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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended March 31, 2020
OR
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
Commission File Number: 1-11884
ROYAL CARIBBEAN CRUISES LTD.
(Exact name of registrant as specified in its charter)
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Republic of Liberia
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98-0081645
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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1050 Caribbean Way, Miami, Florida 33132
(Address of principal executive offices) (zip code)
(305) 539-6000
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, par value $0.01 per share
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RCL
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New York Stock Exchange
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer ☒
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Accelerated filer ☐
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Non-accelerated filer ☐
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Smaller reporting company ☐
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Emerging growth company ☐
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
There were 209,385,377 shares of common stock outstanding as of May 13, 2020.
EXPLANATORY NOTE
As previously disclosed in the Current Report on Form 8-K filed by Royal Caribbean Cruises Ltd. (the “Company”) on May 11, 2020, as amended on May 12, 2020, the Company delayed the filing of this Quarterly Report on Form 10-Q due to circumstances related to the COVID-19 pandemic and in reliance on the U.S. Securities and Exchange Commission’s order under Section 36 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and certain rules thereunder (Release No. 34-88465). In particular, the COVID-19 pandemic has resulted in the Company announcing a voluntary suspension of its global cruise operations from March 13 through at least July 31, 2020 and China sailings until at least June 30, 2020, interfering with the Company’s normal operations. In addition, voluntary and mandatory measures implemented by the Company to reduce the spread of the virus have limited access to many of the areas where the Company operates, including its corporate offices and facilities, resulting in limited support from staff. These restrictions impacted the Company’s ability to complete its internal quarterly review, including an evaluation of the various impacts of COVID-19 on the Company’s financial statements and to prepare and complete the Form 10-Q in a timely manner.
ROYAL CARIBBEAN CRUISES LTD.
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ROYAL CARIBBEAN CRUISES LTD.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(unaudited; in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended March 31,
|
|
|
|
|
2020
|
|
2019
|
|
Passenger ticket revenues
|
$
|
1,376,851
|
|
|
$
|
1,709,984
|
|
|
Onboard and other revenues
|
655,899
|
|
|
729,783
|
|
|
Total revenues
|
2,032,750
|
|
|
2,439,767
|
|
|
Cruise operating expenses:
|
|
|
|
|
Commissions, transportation and other
|
317,129
|
|
|
363,155
|
|
|
Onboard and other
|
123,718
|
|
|
135,170
|
|
|
Payroll and related
|
330,390
|
|
|
269,532
|
|
|
Food
|
121,316
|
|
|
139,534
|
|
|
Fuel
|
194,268
|
|
|
160,171
|
|
|
Other operating
|
423,998
|
|
|
346,142
|
|
|
Total cruise operating expenses
|
1,510,819
|
|
|
1,413,704
|
|
|
Marketing, selling and administrative expenses
|
395,890
|
|
|
414,947
|
|
|
Depreciation and amortization expenses
|
324,330
|
|
|
292,285
|
|
|
Impairment and credit losses
|
1,108,118
|
|
|
—
|
|
|
Operating (Loss) Income
|
(1,306,407)
|
|
|
318,831
|
|
|
Other income (expense):
|
|
|
|
|
Interest income
|
5,534
|
|
|
9,784
|
|
|
Interest expense, net of interest capitalized
|
(92,911)
|
|
|
(100,415)
|
|
|
Equity investment (loss) income
|
(10,392)
|
|
|
33,694
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense
|
(32,859)
|
|
|
(5,088)
|
|
|
|
(130,628)
|
|
|
(62,025)
|
|
|
Net (Loss) Income
|
(1,437,035)
|
|
|
256,806
|
|
|
Less: Net Income attributable to noncontrolling interest
|
7,444
|
|
|
7,125
|
|
|
Net (Loss) Income attributable to Royal Caribbean Cruises Ltd.
|
$
|
(1,444,479)
|
|
|
$
|
249,681
|
|
|
(Loss) Earnings per Share:
|
|
|
|
|
Basic
|
$
|
(6.91)
|
|
|
$
|
1.19
|
|
|
Diluted
|
$
|
(6.91)
|
|
|
$
|
1.19
|
|
|
Weighted-Average Shares Outstanding:
|
|
|
|
|
Basic
|
209,097
|
|
|
209,322
|
|
|
Diluted
|
209,097
|
|
|
209,874
|
|
|
Comprehensive (Loss) Income
|
|
|
|
|
Net (Loss) Income
|
$
|
(1,437,035)
|
|
|
$
|
256,806
|
|
|
Other comprehensive income (loss):
|
|
|
|
|
Foreign currency translation adjustments
|
10,290
|
|
|
564
|
|
|
Change in defined benefit plans
|
(7,589)
|
|
|
(653)
|
|
|
(Loss) gain on cash flow derivative hedges
|
(300,605)
|
|
|
48,843
|
|
|
|
|
|
|
|
Total other comprehensive (loss) income
|
(297,904)
|
|
|
48,754
|
|
|
Comprehensive (Loss) Income
|
(1,734,939)
|
|
|
305,560
|
|
|
Less: Comprehensive Income attributable to noncontrolling interest
|
7,444
|
|
|
7,125
|
|
|
Comprehensive (Loss) Income attributable to Royal Caribbean Cruises Ltd.
|
$
|
(1,742,383)
|
|
|
$
|
298,435
|
|
The accompanying notes are an integral part of these consolidated financial statements.
ROYAL CARIBBEAN CRUISES LTD.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
2020
|
|
2019
|
|
|
(unaudited)
|
|
|
|
Assets
|
|
|
|
|
Current assets
|
|
|
|
|
Cash and cash equivalents
|
$
|
3,890,811
|
|
|
$
|
243,738
|
|
|
Trade and other receivables, net
|
220,876
|
|
|
305,821
|
|
|
Inventories
|
177,705
|
|
|
162,107
|
|
|
Prepaid expenses and other assets
|
304,809
|
|
|
429,211
|
|
|
Derivative financial instruments
|
—
|
|
|
21,751
|
|
|
Total current assets
|
4,594,201
|
|
|
1,162,628
|
|
|
Property and equipment, net
|
25,857,215
|
|
|
25,466,808
|
|
|
Operating lease right-of-use assets
|
619,439
|
|
|
687,555
|
|
|
Goodwill
|
809,216
|
|
|
1,385,644
|
|
|
Other assets
|
1,564,982
|
|
|
1,617,649
|
|
|
Total assets
|
$
|
33,445,053
|
|
|
$
|
30,320,284
|
|
|
Liabilities, Redeemable Noncontrolling Interest and Shareholders’ Equity
|
|
|
|
|
Current liabilities
|
|
|
|
|
Current portion of debt
|
$
|
3,411,993
|
|
|
$
|
1,186,586
|
|
|
Commercial paper
|
343,557
|
|
|
1,434,180
|
|
|
Current portion of operating lease liabilities
|
98,883
|
|
|
96,976
|
|
|
Accounts payable
|
1,414,394
|
|
|
563,706
|
|
|
Accrued interest
|
114,738
|
|
|
70,090
|
|
|
Accrued expenses and other liabilities
|
1,022,405
|
|
|
1,078,345
|
|
|
Derivative financial instruments
|
203,308
|
|
|
94,875
|
|
|
Customer deposits
|
2,373,092
|
|
|
3,428,138
|
|
|
Total current liabilities
|
8,982,370
|
|
|
7,952,896
|
|
|
Long-term debt
|
12,273,322
|
|
|
8,414,110
|
|
|
Long-term operating lease liabilities
|
583,979
|
|
|
601,641
|
|
|
Other long-term liabilities
|
796,182
|
|
|
617,810
|
|
|
Total liabilities
|
22,635,853
|
|
|
17,586,457
|
|
|
Commitments and contingencies (Note 10)
|
|
|
|
|
Redeemable noncontrolling interest
|
577,425
|
|
|
569,981
|
|
|
Shareholders’ equity
|
|
|
|
|
Preferred stock ($0.01 par value; 20,000,000 shares authorized; none outstanding)
|
—
|
|
|
—
|
|
|
Common stock ($0.01 par value; 500,000,000 shares authorized; 237,168,148 and 236,547,842 shares issued, March 31, 2020 and December 31, 2019, respectively)
|
2,372
|
|
|
2,365
|
|
|
Paid-in capital
|
3,473,253
|
|
|
3,493,959
|
|
|
Retained earnings
|
9,915,758
|
|
|
11,523,326
|
|
|
Accumulated other comprehensive loss
|
(1,095,617)
|
|
|
(797,713)
|
|
|
Treasury stock (27,799,775 and 27,746,848 common shares at cost, March 31, 2020 and December 31, 2019, respectively)
|
(2,063,991)
|
|
|
(2,058,091)
|
|
|
Total shareholders’ equity
|
10,231,775
|
|
|
12,163,846
|
|
|
Total liabilities, redeemable noncontrolling interest and shareholders’ equity
|
$
|
33,445,053
|
|
|
$
|
30,320,284
|
|
The accompanying notes are an integral part of these consolidated financial statements.
ROYAL CARIBBEAN CRUISES LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited; in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
2020
|
|
2019
|
|
Operating Activities
|
|
|
|
|
Net (Loss) Income
|
$
|
(1,437,035)
|
|
|
$
|
256,806
|
|
|
Adjustments:
|
|
|
|
|
Depreciation and amortization
|
324,330
|
|
|
292,285
|
|
|
Impairment and credit losses
|
1,108,118
|
|
|
—
|
|
|
Net deferred income tax expense
|
253
|
|
|
2,983
|
|
|
Loss (gain) on derivative instruments not designated as hedges
|
120,765
|
|
|
(4,780)
|
|
|
Share-based compensation (income) expense
|
(7,428)
|
|
|
27,322
|
|
|
Equity investment loss (income)
|
10,392
|
|
|
(33,694)
|
|
|
Amortization of debt issuance costs
|
7,795
|
|
|
10,366
|
|
|
Amortization of commercial paper notes discount
|
6,615
|
|
|
7,916
|
|
|
Change in fair value of contingent consideration
|
(51,019)
|
|
|
—
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
Decrease (increase) in trade and other receivables, net
|
84,578
|
|
|
(44,382)
|
|
|
Increase in inventories
|
(15,598)
|
|
|
(4,366)
|
|
|
Decrease (increase) in prepaid expenses and other assets
|
24,476
|
|
|
(12,323)
|
|
|
Increase in accounts payable
|
851,342
|
|
|
8,843
|
|
|
Increase in accrued interest
|
44,648
|
|
|
45,581
|
|
|
Increase (decrease) in accrued expenses and other liabilities
|
110,440
|
|
|
(68,688)
|
|
|
(Decrease) increase in customer deposits
|
(959,555)
|
|
|
580,735
|
|
|
Dividends received from unconsolidated affiliates
|
1,991
|
|
|
42,435
|
|
|
Other, net
|
(26,398)
|
|
|
(28,585)
|
|
|
Net cash provided by operating activities
|
198,710
|
|
|
1,078,454
|
|
|
Investing Activities
|
|
|
|
|
Purchases of property and equipment
|
(1,252,554)
|
|
|
(470,116)
|
|
|
Cash received on settlement of derivative financial instruments
|
1,132
|
|
|
5,803
|
|
|
Cash paid on settlement of derivative financial instruments
|
(96,575)
|
|
|
(678)
|
|
|
Investments in and loans to unconsolidated affiliates
|
(2,000)
|
|
|
—
|
|
|
Cash received on loans to unconsolidated affiliates
|
5,160
|
|
|
11,824
|
|
|
Proceeds from the sale of property and equipment
|
5,256
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Other, net
|
(1,596)
|
|
|
2,719
|
|
|
Net cash used in investing activities
|
(1,341,177)
|
|
|
(450,448)
|
|
|
Financing Activities
|
|
|
|
|
Debt proceeds
|
7,052,189
|
|
|
316,810
|
|
|
Debt issuance costs
|
(62,346)
|
|
|
(3,675)
|
|
|
Repayments of debt
|
(921,867)
|
|
|
(1,146,674)
|
|
|
Proceeds from issuance of commercial paper notes
|
6,396,787
|
|
|
5,039,834
|
|
|
Repayments of commercial paper notes
|
(7,494,025)
|
|
|
(4,711,208)
|
|
|
|
|
|
|
|
Dividends paid
|
(163,563)
|
|
|
(146,817)
|
|
|
Proceeds from exercise of common stock options
|
384
|
|
|
241
|
|
|
|
|
|
|
|
Other, net
|
(17,347)
|
|
|
(16,192)
|
|
|
Net cash provided by (used in) financing activities
|
4,790,212
|
|
|
(667,681)
|
|
|
Effect of exchange rate changes on cash
|
(672)
|
|
|
20
|
|
|
Net increase (decrease) in cash and cash equivalents
|
3,647,073
|
|
|
(39,655)
|
|
|
Cash and cash equivalents at beginning of period
|
243,738
|
|
|
287,852
|
|
|
Cash and cash equivalents at end of period
|
$
|
3,890,811
|
|
|
$
|
248,197
|
|
|
Supplemental Disclosure
|
|
|
|
|
Cash paid during the period for:
|
|
|
|
|
Interest, net of amount capitalized
|
$
|
31,481
|
|
|
$
|
37,103
|
|
|
Non-cash Investing Activities
|
|
|
|
|
Notes receivable issued upon sale of property and equipment
|
$
|
6,294
|
|
|
$
|
—
|
|
|
Purchase of property and equipment included in accounts payable and accrued expenses and other liabilities
|
$
|
29,022
|
|
|
$
|
—
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements.
ROYAL CARIBBEAN CRUISES LTD.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(unaudited; in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock
|
|
Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Treasury Stock
|
|
Total Shareholders' Equity
|
|
Balance at January 1, 2020
|
$
|
2,365
|
|
|
$
|
3,493,959
|
|
|
$
|
11,523,326
|
|
|
$
|
(797,713)
|
|
|
$
|
(2,058,091)
|
|
|
$
|
12,163,846
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Activity related to employee stock plans
|
7
|
|
|
(20,706)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,699)
|
|
|
Common stock dividends, $0.78 per share
|
—
|
|
|
—
|
|
|
(163,089)
|
|
|
—
|
|
|
—
|
|
|
(163,089)
|
|
|
Changes related to cash flow derivative hedges
|
—
|
|
|
—
|
|
|
—
|
|
|
(300,605)
|
|
|
—
|
|
|
(300,605)
|
|
|
Change in defined benefit plans
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,589)
|
|
|
—
|
|
|
(7,589)
|
|
|
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
10,290
|
|
|
—
|
|
|
10,290
|
|
|
Purchases of treasury stock
|
—
|
|
|
|
|
|
—
|
|
|
—
|
|
|
(5,900)
|
|
|
(5,900)
|
|
|
Net Loss attributable to Royal Caribbean Cruises Ltd.
|
—
|
|
|
—
|
|
|
(1,444,479)
|
|
|
—
|
|
|
—
|
|
|
(1,444,479)
|
|
|
Balance at March 31, 2020
|
$
|
2,372
|
|
|
$
|
3,473,253
|
|
|
$
|
9,915,758
|
|
|
$
|
(1,095,617)
|
|
|
$
|
(2,063,991)
|
|
|
$
|
10,231,775
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock
|
|
Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Treasury Stock
|
|
Total Shareholders' Equity
|
|
Balance at January 1, 2019
|
$
|
2,358
|
|
|
$
|
3,420,900
|
|
|
$
|
10,263,282
|
|
|
$
|
(627,734)
|
|
|
$
|
(1,953,345)
|
|
|
$
|
11,105,461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Activity related to employee stock plans
|
6
|
|
|
11,519
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,525
|
|
|
Common stock dividends, $0.70 per share
|
—
|
|
|
—
|
|
|
(146,351)
|
|
|
—
|
|
|
—
|
|
|
(146,351)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes related to cash flow derivative hedges
|
—
|
|
|
—
|
|
|
—
|
|
|
48,843
|
|
|
—
|
|
|
48,843
|
|
|
Change in defined benefit plans
|
—
|
|
|
—
|
|
|
—
|
|
|
(653)
|
|
|
—
|
|
|
(653)
|
|
|
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
564
|
|
|
—
|
|
|
564
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income attributable to Royal Caribbean Cruises Ltd.
|
—
|
|
|
—
|
|
|
249,681
|
|
|
—
|
|
|
—
|
|
|
249,681
|
|
|
Balance at March 31, 2019
|
$
|
2,364
|
|
|
$
|
3,432,419
|
|
|
$
|
10,366,612
|
|
|
$
|
(578,980)
|
|
|
$
|
(1,953,345)
|
|
|
$
|
11,269,070
|
|
ROYAL CARIBBEAN CRUISES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
As used in this Quarterly Report on Form 10-Q, the terms “Royal Caribbean,” the “Company,” “we,” “our” and “us” refer to Royal Caribbean Cruises Ltd. and, depending on the context, Royal Caribbean Cruises Ltd.’s consolidated subsidiaries and/or affiliates. The terms “Royal Caribbean International,” “Celebrity Cruises,” “Azamara Club Cruises” and "Silversea Cruises" refer to our wholly- or majority-owned global cruise brands. Throughout this report, we also refer to regional brands in which we hold an ownership interest, including “TUI Cruises” and “Pullmantur.” However, because these regional brands are unconsolidated investments, our operating results and other disclosures herein do not include these brands unless otherwise specified. In accordance with cruise vacation industry practice, the term “berths” is determined based on double occupancy per cabin even though many cabins can accommodate three or more passengers. This report should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2019, including the audited consolidated financial statements and related notes included therein, as updated by our Current Report on Form-8K dated May 13, 2020.
This Quarterly Report on Form 10-Q also includes trademarks, trade names and service marks of other companies. Use or display by us of other parties’ trademarks, trade names or service marks is not intended to and does not imply a relationship with, or endorsement or sponsorship of us by, these other parties other than as described herein.
Note 1. General
Description of Business
We are a global cruise company. As of March 31, 2020, we control and operate four global cruise brands: Royal Caribbean International, Celebrity Cruises, Azamara Club Cruises and Silversea Cruises (collectively, our "Global Brands").
We also own a 50% joint venture interest in the German brand TUI Cruises and a 49% interest in the Spanish brand Pullmantur (collectively, our "Partner Brands"). We account for our investments in our Partner Brands under the equity method of accounting.
Management's Plan and Liquidity
As part of the global containment effort for the COVID-19 pandemic, the Company implemented a voluntary suspension of its global cruise operations effective March 13, 2020, which has subsequently been extended through at least July 31, 2020 and China sailings until at least June 30, 2020. On March 14, 2020, concurrent with our and the broader cruise industry’s suspension, the U.S. Centers for Disease Control and Prevention (“CDC”) issued a No Sail Order through April 13, 2020. On April 9, 2020, the CDC modified its existing No Sail Order to extend it until the earliest of (a) the expiration of the Secretary of Health and Human Services’ declaration that COVID-19 constitutes a public health emergency, (b) the date the Director of the CDC rescinds or modifies the No Sail Order or (c) 100 days after the order appears on the Federal Register, which would be July 24, 2020.
Significant events affecting travel, including COVID-19, typically have an impact on the booking pattern for cruise vacations, with the full extent of the impact generally determined by the length of time the event influences travel decisions. Based on our assumptions and estimates and our financial condition, we believe that the liquidity described in the following paragraphs will be sufficient to fund our liquidity requirements for at least the next twelve months. However, there can be no assurance that our assumptions and estimates are accurate due to possible unknown variables, including, but not limited to, whether the CDC will issue additional No Sail Orders on cruises out of the United States. The No Sail Order is currently set to expire on or before July 24, 2020. The Company, working with the CDC, is developing its enhanced safety and health protocols as well as other operational procedures necessary to return its vessels to service and is targeting mid-summer of 2020 to begin sailings; however, if the ban on cruising is extended beyond the third quarter of 2020, it will have a material adverse impact on our current and forecasted liquidity levels. There are also other unknown variables related to the unprecedented suspension of our operations and, as such, there is significant uncertainty in our ability to predict future liquidity requirements.
As of March 31, 2020, the Company had liquidity of $3.6 billion, consisting of cash and cash equivalents, net of our outstanding commercial paper notes. During the quarter ended March 31, 2020 and through the issuance of these financial statements, as described in Note 7. Debt, the Company:
•increased the capacity under our revolving credit facilities by $0.6 billion and fully drew on both facilities;
•entered into 364-day senior secured term loan for $2.2 billion, which was subsequently increased to $2.35 billion and was repaid in its entirety through the date of these financial statements; and
•secured deferrals of existing debt amortization under our export-credit backed ship debt facilities which increased the Company’s liquidity by an additional $0.8 billion.
The Company has also undertaken several proactive measures as well as has future plans to mitigate the financial and operational impacts of COVID-19, through new financing options, reduction of capital expenditures and operating expenses, including furloughing staff, laying up vessels, as well as agreeing with certain of our lenders not to pay dividends or engage in stock repurchases.
We were in compliance with all of our debt covenants as of March 31, 2020 and the date these financial statements were issued. Subsequent to March 31, 2020, we amended each of our outstanding facilities to waive compliance with all financial covenants in such facilities through and including the first quarter of 2021.
We also have agreements with a number of credit card processors that transact advance passenger ticket deposits and onboard transactions related to our cruise voyages. These agreements allow the credit card processors to require under certain circumstances, including the existence of a material adverse change, excessive chargebacks and other triggering events, that we maintain a reserve which could be satisfied by posting collateral. While we have not posted any collateral under these agreements as of the date of the issuance of the financial statements, we are currently in discussions with certain processors which may result in the posting of collateral to satisfy reserve requirements. Based on the triggers in the various agreements and the conversations to date, we believe the maximum reserve we may need to provide under these agreements in the next twelve months is approximately $300 million.
Any covenant waiver may lead to increased costs, increased interest rates, additional restrictive covenants and other available lender protections that would be applicable. There can be no assurance that we would be able to obtain waivers in a timely manner, or on acceptable terms at all. If we were not able to obtain waivers or repay the debt facilities, this would lead to an event of default and potential acceleration of amounts due under all of our outstanding debt and derivative contract payables.
Note 2. Summary of Significant Accounting Policies
Adoption of Accounting Pronouncements
In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2016-13, Financial Instruments - Credit Losses (Topic 326); Measurement of Credit Losses on Financial Instruments. This ASU, along with subsequent ASUs issued to clarify certain of its provisions, introduces new guidance which makes substantive changes to the accounting model for financial assets subject to credit losses that are measured at amortized cost, as well as certain off-balance sheet credit exposures. The updates include the introduction of a new current expected credit loss (“CECL”) model that is based on expected rather than incurred losses. On January 1, 2020, we adopted these updates using the modified retrospective approach. The adoption did not have a material impact to our consolidated financial statements.
Recent Accounting Pronouncements
In January 2020, the FASB issued ASU No. 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivative and Hedging (Topic 815), which clarifies the interaction of rules for equity securities, the equity method of accounting, and forward contracts and purchase options on certain types of securities. The guidance clarifies how to account for the transition into and out of the equity method of accounting when considering observable transactions under the measurement alternative. The ASU is effective for annual reporting periods beginning after December 15, 2020, including interim reporting periods within those annual periods, with early adoption permitted. We are currently evaluating the impact of the new guidance on our consolidated financial statements.
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848), which provides optional expedients and exceptions to the current guidance on contract modifications and hedging relationships to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. We are currently evaluating the impact of the new guidance on our consolidated financial statements.
Note 3. Impairment and Credit Losses
The increased challenges related to COVID-19 has significantly impacted our expected investments, operating plans and projected cash flows. Refer to Note 1. General for further information regarding COVID-19 and its impact to the Company. As a result of these developments, we performed interim impairment evaluations on certain assets as further discussed below.
Goodwill & Intangible Assets
The following are the carrying amounts of goodwill attributable to our Royal Caribbean International, Celebrity Cruises and Silversea Cruises reporting units and the changes in such balances during the quarter ended March 31, 2020 (in thousands) are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Royal Caribbean International
|
|
Celebrity Cruises
|
|
Silversea Cruises
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2019
|
$
|
299,226
|
|
|
$
|
1,632
|
|
|
$
|
1,084,786
|
|
|
|
$
|
1,385,644
|
|
|
Impairment charge
|
—
|
|
|
—
|
|
|
(576,208)
|
|
|
|
(576,208)
|
|
|
|
|
|
|
|
|
|
|
|
Transfer of goodwill attributable to the 2019 purchase of photo operations onboard our ships
|
(2,694)
|
|
|
2,694
|
|
|
—
|
|
|
|
—
|
|
|
Foreign currency translation adjustment
|
(220)
|
|
|
—
|
|
|
—
|
|
|
|
(220)
|
|
|
Balance at March 31, 2020
|
$
|
296,312
|
|
|
$
|
4,326
|
|
|
$
|
508,578
|
|
|
|
$
|
809,216
|
|
We performed an interim impairment evaluation of Royal Caribbean International’s goodwill in connection with the preparation of our financial statements during the quarter ended March 31, 2020. As a result of the test, we determined that the fair value of the Royal Caribbean International reporting unit exceeded its carrying value by approximately 32% resulting in no impairment to the Royal Caribbean International goodwill. As of March 31, 2020, the carrying amount of goodwill attributable to our Royal Caribbean reporting unit was $296.3 million.
We also performed an interim impairment evaluation of Silversea Cruises’ goodwill in connection with the preparation of our financial statements for the quarter ended March 31, 2020. We estimated the fair value of the Silversea Cruises reporting unit using a probability-weighted discounted cash flow model in combination with a market based valuation approach. As a result of this analysis, we determined that the carrying value of the Silversea Cruises reporting unit exceeded its fair value. Accordingly, we recognized a goodwill impairment charge of $576.2 million during the quarter ended March 31, 2020, which is also the accumulated impairment charge as of March 31, 2020.
Intangible assets consist of finite and indefinite life assets and are reported within Other assets in our consolidated balance sheets. The following is a summary of our intangible assets as of March 31, 2020 and December 31, 2019 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Accumulated Impairment losses
|
|
Net Carrying Value
|
|
Finite-life intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
Customer relationships
|
|
|
|
$
|
97,400
|
|
|
$
|
9,199
|
|
|
$
|
—
|
|
|
$
|
88,201
|
|
|
Galapagos operating license
|
|
|
|
47,669
|
|
|
6,506
|
|
|
—
|
|
|
41,163
|
|
|
Other finite-life intangible assets
|
|
|
|
11,560
|
|
|
8,188
|
|
|
—
|
|
|
3,372
|
|
|
Total finite-life intangible assets
|
|
|
|
156,629
|
|
|
23,893
|
|
|
—
|
|
|
132,736
|
|
|
Indefinite-life intangible assets
|
|
|
|
352,275
|
|
|
—
|
|
|
30,800
|
|
|
321,475
|
|
|
Total intangible assets, net
|
|
|
|
$
|
508,904
|
|
|
$
|
23,893
|
|
|
$
|
30,800
|
|
|
$
|
454,211
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2019
|
|
|
|
|
|
|
|
|
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Net Carrying Value
|
|
Finite-life intangible assets:
|
|
|
|
|
|
|
|
|
|
Customer relationships
|
|
|
|
$
|
97,400
|
|
|
$
|
7,576
|
|
|
$
|
89,824
|
|
|
Galapagos operating license
|
|
|
|
47,669
|
|
|
6,010
|
|
|
41,659
|
|
|
Other finite-life intangible assets
|
|
|
|
11,560
|
|
|
6,743
|
|
|
4,817
|
|
|
Total finite-life intangible assets
|
|
|
|
156,629
|
|
|
20,329
|
|
|
136,300
|
|
|
Indefinite-life intangible assets
|
|
|
|
352,275
|
|
|
—
|
|
|
352,275
|
|
|
Total intangible assets, net
|
|
|
|
$
|
508,904
|
|
|
$
|
20,329
|
|
|
$
|
488,575
|
|
Impairment charges related to the Silversea Cruises trade name included within Indefinite-life intangible assets in the table above was $30.8 million as of March 31, 2020.
Long-lived Assets
We identified that the undiscounted cash flows of certain long-lived assets, consisting of 8 ships and certain right-of-use assets, were less than their carrying values. Events surrounding the COVID-19 pandemic negatively impacted the expected undiscounted cash flows of these assets. As a result of this determination, we evaluated these assets pursuant to our long -lived asset impairment test, which resulted in an impairment charge of $463.0 million to write down these assets to their estimated fair values during the quarter ended March 31, 2020.
Notes Receivable
We reviewed our notes receivable for credit losses in connection with the preparation of our financial statements for the quarter ended March 31, 2020. In evaluating the allowance for loan losses, management considered factors such as historical loss experience, the types of loans and the amount of loans in the loan portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, peer group information and prevailing economic conditions. Based on these credit loss estimation factors, we recorded and subsequently wrote-off loan loss allowances of $38.1 million primarily due to loans and other net receivables related to Pullmantur Holdings S.L. ("Pullmantur Holdings"). Refer to Note 6. Other Assets for further information regarding our investment in Pullmantur Holdings.
Equity Investments
For an equity method investment that experiences a loss in fair value determined to be other than temporary, we will reduce our basis in the investment to fair value and record an impairment loss. Given the recent impact of the COVID-19 pandemic to our business, we evaluated whether our equity method investments were other than temporarily impaired. Based on our review of each of the investment's most recent financial results and projections, we determined that certain of our equity method investments, primarily Grand Bahama Shipyard Ltd. (“Grand Bahama”), were other than temporarily impaired, which resulted in an impairment charge of $39.7 million during the quarter ended March 31, 2020. Refer to Note 6. Other Assets for information regarding our significant equity investments.
The combined impairment and credit loss charge of $1.1 billion related to our goodwill, trademarks and trade names, vessels, right-of-use assets and notes receivable was recognized in earnings during the quarter ended March 31, 2020 and is reported within Impairment and credit losses within our consolidated statements of comprehensive (loss) income. The impairment charge of $39.7 million related to our equity investments was recognized in earnings during the quarter ended March 31, 2020 and is reported within Equity investment (loss) income within our consolidated statements of comprehensive (loss) income. For further information on the measurements used to estimate the fair value of these assets, refer to Note 13. Fair Value Measurements and Derivative Instruments. These impairment assessments and the resulting charges were determined based on management’s current estimates and projections using information through the time of the issuance of these financial statements. The adverse impact COVID-19 will continue to have on our business, operating results, cash flows and overall financial condition is uncertain and may result in changes to the assumptions used in the impairment tests discussed above, which may result in additional impairments to these assets in the future.
Note 4. Revenues
Revenue Recognition
Revenues are measured based on consideration specified in our contracts with customers and are recognized as the related performance obligations are satisfied.
The majority of our revenues are derived from passenger cruise contracts which are reported within Passenger ticket revenues in our consolidated statements of comprehensive (loss) income. Our performance obligation under these contracts is to provide a cruise vacation in exchange for the ticket price. We satisfy this performance obligation and recognize revenue over the duration of each cruise, which generally range from two to 25 nights.
Passenger ticket revenues include charges to our guests for port costs that vary with passenger head counts. These type of port costs, along with port costs that do not vary by passenger head counts, are included in our cruise operating expenses. The amounts of port costs charged to our guests and included within Passenger ticket revenues on a gross basis were $124.5 million and $152.0 million for the quarters ended March 31, 2020 and 2019, respectively.
Our total revenues also include Onboard and other revenues, which consist primarily of revenues from the sale of goods and services onboard our ships that are not included in passenger ticket prices. We receive payment before or concurrently with the transfer of these goods and services to passengers during a cruise and recognize revenue at the time of transfer over the duration of the related cruise.
Disaggregated Revenues
The following table disaggregates our total revenues by geographic regions where we provide cruise itineraries (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended March 31,
|
|
|
|
|
|
|
|
|
2020
|
|
2019
|
|
|
|
|
|
Revenues by itinerary
|
|
|
|
|
|
|
|
|
North America(1)
|
$
|
1,324,573
|
|
|
$
|
1,681,058
|
|
|
|
|
|
|
Asia/Pacific(2)
|
362,398
|
|
|
490,075
|
|
|
|
|
|
|
Europe(3)
|
19,540
|
|
|
7,982
|
|
|
|
|
|
|
Other regions(4)
|
158,043
|
|
|
162,505
|
|
|
|
|
|
|
Total revenues by itinerary
|
1,864,554
|
|
|
2,341,620
|
|
|
|
|
|
|
Other revenues(5)
|
168,196
|
|
|
98,147
|
|
|
|
|
|
|
Total revenues
|
$
|
2,032,750
|
|
|
$
|
2,439,767
|
|
|
|
|
|
(1)Includes the United States, Canada, Mexico and the Caribbean.
(2)Includes Southeast Asia (e.g., Singapore, Thailand and the Philippines), East Asia (e.g., China and Japan), South Asia (e.g., India and Pakistan) and Oceania (e.g., Australia and Fiji Islands) regions.
(3)Includes European countries (e.g., Nordics, Germany, France, Italy, Spain and the United Kingdom).
(4)Includes seasonality impacted itineraries primarily in South and Latin American countries.
(5)Includes revenues primarily related to cancellation fees, vacation protection insurance, pre- and post-cruise tours and fees for operating certain port facilities. Amounts also include revenues related to our bareboat charter, procurement and management related services we perform on behalf of our unconsolidated affiliates. Refer to Note 6. Other Assets for more information on our unconsolidated affiliates.
Passenger ticket revenues are attributed to geographic areas based on where the reservation originates. For the quarters ended March 31, 2020 and 2019, our guests were sourced from the following areas:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended March 31,
|
|
|
|
|
|
|
|
|
2020
|
|
2019
|
|
|
|
|
|
Passenger ticket revenues:
|
|
|
|
|
|
|
|
|
United States
|
68
|
%
|
|
66
|
%
|
|
|
|
|
|
Australia
|
9
|
%
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All other countries (1)
|
23
|
%
|
|
26
|
%
|
|
|
|
|
(1)No other individual country's revenue exceeded 10% for the quarters ended March 31, 2020 and 2019.
Customer Deposits and Contract Liabilities
Our payment terms generally require an upfront deposit to confirm a reservation, with the balance due prior to the cruise. Deposits received on sales of passenger cruises are initially recorded as Customer deposits in our consolidated balance sheets and subsequently recognized as passenger ticket revenues during the duration of the cruise. ASC 606, Revenues from Contracts with Customers, defines a “contract liability” as an entity’s obligation to transfer goods or services to a customer for which the entity has received consideration from the customer. We do not consider customer deposits to be a contract liability until the customer no longer retains the unilateral right, resulting from the passage of time, to cancel such customer's reservation and receive a full refund.
The current reduction in demand for cruising due to the COVID-19 pandemic has resulted in an unprecedented low level of advance bookings and the associated customer deposits received. At the same time, we experienced significant cancellations beginning in the second half of March, which has led to issuance of refunds to customers, while the remainder have been rebooked on future cruises or received credits in lieu of cash refunds. As of March 31, 2020, refunds due to customers mostly as a result of booking cancellations were $847.2 million compared to $32.9 million as of March 31, 2019. Due to the uncertainty around the return of demand for cruising, we are unable to estimate the amount of the March 31, 2020 customer deposits that will be recognized in earnings compared to amounts that will be refunded to customers or issued as a credit for future travel through the end of 2020. Customer deposits presented in our consolidated balance sheets include contract liabilities of $470.2 million and $1.7 billion as of March 31, 2020 and December 31, 2019, respectively.
Contract Receivables and Contract Assets
Although we generally require full payment from our customers prior to their cruise, we grant credit terms to a relatively small portion of our revenue sourced in select markets outside of the United States. As a result, we have outstanding receivables from passenger cruise contracts in those markets. We also have receivables from credit card merchants for cruise ticket purchases and goods and services sold to guests during cruises that are collected before, during or shortly after the cruise voyage. In addition, we have receivables due from concessionaires onboard our vessels. These receivables are included within Trade and other receivables, net in our consolidated balance sheets.
We have contract assets that are conditional rights to consideration for satisfying the construction services performance obligations under a service concession arrangement. As of March 31, 2020 and December 31, 2019, our contract assets were $54.9 million and $55.5 million, respectively, and were included within Other assets in our consolidated balance sheets. Given the short duration of our cruises and our collection terms, we do not have any other significant contract assets.
Assets Recognized from the Costs to Obtain a Contract with a Customer
Prepaid travel agent commissions are an incremental cost of obtaining contracts with customers that we recognize as an asset and include within Prepaid expenses and other assets in our consolidated balance sheets. Prepaid travel agent commissions were $33.5 million and $163.2 million as of March 31, 2020 and December 31, 2019, respectively. Substantially all of our prepaid travel agent commissions at December 31, 2019 were expensed and reported primarily within Commissions, transportation and other in our consolidated statements of comprehensive income (loss) for the quarter ended March 31, 2020.
Note 5. (Loss) Earnings Per Share
A reconciliation between basic and diluted (loss) earnings per share is as follows (in thousands, except per share data):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended March 31,
|
|
|
|
|
2020
|
|
2019
|
|
Net (Loss) Income attributable to Royal Caribbean Cruises Ltd. for basic and diluted earnings per share
|
$
|
(1,444,479)
|
|
|
$
|
249,681
|
|
|
Weighted-average common shares outstanding
|
209,097
|
|
|
209,322
|
|
|
Dilutive effect of stock-based awards
|
—
|
|
|
552
|
|
|
Diluted weighted-average shares outstanding
|
209,097
|
|
|
209,874
|
|
|
Basic (loss) earnings per share
|
$
|
(6.91)
|
|
|
$
|
1.19
|
|
|
Diluted (loss) earnings per share
|
$
|
(6.91)
|
|
|
$
|
1.19
|
|
There were approximately 877,000 antidilutive shares for the quarter ended March 31, 2020 and no antidilutive shares for the quarter ended March 31, 2019.
Note 6. Other Assets
A Variable Interest Entity (“VIE”) is an entity in which the equity investors have not provided enough equity to finance the entity’s activities or the equity investors: (1) cannot directly or indirectly make decisions about the entity’s activities through their voting rights or similar rights; (2) do not have the obligation to absorb the expected losses of the entity; (3) do not have the right to receive the expected residual returns of the entity; or (4) have voting rights that are not proportionate to their economic interests and the entity’s activities involve or are conducted on behalf of an investor with a disproportionately small voting interest.
We have determined that TUI Cruises GmbH, our 50%-owned joint venture, which operates the brand TUI Cruises, is a VIE. As of March 31, 2020, the net book value of our investment in TUI Cruises was $613.9 million, primarily consisting of $467.9 million in equity and a loan of €130.8 million, or approximately $143.5 million based on the exchange rate at March 31, 2020. As of December 31, 2019, the net book value of our investment in TUI Cruises was $598.1 million, primarily consisting of $443.1 million in equity and a loan of €133.2 million, or approximately $149.5 million based on the exchange rate at December 31, 2019. The loan, which was made in connection with the sale of Splendour of the Seas in April 2016, accrues interest at a rate of 6.25% per annum and is payable over 10 years. This loan is 50% guaranteed by TUI AG, our joint venture partner in TUI Cruises, and is secured by a first priority mortgage on the ship. The majority of these amounts were included within Other assets in our consolidated balance sheets. TUI Cruises has various ship construction and financing agreements which include certain restrictions on each of our and TUI AG’s ability to reduce our current ownership interest in TUI Cruises below 37.55% through May 2031.
Our investment amount, outstanding term loan and the potential obligations under the bank loan guarantee are substantially our maximum exposure to loss in connection with our investment in TUI Cruises. We have determined that we are not the primary beneficiary of TUI Cruises. We believe that the power to direct the activities that most significantly impact TUI Cruises’ economic performance are shared between ourselves and TUI AG. All the significant operating and financial decisions of TUI Cruises require the consent of both parties, which we believe creates shared power over TUI Cruises. Accordingly, we do not consolidate this entity and account for this investment under the equity method of accounting.
On February 7, 2020, TUI Cruises entered into an agreement to acquire Hapag-Lloyd Cruises, a luxury and expedition brand for German-speaking guests, from TUI AG. Hapag-Lloyd Cruises operates two luxury liners and three smaller expedition ships. The transaction is subject to regulatory approval and customary closing conditions. The majority of the purchase price for this acquisition is being financed by third-party financing, however, each shareholder is making a contribution of €75 million to fund a portion of the purchase price.
We have determined that Pullmantur Holdings, in which we have a 49% noncontrolling interest and Springwater Capital LLC has a 51% interest, is a VIE for which we are not the primary beneficiary, as we do not have the power to direct the activities that most significantly impact the entity's economic performance. Accordingly, we do not consolidate this entity and we account for this investment under the equity method of accounting. As of March 31, 2020, we did not have any exposure to loss in Pullmantur Holdings as a result of the loans and net receivables written-off as of March 31, 2020. Refer to Note 3. Impairment and Credit Losses for further information on our credit loss evaluation related to these receivables as of March 31, 2020.
As of December 31, 2019, our maximum exposure to loss in Pullmantur Holdings was $49.7 million, consisting of loans and other receivables. These amounts were included within Trade and other receivables, net and Other assets in our consolidated balance sheets.
We have provided a non-revolving working capital facility to a Pullmantur Holdings subsidiary in the amount of up to €15.0 million or approximately $16.5 million based on the exchange rate at March 31, 2020. Proceeds of the facility, which were available to be drawn through December 2018 accrued interest at an interest rate of 6.5% per annum and are payable through 2022. An affiliate of Springwater Capital LLC has guaranteed repayment of 51% of the outstanding amounts under the facility. As of March 31, 2020, €11.4 million, or approximately $12.5 million, based on the exchange rate at March 31, 2020, was outstanding under this facility and was fully written-off as of March 31, 2020. As of December 31, 2019, €11.0 million, or approximately $12.3 million, based on the exchange rate at December 31, 2019, was outstanding under this facility.
We have determined that Grand Bahama, a ship repair and maintenance facility in which we have a 40% noncontrolling interest, is a VIE. This facility serves cruise and cargo ships, oil and gas tankers and offshore units. We utilize this facility, among other ship repair facilities, for our regularly scheduled drydocks and certain emergency repairs as may be required. During the quarters ended March 31, 2020 and 2019, we made payments of $0.2 million and $40.3 million, respectively, to Grand Bahama for ship repair and maintenance services. We have determined that we are not the primary beneficiary of this facility as we do not have the power to direct the activities that most significantly impact the facility’s economic performance. Accordingly, we do not consolidate this entity and we account for this investment under the equity method of accounting. During the quarter ended March 31, 2020, we performed an impairment evaluation on our investment in Grand Bahama. As a result of the evaluation, we did not deem our investment balance to be recoverable and recorded an impairment charge of $30.1 million. Refer to Note 3. Impairment and Credit Losses for further information regarding the impairment evaluation. As of March 31, 2020, the net book value of our investment in Grand Bahama was $24.0 million, consisting of loans. As of December 31, 2019, the net book value of our investment in Grand Bahama was $47.9 million, consisting of $27.0 million in equity and loans of $20.9 million. These amounts represent our maximum exposure to loss related to our investment in Grand Bahama. Our loans to Grand Bahama mature between December 2020 and March 2026 and bear interest at LIBOR plus 2.00% to 3.75%, capped at 5.75% for the majority of the outstanding loan balance. Interest payable on the loans is due on a semi-annual basis. We did not receive any principal and interest payments during the quarter ended March 31, 2020. During the quarter ended March 31, 2019, we received principal and interest payments of $6.6 million. The loan balances are included within Trade and other receivables, net and Other assets in our consolidated balance sheets. As of March 31, 2020, the loans were accruing interest under the effective yield method. Effective April 1, 2020, we determined the loans to be in non-accrual status.
We monitor credit risk associated with the loans through our participation on Grand Bahama’s board of directors along with our review of Grand Bahama’s financial statements and projected cash flows. Based on this review, we do not expect to realize credit losses associated with the outstanding loans as of March 31, 2020.
The following tables set forth information regarding our investments accounted for under the equity method of accounting, including the entities discussed above (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended March 31,
|
|
|
|
|
|
|
|
|
|
2020
|
|
2019
|
|
|
|
|
|
Share of equity (loss) income from investments
|
|
$
|
(10,392)
|
|
|
$
|
33,694
|
|
|
|
|
|
|
Dividends received (1)
|
|
$
|
1,991
|
|
|
$
|
42,435
|
|
|
|
|
|
(1)There were no dividends received from TUI Cruises for the quarter ended March 31, 2020. For the quarter ended March 31, 2019, amount includes dividends of €50.0 million from TUI Cruises, net of tax withholdings.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March 31, 2020
|
|
As of December 31, 2019
|
|
Total notes receivable due from equity investments
|
|
$
|
167,352
|
|
|
$
|
193,351
|
|
|
Less-current portion (1)
|
|
27,323
|
|
|
19,681
|
|
|
Long-term portion (2)
|
|
$
|
140,029
|
|
|
$
|
173,670
|
|
(1)Included within Trade and other receivables, net in our consolidated balance sheets.
(2)Included within Other assets in our consolidated balance sheets.
We also provide ship management services to TUI Cruises GmbH and Pullmantur Holdings. Additionally, we bareboat charter to Pullmantur Holdings the vessels currently operated by its brands, which were retained by us following the sale of our 51% interest in Pullmantur Holdings. We recorded the following as it relates to these services in our operating results within our consolidated statements of comprehensive income (loss) (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended March 31,
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
7,411
|
|
|
$
|
11,882
|
|
|
|
|
|
|
|
|
Expenses
|
|
$
|
782
|
|
|
$
|
974
|
|
|
|
|
|
|
|
As of March 31, 2020 and December 31, 2019, our total credit loss allowance related to receivables subject to credit loss evaluation was $5.7 million and $5.6 million, respectively.
Note 7. Debt
Debt consist of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Rate (1)
|
|
Maturities Through
|
|
Quarter ended March 31, 2020
|
|
Year ended December 31, 2019
|
|
Fixed rate debt:
|
|
|
|
|
|
|
|
|
|
Unsecured senior notes
|
|
2.65% to 7.50%
|
|
2020 - 2028
|
|
$
|
1,767,059
|
|
|
$
|
1,746,280
|
|
|
Secured senior notes
|
|
7.25%
|
|
2025
|
|
658,645
|
|
|
662,398
|
|
|
Unsecured term loans
|
|
2.53% to 5.41%
|
|
2021 - 2032
|
|
3,480,147
|
|
|
2,806,774
|
|
|
Total fixed rate debt
|
|
|
|
|
|
5,905,851
|
|
|
5,215,452
|
|
|
Variable rate debt:
|
|
|
|
|
|
|
|
|
|
Unsecured revolving credit facilities (2)
|
|
2.79%
|
|
2022 - 2024
|
|
3,475,000
|
|
|
165,000
|
|
|
Commercial paper
|
|
1.93%
|
|
2020
|
|
343,557
|
|
|
1,434,180
|
|
|
USD secured term loan
|
|
2.25% to 2.75%
|
|
2021
|
|
2,200,000
|
|
|
—
|
|
|
USD unsecured term loan
|
|
1.55% to 5.64%
|
|
2020 - 2028
|
|
3,471,256
|
|
|
3,519,853
|
|
|
Euro unsecured term loan
|
|
1.15% to 1.58%
|
|
2021 - 2028
|
|
661,487
|
|
|
676,740
|
|
|
Total variable rate debt
|
|
|
|
|
|
10,151,300
|
|
|
5,795,773
|
|
|
Finance lease liabilities
|
|
|
|
|
|
226,471
|
|
|
230,258
|
|
|
Total debt (3)
|
|
|
|
|
|
16,283,622
|
|
|
11,241,483
|
|
|
Less: unamortized debt issuance costs
|
|
|
|
|
|
(254,750)
|
|
|
(206,607)
|
|
|
Total debt, net of unamortized debt issuance costs
|
|
|
|
|
|
16,028,872
|
|
|
11,034,876
|
|
|
Less—current portion including commercial paper
|
|
|
|
|
|
(3,755,550)
|
|
|
(2,620,766)
|
|
|
Long-term portion
|
|
|
|
|
|
$
|
12,273,322
|
|
|
$
|
8,414,110
|
|
(1) Interest rates based on outstanding loan balance as of March 31, 2020 and, for variable rate debt, include either LIBOR or EURIBOR plus the applicable margin.
(2) Includes $1.9 billion facility due in 2024 and $1.6 billion facility due in 2022, each of which accrue interest at LIBOR plus 1.10%, which interest rate was 2.55% as of March 31, 2020 and each is subject to a facility fee of 0.15%.
(3) At March 31, 2020 and December 31, 2019, the weighted average interest rate for total debt was 3.98% and 3.99%, respectively.
In March 2020, we increased the capacity of our $1.7 billion and $1.2 billion unsecured revolving credit facilities due in 2024 and 2022, by $200 million and $400 million, respectively, utilizing their respective accordion features. As of March 31, 2020, our aggregate revolving borrowing capacity was $3.5 billion and was fully drawn upon.
In March 2020, we took delivery of Celebrity Apex. To finance the purchase, we borrowed $722.2 million under a previously committed unsecured term loan which is 100% guaranteed by Bpifrance Assurance Export, the official export credit agency of France. The loan amortizes semi-annually over 12 years and bears interest at a fixed rate of 3.23% per annum.
As of March 31, 2020, we had $343.6 million of commercial paper notes outstanding with a weighted average interest rate of 1.93% and a weighted average maturity of approximately 4 days. As of March 31, 2019, we had $1.1 billion of commercial paper notes outstanding with a weighted average interest rate of 3.04% and a weighted average maturity of approximately 34 days.
In March 2020, we borrowed $2.2 billion pursuant to a 364-day senior secured term loan agreement. The loan would have matured 364 days after funding and maturity could have been extended at our option for an additional 364 days subject to customary conditions, including the payment of a 1.00% extension fee. Our obligation under the loan was guaranteed by our wholly-owned subsidiaries, Celebrity Cruises Holdings Inc., Celebrity Cruises Inc. and certain of our wholly-owned vessel-owning subsidiaries, and was secured by certain of our trademarks and a pledge of 100% of the equity interests of certain of our vessel-owning subsidiaries. Interest accrued at LIBOR plus a margin of 2.25% which would have increased to 2.50% and 2.75%, 180 days and 365 days, respectively, after funding. We were also required to pay a duration fee in an amount equal to 0.25% of the aggregate loan principal amount every 60 days. Two of our board members each purchased a participation interest equal to $100 million in our 364-day, $2.2 billion senior secured term loan agreement. In May 2020, this secured term loan was increased by an additional $150 million through an accordion feature.
In May 2020, we issued $3.32 billion in senior secured notes, less original issue discount. $1.0 billion of the notes accrue interest at 10.875% and mature in 2023. The remaining $2.32 billion of the notes accrue interest at a fixed rate of 11.5% and mature in 2025. The notes are fully and unconditionally guaranteed by Celebrity Cruises Holdings Inc., Celebrity Cruises Inc., and certain of our wholly-owned vessel-owning subsidiaries. The notes are secured by first priority security interests in the collateral (which generally includes certain of our material intellectual property, a pledge of 100% of the equity interests of certain of our vessel-owning subsidiaries and mortgages on the 28 vessels owned by such subsidiaries, subject to permitted liens and certain exclusions and release provisions). The obligations under the senior secured notes will be secured by the collateral in an amount not to exceed $1.662 billion based on our debt rating as of the date of issuance. We repaid the $2.35 billion, 364-day senior secured term loan in its entirety with a portion of the proceeds of these $3.32 billion secured notes. We expect to use the remainder of the proceeds for general corporate purposes, which may include repayment of additional indebtedness.
Subsequent to March 31, 2020 and through the date of these financial statements, we amended certain export-credit backed ship debt facilities to benefit from a 12-month debt amortization and financial covenant holiday ("Debt Holiday"). Under the Debt Holiday, deferred debt amortization of approximately $0.8 billion will be paid over a period of four years after the 12-month deferral period. The Debt Holiday was offered by certain export credit agencies as a result of the current impact to cruise-line borrowers as a result of COVID-19.
Except for Celebrity Flora and Azamara Pursuit, all of our unsecured ship financing term loans are guaranteed by the export credit agency in the respective country in which the ship is constructed. As of March 31, 2020, in consideration for these guarantees, depending on the financing arrangement, we pay to the applicable export credit agency (1) a fee of 1.01% per annum based on the outstanding loan balance semi-annually over the term of the loan (subject to adjustments based upon our credit ratings) or (2) an upfront fee of 2.35% to 2.37% of the maximum loan amount. We amortize the fees that are paid upfront over the life of the loan and those that are paid semi-annually over each respective payment period. Prior to the loan being drawn, we present these fees within Other assets in our consolidated balance sheets. Once the loan is drawn, such fees are classified as a discount to the related loan, or contra-liability account, within Current portion of long-term debt or long-term debt. In our consolidated statements of cash flows, we classify these fees within Amortization of debt issuance costs.
Except for the 2027 series (which are not redeemable), unsecured senior notes outstanding as of March 31, 2020 are redeemable upon the payment of a make-whole premium prior to maturity, or with respect to the 2028 series, prior to the par call date. The 2028 series may also be redeemed three months prior to maturity at par.
Certain of our debt agreements contain covenants that, among other things, require us to maintain a minimum level of shareholder's equity and certain financial ratios. We were in compliance with our financial covenants as of March 31, 2020. However, subsequent to March 31, 2020, we amended these debt agreements to waive the quarterly testing of our financing covenants through and including the first quarter of 2021. For information related to the covenant in our PortMiami Terminal "A" operating lease agreement, refer to Note 8. Leases.
As part of obtaining these debt compliance waivers, we are now required to maintain a minimum of $300 million in cash and cash equivalents tested on a monthly basis through March 31, 2021, and we are not permitted during the covenant waiver period, subject to limited exceptions, to pay cash dividends or make share repurchases unless we would have been compliant with our fixed charge coverage ratio at such time. In addition, the lenders under such unsecured bank facilities required a number of structural enhancements to such facilities. Under certain of our agreements, the contractual interest rate, facility fee and/or export credit agency fee vary with our debt rating. On April 2, 2020, S&P Global downgraded us from BBB- to BB and on May 13, 2020, Moody’s downgraded us from Baa3 to Ba2.
The following is a schedule of annual maturities on our total debt net of debt issuance costs, and including capital leases and commercial paper, as of March 31, 2020 for each of the next five years (in thousands):
|
|
|
|
|
|
|
|
Year
|
|
|
Remainder of 2020
|
1,082,153
|
|
|
2021
|
3,102,445
|
|
|
2022
|
4,289,601
|
|
|
2023
|
823,209
|
|
|
2024
|
2,706,216
|
|
|
Thereafter
|
4,025,248
|
|
|
|
16,028,872
|
|
Finance Leases
Silversea Cruises operates two ships, the Silver Whisper and Silver Explorer, under finance leases. The finance lease for the Silver Whisper will expire in 2022, subject to an option to purchase the ship, and the finance lease for the Silver Explorer will expire in 2021, subject to an option to extend the lease for up to an additional six years. The total aggregate amount of the finance lease liabilities recorded for these ships was $54.3 million and $55.6 million at March 31, 2020 and December 31, 2019, respectively. The lease payments on the Silver Whisper are subject to adjustments based on the LIBOR rate.
Note 8. Leases
Our operating leases primarily relate to preferred berthing arrangements, real estate and shipboard equipment and are included within Operating lease right-of-use assets, and Long-term operating lease liabilities with the current portion of the liability included within Current portion of operating lease liabilities in our consolidated balance sheets as of March 31, 2020 and December 31, 2019. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term.
During the first quarter ended March 31, 2020, we identified that the undiscounted cash flows of certain right-of-use assets, were less than their carrying values. Events surrounding the COVID-19 pandemic negatively impacted the expected undiscounted cash flows of these assets. As a result of this determination, we evaluated these assets pursuant to our long-lived asset impairment test, which resulted in an impairment charge of $45.9 million to write down these right-of-use assets to their estimated fair values during the quarter ended March 31, 2020.
Our finance leases include two ships, Silver Whisper and Silver Explorer, operated by Silversea Cruises. Finance leases are included within Property and equipment, net and Long-term debt, with the current portion of the debt reported within Current portion of debt, in our consolidated balance sheets. The finance lease for Silver Whisper will expire in 2022, subject to an option to purchase the ship, and the finance lease for Silver Explorer will expire in 2021, subject to an option to extend the lease for up to an additional six years.
For some of our real estate leases and berthing agreements, we do have the option to extend our current lease term. For those lease agreements with renewal options, the renewal periods for real estate leases range from one to 10 years and the
renewal periods for berthing agreements range from one to 20 years. Generally, we do not include renewal options as a component of our present value calculation for berthing agreements. However, for certain real estate leases, we include them. Additionally, we do have a residual value guarantee associated with our lease of a terminal at Port of Miami in Miami, Florida that approximates a percentage of cost of the asset as of the inception of the lease. We consider the possibility of incurring costs associated with the residual value guarantee to be remote. As of March 31, 2020, we were not in compliance with one covenant in our Port of Miami Terminal "A" operating lease agreement, which we subsequently obtained a waiver for and amended our agreement with the lessor to increase the lien basket in line with our debt facilities.
As most of our leases do not provide an implicit rate, we use our incremental borrowing rate in determining the present value of lease payments. We estimate our incremental borrowing rates based on LIBOR and U.S. Treasury note rates corresponding to lease terms increased by the Company’s credit risk spread and reduced by the estimated impact of collateral. We used the incremental borrowing rate as of the adoption date for operating leases that commenced prior to that date. In addition, we have lease agreements with lease and non-lease components, which are generally accounted for separately. However, for berthing agreements, we account for the lease and non-lease components as a single lease component.
Additionally, we bareboat charter to Pullmantur Holdings the vessels currently operated by its brands, which were retained by us following the sale of our 51% interest in Pullmantur Holdings in 2016. We account for the bareboat charters of these vessels as operating leases for which we are the lessor. The remaining payments and term of these leases are immaterial to our consolidated financial statements.
The components of lease expense were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statement of Comprehensive Income (Loss) Classification
|
Quarter Ended March 31, 2020
|
|
Quarter Ended March 31, 2019
|
|
Lease costs:
|
|
|
|
|
|
Operating lease costs
|
Commission, transportation and other
|
$
|
14,745
|
|
|
$
|
19,056
|
|
|
Operating lease costs
|
Other operating expenses
|
7,001
|
|
|
6,931
|
|
|
Operating lease costs
|
Marketing, selling and administrative expenses
|
5,368
|
|
|
5,679
|
|
|
Financial lease costs:
|
|
|
|
|
|
Amortization of right-of-use-assets
|
Depreciation and amortization expenses
|
4,881
|
|
|
3,195
|
|
|
Interest on lease liabilities
|
Interest expense, net of interest capitalized
|
1,933
|
|
|
596
|
|
|
Total lease costs
|
|
$
|
33,928
|
|
|
$
|
35,457
|
|
In addition, certain of our berth agreements include variable lease costs based on the number of passengers berthed. During the quarter ended March 31, 2020, we had $25.6 million of variable lease costs recorded within Commission, transportation and other in our consolidated statement of comprehensive income (loss).
Weighted average of the remaining lease terms and weighted average discount rates are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March 31, 2020
|
|
|
|
Weighted average of the remaining lease term
|
|
|
|
|
Operating leases
|
8.6 years
|
|
|
|
Finance leases
|
30.17 years
|
|
|
|
Weighted average discount rate
|
|
|
|
|
Operating leases
|
4.7
|
%
|
|
|
|
Finance leases
|
4.5
|
%
|
|
|
Supplemental cash flow information related to leases is as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended March 31, 2020
|
Quarter Ended March 31, 2019
|
|
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
|
Operating cash flows from operating leases
|
$
|
27,841
|
|
$
|
31,981
|
|
|
Operating cash flows from finance leases
|
$
|
1,933
|
|
$
|
596
|
|
|
Financing cash flows from finance leases
|
$
|
3,823
|
|
$
|
3,606
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March 31, 2020, maturities related to lease liabilities were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
|
Operating Leases
|
|
Finance Leases
|
|
Remainder of 2020
|
$
|
97,082
|
|
|
$
|
37,905
|
|
|
2021
|
117,145
|
|
|
46,451
|
|
|
2022
|
106,714
|
|
|
23,480
|
|
|
2023
|
101,557
|
|
|
12,539
|
|
|
2024
|
75,509
|
|
|
12,528
|
|
|
|
|
|
|
|
Thereafter
|
417,122
|
|
|
406,088
|
|
|
Total lease payments
|
915,129
|
|
|
538,991
|
|
|
Less: Interest
|
(232,267)
|
|
|
(312,520)
|
|
|
Present value of lease liabilities
|
$
|
682,862
|
|
|
$
|
226,471
|
|
Note 9. Redeemable Noncontrolling Interest
In connection with the acquisition of Silversea Cruises, we recorded redeemable noncontrolling interest due to the put options held by the non-controlling interest shareholder, which may require us to purchase the remaining interest, or 33.3% of Silversea Cruises, upon the occurrence or nonoccurrence of certain future events that are not solely within our control. At the acquisition date, the estimated fair value of the redeemable noncontrolling interest was based on 33.3% of Silversea Cruises' equity value, which was determined based on the transaction price paid for 66.7% of Silversea Cruises. As of March 31, 2020, the non-controlling controlling interest shareholder's interest is presented as Redeemable noncontrolling interest and is classified outside of shareholders' equity in our consolidated balance sheets. Additionally, the noncontrolling interest's share in the net earnings (loss) and contractual accretion requirements associated with the put options are included in Net Income attributable to noncontrolling interest in our consolidated statements of comprehensive income (loss).
The following table presents changes in the redeemable noncontrolling interest as of March 31, 2020 (in thousands):
|
|
|
|
|
|
|
|
Beginning balance January 1, 2019
|
$
|
542,020
|
|
|
Net income attributable to noncontrolling interest, including the contractual accretion of the put options
|
28,713
|
|
|
Distribution to noncontrolling interest
|
(752)
|
|
|
Balance at December 31, 2019
|
$
|
569,981
|
|
|
|
|
|
Net income attributable to noncontrolling interest, including the contractual accretion of the put options
|
7,444
|
|
|
|
|
|
Ending balance March 31, 2020
|
$
|
577,425
|
|
Note 10. Commitments and Contingencies
Ship Purchase Obligations
Our future capital commitments consist primarily of new ship orders. As of March 31, 2020, we had one Quantum-class ship, two Oasis-class ships and three ships of a new generation, known as our Icon-class, on order for our Royal Caribbean International brand with an aggregate capacity of approximately 32,400 berths. As of March 31, 2020, we had two Edge-class ships on order for our Celebrity Cruises brand with an aggregate capacity of approximately 6,500 berths. Additionally, as of March 31, 2020, we have five ships on order for our Silversea Cruises brand with an aggregate capacity of approximately 2,400 berths.
In June 2019, Silversea Cruises entered into a $300 million unsecured term loan facility for the financing of Silver Moon to pay a portion of the ship's contract price through a facility guaranteed by us. We expect to draw upon this loan when we take delivery of the ship. The loan will be due and payable at maturity in June 2028. Interest on the loan will accrue at LIBOR plus 1.50%.
In September 2019, Silversea Cruises entered into two credit agreements, guaranteed by us, for the unsecured financing of the first and second Evolution-class ships for an amount of up to 80% of each ship's contract price through facilities to be guaranteed 95% by Euler Hermes, the official export credit agency of Germany. The maximum loan amount under each facility is not to exceed the United States dollar equivalent of €351.6 million in the case of the first Evolution-class ship and €359.0 million in the case of the second Evolution-class ship, or approximately $385.8 million and $393.9 million, respectively, based on the exchange rate at March 31, 2020. Each loan, once funded, will amortize semi-annually and will mature 12 years following the delivery of each ship. At our election, interest on each loan will accrue either (1) at a fixed rate of 4.14% and 4.18%, respectively (inclusive of the applicable margin) or (2) at a floating rate equal to LIBOR plus 0.79% and 0.83%, respectively. The first and second Evolution-class ships will each have a capacity of approximately 600 berths and are currently scheduled for delivery in the first quarters of 2022 and 2023, respectively.
In December 2019, we entered into a credit agreement for the unsecured financing of the sixth Oasis-class ship for up to 80% of the ship’s contract price through a facility to be guaranteed 100% by Bpifrance Assurance Export, the official export credit agency of France. Under the financing arrangement, we have the right, but not the obligation, to satisfy the obligations to be incurred upon delivery and acceptance of the ship under the shipbuilding contract by assuming, at delivery and acceptance, the debt indirectly incurred by the shipbuilder during the construction of the ship. The maximum loan amount under the facility is not to exceed the United States dollar equivalent of €1.3 billion, or approximately $1.4 billion based on the exchange rate at March 31, 2020. The loan will amortize semi-annually and will mature 12 years following delivery of the ship. Interest on the loan will accrue at a fixed rate of 3.00% (inclusive of margin). The sixth Oasis-class ship will have a capacity of approximately 5,700 berths and is currently scheduled for delivery in the fall of 2023.
In December 2019, we entered into a credit agreement for the unsecured financing of the third Icon-class ship for up to 80% of the ship’s contract price. Finnvera plc, the official export credit agency of Finland, has agreed to guarantee 95% of the substantial majority of the financing, with a smaller portion of the financing to be 95% guaranteed by Euler Hermes, the official German export credit agency. The maximum loan amount under the facility is not to exceed the United States dollar equivalent of €1.4 billion, or approximately $1.6 billion based on the exchange rate at March 31, 2020. The loan, once funded, will amortize semi-annually and will mature 12 years following the delivery of the ship. Approximately 60% of the loan will accrue interest at a fixed rate of 3.29%. The balance of the loan will accrue interest at a floating rate of LIBOR plus 0.85%. The third Icon-class ship will have a capacity of approximately 5,600 berths and is currently scheduled for delivery in the second quarter of 2025.
Our future capital commitments consist primarily of new ship orders. As of March 31, 2020, our Global Brands and Partner Brands have the following ships on order. COVID-19 has impacted shipyard operations and we expect that this will result in delivery delays of ships on order and will adjust the timing of our contractual ship deliveries:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ship
|
|
Shipyard
|
|
Contractual Delivery Dates
|
|
Approximate
Berths
|
|
Royal Caribbean International —
|
|
|
|
|
|
|
|
Oasis-class:
|
|
|
|
|
|
|
|
Wonder of the Seas
|
|
Chantiers de l'Atlantique
|
|
2nd Quarter 2021
|
|
5,700
|
|
Unnamed
|
|
Chantiers de l'Atlantique
|
|
4nd Quarter 2023
|
|
5,700
|
|
Quantum-class:
|
|
|
|
|
|
|
|
Odyssey of the Seas
|
|
Meyer Werft
|
|
4th Quarter 2020
|
|
4,200
|
|
Icon-class:
|
|
|
|
|
|
|
|
Unnamed
|
|
Meyer Turku Oy
|
|
2nd Quarter 2022
|
|
5,600
|
|
Unnamed
|
|
Meyer Turku Oy
|
|
2nd Quarter 2024
|
|
5,600
|
|
Unnamed
|
|
Meyer Turku Oy
|
|
2nd Quarter 2025
|
|
5,600
|
|
Celebrity Cruises —
|
|
|
|
|
|
|
|
Edge-class:
|
|
|
|
|
|
|
|
Celebrity Beyond
|
|
Chantiers de l'Atlantique
|
|
4th Quarter 2021
|
|
3,250
|
|
Unnamed
|
|
Chantiers de l'Atlantique
|
|
4th Quarter 2022
|
|
3,250
|
|
Silversea Cruises —
|
|
|
|
|
|
|
|
Silver Origin
|
|
De Hoop
|
|
2nd Quarter 2020
|
|
100
|
|
Muse-Class:
|
|
|
|
|
|
|
|
Silver Moon
|
|
Fincantieri
|
|
3rd Quarter 2020
|
|
550
|
|
Silver Dawn
|
|
Fincantieri
|
|
3rd Quarter 2021
|
|
550
|
|
Evolution Class:
|
|
|
|
|
|
|
|
Unnamed
|
|
Meyer Werft
|
|
1st Quarter 2022
|
|
600
|
|
Unnamed
|
|
Meyer Werft
|
|
1st Quarter 2023
|
|
600
|
|
TUI Cruises (50% joint venture) (2)—
|
|
|
|
|
|
|
|
Mein Schiff 7
|
|
Meyer Turku Oy
|
|
2nd Quarter 2023
|
|
2,900
|
|
Unnamed
|
|
Fincantieri
|
|
3rd Quarter 2024
|
|
4,100
|
|
Unnamed
|
|
Fincantieri
|
|
1st Quarter 2026
|
|
4,100
|
|
Total Berths
|
|
|
|
|
|
52,400
|
As of March 31, 2020, the aggregate cost of our ships on order presented in the table above, excluding any ships on order by our Partner Brands, was approximately $13.8 billion, of which we had deposited $810.9 million as of such date. Approximately 63.6% of the aggregate cost was exposed to fluctuations in the Euro exchange rate at March 31, 2020. Refer to Note 13. Fair Value Measurements and Derivative Instruments for further information.
In addition, as of March 31, 2020, we have an agreement in place with Chantiers de l'Atlantique to build an additional Edge-class ship for delivery in the 4th quarter of 2024, which is contingent upon completion of conditions precedent and financing.
Litigation
As previously reported in our Annual Report on Form 10-K for the year ended December 31, 2019, as updated by our Current Report on Form 8-K dated May 13, 2020, two lawsuits were filed against Royal Caribbean Cruises Ltd. in August 2019 in the U.S. District Court for the Southern District of Florida under Title III of the Cuban Liberty and Democratic Solidarity Act, also known as the Helms-Burton Act. The complaint filed by Havana Docks Corporation alleges it holds an interest in the Havana Cruise Port Terminal and the complaint filed by Javier Garcia-Bengochea alleges that he holds an interest in the Port of Santiago, Cuba, both of which were expropriated by the Cuban Government. The complaints further allege that Royal Caribbean Cruises Ltd. trafficked in those properties by embarking and disembarking passengers at these facilities. The plaintiffs seek all available statutory remedies, including the value of the expropriated property, plus interest, treble damages, attorneys’ fees and costs. Royal Caribbean Cruises Ltd. filed its answer to each complaint in October 2019. We believe we have meritorious defenses to the claims, and we intend to vigorously defend ourselves against them. We believe that it is unlikely that the outcome of these matters will have a material adverse impact to our financial condition, results of operations or cash
flows. However, the outcome of litigation is inherently unpredictable and subject to significant uncertainties, and there can be no assurances that the final outcome of this case will not be material.
We are also routinely involved in claims typical within the cruise vacation industry. The majority of these claims are covered by insurance. We believe the outcome of such claims, net of expected insurance recoveries, will not have a material adverse impact on our financial condition or results of operations and cash flows.
Other
If any person acquires ownership of more than 50% of our common stock or, subject to certain exceptions, during any 24-month period, a majority of our board of directors is no longer comprised of individuals who were members of our board of directors on the first day of such period, we may be obligated to prepay indebtedness outstanding under our credit facilities, which we may be unable to replace on similar terms. Our public debt securities also contain change of control provisions that would be triggered by a third-party acquisition of greater than 50% of our common stock coupled with a ratings downgrade. If this were to occur, it would have an adverse impact on our liquidity and operations.
Note 11. Shareholders’ Equity
During the first quarter of 2020, we declared a cash dividend on our common stock of $0.78 per share, which was paid in April 2020. During the first quarter of 2020, we also paid a cash dividend on our common stock of $0.78 per share, which was declared during the fourth quarter of 2019.
During the first quarter of 2019, we declared a cash dividend on our common stock of $0.70 per share, which was paid in April 2019. During the first quarter of 2019, we also paid a cash dividend on our common stock of $0.70 per share, which was declared during the fourth quarter of 2018.
Subsequent to March 31, 2020, we agreed with certain of our our lenders not to pay dividends or engage in common stock repurchases for so long as our debt covenant waivers are in effect.
Note 12. Changes in Accumulated Other Comprehensive Income (Loss)
The following table presents the changes in accumulated other comprehensive income (loss) by component for the quarters ended March 31, 2020 and 2019 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated Other Comprehensive Income (Loss) for the Quarter Ended March 31, 2020
|
|
|
|
|
|
|
|
Accumulated Other Comprehensive Income (Loss) for the Quarter Ended March 31, 2019
|
|
|
|
|
|
|
|
|
Changes related to cash flow derivative hedges
|
|
Changes in defined benefit plans
|
|
Foreign currency translation adjustments
|
|
Accumulated other comprehensive loss
|
|
Changes related to cash flow derivative hedges
|
|
Changes in defined benefit plans
|
|
Foreign currency translation adjustments
|
|
Accumulated other comprehensive loss
|
|
Accumulated comprehensive loss at beginning of the year
|
$
|
(688,529)
|
|
|
$
|
(45,558)
|
|
|
$
|
(63,626)
|
|
|
$
|
(797,713)
|
|
|
$
|
(537,216)
|
|
|
$
|
(26,023)
|
|
|
$
|
(64,495)
|
|
|
$
|
(627,734)
|
|
|
Other comprehensive income (loss) before reclassifications
|
(322,985)
|
|
|
(8,094)
|
|
|
10,290
|
|
|
(320,789)
|
|
|
61,565
|
|
|
(841)
|
|
|
564
|
|
|
61,288
|
|
|
Amounts reclassified from accumulated other comprehensive loss
|
22,380
|
|
|
505
|
|
|
—
|
|
|
22,885
|
|
|
(12,722)
|
|
|
188
|
|
|
—
|
|
|
(12,534)
|
|
|
Net current-period other comprehensive income (loss)
|
(300,605)
|
|
|
(7,589)
|
|
|
10,290
|
|
|
(297,904)
|
|
|
48,843
|
|
|
(653)
|
|
|
564
|
|
|
48,754
|
|
|
Ending balance
|
$
|
(989,134)
|
|
|
$
|
(53,147)
|
|
|
$
|
(53,336)
|
|
|
$
|
(1,095,617)
|
|
|
$
|
(488,373)
|
|
|
$
|
(26,676)
|
|
|
$
|
(63,931)
|
|
|
$
|
(578,980)
|
|
The following table presents reclassifications out of accumulated other comprehensive income (loss) for the quarters ended March 31, 2020 and 2019 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
|
|
|
|
|
|
|
|
|
|
Details About Accumulated Other Comprehensive Income (Loss) Components
|
|
Quarter Ended March 31, 2020
|
|
Quarter Ended March 31, 2019
|
|
|
|
|
|
Affected Line Item in Statements of
Comprehensive Income (Loss)
|
|
Gain (loss) on cash flow derivative hedges:
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps
|
|
$
|
(3,391)
|
|
|
$
|
(391)
|
|
|
|
|
|
|
Interest expense, net of interest capitalized
|
|
Foreign currency forward contracts
|
|
(3,337)
|
|
|
(3,334)
|
|
|
|
|
|
|
Depreciation and amortization expenses
|
|
Foreign currency forward contracts
|
|
(1,763)
|
|
|
(1,315)
|
|
|
|
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel swaps
|
|
344
|
|
|
(256)
|
|
|
|
|
|
|
Other income (expense)
|
|
Fuel swaps
|
|
(14,233)
|
|
|
18,018
|
|
|
|
|
|
|
Fuel
|
|
|
|
(22,380)
|
|
|
12,722
|
|
|
|
|
|
|
|
|
Amortization of defined benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|
Actuarial loss
|
|
(505)
|
|
|
(188)
|
|
|
|
|
|
|
Payroll and related
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(505)
|
|
|
(188)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total reclassifications for the period
|
|
$
|
(22,885)
|
|
|
$
|
12,534
|
|
|
|
|
|
|
|
Note 13. Fair Value Measurements and Derivative Instruments
Fair Value Measurements
The estimated fair value of our financial instruments that are not measured at fair value, categorized based upon the fair value hierarchy, are as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at March 31, 2020 Using
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at December 31, 2019 Using
|
|
|
|
|
|
|
|
|
|
Description
|
|
Total Carrying Amount
|
|
Total Fair Value
|
|
Level 1(1)
|
|
Level 2(2)
|
|
Level 3(3)
|
|
Total Carrying Amount
|
|
Total Fair Value
|
|
Level 1(1)
|
|
Level 2(2)
|
|
Level 3(3)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents(4)
|
|
$
|
3,890,811
|
|
|
$
|
3,890,811
|
|
|
$
|
3,890,811
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
243,738
|
|
|
$
|
243,738
|
|
|
$
|
243,738
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
3,890,811
|
|
|
$
|
3,890,811
|
|
|
$
|
3,890,811
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
243,738
|
|
|
$
|
243,738
|
|
|
$
|
243,738
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt (including current portion of debt)(5)
|
|
$
|
15,458,844
|
|
|
$
|
15,635,346
|
|
|
$
|
—
|
|
|
$
|
15,635,346
|
|
|
$
|
—
|
|
|
$
|
9,370,438
|
|
|
$
|
10,059,055
|
|
|
$
|
—
|
|
|
$
|
10,059,055
|
|
|
$
|
—
|
|
|
Total Liabilities
|
|
$
|
15,458,844
|
|
|
$
|
15,635,346
|
|
|
$
|
—
|
|
|
$
|
15,635,346
|
|
|
$
|
—
|
|
|
$
|
9,370,438
|
|
|
$
|
10,059,055
|
|
|
$
|
—
|
|
|
$
|
10,059,055
|
|
|
$
|
—
|
|
(1) Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.
(2) Inputs other than quoted prices included within Level 1 that are observable for the liability, either directly or indirectly. For unsecured revolving credit facilities and unsecured term loans, fair value is determined utilizing the income valuation approach. This valuation model takes into account the contract terms of our debt such as the debt maturity and the interest rate on the debt. The valuation model also takes into account the creditworthiness of the Company.
(3) Inputs that are unobservable. The Company did not use any Level 3 inputs as of March 31, 2020 and December 31, 2019.
(4) Consists of cash and marketable securities with original maturities of less than 90 days.
(5) Consists of unsecured revolving credit facilities, senior notes, senior debentures and term loans. These amounts do not include our capital lease obligations or commercial paper.
Other Financial Instruments
The carrying amounts of accounts receivable, accounts payable, accrued interest, accrued expenses and commercial paper approximate fair value at March 31, 2020 and December 31, 2019.
Assets and liabilities that are recorded at fair value have been categorized based upon the fair value hierarchy. The following table presents information about the Company’s financial instruments recorded at fair value on a recurring basis (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at March 31, 2020 Using
|
|
|
|
|
|
|
|
Fair Value Measurements at December 31, 2019 Using
|
|
|
|
|
|
|
|
Description
|
|
Total
|
|
Level 1(1)
|
|
Level 2(2)
|
|
Level 3(3)
|
|
Total
|
|
Level 1(1)
|
|
Level 2(2)
|
|
Level 3(3)
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments(4)
|
|
$
|
40,960
|
|
|
$
|
—
|
|
|
$
|
40,960
|
|
|
$
|
—
|
|
|
$
|
39,994
|
|
|
$
|
—
|
|
|
$
|
39,994
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
40,960
|
|
|
$
|
—
|
|
|
$
|
40,960
|
|
|
$
|
—
|
|
|
$
|
39,994
|
|
|
$
|
—
|
|
|
$
|
39,994
|
|
|
$
|
—
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments(5)
|
|
$
|
557,492
|
|
|
$
|
—
|
|
|
$
|
557,492
|
|
|
$
|
—
|
|
|
$
|
257,728
|
|
|
$
|
—
|
|
|
$
|
257,728
|
|
|
$
|
—
|
|
|
Contingent consideration (6)
|
|
11,381
|
|
|
—
|
|
|
—
|
|
|
11,381
|
|
|
62,400
|
|
|
—
|
|
|
—
|
|
|
62,400
|
|
|
Total Liabilities
|
|
$
|
568,873
|
|
|
$
|
—
|
|
|
$
|
557,492
|
|
|
$
|
11,381
|
|
|
$
|
320,128
|
|
|
$
|
—
|
|
|
$
|
257,728
|
|
|
$
|
62,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.
(2)Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. For foreign currency forward contracts, interest rate swaps and fuel swaps, fair value is derived using valuation models that utilize the income valuation approach. These valuation models take into account the contract terms, such as maturity, as well as other inputs, such as foreign exchange rates and curves, fuel types, fuel curves and interest rate yield curves. Derivative instrument fair values take into account the creditworthiness of the counterparty and the Company.
(3)Inputs that are unobservable.
(4)Consists of foreign currency forward contracts, interest rate swaps and fuel swaps.
(5)Consists of foreign currency forward contracts, interest rate swaps and fuel swaps.
(6)The contingent consideration related to the Silversea Cruises acquisition was estimated by applying a Monte-Carlo simulation method using our closing stock price along with significant inputs not observable in the market, including the probability of achieving the milestones and estimated future operating results. The Monte-Carlo simulation is a generally accepted statistical technique used to generate a defined number of valuation paths in order to develop a reasonable estimate of fair value.
The reported fair values are based on a variety of factors and assumptions. Accordingly, the fair values may not represent actual values of the financial instruments that could have been realized as of March 31, 2020 or December 31, 2019, or that will be realized in the future, and do not include expenses that could be incurred in an actual sale or settlement.
Nonfinancial Instruments Recorded at Fair Value on a Nonrecurring Basis
The following table presents information about the Company’s nonfinancial instruments recorded at fair value on a nonrecurring basis (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at March 31, 2020 Using
|
|
|
|
|
Description
|
Total Carrying Amount
|
Total Fair Value
|
Level 3
|
Total Impairment
|
|
Silversea Cruises Goodwill (1)
|
$
|
508,579
|
|
$
|
508,579
|
|
$
|
508,579
|
|
$
|
576,208
|
|
|
Indefinite-life intangible asset (2)
|
$
|
318,700
|
|
$
|
318,700
|
|
$
|
318,700
|
|
$
|
30,800
|
|
|
Long-lived assets - vessels(3)
|
$
|
156,270
|
|
$
|
156,270
|
|
$
|
156,270
|
|
$
|
417,057
|
|
|
Right-of-use assets(4)
|
$
|
57,068
|
|
$
|
57,068
|
|
$
|
57,068
|
|
$
|
45,945
|
|
|
Equity-method investments(5)
|
—
|
|
—
|
|
—
|
|
$
|
39,735
|
|
|
Total
|
$
|
1,040,617
|
|
$
|
1,040,617
|
|
$
|
1,040,617
|
|
$
|
1,109,745
|
|
_________________________________________________________________________________________________________
(1) We estimated the fair value of the Silversea Cruises reporting unit using a probability-weighted discounted cash flow model in combination with a market based valuation approach. The principal assumptions used in the discounted cash flow model are projected operating results, weighted-average cost of capital and terminal value. Significantly impacting these assumptions were changes in market conditions associated with COVID-19 and its impact to the business and related operating plans. The discounted cash flow model used our 2020 projected operating results as a base. To that base we added future years’ cash flows through 2030 assuming multiple revenue and expense scenarios that reflect the impact of different global economic environments for this period on Silversea Cruises' reporting unit. We assigned a probability to each revenue and expense scenario. We discounted the projected cash flows using rates specific to Silversea Cruises' reporting unit based on its weighted-average cost of capital, which was determined to be 12.75%. A significant input in performing the fair value assessment for the Silversea Cruises goodwill was forecasted operating results, which takes into consideration expected ship deliveries, including ship options.
(2) We estimated the fair value of our indefinite-life intangible asset using a discounted cash flow model and the relief-from-royalty method. The trade name relates to Silversea Cruises and we used a discount rate of 13.25%, comparable to the rate used in valuing the Silversea Cruises reporting unit. Significant inputs in performing the fair value assessment for the trade name were the royalty rate of 3.0% and forecasted net revenues, which takes into consideration expected ship deliveries, including ship options.
(3) We estimated the fair value of two of our vessels using a blended indication from the income and cost approaches. The fair value of the remaining vessels was estimated primarily based on their orderly liquidation values. A significant input in performing the fair value assessments for these vessels was management's expected use of the vessels, which takes into consideration forecasted operating results.
(4) Impairments to our right-of-use assets relate to certain of our berthing arrangements. We estimated the fair value of these right-of-use assets using estimated projected discounted cash flows. A significant input in performing the fair value assessments for these assets was our expected passenger headcount.
(5) We estimated the fair value of our other than temporarily impaired equity-method investments using a discounted cash flow model. A significant input in performing the fair value assessments for these assets was forecasted operating results for these investments.
We believe that our estimates and judgments related to the fair values of goodwill, intangibles and long-lived assets discussed above are reasonable. A change in the conditions, circumstances or strategy which influence determinations of fair value, may result in the recognition of additional impairment charges.
Master Netting Agreements
We have master International Swaps and Derivatives Association (“ISDA”) agreements in place with our derivative instrument counterparties. These ISDA agreements generally provide for final close out netting with our counterparties for all positions in the case of default or termination of the ISDA agreement. We have determined that our ISDA agreements provide us with rights of setoff on the fair value of derivative instruments in a gain position and those in a loss position with the same counterparty. We have elected not to offset such derivative instrument fair values in our consolidated balance sheets.
See Credit Related Contingent Features for further discussion on contingent collateral requirements for our derivative instruments.
The following table presents information about the Company’s offsetting of financial assets under master netting agreements with derivative counterparties (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March 31, 2020
|
|
|
|
|
|
|
|
As of December 31, 2019
|
|
|
|
|
|
|
|
|
|
Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet
|
|
Gross Amount of Eligible Offsetting
Recognized
Derivative Liabilities
|
|
Cash Collateral
Received
|
|
Net Amount of
Derivative Assets
|
|
Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet
|
|
Gross Amount of Eligible Offsetting
Recognized
Derivative Assets
|
|
Cash Collateral
Received
|
|
Net Amount of
Derivative Assets
|
|
Derivatives subject to master netting agreements
|
|
$
|
40,960
|
|
|
$
|
(40,960)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
39,994
|
|
|
$
|
(39,994)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
40,960
|
|
|
$
|
(40,960)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
39,994
|
|
|
$
|
(39,994)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
The following table presents information about the Company’s offsetting of financial liabilities under master netting agreements with derivative counterparties (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March 31, 2020
|
|
|
|
|
|
|
|
As of December 31, 2019
|
|
|
|
|
|
|
|
|
|
Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet
|
|
Gross Amount of Eligible Offsetting
Recognized
Derivative Assets
|
|
Cash Collateral
Pledged
|
|
Net Amount of
Derivative Liabilities
|
|
Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet
|
|
Gross Amount of Eligible Offsetting
Recognized
Derivative Liabilities
|
|
Cash Collateral
Pledged
|
|
Net Amount of
Derivative Liabilities
|
|
Derivatives subject to master netting agreements
|
|
$
|
(557,492)
|
|
|
$
|
40,960
|
|
|
$
|
—
|
|
|
$
|
(516,532)
|
|
|
$
|
(257,728)
|
|
|
$
|
39,994
|
|
|
$
|
—
|
|
|
$
|
(217,734)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
(557,492)
|
|
|
$
|
40,960
|
|
|
$
|
—
|
|
|
$
|
(516,532)
|
|
|
$
|
(257,728)
|
|
|
$
|
39,994
|
|
|
$
|
—
|
|
|
$
|
(217,734)
|
|
Concentrations of Credit Risk
We monitor our credit risk associated with financial and other institutions with which we conduct significant business and, to minimize these risks, we select counterparties with credit risks acceptable to us and we seek to limit our exposure to an individual counterparty. Credit risk, including but not limited to counterparty nonperformance under derivative instruments, our credit facilities and new ship progress payment guarantees, is not considered significant, as we primarily conduct business with large, well-established financial institutions, insurance companies and export credit agencies many of which we have long-term relationships with and which have credit risks acceptable to us or where the credit risk is spread out among a large number of counterparties. As of March 31, 2020 we had counterparty credit risk exposure under our derivative instruments of $19.2 million, which were limited to the cost of replacing the contracts in the event of non-performance by the counterparties to the contracts, the majority of which are currently our lending banks. We do not anticipate nonperformance by any of our significant counterparties. In addition, we have established guidelines we follow regarding credit ratings and instrument maturities to maintain safety and liquidity. We do not normally require collateral or other security to support credit relationships; however, in certain circumstances this option is available to us.
Derivative Instruments
We are exposed to market risk attributable to changes in interest rates, foreign currency exchange rates and fuel prices. We try to mitigate these risks through a combination of our normal operating and financing activities and through the use of derivative financial instruments pursuant to our hedging practices and policies. The financial impact of these hedging instruments is primarily offset by corresponding changes in the underlying exposures being hedged. We achieve this by closely matching the notional amount, term and conditions of the derivative instrument with the underlying risk being hedged. Although certain of our derivative financial instruments do not qualify or are not accounted for under hedge accounting, our objective is not to hold or issue derivative financial instruments for trading or other speculative purposes.
We enter into various forward, swap and option contracts to manage our interest rate exposure and to limit our exposure to fluctuations in foreign currency exchange rates and fuel prices. These instruments are recorded on the balance sheet at their fair value and the vast majority are designated as hedges. We also use non-derivative financial instruments designated as hedges of our net investment in our foreign operations and investments.
At inception of the hedge relationship, a derivative instrument that hedges the exposure to changes in the fair value of a firm commitment or a recognized asset or liability is designated as a fair value hedge. A derivative instrument that hedges a forecasted transaction or the variability of cash flows related to a recognized asset or liability is designated as a cash flow hedge.
Changes in the fair value of derivatives that are designated as fair value hedges are offset against changes in the fair value of the underlying hedged assets, liabilities or firm commitments. Gains and losses on derivatives that are designated as cash flow hedges are recorded as a component of Accumulated other comprehensive loss until the underlying hedged transactions are recognized in earnings. The foreign currency transaction gain or loss of our non-derivative financial instruments and the changes in the fair value of derivatives designated as hedges of our net investment in foreign operations and investments are recognized as a component of Accumulated other comprehensive loss along with the associated foreign currency translation adjustment of the foreign operation or investment, with the amortization of excluded components affecting earnings.
On an ongoing basis, we assess whether derivatives used in hedging transactions are "highly effective" in offsetting changes in the fair value or cash flow of hedged items. For our net investment hedges, we use the dollar offset method to measure effectiveness. For all other hedging programs, we use the long-haul method to assess hedge effectiveness using regression analysis for each hedge relationship. The methodology for assessing hedge effectiveness is applied on a consistent basis for each one of our hedging programs (i.e., interest rate, foreign currency ship construction, foreign currency net investment and fuel). For our regression analyses, we use an observation period of up to three years, utilizing market data relevant to the hedge horizon of each hedge relationship. High effectiveness is achieved when a statistically valid relationship reflects a high degree of offset and correlation between the changes in the fair values of the derivative instrument and the hedged item. If it is determined that a derivative is not highly effective as a hedge or hedge accounting is discontinued, any change in fair value of the derivative since the last date at which it was determined to be effective is recognized in earnings.
Cash flows from derivative instruments that are designated as fair value or cash flow hedges are classified in the same category as the cash flows from the underlying hedged items. In the event that hedge accounting is discontinued, cash flows subsequent to the date of discontinuance are classified within investing activities. Cash flows from derivative instruments not designated as hedging instruments are classified as investing activities.
We consider the classification of the underlying hedged item’s cash flows in determining the classification for the designated derivative instrument’s cash flows. We classify derivative instrument cash flows from hedges of benchmark interest rate or hedges of fuel expense as operating activities due to the nature of the hedged item. Likewise, we classify derivative instrument cash flows from hedges of foreign currency risk on our newbuild ship payments as investing activities.
Interest Rate Risk
Our exposure to market risk for changes in interest rates primarily relates to our debt obligations including future interest payments. At March 31, 2020 and December 31, 2019, approximately 47.0% and 62.1%, respectively, of our debt was effectively fixed. We use interest rate swap agreements to modify our exposure to interest rate movements and to manage our interest expense.
Market risk associated with our fixed rate debt is the potential increase in fair value resulting from a decrease in interest rates. We use interest rate swap agreements that effectively convert a portion of our fixed-rate debt to a floating-rate basis to manage this risk. At March 31, 2020 and December 31, 2019, we maintained interest rate swap agreements on the following fixed-rate debt instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Instrument
|
Swap Notional as of March 31, 2020 (In thousands)
|
Maturity
|
Debt Fixed Rate
|
Swap Floating Rate: LIBOR plus
|
All-in Swap Floating Rate as of March 31, 2020
|
|
Oasis of the Seas term loan
|
$
|
70,000
|
|
October 2021
|
5.41%
|
3.87%
|
5.8%
|
|
Unsecured senior notes
|
650,000
|
|
November 2022
|
5.25%
|
3.63%
|
5.32%
|
|
|
$
|
720,000
|
|
|
|
|
|
These interest rate swap agreements are accounted for as fair value hedges.
Market risk associated with our long-term floating rate debt is the potential increase in interest expense from an increase in interest rates. We use interest rate swap agreements that effectively convert a portion of our floating-rate debt to a fixed-rate basis to manage this risk. At March 31, 2020 and December 31, 2019, we maintained interest rate swap agreements on the following floating-rate debt instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Instrument
|
Swap Notional as of March 31, 2020 (In thousands)
|
Maturity
|
Debt Floating Rate
|
|
All-in Swap Fixed Rate
|
|
Celebrity Reflection term loan
|
$
|
272,708
|
|
October 2024
|
LIBOR plus
|
|
0.40%
|
|
2.85%
|
|
Quantum of the Seas term loan
|
428,750
|
|
October 2026
|
LIBOR plus
|
|
1.30%
|
|
3.74%
|
|
Anthem of the Seas term loan
|
453,125
|
|
April 2027
|
LIBOR plus
|
|
1.30%
|
|
3.86%
|
|
Ovation of the Seas term loan
|
587,917
|
|
April 2028
|
LIBOR plus
|
|
1.00%
|
|
3.16%
|
|
Harmony of the Seas term loan (1)
|
538,899
|
|
May 2028
|
EURIBOR plus
|
|
1.15%
|
|
2.26%
|
|
Odyssey of the Seas term loan (2)
|
460,000
|
|
October 2032
|
LIBOR plus
|
|
0.95%
|
|
3.20%
|
|
Odyssey of the Seas term loan (2)
|
191,667
|
|
October 2032
|
LIBOR plus
|
|
0.95%
|
|
2.83%
|
|
|
$
|
2,933,066
|
|
|
|
|
|
(1)Interest rate swap agreements hedging the Euro-denominated term loan for Harmony of the Seas include EURIBOR zero-floor matching the hedged debt EURIBOR zero-floor. Amount presented is based on the exchange rate as of March 31, 2020.
(2)Interest rate swap agreements hedging the term loan of Odyssey of the Seas include LIBOR zero-floors matching the debt LIBOR zero-floor. The effective dates of the $460.0 million and $191.7 million interest rate swap agreements are October 2020 and October 2022, respectively. The anticipated unsecured term loan for the financing of Odyssey of the Seas was initially expected to be drawn in October 2020. However, due to the impact of COVID-19 to shipyard operations, there may be a delay in the ship delivery.
These interest rate swap agreements are accounted for as cash flow hedges.
The notional amount of interest rate swap agreements related to outstanding debt and our current unfunded financing arrangements as of March 31, 2020 and December 31, 2019 was $3.7 billion and $3.5 billion, respectively.
Foreign Currency Exchange Rate Risk
Derivative Instruments
Our primary exposure to foreign currency exchange rate risk relates to our ship construction contracts denominated in Euros, our foreign currency denominated debt and our international business operations. We enter into foreign currency forward contracts to manage portions of the exposure to movements in foreign currency exchange rates. As of March 31, 2020, the aggregate cost of our ships on order was $13.8 billion, of which we had deposited $810.9 million as of such date. These amounts do not include any ships placed on order that are contingent upon completion of conditions precedent and/or financing, any ships on order by our Partner Brands and any ships on order placed by Silversea Cruises during the reporting lag period. Refer to Note 10. Commitments and Contingencies, for further information on our ships on order. At March 31, 2020 and December 31, 2019, approximately 63.6% and 65.9%, respectively, of the aggregate cost of the ships under construction was exposed to fluctuations in the Euro exchange rate. Our foreign currency forward contract agreements are accounted for as cash flow or net investment hedges depending on the designation of the related hedge.
On a regular basis, we enter into foreign currency forward contracts and, from time to time, we utilize cross-currency swap agreements and collar options to minimize the volatility resulting from the remeasurement of net monetary assets and liabilities denominated in a currency other than our functional currency or the functional currencies of our foreign subsidiaries. During the first quarter of 2020, we maintained an average of approximately $549.8 million of these foreign currency forward contracts. These instruments are not designated
as hedging instruments. For the quarters ended March 31, 2020 and 2019, changes in the fair value of the foreign currency forward contracts resulted in a loss and a gain of $(52.7) million and $5.0 million, respectively. These amounts were recognized in earnings within Other income (expense) in our consolidated statements of comprehensive income (loss).
We consider our investments in our foreign operations to be denominated in relatively stable currencies and to be of a long-term nature. As of March 31, 2020, we maintained foreign currency forward contracts and designated them as hedges of a portion of our net investments primarily in TUI Cruises of €245.0 million, or approximately $268.8 million based on the exchange rate at March 31, 2020. These forward currency contracts mature in October 2021.
The notional amount of outstanding foreign exchange contracts, excluding the forward contracts entered into to minimize remeasurement volatility, as of both March 31, 2020 and December 31, 2019 was $3.7 billion and $2.9 billion, respectively.
Non-Derivative Instruments
We also address the exposure of our investments in foreign operations by denominating a portion of our debt in our subsidiaries’ and investments’ functional currencies and designating it as a hedge of these subsidiaries and investments. We had designated debt as a hedge of our net investments primarily in TUI Cruises of €286.0 million, or approximately $313.8 million, as of March 31, 2020. As of December 31, 2019, we had designated debt as a hedge of our net investments in TUI Cruises of €319.0 million, or approximately $358.1 million.
Fuel Price Risk
Our exposure to market risk for changes in fuel prices relates primarily to the consumption of fuel on our ships. We use fuel swap agreements to mitigate the financial impact of fluctuations in fuel prices.
Our fuel swap agreements are generally accounted for as cash flow hedges. In the case that our hedged forecasted fuel consumption is not probable of occurring, hedge accounting will be discontinued and the related accumulated other comprehensive gain or loss will be reclassified to Other income (expense) immediately.
At March 31, 2020, we have hedged the variability in future cash flows for certain forecasted fuel transactions occurring through 2023. As of March 31, 2020 and December 31, 2019, we had the following outstanding fuel swap agreements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel Swap Agreements
|
|
|
|
|
As of March 31, 2020
|
|
As of December 31, 2019
|
|
|
(metric tons)
|
|
|
|
2020(1)
|
596,850
|
|
|
830,500
|
|
|
2021
|
614,900
|
|
|
488,900
|
|
|
2022
|
404,300
|
|
|
322,900
|
|
|
2023
|
82,400
|
|
|
82,400
|
|
|
|
|
|
|
(1) As a result of the COVID-19 pandemic, we discontinued cash flow hedge accounting on 0.2 million metric tons of our fuel swap agreements maturing in 2020 as of March 31, 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel Swap Agreements
|
|
|
|
|
As of March 31, 2020
|
|
As of December 31, 2019
|
|
|
(% hedged)
|
|
|
|
Projected fuel purchases:
|
|
|
|
|
2020
|
60
|
%
|
|
54
|
%
|
|
2021
|
39
|
%
|
|
30
|
%
|
|
2022
|
23
|
%
|
|
19
|
%
|
|
2023
|
5
|
%
|
|
5
|
%
|
|
|
|
|
|
At March 31, 2020, $70.8 million of estimated unrealized loss associated with our cash flow hedges pertaining to fuel swap agreements is expected to be reclassified to earnings from Accumulated other comprehensive loss within the next twelve months. Reclassification is expected to occur as the result of fuel consumption associated with our hedged forecasted fuel purchases.
The fair value and line item caption of derivative instruments recorded within our consolidated balance sheets were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value of Derivative Instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Derivatives
|
|
|
|
|
|
Liability Derivatives
|
|
|
|
|
|
|
|
Balance Sheet Location
|
|
As of March 31, 2020
|
|
As of December 31, 2019
|
|
Balance Sheet Location
|
|
As of March 31, 2020
|
|
As of December 31, 2019
|
|
|
|
|
|
Fair Value
|
|
Fair Value
|
|
|
|
Fair Value
|
|
Fair Value
|
|
Derivatives designated as hedging instruments under ASC 815-20(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps
|
|
Other assets
|
|
$
|
19,787
|
|
|
$
|
11
|
|
|
Other long-term liabilities
|
|
$
|
113,312
|
|
|
$
|
64,168
|
|
|
Foreign currency forward contracts
|
|
Derivative financial instruments
|
|
—
|
|
|
—
|
|
|
Derivative financial instruments
|
|
75,862
|
|
|
75,260
|
|
|
Foreign currency forward contracts
|
|
Other assets
|
|
21,173
|
|
|
9,380
|
|
|
Other long-term liabilities
|
|
119,303
|
|
|
64,711
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel swaps
|
|
Derivative financial instruments
|
|
—
|
|
|
16,922
|
|
|
Derivative financial instruments
|
|
66,098
|
|
|
16,901
|
|
|
Fuel swaps
|
|
Other assets
|
|
—
|
|
|
8,677
|
|
|
Other long-term liabilities
|
|
119,472
|
|
|
33,965
|
|
|
Total derivatives designated as hedging instruments under 815-20
|
|
|
|
40,960
|
|
|
34,990
|
|
|
|
|
494,047
|
|
|
255,005
|
|
|
Derivatives not designated as hedging instruments under ASC 815-20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency forward contracts
|
|
Derivative financial instruments
|
|
$
|
—
|
|
|
$
|
3,186
|
|
|
Derivative financial instruments
|
|
$
|
—
|
|
|
$
|
2,419
|
|
|
Foreign currency forward contracts
|
|
Other assets
|
|
—
|
|
|
—
|
|
|
Other long-term liabilities
|
|
—
|
|
|
—
|
|
|
Fuel swaps
|
|
Derivative financial instruments
|
|
—
|
|
|
1,643
|
|
|
Derivative financial instruments
|
|
61,347
|
|
|
295
|
|
|
Fuel swaps
|
|
Other Assets
|
|
—
|
|
|
175
|
|
|
Other long-term liabilities
|
|
2,098
|
|
|
9
|
|
|
Total derivatives not designated as hedging instruments under 815-20
|
|
|
|
—
|
|
|
5,004
|
|
|
|
|
63,445
|
|
|
2,723
|
|
|
Total derivatives
|
|
|
|
$
|
40,960
|
|
|
$
|
39,994
|
|
|
|
|
$
|
557,492
|
|
|
$
|
257,728
|
|
(1)Accounting Standard Codification 815-20 “Derivatives and Hedging.”
The location and amount of gain or (loss) recognized in income on fair value and cash flow hedging relationships were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended March 31, 2020
|
|
|
|
|
|
|
|
|
|
Quarter Ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel Expense
|
|
Depreciation and Amortization Expenses
|
|
Interest Income (Expense)
|
|
Other Income (Expense)
|
|
|
|
Fuel Expense
|
|
Depreciation and Amortization Expenses
|
|
Interest Income (Expense)
|
|
Other Income (Expense)
|
|
Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded
|
|
|
|
|
|
$194,268
|
|
$324,330
|
|
$(87,377)
|
|
$(32,859)
|
|
|
|
$160,171
|
|
$292,285
|
|
$(90,631)
|
|
$(5,088)
|
|
The effects of fair value and cash flow hedging:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain or (loss) on fair value hedging relationships in Subtopic 815-20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedged items
|
|
|
n/a
|
|
n/a
|
|
$(21,330)
|
|
$—
|
|
|
|
n/a
|
|
n/a
|
|
(8,459)
|
|
$—
|
|
|
|
|
Derivatives designated as hedging instruments
|
|
|
n/a
|
|
n/a
|
|
$20,430
|
|
$—
|
|
|
|
n/a
|
|
n/a
|
|
$(2,257)
|
|
$8,092
|
|
|
Gain or (loss) on cash flow hedging relationships in Subtopic 815-20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of gain or (loss) reclassified from accumulated other comprehensive income (loss) into income
|
|
|
n/a
|
|
n/a
|
|
$(3,391)
|
|
n/a
|
|
|
|
n/a
|
|
n/a
|
|
$(391)
|
|
n/a
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of gain or (loss) reclassified from accumulated other comprehensive income (loss) into income
|
|
|
$(14,233)
|
|
n/a
|
|
n/a
|
|
$344
|
|
|
|
$18,018
|
|
n/a
|
|
n/a
|
|
$(256)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of gain or (loss) reclassified from accumulated other comprehensive income (loss) into income
|
|
|
n/a
|
|
$(3,337)
|
|
n/a
|
|
$(1,763)
|
|
|
|
n/a
|
|
$(3,334)
|
|
n/a
|
|
$(1,315)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The carrying value and line item caption of non-derivative instruments designated as hedging instruments recorded within our consolidated balance sheets were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying Value
|
|
|
Non-derivative instrument designated as
hedging instrument under ASC 815-20
|
|
Balance Sheet Location
|
|
As of March 31, 2020
|
|
As of December 31, 2019
|
|
Foreign currency debt
|
|
Current portion of debt
|
|
$
|
70,293
|
|
|
$
|
73,572
|
|
|
Foreign currency debt
|
|
Long-term debt
|
|
243,506
|
|
|
284,506
|
|
|
|
|
|
|
$
|
313,799
|
|
|
$
|
358,078
|
|
The effect of derivative instruments qualifying and designated as hedging instruments and the related hedged items in fair value hedges on the consolidated statements of comprehensive income (loss) was as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives and Related Hedged Items under ASC 815-20 Fair Value Hedging Relationships
|
|
Location of Gain (Loss) Recognized in Income on Derivative and Hedged Item
|
|
Amount of Gain (Loss)
Recognized in
Income on Derivative
|
|
|
|
|
|
|
|
Amount of Gain (Loss)
Recognized in
Income on Hedged Item
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended March 31, 2020
|
|
Quarter Ended March 31, 2019
|
|
|
|
|
|
Quarter Ended March 31, 2020
|
|
Quarter Ended March 31, 2019
|
|
|
|
|
|
Interest rate swaps
|
|
Interest expense, net of interest capitalized
|
|
$
|
20,430
|
|
|
$
|
(2,257)
|
|
|
|
|
|
|
$
|
(21,330)
|
|
|
$
|
(8,459)
|
|
|
|
|
|
|
Interest rate swaps
|
|
Other income (expense)
|
|
—
|
|
|
8,092
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
20,430
|
|
|
$
|
5,835
|
|
|
|
|
|
|
$
|
(21,330)
|
|
|
$
|
(8,459)
|
|
|
|
|
|
The fair value and line item caption of derivative instruments recorded within our consolidated balance sheets for the cumulative basis adjustment for fair value hedges were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Line Item in the Statement of Financial Position Where the Hedged Item is Included
|
|
Carrying Amount of the Hedged Liabilities
|
|
|
|
Cumulative amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liabilities
|
|
|
|
|
|
As of March 31, 2020
|
|
As of December 31, 2019
|
|
As of March 31, 2020
|
|
As of December 31, 2019
|
|
Current portion of debt and Long-term debt
|
|
$
|
736,885
|
|
|
$
|
715,234
|
|
|
$
|
20,029
|
|
|
$
|
(1,301)
|
|
|
|
|
$
|
736,885
|
|
|
$
|
715,234
|
|
|
$
|
20,029
|
|
|
$
|
(1,301)
|
|
The effect of derivative instruments qualifying and designated as cash flow hedging instruments on the consolidated financial statements was as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives
under ASC 815-20 Cash Flow Hedging Relationships
|
|
Amount of Gain (Loss) Recognized in
Accumulated Other
Comprehensive Income (Loss) on Derivative
|
|
|
|
|
|
|
|
Location of
Gain (Loss)
Reclassified
from
Accumulated
Other Comprehensive
Loss into Income
|
|
Amount of Gain (Loss) Reclassified from
Accumulated Other Comprehensive Income (Loss) into Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended March 31, 2020
|
|
Quarter Ended March 31, 2019
|
|
|
|
|
|
|
|
Quarter Ended March 31, 2020
|
|
Quarter Ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps
|
|
$
|
(52,595)
|
|
|
$
|
(28,329)
|
|
|
|
|
|
|
Interest expense, net of interest capitalized
|
|
$
|
(3,391)
|
|
|
$
|
(391)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency forward contracts
|
|
(100,014)
|
|
|
(90,144)
|
|
|
|
|
|
|
Depreciation and amortization expenses
|
|
(3,337)
|
|
|
(3,334)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency forward contracts
|
|
—
|
|
|
—
|
|
|
|
|
|
|
Other income (expense)
|
|
(1,763)
|
|
|
(1,315)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel swaps
|
|
—
|
|
|
—
|
|
|
|
|
|
|
Other income (expense)
|
|
344
|
|
|
(256)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel swaps
|
|
(170,376)
|
|
|
180,038
|
|
|
|
|
|
|
Fuel
|
|
(14,233)
|
|
|
18,018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(322,985)
|
|
|
$
|
61,565
|
|
|
|
|
|
|
|
|
$
|
(22,380)
|
|
|
$
|
12,722
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The table below represents amounts excluded from the assessment of effectiveness for our net investment hedging instruments for which the difference between changes in fair value and periodic amortization is recorded in accumulated other comprehensive income (loss) (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (Loss) Recognized in Income (Net Investment Excluded Components)
|
|
|
|
Three Months Ended March 31, 2020
|
|
|
|
|
|
|
|
Net inception fair value at January 1, 2020
|
|
|
|
$
|
(8,008)
|
|
|
Amount of gain recognized in income on derivatives for the period ended March 31, 2020
|
|
|
|
1,617
|
|
|
Amount of gain (loss) remaining to be amortized in accumulated other comprehensive loss, as of March 31, 2020
|
|
|
|
1,654
|
|
|
Fair value at March 31, 2020
|
|
|
|
$
|
(4,737)
|
|
The effect of non-derivative instruments qualifying and designated as net investment hedging instruments on the consolidated financial statements was as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-derivative instruments under ASC 815-20 Net
Investment Hedging Relationships
|
|
Quarter Ended March 31, 2020
|
|
Quarter Ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign Currency Debt
|
|
$
|
7,489
|
|
|
$
|
5,702
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
7,489
|
|
|
$
|
5,702
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
There was no amount recognized in income (ineffective portion and amount excluded from effectiveness testing) for the quarters ended March 31, 2020.
The effect of derivatives not designated as hedging instruments on the consolidated financial statements was as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of Gain (Loss) Recognized in Income on Derivatives
|
|
|
|
|
|
|
Derivatives Not Designated as Hedging
Instruments under ASC 815-20
|
|
Location of
Gain (Loss) Recognized in
Income on Derivatives
|
|
Quarter Ended March 31, 2020
|
|
Quarter Ended March 31, 2019
|
|
|
|
|
|
Foreign currency forward contracts
|
|
Other income (expense)
|
|
$
|
(52,676)
|
|
|
$
|
5,014
|
|
|
|
|
|
|
Fuel swaps
|
|
Fuel
|
|
—
|
|
|
(136)
|
|
|
|
|
|
|
Fuel swaps
|
|
Other income (expense)
|
|
(67,206)
|
|
|
(98)
|
|
|
|
|
|
|
|
|
|
|
$
|
(119,882)
|
|
|
$
|
4,780
|
|
|
|
|
|
The current suspension of our cruise operations due to the COVID-19 pandemic resulted in changes to our forecasted fuel purchases. As of March 31, 2020, we discontinued cash flow hedge accounting on 0.2 million metric tons of our fuel swap agreements. The discontinuance of the hedging relationship for these fuel swap agreements resulted in the reclassification of a net $54.9 million loss from Accumulated other comprehensive loss to Other expense.
Credit Related Contingent Features
Our current interest rate derivative instruments require us to post collateral if our Standard & Poor’s and Moody’s credit ratings fall below specified levels. Specifically, under most of our agreements, if on the fifth anniversary of executing a derivative instrument, or on any succeeding fifth-year anniversary, our credit ratings for our senior unsecured debt is rated below BBB- by Standard & Poor’s and Baa3 by Moody’s, then the counterparty will periodically demand that we post collateral in an amount equal to the difference between (i) the net market value of all derivative transactions with such counterparty that have reached their fifth year anniversary, to the extent negative, and (ii) the applicable minimum call amount.
The amount of collateral required to be posted will change as, and to the extent, our net liability position increases or decreases by more than the applicable minimum call amount. If our credit rating for our senior unsecured debt is subsequently equal to or above BBB- by Standard & Poor’s or Baa3 by Moody’s, then any collateral posted at such time will be released to us and we will no longer be required to post collateral unless we meet the collateral trigger requirement, generally, at the next fifth-year anniversary.
At March 31, 2020, our senior unsecured debt credit rating was BBB- by Standard & Poor's and Baa3 by Moody's and as such we were not required to post collateral. We currently have five interest rate derivative hedges that have a term of at least five years. On April 2, 2020, S&P Global downgraded us from BBB- to BB and on May 13, 2020, Moody’s downgraded us from Baa3 to Ba2. Based on our current projected fair value of certain derivative instruments in net liability positions, on or prior to September 23, 2020, we will be required to post collateral of approximately $80.4 million.
Note 14. Restructuring Charges
For the quarter ended March 31, 2020, we incurred restructuring charges of $5.5 million in connection with our international sales and marketing strategy. We did not incur restructuring charges for the quarter ended March 31, 2019.
Centralization of Global Sales and Marketing Structure
During the year ended December 31, 2019, we implemented a strategy related to the restructuring and centralization of our international sales and marketing structure. Activities related to this strategy focused on moving from a multi-brand sales model to a brand dedicated sales model, which resulted in the consolidation of some of our international offices and personnel reorganization among our sales and marketing teams. The personnel reorganization resulted in the recognition of a liability for one-time termination benefits during the twelve months ended December 31, 2019. We also incurred contract termination costs related to the closure of some of our international offices and other related costs consisting of legal and consulting fees to implement this initiative. As a result of these actions, we incurred restructuring exit costs of $12.0 million for the year ended December 31, 2019, which were reported within Marketing, selling and administrative expenses in our consolidated statements of comprehensive income (loss). As of March 31, 2020, we incurred $5.5 million and we expected to incur $5.6 million additional costs as it relates to the restructuring activities of this strategy.
The following table summarizes our restructuring exit costs (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance January 1, 2020
|
|
Accruals
|
|
Payments
|
|
Ending balance March 31, 2020
|
|
Cumulative
Charges
Incurred
|
|
Expected
Additional
Expenses
to be
Incurred
|
|
Termination benefits
|
$
|
8,389
|
|
|
$
|
761
|
|
|
$
|
1,824
|
|
|
$
|
7,326
|
|
|
$
|
9,641
|
|
|
$
|
2,220
|
|
|
Contract termination costs
|
338
|
|
|
—
|
|
|
—
|
|
|
338
|
|
|
338
|
|
|
300
|
|
|
Other related costs
|
2,785
|
|
|
4,786
|
|
|
2,408
|
|
|
5,163
|
|
|
7,594
|
|
|
3,036
|
|
|
Total
|
$
|
11,512
|
|
|
$
|
5,547
|
|
|
$
|
4,232
|
|
|
$
|
12,827
|
|
|
$
|
17,573
|
|
|
$
|
5,556
|
|
Operating Expense Reduction in Workforce
In April 2020, we reduced our US shoreside workforce by approximately 23% through a combination of permanent layoffs and 90-day furloughs with paid benefits. We incurred severance costs of $26.9 million in April 2020.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Note Concerning Forward-Looking Statements
The discussion under this caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this document includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, business and industry prospects or future results of operations or financial position, made in this Quarterly Report on Form 10-Q are forward-looking. Words such as "anticipate," "believe," "could," "estimate," "expect," "goal," "intend," "may," "plan," "project," "seek," "should," "will," "driving" and similar expressions are intended to further identify any of these forward-looking statements. Forward-looking statements reflect management's current expectations but they are based on judgments and are inherently uncertain. Furthermore, they are subject to risks, uncertainties and other factors that could cause our actual results, performance or achievements to differ materially from the future results, performance or achievements expressed or implied in those forward-looking statements. Examples of these risks, uncertainties and other factors include, but are not limited to, those discussed in this Quarterly Report on Form 10-Q and, in particular, the risks discussed under the caption "Risk Factors" in Part II, Item 1A herein.
All forward-looking statements made in this Quarterly Report on Form 10-Q speak only as of the date of this document. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Overview
The discussion and analysis of our financial condition and results of operations is organized to present the following:
•a review of our financial presentation, including discussion of certain operational and financial metrics we utilize to assist us in managing our business;
•a discussion of our results of operations for the quarter ended March 31, 2020 compared to the same period in 2019;
•a discussion of our business outlook
•a discussion of our liquidity and capital resources, including our future capital and contractual commitments and potential funding sources.
Critical Accounting Policies
Valuation of Goodwill, Indefinite-Lived Intangible Assets and Long-Lived Assets
The outbreak of COVID-19 has resulted in an unprecedented global response to contain the spread of the disease. These global efforts have resulted in travel restrictions and created significant uncertainty regarding worldwide port closures and availability. As part of the global containment effort, the Company previously announced a voluntary suspension of its global cruise operations from March 13 through at least July 31, 2020 and China sailings until at least June 30, 2020. Continued disruptions to travel and port operations in various regions may result in further suspensions. Refer to Note 1. General to our consolidated financial statements for further information regarding COVID-19 and its impact to the Company.
As a result of these developments, we performed an interim impairment evaluation on our goodwill, indefinite-lived intangible assets and long-lived assets as discussed below in connection with the preparation of our financial statements for the quarter ended March 31, 2020.
When performing the goodwill impairment test, the fair value of the reporting unit is determined and compared to the carrying value of the net assets allocated to the reporting unit. We typically estimate the fair value of our reporting units using a probability-weighted discounted cash flow model, which may also include a combination of a market based valuation approach. The estimation of fair value utilizing discounted expected future cash flows includes numerous uncertainties which require our significant judgment when making assumptions of expected revenues, operating costs, marketing, selling and administrative expenses, interest rates, ship additions and retirements as well as assumptions regarding the cruise vacation industry's competitive environment and general economic and business conditions, among other factors. The principal assumptions we use in the discounted cash flow model are projected operating results, weighted-average cost of capital, and terminal value. The discounted cash flow model uses the most current projected operating results for the upcoming fiscal year as a base. To that base, we add future years' cash flows assuming multiple revenue and expense scenarios that reflect the impact of different global economic environments beyond the base year on the reporting unit. We discount the projected cash flows using rates specific to the reporting unit based on its weighted-average cost of capital. If the fair value of the reporting unit exceeds its carrying value, no write-down of goodwill is required. As amended by ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350) – Simplifying the Test for Goodwill Impairment, if the fair value of the reporting unit is less than the carrying value of its net assets, an impairment is recognized based on the amount by which the carrying amount of a reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to such reporting unit.
For further discussion of our critical accounting policies, refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations within our Annual Report on Form 10-K for the year ended December 31, 2019, as updated by our Current Report on Form 8-K dated May 13, 2020. For further discussion on impairment losses recorded in the three months ended March 31, 2020, refer to Note 3. Impairment and Credit Losses to our consolidated financial statements.
Royal Caribbean International Reporting Unit
We performed an interim impairment evaluation of Royal Caribbean International’s goodwill in connection with the preparation of our financial statements during the quarter ended March 31, 2020. As a result of the test, we determined that the fair value of the Royal Caribbean International reporting unit exceeded its carrying value by approximately 32% resulting in no impairment to the Royal Caribbean International goodwill. As of March 31, 2020, the carrying amount of goodwill attributable to our Royal Caribbean reporting unit was $296.3 million.
Silversea Cruises Reporting Unit
We performed an interim impairment evaluation of Silversea Cruises’ goodwill and trade name in connection with the preparation of our financial statements for the quarter ended March 31, 2020. As a result of this analysis, we determined that the carrying value of the Silversea Cruises reporting unit exceeded its fair value. Similarly, we determined that the carrying value of Silversea Cruises’ trade name exceeded its fair value as well. Accordingly, upon the completion of the impairment test, we recognized impairment charges of $576.2 million and $30.8 million for goodwill and the trade name, respectively, during the quarter ended March 31, 2020.
Long-lived Assets
We identified that the undiscounted cash flows of certain long-lived assets, consisting of 8 ships and certain right-of-use assets, were less than their carrying values. Events surrounding the COVID-19 pandemic negatively impacted the expected undiscounted cash flows of these assets. As a result of this determination, we evaluated these assets pursuant to our long -lived asset impairment test, which resulted in an impairment charge of $463.0 million to write down these assets to their estimated fair values during the quarter ended March 31, 2020.
The combined impairment charge of $1.1 billion related to our goodwill, trademarks and trade names, vessels and right-of-use assets was recognized in earnings during the quarter ended March 31, 2020 and is reported within Impairment and credit losses within our consolidated statements of comprehensive income (loss). For further information on the impairment losses and the fair value measurements used to estimate the fair value of these assets, refer to Note 3. Impairment and Credit Losses and Note 13. Fair Value Measurements and Derivative Instruments to our consolidated financial statements.
These impairment assessments and the resulting charges were determined based on management’s current estimates and projections using information through the time of the issuance of these financial statements. The adverse impact COVID-19 will continue to have on our business, operating results, cash flows and overall financial condition is uncertain and may result in changes to the assumptions used in the impairment tests discussed above, which may result in additional impairments of our goodwill, indefinite-lived intangible assets and long-lived assets in the future. Refer to Risk Factors in Part 2, Item 1A. for further discussion on risks related to the COVID-19 pandemic.
Seasonality
Our revenues are seasonal based on demand for cruises. Demand has historically been strongest for cruises during the Northern Hemisphere’s summer months and holidays. In order to mitigate the impact of the winter weather in the Northern Hemisphere and to capitalize on the summer season in the Southern Hemisphere, our brands have focused on deployment to the Caribbean, Asia and Australia during that period.
Financial Presentation
Description of Certain Line Items
Revenues
Our revenues are comprised of the following:
•Passenger ticket revenues, which consist of revenue recognized from the sale of passenger tickets and the sale of air transportation to and from our ships; and
•Onboard and other revenues, which consist primarily of revenues from the sale of goods and/or services onboard our ships not included in passenger ticket prices, cancellation fees, sales of vacation protection insurance, pre- and post-cruise tours and fees for operating certain port facilities. Onboard and other revenues also include revenues we receive from independent third party concessionaires that pay us a percentage of their revenues in exchange for the right to provide selected goods and/or services onboard our ships, as well as revenues received for our bareboat charter, procurement and management related services we perform on behalf of our unconsolidated affiliates.
Cruise Operating Expenses
Our cruise operating expenses are comprised of the following:
•Commissions, transportation and other expenses, which consist of those costs directly associated with passenger ticket revenues, including travel agent commissions, air and other transportation expenses, port costs that vary with passenger head counts and related credit card fees;
•Onboard and other expenses, which consist of the direct costs associated with onboard and other revenues, including the costs of products sold onboard our ships, vacation protection insurance premiums, costs associated with pre- and post-cruise tours and related credit card fees, as well as, the minimal costs associated with concession revenues, as the costs are mostly incurred by third-party concessionaires, and costs incurred for the procurement and management related services we perform on behalf of our unconsolidated affiliates;
•Payroll and related expenses, which consist of costs for shipboard personnel (costs associated with our shoreside personnel are included in Marketing, selling and administrative expenses);
•Food expenses, which include food costs for both guests and crew;
•Fuel expenses, which include fuel and related delivery, storage and emission consumable costs and the financial impact of fuel swap agreements; and
•Other operating expenses, which consist primarily of operating costs such as repairs and maintenance, port costs that do not vary with passenger head counts, vessel related insurance, entertainment and gains and/or losses related to the sale of our ships, if any.
We do not allocate payroll and related expenses, food expenses, fuel expenses or other operating expenses to the expense categories attributable to passenger ticket revenues or onboard and other revenues since they are incurred to provide the total cruise vacation experience.
Selected Operational and Financial Metrics
We utilize a variety of operational and financial metrics which are defined below to evaluate our performance and financial condition. As discussed in more detail herein, certain of these metrics are non-GAAP financial measures. These non-GAAP financial measures are provided along with the related GAAP financial measures as we believe they provide useful information to investors as a supplement to our consolidated financial statements, which are prepared and presented in accordance with GAAP. The presentation of non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
Adjusted (Loss) Earnings per Share ("Adjusted EPS") represents Adjusted Net (Loss) Income attributable to Royal Caribbean Cruises Ltd. divided by weighted average shares outstanding or by diluted weighted average shares outstanding, as applicable. We believe that this non-GAAP measure is meaningful when assessing our performance on a comparative basis.
Adjusted Net (Loss) Income represents net (loss) income less net income attributable to noncontrolling interest excluding certain items that we believe adjusting for is meaningful when assessing our performance on a comparative basis. For the periods presented, these items included (i) asset impairment and credit losses recorded in the first quarter of 2020 as a result of the impact of COVID-19; (ii) the change in fair value in the Silversea Cruises contingent consideration; (iii) net insurance recoveries related to the collapse of the drydock structure at the Grand Bahama Shipyard involving Oasis of the Seas; (iv) restructuring charges incurred in relation to the reorganization of our international sales and marketing structure and other initiatives expenses; (v) the amortization of the Silversea Cruises intangible assets resulting from the acquisition; (vi) the noncontrolling interest adjustment to exclude the impact of the contractual accretion requirements associated with the put option held by Heritage Cruise Holding Ltd.'s (previously known as Silversea Cruises Group Ltd.) noncontrolling interest; (vii) transaction costs related to the Silversea Cruises acquisition and (viii) equity investment impairment..
Available Passenger Cruise Days (“APCD”) is our measurement of capacity and represents double occupancy per cabin multiplied by the number of cruise days for the period, which excludes canceled cruise days and drydock days. We use this measure to perform capacity and rate analysis to identify our main non-capacity drivers that cause our cruise revenue and expenses to vary.
Gross Cruise Costs represent the sum of total cruise operating expenses plus marketing, selling and administrative expenses. For the periods presented, Gross Cruise Costs exclude (i) restructuring charges incurred in relation to the reorganization of our international sales and marketing structure and other initiative costs and (ii) transaction costs related to the Silversea Cruises acquisition, which were included within Marketing, selling and administrative expenses.
Gross Yields represent total revenues per APCD.
Net Cruise Costs and Net Cruise Costs Excluding Fuel represent Gross Cruise Costs excluding commissions, transportation and other expenses and onboard and other expenses and, in the case of Net Cruise Costs Excluding Fuel, fuel expenses (each of which is described above under the Description of Certain Line Items heading). In measuring our ability to control costs in a manner that positively impacts net income, we believe changes in Net Cruise Costs and Net Cruise Costs Excluding Fuel to be the most relevant indicators of our performance. A reconciliation of historical Gross Cruise Costs to Net Cruise Costs and Net Cruise Costs Excluding Fuel is provided below under Results of Operations. Net Cruise Costs and Net Cruise Costs Excluding Fuel exclude net insurance recoveries related to the collapse of the drydock structure at Grand Bahama Shipyard involving Oasis of the Seas.
Net Revenues represent total revenues less commissions, transportation and other expenses and onboard and other expenses (each of which is described above under the Description of Certain Line Items heading).
Net Yields represent Net Revenues per APCD. We utilize Net Revenues and Net Yields to manage our business on a day-to-day basis as we believe that they are the most relevant measures of our pricing performance because they reflect the cruise revenues earned by us net of our most significant variable costs, which are commissions, transportation and other expenses and onboard and other expenses. A reconciliation of historical Gross Yields to Net Yields is provided below under Results of Operations.
Occupancy, in accordance with cruise vacation industry practice, is calculated by dividing Passenger Cruise Days by APCD. A percentage in excess of 100% indicates that three or more passengers occupied some cabins.
Passenger Cruise Days represent the number of passengers carried for the period multiplied by the number of days of their respective cruises.
We believe Net Yields, Net Cruise Costs and Net Cruise Costs Excluding Fuel are our most relevant non-GAAP financial measures. However, a significant portion of our revenue and expenses are denominated in currencies other than the United States dollar. Because our reporting currency is the United States dollar, the value of these revenues and expenses can be affected by changes in currency exchange rates. Although such changes in local currency prices are just one of many elements impacting our revenues and expenses, they can be an important element. For this reason, we also monitor Net Yields, Net Cruise Costs and Net Cruise Costs Excluding Fuel as if the current period's currency exchange rates had remained constant with the comparable prior period's rates, or on a “Constant Currency” basis.
It should be emphasized that Constant Currency is primarily used for comparing short-term changes and/or projections. Changes in guest sourcing and shifting the amount of purchases between currencies can change the impact of the purely currency-based fluctuations.
The use of certain significant non-GAAP measures, such as Net Yields, Net Cruise Costs and Net Cruise Costs Excluding Fuel, allows us to perform capacity and rate analysis to separate the impact of known capacity changes from other less predictable changes which affect our business. We believe these non-GAAP measures provide expanded insight to measure revenue and cost performance in addition to the standard GAAP based financial measures. There are no specific rules or regulations for determining non-GAAP and Constant Currency measures, and as such, they may not be comparable to other companies within the industry.
Recent Developments: COVID-19
The disruptions to our operations resulting from the COVID-19 pandemic (“COVID-19”) have had, and continue to have, a material negative impact on our financial condition and results of operations. The outbreak of COVID-19 has resulted in an unprecedented global response to contain the spread of the disease. These global efforts have resulted in travel restrictions and created significant uncertainty regarding worldwide port closures and availability. As part of the global containment effort, the Company previously announced a voluntary suspension of its global cruise operations from March 13 through at least July 31, 2020 and China sailings until at least June 30, 2020. Continued disruptions to travel and port operations in various regions may result in further suspensions.
The Company has been developing a comprehensive and multi-faceted program to address the unique public health challenges posed by COVID-19. This includes, among other things, enhanced screening, upgraded cleaning and disinfection protocols and plans for social distancing. The Company will continue to work with the Centers for Disease Control and Prevention, global public health authorities and national and local governments to enhance measures to protect the health, safety and security of guests, crew and the communities visited when we are out of service and once operations resume.
Update on Bookings
Prior to the outbreak of COVID-19, the Company started the year in a strong booked position and at higher prices on a prior year comparable basis. Given the impact of COVID-19, booking volumes for the remainder of 2020 are meaningfully lower than the same time last year at prices that are down low-single digits. Due to the suspension in sailings, booking trends reflect elevated cancellations for 2020 and more typical levels for 2021 and beyond. Although still early in the booking cycle, the booked position for 2021 is within historical ranges when compared to same time last year with 2021 prices up mid-single digits compared to 2020, subject to the uncertainty around the duration of our suspension of sailings and resumption of service.
The Company has instituted several programs in order to best serve its guests: for cancelled cruises, guests are offered the choice of future cruise credits valued at 125% of the initial cruise fare paid in lieu of providing cash refunds. These future cruise credits can be redeemed on any sailing on or before December 31, 2021. As of April 30, 2020, approximately 45% of the guests booked on cancelled sailings have requested cash refunds. For non-cancelled cruises, the Company has implemented a “Cruise with Confidence” policy. This policy allows guests to cancel up to 48 hours prior to sailing (for sailings on or before August 1, 2020) and receive a full credit for their fare usable until April 30, 2022.
As of March 31, 2020, the Company had $2.4 billion in customer deposits. This includes approximately $0.8 billion of future cruise credits related to previously announced voyage cancellations. The Company also continues to take future bookings for 2020, 2021 and 2022, and receive new customer deposits and final payments on these bookings.
Update on Recent Liquidity Actions and Ongoing Uses of Cash
As of April 30, 2020, the Company had liquidity of approximately $2.3 billion all in the form of cash and cash equivalents. In response to the financial impacts of COVID-19, the Company has taken preemptive actions that focus on strengthening liquidity through significant cost and capital reductions, cash conservation and additional financing sources, as described below.
Reduced Operating Expenses
The Company has taken significant actions to reduce operating expenses during the suspension of its global cruise operations. In particular, we:
• significantly reduced ship operating expenses, including crew payroll, food, fuel, insurance and port charges;
• further reduced operating expenses as the Company’s ships are currently transitioning into various levels of layup with several ships in the fleet transitioning into cold layup;
• eliminated or significantly reduced marketing and selling expenses for the remainder of 2020;
• reduced and furloughed our workforce, with approximately 23% of our US shoreside employee base being impacted; and
• suspended travel for shoreside employees and instituted a hiring freeze across the organization.
The Company estimates that its average ongoing ship operating expenses and administrative expenses are approximately $150 million to $170 million per month during a prolonged suspension of operations. The Company may seek to further reduce this average monthly requirement under a further prolonged non-revenue scenario.
Reduced Capital Expenditures
Since the start of February 2020, the Company has identified approximately $3.0 billion and $1.4 billion of capital expenditure reductions or deferrals in 2020 and 2021, respectively. The reductions or deferrals of capital expenditures in 2020 comprise:
• $1.2 billion of non-newbuild, discretionary capital expenditures; and
• $1.8 billion in reduced spend or deferred installment payments for newbuild related payments which the Company is currently finalizing.
The Company believes COVID-19 has impacted shipyard operations and will result in delivery delays of ships previously planned for delivery in 2020 and 2021.
Debt Maturities, New Financings and Other Liquidity Actions
Since the start of February 2020, the Company has taken several additional actions to further improve its liquidity position and manage cash flow. In particular, we:
• increased the capacity under our revolving credit facilities by $0.6 billion, and fully drew on both facilities;
• entered into a $2.35 billion 364-day senior secured loan agreement with an option to extend the maturity for an additional 364 days secured by 28 ships with a net book value of approximately $12 billion as of March 31, 2020, after giving effect to the vessel impairment described in Note 3. Impairment and Credit Losses in the Notes to our Consolidated Financial Statements;
• issued $3.32 billion in senior secured notes, of which $1.0 billion is due in 2023 and $2.32 billion is due in 2025. The previously mentioned $2.35 billion, 364-day senior secured loan was repaid in its entirety with a portion of the proceeds of these notes;
• obtained a $0.8 billion, 12-month debt amortization and financial covenant holiday with respect to certain export-credit backed facilities;
• amended certain of our non-export-credit backed bank facilities to incorporate a 12-month financial covenant holiday; and
• agreed with certain of our lenders that we will not pay dividends or engage in stock repurchases for so long as our debt covenant waivers are in effect.
Expected debt maturities for the remainder of 2020 and 2021 are $0.4 billion and $0.9 billion, respectively. The expected debt maturities do not include the repayment at maturity of the $2.35 billion 364-day senior secured loan agreement, which we repaid in full with a portion of the proceeds from the issuance of the $3.32 billion secured senior notes.
The Company estimates its cash burn to be, on average, in the range of approximately $250 million to $275 million per month during a prolonged suspension of operations. This range includes ongoing ship operating expenses, administrative
expenses, debt service expense, hedging costs, expected necessary capital expenditures (net of committed financings in the case of newbuilds) and excludes cash refunds of customer deposits as well as cash inflows from new and existing bookings. The Company is considering ways to further reduce the average monthly requirement under a further prolonged out-of-service scenario and during start-up of operations.
The Company continues to identify and evaluate further actions to improve its liquidity. These include and are not limited to: further reductions in capital expenditures, operating expenses and administrative costs and additional financings.
Furthermore, certain of our separate unsecured bank facilities totaling an outstanding principal amount of approximately $4.7 billion as of March 31, 2020 contain covenants that require us, among other things, to maintain a fixed charge coverage ratio of at least 1.25x and limit our net debt-to-capital ratio to no more than 62.5%. In May 2020, the requisite lenders under such unsecured bank facilities agreed to waive the requirement to comply with such financial covenants, so that the next time we will be required to comply with such covenants will be for the three months then ended June 30, 2021. As a condition to obtaining such waivers, we agreed to certain additional covenants during the covenant waiver period, including that we maintain at least $300 million in unrestricted cash and cash equivalents (tested monthly) and that we are not permitted during the covenant waiver period, subject to limited exceptions, to pay cash dividends or make share repurchases unless we would have been compliant with our fixed charge coverage ratio at such time.
Results of Operations
Summary
Net Loss attributable to Royal Caribbean Cruises Ltd. and Adjusted Loss attributable to Royal Caribbean Cruises Ltd. for the first quarter of 2020 were $(1.4) billion and $(310.4) million, or $(6.91) and $(1.48) per share on a diluted basis, respectively, reflecting the impact of our suspension of global fleet sailings starting in mid-March, compared to Net Income attributable to Royal Caribbean Cruises Ltd. and Adjusted Net Income attributable Royal Caribbean Cruises Ltd. of $249.7 million and $275.8 million, or $1.19 and $1.31 per share on a diluted basis, respectively, for the first quarter of 2019.
Significant items for the quarter ended March 31, 2020 include:
•Total revenues, excluding the effect of changes in foreign currency exchange rates, decreased $385.3 million for the quarter ended March 31, 2020 as compared to the same period in 2019, reflecting the volume impact of our cancelled sailings during the first quarter of 2020 as a result of the COVID-19 pandemic.
•The effect of changes in foreign currency exchange rates related to our passenger ticket and onboard and other revenue transactions, denominated in currencies other than the United States dollar, resulted in a decrease in total revenues of $21.6 million for the quarter ended March 31, 2020 compared to the same period in 2019.
•Total cruise operating expenses, excluding the effect of changes in foreign currency exchange rates, increased $105.4 million for the quarter ended March 31, 2020 as compared to the same period in 2019. The increase was primarily due to incremental costs incurred as a result of the COVID-19 pandemic.
•The effect of changes in foreign currency exchange rates related to our cruise operating expenses, denominated in currencies other than the United States dollar, resulted in a decrease in total operating expenses of $8.3 million for the quarter ended March 31, 2020 compared to the same period in 2019.
•During the quarter ended March 31, 2020, as a result of the current and expected ongoing impact of COVID-19 pandemic on our operations and cash flows, we recorded total impairment and credit losses of $1.1 billion related to goodwill, intangibles, vessels, operating lease right-of-use assets and credit losses related to other long-lived assets.
•Our consolidated results of operations for the quarter ended March 31, 2020 include the results for October, November and December 2019 for Silversea Cruises due to the three month reporting lag for the entity.
•In March 2020, we increased the capacity of our $1.7 billion and $1.2 billion unsecured revolving credit facilities due in 2024 and 2022, by $200 million and $400 million, respectively.
•In March 2020, we borrowed $2.2 billion pursuant to a 364-day senior secured term loan agreement which would have matured 364 days after funding and could have been extended at our option for an additional 364 days. Subsequently, the term loan was increased to $2.35 billion and was repaid on May 19, 2020.
•In March 2020, we took delivery of Celebrity Apex.
Operating results for the quarter ended March 31, 2020 compared to the same period in 2019 are shown in the following table (in thousands, except per share data):
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Quarter Ended March 31,
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2020
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2019
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% of Total
Revenues
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% of Total
Revenues
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Passenger ticket revenues
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$
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1,376,851
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67.7
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%
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$
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1,709,984
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70.1
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%
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Onboard and other revenues
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655,899
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32.3
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%
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729,783
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29.9
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%
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Total revenues
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2,032,750
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100.0
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%
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2,439,767
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100.0
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%
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Cruise operating expenses:
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Commissions, transportation and other
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317,129
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15.6
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%
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363,155
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14.9
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%
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Onboard and other
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123,718
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6.1
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%
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135,170
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5.5
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%
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Payroll and related
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330,390
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16.3
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%
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269,532
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11.0
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%
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Food
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121,316
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6.0
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%
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139,534
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5.7
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%
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Fuel
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194,268
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9.6
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%
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160,171
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6.6
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%
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Other operating
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423,998
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20.9
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%
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346,142
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14.2
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%
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Total cruise operating expenses
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1,510,819
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74.3
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%
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1,413,704
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57.9
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%
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Marketing, selling and administrative expenses
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395,890
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19.5
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%
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414,947
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17.0
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%
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Depreciation and amortization expenses
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324,330
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16.0
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%
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292,285
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12.0
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%
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Impairment and credit losses
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1,108,118
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54.5
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%
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—
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—
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%
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Operating (Loss) Income
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(1,306,407)
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(64.3)
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%
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318,831
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13.1
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%
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Other (expense) income:
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Interest income
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5,534
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0.3
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%
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9,784
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0.4
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%
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Interest expense, net of interest capitalized
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(92,911)
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(4.6)
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%
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(100,415)
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(4.1)
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%
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Equity investment (loss) income
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(10,392)
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(0.5)
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%
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33,694
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1.4
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%
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Other expense
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(32,859)
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(1.6)
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%
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(5,088)
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(0.2)
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%
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(130,628)
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(6.4)
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%
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(62,025)
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(2.5)
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%
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Net (Loss) Income
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(1,437,035)
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(70.7)
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%
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256,806
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10.5
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%
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Less: Net Income attributable to noncontrolling interest
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7,444
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0.4
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%
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7,125
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0.3
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%
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Net (Loss) Income attributable to Royal Caribbean Cruises Ltd.
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$
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(1,444,479)
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(71.1)
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%
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$
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249,681
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10.2
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%
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Diluted (Loss) Earnings per Share
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$
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(6.91)
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$
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1.19
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Adjusted Net (Loss) Income attributable to Royal Caribbean Cruises Ltd and Adjusted (Loss) Earnings per Share attributable to Royal Caribbean Cruises Ltd were calculated as follows (in thousands, except per share data):
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Quarter Ended March 31,
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2020
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2019
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Net (Loss) Income attributable to Royal Caribbean Cruises Ltd.
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$
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(1,444,479)
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$
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249,681
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Adjusted Net (Loss) Income attributable to Royal Caribbean Cruises Ltd.
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(310,412)
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275,847
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Net Adjustments to Net (Loss) Income attributable to Royal Caribbean Cruises Ltd.
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$
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1,134,067
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$
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26,166
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Adjustments to Net (Loss) Income attributable to Royal Caribbean Cruises Ltd.:
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Impairment and credit losses (1)
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$
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1,108,118
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$
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—
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Equity investment impairment (2)
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39,735
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—
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Change in fair value of the Silversea contingent consideration (3)
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(51,019)
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—
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Net insurance recoveries of Oasis of the Seas incident (4)
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(1,938)
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—
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Restructuring charges and other initiatives expense (5)
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12,043
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—
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Amortization of Silversea Cruises intangible assets resulting from the acquisition (3)
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3,069
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3,069
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Noncontrolling interest adjustment (6)
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24,059
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21,911
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Transaction costs related to Silversea acquisition (3)
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—
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1,186
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Net Adjustments to Net (Loss) Income attributable to Royal Caribbean Cruises Ltd.
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$
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1,134,067
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$
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26,166
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Basic:
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(Loss) Earnings per Share
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$
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(6.91)
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$
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1.19
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Adjusted (Loss) Earnings per Share
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$
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(1.48)
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$
|
1.32
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Diluted:
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(Loss) Earnings per Share
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$
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(6.91)
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$
|
1.19
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Adjusted (Loss) Earnings per Share
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$
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(1.48)
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$
|
1.31
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Weighted-Average Shares Outstanding:
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Basic
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209,097
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209,322
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Diluted
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209,097
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209,874
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(1)Represents asset impairment and credit losses recorded in the first quarter of 2020 as a result of the impact of COVID-19.
(2)Represents equity investment asset impairment, primarily for our investment in Grand Bahama Shipyard, recorded in the first quarter of 2020 as a result of the impact of COVID-19.
(3)Related to the Silversea Cruises acquisition.
(4)Amount includes net insurance recoveries related to the collapse of the drydock structure at the Grand Bahama Shipyard involving Oasis of the Seas.
(5)Represents restructuring charges incurred in relation to the reorganization of our international sales and marketing structure and other initiatives expenses.
(6)Adjustment made to exclude the impact of the contractual accretion requirements associated with the put option held by Silversea Cruises Group Ltd.'s noncontrolling interest.
Selected statistical information is shown in the following table:
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Quarter Ended March 31, (1)
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2020
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2019
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Passengers Carried
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1,239,817
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1,533,226
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Passenger Cruise Days
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8,467,106
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10,561,817
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APCD
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8,217,133
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9,860,600
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Occupancy
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103.0
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%
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107.1
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%
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(1)Due to the three-month reporting lag, these metrics include October, November and December amounts for Silversea Cruises.
Gross Yields and Net Yields were calculated as follows (in thousands, except APCD and Yields):
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Quarter Ended March 31,
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2020
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|
2020 On a Constant Currency Basis
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2019
|
|
|
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|
Passenger ticket revenues
|
$
|
1,376,851
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|
$
|
1,391,923
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|
$
|
1,709,984
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Onboard and other revenues
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655,899
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|
662,465
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729,783
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Total revenues
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2,032,750
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|
2,054,388
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|
2,439,767
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Less:
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Commissions, transportation and other
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317,129
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320,131
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363,155
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Onboard and other
|
123,718
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|
124,119
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|
135,170
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Net Revenues
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$
|
1,591,903
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|
$
|
1,610,138
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|
|
$
|
1,941,442
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APCD
|
8,217,133
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|
8,217,133
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9,860,600
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Gross Yields
|
$
|
247.38
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|
|
$
|
250.01
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|
|
$
|
247.43
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Net Yields
|
$
|
193.73
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$
|
195.95
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|
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$
|
196.89
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|
Gross Cruise Costs, Net Cruise Costs and Net Cruise Costs Excluding Fuel were calculated as follows (in thousands, except APCD and costs per APCD):
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Quarter Ended March 31,
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2020
|
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2020 On a Constant Currency Basis
|
|
2019
|
|
|
|
|
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|
Total cruise operating expenses
|
$
|
1,510,819
|
|
|
$
|
1,519,124
|
|
|
$
|
1,413,704
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|
|
|
|
|
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|
|
Marketing, selling and administrative expenses (1) (2)
|
383,847
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|
|
385,694
|
|
|
413,761
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|
|
|
|
|
|
|
|
Gross Cruise Costs
|
1,894,666
|
|
|
1,904,818
|
|
|
1,827,465
|
|
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|
|
|
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|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commissions, transportation and other
|
317,129
|
|
|
320,131
|
|
|
363,155
|
|
|
|
|
|
|
|
|
Onboard and other
|
123,718
|
|
|
124,119
|
|
|
135,170
|
|
|
|
|
|
|
|
|
Net Cruise Costs Including Other Costs
|
1,453,819
|
|
|
1,460,568
|
|
|
1,329,140
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net insurance recoveries related to the Oasis of the Seas incident included within cruise operating expenses
|
(1,580)
|
|
|
(1,580)
|
|
|
—
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cruise Costs
|
1,455,399
|
|
|
1,462,148
|
|
|
1,329,140
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel (3)
|
193,458
|
|
|
193,463
|
|
|
160,171
|
|
|
|
|
|
|
|
|
Net Cruise Costs Excluding Fuel
|
$
|
1,261,941
|
|
|
$
|
1,268,685
|
|
|
$
|
1,168,969
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
APCD
|
8,217,133
|
|
|
8,217,133
|
|
|
9,860,600
|
|
|
|
|
|
|
|
|
Gross Cruise Costs per APCD
|
$
|
230.58
|
|
|
$
|
231.81
|
|
|
$
|
185.33
|
|
|
|
|
|
|
|
|
Net Cruise Costs per APCD
|
$
|
177.12
|
|
|
$
|
177.94
|
|
|
$
|
134.79
|
|
|
|
|
|
|
|
|
Net Cruise Costs Excluding Fuel per APCD
|
$
|
153.57
|
|
|
$
|
154.40
|
|
|
$
|
118.55
|
|
|
|
|
|
|
|
(1)For the quarter ended March 31, 2020, the amount does not include restructuring charges and other initiatives expense of $12.0 million.
(2)For the quarter ended March 31, 2019, the amount does not include the transaction costs related to the Silversea Cruises acquisition of $1.2 million.
(3) For the quarter ended March 31, 2020, the amount does not include the fuel impact of the Oasis of the Seas incident of $0.8 million already considered to arrive at Net Cruise Costs.
2020 Outlook
On March 10, 2020, we withdrew our full-year 2020 guidance due to the heightened impact and uncertainty of changes in the magnitude, duration and geographic reach of COVID-19. The duration and intensity of this global health crisis and related disruptions continue to be highly uncertain. The adverse impact of the COVID-19 pandemic on our revenues, consolidated results of operations, cash flows and financial condition will be material in 2020. We expect to report a loss for the second quarter ended June 30, 2020 and the year ended December 31, 2020, the extent of which will depend on the timing and extent of our return to service. However, we cannot reasonably estimate the magnitude of the expected loss or any future results as it is not known when the COVID-19 pandemic will end, when or how quickly the current travel restrictions and advisories will be modified or cease to be necessary and the resulting impact on the global economy and the Company’s operations.
Quarter Ended March 31, 2020 Compared to Quarter Ended March 31, 2019
In this section, references to 2020 refer to the quarter ended March 31, 2020 and references to 2019 refer to the quarter ended March 31, 2019.
Revenues
Total revenues for 2020 decreased $407.0 million, or 16.7%, to $2.0 billion from $2.4 billion in 2019.
Passenger ticket revenues comprised 67.7% of our 2020 total revenues. Passenger ticket revenues for 2020 decreased by $333.1 million, or 19.5%, from 2019. The decrease was due to a 16.7% decrease in capacity, which decreased Passenger ticket revenues by $285.2 million, driven by our cancelled sailings resulting from the suspension of our global fleet operations in mid-March 2020 in response to the COVID-19 pandemic. To a lesser degree, we experienced decreased capacity due to a higher number of drydock days in 2020, partially offset by the inclusion of Spectrum of the Seas in our fleet during the first quarter of 2020.
Passenger ticket revenues was also affected negatively by unfavorable foreign currency exchange rates movements related to our revenue transactions denominated in currencies other than the United States dollar of $15.0 million.
The remaining 32.3% of 2020 total revenues was comprised of Onboard and other revenues, which decreased $73.9 million, or 10.1%, to $655.9 million in 2020 from $729.8 million in 2019. The decrease in Onboard and other revenues was primarily due to the 16.7% decrease in capacity noted above, and was partially offset by higher cancellation fee revenue associated with non-refundable deposits.
Unfavorable movements in foreign currency exchange rates related to our revenue transactions denominated in currencies other than the United States dollar decreased Onboard and other revenues by $6.6 million.
Onboard and other revenues included concession revenues of $72.0 million in 2020 and $91.7 million in 2019.
Cruise Operating Expenses
Total Cruise operating expenses for 2020 increased $97.1 million, or 6.9%, to $1.5 billion from $1.4 billion in 2019. The increase was primarily due to:
•a $60.8 million increase in Payroll and related costs primarily due to crew contract terminations and higher repatriation costs as a result our cancelled sailings due to the COVID-19 pandemic;
•a $34.1 million increase in Fuel expenses;
•an increase in commissions as a result of sailing cancellations, mostly recorded in Other operating and
•to a lesser extent, an increase in running costs related to the inclusion of Spectrum of the Seas in 2020.
The increase in Cruise operating expenses was partially offset by:
•a $11.5 million decrease in Onboard and other expenses and $18.2 million decrease in Food due to the decrease in capacity discussed above and
•the favorable effect of changes in foreign currency exchange rates related to our cruise operating expenses denominated in currencies other than the United States dollar of $8.3 million.
Marketing, Selling and Administrative Expenses
Marketing, selling and administrative expenses for 2020 decreased $19.1 million, or 4.6%, to $395.9 million from $414.9 million in 2019. The decrease was primarily due to a lower stock price year over year related to our performance share awards, partially offset by an increase in payroll and benefits expense primarily driven by an increase in headcount.
Depreciation and Amortization Expenses
Depreciation and amortization expenses for 2020 increased $32.0 million, or 11.0%, to $324.3 million from $292.3 million in 2019. The increase was primarily due to new shipboard additions associated with our 2019 ship modernization projects, additions related to A Perfect Day and the addition of Spectrum of the Seas in the first quarter of 2019.
Impairment and Credit Losses
During the quarter ended March 31, 2020, as a result of the current and expected ongoing impact of COVID-19 pandemic on our operations and cash flows, we recorded total impairment and credit losses of $1.1 billion related to goodwill, intangibles, vessels, operating lease right-of-use assets and credit losses related to other long-lived assets.
Other Income (Expense)
Interest expense, net of interest capitalized for 2020 decreased $7.5 million, or 7.5%, to $92.9 million from $100.4 million in 2019. The decrease was primarily due to lower interest rates overall and as a result of debt refinancing in 2019.
Equity investment (loss) income was a loss of ($10.4) million for the three months ended March 31, 2020. The loss includes a $39.7 million impairment charge of equity investments, primarily Grand Bahama Shipyard, that we deemed to be impaired due to the impact of the COVID-19 pandemic to our business. Excluding the impairment loss, we reported equity investment income of $29.3 million in 2020 compared to income of $33.7 million in 2019.
Other expense for 2020 increased $27.8 million to $32.9 million from $5.1 million in 2019. The increase was primarily due to a net $26.6 million loss related the change in fair value of fuel swaps with no hedge accounting and $11.1 million in foreign currency losses on the remeasurement of monetary assets.
Gross and Net Yields
Gross and Net Yields remained flat and decreased 1.6%, respectively, in 2020 compared to 2019. Gross and Net Yields on a Constant Currency basis increased 1.0% and decreased 0.5%, respectively, in 2020 compared to 2019.
Gross and Net Cruise Costs
Gross Cruise Costs increased 3.7% in 2020 compared to 2019 primarily due to the net increase in cruise operating expenses discussed above. Net Cruise Costs increased 9.5% in 2020 compared to 2019 primarily due to a decrease in Commissions, transportation and other and Onboard and other related to the decrease in capacity discussed above. Gross and Net Cruise Costs per APCD increased 24.4% and 31.4%, respectively, in 2020 compared to 2019 and Gross and Net Cruise Costs per APCD on a Constant Currency basis increased 25.1% and 32.0%, respectively, in 2020 compared to 2019 due to the increase in Gross Cruise Costs and Net Cruise Costs discussed above applied to a lower number of APCD's in 2020.
Net Cruise Costs Excluding Fuel
Net Cruise Costs Excluding Fuel per APCD increased 29.5% in 2020 compared to 2019 and increased 30.2% in 2020 compared to 2019 on a Constant Currency basis.
Other Comprehensive (Loss) Income
Other comprehensive (loss) in 2020 was $(297.9) million compared to Other comprehensive income of $48.8 million in 2019. The increase in loss of $(346.7) million was primarily due to a Loss on cash flow derivative hedges in 2020 of $(300.6) million compared to a Gain on cash flow derivative hedges in 2019 of $48.8 million.
Future Application of Accounting Standards
Refer to Note 2. Summary of Significant Accounting Policies to our consolidated financial statements for further information on Recent Accounting Pronouncements.
Liquidity and Capital Resources
Sources and Uses of Cash
As a result of the COVID-19 impact on our business, including the suspension of global sailings, we have experienced a decrease in bookings and an increase in customer deposit refunds in the first quarter of 2020 which has significantly affected our liquidity and cash flow. Net cash provided by operating activities decreased $879.7 million to $198.7 million for the first three months in 2020 compared to $1.1 billion for the same period in 2019. The current disruptions to our business led to a decrease in customer deposits of $959.6 million in the first three months of 2020. Also affecting our operating cash flows, we experienced a decrease of Onboard and other revenues of $73.9 million and a decrease of $40.4 million in dividends received from unconsolidated affiliates during the first three months in 2020 compared to the same period in 2019.
Net cash used in investing activities increased $890.7 million to $1.3 billion for the first three months in 2020 compared to $450.4 million for the same period in 2019. The increase in investing activities was primarily attributable to an increase in
capital expenditures of $782.4 million due to the delivery of Celebrity Apex in the first three months of 2020 compared to no ship deliveries or purchases during the same period in 2019.
Net cash provided by financing activities was $4.8 billion for the first three months in 2020 compared to Net cash used in financing activities of $667.7 million for the same period in 2019. The change was primarily attributable to an increase in debt proceeds of $6.7 billion for the first three months in 2020 compared to the same period in 2019, partially offset by an increase of debt repayments of $224.8 million. Also offsetting the increase in debt proceeds, was net repayments of commercial paper of $1.1 billion during the first three months of 2020 compared to net borrowings of commercial paper of $328.6 million during the same period in 2019. The increase in debt proceeds was primarily due to the $2.2 billion 364-day senior secured term loan agreement and the $722.2 million unsecured term loan borrowed to finance Celebrity Apex, both borrowed in March 2020, and higher drawings on our revolving credit facilities, resulting in a fully drawn balance, during the first three months of 2020, compared to the same period in 2019.
Future Capital Commitments
Capital Expenditures
As of March 31, 2020, our Global Brands and our Partner Brands have 16 ships on order. Their original contractual delivery dates and their approximate berths are listed below. COVID-19 has impacted shipyard operations and we expect that this will result in delivery delays of ships on order and will adjust the timing of our contractual ship deliveries:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ship
|
Shipyard
|
Contractual Delivery Date
|
|
Approximate
Berths
|
|
Royal Caribbean International —
|
|
|
|
|
|
Oasis-class:
|
|
|
|
|
|
Wonder of the Seas
|
Chantiers de l'Atlantique
|
2nd Quarter 2021
|
|
5,700
|
|
Unnamed
|
Chantiers de l'Atlantique
|
4nd Quarter 2023
|
|
5,700
|
|
Quantum-class:
|
|
|
|
|
|
Odyssey of the Seas
|
Meyer Werft
|
4th Quarter 2020
|
|
4,200
|
|
Icon-class:
|
|
|
|
|
|
Unnamed
|
Meyer Turku Oy
|
2nd Quarter 2022
|
|
5,600
|
|
Unnamed
|
Meyer Turku Oy
|
2nd Quarter 2024
|
|
5,600
|
|
Unnamed
|
Meyer Turku Oy
|
2nd Quarter 2025
|
|
5,600
|
|
Celebrity Cruises —
|
|
|
|
|
|
Edge-class:
|
|
|
|
|
|
Celebrity Beyond
|
Chantiers de l'Atlantique
|
4th Quarter 2021
|
|
3,250
|
|
Unnamed
|
Chantiers de l'Atlantique
|
4th Quarter 2022
|
|
3,250
|
|
Silversea Cruises —
|
|
|
|
|
|
Silver Origin
|
De Hoop
|
2nd Quarter 2020
|
|
100
|
|
Muse-Class:
|
|
|
|
|
|
Silver Moon
|
Fincantieri
|
3rd Quarter 2020
|
|
550
|
|
Silver Dawn
|
Fincantieri
|
3rd Quarter 2021
|
|
550
|
|
Evolution Class:
|
|
|
|
|
|
Unnamed
|
Meyer Werft
|
1st Quarter 2022
|
|
600
|
|
Unnamed
|
Meyer Werft
|
1st Quarter 2023
|
|
600
|
|
TUI Cruises (50% joint venture) (2)—
|
|
|
|
|
|
Mein Schiff 7
|
Meyer Turku Oy
|
2nd Quarter 2023
|
|
2,900
|
|
Unnamed
|
Fincantieri
|
3rd Quarter 2024
|
|
4,100
|
|
Unnamed
|
Fincantieri
|
1st Quarter 2026
|
|
4,100
|
|
|
|
|
|
|
|
Total Berths
|
|
|
|
52,400
|
In April 2019, we entered into an agreement with Chantiers de l’Atlantique to build the fifth Edge-class ship for Celebrity Cruises. The ship is expected to have an aggregate capacity of approximately 3,200 berths and is expected to enter service in the
fourth quarter of 2024. The order with Chantiers de l’Atlantique is contingent upon completion of conditions precedent and financing.
Our future capital commitments consist primarily of new ship orders. As of March 31, 2020, the aggregate cost of our ships on order presented in the table above, excluding any ships on order by our Partner Brands, was $13.8 billion, of which we had deposited $810.9 million. Approximately 63.6% of the aggregate cost was exposed to fluctuations in the Euro exchange rate at March 31, 2020. These amounts do not include the ship order placed by Silversea Cruises during the reporting lag period. Refer to Note 13. Fair Value Measurements and Derivative Instruments to our consolidated financial statements.
Decreased demand for cruising as a result of concerns regarding the COVID-19 pandemic has had, and is expected to continue to have, a material impact on our cash flows, liquidity and financial position. In order to preserve liquidity throughout the COVID-19 pandemic, we deferred a significant portion of our planned 2020 and 2021 capital expenditures. As of March 31, 2020, we anticipate overall full year capital expenditures, based on our existing ships on order, will be approximately $0.5 billion for 2020 and $2.1 billion for 2021. These amounts do not include any ships on order by our Partner Brands.
Contractual Obligations
As of March 31, 2020, our contractual obligations were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments due by period
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than
|
|
1-3
|
|
3-5
|
|
More than
|
|
|
Total
|
|
1 year
|
|
years
|
|
years
|
|
5 years
|
|
Operating Activities:
|
|
|
|
|
|
|
|
|
|
|
Operating lease obligations(1)
|
$
|
915,129
|
|
|
$
|
127,273
|
|
|
$
|
219,304
|
|
|
$
|
168,384
|
|
|
$
|
400,168
|
|
|
Interest on debt(2)
|
2,416,916
|
|
|
516,618
|
|
|
826,821
|
|
|
454,155
|
|
|
619,322
|
|
|
Other(3)
|
510,721
|
|
|
241,783
|
|
|
224,488
|
|
|
22,347
|
|
|
22,103
|
|
|
Investing Activities:
|
0
|
|
|
|
|
|
|
|
|
|
Ship purchase obligations(4)
|
10,629,536
|
|
|
1,551,358
|
|
|
4,920,903
|
|
|
2,981,077
|
|
|
1,176,198
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing Activities:
|
0
|
|
|
|
|
|
|
|
|
|
Commercial paper(5)
|
343,557
|
|
|
343,557
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Debt obligations(6)
|
15,458,844
|
|
|
3,377,652
|
|
|
4,902,203
|
|
|
3,361,788
|
|
|
3,817,201
|
|
|
Finance lease obligations(7)
|
226,471
|
|
|
34,342
|
|
|
49,605
|
|
|
10,601
|
|
|
131,923
|
|
|
Other(8)
|
19,132
|
|
|
6,366
|
|
|
9,790
|
|
|
2,976
|
|
|
—
|
|
|
Total
|
$
|
30,520,306
|
|
|
$
|
6,198,949
|
|
|
$
|
11,153,114
|
|
|
$
|
7,001,328
|
|
|
$
|
6,166,915
|
|
(1) We are obligated under noncancelable operating leases primarily for preferred berthing arrangements, real estate and shipboard equipment. Amounts represent contractual obligations with initial terms in excess of one year.
(2) Long-term debt obligations mature at various dates through fiscal year 2037 and bear interest at fixed and variable rates. Interest on variable-rate debt is calculated based on forecasted debt balances, including the impact of interest rate swap agreements using the applicable rate at March 31, 2020. Debt denominated in other currencies is calculated based on the applicable exchange rate at March 31, 2020. The interest related to the $2.2 billion 364-day secured term loan is reported in the Less than 1 year column. Subsequent to March 31, 2020, the $2.2 billion 364-day term loan was fully repaid with a portion of the proceeds from the $3.32 billion secured bond issued in May 2020.
(3) Amounts primarily represent future commitments with remaining terms in excess of one year to pay for our usage of certain port facilities, marine consumables, services and maintenance contracts.
(4) Amounts are based on contractual installment and delivery dates for our ships on order. Included in these figures are $8.8 billion in final contractual installments, which have committed financing. COVID-19 has impacted shipyard operations and we expect that this will result in delivery delays of ships on order and will adjust the timing of our contractual ship deliveries. Amounts do not include potential obligations which remain subject to cancellation at our sole discretion or any agreements entered for ships on order that remain contingent upon completion of conditions precedent. Additionally, amounts do not include activity related to Silversea Cruises, including ships placed on order, if any, during the three-month reporting lag period.
(5) Refer to Note 7. Debt to our consolidated financial statements for further information.
(6) Amounts represent debt obligations with initial terms in excess of one year. Debt denominated in other currencies is calculated based on the applicable exchange rate at March 31, 2020. In addition, debt obligations presented above are
net of debt issuance costs of $254.7 million as of March 31, 2020. The $2.2 billion 364-day secured term loan is reported in the "Less than 1 year" column. Subsequent to March 31, 2020, the term loan was refinanced with debt maturing in 2023 and 2025.
(7) Amounts represent finance lease obligations with initial terms in excess of one year, net of imputed interest.
(8) Amounts represent fees payable to sovereign guarantors in connection with certain of our export credit debt facilities and facility fees on our revolving credit facilities.
Please refer to Funding Needs and Sources for discussion on the planned funding of the above contractual obligations.
As a normal part of our business, depending on market conditions, pricing and our overall growth strategy, we continuously consider opportunities to enter into contracts for the building of additional ships. We may also consider the sale of ships or the purchase of existing ships. We continuously consider potential acquisitions and strategic alliances. If any of these were to occur, they would be financed through the incurrence of additional indebtedness, the issuance of additional shares of equity securities or through cash flows from operations.
Off-Balance Sheet Arrangements
TUI Cruises has entered into various ship construction and credit agreements that include certain restrictions on each of our and TUI AG’s ability to reduce our current ownership interest in TUI Cruises below 37.55% through May 2031.
Some of the contracts that we enter into include indemnification provisions that obligate us to make payments to the counterparty if certain events occur. These contingencies generally relate to changes in taxes, increased lender capital costs and other similar costs. The indemnification clauses are often standard contractual terms and are entered into in the normal course of business. There are no stated or notional amounts included in the indemnification clauses and we are not able to estimate the maximum potential amount of future payments, if any, under these indemnification clauses. We have not been required to make any payments under such indemnification clauses in the past and, under current circumstances, we do not believe an indemnification obligation is probable.
On April 2, 2020, S&P Global downgraded us from BBB- to BB and on May 13, 2020, Moody’s downgraded us from Baa3 to Ba2. Our access to, and cost of debt financing is negatively impacted by by the downgrades. Based on our current projected fair value of certain derivative instruments in net liability positions, on or prior to September 23, 2020, we will be required to post collateral of approximately $80.4 million as a result of the downgrades.
As of March 31, 2020, other than the items described above, we are not party to any other off-balance sheet arrangements, including guarantee contracts, retained or contingent interest, certain derivative instruments and variable interest entities, that either have, or are reasonably likely to have, a current or future material effect on our financial position.
Funding Needs and Sources
Historically, we relied on a combination of cash flows provided by operations, draw downs under our available credit facilities, the incurrence of additional debt and/or the refinancing of our existing debt and the issuance of additional shares of equity securities to fund our obligations. The impact of COVID-19 resulted in our previously announced voluntary suspension of global cruise operations from March 13 through at least July 31, 2020 and China sailings until at least June 30, 2020. This suspension of operations has strained our sources of cash flow and liquidity, causing us to take actions resulting in reductions in our operating expenses, reductions in our capital expenses and new financings and other liquidity actions.
The Company continues to identify and evaluate further actions to improve its liquidity. These include and are not limited to: further reductions in capital expenditures, operating expenses and administrative costs and additional financings. See further discussion on these liquidity actions at Recent Developments - COVID-19.
We have significant contractual obligations of which our debt service obligations and the capital expenditures associated with our ship purchases represent our largest funding needs. As of March 31, 2020, we had $8.8 billion of committed financing for final delivery installments on our ships on order.
As of March 31, 2020, we had $6.2 billion in contractual obligations due through March 31, 2021, of which approximately $3.4 billion relates to debt maturities, $516.6 million relates to interest on debt and $1.6 billion relates to progress payments on our ship orders and the final installments payable due upon the delivery of Odyssey of the Seas, Silver Origin and Silver Moon, based on their contractual delivery dates. The $2.2 billion 364-day secured term loan is reported as maturing prior to March 31, 2021; however, subsequent to March 31, 2020, the term loan was refinanced with debt maturing in 2023 and 2025.
As of March 31, 2020, we had liquidity of $3.6 billion, consisting of cash and cash equivalents, net of commercial paper issuances. As of March 31, 2020, our revolving credit facilities were fully drawn. Subsequent to March 31, 2020, we agreed
with certain of our lenders not to pay dividends or engage in stock repurchases. Refer to Note 11. Shareholders' Equity to our consolidated financial statements for further information.
Based on our assumptions and estimates and our financial condition, we believe that the liquidity resulting from the actions mentioned above will be sufficient to fund our liquidity requirements over at least the next twelve months. However, there is no assurance that our assumptions and estimates are accurate due to possible unknown variables related this unprecedented suspension of our operations and, as such, there is inherent uncertainty in our ability to predict future liquidity requirements.
If any person acquires ownership of more than 50% of our common stock or, subject to certain exceptions, during any 24-month period, a majority of our board of directors is no longer comprised of individuals who were members of our board of directors on the first day of such period, we may be obligated to prepay indebtedness outstanding under our credit facilities, which we may be unable to replace on similar terms. Our public debt securities also contain change of control provisions that would be triggered by a third-party acquisition of greater than 50% of our common stock coupled with a ratings downgrade. If this were to occur, it would have an adverse impact on our liquidity and operations.
Debt Covenants
Certain of our financing agreements contain covenants that require us, among other things, to maintain minimum net worth of at least $9.9 billion, a fixed charge coverage ratio of at least 1.25x and limit our net debt-to-capital ratio to no more than 62.5%. The fixed charge coverage ratio is calculated by dividing net cash from operations for the past four quarters by the sum of dividend payments plus scheduled principal debt payments in excess of any new financings for the past four quarters. Our minimum net worth and maximum net debt-to-capital calculations exclude the impact of Accumulated other comprehensive loss on Total shareholders’ equity.
We were in compliance with our financial covenants as of March 31, 2020. However, we amended these debt agreements to waive the quarterly testing of our financing covenants through and including the first quarter of 2021. In addition to the above, as of March 31, 2020, we were not in compliance with one covenant in our Port of Miami Terminal "A" operating lease agreement which we subsequently obtained a waiver for and amended our agreement with the lessor to increase the lien basket in line with our debt facilities.
As part of obtaining these debt compliance waivers, we are now required to maintain a minimum of $300 million in cash and cash equivalents tested on a monthly basis through March 31, 2021, and we are not permitted during the covenant waiver period, subject to limited exceptions, to pay cash dividends or make share repurchases unless we would have been compliant with our fixed charge coverage ratio at such time. In addition, the lenders under such unsecured bank facilities required a number of structural enhancements to such facilities. Under certain of our agreements, the contractual interest rate, facility fee and/or export credit agency fee vary with our debt rating. On April 2, 2020, S&P Global downgraded us from BBB- to BB and on May 13, 2020, Moody’s downgraded us from Baa3 to Ba2.
Any covenant waiver may lead to increased costs, increased interest rates, additional restrictive covenants and other available lender protections that would be applicable. There can be no assurance that we would be able to obtain waivers in a timely manner, or on acceptable terms at all. If we were not able to obtain waivers or repay the debt facilities, this would lead to an event of default and potential acceleration of amounts due under all of our outstanding debt and derivative contract payables.
Dividends
During the first quarter of 2020, we declared a cash dividend on our common stock of $0.78 per share, which was paid in April 2020. During the first quarter of 2020, we also paid a cash dividend on our common stock of $0.78 per share, which was declared during the fourth quarter of 2019.
During the first quarter of 2019, we declared a cash dividend on our common stock of $0.70 per share, which was paid in April 2019. During the first quarter of 2019, we also paid a cash dividend on our common stock of $0.70 per share, which was declared during the fourth quarter of 2018. Subsequent to March 31, 2020, we agreed with certain of our lenders not to pay dividends for so long as our debt covenant waivers are in effect.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
For a discussion of our market risks, refer to Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our Annual Report on Form 10-K for the year ended December 31, 2019, as updated by our Current Report on Form 8-K dated May 13, 2020. There have been no significant developments or material changes since the date of our Annual Report.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chairman and Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures, as such term is defined in Exchange Act Rule 13a-15(e), as of the end of the period covered by this report. Based upon such evaluation, our Chairman and Chief Executive Officer and Chief Financial Officer concluded that those controls and procedures are effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Chairman and Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure and are effective to provide reasonable assurance that such information is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Exchange Act Rule 13a-15(d) during the quarter ended March 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
Readers are cautioned that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there is only reasonable assurance that our controls will succeed in achieving their goals under all potential future conditions.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
As previously reported in our Annual Report on Form 10-K for the year ended December 31, 2019, as updated by our Current Report on Form 8-K dated May 13, 2020, two lawsuits were filed against Royal Caribbean Cruises Ltd. in August 2019 in the U.S. District Court for the Southern District of Florida under Title III of the Cuban Liberty and Democratic Solidarity Act, also known as the Helms-Burton Act. The complaint filed by Havana Docks Corporation alleges it holds an interest in the Havana Cruise Port Terminal and the complaint filed by Javier Garcia-Bengochea alleges that he holds an interest in the Port of Santiago, Cuba, both of which were expropriated by the Cuban Government. The complaints further allege that Royal Caribbean Cruises Ltd. trafficked in those properties by embarking and disembarking passengers at these facilities. The plaintiffs seek all available statutory remedies, including the value of the expropriated property, plus interest, treble damages, attorneys’ fees and costs. Royal Caribbean Cruises Ltd. filed its answer to each complaint in October 2019. We believe we have meritorious defenses to the claims, and we intend to vigorously defend ourselves against them. We believe that it is unlikely that the outcome of these matters will have a material adverse impact to our financial condition, results of operations or cash flows. However, the outcome of litigation is inherently unpredictable and subject to significant uncertainties, and there can be no assurances that the final outcome of this case will not be material.
We are also routinely involved in claims typical within the cruise vacation industry. The majority of these claims are covered by insurance. We believe the outcome of such claims, net of expected insurance recoveries, will not have a material adverse impact on our financial condition or results of operations and cash flows.
Item 1A. Risk Factors
The risk factors set forth below and elsewhere in this Quarterly Report on Form 10-Q are important factors that could cause actual results to differ from expected or historical results. It is not possible to predict or identify all such risks. There may be additional risks that we consider not to be material, or which are not known, and any of these risks could have the effects set forth below. The ordering of the risk factors set forth below is not intended to reflect any Company indication of priority or likelihood. See Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations for a cautionary note regarding forward-looking statements.
The global COVID-19 pandemic has had, and will continue to have, a material adverse impact on our business and results of operations. The global spread of COVID-19 and the unprecedented responses by governments and other authorities to control and contain the spread has caused significant disruptions, created new risks, and exacerbated existing risks to our business.
We have been, and will continue to be, negatively impacted by the COVID-19 pandemic, including impacts that resulted from actions taken in response to the outbreak. Examples of these include, but are not limited to, travel bans and cruising advisories and the resulting temporary suspension of our operations, which is expected to continue until at least July 31, 2020 and China sailings until at least June 30, 2020, restrictions on the movement and gathering of people, social distancing measures, shelter-in-place/stay-at-home orders, and disruptions to businesses in our supply chain. In addition to the imposed restrictions affecting our business, the extent, duration, and magnitude of the COVID-19 pandemic’s effect on the economy and consumer demand for cruising and travel is still rapidly fluctuating and difficult to predict. As such, these impacts may persist for an extended period of time or even become more pronounced, even after we are permitted to and/or begin to resume operations.
The COVID-19 pandemic also has elevated risks affecting significant parts of our business:
•Operations: Due to the global public health circumstances, we have decided to extend the suspension of sailings of our global fleet through at least July 31, 2020 and China sailings until at least June 30, 2020. It is uncertain as to whether we will need to suspend additional sailings and to what extent. The suspension of sailings and the expected reduction in demand for future cruising once we resume sailing has led to a significant decline in our revenues and cash inflows, which has required us to take cost and capital expenditure containment actions. Consequently, we have reduced and furloughed our workforce, with approximately 23% of our U.S. shoreside employee base being impacted and, except for the minimum safe manning shipboard crew required to operate the ships during the suspension of operations, our shipboard crew were notified that their contracts would end early and they would be notified about new assignments when operations resume in the future, which may delay our ability to rebuild our workforce in the case of
improved conditions. In addition, we have reduced our planned capital spending through 2021, which may negatively impact our execution of planned growth strategies, particularly as it relates to investments in our ships, technology, and our expansion of land-based developments. Furthermore, we have taken actions to monitor and mitigate changes in our supply chain, and port destination availability, which may strain relationships with our vendors and port partners. Due to the unprecedented and uncertain nature of the COVID-19 pandemic, it is difficult to predict the impact of further disruptions and their magnitude. The impact of further disruptions may depend on how they coincide with the timing of when we seek to resume sailing. In addition, we have never previously experienced a complete cessation of our cruising operations, and as a consequence, our ability to predict the impact of such a cessation on our brands and future prospects is limited and such impact is uncertain.
•Results of Operations: Our decision to suspend sailings of our global fleet through at least July 31, 2020 and China sailings until at least June 30, 2020 and the resulting trip cancellations have materially impacted the results of our operations. We have incurred and will continue to incur significant costs associated with cancellations as we accommodate passengers with refunds and future cruise credits; as well as assisting our crew with their return home, food, housing, and medical needs. In addition, although cruise operations are currently suspended, we have incurred and will likely continue to incur significant overhead costs associated with layup of our fleet and enhanced COVID-19 related sanitation procedures. As we cannot control adverse media coverage and we cannot predict exactly when we will resume sailing operations, we are experiencing and may continue to experience weak demand for cruising for an undeterminable length of time and we cannot predict when we will return to pre-outbreak demand or fare pricing or if we will return to such levels in the foreseeable future. In turn, these negative impacts to our financial performance have resulted and may continue to result in impairments of our long-lived and intangible assets. For the three months ended March 31, 2020, we incurred impairment charges of $1.1 billion primarily related to the impairment of goodwill attributable to our Silversea Cruises reporting unit and several of our vessels. Additionally, future profitability will be impacted by increased debt service costs as a result of our liquidity actions.
•Liquidity: The suspension of our sailings and the reduction in demand for future cruising has adversely impacted our liquidity as we have experienced a significant increase in refunds of customer deposits while cash inflows from new or existing bookings on future sailings has reduced sharply. As a result, we have taken actions to increase our liquidity through a combination of capital and operating expense reductions and financing activities. For instance, we borrowed an aggregate principal amount of $2.2 billion on March 23, 2020 and an additional $150 million on May 4, 2020 pursuant to a 364-day senior secured term loan. On March 27, 2020, we drew down all the remaining capacity of our revolving credit facilities for a total of $3.475 billion outstanding. On May 19, 2020, we issued $3.32 billion in senior secured notes of which $1.0 billion is due in 2023 and $2.32 billion is due in 2025. The previously mentioned $2.35 billion, 364-day senior secured loan was repaid in its entirety with a portion the proceeds of these notes. On April 2, 2020, S&P Global downgraded us from BBB- to BB and on May 13, 2020, Moody’s downgraded us from Baa3 to Ba2. These downgrades reduce our ability to incur secured indebtedness by reducing the amount of indebtedness that we are permitted to secure. In April and May 2020, we obtained interim debt service and financial covenant holidays under certain of our export-credit backed loan facilities to generate a cumulative $0.8 billion of incremental liquidity through April 2021. Our ability to raise additional financing, whether or not secured, could be limited if our credit rating is further downgraded, and/or if we fail to comply with applicable covenants governing our outstanding indebtedness, and/or if overall financial market conditions worsen. Additionally, due to the complexity of the pandemic’s impact to the economy and uncertainty of its duration, we cannot guarantee that assumptions used to project our liquidity needs will be correct, which may result in the need for additional financing and/or may result in the inability to satisfy covenants required by our current credit facilities. If we raise additional funds through equity or debt issuances, our shareholders could experience dilution of their ownership interest, and these securities could have rights, preferences, and privileges that are superior to that of holders of our ordinary shares. If we raise additional funds by issuing debt, we may be subject to limitations on our operations due to restrictive covenants, which may be more restrictive than the covenants in our existing debt agreements, and we may be required to further encumber our assets. If adequate funds are not available on acceptable terms, or at all, we may be unable to fund our operations, or respond to competitive pressures, any of which could negatively affect our business. There is no guarantee that financing will be available in the future or that such financing will be available with similar terms or terms that are commercially acceptable to us. Further, if any government agrees to provide us with disaster relief assistance, or other assistance due to the impacts of the COVID-19 pandemic, and we determine it is beneficial to seek such government assistance, it may impose restrictions on executive compensation, share buybacks, dividends, prepayment of debt and other similar restrictions until the aid is repaid or redeemed in full, which could significantly limit our corporate
activities and adversely impact our business and operations. We cannot assure you that any such disaster relief would be available to us.
Adverse worldwide economic or other conditions could result in prolonged reduction in the demand for cruises and passenger spending, adversely impacting our operating results, cash flows and financial condition including impairing the value of our goodwill, ships, trademarks and other assets and potentially affecting other critical accounting estimates where the change may be material to our operating results.
In addition to health and safety concerns, demand for cruises is affected by international, national, and local economic conditions. Weak or uncertain economic conditions may impact consumer confidence and pose a risk as vacationers postpone or reduce discretionary spending. This, in turn, may result in cruise booking slowdowns, decreased cruise prices and lower onboard revenues, even after the COVID-19 pandemic has ended and/or related health and safety concerns are reduced. Given the global nature of our business, we are exposed to many different economies and our business could be hurt by challenging conditions in any of our markets. Any significant deterioration of international, national, or local economic conditions, including those resulting from geopolitical events and/or international disputes and the current economic and employment impact of the COVID-19 pandemic in countries where many of our customers reside could result in a prolonged period of booking slowdowns, depressed cruise prices and/or reduced onboard revenues, even after the COVID-19 pandemic has ended and/or related health and safety concerns are reduced. The COVID-19 pandemic could cause a global recession, which would have a further adverse impact on our financial condition and results of operations. In past recessions, demand in the cruise industry was significantly negatively impacted resulting in lower occupancy rates and adverse pricing, with a corresponding increase in the use of credits and other means to attract travelers. Additionally, the impact of COVID-19 on the financial markets is complicated and we cannot predict its effect on geopolitical events and/or international trade policies as countries attempt to mitigate the impact as economies re-open.
Our operating costs could increase due to market forces and economic or geopolitical factors beyond our control.
Our operating costs, including fuel, food, payroll and benefits, airfare, taxes, insurance, and security costs, are all subject to increases due to market forces and economic or geopolitical conditions or other factors beyond our control, including as a result of rerouting itineraries due to ports closing or not accepting passengers in connection with the COVID-19 pandemic. Increases in these operating costs could adversely affect our future profitability when an economic recovery begins.
Conducting business globally may result in increased costs and other risks.
We operate our business globally, which exposes us to a number of risks, including increased exposure to a wider range of regional and local economic conditions, volatile local political conditions, potential changes in duties and taxes, including changing and/or uncertain interpretations of existing tax laws and regulations, required compliance with additional laws and policies affecting cruising, vacation or maritime businesses or governing the operations of foreign-based companies, currency fluctuations, interest rate movements, difficulties in operating under local business environments, port quality and availability in certain regions, U.S. and global anti-bribery laws or regulations, imposition of trade barriers and restrictions on repatriation of earnings.
Our future growth strategies increasingly depend on the growth and sustained profitability of international markets. Factors that will be critical to our success in these markets include our ability to continue to raise awareness of our products and our ability to adapt our offerings to best suit rapidly evolving consumer demands. This risk is further heightened by the COVID-19 pandemic, as authorities in many of these markets have implemented numerous measures to contain the spread and impact of COVID-19, such as travel bans and restrictions, shelter-in-place/stay-at-home orders, and other limitations on business activity, including business closures. The execution of our planned growth strategies is dependent on meeting the governmental and regulatory measures and policies in each of these markets as they begin to re-open. Our ability to realize our future growth strategy is highly dependent on our ability to satisfy country-specific policies and requirements in order to return to service, as well as meeting the needs of region specific consumer preferences as services come back online. These factors may cause us to reevaluate some of our international business strategies.
Operating globally also exposes us to numerous and sometimes conflicting legal, regulatory and tax requirements. In many parts of the world, including countries in which we operate, practices in the local business communities might not conform to international business standards. These legal and regulatory requirements and standards may change in response to the COVID-19 pandemic, and there may be greater uncertainty as to the interpretation and enforcement of applicable laws and
regulations, including those introduced in response to the COVID-19 pandemic. We cannot guarantee consistent interpretation, application, and enforcement of rules and regulations put in place in response to the COVID-19 pandemic, which could place limits on our operations or increase our costs, as well as negatively impact our future growth strategies in our key growth markets. We must adhere to policies designed to promote legal and regulatory compliance as well as applicable laws and regulations. However, we might not be successful in ensuring that our employees, agents, representatives and other third parties with whom we associate throughout the world properly adhere to them. In addition, we may be exposed to the risk of penalties and other liabilities if we fail to comply with all applicable legal and regulatory requirements introduced in response to the COVID-19 pandemic, which may be subject to frequent and rapid change. Failure by us, our employees or any of these third parties to adhere to our policies or applicable laws or regulations could result in penalties, sanctions, damage to our reputation and related costs, which in turn could negatively affect our results of operations and cash flows.
We have operations in, and source passengers from, the United Kingdom and the European Union. On January 31, 2020, the United Kingdom withdrew from the European Union and immediately entered an 11-month transition period. Uncertainty during the transition period (including any impact that COVID-19 may have on the negotiations during this transition period) could lead to adverse effects on the economy of the United Kingdom, including the value of the British Pound, and the other economies in which we operate, making it more difficult to source passengers from these regions. Additionally, if the withdrawal is not executed effectively, it could adversely affect tax, legal and regulatory regimes to which our business in the region is subject. The withdrawal could also, among other potential outcomes, disrupt the free movement of goods, services and people between the United Kingdom and the European Union, if not executed effectively.
As a global operator, our business also may be impacted by changes in U.S. policy or priorities in areas such as trade, immigration (including any continuation of any of the immigration policies put in place by the U.S. government in response to the COVID-19 pandemic) and/or environmental or labor regulations, among others. Depending on the nature and scope of any such changes, they could impact our domestic and international business operations. Any such changes, and any international response to them, could potentially introduce new barriers to passenger or crew travel and/or cross border transactions, impact our guest experience and/or increase our operating costs.
If we are unable to address these risks adequately, our financial position and results of operations could be adversely affected, including impairing the value of our ships and other assets.
Price increases for commercial airline service for our guests or major changes or reduction in commercial airline service and/or availability could adversely impact the demand for cruises and undermine our ability to provide reasonably priced vacation packages to our guests.
Many of our guests depend on scheduled commercial airline services to transport them to or from the ports where our cruises embark or disembark. Increases in the price of airfare would increase the overall price of the cruise vacation to our guests, which may adversely impact demand for our cruises. In addition, changes in the availability and/or regulations governing commercial airline services, including those resulting from the COVID-19 pandemic, have adversely affected and could continue to adversely affect our guests’ ability to obtain air travel, as well as our ability to transfer our guests to or from our cruise ships, which could adversely affect our results of operations.
Fears of terrorist attacks, war, and other hostilities could have a negative impact on our results of operations.
Events such as terrorist attacks, war (or war-like conditions), conflicts (domestic or cross-border), civil unrest and other hostilities, including an escalation in the frequency or severity of incidents, and the resulting political instability, travel restrictions and advisories, and concerns over safety and security aspects of traveling or the fear of any of the foregoing have had, and could have in the future, a significant adverse impact on demand and pricing in the travel and vacation industry. In view of our global operations, we are susceptible to a wide range of adverse events. These events could also result in additional security measures taken by local authorities which may potentially impact access to ports and/or destinations.
Fluctuations in foreign currency exchange rates, fuel prices and interest rates could affect our financial results.
We are exposed to market risk attributable to changes in foreign currency exchange rates, fuel prices and interest rates. Significant changes in any of the foregoing could have a material impact on our financial results, net of the impact of our hedging activities and natural offsets. Our operating results have been and will continue to be impacted, often significantly, by changes in each of these factors. The value of our earnings in foreign currencies is adversely impacted by a strong U.S. dollar. In addition, any significant increase in fuel prices could materially and adversely affect our business as fuel prices not only impact our fuel costs, but also some of our other expenses, such as crew travel, freight, and commodity prices. Mandatory fuel restrictions, such as the International Maritime Organization’s 2020 Low Sulphur Regulation (“IMO 2020”), may also create uncertainty related to the price and availability of certain fuel types potentially impacting operating costs and the value of our related hedging instruments. Also, a significant increase in interest rates could materially impact the cost of our floating rate debt. Furthermore, regulatory changes, such as the announcement of the United Kingdom’s Financial Conduct Authority to
phase out LIBOR by the end of 2021, may adversely affect our portfolio of floating-rate debt and interest rate derivatives. If LIBOR ceases to exist, we may need to renegotiate any credit agreements or interest rate derivatives agreements extending beyond 2021 that utilize LIBOR as a factor in determining the interest rate or hedge rate, which could adversely impact our cost of debt.
Changes in U.S. or other countries’ foreign travel policy may affect our results of operations.
Changes in U.S. foreign policy could result in the imposition of travel restrictions or travel bans on U.S. persons to certain countries or result in the imposition of U.S. travel advisories, warnings, rules, regulations or legislation that could expose us to penalties or claims of monetary damages. The timing and scope of these changes are unpredictable, and they could cause us to cancel scheduled sailings, possibly on short notice, or could result in possible litigation against us. This, in turn, could decrease our revenue, increase our operating costs and otherwise impair our profitability. For instance, in June 2019, the U.S. government announced that cruise ships would no longer be allowed to travel between the U.S. and Cuba. This required us to change our high yielding Cuba sailings on short notice, which impacted our earnings. Moreover, in May 2019, the U.S. government activated Title III of the Cuban Liberty and Solidarity (Libertad) Act of 1996, popularly known as the Helms-Burton Act. This allowed certain individuals whose property was confiscated by the Cuban government to sue in U.S. courts anyone who “traffics” in the property in question. The activation of Title III has resulted in litigation against us and others in the tourism industry.
Additionally, in the first quarter of 2020, the U.S. Department of State, along with other governments, including Canada, issued travel advisories warning against cruise travel as a result of the COVID-19 pandemic and subsequently imposed restrictions on those entering the U.S. and many nations imposed strict temporary restrictions on international travel. This, combined with other factors, ultimately lead to the company voluntarily suspending the sailings of our fleet globally through at least July 31, 2020 and China sailings until at least June 30, 2020 and may limit or slow our ability to resume operations in the near term. In addition to the loss of revenues, our financial condition is affected by refund requests, future cruise credit issuances, and other costs associated with returning passengers and crew home safely.
Disease outbreaks and an increase in concern about the risk of illness could adversely impact our business and results from operations.
Disease outbreaks and increased concern related to illness when travelling to, from, and on our ships could cause a drop in demand for cruises, guest cancellations, travel restrictions, an unavailability of ports and/or destinations, cruise cancellations, ship redeployments and an inability to source our crew, provisions or supplies from certain places. Due to the complex and evolving nature of the COVID-19 pandemic we cannot predict the duration of the effect of the current pandemic, and the magnitude is dependent on the development of future events and responses from governments, other authorities, and individual consumers. Our industry may be subject to enhanced health and safety requirements in the future which may be costly and take a significant amount of time to implement across our fleet and we may be subject to concerns that cruises are susceptible to the spread of infectious diseases such as COVID-19. These effects may extend beyond any resolution of the current COVID-19 pandemic through the development of a vaccine or effective therapeutic treatment, and the impact of any of these factors could have a material adverse effect on our business and results of operations.
Incidents on ships, at port facilities, land destinations and/or affecting the cruise vacation industry in general, and the associated negative media coverage and publicity, could affect our reputation and impact our sales and results of operations.
The ownership and/or operation of cruise ships, private destinations, port facilities and shore excursions involves the risk of accidents, illnesses, mechanical failures, environmental incidents and other incidents which may bring into question safety, health, security and vacation satisfaction and can negatively impact our sales, operations and reputation. Incidents involving cruise ships, and, in particular the safety, health and security of guests and crew and the media coverage thereof, including those related to the COVID-19 pandemic, have impacted and could continue to impact demand for our cruises and pricing in the industry. In particular, we cannot predict the impact on our financial performance and our cash flows required for cash refunds of deposits as a result of the pause in our global fleet cruise operations, which may be prolonged, and the public’s concern regarding the health and safety of travel, especially by cruise ship, and related decreases in demand for travel and cruising. Moreover, our ability to attract and retain guests and crew depends, in part, upon the perception and reputation of our company and our brands and the public’s concerns regarding the health and safety of travel generally, as well as regarding the cruising industry and our ships specifically. Our reputation and our business could also be damaged by continued or additional negative publicity regarding the cruise industry in general, including publicity regarding the spread of contagious disease such as COVID-19, over-tourism in key ports and destinations and the potentially adverse environmental impacts of cruising. The considerable expansion in the use of social and digital media over recent years has compounded the potential scope and reach of
any negative publicity. In addition, incidents involving cruise ships may result in additional costs to our business, increasing government or other regulatory oversight and, in certain cases, potential litigation.
Significant weather, climate events and/or natural disasters could adversely impact our business and results from operations.
Natural disasters (e.g. earthquakes, volcanos), weather and/or climate events (including hurricanes and typhoons) could impact our source markets and operations resulting in travel restrictions, guest cancellations, an inability to source our crew or our provisions and supplies from certain places. We are often forced to alter itineraries and occasionally cancel a cruise or a series of cruises or to redeploy our ships due to these types of events, which could have an adverse effect on our sales, operating costs and profitability in the current and future periods. Increases in the frequency, severity or duration of these types of events could exacerbate their impact and cause further disruption to our operations or make certain destinations less desirable or unavailable impacting our revenues and profitability further. Any of the foregoing could have an adverse impact on our results of operations and on industry performance.
Our reliance on shipyards, their subcontractors and our suppliers to implement our newbuild and ship upgrade programs and to repair and maintain our ships exposes us to risks which, if realized, could adversely impact our business.
We rely on shipyards, their subcontractors and our suppliers to effectively construct our new ships and to repair, maintain, and upgrade our existing ships on a timely basis and in a cost effective manner; and there are a limited number of shipyards with the capability and capacity to build, repair, maintain and/or upgrade our ships. As such, any disruptions effecting the newbuild or fleet modernization supply chain will adversely impact our business as there are limited substitutes.
The COVID-19 pandemic has led to suspensions and/or a slowdowns of work at certain shipyards, which impacts our ability to construct new ships when and as planned, our ability to timely and cost-effectively procure new capacity, and our ability to execute scheduled drydocks and/or fleet modernizations. We believe the effects of the COVID-19 pandemic on the shipyards, their subcontractors, and our suppliers will result in a delay in ship deliveries and we cannot yet reasonably predict the extent and duration of such delays. Variations from our plan could have a significant negative impact on our business operations and financial condition.
Building, repairing, maintaining and/or upgrading a ship is sophisticated work that involves significant risks. In addition, the prices of labor and/or various commodities that are used in the construction of ships can be subject to volatile price changes, including the impact of fluctuations in foreign exchange rates. Shipyards, their subcontractors, and/or our suppliers may encounter financial, technical or design problems when doing these jobs. If materialized, these problems could impact the timely delivery or costs of new ships or the ability of shipyards to repair and upgrade our fleet in accordance with our needs or expectations. In addition, delays, mechanical faults and/or unforeseen incidents may result in cancellation of cruises, or, in more severe situations, delays of new ship orders, or necessitate unscheduled drydocks. Such events could result in lost revenue, increased operating expenses, or both, and thus adversely affect our results of operations.
An increase in capacity worldwide or excess capacity in a particular market could adversely impact our cruise sales and/or pricing.
Although our ships can be redeployed, cruise sales and/or pricing may be impacted by the introduction of new ships into the marketplace, reductions in cruise capacity, overall market growth and deployment decisions of ourselves and our competitors. As of December 31, 2019, a total of 67 new ships with approximately 159,000 berths are on order for delivery through 2024 in the cruise industry, including 15 ships currently scheduled to be delivered to us through 2024. The further net growth in capacity from these new ships and future orders, without an increase in the cruise industry’s demand and/or share of the vacation market, could depress cruise prices and impede our ability to achieve yield improvement. Additionally, due to our global suspension of operations and the suspension of operations by other cruise operators, cruise prices and yield improvement are further at risk depending on how, when, and where global operations resume.
In addition, to the extent that we or our competitors deploy ships to a particular itinerary/region and the resulting capacity in that region exceeds the demand, we may lower pricing and profitability may be lower than anticipated. This risk exists in emerging cruise markets, where capacity has grown rapidly over the past few years and in mature markets where excess capacity is typically redeployed. Any of the foregoing could have an adverse impact on our results of operations, cash flows and financial condition, including potentially impairing the value of our ships and other assets.
Unavailability of ports of call may adversely affect our results of operations.
We believe that port destinations are a major reason why guests choose to go on a particular cruise or on a cruise vacation. The availability of ports and destinations is affected by a number of factors, including industry demand and competition for key ports and destinations, existing capacity constraints, constraints related to the size of certain ships, security, financial limitations
on port development, exclusivity arrangements that ports may have with our competitors, geopolitical developments and local governmental regulations; and in light of the COVID-19 pandemic, port availability could also be subject to immediate change depending on local and/or onboard disease outbreaks or other government restrictions as well as limited availability when sailing resumes. In addition, higher fuel costs may adversely impact the destinations we choose to call upon on certain of our itineraries as they become too costly to include.
Increased demand and competition for key ports of call or destinations, limitations on the availability or feasibility of use of specific ports of call and/or constraints on the availability of shore excursions and other service providers at such ports or destinations could adversely affect our results of operations.
Growing anti-tourism sentiments and environmental concerns related to cruising could adversely impact our operations.
Certain ports and destinations are facing a surge of both cruise and non-cruise tourism which, in certain cases, has fueled anti-tourism sentiments and related countermeasures to limit the volume of tourists allowed in these destinations. In certain destinations, countermeasures to limit the volume of tourists are being contemplated and/or put into effect, including proposed limits on cruise ships and cruise passengers. Potential restrictions in ports and destinations such as Venice and Barcelona could limit the itinerary and destination options we can offer our passengers going forward. Some environmental groups have also generated negative publicity about the environmental impact of the cruise vacation industry and are advocating for more stringent regulation of ship emissions at berth and at sea. These anti-tourism sentiments and growing environmental scrutiny of the cruise industry and any related countermeasures could adversely impact our operations and financial results and subject us to increasing compliance costs.
We may lose business to competitors throughout the vacation market.
We operate in the vacation market and cruising is one of many alternatives for people choosing a vacation. We therefore risk losing business not only to other cruise lines, but also to other vacation operators, which provide other leisure options, including hotels, resorts, internet-based alternative lodging sites and package holidays and tours.
We face significant competition from other cruise lines on the basis of cruise pricing, travel agent preference and also in terms of the nature of ships, services and destinations that we offer to guests. Our principal competitors within the cruise vacation industry include Carnival Corporation & plc, which owns, among others, Aida Cruises, Carnival Cruise Line, Costa Cruises, Cunard Line, Holland America Line, P&O Cruises, Princess Cruises and Seabourn; Disney Cruise Line; MSC Cruises; and Norwegian Cruise Line Holdings Ltd, which owns Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises. Our revenues are sensitive to the actions of other cruise lines in many areas including pricing, scheduling, capacity and promotions, which can have a substantial adverse impact not only on our revenues, but on overall industry revenues.
In the event that we do not effectively market or differentiate our cruise brands from our competitors or otherwise compete effectively with other vacation alternatives and new or existing cruise companies, our results of operations and financial position could be adversely affected.
We may not be able to obtain sufficient financing or capital for our needs or may not be able to do so on terms that are acceptable or consistent with our expectations.
To fund our capital expenditures (including new ship orders), operations and scheduled debt payments, we have historically relied on a combination of cash flows provided by operations, drawdowns under available credit facilities, the incurrence of additional indebtedness and the sale of equity or debt securities in private or public securities markets. Any circumstance or event which leads to a decrease in consumer cruise spending, such as worsening global economic conditions or significant incidents impacting the cruise industry, including the COVID-19 pandemic, negatively affects our operating cash flows. In the case of the COVID-19 pandemic and the resulting suspension of our operations, these circumstances have also resulted in credit rating downgrades. See “—Adverse worldwide economic or other conditions could result in prolonged reduction in the demand for cruises and passenger spending, adversely impacting our operating results, cash flows and financial condition including potentially impairing the value of our goodwill, ships, trademarks and other assets and potentially affecting other critical accounting estimates where the change may be material to our operating results” and “—Incidents on ships, at port facilities, land destinations and/or affecting the cruise vacation industry in general, and the associated negative media coverage and publicity, could affect our reputation and impact our sales and results of operations” for more information.
Our ability to access additional funding as and when needed, our ability to timely refinance and/or replace our outstanding debt securities and credit facilities on acceptable terms and our cost of funding will depend upon numerous factors including, but not limited to, the recovery and strength of the financial markets, our financial performance, the performance of our industry in general and the size, scope and timing of our financial needs. In addition, even where financing commitments have been secured, significant disruptions in the capital and credit markets could cause our banking and other counterparties to breach their contractual obligations to us or could cause the conditions to the availability of such funding not to be satisfied.
This could include failures of banks or other financial service companies to fund required borrowings under our loan agreements or to pay us amounts that may become due or return collateral that is refundable under our derivative contracts for hedging of fuel prices, interest rates and foreign currencies or other agreements. If any of the foregoing occurs for a prolonged period of time it will have a long-term negative impact on our cash flows and our ability to meet our obligations cannot be guaranteed.
Our liquidity could be adversely impacted if we are unable to satisfy the covenants required by our credit facilities.
Our debt agreements contain covenants, including financial and other covenants restricting our ability, or requiring us, to take certain actions. Certain of our separate unsecured bank facilities totaling an outstanding principal amount of approximately $4.7 billion as of March 31, 2020 contain covenants that require us, among other things, to maintain a fixed charge coverage ratio of at least 1.25x and limit our net debt-to-capital ratio to no more than 62.5%. In May 2020, the requisite lenders under such unsecured bank facilities agreed to waive the requirement to comply with such financial covenants, so that the next time we will be required to comply with such covenants will be for the three months ended June 30, 2021. As a condition to obtaining such waivers, we agreed to certain additional covenants during the covenant waiver period, including that we maintain at least $300 million in unrestricted cash and cash equivalents (tested monthly) and that we are not permitted during the covenant waiver period, subject to limited exceptions, to pay cash dividends or make share repurchases unless we would have been compliant with our fixed charge coverage ratio at such time. In addition, the lenders under such unsecured bank facilities required a number of structural enhancements to such facilities. Among other things, certain of our subsidiaries that directly own other of our subsidiaries that own certain of our cruise ships are not permitted to incur or guarantee debt in excess of $1.7 billion in the aggregate prior to April 5, 2022 and, in certain circumstances, are required to provide additional guarantees for the benefit of the lenders under such facilities. Until such additional guarantees are released, which will occur automatically in certain circumstances where we eliminate secured and guaranteed debt, certain of our subsidiaries will be subject to limitations on incurring debt and creating liens on their assets and we and our subsidiaries will be subject to limitations on selling assets that are subject to such guarantees.
In addition, our ability to maintain our credit facilities may also be impacted by changes in our ownership base. More specifically, we may be required to prepay our bank financing facilities if any person acquires ownership of more than 50% of our common stock or, subject to certain exceptions, during any 24-month period, a majority of our board of directors is no longer comprised of individuals who were members of our board of directors on the first day of such period. Our public debt securities also contain change of control provisions that would be triggered by a third-party acquisition of greater than 50% of our common stock coupled with a ratings downgrade, which would require us to offer to repurchase our public debt securities in the event of such change of control.
Failure to comply with the terms of these debt facilities, or any prepayment or repurchase obligations, could result in an event of default. Generally, if an event of default under any debt agreement or debt security occurs, then pursuant to cross default acceleration clauses, our outstanding debt and derivative contract payables could become due and/or terminated. In addition, in such events, our credit card processors could hold back payments to create a reserve. We cannot provide assurances that we would have sufficient liquidity to repay, or the ability to refinance the debt if such amounts were accelerated upon an event of default.
If we are unable to appropriately balance our cost management and capital allocation strategies with our goal of satisfying guest expectations, it may adversely impact our business success.
Our goals call for us to provide high quality products and deliver high quality services. There can be no assurance that we can successfully balance these goals with our cost management and capital allocation strategies. Our business also requires us to make capital allocation decisions across a broad scope of investment options with varying return profiles and time horizons for value realization. These include significant capital investment decisions such as ordering new ships, upgrading our existing fleet, enhancing our technology and/or data capabilities, and expanding our portfolio of land-based assets, based on expected market preferences, competition and projected demand. There can be no assurance that our strategies will be successful, which could adversely impact our business, financial condition and results of operations. Investments in older tonnage, in particular, run the risk of not meeting expected returns and diluting related asset values.
Our attempts to expand our business into new markets and new ventures may not be successful.
We opportunistically seek to grow our business through, among other things, expansion into new destinations or source markets and establishment of new ventures complementary to our current offerings. These attempts to expand our business increase the complexity of our business, require significant levels of investment and can strain our management, personnel, operations and systems. In addition, we may be unable to execute our attempts to expand our business as a result of the impacts of the COVID-19 pandemic, as described elsewhere herein. There can be no assurance that these business expansion efforts will
develop as anticipated or that we will succeed, and if we do not, we may be unable to recover our investment, which could adversely impact our business, financial condition and results of operations.
Risks associated with our development and operation of key land-based destination projects may adversely impact our business or results of operations.
We have invested, either directly or indirectly through joint ventures and partnerships, in a growing portfolio of key land-based projects including port and terminal facilities, private destinations and multi-brand destination projects. These investments can increase our exposure to certain key risks depending on the scope, location, and the ownership and management structure of these projects. These risks include susceptibility to weather events, exposure to local political/regulatory developments and policies, logistical challenges and human resource and labor risks; in addition to location-specific safety, environmental, and health risks, including challenges posed by the COVID-19 pandemic and its effects locally where we have these projects and relationships.
Our reliance on travel agencies to sell and market our cruises exposes us to certain risks which, if realized, could adversely impact our business.
We rely on travel agencies to generate the majority of bookings for our ships. Accordingly, we must ensure that our commission rates and incentive structures remain competitive. If we fail to offer competitive compensation packages or fail to maintain our relationships, these agencies may be incentivized to sell cruises offered by our competitors to our detriment, which could adversely impact our operating results. Our reliance on third-party sellers is particularly pronounced in certain markets. In addition, the travel agent industry is sensitive to economic conditions that impact discretionary income of consumers. Significant disruptions, such as those caused by the COVID-19 pandemic, or contractions in the industry could reduce the number of travel agencies available for us to market and sell our cruises, which could have an adverse impact on our financial condition and results of operations. Additionally, the strength of our recovery from suspended operations could be delayed if we are not aligned and partnered with key travel agencies.
Disruptions in our shoreside or shipboard operations or our information systems may adversely affect our results of operations.
Our principal executive office and principal shoreside operations are located in Florida, and we have shoreside offices throughout the world. Actual or threatened natural disasters (e.g., hurricanes/typhoons, earthquakes, tornadoes, fires or floods), municipal lockdowns, curfews, quarantines, or similar events in these locations may have a material impact on our business continuity, reputation and results of operations. For instance, virtually all Company shoreside operations are working remotely due to the COVID-19 pandemic, which may pose increased technological risks. In addition, substantial or repeated information system failures, computer viruses or cyber attacks impacting our shoreside or shipboard operations could adversely impact our business. We do not generally carry business interruption insurance for our shoreside or shipboard operations or our information systems. As such, any losses or damages incurred by us could have an adverse impact on our results of operations.
The loss of key personnel, our inability to recruit or retain qualified personnel, or disruptions among our shipboard personnel due to strained employee relations could adversely affect our results of operations.
Our success depends, in large part, on the skills and contributions of key executives and other employees, and on our ability to recruit, develop and retain high quality personnel as well as having adequate succession plans and back-up operating plans for when critical executives are unable to serve. As demand for qualified personnel in the industry grows, we must continue to effectively recruit, train, motivate and retain our employees, both shoreside and on our ships, in order to effectively compete in our industry, maintain our current business and support our projected global growth. In addition, we may experience difficulties in recruiting and retaining qualified personnel if we reduce the levels of fixed or variable compensation that we offer (including equity compensation impacted by the trading price of our equity), whether in response to the impacts of the COVID-19 pandemic or otherwise.
As of December 31, 2019, 89% of our shipboard employees were covered by collective bargaining agreements. A dispute under our collective bargaining agreements could result in a work stoppage of those employees covered by the agreements. We may not be able to satisfactorily renegotiate these collective bargaining agreements when they expire. In addition, existing collective bargaining agreements may not prevent a strike or work stoppage on our ships. We may also be subject to or affected by work stoppages unrelated to our business or collective bargaining agreements. Any such work stoppages or potential work stoppages could have a material adverse effect on our financial results, as could a loss of key employees, our inability to recruit or retain qualified personnel or disruptions among our personnel.
Business activities that involve our co-investments with third parties may subject us to additional risks.
Partnerships, joint ventures and other business structures involving our co-investments with third parties generally include some form of shared control over the operations of the business and create additional risks, including the possibility that other investors in such ventures could become bankrupt or otherwise lack the financial resources to meet their obligations, or could have or develop business interests, policies or objectives that are inconsistent with ours. In addition to financial risks, our co-investment activities may also present managerial and operational risks and expose us to reputational or legal concerns. These or other issues related to our co-investments with third parties could adversely impact our operations or liquidity. Due to the COVID-19 pandemic, our Pullmantur, TUI Cruises and Silversea affiliate cruise lines have suspended sailings and their operations, results of operations and liquidity have been and will continue to be adversely materially impacted. The Company may be required to provide funding for these affiliated operations and it is unclear when and to what extent these brands will resume operations and our ability to provide such funding will be limited by the level and terms of our outstanding indebtedness. Further, due to the arrangements we have in place with our partners in these ventures, we are limited in our ability to control the strategy of these ventures if and when they resume operations, or their use of capital and other key factors to their results of operation which could adversely affect our investments and impact our results of operations.
We have a partial ownership interest in Silversea Cruises and as a result may be unable to control the amount of cash we receive or retain from the operation of Silversea Cruises and are limited in the flexibility we have to support Silversea Cruises’ operations.
On July 31, 2018, we acquired a 66.7% equity stake in Silversea Cruises. In connection with the acquisition of our equity stake in Silversea Cruises, we with the other shareholder of Silversea Cruises became party to a Shareholders’ Agreement with Silversea Cruises and Silversea Cruises Group Ltd. (the “Shareholders’ Agreement”). Among other things, the Shareholders’ Agreement contains certain provisions concerning our funding and support of Silversea Cruises. We have provided and expect to continue to provide significant operational support and funding to Silversea Cruises. However our ability to control the operational support and funding that we believe is advisable to provide to Silversea Cruises is limited by provisions of the Shareholders’ Agreement. To the extent we continue to own less than 100% of Silversea Cruises and Silversea Cruises requires additional operational support and funding, our flexibility to contribute such support and funding is limited by the rights of the other shareholder of Silversea Cruises. Our inability, or limited ability, to control the operations and/or management of Silversea Cruises may limit the business strategies and operational results of Silversea Cruises and the value of our investment. Further, our continued significant operational support and funding of Silversea Cruises may have an adverse impact on our business and results of operation.
In addition, we and Silversea Cruise Holding Ltd. are guarantors of the 7.25% senior secured notes 2025 issued by Silversea Cruise Finance Ltd. (the “Silversea Notes”). The Silversea Notes are rated Baa3 by Moody’s and BBB- by S&P. If the credit rating of the Silversea Notes is downgraded to below investment grade by one rating agency, then Silversea Cruises and its restricted subsidiaries will become subject to certain restrictive and other covenants, the application of which is currently suspended unless and until any such downgrade occurs. For example, if the credit rating of the Silversea Notes is downgraded to below investment grade, among other things, Silversea Cruises and its restricted subsidiaries will be subject to limitations on the incurrence of indebtedness, limitations on entering into transactions with affiliates (including Royal Caribbean and its subsidiaries that are not restricted subsidiaries of Silversea Cruises) and limitations on the payment of dividends and other distributions from Silversea Cruises to Royal Caribbean, each of which may limit our ability to obtain funding and may decrease our operational and financial flexibility, including the ability to make upstream payments from Silversea Cruises. The Silversea Notes are guaranteed by the Company on a senior unsecured basis. Any event of default or acceleration of the indebtedness under the Silversea Notes could cause the borrowings under other of our debt instruments that contain cross-default provisions to be accelerated or become payable on demand.
Past or pending business acquisitions or potential acquisitions that we may decide to pursue in the future carry inherent risks which could adversely impact our financial performance and condition.
The Company, from time to time, has engaged in acquisitions (e.g., our Silversea Cruises acquisition) and may pursue acquisitions in the future, which are subject to, among other factors, the Company’s ability to identify attractive business opportunities and to negotiate favorable terms for such opportunities. Accordingly, the Company cannot make any assurances that potential acquisitions will be completed timely or at all, or that if completed, we would realize the anticipated benefits of such acquisition. Acquisitions also carry inherent risks such as, among others: (1) the potential delay or failure of our efforts to successfully integrate business processes and realizing expected synergies; (2) difficulty in aligning procedures, controls and/or policies; and (3) future unknown liabilities and costs that may be associated with an acquisition. In addition, acquisitions may also adversely impact our liquidity and/or debt levels, and the recognized value of goodwill and other intangible assets can be negatively affected by unforeseen events and/or circumstances, which may result in an impairment charge. Any of the foregoing events could adversely impact our financial condition and results of operations.
We rely on supply chain vendors and third-party service providers who are integral to the operations of our businesses. These vendors and service providers are also affected by COVID-19 and may be unable or unwilling to deliver on their commitments or may act in ways that could harm our business.
We rely on supply chain vendors to deliver key products to the operations of our businesses around the world. Any event impacting a vendor’s ability to deliver goods of the expected quality at the location and time needed could negatively impact our ability to deliver our cruise experience. Events impacting our supply chain could be caused by factors beyond the control of our suppliers or us, including inclement weather, natural disasters, increased demand, problems in production or distribution and/or disruptions in third-party logistics or transportation systems, such as those caused by the COVID-19 pandemic. Any such interruptions to our supply chain could increase our costs and could limit the availability of products critical to our operations.
In order to achieve cost and operational efficiencies, we outsource to third-party vendors certain services that are integral to the operations of our global businesses, such as our onboard concessionaires, certain of our call center operations and operation of a large part of our information technology systems, which are also affected by the COVID-19 pandemic. We are subject to the risk that certain decisions are subject to the control of our third-party service providers and that these decisions may adversely affect our activities. A failure to adequately monitor a third-party service provider’s compliance with a service level agreement or regulatory or legal requirements could result in significant economic and reputational harm to us. There is also a risk the confidentiality, privacy and/or security of data held by third parties or communicated over third-party networks or platforms could become compromised.
If we are unable to keep pace with developments in technology or technological obsolescence, including technology in response to the COVID-19 pandemic, our operations or competitive position could become impaired.
Our business continues to demand the use of sophisticated technology and systems. These technologies and systems require significant investment and must be proven, refined, updated, upgraded and/or replaced with more advanced systems in order to continue to meet our customers’ demands and expectations. If we are unable to do so in a timely manner or within reasonable cost parameters or if we are unable to appropriately and timely train our employees to operate any of these new systems, our business could suffer. We also may not achieve the benefits that we anticipate from any new technology or system, which could result in higher than anticipated costs or impair our operating results.
In response to the COVID-19 pandemic, there has been a search for technology to accurately detect, either directly or indirectly, whether an individual is or has been infected with the virus or has been exposed to someone who is or might be infected. While this technology is in the early stages, as this technology continues to develop we may be faced with decisions regarding what technology to adopt for testing our passengers and employees, and what safety procedures to adopt for future sailings. We may be unable to obtain appropriate technology in a timely manner or at all or we may incur significant costs in doing so. A failure to adopt the appropriate technology, a failure or obsolescence in the technology that we do adopt, or a failure in our safety procedures could adversely affect our results of operations.
We are exposed to cyber security attacks and data breaches, including the risks and costs associated with protecting our systems and maintaining integrity and security of our business information, as well as personal data of our guests, employees and business partners.
We are subject to cyber security attacks. These cyber attacks can vary in scope and intent from attacks with the objective of compromising our systems, networks and communications for economic gain to attacks with the objective of disrupting, disabling or otherwise compromising our maritime and/or shoreside operations. The attacks can encompass a wide range of methods and intent, including phishing attacks, illegitimate requests for payment, theft of intellectual property, theft of confidential or non-public information, installation of malware, installation of ransomware and theft of personal or business information. The breadth and scope of these attacks, as well as the techniques and sophistication used to conduct these attacks, have grown over time.
A successful cyber security attack may target us directly, or it may be the result of a third party’s inadequate care. In either scenario, the Company may suffer damage to its systems and data that could interrupt our operations, adversely impact our reputation and brand and expose us to increased risks of governmental investigation, litigation, fines and other liability, any of which could adversely affect our business. Furthermore, responding to such an attack and mitigating the risk of future attacks could result in additional operating and capital costs in systems technology, personnel, monitoring and other investments.
In addition, we are also subject to various risks associated with the collection, handling, storage and transmission of sensitive information. In the course of doing business, we collect large volumes of employee, customer and other third-party data, including personally identifiable information and individual credit data, for various business purposes. We are subject to federal, state and international laws (including the European Union General Data Protection Regulation), as well as industry standards, relating to the collection, use, retention, security and transfer of personally identifiable information and individual
credit data. In many cases, these laws apply not only to third-party transactions, but also to transfers of information between the Company and its subsidiaries, and among the Company, its subsidiaries and other parties with which the Company has commercial relations. Several jurisdictions have passed laws in this area, and other jurisdictions are considering imposing additional restrictions. These laws continue to develop and may be inconsistent from jurisdiction to jurisdiction. Complying with emerging and changing international requirements has caused, and may cause us to incur substantial costs or require us to change our business practices. If we fail to comply with the various applicable data collection and privacy laws, we could be exposed to fines, penalties, restrictions, litigation or other expenses, and our business could be adversely impacted.
While we continue to evolve our cyber security practices in line with our business’ reliance on technology and the changing external threat landscape, and we invest time, effort and financial resources to secure our systems, networks and communications, our security measures cannot provide absolute assurance that we will be successful in preventing or responding to all cyber security attacks. There can be no assurance that any breach or incident will not have a material impact on our operations and financial results.
Any breach, theft, loss, or fraudulent use of guest, employee, third-party or company data, could adversely impact our reputation and brand and our ability to retain or attract new customers, and expose us to risks of data loss, business disruption, governmental investigation, litigation and other liability, any of which could adversely affect our business. Significant capital investments and other expenditures could be required to remedy the problem and prevent future breaches, including costs associated with additional security technologies, personnel, experts and credit monitoring services for those whose data has been breached. Further, if we or our vendors experience significant data security breaches or fail to detect and appropriately respond to significant data security breaches, we could be exposed to government enforcement actions and private litigation.
Litigation, enforcement actions, fines or penalties could adversely impact our financial condition or results of operations and/or damage our reputation.
Our business is subject to various U.S. and international laws and regulations that could lead to enforcement actions, fines, civil or criminal penalties or the assertion of litigation claims and damages. In addition, improper conduct by our employees, agents or joint venture partners could damage our reputation and/or lead to litigation or legal proceedings that could result in civil or criminal penalties, including substantial monetary fines. In certain circumstances it may not be economical to defend against such matters and/or our legal strategy may not ultimately result in us prevailing in a matter. Such events could lead to an adverse impact on our financial condition or results of operations. In addition, we have experienced, and may continue to experience, increases in litigation pertaining to the COVID-19 crisis. We cannot predict the quantum or outcome of any such proceedings and the impact that they will have on our financial results, but any such impact may be material. While some of these claims are covered by insurance, we cannot be certain that all of them will be, which could have an adverse impact on our financial condition or results of operations.
The potential unavailability of insurance coverage, an inability to obtain insurance coverage at commercially reasonable rates or our failure to have coverage in sufficient amounts to cover our incurred losses may adversely affect our financial condition or results of operations.
We seek to maintain appropriate insurance coverage at commercially reasonable rates. We normally insure based on the cost of an asset rather than replacement value and we also elect to self-insure, co-insure, or use deductibles in certain circumstances for certain risks such as loss of use of a ship or a cyber security breach. The limits of insurance coverage we purchase are based on the availability of the coverage, evaluation of our risk profile and cost of coverage. We do not carry business interruption insurance and accordingly we have no insurance coverage for loss of revenues or earnings from our ships or other operations. Accordingly, we are not protected against all risks and we cannot be certain that our coverage will be adequate for liabilities actually incurred which could result in an unexpected decrease in our revenue and results of operations in the event of an incident.
We are members of four Protection and Indemnity (“P&I”) clubs, which are part of a worldwide group of 13 P&I clubs, known as the International Group of P&I Clubs (the “IG”). P&I coverage provided by the clubs is on a mutual basis and we are subject to additional premium calls in the event of a catastrophic loss incurred by any member of the 13 P&I clubs, whereby the reinsurance limits purchased by the IG are exhausted. We are also subject to additional premium calls based on investment and underwriting shortfalls experienced by our own individual insurers. Certain liabilities, costs, and expenses associated with the COVID-19 pandemic are insured by our participation in these P&I clubs.
We cannot be certain that insurance and reinsurance coverage will be available to us and at commercially reasonable rates in the future or at all or, if available, that it will be sufficient to cover potential claims. Additionally, if we or other insureds sustain significant losses, the result may be higher insurance premiums, cancellation of coverage, or the inability to obtain coverage. Such events could adversely affect our financial condition or results of operations.
Environmental, labor, health and safety, financial responsibility and other maritime regulations could affect operations and increase operating costs.
The U.S. and various state and foreign government or regulatory agencies have enacted or may enact environmental regulations or policies, such as requiring the use of low sulfur fuels (e.g. IMO 2020), that could increase our direct cost to operate in certain markets, increase our cost for fuel, limit the supply of compliant fuel, cause us to incur significant expenses to purchase and/or develop new equipment and adversely impact the cruise vacation industry. While we have taken and expect to continue to take a number of actions to mitigate the potential impact of certain of these regulations, there can be no assurances that these efforts will be successful or completed on a timely basis.
There is increasing global regulatory focus on climate change, greenhouse gas and other emissions. These regulatory efforts, both internationally and in the U.S. are still developing, and we cannot yet determine what the final regulatory programs or their impact will be in any jurisdiction where we do business. However, such climate change-related regulatory activity in the future may adversely affect our business and financial results by requiring us to reduce our emissions, purchase allowances or otherwise pay for our emissions. Such activity may also impact us by increasing our operating costs, including fuel costs.
In addition, we are subject to various international, national, state and local laws, regulations and treaties that govern, among other things, discharge from our ships, safety standards applicable to our ships, treatment of disabled persons, health and sanitary standards applicable to our guests, security standards on board our ships and at the ship/port interface areas, and financial responsibilities to our guests. These issues are, and we believe will continue to be, an area of focus by the relevant authorities throughout the world. This could result in the enactment of more stringent regulation of cruise ships that could subject us to increasing compliance costs in the future.
A change in our tax status under the U.S. Internal Revenue Code, or other jurisdictions, may have adverse effects on our income.
We and a number of our subsidiaries are foreign corporations that derive income from a U.S. trade or business and/or from sources within the U.S. In connection with the year end audit, each year, Faegre Drinker Biddle & Reath LLP, our U.S. tax counsel, delivers to us an opinion, based on certain representations and assumptions set forth in it, to the effect that this income, to the extent derived from or incidental to the international operation of a ship or ships, is excluded from gross income for U.S. federal income tax purposes pursuant to Section 883 of the Internal Revenue Code. We believe that most of our income (including that of our subsidiaries) is derived from or incidental to the international operation of ships.
Our ability to rely on Section 883 could be challenged or could change in the future. Provisions of the Internal Revenue Code, including Section 883, are subject to legislative change at any time. Moreover, changes could occur in the future with respect to the identity, residence or holdings of our direct or indirect shareholders, trading volume or trading frequency of our shares, or relevant foreign tax laws of Liberia or Bahamas, such that they no longer qualify as equivalent exemption jurisdictions, that could affect our eligibility for the Section 883 exemption. Accordingly, there can be no assurance that we will continue to be exempt from U.S. income tax on U.S. source shipping income in the future. If we were not entitled to the benefit of Section 883, we and our subsidiaries would be subject to U.S. taxation on a portion of the income derived from or incidental to the international operation of our ships, which would reduce our net income.
Additionally, portions of our business are operated by companies that are within the United Kingdom tonnage tax regime. Further, some of our operations are conducted in jurisdictions where we rely on tax treaties to provide exemption from taxation. To the extent the United Kingdom tonnage tax laws change or we do not continue to meet the applicable qualification requirements or if tax treaties are changed or revoked, we may be required to pay higher income tax in these jurisdictions, adversely impacting our results of operations.
As budgetary constraints continue to adversely impact the jurisdictions in which we operate, increases in income tax regulations, tax audits or tax reform affecting our operations may be imposed.
We are not a U.S. corporation and our shareholders may be subject to the uncertainties of a foreign legal system in protecting their interests.
Our corporate affairs are governed by our Articles of Incorporation and By-Laws and by the Business Corporation Act of Liberia. The provisions of the Business Corporation Act of Liberia resemble provisions of the corporation laws of a number of states in the U.S. However, while most states have a fairly well developed body of case law interpreting their respective corporate statutes, there are very few judicial cases in Liberia interpreting the Business Corporation Act of Liberia. As such, the rights and fiduciary responsibilities of directors under Liberian law are not as clearly established as the rights and fiduciary responsibilities of directors under statutes or judicial precedent in certain U.S. States jurisdictions. For example, the right of shareholders to bring a derivative action in Liberian courts may be more limited than in U.S. jurisdictions. There may also be practical difficulties for shareholders attempting to bring suit in Liberia and Liberian courts may or may not recognize and
enforce foreign judgments. Thus, our public shareholders may have more difficulty in protecting their interests with respect to actions by management, directors or controlling shareholders than would shareholders of a corporation incorporated in a U.S. jurisdiction.
Provisions of our Articles of Incorporation, By-Laws and Liberian law could inhibit others from acquiring us, prevent a change of control, and may prevent efforts by our shareholders to change our management.
Certain provisions of our Articles of Incorporation and By-Laws and Liberian law may inhibit third parties from effectuating a change of control of the Company without approval from our board of directors which could result in the entrenchment of current management. These include provisions in our Articles of Incorporation that prevent third parties, other than A. Wilhelmsen AS. and Cruise Associates, from acquiring beneficial ownership of more than 4.9% of our outstanding shares without the consent of our board of directors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Share Repurchases
The following table provides information about our repurchase of common stock during the quarter ended March 31, 2020,
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Period
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Total number of shares purchased (1)
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Average price paid per share
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Total number of shares purchased as part of publicly announced plans or programs
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Approximate dollar value of shares that may yet be purchased under the plans or programs
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January 1, 2020 - January 31,2020
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—
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—
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—
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$
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600,000,000
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February 1, 2020 - February 29, 2020
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—
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—
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—
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$
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600,000,000
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March 1, 2020 - March 31, 2020
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52,927
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$
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111.47
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—
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$
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600,000,000
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Total
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52,927
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$
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111.47
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(1) Includes shares related to employee stock plans, primarily withheld by us to cover withholding taxes due at the election of certain holders.
As of March 31, 2020, we have approximately $600.0 million that remains available for future stock repurchase transactions under a 24-month common stock repurchase program for up to $1.0 billion authorized by our board of directors on May 9, 2018. Subsequent to March 31, 2020, we agreed with our lenders not to engage in stock repurchases for so long as our debt covenant waivers are in effect.
Item 6. Exhibits
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10.1
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10.2
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10.3
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10.4
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First Supplemental Agreement relating to Hull No. L34 at Chantiers de l’Atlantique (previously known as STX France S.A.), dated as of March 12, 2020, by and among Houatorris Finance Limited, Chantiers de L’Atlantique, the Company, Citibank Europe PLC, UK Branch as facility agent, Citicorp Trustee Company Limited as security trustee, Citibank N.A., London branch, HSBC France, Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch and the banks and financial institutions party thereto.*
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10.5
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First Supplemental Agreement relating to Hull No. M34 at Chantiers de l’Atlantique (previously known as STX France S.A.), dated as of March 12, 2020, by and among Hoediscus Finance Limited, Chantiers de L’Atlantique as seller, the Company as buyer, Citibank Europe PLC, UK Branch as facility agent, Citicorp Trustee Company Limited as security trustee, Citibank N.A., London branch as global coordinator, HSBC France as French coordinating bank, Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch as ECA agent and the banks and financial institutions listed thereto.*
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10.6
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First Supplemental Agreement relating to Hull No. C34 at Chantiers de l’Atlantique (previously known as STX France S.A.), dated as of March 12, 2020, by and among Hibisyeu Finance Limited as borrower, Chantiers de L’Atlantique as seller, the Company as buyer, Citibank Europe PLC, UK Branch as facility agent, Citicorp Trustee Company Limited as security trustee, Citibank N.A., London branch as global coordinator, HSBC France as French coordinating bank, Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch as ECA agent and the banks and financial institutions listed thereto.*
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31.1
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31.2
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32.1
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*
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Filed herewith
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**
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Furnished herewith
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Interactive Data File
101 The following financial statements of Royal Caribbean Cruises Ltd. for the period ended March 31, 2020, formatted in iXBRL (Inline extensible Reporting Language) are filed herewith:
(i) the Consolidated Statements of Comprehensive Income (Loss) for the quarter ended March 31, 2020 and 2019;
(ii) the Consolidated Balance Sheets at March 31, 2020 and December 31, 2019;
(iii) the Consolidated Statements of Cash Flows for the three months ended March 31, 2020 and 2019; and
(iv) the Notes to the Consolidated Financial Statements, tagged in summary and detail.
104 Cover page interactive data file (the cover page XBRL tags are embedded within the Inline XBRL document).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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ROYAL CARIBBEAN CRUISES LTD.
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(Registrant)
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/s/ JASON T. LIBERTY
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Jason T. Liberty
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Executive Vice President, Chief Financial Officer
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May 21, 2020
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(Principal Financial Officer and duly authorized signatory)
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Dated 12 March 2020
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HOEDISCUS FINANCE LIMITED
as Borrower
CHANTIERS DE L’ATLANTIQUE (PREVIOUSLY KNOWN AS STX FRANCE S.A.)
as Seller
ROYAL CARIBBEAN CRUISES LTD.
as Buyer
CITIBANK EUROPE PLC, UK BRANCH
as Facility Agent
CITICORP TRUSTEE COMPANY LIMITED
as Security Trustee
CITIBANK N.A., LONDON BRANCH
as Global Coordinator
HSBC FRANCE
as French Coordinating Bank
SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH
as ECA Agent
THE BANKS AND FINANCIAL INSTITUTIONS LISTED IN SCHEDULE 1
as Lenders and
CITIBANK N.A., LONDON BRANCH, BANCO SANTANDER, S.A., PARIS BRANCH, BNP PARIBAS, HSBC FRANCE, SOCIÉTÉ GÉNÉRALE and SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH
as Mandated Lead Arrangers
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FIRST SUPPLEMENTAL AGREEMENT
relating to Hull No. L34 at Chantiers de l’Atlantique (previously known as STX France S.A.)
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Contents
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Clause
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Page
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1
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Definitions
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2
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2
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Agreement of the Parties
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3
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3
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Amendments to Relevant Documents
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3
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4
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Representations and warranties
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4
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5
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Conditions
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4
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6
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Confirmation of continued effect
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5
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7
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Costs and expenses
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5
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8
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Miscellaneous and notices
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6
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9
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Governing law
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6
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Schedule 1 The Lenders
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8
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Schedule 2 Documents and evidence required as conditions precedent (referred to in clause 5.1)
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12
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Schedule 3 Form of Amended and Restated Facility Agreement
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15
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Schedule 4 Form of Amended and Restated Receivable Purchase Agreement
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16
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Schedule 5 Form of Amended and Restated Novation Agreement
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17
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Schedule 6 Form of Amended and Restated Agency and Trust Deed
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18
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Schedule 7 Form of Effective Date certificate
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THIS FIRST SUPPLEMENTAL AGREEMENT is dated 12 March 2020 and made BETWEEN:
(1)HOEDISCUS FINANCE LIMITED as Borrower;
(2)CHANTIERS DE L’ATLANTIQUE as Seller;
(3)ROYAL CARIBBEAN CRUISES LTD. as Buyer;
(4)CITIBANK EUROPE PLC, UK BRANCH as Facility Agent;
(5)CITICORP TRUSTEE COMPANY LIMITED as Security Trustee;
(6)CITIBANK N.A., LONDON BRANCH as Global Coordinator;
(7)HSBC FRANCE as French Coordinating Bank;
(8)SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH as ECA Agent;
(9)THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1 as Lenders; and
(10)CITIBANK N.A., LONDON BRANCH, BANCO SANTANDER, S.A., PARIS BRANCH, BNP PARIBAS, HSBC FRANCE, SOCIÉTÉ GÉNÉRALE and SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH as Mandated Lead Arrangers.
WHEREAS:
(A)By a building contract dated 16 February 2015 (as amended and restated by an amending and restating agreement dated 30 September 2016 and as further amended by Addendum No.1 dated 18 October 2017 and Addendum No.2 dated 25 January 2018, the Building Contract) between the Seller and the Buyer the Seller has agreed to design, construct, equip and complete a passenger cruise vessel with Hull No. L34 (the Vessel) for the Buyer.
(B)By a receivable purchase agreement dated 24 July 2017 (the Receivable Purchase Agreement), the Seller has agreed to sell its contractual rights to the Receivable to the Borrower.
(C)The Borrower will fund the purchase of the Receivable through the borrowing of advances in an amount of up to €603,426,960 pursuant to a facility agreement dated 24 July 2017 (the Facility Agreement) between (1) the Borrower, (2) the Facility Agent, (3) the Security Trustee, (4) the ECA Agent, (5) the Global Coordinator, (6) the French Coordinating Bank, (7) the Mandated Lead Arrangers and (8) the Lenders.
(D)By a buyer consent agreement dated 24 July 2017 (the Buyer Consent Agreement) between (1) the Borrower, (2) the Seller, (3) the Facility Agent, (4) the Security Trustee, (5) the Refund Guarantors, (6) the RG Agent and (7) the Buyer, the parties have agreed (among other things) the basis upon which the Buyer has consented to the sale of the Receivable and has granted a first priority pre-delivery mortgage over the Vessel.
(E)By a novation agreement dated 24 July 2017 (the Novation Agreement) between (1) the Borrower, (2) the Buyer, (3) the Facility Agent, (4) the Security Trustee, (5) the ECA Agent, (6) the Global Coordinator, (7) the French Coordinating Bank, (8) the Mandated Lead Arrangers, and (9) the Lenders, the parties agreed to the future novation, amendment and restatement of the Facility Agreement with the Buyer as borrower in the form set out therein.
(F)In connection with certain requirements of BpiFAE in relation to the French content in respect of the Vessel and the drawdown arrangements under the Facility Agreement in respect of the Non-
Yard Costs it has been agreed that certain amendments should be made to the Facility Agreement and the Novated Credit Agreement.
(G)The Buyer has also requested that certain changes be made to the provisions of the Novated Credit Agreement so that this reflects certain changes that were agreed to the $1.15 billion revolving credit facility of the Buyer pursuant to amendment and restatement of this facility on 12 October 2017.
(H)This Agreement sets out the terms and conditions upon which the parties to this Agreement shall agree to the amendments referred to in recitals (F) and (G) above.
NOW IT IS HEREBY AGREED as follows:
1.Definitions
1.aDefined expressions
Words and expressions defined in the Facility Agreement and/or the Novation Agreement shall unless the context otherwise requires or unless otherwise defined herein, have the same meanings when used in this Agreement.
1.bDefinitions
In this Agreement, unless the context otherwise requires:
Effective Date means the date specified as the “Effective Date” in the certificate signed by the Facility Agent, the Seller and the Buyer in accordance with clause 5.4.
Party means each of the parties to this Agreement.
Relevant Documents means the Facility Agreement, the Receivable Purchase Agreement, the Novation Agreement and the Agency and Trust Deed.
1.cRelevant Documents
References in the Relevant Documents to “this Agreement” or “this Deed” shall, with effect from the Effective Date and unless the context otherwise requires, be references to such Relevant Document as amended and restated by this Agreement and words such as “herein”, “hereof”, “hereunder”, “hereafter”, “hereby” and “hereto”, where they appear in the Relevant Documents, shall be construed accordingly.
1.dHeadings
Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Agreement.
1.eConstruction of certain terms
Clause 1.5 of the Buyer Consent Agreement shall apply to this agreement (mutatis mutandis) as if set out herein and as if references therein to “this Deed” were references to this Agreement.
1.fDesignation as a Transaction Document
This Agreement is designated as a Transaction Document.
2.Agreement of the Parties
Each of the Parties, relying upon the representations and warranties on the part of the other Parties contained in clause 4, agrees that, subject to the terms and conditions of this Agreement and in particular, but without prejudice to the generality of the foregoing, fulfilment of the conditions contained in clause 5 and Schedule 2, the Relevant Documents shall be amended and restated on the terms set out in clause 3.
3.Amendments to Relevant Documents
3.aAmendments to Facility Agreement
The Facility Agreement shall, with effect on and from the Effective Date, be (and it is hereby) amended and restated so as to read in accordance with the form of the amended and restated Facility Agreement set out in Schedule 3 and (as so amended) will continue to be binding upon each of the Borrower and the Finance Parties in accordance with its terms as so amended and restated.
3.bAmendments to the Receivable Purchase Agreement
The Receivable Purchase Agreement shall, with effect on and from the Effective Date, be (and it is hereby) amended and restated so as to read in accordance with the form of the amended and restated Receivable Purchase Agreement set out in Schedule 4 and (as so amended) will continue to be binding upon each of the Seller and the Borrower in accordance with its terms as so amended and restated.
3.cAmendments to Novation Agreement
The Novation Agreement shall, with effect on and from the Effective Date, be (and it is hereby) amended and restated in accordance with the form of the amended and restated Novation Agreement set out in Schedule 5 and (as so amended) will continue to be binding upon each of the Borrower, the Finance Parties and the Buyer in accordance with its terms as so amended and restated.
3.dAmendments to Agency and Trust Deed
The Agency and Trust Deed shall, with effect on and from the Novation Effective Date, be (and it is hereby) amended and restated in accordance with the form of the amended and restated Agency and Trust Deed set out in Schedule 6 and (as so amended) will continue to be binding upon each of the Finance Parties (save for the French Coordinating Bank as set out below) and the Buyer (as borrower and reflecting the accession set out below) in accordance with its terms as so amended and restated. In addition, on the Novation Effective Date and at the same time as the amendments referred to above:
(a)the Buyer shall accede to the Agency and Trust Deed as the borrower thereunder and in replacement of the Borrower; and
(b)the Borrower and the French Coordinating Bank shall cease to be parties to the Agency and Trust Deed and shall be released from any obligations thereunder,
and as such arrangements are reflected in the amendment and restatement of the Agency and Trust Deed set out in Schedule 6.
3.eContinued force and effect
The provisions of the Relevant Documents shall continue in full force and effect (as amended and restated by this Agreement) and each of the Relevant Documents and this Agreement shall be read and construed as one instrument.
4.Representations and warranties
4.aGeneral representations and warranties
Each Party represents and warrants (each severally for and in respect of itself) to each of the other Parties hereto that as at the date hereof:
(a)it is a corporation or limited liability company, duly incorporated and validly existing under the laws of its country of incorporation;
(b)it has the power to enter into, perform and deliver, and each has taken all necessary corporate action to authorise the entry into, performance and delivery of, this Agreement and the transactions contemplated by this Agreement;
(c)this Agreement constitutes its legal, valid, binding and enforceable obligations subject to any relevant qualifications as to matters of law of the type set out in the legal opinions delivered under the Facility Agreement on the Signing Date (as defined in the Facility Agreement) and under Part A of Schedule 2; and
(d)all contractual and other consents or approvals necessary in connection with the authorisation, execution, delivery, validity, enforceability or admissibility in evidence of this Agreement or the performance by it of its obligations under this Agreement have been or will, when required, be obtained or made.
4.bSeller additional representations
The Seller further represents and warrants to the Borrower that the representations and warranties set out in clauses 8.1 and 8.2 of the Receivable Purchase Agreement are true and correct, including to the extent that they may have been or shall be amended by this Agreement as if made at the date of this Agreement with reference to the facts and circumstances existing on such date.
4.cBorrower additional representations
The Borrower further represents and warrants to the Finance Parties that the representations and warranties set out in clause 7.1 of the Facility Agreement are true and correct, including to the extent that they may have been or shall be amended by this Agreement as if made at the date of this Agreement with reference to the facts and circumstances existing on such date.
4.dBuyer additional representations
The Buyer further represents and warrants to the Finance Parties that the representations and warranties set out in the first paragraph of clause 8.2 of the Novation Agreement are true and correct, including to the extent that they may have been or shall be amended by this Agreement as if made at the date of this Agreement with reference to the facts and circumstances existing on such date.
4.eRepetition of representations and warranties
The representations and warranties in clauses 4.1 to 4.4 shall be deemed repeated by each relevant Party on and as of the Effective Date, as if made with reference to the facts and circumstances existing on the Effective Date.
5.Conditions
5.aDocuments and evidence
The agreement of the Parties referred to in clause 2 shall be subject to:
(a)the receipt by the Facility Agent or its duly authorised representative of the documents and evidence specified in Part A of Schedule 2;
(b)the receipt by the Seller or its duly authorised representative of the documents and evidence specified in Part B of Schedule 2; and
(c)the receipt by the Buyer or its duly authorised representative of the documents and evidence specified in Part C of Schedule 2,
in each case in form and substance satisfactory to the relevant Party.
b.General conditions precedent
The agreement of the Finance Parties referred to in clause 2 shall be subject to the further conditions that on the Effective Date:
(a)the representations and warranties of the other Parties contained in clause 4 are true and correct in all material respects (except for such representations and warranties that are qualified by materiality or non-existence of a material adverse effect which shall be accurate in all respects) on and as of each such time as if each was made with respect to the facts and circumstances existing at such time; an
(b) Event of Default shall have occurred and be continuing or would result from the amendment and restatement of the Relevant Documents pursuant to this Agreement.
c.Waiver of conditions precedent
The conditions set out in clauses 5.1 and 5.2 of this Agreement are for the sole benefit of the Party specified in the relevant clause, who shall be entitled to waive the fulfilment for its benefit of any of those conditions on such terms as it deems fit (in the case of the Facility Agent, acting on the instructions of the Majority Lenders).
d.Effective Date certificate
Upon fulfilment or waiver of the conditions in this clause 5, the Facility Agent, the Seller and the Buyer shall sign a certificate in the form set out in Schedule 7 confirming that the Effective Date has occurred and such certificate shall be binding on all Parties.
6.Confirmation of continued effect
Each of the Parties acknowledge and agree that the Transaction Documents to which they are respectively a party shall remain in full force and effect save that, with effect on and from the Effective Date, the references therein to any Relevant Document shall be construed as references to such document as amended and restated and, as applicable, acceded to by this Agreement.
7.Costs and expenses
7.aExpenses
The Buyer agrees to pay on demand, on an after-tax basis, all costs and expenses in connection with:
(a)the preparation, execution and delivery of; and
(b)the administration, modification and amendment of,
this Agreement and all other documents to be delivered hereunder or thereunder, including, without limitation, the reasonable fees and out-of-pocket expenses of Norton Rose Fulbright LLP as the legal adviser to the Lenders, the Facility Agent and the Security Trustee and any correspondent counsel separately agreed in writing between the Seller and the Facility Agent with respect thereto on a basis (in relation to the costs referred to in (a) above) separately agreed between the Seller, the Buyer and the Facility Agent.
b.Value Added Tax
All fees and expenses payable pursuant to this clause 7 shall be paid together with value added tax or any similar tax (if any) properly chargeable thereon.
c.Stamp and other duties
The Buyer agrees to pay on demand all stamp, documentary, registration or other like duties or taxes (including any duties or taxes payable by a Finance Party) imposed on or in connection with this Agreement and shall indemnify the other Parties against any liability arising by reason of any delay or omission by the Buyer to pay such duties or taxes.
8.Miscellaneous and notices
a.Notices
The provisions of clause 23.1 of the Buyer Consent Agreement shall extend and apply to the giving or making of notices or demands hereunder as if the same were expressly stated herein with all necessary changes and so that any notices to a Lender shall be sent to the relevant Lender to its address and contact details set out in Schedule 1.
b.Counterparts
This Agreement may be executed in any number of counterparts and by the different parties on separate counterparts, each of which when so executed and delivered shall be an original but all counterparts shall together constitute one and the same instrument.
c.Limitation on recourse
The provisions of clause 16 (Limitation on recourse) of the Facility Agreement shall apply equally to this Agreement.
9.Governing law
a.Law
This Agreement and any non-contractual obligations connected with it are governed by and shall be construed in accordance with English law.
b.Submission to jurisdiction
Each of the Parties hereto agree for the benefit of the other Parties hereto that any legal action or proceedings arising out of or in connection with this Agreement and any non-contractual obligations connected with it against any of the Parties hereto or any of their respective assets shall be brought in the English courts, and each of the Parties hereto irrevocably and unconditionally submits to the jurisdiction of the English courts. Each of the Parties hereto further agrees that only the courts of England and not those of any other country shall have jurisdiction to determine any claim which a Party may have against the another Party hereto arising out of or in connection with this Agreement.
Each of the Seller, the Borrower and the Buyer confirms and agrees for the benefit of the each of the other Parties hereto that those agents appointed by it pursuant to clause 27.2 of the Buyer Consent Agreement are also designated, appointed and empowered to receive for it and on its behalf, service of process issued out of the English courts in any legal action or proceedings arising out of or in connection with this Agreement and any non-contractual obligations connected with it.
IN WITNESS whereof the parties to this Agreement have caused this Agreement to be duly executed on the date first above written.
Schedule 1 The Lenders
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Name
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Facility Office and contact details
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Banco Santander, S.A, Paris Branch
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Facility Office:
374, rue Saint-Honoré
75001 Paris France
Operational address:
Ciudad Financiera Avenida de Cantabria s/n Edificio Encinar 2a planta 28600 Boadilla del Monte Spain
Fax No: +34 91 257 1682
Attention: Elise Regnault
Julián Arroyo Angela Rabanal Ecaterina Mucuta
Vanessa Berrio Vélez Ana Sanz Gómez
Tel No: +34 912893722
+1 212-297-2919
+1 212-297-2942
+33 1 53 53 70 46
+34 91 289 10 28
+34 91 289 17 90
E-mail: elise.regnault@gruposantander.com Julian.Arroyo@santander.us arabanal@santander.us ecaterina.mucuta@gruposantander.com vaberrio@gruposantander.com anasanz@gruposantander.com MiddleOfficeParis@gruposantander.com
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BNP Paribas
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Front Office to keep copied to all matters. BNPP SA
37 RUE DU MARCHE SAINT HONORE
75001 PARIS ACI : CHC03B1
Alexandre de VATHAIRE / Mauricio GONZALEZ alexandre.devathaire@bnpparibas.com mauricio.gonzalez@us.bnpparibas.com
Tel : 00 331 42 98 00 29/00 1212 841 38 88
Middle Office: For Operational / Servicing matters KHALID BOUITIDA / THIERRY ANEZO MILLENAIRE 4
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Name
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Facility Office and contact details
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35, RUE DE LA GARE
75019 PARIS ACI : CVA05A1
khalid.k.bouitida@bnpparibas.com thierry.anezo@bnpparibas.com
Tel : 00 331 42 98 58 69 / 00 331 43 16 81 57
Back Office : For Standard Settlement Instruction authentication/call-back
STEVE LOUISOR / VALERIE DUMOULIN MILLENAIRE 4
35, RUE DE LA GARE
75019 PARIS ACI : CVA03A1
paris.cib.boci.ca.3@bnpparibas.com valerie.dumoulin@bnpparibas.com steve.louisor@bnpparibas.com
Tel : 00 331 55 77 91 86 / 00 331 40 14 46 59
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HSBC France
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HSBC France – Global Banking Agency Operations (GBAO) Transaction Manager Unit 103 avenue des Champs Elysées
75008 Paris France
Attention: Florencia Thomas
Alexandra Penda
Fax No: +33 1 40 70 28 80
Tel No: +33 1 40 70 73 81 /
+33 1 41 02 67 50
Email: florencia.thomas@hsbc.fr
alexandra.penda@hsbc.fr
Copy to:
HSBC France
103 avenue des Champs Elysées 75008 Paris
France
Attention: Celine Karsenty / Julie Bellais Fax No: +33 1 40 70 78 93
Tel No: +33 1 40 70 28 59 /
+33 1 40 70 22 97
Email: celine.karsenty@hsbc.fr
julie.bellais@hsbc.fr
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Name
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Facility Office and contact details
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Société Générale
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Société Générale Facility Office 29 Boulevard Haussmann
75009 Paris France
For operational/servicing matters:
Bouchra BOUMEZOUED / Tatiana BYCHKOVA Société Générale 189, rue d’Aubervilliers 75886
PARIS CEDEX 18 OPER/FIN/CAF/DMT6
Phone: +33 1 57 29 13 12 / +33 1 58 98 43 05
Email: bouchra.boumezoued@sgcib.com tatiana.bychkova@sgcib.com
par-oper-caf-dmt6@sgcib.com For credit matters:
Francois Rolland / Tingting Yu / Muriel Baumann Société Générale 189, rue d’Aubervilliers 75886
PARIS CEDEX 18 OPER/FIN/SMO/EXT
Phone: +33 1 58 98 17 78 / +33 1 58 98 49 18 /
+33 1 58 98 22 76
Email: francois.rolland@sgcib.com tingting.yu@sgcib.com muriel.baumann@sgcib.com
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Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch
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1/3/5 rue Paul Cézanne 75008 Paris
France
Attention: Cedric le Duigou
Guillaume Branco Herve Billi
Claire Lucien
Fax No: +33 1 44 90 48 01
Tel No:
Cedric le Duigou: + 33 1 44 90 48 83
Guillaume Branco: + 33 1 44 90 48 71
Herve Billi: +33 1 44 90 48 48
Claire Lucien: + 33 1 44 90 48 49
Helene Ly: +33 1 44 90 48 76
E-mail: cedric_leduigou@fr.smbcgroup.com guillaume_branco@fr.smbcgroup.com herve_billi@fr.smbcgroup.com claire_lucien@fr.smbcgroup.com helene_ly@fr.smbcgroup.com
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Name
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Facility Office and contact details
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SFIL
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1-3, rue de Passeur de Boulogne – CS 80054 92861 Issy-les-Moulineaux Cedex 9
France
Contact Person
Loan Administration Department:
Direction du Crédit Export:
Pierre-Marie Debreuille / Anne Crépin Direction des Opérations:
Dominique Brossard / Patrick Sick
Telephone:
Pierre-Marie Debreuille +33 1 73 28 87 64
Anne Crépin +33 1 73 28 88 59
Dominique Brossard +33 1 73 28 91 93
Patrick Sick +33 1 73 28 87 66
Email:
pierre-marie.debreuille@sfil.fr anne.crepin@sfil.fr dominique.brossard@sfil.fr patrick.sick@sfil.fr refinancements-export@sfil.fr creditexport_ops@sfil.fr
Fax: + 33 1 73 28 85 04
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Schedule 2
Documents and evidence required as conditions precedent (referred to in clause 5.1)
Part A: Facility Agent
1.A certificate from an authorised signatory of each of the Borrower, the Seller and the Buyer confirming that there have been no changes or amendments to the constitutional documents or board resolutions of such Party, certified copies of which were previously delivered to the Purchaser or the Facility Agent pursuant to the Receivable Purchase Agreement or the Facility Agreement or attaching revised versions in case of any changes or amendments.
2A copy, certified by an authorised officer of each of the Borrower and the Buyer of (a) resolutions of the board of directors of such Party approving the transactions contemplated by this Agreement and authorising a person or persons to execute this Agreement and any notices or other documents to be given pursuant hereto and (b) any power of attorney issued pursuant to such resolutions (which shall be certified as being in full force and effect and not revoked or withdrawn).
3Evidence of the authority of the signatories of the Seller to sign this Agreement.
4.A copy, certified as a true copy by an authorised signatory of the Buyer or the Seller, of the following:
(a)addendum no.1 to the Building Contract which (among other things) adjusts the provisions dealing with payment of the first instalment of the Basic Contract Price (as defined in the Receivable Purchase Agreement); and
(b)addendum no.2 to the Building Contract which (among other things) adjusts the provisions dealing with adjustments to the Basic Contract Price (as defined in the Receivable Purchase Agreement) and the exercise of the Buyer’s stretch option as set out in the Building Contract.
5Payment of all fees, commissions, costs and expenses required to be paid to the Finance Parties on or before the Effective Date under any of the Transaction Documents or under any mandate letter or fee letter entered into in connection with the Transaction Documents.
6Written acceptance by the agents for service of process in respect of the Seller, the Borrower and the Buyer in relation to this Agreement.
7An opinion of Norton Rose Fulbright LLP, English legal advisers.
8An opinion of Norton Rose Fulbright LLP, French legal advisers.
9An opinion of Watson Farley & Williams LLP, Liberian legal advisers.
10An opinion of Walkers, Cayman Islands legal advisers.
11A confirmation from Walkers Fiduciary Limited as shareholder of the Borrower that the share charge dated 24 July 2017 remains in full force and effect.
12Evidence, in a form and substance satisfactory to the Lenders, that BpiFAE has agreed to the changes referred to in this Agreement.
Part B: Seller
1A certificate from an authorised signatory of each of the Borrower and the Buyer confirming that there have been no changes or amendments to the constitutional documents or board resolutions of such Party, certified copies of which were previously delivered to the Purchaser or the Facility Agent pursuant to the Receivable Purchase Agreement or the Facility Agreement or attaching revised versions in case of any changes or amendments.
2A copy, certified by an authorised officer of each of the Borrower and the Buyer of (a) resolutions of the board of directors of such Party approving the transactions contemplated by this Agreement and authorising a person or persons to execute this Agreement and any notices or other documents to be given pursuant hereto and (b) any power of attorney issued pursuant to such resolutions (which shall be certified as being in full force and effect and not revoked or withdrawn).
3Written acceptance by the agents for service of process in respect of the Borrower and the Buyer in relation to this Agreement.
Part C: Buyer
1A certificate from an authorised signatory of each of the Borrower and the Seller confirming that there have been no changes or amendments to the constitutional documents or board resolutions of such Party, certified copies of which were previously delivered to the Borrower or the Facility Agent pursuant to the Receivable Purchase Agreement or the Facility Agreement or attaching revised versions in case of any changes or amendments.
2A copy, certified by an authorised officer of the Borrower of (a) resolutions of the board of directors of the Borrower approving the transactions contemplated by this Agreement and authorising a person or persons to execute this Agreement and any notices or other documents to be given pursuant hereto and (b) any power of attorney issued pursuant to such resolutions (which shall be certified as being in full force and effect and not revoked or withdrawn).
3Evidence of the authority of the signatories of the Seller to sign this Agreement.
4Written acceptance by the agents for service of process in respect of the Seller and the Borrower in relation to this Agreement.
Schedule 3
Form of Amended and Restated Facility Agreement
Schedule 4
Form of Amended and Restated Receivable Purchase Agreement
Schedule 5
Form of Amended and Restated Novation Agreement
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Private & Confidential
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Dated 24 July 2017
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(as amended and restated by a first supplemental
agreement dated 12 March 2020)
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HOEDISCUS FINANCE LIMITED
as Existing Borrower
ROYAL CARIBBEAN CRUISES LTD.
as New Borrower
CITIBANK EUROPE PLC, UK BRANCH
as Facility Agent
CITICORP TRUSTEE COMPANY LIMITED
as Security Trustee
CITIBANK N.A., LONDON BRANCH
as Global Coordinator
HSBC FRANCE
as French Coordinating Bank
SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH
as ECA Agent
CITIBANK N.A., LONDON BRANCH, BANCO SANTANDER, S.A., BNP PARIBAS, HSBC FRANCE, SOCIÉTÉ GÉNÉRALE and SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH
as Mandated Lead Arrangers AND
THE BANKS AND FINANCIAL INSTITUTIONS LISTED IN SCHEDULE 1
as Original Lenders
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NOVATION AGREEMENT
relating to a secured credit facility agreement for Hull No. L34 at Chantiers de l’Atlantique
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Contents
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Clause
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Page
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1
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Definitions
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2
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2
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Consent and agreement of the Finance Parties
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3
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3
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Assumption of liability and obligations
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4
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4
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Amendment and restatement of Principal Agreement
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5
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5
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Loan currency, Additional Advances and undrawn Commitments under the Principal Agreement
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6
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6
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Conditions
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8
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7
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Fixed rate
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9
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8
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Representations and warranties
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9
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9
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Covenants
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9
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10
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Commitment and cancellation by the New Borrower
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10
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11
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Satisfaction of Receivable, releases and BpiFAE Insurance Policy
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12
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12
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Assignment and transfers
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13
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13
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Miscellaneous and notices
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13
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14
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Governing law and jurisdiction
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14
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Schedule 1 The Original Lenders
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16
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Schedule 2 Conditions precedent
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19
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Schedule 3 Form of Novated Credit Agreement
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THIS NOVATION AGREEMENT is dated 24 July 2017 (as amended and restated by a first supplemental agreement dated 12 March 2020) and made BETWEEN:
(1)HOEDISCUS FINANCE LIMITED as transferor (the Existing Borrower);
(2)ROYAL CARIBBEAN CRUISES LTD. as transferee (the New Borrower);
(3)CITIBANK EUROPE PLC, UK BRANCH as facility agent for the other Finance Parties (the
Facility Agent);
(4)CITICORP TRUSTEE COMPANY LIMITED as security trustee for the other Finance Parties (the Security Trustee);
(5)CITIBANK N.A., LONDON BRANCH as global coordinator (the Global Coordinator);
(6)HSBC FRANCE as French coordinating bank (the French Coordinating Bank);
(7)SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH as ECA agent (the ECA Agent);
(8)CITIBANK N.A., LONDON BRANCH, BANCO SANTANDER, S.A., BNP PARIBAS, HSBC FRANCE, SOCIÉTÉ GÉNÉRALE and SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH as Mandated Lead Arrangers; and
(9)THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1 as Original Lenders.
WHEREAS:
(A)By a facility agreement dated on or about the date of this Agreement (the Principal Agreement) and made between (1) the Existing Borrower as borrower, (2) the banks and financial institutions named therein as original lenders, (3) the Mandated Lead Arrangers as mandated lead arrangers, (4) the Facility Agent as facility agent, (5) the Security Trustee as security trustee (6) the Global Coordinator as global coordinator, (7) the French Coordinating Bank as French coordinating bank and (8) the ECA Agent as ECA agent, the Lenders have agreed to make available a loan of up to €603,426,960 to the Existing Borrower in connection with the purchase by the Existing Borrower of the Receivable from the Seller pursuant to the Receivable Purchase Agreement.
(B)It is intended that on the Actual Delivery Date, and subject to the delivery of the Vessel to, and acceptance of the Vessel by, the New Borrower or the Nominated Owner (as defined below) on its behalf under the Building Contract and by way of satisfying the obligation of the New Borrower to pay the Receivable to the Existing Borrower (as purchaser of the Receivable from the Seller pursuant to the Receivable Purchase Agreement), all of the rights and obligations of the Existing Borrower in respect of the Principal Agreement shall be transferred by novation by the Existing Borrower to the New Borrower.
(C)The parties have also agreed that on the date of the novation contemplated in Recital (B) certain additional advances shall be made to the New Borrower and the Principal Agreement shall be amended and restated (in the form of the Novated Credit Agreement) pursuant to the terms of this Agreement.
(D)This Agreement sets out the terms and conditions upon which (i) the parties hereto shall agree to such novation, amendment and restatement of the Principal Agreement and (ii) the Lenders shall agree to make additional advances to the New Borrower.
NOW IT IS HEREBY AGREED as follows:
1Definitions
a.Definitions
Words and expressions defined in the Principal Agreement shall have the same meaning when used in this Agreement, except insofar as the context otherwise requires or as otherwise defined in this Agreement:
Additional Advances has the meaning given to it in clause 5.2.
Change Orders has the meaning given to it in the Receivable Purchase Agreement.
BpiFAE Premium has the meaning given to it in the Novated Credit Agreement.
Dollars has the meaning given to it in the Novated Credit Agreement.
Initial Effective Date has the meaning given to it in the Receivable Purchase Agreement.
Maximum Loan Amount has the meaning given to it in the Novated Credit Agreement.
Mortgage means the first ranking ship construction mortgage over the Vessel granted or, as the case may be, to be granted by the New Borrower in favour of the Security Trustee and certain other parties in the form scheduled to the Buyer Consent Agreement.
Nominated Owner has the meaning given to it in the Credit Agreement.
Non-Yard Costs has the meaning given to it in the Novated Credit Agreement.
Novated Credit Agreement means the Principal Agreement as novated, amended and restated by this Agreement.
Novated Loan Balance means, subject to clause 10.2 and subject to the approval of the New Borrower pursuant to clause 3.5, the outstanding principal amount of the Loan owing by the Existing Borrower on the Novation Effective Date (and reflecting the amount of any Advances drawndown or deemed drawndown by the Existing Borrower in accordance with the terms of the Principal Agreement on such date but excluding any Unsecured Advances) up to the amount not exceeding the lower of:
(a)the amount of the Final Payment after any deductions permitted under the Buyer Consent Agreement;
(b) €603,426,960; and
(c) the amount referred to in clause 2.1(c) of the Principal Agreement.
Novation Effective Date means, when the Novation Effective Time has occurred, the date on which the Novation Effective Time so occurs.
Novation Effective Time means the time at which the Vessel is delivered to, and accepted by, the New Borrower (as buyer) or, as the case may be, the Nominated Owner (on its behalf) under the Building Contract (as evidenced by the protocol of delivery and acceptance for the Vessel), save that the “Novation Effective Time” shall not occur hereunder unless:
(a)the Facility Agent has notified the parties in writing that it has received all of the documents and other evidence referred to in clause 6; and
(b)such time falls before the Back Stop Date (as defined in the Receivable Purchase Agreement and subject to clause 10.2).
NYC Applicable Rate means the USD-to-EUR rate used by the New Borrower to convert the relevant Dollar amount of the Non-Yard Costs into euro for the purpose of the Seller invoicing the same to the New Borrower in euro in accordance with the Building Contract.
Other Basic Contract Price Increases means any increase in the Basic Contract Price pursuant to the following Articles of the Building Contract: I.5.7 and I.5.8 (choice of suppliers),
III.2.3 (speed bonus), III.6.2 (extra cabins) and VII.7 (early delivery bonus), in the amount provided for in the Building Contract or as reasonably determined by the New Borrower and, in each case, evidenced to the reasonable satisfaction of the Facility Agent, but (for the purpose of calculating the Maximum Loan Amount and the Additional Advance in respect of such items) in an aggregate amount not exceeding €10,000,000.
Signing Date means the date of this Agreement.
Unsecured Advances has the meaning given to it in the Buyer Consent Agreement.
b.Headings
Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Agreement.
c.Construction
Clause 1.4 of the Principal Agreement shall apply to this Agreement as if set out herein.
d.References to Novated Credit Agreement
Unless a contrary indication appears, any reference in this Agreement to a term defined in, or an article or section of, or an exhibit to, the Novated Credit Agreement, shall refer to such term defined in, or article or section of, or exhibit to, the agreement set out in Schedule 3 notwithstanding that such agreement is not yet effective, it being agreed that articles and sections of the Novated Credit Agreement, where so incorporated into, or which are to apply for the purpose of, this Agreement, shall be effective and apply under this Agreement notwithstanding that for the purpose of the Novated Credit Agreement they shall only apply from the Novation Effective Time.
e.References to Security Trustee and Finance Parties
It is agreed that as the Security Trustee will not be a party to the Novated Credit Agreement and accordingly have no responsibilities thereunder, the Security Trustee is a party to this Agreement for the purpose of approving the novation and allowing the Novation Effective Date to occur but it shall have no responsibilities in respect of the Novated Credit Agreement or have rights or obligations under this Agreement in respect of the Novated Credit Agreement. Accordingly, references to parties or the Finance Parties in clauses 3.2, 5.3, 5.4 and 8.3 shall not include the Security Trustee.
2.Consent and agreement of the Finance Parties
Subject to the other provisions of this Agreement and upon reliance of each of the representations and warranties in clause 8, the Facility Agent, the Security Trustee, the Global Coordinator, the French Coordinating Bank, the ECA Agent, the Mandated Lead Arrangers, the Arrangers and the Lenders agree with the Existing Borrower and the New Borrower on the Novation Effective Date (and at the Novation Effective Time), that they consent to the novation, amendment and restatement of the Principal Agreement on the terms set out in clauses 3 and 4 and to the making of the Additional Advances in accordance with clause 5.
3.Assumption of liability and obligations
a.Substitution
It is hereby agreed that, as and with effect from the Novation Effective Time:
1.the New Borrower shall be, and is hereby made, a party to the Principal Agreement in substitution for the Existing Borrower; and
2.the Principal Agreement shall be amended and restated as set out in clause 4.
b.Assumption of liability
The New Borrower hereby agrees with the Finance Parties that, as and with effect from the Novation Effective Time, it shall be indebted to the Finance Parties for the full amount of the Novated Loan Balance and, when drawn pursuant to clause 5.2, the Additional Advances and the New Borrower further agrees that from the Novation Effective Time it shall duly and punctually perform all the liabilities and obligations to be performed or discharged in respect of the Novated Loan Balance under the Novated Credit Agreement and shall be bound by the terms of the Novated Credit Agreement from the Novation Effective Time as the “Borrower” thereunder.
c.Release
The Existing Borrower and the Finance Parties hereby agree that, as and with effect from the Novation Effective Time, they shall each mutually release and discharge each other from all liabilities, obligations, claims and demands whatsoever under or touching or concerning the Principal Agreement and in respect of anything done or omitted to be done under or in connection therewith except that if at the Novation Effective Time there are any outstanding liabilities of the Existing Borrower under the Principal Agreement which are the subject of an indemnity claim against the Seller pursuant to clause 7 of the Receivable Purchase Agreement, to prevent the Finance Parties losing the ability to recover those claims against the Seller, such liabilities shall be preserved against the Existing Borrower until such claims are satisfied.
d.No liability
The Finance Parties hereby confirm to the New Borrower, that except for the obligations in respect of the Novated Loan Balance which are, with effect from the Novation Effective Time, to be assumed by the New Borrower pursuant to clause 3.2, the New Borrower shall have no liability, and the Finance Parties shall have no recourse whatsoever to the New Borrower or any of its assets, in respect of any liabilities, obligations, claims and demands whatsoever under or touching or concerning the Principal Agreement or in respect of anything done or omitted to be done under or in connection therewith.
e.Novated Loan Balance
The Facility Agent agrees that:
(a)following each Drawdown Date (and at any other time upon reasonable request), it will provide the New Borrower with an update in relation to the amount of the outstanding Loan;
(b)not less than ten Banking Days prior to the anticipated Actual Delivery Date, it will consult with the New Borrower regarding the anticipated amount of the Novated Loan Balance as at the anticipated Novation Effective Time to enable the New Borrower to confirm and verify this amount (having regard to paragraphs (a) and (b) of the definition of Novated Loan Balance) and satisfy itself that it is an amount which reflects the expected drawdown of the Loan during the period prior to the Actual Delivery Date and that the same does not include any Unsecured
Advances. The New Borrower shall promptly confirm its acceptance of the amount or, if applicable, raise any questions as to the calculation of thisamount with the Facility Agent so that the amount can be approved prior to the Novation Effective Time; and
(c)as part of the process of agreeing the Novated Loan Balance it will participate in the preparation of the delivery funds flow agreement referred to in clause 13.6 of the Buyer Consent Agreement.
f.Prepayment in respect of overpaid Purchase Price
If at the Novation Effective Time the Seller has become liable to make a refund of the Purchase Price pursuant to clause 2.5 of the Receivable Purchase Agreement and has not made payment of that refund such that a partial prepayment of the Loan in an amount equal to that refund (the Refund Prepayment Amount) has not been made, the New Borrower shall prepay an amount of the Novated Loan Balance corresponding to that Refund Prepayment Amount on the Novation Effective Date, such prepayment to be without premium, penalty or breakage costs, and shall be by way of a regularly scheduled required prepayment (and not a requirement to make payment prior to the scheduled maturity thereof).
Where any such prepayment is required by the New Borrower pursuant to this clause 3.6:
(a)the relevant amount of such prepayment may, if requested by the New Borrower, be deducted from the amount of the Additional Advances to be made available to the New Borrower on the Novation Effective Date and, where the New Borrower has requested that the prepayment required under this clause 3.6 be deducted from the Additional Advances, an actual payment shall only be required by the New Borrower if the prepayment amount exceeds the aggregate amount of the Additional Advances to be advanced to the New Borrower; and
(b)the New Borrower shall be entitled to exercise its rights under clause 13.2(b) of the Buyer Consent Agreement.
It is agreed that the liability of the New Borrower in respect of the Refund Prepayment Amount under this clause shall not exceed the amounts referred to in clause 13.2(a) of the Buyer Consent Agreement.
g.Notification of set-off
Where clause 7.5 (Set-off for unpaid amounts) of the Receivable Purchase Agreement applies and an amount is to be deducted from the Payment Amount due to the Seller in relation to any amount due and owing by the Seller to the Existing Borrower or the Finance Parties under the Transaction Documents which remains unpaid at the Drawdown Date for an Advance (an unpaid amount) and that unpaid amount will consequently be retained from the relevant Advance under clause 2.2(d) of the Principal Agreement, the Facility Agent shall notify the New Borrower before the relevant Drawdown Date of the unpaid amount (together with reasonable details of the type, amount and the manner in which such amount, and all components thereof, have been calculated).
4.Amendment and restatement of Principal Agreement
The Principal Agreement shall, with effect on and from the Novation Effective Time, be (and it is hereby) amended and restated so as to read in accordance with the form of the Novated Credit Agreement set out in Schedule 3 and (as so amended and restated) will be binding upon each of the parties thereto in accordance with its terms as so amended and restated.
5.Loan currency, Additional Advances and undrawn Commitments under the Principal Agreement
a.Currency conversion
On the Novation Effective Date the Additional Advances to be drawndown by the New Borrower on the Novation Effective Date shall be made available in Euros in accordance with the following provisions of this clause 5 and the Novated Credit Agreement.
b.Additional Advances
Subject to the terms and conditions of this Agreement, on the Novation Effective Date, the New Borrower shall be entitled to borrow further advances (the Additional Advances) in Euros in respect of the following amounts:
(a.)an amount of up to 80% of the incurred Non-Yard Costs (of up to €76,000,000) and the Other Basic Contract Price Increases paid or to be paid by the New Borrower under the Building Contract and in a maximum aggregate amount of €76,000,000; and
(b.)an amount equal to 100% of the BpiFAE Premium as calculated in accordance with Section 11.13.1(b) of the Novated Credit Agreement as at the Novation Effective Time, which amount shall be divided into two parts:
(i)the amount payable by the New Borrower to BpiFAE in respect of such part of the BpiFAE Premium which remains payable to BpiFAE at the Novation Effective Date; and
(ii)the balance, which shall, subject to the New Borrower’s set-off rights referred to in clause 13.3 of the Buyer Consent Agreement, be payable by the New Borrower to the Seller in reimbursement of the amounts which have been deducted from the Payment Amounts in respect of the BpiFAE Premium pursuant to the Receivable Purchase Agreement,
provided however that the aggregate amount of the Additional Advances, when added to the Novated Loan Balance (or, if different and to the extent applicable, the aggregate of any amounts advanced in respect of the Facility (and not of the Additional Advances) in the manner contemplated by clause 5.3), shall not exceed the Maximum Loan Amount.
The Additional Advance referred to in clause 5.2(b)(i) shall be paid directly to BpiFAE in the manner described in Section 2.3(d) of the Novated Credit Agreement.
c.Undrawn Commitments under the Principal Agreement
In the event that either:
(a)the Existing Borrower has not drawn the full amount of the Total Commitments under the Principal Agreement at the Novation Effective Date; or
(b)the Total Commitments under the Principal Agreement have been cancelled or reduced before the Novation Effective Date and this is not as a result of a cancellation of the Building Contract by the Seller due to a Buyer Specified Event; or
(c)it is not possible for the Facility to be made available to the Existing Borrower to the satisfaction of the Seller and the New Borrower,
the Finance Parties agree that if the Vessel continues to be constructed by the Seller in France and the BpiFAE Insurance Policy continues to be maintained (or, if applicable, reinstated or reissued) then, if required by the New Borrower, the Facility will continue to be available to the New Borrower and the amount of the Facility shall be the amount that it would otherwise have
been but for the occurrence of the events referred to in (a) to (c) above and such Facility shall include, without limitation, amounts to finance or refinance any reasonable completion expenses (the Completion Expenses) incurred by the New Borrower in completing the Vessel (of the type contemplated by Article XI 5 of the Building Contract and, where applicable, up to the amount of such Completion Expenses agreed pursuant to clause 10.2 of the Buyer Consent Agreement).
If this clause applies and the New Borrower exercises its rights to continue to have the Facility made available to it on the Actual Delivery Date or (with the prior consent of BpiFAE, not to be unreasonably withheld and having regard to the provisions relating to BpiFAE below) before the Actual Delivery Date this will either be through a novation, amendment and restatement of the Principal Agreement in the manner contemplated by clauses 3 and 4 or through the execution of a new credit agreement based substantially on the terms of the Novated Credit Agreement, but in each case updated to the extent necessary to reflect the additional amounts which would need to be made available thereunder in addition to the Additional Advances and, when applicable, in respect of the Completion Expenses, to allow the New Borrower to draw and/or assume by way of novation an amount in aggregate up to the Maximum Loan Amount and to reflect any agreed changes related to the New Borrower’s hedging arrangements in respect of the Contract Price. In these circumstances the Finance Parties and the New Borrower shall, in good faith, agree such changes to this Agreement and/or the Novated Credit Agreement or agree and thereafter enter into a new credit agreement of the type referred to above, so as to place the New Borrower in all material respects in the same position it would have been had the Facility been fully available during the pre-delivery period in the manner set out in the Transaction Documents.
Where this clause applies, the amount of the Facility available to the New Borrower shall not exceed the Maximum Loan Amount and the amount of the indebtedness of the Existing Borrower under the Principal Agreement which the New Borrower may be required to assume by way of novation shall not exceed an amount equal to the Novated Loan Balance at the relevant time.
It is acknowledged that BpiFAE have confirmed that they will agree to continue, reinstate or reissue the BpiFAE cover in circumstances where this clause applies and the New Borrower is to draw the Facility on the Actual Delivery Date. Formal consent of BpiFAE will be required in relation to (i) any availability of the Facility to the New Borrower before the Actual Delivery Date and (ii) the arrangements and the terms of any new or novated facility agreement, such consent not to be unreasonably withheld. The New Borrower and the Finance Parties agree to co- operate in good faith and use reasonable efforts to procure such consent.
In addition, where this clause applies, the New Borrower agrees that:
(A)the amounts payable to the Lenders in respect of arrangement fees in respect of the Facility (as set out in the relevant Fee Letter attached to any Fee Letter signed by the New Borrower) and the BpiFAE Premium payable to BpiFAE, shall continue to be payable in full and the New Borrower shall be required, where it does not currently have responsibility for the full payment of all those amounts, to assume responsibility for the payment of such amounts (it being acknowledged that the New Borrower shall not have any responsibility for payment of amounts of BpiFAE Premium already paid to BpiFAE pursuant to the Receivable Purchase Agreement where these amounts have not been (or will not be) refunded due to the cancellation of the Facility); and
(B)it shall be liable to pay commitment fees on the basis set out in Section 3.4 (Commitment Fees) of the Novated Credit Agreement (but without double counting in relation to any amounts due under clause 10.1).
The Finance Parties agree that this clause 5.3 shall apply notwithstanding that the Initial Effective Date may not occur.
d.Borrowing procedure for Additional Advances
The New Borrower and the Finance Parties agree that the procedures set out in Article II (Commitments and borrowing procedures) of the Novated Credit Agreement shall apply in relation to the borrowing of the Additional Advances and, if applicable (and subject to any agreed amendments arising pursuant to clause 5.3), any amounts under clause 5.3.
6.Conditions
a.Documents and evidence
The agreement of the Finance Parties referred to in clause 2 and the obligation of the Lenders to contribute to any advances in respect of the Facility to be made in accordance with this Agreement shall be subject to the condition that:
(a)by no later than the Signing Date, the Facility Agent, or its duly authorised representative, shall have received the documents and evidence specified in Part 1 of Schedule 2 in form and substance satisfactory to the Facility Agent (acting on the instructions of the Lenders and BpiFAE);
(b)by no later than the Initial Effective Date, the Facility Agent, or its duly authorised representative, shall have received the documents and evidence specified in Part 2 of Schedule 2 in form and substance satisfactory to the Facility Agent (acting on the instructions of the Lenders and BpiFAE); and
(c)by no later than the Novation Effective Time, the Facility Agent, or its duly authorised representative, shall have received each of the documents and evidence set out in section
5.1 of the Novated Credit Agreement (but subject to the proviso to Section 5.1.10) and confirmation in writing from the New Borrower to the Facility Agent that it (or the Nominated Owner on its behalf) will take delivery of the Vessel under the Building Contract and the actual date on which delivery shall occur, which confirmation shall be given immediately prior to the occurrence of the Novation Effective Time.
b.General conditions precedent
The agreement of the Finance Parties referred to in clause 2 and the obligation of each Lender to contribute to any advances in respect of the Facility to be made under this Agreement shall be subject to the further conditions that on the Novation Effective Date:
(a)the representations and warranties of the New Borrower contained in clause 8 are true and correct in all material respects (except for such representations and warranties that are qualified by materiality or non-existence of a material adverse effect which shall be accurate in all respects) on and as of each such time as if each was made with respect to the facts and circumstances existing at such time; and
(b)no Event of Default and no Prepayment Event (each as defined in the Novated Credit Agreement) shall have occurred and be continuing or would result from the novation of the Principal Agreement or the making of the Additional Advances pursuant to this Agreement.
c.Waiver of conditions precedent
The conditions specified in this clause 6 are inserted solely for the benefit of the Lenders and may be waived on their behalf in whole or in part and with or without conditions by the Facility Agent acting on the instructions of the Majority Lenders and BpiFAE.
d.Confirmation of conditions precedent
Once the conditions set out in this clause 6 have been satisfied (or waived) as provided above, the Facility Agent shall confirm the same by written notice to the other parties to this Agreement.
7.Fixed rate
The New Borrower has elected that the CIRR fixed interest rate shall apply under the Novated Credit Agreement.
8.Representations and warranties
a.Existing Borrower representations and warranties
The Existing Borrower shall be deemed to repeat the representations and warranties:
(a)in clause 7.1 of the Principal Agreement on (i) the date of this Agreement and (ii) the Initial Effective Date; and
(b)in clauses 7.1(a), 7.1(b), 7.1(c), 7.1(d) and 7.1(j) of the Principal Agreement on the Novation Effective Date,
in each case, as if made with reference to the facts and circumstances existing on such dates.
b.New Borrower representations and warranties
The New Borrower represents and warrants to the Finance Parties that the representations and warranties set out in Sections 6.1 (Organization, etc.), 6.2 (Due Authorization, Non- Contravention, etc.), 6.3 (Government Approval, Regulation, etc.), 6.5. (Validity, etc.), 6.9(a) (Obligations rank pari passu), 6.10 (Withholding, etc.), 6.11 (No Filing, etc. Required), 6.12 (No Immunity) and 6.13 (Investment Company Act) of Article VI of the Novated Credit Agreement are true and correct as if made on (a) the date of this Agreement and (b) the Initial Effective Date with reference to the facts and circumstances existing on such day (and as if references therein to “this Agreement” were to this Agreement and to “the Novation Effective Date” were references to (a) the Signing Date and (b) the Initial Effective Date).
The New Borrower shall be deemed to make the representations and warranties set out in the said Article VI on the Novation Effective Date in accordance with the terms of the Novated Credit Agreement (and as if references therein to “this Agreement” were to this Agreement and the Novated Credit Agreement).
c.Novation Effective Date representations by existing parties
On the Novation Effective Date, each of the Existing Borrower and the Finance Parties shall be deemed to represent to each other party to this Agreement that:
(a)it has not transferred (whether by way of security or otherwise) any of its rights or obligations under the Principal Agreement (other than (i) any transfers or assignments by a Lender in accordance with the provisions of clause 14 (Assignment, transfer and Facility Office) of the Principal Agreement or (ii) any replacement of the Facility Agent, Security Trustee, the French Coordinating Bank or the ECA Agent in accordance with the applicable provisions of the Agency and Trust Deed and the Security Trust Deed, which in each case, have previously been disclosed to the New Borrower where consent or approval of the New Borrower is not otherwise required in relation to any such assignments or transfers); and
(b)it has duly performed all of its obligations under the Principal Agreement.
9.Covenants
a.New Borrower covenants
The New Borrower undertakes with each of the Finance Parties that, from the date of this Agreement, the New Borrower will comply with its obligations under the following Sections of the
Novated Credit Agreement (as if references in those Sections to the “Novation Effective Date” referred to the Signing Date):
(a)Section 7.1.1a) and b) (Annual and quarterly financial information);
(b)Section 7.1.2 (Approvals and other consents);
(c)Section 7.1.3 (Compliance with laws, etc.); and
(d)the first sentence of Section 7.1.7 (BpiFAE insurance policy/French authority requirements).
b.Notification of increased costs, etc.
Each Lender shall (through the Facility Agent) notify the New Borrower at least three months before the anticipated Novation Effective Date if:
(a)it intends to claim for any increased cost under Sections 4.3 (Increased LIBO Rate Loan Costs, etc.) or 4.5 (Increased capital costs) or for any Covered Taxes (as defined in the Novated Credit Agreement) under Section 4.6 (Taxes) or reserve costs under Section 4.7 (Reserve costs) of the Novated Credit Agreement for the period falling after the Novation Effective Date; or
(b)any of the circumstances referred to in Sections 4.1 (LIBO Rate lending unlawful) or 4.2 (Deposits unavailable) apply to it,
it being acknowledged that the New Borrower shall have no liability in respect of any such increased costs or amounts incurred or arising in respect of the period prior to the Novation Effective Time. Such notice shall include the relevant details referred to in those Sections.
c.Notification of anticipated buffer claims
Following completion of sea trials for the Vessel, each Lender shall (through the Facility Agent) notify the New Borrower if there are any accrued claims outstanding against the Seller or other amounts that it anticipates will or may be deducted from the Pre-delivery Buffer on the Actual Delivery Date and shall (if reasonably requested by the New Borrower) provide the New Borrower with a notice of such anticipated amounts at any other time.
d.Interest stabilisation
Each Lender agrees with the New Borrower that it will, from the date of this Agreement, comply with its obligations under Section 3.3.3 (Interest stabilisation) of the Novated Credit Agreement.
10.Commitment and cancellation by the New Borrower
a.Commitment Fees
The New Borrower agrees to pay to the Facility Agent for the account of each Lender a commitment fee on its daily unused portion of the Maximum Loan Amount (as such amount may be adjusted from time to time) on the basis of and at the times set out in Section 3.4 (Commitment Fees) of the Novated Credit Agreement. In calculating the amount of commitment fee due to each Lender on each Commitment Fee Payment Date (as defined in Section 3.4), the Facility Agent shall take into account whether any Lender was a Defaulting Lender at any time during the period since the previous Commitment Fee Payment Date. For this purpose, each Lender agrees that it will notify the Facility Agent, the other Lenders and the New Borrower if it becomes a Defaulting Lender. In the event that a Lender becomes a Defaulting Lender and the other Lenders have not confirmed to the New Borrower within five Banking Days of receiving the notice referred to above that they will honour the commitment of any Defaulting Lender, no commitment fee shall be payable to the Facility Agent for the account of a Lender on any unused portion of the Maximum Loan Amount of that Lender for any day on which that Lender was a
Defaulting Lender. If the other Lenders (or any of them) have confirmed within such five Banking Day period that they will honour all or part of a Defaulting Lender’s commitment, the commitment fee shall continue to be payable in respect of the relevant portion of the Defaulting Lender’s commitment so honoured.
b.Cancellation
The New Borrower may, by written notice to the Facility Agent at any time prior to the date falling not less than ten days prior to the anticipated Actual Delivery Date (and which shall also be a minimum period of not less than 10 Banking Days prior to the proposed date of cancellation set out in the New Borrower’s notice, the Notified Cancellation Date), without premium or penalty (except as may be required by clause 10.5), terminate, or from time to time reduce, the Commitment (as defined in the Novated Credit Agreement). Any such termination or reduction of the Commitment shall be applied to the respective Commitments of the Lenders, pro rata according to the amounts of their respective Commitments. Where the Commitment is cancelled in full or in part the New Borrower shall pay on the date of such cancellation all amounts, including any fees and commissions which have accrued but remain unpaid at such date and any breakage costs payable pursuant to clause 10.5, which are due and owing by the New Borrower to the Finance Parties at such date pursuant to this Agreement or any Fee Letter or any mandate letter entered into in connection with the Transaction Documents to which the New Borrower is a party to the extent that such amounts are the subject of invoices from the Facility Agent to the New Borrower received by the New Borrower not less than two Banking Days prior to the date of such cancellation (the Invoiced Amounts). It is acknowledged and agreed that where the Commitment is cancelled in full the effectiveness of any such proposed cancellation shall be conditional on the payment of the Invoiced Amounts (but on the basis that commitment fees under clause 10.1 shall cease on the Notified Cancellation Date). The ECA Agent shall in such circumstances use reasonable endeavours to provide the New Borrower with both an indicative calculation of any potential breakage costs arising from the proposed cancellation as soon as practicable following receipt of the cancellation notice and an invoice in respect of any actual breakage amounts as soon as practicable prior to the Notified Cancellation Date. If no invoices have been issued for any such amounts (the Non-Invoiced Amounts), such Non-Invoiced Amounts shall be payable by the New Borrower following the Notified Cancellation Date upon the second Banking Day following receipt of the relevant invoices. Where the Commitment is cancelled in part, the allocation of such cancellation between the Novated Loan Balance and the Additional Advances shall be determined at the relevant time of cancellation at the New Borrower’s election made in its discretion after consultation with the other parties concerned including Natixis DAI and BpiFAE (but on the basis that any allocation of any such partial cancellation cannot cause the Novated Loan Balance to be reduced to zero and will be subject to BpiFAE confirming it has no objection to such allocation). In addition, where the Commitment is cancelled in part, any amounts required to be paid by the New Borrower under this clause in respect of such cancellation which remain outstanding at the Novation Effective Time shall be treated as a liability on the New Borrower under the Novated Credit Agreement.
c.Prepayment of Loan under the Principal Agreement
Where a cancellation notice in respect of the full amount of the Commitment is given by the New Borrower in accordance with 10.2:
1.the provisions of clause 3 shall not apply and accordingly the Novation Effective Time shall not be capable of occurring; and
2.the Existing Borrower and the Finance Parties hereby acknowledge that the Loan will be prepaid in full on the Actual Delivery Date in accordance with clause 4.3(e) of the Principal Agreement but that the Principal Agreement shall otherwise continue in force in accordance with its terms and the Facility will continue to be available to the Existing Borrower pursuant to the terms of the Principal Agreement.
d.BpiFAE Premium
It is acknowledged by the parties that if the New Borrower voluntarily cancels all or any of the Commitment under clause 10.2, the New Borrower shall not be obliged to pay (or reimburse the Existing Borrower or the Seller for) all or any part of the BpiFAE Premium.
e.Fixed rate breakage costs
If the New Borrower:
1.voluntarily cancels all or any of the Commitment under clause 10.2;
2.voluntarily cancels all or any of the Commitment after it has exercised its rights under clause 4.3 of the Buyer Consent Agreement; or
3.subject to the proviso below, does not borrow the Maximum Loan Amount as a result of the Contract Price being reduced in accordance with Article III of the Building Contract (resulting in a corresponding cancellation of part of the Commitment),
the New Borrower shall pay to the Facility Agent breakage costs in the amount notified to it following a calculation of such breakage costs based on the methodology referred to in Section 4.4.1b) of the Novated Credit Agreement and on the basis that for this purpose references in such clause to prepayment and prepay shall be treated as references to cancellation and the basis for the calculation of any breakage costs shall be determined by reference to:
i.if:
a.the Commitment is cancelled in full, 80% of €631,167,000; or
b.the Commitment is partially cancelled, the amount which is 80% of
€631,167,000 minus the un-cancelled Commitment; and
ii.24 assumed semi-annual repayment instalments starting from the Expected Delivery Date at the Signing Date.
Provided however that no breakage costs will be charged under clauses 10.5(a), 10.5(b) or 10.5(c) above if the Loan (as defined in the Novated Credit Agreement) assumed by and/or advanced to the New Borrower on the Novation Effective Date or otherwise pursuant to any restated or new credit agreement entered into in accordance with clause 5.3 equals or exceeds
€504,933,600 (being 80% of €631,167,000).
It is acknowledged and agreed for all purposes of this Agreement and the Novated Credit Agreement that the New Borrower shall not be liable to pay (or indemnify any Indemnified Party under Section 11.4 of the Novated Credit Agreement in respect of) any breakage costs related to the Fixed Rate in the event the Fixed Rate is not available as a result of any of the conditions precedent set forth in Section 5.1.10 of the Novated Credit Agreement not being satisfied for any reason other than due to the New Borrower’s own breach of the terms of this Agreement.
11.Satisfaction of Receivable, releases and BpiFAE Insurance Policy
a.Receivable
The Existing Borrower and the New Borrower agree that the assumption by the New Borrower of the Existing Borrower’s obligation to repay the Novated Loan Balance on the Novation Effective Date shall satisfy the obligation of the New Borrower to pay the Receivable to the Existing Borrower (as purchaser of the Receivable from the Seller pursuant to the Receivable Purchase Agreement).
b.Release of Security Documents on Novation Effective Date
It is acknowledged that on the Novation Effective Date (and subject to satisfaction of the conditions precedent referred to in this Agreement and the other Transaction Documents):
4.the Mortgage will be released (but without prejudice to the Finance Parties’ obligation to release the Mortgage in accordance with clause 11.1 of the Buyer Consent Agreement);
5.the Borrower Assignment (and any security assigned thereunder) and the Share Security will be released;
6.the Security Trustee will be released from its obligations under the Security Trust Deed and the Agency and Trust Deed;
7.the Facility Agent, the French Coordinating Bank and the ECA Agent will be released from their respective obligations under the Agency and Trust Deed (on the basis that the provisions of Article X of the Novated Credit Agreement will then apply); and
8.the Facility Guarantors shall be released from their obligations under the Facility Guarantees,
and the parties to such documents agree to enter into such documentation as the Facility Agent or any other party may reasonably require in order to effect such releases and discharges.
c.BpiFAE Insurance Policy
It is acknowledged that the BpiFAE Insurance Policy will remain in full force and effect notwithstanding the occurrence of the Novation Effective Date.
12.Assignment and transfers
The provisions of clause 14 (Assignment, transfer and facility office) of the Principal Agreement shall apply with equal effect to the Existing Borrower and the Finance Parties in relation to this Agreement as if the same were expressly stated herein and references therein to “the Agreement” shall be construed as references to this Agreement. Except to the extent permitted under section 7.2.6 of the Novated Credit Agreement, the New Borrower may not assign or transfer any of its rights or obligations under this Agreement.
13.Miscellaneous and notices
a.Notices
The provisions of clauses 17.1 and 17.2 (Notices) of the Principal Agreement shall extend and apply to the giving or making of notices or demands hereunder as if the same were expressly stated herein and for this purpose notices to the New Borrower shall be sent to it at:
1050 Caribbean Way Miami
Florida 33132
Fax no: +1 (305) 539-0562
Attn: Vice President, Treasurer Copy to: General Counsel
b.Counterparts
This Agreement may be executed in any number of original counterparts and by facsimile provided that original signed copies are provided within a reasonable period of time thereafter. All such counterparts shall, once executed, constitute a single document.
c.Contracts (Rights of Third Parties) Act 1999
9.With the exception of BpiFAE, no term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement.
10.Notwithstanding any term of this Agreement, the consent of any person who is not a party to this Agreement is not required to amend or vary this Agreement at any time.
d.Rights of New Borrower under the Principal Agreement
It is agreed where any rights are expressed to be conferred on the New Borrower (as Buyer) under the Principal Agreement, the New Borrower shall be entitled to the benefit of such rights as if it were a party to the Principal Agreement for the sole purpose of those rights (and clause
17.7 of the Principal Agreement shall be deemed to be modified accordingly).
e.New Borrower payments
The provisions of section 3.3.4 (Post Maturity Rates) and 4.6 (Taxes) of the Novated Credit Agreement shall be deemed to apply in relation to any non-payment or, as the case may be, payments of amounts required to be made by the New Borrower to any of the Finance Parties under this Agreement as if the same was expressly incorporated herein and references therein to “the Agreement” shall be construed as references to this Agreement.
f.Confidentiality
The Lenders agree to be bound by the terms of clause 24 of the Buyer Consent Agreement as if the same were set out in full herein and as if references to a Party in that clause included a Lender.
14.Governing law and jurisdiction
a.Law
This Agreement and any non-contractual obligations connected with it are governed by and shall be construed in accordance with English law.
b.Submission to jurisdiction
The Existing Borrower and the New Borrower agree, for the benefit of the Finance Parties, that any legal action or proceedings arising out of or in connection with this Agreement against the Existing Borrower and/or the New Borrower or any of its assets (including any non-contractual obligations) may be brought in the English courts. Each of the Existing Borrower and the New Borrower irrevocably and unconditionally submits to the jurisdiction of such courts and irrevocably designates, appoints and empowers the following person to receive for it and on its behalf, service of process issued out of the English courts in any such legal action or proceedings:
|
|
|
|
|
|
|
|
Existing Borrower
|
Walkers London office at present of 6 Gracechurch Street,
London EC3V 0AT
|
|
New Borrower
|
RCL Cruises Ltd., Building 3, The Heights – Brooklands, Weybridge, Surrey, KT13 ONY, Attention: General Counsel
|
The submission to such jurisdiction shall not (and shall not be construed so as to) limit the right of the Finance Parties to take proceedings against the Existing Borrower and/or the New Borrower in the courts of any other competent jurisdiction nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not.
The parties further agree that only the courts of England and not those of any other country shall have jurisdiction to determine any claim which the Existing Borrower and/or the New Borrower may have against any of the Finance Parties arising out of or in connection with this Agreement.
c.Waiver of immunity
To the extent that the Existing Borrower or the New Borrower has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its assets, each of the Existing Borrower and the New Borrower hereby irrevocably waives such immunity in respect of its obligations under this Agreement.
IN WITNESS whereof the parties to this Agreement have caused this Agreement to be duly executed on the date first above written.
Schedule 1
The Original Lenders
|
|
|
|
|
|
|
|
|
|
|
Original Lender
|
Facility Office and contact details
|
Commitment
%
|
|
Banco Santander,
S.A. , Paris Branch
|
374 rue Saint Honoré 75001 Paris
Operational Address: Ciudad Grupo Santander, Avda De Cantabria, 28660 Boadilla del Monte, Madrid, Spain
For Credit Matters:
Elise Regnault / Ecaterina Mucuta / Andrea Ortiz / Ana Sanz Gomez / Vanessa Berrio / Caroline Pereira Pantaleao
Fax No: +34 91 257 1682
Tel No: +34 912893722 / +33 1 53 53 70 46
/ +1 6172170157 / +34 912891790 / +34
912891028 / +33 1 53 53 70 35
E-mail: elise.regnault@gruposantander.com ecaterina.mucuta@gruposantander.com andrea.ortiz@santander.us anasanz@gruposantander.com vaberrio@gruposantander.com cpantaleao@gruposantander.com
For Operational Matters:
Ana Sanz Gomez / Vanessa Berrio / Caroline Pereira Pantaleao
Fax No: +34 91 257 1682 /
Tel No: +34 912891790 / +34 912891028 /
+33 1 53 53 70 35
E-mail:anasanz@gruposantander.com vaberrio@gruposantander.com cpantaleao@gruposantander.com corporativaeuropa@gruposantander.com
|
19.5%
|
|
BNP Paribas
|
Front Office to keep copied to all matters. BNPP SA
37 RUE DU MARCHE SAINT HONORE
75001 PARIS ACI : CHC03B1
Alexandre de VATHAIRE / Mauricio GONZALEZ
alexandre.devathaire@bnpparibas.com mauricio.gonzalez@us.bnpparibas.com
Tel : 00 331 42 98 00 29/00 1212 841 38 88
Middle Office: For Operational / Servicing matters
KHALID BOUITIDA / THIERRY ANEZO MILLENAIRE 4
35, RUE DE LA GARE
75019 PARIS ACI : CVA05A1
khalid.k.bouitida@bnpparibas.com
|
15.7%
|
Original Lender Facility Office and contact details Commitment
%
thierry.anezo@bnpparibas.com
Tel : 00 331 42 98 58 69 / 00 331 43 16 81
57
Back Office : For Standard Settlement Instruction authentication/call-back
STEVE LOUISOR / VALERIE DUMOULIN MILLENAIRE 4
35, RUE DE LA GARE
75019 PARIS ACI : CVA03A1
paris.cib.boci.ca.3@bnpparibas.com valerie.dumoulin@bnpparibas.com steve.louisor@bnpparibas.com
Tel : 00 331 55 77 91 86 / 00 331 40 14 46
59
HSBC France HSBC France – Global Banking Agency
Operations (GBAO) Transaction Manager Unit
103 avenue des Champs Elysées 75008 Paris
France
Attention: Florencia Thomas Alexandra Penda
Fax No: +33 1 40 70 28 80
Tel No: +33 1 40 70 73 81 /
+33 1 41 02 67 50
Email: florencia.thomas@hsbc.fr
alexandra.penda@hsbc.fr
29.0%
Copy to:
HSBC France
103 avenue des Champs Elysées 75008 Paris
France
Attention: Celine Karsenty / Julie Bellais Fax No: +33 1 40 70 78 93
Tel No: +33 1 40 70 28 59 /
+33 1 40 70 22 97
Email: celine.karsenty@hsbc.fr
julie.bellais@hsbc.fr
Société Générale 29 Boulevard Haussmann, 75009 Paris,
France
For Credit Matters:
Francois Rolland and Mathieu Chevallier 189, rue d’Aubervilliers, 75886 Paris,
24.8%
|
|
|
|
|
|
|
|
|
|
|
Original Lender
|
Facility Office and contact details
|
Commitment
%
|
|
|
CEDEX 18, OPER/FIN/SMO/EXT
|
|
|
|
Phone: +33 1 58 98 17 78 / +33 1 58 98 78
|
|
|
|
98
|
|
|
|
francois.rolland@sgcib.com /
|
|
|
|
mathieu.chevallier@sgcib.com
|
|
|
|
For Operational Matters:
|
|
|
|
Isabelle Guner and Laetitia Perrot
|
|
|
|
Francois Rolland and Mathieu Chevallier
|
|
|
|
189, rue d’Aubervilliers, 75886 Paris,
|
|
|
|
CEDEX 18, OPER/FIN/STR/DMT6
|
|
|
|
Phone: +33 1 57 29 20 76 / +33 1 58 98 26
|
|
|
|
20
|
|
|
|
par-oper-caf-dmt6@sgcib.com
|
|
|
Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch
|
1/3/5 rue Paul Cézanne, 75008 Paris, France
Attention: Cedric Le Duigou
Guillaume Branco Herve Billi
Claire Lucien Helene Ly
|
10.9%
|
|
|
Fax No: +33 1 44 90 48 01
Tel No:
|
|
|
|
Cedric Le Duigou: +33 1 44 90 48 83
Guillaume Branco: +33 1 44 90 48 71
Herve Billi: +33 1 44 90 48 48
Claire Lucien: +33 1 44 90 48 49
Helene Ly: +33 1 44 90 48 76
|
|
|
|
E-mail : cedric_leduigou@fr.smbcgroup.com guillaume_branco@fr.smbcgroup.com herve_billi@fr.smbcgroup.com claire_lucien@fr.smbcgroup.com helene_ly@fr.smbcgroup.com
|
|
|
|
|
100
|
Schedule 2 Conditions precedent
Part 1
Documents and evidence to be delivered to the Facility Agent not later than the Signing Date
1Evidence that the conditions precedent set out in clause 9.1(a) of, and Schedule 3 Part 1 to, the Principal Agreement have been satisfied in full or waived in accordance with clause 9.4 of the Principal Agreement.
2Documents equivalent to those referred to in Section 5.1.1 (Resolutions, etc.) of the Novated Credit Agreement in relation to the New Borrower and its execution of this Agreement, the Buyer Consent Agreement and any other Transaction Documents to which it is a party.
Part 2
Documents and evidence to be delivered to the Facility Agent not later than the Initial Effective Date
1 Evidence that the conditions precedent set out in clause 9.1(b) of, and Schedule 3 Part 2 to, the Principal Agreement have been satisfied in full or waived in accordance with clause 9.4 of the Principal Agreement.
Schedule 3
Form of Novated Credit Agreement
HULL NO. L34 CREDIT AGREEMENT
dated 24 July 2017 as novated, amended and restated on the Actual Delivery Date pursuant to
a novation agreement dated 24 July 2017 (as amended and restated by a first supplemental
agreement dated 12 March 2020)
BETWEEN
Royal Caribbean Cruises Ltd. as the Borrower,
the Lenders from time to time party hereto,
Citibank N.A., London Branch as Global Coordinator
Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch as ECA Agent and
Citibank Europe plc, UK Branch as Facility Agent and
Citibank N.A., London Branch, Banco Santander, S.A., Paris Branch, BNP Paribas, HSBC France, Société Générale and Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch as Mandated Lead Arrangers
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms 10
SECTION 1.2. Use of Defined Terms 23
SECTION 1.3. Cross-References 23
SECTION 1.4. Accounting and Financial Determinations 23
ARTICLE II COMMITMENTS AND BORROWING PROCEDURES
SECTION 2.1. Commitment 24
SECTION 2.2. Commitment of the Lenders; Termination and Reduction of Commitments 24
SECTION 2.3. Borrowing Procedure 25
SECTION 2.4. Funding 26
ARTICLE III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments 27
SECTION 3.3. Interest Provisions 28
SECTION 3.3.1. Rates 28
SECTION 3.3.2. [Intentionally omitted] 28
SECTION 3.3.3. Interest stabilisation. 28
SECTION 3.3.4. Post-Maturity Rates 29
SECTION 3.3.5. Payment Dates 29
SECTION 3.3.6. Interest Rate Determination; Replacement Reference Banks 29
SECTION 3.4.1. Payment. 31
SECTION 3.5. Other Fees 31
ARTICLE IV CERTAIN EURO RATE AND OTHER PROVISIONS
SECTION 4.1. EURO Rate Lending Unlawful 32
SECTION 4.2. Deposits Unavailable 32
SECTION 4.3. Increased EURO Rate Loan Costs, etc. 33
SECTION 4.4. Funding Losses 34
SECTION 4.4.1. Indemnity 34
SECTION 4.4.2. Exclusion 36
SECTION 4.5. Increased Capital Costs 36
SECTION 4.6. Taxes 37
SECTION 4.7. Reserve Costs 39
SECTION 4.8. Payments, Computations, etc 39
SECTION 4.9. Replacement Lenders, etc. 40
SECTION 4.10. Sharing of Payments 41
SECTION 4.10.1. Payments to Lenders 41
SECTION 4.10.2. Redistribution of payments 41
SECTION 4.10.3. Recovering Lender's rights 41
SECTION 4.10.4. Reversal of redistribution 41
SECTION 4.10.5. Exceptions 42
SECTION 4.11. Set-off 42
SECTION 4.12. Use of Proceeds 42
SECTION 4.13. FATCA Information. 43
SECTION 4.14. Resignation of the Facility Agent 44
ARTICLE V CONDITIONS TO BORROWING
SECTION 5.1. Advance of the Loan 44
SECTION 5.1.1. Resolutions, etc 44
SECTION 5.1.2. Opinions of Counsel 45
SECTION 5.1.3. BpiFAE Insurance Policy 45
SECTION 5.1.4. Closing Fees, Expenses, etc 45
SECTION 5.1.5. Compliance with Warranties, No Default, etc 45
SECTION 5.1.6. Loan Request 46
SECTION 5.1.7. [Intentionally omitted] 46
SECTION 5.1.8. Protocol of delivery 46
SECTION 5.1.9. Title to Purchased Vessel 46
SECTION 5.1.10. Interest Stabilisation. 46
SECTION 5.1.11. Escrow Account Security 47
SECTION 6.1. Organization, etc. 48
SECTION 6.2. Due Authorization, Non-Contravention, etc 48
SECTION 6.3. Government Approval, Regulation, etc 48
SECTION 6.4. Compliance with Environmental Laws 49
SECTION 6.5. Validity, etc 49
SECTION 6.6. No Default, Event of Default or Prepayment Event 49
SECTION 6.7. Litigation 49
SECTION 6.8. The Purchased Vessel 49
SECTION 6.9. Obligations rank pari passu; Liens 49
SECTION 6.10. Withholding, etc 50
SECTION 6.11. No Filing, etc. Required 50
SECTION 6.12. No Immunity 50
SECTION 6.13. Investment Company Act 50
SECTION 6.14. Regulation U 50
SECTION 6.15. Accuracy of Information 50
SECTION 6.16. Compliance with Laws 51
ARTICLE VII COVENANTS
SECTION 7.1. Affirmative Covenants 51
SECTION 7.1.1. Financial Information, Reports, Notices, etc 51
SECTION 7.1.2. Approvals and Other Consents 52
SECTION 7.1.3. Compliance with Laws, etc 52
SECTION 7.1.4. The Purchased Vessel 53
SECTION 7.1.5. Insurance 54
SECTION 7.1.6. Books and Records 54
SECTION 7.1.7. BpiFAE Insurance Policy/French Authority Requirements 54
SECTION 7.2. Negative Covenants 54
SECTION 7.2.1. Business Activities 54
SECTION 7.2.2. Indebtedness 54
SECTION 7.2.3. Liens 55
SECTION 7.2.4. Financial Condition 57
SECTION 7.2.5. [Intentionally Omitted] 57
SECTION 7.2.6. Consolidation, Merger, etc 57
SECTION 7.2.7. Asset Dispositions, etc 58
SECTION 7.3. Lender incorporated in the Federal Republic of Germany 58
ARTICLE VIII EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default 59
SECTION 8.1.1. Non-Payment of Obligations 59
SECTION 8.1.2. Breach of Warranty 59
SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations 59
SECTION 8.1.4. Default on Other Indebtedness 59
SECTION 8.1.5. Bankruptcy, Insolvency, etc 60
SECTION 8.2. Action if Bankruptcy 61
SECTION 8.3. Action if Other Event of Default 61
ARTICLE IX PREPAYMENT EVENTS
SECTION 9.1. Listing of Prepayment Events 61
SECTION 9.1.1. Change of Control 61
SECTION 9.1.2. Unenforceability 61
SECTION 9.1.3. Approvals 61
SECTION 9.1.4. Non-Performance of Certain Covenants and Obligations 61
SECTION 9.1.5. Judgments 62
SECTION 9.1.6. Condemnation, etc 62
SECTION 9.1.7. Arrest 62
SECTION 9.1.8. Sale/Disposal of the Purchased Vessel 62
SECTION 9.1.9. BpiFAE Insurance Policy 62
SECTION 9.1.10. Illegality. 62
SECTION 9.2. Mandatory Prepayment 62
SECTION 9.3. Mitigation 63
ARTICLE X THE FACILITY AGENT AND THE ECA AGENT
SECTION 10.1. Actions 63
SECTION 10.2. Indemnity 63
SECTION 10.3. Funding Reliance, etc 64
SECTION 10.4. Exculpation 64
SECTION 10.5. Successor 65
SECTION 10.6. Loans by the Facility Agent 65
SECTION 10.7. Credit Decisions 66
SECTION 10.8. Copies, etc 66
SECTION 10.9. The Agents’ Rights 66
SECTION 10.10. The Facility Agent’s Duties 66
SECTION 10.11. Employment of Agents 67
SECTION 10.12. Distribution of Payments 67
SECTION 10.13. Reimbursement 67
SECTION 10.14. Instructions 67
SECTION 10.15. Payments 68
SECTION 10.16. “Know your customer” Checks 68
SECTION 10.17. No Fiduciary Relationship 68
SECTION 10.18. Illegality 68
ARTICLE XI MISCELLANEOUS PROVISIONS
SECTION 11.1. Waivers, Amendments, etc 68
SECTION 11.2. Notices 69
SECTION 11.3. Payment of Costs and Expenses 71
SECTION 11.4. Indemnification 71
SECTION 11.5. Survival 73
SECTION 11.6. Severability 73
SECTION 11.7. Headings 73
SECTION 11.8. Execution in Counterparts, Effectiveness, etc 73
SECTION 11.9. Third Party Rights 73
SECTION 11.10. Successors and Assigns 73
SECTION 11.11. Sale and Transfer of the Loan; Participations in the Loan 73
SECTION 11.11.1. Assignments 74
SECTION 11.11.2. Participations 76
SECTION 11.11.3. Register 77
SECTION 11.11.4. Rights of BpiFAE to payments 77
SECTION 11.12. Other Transactions 77
SECTION 11.13. BpiFAE Insurance Policy 77
SECTION 11.13.2. Obligations of the Borrower 78
SECTION 11.13.3. Obligations of the ECA Agent and the Lenders 78
SECTION 11.14. Law and Jurisdiction 79
SECTION 11.14.1. Governing Law 79
SECTION 11.14.2. Jurisdiction 79
SECTION 11.14.3. Alternative Jurisdiction 79
SECTION 11.14.4. Service of Process 79
SECTION 11.15. Confidentiality 80
SECTION 11.16. French Authority Requirements 80
SECTION 11.17. Waiver of immunity 81
SECTION 11.18. Acknowledgement and Consent to Bail-In of EEA Financial Institutions 81
EXHIBITS
Exhibit A - Form of Loan Request
Exhibit B-1 - Form of Opinion of Liberian Counsel to Borrower
Exhibit B-2 - Form of Opinion of English Counsel to the Facility Agent and the Lenders
Exhibit B-3 - Form of Opinion of French Counsel to the Facility Agent and the Lenders
Exhibit B-4 - Form of Opinion of US Tax Counsel to the Lenders
Exhibit C - Form of Lender Assignment Agreement
Exhibit D - Form of Certificate of French Content
Exhibit E-1 - Form of Delivery Non-Yard Costs Certificate
Exhibit E-2 - Form of Final Non-Yard Costs Certificate
CREDIT AGREEMENT
HULL NO. L34 CREDIT AGREEMENT, dated 24 July 2017 as novated, amended and restated on the Actual Delivery Date (as defined below), is among Royal Caribbean Cruises Ltd., a Liberian corporation (the “Borrower”), Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch in its capacity as agent for the Lenders referred to below in respect of BpiFAE-related matters (in such capacity, the “ECA Agent”), Citibank Europe plc, UK Branch in its capacity as facility agent (in such capacity, the “Facility Agent”) and the financial institutions listed in Schedule 1 to the Novation Agreement (as defined below) as lenders (in such capacity, together with each of the other Persons that shall become a “Lender” in accordance with clause 12 of the Novation Agreement or Section 11.11.1 hereof, each of them individually a “Lender” and, collectively, the “Lenders”).
W I T N E S S E T H:
WHEREAS,
(A)The Borrower and Chantiers de l’Atlantique (previously known as STX France S.A.) (the “Builder”) have entered on 16 February 2015 into a Contract for the Construction and Sale of Hull No. L34 (as amended from time to time, the “Construction Contract”) pursuant to which the Builder has agreed to design , construct, equip, complete, sell and deliver the passenger cruise vessel bearing Builder’s hull number L34 which shall be owned by the Nominated Owner (the “Purchased Vessel”);
(B)The Lenders have agreed to make available to the Borrower, upon the terms and conditions contained herein, a Euro loan facility calculated on the amount (the “Maximum Loan Amount”) equal to the EUR sum of:
(i)eighty per cent (80%) of the Contract Price (as defined below) of the Purchased Vessel, and including Non-Yard Costs of up to EUR 76,000,000 (the “Maximum Non-Yard Costs Amount”) and the Other Basic Contract Price Increases (as defined below) for the Purchased Vessel of up to EUR 10,000,000 (but which, when aggregated with the Non-Yard Costs, shall not exceed an amount equal to EUR 76,000,000), and all of which amounts shall not exceed in aggregate EUR 707,167,000;
(ii)eighty per cent (80%) of the change orders of up to EUR 123,116,700 effected in accordance with the Construction Contract; and
(iii)100% of the BpiFAE Premium (as defined below), being an amount no greater than EUR 684,153,769;
COf the amounts referred to in recital (B)(i) and (ii) above, the Lenders have made certain amounts available to the Original Borrower during the period prior to the Actual Delivery Date pursuant to this Agreement (the liability for which amount has been assumed by the Borrower following the novation of this Agreement pursuant to the Novation Agreement) and, in relation to the amount referred to in recital (B)(i), the balance has been or shall be made available to
the Borrower as an Additional Advance pursuant to the Novation Agreement and this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms (whether or not underscored) when used in this Agreement, including its preamble and recitals, shall, when capitalized, except where the context otherwise requires, have the following meanings (such meanings to be equally applicable to the singular and plural forms thereof):
“Accumulated Other Comprehensive Income (Loss)” means at any date the Borrower’s accumulated other comprehensive income (loss) on such date, determined in accordance with GAAP.
“Actual Delivery Date” means the date on which the Purchased Vessel is delivered by the Builder to, and accepted by, the Borrower under the Construction Contract, being also the date on which the final balance of the Loan is advanced by way of the Additional Advances.
“Additional Advances” is defined in the Novation Agreement.
“Affiliate” of any Person means any other Person which, directly or indirectly, controls, is controlled by or is under common control with such Person. A Person shall be deemed to be “controlled by” any other Person if such other Person possesses, directly or indirectly, power to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
“Agent” means either the ECA Agent or the Facility Agent and “Agents” means both of them.
“Agreement” means, on any date, this credit agreement as originally in effect on the Signing Date and as novated, amended and restated by the Novation Agreement and as thereafter from time to time amended, supplemented, amended and restated, or otherwise modified and in effect on such date.
“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or any of its Affiliates from time to time concerning or relating to bribery or corruption.
“Anticipated Delivery Date” means the Expected Delivery Date (as defined in the Receivable Purchase Agreement) as at the Signing Date, namely 21 October 2021.
“Applicable Commitment Rate” means (x) from the Signing Date up to and including the date falling two years prior to the Anticipated Delivery Date, 0.15% per annum, (y) from the day following the date falling two years prior to the Anticipated Delivery Date up to and including the date falling one year prior to the Anticipated Delivery Date, 0.28% per annum,
and (z) from the day following the date falling one year prior to the Anticipated Delivery Date until the Commitment Fee Termination Date, 0.33% per annum.
“Applicable Jurisdiction” means the jurisdiction or jurisdictions under which the Borrower is organized, domiciled or resident or from which any of its business activities are conducted or in which any of its properties are located and which has jurisdiction over the subject matter being addressed.
“Approved Appraiser” means any of the following: Barry Rogliano Salles, Paris, H Clarkson & Co. Ltd., London, R.S. Platou Shipbrokers, Norway, or Fearnley AS, Norway.
“Assignee Lender” is defined in Section 11.11.1.
“Authorized Officer” means those officers of the Borrower authorized to act with respect to the Loan Documents and whose signatures and incumbency shall have been certified to the Facility Agent by the Secretary or an Assistant Secretary of the Borrower.
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an EEA Financial Institution.
“Bail-In Legislation” means: (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule; and (b) in relation to any state other than such an EEA Member Country or (to the extent that the United Kingdom is not such an EEA Member Country) the United Kingdom, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation.
“Bank of Nova Scotia Agreement” means the U.S. $1,428,000,000 amended and restated credit agreement dated as of 4 December 2017 (as further amended on 5 April 2019 in order to, amongst other things, increase the loan amount to U.S. $1,725,000,000) among the Borrower, as borrower, the various financial institutions as are or shall become parties thereto, as lenders, and The Bank of Nova Scotia, as administrative agent, as amended, restated, supplemented or otherwise modified from time to time.
“Basic Contract Price” is as defined in the Construction Contract. “Borrower” is defined in the preamble.
“BpiFAE” means BpiFrance Assurance Export, the French export credit agency, a French société par action simplifiée à associé unique with its registered office at 27-31, avenue du Général Leclerc, 94710 Maisons-Alfort Cedex, France, registered at the trade and companies registry of Créteil under number 815 276 308 and includes its successors in title or any other person succeeding to BpiFrance Assurance Export in the role as export credit agency of the Republic of France to manage and provide under its control, on its behalf and in its name the public export guarantees as provided by article L 432-1 of the French insurance code.
“BpiFAE Enhanced Guarantee” means the enhanced guarantee (garantie rehaussée) issued or to be issued by BpiFAE to the benefit of CAFFIL in accordance with article 84 of the French Amending Finance Law 2012 (as amended) in relation to the refinancing of SFIL’s participation and Commitments under the Loan, and any other documents (including any security) entered into or to be entered into by SFIL with CAFFIL and/or BpiFAE in relation thereto.
“BpiFAE Insurance Policy” means the export credit insurance policy in respect of the Loan issued by BpiFAE for the benefit of the Lenders.
“BpiFAE Premium” means the premium payable to BpiFAE under and in respect of the BpiFAE Insurance Policy.
“Builder” is defined in the preamble.
“Business Day” means any day which is neither a Saturday or Sunday nor a legal holiday on which banks are authorized or required to be closed in New York City, London, Madrid or Paris and (in relation to any date for payment or purchase of Euro) any TARGET Day, and if the applicable Business Day relates to an advance of all or part of the Loan, an Interest Period, prepayment or conversion, in each case with respect to the Loan bearing interest by reference to the EURO Rate, a day on which dealings in deposits in Euros are carried on in the interbank market within the Participating Member States.
“B34 Facility Amendment Date” means 20 March 2018, the effective date of the third supplemental agreement dated 16 March 2018 to (among other things) a credit facility supported by BpiFAE (pertaining to Hull No. B34) reflecting the alignment of certain provisions and covenants with the Borrower’s revolving credit facility refinanced on 12 October 2017.
“CAFFIL” means Caisse Française de Financement Local, a French société anonyme, with its registered office at 1-3 rue du Passeur de Boulogne, 92130 Issy-les- Moulineaux, France, registered at the trade and companies registry of Nanterre under number 421 318 064.
“Capital Lease Obligations” means obligations of the Borrower or any Subsidiary of the Borrower under any leasing or similar arrangement which, in accordance with GAAP, would be classified as capitalized leases.
“Capitalization” means, at any date, the sum of (a) Net Debt on such date, plus (b) Stockholders’ Equity on such date.
“Capitalized Lease Liabilities” means the principal portion of all monetary obligations of the Borrower or any of its Subsidiaries under any leasing or similar arrangement which, in accordance with GAAP, would be classified as capitalized leases, and, for purposes of this Agreement and each other Loan Document, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.
“Cash Equivalents” means all amounts other than cash that are included in the “cash and cash equivalents” shown on the Borrower’s balance sheet prepared in accordance with GAAP.
“Change of Control” means an event or series of events by which (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of 50% or more of the equity securities of the Borrower entitled to vote for members of the board of directors or equivalent governing body of the Borrower on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right); or (b) during any period of 24 consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Borrower cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body.
“CIRR” means 0.74% per annum being the Commercial Interest Reference Rate determined in accordance with the OECD Arrangement for Officially Supported Export Credits to be applicable to the Loan hereunder.
“Code” means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time.
“Commitment” is defined in Section 2.2 and means, relative to any Lender, such Lender’s obligation to make the Loan pursuant to Section 2.1.
“Commitment Fees” is defined in Section 3.4.
“Commitment Fee Termination Date” is defined in Section 3.4.
“Commitment Termination Date” means the Back Stop Date (as defined in the Receivable Purchase Agreement) (or such later date as the Lenders and BpiFAE may agree).
“Construction Contract” is defined in the preamble.
“Contract Price” is as defined in the Construction Contract and which includes a lump sum amount in respect of the Non-Yard Costs.
“Contractual Delivery Date” means, at any time, the date which at such time is the date specified for delivery of the Purchased Vessel under the Construction Contract, as such date may be modified from time to time pursuant to the terms of the Construction Contract.
“Covered Taxes” is defined in Section 4.6.
“Default” means any Event of Default or any condition, occurrence or event which, after notice or lapse of time or both, would constitute an Event of Default.
“Delivery Non-Yard Costs Certificate” means the certificate to be provided to the Facility Agent in the form of Exhibit E-1 on or prior to the Actual Delivery Date certifying the amount in EUR and/or Dollars, as applicable, of the Paid Non-Yard Costs and the Unpaid Non-Yard Costs as at the Actual Delivery Date, duly signed by the Borrower and endorsed by the Builder.
“Dollar” and the sign “$” mean lawful money of the United States. “ECA Agent” is defined in the preamble.
“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of a Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or
(b)of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“Effective Date” means the date this Agreement becomes effective pursuant to Section 11.8.
“Effective Time” means the Novation Effective Time as defined in the Novation Agreement.
“Environmental Laws” means all applicable federal, state, local or foreign statutes, laws, ordinances, codes, rules and regulations (including consent decrees and administrative orders) relating to the protection of the environment.
“Escrow Account” means the Euro escrow account of the Borrower opened or to be opened with the Escrow Account Bank for the purpose of receiving the relevant amount of the Additional Advances in respect of Unpaid Non-Yard Costs in accordance with Section 2.3f).
“Escrow Account Bank” means Citibank N.A., London Branch of Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB.
“Escrow Account Security” means the account security in respect of the Escrow Account executed or, as the context may require, to be executed by the Borrower in favour of the Security Trustee in the form agreed by the Lenders and the Borrower on or about the Restatement Date.
“Escrow Agency and Trust Deed” means the agency and trust deed executed or, as the context may require, to be executed by, amongst others, the Borrower, the parties to this Agreement and the Security Trustee.
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.
“EUR”, “Euro” and the sign “€” mean the currency of participating member states of the European Monetary Union pursuant to Council Regulation (EC) 974/98 of 3 May 1998, as amended from time to time.
“EURO Rate” means the rate per annum of the offered quotation for deposits in Euros for six months (or for such other period as shall be agreed by the Borrower and the Facility Agent) which appears on Thomson Reuters EURIBOR01 Page (or any successor page) at or about 11:00 a.m. (Central European Time) two (2) TARGET Days (and which are also days on which banks are open for business in London (excluding Saturdays, Sundays and legal holidays)) before the commencement of the relevant Interest Period; provided that:
a)subject to Section 3.3.6, if no such offered quotation appears on Thomson Reuters EURIBOR01 Page (or any successor page) at the relevant time the EURO Rate shall be the Historic Screen Rate or, if it is not possible to calculate an Historic Screen Rate, it shall be the rate per annum certified by the Facility Agent to be the average of the rates quoted by the Reference Banks as the rate at which each of the Reference Banks was (or would have been) offered deposits of Euros by prime banks in the interbank market within the Participating Member States in an amount approximately equal to the amount of the Loan and for a period of six months;
b)for the purposes of determining the post-maturity rate of interest under Section 3.3.4, the EURO Rate shall be determined by reference to deposits on an overnight or call basis or for such other period or periods as the Facility Agent may determine after consultation with the Lenders, which period shall be no longer than one month unless the Borrower otherwise agrees; and
c)if that rate is less than zero, the EURO Rate shall be deemed to be zero. “Event of Default” is defined in Section 8.1.
“Existing Principal Subsidiaries” means each Subsidiary of the Borrower that is a Principal Subsidiary on the Signing Date.
“Facility Agent” is defined in the preamble and includes each other Person as shall have subsequently been appointed as the successor Facility Agent, and as shall have accepted such appointment, pursuant to Section 10.5.
“FATCA” means (a) Sections 1471 through 1474 of the Code, as in effect at the date hereof, and any current or future regulations promulgated thereunder or official interpretations thereof, (b) any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or (c) any agreement pursuant to the implementation of any treaty, law or
regulation referred to in paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.
“FATCA Deduction” means a deduction or withholding from a payment under a Loan Document required by FATCA.
“FATCA Exempt Party” means a party to this Agreement that is entitled to receive payments free from any FATCA Deduction.
“Fee Letter” means any letter entered into by reference to this Agreement between any or all of the Facility Agent, the Mandated Lead Arrangers, the Arrangers, the Lenders and/or the Borrower setting out the amount of certain fees referred to in, or payable in connection with, this Agreement.
“Final Maturity” means twelve (12) years after the Actual Delivery Date.
“Final Non-Yard Costs Certificate” means the certificate to be provided to the Facility Agent in the form of Exhibit E-2 on or prior to the NYC Cut Off Date certifying the amount of the Paid Non-Yard Costs as at the date of that certificate, duly signed by the Borrower.
“Fiscal Quarter” means any quarter of a Fiscal Year.
“Fiscal Year” means any annual fiscal reporting period of the Borrower.
“Fixed Charge Coverage Ratio” means, as of the end of any Fiscal Quarter, the ratio computed for the period of four consecutive Fiscal Quarters ending on the close of such Fiscal Quarter of:
i.net cash from operating activities (determined in accordance with GAAP) for such period, as shown in the Borrower’s consolidated statement of cash flow for such period, to
ii.the sum of:
1.dividends actually paid by the Borrower during such period (including, without limitation, dividends in respect of preferred stock of the Borrower); plus
2.scheduled payments of principal of all debt less New Financings (determined in accordance with GAAP, but in any event including Capitalized Lease Liabilities) of the Borrower and its Subsidiaries for such period.
“Fixed Rate” means a rate per annum equal to the sum of the CIRR plus the Fixed Rate Margin.
“Fixed Rate Margin” means 0.54% per annum.
“Floating Rate” means a rate per annum equal to the sum of the EURO Rate plus the Floating Rate Margin.
“Floating Rate Margin” means, for each Interest Period 0.69% per annum.
“F.R.S. Board” means the Board of Governors of the Federal Reserve System or any successor thereto.
“French Authorities” means the Direction Générale du Trésor of the French Ministry of Economy and Finance, any successors thereto, or any other governmental authority in or of France involved in the provision, management or regulation of the terms, conditions and issuance of export credits including, among others, such entities to whom authority in respect of the extension or administration of export financing matters have been delegated, such as BpiFAE and Natixis DAI.
“Funding Losses Event” is defined in Section 4.4.1. “GAAP” is defined in Section 1.4.
“Government-related Obligations” means obligations of the Borrower or any Subsidiary of the Borrower under, or Indebtedness incurred by the Borrower or any Subsidiary of the Borrower to satisfy obligations under, any governmental requirement imposed by any Applicable Jurisdiction that must be complied with to enable the Borrower and its Subsidiaries to continue their business in such Applicable Jurisdiction, excluding, in any event, any taxes imposed on the Borrower or any Subsidiary of the Borrower.
“Hedging Instruments” means options, caps, floors, collars, swaps, forwards, futures and any other agreements, options or instruments substantially similar thereto or any series or combination thereof used to hedge interest, foreign currency and commodity exposures.
“herein”, “hereof”, “hereto”, “hereunder” and similar terms contained in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular Section, paragraph or provision of this Agreement or such other Loan Document.
“Historic Screen Rate” means, in relation to the Loan, the most applicable recent rate which appeared on Thomson Reuters EURIBOR 01 Page (or any replacement page) for the currency of the Loan and for a period equal to the applicable Interest Period for the Loan and which is no more than 7 days before the commencement of the applicable Interest Period for which such rate may be applicable.
“Illegality Notice” is defined in Section 3.2(b).
“Indebtedness” means, for any Person: (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of property or services, other than (i) trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business so long as such trade accounts payable are payable within 180 days of the date the respective goods are delivered or the respective services are rendered and (ii) any purchase price adjustment, earnout or deferred payment of a similar nature incurred in connection with an acquisition (but only to the extent that no payment has at the time
accrued pursuant to such purchase price adjustment, earnout or deferred payment obligation);
(c)Indebtedness of others secured by a Lien on the property of such Person, whether or not the respective indebtedness so secured has been assumed by such Person; (d) obligations of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for the account of such Person; (e) Capital Lease Obligations of such Person; (f) guarantees by such Person of Indebtedness of others, up to the amount of Indebtedness so guaranteed; (g) obligations of such Person in respect of surety bonds and similar obligations; and (h) liabilities arising under Hedging Instruments.
“Indemnified Liabilities” is defined in Section 11.4. “Indemnified Parties” is defined in Section 11.4.
“Interest Payment Date” means each Repayment Date.
“Interest Period” means the period between the Actual Delivery Date and the first Repayment Date, and subsequently each succeeding period between two consecutive Repayment Dates.
“Interest Stabilisation Agreement” means an agreement on interest stabilisation entered into between Natixis and each Lender (other than BpiFAE or CAFFIL as assignee of all or any of SFIL’s rights as Lender following the enforcement of any security granted pursuant to paragraph (iv) of Section 11.11.1 in connection with the BpiFAE Enhanced Guarantee, subject as provided in Section 11.11.1) in connection with the Loan.
“Investment Grade” means, with respect to Moody’s, a Senior Debt Rating of Baa3 or better and, with respect to S&P, a Senior Debt Rating of BBB- or better.
“Lender Assignment Agreement” means any Lender Assignment Agreement substantially in the form of Exhibit C.
“Lender” and “Lenders” are defined in the preamble.
“Lending Office” means, relative to any Lender, the office of such Lender designated as such below its signature hereto or designated in a Lender Assignment Agreement or such other office of a Lender as designated from time to time by notice from such Lender to the Borrower and the Facility Agent, whether or not outside the United States but subject in all cases to the agreement of Natixis DAI in relation to the CIRR, which shall be making or maintaining the Loan of such Lender hereunder.
“Lien” means any security interest, mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), charge against or interest in property to secure payment of a debt or performance of an obligation or other priority or preferential arrangement of any kind or nature whatsoever.
“Loan” means the advances made by the Lenders under this Agreement from time to time or, as the case may be, the aggregate outstanding amount of such advances from time to time.
“Loan Documents” means this Agreement, the Novation Agreement, the Escrow Agency and Trust Deed, the Fee Letters and the Escrow Account Security.
“Loan Request” means the loan request and certificate duly executed by an Authorized Officer of the Borrower, substantially in the form of Exhibit A hereto.
“Material Adverse Effect” means a material adverse effect on (a) the business, operations or financial condition of the Borrower and its Subsidiaries taken as a whole, (b) the rights and remedies of the Facility Agent or any Lender under the Loan Documents or (c) the ability of the Borrower to perform its payment Obligations under the Loan Documents.
“Material Litigation” is defined in Section 6.7.
“Maximum Loan Amount” is defined in the preamble.
“Maximum Non-Yard Costs Amount” is defined in the preamble.
“Moody's” means Moody's Investors Service, Inc.
“Natixis” means Natixis, a French société anonyme with its registered office at 30, avenue Pierre Mendès France, 75013 Paris, France, registered with the Paris Commercial and Companies Registry under number 542 044 524 RCS Paris.
“Natixis DAI” means Natixis DAI Direction des Activités Institutionnelles.
“Net Debt” means, at any time, the aggregate outstanding principal amount of all debt (including, without limitation, the principal portion of all capitalized leases) of the Borrower and its Subsidiaries (determined on a consolidated basis in accordance with GAAP) less the sum of (without duplication);
i.all cash on hand of the Borrower and its Subsidiaries; plus
ii.all Cash Equivalents.
“Net Debt to Capitalization Ratio” means, as at any date, the ratio of (a) Net Debt on such date to (b) Capitalization on such date.
“New Financings” means proceeds from:
a)borrowed money (whether by loan or issuance and sale of debt securities), including drawings under this Agreement and any revolving credit facilities of the Borrower, and
b)the issuance and sale of equity securities.
“Nominated Owner” means a Subsidiary of the Borrower to be nominated by the Borrower prior to the Actual Delivery Date to take delivery of the Vessel under the Construction Contract.
“Non-Yard Costs” has the meaning assigned to “NYC Allowance” in paragraph 1.5 of Article II of the Construction Contract and, when such expression is prefaced by the word
“incurred”, shall mean such amount of the Non-Yard Costs not exceeding EUR 76,000,000 and, when aggregated with the Other Basic Contract Price Increases, in an amount not exceeding EUR 76,000,000, as shall at the relevant time have been paid, or become payable, to the Builder by the Borrower under the Construction Contract as part of the Contract Price.
“Nordea Agreement” means the U.S. $1,150,000,000 amended and restated credit agreement dated as of October 12, 2017, among the Borrower, as the borrower, the various financial institutions as are or shall become parties thereto and Nordea Bank AB (publ), New York Branch as administrative agent, as amended, restated, supplemented or otherwise modified from time to time.
“Novated Loan Balance” is as defined in the Novation Agreement.
“Novation Agreement” means the novation agreement dated 24 July 2017 and made between the Original Borrower and the parties hereto pursuant to which (amongst other things) this Agreement was novated, amended and restated.
“NYC Cut Off Date” means the date falling 60 days after the Actual Delivery Date or such later date as the Lenders (with the approval of BpiFAE) may agree.
“Obligations” means all obligations (payment or otherwise) of the Borrower arising under or in connection with this Agreement.
"Option Period" is defined in Section 3.2(c).
“Organic Document” means, relative to the Borrower, its articles of incorporation (inclusive of any articles of amendment to its articles of incorporation) and its by-laws.
“Original Borrower” means Hoediscus Finance Limited of Cayman Corporate Centre, 27 Hospital Road, George Town, Grand Cayman KY1-9008, Cayman Islands.
“Other Basic Contract Price Increases” is defined in the Novation Agreement.
“Paid Non-Yard Costs” means as at any relevant date, the amount in Euro of the Non- Yard Costs which have been paid for by the Borrower and, where applicable, supplied, installed and completed on the Purchased Vessel and as determined in accordance with the relevant amounts certified in the Delivery Non-Yard Costs Certificate or, as the case may be, the Final Non-Yard Costs Certificate as at such time.
“Participant” is defined in Section 11.11.2.
“Participant Register” is defined in Section 11.11.2.
“Participating Member State” means any member state of the European Union that has the Euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.
“Percentage” means, relative to any Lender, the percentage set forth opposite its signature hereto or as set out in the applicable Lender Assignment Agreement, as such percentage may be adjusted from time to time pursuant to Section 4.9 or pursuant to Lender
Assignment Agreement(s) executed by such Lender and its Assignee Lender(s) and delivered pursuant to Section 11.11.1.
“Person” means any natural person, corporation, limited liability company, partnership, firm, association, trust, government, governmental agency or any other entity, whether acting in an individual, fiduciary or other capacity.
“Prepayment Event” is defined in Section 9.1.
“Principal Subsidiary” means any Subsidiary of the Borrower that owns a Vessel.
“Purchased Vessel” is defined in the preamble.
“Receivable Purchase Agreement” is as defined in the Novation Agreement.
“Reference Banks” means Société Générale and Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch and such other Lender as shall be so named by the Borrower and agrees to serve in such role and each additional Reference Bank and/or each replacement Reference Bank appointed by the Facility Agent pursuant to Section 3.3.6.
“Register” is defined in Section 11.11.3.
“Repayment Date” means, subject to Section 4.8(c), each of the dates for payment of the repayment installments of the Loan pursuant to Section 3.1.
“Required Lenders” means (a) at any time when SFIL is a Lender, SFIL and at least one other Lender that in the aggregate with SFIL hold more than 50% of the aggregate unpaid principal amount of the Loan or (b) or at any other time, Lenders that in the aggregate hold more than 50% of the aggregate unpaid principal amount of the Loan, and in each case, if no such principal amount is then outstanding, Lenders that in the aggregate have more than 50% of the Commitments.
“Resolution Authority” means any body which has authority to exercise any Write- down and Conversion Powers.
“Restatement Date” means 2020, being the date on which the form of this Agreement was amended and restated.
“S&P” means Standard & Poor's Financial Services LLC, a wholly-owned subsidiary of The McGraw-Hill Financial Inc.
“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, or (b) the United Nations Security Council, the European Union, any European Union member state or Her Majesty’s Treasury of the United Kingdom.
“Sanctioned Country” means, at any time, a country, region or territory which is itself the subject or target of any Sanctions.
“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions- related list of designated Persons maintained by the Office of Foreign Assets Control of the
U.S. Department of the Treasury, the U.S. Department of State, or by the United Nations Security Council, the European Union or any European Union member state, or any person owned or controlled by any such Person or Persons, or (b) any Person operating, organized or resident in a Sanctioned Country.
“SEC” means the United States Securities and Exchange Commission and any successor thereto.
“Security Trustee” means Citicorp Trustee Company Limited of Citigroup Centre, Canada Square, London E14 5LB in its capacity as security trustee for the purpose of the Escrow Account Security.
“Senior Debt Rating” means, as of any date, (a) the implied senior debt rating of the Borrower for debt pari passu in right of payment and in right of collateral security with the Obligations as given by Moody's and S&P or (b) in the event the Borrower receives an actual unsecured senior debt rating (apart from an implied rating) from Moody's and/or S&P, such actual rating or ratings, as the case may be (and in such case the Senior Debt Rating shall not be determined by reference to any implied senior debt rating from either agency).
“SFIL” means SFIL, a French société anonyme with is registered office at 1-3 rue du Passeur de Boulogne, 92130 Issy-les-Moulineaux, France, registered at the trade and companies registry of Nanterre under number 428 782 585.
“Signing Date” means the date of the Novation Agreement.
“Stockholders’ Equity” means, as at any date, the Borrower’s stockholders’ equity on such date, excluding Accumulated Other Comprehensive Income (Loss), determined in accordance with GAAP, provided that any non-cash charge to Stockholders’ Equity resulting (directly or indirectly) from a change after the Signing Date in GAAP or in the interpretation thereof shall be disregarded in the computation of Stockholders’ Equity such that the amount of any reduction thereof resulting from such change shall be added back to Stockholders’ Equity.
“Subsidiary” means, with respect to any Person, any corporation of which more than 50% of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned by such Person, by such Person and one or more other Subsidiaries of such Person, or by one or more other Subsidiaries of such Person.
“TARGET2” means the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which utilises a single shared platform and which was launched on 19 November 2007.
“TARGET Day” means any day on which TARGET2 is open for the settlement of payments in euro.
“UK Bail-In Legislation” means (to the extent that the United Kingdom is not an EEA Member Country which has implemented, or implements, Article 55 of Directive 2014/59/EU) Part I of the United Kingdom Banking Act 2009 and any other law or regulation applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (otherwise than through liquidation, administration or other insolvency proceedings).
“Unpaid Non-Yard Costs” means, as at the Actual Delivery Date, the amount in Euro of the Non-Yard Costs which have not been paid for by the Borrower and/or where applicable, supplied, installed and completed on the Purchased Vessel as at the Actual Delivery Date and as determined in accordance with the relevant amounts certified in the Delivery Non-Yard Costs Certificate.
“United States” or “U.S.” means the United States of America, its fifty States and the District of Columbia.
“Vessel” means a passenger cruise vessel owned by the Borrower or one of its Subsidiaries.
“Write-Down and Conversion Powers” means: (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule; and (b) in relation to any UK Bail-In Legislation: (i) any powers under that UK Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that UK Bail-In Legislation that are related to or ancillary to any of those powers; and (ii) any similar or analogous powers under that UK Bail-In Legislation.
SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the context otherwise requires, terms for which meanings are provided in this Agreement shall, when capitalized, have such meanings when used in the Loan Request and each notice and other communication delivered from time to time in connection with this Agreement or any other Loan Document.
SECTION 1.3. Cross-References. Unless otherwise specified, references in this Agreement and in each other Loan Document to any Article or Section are references to such Article or Section of this Agreement or such other Loan Document, as the case may be, and, unless otherwise specified, references in any Article, Section or definition to any clause are references to such clause of such Article, Section or definition.
SECTION 1.4. Accounting and Financial Determinations. Unless otherwise specified, all accounting terms used herein or in any other Loan Document shall be interpreted, all accounting determinations and computations hereunder or thereunder (including under Section 7.2.4) shall be made, and all financial statements required to be
delivered hereunder or thereunder shall be prepared, in accordance with United States generally accepted accounting principles (“GAAP”) consistently applied (or, if not consistently applied, accompanied by details of the inconsistencies); provided that if the Borrower elects to apply or is required to apply International Financial Reporting Standards (“IFRS”) accounting principles in lieu of GAAP, upon any such election and notice to the Facility Agent, references herein to GAAP shall thereafter be construed to mean IFRS (except as otherwise provided in this Agreement); provided further that if, as a result of (i) any change in GAAP or IFRS or in the interpretation thereof or (ii) the application by the Borrower of IFRS in lieu of GAAP, in each case, after the date of the financial statements referred to in Section 6.15, there is a change in the manner of determining any of the items referred to herein or thereunder that are to be determined by reference to GAAP, and the effect of such change would (in the reasonable opinion of the Borrower or the Facility Agent) be such as to affect the basis or efficacy of the financial covenants contained in Section 7.2.4 in ascertaining the consolidated financial condition of the Borrower and its Subsidiaries and the Borrower notifies the Facility Agent that the Borrower requests an amendment to any provision hereof to eliminate such change occurring after the date hereof in GAAP or the application thereof on the operation of such provision (or if the Facility Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), then such item shall for the purposes of Section 7.2.4 continue to be determined in accordance with GAAP relating thereto as if GAAP were applied immediately prior to such change in GAAP or in the interpretation thereof until such notice shall have been withdrawn or such provision amended in accordance herewith. Notwithstanding the foregoing, all obligations of any person that are or would be characterized as operating lease obligations in accordance with GAAP on the B34 Facility Amendment Date (whether or not such operating lease obligations were in effect on such date) shall continue to be accounted for as operating lease obligations for the purposes of this Agreement regardless of any change in GAAP following the B34 Facility Amendment Date that would otherwise require such obligations to be recharacterized (on a prospective or retroactive basis or otherwise) as capital leases, provided that, for clarification purposes, operating leases recorded as liabilities on the balance sheet due to a change in accounting treatment, or otherwise, shall for all purposes not be treated as Indebtedness, Capital Lease Obligations or Capitalized Lease Liabilities.
ARTICLE II
COMMITMENTS AND BORROWING PROCEDURES
SECTION 2.1. Commitment. On the terms and subject to the conditions of this Agreement (including Article V), each Lender severally agrees to make its portion of the Loan pursuant to its Commitment described in Section 2.2. No Lender’s obligation to make its portion of the Loan shall be affected by any other Lender’s failure to make its portion of the Loan.
SECTION 2.2. Commitment of the Lenders; Termination and Reduction of Commitments.
i.Each Lender will make its portion of the Loan available to the Borrower in accordance with Section 2.3 on the Actual Delivery Date. The commitment of each Lender described in this Section 2.2 (herein referred to as its “Commitment”) shall be the commitment of such Lender to make available to the Borrower its portion of the
Loan hereunder expressed as the initial amount set forth opposite such Lender’s name on its signature page attached hereto or, in the case of any Lender that becomes a Lender pursuant to an assignment pursuant to Section 11.11.1, the amount set forth as such Lender’s Commitment in the related Lender Assignment Agreement, in each case as such amount may be reduced from time to time pursuant clause 10.2 of the Novation Agreement or reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 11.11.1. Notwithstanding the foregoing, each Lender’s Commitment shall terminate on the earlier of (i) the Commitment Termination Date if the Purchased Vessel is not delivered prior to such date and (ii) the Actual Delivery Date.
ii.If any Lender shall default in its obligations under Section 2.1, the Facility Agent shall, at the request of the Borrower, use reasonable efforts to assist the Borrower in finding a bank or financial institution acceptable to the Borrower to replace such Lender.
SECTION 2.3. Borrowing Procedure.
a)Part of the Loan in an amount equal to the Novated Loan Balance shall be assumed by the Borrower and be deemed to be advanced to, and borrowed by the Borrower, pursuant to the provisions of clause 3 of the Novation Agreement.
b)In relation to the amount of the Loan comprised by the Additional Advances, the Borrower shall deliver a Loan Request and the documents required to be delivered pursuant to Section 5.1.1(a) to the Facility Agent on or before 3:00 p.m., London time, not less than two (2) Business Days prior to the anticipated Actual Delivery Date. The Additional Advances shall be drawn in Euros.
c)The Facility Agent shall promptly notify each Lender of the Loan Request in respect of the Additional Advances by forwarding a copy thereof to each Lender, together with its attachments. On the terms and subject to the conditions of this Agreement, the portion of the Loan in respect of the Additional Advances shall be made on the Actual Delivery Date. On or before 11:00 a.m., London time, on the Actual Delivery Date, the Lenders shall, without any set-off or counterclaim, deposit with the Facility Agent same day funds in an amount equal to such Lender’s Percentage of the requested portion of the Additional Advances in Euros. Such deposits will be made to such account which the Facility Agent shall specify from time to time by notice to the Lenders. To the extent funds are so received from the Lenders (and having regard, where applicable, to Sections 2.3d), e) and f) below), the Facility Agent shall, without any set-off or counterclaim, make such funds available to the Borrower on the Actual Delivery Date by wire transfer of same day funds to the accounts the Borrower shall have specified in its Loan Request.
d)If the Borrower elects to finance that part of the BpiFAE Premium payable by the Borrower with an Additional Advance under clause 5.2(b)(i) of the Novation Agreement, the Borrower shall indicate such election in the Loan Request.
e)If the Borrower elects to finance that part of the BpiFAE Premium payable by the Borrower with an Additional Advance under clause 5.2(b)(ii) of the Novation Agreement, the Borrower shall indicate such election in the Loan Request.
f)In relation to any Additional Advance that is to be advanced to the Borrower in respect of the Non-Yard Costs it is agreed that:
i)an amount equal to eighty per cent (80%) of the Paid Non-Yard Costs shall be advanced to the Borrower on the Actual Delivery Date in accordance with the provisions of Section 2.3 c), which amount shall be determined by the Facility Agent based on the amounts contained in the Delivery Non-Yard Costs Certificate; and
ii)an amount equal to eighty per cent (80%) of the Unpaid Non-Yard Costs, which amount shall be determined by the Facility Agent based on the amounts contained in the Delivery Non-Yard Costs Certificate (the “Escrow Amount”), shall be remitted by the Facility Agent (and the Borrower hereby instructs the Facility Agent to make such remittance) to the Escrow Account and such amount shall be regulated in accordance with the following provisions of this Section 2.3 f) and the Escrow Account Security,
subject to the aggregate of the amounts referred to in i) and ii) above not exceeding the Maximum Non-Yard Costs Amount.
Where an Escrow Amount payment is made to the Escrow Account pursuant to ii) above, the Borrower shall be entitled at any time prior to the NYC Cut Off Date to provide the Facility Agent with the Final Non-Yard Cost Certificate setting out the final amount of the Paid Non-Yard Costs. Where the Final Non-Yard Costs Certificate is so received by the Facility Agent, the Facility Agent shall promptly authorize the release of the Escrow Amount (or, if less, an amount equal to eighty per cent of the final amount of the Paid Non-Yard Costs less the amount previously advanced to the Borrower under i) above) to the Borrower. Any interest accruing on the Escrow Account shall be released to the Borrower at the same time as the release of the Escrow Amount (or, if applicable, part thereof) to the Borrower pursuant to this provision.
If any amount of the Escrow Amount remains on the Escrow Account on the day falling immediately after the NYC Cut Off Date (having regard to any applicable permitted release of moneys from the Escrow Account to the Borrower referred to above) then on the Business Day thereafter the Facility Agent shall be entitled to request the withdrawal of that amount from the Escrow Account and shall apply the amount so received, on behalf of the Borrower, in or towards prepayment of the Loan.
The basis on which the Escrow Account Security is held by the Security Trustee for the benefit of the Lenders is regulated under the Escrow Agency and Trust Deed.
SECTION 2.4. Funding. Each Lender may, if it so elects, fulfill its obligation to make or continue its portion of the Loan hereunder by causing a branch or Affiliate (or an international banking facility created by such Lender) other than that indicated next to its signature to this Agreement or, as the case may be, in the relevant Lender Assignment Agreement, to make or maintain such portion of the Loan; provided that such portion of the Loan shall nonetheless be deemed to have been made and to be held by such
Lender, and the obligation of the Borrower to repay such portion of the Loan shall nevertheless be to such Lender for the account of such foreign branch, Affiliate or international banking facility; provided, further, that the Borrower shall not be required to pay any amount under Sections 4.2(c), 4.3, 4.4, 4.5, 4.6 and 4.7 that is greater than the amount which it would have been required to pay had the Lender not caused such branch or Affiliate (or international banking facility) to make or maintain such portion of the Loan.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments.
a)The Borrower shall repay the Loan in 24 equal semi-annual installments, with the first installment to fall due on the date falling six (6) months after the Actual Delivery Date and the final installment to fall due on the date of Final Maturity.
b)No such amounts repaid by the Borrower pursuant to this Section 3.1 may be re- borrowed under the terms of this Agreement.
SECTION 3.2. Prepayment.
a)The Borrower
i)may, from time to time on any Business Day, make a voluntary prepayment, in whole or in part, of the outstanding principal amount of the Loan; provided that:
(1)all such voluntary prepayments shall require at least five (5) Business Days’ prior written notice to the Facility Agent; and
(2)all such voluntary partial prepayments shall be in an aggregate minimum amount of €10,000,000 and a multiple of €1,000,000 (or in the remaining amount of the Loan) and shall be applied in inverse order of maturity or ratably among all remaining installments, as the Borrower shall designate to the Facility Agent, in satisfaction of the remaining repayment installments of the Loan; and
ii)shall, immediately upon any acceleration of the repayment of the installments of the Loan pursuant to Section 8.2 or 8.3 or the mandatory prepayment of the Loan pursuant to Section 9.2, repay the Loan.
b)If it becomes unlawful in any jurisdiction for any Lender to perform any of its obligations under the Loan Documents or to maintain or fund its portion of the Loan, the affected Lender may give written notice (the "Illegality Notice") to the Borrower and the Facility Agent of such event, including reasonable details of the relevant circumstances.
c)If an affected Lender delivers an Illegality Notice, the Borrower, the Facility Agent and the affected Lender shall discuss in good faith (but without obligation) what steps
may be open to the relevant Lender to mitigate or remove such circumstances but, if they are unable to agree such steps within 20 Business Days or if the Borrower so elects, the Borrower shall have the right, but not the obligation, exercisable at any time within 50 days after receipt of such Illegality Notice or, if earlier, the date upon which the unlawful event referred to in (b) above will apply (but not being a date falling earlier than the end of the 20 Business Day period referred to above) (the "Option Period"), either (1) to prepay the portion of the Loan held by such Lender in full on or before the expiry of the Option Period, together with all unpaid interest and fees thereon accrued to but excluding the date of such prepayment, or (2) to replace such Lender on or before the expiry of the Option Period with one or more financial institutions (I) acceptable to the Facility Agent (such consent not to be unreasonably withheld or delayed) and (II) where relevant, eligible to benefit from an Interest Stabilisation Agreement, pursuant to assignment(s) notified to and consented in writing by BpiFAE and, where relevant Natixis DAI, provided that (x) in the case of a single assignment, any such assignment shall be either an assignment of all of the rights and obligations of the assigning Lender under this Agreement or, in the case of more than one assignment, an assignment of a portion of such rights and obligations made concurrently with another such assignment or other such assignments that collectively cover all of the rights and obligations of the assigning Lender under this Agreement and (y) no Lender shall be obliged to make any such assignment as a result of an election by the Borrower pursuant to this Section 3.2(c) unless and until such Lender shall have received one or more payments from one or more Assignee Lenders and/or the Borrower in an aggregate amount at least equal to the portion of the Loan held by such Lender, together with all unpaid interest and fees thereon accrued to but excluding the date of such assignment (and all other amounts then owing to such Lender under this Agreement).
Each prepayment of the Loan made pursuant to this Section shall be without premium or penalty, except as may be required by Section 4.4. No amounts prepaid by the Borrower may be re-borrowed under the terms of this Agreement.
SECTION 3.3. Interest Provisions. Interest on the outstanding principal amount of the Loan shall accrue and be payable in accordance with this Section 3.3.
SECTION 3.3.1. Rates. The Loan shall accrue interest from the Actual Delivery Date to the date of repayment or prepayment of the Loan in full to the Lenders at either the Fixed Rate or, where the proviso to Section 5.1.10 applies, the Floating Rate. Interest calculated at the Fixed Rate or the Floating Rate shall be payable in arrears on each Repayment Date. The Loan shall bear interest from and including the first day of the applicable Interest Period to (but not including) the last day of such Interest Period at the interest rate determined as applicable to the Loan. All interest shall be calculated on the basis of the actual number of days elapsed over a year comprised of 360 days.
SECTION 3.3.2. [Intentionally omitted]
SECTION 3.3.3. Interest stabilisation. Each Lender who is a party hereto on the Restatement Date represents and warrants to the Borrower that it has entered into an Interest Stabilisation Agreement and any Lender not a party hereto on the Restatement Date (other than BpiFAE or CAFFIL as assignee of all or any of SFIL’s rights as Lender
following the enforcement of the security granted pursuant to paragraph (iv) of Section 11.11.1 in connection with the BpiFAE Enhanced Guarantee, subject as provided in Section 11.11.1(iv)) represents and warrants to the Borrower on the date that such Lender becomes a party hereto that it has entered into an Interest Stabilisation Agreement on or prior to becoming a party hereto.
SECTION 3.3.4. Post-Maturity Rates. After the date any principal amount of the Loan is due and payable (whether on any Repayment Date, upon acceleration or otherwise), or after any other monetary Obligation of the Borrower shall have become due and payable, the Borrower shall pay, but only to the extent permitted by law, interest (after as well as before judgment) on such amounts for each day during the period of such default at a rate per annum certified by the Facility Agent to the Borrower (which certification shall be conclusive in the absence of manifest error) to be equal to the sum of the Floating Rate plus 1.5% per annum.
SECTION 3.3.5. Payment Dates. Interest accrued on the Loan shall be payable, without duplication, on the earliest of:
1.each Interest Payment Date;
2.each Repayment Date;
3.the date of any prepayment, in whole or in part, of principal outstanding on the Loan (but only on the principal so prepaid); and
4.on that portion of the Loan the repayment of which is accelerated pursuant to Section 8.2 or Section 8.3, immediately upon such acceleration.
SECTION 3.3.6. Interest Rate Determination; Replacement Reference Banks. Where Section 3.3.4 or the Floating Rate applies, the Facility Agent shall
obtain from each Reference Bank timely information for the purpose of determining the EURO Rate in the event that no offered quotation appears on Thomson Reuters EURIBOR 01 Page (or any successor page) and the EURO Rate is to be determined by reference to quotations supplied by the Reference Banks and not by reference to the Historic Screen Rate. If any one or more of the Reference Banks shall fail to furnish in a timely manner such information to the Facility Agent for any such interest rate, the Facility Agent shall determine such interest rate on the basis of the information furnished by the remaining Reference Banks. If the Borrower elects to add an additional Reference Bank hereunder or a Reference Bank ceases for any reason to be able and willing to act as such, the Facility Agent shall, at the direction of the Required Lenders and after consultation with the Borrower and the Lenders, appoint a replacement for such Reference Bank reasonably acceptable to the Borrower, and such replaced Reference Bank shall cease to be a Reference Bank hereunder. The Facility Agent shall furnish to the Borrower and to the Lenders each determination of the EURO Rate made by reference to quotations of interest rates furnished by Reference Banks (it being understood that the Facility Agent shall not be required to disclose to any party hereto (other than the Borrower) any information regarding any Reference Bank or any rate quoted by a Reference Bank, including, without limitation, whether a Reference Bank has provided a rate or the rate provided by any individual Reference Bank).
Interest accrued on the Loan or other monetary Obligations arising under this Agreement or any other Loan Document after the date such amount is due and payable (whether upon acceleration or otherwise) shall be payable upon demand.
SECTION 3.3.7. Unavailability of the EURO Rate.
Notwithstanding anything to the contrary in this Agreement or any other Loan Documents, if the Facility Agent determines (which determination shall, in the absence of manifest error, be conclusive) or the Borrower or the Required Lenders notify the Facility Agent (with, in the case of the Required Lenders, a copy to Borrower) that the Borrower or the Required Lenders (as applicable) have determined that:
a)adequate and reasonable means would not exist for ascertaining (should the Floating Rate apply) the EURO Rate for the relevant Interest Period including, without limitation, because the EURO Rate is not available or published on a current basis and such circumstances are unlikely to be temporary; or
b)the administrator of the EURO Rate or a governmental authority having jurisdiction over the Facility Agent has made a public statement identifying a specific date after which the EURO Rate shall no longer be made available or used for determining the interest rate of loans (such specific date, the “Scheduled Unavailability Date”); or
c)syndicated loans currently being executed, or existing syndicated loans that include language similar to that contained in this section 3.3.7, are being executed and/or amended (as applicable) to incorporate or adopt a new benchmark interest rate to replace the EURO Rate,
then, reasonably promptly after such determination by the Facility Agent or receipt by the Facility Agent of such notice, as applicable, or if the Borrower otherwise requests, the Facility Agent and the Borrower may amend this Agreement to replace the EURO Rate with an alternate benchmark rate (including any mathematical or other adjustments to the benchmark (if any) incorporated therein), giving due consideration to any evolving or then existing convention for similar EURO denominated syndicated credit facilities for such alternative benchmarks (any such proposed rate, a “EURO Successor Rate”), and also together with any proposed EURO Successor Rate Conforming Changes (as defined below) and any such amendment shall become effective at 5:00 P.M. (London time) on the fifth (5) Business Day after the Facility Agent shall have posted such proposed amendment to all Lenders and the Borrower unless, prior to such time, Lenders comprising the Required Lenders have delivered to the Facility Agent written notice that such Required Lenders do not accept such amendment. Such EURO Successor Rate shall be applied in a manner consistent with market practice; provided that to the extent such market practice is not administratively feasible for the Facility Agent, such EURO Successor Rate shall be applied in a manner as otherwise reasonably determined by the Facility Agent.
If no EURO Successor Rate has been determined and the circumstances under paragraph a) above exist or the Scheduled Unavailability Date has occurred (as applicable), the Facility Agent will promptly notify the Borrower and each Lender.
Thereafter, the obligation of the Lenders to fund or maintain the relevant portion of the Loan at the EURO Rate (to the extent of the affected part of the Loan or Interest Periods) shall be suspended. Upon receipt of such notice, the Borrower may revoke any pending request for a borrowing of, conversion to or continuation of any part of the Loan (to the extent of the affected part of the Loan or Interest Periods).
Notwithstanding anything else herein, any definition of EURO Successor Rate shall provide that in no event shall such EURO Successor Rate be less than zero for purposes of this Agreement.
For the purposes of this Agreement, “EURO Successor Rate Conforming Changes” means, with respect to any proposed EURO Successor Rate, any conforming changes to the definition of Floating Rate, Interest Period, timing and frequency of determining rates and making payments of interest and other administrative matters as may be appropriate, in the discretion of the Facility Agent in consultation with the Borrower, to reflect the adoption of such EURO Successor Rate and to permit the administration thereof by the Facility Agent in a manner substantially consistent with market practice (or, if the Facility Agent determines that adoption of any portion of such market practice is not administratively feasible or that no market practice for the administration of such EURO Successor Rate exists, in such other manner of administration as the Facility Agent determines is reasonably necessary in connection with the administration of this Agreement).
SECTION 3.4. Commitment Fees. Subject to clause 10.1 of the Novation Agreement, the Borrower agrees to pay to the Facility Agent for the account of each Lender a commitment fee (the “Commitment Fee”) on its daily unused portion of Maximum Loan Amount (as such amount may be adjusted from time to time), for the period commencing on the Signing Date and continuing through the earliest to occur (the “Commitment Fee Termination Date”) of (i) the Actual Delivery Date, (ii) the date upon which the Facility Agent has provided the Borrower with written notice that the Lenders will not advance the Loan because the Commitments have been terminated pursuant to Section
8.2 or 8.3, (iii) the Commitment Termination Date and (iv) the date the Commitments shall have been terminated in full pursuant to clause 10.2 of the Novation Agreement.
SECTION 3.4.1. Payment. The Commitment Fee shall be payable by the Borrower to the Facility Agent for the account of each Lender six-monthly in arrears, with the first such payment (the “First Commitment Fee Payment”) to be made on the day falling six months following the Signing Date and the final such payment to be made on the Commitment Fee Termination Date (each date on which a Commitment Fee payment is required to be made in accordance with this Section 3.4.1 referred to herein as a “Commitment Fee Payment Date”). The Commitment Fee shall be in the amount in EUR equal to the product of the Applicable Commitment Rate, multiplied by, for each day elapsed since the preceding Commitment Fee Payment Date (or, in the case of the First Commitment Fee Payment, the Signing Date), 75% of the daily unused portion of Maximum Loan Amount (as such amount may be adjusted from time to time), divided by 360 days.
SECTION 3.5. Other Fees. The Borrower agrees to pay to the Facility Agent the agreed-upon fees set forth in the Fee Letters on the dates and in the amounts set forth therein.
ARTICLE IV
CERTAIN EURO RATE AND OTHER PROVISIONS
SECTION 4.1. EURO Rate Lending Unlawful. If after the Signing Date the introduction of or any change in or in the interpretation of any law makes it unlawful, or any central bank or other governmental authority having jurisdiction over such Lender asserts that it is unlawful for such Lender to make, continue or maintain its portion of the Loan where the relevant Lender has funded itself in the interbank market at a rate based on the EURO Rate, the obligation of such Lender to make, continue or maintain its portion of the Loan shall, upon notice thereof to the Borrower, the Facility Agent and each other Lender, forthwith be suspended until the circumstances causing such suspension no longer exist, provided that such Lender’s obligation to make, continue and maintain its portion of the Loan hereunder shall be automatically converted into an obligation to make, continue and maintain its portion of the Loan bearing interest at a rate to be negotiated between such Lender and the Borrower that is the equivalent of the sum of the EURO Rate for the relevant Interest Period plus the Floating Rate Margin.
SECTION 4.2. Deposits Unavailable. If any Lender has funded itself in the interbank market and the Facility Agent shall have determined that:
a)Euro deposits in the relevant amount and for the relevant Interest Period are not available to each Reference Bank in its relevant market, or
b)by reason of circumstances affecting the Reference Banks’ relevant markets, adequate means do not exist for ascertaining the interest rate applicable hereunder to EURO Rate loans for the relevant Interest Period, or
c)the cost to Lenders that in the aggregate hold more than 50% of the aggregate outstanding principal amount of the Loan then held by Lenders of obtaining matching deposits in the relevant interbank market for the relevant Interest Period would be in excess of the EURO Rate, (provided, that no Lender may exercise its rights under this Section 4.2.c) for amounts up to the difference between such Lender’s cost of obtaining matching deposits on the date such Lender becomes a Lender hereunder less the EURO Rate on such date),
then the Facility Agent shall give notice of such determination (hereinafter called a “Determination Notice”) to the Borrower and each of the Lenders. The Borrower, the Lenders and the Facility Agent shall then negotiate in good faith in order to agree upon a mutually satisfactory interest rate and interest period (or interest periods) to be substituted for those which would otherwise have applied under this Agreement. If the Borrower, the Lenders and the Facility Agent are unable to agree upon an interest rate (or rates) and interest period (or interest periods) prior to the date occurring fifteen (15) Business Days after the giving of such Determination Notice, the Facility Agent shall (after consultation with the Lenders) set an interest rate and an interest period (or interest periods), in each case to take effect at the end of the Interest Period current at the date of the Determination Notice, which rate (or rates) shall be equal to the sum of the Floating Rate Margin and the weighted average of the corresponding interest rates at or about 11:00 a.m. (London time) two (2) Business Days before the commencement of the relevant Interest Period on Thomson Reuters’ pages
KLIEMMM, GARBIC01 and FINA01 (or such other pages as may replace Thomson Reuters’ pages KLIEMMM, GARBIC01 or FINA01 on Thomson Reuters’ service) (or, in the case of clause (c) above, the lesser of (x) the respective cost to the Lenders of funding the respective portions of the Loan held by the Lenders and (y) such weighted average). The Facility Agent shall furnish a certificate to the Borrower as soon as reasonably practicable after the Facility Agent has given such Determination Notice setting forth such rate(s). In the event that the circumstances described in this Section 4.2 shall extend beyond the end of an interest period agreed or set pursuant hereto, the foregoing procedure shall be repeated as often as may be necessary.
SECTION 4.3. Increased EURO Rate Loan Costs, etc. If after the Signing Date a change in any applicable treaty, law, regulation or regulatory requirement or in the interpretation thereof or in its application to the Borrower, or if compliance by any Lender with any applicable direction, request, requirement or guideline (whether or not having the force of law) of any governmental or other authority including, without limitation, any agency of the European Union or similar monetary or multinational authority insofar as it may be changed or imposed after the date hereof, shall:
i.subject any Lender to any taxes, levies, duties, charges, fees, deductions or withholdings of any nature with respect to its portion of the Loan or any part thereof imposed, levied, collected, withheld or assessed by any jurisdiction or any political subdivision or taxing authority thereof (other than taxation on overall net income and, to the extent such taxes are described in Section 4.6, withholding taxes); or
ii.change the basis of taxation to any Lender (other than a change in taxation on the overall net income of any Lender) of payments of principal or interest or any other payment due or to become due pursuant to this Agreement; or
iii.impose, modify or deem applicable any reserve or capital adequacy requirements (other than the increased capital costs described in Section 4.5 and the reserve costs described in Section 4.7) or other banking or monetary controls or requirements which affect the manner in which a Lender shall allocate its capital resources to its obligations hereunder or require the making of any special deposits against or in respect of any assets or liabilities of, deposits with or for the account of, or loans by, any Lender (provided that such Lender shall, unless prohibited by law, allocate its capital resources to its obligations hereunder in a manner which is consistent with its present treatment of the allocation of its capital resources); or
iv.impose on any Lender any other condition affecting its portion of the Loan or any part thereof,
and the result of any of the foregoing is either (i) to increase the cost to such Lender of making its portion of the Loan or maintaining its portion of the Loan or any part thereof, (ii) to reduce the amount of any payment received by such Lender or its effective return hereunder or on its capital or (iii) to cause such Lender to make any payment or to forego any return based on any amount received or receivable by such Lender hereunder, then and in any such case if such increase or reduction in the opinion of such Lender materially affects the
interests of such Lender, (A) such Lender shall (through the Facility Agent) notify the Borrower of the occurrence of such event and use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions and the terms of the BpiFAE Insurance Policy and (if the Fixed Rate applies) the arrangements with Natixis DAI relating to the CIRR) to designate a different Lending Office if the making of such a designation would avoid the effects of such law, regulation or regulatory requirement or any change therein or in the interpretation thereof and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender and (B) the Borrower shall forthwith upon such demand pay to the Facility Agent for the account of such Lender such amount as is necessary to compensate such Lender for such additional cost or such reduction and ancillary expenses, including taxes, incurred as a result of such adjustment. Such notice shall (i) describe in reasonable detail the event leading to such additional cost, together with the approximate date of the effectiveness thereof, (ii) set forth the amount of such additional cost, (iii) describe the manner in which such amount has been calculated, (iv) certify that the method used to calculate such amount is such Lender’s standard method of calculating such amount, (v) certify that such request is consistent with its treatment of other borrowers that are subject to similar provisions, and (vi) certify that, to the best of its knowledge, such change in circumstance is of general application to the commercial banking industry in such Lender’s jurisdiction of organization or in the relevant jurisdiction in which such Lender does business. Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that in relation to increased costs or reductions arising after the Effective Date the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than three months prior to the date that such Lender notifies the Borrower of the circumstance giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the circumstance giving rise to such increased costs or reductions is retroactive, then the three-month period referred to above shall be extended to include the period of retroactive effect thereof, but not more than six months prior to the date that such Lender notifies the Borrower of the circumstance giving rise to such cost or reductions and of such Lender’s intention to claim compensation therefor.
It is acknowledged that the Borrower shall have no liability to compensate any Lender under this Section for amounts of increased costs that accrue before the Effective Time on the Actual Delivery Date (with any such amounts arising before the Effective Time being the responsibility of the Original Borrower).
SECTION 4.4. Funding Losses.
SECTION 4.4.1. Indemnity. In the event any Lender shall incur any loss or expense (for the avoidance of doubt excluding loss of profit) by reason of the liquidation or re-employment (at not less than the market rate) of deposits or other funds acquired by such Lender, to make, continue or maintain any portion of the principal amount of its portion of the Loan as a result of:
i)any repayment or prepayment or acceleration of the principal amount of such Lender’s portion of the Loan, other than any repayment made on the date scheduled for such repayment or (if the Floating Rate applies) any repayment or prepayment or
acceleration on a date other than the scheduled last day of an Interest Period or otherwise scheduled date for repayment or payment; or
ii)the relevant portion of the Loan not being made in accordance with the Loan Request therefor due to the fault of the Borrower or as a result of any of the conditions precedent set forth in clause 6.1(c) of the Novation Agreement and Article V not being satisfied,
(a “Funding Losses Event”) then, upon the written notice of such Lender to the Borrower (with a copy to the Facility Agent), the Borrower shall, within three (3) days of its receipt thereof:
1)if at that time interest is calculated at the Floating Rate on such Lender’s portion of the Loan, pay directly to the Facility Agent for the account of such Lender an amount equal to the amount by which:
(a)interest calculated at the Floating Rate (excluding the Floating Rate Margin) which such Lender would have received on its share of the amount of the Loan subject to such Funding Losses Event for the period from the date of receipt of any part of its share in the Loan to the last day of the applicable Interest Period,
exceeds:
(b)the amount which such Lender would be able to obtain by placing an amount equal to the amount received by it on deposit with a leading bank in the appropriate interbank market for a period starting on the Business Day following receipt and ending on the last day of the applicable Interest Period; or
2)if at that time interest is calculated at the Fixed Rate on such Lender’s portion of the Loan, pay to the Facility Agent the amount notified to it following the calculation referred to in the next paragraph.
Since the Lenders commit themselves irrevocably to the French Authorities in charge of monitoring the CIRR mechanism, any prepayment (whether voluntary, involuntary or mandatory, including following the acceleration of the Loan) will be subject to the mandatory payment by the Borrower of the amount calculated in liaison with the French Authorities two (2) Business Days prior to the prepayment date by taking into account the differential (the “Rate Differential”) between the CIRR and the prevailing market yield (currently ISDAFIX) for each installment to be prepaid and applying such Rate Differential to the remaining residual period of such installment and discounting to the net present value as described below. Each of these Rate Differentials will be applied to the corresponding installment to be prepaid during the period starting on the date on which such prepayment is required to be made and ending on the original Repayment Date (as adjusted following any previous prepayments) for such installment and:
(A)the net present value of each corresponding amount resulting from the above calculation will be determined at the corresponding market yield; and
(B)if the cumulated amount of such present values is negative, no amount shall be due to the Borrower or from the Borrower.
Such written notice shall include calculations in reasonable detail setting forth the loss or expense to such Lender.
SECTION 4.4.2. Exclusion In the event that a Lender’s wilful misconduct or gross negligence has caused the loss or cancellation of the BpiFAE Insurance Policy, the Borrower shall not be liable to indemnify that Lender under Section 4.4.1 for its loss or expense arising due to the occurrence of the Prepayment Event referred to in Section 9.1.9.
SECTION 4.5. Increased Capital Costs. If after the Signing Date any change in, or the introduction, adoption, effectiveness, interpretation, reinterpretation or phase-in of, any law or regulation, directive, guideline, decision or request (whether or not having the force of law) of any court, central bank, regulator or other governmental authority increases the amount of capital required to be maintained by any Lender or any Person controlling such Lender, and the rate of return on its or such controlling Person’s capital as a consequence of its Commitment or its portion of the Loan made by such Lender is reduced to a level below that which such Lender or such controlling Person would have achieved but for the occurrence of any such change in circumstance, then, in any such case upon notice from time to time by such Lender to the Borrower, the Borrower shall immediately pay directly to such Lender additional amounts sufficient to compensate such Lender or such controlling Person for such reduction in rate of return. Any such notice shall (i) describe in reasonable detail the capital adequacy requirements which have been imposed, together with the approximate date of the effectiveness thereof, (ii) set forth the amount of such lowered return, (iii) describe the manner in which such amount has been calculated, (iv) certify that the method used to calculate such amount is such Lender’s standard method of calculating such amount, (v) certify that such request for such additional amounts is consistent with its treatment of other borrowers that are subject to similar provisions and (vi) certify that, to the best of its knowledge, such change in circumstances is of general application to the commercial banking industry in the jurisdictions in which such Lender does business. In determining such amount, such Lender may use any method of averaging and attribution that it shall, subject to the foregoing sentence, deem applicable. Each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions and the terms of the BpiFAE Insurance Policy and (if the Fixed Rate applies) the arrangements with Natixis DAI relating to the CIRR) to designate a different Lending Office if the making of such a designation would avoid such reduction in such rate of return and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender. Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that in relation to increased costs or reductions arising after the Effective Date the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than three months prior to the date that such Lender notifies the Borrower of the circumstance giving rise to such reductions and of such Lender’s intention to
claim compensation therefor; provided further that, if the circumstance giving rise to such reductions is retroactive, then the three-month period referred to above shall be extended to include the period of retroactive effect thereof, but not more than six months prior to the date that such Lender notifies the Borrower of the circumstance giving rise to such reductions and of such Lender’s intention to claim compensation therefor.
It is acknowledged that the Borrower shall have no liability to compensate any Lender under this Section for reduced returns that accrue before the Effective Time on the Actual Delivery Date (with any compensation liability to the Lenders arising before the Effective Time being the responsibility of the Original Borrower).
SECTION 4.6. Taxes. All payments by the Borrower of principal of, and interest on, the Loan and all other amounts payable hereunder shall be made free and clear of and without deduction for any present or future income, excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or other charges of any nature whatsoever imposed by any taxing authority, but excluding franchise taxes and taxes imposed on or measured by any Lender’s net income or receipts of such Lender and franchise taxes imposed in lieu of net income taxes or taxes on receipts, by the jurisdiction under the laws of which such Lender is organized or any political subdivision thereof or the jurisdiction of such Lender’s Lending Office or any political subdivision thereof or any other jurisdiction unless such net income taxes are imposed solely as a result of the Borrower’s activities in such other jurisdiction, and any taxes imposed under FATCA (such non-excluded items being called “Covered Taxes”). In the event that any withholding or deduction from any payment to be made by the Borrower hereunder is required in respect of any Covered Taxes pursuant to any applicable law, rule or regulation, then the Borrower will:
v.pay directly to the relevant authority the full amount required to be so withheld or deducted;
vi.promptly forward to the Facility Agent an official receipt or other documentation satisfactory to the Facility Agent evidencing such payment to such authority; and
vii.pay to the Facility Agent for the account of the Lenders such additional amount or amounts as is necessary to ensure that the net amount actually received by each Lender will equal the full amount such Lender would have received had no such withholding or deduction been required.
Moreover, if any Covered Taxes are directly asserted against the Facility Agent or any Lender with respect to any payment received or paid by the Facility Agent or such Lender hereunder, the Facility Agent or such Lender may pay such Covered Taxes and the Borrower will promptly pay such additional amounts (including any penalties, interest or expenses) as is necessary in order that the net amount received by such person after the payment of such Covered Taxes (including any Covered Taxes on such additional amount) shall equal the amount such person would have received had no such Covered Taxes been asserted.
Any Lender claiming any additional amounts payable pursuant to this Section agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions and the terms of the BpiFAE Insurance Policy and (if the Fixed Rate applies) the arrangements with Natixis DAI relating to the CIRR) to change the jurisdiction of its Lending Office if the making of such a change would avoid the need for, or reduce the amount of, any
such additional amounts that may thereafter accrue and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.
If the Borrower fails to pay any Covered Taxes when due to the appropriate taxing authority or fails to remit to the Facility Agent for the account of the respective Lenders the required receipts or other required documentary evidence, the Borrower shall indemnify the Lenders for any incremental withholding Covered Taxes, interest or penalties that may become payable by any Lender as a result of any such failure (so long as such amount did not become payable as a result of the failure of such Lender to provide timely notice to the Borrower of the assertion of a liability related to the payment of Covered Taxes). For purposes of this Section 4.6, a distribution hereunder by the Facility Agent or any Lender to or for the account of any Lender shall be deemed a payment by the Borrower.
If any Lender is entitled to any refund, credit, deduction or other reduction in tax by reason of any payment made by the Borrower in respect of any Covered Tax under this Section 4.6 or by reason of any payment made by the Borrower pursuant to Section 4.3, such Lender shall use reasonable efforts to obtain such refund, credit, deduction or other reduction and, promptly after receipt thereof, will pay to the Borrower such amount (plus any interest received by such Lender in connection with such refund, credit, deduction or reduction) as is equal to the net after-tax value to such Lender of such part of such refund, credit, deduction or reduction as such Lender reasonably determines is allocable to such Covered Tax or such payment (less out-of-pocket expenses incurred by such Lender), provided that no Lender shall be obligated to disclose to the Borrower any information regarding its tax affairs or tax computations.
Each Lender (and each Participant) agrees with the Borrower and the Facility Agent that it will (i) in the case of a Lender or a Participant organized under the laws of a jurisdiction other than the United States (a) provide to the Facility Agent and the Borrower an appropriately executed copy of Internal Revenue Service Form W-8ECI certifying that any payments made to or for the benefit of such Lender or such Participant are effectively connected with a trade or business in the United States (or alternatively, an Internal Revenue Service Form W-8BEN claiming the benefits of a tax treaty, but only if the applicable treaty described in such form provides for a complete exemption from U.S. federal income tax withholding), or any successor form, on or prior to the date hereof (or, in the case of any Assignee Lender or Participant, on or prior to the date of the relevant assignment or participation), in each case attached to an Internal Revenue Service Form W-8IMY, if appropriate, (b) notify the Facility Agent and the Borrower if the certifications made on any form provided pursuant to this paragraph are no longer accurate and true in all material respects and (c) without prejudice to its obligations under Section 4.13, provide such other tax forms or other documents as shall be prescribed by applicable law, if any, or as otherwise reasonably requested, to demonstrate, to the extent applicable, that payments to such Lender Party (or Participant) hereunder are exempt from withholding under FATCA, and (ii) in all cases, provide such forms, certificates or other documents, as and when reasonably requested by the Borrower, necessary to claim any applicable exemption from, or reduction of, Covered Taxes or any payments made to or for benefit of such Lender Party or such Participant, provided that the Lender Party or Participant is legally able to deliver such forms, certificates or other documents. For any period with respect to which a Lender (or Assignee Lender or Participant) has failed to provide the Borrower with the foregoing forms (other than if such failure is due to a change in law occurring after the date on which a form originally was
required to be provided (which, in the case of an Assignee Lender, would be the date on which the original assignor was required to provide such form) or if such form otherwise is not required hereunder) such Lender (or Assignee Lender or Participant) shall not be entitled to the benefits of this Section 4.6 with respect to Covered Taxes imposed by reason of such failure.
All fees and expenses payable pursuant to Section 11.3 shall be paid together with value added tax or any similar tax (if any) properly chargeable thereon. Any value added tax chargeable in respect of any services supplied by a Lender or an Agent under this Agreement shall, on delivery of the value added tax invoice, be paid in addition to any sum agreed to be paid hereunder.
SECTION 4.7. Reserve Costs. Without in any way limiting the Borrower’s obligations under Section 4.3, the Borrower shall, with effect from the Effective Time, pay to the Facility Agent for the account of each Lender on the last day of each Interest Period, so long as the relevant Lending Office of such Lender is required to maintain reserves against “Eurocurrency liabilities” under Regulation D of the F.R.S. Board, upon notice from such Lender, an additional amount equal to the product of the following for the Loan for each day during such Interest Period:
a.the principal amount of the Loan outstanding on such day; and
b.the remainder of (x) a fraction the numerator of which is the rate (expressed as a decimal) at which interest accrues on the Loan for such Interest Period as provided in this Agreement (less, if applicable, the Floating Rate Margin) and the denominator of which is one minus any increase after the Signing Date in the effective rate (expressed as a decimal) at which such reserve requirements are imposed on such Lender minus (y) such numerator; and
c.1/360.
Such notice shall (i) describe in reasonable detail the reserve requirement that has been imposed, together with the approximate date of the effectiveness thereof, (ii) set forth the applicable reserve percentage, (iii) certify that such request is consistent with such Lender’s treatment of other borrowers that are subject to similar provisions and (iv) certify that, to the best of its knowledge, such requirements are of general application in the commercial banking industry in the United States.
Each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions and the terms of the BpiFAE Insurance Policy and (if the Fixed Rate applies) the arrangements with Natixis DAI relating to the CIRR) to avoid the requirement of maintaining such reserves (including by designating a different Lending Office) if such efforts would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.
SECTION 4.8. Payments, Computations, etc.
a)Unless otherwise expressly provided, all payments by the Borrower pursuant to this Agreement or any other Loan Document shall be made by the Borrower to the
Facility Agent for the pro rata account of the Lenders entitled to receive such payment. All such payments required to be made to the Facility Agent shall be made, without set-off, deduction or counterclaim, not later than 11:00 a.m., London time, on the date due, in same day or immediately available funds through TARGET2 (or such other funds as may be customary for the settlement of international banking transactions in Euros), to such account as the Facility Agent shall specify from time to time by notice to the Borrower. Funds received after that time shall be deemed to have been received by the Lenders on the next succeeding Business Day.
b.Each Lender hereby instructs the Facility Agent, with respect to any portion of the Loan held by such Lender, to pay directly to such Lender interest thereon at the Fixed Rate or (if the proviso to Section 5.1.10 applies) the Floating Rate, on the basis that (if the Fixed Rate applies) such Lender will, where amounts are payable to Natixis by that Lender under the Interest Stabilisation Agreement, account directly to Natixis for any such amounts payable by that Lender under the Interest Stabilisation Agreement to which such Lender is a party.
c.The Facility Agent shall promptly (but in any event on the same Business Day that the same are received or, as contemplated in clause (a) of this Section, deemed received) remit in same day funds to each Lender its share, if any, of such payments received by the Facility Agent for the account of such Lender without any set-off, deduction or counterclaim. All interest and fees shall be computed on the basis of the actual number of days (including the first day but excluding the last day) occurring during the period for which such interest or fee is payable over a year comprised of 360 days. Whenever any payment to be made shall otherwise be due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall be included in computing interest and fees, if any, in connection with such payment.
SECTION 4.9. Replacement Lenders, etc. If the Borrower shall be required to make any payment to any Lender pursuant to Section 4.2(c), 4.3, 4.4, 4.5, 4.6 or 4.7, the Borrower shall be entitled at any time (so long as no Default and no Prepayment Event shall have occurred and be continuing) within 180 days after receipt of notice from such Lender of such required payment to (a) terminate such Lender’s Commitment (where upon the Percentage of each other Lender shall automatically be adjusted to an amount equal to such Lender’s ratable share of the remaining Commitments), (b) prepay the affected portion of such Lender’s Loan in full, together with accrued interest thereon through the date of such prepayment (provided that the Borrower shall not terminate any Lender’s Commitment pursuant to clause (a) or prepay any such Lender pursuant to this clause (b) without replacing such Lender pursuant to the following clause (c) until a 30-day period shall have elapsed during which the Borrower and the Facility Agent shall have attempted in good faith to replace such Lender), and/or (c) replace such Lender with another financial institution reasonably acceptable to the Facility Agent and (if the Fixed Rate applies) Natixis DAI, provided that (i) each such transfer shall be either a transfer of all of the rights and obligations of the transferring Lender under this Agreement or a transfer of a portion of such rights and obligations made concurrently with another such transfer or other such transfers that together cover all of the rights and obligations of the transferring Lender under this Agreement and (ii) no Lender shall be obligated to make any such transfer as a result of a
demand by the Borrower pursuant to this Section unless and until such Lender shall have received one or more payments from either the Borrower or one or more Assignee Lenders in an aggregate amount at least equal to the aggregate outstanding principal amount of the Loan owing to such Lender, together with accrued interest thereon to the date of payment of such principal amount and all other amounts payable to such Lender under this Agreement. Each Lender represents and warrants to the Borrower that, as of the Signing Date (or, with respect to any Lender not a party hereto on the Signing Date, on the date that such Lender becomes a party hereto), there is no existing treaty, law, regulation, regulatory requirement, interpretation, directive, guideline, decision or request pursuant to which such Lender would be entitled to request any payments under any of Sections 4.3, 4.4, 4.5, 4.6 and 4.7 to or for account of such Lender.
SECTION 4.10. Sharing of Payments.
SECTION 4.10.1. Payments to Lenders. If a Lender (a "Recovering Lender") receives or recovers any amount from the Borrower other than in accordance with Section 4.8 (Payments, Computations, etc.) (a "Recovered Amount") and applies that amount to a payment due under the Loan Documents then:
a)the Recovering Lender shall, within three (3) Business Days, notify details of the receipt or recovery to the Facility Agent;
b)the Facility Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Lender would have been paid had the receipt or recovery been received or made by the Facility Agent and distributed in accordance with the said Section 4.8, without taking account of any taxes which would be imposed on the Facility Agent in relation to the receipt, recovery or distribution; and
c)the Recovering Lender shall, within three (3) Business Days of demand by the Facility Agent, pay to the Facility Agent an amount (the "Sharing Payment") equal to such receipt or recovery less any amount which the Facility Agent determines may be retained by the Recovering Lender as its share of any payment to be made, in accordance with any applicable provisions of this Agreement.
SECTION 4.10.2. Redistribution of payments. The Facility Agent shall treat the Sharing Payment as if it had been paid by the Borrower and distribute it between the Lenders (other than the Recovering Lender) (the "Sharing Lenders") in accordance with the provisions of this Agreement towards the obligations of the Borrower to the Sharing Lenders.
SECTION 4.10.3. Recovering Lender's rights. On a distribution by the Facility Agent under Section 4.10.2 of a payment received by a Recovering Lender from the Borrower, as between the Borrower and the Recovering Lender, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by the Borrower.
SECTION 4.10.4. Reversal of redistribution If any part of the Sharing Payment received or recovered by a Recovering Lender becomes repayable and is repaid by that Recovering Lender, then:
a)each Sharing Lender shall, upon request of the Facility Agent, pay to the Facility Agent for the account of that Recovering Lender an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Lender for its proportion of any interest on the Sharing Payment which that Recovering Lender is required to pay) (the "Redistributed Amount"); and
b)as between the Borrower and each relevant Sharing Lender, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by the Borrower.
SECTION 4.10.5. Exceptions.
a)This Section 4.10 shall not apply to the extent that the Recovering Lender would not, after making any payment pursuant to this Section 4.10, have a valid and enforceable claim against the Borrower.
b)A Recovering Lender is not obliged to share with any other Lender any amount which the Recovering Lender has received or recovered as a result of taking legal or arbitration proceedings, if:
(i)it notified the other Lender of the legal or arbitration proceedings; and
(ii)the other Lender had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.
SECTION 4.11. Set-off. Upon the occurrence and during the continuance of an Event of Default or a Prepayment Event, each Lender shall have, to the extent permitted by applicable law, the right to appropriate and apply to the payment of the Obligations then due and owing to it any and all balances, credits, deposits, accounts or moneys of the Borrower then or thereafter maintained with such Lender; provided that any such appropriation and application shall be subject to the provisions of Section 4.10. Each Lender agrees promptly to notify the Borrower and the Facility Agent after any such set-off and application made by such Lender; provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of set-off under applicable law or otherwise) which such Lender may have.
SECTION 4.12. Use of Proceeds. The Borrower shall apply the proceeds of the Loan made available to the Borrower in respect of the Additional Advances for the purpose of making payments of, or reimbursing the Borrower for payments already made for, the amounts referred to in clauses 5.2, 5.3 and/or 5.4 of the Novation Agreement and, without limiting the foregoing, no proceeds of the Loan will be used to acquire any equity security of a class which is registered pursuant to Section 12 of the Securities Exchange Act of 1934 or any “margin stock”, as defined in F.R.S. Board Regulation U.
SECTION 4.13. FATCA Information.
a)Subject to paragraph c) below, each party (other than the Borrower) shall, within ten Business Days of a reasonable request by another party (other than the Borrower):
(i)confirm to that other party whether it is:
(1)a FATCA Exempt Party; or
(2)not a FATCA Exempt Party;
(ii)supply to that other party such forms, documentation and other information relating to its status under FATCA as that other party reasonably requests for the purposes of that other party's compliance with FATCA;
(iii)supply to that other party such forms, documentation and other information relating to its status as that other party reasonably requests for the purposes of that other party's compliance with any other law, regulation, or exchange of information regime.
b)If a party confirms to another party pursuant to paragraph (a)(i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not or has ceased to be a FATCA Exempt Party, that party shall notify that other party reasonably promptly.
c)Paragraph a) above shall not oblige any Lender or the Facility Agent to do anything, and paragraph a)(iii) above shall not oblige any other party to do anything, which would or might in its reasonable opinion constitute a breach of:
(i)any law or regulation;
(ii)any fiduciary duty; or
(iii)any duty of confidentiality.
d)If a party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with paragraph (a)(i) or (ii) above (including, for the avoidance of doubt, where paragraph (c) above applies), then such party shall be treated for the purposes of the Loan Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the party in question provides the requested confirmation, forms, documentation or other information.
e)Each party may make a FATCA Deduction from a payment under this Agreement that it is required to be made by FATCA, and any payment required in connection with that FATCA Deduction, and no party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.
SECTION 4.14. Resignation of the Facility Agent. The Facility Agent shall resign (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Facility Agent) if, either:
a)the Facility Agent fails to respond to a request under Section 4.13 and a Lender reasonably believes that the Facility Agent will not be (or will have ceased to be) a FATCA Exempt Party;
b)the information supplied by the Facility Agent pursuant to Section 4.13 indicates that the Facility Agent will not be (or will have ceased to be) a FATCA Exempt Party; or
c)the Facility Agent notifies the Lenders that the Facility Agent will not be (or will have ceased to be) a FATCA Exempt Party;
and (in each case) a Lender reasonably believes that a party to this Agreement will be required to make a FATCA Deduction that would not be required if the Facility Agent were a FATCA Exempt Party, and that Lender, by notice to the Facility Agent, requires it to resign.
ARTICLE V CONDITIONS TO BORROWING
SECTION 5.1. Advance of the Loan. The obligation of the Lenders
to fund the relevant portion of the Loan to be made available on the Actual Delivery Date shall be subject to the prior or concurrent satisfaction of each of the conditions precedent set forth in this Section 5.1. The Facility Agent shall advise the Lenders of the satisfaction of the conditions precedent set forth in this Section 5.1 prior to funding on the Actual Delivery Date.
SECTION 5.1.1. Resolutions, etc. The Facility Agent shall have received from the Borrower:
a)a certificate of its Secretary or Assistant Secretary as to the incumbency and signatures of those of its officers authorized to act with respect to this Agreement and each other Loan Document and as to the truth and completeness of the attached:
(x) resolutions of its Board of Directors then in full force and effect authorizing the execution, delivery and performance of this Agreement and each other Loan Document, and
(y) Organic Documents of the Borrower,
and upon which certificate the Lenders may conclusively rely until the Facility Agent shall have received a further certificate of the Secretary or Assistant Secretary of the Borrower canceling or amending such prior certificate; and
b)a Certificate of Good Standing issued by the relevant Liberian authorities in respect of the Borrower.
SECTION 5.1.2. Opinions of Counsel. The Facility Agent shall have received opinions, addressed to the Facility Agent, the Security Trustee (in relation to a) and b) below) and each Lender from:
i)Watson Farley & Williams LLP, counsel to the Borrower, as to Liberian Law, covering the matters set forth in Exhibit B-1 hereto (and which shall be updated to include reference to the Escrow Account Security);
ii)Norton Rose Fulbright LLP, counsel to the Facility Agent and the Lenders, covering the matters set forth in Exhibit B-2 hereto (and which shall be updated to include reference to the Escrow Account Security) and, if the BpiFAE Insurance Policy is to be re-issued or replaced on or about the Actual Delivery Date, Exhibit B-3 hereto; and
iii)Clifford Chance US LLP, United States tax counsel to the Facility Agent for the benefit of the Lenders, covering the matters set forth in Exhibit B-4 hereto,
each such opinion to be updated to take into account all relevant and applicable Loan Documents at the time of issue thereof.
SECTION 5.1.3. BpiFAE Insurance Policy. The Facility Agent or the ECA Agent shall have received the BpiFAE Insurance Policy duly issued and BpiFAE shall not have, prior to the advance of the Loan, delivered to the Facility Agent or the ECA Agent any notice seeking the cancellation, suspension or termination of the BpiFAE Insurance Policy or the suspension of the drawing of the Additional Advances under this Agreement.
SECTION 5.1.4. Closing Fees, Expenses, etc. The Facility Agent shall have received for its own account, or for the account of each Lender or BpiFAE, as the case may be, all fees that the Borrower shall have agreed in writing to pay to the Facility Agent (whether for its own account or for the account of any of the Lenders) that are due and owing as of the date of such funding and all invoiced expenses of the Facility Agent (including the agreed fees and expenses of counsel to the Facility Agent and the BpiFAE Premium) required to be paid by the Borrower pursuant to Section 11.3 or that the Borrower has otherwise agreed in writing to pay to the Facility Agent, in each case on or prior to the date of such funding.
SECTION 5.1.5. Compliance with Warranties, No Default, etc. Both before and after giving effect to the funding of the Loan the following statements shall be true and correct:
a)the representations and warranties set forth in Article VI (excluding, however, those set forth in Section 6.10) shall be true and correct in all material respects except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct, with the same effect as if then made; and
b)no Default and no Prepayment Event and no event which (with notice or lapse of time or both) would become a Prepayment Event shall have then occurred and be continuing.
SECTION 5.1.6. Loan Request. The Facility Agent shall have received a Loan Request duly executed by the Borrower together with:
a)where an Additional Advance is requested in respect of the Non-Yard Costs, the Delivery Non-Yard Costs Certificate;
b)certified as true (by the Builder) copies of the invoice and supporting documents received by the Builder from the Borrower pursuant to Appendix C of the Construction Contract in relation to the Paid Non-Yard Costs to be financed as at the time of issue and a declaration from the Borrower in substantially the form set forth in Exhibit D hereto that the requirements for a minimum 15% French content in respect of Non-Yard Costs have been fulfilled;
c)a copy of the final commercial invoice from the Builder showing the amount of the Contract Price (including the Non-Yard Costs and the Other Basic Contract Price Increases) and the portion thereof payable to the Builder on the Actual Delivery Date under the Construction Contract; and
d)copies of the wire transfers for all payments by the Borrower to the Builder under the Construction Contract in respect of the Basic Contract Price to the extent not already provided as part of the drawdown conditions for drawdowns made by the Original Borrower.
SECTION 5.1.7. [Intentionally omitted].
SECTION 5.1.8. Protocol of delivery. The Facility Agent shall have received a copy of the protocol of delivery and acceptance under the Construction Contract duly signed by the Builder and the Borrower or the Nominated Owner to be notified to the Facility Agent.
SECTION 5.1.9. Title to Purchased Vessel. The Facility Agent shall have received evidence that the Purchased Vessel is legally and beneficially owned by the Borrower or the Nominated Owner (as the case may be), free of all recorded Liens, other than Liens permitted by Section 7.2.3 and, to the extent not yet discharged, the Mortgage (as defined in the Novation Agreement).
SECTION 5.1.10. Interest Stabilisation. The ECA Agent shall have received a duly executed fixed rate approval from Natixis DAI issued to the Lenders in respect of the CIRR applicable to the Loan and shall have been informed by the French Authorities of the conditions of the interest make-up mechanisms (stabilisation du taux d'intérêt) applicable to the Loan under the applicable Interest Stabilisation Agreement in respect of the Lenders, such conditions to specify, among other things, that the CIRR has been retained under the interest make-up mechanisms applicable to the Loan.
In relation to Section 5.1.10, if a Lender (an “Ineligible Lender”) becomes ineligible or otherwise ceases to be a party to an Interest Stabilisation Agreement, it shall promptly
upon becoming aware thereof (and by no later than 15 Business Days before the anticipated Actual Delivery Date) notify the Borrower, the ECA Agent and the Facility Agent.
Following receipt of such a notice, the ECA Agent (through the Facility Agent) shall give to the Borrower at least 10 Business Days’ prior notice stating if the condition precedent in Section 5.1.10 will not be satisfied due to the Ineligible Lender but would be satisfied by the replacement of the Ineligible Lender as set out below, with such replacement to take effect for the purpose of this Section on the Actual Delivery Date.
On its receipt of such notice from the ECA Agent, the Borrower shall be entitled, at any time thereafter and without prejudice to any rights and remedies it may have against such Ineligible Lender pursuant to Section 3.3.3,to replace such Ineligible Lender with another bank or financial institution reasonably acceptable to the Facility Agent, BpiFAE and Natixis DAI with effect from the Actual Delivery Date, provided that (i) each such transfer shall be either a transfer of all of the rights and obligations of the Ineligible Lender under this Agreement or a transfer of a portion of such rights and obligations made concurrently with another such transfer or other such transfers that together cover all of the rights and obligations of the Ineligible Lender under this Agreement and (ii) no Lender shall be obligated to make effective any such transfer as a result of a demand by the Borrower pursuant to this Section unless and until such Lender shall have received one or more payments from one or more Assignee Lenders in an aggregate amount equal to the aggregate outstanding principal amount of the portion of the Novated Loan Balance which, immediately following the Novation Effective Time, would have been owing to such Lender pursuant to Section 2.3(a) had that Lender not been replaced prior to the Novation Effective Time. The ECA Agent and the Facility Agent shall, at the request of the Borrower, use reasonable efforts to assist the Borrower in finding a bank or financial institution acceptable to the Borrower to replace such Ineligible Lender, and taking such other steps that may be reasonably required and which are within the control of the ECA Agent and the Facility Agent to assist with the satisfaction of the condition precedent in Section 5.1.10 prior to funding on the Actual Delivery Date.
Provided however the Borrower shall be entitled, without prejudice to its rights and remedies pursuant to Section 3.3.3, to elect that if at the Actual Delivery Date the condition precedent in Section 5.1.10 is not satisfied the Floating Rate should apply to the Loan, such election to be made by notice in writing to the Facility Agent not less than five (5) Business Days prior to the anticipated Actual Delivery Date in which event, subject to the approval of BpiFAE, the Loan shall bear interest at the Floating Rate and the condition set out in Section
x.shall be deemed waived by the Lenders.
The ECA Agent (through the Facility Agent) shall, promptly after the Borrower’s request, advise the Borrower whether it is aware (based solely on information obtained from Natixis DAI and other French Authorities and/or received from the Lenders at the time of any such request and without any liability on the ECA Agent for the accuracy of that information) that the condition precedent in Section 5.1.10 will not or may not be satisfied as required by Section 5.1.10.Escrow Account Security. The Facility Agent shall have received the Escrow Account Security duly executed by the Borrower together with a duly executed
notice of charge and acknowledgement thereto executed by the Borrower and the Escrow Account Bank respectively.
ARTICLE VI REPRESENTATIONS AND WARRANTIES
To induce the Lenders and the Facility Agent to enter into this Agreement and to
make the Loan hereunder, the Borrower represents and warrants to the Facility Agent and each Lender as set forth in this Article VI as of the Actual Delivery Date (except as otherwise stated).
SECTION 6.1. Organization, etc. The Borrower is a corporation validly organized and existing and in good standing under the laws of its jurisdiction of incorporation; the Borrower is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the nature of its business requires such qualification, except where the failure to be so qualified would not have a Material Adverse Effect; and the Borrower has full power and authority, has taken all corporate action and holds all governmental and creditors’ licenses, permits, consents and other approvals necessary to enter into each Loan Document and to perform the Obligations.
SECTION 6.2. Due Authorization, Non-Contravention, etc. The execution, delivery and performance by the Borrower of this Agreement and each other Loan Document, are within the Borrower’s corporate powers, have been duly authorized by all necessary corporate action, and do not:
1.contravene the Borrower’s Organic Documents;
2.contravene any law or governmental regulation of any Applicable Jurisdiction except as would not reasonably be expected to result in a Material Adverse Effect;
3.contravene any court decree or order binding on the Borrower or any of its property except as would not reasonably be expected to result in a Material Adverse Effect;
4.contravene any contractual restriction binding on the Borrower or any of its property except as would not reasonably be expected to result in a Material Adverse Effect; or
5.result in, or require the creation or imposition of, any Lien on any of the Borrower’s properties except as would not reasonably be expected to result in a Material Adverse Effect.
SECTION 6.3. Government Approval, Regulation, etc. No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or other Person is required for the due execution, delivery or performance by the Borrower of this Agreement or any other Loan Document (except for authorizations or approvals not required to be obtained on or prior to the Actual Delivery Date or that have been obtained or actions not required to be taken on or prior to the Actual Delivery Date or that have been taken). The Borrower holds all governmental licenses, permits and other approvals required to conduct its business as conducted by it on the Actual Delivery Date, except to the extent the failure to hold any such licenses, permits or other approvals would not have a Material Adverse Effect.
SECTION 6.4. Compliance with Environmental Laws. The Borrower is in compliance with all applicable Environmental Laws, except to the extent that the failure to so comply would not have a Material Adverse Effect.
SECTION 6.5. Validity, etc. This Agreement constitutes the legal, valid and binding obligation of the Borrower enforceable in accordance with its terms, except as the enforceability hereof may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally or by general equitable principles.
SECTION 6.6. No Default, Event of Default or Prepayment Event.
No Default, Event of Default or Prepayment Event has occurred and is continuing.
SECTION 6.7. Litigation. There is no action, suit, litigation, investigation or proceeding pending or, to the knowledge of the Borrower, threatened against the Borrower, that (i) except as set forth in filings made by the Borrower with the SEC in the Borrower’s reasonable opinion might reasonably be expected to materially adversely affect the business, operations or financial condition of the Borrower and its Subsidiaries (taken as a whole) (collectively, “Material Litigation”) or (ii) purports to affect the legality, validity or enforceability of the Loan Documents or the consummation of the transactions contemplated hereby.
SECTION 6.8. The Purchased Vessel. Immediately following the delivery of the Purchased Vessel to the Borrower under the Construction Contract, the Purchased Vessel will be:
a)legally and beneficially owned by the Borrower or one of the Borrower’s wholly owned Subsidiaries,
b)registered in the name of the Borrower or one of the Borrower’s wholly owned Subsidiaries under the Bahamian or Maltese flag or such other flag as the parties may mutually agree,
c)classed as required by Section 7.1.4(b),
d)free of all recorded Liens, other than Liens permitted by Section 7.2.3,
e)insured against loss or damage in compliance with Section 7.1.5, and
f)exclusively operated by or chartered to the Borrower or one of the Borrower’s wholly owned Subsidiaries.
SECTION 6.9. Obligations rank pari passu; Liens.
a)The Obligations rank at least pari passu in right of payment and in all other respects with all other unsecured unsubordinated Indebtedness of the Borrower other than Indebtedness preferred as a matter of law.
b)As at the date of this Agreement, the provisions of this Agreement which permit or restrict the granting of Liens are no less favorable than the provisions permitting or restricting the granting of Liens in any other agreement entered into
by the Borrower with any other person providing financing or credit to the Borrower.
SECTION 6.10. Withholding, etc.. As of the Signing Date, no payment to be made by the Borrower under any Loan Document is subject to any withholding or like tax imposed by any Applicable Jurisdiction.
SECTION 6.11. No Filing, etc. Required. No filing, recording or registration and no payment of any stamp, registration or similar tax is necessary under the laws of any Applicable Jurisdiction to ensure the legality, validity, enforceability, priority or admissibility in evidence of this Agreement or the other Loan Documents (except for filings, recordings, registrations or payments not required to be made on or prior to the Actual Delivery Date or that have been made).
SECTION 6.12. No Immunity. The Borrower is subject to civil and commercial law with respect to the Obligations. Neither the Borrower nor any of its properties or revenues is entitled to any right of immunity in any Applicable Jurisdiction from suit, court jurisdiction, judgment, attachment (whether before or after judgment), set-off or execution of a judgment or from any other legal process or remedy relating to the Obligations (to the extent such suit, court jurisdiction, judgment, attachment, set-off, execution, legal process or remedy would otherwise be permitted or exist).
SECTION 6.13. Investment Company Act. The Borrower is not required to register as an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
SECTION 6.14. Regulation U. The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock, and no proceeds of the Loan will be used for a purpose which violates, or would be inconsistent with, F.R.S. Board Regulation U. Terms for which meanings are provided in F.R.S. Board Regulation U or any regulations substituted therefor, as from time to time in effect, are used in this Section with such meanings.
SECTION 6.15. Accuracy of Information. The financial and other information (other than financial projections or other forward looking information) furnished to the Facility Agent and the Lenders in writing by or on behalf of the Borrower by its chief financial officer, treasurer or corporate controller in connection with the negotiation of this Agreement is, when taken as a whole, to the best knowledge and belief of the Borrower, true and correct and contains no misstatement of a fact of a material nature. All financial projections, if any, that have been furnished to the Facility Agent and the Lenders in writing by or on behalf of the Borrower by its chief financial officer, treasurer or corporate controller in connection with this Agreement have been or will be prepared in good faith based upon assumptions believed by the Borrower to be reasonable at the time made (it being understood that such projections are subject to significant uncertainties and contingencies, many of which are beyond the Borrower’s control, and that no assurance can be given that the projections will be realized). All financial and other information furnished to the Facility Agent and the Lenders in writing by or on behalf of the Borrower by its chief financial officer, treasurer or corporate controller after the date of this Agreement shall have been prepared by the Borrower in good faith.
SECTION 6.16. Compliance with Laws. The Borrower is in compliance with all applicable laws, rules, regulations and orders, except to the extent that the failure to so comply does not and could not reasonably be expected to have a Material Adverse Effect, and the Borrower has implemented and maintains in effect policies and procedures designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions. The Borrower and its Subsidiaries and, to the knowledge of the Borrower, their respective officers, employees, directors and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions, in all material respects and are not knowingly engaged in any activity that would reasonably be expected to result in Borrower being designated as a Sanctioned Person. None of (a) the Borrower, any Subsidiary or to the knowledge of the Borrower or such Subsidiary any of their respective directors, officers or employees, or (b) to the knowledge of the Borrower, any agent of the Borrower or any Subsidiary that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person.
ARTICLE VII COVENANTS
SECTION 7.1. Affirmative Covenants. The Borrower agrees with
the Facility Agent and each Lender that, from the Effective Date (or, where applicable, from such time as may be stated in any applicable provision below) until all Commitments have terminated and all Obligations have been paid in full, the Borrower will perform the obligations set forth in this Section 7.1.
SECTION 7.1.1. Financial Information, Reports, Notices, etc. The Borrower will furnish, or will cause to be furnished, to the Facility Agent (with sufficient copies for distribution to each Lender) the following financial statements, reports, notices and information:
a)as soon as available and in any event within 60 days after the end of each of the first three Fiscal Quarters of each Fiscal Year of the Borrower, a copy of the Borrower’s report on Form 10-Q (or any successor form) as filed by the Borrower with the SEC for such Fiscal Quarter, containing unaudited consolidated financial statements of the Borrower for such Fiscal Quarter (including a balance sheet and profit and loss statement) prepared in accordance with GAAP, subject to normal year-end audit adjustments;
b)as soon as available and in any event within 120 days after the end of each Fiscal Year of the Borrower, a copy of the Borrower’s annual report on Form 10-K (or any successor form) as filed by the Borrower with the SEC for such Fiscal Year, containing audited consolidated financial statements of the Borrower for such Fiscal Year prepared in accordance with GAAP (including a balance sheet and profit and loss statement) and audited by PricewaterhouseCoopers LLP or another firm of independent public accountants of similar standing;
c)together with each of the statements delivered pursuant to the foregoing clause (a) or (b), a certificate, executed by the chief financial officer, the treasurer or the
corporate controller of the Borrower, showing, as of the last day of the relevant Fiscal Quarter or Fiscal Year compliance with the covenants set forth in Section
7.2.4 (in reasonable detail and with appropriate calculations and computations in all respects reasonably satisfactory to the Facility Agent);
d)as soon as possible after the occurrence of a Default or Prepayment Event, a statement of the chief financial officer of the Borrower setting forth details of such Default or Prepayment Event (as the case may be) and the action which the Borrower has taken and proposes to take with respect thereto;
e)as soon as the Borrower becomes aware thereof, notice of any Material Litigation except to the extent that such Material Litigation is disclosed by the Borrower in filings with the SEC;
f)as soon as the Borrower becomes aware thereof, notice of any event which, in its reasonable opinion, would be expected to materially adversely affect the business, operations or financial condition of the Borrower and its Subsidiaries taken as a whole;
g)promptly after the sending or filing thereof, copies of all reports which the Borrower sends to all holders of each security issued by the Borrower, and all registration statements which the Borrower or any of its Subsidiaries files with the SEC or any national securities exchange; and
h)such other information respecting the condition or operations, financial or otherwise, of the Borrower or any of its Subsidiaries as any Lender through the Facility Agent may from time to time reasonably request (including an update to any information and projections previously provided to the Lenders where these have been prepared and are available);
provided that information required to be furnished to the Facility Agent under subsections (a), (b) and (g) of this Section 7.1.1 shall be deemed furnished to the Facility Agent when available free of charge on the Borrower’s website at http://www.rclinvestor.com or the SEC’s website at http://www.sec.gov.
SECTION 7.1.2. Approvals and Other Consents. The Borrower will obtain (or cause to be obtained) all such governmental licenses, authorizations, consents, permits and approvals as may be required for (a) the Borrower to perform its obligations under this Agreement and the other Loan Documents and (b) the operation of the Purchased Vessel in compliance with all applicable laws, except, in each case, to the extent that failure to obtain (or cause to be obtained) such governmental licenses, authorizations, consents, permits and approvals would not be expected to have a Material Adverse Effect.
SECTION 7.1.3. Compliance with Laws, etc. The Borrower will, and will cause each of its Subsidiaries to, comply in all material respects with all applicable laws, rules, regulations and orders, except (other than as described in clauses (a) and (f) below) to the extent that the failure to so comply would not have a Material Adverse Effect, which compliance shall in any case include (but not be limited to):
a)in the case of the Borrower, the maintenance and preservation of its corporate existence (subject to the provisions of Section 7.2.6);
b)in the case of the Borrower, maintenance of its qualification as a foreign corporation in the State of Florida;
c)the payment, before the same become delinquent, of all taxes, assessments and governmental charges imposed upon it or upon its property, except to the extent being diligently contested in good faith by appropriate proceedings;
d)compliance with all applicable Environmental Laws;
e)compliance with all anti-money laundering and anti-corrupt practices laws applicable to the Borrower, including by not making or causing to be made any offer, gift or payment, consideration or benefit of any kind to anyone, either directly or indirectly, as an inducement or reward for the performance of any of the transactions contemplated by this agreement to the extent the same would be in contravention of such applicable laws; and
f)the Borrower will maintain in effect policies and procedures designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers and employees with Anti-Corruption Laws and applicable Sanctions.
SECTION 7.1.4. The Purchased Vessel. The Borrower will:
a)cause the Purchased Vessel to be exclusively operated by or chartered to the Borrower or one of the Borrower’s wholly owned Subsidiaries, provided that the Borrower or such Subsidiary may charter out the Purchased Vessel (i) to entities other than the Borrower and the Borrower’s wholly owned Subsidiaries and (ii) on a time charter with a stated duration not in excess of one year;
b)cause the Purchased Vessel to be kept in such condition as will entitle her to classification by a classification society of recognized standing;
c)provide the following to the Facility Agent with respect to the Purchased Vessel:
(i)evidence as to the ownership of the Purchased Vessel by the Borrower or one of the Borrower’s wholly owned Subsidiaries; and
(ii)evidence of no recorded Liens on the Purchased Vessel, other than Liens permitted pursuant to Section 7.2.3;
d)within seven days after the Actual Delivery Date, provide the following to the Facility Agent with respect to the Purchased Vessel:
(i)evidence of the class of the Purchased Vessel; and
(ii)evidence as to all required insurance being in effect with respect to the Purchased Vessel.
SECTION 7.1.5. Insurance. The Borrower will maintain or cause to be maintained with responsible insurance companies insurance with respect to the Purchased Vessel against such casualties, third-party liabilities and contingencies and in such amounts, in each case, as is customary for other businesses of similar size in the passenger cruise line industry (provided that in no event will the Borrower or any Subsidiary be required to obtain any business interruption, loss of hire or delay in delivery insurance) and will, upon request of the Facility Agent, furnish to the Facility Agent (with sufficient copies for distribution to each Lender) at reasonable intervals a certificate of a senior officer of the Borrower setting forth the nature and extent of all insurance maintained by the Borrower and certifying as to compliance with this Section.
SECTION 7.1.6. Books and Records. The Borrower will keep books and records that accurately reflect all of its business affairs and transactions and permit the Facility Agent and each Lender or any of their respective representatives, at reasonable times and intervals and upon reasonable prior notice, to visit each of its offices, to discuss its financial matters with its officers and to examine any of its books or other corporate records.
SECTION 7.1.7. BpiFAE Insurance Policy/French Authority Requirements. The Borrower shall, on the reasonable request of the ECA Agent
or the Facility Agent, provide such other information as required under the BpiFAE Insurance Policy and/or the Interest Stabilisation Agreement as necessary to enable the ECA Agent or the Facility Agent to obtain the full support of the relevant French Authority pursuant to the BpiFAE Insurance Policy and/or the Interest Stabilisation Agreement (as the case may be). The Borrower must pay to the ECA Agent or the Facility Agent the amount of all reasonable costs and expenses reasonably incurred by the ECA Agent or the Facility Agent in connection with complying with a request by any French Authority for any additional information necessary or desirable in connection with the BpiFAE Insurance Policy or the Interest Stabilisation Agreement (as the case may be); provided that the Borrower is consulted before the ECA Agent or Natixis incurs any such cost or expense.
SECTION 7.2. Negative Covenants. The Borrower agrees with the Facility Agent and each Lender that, from the Effective Date until all Commitments have terminated and all Obligations have been paid and performed in full, the Borrower will perform the obligations set forth in this Section 7.2.
SECTION 7.2.1. Business Activities. The Borrower will not, and will not permit any of its Subsidiaries to, engage in any principal business activity other than those engaged in by the Borrower and its Subsidiaries on the date hereof and other business activities reasonably related, ancillary or complimentary thereto or that are reasonable extensions thereof.
SECTION 7.2.2. Indebtedness. The Borrower will not permit any of the Existing Principal Subsidiaries to create, incur, assume or suffer to exist or otherwise become or be liable in respect of any Indebtedness, other than, without duplication, the following:
a)Indebtedness secured by Liens of the type described in Section 7.2.3;
b)Indebtedness owing to the Borrower or a direct or indirect Subsidiary of the Borrower;
c.Indebtedness incurred to finance, refinance or refund the cost (including the cost of construction) of assets acquired after the Effective Date;
d.Indebtedness in an aggregate principal amount, together with (but without duplication of) Indebtedness permitted to be secured under Section 7.2.3(b), at any one time outstanding not exceeding (determined at the time of creation of such Lien or the incurrence by any Existing Principal Subsidiary of such Indebtedness, as applicable) 10% of the total assets of the Borrower and its Subsidiaries taken as a whole as determined in accordance with GAAP as at the last day of the most recent ended Fiscal Quarter; and
e.obligations in respect of Hedging Instruments entered into for the purpose of managing interest rate, foreign currency exchange or commodity exposure risk and not for speculative purposes.
SECTION 7.2.3. Liens. The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any of its property, revenues or assets, whether now owned or hereafter acquired, except:
a)Liens on assets (including, without limitation, shares of capital stock of corporations and assets owned by any corporation that becomes a Subsidiary of the Borrower after the Effective Date) acquired after the Effective Date (whether by purchase, construction or otherwise) by the Borrower or any of its Subsidiaries (other than (x) an Existing Principal Subsidiary or (y) any other Principal Subsidiary which, at any time, after three months after the acquisition of a Vessel, owns a Vessel free of any mortgage Lien), which Liens were created solely for the purpose of securing Indebtedness representing, or incurred to finance, refinance or refund, the cost (including the cost of construction) of such assets, so long as (i) the acquisition of such assets is not otherwise prohibited by the terms of this Agreement and (ii) each such Lien is created within three months after the acquisition of the relevant assets;
b)in addition to other Liens permitted under this Section 7.2.3, Liens securing Indebtedness in an aggregate principal amount, together with (but without duplication of) Indebtedness permitted under Section 7.2.2(d), at any one time outstanding not exceeding (determined at the time of creation of such Lien or the incurrence by any Existing Principal Subsidiary of such indebtedness, as applicable) 10% of the total assets of the Borrower and its Subsidiaries (the “Lien Basket Amount”) taken as a whole as determined in accordance with GAAP as at the last day of the most recent ended Fiscal Quarter; provided, however that, if, at any time, the Senior Debt Rating of the Borrower is less than Investment Grade as given by both Moody’s and S&P, the Lien Basket Amount shall be the greater of
(x) 5.0% of the total assets of the Borrower and its Subsidiaries taken as a whole as determined in accordance with GAAP as at the last day of the most recent ended Fiscal Quarter and (y) $735,000,000;
c)Liens on assets acquired after the Effective Date by the Borrower or any of its Subsidiaries (other than by (x) any Subsidiary that is an Existing Principal Subsidiary or (y) any other Principal Subsidiary which, at any time, owns a Vessel
free of any mortgage Lien) so long as (i) the acquisition of such assets is not otherwise prohibited by the terms of this Agreement and (ii) each of such Liens existed on such assets before the time of its acquisition and was not created by the Borrower or any of its Subsidiaries in anticipation thereof;
d)Liens on any asset of any corporation that becomes a Subsidiary of the Borrower (other than a corporation that also becomes a Subsidiary of an Existing Principal Subsidiary) after the Effective Date so long as (i) the acquisition or creation of such corporation by the Borrower is not otherwise prohibited by the terms of this Agreement and (ii) such Liens are in existence at the time such corporation becomes a Subsidiary of the Borrower and were not created by the Borrower or any of its Subsidiaries in anticipation thereof;
e)Liens securing Government-related Obligations;
f)Liens for taxes, assessments or other governmental charges or levies not at the time delinquent or thereafter payable without penalty or being diligently contested in good faith by appropriate proceedings;
g)Liens of carriers, warehousemen, mechanics, material-men and landlords incurred in the ordinary course of business for sums not overdue by more than 60 days or being diligently contested in good faith by appropriate proceedings;
h)Liens incurred in the ordinary course of business in connection with workers’ compensation, unemployment insurance or other forms of governmental insurance or benefits;
i)Liens for current crew’s wages and salvage;
j)Liens arising by operation of law as the result of the furnishing of necessaries for any Vessel so long as the same are discharged in the ordinary course of business or are being diligently contested in good faith by appropriate proceedings;
k)Liens on Vessels that:
(i)secure obligations covered (or reasonably expected to be covered) by insurance;
(ii)were incurred in the course of or incidental to trading such Vessel in connection with repairs or other work to such Vessel; or
(iii)were incurred in connection with work to such Vessel that is required to be performed pursuant to applicable law, rule, regulation or order;
provided that, in each case described in this clause (k), such Liens are either (x) discharged in the ordinary course of business or (y) being diligently contested in good faith by appropriate proceedings;
l)normal and customary rights of set-off upon deposits of cash or other Liens originating solely by virtue of any statutory or common law provision relating to
bankers’ liens, rights of set-off or similar rights in favor of banks or other depository institutions;
m)Liens in respect of rights of set-off, recoupment and holdback in favor of credit card processors securing obligations in connection with credit card processing services incurred in the ordinary course of business;
n)Liens on cash or Cash Equivalents or marketable securities securing obligations in respect of Hedging Instruments not incurred for speculative purposes or securing letters of credit that support such obligations;
o)deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business and deposits securing liabilities to insurance carriers under insurance or self-insurance arrangements;
p)easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Borrower or any Subsidiary; and
q)licenses, sublicenses, leases or subleases granted to other Persons not materially interfering with the conduct of the business of the Borrower or any of its Subsidiaries.
SECTION 7.2.4. Financial Condition. The Borrower will not permit:
a)Net Debt to Capitalization Ratio, as at the end of any Fiscal Quarter, to be greater than 0.625 to 1.
b)Fixed Charge Coverage Ratio to be less than 1.25 to 1 as at the last day of any Fiscal Quarter.
In addition, if, at any time, the Senior Debt Rating of the Borrower is less than Investment Grade as given by both Moody’s and S&P, the Borrower will not permit Stockholders’ Equity to be less than, as at the last day of any Fiscal Quarter, the sum of (i) $4,150,000,000 plus (ii) 50% of the consolidated net income of the Borrower and its Subsidiaries for the period commencing on January 1, 2007 and ending on the last day of the Fiscal Quarter most recently ended (treated for these purposes as a single accounting period, but in any event excluding any Fiscal Quarters for which the Borrower and its Subsidiaries have a consolidated net loss).
SECTION 7.2.5. [Intentionally Omitted].
SECTION 7.2.6. Consolidation, Merger, etc. The Borrower will not, and will not permit any of its Subsidiaries to, liquidate or dissolve, consolidate with, or merge into or with, any other corporation, except:
i.any such Subsidiary may (i) liquidate or dissolve voluntarily into, and may merge with and into, the Borrower or any other Subsidiary, and the assets or stock of any Subsidiary may be purchased or otherwise acquired by the Borrower or any other Subsidiary or (ii) merge with and into another Person in connection with a sale or other disposition permitted by Section 7.2.7; and
ii.so long as no Event of Default has occurred and is continuing or would occur after giving effect thereto, the Borrower or any of its Subsidiaries may merge into any other Person, or any other Person may merge into the Borrower or any such Subsidiary, or the Borrower or any of its Subsidiaries may purchase or otherwise acquire all or substantially all of the assets of any Person, in each case so long as:
1.after giving effect thereto, the Stockholders’ Equity of the Borrower and its Subsidiaries is at least equal to 90% of such Stockholders’
Equity immediately prior thereto; and
2.in the case of a merger involving the Borrower where the Borrower is not the surviving corporation, (and without prejudice to the provisions of Sections 3.2b) and c) and 9.1.10, which shall not restrict the proposed merger but which can still apply to the extent that the proposed merger would give rise to any of the events or circumstances contemplated by such Sections):
a.the surviving corporation shall have assumed in writing, delivered to the Facility Agent, all of the Borrower’s obligations hereunder and under the other Loan Documents; and
b.the surviving corporation shall, promptly upon the request of the Facility Agent or any Lender, supply such documentation and other evidence as is reasonably requested by the Facility Agent or any Lender in order for the Facility Agent or such Lender to carry out and be satisfied it has complied with the results of all necessary “know your customer” or other similar checks under all applicable laws and regulations.
SECTION 7.2.7. Asset Dispositions, etc. The Borrower will not, and will not permit any of its Subsidiaries to, sell, transfer, contribute or otherwise convey, or grant options, warrants or other rights with respect to, all or substantially all of the assets of
(a)the Borrower or (b) the Subsidiaries of the Borrower, taken as a whole, except sales of assets between or among the Borrower and Subsidiaries of the Borrower.
SECTION 7.3. Lender incorporated in the Federal Republic of Germany. The representations and warranties and covenants given in
Sections 6.16 and 7.1.3(f) respectively shall only be given, and be applicable to, a Lender incorporated in the Federal Republic of Germany insofar as the giving of and compliance with such representations and warranties do not result in a violation of or conflict with section 7 of the German Foreign Trade Regulation (Außenwirtschaftsverordnung) (in
conjunction with section 4 paragraph 1 a no.3 foreign trade law (AWG) (Außenwirtschaftsgesetz)), any provision of Council Regulation (EC) 2271/1996 or any similar applicable anti-boycott law or regulation.
ARTICLE VIII EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default. Each of the following
events or occurrences described in this Section 8.1 shall constitute an “Event of Default”.
SECTION 8.1.1. Non-Payment of Obligations. The Borrower shall default in the payment when due of any principal of or interest on the Loan or any Commitment Fee, or the Borrower shall default in the payment of any fee due and payable under the Fee Letter, provided that, in the case of any default in the payment of any interest on the Loan or of any Commitment Fee, such default shall continue unremedied for a period of at least five (5) Business Days after notice thereof shall have been given to the Borrower by the Facility Agent; and provided further that, in the case of any default in the payment of any fee due and payable under the Fee Letter, such default shall continue unremedied for a period of at least ten days after notice thereof shall have been given to the Borrower by the Facility Agent.
SECTION 8.1.2. Breach of Warranty. Any representation or warranty of the Borrower made or deemed to be made hereunder (including any certificates delivered pursuant to Article V) is or shall be incorrect in any material respect when made.
SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations. The Borrower shall default in the due performance and observance
of any other agreement contained herein or in any other Loan Document (other than the covenants set forth in Section 7.2.4 and the obligations referred to in Section 8.1.1) and such default shall continue unremedied for a period of five days after notice thereof shall have been given to the Borrower by the Facility Agent or any Lender (or, if (a) such default is capable of being remedied within 30 days (commencing on the first day following such five- day period) and (b) the Borrower is actively seeking to remedy the same during such period, such default shall continue unremedied for at least 35 days after such notice to the Borrower).
SECTION 8.1.4. Default on Other Indebtedness. (a) The Borrower or any of its Principal Subsidiaries shall fail to pay any Indebtedness that is outstanding in a principal amount of at least $100,000,000 (or the equivalent in other currencies) in the aggregate (but excluding Indebtedness hereunder or with respect to Hedging Instruments) when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Indebtedness; (b) the occurrence under any Hedging Instrument of an Early Termination Date (as defined in such Hedging Instrument) resulting from (A) any event of default under such Hedging Instrument as to which the Borrower is the Defaulting Party (as defined in such Hedging Instrument) or (B) any Termination Event (as so defined) as to which the Borrower is an Affected Party (as so defined) and, in either event, the termination value with respect to any such Hedging Instrument owed by the Borrower as a result thereof is greater than
$100,000,000 and the Borrower fails to pay such termination value when due after applicable grace periods; or (c) any other event shall occur or condition shall exist under any agreement or instrument evidencing, securing or relating to any such Indebtedness and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to cause or permit the holder or holders of such Indebtedness to cause such Indebtedness to become due and payable prior to its scheduled maturity; or (d) any such Indebtedness shall be declared to be due and payable or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption or by voluntary agreement), purchased or defeased, or an offer to prepay, redeem, purchase or defease such Indebtedness is required to be made, in each case prior to the scheduled maturity thereof (other than as a result of any sale or other disposition of any property or assets under the terms of such Indebtedness); provided that any required prepayment or right to require prepayment triggered by terms that are certified by the Borrower to be unique to, but customary in, ship financings shall not constitute an Event of Default under this Section 8.1.4 so long as any required prepayment is made when due. For purposes of determining Indebtedness for any Hedging Instrument, the principal amount of the obligations under any such instrument at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or any Principal Subsidiary would be required to pay if such instrument were terminated at such time.
SECTION 8.1.5. Bankruptcy, Insolvency, etc. The Borrower or any of the Principal Subsidiaries (or any of its other Subsidiaries to the extent that the relevant event described below would have a Material Adverse Effect) shall:
i.generally fail to pay, or admit in writing its inability to pay, its debts as they become due;
ii.apply for, consent to, or acquiesce in, the appointment of a trustee, receiver, sequestrator or other custodian for it or any of its property, or make a general assignment for the benefit of creditors;
iii.in the absence of such application, consent or acquiescence, permit or suffer to exist the appointment of a trustee, receiver, sequestrator or other custodian for it or for a substantial part of its property, and such trustee, receiver, sequestrator or other custodian shall not be discharged within 60 days, provided that in the case of such an event in respect of the Borrower, the Borrower hereby expressly authorizes the Facility Agent and each Lender to appear in any court conducting any relevant proceeding during such 60-day period to preserve, protect and defend their respective rights under the Loan Documents;
iv.permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law, or any dissolution, winding up or liquidation proceeding, in respect of the Borrower or any of such Subsidiaries, and, if any such case or proceeding is not commenced by the Borrower or such Subsidiary, such case or proceeding shall be consented to or acquiesced in by the Borrower or such Subsidiary or shall result in the entry of an order for relief or shall remain for 60 days undismissed, provided that the Borrower hereby expressly authorizes the Facility Agent and each Lender to appear in any court conducting any such case or proceeding during such 60-day
period to preserve, protect and defend their respective rights under the Loan Documents; or
v.take any corporate action authorizing, or in furtherance of, any of the foregoing.
SECTION 8.2. Action if Bankruptcy. If any Event of Default described in clauses (b) through (d) of Section 8.1.5 shall occur with respect to the Borrower, the Commitments (if not theretofore terminated) shall automatically terminate and the outstanding principal amount of the Loan and all other Obligations shall automatically be and become immediately due and payable, without notice or demand.
SECTION 8.3. Action if Other Event of Default. If any Event of Default (other than any Event of Default described in clauses (b) through (d) of Section 8.1.5 with respect to the Borrower) shall occur for any reason, whether voluntary or involuntary, and be continuing, the Facility Agent, upon the direction of the Required Lenders (after consultation with BpiFAE who shall have the right to instruct the Lenders to waive such Event of Default), shall by notice to the Borrower declare all of the outstanding principal amount of the Loan and other Obligations to be due and payable and/or the Commitments (if not theretofore terminated) to be terminated, whereupon the full unpaid amount of the Loan and other Obligations shall be and become immediately due and payable, without further notice, demand or presentment, and/or, as the case may be, the Commitments shall terminate.
ARTICLE IX PREPAYMENT EVENTS
SECTION 9.1. Listing of Prepayment Events. Each of the
following events or occurrences described in this Section 9.1 shall constitute a “Prepayment Event”.
SECTION 9.1.1. Change of Control. There occurs any Change of Control.
SECTION 9.1.2. Unenforceability. Any Loan Document shall cease to be the legally valid, binding and enforceable obligation of the Borrower (in each case, other than with respect to provisions of any Loan Document (i) identified as unenforceable in the form of the opinion of the Borrower’s counsel set forth as Exhibit B-1 or (ii) that a court of competent jurisdiction has determined are not material) and such event shall continue unremedied for 15 days after notice thereof has been given to the Borrower by the Facility Agent.
SECTION 9.1.3. Approvals. Any material license, consent, authorization, registration or approval at any time necessary to enable the Borrower or any Principal Subsidiary to conduct its business shall be revoked, withdrawn or otherwise cease to be in full force and effect, unless the same would not have a Material Adverse Effect.
SECTION 9.1.4. Non-Performance of Certain Covenants and Obligations. The Borrower shall default in the due performance and observance
of any of the covenants set forth in Sections 4.12 or 7.2.4.
SECTION 9.1.5. Judgments. Any judgment or order for the payment of money in excess of $100,000,000 shall be rendered against the Borrower or any of the Principal Subsidiaries by a court of competent jurisdiction and the Borrower or such Principal Subsidiary shall have failed to satisfy such judgment and either:
3.enforcement proceedings in respect of any material assets of the Borrower or such Principal Subsidiary shall have been commenced by any creditor upon such judgment or order and shall not have been stayed or enjoined within five (5)
Business Days after the commencement of such enforcement proceedings; or
4.there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect.
SECTION 9.1.6. Condemnation, etc.. The Purchased Vessel shall be condemned or otherwise taken under color of law or requisitioned and the same shall continue unremedied for at least 20 days, unless such condemnation or other taking would not have a Material Adverse Effect.
SECTION 9.1.7. Arrest. The Purchased Vessel shall be arrested and the same shall continue unremedied for at least 20 days, unless such arrest would not have a Material Adverse Effect.
SECTION 9.1.8. Sale/Disposal of the Purchased Vessel. The Purchased Vessel is sold to a company which is not the Borrower or any other Subsidiary of the Borrower (other than for the purpose of a lease back to the Borrower or any other Subsidiary of the Borrower).
SECTION 9.1.9. BpiFAE Insurance Policy. The BpiFAE Insurance Policy is cancelled for any reason or ceases to be in full force and effect.
SECTION 9.1.10. Illegality. No later than the close of business on the last day of the Option Period related to the giving of any Illegality Notice by an affected Lender pursuant to Section 3.2(b), either: (x) the Borrower has not elected to take an action specified in clause (1) or (2) of Section 3.2(c) or (y) if any such election shall have been made, the Borrower has failed to take the action required in respect of such election. In such circumstances the Facility Agent (at the direction of the affected Lender) shall by notice to the Borrower require the Borrower to prepay in full all principal and interest and all other Obligations owing to such Lender either (i) forthwith or, as the case may be, (ii) on a future specified date not being earlier than the latest date permitted by the relevant law.
SECTION 9.2. Mandatory Prepayment. If any Prepayment Event (other than a Prepayment Event under Section 9.1.10) shall occur and be continuing, the Facility Agent, upon the direction of the Required Lenders, shall by notice to the Borrower require the Borrower to prepay in full on the date of such notice all principal of and interest on the Loan and all other Obligations (and, in such event, the Borrower agrees to so pay the full unpaid amount of the Loan and all accrued and unpaid interest thereon and all other Obligations).
SECTION 9.3. Mitigation. If the ECA Agent, the Facility Agent or any of the Lenders become aware that an event or circumstance has arisen which will cause the BpiFAE Insurance Policy to be cancelled for any reason or no longer remain in full force and effect they shall notify the Borrower and the Lenders, the Borrower, the ECA Agent and the Facility Agent shall negotiate in good faith for a period of up to 30 days or, if less, the date by which the BpiFAE Insurance Policy shall be terminated or cease to be in full force and effect to determine whether the facility can be restructured and/or the Loan refinanced in a manner acceptable to each of the Lenders in their absolute discretion. The Lenders will use reasonable efforts to involve BpiFAE in such negotiations.
ARTICLE X
THE FACILITY AGENT AND THE ECA AGENT
SECTION 10.1. Actions. Each Lender hereby appoints Citibank Europe plc, UK Branch, as Facility Agent and Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch as ECA Agent, as its agent under and for purposes of this Agreement and each other Loan Document (for purposes of this Article X, the Facility Agent and the ECA Agent are referred to collectively as the “Agents”). Each Lender authorizes the Agents to act on behalf of such Lender under this Agreement and each other Loan Document and, in the absence of other written instructions from the Required Lenders received from time to time by the Agents (with respect to which each Agent agrees that it will comply, except as otherwise provided in this Section 10.1 or as otherwise advised by counsel or as otherwise instructed by any French Authority, it being understood and agreed that any instructions provided by a French Authority shall prevail), to exercise such powers hereunder and thereunder as are specifically delegated to or required of the Agents by the terms hereof and thereof, together with such powers as may be reasonably incidental thereto. Neither Agent shall be obliged to act on the instructions of any Lender or the Required Lenders if to do so would, in the opinion of such Agent, be contrary to any provision of this Agreement or any other Loan Document or the BpiFAE Insurance Policy or to any law or the conflicting instructions of any French Authority, or would expose such Agent to any actual or potential liability to any third party. As between the Lenders and the Agents, it is acknowledged that each Agent’s duties under this Agreement and the other Loan Documents are solely mechanical and administrative in nature.
SECTION 10.2. Indemnity. Each Lender hereby indemnifies (which indemnity shall survive any termination of this Agreement) each Agent, pro rata according to such Lender’s Percentage, from and against any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and disbursements of counsel) that be incurred by or asserted or awarded against, such Agent in any way relating to or arising out of this Agreement and any other Loan Document or any action taken or omitted by such Agent under this Agreement or any other Loan Document; provided that no Lender shall be liable for the payment of any portion of such claims, damages, losses, liabilities and expenses which have resulted from such Agent’s gross negligence or willful misconduct. Without limitation of the foregoing, each Lender agrees to reimburse each Agent promptly upon demand for its ratable share of any out-of-pocket expenses (including reasonable counsel fees) incurred by such Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities
under, this Agreement, to the extent that such Agent is not reimbursed for such expenses by the Borrower. In the case of any investigation, litigation or proceeding giving rise to any such indemnified costs, this Section applies whether any such investigation, litigation or proceeding is brought by any Agent, any Lender or a third party. Neither Agent shall be required to take any action hereunder or under any other Loan Document, or to prosecute or defend any suit in respect of this Agreement or any other Loan Document, unless it is expressly required to do so under this Agreement or is indemnified hereunder to its satisfaction. If any indemnity in favor of an Agent shall be or become, in such Agent’s determination, inadequate, such Agent may call for additional indemnification from the Lenders and cease to do the acts indemnified against hereunder until such additional indemnity is given.
SECTION 10.3. Funding Reliance, etc. Each Lender shall notify the Facility Agent by 4:00 p.m., London time, one day prior to the advance of the Loan if it is not able to fund the following day. Unless the Facility Agent shall have been notified by telephone, confirmed in writing, by any Lender by 4:00 p.m., London time, on the day prior to the advance of the Loan that such Lender will not make available the amount which would constitute its Percentage of the Loan on the date specified therefor, the Facility Agent may assume that such Lender has made such amount available to the Facility Agent and, in reliance upon such assumption, may, but shall not be obliged to, make available to the Borrower a corresponding amount. If and to the extent that such Lender shall not have made such amount available to the Facility Agent, such Lender and the Borrower severally agree to repay the Facility Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date the Facility Agent made such amount available to the Borrower to the date such amount is repaid to the Facility Agent, at the interest rate applicable at the time to the Loan without premium or penalty.
SECTION 10.4. Exculpation. Neither of the Agents nor any of their respective directors, officers, employees or agents shall be liable to any Lender for any action taken or omitted to be taken by it under this Agreement or any other Loan Document, or in connection herewith or therewith, except for its own willful misconduct or gross negligence. Without limitation of the generality of the foregoing, each Agent (i) may consult with legal counsel (including counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it and in accordance with the advice of such counsel, accountants or experts, (ii) makes no warranty or representation to any Lender and shall not be responsible to any Lender for any statements, warranties or representations (whether written or oral) made in or in connection with this Agreement, (iii) shall not have any duty to ascertain or to inquire as to the performance, observance or satisfaction of any of the terms, covenants or conditions of this Agreement on the part of the Borrower or the existence at any time of any Default or Prepayment Event or to inspect the property (including the books and records) of the Borrower, (iv) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto, (v) shall incur no liability under or in respect of this Agreement by action upon any notice, consent, certificate or other instrument or writing (which may be by telecopier) believed by it to be genuine and signed or sent by the proper party or parties, and (vi) shall have no responsibility to the Borrower or any Lender on account of (A) the failure of a Lender or the Borrower to perform any of its obligations under this Agreement or any Loan Document; (B) the financial condition of the Borrower; (C) the
completeness or accuracy of any statements, representations or warranties made in or pursuant to this Agreement or any Loan Document, or in or pursuant to any document delivered pursuant to or in connection with this Agreement or any Loan Document; or (D) the negotiation, execution, effectiveness, genuineness, validity, enforceability, admissibility in evidence or sufficiency of this Agreement or any Loan Document or of any document executed or delivered pursuant to or in connection with any Loan Document.
SECTION 10.5. Successor. The Facility Agent may resign as such at any time upon at least 30 days’ prior notice to the Borrower and all Lenders and shall resign where required to do in accordance with Section 4.14, provided that any such resignation shall not become effective until a successor Facility Agent has been appointed as provided in this Section 10.5 and such successor Facility Agent has accepted such appointment. If the Facility Agent at any time shall resign, the Required Lenders shall, subject to the immediately preceding proviso and subject to the consent of the Borrower (such consent not to be unreasonably withheld), appoint another Lender as a successor to the Facility Agent which shall thereupon become such Facility Agent’s successor hereunder (provided that the Required Lenders shall, subject to the consent of the Borrower unless an Event or Default or a Prepayment Event shall have occurred and be continuing (such consent not to be unreasonably withheld or delayed) offer to each of the other Lenders in turn, in the order of their respective Percentages of the Loan, the right to become successor Facility Agent). If no successor Facility Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30 days after the Facility Agent’s giving notice of resignation, then the Facility Agent may, on behalf of the Lenders, appoint a successor Facility Agent, which shall be one of the Lenders or a commercial banking institution having a combined capital and surplus of at least $1,000,000,000 (or the equivalent in other currencies), subject, in each case, to the consent of the Borrower (such consent not to be unreasonably withheld). Upon the acceptance of any appointment as Facility Agent hereunder by a successor Facility Agent, such successor Facility Agent shall be entitled to receive from the resigning Facility Agent such documents of transfer and assignment as such successor Facility Agent may reasonably request, and shall thereupon succeed to and become vested with all rights, powers, privileges and duties of the resigning Facility Agent, and the resigning Facility Agent shall be discharged from its duties and obligations under this Agreement. After any resigning Facility Agent’s resignation hereunder as the Facility Agent, the provisions of:
a)this Article X shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Facility Agent under this Agreement; and
b)Section 11.3 and Section 11.4 shall continue to inure to its benefit.
If a Lender acting as the Facility Agent assigns its Loan to one of its Affiliates, such Facility Agent may, subject to the consent of the Borrower (such consent not to be unreasonably withheld or delayed) assign its rights and obligations as Facility Agent to such Affiliate.
SECTION 10.6. Loans by the Facility Agent. The Facility Agent shall have the same rights and powers with respect to the Loan made by it or any of its Affiliates. The Facility Agent and its Affiliates may accept deposits from, lend money to, and generally engage in any kind of business with the Borrower or any Affiliate of the Borrower as if the Facility Agent were not the Facility Agent hereunder and without any duty
to account therefor to the Lenders. The Facility Agent shall have no duty to disclose information obtained or received by it or any of its Affiliates relating to the Borrower or its Subsidiaries to the extent such information was obtained or received in any capacity other than as the Facility Agent.
SECTION 10.7. Credit Decisions. Each Lender acknowledges that it has, independently of each Agent and each other Lender, and based on such Lender’s review of the financial information of the Borrower, this Agreement, the other Loan Documents (the terms and provisions of which being satisfactory to such Lender) and such other documents, information and investigations as such Lender has deemed appropriate, made its own credit decision to extend its Commitment. Each Lender also acknowledges that it will, independently of each Agent and each other Lender, and based on such other documents, information and investigations as it shall deem appropriate at any time, continue to make its own credit decisions as to exercising or not exercising from time to time any rights and privileges available to it under this Agreement or any other Loan Document.
SECTION 10.8. Copies, etc. Each Agent shall give prompt notice to each Lender of each notice or request required or permitted to be given to such Agent by the Borrower pursuant to the terms of this Agreement (unless concurrently delivered to the Lenders by the Borrower). Each Agent will distribute to each Lender each document or instrument received for its account and copies of all other communications received by such Agent from the Borrower for distribution to the Lenders by such Agent in accordance with the terms of this Agreement.
SECTION 10.9. The Agents’ Rights. Each Agent may (i) assume that all representations or warranties made or deemed repeated by the Borrower in or pursuant to this Agreement or any Loan Document are true and complete, unless, in its capacity as the Facility Agent, it has acquired actual knowledge to the contrary, (ii) assume that no Default has occurred unless, in its capacity as an Agent, it has acquired actual knowledge to the contrary, (iii) rely on any document or notice believed by it to be genuine,
(iv) rely as to legal or other professional matters on opinions and statements of any legal or other professional advisers selected or approved by it, (v) rely as to any factual matters which might reasonably be expected to be within the knowledge of the Borrower on a certificate signed by or on behalf of the Borrower and (vi) refrain from exercising any right, power, discretion or remedy unless and until instructed to exercise that right, power, discretion or remedy and as to the manner of its exercise by the Lenders (or, where applicable, by the Required Lenders) and unless and until such Agent has received from the Lenders any payment which such Agent may require on account of, or any security which such Agent may require for, any costs, claims, expenses (including legal and other professional fees) and liabilities which it considers it may incur or sustain in complying with those instructions.
SECTION 10.10. The Facility Agent’s Duties. The Facility Agent shall (i) if requested in writing to do so by a Lender, make enquiry and advise the Lenders as to the performance or observance of any of the provisions of this Agreement or any Loan Document by the Borrower or as to the existence of an Event of Default and (ii) inform the Lenders promptly of any Event of Default of which the Facility Agent has actual knowledge.
The Facility Agent shall not be deemed to have actual knowledge of the falsehood or incompleteness of any representation or warranty made or deemed repeated by the Borrower
or actual knowledge of the occurrence of any Default unless a Lender or the Borrower shall have given written notice thereof to the Facility Agent in its capacity as the Facility Agent. Any information acquired by the Facility Agent other than specifically in its capacity as the Facility Agent shall not be deemed to be information acquired by the Facility Agent in its capacity as the Facility Agent.
The Facility Agent may, without any liability to account to the Lenders, generally engage in any kind of banking or trust business with the Borrower or with the Borrower’s subsidiaries or associated companies or with a Lender as if it were not the Facility Agent.
SECTION 10.11. Employment of Agents. In performing its duties and exercising its rights, powers, discretions and remedies under or pursuant to this Agreement or the Loan Documents, each Agent shall be entitled to employ and pay agents to do anything which such Agent is empowered to do under or pursuant to this Agreement or the Loan Documents (including the receipt of money and documents and the payment of money); provided that, unless otherwise provided herein, including without limitation Section 11.3, the employment of such agents shall be for such Agent’s account, and to act or refrain from taking action in reliance on the opinion of, or advice or information obtained from, any lawyer, banker, broker, accountant, valuer or any other person believed by such Agent in good faith to be competent to give such opinion, advice or information.
SECTION 10.12. Distribution of Payments. The Facility Agent shall pay promptly to the order of each Lender that Lender’s Percentage share of every sum of money received by the Facility Agent pursuant to this Agreement or the Loan Documents (including, without limitation, any amounts payable pursuant to Section 4.4.1 but not including any amounts payable pursuant to the Fee Letter and any amounts which, by the terms of this Agreement or the Loan Documents, are paid to the Facility Agent for the account of the Facility Agent alone or specifically for the account of one or more Lenders) and until so paid such amount shall be held by the Facility Agent on trust absolutely for that Lender.
SECTION 10.13. Reimbursement. The Facility Agent shall have no liability to pay any sum to a Lender until it has itself received payment of that sum. If, however, the Facility Agent does pay any sum to a Lender on account of any amount prospectively due to that Lender pursuant to Section 10.12 before it has itself received payment of that amount, and the Facility Agent does not in fact receive payment within two
(2)Business Days after the date on which that payment was required to be made by the terms of this Agreement or the Loan Documents, that Lender will, on demand by the Facility Agent, refund to the Facility Agent an amount equal to the amount received by it, together with an amount sufficient to reimburse the Facility Agent for any amount which the Facility Agent may certify that it has been required to pay by way of interest on money borrowed to fund the amount in question during the period beginning on the date on which that amount was required to be paid by the terms of this Agreement or the Loan Documents and ending on the date on which the Facility Agent receives reimbursement.
SECTION 10.14. Instructions. Where an Agent is authorized or directed to act or refrain from acting in accordance with the instructions of the Lenders or of the Required Lenders each of the Lenders shall provide such Agent with instructions within three (3) Business Days of such Agent’s request (which request may be made orally or in
writing). If a Lender does not provide such Agent with instructions within that period, that Lender shall be bound by the decision of such Agent. Nothing in this Section 10.14 shall limit the right of such Agent to take, or refrain from taking, any action without obtaining the instructions of the Lenders or the Required Lenders if such Agent in its discretion considers it necessary or appropriate to take, or refrain from taking, such action in order to preserve the rights of the Lenders under or in connection with this Agreement or the Loan Documents. In that event, such Agent will notify the Lenders of the action taken by it as soon as reasonably practicable, and the Lenders agree to ratify any action taken by the Facility Agent pursuant to this Section 10.14.
SECTION 10.15. Payments. All amounts payable to a Lender under this Section 10 shall be paid to such account at such bank as that Lender may from time to time direct in writing to the Facility Agent.
SECTION 10.16. “Know your customer” Checks. Each Lender shall promptly upon the request of the Facility Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Facility Agent (for itself) in order for the Facility Agent to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in this Agreement or the Loan Documents.
SECTION 10.17. No Fiduciary Relationship. Except as provided in Section 10.12, no Agent shall have any fiduciary relationship with or be deemed to be a trustee of or for any other person and nothing contained in this Agreement or any Loan Document shall constitute a partnership between any two or more Lenders or between either Agent and any other person.
SECTION 10.18. Illegality. The Agent shall refrain from doing anything which it reasonably believes would be contrary to any law of any jurisdiction (including but not limited to England and Wales, the United States of America or any jurisdiction forming part of it) or any regulation or directive of any agency of such state or jurisdiction or which would or might render it liable to any person and may without liability do anything which is, in its opinion, necessary to comply with any such law, directive or regulation.
ARTICLE XI MISCELLANEOUS PROVISIONS
SECTION 11.1. Waivers, Amendments, etc. The provisions of this
Agreement and of each other Loan Document may from time to time be amended, modified or waived, if such amendment, modification or waiver is in writing and consented to by the Borrower and the Required Lenders; provided that no such amendment, modification or waiver which would:
a.contravene or be in breach of the terms of the BpiFAE Insurance Policy or the arrangements with Natixis DAI relating to the CIRR (if the Fixed Rate applies) shall be effective unless consented to by, as applicable, BpiFAE and/or Natixis DAI;
b.modify any requirement hereunder that any particular action be taken by all the Lenders or by the Required Lenders shall be effective unless consented to by each Lender;
c.modify this Section 11.1 or change the definition of “Required Lenders” shall be made without the consent of each Lender;
d.increase the Commitment of any Lender shall be made without the consent of such Lender;
e.reduce any fees described in Article III payable to any Lender shall be made without the consent of such Lender;
f.extend the Commitment Termination Date of any Lender shall be made without the consent of such Lender;
g.extend the due date for, or reduce the amount of, any scheduled repayment or prepayment of principal of or interest on the Loan (or reduce the principal amount of or rate of interest on the Loan) owed to any Lender shall be made without the consent of such Lender; or
h.affect adversely the interests, rights or obligations of the Facility Agent in its capacity as such shall be made without consent of the Facility Agent.
No failure or delay on the part of the Facility Agent or any Lender in exercising any power or right under this Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right. No notice to or demand on the Borrower in any case shall entitle it to any notice or demand in similar or other circumstances. No waiver or approval by any the Facility Agent or any Lender under this Agreement or any other Loan Document shall, except as may be otherwise stated in such waiver or approval, be applicable to subsequent transactions. No waiver or approval hereunder shall require any similar or dissimilar waiver or approval thereafter to be granted hereunder. The Lenders hereby agree, at any time and from time to time that the Nordea Agreement or the Bank of Nova Scotia Agreement is amended or refinanced, to negotiate in good faith to amend this Agreement to conform any representations, warranties, covenants or events of default in this Agreement to the amendments made to any substantively comparable provisions in the Nordea Agreement or the Bank of Nova Scotia Agreement or any refinancing thereof.
Neither the Borrower’s rights nor its obligations under the Loan Documents shall be changed, directly or indirectly, as a result of any amendment, supplement, modification, variance or novation of the BpiFAE Insurance Policy, except any amendments, supplements, modifications, variances or novations, as the case may be, which occur (i) with the Borrower’s consent, (ii) at the Borrower’s request or (iii) in order to conform to amendments, supplements, modifications, variances or novations effected in respect of the Loan Documents in accordance with their terms.
SECTION 11.2. Notices.
a)All notices and other communications provided to any party hereto under this Agreement or any other Loan Document shall be in writing, by facsimile or by electronic mail and addressed, delivered or transmitted to such party at its address, facsimile number or electronic mail address set forth below its signature hereto or set forth in the Lender Assignment Agreement or at such other address, or facsimile number as may be designated by such party in a notice to the other parties. Any notice, if mailed and properly addressed with postage prepaid or if properly addressed and sent by pre-paid courier service, shall be deemed given when received; any notice, if transmitted by facsimile, shall be deemed given when transmitted provided it is received in legible form; any notice, if transmitted by electronic mail, shall be deemed given upon acknowledgment of receipt by the recipient.
b)So long as Citibank Europe plc, UK Branch is the Facility Agent, the Borrower may provide to the Facility Agent all information, documents and other materials that it furnishes to the Facility Agent hereunder or any other Loan Document (and any guaranties, security agreements and other agreements relating thereto), including, without limitation, all notices, requests, financial statements, financial and other reports, certificates and other materials, but excluding any such communication that (i) relates to a request for a new, or a conversion of an existing advance or other extension of credit (including any election of an interest rate or interest period relating thereto), (ii) relates to the payment of any principal or other amount due hereunder or any other Loan Document prior to the scheduled date therefor, (iii) provides notice of any Default or Event of Default or
(iv) is required to be delivered to satisfy any condition precedent to the effectiveness of the Agreement and/or any advance or other extension of credit hereunder (all such non-excluded communications being referred to herein collectively as “Communications”), by transmitting the Communications in an electronic/soft medium in a format acceptable to the Facility Agent to such email address notified by the Facility Agent to the Borrower; provided that any Communication requested pursuant to Section 7.1.1(h) shall be in a format acceptable to the Borrower and the Facility Agent.
c)The Borrower agrees that the Facility Agent may make such items included in the Communications as the Borrower may specifically agree available to the Lenders by posting such notices, at the option of the Borrower, on Intralinks or any similar such platform (the “Platform”) acceptable to the Borrower. Although the primary web portal is secured with a dual firewall and a User ID/Password Authorization System and the Platform is secured through a single user per deal authorization method whereby each user may access the Platform only on a deal-by-deal basis, the Borrower acknowledges that (i) the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution, (ii) the Platform is provided “as is” and “as available” and (iii) neither the Facility Agent nor any of its Affiliates warrants the accuracy, adequacy or completeness of the Communications or the Platform and each expressly disclaims liability for errors or omissions in the Communications or the Platform. No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third party rights or freedom from
viruses or other code defects, is made by the Facility Agent or any of its Affiliates in connection with the Platform.
d.The Facility Agent agrees that the receipt of Communications by the Facility Agent at its e-mail address set forth above shall constitute effective delivery of such Communications to the Facility Agent for purposes hereunder and any other Loan Document (and any guaranties, security agreements and other agreements relating thereto).
SECTION 11.3. Payment of Costs and Expenses. The Borrower agrees to pay on demand all reasonable expenses of the Facility Agent (including the reasonable fees and out-of-pocket expenses of counsel to the Facility Agent and of local counsel, if any, who may be retained by counsel to the Facility Agent) in connection with any amendments, waivers, consents, supplements or other modifications to, this Agreement or any other Loan Document as may from time to time hereafter be required, whether or not the transactions contemplated hereby are consummated. The Borrower further agrees to pay, and to save the Facility Agent and the Lenders harmless from all liability for, any stamp, recording, documentary or other similar taxes arising from the execution, delivery or enforcement of this Agreement or the borrowing hereunder or any other Loan Documents. The Borrower also agrees to reimburse the Facility Agent and each Lender upon demand for all reasonable out-of-pocket expenses (including reasonable attorneys’ fees and legal expenses) incurred by the Facility Agent or such Lender in connection with (x) the negotiation of any restructuring or “work-out”, whether or not consummated, of any Obligations and (y) the enforcement of any Obligations.
SECTION 11.4. Indemnification. In consideration of the execution and delivery of this Agreement by each Lender and the extension of the Commitments, the Borrower hereby indemnifies and holds harmless the Facility Agent, each Lender and each of their respective Affiliates and their respective officers, advisors, directors and employees (collectively, the “Indemnified Parties”) from and against any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and disbursements of counsel), joint or several, that may be incurred by or asserted or awarded against any Indemnified Party (including, without limitation, in connection with any investigation, litigation or proceeding or the preparation of a defense in connection therewith), in each case arising out of or in connection with or by reason of this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby or any actual or proposed use of the proceeds of the Loans (collectively, the “Indemnified Liabilities”), except to the extent such claim, damage, loss, liability or expense is found in a final, non- appealable judgment by a court of competent jurisdiction to have resulted primarily from such Indemnified Party’s gross negligence or willful misconduct or the material breach by such Indemnified Party of its obligations under this Agreement, any other Loan Document, the BpiFAE Insurance Policy or Interest Stabilisation Agreement and which breach is not attributable to the Borrower’s own breach of the terms of this Agreement or any other Loan Document or is a claim, damage, loss, liability or expense which would have been compensated under other provisions of the Loan Documents but for any exclusions applicable thereunder.
In the case of an investigation, litigation or other proceeding to which the indemnity in this paragraph applies, such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by the Borrower, any of its directors, security holders or creditors, an Indemnified Party or any other person or an Indemnified Party is otherwise a party thereto. Each Indemnified Party shall (a) furnish the Borrower with prompt notice of any action, suit or other claim covered by this Section 11.4, (b) not agree to any settlement or compromise of any such action, suit or claim without the Borrower’s prior consent, (c) shall cooperate fully in the Borrower’s defense of any such action, suit or other claim (provided that the Borrower shall reimburse such indemnified party for its reasonable out-of-pocket expenses incurred pursuant hereto) and (d) at the Borrower’s request, permit the Borrower to assume control of the defense of any such claim, other than regulatory, supervisory or similar investigations, provided that (i) the Borrower acknowledges in writing its obligations to indemnify the Indemnified Party in accordance with the terms herein in connection with such claims, (ii) the Borrower shall keep the Indemnified Party fully informed with respect to the conduct of the defense of such claim, (iii) the Borrower shall consult in good faith with the Indemnified Party (from time to time and before taking any material decision) about the conduct of the defense of such claim, (iv) the Borrower shall conduct the defense of such claim properly and diligently taking into account its own interests and those of the Indemnified Party, (v) the Borrower shall employ counsel reasonably acceptable to the Indemnified Party and at the Borrower’s expense, and (vi) the Borrower shall not enter into a settlement with respect to such claim unless either (A) such settlement involves only the payment of a monetary sum, does not include any performance by or an admission of liability or responsibility on the part of the Indemnified Party, and contains a provision unconditionally releasing the Indemnified Party and each other indemnified party from, and holding all such persons harmless, against, all liability in respect of claims by any releasing party or (B) the Indemnified Party provides written consent to such settlement (such consent not to be unreasonably withheld or delayed). Notwithstanding the Borrower’s election to assume the defense of such action, the Indemnified Party shall have the right to employ separate counsel and to participate in the defense of such action and the Borrower shall bear the fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the Borrower to represent the Indemnified Party would present such counsel with an actual or potential conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the Borrower and the Indemnified Party and the Indemnified Party shall have concluded that there may be legal defenses available to it which are different from or additional to those available to the Borrower and determined that it is necessary to employ separate counsel in order to pursue such defenses (in which case the Borrower shall not have the right to assume the defense of such action on the Indemnified Party’s behalf), (iii) the Borrower shall not have employed counsel reasonably acceptable to the Indemnified Party to represent the Indemnified Party within a reasonable time after notice of the institution of such action, or (iv) the Borrower authorizes the Indemnified Party to employ separate counsel at the Borrower’s expense. The Borrower acknowledges that none of the Indemnified Parties shall have any liability (whether direct or indirect, in contract, tort or otherwise) to the Borrower or any of its security holders or creditors for or in connection with the transactions contemplated hereby, except to the extent such liability is determined in a final non- appealable judgment by a court of competent jurisdiction to have resulted primarily from such Indemnified Party’s gross negligence or willful misconduct. In no event, however, shall any Indemnified Party be liable on any theory of liability for any special, indirect, consequential or punitive damages (including, without limitation, any loss of profits, business or anticipated savings). If and to the extent that the foregoing undertaking may be unenforceable for any reason, the Borrower hereby agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible
under applicable law.
SECTION 11.5. Survival. The obligations of the Borrower under
Sections 4.3, 4.4, 4.5, 4.6, 4.7, 11.3 and 11.4 and the obligations of the Lenders under Section 10.1, shall in each case survive any termination of this Agreement and the payment in full of all Obligations. The representations and warranties made by the Borrower in this Agreement and in each other Loan Document shall survive the execution and delivery of this Agreement and each such other Loan Document.
SECTION 11.6. Severability. Any provision of this Agreement or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement or such Loan Document or affecting the validity or enforceability of such provision in any other jurisdiction.
SECTION 11.7. Headings. The various headings of this Agreement and of each other Loan Document are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or such other Loan Document or any provisions hereof or thereof.
SECTION 11.8. Execution in Counterparts, Effectiveness, etc. This Agreement may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement. This Agreement, as a novated and amended Agreement, shall become effective upon the occurrence of the Novation Effective Time under, and as defined in, the Novation Agreement.
SECTION 11.9. Third Party Rights. Notwithstanding the provisions of the Contracts (Rights of Third Parties) Act 1999, no term of this Agreement is enforceable by a person who is not a party to it with the exception of BpiFAE and Natixis.
SECTION 11.10. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns; provided that:
a)except to the extent permitted under Section 7.2.6, the Borrower may not assign or transfer its rights or obligations hereunder without the prior written consent of the Facility Agent, each Lender and BpiFAE; and
b)the rights of sale, assignment and transfer of the Lenders are subject to Section 11.11.
SECTION 11.11. Sale and Transfer of the Loan; Participations in the Loan. Each Lender may assign its Percentage or portion of the Loan to
one or more other Persons (a “New Lender”), or sell participations in its Percentage or portion of the Loan to one or more other Persons; provided that, in the case of assignments where the Fixed Rate applies, such New Lender (other than BpiFAE or CAFFIL as assignee of all or any of SFIL’s rights as Lender following the enforcement of the security granted pursuant to paragraph (iv) of Section 11.11.1 in connection with the BpiFAE Enhanced
Guarantee, and subject as provided in Section 11.11.1(iv)) enters into an Interest Stabilisation Agreement.
SECTION 11.11.1. Assignments
i.Any Lender with the prior written consents of the Borrower and the Facility Agent (which consents shall not be unreasonably delayed or withheld and which consent, in the case of the Borrower, shall be deemed to have been given in the absence of a written notice delivered by the Borrower to the Facility Agent, on or before the fifth Business Day after receipt by the Borrower of such Lender’s request for consent, stating, in reasonable detail, the reasons why the Borrower proposes to withhold such consent) may at any time (and from time to time) assign or transfer to one or more commercial banks or other financial institutions all or any fraction of such Lender’s portion of the Loan.
ii.Any Lender, with notice to the Borrower and the Facility Agent, and, notwithstanding the foregoing clause (i), without the consent of the Borrower, or the Facility Agent may assign or transfer (A) to any of its Affiliates, (B) to SFIL or (C) following the occurrence and during the continuance of an Event of Default under Sections 8.1.1, 8.1.4(a) or 8.1.5, to any other Person, in each case, all or any fraction of such Lender’s portion of the Loan.
iii.Any Lender may (notwithstanding the foregoing clauses, and without notice to, or consent from, the Borrower or the Facility Agent) assign or charge all or any fraction of its portion of the Loan to any federal reserve or central bank as collateral security in connection with the extension of credit or support by such federal reserve or central bank to such Lender.
iv.SFIL may (notwithstanding the foregoing clauses, and without notice to, or consent from, the Borrower or the Facility Agent) assign, charge or otherwise grant security over all or any fraction of its portion of the Loan and of its rights as Lender to CAFFIL as collateral security in connection with the extension of credit or support by CAFFIL to SFIL in respect of this Agreement and the BpiFAE Enhanced Guarantee, provided that at the time of the assignment, charge or grant of security CAFFIL is an Affiliate of SFIL and that such assignment, charge or other security is on terms that (i) CAFFIL shall not have any rights to assign, charge or grant any security over such rights to any other person (other than to BpiFAE pursuant to and in accordance with the BpiFAE Enhanced Guarantee) without the prior written consent of the Borrower, (ii) CAFFIL shall only be entitled to enforce its rights under such assignment, charge or other security without the prior written consent of the Borrower if at that time it remains an Affiliate of SFIL, (iii) prior to any enforcement such assignment, charge or other security, the Borrower and the Facility Agent shall continue to deal solely and directly with SFIL in connection with its rights and obligations as Lender under this Agreement and other Loan Documents (subject to any payment instructions given by SFIL), (iv) for the avoidance of doubt, the Borrower’s rights and obligations under this Agreement shall not be increased or affected (including, without limitation, the right to pay Fixed Rate under Section 3.3.1) as a result of such assignment, charge or security or any enforcement thereof, (v) the Borrower shall not be liable to pay any amount under Sections 4.2(c), 4.3, 4.4, 4.5, 4.6 and 4.7 that is greater than the amount which it would have been required to pay to SFIL had no such assignment, charge or other security been granted and (vi) without prejudice to SFIL’s obligations under that Section, CAFFIL shall be bound by the confidentiality provisions set forth in Section 11.15. in relation to any information to
which it applies to the same extent as required of the Lenders. For the avoidance of doubt: (A) if CAFFIL becomes a Lender under this Agreement in respect of any portion of the Loan following enforcement of any assignment, charge or other security granted to it by SFIL pursuant to this Section 11.11.1(iv), it shall have the same rights to assign or transfer all or any fraction of such portion of the Loan on and subject to the same terms and conditions as are set forth in this Agreement for assignments and transfers by other Lenders and (B) CAFFIL may not enforce its rights under any such assignment, charge or other security by assigning or transferring all or any fraction of SFIL’s portion of the Loan or any of its rights or obligations under this Agreement or other Loan Documents except pursuant to an assignment or transfer to a commercial bank or other financial institution on and subject to the same terms and conditions as are set forth in this Agreement for assignments and transfers by Lenders.
(v)No Lender may (notwithstanding the foregoing clauses) assign or transfer any of its rights under this Agreement unless it has given prior written notification of the transfer to BpiFAE and (if the Loan is accruing interest at the Fixed Rate) Natixis DAI and has obtained a prior written consent from BpiFAE and Natixis DAI and any Assignee Lender (other than BpiFAE and CAFFIL as assignee of all or any of SFIL’s rights as Lender following the enforcement of the security granted pursuant to paragraph (iv) of Section 11.11.1 in connection with the BpiFAE Enhanced Guarantee, subject as provided in Section 11.11.1(iv)) is, if the Fixed Rate applies, eligible to benefit from the CIRR stabilisation. Any assignment or transfer shall comply with the terms of the BpiFAE Insurance Policy.
(vi)Nothing in this Section 11.11.1 shall prejudice the right of the Lender to assign its rights under this Agreement to BpiFAE, if such assignment is required to be made by that Lender to BpiFAE in accordance with the BpiFAE Insurance Policy or the BpiFAE Enhanced Guarantee or, if the Lender is SFIL, to CAFFIL (but only if CAFFIL is, at that time, an Affiliate of SFIL) upon the enforcement of any security granted pursuant, and subject to the provisions of paragraph (iv) of Section 11.11.1, in connection with the BpiFAE Enhanced Guarantee.
Each Person described in the foregoing clauses as being the Person to whom such assignment or transfer is to be made, is hereinafter referred to as an “Assignee Lender”. Assignments in a minimum aggregate amount of $25,000,000 (or, if less, all of such Lender’s portion of the Loan and Commitment) (which assignment or transfer shall be of a constant, and not a varying, percentage of such Lender’s portion of the Loan) are permitted; provided that the Borrower and the Facility Agent shall be entitled to continue to deal solely and directly with such Lender in connection with the interests so assigned or transferred to an Assignee Lender until:
a)written notice of such assignment or transfer, together with payment instructions, addresses and related information with respect to such Assignee Lender, shall have been given to the Borrower and the Facility Agent by such Lender and such Assignee Lender;
b)such Assignee Lender shall have executed and delivered to the Borrower and the Facility Agent a Lender Assignment Agreement, accepted by the Facility Agent and any other agreements required by the Facility Agent or, if the Fixed Rate applies, Natixis in connection therewith; and
c.the processing fees described below shall have been paid.
From and after the date that the Facility Agent accepts such Lender Assignment Agreement, (x) the Assignee Lender thereunder shall be deemed automatically to have become a party hereto and to the extent that rights and obligations hereunder have been assigned or transferred to such Assignee Lender in connection with such Lender Assignment Agreement, shall have the rights and obligations of a Lender hereunder and under the other Loan Documents, and (y) the assignor Lender, to the extent that rights and obligations hereunder have been assigned or transferred by it, shall be released from its obligations hereunder and under the other Loan Documents, other than any obligations arising prior to the effective date of such assignment. Except to the extent resulting from a subsequent change in law, in no event shall the Borrower be required to pay to any Assignee Lender any amount under Sections 4.2(c), 4.3, 4.4, 4.5, 4.6 and 4.7 that is greater than the amount which it would have been required to pay had no such assignment been made. Such assignor Lender or such Assignee Lender must also pay a processing fee to the Facility Agent upon delivery of any Lender Assignment Agreement in the amount of $5,000 (and shall also reimburse the Facility Agent and Natixis for any reasonable out-of-pocket costs, including reasonable attorneys’ fees and expenses, incurred in connection with the assignment).
SECTION 11.11.2. Participations. Any Lender may at any time sell to one or more commercial banks or other financial institutions (each of such commercial banks and other financial institutions being herein called a “Participant”) participating interests in its Loan; provided that:
1.no participation contemplated in this Section 11.11.2 shall relieve such Lender from its obligations hereunder;
2.such Lender shall remain solely responsible for the performance of its obligations hereunder;
3.the Borrower and the Facility Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and each of the other Loan Documents;
4.no Participant, unless such Participant is an Affiliate of such Lender, shall be entitled to require such Lender to take or refrain from taking any action hereunder or under any other Loan Document, except that such Lender may agree with any Participant that such Lender will not, without such Participant’s consent, take any actions of the type described in clauses (b) through (f) of Section 11.1;
5.the Borrower shall not be required to pay any amount under Sections 4.2(c), 4.3, 4.4, 4.5, 4.6 and 4.7 that is greater than the amount which it would have been required to pay had no participating interest been sold; and
6.each Lender that sells a participation under this Section 11.11.2 shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts of (and stated interest on) each of the Participant’s interest in that Lender’s portion of the Loan, Commitments or other interests hereunder (the “Participant Register”). The entries in the Participant Register shall be conclusive
absent manifest error, and such Lender may treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes hereunder.
The Borrower acknowledges and agrees that each Participant, for purposes of Sections 4.2(c), 4.3, 4.4, 4.5, 4.6 and clause (e) of 7.1.1, shall be considered a Lender.
SECTION 11.11.3. Register. The Facility Agent shall maintain at its address referred to in Section 11.2 a copy of each Lender Assignment Agreement delivered to and accepted by it and a register for the recordation of the names and addresses of the Lenders and the Commitment(s) of, and principal amount of the Loan owing to, each Lender from time to time (the “Register”). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrower, the Facility Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice.
SECTION 11.11.4. Rights of BpiFAE to payments. The Borrower acknowledges that, immediately upon any payment by BpiFAE (i) of any amounts to a Lender under the BpiFAE Insurance Policy, BpiFAE will be automatically subrogated to the extent of such payment to the rights of that Lender under the Loan Documents or (ii) of any amount under the BpiFAE Enhanced Guarantee and the enforcement of any related security granted by SFIL to any of its Affiliates, which may benefit BpiFAE after payment by BpiFAE under the BpiFAE Enhanced Guarantee, BpiFAE will be automatically entitled to receive the payments normally due to SFIL under the Loan Documents( but, for the avoidance of doubt, such payments shall continue to be made by the Borrower to the Facility Agent in accordance with the provisions of Section 4.8 or any other relevant provisions of this Agreement, as applicable).
SECTION 11.12. Other Transactions. Nothing contained herein shall preclude the Facility Agent or any Lender from engaging in any transaction, in addition to those contemplated by this Agreement or any other Loan Document, with the Borrower or any of its Affiliates in which the Borrower or such Affiliate is not restricted hereby from engaging with any other Person.
SECTION 11.13. BpiFAE Insurance Policy.
SECTION 11.13.1. Terms of BpiFAE Insurance Policy
a)The BpiFAE Insurance Policy will cover 100% of the Loan.
b)The BpiFAE Premium will equal 3% of the aggregate principal amount of the Loan as at the Actual Delivery Date.
c)If, after the Actual Delivery Date, the Borrower prepays all or part of the Loan in accordance with this Agreement, BpiFAE shall reimburse to the ECA Agent for the account of the Borrower an amount equal to 80% of all or a corresponding proportion of the unexpired portion of the BpiFAE Premium, having regard to the
amount of the prepayment and the remaining term of the Loan, such amount to be calculated in accordance with the following formula:
R = P x (1 – (1 / (1+3%)) x (N / (12 * 365)) x 80%
where:
“R” means the amount of the refund;
“P” means the amount of the prepayment;
“N” means the number of days between the effective prepayment date and Final Maturity; and
P x (1 – (1 / (1+3%)) corresponds to the share of the financed BpiFAE Premium corresponding to P.
SECTION 11.13.2. Obligations of the Borrower. Provided that the BpiFAE Insurance Policy complies with Section 11.13.1 and remains in full force and effect, the Borrower shall pay the balance of the BpiFAE Premium calculated in accordance with Section 11.3.1(b) and still owing to BpiFAE on the Actual Delivery Date to BpiFAE on the Actual Delivery Date by directing the Agent in the Loan Request to pay the Additional Advance in respect of the BpiFAE Premium directly to BpiFAE.
SECTION 11.13.3. Obligations of the ECA Agent and the Lenders.
a)Promptly upon receipt of the BpiFAE Insurance Policy from BpiFAE, the ECA Agent shall (subject to any confidentiality undertakings given to BpiFAE by the ECA Agent pursuant to the terms of the BpiFAE Insurance Policy) send a copy thereof to the Borrower.
b)The ECA Agent shall perform such acts or provide such information, which are, acting reasonably, within its power so to perform or so to provide, as required by BpiFAE under the BpiFAE Insurance Policy as necessary to ensure that the Lenders obtain the support of BpiFAE pursuant to the BpiFAE Insurance Policy.
c)Each Lender will co-operate with the ECA Agent, the Facility Agent and each other Lender, and take such action and/or refrain from taking such action as may be reasonably necessary, to ensure that the BpiFAE Insurance Policy and each Interest Stabilisation Agreement continues in full force and effect and shall indemnify and hold harmless each other Lender in the event that the BpiFAE Insurance Policy or such Interest Stabilisation Agreement (as the case may be) does not continue in full force and effect due to its gross negligence or willful default or due to a voluntary change in status which results in it no longer being eligible for CIRR interest stabilisation.
d)The ECA Agent shall, in conjunction with the Facility Agent:
i.make written requests to BpiFAE seeking a reimbursement of the BpiFAE Premium in the circumstances described in Section 11.13.1(c) promptly after the relevant cancellation or prepayment and (subject to any confidentiality undertakings given to BpiFAE by the ECA Agent pursuant to the terms of the BpiFAE Insurance Policy) provide a copy of the request to the Borrower;
ii.use its reasonable endeavours to seek any reimbursement of the BpiFAE Premium to which the ECA Agent is entitled;
iii.pay to the Borrower (in the same currency as the refund received from BpiFAE) the full amount of any reimbursement of the BpiFAE Premium that the ECA Agent receives from BpiFAE within two (2) Business Days of receipt with same day value; and
iv.relay the good faith concerns of the Borrower to BpiFAE regarding the amount of any reimbursement to which the ECA Agent is entitled, it being agreed that the ECA Agent’s obligation shall be no greater than simply to pass on to BpiFAE the Borrower’s concerns.
SECTION 11.14. Law and Jurisdiction
SECTION 11.14.1. Governing Law. This Agreement and any non- contractual obligations arising out of or in respect of this Agreement shall in all respects be governed by and interpreted in accordance with English Law.
SECTION 11.14.2. Jurisdiction. For the exclusive benefit of the Facility Agent and the Lenders, the parties to this Agreement irrevocably agree that the courts of England are to have jurisdiction to settle any disputes which may arise out of or in connection with this Agreement and that any proceedings may be brought in those courts. The Borrower irrevocably waives any objection which it may now or in the future have to the laying of the venue of any proceedings in any court referred to in this Section, and any claim that those proceedings have been brought in an inconvenient or inappropriate forum.
SECTION 11.14.3. Alternative Jurisdiction. Nothing contained in this Section shall limit the right of the Facility Agent or the Lenders to commence any proceedings against the Borrower in any other court of competent jurisdiction nor shall the commencement of any proceedings against the Borrower in one or more jurisdictions preclude the commencement of any proceedings in any other jurisdiction, whether concurrently or not.
SECTION 11.14.4. Service of Process. Without prejudice to the right of the Facility Agent or the Lenders to use any other method of service permitted by law, the Borrower irrevocably agrees that any writ, notice, judgment or other legal process shall be sufficiently served on it if addressed to it and left at or sent by post to RCL Cruises Ltd., presently at Building 3, The Heights – Brooklands, Weybridge, Surrey, KT13 ONY, Attention: General Counsel, and in that event shall be conclusively deemed to have been served at the time of leaving or, if posted, at 9:00 am on the third Business Day after posting by prepaid first class registered post.
SECTION 11.15. Confidentiality. Each of the Facility Agent and the Lenders agrees to maintain and to cause its Affiliates to maintain the confidentiality of all information provided to it by the Borrower or any Subsidiary of the Borrower, or by the Facility Agent on the Borrower’s or such Subsidiary’s behalf, under this Agreement, and neither it nor any of its Affiliates shall use any such information other than in connection with or in enforcement of this Agreement or in connection with other business now or hereafter existing or contemplated with the Borrower or any Subsidiary, except to the extent such information (i) was or becomes generally available to the public other than as a result of disclosure by it or its Affiliates or their respective directors, officers, employees and agents, or (ii) was or becomes available on a non-confidential basis from a source other than the Borrower or any of its Subsidiaries so long as such source is not, to its knowledge, prohibited from disclosing such information by a legal, contractual or fiduciary obligation to the Borrower or any of its Affiliates; provided, however, that it may disclose such information (A) at the request or pursuant to any requirement of any self-regulatory body, governmental body, agency or official to which the Facility Agent, any Lender or any of their respective Affiliates is subject or in connection with an examination of the Facility Agent, such Lender or any of their respective Affiliates by any such authority or body, including without limitation the Republic of France and any French Authority; (B) pursuant to subpoena or other court process; (C) when required to do so in accordance with the provisions of any applicable requirement of law; (D) to the extent reasonably required in connection with any litigation or proceeding to which the Facility Agent, any Lender or their respective Affiliates may be party; (E) to the extent reasonably required in connection with the exercise of any remedy hereunder; (F) to the Facility Agent or such Lender’s independent auditors, counsel, and any other professional advisors of the Facility Agent or such Lender who are advised of the confidentiality of such information; (G) to any participant or assignee, provided that such Person agrees to keep such information confidential to the same extent required of the Facility Agent and the Lenders hereunder; (H) as to the Facility Agent, any Lender or their respective Affiliates, as expressly permitted under the terms of any other document or agreement regarding confidentiality to which the Borrower or any Subsidiary is party with the Facility Agent, such Lender or such Affiliate; (I) to its Affiliates and its Affiliates’ directors, officers, employees, professional advisors and agents, provided that each such Affiliate, director, officer, employee, professional advisor or agent shall keep such information confidential to the same extent required of the Facility Agent and the Lenders hereunder; (J) to any other party to the Agreement and (K) to the French Authorities and any Person to whom information is required to be disclosed by the French Authorities. Each of the Facility Agent and the Lenders shall be responsible for any breach of this Section 11.15 by any of its Affiliates or any of its or its Affiliates’ directors, officers, employees, professional advisors and agents.
SECTION 11.16. French Authority Requirements. The Borrower acknowledges that:
a.the Republic of France and any French Authority or any authorised representatives specified by these bodies shall be authorised at any time to inspect and make or demand copies of the records, accounts, documents and other deeds of any or all of the Lenders relating to this Agreement;
b.in the course of its activity as the Facility Agent, the Facility Agent may:
i.provide the Republic of France and any French Authority with information concerning the transactions to be handled by it under this Agreement; and
ii.disclose information concerning the subsidized transaction contemplated by this Agreement in the context of internationally agreed consultation/notification proceedings and statutory specifications, including information received from the Lenders relating to this Agreement.
SECTION 11.17. Waiver of immunity. To the extent that the Borrower has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its assets, the Borrower hereby irrevocably waives such immunity in respect of its obligations under this Agreement and the other Loan Documents.
SECTION 11.18. Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of a Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
a)the application of any Write-Down and Conversion Powers by a Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and
b)the effects of any Bail-in Action on any such liability, including, if applicable:
(i)a reduction in full or in part or cancellation of any such liability;
(ii)a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or
(iii)the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any Resolution Authority.
IN WITNESS WHEREOF, the parties hereto have caused this Hull No. L34 Credit Agreement to be executed by their respective officers thereunto duly authorized as of the day and year first above written.
ROYAL CARIBBEAN CRUISES LTD.
By___________________
Name:
Title:
Address: 1050 Caribbean Way
Miami, Florida 33132
Facsimile No.: (305) 539-0562
Email: agibson@rccl.com
bstein@rccl.com
Attention: Vice President, Treasurer With a copy to: General Counsel
Citibank N.A., London Branch as Global Coordinator
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By
Name:
Title:
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Citigroup Centre Canada Square London E14 5LB United Kingdom
Attention: Wei-Fong Chan
Kara Catt Romina Coates Antoine Paycha
Fax No: +44 20 7986 4881
Tel No: +44 20 7986 3036 /
+44 20 7508 0344
+44 20 7986 4824
+44 20 7500 0907 /
E-mail: weifong.chan@citi.com kara.catt@citi.com romina.coates@citi.com antoine.paycha@citi.com
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Banco Santander, S.A., Paris Branch as Lender
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Commitment
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9.7505744042% of the
Maximum Loan Amount
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By Name:
Title:
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Lending Office:
374 rue Saint Honoré 75001 Paris
France
Operational address:
Ciudad Financiera Avenida de Cantabria s/n Edificio Encinar 2a planta 28600 Boadilla del Monte Spain
Attention: Elise Regnault
Julián Arroyo Angela Rabanal Ecaterina Mucuta Vanessa Berrio Ana Sanz Gómez
Fax No: +34 91 257 1682
Tel No: +34 912893722 /
+1 212-297-2919
+1 212-297-2942
+33 1 53 53 70 46
+34 91 289 10 28
+34 91 289 17 90
E-mail: elise.regnault@gruposantander.com Julian.Arroyo@santander.us arabanal@santander.us
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Ecaterina.mucuta@gruposantander.com vaberrio@gruposantander.com anasanz@gruposantander.com MiddleOfficeParis@gruposantander.com
BNP PARIBAS as Lender
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Commitment
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3.9306453494% of the
Maximum Loan Amount
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By Name:
Title:
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BNP PARIBAS
Front Office to keep copied to all matters. BNPP SA
37 RUE DU MARCHE SAINT HONORE
75001 PARIS ACI : CHC03B1
Alexandre de VATHAIRE / Mauricio GONZALEZ alexandre.devathaire@bnpparibas.com mauricio.gonzalez@us.bnpparibas.com
Tel : 00 331 42 98 00 29/00 1212 841 38 88
Middle Office: For Operational / Servicing matters KHALID BOUITIDA / THIERRY ANEZO MILLENAIRE 4
35, RUE DE LA GARE
75019 PARIS ACI : CVA05A1
khalid.k.bouitida@bnpparibas.com thierry.anezo@bnpparibas.com
Tel : 00 331 42 98 58 69 / 00 331 43 16 81 57
Back Office : For Standard Settlement Instruction authentication/call-back
STEVE LOUISOR / VALERIE DUMOULIN MILLENAIRE 4
35, RUE DE LA GARE
75019 PARIS ACI : CVA03A1
paris.cib.boci.ca.3@bnpparibas.com valerie.dumoulin@bnpparibas.com steve.louisor@bnpparibas.com
Tel : 00 331 55 77 91 86 / 00 331 40 14 46 59
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HSBC FRANCE as Lender
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Commitment
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7.2499999337% of the
Maximum Loan Amount
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By
Name:
Title::
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HSBC France – Global Banking Agency Operations (GBAO) Transaction Manager Unit
103 avenue des Champs Elysées 75008 Paris
France
Attention:
Florencia Thomas Alexandra Penda
Fax No: +33 1 40 70 28 80
Tel No: +33 1 40 70 73 81 /
+33 1 41 02 67 50
Email: florencia.thomas@hsbc.fr alexandra.penda@hsbc.fr
Copy to:
HSBC France
103 avenue des Champs Elysées 75008 Paris
France
Attention: Julie Bellais
Celine Karsenty
Fax No: +33 1 40 70 78 93
Tel No: +33 1 40 70 28 59 /
+ 33 1 40 70 22 97
Email: julie.bellais@hsbc.fr celine.karesenty@hsbc.fr
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Société Générale as Lender
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Commitment
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9.9328352929% of the
Maximum Loan Amount
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By
Name:
Title:
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Société Générale Facility Office 29 Boulevard Haussmann
75009 Paris France
For operational/servicing matters:
Bouchra BOUMEZOUED / Tatiana BYCHKOVA Société Générale 189, rue d’Aubervilliers 75886
PARIS CEDEX 18 OPER/FIN/CAF/DMT6
Phone: +33 1 57 29 13 12 / +33 1 58 98 43 05
Email: bouchra.boumezoued@sgcib.com tatiana.bychkova@sgcib.com
par-oper-caf-dmt6@sgcib.com For credit matters:
Francois Rolland / Tingting Yu / Muriel Baumann Société Générale 189, rue d’Aubervilliers 75886
PARIS CEDEX 18 OPER/FIN/SMO/EXT
Phone: +33 1 58 98 17 78 / +33 1 58 98 49 18 /
+33 1 58 98 22 76
Email: francois.rolland@sgcib.com tingting.yu@sgcib.com muriel.baumann@sgcib.com
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Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch as ECA Agent and a Lender
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Commitment
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2.7360454163% of the
Maximum Loan Amount
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By
Name:
Title:
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1/3/5 rue Paul Cézanne, 75008 Paris, France
Attention: Cedric Le Duigou
Guillaume Branco Herve Billi
Claire Lucien Helene Ly
Fax No: +33 1 44 90 48 01
Tel No:
Cedric Le Duigou: +33 1 44 90 48 83
Guillaume Branco: +33 1 44 90 48 71
Herve Billi: +33 1 44 90 48 48
Claire Lucien: +33 1 44 90 48 49
Helene Ly: +33 1 44 90 48 76
E-mail : cedric_leduigou@fr.smbcgroup.com guillaume_branco@fr.smbcgroup.com herve_billi@fr.smbcgroup.com claire_lucien@fr.smbcgroup.com helene_ly@fr.smbcgroup.com
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SFIL as Lender
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Commitment
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66.3998996035%
the Maximum Amount
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of Loan
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By
Name:
Title:
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1-3, rue de Passeur de Boulogne – CS
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80054
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92861 Issy-les-Moulineaux Cedex 9
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France
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Contact Person
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Loan Administration Department:
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Direction du Crédit Export:
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Pierre-Marie Debreuille / Anne Crépin
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Direction des Opérations:
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Dominique Brossard / Patrick Sick
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Telephone:
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Pierre-Marie Debreuille
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+33 1 73 28 87 64
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Anne Crépin +33 1 73 28 88 59
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Dominique Brossard +33 1 73 28 91 93
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Patrick Sick +33 1 73 28 87 66
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Email:
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pierre-marie.debreuille@sfil.fr
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anne.crepin@sfil.fr
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dominique.brossard@sfil.fr
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patrick.sick@sfil.fr
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refinancements-export@sfil.fr
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creditexport_ops@sfil.fr
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Fax: + 33 1 73 28 85 04
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Citibank Europe plc, UK Branch as Facility Agent
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By Name:
Title:
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5th Floor Citigroup Centre Mail drop CGC2 05-65
25 Canada Square Canary Wharf London E14 5LB
U.K.
Fax no.: +44 20 7492 3980
Attention: EMEA Loans Agency
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EXECUTION PAGE – NOVATION AGREEMENT
Existing Borrower
SIGNED by )
for and on behalf of )
HOEDISCUS FINANCE LIMITED ) …………………………….
) Attorney-in-Fact
New Borrower
SIGNED by )
for and on behalf of )
ROYAL CARIBBEAN CRUISES LTD. ) …………………………….
) Authorised Officer
Facility Agent
SIGNED by )
for and on behalf of )
CITIBANK EUROPE PLC, UK BRANCH ) …………………………….
) Attorney in-fact
Security Trustee
SIGNED by )
for and on behalf of )
CITICORP TRUSTEE COMPANY LIMITED ) …………………………….
) Attorney in-fact
Global Coordinator
SIGNED by )
for and on behalf of )
CITIBANK N.A., LONDON BRANCH ) ……………………………
) Attorney in-fact
The ECA Agent
SIGNED by )
for and on behalf of )
SUMITOMO MITSUI BANKING CORPORATION)
EUROPE LIMITED, PARIS BRANCH ) ……………………………
) Attorney in-fact
French Coordinating Bank
SIGNED by )
for and on behalf of )
HSBC FRANCE ) ……………………………
) Attorney in-fact
The Original Lenders
SIGNED by )
for and on behalf of )
BANCO SANTANDER, S.A. ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
BNP PARIBAS ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
HSBC FRANCE ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
SOCIÉTÉ GÉNÉRALE ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
SUMITOMO MITSUI BANKING CORPORATION EUROPE )
LIMITED, PARIS BRANCH ) ……………………………
) Attorney in-fact
The Mandated Lead Arrangers
SIGNED by )
for and on behalf of )
CITIBANK N.A., LONDON BRANCH ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
BANCO SANTANDER, S.A. ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
BNP PARIBAS ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
HSBC FRANCE ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
SOCIÉTÉ GÉNÉRALE ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
SUMITOMO MITSUI BANKING CORPORATION EUROPE )
LIMITED, PARIS BRANCH ) ……………………………
) Attorney in-fact
Schedule 6
Form of Amended and Restated Agency and Trust Deed
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Private & Confidential
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Dated 24 July 2017
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(as amended and restated by a First Supplemental Agreement dated March 2020)
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CITIBANK EUROPE PLC, UK BRANCH (1)
as Facility Agent
CITICORP TRUSTEE COMPANY LIMITED (2)
as Security Trustee
CITIBANK N.A., LONDON BRANCH (3)
as Global Coordinator
SUMITOMO MITSUI BANKING CORPORATION (4) EUROPE LIMITED, PARIS BRANCH
as ECA Agent
CITIBANK N.A., LONDON BRANCH, BANCO SANTANDER, S.A., PARIS BRANCH, BNP PARIBAS, HSBC FRANCE, SOCIÉTÉ GÉNÉRALE and SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH
as Mandated Lead Arrangers (5)
THE BANKS AND FINANCIAL INSTITUTIONS LISTED IN SCHEDULE 1 (6)
as Lendrs and
ROYAL CARIBBEAN CRUISES LTD. (7)
as Borrower
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AGENCY AND TRUST DEED
Hull L34
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Contents
Clause Page
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Introduction, definitions and interpretation 1
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Security Trustee 4
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Declaration of trust: supplementary provisions 12
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Application of proceeds 14
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Agents’ and Finance Parties' indemnities 16
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Custody of deeds; illegality 16
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Assignments by the Lenders 17
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Effect of Agreement 17
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Miscellaneous 17
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Agreement to provide power of attorney 17
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Notices and other matters 18
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Contracts (Rights of Third Parties) Act 1999 18
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Governing law and jurisdiction 18
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Schedule 1 The Lenders 19
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THIS AGREEMENT is dated 24 July 2017 (as amended and restated by a first supplemental agreement dated March 2020) and made BETWEEN:
(1)CITIBANK EUROPE PLC, UK BRANCH, as Facility Agent;
(2)CITICORP TRUSTEE COMPANY LIMITED, as Security Trustee;
(3)CITIBANK N.A., LONDON BRANCH as Global Coordinator;
(4)SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH as ECA Agent;
(5)CITIBANK N.A., LONDON BRANCH, BANCO SANTANDER, S.A., PARIS BRANCH, BNP PARIBAS, HSBC FRANCE, SOCIÉTÉ GÉNÉRALE and SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH as Mandated Lead Arrangers;
(6)THE BANKS AND FINANCIAL INSTITUTIONS LISTED IN SCHEDULE 1, as Lenders; and
(7)ROYAL CARIBBEAN CRUISES LTD., as Borrower.
1.Introduction, definitions and interpretation
Introduction
a.The parties are entering into this Agreement in connection with:
i.a facility agreement dated 24 July 2017 (the Original Facility Agreement) relating to a loan of up to an aggregate amount of €603,426,960 and made between (1) Hoediscus Finance Limited as Borrower, (2) Citibank Europe plc, UK Branch as Facility Agent, (3) Citicorp Trustee Company Limited as Security Trustee, (4) Citibank, N.A., London Branch as Global Coordinator, (5) HSBC France as French Coordinating Bank, (6) Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch as ECA Agent, (7) the Mandated Lead Arrangers and (8) the banks and financial institutions listed in Schedule 1 as Lenders, as novated and amended and restated by the novation agreement dated 24 July 2017 (as supplemented and amended, the Novation Agreement (the Original Facility Agreement as novated and amended and restated by the Novation Agreement, the Facility Agreement)) between the parties to the Original Facility Agreement and the Borrower; and
ii.the Escrow Account Security,
in order, inter alia, to provide for the appointment of Citicorp Trustee Company Limited as Security Trustee.
Definitions
b.Words and expressions defined in the Facility Agreement (including words and expressions defined by reference to another document) shall, unless the context otherwise requires or unless otherwise defined herein, have the same meanings when used herein. In addition, in this Agreement:
Affiliate means in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.
Agents means each of the Facility Agent, the ECA Agent and the Security Trustee and Agent
shall mean any of them.
Charged Assets means any property, assets and/or rights over which security is granted and/or created under the Escrow Account Security.
ECA Agent means Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch acting as export credit agent pursuant to this Agreement for itself and any other banks or financial institutions who are or may become Lenders in the future and includes its successors in title.
Enforcement Date means the first date on which active steps are taken to enforce and/or realise the security or other assurances created or conferred by the Escrow Account Security.
Escrow Account Security shall have the meaning given to it in the Facility Agreement and shall, when used herein, be deemed to include any Further Assurance Deed.
Expenses means the aggregate at any relevant time (to the extent that the same has not been received or recovered by the Security Trustee) of:
i.all duly evidenced expenses (including, in particular, legal, insurance adviser, printing, out of pocket expenses and late payment interest) properly incurred and any cost, loss (excluding loss of profit) or liability sustained or incurred by the Security Trustee or any Receiver in connection with the exercise of the powers referred to in or granted by the Loan Documents or otherwise payable by the Borrower to the Security Trustee in accordance with any provision of any of the Loan Documents; and
ii.interest on all such unpaid expenses, costs, losses and liabilities from the date falling ten Business Days after the date on which a demand for the same was made by the Security Trustee until the date of receipt or recovery thereof (whether before or after judgment) at the Floating Rate plus two per cent per annum.
Facility Agent means Citibank Europe plc, UK Branch acting as agent pursuant to this Agreement for itself and any other banks or financial institutions who are or may become Lenders in the future and includes its successors in title.
Finance Parties means the Lenders, the Facility Agent, the ECA Agent, the Global Coordinator, and the Security Trustee.
Further Assurance Deed means any document executed or to be executed pursuant to a further assurance covenant or obligation contained in the Escrow Account Security.
Holding Company means, in relation to a person, any other person in respect of which it is a Subsidiary.
Receiver means and includes any receiver and/or manager of any of the Charged Assets appointed under the Escrow Account Security (and whether acting as agent for the Borrower or otherwise).
Release Date means the date, occurring promptly following the NYC Cut Off Date, on which the Facility Agent notifies the parties that the Escrow Account Security can be released following the withdrawal of all amounts standing to the credit of the Escrow Account in accordance with the provisions of Section 2.3f) of the Facility Agreement.
Secured Obligations means the obligations of the Borrower to the Finance Parties under the Facility Agreement and each of the other Loan Documents.
Security Trustee means Citicorp Trustee Company Limited acting as security trustee pursuant to this Agreement for itself and any banks or financial institutions who are or may become Lenders and includes its successors in title.
Trust Property means (a) the security, powers, rights, titles, benefits and interests (both present and future) constituted by and conferred on the Security Trustee under or pursuant to this Agreement and the Escrow Account Security and any notices or acknowledgements or undertakings given in connection with the Escrow Account Security (including, without limitation, the benefit of all covenants, undertakings, representations, warranties and obligations given, made or undertaken to the Security Trustee in the Escrow Account Security), (b) all moneys,
property and other assets payable, paid or transferred to or vested in the Security Trustee or any Receiver or receivable, received or recovered by the Security Trustee or any Receiver pursuant to, or in connection with, this Agreement and the Escrow Account Security and any notices or acknowledgements or undertakings given by the Borrower in connection with the Escrow Account Security from the Borrower or any other person and (c) all money, investments, property and other assets at any time representing or deriving from any of the foregoing, including all interest, income and other sums at any time received or receivable by the Security Trustee or any Receiver in respect of the same (or any part thereof).
Headings
c.Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Agreement.
Construction of certain terms
d.Clause 1.4 (Construction) of the Original Facility Agreement applies to this Agreement as if set out herein.
Capacity of parties
e.References in this Agreement to the Facility Agent, the Security Trustee, the ECA Agent, any Mandated Lead Arranger or any Lender and references to obligations or liabilities of any one or more such persons shall be strictly construed as references to any such person or (as the case may be) obligations or liabilities of any such person solely in its capacity as such.
Effectiveness of Required Lender decision
f.Where this Agreement, the Escrow Account Security or any Further Assurance Deed provides for any matter to be determined by reference to the opinion of the Required Lenders or to be subject to the consent or request of the Required Lenders or for any action to be taken on the instructions of the Required Lenders, such opinion, consent, request or instructions shall (as between the Lenders) only be regarded as having been validly given or issued by the Required Lenders if (a) given by the Facility Agent on their behalf and (b) all the Lenders shall have received prior notice of the matter on which such opinion, consent, request or instructions are required to be obtained and the relevant majority of Lenders shall have given or issued such opinion, consent, request or instructions but so that the Borrower and the Security Trustee shall be entitled (and bound) to assume that such notice shall have been duly received by each Lender and that the relevant majority shall have been obtained to constitute Required Lenders whether or not this is the case.
Fees, Indemnity and Costs of Security Trustee
g.It is agreed that the provisions of clause 4.6 (Taxes) of the Facility Agreement, clause 11.4 (Indemnification) of the Facility Agreement (subject to clause 1.8) and clause 5.4 (Value Added tax) of the Original Facility Agreement shall apply to the benefit of the Security Trustee, and the Borrower agrees to be bound by such provisions, as if the same were set out in full herein and on the basis that reference to Loan Documents therein or “amounts due thereunder” included this Agreement, the Escrow Account Security and any Further Assurance Deed or any amounts due under the foregoing. This clause 1.7 and clause 1.8 shall survive the termination of this Agreement, the Escrow Account Security and any Further Assurance Deed.
h.The following words in clause 11.4 (Indemnification) of the Facility Agreement are deemed deleted for the purposes of its incorporation herein under clause 1.7 and shall not apply to the Security Trustee:
i.“or the material breach by such Indemnified Party of its obligations under this Agreement, any other Loan Document, the BpiFAE Insurance Policy or Interest Stabilisation Agreement and which breach is not attributable to the Borrower’s own breach of the terms of this Agreement or any other Loan Document”;
ii.“Each Indemnified Party shall (a) furnish the Borrower with prompt notice of any action, suit or other claim covered by this Section 11.4, (b) not agree to any settlement or compromise of any such action, suit or claim without the Borrower’s prior consent, (c) shall cooperate fully in the Borrower’s defense of any such action, suit or other claim (provided that the Borrower shall reimburse such indemnified party for its reasonable out- of-pocket expenses incurred pursuant hereto) and (d) at the Borrower’s request, permit the Borrower to assume control of the defense of any such claim, other than regulatory, supervisory or similar investigations, provided that (i) the Borrower acknowledges in writing its obligations to indemnify the Indemnified Party in accordance with the terms herein in connection with such claims, (ii) the Borrower shall keep the Indemnified Party fully informed with respect to the conduct of the defense of such claim, (iii) the Borrower shall consult in good faith with the Indemnified Party (from time to time and before taking any material decision) about the conduct of the defense of such claim, (iv) the Borrower shall conduct the defense of such claim properly and diligently taking into account its own interests and those of the Indemnified Party, (v) the Borrower shall employ counsel reasonably acceptable to the Indemnified Party and at the Borrower’s expense, and (vi) the Borrower shall not enter into a settlement with respect to such claim unless either (A) such settlement involves only the payment of a monetary sum, does not include any performance by or an admission of liability or responsibility on the part of the Indemnified Party, and contains a provision unconditionally releasing the Indemnified Party and each other indemnified party from, and holding all such persons harmless, against, all liability in respect of claims by any releasing party or (B) the Indemnified Party provides written consent to such settlement (such consent not to be unreasonably withheld or delayed). Notwithstanding the Borrower’s election to assume the defense of such action, the Indemnified Party shall have the right to employ separate counsel and to participate in the defense of such action and the Borrower shall bear the fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the Borrower to represent the Indemnified Party would present such counsel with an actual or potential conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the Borrower and the Indemnified Party and the Indemnified Party shall have concluded that there may be legal defenses available to it which are different from or additional to those available to the Borrower and determined that it is necessary to employ separate counsel in order to pursue such defenses (in which case the Borrower shall not have the right to assume the defense of such action on the Indemnified Party’s behalf), (iii) the Borrower shall not have employed counsel reasonably acceptable to the Indemnified Party to represent the Indemnified Party within a reasonable time after notice of the institution of such action, or (iv) the Borrower authorizes the Indemnified Party to employ separate counsel at the Borrower’s expense.”.
2.Security Trustee
Appointment of the Security Trustee
a.Each of the Finance Parties appoints the Security Trustee as agent and trustee of the Trust Property on the terms set out in this Agreement. By virtue of such appointment, each of the Finance Parties authorises the Security Trustee (whether or not by or through employees or agents) to take such action on such Finance Party's behalf and to exercise such rights, remedies, powers and discretions as are specifically delegated to the Security Trustee by this Agreement and/or the Escrow Account Security and any Further Assurance Deed, together with such powers and discretions as are reasonably incidental thereto.
b.It is acknowledged that the appointment of the Facility Agent and the ECA Agent for the purpose of the Facility Agreement is regulated under Article X (The Facility Agent and the ECA Agent) of the Facility Agreement.
Duties
c.The Security Trustee shall not have any duties, obligations or liabilities to the Lenders beyond those expressly stated in this Agreement and/or any of the Loan Documents to which it may be or become a party.
d.The Security Trustee’s duties under this Agreement and the other Loan Documents are solely mechanical and administrative in nature.
Instructions to the Agents
e.Subject to clauses 2.6, 2.7 and 2.12 below, unless a contrary indication appears, the Security Trustee shall (a) exercise any right, power, authority or discretion vested in it as an agent or otherwise act in accordance with the written instructions given to it by the Required Lenders (or, if so instructed by the Required Lenders refrain from exercising any right, power, authority or discretion vested in it as Security Trustee), (b) not be liable to any person for any act or omission if it acts (or refrains from taking any action) in good faith in accordance with the instructions of the Required Lenders and (c) have no obligation to act and may refrain from acting until so instructed (without liability to any person). Any reference to the instructions of the Required Lenders to the Security Trustee herein or in the Escrow Account Security shall be construed as such instructions of the Facility Agent on behalf of such Required Lenders.
f.The Security Trustee shall be entitled to request instructions, or clarification of any direction, from the Facility Agent as to whether, and in what manner, it should exercise or refrain from exercising any rights, powers, authorities and discretions and the Security Trustee may refrain from acting unless and until those instructions or clarification are received by it (without liability to any person).
g.In the absence of instructions, the Security Trustee may act (or refrain from acting) as it considers to be in the best interest of the Finance Parties.
h.Clause 2.5 above shall not apply in respect of any provision which protects the Security Trustee’s own position in its personal capacity as opposed to its role as Security Trustee for the Finance Parties.
i.The Security Trustee may refrain from acting in accordance with the instructions of the Lenders or any other person until it has received any indemnification and/or security and/or prefunding that it may in its discretion require (which may be greater in extent than that contained in the Loan Documents and which may include payment in advance) for any cost, loss or liability which it may incur in complying with those instructions.
Execution of Escrow Account Security
j.Each Lender irrevocably authorises the Security Trustee to execute the Escrow Account Security in its capacity as trustee of the Trust Property thereby created.
Authority of Security Trustee
k.Subject to clause 2.12 and, where applicable, 2.14(c), the Security Trustee may, with the consent of the Required Lenders (or the Facility Agent on their behalf) or if and to the extent expressly authorised by the other provisions of this Agreement or the Escrow Account Security, concur with the Borrower to amend, modify or otherwise vary or waive breaches of, or defaults under, or otherwise excuse performance of, any provision of any of the Escrow Account Security. Any such action so authorised and effected by the Security Trustee shall be promptly notified to the other Agents and the Lenders and shall be binding on all the Lenders and, if necessary or appropriate, each Lender agrees to execute or re-execute any document, instrument or agreement required to give full effect to any such action. For the purposes of this clause 2.11 it is expressly agreed and acknowledged that the execution of a Further Assurance Deed shall not constitute an amendment or modification to, or variation of, the Escrow Account Security, and each Lender where applicable further agrees to execute any Further Assurance Deed promptly upon the request of the Security Trustee.
l.Except with the prior written consent of all the Lenders (or the Facility Agent on their behalf), the Security Trustee shall not have authority on behalf of the Lenders to agree with the Borrower any amendment to the Escrow Account Security which would:
1.change any provision of the Escrow Account Security which expressly or impliedly requires the approval or consent of all the Lenders such that the relevant approval or consent may be given otherwise than with the sanction of all the Lenders; or
2.change this clause 2.12 or clause 4.2; or
3.(save to the extent expressly required under this Agreement or any of the Loan Documents) release the Borrower from the security constituted by the Escrow Account Security; or
4.(save to the extent expressly required under this Agreement or any of the Loan Documents) release any of the Charged Assets from the security constituted by the Escrow Account Security; or
5.(save to the extent expressly required under this Agreement or any of the Loan Documents) release the Borrower from any of its indemnity or other assurance obligations under any of the Loan Documents.
m.Unless otherwise stated in any provision of the Loan Documents, any matter under the Escrow Account Security requiring the decision, agreement, determination, consent or approval of the Security Trustee, shall be construed as requiring the decision, agreement, determination, consent or approval of the Required Lenders.
Liability of Security Trustee
n.The Security Trustee shall not:
(a)be obliged:
i.to request any certificate or opinion under any provision of the Escrow Account Security; or
ii.to make any enquiry as to any breach or default by the Borrower in the performance or observance of any of the provisions of any of this Agreement or the Escrow Account Security or as to the existence of a Default or as to whether any other event or circumstance has occurred as a result of which the security constituted by the Escrow Account Security shall have or may become enforceable unless it has actual knowledge thereof or has been notified in writing thereof by a Lender, in which case it shall promptly notify the Lenders of the relevant event or circumstance; or
(b)be obliged to carry out any "know your customer" or other checks in relation to any person on behalf of any Lender and each Lender confirms to the Security Trustee that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Security Trustee; or
(c)be liable to any Finance Party for any action taken or omitted under or in connection with this Agreement and the Escrow Account Security unless caused by its gross negligence or wilful misconduct for any delay (or any related consequences) in crediting an account with an amount required under this Agreement to be paid by the Security Trustee if it has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by it for that purpose.
Knowledge of Agents
o.For the purposes of this clause 2, the Security Trustee shall not be treated as having actual knowledge of any matter of which another department of the person for the time being acting as it may become aware in the context of corporate finance or advisory activities from time to time undertaken by the Security Trustee for the Borrower or any of its Affiliates or Subsidiaries.
Communications by the Security Trustee
p.The Security Trustee shall promptly notify the other Agents and each Lender of the contents of each notice, certificate, information or other document received by it from the Borrower under or pursuant to any provisions of any of the Escrow Account Security or this Agreement.
q.Except where the Escrow Account Security or this Agreement specifically provides otherwise, the Security Trustee is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another party.
r.If the Security Trustee receives notice from a party referring to this Agreement, describing a Default or an Event of Default and stating that the circumstance described is a Default or an Event of Default it shall promptly notify the other Finance Parties.
No independent action by Finance Parties
s.None of the Finance Parties shall have any independent power to enforce the Escrow Account Security, or to exercise any rights, discretions or powers or to grant any consents or releases under or pursuant to the Escrow Account Security or otherwise have direct recourse to the security or other assurances constituted by the Escrow Account Security except through the Security Trustee.
Reliance by Facility Agent
t.In considering at any time (and from time to time) the persons entitled to the benefit of any of the Secured Obligations:
1.the Facility Agent may deem and treat (i) each Lender as the person entitled to the benefit of the Loan of such Lender for all purposes of this Agreement unless and until a Lender Assignment Agreement relating to, such Lender's contribution to the Loan or any part thereof shall have been filed with the Facility Agent and (ii) the office set opposite the name of each Lender in the execution blocks to the Facility Agreement as such Lender's lending office unless and until a written notice of change of lending office shall have been received by the Facility Agent and the Facility Agent may act upon any such notice unless and until the same is superseded by a further such notice; and
2.the Facility Agent may to the extent that any such information is not inconsistent with notices referred to in clause 2.20(a) above, rely and act in reliance upon information provided to it pursuant to such clause so that it shall not have any liability or responsibility to any party as a consequence of placing reliance on and acting in reliance upon any such information unless it has actual knowledge that such information is inaccurate or incorrect.
Provision of information to Agents
u.Without prejudice to clause 2.20, the Lenders shall provide the Security Trustee with such written information as it may reasonably require for the purpose of carrying out its duties and obligations under this Agreement and/or the Escrow Account Security and, in particular, with such directions in writing as may reasonably be required so as to enable the Security Trustee to apply the proceeds of realisation of the Escrow Account Security as contemplated by clause 4.2. However no Lender shall be obliged pursuant to this clause 2.21 to disclose to the Security Trustee any information which it is obliged by law or contract to keep confidential.
Appraisal by Lenders
v.Each Finance Party acknowledges that it has not relied on any statement, opinion, forecast or other representation made by the Security Trustee to induce it to enter into this Agreement or the Facility Agreement.
Responsibility of Security Trustee
w.The Security Trustee shall not have any duty or responsibility, either initially or on a continuing basis, to any Finance Party:
3.to investigate or make any enquiry into the title of the Borrower to, or the existence, suitability or sufficiency of, the Charged Assets or any part thereof; or
4.on account of the failure of the Borrower to perform any of its obligations under any of the Loan Documents; or
5.for the financial condition of the Borrower; or
6.for the completeness or accuracy of any statements, representations or warranties in any of the Loan Documents or any document delivered under any of the Loan Documents unless expressly made by the Security Trustee; or
7.for the execution, effectiveness, adequacy, genuineness, validity, enforceability or admissibility in evidence of any of the Loan Documents or the Charged Assets or of any certificate, report or other document executed or delivered under any of the Loan Documents; or
8.for the failure to register or notify any of the Loan Documents or for otherwise perfecting or failing to perfect any of the security granted in its favour; or
9.for taking or omitting to take any other action under or in relation to any of the Loan Documents or any aspect of any of the Loan Documents; or
10.for the failure to take or require the Borrower to take any steps to render any of the Loan Documents effective as regards Charged Assets outside the jurisdiction in which they are incorporated or have their registered or principal office or to secure the creation of any ancillary charge under the laws of the jurisdiction concerned; or
11.otherwise in connection with the Facility Agreement or its negotiation or for acting in accordance with the instructions of the Lenders or the relevant group of Lenders or refraining from acting when instructed by the Lenders or the relevant group of Lenders, to refrain from acting when no instruction to act has been given to it by the Lenders or the relevant group of Lenders or where the instructions are unclear. The Security Trustee is entitled to seek directions as to the exercise of any of its powers from the Required Lenders or otherwise (as the case may be) the Lenders and to seek clarification of any instructions previously given; or
12.any loss to the Trust Property arising in consequence of the failure, depreciation or loss of any Charged Assets or any investments made or retained in good faith or by reason of any other matter or thing, including by virtue of the fact it may be held by a bank, or any damage to or any unauthorised dealing with the Charged Assets nor shall it have any responsibility or liability arising from the fact that the Charged Assets, or documents relating thereto, may be registered in its name or held by it or any other bank or agent selected by the Security Trustee.
x.The Security Trustee shall be entitled to rely on any communication, instrument or document believed by it to be genuine and correct and to have been signed or sent by the proper person.
y.No party to this Agreement (other than the Security Trustee) may take any proceedings against any officer, employee or agent of the Security Trustee in respect of any claim it might have against the Security Trustee or in respect of any act or omission of any kind by that officer, employee or agent in relation to this Agreement and any officer, employee or agent of the Security Trustee may rely on this clause.
No fiduciary duties
z.Nothing in any Loan Document constitutes the Security Trustee as a trustee or fiduciary of any other person other than the Finance Parties.
aa.The Security Trustee shall not be bound to account to any Finance Party for any sum or the profit element of any sum received by it for its own account.
Rights and discretions
ab.The Security Trustee may:
13.assume that:
iii.any instructions received by it from the Facility Agent on behalf of the Lenders or the Required Lenders or on behalf of any other Finance Party are duly given in accordance with the terms of the Facility Agreement; and
iv.unless it has received notice of revocation, that those instructions have not been revoked;
14.rely on a certificate from any person:
v.as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or
vi.to the effect that such person approves of any particular dealing, transaction, step, action or thing,
as sufficient evidence that that is the case and, in the case of paragraph (i) above, may assume the truth and accuracy of that certificate; and
15.assume (unless it has received notice to the contrary in its capacity as Security Trustee) that:
vii.no Default or Event of Default has occurred; and
viii.any right, power, authority or discretion vested in any party or any group of Finance Parties has not been exercised.
ac.The Security Trustee may engage and pay for the advice or services of any lawyers (who may be separate to counsel appointed by the Finance Parties), accountants, tax advisers, surveyors or other professional advisers or experts (whether such advice is obtained by the Security Trustee or by any other party and whether or not the advice contains a limit on liability by reference to monetary cap or otherwise) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying in good faith.
ad.Notwithstanding any provision of any Loan Document to the contrary, the Security Trustee is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it.
Other business
ae.The Security Trustee may, without any liability to account to the Lenders, accept deposits from, lend money to, and generally engage in any kind of banking or trust business with, the Borrower and any of its Affiliates or Subsidiaries or any of the Lenders as if it were not the Security Trustee.
Credit appraisal by the Finance Parties
af.Without affecting the responsibility of the Borrower for information supplied by it or on its behalf in connection with any Loan Document, each Finance Party confirms to each other Finance Party that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Loan Document including but not limited to:
16.the financial condition, status and nature of the Borrower;
17.the legality, validity, effectiveness, adequacy or enforceability of any Loan Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Loan Document;
18.whether any Finance Party has recourse, and the nature and extent of that recourse, against any party or any of its respective assets under or in connection with any Loan Document, the transactions contemplated by the Loan Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Loan Document or the Charged Assets;
19.the adequacy, accuracy and/or completeness of any information provided by the Facility Agent, any party or by any other person under or in connection with any Loan Document, the transactions contemplated by the Loan Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Loan Document; and
20.the right or title of any person in or to, or the value or sufficiency of, any part of the Charged Assets, the priority of the Escrow Account Security or the existence of any Lien affecting the Charged Assets.
ag.Without prejudice to the generality of any other provision of this Agreement or any other Loan Document, the entry into possession of the Charged Assets shall not render the Security Trustee or any Receiver liable to account as mortgagee in possession thereunder (or its equivalent in any other applicable jurisdiction) or take any action which would expose it to any liability in respect of which it has not been indemnified and/or secured and/or pre-funded to its satisfaction or to be liable for any loss on realisation or for any default or omission on realisation or for any default or omission for which a mortgagee in possession might be liable unless such loss, default or omission is caused by its own gross negligence or wilful misconduct.
ah.The Security Trustee shall have no responsibility whatsoever to the Borrower or any Finance Party as regards any deficiency which might arise because the Security Trustee is subject to any Tax in respect of all or any of the Charged Assets, the income therefrom or the proceeds thereof.
ai.The Security Trustee is not responsible for payment of any taxes or stamp duty (a) as a result of it holding security, (b) as a result of it enforcing any security held by it, or (c) in respect of any remuneration or other amounts payable to it for its own account.
aj.The Security Trustee is not responsible for making any deductions or withholding in respect of taxes or governmental charges in respect of any amounts paid by the Security Trustee from the proceeds of any enforcement of security.
Reimbursement of Agents’ expenses
ak.Without prejudice to clauses 1.7 and 5.1, each Lender shall reimburse the Security Trustee rateably in accordance with such Lender's Commitment (or if such Commitment is then zero, its Commitment immediately prior to such reduction), for the charges and expenses incurred by the Security Trustee in connection with the negotiation, preparation and execution of this Agreement and the Escrow Account Security or in contemplation of, or otherwise in connection with, the enforcement or attempted enforcement of, or the preservation or attempted
preservation of any rights under, or in carrying out its duties under, this Agreement and the Escrow Account Security or otherwise in connection with holding the Charged Assets and/or the Trust Property including (in each case) the reasonable fees and expenses of legal or other professional advisers. All such charges and expenses shall be paid together with value added tax or similar tax (if any) thereon.
Security Trustee’s indemnity
al.Without prejudice to clauses 1.7 and 5.1, each Lender shall indemnify the Security Trustee rateably in accordance with such Lender's Commitment against all liabilities, expenses, damages, costs, actions, demands and claims whatsoever suffered or incurred by the Security Trustee or any agent or other person appointed by the Security Trustee in connection with its appointment under this Agreement or in connection with the Loan Documents or the performance of its duties under this Agreement and/or the Escrow Account Security or any action taken or omitted by it under any of the Escrow Account Security or this Agreement, unless such liabilities, damages, costs or claims arise from the Security Trustee’s own gross negligence or wilful misconduct.
am.In no event shall the Security Trustee be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not it has been advised of the possibility of such loss or damages.
Retirement of Security Trustee
an.The Security Trustee:
21.may (without giving any reason and having given to the Borrower and the other Finance Parties not less than 30 Business Days’ notice of its intention to do so) retire;
22.shall, upon the request of the Required Lenders (after consultation with the Borrower), retire;
23.shall, upon the request of the Borrower in the event the Security Trustee is no longer a Lender or an Affiliate of a Lender, retire under this Agreement, the Facility Agreement and the other Loan Documents.
ao.No such retirement shall take effect unless there has been appointed by the Finance Parties as a successor security trustee:
24.(except where the Security Trustee has been required to retire by notice from the said Lenders) an Affiliate of the Security Trustee nominated by the Security Trustee or, failing such a nomination; or
25.a Lender or an Affiliate of a Lender nominated by the Required Lenders or, failing such a nomination; or
26.any reputable and experienced bank or financial institution nominated by the Security Trustee which appointment must be agreed to by the Lenders as contemplated above,
and such successor security trustee shall have duly accepted such appointment by delivering to the Facility Agent a written confirmation (in a form acceptable to the Facility Agent) of such acceptance agreeing to be bound by this Agreement in the capacity of Security Trustee as if it had been an original party to this Agreement.
ap.Upon any such successor as aforesaid being appointed, the retiring Security Trustee shall be discharged from any further obligation (except as otherwise provided in the Loan Documents) under this Agreement and each of the other Loan Documents and its successor and each of the other parties to this Agreement and any of the other Loan Documents shall have the same rights and obligations among themselves as they would have had if such successor had been a
party to this Agreement and any of the other Loan Documents in place of the retiring Security Trustee.
aq.Upon any successor to the Security Trustee being appointed the Trust Property will automatically vest in such successor without the need for any additional act by the Lenders or the Borrower, but without prejudice to clause 2.23(e).
ar.The retiring Security Trustee, each other Finance Party and the Borrower hereby undertake from time to time to execute, sign, perfect, do and (if required) register every such further assurance, document, act or thing as in the reasonable opinion of each of the successor security trustee and the Finance Parties may be necessary or desirable for the purpose of ensuring that the Trust Property is effectively vested in it so that it holds and enjoys the same rights, interests and powers in relation to the Trust Property as were held by the retiring Security Trustee.
as.The Lenders agree to appoint as successor security trustee the person nominated in accordance with clause 2.41 and to execute such documents as may be required to give effect to such appointment.
Consents and approvals
at.Each Lender agrees that it will respond reasonably promptly (and in any event within 15 Business Days) to any request for a consent, waiver, amendment of (or in relation to) any term of any Loan Document or any other vote of Lenders under the terms of this Agreement.
au.The Borrower shall be consulted as regards any proposed substitute security trustee prior to the appointment thereof and the Borrower’s consent to any proposed substitute shall be required.
3Declaration of trust: supplementary provisions
Declaration of trust
a.The Security Trustee hereby accepts its appointment under clause 2.1 as trustee of the Trust Property and irrevocably acknowledges and declares that it holds the same on trust for itself and the Finance Parties and that it shall deal with and apply the same in accordance with the provisions of this Agreement and the Escrow Account Security.
Duration of trusts
b.The trusts constituted or evidenced in or by this Agreement shall, save as provided by law, remain in full force and effect until receipt by the Security Trustee of confirmation in writing by the Facility Agent that either (a) there is no longer outstanding any Indebtedness (actual or contingent) which is secured by or under any of the Loan Documents or (b) the Release Date has occurred. At the time that the trusts constituted or evidenced by this Agreement are no longer in full force and effect, it is agreed that, save in respect of clauses 1.7, 1.8, 2 and 5, this Agreement shall have no further force and effect. Promptly following the NYC Cut Off Date the Facility Agent shall notify the Borrower of the Release Date.
Powers and discretions as trustee
c.In its capacity as trustee in relation to the Loan Documents and the Trust Property, the Security Trustee shall, without prejudice to any of the powers, discretions and immunities conferred upon trustees by law (and to the extent not inconsistent with the provisions of this Agreement or any of the Loan Documents), have all the same powers and discretions as a natural person acting as the beneficial owner of such property and/or as are conferred upon the Security Trustee by this Agreement and/or any Loan Document.
d.The rights, powers and discretions conferred upon the Security Trustee by this Agreement shall be supplemental to the Trustee Act 1925 and the Trustee Act 2000 and in addition to any which may be vested in the Security Trustee by general law or otherwise. Section 1 of the Trustee Act
2000 shall not apply to the duties of the Security Trustee in relation to the trusts constituted by this Agreement. Where there are any inconsistencies between the Trustee Act 1925 or the Trustee Act 2000 and the provisions of this Agreement, the provisions of this Agreement shall, to the extent allowed by law, prevail and, in the case of any inconsistency with the Trustee Act 2000, the provisions of this Agreement shall constitute a restriction or exclusion for the purposes of that Act.
Determination by the Security Trustee
e.In its capacity as trustee in relation to the Loan Documents and in relation to the Trust Property, the Security Trustee shall have full power to determine all questions and doubts arising in relation to the interpretation or application of any of the provisions of this Agreement or any of the Loan Documents as it affects the Security Trustee or the Trust Property and every such determination (whether made upon a question actually raised or implied in the acts or proceedings of the Security Trustee) shall, in the absence of manifest error, be conclusive and shall bind all the other parties to this Agreement.
Employment of agents
f.The Security Trustee may, instead of acting personally, employ, pay for and rely on the advice of any agent (whether being a lawyer, chartered accountant or any other suitably qualified person) to transact or concur in transacting any business and to do or concur in doing any acts required to be done by the Security Trustee (including the receipt and payment of money) or may, with the consent of the Borrower, delegate to any person on any terms (including the power to sub-delegate) the costs of which shall be borne by the Borrower and be capable of being recoverable by the Security Trustee pursuant to clause 1.7. Any such agent or delegate engaged in any profession or business shall be entitled to be paid all usual reasonable professional and other charges for business transacted and acts done by him or any partner or employee of his in connection with such trusts. The Security Trustee shall not be bound to supervise or, only as between the Security Trustee on the one hand and the Finance Parties on the other hand, nor be responsible for any loss incurred by reason of any act or omission of, any such agent or delegate if the Security Trustee shall have exercised reasonable care in the selection of such agent or delegate (which, without limitation, shall conclusively be deemed to be the case in respect of any agent approved in writing by the Required Lenders).
Non-recognition of trust and amendments
g.It is agreed between all parties to this Agreement that:
i.in relation to any jurisdiction the courts of which would not recognise or give effect to the trusts expressed to be constituted by this Agreement the relationship of the Finance Parties to the Security Trustee shall be construed simply as one of principal and agent but, to the fullest extent permissible under the laws of each and every such jurisdiction, this Agreement shall have full force and effect as between the parties; and
ii.any of the provisions of this clause 3 or of clauses 2 or 4 may be amended by agreement between the Security Trustee and the other Finance Parties without the consent of the Borrower and each such party other than the Security Trustee irrevocably authorises the Facility Agent in its name and on its behalf to execute all documents necessary to effect any such amendment.
Appointment of new or additional trustees
h.Without prejudice to clause 2.40, the statutory power to appoint new or additional trustees of the trusts constituted by this Agreement shall be vested in the Security Trustee. The appointment by the Security Trustee of any such new or additional trustees shall terminate on the appointment of a replacement security trustee in accordance with the terms of clause 2.41.
Appointment of separate and co-trustees
i.The Security Trustee shall have power, by notice in writing given to each of the Finance Parties, to appoint any person who is a reputable bank or financial institution either to act as separate trustee or as co-trustee, jointly with the Security Trustee and, as the case may be:
i.if the Security Trustee (acting on the instructions of the Required Lenders) considers such appointment to be in the interests of the Finance Parties; or
ii.for the purpose of conforming with any legal requirement, restriction or condition in any jurisdiction in which any particular act is to be performed; or
iii.for the purpose of obtaining a judgement in any jurisdiction or the enforcement in any jurisdiction against any person of a judgement already obtained,
any person so appointed shall (subject to the provisions of this Agreement) have such rights (including as to reasonable remuneration), powers, duties and obligations as shall be conferred or imposed by the instrument of appointment. The Security Trustee shall have power to remove any person so appointed and shall notify the other Finance Parties of such removal. At the request of the Security Trustee, the other parties to this Agreement shall forthwith execute all such documents and do all such things as may be required to perfect such appointment or removal and each such party irrevocably authorises the Security Trustee in its name and on its behalf to do the same. Each and any such person shall (subject always to the provisions of this Agreement) have such trusts, powers, authorities and discretions (not exceeding those conferred on the Security Trustee by this Agreement and the Loan Documents) and such duties and obligations as shall be conferred or imposed by the instrument of appointment. The Security Trustee shall not be bound to supervise or, only as between the Security Trustee on one hand and the Lenders on the other hand, be responsible for any loss incurred by reason of any act or omission of, any such person if the Security Trustee shall have exercised reasonable care in the selection of such person (which, without limitation, shall conclusively be deemed to be the case in respect of any such person approved in writing by the Required Lenders). The appointment by the Security Trustee of any such new or additional trustees shall terminate on the appointment of a replacement security trustee in accordance with the terms of clause 2.41.
Majority decisions of trustees
j.Whenever there shall be more than two trustees having equal authority under this Agreement the majority of such trustees shall be competent to execute and exercise all the duties, powers, trusts, authorities and discretions vested by this Agreement in the Security Trustee generally.
4.Application of proceeds
Co-operation by Finance Parties
a.The Finance Parties shall co-operate with each other and any Receiver in realising the Charged Assets and in ensuring that the net proceeds realised under the Escrow Account Security are applied in accordance with clause 4.2.
Application of moneys
b.Moneys received by the Security Trustee or by a Receiver after the Enforcement Date pursuant to the exercise of any rights and powers under or pursuant to the Escrow Account Security shall be paid to the Facility Agent and shall, subject to the Facility Agent receiving written directions pursuant to clause 2.21 and save as otherwise provided by any of the Loan Documents, be applied by the Facility Agent together with any other moneys received by the Facility Agent pursuant to the exercise of any rights and powers under or pursuant to any of the Loan Documents (after providing for all costs, charges, expenses and liabilities and other payments ranking in priority to the Secured Obligations) in the following manner and order:
i.first, in or towards payment to the Security Trustee of any unpaid Expenses incurred and payments made by the Security Trustee and any Receiver and any other amounts due but unpaid under the Loan Documents (including any remuneration payable to them);
ii.secondly, in or towards payment or satisfaction of all Expenses incurred and payments made and all remuneration payable to the Facility Agent under or pursuant to the Loan Documents;
iii.thirdly, in or towards satisfaction of the Secured Obligations owing to the Finance Parties in such order and/or on such basis as may be agreed from time to time between the Facility Agent and the Lenders; and
iv.fourthly, the balance (if any) shall be paid to the Borrower.
Prompt distribution of proceeds
c.The Facility Agent shall make each application and/or distribution falling to be made in accordance with clause 4.2 as soon as is practicable after the relevant moneys are received by, or otherwise become available to, the Facility Agent save that (without prejudice to any other provision contained in any of the Loan Documents) each Agent or any Receiver may (subject to clause 4.4 below) credit any moneys received by it to an interest bearing suspense account for so long and in such manner as such Agent or such Receiver may from time to time reasonably determine with a view to preserving the rights of the Finance Parties or any of them to prove for the whole of their respective claims against the Borrower or any other person liable, provided always that any Lender may instruct the Agent or the Receiver to release to it its share of any such amounts (subject always to clause 4.2).
d.If at any time the aggregate amount of the funds standing to the suspense account referred to in clause 4.3 above, together with any other moneys then held by any of the Finance Parties and which are available to be applied in respect of the Secured Obligations, are in an amount sufficient to discharge the Secured Obligations in full, the relevant Agent or any Receiver (as applicable) shall promptly withdraw the funds from such suspense account and apply them in accordance with clause 4.2 above.
e.The Security Trustee shall not be under any duty to consider investing moneys elsewhere and the Security Trustee shall not be responsible for any loss due to interest rate or exchange rate fluctuations and shall not be liable to account for an amount of interest greater than the standard amount that would be payable to an independent customer.
f.If any party owes an amount to an Agent under this Agreement this Agent may, after giving notice to that party, deduct an amount not exceeding that amount from any payment to that party which this Agent would otherwise be obliged to make under this Agreement and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of this Agreement that party shall be regarded as having received any amount so deducted.
Waiver by Borrower
g.To the extent permitted by law and without prejudice to any duty the Agents and the other Finance Parties may have to mitigate any losses, the Borrower hereby unconditionally waives any rights it may have, whether at law or otherwise, to require demands to be made by any of the Finance Parties under any of the Loan Documents or for the security or any guarantee or other assurance created by the Loan Documents in favour of the Finance Parties (or any of them) to be enforced or realised in any specific order or manner or to require the proceeds thereof to be appropriated in any specific order or manner.
5Agents’ and Finance Parties' indemnities
Indemnity from Trust Property
a.Without prejudice to any right to indemnity by law given to agents or trustees generally and to any provision of the Loan Documents entitling an Agent, any other Finance Party or any other person to indemnity in respect of, and/or reimbursement of, any liabilities, damages, costs, claims, charges or expenses incurred or suffered by it in connection with any of the Loan Documents or the performance of any duties under this Agreement or any of the Loan Documents, each Agent, each Finance Party and every agent or other person appointed by any of them in connection with this Agreement shall be entitled to be indemnified out of the Trust Property in respect of all liabilities, damages, reasonable costs and claims whatsoever incurred or suffered by it:
i.in the execution or exercise or bona fide purported execution or exercise of the rights, powers, authorities, discretions and duties created or conferred by or pursuant to this Agreement; and/or
ii.in respect of any matter or thing done or omitted or in any way relating to the Trust Property or the provisions of any of the Loan Documents.
Stamp taxes
b.The Borrower shall pay all stamp, documentary, registration or other like duties and taxes (including any duties or taxes payable by any Finance Party) to which this Agreement or any of the Loan Documents or any judgement given in connection therewith is, or at any time may be, subject and shall indemnify each Finance Party against any liabilities, costs, claims and expenses resulting from any failure to pay or any delay in paying such tax arising by reason of any delay or omission by the Borrower to pay such duties or taxes.
Expenses
c.Without prejudice to clause 1.7, the Borrower also agrees that the provisions of Section 11.3 (Payment of Costs and Expenses) of the Facility Agreement shall apply with equal effect to this Agreement as if set out in full in this Agreement to cover any expenses of the type referred to in that section of the Security Trustee arising in respect of this Agreement and the Escrow Account Security (including, without limitation, any Expenses) as if reference in that section to the Facility Agent was reference to the Security Trustee.
6.Custody of deeds; illegality
Custody of deeds
a.The Security Trustee shall be entitled to place all deeds, certificates and other documents relating to the Charged Assets deposited with it under or pursuant to the Loan Documents or any of them in any safe deposit, safe or receptacle selected by the Security Trustee or with any firm of lawyers and may make any such arrangements as it thinks fit for allowing the Borrower access to, or its lawyers or auditors possession of, such documents when necessary or convenient and the Security Trustee shall not be responsible for any loss incurred in connection with any such deposit, access or possession.
Illegality
b.The Security Trustee shall refrain from doing anything which would, or might in its opinion, be contrary to any law of any jurisdiction (including but not limited to England and Wales, the United States of America, the Republic of France, the European Union or any jurisdiction forming part of it) or any regulation or directive of any agency of such state or jurisdiction or which would or might render it liable to any person and may without liability do anything which is, in its opinion, necessary to comply with any such law, directive or regulation.
7.Assignments by the Lenders
Benefit and burden
a.This Agreement and the other Escrow Account Security shall be binding upon, and enure for the benefit of, the Finance Parties and the Borrower and their respective successors.
Transfers and sub-participations by Lenders
b.The provisions of Section 11.12 (Sale and Transfer of the Loan; Participations in the Loan) of the Facility Agreement shall apply, mutatis mutandis, to this Agreement in respect of the Borrower and the Lenders as if set out in full herein.
8.Effect of Agreement
Acknowledgement by Borrower
a.The Borrower joins in this Agreement for the purpose of acknowledging the provisions of this Agreement and undertakes with each Finance Party not in any way to prejudice or affect the enforcement of such provisions or do or suffer anything which would be in breach of the terms of this Agreement.
b.Nothing contained in this Agreement shall as between the Borrower and the Finance Parties or any of them affect or prejudice any rights or remedies of any such person against the Borrower in respect of any of the Secured Obligations.
9.Miscellaneous
Other securities unaffected
a.Nothing contained in this Agreement shall prejudice or affect the rights of the Finance Parties or any of them under any guarantee, lien, bill, note, charge or other security from any party other than the Borrower now or hereafter held by it in respect of any moneys, obligations or liabilities thereby secured and so that (without limitation) each and any such person may apply any moneys recovered under any such guarantee, lien, bill, note, charge or other security in or towards payment of any money, obligation or liability actual or contingent now or hereafter due, owing or incurred to it by the Borrower or may hold such moneys on a suspense account for such period as it may in its absolute discretion think fit.
Obligations of Lenders
b.The obligations of each Lender under this Agreement are several; the failure of any Lender to perform such obligations shall not relieve any other Lender or the Borrower of any of their respective obligations or liabilities under this Agreement or any of the Loan Documents nor shall any other Finance Party be responsible for the obligations of any Lender (except for its own obligations, if any, as a Lender) under this Agreement.
No partnership
c.This Agreement shall not and shall not be construed so as to constitute a partnership between the parties or any of them.
10.Agreement to provide power of attorney
Each of the Finance Parties (other than the Security Trustee) shall, if so requested in writing by the Security Trustee, appoint the Security Trustee, subject to any limitations on the powers of the Security Trustee imposed by this Agreement, to be its attorney generally for and in the name and on behalf of such Finance Party and as the act and deed or otherwise of such Finance Party to execute, seal and deliver and otherwise perfect and do all such deeds,
assurances, agreements, instruments, acts and things which may be required for the full exercise of all or any of the rights, powers or remedies conferred in favour of the Security Trustee by the Escrow Account Security or which may be deemed proper in or in connection with all or any of the purposes aforesaid. The power to be conferred by each Finance Party pursuant to this clause 10 shall be a general power of attorney under the Powers of Attorney Act 1971, and each Finance Party agrees that such power will be in terms that the relevant Finance Party will ratify and confirm, and agree to ratify and confirm, any deed, assurance, agreement, instrument, act or thing which the relevant Agent may execute or do pursuant thereto.
11Notices and other matters
a.Section 11.2 (Notices) of the Facility Agreement shall apply with equal effect to this Agreement as if set out herein provided further that in the case of the Security Trustee, its address, facsimile number and email and contact person are:
Citigroup Centre Canada Square London E14 5LB
Fax: +44 207 500 5877
Email: issuerpfla@citi.com
Attn: Agency and Trust
b.Each of the parties to this Agreement represents and warranties to each of the other parties that it has duly authorised the execution hereof and that this Agreement constitutes its valid and legally binding obligations.
12.Contracts (Rights of Third Parties) Act 1999
a.With the exception of BpiFAE and the persons referred to in clause 2.25, no term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement.
b.Notwithstanding any term of any Loan Document, the consent of any person who is not a party to this Agreement is not required to amend or vary this Agreement at any time.
13.Governing law and jurisdiction
Law
a.This Agreement and any non-contractual obligations connected with it are governed by and shall be construed in accordance with English law.
Submission to jurisdiction
b.For their mutual benefit, each of the Finance Parties and the Borrower agree that any legal action or proceedings arising out of or in connection with this Agreement may be brought in the English courts, irrevocably and unconditionally submit to the exclusive jurisdiction of such courts and the Borrower irrevocably designates, appoints and empowers RCL Cruises Ltd. at present of Building 3, The Heights – Brooklands, Weybridge, Surrey KT13 0NY to receive for it and on its behalf, service of process issued out of the English courts in any legal action or proceedings.
IN WITNESS whereof the parties to this Agreement have caused this Agreement to be duly executed and, in the case of the Security Trustee, duly executed as a deed and delivered on the date first above written.
Schedule 1 The Lenders
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Lender
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Facility Office and contact details
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Commitment
%
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Banco Santander,
S.A. Paris Branch
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Facility Office:
374, rue Saint-Honoré
75001 Paris France
Operational address:
Ciudad Financiera Avenida de Cantabria s/n Edificio Encinar 2a planta 28600 Boadilla del Monte Spain
Fax No: +34 91 257 1682
Attention: Elise Regnault
Julián Arroyo Angela Rabanal Ecaterina Mucuta
Vanessa Berrio Vélez Ana Sanz Gómez
Tel No: +34 912893722
+1 212-297-2919
+1 212-297-2942
+33 1 53 53 70 46
+34 91 289 10 28
+34 91 289 17 90
E-mail: elise.regnault@gruposantander.com Julian.Arroyo@santander.us arabanal@santander.us ecaterina.mucuta@gruposantander.com vaberrio@gruposantander.com
anasanz@gruposantander.com MiddleOfficeParis@gruposantander.com
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9.7505744042
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BNP Paribas
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Front Office to keep copied to all matters. BNPP SA
37 RUE DU MARCHE SAINT HONORE
75001 PARIS ACI : CHC03B1
Alexandre de VATHAIRE / Mauricio GONZALEZ
alexandre.devathaire@bnpparibas.com mauricio.gonzalez@us.bnpparibas.com
Tel : 00 331 42 98 00 29/00 1212 841 38 88
Middle Office: For Operational / Servicing matters
KHALID BOUITIDA / THIERRY ANEZO
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3.9306453494
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Lender
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Facility Office and contact details
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Commitment
%
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MILLENAIRE 4
35, RUE DE LA GARE
75019 PARIS ACI : CVA05A1
khalid.k.bouitida@bnpparibas.com thierry.anezo@bnpparibas.com
Tel : 00 331 42 98 58 69 / 00 331 43 16 81 57
Back Office : For Standard Settlement Instruction authentication/call-back
STEVE LOUISOR / VALERIE DUMOULIN MILLENAIRE 4
35, RUE DE LA GARE
75019 PARIS ACI : CVA03A1
paris.cib.boci.ca.3@bnpparibas.com valerie.dumoulin@bnpparibas.com steve.louisor@bnpparibas.com
Tel : 00 331 55 77 91 86 / 00 331 40 14 46 59
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HSBC France
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HSBC France – Global Banking Agency Operations (GBAO) Transaction Manager Unit
103 avenue des Champs Elysées 75008 Paris
France
Attention: Florencia Thomas
Alexandra Penda
Fax No: +33 1 40 70 28 80
Tel No: +33 1 40 70 73 81 /
+33 1 41 02 67 50
Email: florencia.thomas@hsbc.fr
alexandra.penda@hsbc.fr
Copy to:
HSBC France
103 avenue des Champs Elysées 75008 Paris
France
Attention: Celine Karsenty / Julie Bellais Fax No: +33 1 40 70 78 93
Tel No: +33 1 40 70 28 59 /
+33 1 40 70 22 97
Email: celine.karsenty@hsbc.fr
julie.bellais@hsbc.fr
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7.2499999337
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Société Générale
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Société Générale Facility Office 29 Boulevard Haussmann
75009 Paris France
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9.9328352929
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Lender
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Facility Office and contact details
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Commitment
%
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For operational/servicing matters:
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Bouchra BOUMEZOUED / Tatiana
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BYCHKOVA
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Société Générale 189, rue d’Aubervilliers
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75886
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PARIS CEDEX 18
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OPER/FIN/CAF/DMT6
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Phone: +33 1 57 29 13 12 / +33 1 58 98 43 05
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Email: bouchra.boumezoued@sgcib.com
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tatiana.bychkova@sgcib.com
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par-oper-caf-dmt6@sgcib.com
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For credit matters:
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Francois Rolland / Tingting Yu / Muriel
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Baumann
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Société Générale 189, rue d’Aubervilliers
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75886
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PARIS CEDEX 18
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OPER/FIN/SMO/EXT
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Phone: +33 1 58 98 17 78 / +33 1 58 98 49 18
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/ +33 1 58 98 22 76
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Email: francois.rolland@sgcib.com
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tingting.yu@sgcib.com
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muriel.baumann@sgcib.com
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Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch
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1/3/5 rue Paul Cézanne, 75008 Paris, France
Attention: Cedric Le Duigou
Guillaume Branco Herve Billi
Claire Lucien
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2.7360454163
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Fax No: +33 1 44 90 48 01
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Tel No:
Cedric Le Duigou: +33 1 44 90 48 83
Guillaume Branco: +33 1 44 90 48 71
Herve Billi: +33 1 44 90 48 48
Claire Lucien: +33 1 44 90 48 49
Helene Ly: +33 1 44 90 48 49
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E-mail: cedric_leduigou@fr.smbcgroup.com guillaume_branco@fr.smbcgroup.com herve_billi@fr.smbcgroup.com
claire_lucien@fr.smbcgroup.com helene_ly@fr.smbcgroup.com
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Lender
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Facility Office and contact details
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Commitment
%
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SFIL
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1-3, rue de Passeur de Boulogne – CS 80054 92861 Issy-les-Moulineaux Cedex 9
France
Contact Person
Loan Administration Department: Direction du Crédit Export:
Pierre-Marie Debreuille / Anne Crépin
Direction des Opérations: Dominique Brossard / Patrick Sick
Telephone:
Pierre-Marie Debreuille +33 1 73 28 87 64
Anne Crépin +33 1 73 28 88 59
Dominique Brossard +33 1 73 28 91 93
Patrick Sick +33 1 73 28 87 66
Email:
pierre-marie.debreuille@sfil.fr anne.crepin@sfil.fr dominique.brossard@sfil.fr patrick.sick@sfil.fr refinancements-export@sfil.fr creditexport_ops@sfil.fr
Fax: +33 1 73 28 85 04
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66.3998996035
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100
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Execution Page – Agency and Trust Deed
Facility Agent
SIGNED by )
for and on behalf of )
CITIBANK EUROPE PLC, UK BRANCH )
as Facility Agent ) .....................................
Attorney-in-fact
Security Trustee
EXECUTED as a DEED by )
for and on behalf of )
CITICORP TRUSTEE COMPANY LIMITED )
as Security Trustee ) .....................................
in the presence of: Attorney-in-fact
................................
Witness Name:
Address:
Occupation:
Global Coordinator
SIGNED by )
for and on behalf of )
CITIBANK N.A., LONDON BRANCH ) .....................................
as Global Coordinator ) Attorney-in-fact
ECA Agent
SIGNED by )
for and on behalf of )
SUMITOMO MITSUI BANKING CORPORATION )
EUROPE LIMITED, PARIS BRANCH )
as ECA Agent ) .....................................
Attorney-in-fact
Mandated Lead Arrangers
SIGNED by )
for and on behalf of )
CITIBANK N.A., LONDON BRANCH )
as Mandated Lead Arranger ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
BANCO SANTANDER, S.A., )
PARIS BRANCH )
as Mandated Lead Arranger ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
BNP PARIBAS )
as Mandated Lead Arranger ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
HSBC FRANCE )
as Mandated Lead Arranger ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
SOCIÉTÉ GÉNÉRALE )
as Mandated Lead Arranger ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
SUMITOMO MITSUI BANKING ) CORPORATION EUROPE LIMITED, ) PARIS BRANCH )
as Mandated Lead Arranger ) .....................................
Attorney-in-fact
Lenders
SIGNED by )
for and on behalf of )
BANCO SANTANDER, S.A. )
PARIS BRANCH )
as Lender ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
BNP PARIBAS )
as Lender ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
HSBC FRANCE )
as Lender ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
SOCIÉTÉ GÉNÉRALE )
as Lender ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
SUMITOMO MITSUI BANKING ) CORPORATION EUROPE LIMITED, ) PARIS BRANCH )
as Lender ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
SFIL )
as Lender ) .....................................
Attorney-in-fact
Borrower
SIGNED by )
for and on behalf of )
ROYAL CARIBBEAN CRUISES LTD. )
as Borrower ) .....................................
Attorney-in-fact
Schedule 7
Form of Effective Date certificate
To: The other parties to the First Supplemental Agreement referred to below
Dear Sirs,
Hull No. L34 at Chantiers de l’Atlantique – First Supplemental Agreement dated [] 2020 (the First Supplemental Agreement)
We refer to clause 5.4 of the First Supplemental Agreement and confirm that all conditions precedent in clause 5.1 of the First Supplemental Agreement (and, in relation to the Finance Parties, clause 5.2 of the First Supplemental Agreement) have been fulfilled or waived on [ ] 2020.
Accordingly, the “Effective Date” for the purposes of the First Supplemental Agreement is [ ] 2020.
Facility Agent
Signed by ………………………………………………………………..
For and on behalf of Citibank Europe plc, UK Branch
Seller
Signed by ………………………………………………………………..
For and on behalf of Chantiers de l’Atlantique
Buyer
Signed by ………………………………………………………………..
For and on behalf of Royal Caribbean Cruises Ltd.
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EXECUTION PAGE – FIRST SUPPLEMENTAL AGREEMENT (EDGE 3)
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Borrower
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SIGNED by Colin Girgenti
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for and on behalf of
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/s/ COLIN GIRGENTI
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HOEDISCUS FINANCE LIMITED
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Attorney in-fact
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Seller
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SIGNED by Gilles Pinot de Villechenon
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for and on behalf of
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/s/ GILLES PINOT DE VILLECHENON
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CHANTIERS DE L’ATLANTIQUE
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Attorney in-fact
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Buyer
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SIGNED by Antje M. Gibson
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for and on behalf of
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/s/ ANTJE M. GIBSON
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ROYAL CARIBBEAN CRUISES LTD.
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Attorney in-fact
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Facility Agent
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SIGNED by Robert Brodie
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for and on behalf of
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/s/ ROBERT BRODIE
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Citibank Europe plc, UK Branch
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Delegated Signatory
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Security Trustee
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SIGNED by Viola Japaul
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for and on behalf of
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/s/ VIOLA JAPAUL
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CITICORP TRUSTEE COMPANY LIMITED
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Authorised Signatory
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Global Coordinator
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SIGNED by Alex C. Taylor
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for and on behalf of
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/s/ ALEX C. TAYLOR
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Citibank N.A., LOndon Branch
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Managing Director
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French Coordinating Bank
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SIGNED by
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/s/JULIE BELLAIS
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for and on behalf of
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Authorised Signatory
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HSBC FRANCE
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/s/ GUY WOELFEL
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Authorised Signatory
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ECA Agent
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SIGNED by Matthew Bambury
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for and on behalf of
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SUMITOMO MITSUI BANKING CORPORATION
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/s/ MATTHEW BAMBURY
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EUROPE LIMITED, PARIS BRANCH
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Attorney in-fact
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The Lenders
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SIGNED by
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/s/ CAROLINE PANTALEAO
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for and on behalf of
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Caroline Pantaleao
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BANCO SANTANDER, S.A., PARIS BRANCH
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Authorised Signatory
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/s/ PIERRE ROSEROT
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Pierre Roserot
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Authorised Signatory
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SIGNED by
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/s/ GEORGES CUREY
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for and on behalf of
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Georges Curey
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BNP PARIBAS
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Head of Structured Export Finance
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/s/ M. ALEXANDRE DE VATHAIRE
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M. Alexandre de Vathaire
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Head of France & UK Export Finance
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SIGNED by
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/s/JULIE BELLAIS
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for and on behalf of
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Julie Bellais
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HSBC FRANCE
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Authorised Signatory
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/s/ GUY WOELFEL
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Guy Woelfel
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Authorised Signatory
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SIGNED by Agnes Deschenes Voirin
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for and on behalf of
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/s/ AGNES DESCHENES VOIRIN
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SOCIÉTÉ GÉNÉRALE
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Authorised Signatory
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SIGNED by Matthew Bambury
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for and on behalf of
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SUMITOMO MITSUI BANKING CORPORATION
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/s/ MATTHEW BAMBURY
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EUROPE LIMITED, PARIS BRANCH
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Attorney in-fact
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SIGNED by
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/s/ BENJAMIN PHILIPPAERTS
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for and on behalf of
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Benjamin Philippaerts
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SFIL
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Direction Credit Export
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/s/ EMILIE BOISSIER
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Emilie Boissier
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Direction Credit Export
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The Mandated Lead Arrangers
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SIGNED by Alex C. Taylor
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for and on behalf of
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/s/ ALEX C. TAYLOR
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Citibank N.A., LOndon Branch
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Managing Director
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SIGNED by
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for and on behalf of
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/s/ CAROLINE PANTALEAO
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BANCO SANTANDER, S.A., PARIS BRANCH
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Caroline Pantaleao
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Authorised Signatory
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/s/ PIERRE ROSEROT
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Pierre Roserot
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Authorised Signatory
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SIGNED by
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for and on behalf of
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/s/ GEORGES CUREY
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BNP PARIBAS
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Georges Curey
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Head of Structured Export Finance
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/s/ M. ALEXANDRE DE VATHAIRE
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M. Alexandre de Vathaire
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Head of France & UK Export Finance
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SIGNED by
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/s/JULIE BELLAIS
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for and on behalf of
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Julie Bellais
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HSBC FRANCE
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Authorised Signatory
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/s/ GUY WOELFEL
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Guy Woelfel
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Authorised Signatory
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SIGNED by Agnes Deschenes Voirin
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for and on behalf of
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/s/ AGNES DESCHENES VOIRIN
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SOCIÉTÉ GÉNÉRALE
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Authorised Signatory
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SIGNED by Matthew Bambury
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or and on behalf of
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SUMITOMO MITSUI BANKING CORPORATION
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/s/ MATTHEW BAMBURY
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EUROPE LIMITED, PARIS BRANCH
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Attorney in-fact
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Dated March 12 2020
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HOUATORRIS FINANCE LIMITED
as Borrower
CHANTIERS DE L’ATLANTIQUE (PREVIOUSLY KNOWN AS STX FRANCE S.A.)
as Seller
ROYAL CARIBBEAN CRUISES LTD.
as Buyer
CITIBANK EUROPE PLC, UK BRANCH
as Facility Agent
CITICORP TRUSTEE COMPANY LIMITED
as Security Trustee
CITIBANK N.A., LONDON BRANCH
as Global Coordinator
HSBC FRANCE
as French Coordinating Bank
SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH
as ECA Agent
THE BANKS AND FINANCIAL INSTITUTIONS LISTED IN SCHEDULE 1
as Lenders and
CITIBANK N.A., LONDON BRANCH, BANCO SANTANDER, S.A., PARIS BRANCH, BNP PARIBAS, HSBC FRANCE, SOCIÉTÉ GÉNÉRALE and SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH
as Mandated Lead Arrangers
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FIRST SUPPLEMENTAL AGREEMENT
relating to Hull No. M34 at Chantiers de l’Atlantique (previously known as STX France S.A.)
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Contents
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Clause
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Page
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1
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Definitions
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2
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2
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Agreement of the Parties
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3
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3
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Amendments to Relevant Documents
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3
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4
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Representations and warranties
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4
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5
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Conditions
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4
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6
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Confirmation of continued effect
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5
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7
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Costs and expenses
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5
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8
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Miscellaneous and notices
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6
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9
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Governing law
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6
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Schedule 1 The Lenders
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8
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Schedule 2 Documents and evidence required as conditions precedent (referred to in clause 5.1)
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13
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Schedule 3 Form of Amended and Restated Facility Agreement
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Schedule 4 Form of Amended and Restated Receivable Purchase Agreement
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Schedule 5 Form of Amended and Restated Novation Agreement
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Schedule 6 Form of Amended and Restated Agency and Trust Deed
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Schedule 7 Form of Effective Date certificate
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THIS FIRST SUPPLEMENTAL AGREEMENT is dated 2020 and made BETWEEN:
(1)HOUATORRIS FINANCE LIMITED as Borrower;
(2)CHANTIERS DE L’ATLANTIQUE as Seller;
(3)ROYAL CARIBBEAN CRUISES LTD. as Buyer;
(4)CITIBANK EUROPE PLC, UK BRANCH as Facility Agent;
(5)CITICORP TRUSTEE COMPANY LIMITED as Security Trustee;
(6)CITIBANK N.A., LONDON BRANCH as Global Coordinator;
(7)HSBC FRANCE as French Coordinating Bank;
(8)SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH as ECA Agent;
(9)THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1 as Lenders; and
(10)CITIBANK N.A., LONDON BRANCH, BANCO SANTANDER, S.A., PARIS BRANCH, BNP PARIBAS, HSBC FRANCE, SOCIÉTÉ GÉNÉRALE and SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH as Mandated Lead Arrangers.
WHEREAS:
(A)By a building contract dated 30 September 2016 (as amended by Addendum No.1 dated 18 October 2017, Addendum No.2 dated 25 January 2018, Addendum No. 3 dated 21 December 2018, Addendum No. 4 dated 4 April 2019 and Addendum No. 5 dated 18 December 2019, the Building Contract) between the Seller and the Buyer the Seller has agreed to design, construct, equip and complete a passenger cruise vessel with Hull No. M34 (the Vessel) for the Buyer.
(B)By a receivable purchase agreement dated 24 July 2017 (the Receivable Purchase Agreement), the Seller has agreed to sell its contractual rights to the Receivable to the Borrower.
(C)The Borrower will fund the purchase of the Receivable through the borrowing of advances in an amount of up to €630,622,480 pursuant to a facility agreement dated 24 July 2017 (the Facility Agreement) between (1) the Borrower, (2) the Facility Agent, (3) the Security Trustee, (4) the ECA Agent, (5) the Global Coordinator, (6) the French Coordinating Bank, (7) the Mandated Lead Arrangers and (8) the Lenders.
(D)By a buyer consent agreement dated 24 July 2017 (the Buyer Consent Agreement) between (1) the Borrower, (2) the Seller, (3) the Facility Agent, (4) the Security Trustee, (5) the Refund Guarantors, (6) the RG Agent and (7) the Buyer, the parties have agreed (among other things) the basis upon which the Buyer has consented to the sale of the Receivable and has granted a first priority pre-delivery mortgage over the Vessel.
(E)By a novation agreement dated 24 July 2017 (the Novation Agreement) between (1) the Borrower, (2) the Buyer, (3) the Facility Agent, (4) the Security Trustee, (5) the ECA Agent, (6) the Global Coordinator, (7) the French Coordinating Bank, (8) the Mandated Lead Arrangers, and (9) the Lenders, the parties agreed to the future novation, amendment and restatement of the Facility Agreement with the Buyer as borrower in the form set out therein.
(F)In connection with certain requirements of BpiFAE in relation to the French content in respect of the Vessel and the drawdown arrangements under the Facility Agreement in respect of the Non-
Yard Costs it has been agreed that certain amendments should be made to the Facility Agreement and the Novated Credit Agreement.
(G)The Buyer has also requested that certain changes be made to the provisions of the Novated Credit Agreement so that this reflects certain changes that were agreed to the $1.15 billion revolving credit facility of the Buyer pursuant to amendment and restatement of this facility on 12 October 2017.
(H)This Agreement sets out the terms and conditions upon which the parties to this Agreement shall agree to the amendments referred to in recitals (F) and (G) above.
NOW IT IS HEREBY AGREED as follows:
1Definitions
a.Defined expressions
Words and expressions defined in the Facility Agreement and/or the Novation Agreement shall unless the context otherwise requires or unless otherwise defined herein, have the same meanings when used in this Agreement.
b.Definitions
In this Agreement, unless the context otherwise requires:
Effective Date means the date specified as the “Effective Date” in the certificate signed by the Facility Agent, the Seller and the Buyer in accordance with clause 5.4.
Party means each of the parties to this Agreement.
Relevant Documents means the Facility Agreement, the Receivable Purchase Agreement, the Novation Agreement and the Agency and Trust Deed.
c.Relevant Documents
References in the Relevant Documents to “this Agreement” or “this Deed” shall, with effect from the Effective Date and unless the context otherwise requires, be references to such Relevant Document as amended and restated by this Agreement and words such as “herein”, “hereof”, “hereunder”, “hereafter”, “hereby” and “hereto”, where they appear in the Relevant Documents, shall be construed accordingly.
d.Headings
Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Agreement.
e.Construction of certain terms
Clause 1.5 of the Buyer Consent Agreement shall apply to this agreement (mutatis mutandis) as if set out herein and as if references therein to “this Deed” were references to this Agreement.
f.Designation as a Transaction Document
This Agreement is designated as a Transaction Document.
2.Agreement of the Parties
Each of the Parties, relying upon the representations and warranties on the part of the other Parties contained in clause 4, agrees that, subject to the terms and conditions of this Agreement and in particular, but without prejudice to the generality of the foregoing, fulfilment of the conditions contained in clause 5 and Schedule 2, the Relevant Documents shall be amended and restated on the terms set out in clause 3.
3.Amendments to Relevant Documents
a.Amendments to Facility Agreement
The Facility Agreement shall, with effect on and from the Effective Date, be (and it is hereby) amended and restated so as to read in accordance with the form of the amended and restated Facility Agreement set out in Schedule 3 and (as so amended) will continue to be binding upon each of the Borrower and the Finance Parties in accordance with its terms as so amended and restated.
b.Amendments to the Receivable Purchase Agreement
The Receivable Purchase Agreement shall, with effect on and from the Effective Date, be (and it is hereby) amended and restated so as to read in accordance with the form of the amended and restated Receivable Purchase Agreement set out in Schedule 4 and (as so amended) will continue to be binding upon each of the Seller and the Borrower in accordance with its terms as so amended and restated.
c.Amendments to Novation Agreement
The Novation Agreement shall, with effect on and from the Effective Date, be (and it is hereby) amended and restated in accordance with the form of the amended and restated Novation Agreement set out in Schedule 5 and (as so amended) will continue to be binding upon each of the Borrower, the Finance Parties and the Buyer in accordance with its terms as so amended and restated.
d.Amendments to Agency and Trust Deed
The Agency and Trust Deed shall, with effect on and from the Novation Effective Date, be (and it is hereby) amended and restated in accordance with the form of the amended and restated Agency and Trust Deed set out in Schedule 6 and (as so amended) will continue to be binding upon each of the Finance Parties (save for the French Coordinating Bank as set out below) and the Buyer (as borrower and reflecting the accession set out below) in accordance with its terms as so amended and restated. In addition, on the Novation Effective Date and at the same time as the amendments referred to above:
i.the Buyer shall accede to the Agency and Trust Deed as the borrower thereunder and in replacement of the Borrower; and
ii.the Borrower and the French Coordinating Bank shall cease to be parties to the Agency and Trust Deed and shall be released from any obligations thereunder,
and as such arrangements are reflected in the amendment and restatement of the Agency and Trust Deed set out in Schedule 6.
e.Continued force and effect
The provisions of the Relevant Documents shall continue in full force and effect (as amended and restated by this Agreement) and each of the Relevant Documents and this Agreement shall be read and construed as one instrument.
4.Representations and warranties
a.General representations and warranties
Each Party represents and warrants (each severally for and in respect of itself) to each of the other Parties hereto that as at the date hereof:
i.it is a corporation or limited liability company, duly incorporated and validly existing under the laws of its country of incorporation;
ii.it has the power to enter into, perform and deliver, and each has taken all necessary corporate action to authorise the entry into, performance and delivery of, this Agreement and the transactions contemplated by this Agreement;
iii.this Agreement constitutes its legal, valid, binding and enforceable obligations subject to any relevant qualifications as to matters of law of the type set out in the legal opinions delivered under the Facility Agreement on the Signing Date (as defined in the Facility Agreement) and under Part A of Schedule 2; and
iv.all contractual and other consents or approvals necessary in connection with the authorisation, execution, delivery, validity, enforceability or admissibility in evidence of this Agreement or the performance by it of its obligations under this Agreement have been or will, when required, be obtained or made.
b.Seller additional representations
The Seller further represents and warrants to the Borrower that the representations and warranties set out in clauses 8.1 and 8.2 of the Receivable Purchase Agreement are true and correct, including to the extent that they may have been or shall be amended by this Agreement as if made at the date of this Agreement with reference to the facts and circumstances existing on such date.
c.Borrower additional representations
The Borrower further represents and warrants to the Finance Parties that the representations and warranties set out in clause 7.1 of the Facility Agreement are true and correct, including to the extent that they may have been or shall be amended by this Agreement as if made at the date of this Agreement with reference to the facts and circumstances existing on such date.
d.Buyer additional representations
The Buyer further represents and warrants to the Finance Parties that the representations and warranties set out in the first paragraph of clause 8.2 of the Novation Agreement are true and correct, including to the extent that they may have been or shall be amended by this Agreement as if made at the date of this Agreement with reference to the facts and circumstances existing on such date.
e.Repetition of representations and warranties
The representations and warranties in clauses 4.1 to 4.4 shall be deemed repeated by each relevant Party on and as of the Effective Date, as if made with reference to the facts and circumstances existing on the Effective Date.
5.Conditions
a.Documents and evidence
The agreement of the Parties referred to in clause 2 shall be subject to:
i.the receipt by the Facility Agent or its duly authorised representative of the documents and evidence specified in Part A of Schedule 2;
ii.the receipt by the Seller or its duly authorised representative of the documents and evidence specified in Part B of Schedule 2; and
iii.the receipt by the Buyer or its duly authorised representative of the documents and evidence specified in Part C of Schedule 2,
in each case in form and substance satisfactory to the relevant Party.
b.General conditions precedent
The agreement of the Finance Parties referred to in clause 2 shall be subject to the further conditions that on the Effective Date:
i.the representations and warranties of the other Parties contained in clause 4 are true and correct in all material respects (except for such representations and warranties that are qualified by materiality or non-existence of a material adverse effect which shall be accurate in all respects) on and as of each such time as if each was made with respect to the facts and circumstances existing at such time; and
ii.no Event of Default shall have occurred and be continuing or would result from the amendment and restatement of the Relevant Documents pursuant to this Agreement.
c.Waiver of conditions precedent
The conditions set out in clauses 5.1 and 5.2 of this Agreement are for the sole benefit of the Party specified in the relevant clause, who shall be entitled to waive the fulfilment for its benefit of any of those conditions on such terms as it deems fit (in the case of the Facility Agent, acting on the instructions of the Majority Lenders).
d.Effective Date certificate
Upon fulfilment or waiver of the conditions in this clause 5, the Facility Agent, the Seller and the Buyer shall sign a certificate in the form set out in Schedule 7 confirming that the Effective Date has occurred and such certificate shall be binding on all Parties.
6.Confirmation of continued effect
Each of the Parties acknowledge and agree that the Transaction Documents to which they are respectively a party shall remain in full force and effect save that, with effect on and from the Effective Date, the references therein to any Relevant Document shall be construed as references to such document as amended and restated and, as applicable, acceded to by this Agreement.
7.Costs and expenses
a.Expenses
The Buyer agrees to pay on demand, on an after-tax basis, all costs and expenses in connection with:
i.the preparation, execution and delivery of; and
ii.the administration, modification and amendment of,
this Agreement and all other documents to be delivered hereunder or thereunder, including, without limitation, the reasonable fees and out-of-pocket expenses of Norton Rose Fulbright LLP as the legal adviser to the Lenders, the Facility Agent and the Security Trustee and any correspondent counsel separately agreed in writing between the Seller and the Facility Agent with respect thereto on a basis (in relation to the costs referred to in (a) above) separately agreed between the Seller, the Buyer and the Facility Agent.
b.Value Added Tax
All fees and expenses payable pursuant to this clause 7 shall be paid together with value added tax or any similar tax (if any) properly chargeable thereon.
c.Stamp and other duties
The Buyer agrees to pay on demand all stamp, documentary, registration or other like duties or taxes (including any duties or taxes payable by a Finance Party) imposed on or in connection with this Agreement and shall indemnify the other Parties against any liability arising by reason of any delay or omission by the Buyer to pay such duties or taxes.
8.Miscellaneous and notices
a.Notices
The provisions of clause 23.1 of the Buyer Consent Agreement shall extend and apply to the giving or making of notices or demands hereunder as if the same were expressly stated herein with all necessary changes and so that any notices to a Lender shall be sent to the relevant Lender to its address and contact details set out in Schedule 1.
b.Counterparts
This Agreement may be executed in any number of counterparts and by the different parties on separate counterparts, each of which when so executed and delivered shall be an original but all counterparts shall together constitute one and the same instrument.
c.Limitation on recourse
The provisions of clause 16 (Limitation on recourse) of the Facility Agreement shall apply equally to this Agreement.
9.Governing law
a.Law
This Agreement and any non-contractual obligations connected with it are governed by and shall be construed in accordance with English law.
b.Submission to jurisdiction
Each of the Parties hereto agree for the benefit of the other Parties hereto that any legal action or proceedings arising out of or in connection with this Agreement and any non-contractual obligations connected with it against any of the Parties hereto or any of their respective assets shall be brought in the English courts, and each of the Parties hereto irrevocably and unconditionally submits to the jurisdiction of the English courts. Each of the Parties hereto further agrees that only the courts of England and not those of any other country shall have jurisdiction to determine any claim which a Party may have against the another Party hereto arising out of or in connection with this Agreement.
Each of the Seller, the Borrower and the Buyer confirms and agrees for the benefit of the each of the other Parties hereto that those agents appointed by it pursuant to clause 27.2 of the Buyer Consent Agreement are also designated, appointed and empowered to receive for it and on its behalf, service of process issued out of the English courts in any legal action or proceedings arising out of or in connection with this Agreement and any non-contractual obligations connected with it.
IN WITNESS whereof the parties to this Agreement have caused this Agreement to be duly executed on the date first above written.
Schedule 1 The Lenders
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Name
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Facility Office and contact details
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Citibank N.A., London Branch
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Citigroup Centre Canada Square London E14 5LB United Kingdom
Attention: Wei-Fong Chan
Kara Catt Romina Coates Antoine Paycha
Fax No: +44 20 7986 4881
Tel No: +44 20 7986 3036 /
+44 20 7508 0344
+44 20 7986 4824
+44 20 7500 0907 /
E-mail: weifong.chan@citi.com kara.catt@citi.com
romina.coates@citi.com antoine.paycha@citi.com
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Banco Santander, S.A, Paris Branch
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Facility Office:
374, rue Saint-Honoré
75001 Paris France
Operational address:
Ciudad Financiera Avenida de Cantabria s/n Edificio Encinar 2a planta 28600 Boadilla del Monte Spain
Fax No: +34 91 257 1682
Attention: Elise Regnault
Julián Arroyo Angela Rabanal Ecaterina Mucuta
Vanessa Berrio Vélez Ana Sanz Gómez
Tel No: +34 912893722
+1 212-297-2919
+1 212-297-2942
+33 1 53 53 70 46
+34 91 289 10 28
+34 91 289 17 90
E-mail:
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Name
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Facility Office and contact details
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elise.regnault@gruposantander.com Julian.Arroyo@santander.us arabanal@santander.us ecaterina.mucuta@gruposantander.com vaberrio@gruposantander.com anasanz@gruposantander.com MiddleOfficeParis@gruposantander.com
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BNP Paribas
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Front Office to keep copied to all matters. BNPP SA
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37 RUE DU MARCHE SAINT HONORE
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75001 PARIS
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ACI : CHC03B1
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Alexandre de VATHAIRE / Mauricio GONZALEZ
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alexandre.devathaire@bnpparibas.com
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mauricio.gonzalez@us.bnpparibas.com
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Tel : 00 331 42 98 00 29/00 1212 841 38 88
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Middle Office: For Operational / Servicing matters
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KHALID BOUITIDA / THIERRY ANEZO
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MILLENAIRE 4
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35, RUE DE LA GARE
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75019 PARIS
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ACI : CVA05A1
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khalid.k.bouitida@bnpparibas.com
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thierry.anezo@bnpparibas.com
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Tel : 00 331 42 98 58 69 / 00 331 43 16 81 57
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Back Office : For Standard Settlement Instruction
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authentication/call-back
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STEVE LOUISOR / VALERIE DUMOULIN
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MILLENAIRE 4
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35, RUE DE LA GARE
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75019 PARIS
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ACI : CVA03A1
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paris.cib.boci.ca.3@bnpparibas.com
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valerie.dumoulin@bnpparibas.com
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steve.louisor@bnpparibas.com
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Tel : 00 331 55 77 91 86 / 00 331 40 14 46 59
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Name
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Facility Office and contact details
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HSBC France
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HSBC France – Global Banking Agency Operations (GBAO) Transaction Manager Unit 103 avenue des Champs Elysées
75008 Paris France
Attention: Florencia Thomas
Alexandra Penda
Fax No: +33 1 40 70 28 80
Tel No: +33 1 40 70 73 81 /
+33 1 41 02 67 50
Email: florencia.thomas@hsbc.fr
alexandra.penda@hsbc.fr
Copy to:
HSBC France
103 avenue des Champs Elysées 75008 Paris
France
Attention: Celine Karsenty / Julie Bellais Fax No: +33 1 40 70 78 93
Tel No: +33 1 40 70 28 59 /
+33 1 40 70 22 97
Email: celine.karsenty@hsbc.fr
julie.bellais@hsbc.fr
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Name
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Facility Office and contact details
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Société Générale
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Société Générale Facility Office 29 Boulevard Haussmann
75009 Paris France
For operational/servicing matters:
Bouchra BOUMEZOUED / Tatiana BYCHKOVA Société Générale 189, rue d’Aubervilliers 75886
PARIS CEDEX 18 OPER/FIN/CAF/DMT6
Phone: +33 1 57 29 13 12 / +33 1 58 98 43 05
Email: bouchra.boumezoued@sgcib.com tatiana.bychkova@sgcib.com
par-oper-caf-dmt6@sgcib.com For credit matters:
Francois Rolland / Tingting Yu / Muriel Baumann Société Générale 189, rue d’Aubervilliers 75886
PARIS CEDEX 18 OPER/FIN/SMO/EXT
Phone: +33 1 58 98 17 78 / +33 1 58 98 49 18 /
+33 1 58 98 22 76
Email: francois.rolland@sgcib.com
tingting.yu@sgcib.com muriel.baumann@sgcib.com
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Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch
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1/3/5 rue Paul Cézanne 75008 Paris
France
Attention: Cedric le Duigou
Guillaume Branco Herve Billi
Claire Lucien
Fax No: +33 1 44 90 48 01
Tel No:
Cedric le Duigou: + 33 1 44 90 48 83
Guillaume Branco: + 33 1 44 90 48 71
Herve Billi: +33 1 44 90 48 48
Claire Lucien: + 33 1 44 90 48 49
Helene Ly: +33 1 44 90 48 76
E-mail: cedric_leduigou@fr.smbcgroup.com guillaume_branco@fr.smbcgroup.com herve_billi@fr.smbcgroup.com
claire_lucien@fr.smbcgroup.com helene_ly@fr.smbcgroup.com
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SFIL
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1-3, rue de Passeur de Boulogne – CS 80054
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Name
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Facility Office and contact details
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92861 Issy-les-Moulineaux Cedex 9 France
Contact Person
Loan Administration Department: Direction du Crédit Export:
Pierre-Marie Debreuille / Anne Crépin Direction des Opérations:
Dominique Brossard / Patrick Sick
Telephone:
Pierre-Marie Debreuille +33 1 73 28 87 64
Anne Crépin +33 1 73 28 88 59
Dominique Brossard +33 1 73 28 91 93
Patrick Sick +33 1 73 28 87 66
Email:
pierre-marie.debreuille@sfil.fr anne.crepin@sfil.fr dominique.brossard@sfil.fr patrick.sick@sfil.fr
refinancements-export@sfil.fr creditexport_ops@sfil.fr
Fax: + 33 1 73 28 85 04
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Schedule 2
Documents and evidence required as conditions precedent (referred to in clause 5.1)
Part A: Facility Agent
1.A certificate from an authorised signatory of each of the Borrower, the Seller and the Buyer confirming that there have been no changes or amendments to the constitutional documents or board resolutions of such Party, certified copies of which were previously delivered to the Purchaser or the Facility Agent pursuant to the Receivable Purchase Agreement or the Facility Agreement or attaching revised versions in case of any changes or amendments.
2.A copy, certified by an authorised officer of each of the Borrower and the Buyer of (a) resolutions of the board of directors of such Party approving the transactions contemplated by this Agreement and authorising a person or persons to execute this Agreement and any notices or other documents to be given pursuant hereto and (b) any power of attorney issued pursuant to such resolutions (which shall be certified as being in full force and effect and not revoked or withdrawn).
3.Evidence of the authority of the signatories of the Seller to sign this Agreement.
4.A copy, certified as a true copy by an authorised signatory of the Buyer or the Seller, of the following:
a.addendum no.1 to the Building Contract which (among other things) adjusts the provisions dealing with payment of the first instalment of the Basic Contract Price (as defined in the Receivable Purchase Agreement);
b.addendum no.2 to the Building Contract which (among other things) adjusts the provisions dealing adjustments to the Basic Contract Price (as defined in the Receivable Purchase Agreement); and
c.addendum no.3, addendum no. 4 and addendum no. 5 to the Building Contract which (among other things) adjusts the provisions relating to the EDGE 5 CP Deadline (as defined therein).
5.Payment of all fees, commissions, costs and expenses required to be paid to the Finance Parties on or before the Effective Date under any of the Transaction Documents or under any mandate letter or fee letter entered into in connection with the Transaction Documents.
6.Written acceptance by the agents for service of process in respect of the Seller, the Borrower and the Buyer in relation to this Agreement.
7.An opinion of Norton Rose Fulbright LLP, English legal advisers.
8.An opinion of Norton Rose Fulbright LLP, French legal advisers.
9.An opinion of Watson Farley & Williams LLP, Liberian legal advisers.
10.An opinion of Walkers, Cayman Islands legal advisers.
11.A confirmation from Walkers Fiduciary Limited as shareholder of the Borrower that the share charge dated 24 July 2017 remains in full force and effect.
12.Evidence, in a form and substance satisfactory to the Lenders, that BpiFAE has agreed to the changes referred to in this Agreement.
Part B: Seller
1.A certificate from an authorised signatory of each of the Borrower and the Buyer confirming that there have been no changes or amendments to the constitutional documents or board resolutions of such Party, certified copies of which were previously delivered to the Purchaser or the Facility Agent pursuant to the Receivable Purchase Agreement or the Facility Agreement or attaching revised versions in case of any changes or amendments.
2.A copy, certified by an authorised officer of each of the Borrower and the Buyer of (a) resolutions of the board of directors of such Party approving the transactions contemplated by this Agreement and authorising a person or persons to execute this Agreement and any notices or other documents to be given pursuant hereto and (b) any power of attorney issued pursuant to such resolutions (which shall be certified as being in full force and effect and not revoked or withdrawn).
3.Written acceptance by the agents for service of process in respect of the Borrower and the Buyer in relation to this Agreement.
Part C: Buyer
1.A certificate from an authorised signatory of each of the Borrower and the Seller confirming that there have been no changes or amendments to the constitutional documents or board resolutions of such Party, certified copies of which were previously delivered to the Borrower or the Facility Agent pursuant to the Receivable Purchase Agreement or the Facility Agreement or attaching revised versions in case of any changes or amendments.
2.A copy, certified by an authorised officer of the Borrower of (a) resolutions of the board of directors of the Borrower approving the transactions contemplated by this Agreement and authorising a person or persons to execute this Agreement and any notices or other documents to be given pursuant hereto and (b) any power of attorney issued pursuant to such resolutions (which shall be certified as being in full force and effect and not revoked or withdrawn).
3.Evidence of the authority of the signatories of the Seller to sign this Agreement.
4.Written acceptance by the agents for service of process in respect of the Seller and the Borrower in relation to this Agreement.
Schedule 3
Form of Amended and Restated Facility Agreement
Schedule 4
Form of Amended and Restated Receivable Purchase Agreement
Schedule 5
Form of Amended and Restated Novation Agreement
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Private & Confidential
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Dated 24 July 2017
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(as amended and restated by a first supplemental agreement dated March 2020)
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HOUATORRIS FINANCE LIMITED
as Existing Borrower
ROYAL CARIBBEAN CRUISES LTD.
as New Borrower
CITIBANK EUROPE PLC, UK BRANCH
as Facility Agent
CITICORP TRUSTEE COMPANY LIMITED
as Security Trustee
CITIBANK N.A., LONDON BRANCH
as Global Coordinator
HSBC FRANCE
as French Coordinating Bank
SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH
as ECA Agent
CITIBANK N.A., LONDON BRANCH, BANCO SANTANDER, S.A., BNP PARIBAS, HSBC FRANCE, SOCIÉTÉ GÉNÉRALE and SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH
as Mandated Lead Arrangers AND
THE BANKS AND FINANCIAL INSTITUTIONS LISTED IN SCHEDULE 1
as Original Lenders
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NOVATION AGREEMENT
relating to a secured credit facility agreement for Hull No. M34 at Chantiers de l’Atlantique
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Contents
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Clause
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Page
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1
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Definitions
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2
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2
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Consent and agreement of the Finance Parties
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4
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3
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Assumption of liability and obligations
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4
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4
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Amendment and restatement of Principal Agreement
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6
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5
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Loan currency, Additional Advances and undrawn Commitments under the Principal Agreement
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6
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6
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Conditions
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9
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7
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Fixed rate
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10
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8
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Representations and warranties
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10
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9
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Covenants
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11
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10
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Commitment and cancellation by the New Borrower
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12
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11
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Satisfaction of Receivable, releases and BpiFAE Insurance Policy
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14
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12
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Assignment and transfers
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14
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13
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Miscellaneous and notices
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15
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14
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Governing law and jurisdiction
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15
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Schedule 1 The Original Lenders
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17
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Schedule 2 Conditions precedent
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20
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Schedule 3 Form of Novated Credit Agreement
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22
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THIS NOVATION AGREEMENT is dated 24 July 2017 (as amended and restated by a first supplemental agreement dated March 2020) and made BETWEEN:
(1)HOUATORRIS FINANCE LIMITED as transferor (the Existing Borrower);
(2)ROYAL CARIBBEAN CRUISES LTD. as transferee (the New Borrower);
(3)CITIBANK EUROPE PLC, UK BRANCH as facility agent for the other Finance Parties (the
Facility Agent);
(4)CITICORP TRUSTEE COMPANY LIMITED as security trustee for the other Finance Parties (the Security Trustee);
(5)CITIBANK N.A., LONDON BRANCH as global coordinator (the Global Coordinator);
(6)HSBC FRANCE as French coordinating bank (the French Coordinating Bank);
(7)SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH as ECA agent (the ECA Agent);
(8)CITIBANK N.A., LONDON BRANCH, BANCO SANTANDER, S.A., BNP PARIBAS, HSBC FRANCE, SOCIÉTÉ GÉNÉRALE and SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH as Mandated Lead Arrangers; and
(9)THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1 as Original Lenders.
WHEREAS:
(A)By a facility agreement dated on or about the date of this Agreement (the Principal Agreement) and made between (1) the Existing Borrower as borrower, (2) the banks and financial institutions named therein as original lenders, (3) the Mandated Lead Arrangers as mandated lead arrangers, (4) the Facility Agent as facility agent, (5) the Security Trustee as security trustee (6) the Global Coordinator as global coordinator, (7) the French Coordinating Bank as French coordinating bank and (8) the ECA Agent as ECA agent, the Lenders have agreed to make available a loan of up to €630,622,480 to the Existing Borrower in connection with the purchase by the Existing Borrower of the Receivable from the Seller pursuant to the Receivable Purchase Agreement.
(B)It is intended that on the Actual Delivery Date, and subject to the delivery of the Vessel to, and acceptance of the Vessel by, the New Borrower or the Nominated Owner (as defined below) on its behalf under the Building Contract and by way of satisfying the obligation of the New Borrower to pay the Receivable to the Existing Borrower (as purchaser of the Receivable from the Seller pursuant to the Receivable Purchase Agreement), all of the rights and obligations of the Existing Borrower in respect of the Principal Agreement shall be transferred by novation by the Existing Borrower to the New Borrower.
(C)The parties have also agreed that on the date of the novation contemplated in Recital (B) the Novated Loan Balance at such date shall be converted into Dollars, certain additional advances shall be made to the New Borrower and the Principal Agreement shall be amended and restated (in the form of the Novated Credit Agreement) pursuant to the terms of this Agreement.
(D)This Agreement sets out the terms and conditions upon which (i) the parties hereto shall agree to such novation, amendment and restatement of the Principal Agreement and (ii) the Lenders shall agree to make additional advances to the New Borrower.
NOW IT IS HEREBY AGREED as follows:
1.Definitions
a.Definitions
Words and expressions defined in the Principal Agreement shall have the same meaning when used in this Agreement, except insofar as the context otherwise requires or as otherwise defined in this Agreement:
Additional Advances has the meaning given to it in clause 5.2.
Change Orders has the meaning given to it in the Receivable Purchase Agreement.
BpiFAE Premium has the meaning given to it in the Novated Credit Agreement.
Dollars has the meaning given to it in the Novated Credit Agreement.
Initial Effective Date has the meaning given to it in the Receivable Purchase Agreement.
Maximum Loan Amount has the meaning given to it in the Novated Credit Agreement.
Mortgage means the first ranking ship construction mortgage over the Vessel granted or, as the case may be, to be granted by the New Borrower in favour of the Security Trustee and certain other parties in the form scheduled to the Buyer Consent Agreement.
Nominated Owner has the meaning given to it in the Credit Agreement.
Non-Yard Costs has the meaning given to it in the Novated Credit Agreement.
Novated Credit Agreement means the Principal Agreement as novated, amended and restated by this Agreement.
Novated Loan Balance means, subject to clause 10.2 and subject to the approval of the New Borrower pursuant to clause 3.5, the outstanding principal amount of the Loan owing by the Existing Borrower on the Novation Effective Date (and reflecting the amount of any Advances drawndown or deemed drawndown by the Existing Borrower in accordance with the terms of the Principal Agreement on such date but excluding any Unsecured Advances) up to the amount not exceeding the lower of:
(a)the amount of the Final Payment after any deductions permitted under the Buyer Consent Agreement;
(b) €630,622,480; and
(c) the amount referred to in clause 2.1(c) of the Principal Agreement.
Novation Effective Date means, when the Novation Effective Time has occurred, the date on which the Novation Effective Time so occurs.
Novation Effective Time means the time at which the Vessel is delivered to, and accepted by, the New Borrower (as buyer) or, as the case may be, the Nominated Owner (on its behalf) under the Building Contract (as evidenced by the protocol of delivery and acceptance for the Vessel), save that the “Novation Effective Time” shall not occur hereunder unless:
(a)the Facility Agent has notified the parties in writing that it has received all of the documents and other evidence referred to in clause 6; and
b.such time falls before the Back Stop Date (as defined in the Receivable Purchase Agreement and subject to clause 10.2).
NYC Applicable Rate means the USD-to-EUR rate used by the New Borrower to convert the relevant Dollar amount of the Non-Yard Costs into euro for the purpose of the Seller invoicing the same to the New Borrower in euro in accordance with the Building Contract.
Other Basic Contract Price Increases means any increase in the Basic Contract Price pursuant to the following Articles of the Building Contract: I.5.7 and I.5.8 (choice of suppliers),
II.1 (in relation to the Non-Exercise Premium as defined in that Article), III.2.3 (speed bonus) and
III.6.2 (extra cabins), in the amount provided for in the Building Contract or as reasonably determined by the New Borrower and, in each case, evidenced to the reasonable satisfaction of the Facility Agent, but (for the purpose of calculating the Maximum Loan Amount and the Additional Advance in respect of such items) in an aggregate amount not exceeding
€12,000,000 (in relation to the Non-Exercise Premium) plus an amount not exceeding
€10,000,000 (in relation to bonuses pursuant to Articles III.2 and III.6 of the Building Contract).
Signing Date means the date of this Agreement.
Spot Rate of Exchange means, for the purposes of determining an equivalent amount in EUR of Dollars on any relevant date, the mid FX Rate EUR/USD (published on the basis of the 1:00pm London Bloomberg BFIX rate) two (2) Banking Days before that date.
Unsecured Advances has the meaning given to it in the Buyer Consent Agreement.
US Dollar Equivalent has the meaning given to it in the Novated Credit Agreement.
Weighted Average Rate of Exchange means the weighted average rate of exchange that the New Borrower has agreed, either in the spot or forward currency markets, to pay its counterparties for the purchase of the relevant amounts of euro with Dollars for the payment of the euro amount of the Contract Price (including the portion thereof comprising the Change Orders, any Other Basic Contract Price Increases and the Non-Yard Costs) and including in such weighted average calculation (a) the NYC Applicable Rate in relation to the portion of the Contract Price comprising the Non-Yard Costs and (b) the spot rates for any other euro amounts that have not been hedged by the New Borrower.
b.Headings
Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Agreement.
c.Construction
Clause 1.4 of the Principal Agreement shall apply to this Agreement as if set out herein.
d.References to Novated Credit Agreement
Unless a contrary indication appears, any reference in this Agreement to a term defined in, or an article or section of, or an exhibit to, the Novated Credit Agreement, shall refer to such term defined in, or article or section of, or exhibit to, the agreement set out in Schedule 3 notwithstanding that such agreement is not yet effective, it being agreed that articles and sections of the Novated Credit Agreement, where so incorporated into, or which are to apply for the purpose of, this Agreement, shall be effective and apply under this Agreement notwithstanding that for the purpose of the Novated Credit Agreement they shall only apply from the Novation Effective Time.
e.References to Security Trustee and Finance Parties
It is agreed that as the Security Trustee will not be a party to the Novated Credit Agreement and accordingly have no responsibilities thereunder, the Security Trustee is a party to this Agreement
for the purpose of approving the novation and allowing the Novation Effective Date to occur but it shall have no responsibilities in respect of the Novated Credit Agreement or have rights or obligations under this Agreement in respect of the Novated Credit Agreement. Accordingly, references to parties or the Finance Parties in clauses 3.2, 5.3, 5.4, 5.5 and 8.3 shall not include the Security Trustee.
2.Consent and agreement of the Finance Parties
Subject to the other provisions of this Agreement and upon reliance of each of the representations and warranties in clause 8, the Facility Agent, the Security Trustee, the Global Coordinator, the French Coordinating Bank, the ECA Agent, the Mandated Lead Arrangers, the Arrangers and the Lenders agree with the Existing Borrower and the New Borrower on the Novation Effective Date (and at the Novation Effective Time), that they consent to the novation, amendment and restatement of the Principal Agreement on the terms set out in clauses 3 and 4 and to the conversion of the currency of the Loan and to the making of the Additional Advances in accordance with clause 5.
3.Assumption of liability and obligations
a.Substitution
It is hereby agreed that, as and with effect from the Novation Effective Time:
1.the New Borrower shall be, and is hereby made, a party to the Principal Agreement in substitution for the Existing Borrower; and
2.the Principal Agreement shall be amended and restated as set out in clause 4.
b.Assumption of liability
The New Borrower hereby agrees with the Finance Parties that, as and with effect from the Novation Effective Time, it shall be indebted to the Finance Parties for the full amount of the Novated Loan Balance and, when drawn pursuant to clause 5.2 (and as adjusted pursuant to clause 5.3), the Additional Advances and the New Borrower further agrees that from the Novation Effective Time it shall duly and punctually perform all the liabilities and obligations to be performed or discharged in respect of the Novated Loan Balance under the Novated Credit Agreement and shall be bound by the terms of the Novated Credit Agreement from the Novation Effective Time as the “Borrower” thereunder.
c.Release
The Existing Borrower and the Finance Parties hereby agree that, as and with effect from the Novation Effective Time, they shall each mutually release and discharge each other from all liabilities, obligations, claims and demands whatsoever under or touching or concerning the Principal Agreement and in respect of anything done or omitted to be done under or in connection therewith except that if at the Novation Effective Time there are any outstanding liabilities of the Existing Borrower under the Principal Agreement which are the subject of an indemnity claim against the Seller pursuant to clause 7 of the Receivable Purchase Agreement, to prevent the Finance Parties losing the ability to recover those claims against the Seller, such liabilities shall be preserved against the Existing Borrower until such claims are satisfied.
d.No liability
The Finance Parties hereby confirm to the New Borrower, that except for the obligations in respect of the Novated Loan Balance which are, with effect from the Novation Effective Time, to be assumed by the New Borrower pursuant to clause 3.2, the New Borrower shall have no liability, and the Finance Parties shall have no recourse whatsoever to the New Borrower or any of its assets, in respect of any liabilities, obligations, claims and demands whatsoever under or touching or concerning the Principal Agreement or in respect of anything done or omitted to be done under or in connection therewith.
e.Novated Loan Balance
The Facility Agent agrees that:
(a)following each Drawdown Date (and at any other time upon reasonable request), it will provide the New Borrower with an update in relation to the amount of the outstanding Loan;
(b)not less than ten Banking Days prior to the anticipated Actual Delivery Date, it will consult with the New Borrower regarding the anticipated amount of the Novated Loan Balance as at the anticipated Novation Effective Time to enable the New Borrower to confirm and verify this amount (having regard to paragraphs (a) and (b) of the definition of Novated Loan Balance) and satisfy itself that it is an amount which reflects the expected drawdown of the Loan during the period prior to the Actual Delivery Date and that the same does not include any Unsecured Advances. The New Borrower shall promptly confirm its acceptance of the amount or, if applicable, raise any questions as to the calculation of this amount with the Facility Agent so that the amount can be approved prior to the Novation Effective Time; and
(c)as part of the process of agreeing the Novated Loan Balance it will participate in the preparation of the delivery funds flow agreement referred to in clause 13.6 of the Buyer Consent Agreement.
f.Prepayment in respect of overpaid Purchase Price
If at the Novation Effective Time the Seller has become liable to make a refund of the Purchase Price pursuant to clause 2.5 of the Receivable Purchase Agreement and has not made payment of that refund such that a partial prepayment of the Loan in an amount equal to that refund (the Refund Prepayment Amount) has not been made, the New Borrower shall prepay an amount of the Novated Loan Balance corresponding to that Refund Prepayment Amount on the Novation Effective Date, such prepayment to be without premium, penalty or breakage costs, and shall be by way of a regularly scheduled required prepayment (and not a requirement to make payment prior to the scheduled maturity thereof).
Where any such prepayment is required by the New Borrower pursuant to this clause 3.6:
(a)the relevant amount of such prepayment may, if requested by the New Borrower, be deducted from the amount of the Additional Advances to be made available to the New Borrower on the Novation Effective Date and, where the New Borrower has requested that the prepayment required under this clause 3.6 be deducted from the Additional Advances, an actual payment shall only be required by the New Borrower if the prepayment amount exceeds the aggregate amount of the Additional Advances to be advanced to the New Borrower; and
(b)the New Borrower shall be entitled to exercise its rights under clause 13.2(b) of the Buyer Consent Agreement.
It is agreed that the liability of the New Borrower in respect of the Refund Prepayment Amount under this clause shall not exceed the amounts referred to in clause 13.2(a) of the Buyer Consent Agreement.
g.Notification of set-off
Where clause 7.5 (Set-off for unpaid amounts) of the Receivable Purchase Agreement applies and an amount is to be deducted from the Payment Amount due to the Seller in relation to any amount due and owing by the Seller to the Existing Borrower or the Finance Parties under the Transaction Documents which remains unpaid at the Drawdown Date for an Advance (an unpaid amount) and that unpaid amount will consequently be retained from the relevant Advance under clause 2.2(d) of the Principal Agreement, the Facility Agent shall notify the New Borrower before the relevant Drawdown Date of the unpaid amount (together with reasonable
details of the type, amount and the manner in which such amount, and all components thereof, have been calculated).
4.Amendment and restatement of Principal Agreement
The Principal Agreement shall, with effect on and from the Novation Effective Time, be (and it is hereby) amended and restated so as to read in accordance with the form of the Novated Credit Agreement set out in Schedule 3 and (as so amended and restated) will be binding upon each of the parties thereto in accordance with its terms as so amended and restated.
5.Loan currency, Additional Advances and undrawn Commitments under the Principal Agreement
a.Currency conversion
On the Novation Effective Date the Additional Advances to be drawndown by the New Borrower on the Novation Effective Date shall be made available in Dollars in accordance with the following provisions of this clause 5 and the Novated Credit Agreement and thereafter the Novated Loan Balance shall be converted from euro to Dollars by reference to the US Dollar Equivalent (as defined in the Novated Credit Agreement) of such amount.
b.Additional Advances
Subject to the terms and conditions of this Agreement, on the Novation Effective Date, the New Borrower shall be entitled to borrow further advances (the Additional Advances) in Dollars in respect of the following amounts:
i.an amount of up to 80% of the incurred Non-Yard Costs (of up to €76,000,000) and the Other Basic Contract Price Increases paid or to be paid by the New Borrower under the Building Contract and in a maximum aggregate amount of €79,000,000; and
ii.an amount equal to 100% of the BpiFAE Premium as calculated in accordance with Section 11.13.1(b) of the Novated Credit Agreement as at the Novation Effective Time, which amount shall be divided into two parts:
1.the amount payable by the New Borrower to BpiFAE in respect of such part of the BpiFAE Premium which remains payable to BpiFAE at the Novation Effective Date; and
2.the balance, which shall, subject to the New Borrower’s set-off rights referred to in clause 13.3 of the Buyer Consent Agreement, be payable by the New Borrower to the Seller in reimbursement of the amounts which have been deducted from the Payment Amounts in respect of the BpiFAE Premium pursuant to the Receivable Purchase Agreement,
provided however that the aggregate amount of the Additional Advances (as adjusted, where relevant, under clause 5.3), when added to the Novated Loan Balance (or, if different and to the extent applicable, the aggregate of any amounts advanced in respect of the Facility (and not of the Additional Advances) in the manner contemplated by clause 5.4), shall not exceed the Maximum Loan Amount.
The Weighted Average Rate of Exchange shall be used to calculate the Dollar amount of the Additional Advance referred to in clause 5.2(a) and the Spot Rate of Exchange shall be used to calculate the Dollar amount of the Additional Advance referred to in clause 5.2(b).
The Additional Advance referred to in clause 5.2(b)(i) shall be paid directly to BpiFAE in the manner described in Section 2.3(d) of the Novated Credit Agreement.
c.Adjustment of Additional Advances
On the Novation Effective Date, the parties hereby agree that the aggregate amount of the Additional Advances (other than the amount referred to in clause 5.2(b)(i)) shall be adjusted, as applicable, by a Dollar amount (the Adjustment Amount) equal to the product of:
i.the difference obtained by subtracting the Spot Rate of Exchange on the Actual Delivery Date from the Weighted Average Rate of Exchange; and
ii.the Novated Loan Balance.
If the Adjustment Amount is a positive number, the aggregate amount of the Additional Advances to be drawn in Dollars shall be increased by such Adjustment Amount.
Conversely, if the Adjustment Amount is a negative number, the aggregate amount of the Additional Advances to be drawn in Dollars shall be decreased by such Adjustment Amount, provided however, if such Adjustment Amount exceeds the amount of the Additional Advances that would have been advanced in Dollars but for the operation of this clause (and subject to any agreement reached to the contrary in the delivery funds flow agreement referred to in clause 3.5(c)), no Dollar Additional Advances will be made and the New Borrower shall prepay (in Dollars) an amount of the Novated Loan Balance corresponding to that excess amount on the Novation Effective Date (a Section 5.3 Prepayment), such prepayment to be without premium, penalty or breakage costs, and shall be by way of a regularly scheduled required prepayment (and not a requirement to make payment prior to the scheduled maturity thereof). Any failure by the New Borrower to make the Section 5.3 Prepayment on the Novation Effective Date shall be capable of giving rise to an Event of Default under Section 8.1.1 of the Novated Credit Agreement unless waived by, or alternative arrangements are agreed with, the Required Lenders (as defined in the Novated Credit Agreement) acting on the instructions of BpiFAE.
d.Undrawn Commitments under the Principal Agreement
In the event that either:
i.the Existing Borrower has not drawn the full amount of the Total Commitments under the Principal Agreement at the Novation Effective Date; or
ii.the Total Commitments under the Principal Agreement have been cancelled or reduced before the Novation Effective Date and this is not as a result of a cancellation of the Building Contract by the Seller due to a Buyer Specified Event; or
iii.it is not possible for the Facility to be made available to the Existing Borrower to the satisfaction of the Seller and the New Borrower,
the Finance Parties agree that if the Vessel continues to be constructed by the Seller in France and the BpiFAE Insurance Policy continues to be maintained (or, if applicable, reinstated or reissued) then, if required by the New Borrower, the Facility will continue to be available to the New Borrower and the amount of the Facility shall be the amount that it would otherwise have been but for the occurrence of the events referred to in (a) to (c) above and such Facility shall include, without limitation, amounts to finance or refinance any reasonable completion expenses (the Completion Expenses) incurred by the New Borrower in completing the Vessel (of the type contemplated by Article XI 5 of the Building Contract and, where applicable, up to the amount of such Completion Expenses agreed pursuant to clause 10.2 of the Buyer Consent Agreement).
If this clause applies and the New Borrower exercises its rights to continue to have the Facility made available to it on the Actual Delivery Date or (with the prior consent of BpiFAE, not to be unreasonably withheld and having regard to the provisions relating to BpiFAE below) before the Actual Delivery Date this will either be through a novation, amendment and restatement of the Principal Agreement in the manner contemplated by clauses 3 and 4 or through the execution of a new credit agreement based substantially on the terms of the Novated Credit Agreement, but in each case updated to the extent necessary to reflect the additional amounts which would
need to be made available thereunder in addition to the Additional Advances and, when applicable, in respect of the Completion Expenses, to allow the New Borrower to draw and/or assume by way of novation an amount in aggregate up to the Maximum Loan Amount and to reflect any agreed changes related to the New Borrower’s hedging arrangements in respect of the Contract Price. In these circumstances the Finance Parties and the New Borrower shall, in good faith, agree such changes to this Agreement and/or the Novated Credit Agreement or agree and thereafter enter into a new credit agreement of the type referred to above, so as to place the New Borrower in all material respects in the same position it would have been had the Facility been fully available during the pre-delivery period in the manner set out in the Transaction Documents.
Where this clause applies, the amount of the Facility available to the New Borrower shall not exceed the Maximum Loan Amount and the amount of the indebtedness of the Existing Borrower under the Principal Agreement which the New Borrower may be required to assume by way of novation shall not exceed an amount equal to the Novated Loan Balance at the relevant time.
It is acknowledged that BpiFAE have confirmed that they will agree to continue, reinstate or reissue the BpiFAE cover in circumstances where this clause applies and the New Borrower is to draw the Facility on the Actual Delivery Date. Formal consent of BpiFAE will be required in relation to (i) any availability of the Facility to the New Borrower before the Actual Delivery Date and (ii) the arrangements and the terms of any new or novated facility agreement, such consent not to be unreasonably withheld. The New Borrower and the Finance Parties agree to co- operate in good faith and use reasonable efforts to procure such consent.
In addition, where this clause applies, the New Borrower agrees that:
(A)the amounts payable to the Lenders in respect of arrangement fees in respect of the Facility (as set out in the relevant Fee Letter attached to any Fee Letter signed by the New Borrower) and the BpiFAE Premium payable to BpiFAE, shall continue to be payable in full and the New Borrower shall be required, where it does not currently have responsibility for the full payment of all those amounts, to assume responsibility for the payment of such amounts (it being acknowledged that the New Borrower shall not have any responsibility for payment of amounts of BpiFAE Premium already paid to BpiFAE pursuant to the Receivable Purchase Agreement where these amounts have not been (or will not be) refunded due to the cancellation of the Facility); and
(B)it shall be liable to pay commitment fees on the basis set out in Section 3.4 (Commitment Fees) of the Novated Credit Agreement (but without double counting in relation to any amounts due under clause 10.1).
The Finance Parties agree that this clause 5.4 shall apply notwithstanding that the Initial Effective Date may not occur.
e.Borrowing procedure for Additional Advances
The New Borrower and the Finance Parties agree that the procedures set out in Article II (Commitments and borrowing procedures) of the Novated Credit Agreement shall apply in relation to the borrowing of the Additional Advances and, if applicable (and subject to any agreed amendments arising pursuant to clause 5.4), any amounts under clause 5.4.
f.Notification of New Borrower’s hedging arrangements
1.In connection with the calculation of the Weighted Average Rate of Exchange, the New Borrower agrees to provide the Facility Agent with the information referred to in this clause
5.6. The New Borrower and the Facility Agent agree to have an initial discussion in relation to the calculation by no later than the date falling 60 days before the anticipated Actual Delivery Date and thereafter, following the invoicing of the Non-Yard Costs to the Builder (on or about the date falling 30 days before the anticipated Actual Delivery Date),
the New Borrower and the Facility Agent will further discuss the calculation of the Weighted Average Rate of Exchange during the period up to the Novation Effective Time.
2.The New Borrower shall deliver to the Facility Agent (who shall promptly forward the same to the Lenders and BpiFAE), on a quarterly basis following the Signing Date, a schedule of the Weighted Average Rate of Exchange, accompanied by copies of confirmations or screen shots evidencing the entry into, termination or modification of any trades or fixings effected during such quarter under any agreements entered into by the New Borrower from time to time in spot or forward currency markets for the purchase of euros with Dollars in order to pay the Contract Price or fix the NYC Applicable Rate.
3.Notwithstanding paragraph (b) above, on or between the tenth and second Banking Days prior to the date on which the New Borrower intends to deliver the Loan Request (as defined in the Novated Credit Agreement) to the Facility Agent, the New Borrower shall deliver to the Facility Agent (who shall promptly forward the same to the Lenders and BpiFAE) the New Borrower's preliminary written calculation in reasonable detail of the Weighted Average Rate of Exchange (to the extent not previously provided) and the New Borrower shall also provide copies or other evidence of such currency hedges as the Facility Agent may reasonably require.
6.Conditions
a.Documents and evidence
The agreement of the Finance Parties referred to in clause 2 and the obligation of the Lenders to contribute to any advances in respect of the Facility to be made in accordance with this Agreement shall be subject to the condition that:
(a)by no later than the Signing Date, the Facility Agent, or its duly authorised representative, shall have received the documents and evidence specified in Part 1 of Schedule 2 in form and substance satisfactory to the Facility Agent (acting on the instructions of the Lenders and BpiFAE);
(b)by no later than the Initial Effective Date, the Facility Agent, or its duly authorised representative, shall have received the documents and evidence specified in Part 2 of Schedule 2 in form and substance satisfactory to the Facility Agent (acting on the instructions of the Lenders and BpiFAE); and
(c)by no later than the Novation Effective Time, the Facility Agent, or its duly authorised representative, shall have received each of the documents and evidence set out in section
5.1 of the Novated Credit Agreement (but subject to the proviso to Section 5.1.10) and confirmation in writing from the New Borrower to the Facility Agent that it (or the Nominated Owner on its behalf) will take delivery of the Vessel under the Building Contract and the actual date on which delivery shall occur, which confirmation shall be given immediately prior to the occurrence of the Novation Effective Time.
b.General conditions precedent
The agreement of the Finance Parties referred to in clause 2 and the obligation of each Lender to contribute to any advances in respect of the Facility to be made under this Agreement shall be subject to the further conditions that on the Novation Effective Date:
1.the representations and warranties of the New Borrower contained in clause 8 are true and correct in all material respects (except for such representations and warranties that are qualified by materiality or non-existence of a material adverse effect which shall be accurate in all respects) on and as of each such time as if each was made with respect to the facts and circumstances existing at such time; and
2.no Event of Default and no Prepayment Event (each as defined in the Novated Credit Agreement) shall have occurred and be continuing or would result from the novation of
the Principal Agreement or the making of the Additional Advances pursuant to this Agreement.
c.Waiver of conditions precedent
The conditions specified in this clause 6 are inserted solely for the benefit of the Lenders and may be waived on their behalf in whole or in part and with or without conditions by the Facility Agent acting on the instructions of the Majority Lenders and BpiFAE.
d.Confirmation of conditions precedent
Once the conditions set out in this clause 6 have been satisfied (or waived) as provided above, the Facility Agent shall confirm the same by written notice to the other parties to this Agreement.
7.Fixed rate
The New Borrower has elected that the CIRR fixed interest rate shall apply under the Novated Credit Agreement.
8.Representations and warranties
a.Existing Borrower representations and warranties
The Existing Borrower shall be deemed to repeat the representations and warranties:
3.in clause 7.1 of the Principal Agreement on (i) the date of this Agreement and (ii) the Initial Effective Date; and
4.in clauses 7.1(a), 7.1(b), 7.1(c), 7.1(d) and 7.1(j) of the Principal Agreement on the Novation Effective Date,
in each case, as if made with reference to the facts and circumstances existing on such dates.
b.New Borrower representations and warranties
The New Borrower represents and warrants to the Finance Parties that the representations and warranties set out in Sections 6.1 (Organization, etc.), 6.2 (Due Authorization, Non- Contravention, etc.), 6.3 (Government Approval, Regulation, etc.), 6.5. (Validity, etc.), 6.9(a) (Obligations rank pari passu), 6.10 (Withholding, etc.), 6.11 (No Filing, etc. Required), 6.12 (No Immunity) and 6.13 (Investment Company Act) of Article VI of the Novated Credit Agreement are true and correct as if made on (a) the date of this Agreement and (b) the Initial Effective Date with reference to the facts and circumstances existing on such day (and as if references therein to “this Agreement” were to this Agreement and to “the Novation Effective Date” were references to (a) the Signing Date and (b) the Initial Effective Date).
The New Borrower shall be deemed to make the representations and warranties set out in the said Article VI on the Novation Effective Date in accordance with the terms of the Novated Credit Agreement (and as if references therein to “this Agreement” were to this Agreement and the Novated Credit Agreement).
c.Novation Effective Date representations by existing parties
On the Novation Effective Date, each of the Existing Borrower and the Finance Parties shall be deemed to represent to each other party to this Agreement that:
1.it has not transferred (whether by way of security or otherwise) any of its rights or obligations under the Principal Agreement (other than (i) any transfers or assignments by a Lender in accordance with the provisions of clause 14 (Assignment, transfer and Facility Office) of the Principal Agreement or (ii) any replacement of the Facility Agent, Security
Trustee, the French Coordinating Bank or the ECA Agent in accordance with the applicable provisions of the Agency and Trust Deed and the Security Trust Deed, which in each case, have previously been disclosed to the New Borrower where consent or approval of the New Borrower is not otherwise required in relation to any such assignments or transfers); and
2.it has duly performed all of its obligations under the Principal Agreement.
9.Covenants
a.New Borrower covenants
The New Borrower undertakes with each of the Finance Parties that, from the date of this Agreement, the New Borrower will comply with its obligations under the following Sections of the Novated Credit Agreement (as if references in those Sections to the “Novation Effective Date” referred to the Signing Date):
(a)Section 7.1.1a) and b) (Annual and quarterly financial information);
(b)Section 7.1.2 (Approvals and other consents);
(c)Section 7.1.3 (Compliance with laws, etc.); and
(d)the first sentence of Section 7.1.7 (BpiFAE insurance policy/French authority requirements).
b.Notification of increased costs, etc.
Each Lender shall (through the Facility Agent) notify the New Borrower at least three months before the anticipated Novation Effective Date if:
(a)it intends to claim for any increased cost under Sections 4.3 (Increased LIBO Rate Loan Costs, etc.) or 4.5 (Increased capital costs) or for any Covered Taxes (as defined in the Novated Credit Agreement) under Section 4.6 (Taxes) or reserve costs under Section 4.7 (Reserve costs) of the Novated Credit Agreement for the period falling after the Novation Effective Date; or
(b)any of the circumstances referred to in Sections 4.1 (LIBO Rate lending unlawful) or 4.2 (Deposits unavailable) apply to it,
it being acknowledged that the New Borrower shall have no liability in respect of any such increased costs or amounts incurred or arising in respect of the period prior to the Novation Effective Time. Such notice shall include the relevant details referred to in those Sections.
c.Notification of anticipated buffer claims
Following completion of sea trials for the Vessel, each Lender shall (through the Facility Agent) notify the New Borrower if there are any accrued claims outstanding against the Seller or other amounts that it anticipates will or may be deducted from the Pre-delivery Buffer on the Actual Delivery Date and shall (if reasonably requested by the New Borrower) provide the New Borrower with a notice of such anticipated amounts at any other time.
d.Interest stabilisation
Each Lender agrees with the New Borrower that it will, from the date of this Agreement, comply with its obligations under Section 3.3.3 (Interest stabilisation) of the Novated Credit Agreement.
10.Commitment and cancellation by the New Borrower
a.Commitment Fees
The New Borrower agrees to pay to the Facility Agent for the account of each Lender a commitment fee on its daily unused portion of the Maximum Loan Amount (as such amount may be adjusted from time to time) on the basis of and at the times set out in Section 3.4 (Commitment Fees) of the Novated Credit Agreement. In calculating the amount of commitment fee due to each Lender on each Commitment Fee Payment Date (as defined in Section 3.4), the Facility Agent shall take into account whether any Lender was a Defaulting Lender at any time during the period since the previous Commitment Fee Payment Date. For this purpose, each Lender agrees that it will notify the Facility Agent, the other Lenders and the New Borrower if it becomes a Defaulting Lender. In the event that a Lender becomes a Defaulting Lender and the other Lenders have not confirmed to the New Borrower within five Banking Days of receiving the notice referred to above that they will honour the commitment of any Defaulting Lender, no commitment fee shall be payable to the Facility Agent for the account of a Lender on any unused portion of the Maximum Loan Amount of that Lender for any day on which that Lender was a Defaulting Lender. If the other Lenders (or any of them) have confirmed within such five Banking Day period that they will honour all or part of a Defaulting Lender’s commitment, the commitment fee shall continue to be payable in respect of the relevant portion of the Defaulting Lender’s commitment so honoured.
b.Cancellation
The New Borrower may, by written notice to the Facility Agent at any time prior to the date falling not less than ten days prior to the anticipated Actual Delivery Date (and which shall also be a minimum period of not less than 10 Banking Days prior to the proposed date of cancellation set out in the New Borrower’s notice, the Notified Cancellation Date), without premium or penalty (except as may be required by clause 10.5), terminate, or from time to time reduce, the Commitment (as defined in the Novated Credit Agreement). Any such termination or reduction of the Commitment shall be applied to the respective Commitments of the Lenders, pro rata according to the amounts of their respective Commitments. Where the Commitment is cancelled in full or in part the New Borrower shall pay on the date of such cancellation all amounts, including any fees and commissions which have accrued but remain unpaid at such date and any breakage costs payable pursuant to clause 10.5, which are due and owing by the New Borrower to the Finance Parties at such date pursuant to this Agreement or any Fee Letter or any mandate letter entered into in connection with the Transaction Documents to which the New Borrower is a party to the extent that such amounts are the subject of invoices from the Facility Agent to the New Borrower received by the New Borrower not less than two Banking Days prior to the date of such cancellation (the Invoiced Amounts). It is acknowledged and agreed that where the Commitment is cancelled in full the effectiveness of any such proposed cancellation shall be conditional on the payment of the Invoiced Amounts (but on the basis that commitment fees under clause 10.1 shall cease on the Notified Cancellation Date). The ECA Agent shall in such circumstances use reasonable endeavours to provide the New Borrower with both an indicative calculation of any potential breakage costs arising from the proposed cancellation as soon as practicable following receipt of the cancellation notice and an invoice in respect of any actual breakage amounts as soon as practicable prior to the Notified Cancellation Date. If no invoices have been issued for any such amounts (the Non-Invoiced Amounts), such Non-Invoiced Amounts shall be payable by the New Borrower following the Notified Cancellation Date upon the second Banking Day following receipt of the relevant invoices. Where the Commitment is cancelled in part, the allocation of such cancellation between the Novated Loan Balance and the Additional Advances shall be determined at the relevant time of cancellation at the New Borrower’s election made in its discretion after consultation with the other parties concerned including Natixis DAI and BpiFAE (but on the basis that any allocation of any such partial cancellation cannot cause the Novated Loan Balance to be reduced to zero and will be subject to BpiFAE confirming it has no objection to such allocation). In addition, where the Commitment is cancelled in part, any amounts required to be paid by the New Borrower under this clause in respect of such cancellation which remain outstanding at the Novation Effective Time shall be treated as a liability on the New Borrower under the Novated Credit Agreement.
c.Prepayment of Loan under the Principal Agreement
Where a cancellation notice in respect of the full amount of the Commitment is given by the New Borrower in accordance with 10.2:
1.the provisions of clause 3 shall not apply and accordingly the Novation Effective Time shall not be capable of occurring; and
2.the Existing Borrower and the Finance Parties hereby acknowledge that the Loan will be prepaid in full on the Actual Delivery Date in accordance with clause 4.3(e) of the Principal Agreement but that the Principal Agreement shall otherwise continue in force in accordance with its terms and the Facility will continue to be available to the Existing Borrower pursuant to the terms of the Principal Agreement.
d.BpiFAE Premium
It is acknowledged by the parties that if the New Borrower voluntarily cancels all or any of the Commitment under clause 10.2, the New Borrower shall not be obliged to pay (or reimburse the Existing Borrower or the Seller for) all or any part of the BpiFAE Premium.
e.Fixed rate breakage costs
If the New Borrower:
(a)voluntarily cancels all or any of the Commitment under clause 10.2;
(b)voluntarily cancels all or any of the Commitment after it has exercised its rights under clause 4.3 of the Buyer Consent Agreement; or
(c)subject to the proviso below, does not borrow the Maximum Loan Amount as a result of the Contract Price being reduced in accordance with Article III of the Building Contract (resulting in a corresponding cancellation of part of the Commitment),
the New Borrower shall pay to the Facility Agent breakage costs in the amount notified to it following a calculation of such breakage costs based on the methodology referred to in Section 4.4.1b) of the Novated Credit Agreement and on the basis that for this purpose references in such clause to prepayment and prepay shall be treated as references to cancellation and the basis for the calculation of any breakage costs shall be determined by reference to:
i.if:
a.the Commitment is cancelled in full, 80% of €662,071,000; or
b.the Commitment is partially cancelled, the amount which is 80% of
€662,071,000 minus the un-cancelled Commitment; and
ii.24 assumed semi-annual repayment instalments starting from the Expected Delivery Date at the Signing Date.
Provided however that no breakage costs will be charged under clauses 10.5(a), 10.5(b) or 10.5(c) above if the Loan (as defined in the Novated Credit Agreement) assumed by and/or advanced to the New Borrower on the Novation Effective Date or otherwise pursuant to any restated or new credit agreement entered into in accordance with clause 5.4 equals or exceeds the US Dollar Equivalent of €529,656,800 (being 80% of €662,071,000).
For the purpose of calculating the Dollar amount of the breakage costs under this clause, the notional amount of the Loan shall be converted to a corresponding Dollar amount on the basis of the Spot Rate of Exchange on the date which is two Banking Days prior to the date of effective cancellation.
It is acknowledged and agreed for all purposes of this Agreement and the Novated Credit Agreement that the New Borrower shall not be liable to pay (or indemnify any Indemnified Party under Section 11.4 of the Novated Credit Agreement in respect of) any breakage costs related to the Fixed Rate in the event the Fixed Rate is not available as a result of any of the conditions precedent set forth in Section 5.1.10 of the Novated Credit Agreement not being satisfied for any reason other than due to the New Borrower’s own breach of the terms of this Agreement.
11.Satisfaction of Receivable, releases and BpiFAE Insurance Policy
a.Receivable
The Existing Borrower and the New Borrower agree that the assumption by the New Borrower of the Existing Borrower’s obligation to repay the Novated Loan Balance on the Novation Effective Date shall satisfy the obligation of the New Borrower to pay the Receivable to the Existing Borrower (as purchaser of the Receivable from the Seller pursuant to the Receivable Purchase Agreement).
b.Release of Security Documents on Novation Effective Date
It is acknowledged that on the Novation Effective Date (and subject to satisfaction of the conditions precedent referred to in this Agreement and the other Transaction Documents):
1.the Mortgage will be released (but without prejudice to the Finance Parties’ obligation to release the Mortgage in accordance with clause 11.1 of the Buyer Consent Agreement);
2.the Borrower Assignment (and any security assigned thereunder) and the Share Security will be released;
3.the Security Trustee will be released from its obligations under the Security Trust Deed and the Agency and Trust Deed;
4.the Facility Agent, the French Coordinating Bank and the ECA Agent will be released from their respective obligations under the Agency and Trust Deed (on the basis that the provisions of Article X of the Novated Credit Agreement will then apply); and
5.the Facility Guarantors shall be released from their obligations under the Facility Guarantees,
and the parties to such documents agree to enter into such documentation as the Facility Agent or any other party may reasonably require in order to effect such releases and discharges.
c.BpiFAE Insurance Policy
It is acknowledged that the BpiFAE Insurance Policy will remain in full force and effect notwithstanding the occurrence of the Novation Effective Date.
12.Assignment and transfers
The provisions of clause 14 (Assignment, transfer and facility office) of the Principal Agreement shall apply with equal effect to the Existing Borrower and the Finance Parties in relation to this Agreement as if the same were expressly stated herein and references therein to “the Agreement” shall be construed as references to this Agreement. Except to the extent permitted under section 7.2.6 of the Novated Credit Agreement, the New Borrower may not assign or transfer any of its rights or obligations under this Agreement.
13.Miscellaneous and notices
a.Notices
The provisions of clauses 17.1 and 17.2 (Notices) of the Principal Agreement shall extend and apply to the giving or making of notices or demands hereunder as if the same were expressly stated herein and for this purpose notices to the New Borrower shall be sent to it at:
1050 Caribbean Way Miami
Florida 33132
Fax no: +1 (305) 539-0562
Attn: Vice President, Treasurer
Copy to: General Counsel
b.Counterparts
This Agreement may be executed in any number of original counterparts and by facsimile provided that original signed copies are provided within a reasonable period of time thereafter. All such counterparts shall, once executed, constitute a single document.
c.Contracts (Rights of Third Parties) Act 1999
6.With the exception of BpiFAE, no term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement.
7.Notwithstanding any term of this Agreement, the consent of any person who is not a party to this Agreement is not required to amend or vary this Agreement at any time.
d.Rights of New Borrower under the Principal Agreement
It is agreed where any rights are expressed to be conferred on the New Borrower (as Buyer) under the Principal Agreement, the New Borrower shall be entitled to the benefit of such rights as if it were a party to the Principal Agreement for the sole purpose of those rights (and clause
17.7 of the Principal Agreement shall be deemed to be modified accordingly).
e.New Borrower payments
The provisions of section 3.3.4 (Post Maturity Rates) and 4.6 (Taxes) of the Novated Credit Agreement shall be deemed to apply in relation to any non-payment or, as the case may be, payments of amounts required to be made by the New Borrower to any of the Finance Parties under this Agreement as if the same was expressly incorporated herein and references therein to “the Agreement” shall be construed as references to this Agreement.
f.Confidentiality
The Lenders agree to be bound by the terms of clause 24 of the Buyer Consent Agreement as if the same were set out in full herein and as if references to a Party in that clause included a Lender.
14.Governing law and jurisdiction
a.Law
This Agreement and any non-contractual obligations connected with it are governed by and shall be construed in accordance with English law.
b.Submission to jurisdiction
The Existing Borrower and the New Borrower agree, for the benefit of the Finance Parties, that any legal action or proceedings arising out of or in connection with this Agreement against the Existing Borrower and/or the New Borrower or any of its assets (including any non-contractual obligations) may be brought in the English courts. Each of the Existing Borrower and the New Borrower irrevocably and unconditionally submits to the jurisdiction of such courts and irrevocably designates, appoints and empowers the following person to receive for it and on its behalf, service of process issued out of the English courts in any such legal action or proceedings:
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Existing Borrower
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Walkers London office at present of 6 Gracechurch Street,
London EC3V 0AT
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New Borrower
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RCL Cruises Ltd., Building 3, The Heights – Brooklands, Weybridge, Surrey, KT13 ONY, Attention: General Counsel
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The submission to such jurisdiction shall not (and shall not be construed so as to) limit the right of the Finance Parties to take proceedings against the Existing Borrower and/or the New Borrower in the courts of any other competent jurisdiction nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not.
The parties further agree that only the courts of England and not those of any other country shall have jurisdiction to determine any claim which the Existing Borrower and/or the New Borrower may have against any of the Finance Parties arising out of or in connection with this Agreement.
c.Waiver of immunity
To the extent that the Existing Borrower or the New Borrower has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its assets, each of the Existing Borrower and the New Borrower hereby irrevocably waives such immunity in respect of its obligations under this Agreement.
IN WITNESS whereof the parties to this Agreement have caused this Agreement to be duly executed on the date first above written.
Schedule 1
The Original Lenders
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Original Lender
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Facility Office and contact details
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Commitment
%
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Citibank N.A., London Branch
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Citigroup Centre Canada Square London E14 5LB United Kingdom
Attention: Wei-Fong Chan
Kara Catt Romina Coates Antoine Paycha
Fax No: +44 20 7986 4881
Tel No: +44 20 7986 3036 /
+44 20 7508 0344 /
+44 20 7986 4824 /
+44 20 7500 0907
E-mail: weifong.chan@citi.com; antoine.paycha@citi.com;
kara.catt@citi.com; romina.coates@citi.com
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24.1%
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Banco Santander,
S.A. , Paris Branch
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374 rue Saint Honoré 75001 Paris
Operational Address: Ciudad Grupo Santander, Avda De Cantabria, 28660 Boadilla del Monte, Madrid, Spain
For Credit Matters:
Elise Regnault / Ecaterina Mucuta / Andrea Ortiz / Ana Sanz Gomez / Vanessa Berrio / Caroline Pereira Pantaleao
Fax No: +34 91 257 1682
Tel No: +34 912893722 / +33 1 53 53 70 46 /
+1 6172170157 / +34 912891790 / +34
912891028 / +33 1 53 53 70 35
E-mail: elise.regnault@gruposantander.com ecaterina.mucuta@gruposantander.com andrea.ortiz@santander.us anasanz@gruposantander.com vaberrio@gruposantander.com cpantaleao@gruposantander.com
For Operational Matters:
Ana Sanz Gomez / Vanessa Berrio / Caroline Pereira Pantaleao
Fax No: +34 91 257 1682 /
Tel No: +34 912891790 / +34 912891028 /
+33 1 53 53 70 35
E-mail:anasanz@gruposantander.com vaberrio@gruposantander.com
cpantaleao@gruposantander.com corporativaeuropa@gruposantander.com
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8.6%
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Original Lender
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Facility Office and contact details
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Commitment
%
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BNP Paribas
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Front Office to keep copied to all matters. BNPP SA
37 RUE DU MARCHE SAINT HONORE
75001 PARIS ACI : CHC03B1
Alexandre de VATHAIRE / Mauricio GONZALEZ
alexandre.devathaire@bnpparibas.com mauricio.gonzalez@us.bnpparibas.com
Tel : 00 331 42 98 00 29/00 1212 841 38 88
Middle Office: For Operational / Servicing matters
KHALID BOUITIDA / THIERRY ANEZO MILLENAIRE 4
35, RUE DE LA GARE
75019 PARIS ACI : CVA05A1
khalid.k.bouitida@bnpparibas.com thierry.anezo@bnpparibas.com
Tel : 00 331 42 98 58 69 / 00 331 43 16 81 57
Back Office : For Standard Settlement Instruction authentication/call-back
STEVE LOUISOR / VALERIE DUMOULIN MILLENAIRE 4
35, RUE DE LA GARE
75019 PARIS ACI : CVA03A1
paris.cib.boci.ca.3@bnpparibas.com valerie.dumoulin@bnpparibas.com steve.louisor@bnpparibas.com
Tel : 00 331 55 77 91 86 / 00 331 40 14 46
59
HSBC France – Global Banking Agency Operations (GBAO) Transaction Manager Unit
103 avenue des Champs Elysées 75008 Paris
France
Attention: Florencia Thomas Alexandra Penda
Fax No: +33 1 40 70 28 80
Tel No: +33 1 40 70 73 81 /
+33 1 41 02 67 50
Email: florencia.thomas@hsbc.fr
alexandra.penda@hsbc.fr
Copy to:
HSBC France
103 avenue des Champs Elysées
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15.7%
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HSBC France
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15.8%
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|
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|
|
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Original Lender
|
Facility Office and contact details
|
Commitment
%
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75008 Paris France
Attention: Celine Karsenty / Julie Bellais Fax No: +33 1 40 70 78 93
Tel No: +33 1 40 70 28 59 /
+33 1 40 70 22 97
Email: celine.karsenty@hsbc.fr
julie.bellais@hsbc.fr
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Société Générale
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29 Boulevard Haussmann, 75009 Paris, France
For Credit Matters:
Francois Rolland and Mathieu Chevallier 189, rue d’Aubervilliers, 75886 Paris, CEDEX
18, OPER/FIN/SMO/EXT
Phone: +33 1 58 98 17 78 / +33 1 58 98 78 98
francois.rolland@sgcib.com / mathieu.chevallier@sgcib.com
For Operational Matters:
Isabelle Guner and Laetitia Perrot Francois Rolland and Mathieu Chevallier
189, rue d’Aubervilliers, 75886 Paris, CEDEX
18, OPER/FIN/STR/DMT6
Phone: +33 1 57 29 20 76 / +33 1 58 98 26 20
par-oper-caf-dmt6@sgcib.com
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24.8%
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Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch
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1/3/5 rue Paul Cézanne, 75008 Paris, France
Attention: Cedric Le Duigou
Guillaume Branco Herve Billi
Claire Lucien Helene Ly
Fax No: +33 1 44 90 48 01
Tel No:
Cedric Le Duigou: +33 1 44 90 48 83
Guillaume Branco: +33 1 44 90 48 71
Herve Billi: +33 1 44 90 48 48
Claire Lucien: +33 1 44 90 48 49
Helene Ly: +33 1 44 90 48 76
E-mail : cedric_leduigou@fr.smbcgroup.com guillaume_branco@fr.smbcgroup.com herve_billi@fr.smbcgroup.com claire_lucien@fr.smbcgroup.com helene_ly@fr.smbcgroup.com
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10.9%
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100
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Schedule 2 Conditions precedent
Part 1
Documents and evidence to be delivered to the Facility Agent not later than the Signing Date
1.Evidence that the conditions precedent set out in clause 9.1(a) of, and Schedule 3 Part 1 to, the Principal Agreement have been satisfied in full or waived in accordance with clause 9.4 of the Principal Agreement.
2.Documents equivalent to those referred to in Section 5.1.1 (Resolutions, etc.) of the Novated Credit Agreement in relation to the New Borrower and its execution of this Agreement, the Buyer Consent Agreement and any other Transaction Documents to which it is a party.
Part 2
Documents and evidence to be delivered to the Facility Agent not later than the Initial Effective Date
1 Evidence that the conditions precedent set out in clause 9.1(b) of, and Schedule 3 Part 2 to, the Principal Agreement have been satisfied in full or waived in accordance with clause 9.4 of the Principal Agreement.
Schedule 3
Form of Novated Credit Agreement
HULL NO. M34 CREDIT AGREEMENT
dated 24 July 2017 as novated, amended and restated on the Actual Delivery Date pursuant to
a novation agreement dated 24 July 2017 (as amended and restated by a first supplemental agreement dated 2020)
BETWEEN
Royal Caribbean Cruises Ltd. as the Borrower,
the Lenders from time to time party hereto,
Citibank N.A., London Branch as Global Coordinator
Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch as ECA Agent
and
Citibank Europe plc, UK Branch as Facility Agent and
Citibank N.A., London Branch, Banco Santander, S.A., Paris Branch, BNP Paribas, HSBC France, Société Générale and Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch as Mandated Lead Arrangers
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
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SECTION 1.1. Defined Terms
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10
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SECTION 1.2. Use of Defined Terms
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24
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SECTION 1.3. Cross-References
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24
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SECTION 1.4. Accounting and Financial Determinations
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24
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ARTICLE II COMMITMENTS AND BORROWING PROCEDURES
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SECTION 2.1. Commitment
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25
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SECTION 2.2. Commitment of the Lenders; Termination and Reduction of Commitments
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25
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SECTION 2.3. Borrowing Procedure
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25
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SECTION 2.4. Funding
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28
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ARTICLE III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
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SECTION 3.1. Repayments
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28
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SECTION 3.2. Prepayment
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28
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SECTION 3.3. Interest Provisions
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29
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SECTION 3.3.1. Rates
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29
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SECTION 3.3.2. [Intentionally omitted]
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30
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SECTION 3.3.3. Interest stabilisation.
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30
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SECTION 3.3.4. Post-Maturity Rates
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30
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SECTION 3.3.5. Payment Dates
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30
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SECTION 3.3.6. Interest Rate Determination; Replacement Reference Banks
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30
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SECTION 3.4. Commitment Fees
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32
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SECTION 3.4.1. Payment
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32
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SECTION 3.5. Other Fees
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33
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ARTICLE IV CERTAIN LIBO RATE AND OTHER PROVISIONS
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SECTION 4.1. LIBO Rate Lending Unlawful
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33
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SECTION 4.2. Deposits Unavailable
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33
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SECTION 4.3. Increased LIBO Rate Loan Costs, etc.
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34
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SECTION 4.4. Funding Losses
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36
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SECTION 4.4.1. Indemnity
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36
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SECTION 4.4.2. Exclusion
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37
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SECTION 4.5. Increased Capital Costs
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37
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SECTION 4.6. Taxes
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38
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SECTION 4.7. Reserve Costs
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40
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SECTION 4.8. Payments, Computations, etc
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41
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SECTION 4.9. Replacement Lenders, etc.
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41
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SECTION 4.10. Sharing of Payments
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42
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SECTION 4.10.1. Payments to Lenders
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42
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SECTION 4.10.2. Redistribution of payments
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42
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SECTION 4.10.3. Recovering Lender's rights
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43
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SECTION 4.10.4. Reversal of redistribution
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43
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SECTION 4.10.5. Exceptions
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43
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SECTION 4.11. Set-off
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43
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SECTION 4.12. Use of Proceeds
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44
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SECTION 4.13. FATCA Information.
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44
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SECTION 4.14. Resignation of the Facility Agent
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45
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ARTICLE V CONDITIONS TO BORROWING
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45
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SECTION 5.1. Advance of the Loan
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45
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SECTION 5.1.1. Resolutions, etc
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46
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SECTION 5.1.2. Opinions of Counsel
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46
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SECTION 5.1.3. BpiFAE Insurance Policy
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46
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SECTION 5.1.4. Closing Fees, Expenses, etc.
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46
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SECTION 5.1.5. Compliance with Warranties, No Default, etc
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47
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SECTION 5.1.6. Loan Request
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47
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SECTION 5.1.7. Foreign Exchange Counterparty Confirmations
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47
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SECTION 5.1.8. Protocol of delivery
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47
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SECTION 5.1.9. Title to Purchased Vessel
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47
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SECTION 5.1.10. Interest Stabilisation.
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48
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SECTION 5.1.11. Escrow Account Security
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49
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ARTICLE VI REPRESENTATIONS AND WARRANTIES
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SECTION 6.1. Organization, etc
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49
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SECTION 6.2. Due Authorization, Non-Contravention, etc
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49
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SECTION 6.3. Government Approval, Regulation, etc
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50
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SECTION 6.4. Compliance with Environmental Laws
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50
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SECTION 6.5. Validity, etc
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50
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SECTION 6.6. No Default, Event of Default or Prepayment Event
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50
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SECTION 6.7. Litigation
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50
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SECTION 6.8. The Purchased Vessel
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50
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SECTION 6.9. Obligations rank pari passu; Liens
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51
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SECTION 6.10. Withholding, etc
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51
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SECTION 6.11. No Filing, etc. Required
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51
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SECTION 6.12. No Immunity
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51
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SECTION 6.13. Investment Company Act
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51
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SECTION 6.14. Regulation U
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51
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SECTION 6.15. Accuracy of Information
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51
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SECTION 6.16. Compliance with Laws
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52
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ARTICLE VII COVENANTS
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SECTION 7.1. Affirmative Covenants
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52
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SECTION 7.1.1. Financial Information, Reports, Notices, etc
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52
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SECTION 7.1.2. Approvals and Other Consents
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54
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SECTION 7.1.3. Compliance with Laws, etc
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54
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SECTION 7.1.4. The Purchased Vessel
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54
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SECTION 7.1.5. Insurance
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55
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SECTION 7.1.6. Books and Records
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55
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SECTION 7.1.7. BpiFAE Insurance Policy/French Authority Requirements
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55
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SECTION 7.2. Negative Covenants
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55
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SECTION 7.2.1. Business Activities
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56
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SECTION 7.2.2. Indebtedness
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56
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SECTION 7.2.3. Liens
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56
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SECTION 7.2.4. Financial Condition
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58
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SECTION 7.2.5. [Intentionally Omitted]
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SECTION 7.2.6. Consolidation, Merger, etc
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59
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SECTION 7.2.7. Asset Dispositions, etc
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60
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SECTION 7.3. Lender incorporated in the Federal Republic of Germany
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60
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ARTICLE VIII EVENTS OF DEFAULT
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SECTION 8.1. Listing of Events of Default
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60
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SECTION 8.1.1. Non-Payment of Obligations
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60
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SECTION 8.1.2. Breach of Warranty
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60
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SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations
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60
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SECTION 8.1.4. Default on Other Indebtedness
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60
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SECTION 8.1.5. Bankruptcy, Insolvency, etc
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61
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SECTION 8.2. Action if Bankruptcy
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62
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SECTION 8.3. Action if Other Event of Default
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62
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ARTICLE IX PREPAYMENT EVENTS
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SECTION 9.1. Listing of Prepayment Events
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62
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SECTION 9.1.1. Change of Control
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62
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SECTION 9.1.2. Unenforceability
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62
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SECTION 9.1.3. Approvals
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63
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SECTION 9.1.4. Non-Performance of Certain Covenants and Obligations
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63
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SECTION 9.1.5. Judgments
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63
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SECTION 9.1.6. Condemnation, etc
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63
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SECTION 9.1.7. Arrest
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63
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SECTION 9.1.8. Sale/Disposal of the Purchased Vessel
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63
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SECTION 9.1.9. BpiFAE Insurance Policy
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63
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SECTION 9.1.10. Illegality
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63
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SECTION 9.2. Mandatory Prepayment
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64
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SECTION 9.3. Mitigation
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64
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ARTICLE X THE FACILITY AGENT AND THE ECA AGENT
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SECTION 10.1. Actions
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64
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SECTION 10.2. Indemnity
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64
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SECTION 10.3. Funding Reliance, etc
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65
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SECTION 10.4. Exculpation
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65
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SECTION 10.5. Successor
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66
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SECTION 10.6. Loans by the Facility Agent
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67
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SECTION 10.7. Credit Decisions
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67
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SECTION 10.8. Copies, etc
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67
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SECTION 10.9. The Agents’ Rights
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67
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SECTION 10.10. The Facility Agent’s Duties
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68
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SECTION 10.11. Employment of Agents
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68
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SECTION 10.12. Distribution of Payments
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68
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SECTION 10.13. Reimbursement
|
68
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SECTION 10.14. Instructions
|
69
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SECTION 10.15. Payments
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69
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SECTION 10.16. “Know your customer” Checks
|
69
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SECTION 10.17. No Fiduciary Relationship
|
69
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SECTION 10.18. Illegality
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69
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ARTICLE XI MISCELLANEOUS PROVISIONS
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SECTION 11.1. Waivers, Amendments, etc
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70
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SECTION 11.2. Notices
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71
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SECTION 11.3. Payment of Costs and Expenses
|
72
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SECTION 11.4. Indemnification
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72
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SECTION 11.5. Survival
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74
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SECTION 11.6. Severability
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74
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SECTION 11.7. Headings
|
74
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SECTION 11.8. Execution in Counterparts, Effectiveness, etc
|
74
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SECTION 11.9. Third Party Rights
|
74
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SECTION 11.10. Successors and Assigns
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75
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SECTION 11.11. Sale and Transfer of the Loan; Participations in the Loan
|
75
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SECTION 11.11.1. Assignments
|
75
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SECTION 11.11.2. Participations
|
77
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SECTION 11.11.3. Register
|
78
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SECTION 11.11.4. Rights of BpiFAE to payments
|
78
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SECTION 11.12. Other Transactions
|
79
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SECTION 11.13. BpiFAE Insurance Policy
|
79
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SECTION 11.13.1. Terms of BpiFAE Insurance Policy
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79
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SECTION 11.13.2. Obligations of the Borrower
|
79
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SECTION 11.13.3. Obligations of the ECA Agent and the Lenders
|
79
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SECTION 11.14. Law and Jurisdiction
|
80
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SECTION 11.14.1. Governing Law
|
80
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SECTION 11.14.2. Jurisdiction
|
80
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SECTION 11.14.3. Alternative Jurisdiction
|
81
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SECTION 11.14.4. Service of Process
|
81
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SECTION 11.15. Confidentiality
|
81
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SECTION 11.16. French Authority Requirements
|
82
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SECTION 11.17. Waiver of immunity
|
82
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SECTION 11.18. Acknowledgement and Consent to Bail-In of EEA Financial Institutions
|
82
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EXHIBITS
Exhibit A - Form of Loan Request
Exhibit B-1 - Form of Opinion of Liberian Counsel to Borrower
Exhibit B-2 - Form of Opinion of English Counsel to the Facility Agent and the Lenders
Exhibit B-3 - Form of Opinion of French Counsel to the Facility Agent and the Lenders
Exhibit B-4 - Form of Opinion of US Tax Counsel to the Lenders
Exhibit C - Form of Lender Assignment Agreement
Exhibit D - Form of Certificate of French Content
Exhibit E-1 - Form of Delivery Non-Yard Costs Certificate
Exhibit E-2 - Form of Final Non-Yard Costs Certificate
CREDIT AGREEMENT
HULL NO. M34 CREDIT AGREEMENT, dated 24 July 2017 as novated, amended and restated on the Actual Delivery Date (as defined below), is among Royal Caribbean Cruises Ltd., a Liberian corporation (the “Borrower”), Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch in its capacity as agent for the Lenders referred to below in respect of BpiFAE-related matters (in such capacity, the “ECA Agent”), Citibank Europe plc, UK Branch in its capacity as facility agent (in such capacity, the “Facility Agent”) and the financial institutions listed in Schedule 1 to the Novation Agreement (as defined below) as lenders (in such capacity, together with each of the other Persons that shall become a “Lender” in accordance with clause 12 of the Novation Agreement or Section 11.11.1 hereof, each of them individually a “Lender” and, collectively, the “Lenders”).
W I T N E S S E T H:
WHEREAS,
(A)The Borrower and Chantiers de l’Atlantique (previously known as STX France S.A.) (the “Builder”) have entered on 30 September 2016 into a Contract for the Construction and Sale of Hull No. M34 (as amended from time to time, the “Construction Contract”) pursuant to which the Builder has agreed to design , construct, equip, complete, sell and deliver the passenger cruise vessel bearing Builder’s hull number M34 which shall be owned by the Nominated Owner (the “Purchased Vessel”);
(B)The Lenders have agreed to make available to the Borrower, upon the terms and conditions contained herein, a US dollar loan facility calculated on the amount (the “Maximum Loan Amount”) equal to the EUR sum of:
(i)eighty per cent (80%) of the Contract Price (as defined below) of the Purchased Vessel, and including Non-Yard Costs of up to EUR 76,000,000 (the “Maximum Non-Yard Costs Amount”) and the Other Basic Contract Price Increases (as defined below) for the Purchased Vessel of up to EUR 22,000,000 (but which, when aggregated with the Non-Yard Costs, shall not exceed an amount equal to EUR 79,000,000), and all of which amounts shall not exceed in aggregate EUR 741,071,000;
(ii)eighty per cent (80%) of the change orders of up to EUR 126,207,100 effected in accordance with the Construction Contract; and
(iii)100% of the BpiFAE Premium (as defined below),
being an amount no greater than EUR 714,637,154 and being made available in the US Dollar Equivalent of that Maximum Loan Amount (as such Dollar amount may be adjusted pursuant to clause 5.3 of the Novation Agreement);
(C)Of the amounts referred to in recital (B)(i) and (ii) above, the Lenders have made certain amounts available to the Original Borrower during the period prior to the Actual Delivery Date pursuant to this Agreement (the liability for which amount has been assumed by the Borrower following the novation of this
Agreement pursuant to the Novation Agreement) and, in relation to the amount referred to in recital (B)(i), the balance has been or shall be made available to the Borrower as an Additional Advance pursuant to the Novation Agreement and this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms (whether or not underscored) when used in this Agreement, including its preamble and recitals, shall, when capitalized, except where the context otherwise requires, have the following meanings (such meanings to be equally applicable to the singular and plural forms thereof):
“Accumulated Other Comprehensive Income (Loss)” means at any date the Borrower’s accumulated other comprehensive income (loss) on such date, determined in accordance with GAAP.
“Actual Delivery Date” means the date on which the Purchased Vessel is delivered by the Builder to, and accepted by, the Borrower under the Construction Contract, being also the date on which the final balance of the Loan is advanced by way of the Additional Advances.
“Additional Advances” is defined in the Novation Agreement.
“Affiliate” of any Person means any other Person which, directly or indirectly, controls, is controlled by or is under common control with such Person. A Person shall be deemed to be “controlled by” any other Person if such other Person possesses, directly or indirectly, power to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
“Agent” means either the ECA Agent or the Facility Agent and “Agents” means both of them.
“Agreement” means, on any date, this credit agreement as originally in effect on the Signing Date and as novated, amended and restated by the Novation Agreement and as thereafter from time to time amended, supplemented, amended and restated, or otherwise modified and in effect on such date.
“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or any of its Affiliates from time to time concerning or relating to bribery or corruption.
“Anticipated Delivery Date” means the Expected Delivery Date (as defined in the Receivable Purchase Agreement) as at the Signing Date, namely 20 October 2022.
“Applicable Commitment Rate” means (x) from the Signing Date up to and including the date falling two years prior to the Anticipated Delivery Date, 0.15% per annum, (y) from the day following the date falling two years prior to the Anticipated Delivery Date up to and
including the date falling one year prior to the Anticipated Delivery Date, 0.28% per annum, and (z) from the day following the date falling one year prior to the Anticipated Delivery Date until the Commitment Fee Termination Date, 0.33% per annum.
“Applicable Jurisdiction” means the jurisdiction or jurisdictions under which the Borrower is organized, domiciled or resident or from which any of its business activities are conducted or in which any of its properties are located and which has jurisdiction over the subject matter being addressed.
“Approved Appraiser” means any of the following: Barry Rogliano Salles, Paris, H Clarkson & Co. Ltd., London, R.S. Platou Shipbrokers, Norway, or Fearnley AS, Norway.
“Assignee Lender” is defined in Section 11.11.1.
“Authorized Officer” means those officers of the Borrower authorized to act with respect to the Loan Documents and whose signatures and incumbency shall have been certified to the Facility Agent by the Secretary or an Assistant Secretary of the Borrower.
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an EEA Financial Institution.
“Bail-In Legislation” means: (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule; and (b) in relation to any state other than such an EEA Member Country or (to the extent that the United Kingdom is not such an EEA Member Country) the United Kingdom, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation.
“Bank of Nova Scotia Agreement” means the U.S. $1,428,000,000 amended and restated credit agreement dated as of 4 December 2017 (as further amended on 5 April 2019 in order to, amongst other things, increase the loan amount to U.S. $1,725,000,000) among the Borrower, as borrower, the various financial institutions as are or shall become parties thereto, as lenders, and The Bank of Nova Scotia, as administrative agent, as amended, restated, supplemented or otherwise modified from time to time.
“Basic Contract Price” is as defined in the Construction Contract.
“Borrower” is defined in the preamble.
“BpiFAE” means BpiFrance Assurance Export, the French export credit agency, a French société par action simplifiée à associé unique with its registered office at 27-31, avenue du Général Leclerc, 94710 Maisons-Alfort Cedex, France, registered at the trade and companies registry of Créteil under number 815 276 308 and includes its successors in title or any other person succeeding to BpiFrance Assurance Export in the role as export credit agency of the Republic of France to manage and provide under its control, on its behalf and in its name the public export guarantees as provided by article L 432-1 of the French insurance code.
“BpiFAE Enhanced Guarantee” means the enhanced guarantee (garantie rehaussée) issued or to be issued by BpiFAE to the benefit of CAFFIL in accordance with article 84 of the French Amending Finance Law 2012 (as amended) in relation to the refinancing of SFIL’s participation and Commitments under the Loan, and any other documents (including any security) entered into or to be entered into by SFIL with CAFFIL and/or BpiFAE in relation thereto.
“BpiFAE Insurance Policy” means the export credit insurance policy in respect of the Loan issued by BpiFAE for the benefit of the Lenders.
“BpiFAE Premium” means the premium payable to BpiFAE under and in respect of the BpiFAE Insurance Policy.
“Builder” is defined in the preamble.
“Business Day” means any day which is neither a Saturday or Sunday nor a legal holiday on which banks are authorized or required to be closed in New York City, London, Madrid or Paris, and if the applicable Business Day relates to an advance of all or part of the Loan, an Interest Period, prepayment or conversion, in each case with respect to the Loan bearing interest by reference to the LIBO Rate, a day on which dealings in deposits in Dollars are carried on in the London interbank market.
“B34 Facility Amendment Date” means 20 March 2018, the effective date of the third supplemental agreement dated 16 March 2018 to (among other things) a credit facility supported by BpiFAE (pertaining to Hull No. B34) reflecting the alignment of certain provisions and covenants with the Borrower’s revolving credit facility refinanced on 12 October 2017.
“CAFFIL” means Caisse Française de Financement Local, a French société anonyme, with its registered office at 1-3 rue du Passeur de Boulogne, 92130 Issy-les- Moulineaux, France, registered at the trade and companies registry of Nanterre under number 421 318 064.
“Capital Lease Obligations” means obligations of the Borrower or any Subsidiary of the Borrower under any leasing or similar arrangement which, in accordance with GAAP, would be classified as capitalized leases.
“Capitalization” means, at any date, the sum of (a) Net Debt on such date, plus (b) Stockholders’ Equity on such date.
“Capitalized Lease Liabilities” means the principal portion of all monetary obligations of the Borrower or any of its Subsidiaries under any leasing or similar arrangement which, in accordance with GAAP, would be classified as capitalized leases, and, for purposes of this Agreement and each other Loan Document, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.
“Cash Equivalents” means all amounts other than cash that are included in the “cash and cash equivalents” shown on the Borrower’s balance sheet prepared in accordance with GAAP.
“Change of Control” means an event or series of events by which (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of 50% or more of the equity securities of the Borrower entitled to vote for members of the board of directors or equivalent governing body of the Borrower on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right); or (b) during any period of 24 consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Borrower cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body.
“CIRR” means 2.56% per annum being the Commercial Interest Reference Rate determined in accordance with the OECD Arrangement for Officially Supported Export Credits to be applicable to the Loan hereunder.
“Code” means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time.
“Commitment” is defined in Section 2.2 and means, relative to any Lender, such Lender’s obligation to make the Loan pursuant to Section 2.1.
“Commitment Fees” is defined in Section 3.4.
“Commitment Fee Termination Date” is defined in Section 3.4.
“Commitment Termination Date” means the Back Stop Date (as defined in the Receivable Purchase Agreement) (or such later date as the Lenders and BpiFAE may agree).
“Construction Contract” is defined in the preamble.
“Contract Price” is as defined in the Construction Contract and which includes a lump sum amount in respect of the Non-Yard Costs.
“Contractual Delivery Date” means, at any time, the date which at such time is the date specified for delivery of the Purchased Vessel under the Construction Contract, as such date may be modified from time to time pursuant to the terms of the Construction Contract.
“Covered Taxes” is defined in Section 4.6.
“Default” means any Event of Default or any condition, occurrence or event which, after notice or lapse of time or both, would constitute an Event of Default.
“Delivery Non-Yard Costs Certificate” means the certificate to be provided to the Facility Agent in the form of Exhibit E-1 on or prior to the Actual Delivery Date certifying the amount in EUR of the Paid Non-Yard Costs and the Unpaid Non-Yard Costs as at the Actual Delivery Date, duly signed by the Borrower and endorsed by the Builder.
“Dollar” and the sign “$” mean lawful money of the United States. “ECA Agent” is defined in the preamble.
“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of a Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“Effective Date” means the date this Agreement becomes effective pursuant to Section 11.8.
“Effective Time” means the Novation Effective Time as defined in the Novation Agreement.
“Environmental Laws” means all applicable federal, state, local or foreign statutes, laws, ordinances, codes, rules and regulations (including consent decrees and administrative orders) relating to the protection of the environment.
“Escrow Account” means the Dollar escrow account of the Borrower opened or to be opened with the Escrow Account Bank for the purpose of receiving the relevant amount of the Additional Advances in respect of Unpaid Non-Yard Costs in accordance with Section 2.3f).
“Escrow Account Bank” means Citibank N.A., London Branch of Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB.
“Escrow Account Security” means the account security in respect of the Escrow Account executed or, as the context may require, to be executed by the Borrower in favour of the Security Trustee in the form agreed by the Lenders and the Borrower on or about the Restatement Date.
“Escrow Agency and Trust Deed” means the agency and trust deed executed or, as the context may require, to be executed by, amongst others, the Borrower, the parties to this Agreement and the Security Trustee.
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.
“EUR”, “Euro” and the sign “€” mean the currency of participating member states of the European Monetary Union pursuant to Council Regulation (EC) 974/98 of 3 May 1998, as amended from time to time.
“Event of Default” is defined in Section 8.1.
“Existing Principal Subsidiaries” means each Subsidiary of the Borrower that is a Principal Subsidiary on the Signing Date.
“Facility Agent” is defined in the preamble and includes each other Person as shall have subsequently been appointed as the successor Facility Agent, and as shall have accepted such appointment, pursuant to Section 10.5.
“FATCA” means (a) Sections 1471 through 1474 of the Code, as in effect at the date hereof, and any current or future regulations promulgated thereunder or official interpretations thereof, (b) any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or (c) any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.
“FATCA Deduction” means a deduction or withholding from a payment under a Loan Document required by FATCA.
“FATCA Exempt Party” means a party to this Agreement that is entitled to receive payments free from any FATCA Deduction.
“Fee Letter” means any letter entered into by reference to this Agreement between any or all of the Facility Agent, the Mandated Lead Arrangers, the Arrangers, the Lenders and/or the Borrower setting out the amount of certain fees referred to in, or payable in connection with, this Agreement.
“Final Maturity” means twelve (12) years after the Actual Delivery Date.
“Final Non-Yard Costs Certificate” means the certificate to be provided to the Facility Agent in the form of Exhibit E-2 on or prior to the NYC Cut Off Date certifying the amount in Euro of the Paid Non-Yard Costs as at the date of that certificate, duly signed by the Borrower.
“Fiscal Quarter” means any quarter of a Fiscal Year.
“Fiscal Year” means any annual fiscal reporting period of the Borrower.
“Fixed Charge Coverage Ratio” means, as of the end of any Fiscal Quarter, the ratio computed for the period of four consecutive Fiscal Quarters ending on the close of such Fiscal Quarter of:
i.net cash from operating activities (determined in accordance with GAAP) for such period, as shown in the Borrower’s consolidated statement of cash flow for such period, to
ii.the sum of:
1.dividends actually paid by the Borrower during such period (including, without limitation, dividends in respect of preferred stock of the Borrower); plus
2.scheduled payments of principal of all debt less New Financings (determined in accordance with GAAP, but in any event including Capitalized Lease Liabilities) of the Borrower and its Subsidiaries for such period.
“Fixed Rate” means a rate per annum equal to the sum of the CIRR plus the Fixed Rate Margin.
“Fixed Rate Margin” means 0.62% per annum.
“Floating Rate” means a rate per annum equal to the sum of the LIBO Rate plus the Floating Rate Margin.
“Floating Rate Margin” means, for each Interest Period 1.05% per annum.
“F.R.S. Board” means the Board of Governors of the Federal Reserve System or any successor thereto.
“French Authorities” means the Direction Générale du Trésor of the French Ministry of Economy and Finance, any successors thereto, or any other governmental authority in or of France involved in the provision, management or regulation of the terms, conditions and issuance of export credits including, among others, such entities to whom authority in respect of the extension or administration of export financing matters have been delegated, such as BpiFAE and Natixis DAI.
“Funding Losses Event” is defined in Section 4.4.1.
“GAAP” is defined in Section 1.4.
“Government-related Obligations” means obligations of the Borrower or any Subsidiary of the Borrower under, or Indebtedness incurred by the Borrower or any Subsidiary of the Borrower to satisfy obligations under, any governmental requirement imposed by any Applicable Jurisdiction that must be complied with to enable the Borrower and its Subsidiaries to continue their business in such Applicable Jurisdiction, excluding, in any event, any taxes imposed on the Borrower or any Subsidiary of the Borrower.
“Hedging Instruments” means options, caps, floors, collars, swaps, forwards, futures and any other agreements, options or instruments substantially similar thereto or any series or combination thereof used to hedge interest, foreign currency and commodity exposures.
“herein”, “hereof”, “hereto”, “hereunder” and similar terms contained in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular Section, paragraph or provision of this Agreement or such other Loan Document.
“Historic Screen Rate” means, in relation to the Loan, the most applicable recent rate which appeared on Thomson Reuters LIBOR 01 Page (or any replacement page) for the currency of the Loan and for a period equal to the applicable Interest Period for the Loan and which is no more than 7 days before the commencement of the applicable Interest Period for which such rate may be applicable.
“Illegality Notice” is defined in Section 3.2(b).
“Indebtedness” means, for any Person: (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of property or services, other than (i) trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business so long as such trade accounts payable are payable within 180 days of the date the respective goods are delivered or the respective services are rendered and
(ii)any purchase price adjustment, earnout or deferred payment of a similar nature incurred in connection with an acquisition (but only to the extent that no payment has at the time accrued pursuant to such purchase price adjustment, earnout or deferred payment obligation);
(c)Indebtedness of others secured by a Lien on the property of such Person, whether or not the respective indebtedness so secured has been assumed by such Person; (d) obligations of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for the account of such Person; (e) Capital Lease Obligations of such Person; (f) guarantees by such Person of Indebtedness of others, up to the amount of Indebtedness so guaranteed; (g) obligations of such Person in respect of surety bonds and similar obligations; and (h) liabilities arising under Hedging Instruments.
“Indemnified Liabilities” is defined in Section 11.4. “Indemnified Parties” is defined in Section 11.4.
“Interest Payment Date” means each Repayment Date.
“Interest Period” means the period between the Actual Delivery Date and the first Repayment Date, and subsequently each succeeding period between two consecutive Repayment Dates.
“Interest Stabilisation Agreement” means an agreement on interest stabilisation entered into between Natixis and each Lender (other than BpiFAE or CAFFIL as assignee of all or any of SFIL’s rights as Lender following the enforcement of any security granted
pursuant to paragraph (iv) of Section 11.11.1 in connection with the BpiFAE Enhanced Guarantee, subject as provided in Section 11.11.1) in connection with the Loan.
“Investment Grade” means, with respect to Moody’s, a Senior Debt Rating of Baa3 or better and, with respect to S&P, a Senior Debt Rating of BBB- or better.
“Lender Assignment Agreement” means any Lender Assignment Agreement substantially in the form of Exhibit C.
“Lender” and “Lenders” are defined in the preamble.
“Lending Office” means, relative to any Lender, the office of such Lender designated as such below its signature hereto or designated in a Lender Assignment Agreement or such other office of a Lender as designated from time to time by notice from such Lender to the Borrower and the Facility Agent, whether or not outside the United States but subject in all cases to the agreement of Natixis DAI in relation to the CIRR, which shall be making or maintaining the Loan of such Lender hereunder.
“LIBO Rate” means the rate per annum of the offered quotation for deposits in Dollars for six months (or for such other period as shall be agreed by the Borrower and the Facility Agent) which appears on Thomson Reuters LIBOR01 Page (or any successor page) at or about 11:00 a.m. (London time) two (2) Business Days before the commencement of the relevant Interest Period; provided that:
i.subject to Section 3.3.6, if no such offered quotation appears on Thomson Reuters LIBOR01 Page (or any successor page) at the relevant time the LIBO Rate shall be the Historic Screen Rate or, if it is not possible to calculate an Historic Screen Rate, it shall be the rate per annum certified by the Facility Agent to be the average of the rates quoted by the Reference Banks as the rate at which each of the Reference Banks was (or would have been) offered deposits of Dollars by prime banks in the London interbank market in an amount approximately equal to the amount of the Loan and for a period of six months;
ii.for the purposes of determining the post-maturity rate of interest under Section 3.3.4, the LIBO Rate shall be determined by reference to deposits on an overnight or call basis or for such other period or periods as the Facility Agent may determine after consultation with the Lenders, which period shall be no longer than one month unless the Borrower otherwise agrees; and
iii.if that rate is less than zero, the LIBO Rate shall be deemed to be zero. “Lien” means any security interest, mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or otherwise), charge against or interest in property to secure payment of a debt or performance of an obligation or other priority or preferential arrangement of any kind or nature whatsoever.
“Lien Basket Amount” is defined in Section 7.2.3.b).
“Loan” means the advances made by the Lenders under this Agreement from time to time or, as the case may be, the aggregate outstanding amount of such advances from time to time.
“Loan Documents” means this Agreement, the Novation Agreement, the Escrow Agency and Trust Deed, the Fee Letters and the Escrow Account Security.
“Loan Request” means the loan request and certificate duly executed by an Authorized Officer of the Borrower, substantially in the form of Exhibit A hereto.
“Material Adverse Effect” means a material adverse effect on (a) the business, operations or financial condition of the Borrower and its Subsidiaries taken as a whole, (b) the rights and remedies of the Facility Agent or any Lender under the Loan Documents or (c) the ability of the Borrower to perform its payment Obligations under the Loan Documents.
“Material Litigation” is defined in Section 6.7.
“Maximum Loan Amount” is defined in the preamble.
“Maximum Non-Yard Costs Amount” is defined in the preamble.
“Moody's” means Moody's Investors Service, Inc.
“Natixis” means Natixis, a French société anonyme with its registered office at 30, avenue Pierre Mendès France, 75013 Paris, France, registered with the Paris Commercial and Companies Registry under number 542 044 524 RCS Paris.
“Natixis DAI” means Natixis DAI Direction des Activités Institutionnelles.
“Net Debt” means, at any time, the aggregate outstanding principal amount of all debt (including, without limitation, the principal portion of all capitalized leases) of the Borrower and its Subsidiaries (determined on a consolidated basis in accordance with GAAP) less the sum of (without duplication);
a)all cash on hand of the Borrower and its Subsidiaries; plus
b)all Cash Equivalents.
“Net Debt to Capitalization Ratio” means, as at any date, the ratio of (a) Net Debt on such date to (b) Capitalization on such date.
“New Financings” means proceeds from:
a)borrowed money (whether by loan or issuance and sale of debt securities), including drawings under this Agreement and any revolving credit facilities of the Borrower, and
b)the issuance and sale of equity securities.
“Nominated Owner” means a Subsidiary of the Borrower to be nominated by the Borrower prior to the Actual Delivery Date to take delivery of the Vessel under the Construction Contract.
“Non-Yard Costs” has the meaning assigned to “NYC Allowance” in paragraph 1.5 of Article II of the Construction Contract and, when such expression is prefaced by the word “incurred”, shall mean such amount of the Non-Yard Costs not exceeding EUR 76,000,000 and, when aggregated with the Other Basic Contract Price Increases, in an amount not exceeding EUR 79,000,000, as shall at the relevant time have been paid, or become payable, to the Builder by the Borrower under the Construction Contract as part of the Contract Price.
“Nordea Agreement” means the U.S. $1,150,000,000 amended and restated credit agreement dated as of October 12, 2017, among the Borrower, as the borrower, the various financial institutions as are or shall become parties thereto and Nordea Bank AB (publ), New York Branch as administrative agent, as amended, restated, supplemented or otherwise modified from time to time.
“Novated Loan Balance” is as defined in the Novation Agreement.
“Novation Agreement” means the novation agreement dated 24 July 2017 and made between the Original Borrower and the parties hereto pursuant to which (amongst other things) this Agreement was novated, amended and restated.
“NYC Cut Off Date” means the date falling 60 days after the Actual Delivery Date or such later date as the Lenders (with the approval of BpiFAE) may agree.
“Obligations” means all obligations (payment or otherwise) of the Borrower arising under or in connection with this Agreement.
"Option Period" is defined in Section 3.2(c).
“Organic Document” means, relative to the Borrower, its articles of incorporation (inclusive of any articles of amendment to its articles of incorporation) and its by-laws.
“Original Borrower” means Houatorris Finance Limited of Cayman Corporate Centre, 27 Hospital Road, George Town, Grand Cayman KY1-9008, Cayman Islands.
“Other Basic Contract Price Increases” is defined in the Novation Agreement.
“Paid Non-Yard Costs” means as at any relevant date, the amount in Euro of the Non- Yard Costs which have been paid for by the Borrower and, where applicable, supplied, installed and completed on the Purchased Vessel and as determined in accordance with the relevant amounts certified in the Delivery Non-Yard Costs Certificate or, as the case may be, the Final Non-Yard Costs Certificate as at such time.
“Participant” is defined in Section 11.11.2.
“Participant Register” is defined in Section 11.11.2.
“Percentage” means, relative to any Lender, the percentage set forth opposite its signature hereto or as set out in the applicable Lender Assignment Agreement, as such percentage may be adjusted from time to time pursuant to Section 4.9 or pursuant to Lender Assignment Agreement(s) executed by such Lender and its Assignee Lender(s) and delivered pursuant to Section 11.11.1.
“Person” means any natural person, corporation, limited liability company, partnership, firm, association, trust, government, governmental agency or any other entity, whether acting in an individual, fiduciary or other capacity.
“Prepayment Event” is defined in Section 9.1.
“Principal Subsidiary” means any Subsidiary of the Borrower that owns a Vessel.
“Purchased Vessel” is defined in the preamble.
“Receivable Purchase Agreement” is as defined in the Novation Agreement.
“Reference Banks” means Société Générale and Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch and such other Lender as shall be so named by the Borrower and agrees to serve in such role and each additional Reference Bank and/or each replacement Reference Bank appointed by the Facility Agent pursuant to Section 3.3.6.
“Register” is defined in Section 11.11.3.
“Repayment Date” means, subject to Section 4.8(c), each of the dates for payment of the repayment installments of the Loan pursuant to Section 3.1.
“Required Lenders” means (a) at any time when SFIL is a Lender, SFIL and at least one other Lender that in the aggregate with SFIL hold more than 50% of the aggregate unpaid principal amount of the Loan or (b) or at any other time, Lenders that in the aggregate hold more than 50% of the aggregate unpaid principal amount of the Loan, and in each case, if no such principal amount is then outstanding, Lenders that in the aggregate have more than 50% of the Commitments.
“Resolution Authority” means any body which has authority to exercise any Write- down and Conversion Powers.
“Restatement Date” means 2020, being the date on which the form of this Agreement was amended and restated.
“S&P” means Standard & Poor's Financial Services LLC, a wholly-owned subsidiary of The McGraw-Hill Financial Inc.
“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, or (b) the United Nations Security Council, the European Union, any European Union member state or Her Majesty’s Treasury of the United Kingdom.
“Sanctioned Country” means, at any time, a country, region or territory which is itself the subject or target of any Sanctions.
“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions- related list of designated Persons maintained by the Office of Foreign Assets Control of the
U.S. Department of the Treasury, the U.S. Department of State, or by the United Nations Security Council, the European Union or any European Union member state, or any person owned or controlled by any such Person or Persons, or (b) any Person operating, organized or resident in a Sanctioned Country.
“SEC” means the United States Securities and Exchange Commission and any successor thereto.
“Security Trustee” means Citicorp Trustee Company Limited of Citigroup Centre, Canada Square, London E14 5LB in its capacity as security trustee for the purpose of the Escrow Account Security.
“Senior Debt Rating” means, as of any date, (a) the implied senior debt rating of the Borrower for debt pari passu in right of payment and in right of collateral security with the Obligations as given by Moody's and S&P or (b) in the event the Borrower receives an actual unsecured senior debt rating (apart from an implied rating) from Moody's and/or S&P, such actual rating or ratings, as the case may be (and in such case the Senior Debt Rating shall not be determined by reference to any implied senior debt rating from either agency).
“SFIL” means SFIL, a French société anonyme with is registered office at 1-3 rue du Passeur de Boulogne, 92130 Issy-les-Moulineaux, France, registered at the trade and companies registry of Nanterre under number 428 782 585.
“Signing Date” means the date of the Novation Agreement.
“Spot Rate of Exchange” is as defined in the Novation Agreement.
“Stockholders’ Equity” means, as at any date, the Borrower’s stockholders’ equity on such date, excluding Accumulated Other Comprehensive Income (Loss), determined in accordance with GAAP, provided that any non-cash charge to Stockholders’ Equity resulting (directly or indirectly) from a change after the Signing Date in GAAP or in the interpretation thereof shall be disregarded in the computation of Stockholders’ Equity such that the amount of any reduction thereof resulting from such change shall be added back to Stockholders’ Equity.
“Subsidiary” means, with respect to any Person, any corporation of which more than 50% of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned by such Person, by such Person and one or more other Subsidiaries of such Person, or by one or more other Subsidiaries of such Person.
“UK Bail-In Legislation” means (to the extent that the United Kingdom is not an EEA Member Country which has implemented, or implements, Article 55 of Directive
2014/59/EU) Part I of the United Kingdom Banking Act 2009 and any other law or regulation applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (otherwise than through liquidation, administration or other insolvency proceedings).
“Unpaid Non-Yard Costs” means, as at the Actual Delivery Date, the amount in Euro of the Non-Yard Costs which have not been paid for by the Borrower and/or where applicable, supplied, installed and completed on the Purchased Vessel as at the Actual Delivery Date and as determined in accordance with the relevant amounts certified in the Delivery Non-Yard Costs Certificate.
“US Dollar Equivalent” means (i) for all EUR amounts payable in respect of the Additional Advances for the amount of the Non-Yard Costs or the Other Basic Contract Price Increases referred to in clause 5.2(a) of the Novation Agreement (and disregarding for the purposes of this definition that the Additional Advance in respect of such amounts shall be drawn in Dollars), such EUR amounts converted to a corresponding Dollar amount at the Weighted Average Rate of Exchange and (ii) for the EUR amount payable in respect of the Additional Advance for the BpiFAE Premium referred to in clause 5.2(b) of the Novation Agreement and for the calculation and payment of the Novated Loan Balance (as defined in the Novation Agreement), the amount thereof in EUR converted to a corresponding Dollar amount as determined by the Facility Agent on the basis of the Spot Rate of Exchange. Such rate of exchange under (i) above shall be evidenced by foreign exchange counterparty confirmations to the extent applicable. The US Dollar Equivalent of the Maximum Loan Amount shall be calculated by the Borrower in consultation with the Facility Agent no less than two (2) Business Days prior to the proposed Actual Delivery Date.
“United States” or “U.S.” means the United States of America, its fifty States and the District of Columbia.
“Vessel” means a passenger cruise vessel owned by the Borrower or one of its Subsidiaries.
“Weighted Average Rate of Exchange” means the weighted average rate of exchange that the Borrower has agreed, either in the spot or forward currency markets, to pay its counterparties for the purchase of the relevant amounts of euro with Dollars for the payment of the euro amount of the Contract Price (including the portion thereof comprising the change orders, any Other Basic Contract Price Increases and the Non-Yard Costs) and including in such weighted average calculation (a) the NYC Applicable Rate (as defined in the Novation Agreement) in relation to the portion of the Contract Price comprising the Non-Yard Costs and (b) the spot rates for any other euro amounts that have not been hedged by the Borrower.
“Write-Down and Conversion Powers” means: (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule; and (b) in relation to any UK Bail-In Legislation: (i) any powers under that UK Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a
person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that UK Bail-In Legislation that are related to or ancillary to any of those powers; and (ii) any similar or analogous powers under that UK Bail-In Legislation.
SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the context otherwise requires, terms for which meanings are provided in this Agreement shall, when capitalized, have such meanings when used in the Loan Request and each notice and other communication delivered from time to time in connection with this Agreement or any other Loan Document.
SECTION 1.3. Cross-References. Unless otherwise specified, references in this Agreement and in each other Loan Document to any Article or Section are references to such Article or Section of this Agreement or such other Loan Document, as the case may be, and, unless otherwise specified, references in any Article, Section or definition to any clause are references to such clause of such Article, Section or definition.
SECTION 1.4. Accounting and Financial Determinations. Unless otherwise specified, all accounting terms used herein or in any other Loan Document shall be interpreted, all accounting determinations and computations hereunder or thereunder (including under Section 7.2.4) shall be made, and all financial statements required to be delivered hereunder or thereunder shall be prepared, in accordance with United States generally accepted accounting principles (“GAAP”) consistently applied (or, if not consistently applied, accompanied by details of the inconsistencies); provided that if the Borrower elects to apply or is required to apply International Financial Reporting Standards (“IFRS”) accounting principles in lieu of GAAP, upon any such election and notice to the Facility Agent, references herein to GAAP shall thereafter be construed to mean IFRS (except as otherwise provided in this Agreement); provided further that if, as a result of (i) any change in GAAP or IFRS or in the interpretation thereof or (ii) the application by the Borrower of IFRS in lieu of GAAP, in each case, after the date of the financial statements referred to in Section 6.15, there is a change in the manner of determining any of the items referred to herein or thereunder that are to be determined by reference to GAAP, and the effect of such change would (in the reasonable opinion of the Borrower or the Facility Agent) be such as to affect the basis or efficacy of the financial covenants contained in Section 7.2.4 in ascertaining the consolidated financial condition of the Borrower and its Subsidiaries and the Borrower notifies the Facility Agent that the Borrower requests an amendment to any provision hereof to eliminate such change occurring after the date hereof in GAAP or the application thereof on the operation of such provision (or if the Facility Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), then such item shall for the purposes of Section 7.2.4 continue to be determined in accordance with GAAP relating thereto as if GAAP were applied immediately prior to such change in GAAP or in the interpretation thereof until such notice shall have been withdrawn or such provision amended in accordance herewith. Notwithstanding the foregoing, all obligations of any person that are or would be characterized as operating lease obligations in accordance with GAAP on the B34 Facility Amendment Date (whether or not such operating lease obligations were in effect on such date) shall continue to be accounted for as operating lease obligations for the purposes of this Agreement regardless of any change in GAAP
following the B34 Facility Amendment Date that would otherwise require such obligations to be recharacterized (on a prospective or retroactive basis or otherwise) as capital leases, provided that, for clarification purposes, operating leases recorded as liabilities on the balance sheet due to a change in accounting treatment, or otherwise, shall for all purposes not be treated as Indebtedness, Capital Lease Obligations or Capitalized Lease Liabilities.
ARTICLE II
COMMITMENTS AND BORROWING PROCEDURES
SECTION 2.1. Commitment. On the terms and subject to the conditions of this Agreement (including Article V), each Lender severally agrees to make its portion of the Loan pursuant to its Commitment described in Section 2.2. No Lender’s obligation to make its portion of the Loan shall be affected by any other Lender’s failure to make its portion of the Loan.
SECTION 2.2. Commitment of the Lenders; Termination and Reduction of Commitments.
a)Each Lender will make its portion of the Loan available to the Borrower in accordance with Section 2.3 on the Actual Delivery Date. The commitment of each Lender described in this Section 2.2 (herein referred to as its “Commitment”) shall be the commitment of such Lender to make available to the Borrower its portion of the Loan hereunder expressed as the initial amount set forth opposite such Lender’s name on its signature page attached hereto or, in the case of any Lender that becomes a Lender pursuant to an assignment pursuant to Section 11.11.1, the amount set forth as such Lender’s Commitment in the related Lender Assignment Agreement, in each case as such amount may be reduced from time to time pursuant clause 10.2 of the Novation Agreement or reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 11.11.1. Notwithstanding the foregoing, each Lender’s Commitment shall terminate on the earlier of (i) the Commitment Termination Date if the Purchased Vessel is not delivered prior to such date and (ii) the Actual Delivery Date.
b)If any Lender shall default in its obligations under Section 2.1, the Facility Agent shall, at the request of the Borrower, use reasonable efforts to assist the Borrower in finding a bank or financial institution acceptable to the Borrower to replace such Lender.
SECTION 2.3. Borrowing Procedure.
a)Part of the Loan in an amount equal to the Novated Loan Balance shall be assumed by the Borrower and be deemed to be advanced to, and borrowed by the Borrower, pursuant to the provisions of clause 3 of the Novation Agreement and thereafter converted into Dollars pursuant to clause 5.1 of the Novation Agreement.
b)In relation to the amount of the Loan comprised by the Additional Advances, the Borrower shall deliver a Loan Request and the documents required to be delivered pursuant to Section 5.1.1(a) to the Facility Agent on or before 3:00 p.m., London
time, not less than two (2) Business Days prior to the anticipated Actual Delivery Date. The Additional Advances shall be drawn in Dollars.
c)The Facility Agent shall promptly notify each Lender of the Loan Request in respect of the Additional Advances by forwarding a copy thereof to each Lender, together with its attachments. On the terms and subject to the conditions of this Agreement, the portion of the Loan in respect of the Additional Advances shall be made on the Actual Delivery Date. On or before 11:00 a.m., London time, on the Actual Delivery Date, the Lenders shall, without any set-off or counterclaim, deposit with the Facility Agent same day funds in an amount equal to such Lender’s Percentage of the requested portion of the Additional Advances in Dollars. Such deposits will be made to such account which the Facility Agent shall specify from time to time by notice to the Lenders. To the extent funds are so received from the Lenders (and having regard, where applicable, to Sections 2.3d), e) and f) below), the Facility Agent shall, without any set-off or counterclaim, make such funds available to the Borrower on the Actual Delivery Date by wire transfer of same day funds to the accounts the Borrower shall have specified in its Loan Request.
d)If the Borrower elects to finance that part of the BpiFAE Premium payable by the Borrower with an Additional Advance under clause 5.2(b)(i) of the Novation Agreement, the Borrower shall indicate such election in the Loan Request. The amount of the advance in Dollars (the “US Dollar BpiFAE Advance Amount”) that will fund the BpiFAE Premium shall be equal to the Dollar amount that corresponds to the EUR amount of the BpiFAE Premium to be financed with such advance, which amount shall be determined by the Facility Agent based on the Spot Rate of Exchange. The Facility Agent shall notify the Borrower and the Lenders of the US Dollar BpiFAE Advance Amount on the date such Loan Request is delivered, and the Lenders shall deposit such US Dollar BpiFAE Advance Amount with the Facility Agent in accordance with Section 2.3.c). The Facility Agent shall furnish a certificate to the Borrower on the date such Loan Request is delivered setting forth such Spot Rate of Exchange, its derivation and the calculation of the US Dollar BpiFAE Advance Amount. If the Borrower elects to so finance the BpiFAE Premium, the Borrower will be deemed to have directed the Facility Agent to pay over directly to BpiFAE on behalf of the Borrower that portion of the EUR amount of the BpiFAE Premium to be financed with the proceeds of the advance on the Actual Delivery Date and to retain for its own account deposits made by the Lenders in Dollars in an amount equal to the portion of the US Dollar BpiFAE Advance Amount attributable to the BpiFAE Premium paid by the Facility Agent to BpiFAE on behalf of the Borrower.
e)If the Borrower elects to finance that part of the BpiFAE Premium payable by the Borrower with an Additional Advance under clause 5.2(b)(ii) of the Novation Agreement, the Borrower shall indicate such election in the Loan Request (and whether it wishes to receive such amount in EUR or in Dollars). The amount of the advance in Dollars (the “US Dollar BpiFAE Balance Amount”) that will fund the BpiFAE Premium shall be equal to the Dollar amount that corresponds to the EUR amount of the BpiFAE Premium to be financed with such advance, which amount shall be determined by the Facility Agent based on the Spot Rate of Exchange. The Facility Agent shall notify the Borrower and the Lenders of the US Dollar BpiFAE
Balance Amount on the date such Loan Request is delivered, and the Lenders shall deposit such US Dollar BpiFAE Balance Amount with the Facility Agent in accordance with Section 2.3.c). The Facility Agent shall furnish a certificate to the Borrower on the date such Loan Request is delivered setting forth such Spot Rate of Exchange, its derivation and the calculation of the US Dollar BpiFAE Balance Amount. If the Borrower elects to so finance the BpiFAE Premium and receive the proceeds in EUR, the Borrower will be deemed to have directed the Facility Agent to pay over to the Borrower that portion of the EUR amount of the BpiFAE Premium to be financed with the proceeds of the advance on the Actual Delivery Date and to retain for its own account deposits made by the Lenders in Dollars in an amount equal to the US Dollar BpiFAE Balance Amount.
f)In relation to any Additional Advance that is to be advanced to the Borrower in respect of the Non-Yard Costs it is agreed that:
i)an amount equal to the US Dollar Equivalent of eighty per cent (80%) of the Paid Non-Yard Costs shall be advanced to the Borrower on the Actual Delivery Date in accordance with the provisions of Section 2.3 c), which amount shall be determined by the Facility Agent based on the amounts contained in the Delivery Non-Yard Costs Certificate; and
ii)an amount equal to the US Dollar Equivalent of eighty per cent (80%) of the Unpaid Non-Yard Costs, which amount shall be determined by the Facility Agent based on the amounts contained in the Delivery Non-Yard Costs Certificate (the “Escrow Amount”), shall be remitted by the Facility Agent (and the Borrower hereby instructs the Facility Agent to make such remittance) to the Escrow Account and such amount shall be regulated in accordance with the following provisions of this Section 2.3 f) and the Escrow Account Security,
subject to the aggregate of the amounts referred to in i) and ii) above not exceeding the Maximum Non-Yard Costs Amount.
Where an Escrow Amount payment is made to the Escrow Account pursuant to ii) above, the Borrower shall be entitled at any time prior to the NYC Cut Off Date to provide the Facility Agent with the Final Non-Yard Cost Certificate setting out the final amount of the Paid Non-Yard Costs. Where the Final Non-Yard Costs Certificate is so received by the Facility Agent, the Facility Agent shall determine promptly the US Dollar Equivalent of the EUR amount of the Paid Non-Yard Costs and within one Business Day thereafter shall authorize the release of the Escrow Amount (or, if less, an amount equal to the US Dollar Equivalent of eighty per cent of the final amount of the Paid Non-Yard Costs (as determined above) less the amount previously advanced to the Borrower under i) above) to the Borrower. Any interest accruing on the Escrow Account shall be released to the Borrower at the same time as the release of the Escrow Amount (or, if applicable, part thereof) to the Borrower pursuant to this provision.
If any amount of the Escrow Amount remains on the Escrow Account on the day falling immediately after the NYC Cut Off Date (having regard to any applicable permitted release of moneys from the Escrow Account to the Borrower referred to
above) then on the Business Day thereafter the Facility Agent shall be entitled to request the withdrawal of that amount from the Escrow Account and shall apply the amount so received, on behalf of the Borrower, in or towards prepayment of the Loan.
The basis on which the Escrow Account Security is held by the Security Trustee for the benefit of the Lenders is regulated under the Escrow Agency and Trust Deed.
SECTION 2.4. Funding. Each Lender may, if it so elects, fulfill its obligation to make or continue its portion of the Loan hereunder by causing a branch or Affiliate (or an international banking facility created by such Lender) other than that indicated next to its signature to this Agreement or, as the case may be, in the relevant Lender Assignment Agreement, to make or maintain such portion of the Loan; provided that such portion of the Loan shall nonetheless be deemed to have been made and to be held by such Lender, and the obligation of the Borrower to repay such portion of the Loan shall nevertheless be to such Lender for the account of such foreign branch, Affiliate or international banking facility; provided, further, that the Borrower shall not be required to pay any amount under Sections 4.2(c), 4.3, 4.4, 4.5, 4.6 and 4.7 that is greater than the amount which it would have been required to pay had the Lender not caused such branch or Affiliate (or international banking facility) to make or maintain such portion of the Loan.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments.
a)The Borrower shall repay the Loan in 24 equal semi-annual installments, with the first installment to fall due on the date falling six (6) months after the Actual Delivery Date and the final installment to fall due on the date of Final Maturity.
b)No such amounts repaid by the Borrower pursuant to this Section 3.1 may be re- borrowed under the terms of this Agreement.
SECTION 3.2. Prepayment.
a)The Borrower
i)may, from time to time on any Business Day, make a voluntary prepayment, in whole or in part, of the outstanding principal amount of the Loan; provided that:
(A)all such voluntary prepayments shall require at least five (5) Business Days’ prior written notice to the Facility Agent; and
(B)all such voluntary partial prepayments shall be in an aggregate minimum amount of $10,000,000 and a multiple of $1,000,000 (or in the remaining amount of the Loan) and shall be applied in inverse order of maturity or ratably among all remaining installments, as the Borrower shall designate to the Facility Agent, in satisfaction of the remaining repayment installments of the Loan; and
ii)shall, immediately upon any acceleration of the repayment of the installments of the Loan pursuant to Section 8.2 or 8.3 or the mandatory prepayment of the Loan pursuant to Section 9.2, repay the Loan.
b)If it becomes unlawful in any jurisdiction for any Lender to perform any of its obligations under the Loan Documents or to maintain or fund its portion of the Loan, the affected Lender may give written notice (the "Illegality Notice") to the Borrower and the Facility Agent of such event, including reasonable details of the relevant circumstances.
c)If an affected Lender delivers an Illegality Notice, the Borrower, the Facility Agent and the affected Lender shall discuss in good faith (but without obligation) what steps may be open to the relevant Lender to mitigate or remove such circumstances but, if they are unable to agree such steps within 20 Business Days or if the Borrower so elects, the Borrower shall have the right, but not the obligation, exercisable at any time within 50 days after receipt of such Illegality Notice or, if earlier, the date upon which the unlawful event referred to in (b) above will apply (but not being a date falling earlier than the end of the 20 Business Day period referred to above) (the "Option Period"), either (1) to prepay the portion of the Loan held by such Lender in full on or before the expiry of the Option Period, together with all unpaid interest and fees thereon accrued to but excluding the date of such prepayment, or (2) to replace such Lender on or before the expiry of the Option Period with one or more financial institutions (I) acceptable to the Facility Agent (such consent not to be unreasonably withheld or delayed) and (II) where relevant, eligible to benefit from an Interest Stabilisation Agreement, pursuant to assignment(s) notified to and consented in writing by BpiFAE and, where relevant Natixis DAI, provided that (x) in the case of a single assignment, any such assignment shall be either an assignment of all of the rights and obligations of the assigning Lender under this Agreement or, in the case of more than one assignment, an assignment of a portion of such rights and obligations made concurrently with another such assignment or other such assignments that collectively cover all of the rights and obligations of the assigning Lender under this Agreement and (y) no Lender shall be obliged to make any such assignment as a result of an election by the Borrower pursuant to this Section 3.2(c) unless and until such Lender shall have received one or more payments from one or more Assignee Lenders and/or the Borrower in an aggregate amount at least equal to the portion of the Loan held by such Lender, together with all unpaid interest and fees thereon accrued to but excluding the date of such assignment (and all other amounts then owing to such Lender under this Agreement).
Each prepayment of the Loan made pursuant to this Section shall be without premium or penalty, except as may be required by Section 4.4. No amounts prepaid by the Borrower may be re-borrowed under the terms of this Agreement.
SECTION 3.3. Interest Provisions. Interest on the outstanding principal amount of the Loan shall accrue and be payable in accordance with this Section 3.3.
SECTION 3.3.1. Rates. The Loan shall accrue interest from the Actual Delivery Date to the date of repayment or prepayment of the Loan in full to the Lenders at either the Fixed Rate or, where the proviso to Section 5.1.10 applies, the Floating
Rate. Interest calculated at the Fixed Rate or the Floating Rate shall be payable in arrears on each Repayment Date. The Loan shall bear interest from and including the first day of the applicable Interest Period to (but not including) the last day of such Interest Period at the interest rate determined as applicable to the Loan. All interest shall be calculated on the basis of the actual number of days elapsed over a year comprised of 360 days.
SECTION 3.3.2. [Intentionally omitted]
SECTION 3.3.3. Interest stabilisation. Each Lender who is a party hereto on the Restatement Date represents and warrants to the Borrower that it has entered into an Interest Stabilisation Agreement and any Lender not a party hereto on the Restatement Date (other than BpiFAE or CAFFIL as assignee of all or any of SFIL’s rights as Lender following the enforcement of the security granted pursuant to paragraph (iv) of Section
i.in connection with the BpiFAE Enhanced Guarantee, subject as provided in Section 11.11.1(iv)) represents and warrants to the Borrower on the date that such Lender becomes a party hereto that it has entered into an Interest Stabilisation Agreement on or prior to becoming a party hereto.
SECTION 3.3.4. Post-Maturity Rates. After the date any principal amount of the Loan is due and payable (whether on any Repayment Date, upon acceleration or otherwise), or after any other monetary Obligation of the Borrower shall have become due and payable, the Borrower shall pay, but only to the extent permitted by law, interest (after as well as before judgment) on such amounts for each day during the period of such default at a rate per annum certified by the Facility Agent to the Borrower (which certification shall be conclusive in the absence of manifest error) to be equal to the sum of the Floating Rate plus 1.5% per annum.
SECTION 3.3.5. Payment Dates. Interest accrued on the Loan shall be payable, without duplication, on the earliest of:
a)each Interest Payment Date;
b)each Repayment Date;
c)the date of any prepayment, in whole or in part, of principal outstanding on the Loan (but only on the principal so prepaid); and
d)on that portion of the Loan the repayment of which is accelerated pursuant to Section 8.2 or Section 8.3, immediately upon such acceleration.
SECTION 3.3.6. Interest Rate Determination; Replacement Reference Banks. Where Section 3.3.4 or the Floating Rate applies, the Facility Agent shall
obtain from each Reference Bank timely information for the purpose of determining the LIBO Rate in the event that no offered quotation appears on Thomson Reuters LIBOR01 Page (or any successor page) and the LIBO Rate is to be determined by reference to quotations supplied by the Reference Banks and not by reference to the Historic Screen Rate. If any one or more of the Reference Banks shall fail to furnish in a timely manner such information to the Facility Agent for any such interest rate, the Facility Agent shall determine such interest rate on the basis of the information furnished by the remaining Reference
Banks. If the Borrower elects to add an additional Reference Bank hereunder or a Reference Bank ceases for any reason to be able and willing to act as such, the Facility Agent shall, at the direction of the Required Lenders and after consultation with the Borrower and the Lenders, appoint a replacement for such Reference Bank reasonably acceptable to the Borrower, and such replaced Reference Bank shall cease to be a Reference Bank hereunder. The Facility Agent shall furnish to the Borrower and to the Lenders each determination of the LIBO Rate made by reference to quotations of interest rates furnished by Reference Banks (it being understood that the Facility Agent shall not be required to disclose to any party hereto (other than the Borrower) any information regarding any Reference Bank or any rate quoted by a Reference Bank, including, without limitation, whether a Reference Bank has provided a rate or the rate provided by any individual Reference Bank).
Interest accrued on the Loan or other monetary Obligations arising under this Agreement or any other Loan Document after the date such amount is due and payable (whether upon acceleration or otherwise) shall be payable upon demand.
SECTION 3.3.7. Unavailability of the LIBO Rate.
Notwithstanding anything to the contrary in this Agreement or any other Loan Documents, if the Facility Agent determines (which determination shall, in the absence of manifest error, be conclusive) or the Borrower or the Required Lenders notify the Facility Agent (with, in the case of the Required Lenders, a copy to Borrower) that the Borrower or the Required Lenders (as applicable) have determined that:
a)adequate and reasonable means would not exist for ascertaining (should the Floating Rate apply) the LIBO Rate for the relevant Interest Period including, without limitation, because the LIBO Rate is not available or published on a current basis and such circumstances are unlikely to be temporary; or
b)the administrator of the LIBO Rate or a governmental authority having jurisdiction over the Facility Agent has made a public statement identifying a specific date after which the LIBO Rate shall no longer be made available or used for determining the interest rate of loans (such specific date, the “Scheduled Unavailability Date”); or
c)syndicated loans currently being executed, or existing syndicated loans that include language similar to that contained in this section 3.3.7, are being executed and/or amended (as applicable) to incorporate or adopt a new benchmark interest rate to replace the LIBO Rate,
then, reasonably promptly after such determination by the Facility Agent or receipt by the Facility Agent of such notice, as applicable, or if the Borrower otherwise requests, the Facility Agent and the Borrower may amend this Agreement to replace the LIBO Rate with an alternate benchmark rate (including any mathematical or other adjustments to the benchmark (if any) incorporated therein), giving due consideration to any evolving or then existing convention for similar U.S. dollar denominated syndicated credit facilities for such alternative benchmarks (any such proposed rate, a “LIBO Successor Rate”), and also together with any proposed LIBO Successor Rate Conforming Changes (as defined below) and any such amendment shall become
effective at 5:00 P.M. (London time) on the fifth (5) Business Day after the Facility Agent shall have posted such proposed amendment to all Lenders and the Borrower unless, prior to such time, Lenders comprising the Required Lenders have delivered to the Facility Agent written notice that such Required Lenders do not accept such amendment. Such LIBO Successor Rate shall be applied in a manner consistent with market practice; provided that to the extent such market practice is not administratively feasible for the Facility Agent, such LIBO Successor Rate shall be applied in a manner as otherwise reasonably determined by the Facility Agent.
If no LIBO Successor Rate has been determined and the circumstances under paragraph a) above exist or the Scheduled Unavailability Date has occurred (as applicable), the Facility Agent will promptly notify the Borrower and each Lender. Thereafter, the obligation of the Lenders to fund or maintain the relevant portion of the Loan at the LIBO Rate (to the extent of the affected part of the Loan or Interest Periods) shall be suspended. Upon receipt of such notice, the Borrower may revoke any pending request for a borrowing of, conversion to or continuation of any part of the Loan (to the extent of the affected part of the Loan or Interest Periods).
Notwithstanding anything else herein, any definition of LIBO Successor Rate shall provide that in no event shall such LIBO Successor Rate be less than zero for purposes of this Agreement.
For the purposes of this Agreement, “LIBO Successor Rate Conforming Changes” means, with respect to any proposed LIBO Successor Rate, any conforming changes to the definition of Floating Rate, Interest Period, timing and frequency of determining rates and making payments of interest and other administrative matters as may be appropriate, in the discretion of the Facility Agent in consultation with the Borrower, to reflect the adoption of such LIBO Successor Rate and to permit the administration thereof by the Facility Agent in a manner substantially consistent with market practice (or, if the Facility Agent determines that adoption of any portion of such market practice is not administratively feasible or that no market practice for the administration of such LIBO Successor Rate exists, in such other manner of administration as the Facility Agent determines is reasonably necessary in connection with the administration of this Agreement).
SECTION 3.4. Commitment Fees. Subject to clause 10.1 of the Novation Agreement, the Borrower agrees to pay to the Facility Agent for the account of each Lender a commitment fee (the “Commitment Fee”) on its daily unused portion of Maximum Loan Amount (as such amount may be adjusted from time to time), for the period commencing on the Signing Date and continuing through the earliest to occur (the “Commitment Fee Termination Date”) of (i) the Actual Delivery Date, (ii) the date upon which the Facility Agent has provided the Borrower with written notice that the Lenders will not advance the Loan because the Commitments have been terminated pursuant to Section
8.2 or 8.3, (iii) the Commitment Termination Date and (iv) the date the Commitments shall have been terminated in full pursuant to clause 10.2 of the Novation Agreement.
SECTION 3.4.1. Payment. The Commitment Fee shall be payable by the Borrower to the Facility Agent for the account of each Lender six-monthly in arrears, with the first such payment (the “First Commitment Fee Payment”) to be made on the day
falling six months following the Signing Date and the final such payment to be made on the Commitment Fee Termination Date (each date on which a Commitment Fee payment is required to be made in accordance with this Section 3.4.1 referred to herein as a “Commitment Fee Payment Date”). The Commitment Fee shall be in the amount in EUR equal to the product of the Applicable Commitment Rate, multiplied by, for each day elapsed since the preceding Commitment Fee Payment Date (or, in the case of the First Commitment Fee Payment, the Signing Date), 75% of the daily unused portion of Maximum Loan Amount (as such amount may be adjusted from time to time), divided by 360 days.
SECTION 3.5. Other Fees. The Borrower agrees to pay to the Facility Agent the agreed-upon fees set forth in the Fee Letters on the dates and in the amounts set forth therein.
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1. LIBO Rate Lending Unlawful. If after the Signing Date the introduction of or any change in or in the interpretation of any law makes it unlawful, or any central bank or other governmental authority having jurisdiction over such Lender asserts that it is unlawful for such Lender to make, continue or maintain its portion of the Loan where the relevant Lender has funded itself in the interbank market at a rate based on the LIBO Rate, the obligation of such Lender to make, continue or maintain its portion of the Loan shall, upon notice thereof to the Borrower, the Facility Agent and each other Lender, forthwith be suspended until the circumstances causing such suspension no longer exist, provided that such Lender’s obligation to make, continue and maintain its portion of the Loan hereunder shall be automatically converted into an obligation to make, continue and maintain its portion of the Loan bearing interest at a rate to be negotiated between such Lender and the Borrower that is the equivalent of the sum of the LIBO Rate for the relevant Interest Period plus the Floating Rate Margin.
SECTION 4.2. Deposits Unavailable. If any Lender has funded itself in the interbank market and the Facility Agent shall have determined that:
a)Dollar deposits in the relevant amount and for the relevant Interest Period are not available to each Reference Bank in its relevant market, or
b)by reason of circumstances affecting the Reference Banks’ relevant markets, adequate means do not exist for ascertaining the interest rate applicable hereunder to LIBO Rate loans for the relevant Interest Period, or
c)the cost to Lenders that in the aggregate hold more than 50% of the aggregate outstanding principal amount of the Loan then held by Lenders of obtaining matching deposits in the relevant interbank market for the relevant Interest Period would be in excess of the LIBO Rate, (provided, that no Lender may exercise its rights under this Section 4.2.c) for amounts up to the difference between such Lender’s cost of obtaining matching deposits on the date such Lender becomes a Lender hereunder less the LIBO Rate on such date),
then the Facility Agent shall give notice of such determination (hereinafter called a “Determination Notice”) to the Borrower and each of the Lenders. The Borrower, the Lenders and the Facility Agent shall then negotiate in good faith in order to agree upon a mutually satisfactory interest rate and interest period (or interest periods) to be substituted for those which would otherwise have applied under this Agreement. If the Borrower, the Lenders and the Facility Agent are unable to agree upon an interest rate (or rates) and interest period (or interest periods) prior to the date occurring fifteen (15) Business Days after the giving of such Determination Notice, the Facility Agent shall (after consultation with the Lenders) set an interest rate and an interest period (or interest periods), in each case to take effect at the end of the Interest Period current at the date of the Determination Notice, which rate (or rates) shall be equal to the sum of the Floating Rate Margin and the weighted average of the corresponding interest rates at or about 11:00 a.m. (London time) two (2) Business Days before the commencement of the relevant Interest Period on Thomson Reuters’ pages KLIEMMM, GARBIC01 and FINA01 (or such other pages as may replace Thomson Reuters’ pages KLIEMMM, GARBIC01 or FINA01 on Thomson Reuters’ service) (or, in the case of clause (c) above, the lesser of (x) the respective cost to the Lenders of funding the respective portions of the Loan held by the Lenders and (y) such weighted average). The Facility Agent shall furnish a certificate to the Borrower as soon as reasonably practicable after the Facility Agent has given such Determination Notice setting forth such rate(s). In the event that the circumstances described in this Section 4.2 shall extend beyond the end of an interest period agreed or set pursuant hereto, the foregoing procedure shall be repeated as often as may be necessary.
SECTION 4.3. Increased LIBO Rate Loan Costs, etc. If after the Signing Date a change in any applicable treaty, law, regulation or regulatory requirement or in the interpretation thereof or in its application to the Borrower, or if compliance by any Lender with any applicable direction, request, requirement or guideline (whether or not having the force of law) of any governmental or other authority including, without limitation, any agency of the European Union or similar monetary or multinational authority insofar as it may be changed or imposed after the date hereof, shall:
a)subject any Lender to any taxes, levies, duties, charges, fees, deductions or withholdings of any nature with respect to its portion of the Loan or any part thereof imposed, levied, collected, withheld or assessed by any jurisdiction or any political subdivision or taxing authority thereof (other than taxation on overall net income and, to the extent such taxes are described in Section 4.6, withholding taxes); or
b)change the basis of taxation to any Lender (other than a change in taxation on the overall net income of any Lender) of payments of principal or interest or any other payment due or to become due pursuant to this Agreement; or
c)impose, modify or deem applicable any reserve or capital adequacy requirements (other than the increased capital costs described in Section 4.5 and the reserve costs described in Section 4.7) or other banking or monetary controls or requirements which affect the manner in which a Lender shall allocate its capital resources to its obligations hereunder or require the making of any special deposits against or in respect of any assets or liabilities of, deposits with or for the account of, or loans by, any Lender (provided that such Lender shall, unless
prohibited by law, allocate its capital resources to its obligations hereunder in a manner which is consistent with its present treatment of the allocation of its capital resources); or
d)impose on any Lender any other condition affecting its portion of the Loan or any part thereof,
and the result of any of the foregoing is either (i) to increase the cost to such Lender of making its portion of the Loan or maintaining its portion of the Loan or any part thereof, (ii) to reduce the amount of any payment received by such Lender or its effective return hereunder or on its capital or (iii) to cause such Lender to make any payment or to forego any return based on any amount received or receivable by such Lender hereunder, then and in any such case if such increase or reduction in the opinion of such Lender materially affects the interests of such Lender, (A) such Lender shall (through the Facility Agent) notify the Borrower of the occurrence of such event and use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions and the terms of the BpiFAE Insurance Policy and (if the Fixed Rate applies) the arrangements with Natixis DAI relating to the CIRR) to designate a different Lending Office if the making of such a designation would avoid the effects of such law, regulation or regulatory requirement or any change therein or in the interpretation thereof and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender and (B) the Borrower shall forthwith upon such demand pay to the Facility Agent for the account of such Lender such amount as is necessary to compensate such Lender for such additional cost or such reduction and ancillary expenses, including taxes, incurred as a result of such adjustment. Such notice shall (i) describe in reasonable detail the event leading to such additional cost, together with the approximate date of the effectiveness thereof, (ii) set forth the amount of such additional cost, (iii) describe the manner in which such amount has been calculated, (iv) certify that the method used to calculate such amount is such Lender’s standard method of calculating such amount, (v) certify that such request is consistent with its treatment of other borrowers that are subject to similar provisions, and (vi) certify that, to the best of its knowledge, such change in circumstance is of general application to the commercial banking industry in such Lender’s jurisdiction of organization or in the relevant jurisdiction in which such Lender does business. Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that in relation to increased costs or reductions arising after the Effective Date the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than three months prior to the date that such Lender notifies the Borrower of the circumstance giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the circumstance giving rise to such increased costs or reductions is retroactive, then the three-month period referred to above shall be extended to include the period of retroactive effect thereof, but not more than six months prior to the date that such Lender notifies the Borrower of the circumstance giving rise to such cost or reductions and of such Lender’s intention to claim compensation therefor.
It is acknowledged that the Borrower shall have no liability to compensate any Lender under this Section for amounts of increased costs that accrue before the Effective Time on the Actual Delivery Date (with any such amounts arising before the Effective Time being the responsibility of the Original Borrower).
SECTION 4.4. Funding Losses.
SECTION 4.4.1. Indemnity. In the event any Lender shall incur any loss or expense (for the avoidance of doubt excluding loss of profit) by reason of the liquidation or re-employment (at not less than the market rate) of deposits or other funds acquired by such Lender, to make, continue or maintain any portion of the principal amount of its portion of the Loan as a result of:
i)any repayment or prepayment or acceleration of the principal amount of such Lender’s portion of the Loan, other than any repayment made on the date scheduled for such repayment or (if the Floating Rate applies) any repayment or prepayment or acceleration on a date other than the scheduled last day of an Interest Period or otherwise scheduled date for repayment or payment; or
ii)the relevant portion of the Loan not being made in accordance with the Loan Request therefor due to the fault of the Borrower or as a result of any of the conditions precedent set forth in clause 6.1(c) of the Novation Agreement and Article V not being satisfied,
(a “Funding Losses Event”) then, upon the written notice of such Lender to the Borrower (with a copy to the Facility Agent), the Borrower shall, within three (3) days of its receipt thereof:
a)if at that time interest is calculated at the Floating Rate on such Lender’s portion of the Loan, pay directly to the Facility Agent for the account of such Lender an amount equal to the amount by which:
i)interest calculated at the Floating Rate (excluding the Floating Rate Margin) which such Lender would have received on its share of the amount of the Loan subject to such Funding Losses Event for the period from the date of receipt of any part of its share in the Loan to the last day of the applicable Interest Period,
exceeds:
ii)the amount which such Lender would be able to obtain by placing an amount equal to the amount received by it on deposit with a leading bank in the appropriate interbank market for a period starting on the Business Day following receipt and ending on the last day of the applicable Interest Period; or
b)if at that time interest is calculated at the Fixed Rate on such Lender’s portion of the Loan, pay to the Facility Agent the amount notified to it following the calculation referred to in the next paragraph.
Since the Lenders commit themselves irrevocably to the French Authorities in charge of monitoring the CIRR mechanism, any prepayment (whether voluntary, involuntary or mandatory, including following the acceleration of the Loan) will be subject to the mandatory payment by the Borrower of the amount calculated in
liaison with the French Authorities two (2) Business Days prior to the prepayment date by taking into account the differential (the “Rate Differential”) between the CIRR and the prevailing market yield (currently ISDAFIX) for each installment to be prepaid and applying such Rate Differential to the remaining residual period of such installment and discounting to the net present value as described below. Each of these Rate Differentials will be applied to the corresponding installment to be prepaid during the period starting on the date on which such prepayment is required to be made and ending on the original Repayment Date (as adjusted following any previous prepayments) for such installment and:
(A)the net present value of each corresponding amount resulting from the above calculation will be determined at the corresponding market yield; and
(B)if the cumulated amount of such present values is negative, no amount shall be due to the Borrower or from the Borrower.
Such written notice shall include calculations in reasonable detail setting forth the loss or expense to such Lender.
SECTION 4.4.2. Exclusion In the event that a Lender’s wilful misconduct or gross negligence has caused the loss or cancellation of the BpiFAE Insurance Policy, the Borrower shall not be liable to indemnify that Lender under Section 4.4.1 for its loss or expense arising due to the occurrence of the Prepayment Event referred to in Section 9.1.9.
SECTION 4.5. Increased Capital Costs. If after the Signing Date any change in, or the introduction, adoption, effectiveness, interpretation, reinterpretation or phase-in of, any law or regulation, directive, guideline, decision or request (whether or not having the force of law) of any court, central bank, regulator or other governmental authority increases the amount of capital required to be maintained by any Lender or any Person controlling such Lender, and the rate of return on its or such controlling Person’s capital as a consequence of its Commitment or its portion of the Loan made by such Lender is reduced to a level below that which such Lender or such controlling Person would have achieved but for the occurrence of any such change in circumstance, then, in any such case upon notice from time to time by such Lender to the Borrower, the Borrower shall immediately pay directly to such Lender additional amounts sufficient to compensate such Lender or such controlling Person for such reduction in rate of return. Any such notice shall (i) describe in reasonable detail the capital adequacy requirements which have been imposed, together with the approximate date of the effectiveness thereof, (ii) set forth the amount of such lowered return,
ii.describe the manner in which such amount has been calculated, (iv) certify that the method used to calculate such amount is such Lender’s standard method of calculating such amount, (v) certify that such request for such additional amounts is consistent with its treatment of other borrowers that are subject to similar provisions and (vi) certify that, to the best of its knowledge, such change in circumstances is of general application to the commercial banking industry in the jurisdictions in which such Lender does business. In determining such amount, such Lender may use any method of averaging and attribution that it shall, subject to the foregoing sentence, deem applicable. Each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions and
the terms of the BpiFAE Insurance Policy and (if the Fixed Rate applies) the arrangements with Natixis DAI relating to the CIRR) to designate a different Lending Office if the making of such a designation would avoid such reduction in such rate of return and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender. Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that in relation to increased costs or reductions arising after the Effective Date the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than three months prior to the date that such Lender notifies the Borrower of the circumstance giving rise to such reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the circumstance giving rise to such reductions is retroactive, then the three-month period referred to above shall be extended to include the period of retroactive effect thereof, but not more than six months prior to the date that such Lender notifies the Borrower of the circumstance giving rise to such reductions and of such Lender’s intention to claim compensation therefor.
It is acknowledged that the Borrower shall have no liability to compensate any Lender under this Section for reduced returns that accrue before the Effective Time on the Actual Delivery Date (with any compensation liability to the Lenders arising before the Effective Time being the responsibility of the Original Borrower).
SECTION 4.6. Taxes. All payments by the Borrower of principal of, and interest on, the Loan and all other amounts payable hereunder shall be made free and clear of and without deduction for any present or future income, excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or other charges of any nature whatsoever imposed by any taxing authority, but excluding franchise taxes and taxes imposed on or measured by any Lender’s net income or receipts of such Lender and franchise taxes imposed in lieu of net income taxes or taxes on receipts, by the jurisdiction under the laws of which such Lender is organized or any political subdivision thereof or the jurisdiction of such Lender’s Lending Office or any political subdivision thereof or any other jurisdiction unless such net income taxes are imposed solely as a result of the Borrower’s activities in such other jurisdiction, and any taxes imposed under FATCA (such non-excluded items being called “Covered Taxes”). In the event that any withholding or deduction from any payment to be made by the Borrower hereunder is required in respect of any Covered Taxes pursuant to any applicable law, rule or regulation, then the Borrower will:
a)pay directly to the relevant authority the full amount required to be so withheld or deducted;
b)promptly forward to the Facility Agent an official receipt or other documentation satisfactory to the Facility Agent evidencing such payment to such authority; and
c)pay to the Facility Agent for the account of the Lenders such additional amount or amounts as is necessary to ensure that the net amount actually received by each Lender will equal the full amount such Lender would have received had no such withholding or deduction been required.
Moreover, if any Covered Taxes are directly asserted against the Facility Agent or any Lender with respect to any payment received or paid by the Facility Agent or such Lender
hereunder, the Facility Agent or such Lender may pay such Covered Taxes and the Borrower will promptly pay such additional amounts (including any penalties, interest or expenses) as is necessary in order that the net amount received by such person after the payment of such Covered Taxes (including any Covered Taxes on such additional amount) shall equal the amount such person would have received had no such Covered Taxes been asserted.
Any Lender claiming any additional amounts payable pursuant to this Section agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions and the terms of the BpiFAE Insurance Policy and (if the Fixed Rate applies) the arrangements with Natixis DAI relating to the CIRR) to change the jurisdiction of its Lending Office if the making of such a change would avoid the need for, or reduce the amount of, any such additional amounts that may thereafter accrue and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.
If the Borrower fails to pay any Covered Taxes when due to the appropriate taxing authority or fails to remit to the Facility Agent for the account of the respective Lenders the required receipts or other required documentary evidence, the Borrower shall indemnify the Lenders for any incremental withholding Covered Taxes, interest or penalties that may become payable by any Lender as a result of any such failure (so long as such amount did not become payable as a result of the failure of such Lender to provide timely notice to the Borrower of the assertion of a liability related to the payment of Covered Taxes). For purposes of this Section 4.6, a distribution hereunder by the Facility Agent or any Lender to or for the account of any Lender shall be deemed a payment by the Borrower.
If any Lender is entitled to any refund, credit, deduction or other reduction in tax by reason of any payment made by the Borrower in respect of any Covered Tax under this Section 4.6 or by reason of any payment made by the Borrower pursuant to Section 4.3, such Lender shall use reasonable efforts to obtain such refund, credit, deduction or other reduction and, promptly after receipt thereof, will pay to the Borrower such amount (plus any interest received by such Lender in connection with such refund, credit, deduction or reduction) as is equal to the net after-tax value to such Lender of such part of such refund, credit, deduction or reduction as such Lender reasonably determines is allocable to such Covered Tax or such payment (less out-of-pocket expenses incurred by such Lender), provided that no Lender shall be obligated to disclose to the Borrower any information regarding its tax affairs or tax computations.
Each Lender (and each Participant) agrees with the Borrower and the Facility Agent that it will (i) in the case of a Lender or a Participant organized under the laws of a jurisdiction other than the United States (a) provide to the Facility Agent and the Borrower an appropriately executed copy of Internal Revenue Service Form W-8ECI certifying that any payments made to or for the benefit of such Lender or such Participant are effectively connected with a trade or business in the United States (or alternatively, an Internal Revenue Service Form W-8BEN claiming the benefits of a tax treaty, but only if the applicable treaty described in such form provides for a complete exemption from U.S. federal income tax withholding), or any successor form, on or prior to the date hereof (or, in the case of any Assignee Lender or Participant, on or prior to the date of the relevant assignment or participation), in each case attached to an Internal Revenue Service Form W-8IMY, if appropriate, (b) notify the Facility Agent and the Borrower if the certifications made on any form provided pursuant to this paragraph are no longer accurate and true in all material
respects and (c) without prejudice to its obligations under Section 4.13, provide such other tax forms or other documents as shall be prescribed by applicable law, if any, or as otherwise reasonably requested, to demonstrate, to the extent applicable, that payments to such Lender Party (or Participant) hereunder are exempt from withholding under FATCA, and (ii) in all cases, provide such forms, certificates or other documents, as and when reasonably requested by the Borrower, necessary to claim any applicable exemption from, or reduction of, Covered Taxes or any payments made to or for benefit of such Lender Party or such Participant, provided that the Lender Party or Participant is legally able to deliver such forms, certificates or other documents. For any period with respect to which a Lender (or Assignee Lender or Participant) has failed to provide the Borrower with the foregoing forms (other than if such failure is due to a change in law occurring after the date on which a form originally was required to be provided (which, in the case of an Assignee Lender, would be the date on which the original assignor was required to provide such form) or if such form otherwise is not required hereunder) such Lender (or Assignee Lender or Participant) shall not be entitled to the benefits of this Section 4.6 with respect to Covered Taxes imposed by reason of such failure.
All fees and expenses payable pursuant to Section 11.3 shall be paid together with value added tax or any similar tax (if any) properly chargeable thereon. Any value added tax chargeable in respect of any services supplied by a Lender or an Agent under this Agreement shall, on delivery of the value added tax invoice, be paid in addition to any sum agreed to be paid hereunder.
SECTION 4.7. Reserve Costs. Without in any way limiting the Borrower’s obligations under Section 4.3, the Borrower shall, with effect from the Effective Time, pay to the Facility Agent for the account of each Lender on the last day of each Interest Period, so long as the relevant Lending Office of such Lender is required to maintain reserves against “Eurocurrency liabilities” under Regulation D of the F.R.S. Board, upon notice from such Lender, an additional amount equal to the product of the following for the Loan for each day during such Interest Period:
(i)the principal amount of the Loan outstanding on such day; and
(ii)the remainder of (x) a fraction the numerator of which is the rate (expressed as a decimal) at which interest accrues on the Loan for such Interest Period as provided in this Agreement (less, if applicable, the Floating Rate Margin) and the denominator of which is one minus any increase after the Signing Date in the effective rate (expressed as a decimal) at which such reserve requirements are imposed on such Lender minus (y) such numerator; and
(iii)1/360.
Such notice shall (i) describe in reasonable detail the reserve requirement that has been imposed, together with the approximate date of the effectiveness thereof, (ii) set forth the applicable reserve percentage, (iii) certify that such request is consistent with such Lender’s treatment of other borrowers that are subject to similar provisions and (iv) certify that, to the best of its knowledge, such requirements are of general application in the commercial banking industry in the United States.
Each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions and the terms of the BpiFAE Insurance Policy and (if the Fixed Rate applies) the arrangements with Natixis DAI relating to the CIRR) to avoid the requirement of maintaining such reserves (including by designating a different Lending Office) if such efforts would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.
SECTION 4.8. Payments, Computations, etc.
a)Unless otherwise expressly provided, all payments by the Borrower pursuant to this Agreement or any other Loan Document shall be made by the Borrower to the Facility Agent for the pro rata account of the Lenders entitled to receive such payment. All such payments required to be made to the Facility Agent shall be made, without set-off, deduction or counterclaim, not later than 11:00 a.m., New York time, on the date due, in same day or immediately available funds through the New York Clearing House Interbank Payments System (or such other funds as may be customary for the settlement of international banking transactions in Dollars), to such account as the Facility Agent shall specify from time to time by notice to the Borrower. Funds received after that time shall be deemed to have been received by the Lenders on the next succeeding Business Day.
b)Each Lender hereby instructs the Facility Agent, with respect to any portion of the Loan held by such Lender, to pay directly to such Lender interest thereon at the Fixed Rate or (if the proviso to Section 5.1.10 applies) the Floating Rate, on the basis that (if the Fixed Rate applies) such Lender will, where amounts are payable to Natixis by that Lender under the Interest Stabilisation Agreement, account directly to Natixis for any such amounts payable by that Lender under the Interest Stabilisation Agreement to which such Lender is a party.
c)The Facility Agent shall promptly (but in any event on the same Business Day that the same are received or, as contemplated in clause (a) of this Section, deemed received) remit in same day funds to each Lender its share, if any, of such payments received by the Facility Agent for the account of such Lender without any set-off, deduction or counterclaim. All interest and fees shall be computed on the basis of the actual number of days (including the first day but excluding the last day) occurring during the period for which such interest or fee is payable over a year comprised of 360 days. Whenever any payment to be made shall otherwise be due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall be included in computing interest and fees, if any, in connection with such payment.
SECTION 4.9. Replacement Lenders, etc. If the Borrower shall be required to make any payment to any Lender pursuant to Section 4.2(c), 4.3, 4.4, 4.5, 4.6 or 4.7, the Borrower shall be entitled at any time (so long as no Default and no Prepayment Event shall have occurred and be continuing) within 180 days after receipt of notice from such Lender of such required payment to (a) terminate such Lender’s Commitment (where upon the Percentage of each other Lender shall automatically be adjusted to an amount equal to such Lender’s ratable share of the remaining Commitments), (b) prepay the affected portion of such Lender’s Loan in full, together with accrued interest thereon through the date
of such prepayment (provided that the Borrower shall not terminate any Lender’s Commitment pursuant to clause (a) or prepay any such Lender pursuant to this clause (b) without replacing such Lender pursuant to the following clause (c) until a 30-day period shall have elapsed during which the Borrower and the Facility Agent shall have attempted in good faith to replace such Lender), and/or (c) replace such Lender with another financial institution reasonably acceptable to the Facility Agent and (if the Fixed Rate applies) Natixis DAI, provided that (i) each such transfer shall be either a transfer of all of the rights and obligations of the transferring Lender under this Agreement or a transfer of a portion of such rights and obligations made concurrently with another such transfer or other such transfers that together cover all of the rights and obligations of the transferring Lender under this Agreement and (ii) no Lender shall be obligated to make any such transfer as a result of a demand by the Borrower pursuant to this Section unless and until such Lender shall have received one or more payments from either the Borrower or one or more Assignee Lenders in an aggregate amount at least equal to the aggregate outstanding principal amount of the Loan owing to such Lender, together with accrued interest thereon to the date of payment of such principal amount and all other amounts payable to such Lender under this Agreement. Each Lender represents and warrants to the Borrower that, as of the Signing Date (or, with respect to any Lender not a party hereto on the Signing Date, on the date that such Lender becomes a party hereto), there is no existing treaty, law, regulation, regulatory requirement, interpretation, directive, guideline, decision or request pursuant to which such Lender would be entitled to request any payments under any of Sections 4.3, 4.4, 4.5, 4.6 and 4.7 to or for account of such Lender.
SECTION 4.10. Sharing of Payments.
SECTION 4.10.1. Payments to Lenders. If a Lender (a "Recovering Lender") receives or recovers any amount from the Borrower other than in accordance with Section 4.8 (Payments, Computations, etc.) (a "Recovered Amount") and applies that amount to a payment due under the Loan Documents then:
a)the Recovering Lender shall, within three (3) Business Days, notify details of the receipt or recovery to the Facility Agent;
b)the Facility Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Lender would have been paid had the receipt or recovery been received or made by the Facility Agent and distributed in accordance with the said Section 4.8, without taking account of any taxes which would be imposed on the Facility Agent in relation to the receipt, recovery or distribution; and
c)the Recovering Lender shall, within three (3) Business Days of demand by the Facility Agent, pay to the Facility Agent an amount (the "Sharing Payment") equal to such receipt or recovery less any amount which the Facility Agent determines may be retained by the Recovering Lender as its share of any payment to be made, in accordance with any applicable provisions of this Agreement.
SECTION 4.10.2. Redistribution of payments. The Facility Agent shall treat the Sharing Payment as if it had been paid by the Borrower and distribute it between the
Lenders (other than the Recovering Lender) (the "Sharing Lenders") in accordance with the provisions of this Agreement towards the obligations of the Borrower to the Sharing Lenders.
SECTION 4.10.3. Recovering Lender's rights. On a distribution by the Facility Agent under Section 4.10.2 of a payment received by a Recovering Lender from the Borrower, as between the Borrower and the Recovering Lender, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by the Borrower.
SECTION 4.10.4. Reversal of redistribution If any part of the Sharing Payment received or recovered by a Recovering Lender becomes repayable and is repaid by that Recovering Lender, then:
a)each Sharing Lender shall, upon request of the Facility Agent, pay to the Facility Agent for the account of that Recovering Lender an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Lender for its proportion of any interest on the Sharing Payment which that Recovering Lender is required to pay) (the "Redistributed Amount"); and
b)as between the Borrower and each relevant Sharing Lender, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by the Borrower.
SECTION 4.10.5. Exceptions.
a)This Section 4.10 shall not apply to the extent that the Recovering Lender would not, after making any payment pursuant to this Section 4.10, have a valid and enforceable claim against the Borrower.
b)A Recovering Lender is not obliged to share with any other Lender any amount which the Recovering Lender has received or recovered as a result of taking legal or arbitration proceedings, if:
(i)it notified the other Lender of the legal or arbitration proceedings; and
(ii)the other Lender had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.
SECTION 4.11. Set-off. Upon the occurrence and during the continuance of an Event of Default or a Prepayment Event, each Lender shall have, to the extent permitted by applicable law, the right to appropriate and apply to the payment of the Obligations then due and owing to it any and all balances, credits, deposits, accounts or moneys of the Borrower then or thereafter maintained with such Lender; provided that any such appropriation and application shall be subject to the provisions of Section 4.10. Each Lender agrees promptly to notify the Borrower and the Facility Agent after any such set-off and application made by such Lender; provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of set-off under applicable law or otherwise) which such Lender may have.
SECTION 4.12. Use of Proceeds. The Borrower shall apply the proceeds of the Loan made available to the Borrower in respect of the Additional Advances for the purpose of making payments of, or reimbursing the Borrower for payments already made for, the amounts referred to in clauses 5.2, 5.3 and/or 5.4 of the Novation Agreement and, without limiting the foregoing, no proceeds of the Loan will be used to acquire any equity security of a class which is registered pursuant to Section 12 of the Securities Exchange Act of 1934 or any “margin stock”, as defined in F.R.S. Board Regulation U.
SECTION 4.13. FATCA Information.
a)Subject to paragraph c) below, each party (other than the Borrower) shall, within ten Business Days of a reasonable request by another party (other than the Borrower):
(i)confirm to that other party whether it is:
(1)a FATCA Exempt Party; or
(2)not a FATCA Exempt Party;
(ii)supply to that other party such forms, documentation and other information relating to its status under FATCA as that other party reasonably requests for the purposes of that other party's compliance with FATCA;
(iii)supply to that other party such forms, documentation and other information relating to its status as that other party reasonably requests for the purposes of that other party's compliance with any other law, regulation, or exchange of information regime.
b)If a party confirms to another party pursuant to paragraph (a)(i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not or has ceased to be a FATCA Exempt Party, that party shall notify that other party reasonably promptly.
c)Paragraph a) above shall not oblige any Lender or the Facility Agent to do anything, and paragraph a)(iii) above shall not oblige any other party to do anything, which would or might in its reasonable opinion constitute a breach of:
(i)any law or regulation;
(ii)any fiduciary duty; or
(iii)any duty of confidentiality.
d)If a party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with paragraph
(a)(i) or (ii) above (including, for the avoidance of doubt, where paragraph (c) above applies), then such party shall be treated for the purposes of the Loan Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the party in question provides the requested confirmation, forms, documentation or other information.
e)Each party may make a FATCA Deduction from a payment under this Agreement that it is required to be made by FATCA, and any payment required in connection with that FATCA Deduction, and no party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.
SECTION 4.14. Resignation of the Facility Agent. The Facility Agent shall resign (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Facility Agent) if, either:
a)the Facility Agent fails to respond to a request under Section 4.13 and a Lender reasonably believes that the Facility Agent will not be (or will have ceased to be) a FATCA Exempt Party;
b)the information supplied by the Facility Agent pursuant to Section 4.13 indicates that the Facility Agent will not be (or will have ceased to be) a FATCA Exempt Party; or
c)the Facility Agent notifies the Lenders that the Facility Agent will not be (or will have ceased to be) a FATCA Exempt Party;
and (in each case) a Lender reasonably believes that a party to this Agreement will be required to make a FATCA Deduction that would not be required if the Facility Agent were a FATCA Exempt Party, and that Lender, by notice to the Facility Agent, requires it to resign.
ARTICLE V CONDITIONS TO BORROWING
SECTION 5.1. Advance of the Loan. The obligation of the Lenders
to fund the relevant portion of the Loan to be made available on the Actual Delivery Date shall be subject to the prior or concurrent satisfaction of each of the conditions precedent set forth in this Section 5.1. The Facility Agent shall advise the Lenders of the satisfaction of the conditions precedent set forth in this Section 5.1 prior to funding on the Actual Delivery Date.
SECTION 5.1.1. Resolutions, etc. The Facility Agent shall have received from the Borrower:
a)a certificate of its Secretary or Assistant Secretary as to the incumbency and signatures of those of its officers authorized to act with respect to this Agreement and each other Loan Document and as to the truth and completeness of the attached:
(x) resolutions of its Board of Directors then in full force and effect authorizing the execution, delivery and performance of this Agreement and each other Loan Document, and
(y) Organic Documents of the Borrower,
and upon which certificate the Lenders may conclusively rely until the Facility Agent shall have received a further certificate of the Secretary or Assistant Secretary of the Borrower canceling or amending such prior certificate; and
b)a Certificate of Good Standing issued by the relevant Liberian authorities in respect of the Borrower.
SECTION 5.1.2. Opinions of Counsel. The Facility Agent shall have received opinions, addressed to the Facility Agent, the Security Trustee (in relation to a) and b) below) and each Lender from:
a)Watson Farley & Williams LLP, counsel to the Borrower, as to Liberian Law, covering the matters set forth in Exhibit B-1 hereto (and which shall be updated to include reference to the Escrow Account Security);
b)Norton Rose Fulbright LLP, counsel to the Facility Agent and the Lenders, covering the matters set forth in Exhibit B-2 hereto (and which shall be updated to include reference to the Escrow Account Security) and, if the BpiFAE Insurance Policy is to be re-issued or replaced on or about the Actual Delivery Date, Exhibit B-3 hereto; and
c)Clifford Chance US LLP, United States tax counsel to the Facility Agent for the benefit of the Lenders, covering the matters set forth in Exhibit B-4 hereto,
each such opinion to be updated to take into account all relevant and applicable Loan Documents at the time of issue thereof.
SECTION 5.1.3. BpiFAE Insurance Policy. The Facility Agent or the ECA Agent shall have received the BpiFAE Insurance Policy duly issued and BpiFAE shall not have, prior to the advance of the Loan, delivered to the Facility Agent or the ECA Agent any notice seeking the cancellation, suspension or termination of the BpiFAE Insurance Policy or the suspension of the drawing of the Additional Advances under this Agreement.
SECTION 5.1.4. Closing Fees, Expenses, etc. The Facility Agent shall have received for its own account, or for the account of each Lender or BpiFAE, as the case may be, all fees that the Borrower shall have agreed in writing to pay to the Facility Agent (whether for its own account or for the account of any of the Lenders) that are due and owing as of the date of such funding and all invoiced expenses of the Facility Agent (including the agreed fees and expenses of counsel to the Facility Agent and the BpiFAE Premium) required to be paid by the Borrower pursuant to Section 11.3 or that the Borrower has otherwise agreed in writing to pay to the Facility Agent, in each case on or prior to the date of such funding.
SECTION 5.1.5. Compliance with Warranties, No Default, etc. Both before and after giving effect to the funding of the Loan the following statements shall be true and correct:
a)the representations and warranties set forth in Article VI (excluding, however, those set forth in Section 6.10) shall be true and correct in all material respects except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct, with the same effect as if then made; and
b)no Default and no Prepayment Event and no event which (with notice or lapse of time or both) would become a Prepayment Event shall have then occurred and be continuing.
SECTION 5.1.6. Loan Request. The Facility Agent shall have received a Loan Request duly executed by the Borrower together with:
a)where an Additional Advance is requested in respect of the Non-Yard Costs, the Delivery Non-Yard Costs Certificate;
b)certified as true (by the Builder) copies of the invoice and supporting documents received by the Builder from the Borrower pursuant to Appendix C of the Construction Contract in relation to the Paid Non-Yard Costs to be financed as at the time of issue and a declaration from the Borrower in substantially the form set forth in Exhibit D hereto that the requirements for a minimum 15% French content in respect of Non-Yard Costs have been fulfilled;
c)a copy of the final commercial invoice from the Builder showing the amount of the Contract Price (including the Non-Yard Costs and the Other Basic Contract Price Increases) and the portion thereof payable to the Builder on the Actual Delivery Date under the Construction Contract; and
d)copies of the wire transfers for all payments by the Borrower to the Builder under the Construction Contract in respect of the Basic Contract Price to the extent not already provided as part of the drawdown conditions for drawdowns made by the Original Borrower.
SECTION 5.1.7. Foreign Exchange Counterparty Confirmations. The Facility Agent shall have received the documentation and other information referred to in clause 5.6 of the Novation Agreement.
SECTION 5.1.8. Protocol of delivery. The Facility Agent shall have received a copy of the protocol of delivery and acceptance under the Construction Contract duly signed by the Builder and the Borrower or the Nominated Owner to be notified to the Facility Agent.
SECTION 5.1.9. Title to Purchased Vessel. The Facility Agent shall have received evidence that the Purchased Vessel is legally and beneficially owned by the Borrower or the Nominated Owner (as the case may be),, free of all recorded Liens, other
than Liens permitted by Section 7.2.3 and, to the extent not yet discharged, the Mortgage (as defined in the Novation Agreement).
SECTION 5.1.10. Interest Stabilisation. The ECA Agent shall have received a duly executed fixed rate approval from Natixis DAI issued to the Lenders in respect of the CIRR applicable to the Loan and shall have been informed by the French Authorities of the conditions of the interest make-up mechanisms (stabilisation du taux d'intérêt) applicable to the Loan under the applicable Interest Stabilisation Agreement in respect of the Lenders, such conditions to specify, among other things, that the CIRR has been retained under the interest make-up mechanisms applicable to the Loan.
In relation to Section 5.1.10, if a Lender (an “Ineligible Lender”) becomes ineligible or otherwise ceases to be a party to an Interest Stabilisation Agreement, it shall promptly upon becoming aware thereof (and by no later than 15 Business Days before the anticipated Actual Delivery Date) notify the Borrower, the ECA Agent and the Facility Agent.
Following receipt of such a notice, the ECA Agent (through the Facility Agent) shall give to the Borrower at least 10 Business Days’ prior notice stating if the condition precedent in Section 5.1.10 will not be satisfied due to the Ineligible Lender but would be satisfied by the replacement of the Ineligible Lender as set out below, with such replacement to take effect for the purpose of this Section on the Actual Delivery Date.
On its receipt of such notice from the ECA Agent, the Borrower shall be entitled, at any time thereafter and without prejudice to any rights and remedies it may have against such Ineligible Lender pursuant to Section 3.3.3,to replace such Ineligible Lender with another bank or financial institution reasonably acceptable to the Facility Agent, BpiFAE and Natixis DAI with effect from the Actual Delivery Date, provided that (i) each such transfer shall be either a transfer of all of the rights and obligations of the Ineligible Lender under this Agreement or a transfer of a portion of such rights and obligations made concurrently with another such transfer or other such transfers that together cover all of the rights and obligations of the Ineligible Lender under this Agreement and (ii) no Lender shall be obligated to make effective any such transfer as a result of a demand by the Borrower pursuant to this Section unless and until such Lender shall have received one or more payments from one or more Assignee Lenders in an aggregate amount equal to the aggregate outstanding principal amount of the portion of the Novated Loan Balance which, immediately following the Novation Effective Time, would have been owing to such Lender pursuant to Section 2.3(a) had that Lender not been replaced prior to the Novation Effective Time. The ECA Agent and the Facility Agent shall, at the request of the Borrower, use reasonable efforts to assist the Borrower in finding a bank or financial institution acceptable to the Borrower to replace such Ineligible Lender, and taking such other steps that may be reasonably required and which are within the control of the ECA Agent and the Facility Agent to assist with the satisfaction of the condition precedent in Section 5.1.10 prior to funding on the Actual Delivery Date.
Provided however the Borrower shall be entitled, without prejudice to its rights and remedies pursuant to Section 3.3.3, to elect that if at the Actual Delivery Date the condition precedent in Section 5.1.10 is not satisfied the Floating Rate should apply to the Loan, such election to be made by notice in writing to the Facility Agent not less than five (5) Business Days prior to the anticipated Actual Delivery Date in which event, subject to the approval of
BpiFAE, the Loan shall bear interest at the Floating Rate and the condition set out in Section
x.shall be deemed waived by the Lenders.
The ECA Agent (through the Facility Agent) shall, promptly after the Borrower’s request, advise the Borrower whether it is aware (based solely on information obtained from Natixis DAI and other French Authorities and/or received from the Lenders at the time of any such request and without any liability on the ECA Agent for the accuracy of that information) that the condition precedent in Section 5.1.10 will not or may not be satisfied as required by Section 5.1.10.
SECTION 5.1.11. Escrow Account Security. The Facility Agent shall have received the Escrow Account Security duly executed by the Borrower together with a duly executed notice of charge and acknowledgement thereto executed by the Borrower and the Escrow Account Bank respectively.
ARTICLE VI REPRESENTATIONS AND WARRANTIES
To induce the Lenders and the Facility Agent to enter into this Agreement and to
make the Loan hereunder, the Borrower represents and warrants to the Facility Agent and each Lender as set forth in this Article VI as of the Actual Delivery Date (except as otherwise stated).
SECTION 6.1. Organization, etc. The Borrower is a corporation validly organized and existing and in good standing under the laws of its jurisdiction of incorporation; the Borrower is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the nature of its business requires such qualification, except where the failure to be so qualified would not have a Material Adverse Effect; and the Borrower has full power and authority, has taken all corporate action and holds all governmental and creditors’ licenses, permits, consents and other approvals necessary to enter into each Loan Document and to perform the Obligations.
SECTION 6.2. Due Authorization, Non-Contravention, etc. The execution, delivery and performance by the Borrower of this Agreement and each other Loan Document, are within the Borrower’s corporate powers, have been duly authorized by all necessary corporate action, and do not:
a)contravene the Borrower’s Organic Documents;
b)contravene any law or governmental regulation of any Applicable Jurisdiction except as would not reasonably be expected to result in a Material Adverse Effect;
c)contravene any court decree or order binding on the Borrower or any of its property except as would not reasonably be expected to result in a Material Adverse Effect;
d)contravene any contractual restriction binding on the Borrower or any of its property except as would not reasonably be expected to result in a Material Adverse Effect; or
e)result in, or require the creation or imposition of, any Lien on any of the Borrower’s properties except as would not reasonably be expected to result in a Material Adverse Effect.
SECTION 6.3. Government Approval, Regulation, etc. No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or other Person is required for the due execution, delivery or performance by the Borrower of this Agreement or any other Loan Document (except for authorizations or approvals not required to be obtained on or prior to the Actual Delivery Date or that have been obtained or actions not required to be taken on or prior to the Actual Delivery Date or that have been taken). The Borrower holds all governmental licenses, permits and other approvals required to conduct its business as conducted by it on the Actual Delivery Date, except to the extent the failure to hold any such licenses, permits or other approvals would not have a Material Adverse Effect.
SECTION 6.4. Compliance with Environmental Laws. The Borrower is in compliance with all applicable Environmental Laws, except to the extent that the failure to so comply would not have a Material Adverse Effect.
SECTION 6.5. Validity, etc. This Agreement constitutes the legal, valid and binding obligation of the Borrower enforceable in accordance with its terms, except as the enforceability hereof may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally or by general equitable principles.
SECTION 6.6. No Default, Event of Default or Prepayment Event.
No Default, Event of Default or Prepayment Event has occurred and is continuing.
SECTION 6.7. Litigation. There is no action, suit, litigation, investigation or proceeding pending or, to the knowledge of the Borrower, threatened against the Borrower, that (i) except as set forth in filings made by the Borrower with the SEC in the Borrower’s reasonable opinion might reasonably be expected to materially adversely affect the business, operations or financial condition of the Borrower and its Subsidiaries (taken as a whole) (collectively, “Material Litigation”) or (ii) purports to affect the legality, validity or enforceability of the Loan Documents or the consummation of the transactions contemplated hereby.
SECTION 6.8. The Purchased Vessel. Immediately following the delivery of the Purchased Vessel to the Borrower under the Construction Contract, the Purchased Vessel will be:
a)legally and beneficially owned by the Borrower or one of the Borrower’s wholly owned Subsidiaries,
b)registered in the name of the Borrower or one of the Borrower’s wholly owned Subsidiaries under the Bahamian or Maltese flag or such other flag as the parties may mutually agree,
c)classed as required by Section 7.1.4(b),
d)free of all recorded Liens, other than Liens permitted by Section 7.2.3,
e)insured against loss or damage in compliance with Section 7.1.5, and
f)exclusively operated by or chartered to the Borrower or one of the Borrower’s wholly owned Subsidiaries.
SECTION 6.9. Obligations rank pari passu; Liens.
a)The Obligations rank at least pari passu in right of payment and in all other respects with all other unsecured unsubordinated Indebtedness of the Borrower other than Indebtedness preferred as a matter of law.
b)As at the date of this Agreement, the provisions of this Agreement which permit or restrict the granting of Liens are no less favorable than the provisions permitting or restricting the granting of Liens in any other agreement entered into by the Borrower with any other person providing financing or credit to the Borrower.
SECTION 6.10. Withholding, etc.. As of the Signing Date, no payment to be made by the Borrower under any Loan Document is subject to any withholding or like tax imposed by any Applicable Jurisdiction.
SECTION 6.11. No Filing, etc. Required. No filing, recording or registration and no payment of any stamp, registration or similar tax is necessary under the laws of any Applicable Jurisdiction to ensure the legality, validity, enforceability, priority or admissibility in evidence of this Agreement or the other Loan Documents (except for filings, recordings, registrations or payments not required to be made on or prior to the Actual Delivery Date or that have been made).
SECTION 6.12. No Immunity. The Borrower is subject to civil and commercial law with respect to the Obligations. Neither the Borrower nor any of its properties or revenues is entitled to any right of immunity in any Applicable Jurisdiction from suit, court jurisdiction, judgment, attachment (whether before or after judgment), set-off or execution of a judgment or from any other legal process or remedy relating to the Obligations (to the extent such suit, court jurisdiction, judgment, attachment, set-off, execution, legal process or remedy would otherwise be permitted or exist).
SECTION 6.13. Investment Company Act. The Borrower is not required to register as an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
SECTION 6.14. Regulation U. The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock, and no proceeds of the Loan will be used for a purpose which violates, or would be inconsistent with, F.R.S. Board Regulation U. Terms for which meanings are provided in F.R.S. Board Regulation U or any regulations substituted therefor, as from time to time in effect, are used in this Section with such meanings.
SECTION 6.15. Accuracy of Information. The financial and other information (other than financial projections or other forward looking information) furnished to the Facility Agent and the Lenders in writing by or on behalf of the Borrower by its chief
financial officer, treasurer or corporate controller in connection with the negotiation of this Agreement is, when taken as a whole, to the best knowledge and belief of the Borrower, true and correct and contains no misstatement of a fact of a material nature. All financial projections, if any, that have been furnished to the Facility Agent and the Lenders in writing by or on behalf of the Borrower by its chief financial officer, treasurer or corporate controller in connection with this Agreement have been or will be prepared in good faith based upon assumptions believed by the Borrower to be reasonable at the time made (it being understood that such projections are subject to significant uncertainties and contingencies, many of which are beyond the Borrower’s control, and that no assurance can be given that the projections will be realized). All financial and other information furnished to the Facility Agent and the Lenders in writing by or on behalf of the Borrower by its chief financial officer, treasurer or corporate controller after the date of this Agreement shall have been prepared by the Borrower in good faith.
SECTION 6.16. Compliance with Laws. The Borrower is in compliance with all applicable laws, rules, regulations and orders, except to the extent that the failure to so comply does not and could not reasonably be expected to have a Material Adverse Effect, and the Borrower has implemented and maintains in effect policies and procedures designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions. The Borrower and its Subsidiaries and, to the knowledge of the Borrower, their respective officers, employees, directors and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions, in all material respects and are not knowingly engaged in any activity that would reasonably be expected to result in Borrower being designated as a Sanctioned Person. None of (a) the Borrower, any Subsidiary or to the knowledge of the Borrower or such Subsidiary any of their respective directors, officers or employees, or (b) to the knowledge of the Borrower, any agent of the Borrower or any Subsidiary that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person.
ARTICLE VII COVENANTS
SECTION 7.1. Affirmative Covenants. The Borrower agrees with
the Facility Agent and each Lender that, from the Effective Date (or, where applicable, from such time as may be stated in any applicable provision below) until all Commitments have terminated and all Obligations have been paid in full, the Borrower will perform the obligations set forth in this Section 7.1.
SECTION 7.1.1. Financial Information, Reports, Notices, etc. The Borrower will furnish, or will cause to be furnished, to the Facility Agent (with sufficient copies for distribution to each Lender) the following financial statements, reports, notices and information:
a)as soon as available and in any event within 60 days after the end of each of the first three Fiscal Quarters of each Fiscal Year of the Borrower, a copy of the Borrower’s report on Form 10-Q (or any successor form) as filed by the Borrower with the SEC for such Fiscal Quarter, containing unaudited consolidated financial
statements of the Borrower for such Fiscal Quarter (including a balance sheet and profit and loss statement) prepared in accordance with GAAP, subject to normal year-end audit adjustments;
b.as soon as available and in any event within 120 days after the end of each Fiscal Year of the Borrower, a copy of the Borrower’s annual report on Form 10-K (or any successor form) as filed by the Borrower with the SEC for such Fiscal Year, containing audited consolidated financial statements of the Borrower for such Fiscal Year prepared in accordance with GAAP (including a balance sheet and profit and loss statement) and audited by PricewaterhouseCoopers LLP or another firm of independent public accountants of similar standing;
c.together with each of the statements delivered pursuant to the foregoing clause (a) or (b), a certificate, executed by the chief financial officer, the treasurer or the corporate controller of the Borrower, showing, as of the last day of the relevant Fiscal Quarter or Fiscal Year compliance with the covenants set forth in Section
7.2.4 (in reasonable detail and with appropriate calculations and computations in all respects reasonably satisfactory to the Facility Agent);
d)as soon as possible after the occurrence of a Default or Prepayment Event, a statement of the chief financial officer of the Borrower setting forth details of such Default or Prepayment Event (as the case may be) and the action which the Borrower has taken and proposes to take with respect thereto;
e)as soon as the Borrower becomes aware thereof, notice of any Material Litigation except to the extent that such Material Litigation is disclosed by the Borrower in filings with the SEC;
f)as soon as the Borrower becomes aware thereof, notice of any event which, in its reasonable opinion, would be expected to materially adversely affect the business, operations or financial condition of the Borrower and its Subsidiaries taken as a whole;
g)promptly after the sending or filing thereof, copies of all reports which the Borrower sends to all holders of each security issued by the Borrower, and all registration statements which the Borrower or any of its Subsidiaries files with the SEC or any national securities exchange; and
h)such other information respecting the condition or operations, financial or otherwise, of the Borrower or any of its Subsidiaries as any Lender through the Facility Agent may from time to time reasonably request (including an update to any information and projections previously provided to the Lenders where these have been prepared and are available);
provided that information required to be furnished to the Facility Agent under subsections (a), (b) and (g) of this Section 7.1.1 shall be deemed furnished to the Facility Agent when available free of charge on the Borrower’s website at www.rclinvestor.com or the SEC’s website at www.sec.gov
SECTION 7.1.2. Approvals and Other Consents. The Borrower will obtain (or cause to be obtained) all such governmental licenses, authorizations, consents, permits and approvals as may be required for (a) the Borrower to perform its obligations under this Agreement and the other Loan Documents and (b) the operation of the Purchased Vessel in compliance with all applicable laws, except, in each case, to the extent that failure to obtain (or cause to be obtained) such governmental licenses, authorizations, consents, permits and approvals would not be expected to have a Material Adverse Effect.
SECTION 7.1.3. Compliance with Laws, etc. The Borrower will, and will cause each of its Subsidiaries to, comply in all material respects with all applicable laws, rules, regulations and orders, except (other than as described in clauses (a) and (f) below) to the extent that the failure to so comply would not have a Material Adverse Effect, which compliance shall in any case include (but not be limited to):
a)in the case of the Borrower, the maintenance and preservation of its corporate existence (subject to the provisions of Section 7.2.6);
b)in the case of the Borrower, maintenance of its qualification as a foreign corporation in the State of Florida;
c)the payment, before the same become delinquent, of all taxes, assessments and governmental charges imposed upon it or upon its property, except to the extent being diligently contested in good faith by appropriate proceedings;
d)compliance with all applicable Environmental Laws;
e)compliance with all anti-money laundering and anti-corrupt practices laws applicable to the Borrower, including by not making or causing to be made any offer, gift or payment, consideration or benefit of any kind to anyone, either directly or indirectly, as an inducement or reward for the performance of any of the transactions contemplated by this agreement to the extent the same would be in contravention of such applicable laws; and
f)the Borrower will maintain in effect policies and procedures designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers and employees with Anti-Corruption Laws and applicable Sanctions.
SECTION 7.1.4. The Purchased Vessel. The Borrower will:
a)cause the Purchased Vessel to be exclusively operated by or chartered to the Borrower or one of the Borrower’s wholly owned Subsidiaries, provided that the Borrower or such Subsidiary may charter out the Purchased Vessel (i) to entities other than the Borrower and the Borrower’s wholly owned Subsidiaries and (ii) on a time charter with a stated duration not in excess of one year;
b)cause the Purchased Vessel to be kept in such condition as will entitle her to classification by a classification society of recognized standing;
c)provide the following to the Facility Agent with respect to the Purchased Vessel:
(i)evidence as to the ownership of the Purchased Vessel by the Borrower or one of the Borrower’s wholly owned Subsidiaries; and
(ii)evidence of no recorded Liens on the Purchased Vessel, other than Liens permitted pursuant to Section 7.2.3;
d.within seven days after the Actual Delivery Date, provide the following to the Facility Agent with respect to the Purchased Vessel:
i.evidence of the class of the Purchased Vessel; and
ii.evidence as to all required insurance being in effect with respect to the Purchased Vessel.
SECTION 7.1.5. Insurance. The Borrower will maintain or cause to be maintained with responsible insurance companies insurance with respect to the Purchased Vessel against such casualties, third-party liabilities and contingencies and in such amounts, in each case, as is customary for other businesses of similar size in the passenger cruise line industry (provided that in no event will the Borrower or any Subsidiary be required to obtain any business interruption, loss of hire or delay in delivery insurance) and will, upon request of the Facility Agent, furnish to the Facility Agent (with sufficient copies for distribution to each Lender) at reasonable intervals a certificate of a senior officer of the Borrower setting forth the nature and extent of all insurance maintained by the Borrower and certifying as to compliance with this Section.
SECTION 7.1.6. Books and Records. The Borrower will keep books and records that accurately reflect all of its business affairs and transactions and permit the Facility Agent and each Lender or any of their respective representatives, at reasonable times and intervals and upon reasonable prior notice, to visit each of its offices, to discuss its financial matters with its officers and to examine any of its books or other corporate records.
SECTION 7.1.7. BpiFAE Insurance Policy/French Authority Requirements. The Borrower shall, on the reasonable request of the ECA Agent
or the Facility Agent, provide such other information as required under the BpiFAE Insurance Policy and/or the Interest Stabilisation Agreement as necessary to enable the ECA Agent or the Facility Agent to obtain the full support of the relevant French Authority pursuant to the BpiFAE Insurance Policy and/or the Interest Stabilisation Agreement (as the case may be). The Borrower must pay to the ECA Agent or the Facility Agent the amount of all reasonable costs and expenses reasonably incurred by the ECA Agent or the Facility Agent in connection with complying with a request by any French Authority for any additional information necessary or desirable in connection with the BpiFAE Insurance Policy or the Interest Stabilisation Agreement (as the case may be); provided that the Borrower is consulted before the ECA Agent or Natixis incurs any such cost or expense.
SECTION 7.2. Negative Covenants. The Borrower agrees with the Facility Agent and each Lender that, from the Effective Date until all Commitments have terminated and all Obligations have been paid and performed in full, the Borrower will perform the obligations set forth in this Section 7.2.
SECTION 7.2.1. Business Activities. The Borrower will not, and will not permit any of its Subsidiaries to, engage in any principal business activity other than those engaged in by the Borrower and its Subsidiaries on the date hereof and other business activities reasonably related, ancillary or complimentary thereto or that are reasonable extensions thereof.
SECTION 7.2.2. Indebtedness. The Borrower will not permit any of the Existing Principal Subsidiaries to create, incur, assume or suffer to exist or otherwise become or be liable in respect of any Indebtedness, other than, without duplication, the following:
a)Indebtedness secured by Liens of the type described in Section 7.2.3;
b)Indebtedness owing to the Borrower or a direct or indirect Subsidiary of the Borrower;
c)Indebtedness incurred to finance, refinance or refund the cost (including the cost of construction) of assets acquired after the Effective Date;
d)Indebtedness in an aggregate principal amount, together with (but without duplication of) Indebtedness permitted to be secured under Section 7.2.3(b), at any one time outstanding not exceeding (determined at the time of creation of such Lien or the incurrence by any Existing Principal Subsidiary of such Indebtedness, as applicable) 10% of the total assets of the Borrower and its Subsidiaries taken as a whole as determined in accordance with GAAP as at the last day of the most recent ended Fiscal Quarter; and
e)obligations in respect of Hedging Instruments entered into for the purpose of managing interest rate, foreign currency exchange or commodity exposure risk and not for speculative purposes.
SECTION 7.2.3. Liens. The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any of its property, revenues or assets, whether now owned or hereafter acquired, except:
a)Liens on assets (including, without limitation, shares of capital stock of corporations and assets owned by any corporation that becomes a Subsidiary of the Borrower after the Effective Date) acquired after the Effective Date (whether by purchase, construction or otherwise) by the Borrower or any of its Subsidiaries (other than (x) an Existing Principal Subsidiary or (y) any other Principal Subsidiary which, at any time, after three months after the acquisition of a Vessel, owns a Vessel free of any mortgage Lien), which Liens were created solely for the purpose of securing Indebtedness representing, or incurred to finance, refinance or refund, the cost (including the cost of construction) of such assets, so long as (i) the acquisition of such assets is not otherwise prohibited by the terms of this Agreement and (ii) each such Lien is created within three months after the acquisition of the relevant assets;
b)in addition to other Liens permitted under this Section 7.2.3, Liens securing Indebtedness in an aggregate principal amount, together with (but without
duplication of) Indebtedness permitted under Section 7.2.2(d), at any one time outstanding not exceeding (determined at the time of creation of such Lien or the incurrence by any Existing Principal Subsidiary of such indebtedness, as applicable) 10% of the total assets of the Borrower and its Subsidiaries (the “Lien Basket Amount”) taken as a whole as determined in accordance with GAAP as at the last day of the most recent ended Fiscal Quarter; provided, however that, if, at any time, the Senior Debt Rating of the Borrower is less than Investment Grade as given by both Moody’s and S&P, the Lien Basket Amount shall be the greater of
(x) 5.0% of the total assets of the Borrower and its Subsidiaries taken as a whole as determined in accordance with GAAP as at the last day of the most recent ended Fiscal Quarter and (y) $735,000,000;
c)Liens on assets acquired after the Effective Date by the Borrower or any of its Subsidiaries (other than by (x) any Subsidiary that is an Existing Principal Subsidiary or (y) any other Principal Subsidiary which, at any time, owns a Vessel free of any mortgage Lien) so long as (i) the acquisition of such assets is not otherwise prohibited by the terms of this Agreement and (ii) each of such Liens existed on such assets before the time of its acquisition and was not created by the Borrower or any of its Subsidiaries in anticipation thereof;
d)Liens on any asset of any corporation that becomes a Subsidiary of the Borrower (other than a corporation that also becomes a Subsidiary of an Existing Principal Subsidiary) after the Effective Date so long as (i) the acquisition or creation of such corporation by the Borrower is not otherwise prohibited by the terms of this Agreement and (ii) such Liens are in existence at the time such corporation becomes a Subsidiary of the Borrower and were not created by the Borrower or any of its Subsidiaries in anticipation thereof;
e)Liens securing Government-related Obligations;
f)Liens for taxes, assessments or other governmental charges or levies not at the time delinquent or thereafter payable without penalty or being diligently contested in good faith by appropriate proceedings;
g)Liens of carriers, warehousemen, mechanics, material-men and landlords incurred in the ordinary course of business for sums not overdue by more than 60 days or being diligently contested in good faith by appropriate proceedings;
h)Liens incurred in the ordinary course of business in connection with workers’ compensation, unemployment insurance or other forms of governmental insurance or benefits;
i)Liens for current crew’s wages and salvage;
j)Liens arising by operation of law as the result of the furnishing of necessaries for any Vessel so long as the same are discharged in the ordinary course of business or are being diligently contested in good faith by appropriate proceedings;
k)Liens on Vessels that:
i.secure obligations covered (or reasonably expected to be covered) by insurance;
ii.were incurred in the course of or incidental to trading such Vessel in connection with repairs or other work to such Vessel; or
iii.were incurred in connection with work to such Vessel that is required to be performed pursuant to applicable law, rule, regulation or order;
provided that, in each case described in this clause (k), such Liens are either (x) discharged in the ordinary course of business or (y) being diligently contested in good faith by appropriate proceedings;
l)normal and customary rights of set-off upon deposits of cash or other Liens originating solely by virtue of any statutory or common law provision relating to bankers’ liens, rights of set-off or similar rights in favor of banks or other depository institutions;
m)Liens in respect of rights of set-off, recoupment and holdback in favor of credit card processors securing obligations in connection with credit card processing services incurred in the ordinary course of business;
n)Liens on cash or Cash Equivalents or marketable securities securing obligations in respect of Hedging Instruments not incurred for speculative purposes or securing letters of credit that support such obligations;
o)deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business and deposits securing liabilities to insurance carriers under insurance or self-insurance arrangements;
p)easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Borrower or any Subsidiary; and
q)licenses, sublicenses, leases or subleases granted to other Persons not materially interfering with the conduct of the business of the Borrower or any of its Subsidiaries.
SECTION 7.2.4. Financial Condition. The Borrower will not permit
a)Net Debt to Capitalization Ratio, as at the end of any Fiscal Quarter, to be greater than 0.625 to 1.
b)Fixed Charge Coverage Ratio to be less than 1.25 to 1 as at the last day of any Fiscal Quarter
In addition, if, at any time, the Senior Debt Rating of the Borrower is less than Investment Grade as given by both Moody’s and S&P, the Borrower will not permit Stockholders’ Equity to be less than, as at the last day of any Fiscal Quarter, the sum of (i) $4,150,000,000 plus (ii) 50% of the consolidated net income of the Borrower and its Subsidiaries for the period commencing on January 1, 2007 and ending on the last day of the Fiscal Quarter most recently ended (treated for these purposes as a single accounting period, but in any event excluding any Fiscal Quarters for which the Borrower and its Subsidiaries have a consolidated net loss).
SECTION 7.2.5. [Intentionally Omitted].Consolidation, Merger, etc. The Borrower will not, and will not permit any of its Subsidiaries to,
liquidate or dissolve, consolidate with, or merge into or with, any other corporation, except:
a)any such Subsidiary may (i) liquidate or dissolve voluntarily into, and may merge with and into, the Borrower or any other Subsidiary, and the assets or stock of any Subsidiary may be purchased or otherwise acquired by the Borrower or any other Subsidiary or (ii) merge with and into another Person in connection with a sale or other disposition permitted by Section 7.2.7; and
b)so long as no Event of Default has occurred and is continuing or would occur after giving effect thereto, the Borrower or any of its Subsidiaries may merge into any other Person, or any other Person may merge into the Borrower or any such Subsidiary, or the Borrower or any of its Subsidiaries may purchase or otherwise acquire all or substantially all of the assets of any Person, in each case so long as:
(1)after giving effect thereto, the Stockholders’ Equity of the Borrower and its Subsidiaries is at least equal to 90% of such Stockholders’
Equity immediately prior thereto; and
(2)in the case of a merger involving the Borrower where the Borrower is not the surviving corporation, (and without prejudice to the provisions of Sections 3.2b) and c) and 9.1.10, which shall not restrict the proposed merger but which can still apply to the extent that the proposed merger would give rise to any of the events or circumstances contemplated by such Sections):
(a)the surviving corporation shall have assumed in writing, delivered to the Facility Agent, all of the Borrower’s obligations hereunder and under the other Loan Documents; and
(b)the surviving corporation shall, promptly upon the request of the Facility Agent or any Lender, supply such documentation and other evidence as is reasonably requested by the Facility Agent or any Lender in order for the Facility Agent or such Lender to carry out and be satisfied it has complied with the results of all necessary “know your customer” or other similar checks under all applicable laws and regulations.
SECTION 7.2.7. Asset Dispositions, etc. The Borrower will not, and will not permit any of its Subsidiaries to, sell, transfer, contribute or otherwise convey, or grant options, warrants or other rights with respect to, all or substantially all of the assets of
(a)the Borrower or (b) the Subsidiaries of the Borrower, taken as a whole, except sales of assets between or among the Borrower and Subsidiaries of the Borrower.
SECTION 7.3. Lender incorporated in the Federal Republic of Germany. The representations and warranties and covenants given in
Sections 6.16 and 7.1.3(f) respectively shall only be given, and be applicable to, a Lender incorporated in the Federal Republic of Germany insofar as the giving of and compliance with such representations and warranties do not result in a violation of or conflict with section 7 of the German Foreign Trade Regulation (Außenwirtschaftsverordnung) (in conjunction with section 4 paragraph 1 a no.3 foreign trade law (AWG) (Außenwirtschaftsgesetz)), any provision of Council Regulation (EC) 2271/1996 or any similar applicable anti-boycott law or regulation.
ARTICLE VIII EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default. Each of the following
events or occurrences described in this Section 8.1 shall constitute an “Event of Default”.
SECTION 8.1.1. Non-Payment of Obligations. The Borrower shall default in the payment when due of any principal of or interest on the Loan or any Commitment Fee, or the Borrower shall default in the payment of any fee due and payable under the Fee Letter, provided that, in the case of any default in the payment of any interest on the Loan or of any Commitment Fee, such default shall continue unremedied for a period of at least five (5) Business Days after notice thereof shall have been given to the Borrower by the Facility Agent; and provided further that, in the case of any default in the payment of any fee due and payable under the Fee Letter, such default shall continue unremedied for a period of at least ten days after notice thereof shall have been given to the Borrower by the Facility Agent.
SECTION 8.1.2. Breach of Warranty. Any representation or warranty of the Borrower made or deemed to be made hereunder (including any certificates delivered pursuant to Article V) is or shall be incorrect in any material respect when made.
SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations. The Borrower shall default in the due performance and observance
of any other agreement contained herein or in any other Loan Document (other than the covenants set forth in Section 7.2.4 and the obligations referred to in Section 8.1.1) and such default shall continue unremedied for a period of five days after notice thereof shall have been given to the Borrower by the Facility Agent or any Lender (or, if (a) such default is capable of being remedied within 30 days (commencing on the first day following such five- day period) and (b) the Borrower is actively seeking to remedy the same during such period, such default shall continue unremedied for at least 35 days after such notice to the Borrower).
SECTION 8.1.4. Default on Other Indebtedness. (a) The Borrower or any of its Principal Subsidiaries shall fail to pay any Indebtedness that is outstanding in a
principal amount of at least $100,000,000 (or the equivalent in other currencies) in the aggregate (but excluding Indebtedness hereunder or with respect to Hedging Instruments) when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Indebtedness; (b) the occurrence under any Hedging Instrument of an Early Termination Date (as defined in such Hedging Instrument) resulting from (A) any event of default under such Hedging Instrument as to which the Borrower is the Defaulting Party (as defined in such Hedging Instrument) or (B) any Termination Event (as so defined) as to which the Borrower is an Affected Party (as so defined) and, in either event, the termination value with respect to any such Hedging Instrument owed by the Borrower as a result thereof is greater than
$100,000,000 and the Borrower fails to pay such termination value when due after applicable grace periods; or (c) any other event shall occur or condition shall exist under any agreement or instrument evidencing, securing or relating to any such Indebtedness and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to cause or permit the holder or holders of such Indebtedness to cause such Indebtedness to become due and payable prior to its scheduled maturity; or (d) any such Indebtedness shall be declared to be due and payable or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption or by voluntary agreement), purchased or defeased, or an offer to prepay, redeem, purchase or defease such Indebtedness is required to be made, in each case prior to the scheduled maturity thereof (other than as a result of any sale or other disposition of any property or assets under the terms of such Indebtedness); provided that any required prepayment or right to require prepayment triggered by terms that are certified by the Borrower to be unique to, but customary in, ship financings shall not constitute an Event of Default under this Section 8.1.4 so long as any required prepayment is made when due. For purposes of determining Indebtedness for any Hedging Instrument, the principal amount of the obligations under any such instrument at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or any Principal Subsidiary would be required to pay if such instrument were terminated at such time.
SECTION 8.1.5. Bankruptcy, Insolvency, etc. The Borrower or any of the Principal Subsidiaries (or any of its other Subsidiaries to the extent that the relevant event described below would have a Material Adverse Effect) shall:
i.generally fail to pay, or admit in writing its inability to pay, its debts as they become due;
ii.apply for, consent to, or acquiesce in, the appointment of a trustee, receiver, sequestrator or other custodian for it or any of its property, or make a general assignment for the benefit of creditors;
iii.in the absence of such application, consent or acquiescence, permit or suffer to exist the appointment of a trustee, receiver, sequestrator or other custodian for it or for a substantial part of its property, and such trustee, receiver, sequestrator or other custodian shall not be discharged within 60 days, provided that in the case of such an event in respect of the Borrower, the Borrower hereby expressly authorizes the Facility Agent and each Lender to appear in any court conducting
any relevant proceeding during such 60-day period to preserve, protect and defend their respective rights under the Loan Documents;
iv.permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law, or any dissolution, winding up or liquidation proceeding, in respect of the Borrower or any of such Subsidiaries, and, if any such case or proceeding is not commenced by the Borrower or such Subsidiary, such case or proceeding shall be consented to or acquiesced in by the Borrower or such Subsidiary or shall result in the entry of an order for relief or shall remain for 60 days undismissed, provided that the Borrower hereby expressly authorizes the Facility Agent and each Lender to appear in any court conducting any such case or proceeding during such 60-day period to preserve, protect and defend their respective rights under the Loan Documents; or
v.take any corporate action authorizing, or in furtherance of, any of the foregoing.
SECTION 8.2. Action if Bankruptcy. If any Event of Default described in clauses (b) through (d) of Section 8.1.5 shall occur with respect to the Borrower, the Commitments (if not theretofore terminated) shall automatically terminate and the outstanding principal amount of the Loan and all other Obligations shall automatically be and become immediately due and payable, without notice or demand.
SECTION 8.3. Action if Other Event of Default. If any Event of Default (other than any Event of Default described in clauses (b) through (d) of Section 8.1.5 with respect to the Borrower) shall occur for any reason, whether voluntary or involuntary, and be continuing, the Facility Agent, upon the direction of the Required Lenders (after consultation with BpiFAE who shall have the right to instruct the Lenders to waive such Event of Default), shall by notice to the Borrower declare all of the outstanding principal amount of the Loan and other Obligations to be due and payable and/or the Commitments (if not theretofore terminated) to be terminated, whereupon the full unpaid amount of the Loan and other Obligations shall be and become immediately due and payable, without further notice, demand or presentment, and/or, as the case may be, the Commitments shall terminate.
ARTICLE IX PREPAYMENT EVENTS
SECTION 9.1. Listing of Prepayment Events. Each of the
following events or occurrences described in this Section 9.1 shall constitute a “Prepayment Event”.
SECTION 9.1.1. Change of Control. There occurs any Change of Control
SECTION 9.1.2. Unenforceability. Any Loan Document shall cease to be the legally valid, binding and enforceable obligation of the Borrower (in each case, other than with respect to provisions of any Loan Document (i) identified as unenforceable in the form of the opinion of the Borrower’s counsel set forth as Exhibit B-1 or (ii) that a court of competent jurisdiction has determined are not material) and such event
shall continue unremedied for 15 days after notice thereof has been given to the Borrower by the Facility Agent.
SECTION 9.1.3. Approvals. Any material license, consent, authorization, registration or approval at any time necessary to enable the Borrower or any Principal Subsidiary to conduct its business shall be revoked, withdrawn or otherwise cease to be in full force and effect, unless the same would not have a Material Adverse Effect.
SECTION 9.1.4. Non-Performance of Certain Covenants and Obligations. The Borrower shall default in the due performance and observance
of any of the covenants set forth in Sections 4.12 or 7.2.4.
SECTION 9.1.5. Judgments. Any judgment or order for the payment of money in excess of $100,000,000 shall be rendered against the Borrower or any of the Principal Subsidiaries by a court of competent jurisdiction and the Borrower or such Principal Subsidiary shall have failed to satisfy such judgment and either:
1.enforcement proceedings in respect of any material assets of the Borrower or such Principal Subsidiary shall have been commenced by any creditor upon such judgment or order and shall not have been stayed or enjoined within five (5)
Business Days after the commencement of such enforcement proceedings; or
2.there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect.
SECTION 9.1.6. Condemnation, etc.. The Purchased Vessel shall be condemned or otherwise taken under color of law or requisitioned and the same shall continue unremedied for at least 20 days, unless such condemnation or other taking would not have a Material Adverse Effect.
SECTION 9.1.7. Arrest. The Purchased Vessel shall be arrested and the same shall continue unremedied for at least 20 days, unless such arrest would not have a Material Adverse Effect.
SECTION 9.1.8. Sale/Disposal of the Purchased Vessel. The Purchased Vessel is sold to a company which is not the Borrower or any other Subsidiary of the Borrower (other than for the purpose of a lease back to the Borrower or any other Subsidiary of the Borrower).
SECTION 9.1.9. BpiFAE Insurance Policy. The BpiFAE Insurance Policy is cancelled for any reason or ceases to be in full force and effect.
SECTION 9.1.10. Illegality. No later than the close of business on the last day of the Option Period related to the giving of any Illegality Notice by an affected Lender pursuant to Section 3.2(b), either: (x) the Borrower has not elected to take an action specified in clause (1) or (2) of Section 3.2(c) or (y) if any such election shall have been made, the Borrower has failed to take the action required in respect of such election. In such circumstances the Facility Agent (at the direction of the affected Lender) shall by notice to the Borrower require the Borrower to prepay in full all principal and interest and all other
Obligations owing to such Lender either (i) forthwith or, as the case may be, (ii) on a future specified date not being earlier than the latest date permitted by the relevant law.
SECTION 9.2. Mandatory Prepayment. If any Prepayment Event (other than a Prepayment Event under Section 9.1.10) shall occur and be continuing, the Facility Agent, upon the direction of the Required Lenders, shall by notice to the Borrower require the Borrower to prepay in full on the date of such notice all principal of and interest on the Loan and all other Obligations (and, in such event, the Borrower agrees to so pay the full unpaid amount of the Loan and all accrued and unpaid interest thereon and all other Obligations).
SECTION 9.3. Mitigation. If the ECA Agent, the Facility Agent or any of the Lenders become aware that an event or circumstance has arisen which will cause the BpiFAE Insurance Policy to be cancelled for any reason or no longer remain in full force and effect they shall notify the Borrower and the Lenders, the Borrower, the ECA Agent and the Facility Agent shall negotiate in good faith for a period of up to 30 days or, if less, the date by which the BpiFAE Insurance Policy shall be terminated or cease to be in full force and effect to determine whether the facility can be restructured and/or the Loan refinanced in a manner acceptable to each of the Lenders in their absolute discretion. The Lenders will use reasonable efforts to involve BpiFAE in such negotiations.
ARTICLE X
THE FACILITY AGENT AND THE ECA AGENT
SECTION 10.1. Actions. Each Lender hereby appoints Citibank Europe plc, UK Branch, as Facility Agent and Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch as ECA Agent, as its agent under and for purposes of this Agreement and each other Loan Document (for purposes of this Article X, the Facility Agent and the ECA Agent are referred to collectively as the “Agents”). Each Lender authorizes the Agents to act on behalf of such Lender under this Agreement and each other Loan Document and, in the absence of other written instructions from the Required Lenders received from time to time by the Agents (with respect to which each Agent agrees that it will comply, except as otherwise provided in this Section 10.1 or as otherwise advised by counsel or as otherwise instructed by any French Authority, it being understood and agreed that any instructions provided by a French Authority shall prevail), to exercise such powers hereunder and thereunder as are specifically delegated to or required of the Agents by the terms hereof and thereof, together with such powers as may be reasonably incidental thereto. Neither Agent shall be obliged to act on the instructions of any Lender or the Required Lenders if to do so would, in the opinion of such Agent, be contrary to any provision of this Agreement or any other Loan Document or the BpiFAE Insurance Policy or to any law or the conflicting instructions of any French Authority, or would expose such Agent to any actual or potential liability to any third party. As between the Lenders and the Agents, it is acknowledged that each Agent’s duties under this Agreement and the other Loan Documents are solely mechanical and administrative in nature.
SECTION 10.2. Indemnity. Each Lender hereby indemnifies (which indemnity shall survive any termination of this Agreement) each Agent, pro rata according to such Lender’s Percentage, from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and disbursements of counsel) that be incurred by or asserted or awarded against, such Agent in any way relating to or arising out of this Agreement and any other Loan Document or any action taken or omitted by such Agent under this Agreement or any other Loan Document; provided that no Lender shall be liable for the payment of any portion of such claims, damages, losses, liabilities and expenses which have resulted from such Agent’s gross negligence or willful misconduct. Without limitation of the foregoing, each Lender agrees to reimburse each Agent promptly upon demand for its ratable share of any out-of-pocket expenses (including reasonable counsel fees) incurred by such Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, to the extent that such Agent is not reimbursed for such expenses by the Borrower. In the case of any investigation, litigation or proceeding giving rise to any such indemnified costs, this Section applies whether any such investigation, litigation or proceeding is brought by any Agent, any Lender or a third party. Neither Agent shall be required to take any action hereunder or under any other Loan Document, or to prosecute or defend any suit in respect of this Agreement or any other Loan Document, unless it is expressly required to do so under this Agreement or is indemnified hereunder to its satisfaction. If any indemnity in favor of an Agent shall be or become, in such Agent’s determination, inadequate, such Agent may call for additional indemnification from the Lenders and cease to do the acts indemnified against hereunder until such additional indemnity is given.
SECTION 10.3. Funding Reliance, etc. Each Lender shall notify the Facility Agent by 4:00 p.m., London time, one day prior to the advance of the Loan if it is not able to fund the following day. Unless the Facility Agent shall have been notified by telephone, confirmed in writing, by any Lender by 4:00 p.m., London time, on the day prior to the advance of the Loan that such Lender will not make available the amount which would constitute its Percentage of the Loan on the date specified therefor, the Facility Agent may assume that such Lender has made such amount available to the Facility Agent and, in reliance upon such assumption, may, but shall not be obliged to, make available to the Borrower a corresponding amount. If and to the extent that such Lender shall not have made such amount available to the Facility Agent, such Lender and the Borrower severally agree to repay the Facility Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date the Facility Agent made such amount available to the Borrower to the date such amount is repaid to the Facility Agent, at the interest rate applicable at the time to the Loan without premium or penalty.
SECTION 10.4. Exculpation. Neither of the Agents nor any of their respective directors, officers, employees or agents shall be liable to any Lender for any action taken or omitted to be taken by it under this Agreement or any other Loan Document, or in connection herewith or therewith, except for its own willful misconduct or gross negligence. Without limitation of the generality of the foregoing, each Agent (i) may consult with legal counsel (including counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it and in accordance with the advice of such counsel, accountants or experts, (ii) makes no warranty or representation to any Lender and shall not be responsible to any Lender for any statements, warranties or representations (whether written or oral) made in or in connection with this Agreement, (iii) shall not have any duty to ascertain or to inquire as to
the performance, observance or satisfaction of any of the terms, covenants or conditions of this Agreement on the part of the Borrower or the existence at any time of any Default or Prepayment Event or to inspect the property (including the books and records) of the Borrower, (iv) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto, (v) shall incur no liability under or in respect of this Agreement by action upon any notice, consent, certificate or other instrument or writing (which may be by telecopier) believed by it to be genuine and signed or sent by the proper party or parties, and (vi) shall have no responsibility to the Borrower or any Lender on account of (A) the failure of a Lender or the Borrower to perform any of its obligations under this Agreement or any Loan Document; (B) the financial condition of the Borrower; (C) the completeness or accuracy of any statements, representations or warranties made in or pursuant to this Agreement or any Loan Document, or in or pursuant to any document delivered pursuant to or in connection with this Agreement or any Loan Document; or (D) the negotiation, execution, effectiveness, genuineness, validity, enforceability, admissibility in evidence or sufficiency of this Agreement or any Loan Document or of any document executed or delivered pursuant to or in connection with any Loan Document.
SECTION 10.5. Successor. The Facility Agent may resign as such at any time upon at least 30 days’ prior notice to the Borrower and all Lenders and shall resign where required to do in accordance with Section 4.14, provided that any such resignation shall not become effective until a successor Facility Agent has been appointed as provided in this Section 10.5 and such successor Facility Agent has accepted such appointment. If the Facility Agent at any time shall resign, the Required Lenders shall, subject to the immediately preceding proviso and subject to the consent of the Borrower (such consent not to be unreasonably withheld), appoint another Lender as a successor to the Facility Agent which shall thereupon become such Facility Agent’s successor hereunder (provided that the Required Lenders shall, subject to the consent of the Borrower unless an Event or Default or a Prepayment Event shall have occurred and be continuing (such consent not to be unreasonably withheld or delayed) offer to each of the other Lenders in turn, in the order of their respective Percentages of the Loan, the right to become successor Facility Agent). If no successor Facility Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30 days after the Facility Agent’s giving notice of resignation, then the Facility Agent may, on behalf of the Lenders, appoint a successor Facility Agent, which shall be one of the Lenders or a commercial banking institution having a combined capital and surplus of at least $1,000,000,000 (or the equivalent in other currencies), subject, in each case, to the consent of the Borrower (such consent not to be unreasonably withheld). Upon the acceptance of any appointment as Facility Agent hereunder by a successor Facility Agent, such successor Facility Agent shall be entitled to receive from the resigning Facility Agent such documents of transfer and assignment as such successor Facility Agent may reasonably request, and shall thereupon succeed to and become vested with all rights, powers, privileges and duties of the resigning Facility Agent, and the resigning Facility Agent shall be discharged from its duties and obligations under this Agreement. After any resigning Facility Agent’s resignation hereunder as the Facility Agent, the provisions of:
a)this Article X shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Facility Agent under this Agreement; and
b)Section 11.3 and Section 11.4 shall continue to inure to its benefit.
If a Lender acting as the Facility Agent assigns its Loan to one of its Affiliates, such Facility Agent may, subject to the consent of the Borrower (such consent not to be unreasonably withheld or delayed) assign its rights and obligations as Facility Agent to such Affiliate.
SECTION 10.6. Loans by the Facility Agent. The Facility Agent shall have the same rights and powers with respect to the Loan made by it or any of its Affiliates. The Facility Agent and its Affiliates may accept deposits from, lend money to, and generally engage in any kind of business with the Borrower or any Affiliate of the Borrower as if the Facility Agent were not the Facility Agent hereunder and without any duty to account therefor to the Lenders. The Facility Agent shall have no duty to disclose information obtained or received by it or any of its Affiliates relating to the Borrower or its Subsidiaries to the extent such information was obtained or received in any capacity other than as the Facility Agent.
SECTION 10.7. Credit Decisions. Each Lender acknowledges that it has, independently of each Agent and each other Lender, and based on such Lender’s review of the financial information of the Borrower, this Agreement, the other Loan Documents (the terms and provisions of which being satisfactory to such Lender) and such other documents, information and investigations as such Lender has deemed appropriate, made its own credit decision to extend its Commitment. Each Lender also acknowledges that it will, independently of each Agent and each other Lender, and based on such other documents, information and investigations as it shall deem appropriate at any time, continue to make its own credit decisions as to exercising or not exercising from time to time any rights and privileges available to it under this Agreement or any other Loan Document.
SECTION 10.8. Copies, etc. Each Agent shall give prompt notice to each Lender of each notice or request required or permitted to be given to such Agent by the Borrower pursuant to the terms of this Agreement (unless concurrently delivered to the Lenders by the Borrower). Each Agent will distribute to each Lender each document or instrument received for its account and copies of all other communications received by such Agent from the Borrower for distribution to the Lenders by such Agent in accordance with the terms of this Agreement.
SECTION 10.9. The Agents’ Rights. Each Agent may (i) assume that all representations or warranties made or deemed repeated by the Borrower in or pursuant to this Agreement or any Loan Document are true and complete, unless, in its capacity as the Facility Agent, it has acquired actual knowledge to the contrary, (ii) assume that no Default has occurred unless, in its capacity as an Agent, it has acquired actual knowledge to the contrary, (iii) rely on any document or notice believed by it to be genuine,
(iv) rely as to legal or other professional matters on opinions and statements of any legal or other professional advisers selected or approved by it, (v) rely as to any factual matters which might reasonably be expected to be within the knowledge of the Borrower on a certificate signed by or on behalf of the Borrower and (vi) refrain from exercising any right, power, discretion or remedy unless and until instructed to exercise that right, power, discretion or remedy and as to the manner of its exercise by the Lenders (or, where applicable, by the Required Lenders) and unless and until such Agent has received from the Lenders any payment which such Agent may require on account of, or any security which such Agent may
require for, any costs, claims, expenses (including legal and other professional fees) and liabilities which it considers it may incur or sustain in complying with those instructions.
SECTION 10.10. The Facility Agent’s Duties. The Facility Agent shall (i) if requested in writing to do so by a Lender, make enquiry and advise the Lenders as to the performance or observance of any of the provisions of this Agreement or any Loan Document by the Borrower or as to the existence of an Event of Default and (ii) inform the Lenders promptly of any Event of Default of which the Facility Agent has actual knowledge.
The Facility Agent shall not be deemed to have actual knowledge of the falsehood or incompleteness of any representation or warranty made or deemed repeated by the Borrower or actual knowledge of the occurrence of any Default unless a Lender or the Borrower shall have given written notice thereof to the Facility Agent in its capacity as the Facility Agent. Any information acquired by the Facility Agent other than specifically in its capacity as the Facility Agent shall not be deemed to be information acquired by the Facility Agent in its capacity as the Facility Agent.
The Facility Agent may, without any liability to account to the Lenders, generally engage in any kind of banking or trust business with the Borrower or with the Borrower’s subsidiaries or associated companies or with a Lender as if it were not the Facility Agent.
SECTION 10.11. Employment of Agents. In performing its duties and exercising its rights, powers, discretions and remedies under or pursuant to this Agreement or the Loan Documents, each Agent shall be entitled to employ and pay agents to do anything which such Agent is empowered to do under or pursuant to this Agreement or the Loan Documents (including the receipt of money and documents and the payment of money); provided that, unless otherwise provided herein, including without limitation Section 11.3, the employment of such agents shall be for such Agent’s account, and to act or refrain from taking action in reliance on the opinion of, or advice or information obtained from, any lawyer, banker, broker, accountant, valuer or any other person believed by such Agent in good faith to be competent to give such opinion, advice or information.
SECTION 10.12. Distribution of Payments. The Facility Agent shall pay promptly to the order of each Lender that Lender’s Percentage share of every sum of money received by the Facility Agent pursuant to this Agreement or the Loan Documents (including, without limitation, any amounts payable pursuant to Section 4.4.1 but not including any amounts payable pursuant to the Fee Letter and any amounts which, by the terms of this Agreement or the Loan Documents, are paid to the Facility Agent for the account of the Facility Agent alone or specifically for the account of one or more Lenders) and until so paid such amount shall be held by the Facility Agent on trust absolutely for that Lender.
SECTION 10.13. Reimbursement. The Facility Agent shall have no liability to pay any sum to a Lender until it has itself received payment of that sum. If, however, the Facility Agent does pay any sum to a Lender on account of any amount prospectively due to that Lender pursuant to Section 10.12 before it has itself received payment of that amount, and the Facility Agent does not in fact receive payment within two (2) Business Days after the date on which that payment was required to be made by the terms of this Agreement or the Loan Documents, that Lender will, on demand by the Facility
Agent, refund to the Facility Agent an amount equal to the amount received by it, together with an amount sufficient to reimburse the Facility Agent for any amount which the Facility Agent may certify that it has been required to pay by way of interest on money borrowed to fund the amount in question during the period beginning on the date on which that amount was required to be paid by the terms of this Agreement or the Loan Documents and ending on the date on which the Facility Agent receives reimbursement.
SECTION 10.14. Instructions. Where an Agent is authorized or directed to act or refrain from acting in accordance with the instructions of the Lenders or of the Required Lenders each of the Lenders shall provide such Agent with instructions within three (3) Business Days of such Agent’s request (which request may be made orally or in writing). If a Lender does not provide such Agent with instructions within that period, that Lender shall be bound by the decision of such Agent. Nothing in this Section 10.14 shall limit the right of such Agent to take, or refrain from taking, any action without obtaining the instructions of the Lenders or the Required Lenders if such Agent in its discretion considers it necessary or appropriate to take, or refrain from taking, such action in order to preserve the rights of the Lenders under or in connection with this Agreement or the Loan Documents. In that event, such Agent will notify the Lenders of the action taken by it as soon as reasonably practicable, and the Lenders agree to ratify any action taken by the Facility Agent pursuant to this Section 10.14.
SECTION 10.15. Payments. All amounts payable to a Lender under this Section 10 shall be paid to such account at such bank as that Lender may from time to time direct in writing to the Facility Agent.
SECTION 10.16. “Know your customer” Checks. Each Lender shall promptly upon the request of the Facility Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Facility Agent (for itself) in order for the Facility Agent to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in this Agreement or the Loan Documents.
SECTION 10.17. No Fiduciary Relationship. Except as provided in Section 10.12, no Agent shall have any fiduciary relationship with or be deemed to be a trustee of or for any other person and nothing contained in this Agreement or any Loan Document shall constitute a partnership between any two or more Lenders or between either Agent and any other person.
SECTION 10.18. Illegality. The Agent shall refrain from doing anything which it reasonably believes would be contrary to any law of any jurisdiction (including but not limited to England and Wales, the United States of America or any jurisdiction forming part of it) or any regulation or directive of any agency of such state or jurisdiction or which would or might render it liable to any person and may without liability do anything which is, in its opinion, necessary to comply with any such law, directive or regulation.
ARTICLE XI MISCELLANEOUS PROVISIONS
SECTION 11.1. Waivers, Amendments, etc. The provisions of this
Agreement and of each other Loan Document may from time to time be amended, modified or waived, if such amendment, modification or waiver is in writing and consented to by the Borrower and the Required Lenders; provided that no such amendment, modification or waiver which would:
a.contravene or be in breach of the terms of the BpiFAE Insurance Policy or the arrangements with Natixis DAI relating to the CIRR (if the Fixed Rate applies) shall be effective unless consented to by, as applicable, BpiFAE and/or Natixis DAI;
b.modify any requirement hereunder that any particular action be taken by all the Lenders or by the Required Lenders shall be effective unless consented to by each Lender;
c.modify this Section 11.1 or change the definition of “Required Lenders” shall be made without the consent of each Lender;
d.increase the Commitment of any Lender shall be made without the consent of such Lender;
e.reduce any fees described in Article III payable to any Lender shall be made without the consent of such Lender;
f.extend the Commitment Termination Date of any Lender shall be made without the consent of such Lender;
g.extend the due date for, or reduce the amount of, any scheduled repayment or prepayment of principal of or interest on the Loan (or reduce the principal amount of or rate of interest on the Loan) owed to any Lender shall be made without the consent of such Lender; or
h.affect adversely the interests, rights or obligations of the Facility Agent in its capacity as such shall be made without consent of the Facility Agent.
No failure or delay on the part of the Facility Agent or any Lender in exercising any power or right under this Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right. No notice to or demand on the Borrower in any case shall entitle it to any notice or demand in similar or other circumstances. No waiver or approval by any the Facility Agent or any Lender under this Agreement or any other Loan Document shall, except as may be otherwise stated in such waiver or approval, be applicable to subsequent transactions. No waiver or approval hereunder shall require any similar or dissimilar waiver or approval thereafter to be granted hereunder. The Lenders hereby agree, at any time and from time to time that the Nordea Agreement or the Bank of Nova Scotia Agreement is amended or refinanced, to negotiate in
good faith to amend this Agreement to conform any representations, warranties, covenants or events of default in this Agreement to the amendments made to any substantively comparable provisions in the Nordea Agreement or the Bank of Nova Scotia Agreement or any refinancing thereof.
Neither the Borrower’s rights nor its obligations under the Loan Documents shall be changed, directly or indirectly, as a result of any amendment, supplement, modification, variance or novation of the BpiFAE Insurance Policy, except any amendments, supplements, modifications, variances or novations, as the case may be, which occur (i) with the Borrower’s consent, (ii) at the Borrower’s request or (iii) in order to conform to amendments, supplements, modifications, variances or novations effected in respect of the Loan Documents in accordance with their terms.
SECTION 11.2. Notices.
a)All notices and other communications provided to any party hereto under this Agreement or any other Loan Document shall be in writing, by facsimile or by electronic mail and addressed, delivered or transmitted to such party at its address, facsimile number or electronic mail address set forth below its signature hereto or set forth in the Lender Assignment Agreement or at such other address, or facsimile number as may be designated by such party in a notice to the other parties. Any notice, if mailed and properly addressed with postage prepaid or if properly addressed and sent by pre-paid courier service, shall be deemed given when received; any notice, if transmitted by facsimile, shall be deemed given when transmitted provided it is received in legible form; any notice, if transmitted by electronic mail, shall be deemed given upon acknowledgment of receipt by the recipient.
b)So long as Citibank Europe plc, UK Branch is the Facility Agent, the Borrower may provide to the Facility Agent all information, documents and other materials that it furnishes to the Facility Agent hereunder or any other Loan Document (and any guaranties, security agreements and other agreements relating thereto), including, without limitation, all notices, requests, financial statements, financial and other reports, certificates and other materials, but excluding any such communication that (i) relates to a request for a new, or a conversion of an existing advance or other extension of credit (including any election of an interest rate or interest period relating thereto), (ii) relates to the payment of any principal or other amount due hereunder or any other Loan Document prior to the scheduled date therefor, (iii) provides notice of any Default or Event of Default or (iv) is required to be delivered to satisfy any condition precedent to the effectiveness of the Agreement and/or any advance or other extension of credit hereunder (all such non-excluded communications being referred to herein collectively as “Communications”), by transmitting the Communications in an electronic/soft medium in a format acceptable to the Facility Agent to such email address notified by the Facility Agent to the Borrower; provided that any Communication requested pursuant to Section 7.1.1(h) shall be in a format acceptable to the Borrower and the Facility Agent.
c)The Borrower agrees that the Facility Agent may make such items included in the Communications as the Borrower may specifically agree available to the Lenders by posting such notices, at the option of the Borrower, on Intralinks or any similar such platform (the “Platform”) acceptable to the Borrower. Although the primary web portal is secured with a dual firewall and a User ID/Password Authorization System and the Platform is secured through a single user per deal authorization method whereby each user may access the Platform only on a deal-by-deal basis, the Borrower acknowledges that (i) the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution, (ii) the Platform is provided “as is” and “as available” and (iii) neither the Facility Agent nor any of its Affiliates warrants the accuracy, adequacy or completeness of the Communications or the Platform and each expressly disclaims liability for errors or omissions in the Communications or the Platform. No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third party rights or freedom from viruses or other code defects, is made by the Facility Agent or any of its Affiliates in connection with the Platform.
d)The Facility Agent agrees that the receipt of Communications by the Facility Agent at its e-mail address set forth above shall constitute effective delivery of such Communications to the Facility Agent for purposes hereunder and any other Loan Document (and any guaranties, security agreements and other agreements relating thereto).
SECTION 11.3. Payment of Costs and Expenses. The Borrower agrees to pay on demand all reasonable expenses of the Facility Agent (including the reasonable fees and out-of-pocket expenses of counsel to the Facility Agent and of local counsel, if any, who may be retained by counsel to the Facility Agent) in connection with any amendments, waivers, consents, supplements or other modifications to, this Agreement or any other Loan Document as may from time to time hereafter be required, whether or not the transactions contemplated hereby are consummated. The Borrower further agrees to pay, and to save the Facility Agent and the Lenders harmless from all liability for, any stamp, recording, documentary or other similar taxes arising from the execution, delivery or enforcement of this Agreement or the borrowing hereunder or any other Loan Documents. The Borrower also agrees to reimburse the Facility Agent and each Lender upon demand for all reasonable out-of-pocket expenses (including reasonable attorneys’ fees and legal expenses) incurred by the Facility Agent or such Lender in connection with (x) the negotiation of any restructuring or “work-out”, whether or not consummated, of any Obligations and (y) the enforcement of any Obligations.
SECTION 11.4. Indemnification. In consideration of the execution and delivery of this Agreement by each Lender and the extension of the Commitments, the Borrower hereby indemnifies and holds harmless the Facility Agent, each Lender and each of their respective Affiliates and their respective officers, advisors, directors and employees (collectively, the “Indemnified Parties”) from and against any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and disbursements of counsel), joint or several, that may be incurred by or asserted or awarded against any Indemnified Party (including, without limitation, in connection with any
investigation, litigation or proceeding or the preparation of a defense in connection therewith), in each case arising out of or in connection with or by reason of this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby or any actual or proposed use of the proceeds of the Loans (collectively, the “Indemnified Liabilities”), except to the extent such claim, damage, loss, liability or expense is found in a final, non- appealable judgment by a court of competent jurisdiction to have resulted primarily from such Indemnified Party’s gross negligence or willful misconduct or the material breach by such Indemnified Party of its obligations under this Agreement, any other Loan Document, the BpiFAE Insurance Policy or Interest Stabilisation Agreement and which breach is not attributable to the Borrower’s own breach of the terms of this Agreement or any other Loan Document or is a claim, damage, loss, liability or expense which would have been compensated under other provisions of the Loan Documents but for any exclusions applicable thereunder.
In the case of an investigation, litigation or other proceeding to which the indemnity in this paragraph applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by the Borrower, any of its directors, security holders or creditors, an Indemnified Party or any other person or an Indemnified Party is otherwise a party thereto. Each Indemnified Party shall (a) furnish the Borrower with prompt notice of any action, suit or other claim covered by this Section 11.4, (b) not agree to any settlement or compromise of any such action, suit or claim without the Borrower’s prior consent, (c) shall cooperate fully in the Borrower’s defense of any such action, suit or other claim (provided that the Borrower shall reimburse such indemnified party for its reasonable out-of-pocket expenses incurred pursuant hereto) and (d) at the Borrower’s request, permit the Borrower to assume control of the defense of any such claim, other than regulatory, supervisory or similar investigations, provided that (i) the Borrower acknowledges in writing its obligations to indemnify the Indemnified Party in accordance with the terms herein in connection with such claims, (ii) the Borrower shall keep the Indemnified Party fully informed with respect to the conduct of the defense of such claim, (iii) the Borrower shall consult in good faith with the Indemnified Party (from time to time and before taking any material decision) about the conduct of the defense of such claim, (iv) the Borrower shall conduct the defense of such claim properly and diligently taking into account its own interests and those of the Indemnified Party, (v) the Borrower shall employ counsel reasonably acceptable to the Indemnified Party and at the Borrower’s expense, and (vi) the Borrower shall not enter into a settlement with respect to such claim unless either (A) such settlement involves only the payment of a monetary sum, does not include any performance by or an admission of liability or responsibility on the part of the Indemnified Party, and contains a provision unconditionally releasing the Indemnified Party and each other indemnified party from, and holding all such persons harmless, against, all liability in respect of claims by any releasing party or (B) the Indemnified Party provides written consent to such settlement (such consent not to be unreasonably withheld or delayed). Notwithstanding the Borrower’s election to assume the defense of such action, the Indemnified Party shall have the right to employ separate counsel and to participate in the defense of such action and the Borrower shall bear the fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the Borrower to represent the Indemnified Party would present such counsel with an actual or potential conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the Borrower and the Indemnified Party and the Indemnified Party shall have concluded that there may be legal defenses available to it which are different from or additional to those available to the Borrower and determined that it is necessary to employ
separate counsel in order to pursue such defenses (in which case the Borrower shall not have the right to assume the defense of such action on the Indemnified Party’s behalf), (iii) the Borrower shall not have employed counsel reasonably acceptable to the Indemnified Party to represent the Indemnified Party within a reasonable time after notice of the institution of such action, or (iv) the Borrower authorizes the Indemnified Party to employ separate counsel at the Borrower’s expense. The Borrower acknowledges that none of the Indemnified Parties shall have any liability (whether direct or indirect, in contract, tort or otherwise) to the Borrower or any of its security holders or creditors for or in connection with the transactions contemplated hereby, except to the extent such liability is determined in a final non- appealable judgment by a court of competent jurisdiction to have resulted primarily from such Indemnified Party’s gross negligence or willful misconduct. In no event, however, shall any Indemnified Party be liable on any theory of liability for any special, indirect, consequential or punitive damages (including, without limitation, any loss of profits, business or anticipated savings). If and to the extent that the foregoing undertaking may be unenforceable for any reason, the Borrower hereby agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.
SECTION 11.5. Survival. The obligations of the Borrower under Sections 4.3, 4.4, 4.5, 4.6, 4.7, 11.3 and 11.4 and the obligations of the Lenders under Section 10.1, shall in each case survive any termination of this Agreement and the payment in full of all Obligations. The representations and warranties made by the Borrower in this Agreement and in each other Loan Document shall survive the execution and delivery of this Agreement and each such other Loan Document.
SECTION 11.6. Severability. Any provision of this Agreement or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement or such Loan Document or affecting the validity or enforceability of such provision in any other jurisdiction.
SECTION 11.7. Headings. The various headings of this Agreement and of each other Loan Document are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or such other Loan Document or any provisions hereof or thereof.
SECTION 11.8. Execution in Counterparts, Effectiveness, etc. This Agreement may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement. This Agreement, as a novated and amended Agreement, shall become effective upon the occurrence of the Novation Effective Time under, and as defined in, the Novation Agreement.
SECTION 11.9. Third Party Rights. Notwithstanding the provisions of the Contracts (Rights of Third Parties) Act 1999, no term of this Agreement is enforceable by a person who is not a party to it with the exception of BpiFAE and Natixis.
SECTION 11.10. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns; provided that:
a)except to the extent permitted under Section 7.2.6, the Borrower may not assign or transfer its rights or obligations hereunder without the prior written consent of the Facility Agent, each Lender and BpiFAE; and
b)the rights of sale, assignment and transfer of the Lenders are subject to Section 11.11.
SECTION 11.11. Sale and Transfer of the Loan; Participations in the Loan. Each Lender may assign its Percentage or portion of the Loan to
one or more other Persons (a “New Lender”), or sell participations in its Percentage or portion of the Loan to one or more other Persons; provided that, in the case of assignments where the Fixed Rate applies, such New Lender (other than BpiFAE or CAFFIL as assignee of all or any of SFIL’s rights as Lender following the enforcement of the security granted pursuant to paragraph (iv) of Section 11.11.1 in connection with the BpiFAE Enhanced Guarantee, and subject as provided in Section 11.11.1(iv)) enters into an Interest Stabilisation Agreement.
SECTION 11.11.1. Assignments
(i)Any Lender with the prior written consents of the Borrower and the Facility Agent (which consents shall not be unreasonably delayed or withheld and which consent, in the case of the Borrower, shall be deemed to have been given in the absence of a written notice delivered by the Borrower to the Facility Agent, on or before the fifth Business Day after receipt by the Borrower of such Lender’s request for consent, stating, in reasonable detail, the reasons why the Borrower proposes to withhold such consent) may at any time (and from time to time) assign or transfer to one or more commercial banks or other financial institutions all or any fraction of such Lender’s portion of the Loan.
(ii)Any Lender, with notice to the Borrower and the Facility Agent, and, notwithstanding the foregoing clause (i), without the consent of the Borrower, or the Facility Agent may assign or transfer (A) to any of its Affiliates, (B) to SFIL or (C) following the occurrence and during the continuance of an Event of Default under Sections 8.1.1, 8.1.4(a) or 8.1.5, to any other Person, in each case, all or any fraction of such Lender’s portion of the Loan.
(iii)Any Lender may (notwithstanding the foregoing clauses, and without notice to, or consent from, the Borrower or the Facility Agent) assign or charge all or any fraction of its portion of the Loan to any federal reserve or central bank as collateral security in connection with the extension of credit or support by such federal reserve or central bank to such Lender.
(iv)SFIL may (notwithstanding the foregoing clauses, and without notice to, or consent from, the Borrower or the Facility Agent) assign, charge or otherwise grant security over all or any fraction of its portion of the Loan and of its rights as Lender to CAFFIL as collateral security in connection with the extension of credit or support by CAFFIL to SFIL in respect of this Agreement and the BpiFAE Enhanced Guarantee, provided that at the time of the assignment, charge or grant of security CAFFIL is an Affiliate of SFIL and that such
assignment, charge or other security is on terms that (i) CAFFIL shall not have any rights to assign, charge or grant any security over such rights to any other person (other than to BpiFAE pursuant to and in accordance with the BpiFAE Enhanced Guarantee) without the prior written consent of the Borrower, (ii) CAFFIL shall only be entitled to enforce its rights under such assignment, charge or other security without the prior written consent of the Borrower if at that time it remains an Affiliate of SFIL, (iii) prior to any enforcement such assignment, charge or other security, the Borrower and the Facility Agent shall continue to deal solely and directly with SFIL in connection with its rights and obligations as Lender under this Agreement and other Loan Documents (subject to any payment instructions given by SFIL), (iv) for the avoidance of doubt, the Borrower’s rights and obligations under this Agreement shall not be increased or affected (including, without limitation, the right to pay Fixed Rate under Section 3.3.1) as a result of such assignment, charge or security or any enforcement thereof, (v) the Borrower shall not be liable to pay any amount under Sections 4.2(c), 4.3, 4.4, 4.5, 4.6 and 4.7 that is greater than the amount which it would have been required to pay to SFIL had no such assignment, charge or other security been granted and (vi) without prejudice to SFIL’s obligations under that Section, CAFFIL shall be bound by the confidentiality provisions set forth in Section 11.15. in relation to any information to which it applies to the same extent as required of the Lenders. For the avoidance of doubt: (A) if CAFFIL becomes a Lender under this Agreement in respect of any portion of the Loan following enforcement of any assignment, charge or other security granted to it by SFIL pursuant to this Section 11.11.1(iv), it shall have the same rights to assign or transfer all or any fraction of such portion of the Loan on and subject to the same terms and conditions as are set forth in this Agreement for assignments and transfers by other Lenders and (B) CAFFIL may not enforce its rights under any such assignment, charge or other security by assigning or transferring all or any fraction of SFIL’s portion of the Loan or any of its rights or obligations under this Agreement or other Loan Documents except pursuant to an assignment or transfer to a commercial bank or other financial institution on and subject to the same terms and conditions as are set forth in this Agreement for assignments and transfers by Lenders.
(v)No Lender may (notwithstanding the foregoing clauses) assign or transfer any of its rights under this Agreement unless it has given prior written notification of the transfer to BpiFAE and (if the Loan is accruing interest at the Fixed Rate) Natixis DAI and has obtained a prior written consent from BpiFAE and Natixis DAI and any Assignee Lender (other than BpiFAE and CAFFIL as assignee of all or any of SFIL’s rights as Lender following the enforcement of the security granted pursuant to paragraph (iv) of Section 11.11.1 in connection with the BpiFAE Enhanced Guarantee, subject as provided in Section 11.11.1(iv)) is, if the Fixed Rate applies, eligible to benefit from the CIRR stabilisation. Any assignment or transfer shall comply with the terms of the BpiFAE Insurance Policy.
(vi)Nothing in this Section 11.11.1 shall prejudice the right of the Lender to assign its rights under this Agreement to BpiFAE, if such assignment is required to be made by that Lender to BpiFAE in accordance with the BpiFAE Insurance Policy or the BpiFAE Enhanced Guarantee or, if the Lender is SFIL, to CAFFIL (but only if CAFFIL is, at that time, an Affiliate of SFIL) upon the enforcement of any security granted pursuant, and subject to the provisions of paragraph (iv) of Section 11.11.1, in connection with the BpiFAE Enhanced Guarantee.
Each Person described in the foregoing clauses as being the Person to whom such assignment or transfer is to be made, is hereinafter referred to as an “Assignee Lender”. Assignments in a minimum aggregate amount of $25,000,000 (or, if less, all of such Lender’s portion of the Loan and Commitment) (which assignment or transfer shall be of a constant, and not a varying, percentage of such Lender’s portion of the Loan) are permitted; provided that the Borrower and the Facility Agent shall be entitled to continue to deal solely and directly with such Lender in connection with the interests so assigned or transferred to an Assignee Lender until:
a)written notice of such assignment or transfer, together with payment instructions, addresses and related information with respect to such Assignee Lender, shall have been given to the Borrower and the Facility Agent by such Lender and such Assignee Lender;
b)such Assignee Lender shall have executed and delivered to the Borrower and the Facility Agent a Lender Assignment Agreement, accepted by the Facility Agent and any other agreements required by the Facility Agent or, if the Fixed Rate applies, Natixis in connection therewith; and
c)the processing fees described below shall have been paid.
From and after the date that the Facility Agent accepts such Lender Assignment Agreement,
(x)the Assignee Lender thereunder shall be deemed automatically to have become a party hereto and to the extent that rights and obligations hereunder have been assigned or transferred to such Assignee Lender in connection with such Lender Assignment Agreement, shall have the rights and obligations of a Lender hereunder and under the other Loan Documents, and (y) the assignor Lender, to the extent that rights and obligations hereunder have been assigned or transferred by it, shall be released from its obligations hereunder and under the other Loan Documents, other than any obligations arising prior to the effective date of such assignment. Except to the extent resulting from a subsequent change in law, in no event shall the Borrower be required to pay to any Assignee Lender any amount under Sections 4.2(c), 4.3, 4.4, 4.5, 4.6 and 4.7 that is greater than the amount which it would have been required to pay had no such assignment been made. Such assignor Lender or such Assignee Lender must also pay a processing fee to the Facility Agent upon delivery of any Lender Assignment Agreement in the amount of $5,000 (and shall also reimburse the Facility Agent and Natixis for any reasonable out-of-pocket costs, including reasonable attorneys’ fees and expenses, incurred in connection with the assignment).
SECTION 11.11.2. Participations. Any Lender may at any time sell to one or more commercial banks or other financial institutions (each of such commercial banks and other financial institutions being herein called a “Participant”) participating interests in its Loan; provided that:
1)no participation contemplated in this Section 11.11.2 shall relieve such Lender from its obligations hereunder;
2)such Lender shall remain solely responsible for the performance of its obligations hereunder;
3)the Borrower and the Facility Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and each of the other Loan Documents;
4)no Participant, unless such Participant is an Affiliate of such Lender, shall be entitled to require such Lender to take or refrain from taking any action hereunder or under any other Loan Document, except that such Lender may agree with any Participant that such Lender will not, without such Participant’s consent, take any actions of the type described in clauses (b) through (f) of Section 11.1;
5)the Borrower shall not be required to pay any amount under Sections 4.2(c), 4.3, 4.4, 4.5, 4.6 and 4.7 that is greater than the amount which it would have been required to pay had no participating interest been sold; and
6)each Lender that sells a participation under this Section 11.11.2 shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts of (and stated interest on) each of the Participant’s interest in that Lender’s portion of the Loan, Commitments or other interests hereunder (the “Participant Register”). The entries in the Participant Register shall be conclusive absent manifest error, and such Lender may treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes hereunder.
The Borrower acknowledges and agrees that each Participant, for purposes of Sections 4.2(c), 4.3, 4.4, 4.5, 4.6 and clause (e) of 7.1.1, shall be considered a Lender.
SECTION 11.11.3. Register. The Facility Agent shall maintain at its address referred to in Section 11.2 a copy of each Lender Assignment Agreement delivered to and accepted by it and a register for the recordation of the names and addresses of the Lenders and the Commitment(s) of, and principal amount of the Loan owing to, each Lender from time to time (the “Register”). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrower, the Facility Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice.
SECTION 11.11.4. Rights of BpiFAE to payments. The Borrower acknowledges that, immediately upon any payment by BpiFAE (i) of any amounts to a Lender under the BpiFAE Insurance Policy, BpiFAE will be automatically subrogated to the extent of such payment to the rights of that Lender under the Loan Documents or (ii) of any amount under the BpiFAE Enhanced Guarantee and the enforcement of any related security granted by SFIL to any of its Affiliates, which may benefit BpiFAE after payment by BpiFAE under the BpiFAE Enhanced Guarantee, BpiFAE will be automatically entitled to receive the payments normally due to SFIL under the Loan Documents( but, for the avoidance of doubt, such payments shall continue to be made by the Borrower to the Facility Agent in accordance with the provisions of Section 4.8 or any other relevant provisions of this Agreement, as applicable).
SECTION 11.12. Other Transactions. Nothing contained herein shall preclude the Facility Agent or any Lender from engaging in any transaction, in addition to those contemplated by this Agreement or any other Loan Document, with the Borrower or any of its Affiliates in which the Borrower or such Affiliate is not restricted hereby from engaging with any other Person.
SECTION 11.13. BpiFAE Insurance Policy.
SECTION 11.13.1. Terms of BpiFAE Insurance Policy
a)The BpiFAE Insurance Policy will cover 100% of the Loan.
b)The BpiFAE Premium will equal 3% of the aggregate principal amount of the Loan as at the Actual Delivery Date.
c)If, after the Actual Delivery Date, the Borrower prepays all or part of the Loan in accordance with this Agreement, BpiFAE shall reimburse to the ECA Agent for the account of the Borrower an amount equal to 80% of all or a corresponding proportion of the unexpired portion of the BpiFAE Premium, having regard to the amount of the prepayment and the remaining term of the Loan, such amount to be calculated in accordance with the following formula:
R = P x (1 – (1 / (1+3%)) x (N / (12 * 365)) x 80%
where:
“R” means the amount of the refund;
“P” means the amount of the prepayment;
“N” means the number of days between the effective prepayment date and Final Maturity; and
P x (1 – (1 / (1+3%)) corresponds to the share of the financed BpiFAE Premium corresponding to P.
SECTION 11.13.2. Obligations of the Borrower. Provided that the BpiFAE Insurance Policy complies with Section 11.13.1 and remains in full force and effect, the Borrower shall pay the balance of the BpiFAE Premium calculated in accordance with Section 11.3.1(b) and still owing to BpiFAE on the Actual Delivery Date to BpiFAE on the Actual Delivery Date by directing the Agent in the Loan Request to pay the Additional Advance in respect of the BpiFAE Premium directly to BpiFAE.
SECTION 11.13.3. Obligations of the ECA Agent and the Lenders.
a)Promptly upon receipt of the BpiFAE Insurance Policy from BpiFAE, the ECA Agent shall (subject to any confidentiality undertakings given to BpiFAE by the ECA Agent pursuant to the terms of the BpiFAE Insurance Policy) send a copy thereof to the Borrower.
b)The ECA Agent shall perform such acts or provide such information, which are, acting reasonably, within its power so to perform or so to provide, as required by BpiFAE under the BpiFAE Insurance Policy as necessary to ensure that the Lenders obtain the support of BpiFAE pursuant to the BpiFAE Insurance Policy.
c)Each Lender will co-operate with the ECA Agent, the Facility Agent and each other Lender, and take such action and/or refrain from taking such action as may be reasonably necessary, to ensure that the BpiFAE Insurance Policy and each Interest Stabilisation Agreement continues in full force and effect and shall indemnify and hold harmless each other Lender in the event that the BpiFAE Insurance Policy or such Interest Stabilisation Agreement (as the case may be) does not continue in full force and effect due to its gross negligence or willful default or due to a voluntary change in status which results in it no longer being eligible for CIRR interest stabilisation.
d)The ECA Agent shall, in conjunction with the Facility Agent:
(i)make written requests to BpiFAE seeking a reimbursement of the BpiFAE Premium in the circumstances described in Section 11.13.1(c) promptly after the relevant cancellation or prepayment and (subject to any confidentiality undertakings given to BpiFAE by the ECA Agent pursuant to the terms of the BpiFAE Insurance Policy) provide a copy of the request to the Borrower;
(ii)use its reasonable endeavours to seek any reimbursement of the BpiFAE Premium to which the ECA Agent is entitled;
(iii)pay to the Borrower (in the same currency as the refund received from BpiFAE) the full amount of any reimbursement of the BpiFAE Premium that the ECA Agent receives from BpiFAE within two (2) Business Days of receipt with same day value; and
(iv)relay the good faith concerns of the Borrower to BpiFAE regarding the amount of any reimbursement to which the ECA Agent is entitled, it being agreed that the ECA Agent’s obligation shall be no greater than simply to pass on to BpiFAE the Borrower’s concerns.
SECTION 11.14. Law and Jurisdiction
SECTION 11.14.1. Governing Law. This Agreement and any non- contractual obligations arising out of or in respect of this Agreement shall in all respects be governed by and interpreted in accordance with English Law.
SECTION 11.14.2. Jurisdiction. For the exclusive benefit of the Facility Agent and the Lenders, the parties to this Agreement irrevocably agree that the courts of England are to have jurisdiction to settle any disputes which may arise out of or in connection with this Agreement and that any proceedings may be brought in those courts. The Borrower irrevocably waives any objection which it may now or in the future have to the laying of the venue of any proceedings in any court referred to in this Section, and any claim that those proceedings have been brought in an inconvenient or inappropriate forum.
SECTION 11.14.3. Alternative Jurisdiction. Nothing contained in this Section shall limit the right of the Facility Agent or the Lenders to commence any proceedings against the Borrower in any other court of competent jurisdiction nor shall the commencement of any proceedings against the Borrower in one or more jurisdictions preclude the commencement of any proceedings in any other jurisdiction, whether concurrently or not.
SECTION 11.14.4. Service of Process. Without prejudice to the right of the Facility Agent or the Lenders to use any other method of service permitted by law, the Borrower irrevocably agrees that any writ, notice, judgment or other legal process shall be sufficiently served on it if addressed to it and left at or sent by post to RCL Cruises Ltd., presently at Building 3, The Heights – Brooklands, Weybridge, Surrey, KT13 ONY, Attention: General Counsel, and in that event shall be conclusively deemed to have been served at the time of leaving or, if posted, at 9:00 am on the third Business Day after posting by prepaid first class registered post.
SECTION 11.15. Confidentiality. Each of the Facility Agent and the Lenders agrees to maintain and to cause its Affiliates to maintain the confidentiality of all information provided to it by the Borrower or any Subsidiary of the Borrower, or by the Facility Agent on the Borrower’s or such Subsidiary’s behalf, under this Agreement, and neither it nor any of its Affiliates shall use any such information other than in connection with or in enforcement of this Agreement or in connection with other business now or hereafter existing or contemplated with the Borrower or any Subsidiary, except to the extent such information (i) was or becomes generally available to the public other than as a result of disclosure by it or its Affiliates or their respective directors, officers, employees and agents, or (ii) was or becomes available on a non-confidential basis from a source other than the Borrower or any of its Subsidiaries so long as such source is not, to its knowledge, prohibited from disclosing such information by a legal, contractual or fiduciary obligation to the Borrower or any of its Affiliates; provided, however, that it may disclose such information (A) at the request or pursuant to any requirement of any self-regulatory body, governmental body, agency or official to which the Facility Agent, any Lender or any of their respective Affiliates is subject or in connection with an examination of the Facility Agent, such Lender or any of their respective Affiliates by any such authority or body, including without limitation the Republic of France and any French Authority; (B) pursuant to subpoena or other court process; (C) when required to do so in accordance with the provisions of any applicable requirement of law; (D) to the extent reasonably required in connection with any litigation or proceeding to which the Facility Agent, any Lender or their respective Affiliates may be party; (E) to the extent reasonably required in connection with the exercise of any remedy hereunder; (F) to the Facility Agent or such Lender’s independent auditors, counsel, and any other professional advisors of the Facility Agent or such Lender who are advised of the confidentiality of such information; (G) to any participant or assignee, provided that such Person agrees to keep such information confidential to the same extent required of the Facility Agent and the Lenders hereunder; (H) as to the Facility Agent, any Lender or their respective Affiliates, as expressly permitted under the terms of any other document or agreement regarding confidentiality to which the Borrower or any Subsidiary is party with the Facility Agent, such Lender or such Affiliate; (I) to its Affiliates and its Affiliates’ directors, officers, employees, professional advisors and agents, provided that each such Affiliate, director, officer, employee, professional advisor or agent shall keep such information confidential to the same extent required of the Facility Agent and the Lenders
hereunder; (J) to any other party to the Agreement and (K) to the French Authorities and any Person to whom information is required to be disclosed by the French Authorities. Each of the Facility Agent and the Lenders shall be responsible for any breach of this Section 11.15 by any of its Affiliates or any of its or its Affiliates’ directors, officers, employees, professional advisors and agents.
SECTION 11.16. French Authority Requirements. The Borrower acknowledges that:
a.the Republic of France and any French Authority or any authorised representatives specified by these bodies shall be authorised at any time to inspect and make or demand copies of the records, accounts, documents and other deeds of any or all of the Lenders relating to this Agreement;
b.in the course of its activity as the Facility Agent, the Facility Agent may:
i.provide the Republic of France and any French Authority with information concerning the transactions to be handled by it under this Agreement; and
ii.disclose information concerning the subsidized transaction contemplated by this Agreement in the context of internationally agreed consultation/notification proceedings and statutory specifications, including information received from the Lenders relating to this Agreement.
SECTION 11.17. Waiver of immunity. To the extent that the Borrower has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its assets, the Borrower hereby irrevocably waives such immunity in respect of its obligations under this Agreement and the other Loan Documents.
SECTION 11.18. Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of a Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
a)the application of any Write-Down and Conversion Powers by a Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and
b)the effects of any Bail-in Action on any such liability, including, if applicable:
(i)a reduction in full or in part or cancellation of any such liability;
(ii)a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or
(iii)the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any Resolution Authority.
IN WITNESS WHEREOF, the parties hereto have caused this Hull No. M34 Credit Agreement to be executed by their respective officers thereunto duly authorized as of the day and year first above written.
ROYAL CARIBBEAN CRUISES LTD.
By
Name:
Title:
Address: 1050 Caribbean Way
Miami, Florida 33132
Facsimile No.: (305) 539-0562 Email: agibson@rccl.com
bstein@rccl.com
Attention: Vice President, Treasurer With a copy to: General Counsel
Citibank N.A., London Branch as Global Coordinator and a Lender
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Commitment
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6.0250000507% of the
Maximum Loan Amount
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By
Name:
Title::
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Citigroup Centre Canada Square London E14 5LB United Kingdom
Attention: Wei-Fong Chan
Kara Catt Romina Coates Antoine Paycha
Fax No: +44 20 7986 4881
Tel No: +44 20 7986 3036 /
+44 20 7508 0344
+44 20 7986 4824
+44 20 7500 0907 /
E-mail: weifong.chan@citi.com kara.catt@citi.com romina.coates@citi.com antoine.paycha@citi.com
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Banco Santander, S.A., Paris Branch as Lender
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Commitment
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4.3005743278% of the
Maximum Loan Amount
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By Name:
Title:
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Lending Office:
374 rue Saint Honoré 75001 Paris
France
Operational address:
Ciudad Financiera Avenida de Cantabria s/n Edificio Encinar 2a planta 28600 Boadilla del Monte Spain
Attention: Elise Regnault
Julián Arroyo Angela Rabanal Ecaterina Mucuta Vanessa Berrio Ana Sanz Gómez
Fax No: +34 91 257 1682
Tel No: +34 912893722 /
+1 212-297-2919
+1 212-297-2942
+33 1 53 53 70 46
+34 91 289 10 28
+34 91 289 17 90
E-mail: elise.regnault@gruposantander.com Julian.Arroyo@santander.us arabanal@santander.us
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Ecaterina.mucuta@gruposantander.com vaberrio@gruposantander.com anasanz@gruposantander.com MiddleOfficeParis@gruposantander.com
BNP PARIBAS as Lender
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Name
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Facility Office and contact details
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elise.regnault@gruposantander.com Julian.Arroyo@santander.us arabanal@santander.us ecaterina.mucuta@gruposantander.com vaberrio@gruposantander.com anasanz@gruposantander.com MiddleOfficeParis@gruposantand
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BNP Paribas
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Front Office to keep copied to all matters. BNPP SA
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37 RUE DU MARCHE SAINT HONORE
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75001 PARI
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ACI : CHC03B1
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Alexandre de VATHAIRE / Mauricio GONZALEZ
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alexandre.devathaire@bnpparibas.com
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mauricio.gonzalez@us.bnpparibas.com
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Tel : 00 331 42 98 00 29/00 1212 841 38 88
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Middle Office: For Operational / Servicing matters
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KHALID BOUITIDA / THIERRY ANEZO
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MILLENAIRE 4
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35, RUE DE LA GARE
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75019 PARIS
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ACI : CVA05A1
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khalid.k.bouitida@bnpparibas.com
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thierry.anezo@bnpparibas.com
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Tel : 00 331 42 98 58 69 / 00 331 43 16 81 57
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Back Office : For Standard Settlement Instruction
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authentication/call-back
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STEVE LOUISOR / VALERIE DUMOULIN
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MILLENAIRE 4
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35, RUE DE LA GARE
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75019 PARIS
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ACI : CVA03A1
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paris.cib.boci.ca.3@bnpparibas.com
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valerie.dumoulin@bnpparibas.com
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steve.louisor@bnpparibas.com
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Tel : 00 331 55 77 91 86 / 00 331 40 14 46 59
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HSBC FRANCE as Lender
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Commitment
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3.9500000254% of the
Maximum Loan Amount
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By Name:
Title:
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HSBC France – Global Banking Agency Operations (GBAO) Transaction Manager Unit
103 avenue des Champs Elysées 75008 Paris
France
Attention:
Florencia Thomas Alexandra Penda
Fax No: +33 1 40 70 28 80
Tel No: +33 1 40 70 73 81 /
+33 1 41 02 67 50
Email: florencia.thomas@hsbc.fr alexandra.penda@hsbc.fr
Copy to:
HSBC France
103 avenue des Champs Elysées 75008 Paris
France
Attention: Julie Bellais
Celine Karsenty
Fax No: +33 1 40 70 78 93
Tel No: +33 1 40 70 28 59 /
+ 33 1 40 70 22 97
Email: julie.bellais@hsbc.fr celine.karesenty@hsbc.fr
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Société Générale as Lender
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Commitment
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9.9328352107% of the
Maximum Loan Amount
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By Name:
Title:
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Société Générale Facility Office 29 Boulevard Haussmann
75009 Paris France
For operational/servicing matters:
Bouchra BOUMEZOUED / Tatiana BYCHKOVA Société Générale 189, rue d’Aubervilliers 75886
PARIS CEDEX 18 OPER/FIN/CAF/DMT6
Phone: +33 1 57 29 13 12 / +33 1 58 98 43 05
Email: bouchra.boumezoued@sgcib.com tatiana.bychkova@sgcib.com
par-oper-caf-dmt6@sgcib.com For credit matters:
Francois Rolland / Tingting Yu / Muriel Baumann Société Générale 189, rue d’Aubervilliers 75886
PARIS CEDEX 18 OPER/FIN/SMO/EXT
Phone: +33 1 58 98 17 78 / +33 1 58 98 49 18 /
+33 1 58 98 22 76
Email: francois.rolland@sgcib.com tingting.yu@sgcib.com muriel.baumann@sgcib.com
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Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch as ECA Agent and a Lender
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Commitment
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2.7360454039% of the
Maximum Loan Amount
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By Name:
Title:
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1/3/5 rue Paul Cézanne, 75008 Paris, France
Attention: Cedric Le Duigou
Guillaume Branco Herve Billi
Claire Lucien Helene Ly
Fax No: +33 1 44 90 48 01
Tel No:
Cedric Le Duigou: +33 1 44 90 48 83
Guillaume Branco: +33 1 44 90 48 71
Herve Billi: +33 1 44 90 48 48
Claire Lucien: +33 1 44 90 48 49
Helene Ly: +33 1 44 90 48 76
E-mail : cedric_leduigou@fr.smbcgroup.com guillaume_branco@fr.smbcgroup.com herve_billi@fr.smbcgroup.com helene_ly@fr.smbcgroup.com claire_lucien@fr.smbcgroup.com
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SFIL as Lender
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Commitment
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69.1248996040%
the Maximum Amount
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of Loan
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By Name:
Title:
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1-3, rue de Passeur de Boulogne – CS
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80054
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92861 Issy-les-Moulineaux Cedex 9
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France
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Contact Person
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Loan Administration Department:
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Direction du Crédit Export:
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Pierre-Marie Debreuille / Anne Crépin
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Direction des Opérations:
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Dominique Brossard / Patrick Sick
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Telephone:
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Pierre-Marie Debreuille
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+33 1 73 28 87 64
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Anne Crépin +33 1 73 28 88 59
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Dominique Brossard +33 1 73 28 91 93
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Patrick Sick +33 1 73 28 87 66
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Email:
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pierre-marie.debreuille@sfil.fr
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anne.crepin@sfil.fr
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dominique.brossard@sfil.fr
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patrick.sick@sfil.fr
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refinancements-export@sfil.fr
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creditexport_ops@sfil.fr
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Fax: + 33 1 73 28 85 04
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Citibank Europe plc, UK Branch as Facility Agent
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By Name:
Title:
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5th Floor Citigroup Centre Mail drop CGC2 05-65
25 Canada Square Canary Wharf London E14 5LB
U.K.
Fax no.: +44 20 7492 3980
Attention: EMEA Loans Agency
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EXECUTION PAGE – NOVATION AGREEMENT
Existing Borrower
SIGNED by )
for and on behalf of )
HOUATORRIS FINANCE LIMITED ) …………………………….
) Attorney-in-Fact
New Borrower
SIGNED by )
for and on behalf of )
ROYAL CARIBBEAN CRUISES LTD. ) …………………………….
) Authorised Officer
Facility Agent
SIGNED by )
for and on behalf of )
CITIBANK EUROPE PLC, UK BRANCH ) …………………………….
) Attorney in-fact
Security Trustee
SIGNED by )
for and on behalf of )
CITICORP TRUSTEE COMPANY LIMITED ) …………………………….
) Attorney in-fact
Global Coordinator
SIGNED by )
for and on behalf of )
CITIBANK N.A., LONDON BRANCH ) ……………………………
) Attorney in-fact
The ECA Agent
SIGNED by )
for and on behalf of )
SUMITOMO MITSUI BANKING CORPORATION )
EUROPE LIMITED, PARIS BRANCH ) ……………………………
) Attorney in-fact
French Coordinating Bank
SIGNED by )
for and on behalf of )
HSBC FRANCE ) ……………………………
) Attorney in-fact
The Original Lenders
SIGNED by )
for and on behalf of )
CITIBANK N.A., LONDON BRANCH ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
BANCO SANTANDER, S.A. ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
BNP PARIBAS ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
HSBC FRANCE ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
SOCIÉTÉ GÉNÉRALE ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
SUMITOMO MITSUI BANKING CORPORATION EUROPE )
LIMITED, PARIS BRANCH ) ……………………………
) Attorney in-fact
The Mandated Lead Arrangers
SIGNED by )
for and on behalf of )
CITIBANK N.A., LONDON BRANCH ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
BANCO SANTANDER, S.A. ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
BNP PARIBAS ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
HSBC FRANCE ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
SOCIÉTÉ GÉNÉRALE ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
SUMITOMO MITSUI BANKING CORPORATION EUROPE )
LIMITED, PARIS BRANCH ) ……………………………
) Attorney in-fact
Schedule 6
Form of Amended and Restated Agency and Trust Deed
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Private & Confidential
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Dated 24 July 2017
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(as amended and restated by a First Supplemental Agreement dated March 2020)
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CITIBANK EUROPE PLC, UK BRANCH (1)
as Facility Agent
CITICORP TRUSTEE COMPANY LIMITED (2)
as Security Trustee
CITIBANK N.A., LONDON BRANCH (3)
as Global Coordinator
SUMITOMO MITSUI BANKING CORPORATION (4) EUROPE LIMITED, PARIS BRANCH
as ECA Agent
CITIBANK N.A., LONDON BRANCH, BANCO SANTANDER, S.A., PARIS BRANCH, BNP PARIBAS, HSBC FRANCE, SOCIÉTÉ GÉNÉRALE and SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH
as Mandated Lead Arrangers (5)
THE BANKS AND FINANCIAL INSTITUTIONS LISTED IN SCHEDULE 1 (6)
as Lenders and
ROYAL CARIBBEAN CRUISES LTD. (7)
as Borrower
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AGENCY AND TRUST DEED
Hull M34
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Contents
Clause Page
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Introduction, definitions and interpretation 1
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Security Trustee 4
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Declaration of trust: supplementary provisions 12
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Application of proceeds 14
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Agents’ and Finance Parties' indemnities 16
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Custody of deeds; illegality 16
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Assignments by the Lenders 17
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Effect of Agreement 17
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Miscellaneous 17
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Agreement to provide power of attorney 17
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Notices and other matters 18
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Contracts (Rights of Third Parties) Act 1999 18
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Governing law and jurisdiction 18
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Schedule 1 The Lenders 19
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THIS AGREEMENT is dated 24 July 2017 (as amended and restated by a first supplemental agreement dated March 2020) and made BETWEEN:
(1)CITIBANK EUROPE PLC, UK BRANCH, as Facility Agent;
(2)CITICORP TRUSTEE COMPANY LIMITED, as Security Trustee;
(3)CITIBANK N.A., LONDON BRANCH as Global Coordinator;
(4)SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH as ECA Agent;
(5)CITIBANK N.A., LONDON BRANCH, BANCO SANTANDER, S.A., PARIS BRANCH, BNP PARIBAS, HSBC FRANCE, SOCIÉTÉ GÉNÉRALE and SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH as Mandated Lead Arrangers;
(6)THE BANKS AND FINANCIAL INSTITUTIONS LISTED IN SCHEDULE 1, as Lenders; and
(7)ROYAL CARIBBEAN CRUISES LTD., as Borrower.
1Introduction, definitions and interpretation
Introduction
a.The parties are entering into this Agreement in connection with:
i.a facility agreement dated 24 July 2017 (the Original Facility Agreement) relating to a loan of up to an aggregate amount of €630,622,480 and made between (1) Houatorris Finance Limited as Borrower, (2) Citibank Europe plc, UK Branch as Facility Agent, (3) Citicorp Trustee Company Limited as Security Trustee, (4) Citibank, N.A., London Branch as Global Coordinator, (5) HSBC France as French Coordinating Bank, (6) Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch as ECA Agent, (7) the Mandated Lead Arrangers and (8) the banks and financial institutions listed in Schedule 1 as Lenders, as novated and amended and restated by the novation agreement dated 24 July 2017 (as supplemented and amended, the Novation Agreement (the Original Facility Agreement as novated and amended and restated by the Novation Agreement, the Facility Agreement)) between the parties to the Original Facility Agreement and the Borrower; and
ii.the Escrow Account Security,
in order, inter alia, to provide for the appointment of Citicorp Trustee Company Limited as Security Trustee.
Definitions
b.Words and expressions defined in the Facility Agreement (including words and expressions defined by reference to another document) shall, unless the context otherwise requires or unless otherwise defined herein, have the same meanings when used herein. In addition, in this Agreement:
Affiliate means in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.
Agents means each of the Facility Agent, the ECA Agent and the Security Trustee and Agent
shall mean any of them.
Charged Assets means any property, assets and/or rights over which security is granted and/or created under the Escrow Account Security.
ECA Agent means Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch acting as export credit agent pursuant to this Agreement for itself and any other banks or financial institutions who are or may become Lenders in the future and includes its successors in title.
Enforcement Date means the first date on which active steps are taken to enforce and/or realise the security or other assurances created or conferred by the Escrow Account Security.
Escrow Account Security shall have the meaning given to it in the Facility Agreement and shall, when used herein, be deemed to include any Further Assurance Deed.
Expenses means the aggregate at any relevant time (to the extent that the same has not been received or recovered by the Security Trustee) of:
i.all duly evidenced expenses (including, in particular, legal, insurance adviser, printing, out of pocket expenses and late payment interest) properly incurred and any cost, loss (excluding loss of profit) or liability sustained or incurred by the Security Trustee or any Receiver in connection with the exercise of the powers referred to in or granted by the Loan Documents or otherwise payable by the Borrower to the Security Trustee in accordance with any provision of any of the Loan Documents; and
ii.interest on all such unpaid expenses, costs, losses and liabilities from the date falling ten Business Days after the date on which a demand for the same was made by the Security Trustee until the date of receipt or recovery thereof (whether before or after judgment) at the Floating Rate plus two per cent per annum.
Facility Agent means Citibank Europe plc, UK Branch acting as agent pursuant to this Agreement for itself and any other banks or financial institutions who are or may become Lenders in the future and includes its successors in title.
Finance Parties means the Lenders, the Facility Agent, the ECA Agent, the Global Coordinator, and the Security Trustee.
Further Assurance Deed means any document executed or to be executed pursuant to a further assurance covenant or obligation contained in the Escrow Account Security.
Holding Company means, in relation to a person, any other person in respect of which it is a Subsidiary.
Receiver means and includes any receiver and/or manager of any of the Charged Assets appointed under the Escrow Account Security (and whether acting as agent for the Borrower or otherwise).
Release Date means the date, occurring promptly following the NYC Cut Off Date, on which the Facility Agent notifies the parties that the Escrow Account Security can be released following the withdrawal of all amounts standing to the credit of the Escrow Account in accordance with the provisions of Section 2.3f) of the Facility Agreement.
Secured Obligations means the obligations of the Borrower to the Finance Parties under the Facility Agreement and each of the other Loan Documents.
Security Trustee means Citicorp Trustee Company Limited acting as security trustee pursuant to this Agreement for itself and any banks or financial institutions who are or may become Lenders and includes its successors in title.
Trust Property means (a) the security, powers, rights, titles, benefits and interests (both present and future) constituted by and conferred on the Security Trustee under or pursuant to this Agreement and the Escrow Account Security and any notices or acknowledgements or undertakings given in connection with the Escrow Account Security (including, without limitation, the benefit of all covenants, undertakings, representations, warranties and obligations given, made or undertaken to the Security Trustee in the Escrow Account Security), (b) all moneys,
property and other assets payable, paid or transferred to or vested in the Security Trustee or any Receiver or receivable, received or recovered by the Security Trustee or any Receiver pursuant to, or in connection with, this Agreement and the Escrow Account Security and any notices or acknowledgements or undertakings given by the Borrower in connection with the Escrow Account Security from the Borrower or any other person and (c) all money, investments, property and other assets at any time representing or deriving from any of the foregoing, including all interest, income and other sums at any time received or receivable by the Security Trustee or any Receiver in respect of the same (or any part thereof).
Headings
c.Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Agreement.
Construction of certain terms
d.Clause 1.4 (Construction) of the Original Facility Agreement applies to this Agreement as if set out herein.
Capacity of parties
e.References in this Agreement to the Facility Agent, the Security Trustee, the ECA Agent, any Mandated Lead Arranger or any Lender and references to obligations or liabilities of any one or more such persons shall be strictly construed as references to any such person or (as the case may be) obligations or liabilities of any such person solely in its capacity as such.
Effectiveness of Required Lender decision
f.Where this Agreement, the Escrow Account Security or any Further Assurance Deed provides for any matter to be determined by reference to the opinion of the Required Lenders or to be subject to the consent or request of the Required Lenders or for any action to be taken on the instructions of the Required Lenders, such opinion, consent, request or instructions shall (as between the Lenders) only be regarded as having been validly given or issued by the Required Lenders if (a) given by the Facility Agent on their behalf and (b) all the Lenders shall have received prior notice of the matter on which such opinion, consent, request or instructions are required to be obtained and the relevant majority of Lenders shall have given or issued such opinion, consent, request or instructions but so that the Borrower and the Security Trustee shall be entitled (and bound) to assume that such notice shall have been duly received by each Lender and that the relevant majority shall have been obtained to constitute Required Lenders whether or not this is the case.
Fees, Indemnity and Costs of Security Trustee
g.It is agreed that the provisions of clause 4.6 (Taxes) of the Facility Agreement, clause 11.4 (Indemnification) of the Facility Agreement (subject to clause 1.8) and clause 5.4 (Value Added tax) of the Original Facility Agreement shall apply to the benefit of the Security Trustee, and the Borrower agrees to be bound by such provisions, as if the same were set out in full herein and on the basis that reference to Loan Documents therein or “amounts due thereunder” included this Agreement, the Escrow Account Security and any Further Assurance Deed or any amounts due under the foregoing. This clause 1.7 and clause 1.8 shall survive the termination of this Agreement, the Escrow Account Security and any Further Assurance Deed.
h.The following words in clause 11.4 (Indemnification) of the Facility Agreement are deemed deleted for the purposes of its incorporation herein under clause 1.7 and shall not apply to the Security Trustee:
i.“or the material breach by such Indemnified Party of its obligations under this Agreement, any other Loan Document, the BpiFAE Insurance Policy or Interest Stabilisation Agreement and which breach is not attributable to the Borrower’s own breach of the terms of this Agreement or any other Loan Document”;
ii.“Each Indemnified Party shall (a) furnish the Borrower with prompt notice of any action, suit or other claim covered by this Section 11.4, (b) not agree to any settlement or compromise of any such action, suit or claim without the Borrower’s prior consent, (c) shall cooperate fully in the Borrower’s defense of any such action, suit or other claim (provided that the Borrower shall reimburse such indemnified party for its reasonable out- of-pocket expenses incurred pursuant hereto) and (d) at the Borrower’s request, permit the Borrower to assume control of the defense of any such claim, other than regulatory, supervisory or similar investigations, provided that (i) the Borrower acknowledges in writing its obligations to indemnify the Indemnified Party in accordance with the terms herein in connection with such claims, (ii) the Borrower shall keep the Indemnified Party fully informed with respect to the conduct of the defense of such claim, (iii) the Borrower shall consult in good faith with the Indemnified Party (from time to time and before taking any material decision) about the conduct of the defense of such claim, (iv) the Borrower shall conduct the defense of such claim properly and diligently taking into account its own interests and those of the Indemnified Party, (v) the Borrower shall employ counsel reasonably acceptable to the Indemnified Party and at the Borrower’s expense, and (vi) the Borrower shall not enter into a settlement with respect to such claim unless either (A) such settlement involves only the payment of a monetary sum, does not include any performance by or an admission of liability or responsibility on the part of the Indemnified Party, and contains a provision unconditionally releasing the Indemnified Party and each other indemnified party from, and holding all such persons harmless, against, all liability in respect of claims by any releasing party or (B) the Indemnified Party provides written consent to such settlement (such consent not to be unreasonably withheld or delayed). Notwithstanding the Borrower’s election to assume the defense of such action, the Indemnified Party shall have the right to employ separate counsel and to participate in the defense of such action and the Borrower shall bear the fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the Borrower to represent the Indemnified Party would present such counsel with an actual or potential conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the Borrower and the Indemnified Party and the Indemnified Party shall have concluded that there may be legal defenses available to it which are different from or additional to those available to the Borrower and determined that it is necessary to employ separate counsel in order to pursue such defenses (in which case the Borrower shall not have the right to assume the defense of such action on the Indemnified Party’s behalf), (iii) the Borrower shall not have employed counsel reasonably acceptable to the Indemnified Party to represent the Indemnified Party within a reasonable time after notice of the institution of such action, or (iv) the Borrower authorizes the Indemnified Party to employ separate counsel at the Borrower’s expense.”.
2.Security Trustee
Appointment of the Security Trustee
a.Each of the Finance Parties appoints the Security Trustee as agent and trustee of the Trust Property on the terms set out in this Agreement. By virtue of such appointment, each of the Finance Parties authorises the Security Trustee (whether or not by or through employees or agents) to take such action on such Finance Party's behalf and to exercise such rights, remedies, powers and discretions as are specifically delegated to the Security Trustee by this Agreement and/or the Escrow Account Security and any Further Assurance Deed, together with such powers and discretions as are reasonably incidental thereto.
b.It is acknowledged that the appointment of the Facility Agent and the ECA Agent for the purpose of the Facility Agreement is regulated under Article X (The Facility Agent and the ECA Agent) of the Facility Agreement.
Duties
c.The Security Trustee shall not have any duties, obligations or liabilities to the Lenders beyond those expressly stated in this Agreement and/or any of the Loan Documents to which it may be or become a party.
d.The Security Trustee’s duties under this Agreement and the other Loan Documents are solely mechanical and administrative in nature.
Instructions to the Agents
e.Subject to clauses 2.6, 2.7 and 2.12 below, unless a contrary indication appears, the Security Trustee shall (a) exercise any right, power, authority or discretion vested in it as an agent or otherwise act in accordance with the written instructions given to it by the Required Lenders (or, if so instructed by the Required Lenders refrain from exercising any right, power, authority or discretion vested in it as Security Trustee), (b) not be liable to any person for any act or omission if it acts (or refrains from taking any action) in good faith in accordance with the instructions of the Required Lenders and (c) have no obligation to act and may refrain from acting until so instructed (without liability to any person). Any reference to the instructions of the Required Lenders to the Security Trustee herein or in the Escrow Account Security shall be construed as such instructions of the Facility Agent on behalf of such Required Lenders.
f.The Security Trustee shall be entitled to request instructions, or clarification of any direction, from the Facility Agent as to whether, and in what manner, it should exercise or refrain from exercising any rights, powers, authorities and discretions and the Security Trustee may refrain from acting unless and until those instructions or clarification are received by it (without liability to any person).
g.In the absence of instructions, the Security Trustee may act (or refrain from acting) as it considers to be in the best interest of the Finance Parties.
h.Clause 2.5 above shall not apply in respect of any provision which protects the Security Trustee’s own position in its personal capacity as opposed to its role as Security Trustee for the Finance Parties.
i.The Security Trustee may refrain from acting in accordance with the instructions of the Lenders or any other person until it has received any indemnification and/or security and/or prefunding that it may in its discretion require (which may be greater in extent than that contained in the Loan Documents and which may include payment in advance) for any cost, loss or liability which it may incur in complying with those instructions.
Execution of Escrow Account Security
j.Each Lender irrevocably authorises the Security Trustee to execute the Escrow Account Security in its capacity as trustee of the Trust Property thereby created.
Authority of Security Trustee
k.Subject to clause 2.12 and, where applicable, 2.14(c), the Security Trustee may, with the consent of the Required Lenders (or the Facility Agent on their behalf) or if and to the extent expressly authorised by the other provisions of this Agreement or the Escrow Account Security, concur with the Borrower to amend, modify or otherwise vary or waive breaches of, or defaults under, or otherwise excuse performance of, any provision of any of the Escrow Account Security. Any such action so authorised and effected by the Security Trustee shall be promptly notified to the other Agents and the Lenders and shall be binding on all the Lenders and, if necessary or appropriate, each Lender agrees to execute or re-execute any document, instrument or agreement required to give full effect to any such action. For the purposes of this clause 2.11 it is expressly agreed and acknowledged that the execution of a Further Assurance Deed shall not constitute an amendment or modification to, or variation of, the Escrow Account Security, and each Lender where applicable further agrees to execute any Further Assurance Deed promptly upon the request of the Security Trustee.
l.Except with the prior written consent of all the Lenders (or the Facility Agent on their behalf), the Security Trustee shall not have authority on behalf of the Lenders to agree with the Borrower any amendment to the Escrow Account Security which would:
1.change any provision of the Escrow Account Security which expressly or impliedly requires the approval or consent of all the Lenders such that the relevant approval or consent may be given otherwise than with the sanction of all the Lenders; or
2.change this clause 2.12 or clause 4.2; or
3.(save to the extent expressly required under this Agreement or any of the Loan Documents) release the Borrower from the security constituted by the Escrow Account Security; or
4.(save to the extent expressly required under this Agreement or any of the Loan Documents) release any of the Charged Assets from the security constituted by the Escrow Account Security; or
5.(save to the extent expressly required under this Agreement or any of the Loan Documents) release the Borrower from any of its indemnity or other assurance obligations under any of the Loan Documents.
m.Unless otherwise stated in any provision of the Loan Documents, any matter under the Escrow Account Security requiring the decision, agreement, determination, consent or approval of the Security Trustee, shall be construed as requiring the decision, agreement, determination, consent or approval of the Required Lenders.
Liability of Security Trustee
n.The Security Trustee shall not:
6.be obliged:
i.to request any certificate or opinion under any provision of the Escrow Account Security; or
ii.to make any enquiry as to any breach or default by the Borrower in the performance or observance of any of the provisions of any of this Agreement or the Escrow Account Security or as to the existence of a Default or as to whether any other event or circumstance has occurred as a result of which the security constituted by the Escrow Account Security shall have or may become enforceable unless it has actual knowledge thereof or has been notified in writing thereof by a Lender, in which case it shall promptly notify the Lenders of the relevant event or circumstance; or
7.be obliged to carry out any "know your customer" or other checks in relation to any person on behalf of any Lender and each Lender confirms to the Security Trustee that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Security Trustee; or
8.be liable to any Finance Party for any action taken or omitted under or in connection with this Agreement and the Escrow Account Security unless caused by its gross negligence or wilful misconduct for any delay (or any related consequences) in crediting an account with an amount required under this Agreement to be paid by the Security Trustee if it has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by it for that purpose.
Knowledge of Agents
o.For the purposes of this clause 2, the Security Trustee shall not be treated as having actual knowledge of any matter of which another department of the person for the time being acting as it may become aware in the context of corporate finance or advisory activities from time to time undertaken by the Security Trustee for the Borrower or any of its Affiliates or Subsidiaries.
Communications by the Security Trustee
p.The Security Trustee shall promptly notify the other Agents and each Lender of the contents of each notice, certificate, information or other document received by it from the Borrower under or pursuant to any provisions of any of the Escrow Account Security or this Agreement.
q.Except where the Escrow Account Security or this Agreement specifically provides otherwise, the Security Trustee is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another party.
r.If the Security Trustee receives notice from a party referring to this Agreement, describing a Default or an Event of Default and stating that the circumstance described is a Default or an Event of Default it shall promptly notify the other Finance Parties.
No independent action by Finance Parties
s.None of the Finance Parties shall have any independent power to enforce the Escrow Account Security, or to exercise any rights, discretions or powers or to grant any consents or releases under or pursuant to the Escrow Account Security or otherwise have direct recourse to the security or other assurances constituted by the Escrow Account Security except through the Security Trustee.
Reliance by Facility Agent
t.In considering at any time (and from time to time) the persons entitled to the benefit of any of the Secured Obligations:
9.the Facility Agent may deem and treat (i) each Lender as the person entitled to the benefit of the Loan of such Lender for all purposes of this Agreement unless and until a Lender Assignment Agreement relating to, such Lender's contribution to the Loan or any part thereof shall have been filed with the Facility Agent and (ii) the office set opposite the name of each Lender in the execution blocks to the Facility Agreement as such Lender's lending office unless and until a written notice of change of lending office shall have been received by the Facility Agent and the Facility Agent may act upon any such notice unless and until the same is superseded by a further such notice; and
10.the Facility Agent may to the extent that any such information is not inconsistent with notices referred to in clause 2.20(a) above, rely and act in reliance upon information provided to it pursuant to such clause so that it shall not have any liability or responsibility to any party as a consequence of placing reliance on and acting in reliance upon any such information unless it has actual knowledge that such information is inaccurate or incorrect.
Provision of information to Agents
u.Without prejudice to clause 2.20, the Lenders shall provide the Security Trustee with such written information as it may reasonably require for the purpose of carrying out its duties and obligations under this Agreement and/or the Escrow Account Security and, in particular, with such directions in writing as may reasonably be required so as to enable the Security Trustee to apply the proceeds of realisation of the Escrow Account Security as contemplated by clause 4.2. However no Lender shall be obliged pursuant to this clause 2.21 to disclose to the Security Trustee any information which it is obliged by law or contract to keep confidential.
Appraisal by Lenders
v.Each Finance Party acknowledges that it has not relied on any statement, opinion, forecast or other representation made by the Security Trustee to induce it to enter into this Agreement or the Facility Agreement.
Responsibility of Security Trustee
w.The Security Trustee shall not have any duty or responsibility, either initially or on a continuing basis, to any Finance Party:
11.to investigate or make any enquiry into the title of the Borrower to, or the existence, suitability or sufficiency of, the Charged Assets or any part thereof; or
12.on account of the failure of the Borrower to perform any of its obligations under any of the Loan Documents; or
13.for the financial condition of the Borrower; or
14.for the completeness or accuracy of any statements, representations or warranties in any of the Loan Documents or any document delivered under any of the Loan Documents unless expressly made by the Security Trustee; or
15.for the execution, effectiveness, adequacy, genuineness, validity, enforceability or admissibility in evidence of any of the Loan Documents or the Charged Assets or of any certificate, report or other document executed or delivered under any of the Loan Documents; or
16.for the failure to register or notify any of the Loan Documents or for otherwise perfecting or failing to perfect any of the security granted in its favour; or
17.for taking or omitting to take any other action under or in relation to any of the Loan Documents or any aspect of any of the Loan Documents; or
18.for the failure to take or require the Borrower to take any steps to render any of the Loan Documents effective as regards Charged Assets outside the jurisdiction in which they are incorporated or have their registered or principal office or to secure the creation of any ancillary charge under the laws of the jurisdiction concerned; or
19.otherwise in connection with the Facility Agreement or its negotiation or for acting in accordance with the instructions of the Lenders or the relevant group of Lenders or refraining from acting when instructed by the Lenders or the relevant group of Lenders, to refrain from acting when no instruction to act has been given to it by the Lenders or the relevant group of Lenders or where the instructions are unclear. The Security Trustee is entitled to seek directions as to the exercise of any of its powers from the Required Lenders or otherwise (as the case may be) the Lenders and to seek clarification of any instructions previously given; or
20.any loss to the Trust Property arising in consequence of the failure, depreciation or loss of any Charged Assets or any investments made or retained in good faith or by reason of any other matter or thing, including by virtue of the fact it may be held by a bank, or any damage to or any unauthorised dealing with the Charged Assets nor shall it have any responsibility or liability arising from the fact that the Charged Assets, or documents relating thereto, may be registered in its name or held by it or any other bank or agent selected by the Security Trustee.
x.The Security Trustee shall be entitled to rely on any communication, instrument or document believed by it to be genuine and correct and to have been signed or sent by the proper person.
y.No party to this Agreement (other than the Security Trustee) may take any proceedings against any officer, employee or agent of the Security Trustee in respect of any claim it might have against the Security Trustee or in respect of any act or omission of any kind by that officer, employee or agent in relation to this Agreement and any officer, employee or agent of the Security Trustee may rely on this clause.
No fiduciary duties
z.Nothing in any Loan Document constitutes the Security Trustee as a trustee or fiduciary of any other person other than the Finance Parties.
aa.The Security Trustee shall not be bound to account to any Finance Party for any sum or the profit element of any sum received by it for its own account.
Rights and discretions
ab.The Security Trustee may:
21.assume that:
iii.any instructions received by it from the Facility Agent on behalf of the Lenders or the Required Lenders or on behalf of any other Finance Party are duly given in accordance with the terms of the Facility Agreement; and
iv.unless it has received notice of revocation, that those instructions have not been revoked;
22.rely on a certificate from any person:
v.as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or
vi.to the effect that such person approves of any particular dealing, transaction, step, action or thing,
as sufficient evidence that that is the case and, in the case of paragraph (i) above, may assume the truth and accuracy of that certificate; and
23.assume (unless it has received notice to the contrary in its capacity as Security Trustee) that:
vii.no Default or Event of Default has occurred; and
viii.any right, power, authority or discretion vested in any party or any group of Finance Parties has not been exercised.
ac.The Security Trustee may engage and pay for the advice or services of any lawyers (who may be separate to counsel appointed by the Finance Parties), accountants, tax advisers, surveyors or other professional advisers or experts (whether such advice is obtained by the Security Trustee or by any other party and whether or not the advice contains a limit on liability by reference to monetary cap or otherwise) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying in good faith.
ad.Notwithstanding any provision of any Loan Document to the contrary, the Security Trustee is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it.
Other business
ae.The Security Trustee may, without any liability to account to the Lenders, accept deposits from, lend money to, and generally engage in any kind of banking or trust business with, the Borrower and any of its Affiliates or Subsidiaries or any of the Lenders as if it were not the Security Trustee.
Credit appraisal by the Finance Parties
af.Without affecting the responsibility of the Borrower for information supplied by it or on its behalf in connection with any Loan Document, each Finance Party confirms to each other Finance Party that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Loan Document including but not limited to:
24.the financial condition, status and nature of the Borrower;
25.the legality, validity, effectiveness, adequacy or enforceability of any Loan Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Loan Document;
26.whether any Finance Party has recourse, and the nature and extent of that recourse, against any party or any of its respective assets under or in connection with any Loan Document, the transactions contemplated by the Loan Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Loan Document or the Charged Assets;
27.the adequacy, accuracy and/or completeness of any information provided by the Facility Agent, any party or by any other person under or in connection with any Loan Document, the transactions contemplated by the Loan Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Loan Document; and
28.the right or title of any person in or to, or the value or sufficiency of, any part of the Charged Assets, the priority of the Escrow Account Security or the existence of any Lien affecting the Charged Assets.
ag.Without prejudice to the generality of any other provision of this Agreement or any other Loan Document, the entry into possession of the Charged Assets shall not render the Security Trustee or any Receiver liable to account as mortgagee in possession thereunder (or its equivalent in any other applicable jurisdiction) or take any action which would expose it to any liability in respect of which it has not been indemnified and/or secured and/or pre-funded to its satisfaction or to be liable for any loss on realisation or for any default or omission on realisation or for any default or omission for which a mortgagee in possession might be liable unless such loss, default or omission is caused by its own gross negligence or wilful misconduct.
ah.The Security Trustee shall have no responsibility whatsoever to the Borrower or any Finance Party as regards any deficiency which might arise because the Security Trustee is subject to any Tax in respect of all or any of the Charged Assets, the income therefrom or the proceeds thereof.
ai.The Security Trustee is not responsible for payment of any taxes or stamp duty (a) as a result of it holding security, (b) as a result of it enforcing any security held by it, or (c) in respect of any remuneration or other amounts payable to it for its own account.
aj.The Security Trustee is not responsible for making any deductions or withholding in respect of taxes or governmental charges in respect of any amounts paid by the Security Trustee from the proceeds of any enforcement of security.
Reimbursement of Agents’ expenses
ak.Without prejudice to clauses 1.7 and 5.1, each Lender shall reimburse the Security Trustee rateably in accordance with such Lender's Commitment (or if such Commitment is then zero, its Commitment immediately prior to such reduction), for the charges and expenses incurred by the Security Trustee in connection with the negotiation, preparation and execution of this Agreement and the Escrow Account Security or in contemplation of, or otherwise in connection with, the enforcement or attempted enforcement of, or the preservation or attempted
preservation of any rights under, or in carrying out its duties under, this Agreement and the Escrow Account Security or otherwise in connection with holding the Charged Assets and/or the Trust Property including (in each case) the reasonable fees and expenses of legal or other professional advisers. All such charges and expenses shall be paid together with value added tax or similar tax (if any) thereon.
Security Trustee’s indemnity
al.Without prejudice to clauses 1.7 and 5.1, each Lender shall indemnify the Security Trustee rateably in accordance with such Lender's Commitment against all liabilities, expenses, damages, costs, actions, demands and claims whatsoever suffered or incurred by the Security Trustee or any agent or other person appointed by the Security Trustee in connection with its appointment under this Agreement or in connection with the Loan Documents or the performance of its duties under this Agreement and/or the Escrow Account Security or any action taken or omitted by it under any of the Escrow Account Security or this Agreement, unless such liabilities, damages, costs or claims arise from the Security Trustee’s own gross negligence or wilful misconduct.
am.In no event shall the Security Trustee be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not it has been advised of the possibility of such loss or damages.
Retirement of Security Trustee
an.The Security Trustee:
29.may (without giving any reason and having given to the Borrower and the other Finance Parties not less than 30 Business Days’ notice of its intention to do so) retire;
30.shall, upon the request of the Required Lenders (after consultation with the Borrower), retire;
31.shall, upon the request of the Borrower in the event the Security Trustee is no longer a Lender or an Affiliate of a Lender, retire under this Agreement, the Facility Agreement and the other Loan Documents.
ao.No such retirement shall take effect unless there has been appointed by the Finance Parties as a successor security trustee:
32.(except where the Security Trustee has been required to retire by notice from the said Lenders) an Affiliate of the Security Trustee nominated by the Security Trustee or, failing such a nomination; or
33.a Lender or an Affiliate of a Lender nominated by the Required Lenders or, failing such a nomination; or
34.any reputable and experienced bank or financial institution nominated by the Security Trustee which appointment must be agreed to by the Lenders as contemplated above,
and such successor security trustee shall have duly accepted such appointment by delivering to the Facility Agent a written confirmation (in a form acceptable to the Facility Agent) of such acceptance agreeing to be bound by this Agreement in the capacity of Security Trustee as if it had been an original party to this Agreement.
ap.Upon any such successor as aforesaid being appointed, the retiring Security Trustee shall be discharged from any further obligation (except as otherwise provided in the Loan Documents) under this Agreement and each of the other Loan Documents and its successor and each of the other parties to this Agreement and any of the other Loan Documents shall have the same rights and obligations among themselves as they would have had if such successor had been a
party to this Agreement and any of the other Loan Documents in place of the retiring Security Trustee.
aq.Upon any successor to the Security Trustee being appointed the Trust Property will automatically vest in such successor without the need for any additional act by the Lenders or the Borrower, but without prejudice to clause 2.23(e).
ar.The retiring Security Trustee, each other Finance Party and the Borrower hereby undertake from time to time to execute, sign, perfect, do and (if required) register every such further assurance, document, act or thing as in the reasonable opinion of each of the successor security trustee and the Finance Parties may be necessary or desirable for the purpose of ensuring that the Trust Property is effectively vested in it so that it holds and enjoys the same rights, interests and powers in relation to the Trust Property as were held by the retiring Security Trustee.
as.The Lenders agree to appoint as successor security trustee the person nominated in accordance with clause 2.41 and to execute such documents as may be required to give effect to such appointment.
Consents and approvals
at.Each Lender agrees that it will respond reasonably promptly (and in any event within 15 Business Days) to any request for a consent, waiver, amendment of (or in relation to) any term of any Loan Document or any other vote of Lenders under the terms of this Agreement.
au.The Borrower shall be consulted as regards any proposed substitute security trustee prior to the appointment thereof and the Borrower’s consent to any proposed substitute shall be required.
3.Declaration of trust: supplementary provisions
Declaration of trust
a.The Security Trustee hereby accepts its appointment under clause 2.1 as trustee of the Trust Property and irrevocably acknowledges and declares that it holds the same on trust for itself and the Finance Parties and that it shall deal with and apply the same in accordance with the provisions of this Agreement and the Escrow Account Security.
Duration of trusts
b.The trusts constituted or evidenced in or by this Agreement shall, save as provided by law, remain in full force and effect until receipt by the Security Trustee of confirmation in writing by the Facility Agent that either (a) there is no longer outstanding any Indebtedness (actual or contingent) which is secured by or under any of the Loan Documents or (b) the Release Date has occurred. At the time that the trusts constituted or evidenced by this Agreement are no longer in full force and effect, it is agreed that, save in respect of clauses 1.7, 1.8, 2 and 5, this Agreement shall have no further force and effect. Promptly following the NYC Cut Off Date the Facility Agent shall notify the Borrower of the Release Date.
Powers and discretions as trustee
c.In its capacity as trustee in relation to the Loan Documents and the Trust Property, the Security Trustee shall, without prejudice to any of the powers, discretions and immunities conferred upon trustees by law (and to the extent not inconsistent with the provisions of this Agreement or any of the Loan Documents), have all the same powers and discretions as a natural person acting as the beneficial owner of such property and/or as are conferred upon the Security Trustee by this Agreement and/or any Loan Document.
d.The rights, powers and discretions conferred upon the Security Trustee by this Agreement shall be supplemental to the Trustee Act 1925 and the Trustee Act 2000 and in addition to any which may be vested in the Security Trustee by general law or otherwise. Section 1 of the Trustee Act
2000 shall not apply to the duties of the Security Trustee in relation to the trusts constituted by this Agreement. Where there are any inconsistencies between the Trustee Act 1925 or the Trustee Act 2000 and the provisions of this Agreement, the provisions of this Agreement shall, to the extent allowed by law, prevail and, in the case of any inconsistency with the Trustee Act 2000, the provisions of this Agreement shall constitute a restriction or exclusion for the purposes of that Act.
Determination by the Security Trustee
e.In its capacity as trustee in relation to the Loan Documents and in relation to the Trust Property, the Security Trustee shall have full power to determine all questions and doubts arising in relation to the interpretation or application of any of the provisions of this Agreement or any of the Loan Documents as it affects the Security Trustee or the Trust Property and every such determination (whether made upon a question actually raised or implied in the acts or proceedings of the Security Trustee) shall, in the absence of manifest error, be conclusive and shall bind all the other parties to this Agreement.
Employment of agents
f.The Security Trustee may, instead of acting personally, employ, pay for and rely on the advice of any agent (whether being a lawyer, chartered accountant or any other suitably qualified person) to transact or concur in transacting any business and to do or concur in doing any acts required to be done by the Security Trustee (including the receipt and payment of money) or may, with the consent of the Borrower, delegate to any person on any terms (including the power to sub-delegate) the costs of which shall be borne by the Borrower and be capable of being recoverable by the Security Trustee pursuant to clause 1.7. Any such agent or delegate engaged in any profession or business shall be entitled to be paid all usual reasonable professional and other charges for business transacted and acts done by him or any partner or employee of his in connection with such trusts. The Security Trustee shall not be bound to supervise or, only as between the Security Trustee on the one hand and the Finance Parties on the other hand, nor be responsible for any loss incurred by reason of any act or omission of, any such agent or delegate if the Security Trustee shall have exercised reasonable care in the selection of such agent or delegate (which, without limitation, shall conclusively be deemed to be the case in respect of any agent approved in writing by the Required Lenders).
Non-recognition of trust and amendments
g.It is agreed between all parties to this Agreement that:
i.in relation to any jurisdiction the courts of which would not recognise or give effect to the trusts expressed to be constituted by this Agreement the relationship of the Finance Parties to the Security Trustee shall be construed simply as one of principal and agent but, to the fullest extent permissible under the laws of each and every such jurisdiction, this Agreement shall have full force and effect as between the parties; and
ii.any of the provisions of this clause 3 or of clauses 2 or 4 may be amended by agreement between the Security Trustee and the other Finance Parties without the consent of the Borrower and each such party other than the Security Trustee irrevocably authorises the Facility Agent in its name and on its behalf to execute all documents necessary to effect any such amendment.
Appointment of new or additional trustees
h.Without prejudice to clause 2.40, the statutory power to appoint new or additional trustees of the trusts constituted by this Agreement shall be vested in the Security Trustee. The appointment by the Security Trustee of any such new or additional trustees shall terminate on the appointment of a replacement security trustee in accordance with the terms of clause 2.41.
Appointment of separate and co-trustees
i.The Security Trustee shall have power, by notice in writing given to each of the Finance Parties, to appoint any person who is a reputable bank or financial institution either to act as separate trustee or as co-trustee, jointly with the Security Trustee and, as the case may be:
i.if the Security Trustee (acting on the instructions of the Required Lenders) considers such appointment to be in the interests of the Finance Parties; or
ii.for the purpose of conforming with any legal requirement, restriction or condition in any jurisdiction in which any particular act is to be performed; or
iii.for the purpose of obtaining a judgement in any jurisdiction or the enforcement in any jurisdiction against any person of a judgement already obtained,
any person so appointed shall (subject to the provisions of this Agreement) have such rights (including as to reasonable remuneration), powers, duties and obligations as shall be conferred or imposed by the instrument of appointment. The Security Trustee shall have power to remove any person so appointed and shall notify the other Finance Parties of such removal. At the request of the Security Trustee, the other parties to this Agreement shall forthwith execute all such documents and do all such things as may be required to perfect such appointment or removal and each such party irrevocably authorises the Security Trustee in its name and on its behalf to do the same. Each and any such person shall (subject always to the provisions of this Agreement) have such trusts, powers, authorities and discretions (not exceeding those conferred on the Security Trustee by this Agreement and the Loan Documents) and such duties and obligations as shall be conferred or imposed by the instrument of appointment. The Security Trustee shall not be bound to supervise or, only as between the Security Trustee on one hand and the Lenders on the other hand, be responsible for any loss incurred by reason of any act or omission of, any such person if the Security Trustee shall have exercised reasonable care in the selection of such person (which, without limitation, shall conclusively be deemed to be the case in respect of any such person approved in writing by the Required Lenders). The appointment by the Security Trustee of any such new or additional trustees shall terminate on the appointment of a replacement security trustee in accordance with the terms of clause 2.41.
Majority decisions of trustees
j.Whenever there shall be more than two trustees having equal authority under this Agreement the majority of such trustees shall be competent to execute and exercise all the duties, powers, trusts, authorities and discretions vested by this Agreement in the Security Trustee generally.
4.Application of proceeds
Co-operation by Finance Parties
a.The Finance Parties shall co-operate with each other and any Receiver in realising the Charged Assets and in ensuring that the net proceeds realised under the Escrow Account Security are applied in accordance with clause 4.2.
Application of moneys
b.Moneys received by the Security Trustee or by a Receiver after the Enforcement Date pursuant to the exercise of any rights and powers under or pursuant to the Escrow Account Security shall be paid to the Facility Agent and shall, subject to the Facility Agent receiving written directions pursuant to clause 2.21 and save as otherwise provided by any of the Loan Documents, be applied by the Facility Agent together with any other moneys received by the Facility Agent pursuant to the exercise of any rights and powers under or pursuant to any of the Loan Documents (after providing for all costs, charges, expenses and liabilities and other payments ranking in priority to the Secured Obligations) in the following manner and order:
i.first, in or towards payment to the Security Trustee of any unpaid Expenses incurred and payments made by the Security Trustee and any Receiver and any other amounts due but unpaid under the Loan Documents (including any remuneration payable to them);
ii.secondly, in or towards payment or satisfaction of all Expenses incurred and payments made and all remuneration payable to the Facility Agent under or pursuant to the Loan Documents;
iii.thirdly, in or towards satisfaction of the Secured Obligations owing to the Finance Parties in such order and/or on such basis as may be agreed from time to time between the Facility Agent and the Lenders; and
iv.fourthly, the balance (if any) shall be paid to the Borrower.
Prompt distribution of proceeds
c.The Facility Agent shall make each application and/or distribution falling to be made in accordance with clause 4.2 as soon as is practicable after the relevant moneys are received by, or otherwise become available to, the Facility Agent save that (without prejudice to any other provision contained in any of the Loan Documents) each Agent or any Receiver may (subject to clause 4.4 below) credit any moneys received by it to an interest bearing suspense account for so long and in such manner as such Agent or such Receiver may from time to time reasonably determine with a view to preserving the rights of the Finance Parties or any of them to prove for the whole of their respective claims against the Borrower or any other person liable, provided always that any Lender may instruct the Agent or the Receiver to release to it its share of any such amounts (subject always to clause 4.2).
d.If at any time the aggregate amount of the funds standing to the suspense account referred to in clause 4.3 above, together with any other moneys then held by any of the Finance Parties and which are available to be applied in respect of the Secured Obligations, are in an amount sufficient to discharge the Secured Obligations in full, the relevant Agent or any Receiver (as applicable) shall promptly withdraw the funds from such suspense account and apply them in accordance with clause 4.2 above.
e.The Security Trustee shall not be under any duty to consider investing moneys elsewhere and the Security Trustee shall not be responsible for any loss due to interest rate or exchange rate fluctuations and shall not be liable to account for an amount of interest greater than the standard amount that would be payable to an independent customer.
f.If any party owes an amount to an Agent under this Agreement this Agent may, after giving notice to that party, deduct an amount not exceeding that amount from any payment to that party which this Agent would otherwise be obliged to make under this Agreement and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of this Agreement that party shall be regarded as having received any amount so deducted.
Waiver by Borrower
g.To the extent permitted by law and without prejudice to any duty the Agents and the other Finance Parties may have to mitigate any losses, the Borrower hereby unconditionally waives any rights it may have, whether at law or otherwise, to require demands to be made by any of the Finance Parties under any of the Loan Documents or for the security or any guarantee or other assurance created by the Loan Documents in favour of the Finance Parties (or any of them) to be enforced or realised in any specific order or manner or to require the proceeds thereof to be appropriated in any specific order or manner.
5.Agents’ and Finance Parties' indemnities
Indemnity from Trust Property
a.Without prejudice to any right to indemnity by law given to agents or trustees generally and to any provision of the Loan Documents entitling an Agent, any other Finance Party or any other person to indemnity in respect of, and/or reimbursement of, any liabilities, damages, costs, claims, charges or expenses incurred or suffered by it in connection with any of the Loan Documents or the performance of any duties under this Agreement or any of the Loan Documents, each Agent, each Finance Party and every agent or other person appointed by any of them in connection with this Agreement shall be entitled to be indemnified out of the Trust Property in respect of all liabilities, damages, reasonable costs and claims whatsoever incurred or suffered by it:
i.in the execution or exercise or bona fide purported execution or exercise of the rights, powers, authorities, discretions and duties created or conferred by or pursuant to this Agreement; and/or
ii.in respect of any matter or thing done or omitted or in any way relating to the Trust Property or the provisions of any of the Loan Documents.
Stamp taxes
b.The Borrower shall pay all stamp, documentary, registration or other like duties and taxes (including any duties or taxes payable by any Finance Party) to which this Agreement or any of the Loan Documents or any judgement given in connection therewith is, or at any time may be, subject and shall indemnify each Finance Party against any liabilities, costs, claims and expenses resulting from any failure to pay or any delay in paying such tax arising by reason of any delay or omission by the Borrower to pay such duties or taxes.
Expenses
c.Without prejudice to clause 1.7, the Borrower also agrees that the provisions of Section 11.3 (Payment of Costs and Expenses) of the Facility Agreement shall apply with equal effect to this Agreement as if set out in full in this Agreement to cover any expenses of the type referred to in that section of the Security Trustee arising in respect of this Agreement and the Escrow Account Security (including, without limitation, any Expenses) as if reference in that section to the Facility Agent was reference to the Security Trustee.
6.Custody of deeds; illegality
Custody of deeds
a.The Security Trustee shall be entitled to place all deeds, certificates and other documents relating to the Charged Assets deposited with it under or pursuant to the Loan Documents or any of them in any safe deposit, safe or receptacle selected by the Security Trustee or with any firm of lawyers and may make any such arrangements as it thinks fit for allowing the Borrower access to, or its lawyers or auditors possession of, such documents when necessary or convenient and the Security Trustee shall not be responsible for any loss incurred in connection with any such deposit, access or possession.
Illegality
b.The Security Trustee shall refrain from doing anything which would, or might in its opinion, be contrary to any law of any jurisdiction (including but not limited to England and Wales, the United States of America, the Republic of France, the European Union or any jurisdiction forming part of it) or any regulation or directive of any agency of such state or jurisdiction or which would or might render it liable to any person and may without liability do anything which is, in its opinion, necessary to comply with any such law, directive or regulation.
7.Assignments by the Lenders
Benefit and burden
a.This Agreement and the other Escrow Account Security shall be binding upon, and enure for the benefit of, the Finance Parties and the Borrower and their respective successors.
Transfers and sub-participations by Lenders
b.The provisions of Section 11.12 (Sale and Transfer of the Loan; Participations in the Loan) of the Facility Agreement shall apply, mutatis mutandis, to this Agreement in respect of the Borrower and the Lenders as if set out in full herein.
8.Effect of Agreement
Acknowledgement by Borrower
a.The Borrower joins in this Agreement for the purpose of acknowledging the provisions of this Agreement and undertakes with each Finance Party not in any way to prejudice or affect the enforcement of such provisions or do or suffer anything which would be in breach of the terms of this Agreement.
b.Nothing contained in this Agreement shall as between the Borrower and the Finance Parties or any of them affect or prejudice any rights or remedies of any such person against the Borrower in respect of any of the Secured Obligations.
9.Miscellaneous
Other securities unaffected
a.Nothing contained in this Agreement shall prejudice or affect the rights of the Finance Parties or any of them under any guarantee, lien, bill, note, charge or other security from any party other than the Borrower now or hereafter held by it in respect of any moneys, obligations or liabilities thereby secured and so that (without limitation) each and any such person may apply any moneys recovered under any such guarantee, lien, bill, note, charge or other security in or towards payment of any money, obligation or liability actual or contingent now or hereafter due, owing or incurred to it by the Borrower or may hold such moneys on a suspense account for such period as it may in its absolute discretion think fit.
Obligations of Lenders
b.The obligations of each Lender under this Agreement are several; the failure of any Lender to perform such obligations shall not relieve any other Lender or the Borrower of any of their respective obligations or liabilities under this Agreement or any of the Loan Documents nor shall any other Finance Party be responsible for the obligations of any Lender (except for its own obligations, if any, as a Lender) under this Agreement.
No partnership
c.This Agreement shall not and shall not be construed so as to constitute a partnership between the parties or any of them.
10.Agreement to provide power of attorney
Each of the Finance Parties (other than the Security Trustee) shall, if so requested in writing by the Security Trustee, appoint the Security Trustee, subject to any limitations on the powers of the Security Trustee imposed by this Agreement, to be its attorney generally for and in the name and on behalf of such Finance Party and as the act and deed or otherwise of such Finance Party to execute, seal and deliver and otherwise perfect and do all such deeds,
assurances, agreements, instruments, acts and things which may be required for the full exercise of all or any of the rights, powers or remedies conferred in favour of the Security Trustee by the Escrow Account Security or which may be deemed proper in or in connection with all or any of the purposes aforesaid. The power to be conferred by each Finance Party pursuant to this clause 10 shall be a general power of attorney under the Powers of Attorney Act 1971, and each Finance Party agrees that such power will be in terms that the relevant Finance Party will ratify and confirm, and agree to ratify and confirm, any deed, assurance, agreement, instrument, act or thing which the relevant Agent may execute or do pursuant thereto.
11.Notices and other matters
a.Section 11.2 (Notices) of the Facility Agreement shall apply with equal effect to this Agreement as if set out herein provided further that in the case of the Security Trustee, its address, facsimile number and email and contact person are:
Citigroup Centre Canada Square London E14 5LB
Fax: +44 207 500 5877
Email: issuerpfla@citi.com
Attn: Agency and Trust
b.Each of the parties to this Agreement represents and warranties to each of the other parties that it has duly authorised the execution hereof and that this Agreement constitutes its valid and legally binding obligations.
12.Contracts (Rights of Third Parties) Act 1999
a.With the exception of BpiFAE and the persons referred to in clause 2.25, no term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement.
b.Notwithstanding any term of any Loan Document, the consent of any person who is not a party to this Agreement is not required to amend or vary this Agreement at any time.
13.Governing law and jurisdiction
Law
a.This Agreement and any non-contractual obligations connected with it are governed by and shall be construed in accordance with English law.
Submission to jurisdiction
b.For their mutual benefit, each of the Finance Parties and the Borrower agree that any legal action or proceedings arising out of or in connection with this Agreement may be brought in the English courts, irrevocably and unconditionally submit to the exclusive jurisdiction of such courts and the Borrower irrevocably designates, appoints and empowers RCL Cruises Ltd. at present of Building 3, The Heights – Brooklands, Weybridge, Surrey KT13 0NY to receive for it and on its behalf, service of process issued out of the English courts in any legal action or proceedings.
IN WITNESS whereof the parties to this Agreement have caused this Agreement to be duly executed and, in the case of the Security Trustee, duly executed as a deed and delivered on the date first above written.
Schedule 1 The Lenders
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Lender
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Facility Office and contact details
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Commitment
%
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Citibank N.A., London Branch
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Citigroup Centre Canada Square London E14 5LB United Kingdom
Attention: Wei-Fong Chan
Kara Catt Romina Coates Antoine Paycha
Fax No: +44 20 7986 4881
Tel No: +44 20 7986 3036 /
+44 20 7508 0344
+44 20 7986 4824
+44 20 7500 0907 /
E-mail: weifong.chan@citi.com kara.catt@citi.com romina.coates@citi.com
antoine.paycha@citi.com
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6.0250000507
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Banco Santander,
S.A. Paris Branch
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Facility Office:
374, rue Saint-Honoré
75001 Paris France
Operational address:
Ciudad Financiera Avenida de Cantabria s/n Edificio Encinar 2a planta 28600 Boadilla del Monte Spain
Fax No: +34 91 257 1682
Attention: Elise Regnault
Julián Arroyo Angela Rabanal Ecaterina Mucuta
Vanessa Berrio Vélez Ana Sanz Gómez
Tel No: +34 912893722
+1 212-297-2919
+1 212-297-2942
+33 1 53 53 70 46
+34 91 289 10 28
+34 91 289 17 90
E-mail:
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4.3005743278
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Lender
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Facility Office and contact details
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Commitment
%
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elise.regnault@gruposantander.com Julian.Arroyo@santander.us arabanal@santander.us ecaterina.mucuta@gruposantander.com vaberrio@gruposantander.com
anasanz@gruposantander.com MiddleOfficeParis@gruposantander.com
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BNP Paribas
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Front Office to keep copied to all matters. BNPP SA
37 RUE DU MARCHE SAINT HONORE
75001 PARIS ACI : CHC03B1
Alexandre de VATHAIRE / Mauricio GONZALEZ
alexandre.devathaire@bnpparibas.com mauricio.gonzalez@us.bnpparibas.com
Tel : 00 331 42 98 00 29/00 1212 841 38 88
Middle Office: For Operational / Servicing matters
KHALID BOUITIDA / THIERRY ANEZO MILLENAIRE 4
35, RUE DE LA GARE
75019 PARIS ACI : CVA05A1
khalid.k.bouitida@bnpparibas.com thierry.anezo@bnpparibas.com
Tel : 00 331 42 98 58 69 / 00 331 43 16 81 57
Back Office : For Standard Settlement Instruction authentication/call-back
STEVE LOUISOR / VALERIE DUMOULIN MILLENAIRE 4
35, RUE DE LA GARE
75019 PARIS ACI : CVA03A1
paris.cib.boci.ca.3@bnpparibas.com valerie.dumoulin@bnpparibas.com steve.louisor@bnpparibas.com
Tel : 00 331 55 77 91 86 / 00 331 40 14 46 59
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3.9306453776
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HSBC France
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HSBC France – Global Banking Agency Operations (GBAO) Transaction Manager Unit
103 avenue des Champs Elysées 75008 Paris
France
Attention: Florencia Thomas
Alexandra Penda
Fax No: +33 1 40 70 28 80
Tel No: +33 1 40 70 73 81 /
+33 1 41 02 67 50
Email: florencia.thomas@hsbc.fr
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3.9500000254
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Lender
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Facility Office and contact details
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Commitment
%
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alexandra.penda@hsbc.fr
Copy to:
HSBC France
103 avenue des Champs Elysées 75008 Paris
France
Attention: Celine Karsenty / Julie Bellais Fax No: +33 1 40 70 78 93
Tel No: +33 1 40 70 28 59 /
+33 1 40 70 22 97
Email: celine.karsenty@hsbc.fr
julie.bellais@hsbc.fr
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Société Générale
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Société Générale Facility Office
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9.9328352107
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29 Boulevard Haussmann
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75009 Paris
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France
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For operational/servicing matters:
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Bouchra BOUMEZOUED / Tatiana
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BYCHKOVA
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Société Générale 189, rue d’Aubervilliers
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75886
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PARIS CEDEX 18
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OPER/FIN/CAF/DMT6
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Phone: +33 1 57 29 13 12 / +33 1 58 98 43 05
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Email: bouchra.boumezoued@sgcib.com
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tatiana.bychkova@sgcib.com
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par-oper-caf-dmt6@sgcib.com
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For credit matters:
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Francois Rolland / Tingting Yu / Muriel
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Baumann
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Société Générale 189, rue d’Aubervilliers
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75886
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PARIS CEDEX 18
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OPER/FIN/SMO/EXT
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Phone: +33 1 58 98 17 78 / +33 1 58 98 49 18
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/ +33 1 58 98 22 76
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Email: francois.rolland@sgcib.com
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tingting.yu@sgcib.com
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muriel.baumann@sgcib.com
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Sumitomo Mitsui Banking
Corporation
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1/3/5 rue Paul Cézanne, 75008 Paris, France
Attention: Cedric Le Duigou
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2.7360454039
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Lender
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Facility Office and contact details
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Commitment
%
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Europe Limited, Paris Branch
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Guillaume Branco Herve Billi
Claire Lucien
Fax No: +33 1 44 90 48 01
Tel No:
Cedric Le Duigou: +33 1 44 90 48 83
Guillaume Branco: +33 1 44 90 48 71
Herve Billi: +33 1 44 90 48 48
Claire Lucien: +33 1 44 90 48 49
Helene Ly: +33 1 44 90 48 49
E-mail: cedric_leduigou@fr.smbcgroup.com guillaume_branco@fr.smbcgroup.com herve_billi@fr.smbcgroup.com
claire_lucien@fr.smbcgroup.com helene_ly@fr.smbcgroup.com
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SFIL
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1-3, rue de Passeur de Boulogne – CS 80054 92861 Issy-les-Moulineaux Cedex 9
France
Contact Person
Loan Administration Department:
Direction du Crédit Export:
Pierre-Marie Debreuille / Anne Crépin Direction des Opérations:
Dominique Brossard / Patrick Sick
Telephone:
Pierre-Marie Debreuille +33 1 73 28 87 64
Anne Crépin +33 1 73 28 88 59
Dominique Brossard +33 1 73 28 91 93
Patrick Sick +33 1 73 28 87 66
Email:
pierre-marie.debreuille@sfil.fr anne.crepin@sfil.fr dominique.brossard@sfil.fr patrick.sick@sfil.fr refinancements-export@sfil.fr creditexport_ops@sfil.fr
Fax: + 33 1 73 28 85 04
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69.1248996040
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100
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Execution Page – Agency and Trust Deed
Facility Agent
SIGNED by )
for and on behalf of )
CITIBANK EUROPE PLC, UK BRANCH )
as Facility Agent ) .....................................
Attorney-in-fact
Security Trustee
EXECUTED as a DEED by )
for and on behalf of )
CITICORP TRUSTEE COMPANY LIMITED )
as Security Trustee ) .....................................
in the presence of: Attorney-in-fact
................................
Witness Name:
Address:
Occupation:
Global Coordinator
SIGNED by )
for and on behalf of )
CITIBANK N.A., LONDON BRANCH ) .....................................
as Global Coordinator ) Attorney-in-fact
ECA Agent
SIGNED by )
for and on behalf of )
SUMITOMO MITSUI BANKING CORPORATION )
EUROPE LIMITED, PARIS BRANCH )
as ECA Agent ) .....................................
Attorney-in-fact
Mandated Lead Arrangers
SIGNED by )
for and on behalf of )
CITIBANK N.A., LONDON BRANCH )
as Mandated Lead Arranger ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
BANCO SANTANDER, S.A., )
PARIS BRANCH )
as Mandated Lead Arranger ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
BNP PARIBAS )
as Mandated Lead Arranger ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
HSBC FRANCE )
as Mandated Lead Arranger ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
SOCIÉTÉ GÉNÉRALE )
as Mandated Lead Arranger ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
SUMITOMO MITSUI BANKING ) CORPORATION EUROPE LIMITED, ) PARIS BRANCH )
as Mandated Lead Arranger ) .....................................
Attorney-in-fact
Lenders
SIGNED by )
for and on behalf of )
CITIBANK N.A., LONDON BRANCH )
as Lender ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
BANCO SANTANDER, S.A. )
PARIS BRANCH )
as Lender ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
BNP PARIBAS )
as Lender ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
HSBC FRANCE )
as Lender ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
SOCIÉTÉ GÉNÉRALE )
as Lender ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
SUMITOMO MITSUI BANKING ) CORPORATION EUROPE LIMITED, ) PARIS BRANCH )
as Lender ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
SFIL )
as Lender ) .....................................
Attorney-in-fact
Borrower
SIGNED by )
for and on behalf of )
ROYAL CARIBBEAN CRUISES LTD. )
as Borrower ) .....................................
Attorney-in-fact
Schedule 7
Form of Effective Date certificate
To: The other parties to the First Supplemental Agreement referred to below
Dear Sirs,
Hull No. M34 at Chantiers de l’Atlantique – First Supplemental Agreement dated [ ] 2020 (the First Supplemental Agreement)
We refer to clause 5.4 of the First Supplemental Agreement and confirm that all conditions precedent in clause 5.1 of the First Supplemental Agreement (and, in relation to the Finance Parties, clause 5.2 of the First Supplemental Agreement) have been fulfilled or waived on [ ] 2020.
Accordingly, the “Effective Date” for the purposes of the First Supplemental Agreement is [ ] 2020.
Facility Agent
Signed by ………………………………………………………………..
For and on behalf of Citibank Europe plc, UK Branch
Seller
Signed by ………………………………………………………………..
For and on behalf of Chantiers de l’Atlantique
Buyer
Signed by ………………………………………………………………..
For and on behalf of Royal Caribbean Cruises Ltd.
BD-#33670348-v3 20
EXECUTION PAGE – FIRST SUPPLEMENTAL AGREEMENT (EDGE 4)
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Borrower
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SIGNED by Colin Girgenti
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for and on behalf of
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/s/ COLIN GIRGENTI
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HOEDISCUS FINANCE LIMITED
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Attorney in-fact
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Seller
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SIGNED by Gilles Pinot de Villechenon
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for and on behalf of
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/s/ GILLES PINOT DE VILLECHENON
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CHANTIERS DE L’ATLANTIQUE
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Attorney in-fact
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Buyer
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SIGNED by Antje M. Gibson
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for and on behalf of
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/s/ ANTJE M. GIBSON
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ROYAL CARIBBEAN CRUISES LTD.
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Attorney in-fact
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Facility Agent
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SIGNED by Robert Brodie
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for and on behalf of
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/s/ ROBERT BRODIE
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Citibank Europe plc, UK Branch
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Delegated Signatory
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Security Trustee
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SIGNED by Viola Japaul
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for and on behalf of
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/s/ VIOLA JAPAUL
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CITICORP TRUSTEE COMPANY LIMITED
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Authorised Signatory
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Global Coordinator
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SIGNED by Alex C. Taylor
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for and on behalf of
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/s/ ALEX C. TAYLOR
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Citibank N.A., LOndon Branch
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Managing Director
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French Coordinating Bank
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SIGNED by
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/s/JULIE BELLAIS
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for and on behalf of
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Authorised Signatory
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HSBC FRANCE
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/s/ GUY WOELFEL
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Authorised Signatory
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ECA Agent
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SIGNED by Matthew Bambury
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for and on behalf of
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SUMITOMO MITSUI BANKING CORPORATION
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/s/ MATTHEW BAMBURY
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EUROPE LIMITED, PARIS BRANCH
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Attorney in-fact
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The Lenders
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SIGNED by Alex C. Taylor
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for and on behalf of
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/s/ ALEX C. TAYLOR
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CITIBANK N.A., LONDON BRANCH
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Managing Director
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SIGNED by
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/s/ CAROLINE PANTALEAO
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for and on behalf of
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Caroline Pantaleao
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BANCO SANTANDER, S.A., PARIS BRANCH
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Authorised Signatory
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/s/ PIERRE ROSEROT
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Pierre Roserot
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Authorised Signatory
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SIGNED by
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/s/ GEORGES CUREY
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for and on behalf of
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Georges Curey
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BNP PARIBAS
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Head of Structured Export Finance
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/s/ M. ALEXANDRE DE VATHAIRE
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M. Alexandre de Vathaire
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Head of France & UK Export Finance
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SIGNED by
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/s/JULIE BELLAIS
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for and on behalf of
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Julie Bellais
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HSBC FRANCE
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Authorised Signatory
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/s/ GUY WOELFEL
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Guy Woelfel
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Authorised Signatory
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SIGNED by Agnes Deschenes Voirin
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for and on behalf of
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/s/ AGNES DESCHENES VOIRIN
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SOCIÉTÉ GÉNÉRALE
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Authorised Signatory
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SIGNED by Matthew Bambury
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for and on behalf of
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SUMITOMO MITSUI BANKING CORPORATION
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/s/ MATTHEW BAMBURY
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EUROPE LIMITED, PARIS BRANCH
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Attorney in-fact
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SIGNED by
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/s/ BENJAMIN PHILIPPAERTS
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for and on behalf of
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Benjamin Philippaerts
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SFIL
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Direction Credit Export
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/s/ EMILIE BOISSIER
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Emilie Boissier
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Direction Credit Export
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The Mandated Lead Arrangers
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SIGNED by Alex C. Taylor
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for and on behalf of
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/s/ ALEX C. TAYLOR
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Citibank N.A., LOndon Branch
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Managing Director
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SIGNED by
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for and on behalf of
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/s/ CAROLINE PANTALEAO
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BANCO SANTANDER, S.A., PARIS BRANCH
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Caroline Pantaleao
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Authorised Signatory
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/s/ PIERRE ROSEROT
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Pierre Roserot
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Authorised Signatory
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SIGNED by
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for and on behalf of
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/s/ GEORGES CUREY
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BNP PARIBAS
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Georges Curey
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Head of Structured Export Finance
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/s/ M. ALEXANDRE DE VATHAIRE
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M. Alexandre de Vathaire
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Head of France & UK Export Finance
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SIGNED by
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/s/JULIE BELLAIS
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for and on behalf of
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Julie Bellais
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HSBC FRANCE
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Authorised Signatory
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/s/ GUY WOELFEL
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Guy Woelfel
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Authorised Signatory
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SIGNED by Agnes Deschenes Voirin
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for and on behalf of
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/s/ AGNES DESCHENES VOIRIN
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SOCIÉTÉ GÉNÉRALE
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Authorised Signatory
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SIGNED by Matthew Bambury
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or and on behalf of
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SUMITOMO MITSUI BANKING CORPORATION
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/s/ MATTHEW BAMBURY
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EUROPE LIMITED, PARIS BRANCH
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Attorney in-fact
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Dated 12 March 2020
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HIBISYEU FINANCE LIMITED
as Borrower
CHANTIERS DE L’ATLANTIQUE (PREVIOUSLY KNOWN AS STX FRANCE S.A.)
as Seller
ROYAL CARIBBEAN CRUISES LTD.
as Buyer
CITIBANK EUROPE PLC, UK BRANCH
as Facility Agent
CITICORP TRUSTEE COMPANY LIMITED
as Security Trustee
CITIBANK N.A., LONDON BRANCH
as Global Coordinator
HSBC FRANCE
as French Coordinating Bank
SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH
as ECA Agent
THE BANKS AND FINANCIAL INSTITUTIONS LISTED IN SCHEDULE 1
as Lenders and
CITIBANK N.A., LONDON BRANCH, BANCO SANTANDER, S.A., PARIS BRANCH, BNP PARIBAS, HSBC FRANCE, SOCIÉTÉ GÉNÉRALE and SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH
as Mandated Lead Arrangers
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FIRST SUPPLEMENTAL AGREEMENT
relating to Hull No. C34 at Chantiers de l’Atlantique (previously known as STX France S.A.)
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Contents
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Clause
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Page
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1
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Definitions
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2
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2
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Agreement of the Parties
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3
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3
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Amendments to Relevant Documents
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3
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4
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Representations and warranties
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4
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5
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Conditions
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4
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6
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Confirmation of continued effect
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5
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7
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Costs and expenses
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5
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8
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Miscellaneous and notices
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6
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9
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Governing law
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6
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Schedule 1 The Lenders
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8
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Schedule 2 Documents and evidence required as conditions precedent (referred to in clause 5.1)
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13
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Schedule 3 Form of Amended and Restated Facility Agreement
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17
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Schedule 4 Form of Amended and Restated Receivable Purchase Agreement
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18
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Schedule 5 Form of Amended and Restated Novation Agreement
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Schedule 6 Form of Amended and Restated Agency and Trust Deed
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Schedule 7 Form of Effective Date certificate
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THIS FIRST SUPPLEMENTAL AGREEMENT is dated 2020 and made BETWEEN:
(1)HIBISYEU FINANCE LIMITED as Borrower;
(2)CHANTIERS DE L’ATLANTIQUE as Seller;
(3)ROYAL CARIBBEAN CRUISES LTD. as Buyer;
(4)CITIBANK EUROPE PLC, UK BRANCH as Facility Agent;
(5)CITICORP TRUSTEE COMPANY LIMITED as Security Trustee;
(6)CITIBANK N.A., LONDON BRANCH as Global Coordinator;
(7)HSBC FRANCE as French Coordinating Bank;
(8)SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH as ECA Agent;
(9)THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1 as Lenders; and
(10)CITIBANK N.A., LONDON BRANCH, BANCO SANTANDER, S.A., PARIS BRANCH, BNP PARIBAS, HSBC FRANCE, SOCIÉTÉ GÉNÉRALE and SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH as Mandated Lead Arrangers.
WHEREAS:
(A)By a building contract dated 30 September 2016 (as amended by Addendum No.1 dated 1 June 2017, Addendum No.2 dated 18 October 2017, Addendum No. 3 dated 21 December 2018, Addendum No. 4 dated 15 February 2019 and Addendum No.5 dated 30 August 2019, the Building Contract) between the Seller and the Buyer the Seller has agreed to design, construct, equip and complete a passenger cruise vessel with Hull No. C34 (the Vessel) for the Buyer.
(B)By a receivable purchase agreement dated 24 July 2017 (the Receivable Purchase Agreement), the Seller has agreed to sell its contractual rights to the Receivable to the Borrower.
(C)The Borrower will fund the purchase of the Receivable through the borrowing of advances in an amount of up to €971,961,680 pursuant to a facility agreement dated 24 July 2017 (the Facility Agreement) between (1) the Borrower, (2) the Facility Agent, (3) the Security Trustee, (4) the ECA Agent, (5) the Global Coordinator, (6) the French Coordinating Bank, (7) the Mandated Lead Arrangers and (8) the Lenders.
(D)By a buyer consent agreement dated 24 July 2017 (the Buyer Consent Agreement) between (1) the Borrower, (2) the Seller, (3) the Facility Agent, (4) the Security Trustee, (5) the Refund Guarantors, (6) the RG Agent and (7) the Buyer, the parties have agreed (among other things) the basis upon which the Buyer has consented to the sale of the Receivable and has granted a first priority pre-delivery mortgage over the Vessel.
(E)By a novation agreement dated 24 July 2017 (the Novation Agreement) between (1) the Borrower, (2) the Buyer, (3) the Facility Agent, (4) the Security Trustee, (5) the ECA Agent, (6) the Global Coordinator, (7) the French Coordinating Bank, (8) the Mandated Lead Arrangers, and (9) the Lenders, the parties agreed to the future novation, amendment and restatement of the Facility Agreement with the Buyer as borrower in the form set out therein.
(F)In connection with certain requirements of BpiFAE in relation to the French content in respect of the Vessel and the drawdown arrangements under the Facility Agreement in respect of the Non-
Yard Costs it has been agreed that certain amendments should be made to the Facility Agreement and the Novated Credit Agreement.
(G)The Buyer has also requested that certain changes be made to the provisions of the Novated Credit Agreement so that this reflects certain changes that were agreed to the $1.15 billion revolving credit facility of the Buyer pursuant to amendment and restatement of this facility on 12 October 2017.
(H)This Agreement sets out the terms and conditions upon which the parties to this Agreement shall agree to the amendments referred to in recitals (F) and (G) above.
NOW IT IS HEREBY AGREED as follows:
1Definitions
a.Defined expressions
Words and expressions defined in the Facility Agreement and/or the Novation Agreement shall unless the context otherwise requires or unless otherwise defined herein, have the same meanings when used in this Agreement.
b.Definitions
In this Agreement, unless the context otherwise requires:
Effective Date means the date specified as the “Effective Date” in the certificate signed by the Facility Agent, the Seller and the Buyer in accordance with clause 5.4.
Party means each of the parties to this Agreement.
Relevant Documents means the Facility Agreement, the Receivable Purchase Agreement, the Novation Agreement and the Agency and Trust Deed.
c.Relevant Documents
References in the Relevant Documents to “this Agreement” or “this Deed” shall, with effect from the Effective Date and unless the context otherwise requires, be references to such Relevant Document as amended and restated by this Agreement and words such as “herein”, “hereof”, “hereunder”, “hereafter”, “hereby” and “hereto”, where they appear in the Relevant Documents, shall be construed accordingly.
d.Headings
Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Agreement.
e.Construction of certain terms
Clause 1.5 of the Buyer Consent Agreement shall apply to this agreement (mutatis mutandis) as if set out herein and as if references therein to “this Deed” were references to this Agreement.
f.Designation as a Transaction Document
This Agreement is designated as a Transaction Document.
2.Agreement of the Parties
Each of the Parties, relying upon the representations and warranties on the part of the other Parties contained in clause 4, agrees that, subject to the terms and conditions of this Agreement and in particular, but without prejudice to the generality of the foregoing, fulfilment of the conditions contained in clause 5 and Schedule 2, the Relevant Documents shall be amended and restated on the terms set out in clause 3.
3.Amendments to Relevant Documents
a.Amendments to Facility Agreement
The Facility Agreement shall, with effect on and from the Effective Date, be (and it is hereby) amended and restated so as to read in accordance with the form of the amended and restated Facility Agreement set out in Schedule 3 and (as so amended) will continue to be binding upon each of the Borrower and the Finance Parties in accordance with its terms as so amended and restated.
b.Amendments to the Receivable Purchase Agreement
The Receivable Purchase Agreement shall, with effect on and from the Effective Date, be (and it is hereby) amended and restated so as to read in accordance with the form of the amended and restated Receivable Purchase Agreement set out in Schedule 4 and (as so amended) will continue to be binding upon each of the Seller and the Borrower in accordance with its terms as so amended and restated.
c.Amendments to Novation Agreement
The Novation Agreement shall, with effect on and from the Effective Date, be (and it is hereby) amended and restated in accordance with the form of the amended and restated Novation Agreement set out in Schedule 5 and (as so amended) will continue to be binding upon each of the Borrower, the Finance Parties and the Buyer in accordance with its terms as so amended and restated.
d.Amendments to Agency and Trust Deed
The Agency and Trust Deed shall, with effect on and from the Novation Effective Date, be (and it is hereby) amended and restated in accordance with the form of the amended and restated Agency and Trust Deed set out in Schedule 6 and (as so amended) will continue to be binding upon each of the Finance Parties (save for the French Coordinating Bank as set out below) and the Buyer (as borrower and reflecting the accession set out below) in accordance with its terms as so amended and restated. In addition, on the Novation Effective Date and at the same time as the amendments referred to above:
i.the Buyer shall accede to the Agency and Trust Deed as the borrower thereunder and in replacement of the Borrower; and
ii.the Borrower and the French Coordinating Bank shall cease to be parties to the Agency and Trust Deed and shall be released from any obligations thereunder,
and as such arrangements are reflected in the amendment and restatement of the Agency and Trust Deed set out in Schedule 6.
e.Continued force and effect
The provisions of the Relevant Documents shall continue in full force and effect (as amended and restated by this Agreement) and each of the Relevant Documents and this Agreement shall be read and construed as one instrument.
4.Representations and warranties
a.General representations and warranties
Each Party represents and warrants (each severally for and in respect of itself) to each of the other Parties hereto that as at the date hereof:
i.it is a corporation or limited liability company, duly incorporated and validly existing under the laws of its country of incorporation;
ii.it has the power to enter into, perform and deliver, and each has taken all necessary corporate action to authorise the entry into, performance and delivery of, this Agreement and the transactions contemplated by this Agreement;
iii.this Agreement constitutes its legal, valid, binding and enforceable obligations subject to any relevant qualifications as to matters of law of the type set out in the legal opinions delivered under the Facility Agreement on the Signing Date (as defined in the Facility Agreement) and under Part A of Schedule 2; and
iv.all contractual and other consents or approvals necessary in connection with the authorisation, execution, delivery, validity, enforceability or admissibility in evidence of this Agreement or the performance by it of its obligations under this Agreement have been or will, when required, be obtained or made.
b.Seller additional representations
The Seller further represents and warrants to the Borrower that the representations and warranties set out in clauses 8.1 and 8.2 of the Receivable Purchase Agreement are true and correct, including to the extent that they may have been or shall be amended by this Agreement as if made at the date of this Agreement with reference to the facts and circumstances existing on such date.
c.Borrower additional representations
The Borrower further represents and warrants to the Finance Parties that the representations and warranties set out in clause 7.1 of the Facility Agreement are true and correct, including to the extent that they may have been or shall be amended by this Agreement as if made at the date of this Agreement with reference to the facts and circumstances existing on such date.
d.Buyer additional representations
The Buyer further represents and warrants to the Finance Parties that the representations and warranties set out in the first paragraph of clause 8.2 of the Novation Agreement are true and correct, including to the extent that they may have been or shall be amended by this Agreement as if made at the date of this Agreement with reference to the facts and circumstances existing on such date.
e.Repetition of representations and warranties
The representations and warranties in clauses 4.1 to 4.4 shall be deemed repeated by each relevant Party on and as of the Effective Date, as if made with reference to the facts and circumstances existing on the Effective Date.
5.Conditions
a.Documents and evidence
The agreement of the Parties referred to in clause 2 shall be subject to:
i.the receipt by the Facility Agent or its duly authorised representative of the documents and evidence specified in Part A of Schedule 2;
ii.the receipt by the Seller or its duly authorised representative of the documents and evidence specified in Part B of Schedule 2; and
iii.the receipt by the Buyer or its duly authorised representative of the documents and evidence specified in Part C of Schedule 2,
in each case in form and substance satisfactory to the relevant Party.
b.General conditions precedent
The agreement of the Finance Parties referred to in clause 2 shall be subject to the further conditions that on the Effective Date:
i.the representations and warranties of the other Parties contained in clause 4 are true and correct in all material respects (except for such representations and warranties that are qualified by materiality or non-existence of a material adverse effect which shall be accurate in all respects) on and as of each such time as if each was made with respect to the facts and circumstances existing at such time; and
ii.no Event of Default shall have occurred and be continuing or would result from the amendment and restatement of the Relevant Documents pursuant to this Agreement.
c.Waiver of conditions precedent
The conditions set out in clauses 5.1 and 5.2 of this Agreement are for the sole benefit of the Party specified in the relevant clause, who shall be entitled to waive the fulfilment for its benefit of any of those conditions on such terms as it deems fit (in the case of the Facility Agent, acting on the instructions of the Majority Lenders).
d.Effective Date certificate
Upon fulfilment or waiver of the conditions in this clause 5, the Facility Agent, the Seller and the Buyer shall sign a certificate in the form set out in Schedule 7 confirming that the Effective Date has occurred and such certificate shall be binding on all Parties.
6.Confirmation of continued effect
Each of the Parties acknowledge and agree that the Transaction Documents to which they are respectively a party shall remain in full force and effect save that, with effect on and from the Effective Date, the references therein to any Relevant Document shall be construed as references to such document as amended and restated and, as applicable, acceded to by this Agreement.
7.Costs and expenses
a.Expenses
The Buyer agrees to pay on demand, on an after-tax basis, all costs and expenses in connection with:
i.the preparation, execution and delivery of; and
ii.the administration, modification and amendment of,
this Agreement and all other documents to be delivered hereunder or thereunder, including, without limitation, the reasonable fees and out-of-pocket expenses of Norton Rose Fulbright LLP as the legal adviser to the Lenders, the Facility Agent and the Security Trustee and any correspondent counsel separately agreed in writing between the Seller and the Facility Agent with respect thereto on a basis (in relation to the costs referred to in (a) above) separately agreed between the Seller, the Buyer and the Facility Agent.
b.Value Added Tax
All fees and expenses payable pursuant to this clause 7 shall be paid together with value added tax or any similar tax (if any) properly chargeable thereon.
c.Stamp and other duties
The Buyer agrees to pay on demand all stamp, documentary, registration or other like duties or taxes (including any duties or taxes payable by a Finance Party) imposed on or in connection with this Agreement and shall indemnify the other Parties against any liability arising by reason of any delay or omission by the Buyer to pay such duties or taxes.
8.Miscellaneous and notices
a.Notices
The provisions of clause 23.1 of the Buyer Consent Agreement shall extend and apply to the giving or making of notices or demands hereunder as if the same were expressly stated herein with all necessary changes and so that any notices to a Lender shall be sent to the relevant Lender to its address and contact details set out in Schedule 1.
b.Counterparts
This Agreement may be executed in any number of counterparts and by the different parties on separate counterparts, each of which when so executed and delivered shall be an original but all counterparts shall together constitute one and the same instrument.
c.Limitation on recourse
The provisions of clause 16 (Limitation on recourse) of the Facility Agreement shall apply equally to this Agreement.
9.Governing law
a.Law
This Agreement and any non-contractual obligations connected with it are governed by and shall be construed in accordance with English law.
b.Submission to jurisdiction
Each of the Parties hereto agree for the benefit of the other Parties hereto that any legal action or proceedings arising out of or in connection with this Agreement and any non-contractual obligations connected with it against any of the Parties hereto or any of their respective assets shall be brought in the English courts, and each of the Parties hereto irrevocably and unconditionally submits to the jurisdiction of the English courts. Each of the Parties hereto further agrees that only the courts of England and not those of any other country shall have jurisdiction to determine any claim which a Party may have against the another Party hereto arising out of or in connection with this Agreement.
Each of the Seller, the Borrower and the Buyer confirms and agrees for the benefit of the each of the other Parties hereto that those agents appointed by it pursuant to clause 27.2 of the Buyer Consent Agreement are also designated, appointed and empowered to receive for it and on its behalf, service of process issued out of the English courts in any legal action or proceedings arising out of or in connection with this Agreement and any non-contractual obligations connected with it.
IN WITNESS whereof the parties to this Agreement have caused this Agreement to be duly executed on the date first above written.
Schedule 1 The Lenders
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Name
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Facility Office and contact details
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Citibank N.A., London Branch
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Citigroup Centre Canada Square London E14 5LB United Kingdom
Attention: Wei-Fong Chan
Kara Catt Romina Coates Antoine Paycha
Fax No: +44 20 7986 4881
Tel No: +44 20 7986 3036 /
+44 20 7508 0344
+44 20 7986 4824
+44 20 7500 0907 /
E-mail: weifong.chan@citi.com kara.catt@citi.com
romina.coates@citi.com antoine.paycha@citi.com
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Banco Santander, S.A, Paris Branch
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Facility Office:
374, rue Saint-Honoré
75001 Paris France
Operational address:
Ciudad Financiera Avenida de Cantabria s/n Edificio Encinar 2a planta 28600 Boadilla del Monte Spain
Fax No: +34 91 257 1682
Attention: Elise Regnault
Julián Arroyo Angela Rabanal Ecaterina Mucuta
Vanessa Berrio Vélez Ana Sanz Gómez
Tel No: +34 912893722
+1 212-297-2919
+1 212-297-2942
+33 1 53 53 70 46
+34 91 289 10 28
+34 91 289 17 90
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Name
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Facility Office and contact details
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E-mail: elise.regnault@gruposantander.com Julian.Arroyo@santander.us arabanal@santander.us ecaterina.mucuta@gruposantander.com vaberrio@gruposantander.com anasanz@gruposantander.com MiddleOfficeParis@gruposantander.com
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BNP Paribas
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Front Office to keep copied to all matters.
BNPP SA
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37 RUE DU MARCHE SAINT HONORE
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75001 PARIS
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ACI : CHC03B1
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Alexandre de VATHAIRE / Mauricio GONZALEZ
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alexandre.devathaire@bnpparibas.com
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mauricio.gonzalez@us.bnpparibas.com
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Tel : 00 331 42 98 00 29/00 1212 841 38 88
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Middle Office: For Operational / Servicing matters
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KHALID BOUITIDA / THIERRY ANEZO
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MILLENAIRE 4
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35, RUE DE LA GARE
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75019 PARIS
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ACI : CVA05A1
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khalid.k.bouitida@bnpparibas.com
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thierry.anezo@bnpparibas.com
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Tel : 00 331 42 98 58 69 / 00 331 43 16 81 57
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Back Office : For Standard Settlement Instruction
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authentication/call-back
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STEVE LOUISOR / VALERIE DUMOULIN
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MILLENAIRE 4
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35, RUE DE LA GARE
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75019 PARIS
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ACI : CVA03A1
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paris.cib.boci.ca.3@bnpparibas.com
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valerie.dumoulin@bnpparibas.com
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steve.louisor@bnpparibas.com
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Tel : 00 331 55 77 91 86 / 00 331 40 14 46 59
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Name
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Facility Office and contact details
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HSBC France
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HSBC France – Global Banking Agency Operations (GBAO) Transaction Manager Unit 103 avenue des Champs Elysées
75008 Paris France
Attention: Florencia Thomas
Alexandra Penda
Fax No: +33 1 40 70 28 80
Tel No: +33 1 40 70 73 81 /
+33 1 41 02 67 50
Email: florencia.thomas@hsbc.fr
alexandra.penda@hsbc.fr
Copy to:
HSBC France
103 avenue des Champs Elysées 75008 Paris
France
Attention: Celine Karsenty / Julie Bellais Fax No: +33 1 40 70 78 93
Tel No: +33 1 40 70 28 59 /
+33 1 40 70 22 97
Email: celine.karsenty@hsbc.fr
julie.bellais@hsbc.fr
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Name
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Facility Office and contact details
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Société Générale
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Société Générale Facility Office 29 Boulevard Haussmann
75009 Paris France
For operational/servicing matters:
Bouchra BOUMEZOUED / Tatiana BYCHKOVA Société Générale 189, rue d’Aubervilliers 75886
PARIS CEDEX 18 OPER/FIN/CAF/DMT6
Phone: +33 1 57 29 13 12 / +33 1 58 98 43 05
Email: bouchra.boumezoued@sgcib.com tatiana.bychkova@sgcib.com
par-oper-caf-dmt6@sgcib.com For credit matters:
Francois Rolland / Tingting Yu / Muriel Baumann Société Générale 189, rue d’Aubervilliers 75886
PARIS CEDEX 18 OPER/FIN/SMO/EXT
Phone: +33 1 58 98 17 78 / +33 1 58 98 49 18 /
+33 1 58 98 22 76
Email: francois.rolland@sgcib.com
tingting.yu@sgcib.com muriel.baumann@sgcib.com
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Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch
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1/3/5 rue Paul Cézanne 75008 Paris
France
Attention: Cedric le Duigou
Guillaume Branco Herve Billi
Claire Lucien
Fax No: +33 1 44 90 48 01
Tel No:
Cedric le Duigou: + 33 1 44 90 48 83
Guillaume Branco: + 33 1 44 90 48 71
Herve Billi: +33 1 44 90 48 48
Claire Lucien: + 33 1 44 90 48 49
Helene Ly: +33 1 44 90 48 76
E-mail: cedric_leduigou@fr.smbcgroup.com guillaume_branco@fr.smbcgroup.com herve_billi@fr.smbcgroup.com
claire_lucien@fr.smbcgroup.com helene_ly@fr.smbcgroup.com
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SFIL
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1-3, rue de Passeur de Boulogne – CS 80054
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Name
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Facility Office and contact details
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92861 Issy-les-Moulineaux Cedex 9 France
Contact Person
Loan Administration Department: Direction du Crédit Export:
Pierre-Marie Debreuille / Anne Crépin Direction des Opérations:
Dominique Brossard / Patrick Sick
Telephone:
Pierre-Marie Debreuille +33 1 73 28 87 64
Anne Crépin +33 1 73 28 88 59
Dominique Brossard +33 1 73 28 91 93
Patrick Sick +33 1 73 28 87 66
Email:
pierre-marie.debreuille@sfil.fr anne.crepin@sfil.fr dominique.brossard@sfil.fr patrick.sick@sfil.fr
refinancements-export@sfil.fr creditexport_ops@sfil.fr
Fax: + 33 1 73 28 85 04
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Schedule 2
Documents and evidence required as conditions precedent (referred to in clause 5.1)
Part A: Facility Agent
1A certificate from an authorised signatory of each of the Borrower, the Seller and the Buyer confirming that there have been no changes or amendments to the constitutional documents or board resolutions of such Party, certified copies of which were previously delivered to the Purchaser or the Facility Agent pursuant to the Receivable Purchase Agreement or the Facility Agreement or attaching revised versions in case of any changes or amendments.
2A copy, certified by an authorised officer of each of the Borrower and the Buyer of (a) resolutions of the board of directors of such Party approving the transactions contemplated by this Agreement and authorising a person or persons to execute this Agreement and any notices or other documents to be given pursuant hereto and (b) any power of attorney issued pursuant to such resolutions (which shall be certified as being in full force and effect and not revoked or withdrawn).
3Evidence of the authority of the signatories of the Seller to sign this Agreement.
4A copy, certified as a true copy by an authorised signatory of the Buyer or the Seller, of the following:
a.addendum no.1 to the Building Contract which (among other things) increased the Basic Contract Price (as defined in the Receivable Purchase Agreement) and amended certain provisions relating to the the Basic Contract Price and liquidated damages payable pursuant to the terms of the Building Contract;
b.addendum no.2 to the Building Contract which (among other things) adjusts the provisions dealing with payment of the first instalment of the Basic Contract Price (as defined in the Receivable Purchase Agreement); and
c.addendum no.3, addendum no.4 and addendum no.5 to the Building Contract which (among other things) adjusts the provisions relating to the OASIS 6 CP Deadline (as defined therein).
5.Payment of all fees, commissions, costs and expenses required to be paid to the Finance Parties on or before the Effective Date under any of the Transaction Documents or under any mandate letter or fee letter entered into in connection with the Transaction Documents.
6.Written acceptance by the agents for service of process in respect of the Seller, the Borrower and the Buyer in relation to this Agreement.
7.An opinion of Norton Rose Fulbright LLP, English legal advisers.
8.An opinion of Norton Rose Fulbright LLP, French legal advisers.
9.An opinion of Watson Farley & Williams LLP, Liberian legal advisers.
10.An opinion of Walkers, Cayman Islands legal advisers.
11.A confirmation from Walkers Fiduciary Limited as shareholder of the Borrower that the share charge dated 24 July 2017 remains in full force and effect.
12.Evidence, in a form and substance satisfactory to the Lenders, that BpiFAE has agreed to the changes referred to in this Agreement.
Part B: Seller
•A certificate from an authorised signatory of each of the Borrower and the Buyer confirming that there have been no changes or amendments to the constitutional documents or board resolutions of such Party, certified copies of which were previously delivered to the Purchaser or the Facility Agent pursuant to the Receivable Purchase Agreement or the Facility Agreement or attaching revised versions in case of any changes or amendments.
•A copy, certified by an authorised officer of each of the Borrower and the Buyer of (a) resolutions of the board of directors of such Party approving the transactions contemplated by this Agreement and authorising a person or persons to execute this Agreement and any notices or other documents to be given pursuant hereto and (b) any power of attorney issued pursuant to such resolutions (which shall be certified as being in full force and effect and not revoked or withdrawn).
•Written acceptance by the agents for service of process in respect of the Borrower and the Buyer in relation to this Agreement.
Part C: Buyer
•A certificate from an authorised signatory of each of the Borrower and the Seller confirming that there have been no changes or amendments to the constitutional documents or board resolutions of such Party, certified copies of which were previously delivered to the Borrower or the Facility Agent pursuant to the Receivable Purchase Agreement or the Facility Agreement or attaching revised versions in case of any changes or amendments.
•A copy, certified by an authorised officer of the Borrower of (a) resolutions of the board of directors of the Borrower approving the transactions contemplated by this Agreement and authorising a person or persons to execute this Agreement and any notices or other documents to be given pursuant hereto and (b) any power of attorney issued pursuant to such resolutions (which shall be certified as being in full force and effect and not revoked or withdrawn).
•Evidence of the authority of the signatories of the Seller to sign this Agreement.
•Written acceptance by the agents for service of process in respect of the Seller and the Borrower in relation to this Agreement.
Schedule 3
Form of Amended and Restated Facility Agreement
Schedule 4
Form of Amended and Restated Receivable Purchase Agreement
Schedule 5
Form of Amended and Restated Novation Agreement
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Private & Confidential
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Dated 24 July 2017
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(as amended and restated by a first supplemental agreement dated March 2020)
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HIBISYEU FINANCE LIMITED
as Existing Borrower
ROYAL CARIBBEAN CRUISES LTD.
as New Borrower
CITIBANK EUROPE PLC, UK BRANCH
as Facility Agent
CITICORP TRUSTEE COMPANY LIMITED
as Security Trustee
CITIBANK N.A., LONDON BRANCH
as Global Coordinator
HSBC FRANCE
as French Coordinating Bank
SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH
as ECA Agent
CITIBANK N.A., LONDON BRANCH, BANCO SANTANDER, S.A., BNP PARIBAS, HSBC FRANCE, SOCIÉTÉ GÉNÉRALE and SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH
as Mandated Lead Arrangers AND
THE BANKS AND FINANCIAL INSTITUTIONS LISTED IN SCHEDULE 1
as Original Lenders
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NOVATION AGREEMENT
relating to a secured credit facility agreement for Hull No. C34 at Chantiers de l’Atlantique
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Contents
Clause Page
•Definitions 2
•Consent and agreement of the Finance Parties 4
•Assumption of liability and obligations 4
•Amendment and restatement of Principal Agreement 6
•Loan currency, Additional Advances and undrawn Commitments under the Principal Agreement6 6 Conditions 9
•Fixed rate 10
•Representations and warranties 10
•Covenants 11
•Commitment and cancellation by the New Borrower 12
•Satisfaction of Receivable, releases and BpiFAE Insurance Policy 14
•Assignment and transfers 14
•Miscellaneous and notices 15
•Governing law and jurisdiction 15
Schedule 1 The Original Lenders 17
Schedule 2 Conditions precedent 21
Schedule 3 Form of Novated Credit Agreement 23
THIS NOVATION AGREEMENT is dated 24 July 2017 (as amended and restated by a first supplemental agreement dated March 2020) and made BETWEEN:
(1)HIBISYEU FINANCE LIMITED as transferor (the Existing Borrower);
(2)ROYAL CARIBBEAN CRUISES LTD. as transferee (the New Borrower);
(3)CITIBANK EUROPE PLC, UK BRANCH as facility agent for the other Finance Parties (the
Facility Agent);
(4)CITICORP TRUSTEE COMPANY LIMITED as security trustee for the other Finance Parties (the Security Trustee);
(5)CITIBANK N.A. LONDON BRANCH as global coordinator (the Global Coordinator);
(6)HSBC FRANCE as French coordinating bank (the French Coordinating Bank);
(7)SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH as ECA agent (the ECA Agent);
(8)CITIBANK N.A., LONDON BRANCH, BANCO SANTANDER, S.A., BNP PARIBAS, HSBC FRANCE, SOCIÉTÉ GÉNÉRALE and SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH as Mandated Lead Arrangers; and
(9)THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1 as Original Lenders.
WHEREAS:
(A)By a facility agreement dated on or about the date of this Agreement (the Principal Agreement) and made between (1) the Existing Borrower as borrower, (2) the banks and financial institutions named therein as original lenders, (3) the Mandated Lead Arrangers as mandated lead arrangers, (4) the Facility Agent as facility agent, (5) the Security Trustee as security trustee (6) the Global Coordinator as global coordinator, (7) the French Coordinating Bank as French coordinating bank and (8) the ECA Agent as ECA agent, the Lenders have agreed to make available a loan of up to €971,961,680 to the Existing Borrower in connection with the purchase by the Existing Borrower of the Receivable from the Seller pursuant to the Receivable Purchase Agreement.
(B)It is intended that on the Actual Delivery Date, and subject to the delivery of the Vessel to, and acceptance of the Vessel by, the New Borrower or the Nominated Owner (as defined below) on its behalf under the Building Contract and by way of satisfying the obligation of the New Borrower to pay the Receivable to the Existing Borrower (as purchaser of the Receivable from the Seller pursuant to the Receivable Purchase Agreement), all of the rights and obligations of the Existing Borrower in respect of the Principal Agreement shall be transferred by novation by the Existing Borrower to the New Borrower.
(C)The parties have also agreed that on the date of the novation contemplated in Recital (B) the Novated Loan Balance at such date shall be converted into Dollars, certain additional advances shall be made to the New Borrower and the Principal Agreement shall be amended and restated (in the form of the Novated Credit Agreement) pursuant to the terms of this Agreement.
(D)This Agreement sets out the terms and conditions upon which (i) the parties hereto shall agree to such novation, amendment and restatement of the Principal Agreement and (ii) the Lenders shall agree to make additional advances to the New Borrower.
NOW IT IS HEREBY AGREED as follows:
1.Definitions
a.Definitions
Words and expressions defined in the Principal Agreement shall have the same meaning when used in this Agreement, except insofar as the context otherwise requires or as otherwise defined in this Agreement:
Additional Advances has the meaning given to it in clause 5.2.
Change Orders has the meaning given to it in the Receivable Purchase Agreement.
BpiFAE Premium has the meaning given to it in the Novated Credit Agreement.
Dollars has the meaning given to it in the Novated Credit Agreement.
Initial Effective Date has the meaning given to it in the Receivable Purchase Agreement.
Maximum Loan Amount has the meaning given to it in the Novated Credit Agreement.
Mortgage means the first ranking ship construction mortgage over the Vessel granted or, as the case may be, to be granted by the New Borrower in favour of the Security Trustee and certain other parties in the form scheduled to the Buyer Consent Agreement.
Nominated Owner has the meaning given to it in the Credit Agreement.
Non-Yard Costs has the meaning given to it in the Novated Credit Agreement.
Novated Credit Agreement means the Principal Agreement as novated, amended and restated by this Agreement.
Novated Loan Balance means, subject to clause 10.2 and subject to the approval of the New Borrower pursuant to clause 3.5, the outstanding principal amount of the Loan owing by the Existing Borrower on the Novation Effective Date (and reflecting the amount of any Advances drawndown or deemed drawndown by the Existing Borrower in accordance with the terms of the Principal Agreement on such date but excluding any Unsecured Advances) up to the amount not exceeding the lower of:
(a)the amount of the Final Payment after any deductions permitted under the Buyer Consent Agreement;
(b) €971,961,680; and
(c) the amount referred to in clause 2.1(c) of the Principal Agreement.
Novation Effective Date means, when the Novation Effective Time has occurred, the date on which the Novation Effective Time so occurs.
Novation Effective Time means the time at which the Vessel is delivered to, and accepted by, the New Borrower (as buyer) or, as the case may be, the Nominated Owner (on its behalf) under the Building Contract (as evidenced by the protocol of delivery and acceptance for the Vessel), save that the “Novation Effective Time” shall not occur hereunder unless:
(a)the Facility Agent has notified the parties in writing that it has received all of the documents and other evidence referred to in clause 6; and
(b)such time falls before the Back Stop Date (as defined in the Receivable Purchase Agreement and subject to clause 10.2).
NYC Applicable Rate means the USD-to-EUR rate used by the New Borrower to convert the relevant Dollar amount of the Non-Yard Costs into euro for the purpose of the Seller invoicing the same to the New Borrower in euro in accordance with the Building Contract.
Other Basic Contract Price Increases means any increase in the Basic Contract Price pursuant to the following Articles of the Building Contract: I.5.7 and I.5.8 (choice of suppliers),
II.1 (in relation to the Non-Exercise Premium as defined in that Article), III.2.3 (speed bonus) and
III.6.2 (extra cabins), in the amount provided for in the Building Contract or as reasonably determined by the New Borrower and, in each case, evidenced to the reasonable satisfaction of the Facility Agent, but (for the purpose of calculating the Maximum Loan Amount and the Additional Advance in respect of such items) in an aggregate amount not exceeding
€48,000,000 (in relation to the Non-Exercise Premium) plus an amount not exceeding
€20,000,000 (in relation to bonuses pursuant to Articles III.2 and III.6 of the Building Contract).
Signing Date means the date of this Agreement.
Spot Rate of Exchange means, for the purposes of determining an equivalent amount in EUR of Dollars on any relevant date, the mid FX Rate EUR/USD (published on the basis of the 1:00pm London Bloomberg BFIX rate) two (2) Banking Days before that date.
Unsecured Advances has the meaning given to it in the Buyer Consent Agreement.
US Dollar Equivalent has the meaning given to it in the Novated Credit Agreement.
Weighted Average Rate of Exchange means the weighted average rate of exchange that the New Borrower has agreed, either in the spot or forward currency markets, to pay its counterparties for the purchase of the relevant amounts of euro with Dollars for the payment of the euro amount of the Contract Price (including the portion thereof comprising the Change Orders, any Other Basic Contract Price Increases and the Non-Yard Costs) and including in such weighted average calculation (a) the NYC Applicable Rate in relation to the portion of the Contract Price comprising the Non-Yard Costs and (b) the spot rates for any other euro amounts that have not been hedged by the New Borrower.
b.Headings
Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Agreement.
c.Construction
Clause 1.4 of the Principal Agreement shall apply to this Agreement as if set out herein.
d.References to Novated Credit Agreement
Unless a contrary indication appears, any reference in this Agreement to a term defined in, or an article or section of, or an exhibit to, the Novated Credit Agreement, shall refer to such term defined in, or article or section of, or exhibit to, the agreement set out in Schedule 3 notwithstanding that such agreement is not yet effective, it being agreed that articles and sections of the Novated Credit Agreement, where so incorporated into, or which are to apply for the purpose of, this Agreement, shall be effective and apply under this Agreement notwithstanding that for the purpose of the Novated Credit Agreement they shall only apply from the Novation Effective Time.
e.References to Security Trustee and Finance Parties
It is agreed that as the Security Trustee will not be a party to the Novated Credit Agreement and accordingly have no responsibilities thereunder, the Security Trustee is a party to this Agreement
for the purpose of approving the novation and allowing the Novation Effective Date to occur but it shall have no responsibilities in respect of the Novated Credit Agreement or have rights or obligations under this Agreement in respect of the Novated Credit Agreement. Accordingly, references to parties or the Finance Parties in clauses 3.2, 5.3, 5.4, 5.5 and 8.3 shall not include the Security Trustee.
2.Consent and agreement of the Finance Parties
Subject to the other provisions of this Agreement and upon reliance of each of the representations and warranties in clause 8, the Facility Agent, the Security Trustee, the Global Coordinator, the French Coordinating Bank, the ECA Agent, the Mandated Lead Arrangers, the Arrangers and the Lenders agree with the Existing Borrower and the New Borrower on the Novation Effective Date (and at the Novation Effective Time), that they consent to the novation, amendment and restatement of the Principal Agreement on the terms set out in clauses 3 and 4 and to the conversion of the currency of the Loan and to the making of the Additional Advances in accordance with clause 5.
3.Assumption of liability and obligations
a.Substitution
It is hereby agreed that, as and with effect from the Novation Effective Time:
1.the New Borrower shall be, and is hereby made, a party to the Principal Agreement in substitution for the Existing Borrower; and
2.the Principal Agreement shall be amended and restated as set out in clause 4.
b.Assumption of liability
The New Borrower hereby agrees with the Finance Parties that, as and with effect from the Novation Effective Time, it shall be indebted to the Finance Parties for the full amount of the Novated Loan Balance and, when drawn pursuant to clause 5.2 (and as adjusted pursuant to clause 5.3), the Additional Advances and the New Borrower further agrees that from the Novation Effective Time it shall duly and punctually perform all the liabilities and obligations to be performed or discharged in respect of the Novated Loan Balance under the Novated Credit Agreement and shall be bound by the terms of the Novated Credit Agreement from the Novation Effective Time as the “Borrower” thereunder.
c.Release
The Existing Borrower and the Finance Parties hereby agree that, as and with effect from the Novation Effective Time, they shall each mutually release and discharge each other from all liabilities, obligations, claims and demands whatsoever under or touching or concerning the Principal Agreement and in respect of anything done or omitted to be done under or in connection therewith except that if at the Novation Effective Time there are any outstanding liabilities of the Existing Borrower under the Principal Agreement which are the subject of an indemnity claim against the Seller pursuant to clause 7 of the Receivable Purchase Agreement, to prevent the Finance Parties losing the ability to recover those claims against the Seller, such liabilities shall be preserved against the Existing Borrower until such claims are satisfied.
d.No liability
The Finance Parties hereby confirm to the New Borrower, that except for the obligations in respect of the Novated Loan Balance which are, with effect from the Novation Effective Time, to be assumed by the New Borrower pursuant to clause 3.2, the New Borrower shall have no liability, and the Finance Parties shall have no recourse whatsoever to the New Borrower or any of its assets, in respect of any liabilities, obligations, claims and demands whatsoever under or touching or concerning the Principal Agreement or in respect of anything done or omitted to be done under or in connection therewith.
e.Novated Loan Balance
The Facility Agent agrees that:
3.following each Drawdown Date (and at any other time upon reasonable request), it will provide the New Borrower with an update in relation to the amount of the outstanding Loan;
4.not less than ten Banking Days prior to the anticipated Actual Delivery Date, it will consult with the New Borrower regarding the anticipated amount of the Novated Loan Balance as at the anticipated Novation Effective Time to enable the New Borrower to confirm and verify this amount (having regard to paragraphs (a) and (b) of the definition of Novated Loan Balance) and satisfy itself that it is an amount which reflects the expected drawdown of the Loan during the period prior to the Actual Delivery Date and that the same does not include any Unsecured Advances. The New Borrower shall promptly confirm its acceptance of the amount or, if applicable, raise any questions as to the calculation of this amount with the Facility Agent so that the amount can be approved prior to the Novation Effective Time; and
5.as part of the process of agreeing the Novated Loan Balance it will participate in the preparation of the delivery funds flow agreement referred to in clause 13.6 of the Buyer Consent Agreement.
f.Prepayment in respect of overpaid Purchase Price
If at the Novation Effective Time the Seller has become liable to make a refund of the Purchase Price pursuant to clause 2.5 of the Receivable Purchase Agreement and has not made payment of that refund such that a partial prepayment of the Loan in an amount equal to that refund (the Refund Prepayment Amount) has not been made, the New Borrower shall prepay an amount of the Novated Loan Balance corresponding to that Refund Prepayment Amount on the Novation Effective Date, such prepayment to be without premium, penalty or breakage costs, and shall be by way of a regularly scheduled required prepayment (and not a requirement to make payment prior to the scheduled maturity thereof).
Where any such prepayment is required by the New Borrower pursuant to this clause 3.6:
6.the relevant amount of such prepayment may, if requested by the New Borrower, be deducted from the amount of the Additional Advances to be made available to the New Borrower on the Novation Effective Date and, where the New Borrower has requested that the prepayment required under this clause 3.6 be deducted from the Additional Advances, an actual payment shall only be required by the New Borrower if the prepayment amount exceeds the aggregate amount of the Additional Advances to be advanced to the New Borrower; and
7.the New Borrower shall be entitled to exercise its rights under clause 13.2(b) of the Buyer Consent Agreement.
It is agreed that the liability of the New Borrower in respect of the Refund Prepayment Amount under this clause shall not exceed the amounts referred to in clause 13.2(a) of the Buyer Consent Agreement.
g.Notification of set-off
Where clause 7.5 (Set-off for unpaid amounts) of the Receivable Purchase Agreement applies and an amount is to be deducted from the Payment Amount due to the Seller in relation to any amount due and owing by the Seller to the Existing Borrower or the Finance Parties under the Transaction Documents which remains unpaid at the Drawdown Date for an Advance (an unpaid amount) and that unpaid amount will consequently be retained from the relevant Advance under clause 2.2(d) of the Principal Agreement, the Facility Agent shall notify the New Borrower before the relevant Drawdown Date of the unpaid amount (together with reasonable
details of the type, amount and the manner in which such amount, and all components thereof, have been calculated).
4.Amendment and restatement of Principal Agreement
The Principal Agreement shall, with effect on and from the Novation Effective Time, be (and it is hereby) amended and restated so as to read in accordance with the form of the Novated Credit Agreement set out in Schedule 3 and (as so amended and restated) will be binding upon each of the parties thereto in accordance with its terms as so amended and restated.
5.Loan currency, Additional Advances and undrawn Commitments under the Principal Agreement
a.Currency conversion
On the Novation Effective Date the Additional Advances to be drawndown by the New Borrower on the Novation Effective Date shall be made available in Dollars in accordance with the following provisions of this clause 5 and the Novated Credit Agreement and thereafter the Novated Loan Balance shall be converted from euro to Dollars by reference to the US Dollar Equivalent (as defined in the Novated Credit Agreement) of such amount.
b.Additional Advances
Subject to the terms and conditions of this Agreement, on the Novation Effective Date, the New Borrower shall be entitled to borrow further advances (the Additional Advances) in Dollars in respect of the following amounts:
i.an amount of up to 80% of the incurred Non-Yard Costs (of up to €150,000,000) and the Other Basic Contract Price Increases paid or to be paid by the New Borrower under the Building Contract of up to EUR 68,000,000, (but which, when aggregated with the Non-
Yard Costs, shall not exceed an amount equal to EUR 175,000,000); and
ii.an amount equal to 100% of the BpiFAE Premium as calculated in accordance with Section 11.13.1(b) of the Novated Credit Agreement as at the Novation Effective Time, which amount shall be divided into two parts:
1.the amount payable by the New Borrower to BpiFAE in respect of such part of the BpiFAE Premium which remains payable to BpiFAE at the Novation Effective Date; and
2.the balance, which shall, subject to the New Borrower’s set-off rights referred to in clause 13.3 of the Buyer Consent Agreement, be payable by the New Borrower to the Seller in reimbursement of the amounts which have been deducted from the Payment Amounts in respect of the BpiFAE Premium pursuant to the Receivable Purchase Agreement,
provided however that the aggregate amount of the Additional Advances (as adjusted, where relevant, under clause 5.3), when added to the Novated Loan Balance (or, if different and to the extent applicable, the aggregate of any amounts advanced in respect of the Facility (and not of the Additional Advances) in the manner contemplated by clause 5.4), shall not exceed the Maximum Loan Amount.
The Weighted Average Rate of Exchange shall be used to calculate the Dollar amount of the Additional Advance referred to in clause 5.2(a) and the Spot Rate of Exchange shall be used to calculate the Dollar amount of the Additional Advance referred to in clause 5.2(b).
The Additional Advance referred to in clause 5.2(b)(i) shall be paid directly to BpiFAE in the manner described in Section 2.3(d) of the Novated Credit Agreement.
c.Adjustment of Additional Advances
On the Novation Effective Date, the parties hereby agree that the aggregate amount of the Additional Advances (other than the amount referred to in clause 5.2(b)(i)) shall be adjusted, as applicable, by a Dollar amount (the Adjustment Amount) equal to the product of:
i.the difference obtained by subtracting the Spot Rate of Exchange on the Actual Delivery Date from the Weighted Average Rate of Exchange; and
ii.the Novated Loan Balance.
If the Adjustment Amount is a positive number, the aggregate amount of the Additional Advances to be drawn in Dollars shall be increased by such Adjustment Amount.
Conversely, if the Adjustment Amount is a negative number, the aggregate amount of the Additional Advances to be drawn in Dollars shall be decreased by such Adjustment Amount, provided however, if such Adjustment Amount exceeds the amount of the Additional Advances that would have been advanced in Dollars but for the operation of this clause (and subject to any agreement reached to the contrary in the delivery funds flow agreement referred to in clause 3.5(c)), no Dollar Additional Advances will be made and the New Borrower shall prepay (in Dollars) an amount of the Novated Loan Balance corresponding to that excess amount on the Novation Effective Date (a Section 5.3 Prepayment), such prepayment to be without premium, penalty or breakage costs, and shall be by way of a regularly scheduled required prepayment (and not a requirement to make payment prior to the scheduled maturity thereof). Any failure by the New Borrower to make the Section 5.3 Prepayment on the Novation Effective Date shall be capable of giving rise to an Event of Default under Section 8.1.1 of the Novated Credit Agreement unless waived by, or alternative arrangements are agreed with, the Required Lenders (as defined in the Novated Credit Agreement) acting on the instructions of BpiFAE.
d.Undrawn Commitments under the Principal Agreement
In the event that either:
i.the Existing Borrower has not drawn the full amount of the Total Commitments under the Principal Agreement at the Novation Effective Date; or
ii.the Total Commitments under the Principal Agreement have been cancelled or reduced before the Novation Effective Date and this is not as a result of a cancellation of the Building Contract by the Seller due to a Buyer Specified Event; or
iii.it is not possible for the Facility to be made available to the Existing Borrower to the satisfaction of the Seller and the New Borrower,
the Finance Parties agree that if the Vessel continues to be constructed by the Seller in France and the BpiFAE Insurance Policy continues to be maintained (or, if applicable, reinstated or reissued) then, if required by the New Borrower, the Facility will continue to be available to the New Borrower and the amount of the Facility shall be the amount that it would otherwise have been but for the occurrence of the events referred to in (a) to (c) above and such Facility shall include, without limitation, amounts to finance or refinance any reasonable completion expenses (the Completion Expenses) incurred by the New Borrower in completing the Vessel (of the type contemplated by Article XI 5 of the Building Contract and, where applicable, up to the amount of such Completion Expenses agreed pursuant to clause 10.2 of the Buyer Consent Agreement).
If this clause applies and the New Borrower exercises its rights to continue to have the Facility made available to it on the Actual Delivery Date or (with the prior consent of BpiFAE, not to be unreasonably withheld and having regard to the provisions relating to BpiFAE below) before the Actual Delivery Date this will either be through a novation, amendment and restatement of the Principal Agreement in the manner contemplated by clauses 3 and 4 or through the execution of a new credit agreement based substantially on the terms of the Novated Credit Agreement, but in each case updated to the extent necessary to reflect the additional amounts which would
need to be made available thereunder in addition to the Additional Advances and, when applicable, in respect of the Completion Expenses, to allow the New Borrower to draw and/or assume by way of novation an amount in aggregate up to the Maximum Loan Amount and to reflect any agreed changes related to the New Borrower’s hedging arrangements in respect of the Contract Price. In these circumstances the Finance Parties and the New Borrower shall, in good faith, agree such changes to this Agreement and/or the Novated Credit Agreement or agree and thereafter enter into a new credit agreement of the type referred to above, so as to place the New Borrower in all material respects in the same position it would have been had the Facility been fully available during the pre-delivery period in the manner set out in the Transaction Documents.
Where this clause applies, the amount of the Facility available to the New Borrower shall not exceed the Maximum Loan Amount and the amount of the indebtedness of the Existing Borrower under the Principal Agreement which the New Borrower may be required to assume by way of novation shall not exceed an amount equal to the Novated Loan Balance at the relevant time.
It is acknowledged that BpiFAE have confirmed that they will agree to continue, reinstate or reissue the BpiFAE cover in circumstances where this clause applies and the New Borrower is to draw the Facility on the Actual Delivery Date. Formal consent of BpiFAE will be required in relation to (i) any availability of the Facility to the New Borrower before the Actual Delivery Date and (ii) the arrangements and the terms of any new or novated facility agreement, such consent not to be unreasonably withheld. The New Borrower and the Finance Parties agree to co- operate in good faith and use reasonable efforts to procure such consent.
In addition, where this clause applies, the New Borrower agrees that:
(A)the amounts payable to the Lenders in respect of arrangement fees in respect of the Facility (as set out in the relevant Fee Letter attached to any Fee Letter signed by the New Borrower) and the BpiFAE Premium payable to BpiFAE, shall continue to be payable in full and the New Borrower shall be required, where it does not currently have responsibility for the full payment of all those amounts, to assume responsibility for the payment of such amounts (it being acknowledged that the New Borrower shall not have any responsibility for payment of amounts of BpiFAE Premium already paid to BpiFAE pursuant to the Receivable Purchase Agreement where these amounts have not been (or will not be) refunded due to the cancellation of the Facility); and
(B)it shall be liable to pay commitment fees on the basis set out in Section 3.4 (Commitment Fees) of the Novated Credit Agreement (but without double counting in relation to any amounts due under clause 10.1).
The Finance Parties agree that this clause 5.4 shall apply notwithstanding that the Initial Effective Date may not occur.
e.Borrowing procedure for Additional Advances
The New Borrower and the Finance Parties agree that the procedures set out in Article II (Commitments and borrowing procedures) of the Novated Credit Agreement shall apply in relation to the borrowing of the Additional Advances and, if applicable (and subject to any agreed amendments arising pursuant to clause 5.4), any amounts under clause 5.4.
f.Notification of New Borrower’s hedging arrangements
8.In connection with the calculation of the Weighted Average Rate of Exchange, the New Borrower agrees to provide the Facility Agent with the information referred to in this clause
5.6. The New Borrower and the Facility Agent agree to have an initial discussion in relation to the calculation by no later than the date falling 60 days before the anticipated Actual Delivery Date and thereafter, following the invoicing of the Non-Yard Costs to the Builder (on or about the date falling 30 days before the anticipated Actual Delivery Date),
the New Borrower and the Facility Agent will further discuss the calculation of the Weighted Average Rate of Exchange during the period up to the Novation Effective Time.
9.The New Borrower shall deliver to the Facility Agent (who shall promptly forward the same to the Lenders and BpiFAE), on a quarterly basis following the Signing Date, a schedule of the Weighted Average Rate of Exchange, accompanied by copies of confirmations or screen shots evidencing the entry into, termination or modification of any trades or fixings effected during such quarter under any agreements entered into by the New Borrower from time to time in spot or forward currency markets for the purchase of euros with Dollars in order to pay the Contract Price or fix the NYC Applicable Rate.
10.Notwithstanding paragraph (b) above, on or between the tenth and second Banking Days prior to the date on which the New Borrower intends to deliver the Loan Request (as defined in the Novated Credit Agreement) to the Facility Agent, the New Borrower shall deliver to the Facility Agent (who shall promptly forward the same to the Lenders and BpiFAE) the New Borrower's preliminary written calculation in reasonable detail of the Weighted Average Rate of Exchange (to the extent not previously provided) and the New Borrower shall also provide copies or other evidence of such currency hedges as the Facility Agent may reasonably require.
6.Conditions
a.Documents and evidence
The agreement of the Finance Parties referred to in clause 2 and the obligation of the Lenders to contribute to any advances in respect of the Facility to be made in accordance with this Agreement shall be subject to the condition that:
11.by no later than the Signing Date, the Facility Agent, or its duly authorised representative, shall have received the documents and evidence specified in Part 1 of Schedule 2 in form and substance satisfactory to the Facility Agent (acting on the instructions of the Lenders and BpiFAE);
12.by no later than the Initial Effective Date, the Facility Agent, or its duly authorised representative, shall have received the documents and evidence specified in Part 2 of Schedule 2 in form and substance satisfactory to the Facility Agent (acting on the instructions of the Lenders and BpiFAE); and
13.by no later than the Novation Effective Time, the Facility Agent, or its duly authorised representative, shall have received each of the documents and evidence set out in section
5.1 of the Novated Credit Agreement (but subject to the proviso to Section 5.1.10) and confirmation in writing from the New Borrower to the Facility Agent that it (or the Nominated Owner on its behalf) will take delivery of the Vessel under the Building Contract and the actual date on which delivery shall occur, which confirmation shall be given immediately prior to the occurrence of the Novation Effective Time.
b.General conditions precedent
The agreement of the Finance Parties referred to in clause 2 and the obligation of each Lender to contribute to any advances in respect of the Facility to be made under this Agreement shall be subject to the further conditions that on the Novation Effective Date:
14.the representations and warranties of the New Borrower contained in clause 8 are true and correct in all material respects (except for such representations and warranties that are qualified by materiality or non-existence of a material adverse effect which shall be accurate in all respects) on and as of each such time as if each was made with respect to the facts and circumstances existing at such time; and
15.no Event of Default and no Prepayment Event (each as defined in the Novated Credit Agreement) shall have occurred and be continuing or would result from the novation of
the Principal Agreement or the making of the Additional Advances pursuant to this Agreement.
c.Waiver of conditions precedent
The conditions specified in this clause 6 are inserted solely for the benefit of the Lenders and may be waived on their behalf in whole or in part and with or without conditions by the Facility Agent acting on the instructions of the Majority Lenders and BpiFAE.
d.Confirmation of conditions precedent
Once the conditions set out in this clause 6 have been satisfied (or waived) as provided above, the Facility Agent shall confirm the same by written notice to the other parties to this Agreement.
7.Fixed rate
The New Borrower has elected that the CIRR fixed interest rate shall apply under the Novated Credit Agreement.
8.Representations and warranties
a.Existing Borrower representations and warranties
The Existing Borrower shall be deemed to repeat the representations and warranties:
16.in clause 7.1 of the Principal Agreement on (i) the date of this Agreement and (ii) the Initial Effective Date; and
17.in clauses 7.1(a), 7.1(b), 7.1(c), 7.1(d) and 7.1(j) of the Principal Agreement on the Novation Effective Date,
in each case, as if made with reference to the facts and circumstances existing on such dates.
b.New Borrower representations and warranties
The New Borrower represents and warrants to the Finance Parties that the representations and warranties set out in Sections 6.1 (Organization, etc.), 6.2 (Due Authorization, Non- Contravention, etc.), 6.3 (Government Approval, Regulation, etc.), 6.5. (Validity, etc.), 6.9(a) (Obligations rank pari passu), 6.10 (Withholding, etc.), 6.11 (No Filing, etc. Required), 6.12 (No Immunity) and 6.13 (Investment Company Act) of Article VI of the Novated Credit Agreement are true and correct as if made on (a) the date of this Agreement and (b) the Initial Effective Date with reference to the facts and circumstances existing on such day (and as if references therein to “this Agreement” were to this Agreement and to “the Novation Effective Date” were references to (a) the Signing Date and (b) the Initial Effective Date).
The New Borrower shall be deemed to make the representations and warranties set out in the said Article VI on the Novation Effective Date in accordance with the terms of the Novated Credit Agreement (and as if references therein to “this Agreement” were to this Agreement and the Novated Credit Agreement).
c.Novation Effective Date representations by existing parties
On the Novation Effective Date, each of the Existing Borrower and the Finance Parties shall be deemed to represent to each other party to this Agreement that:
18.it has not transferred (whether by way of security or otherwise) any of its rights or obligations under the Principal Agreement (other than (i) any transfers or assignments by a Lender in accordance with the provisions of clause 14 (Assignment, transfer and Facility Office) of the Principal Agreement or (ii) any replacement of the Facility Agent, Security
Trustee, the French Coordinating Bank or the ECA Agent in accordance with the applicable provisions of the Agency and Trust Deed and the Security Trust Deed, which in each case, have previously been disclosed to the New Borrower where consent or approval of the New Borrower is not otherwise required in relation to any such assignments or transfers); and
19.it has duly performed all of its obligations under the Principal Agreement.
9.Covenants
a.New Borrower covenants
The New Borrower undertakes with each of the Finance Parties that, from the date of this Agreement, the New Borrower will comply with its obligations under the following Sections of the Novated Credit Agreement (as if references in those Sections to the “Novation Effective Date” referred to the Signing Date):
20.Section 7.1.1a) and b) (Annual and quarterly financial information);
21.Section 7.1.2 (Approvals and other consents);
22.Section 7.1.3 (Compliance with laws, etc.); and
23.the first sentence of Section 7.1.7 (BpiFAE insurance policy/French authority requirements).
b.Notification of increased costs, etc.
Each Lender shall (through the Facility Agent) notify the New Borrower at least three months before the anticipated Novation Effective Date if:
24.it intends to claim for any increased cost under Sections 4.3 (Increased LIBO Rate Loan Costs, etc.) or 4.5 (Increased capital costs) or for any Covered Taxes (as defined in the Novated Credit Agreement) under Section 4.6 (Taxes) or reserve costs under Section 4.7 (Reserve costs) of the Novated Credit Agreement for the period falling after the Novation Effective Date; or
25.any of the circumstances referred to in Sections 4.1 (LIBO Rate lending unlawful) or 4.2 (Deposits unavailable) apply to it,
it being acknowledged that the New Borrower shall have no liability in respect of any such increased costs or amounts incurred or arising in respect of the period prior to the Novation Effective Time. Such notice shall include the relevant details referred to in those Sections.
c.Notification of anticipated buffer claims
Following completion of sea trials for the Vessel, each Lender shall (through the Facility Agent) notify the New Borrower if there are any accrued claims outstanding against the Seller or other amounts that it anticipates will or may be deducted from the Pre-delivery Buffer on the Actual Delivery Date and shall (if reasonably requested by the New Borrower) provide the New Borrower with a notice of such anticipated amounts at any other time.
d.Interest stabilisation
Each Lender agrees with the New Borrower that it will, from the date of this Agreement, comply with its obligations under Section 3.3.3 (Interest stabilisation) of the Novated Credit Agreement.
10.Commitment and cancellation by the New Borrower
a.Commitment Fees
The New Borrower agrees to pay to the Facility Agent for the account of each Lender a commitment fee on its daily unused portion of the Maximum Loan Amount (as such amount may be adjusted from time to time) on the basis of and at the times set out in Section 3.4 (Commitment Fees) of the Novated Credit Agreement. In calculating the amount of commitment fee due to each Lender on each Commitment Fee Payment Date (as defined in Section 3.4), the Facility Agent shall take into account whether any Lender was a Defaulting Lender at any time during the period since the previous Commitment Fee Payment Date. For this purpose, each Lender agrees that it will notify the Facility Agent, the other Lenders and the New Borrower if it becomes a Defaulting Lender. In the event that a Lender becomes a Defaulting Lender and the other Lenders have not confirmed to the New Borrower within five Banking Days of receiving the notice referred to above that they will honour the commitment of any Defaulting Lender, no commitment fee shall be payable to the Facility Agent for the account of a Lender on any unused portion of the Maximum Loan Amount of that Lender for any day on which that Lender was a Defaulting Lender. If the other Lenders (or any of them) have confirmed within such five Banking Day period that they will honour all or part of a Defaulting Lender’s commitment, the commitment fee shall continue to be payable in respect of the relevant portion of the Defaulting Lender’s commitment so honoured.
b.Cancellation
The New Borrower may, by written notice to the Facility Agent at any time prior to the date falling not less than ten days prior to the anticipated Actual Delivery Date (and which shall also be a minimum period of not less than 10 Banking Days prior to the proposed date of cancellation set out in the New Borrower’s notice, the Notified Cancellation Date), without premium or penalty (except as may be required by clause 10.5), terminate, or from time to time reduce, the Commitment (as defined in the Novated Credit Agreement). Any such termination or reduction of the Commitment shall be applied to the respective Commitments of the Lenders, pro rata according to the amounts of their respective Commitments. Where the Commitment is cancelled in full or in part the New Borrower shall pay on the date of such cancellation all amounts, including any fees and commissions which have accrued but remain unpaid at such date and any breakage costs payable pursuant to clause 10.5, which are due and owing by the New Borrower to the Finance Parties at such date pursuant to this Agreement or any Fee Letter or any mandate letter entered into in connection with the Transaction Documents to which the New Borrower is a party to the extent that such amounts are the subject of invoices from the Facility Agent to the New Borrower received by the New Borrower not less than two Banking Days prior to the date of such cancellation (the Invoiced Amounts). It is acknowledged and agreed that where the Commitment is cancelled in full the effectiveness of any such proposed cancellation shall be conditional on the payment of the Invoiced Amounts (but on the basis that commitment fees under clause 10.1 shall cease on the Notified Cancellation Date). The ECA Agent shall in such circumstances use reasonable endeavours to provide the New Borrower with both an indicative calculation of any potential breakage costs arising from the proposed cancellation as soon as practicable following receipt of the cancellation notice and an invoice in respect of any actual breakage amounts as soon as practicable prior to the Notified Cancellation Date. If no invoices have been issued for any such amounts (the Non-Invoiced Amounts), such Non-Invoiced Amounts shall be payable by the New Borrower following the Notified Cancellation Date upon the second Banking Day following receipt of the relevant invoices. Where the Commitment is cancelled in part, the allocation of such cancellation between the Novated Loan Balance and the Additional Advances shall be determined at the relevant time of cancellation at the New Borrower’s election made in its discretion after consultation with the other parties concerned including Natixis DAI and BpiFAE (but on the basis that any allocation of any such partial cancellation cannot cause the Novated Loan Balance to be reduced to zero and will be subject to BpiFAE confirming it has no objection to such allocation). In addition, where the Commitment is cancelled in part, any amounts required to be paid by the New Borrower under this clause in respect of such cancellation which remain outstanding at the Novation Effective Time shall be treated as a liability on the New Borrower under the Novated Credit Agreement.
c.Prepayment of Loan under the Principal Agreement
Where a cancellation notice in respect of the full amount of the Commitment is given by the New Borrower in accordance with 10.2:
26.the provisions of clause 3 shall not apply and accordingly the Novation Effective Time shall not be capable of occurring; and
27.the Existing Borrower and the Finance Parties hereby acknowledge that the Loan will be prepaid in full on the Actual Delivery Date in accordance with clause 4.3(e) of the Principal Agreement but that the Principal Agreement shall otherwise continue in force in accordance with its terms and the Facility will continue to be available to the Existing Borrower pursuant to the terms of the Principal Agreement.
d.BpiFAE Premium
It is acknowledged by the parties that if the New Borrower voluntarily cancels all or any of the Commitment under clause 10.2, the New Borrower shall not be obliged to pay (or reimburse the Existing Borrower or the Seller for) all or any part of the BpiFAE Premium.
e.Fixed rate breakage costs
If the New Borrower:
28.voluntarily cancels all or any of the Commitment under clause 10.2;
29.voluntarily cancels all or any of the Commitment after it has exercised its rights under clause 4.3 of the Buyer Consent Agreement; or
30.subject to the proviso below, does not borrow the Maximum Loan Amount as a result of the Contract Price being reduced in accordance with Article III of the Building Contract (resulting in a corresponding cancellation of part of the Commitment),
the New Borrower shall pay to the Facility Agent breakage costs in the amount notified to it following a calculation of such breakage costs based on the methodology referred to in Section 4.4.1b) of the Novated Credit Agreement and on the basis that for this purpose references in such clause to prepayment and prepay shall be treated as references to cancellation and the basis for the calculation of any breakage costs shall be determined by reference to:
i.if:
a.the Commitment is cancelled in full, 80% of €1,097,411,000; or
b.the Commitment is partially cancelled, the amount which is 80% of
€1,097,411,000 minus the un-cancelled Commitment; and
ii.24 assumed semi-annual repayment instalments starting from the Expected Delivery Date at the Signing Date.
Provided however that no breakage costs will be charged under clauses 10.5(a), 10.5(b) or 10.5(c) above if the Loan (as defined in the Novated Credit Agreement) assumed by and/or advanced to the New Borrower on the Novation Effective Date or otherwise pursuant to any restated or new credit agreement entered into in accordance with clause 5.4 equals or exceeds the US Dollar Equivalent of €877,928,800 (being 80% of €1,097,411,000).
For the purpose of calculating the Dollar amount of the breakage costs under this clause, the notional amount of the Loan shall be converted to a corresponding Dollar amount on the basis of the Spot Rate of Exchange on the date which is two Banking Days prior to the date of effective cancellation.
It is acknowledged and agreed for all purposes of this Agreement and the Novated Credit Agreement that the New Borrower shall not be liable to pay (or indemnify any Indemnified Party under Section 11.4 of the Novated Credit Agreement in respect of) any breakage costs related to the Fixed Rate in the event the Fixed Rate is not available as a result of any of the conditions precedent set forth in Section 5.1.10 of the Novated Credit Agreement not being satisfied for any reason other than due to the New Borrower’s own breach of the terms of this Agreement.
11.Satisfaction of Receivable, releases and BpiFAE Insurance Policy
a.Receivable
The Existing Borrower and the New Borrower agree that the assumption by the New Borrower of the Existing Borrower’s obligation to repay the Novated Loan Balance on the Novation Effective Date shall satisfy the obligation of the New Borrower to pay the Receivable to the Existing Borrower (as purchaser of the Receivable from the Seller pursuant to the Receivable Purchase Agreement).
b.Release of Security Documents on Novation Effective Date
It is acknowledged that on the Novation Effective Date (and subject to satisfaction of the conditions precedent referred to in this Agreement and the other Transaction Documents):
31.the Mortgage will be released (but without prejudice to the Finance Parties’ obligation to release the Mortgage in accordance with clause 11.1 of the Buyer Consent Agreement);
32.the Borrower Assignment (and any security assigned thereunder) and the Share Security will be released;
33.the Security Trustee will be released from its obligations under the Security Trust Deed and the Agency and Trust Deed;
34.the Facility Agent, the French Coordinating Bank and the ECA Agent will be released from their respective obligations under the Agency and Trust Deed (on the basis that the provisions of Article X of the Novated Credit Agreement will then apply); and
35.the Facility Guarantors shall be released from their obligations under the Facility Guarantees,
and the parties to such documents agree to enter into such documentation as the Facility Agent or any other party may reasonably require in order to effect such releases and discharges.
c.BpiFAE Insurance Policy
It is acknowledged that the BpiFAE Insurance Policy will remain in full force and effect notwithstanding the occurrence of the Novation Effective Date.
12.Assignment and transfers
The provisions of clause 14 (Assignment, transfer and facility office) of the Principal Agreement shall apply with equal effect to the Existing Borrower and the Finance Parties in relation to this Agreement as if the same were expressly stated herein and references therein to “the Agreement” shall be construed as references to this Agreement. Except to the extent permitted under section 7.2.6 of the Novated Credit Agreement, the New Borrower may not assign or transfer any of its rights or obligations under this Agreement.
13.Miscellaneous and notices
a.Notices
The provisions of clauses 17.1 and 17.2 (Notices) of the Principal Agreement shall extend and apply to the giving or making of notices or demands hereunder as if the same were expressly stated herein and for this purpose notices to the New Borrower shall be sent to it at:
1050 Caribbean Way Miami
Florida 33132
Fax no: +1 (305) 539-0562
Attn: Vice President, Treasurer
Copy to: General Counsel
b.Counterparts
This Agreement may be executed in any number of original counterparts and by facsimile provided that original signed copies are provided within a reasonable period of time thereafter. All such counterparts shall, once executed, constitute a single document.
c.Contracts (Rights of Third Parties) Act 1999
36.With the exception of BpiFAE, no term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement.
37.Notwithstanding any term of this Agreement, the consent of any person who is not a party to this Agreement is not required to amend or vary this Agreement at any time.
d.Rights of New Borrower under the Principal Agreement
It is agreed where any rights are expressed to be conferred on the New Borrower (as Buyer) under the Principal Agreement, the New Borrower shall be entitled to the benefit of such rights as if it were a party to the Principal Agreement for the sole purpose of those rights (and clause
17.7 of the Principal Agreement shall be deemed to be modified accordingly).
e.New Borrower payments
The provisions of section 3.3.4 (Post Maturity Rates) and 4.6 (Taxes) of the Novated Credit Agreement shall be deemed to apply in relation to any non-payment or, as the case may be, payments of amounts required to be made by the New Borrower to any of the Finance Parties under this Agreement as if the same was expressly incorporated herein and references therein to “the Agreement” shall be construed as references to this Agreement.
f.Confidentiality
The Lenders agree to be bound by the terms of clause 24 of the Buyer Consent Agreement as if the same were set out in full herein and as if references to a Party in that clause included a Lender.
14.Governing law and jurisdiction
a.Law
This Agreement and any non-contractual obligations connected with it are governed by and shall be construed in accordance with English law.
b.Submission to jurisdiction
The Existing Borrower and the New Borrower agree, for the benefit of the Finance Parties, that any legal action or proceedings arising out of or in connection with this Agreement against the Existing Borrower and/or the New Borrower or any of its assets (including any non-contractual obligations) may be brought in the English courts. Each of the Existing Borrower and the New Borrower irrevocably and unconditionally submits to the jurisdiction of such courts and irrevocably designates, appoints and empowers the following person to receive for it and on its behalf, service of process issued out of the English courts in any such legal action or proceedings:
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Existing Borrower
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Walkers London office at present of 6 Gracechurch Street,
London EC3V 0AT
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New Borrower
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RCL Cruises Ltd., Building 3, The Heights – Brooklands, Weybridge, Surrey, KT13 ONY, Attention: General Counsel
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The submission to such jurisdiction shall not (and shall not be construed so as to) limit the right of the Finance Parties to take proceedings against the Existing Borrower and/or the New Borrower in the courts of any other competent jurisdiction nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not.
The parties further agree that only the courts of England and not those of any other country shall have jurisdiction to determine any claim which the Existing Borrower and/or the New Borrower may have against any of the Finance Parties arising out of or in connection with this Agreement.
c.Waiver of immunity
To the extent that the Existing Borrower or the New Borrower has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its assets, each of the Existing Borrower and the New Borrower hereby irrevocably waives such immunity in respect of its obligations under this Agreement.
IN WITNESS whereof the parties to this Agreement have caused this Agreement to be duly executed on the date first above written.
Schedule 1
The Original Lenders
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Original Lender
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Facility Office and contact details
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Commitment
%
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Citibank N.A., London Branch
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Citigroup Centre Canada Square London E14 5LB United Kingdom
Attention: Wei-Fong Chan
Kara Catt Romina Coates
Fax No: +44 20 7986 4881
Tel No: +44 20 7986 3036 /
+44 20 7508 0344 /
+44 20 7986 4824 /
+44 20 7500 0907
E-mail: weifong.chan@citi.com kara.catt@citi.com romina.coates@citi.com antoine.paycha@citi.com
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21.4 %
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Banco Santander,
S.A. , Paris Branch
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374 rue Saint Honoré 75001 Paris
Operational Address: Ciudad Grupo Santander, Avda De Cantabria, 28660 Boadilla del Monte, Madrid, Spain
For Credit Matters:
Elise Regnault / Ecaterina Mucuta / Andrea Ortiz / Ana Sanz Gomez / Vanessa Berrio / Caroline Pereira Pantaleao
Fax No: +34 91 257 1682
Tel No: +34 912893722 / +33 1 53 53 70 46 /
+1 6172170157 / +34 912891790 / +34
912891028 / +33 1 53 53 70 35
E-mail: elise.regnault@gruposantander.com ecaterina.mucuta@gruposantander.com andrea.ortiz@santander.us anasanz@gruposantander.com vaberrio@gruposantander.com cpantaleao@gruposantander.com
For Operational Matters:
Ana Sanz Gomez / Vanessa Berrio / Caroline Pereira Pantaleao
Fax No: +34 91 257 1682 /
Tel No: +34 912891790 / +34 912891028 /
+33 1 53 53 70 35
E-mail:anasanz@gruposantander.com vaberrio@gruposantander.com cpantaleao@gruposantander.com corporativaeuropa@gruposantander.com
|
10.1%
|
|
BNP Paribas
|
Front Office to keep copied to all matters.
|
15.7%
|
Original Lender Facility Office and contact details Commitment
%
BNPP SA
37 RUE DU MARCHE SAINT HONORE
75001 PARIS ACI : CHC03B1
Alexandre de VATHAIRE / Mauricio GONZALEZ
alexandre.devathaire@bnpparibas.com mauricio.gonzalez@us.bnpparibas.com
Tel : 00 331 42 98 00 29/00 1212 841 38 88
Middle Office: For Operational / Servicing matters
KHALID BOUITIDA / THIERRY ANEZO MILLENAIRE 4
35, RUE DE LA GARE
75019 PARIS ACI : CVA05A1
khalid.k.bouitida@bnpparibas.com thierry.anezo@bnpparibas.com
Tel : 00 331 42 98 58 69 / 00 331 43 16 81 57
Back Office : For Standard Settlement Instruction authentication/call-back
STEVE LOUISOR / VALERIE DUMOULIN MILLENAIRE 4
35, RUE DE LA GARE
75019 PARIS ACI : CVA03A1
paris.cib.boci.ca.3@bnpparibas.com valerie.dumoulin@bnpparibas.com steve.louisor@bnpparibas.com
Tel : 00 331 55 77 91 86 / 00 331 40 14 46
59
HSBC France HSBC France – Global Banking Agency
Operations (GBAO) Transaction Manager Unit
103 avenue des Champs Elysées 75008 Paris
France
Attention: Florencia Thomas Alexandra Penda
Fax No: +33 1 40 70 28 80
Tel No: +33 1 40 70 73 81 /
+33 1 41 02 67 50
Email: florencia.thomas@hsbc.fr
alexandra.penda@hsbc.fr
17.1%
Copy to:
HSBC France
103 avenue des Champs Elysées 75008 Paris
|
|
|
|
|
|
|
|
|
|
|
Original Lender
|
Facility Office and contact details
|
Commitment
%
|
|
|
France
Attention: Celine Karsenty / Julie Bellais Fax No: +33 1 40 70 78 93
Tel No: +33 1 40 70 28 59 /
+33 1 40 70 22 97
Email: celine.karsenty@hsbc.fr
julie.bellais@hsbc.fr
|
|
|
Société Générale
|
29 Boulevard Haussmann, 75009 Paris, France
For Credit Matters:
Francois Rolland and Mathieu Chevallier 189, rue d’Aubervilliers, 75886 Paris, CEDEX
18, OPER/FIN/SMO/EXT
Phone: +33 1 58 98 17 78 / +33 1 58 98 78 98
francois.rolland@sgcib.com / mathieu.chevallier@sgcib.com
For Operational Matters:
Isabelle Guner and Laetitia Perrot Francois Rolland and Mathieu Chevallier
189, rue d’Aubervilliers, 75886 Paris, CEDEX
18, OPER/FIN/STR/DMT6
Phone: +33 1 57 29 20 76 / +33 1 58 98 26 20
par-oper-caf-dmt6@sgcib.com
|
24.8%
|
|
|
|
|
|
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|
Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch
|
1/3/5 rue Paul Cézanne, 75008 Paris, France
Attention: Cedric Le Duigou
Guillaume Branco Herve Billi
Claire Lucien Helene Ly
Fax No: +33 1 44 90 48 01
Tel No:
Cedric Le Duigou: +33 1 44 90 48 83
Guillaume Branco: +33 1 44 90 48 71
Herve Billi: +33 1 44 90 48 48
Claire Lucien: +33 1 44 90 48 49
Helene Ly: +33 1 44 90 48 76
E-mail : cedric_leduigou@fr.smbcgroup.com guillaume_branco@fr.smbcgroup.com herve_billi@fr.smbcgroup.com claire_lucien@fr.smbcgroup.com helene_ly@fr.smbcgroup.com
|
10.9%
|
|
|
|
100
|
Schedule 2 Conditions precedent
Part 1
Documents and evidence to be delivered to the Facility Agent not later than the Signing Date
•Evidence that the conditions precedent set out in clause 9.1(a) of, and Schedule 3 Part 1 to, the Principal Agreement have been satisfied in full or waived in accordance with clause 9.4 of the Principal Agreement.
•Documents equivalent to those referred to in Section 5.1.1 (Resolutions, etc.) of the Novated Credit Agreement in relation to the New Borrower and its execution of this Agreement, the Buyer Consent Agreement and any other Transaction Documents to which it is a party.
Part 2
Documents and evidence to be delivered to the Facility Agent not later than the Initial Effective Date
1 Evidence that the conditions precedent set out in clause 9.1(b) of, and Schedule 3 Part 2 to, the Principal Agreement have been satisfied in full or waived in accordance with clause 9.4 of the Principal Agreement.
Schedule 3
Form of Novated Credit Agreement
HULL NO. C34 CREDIT AGREEMENT
dated 24 July 2017 as novated, amended and restated on the Actual Delivery Date pursuant to
a novation agreement dated 24 July 2017 (as amended and restated by a first supplemental agreement dated 2020)
BETWEEN
Royal Caribbean Cruises Ltd. as the Borrower,
the Lenders from time to time party hereto,
Citibank N.A., London Branch as Global Coordinator
Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch as ECA Agent and
Citibank Europe plc, UK Branch as Facility Agent and
Citibank N.A., London Branch, Banco Santander, S.A., Paris Branch, BNP Paribas, HSBC France, Société Générale and Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch as Mandated Lead Arrangers
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms 10
SECTION 1.2. Use of Defined Terms 24
SECTION 1.3. Cross-References 24
SECTION 1.4. Accounting and Financial Determinations 24
ARTICLE II COMMITMENTS AND BORROWING PROCEDURES
SECTION 2.1. Commitment 25
SECTION 2.2. Commitment of the Lenders; Termination and Reduction of Commitments 25
SECTION 2.3. Borrowing Procedure 25
SECTION 2.4. Funding 28
ARTICLE III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.2. Prepayment 28
SECTION 3.3.1. Rates 29
SECTION 3.3.2. [Intentionally omitted] 30
SECTION 3.3.3. Interest stabilisation. 30
SECTION 3.3.4. Post-Maturity Rates 30
SECTION 3.3.5. Payment Dates 30
SECTION 3.3.6. Interest Rate Determination; Replacement Reference Banks 30
SECTION 3.4. Commitment Fees 32
SECTION 3.4.1. Payment 32
SECTION 3.5. Other Fees 33
ARTICLE IV CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.2. Deposits Unavailable 33
SECTION 4.3. Increased LIBO Rate Loan Costs, etc. 34
SECTION 4.4. Funding Losses 36
SECTION 4.4.1. Indemnity 36
SECTION 4.4.2. Exclusion 37
SECTION 4.5. Increased Capital Costs 37
SECTION 4.6. Taxes 38
SECTION 4.7. Reserve Costs 40
SECTION 4.8. Payments, Computations, etc 41
SECTION 4.9. Replacement Lenders, etc. 41
SECTION 4.10. Sharing of Payments 42
SECTION 4.10.1. Payments to Lenders 42
SECTION 4.10.2. Redistribution of payments 42
SECTION 4.10.3. Recovering Lender's rights 43
SECTION 4.10.4. Reversal of redistribution 43
SECTION 4.10.5. Exceptions 43
SECTION 4.11. Set-off 43
SECTION 4.12. Use of Proceeds 44
SECTION 4.13. FATCA Information. 44
SECTION 4.14. Resignation of the Facility Agent 45
ARTICLE V CONDITIONS TO BORROWING
SECTION 5.1.1. Resolutions, etc 45
SECTION 5.1.2. Opinions of Counsel 46
SECTION 5.1.3. BpiFAE Insurance Policy 46
SECTION 5.1.4. Closing Fees, Expenses, etc. 46
SECTION 5.1.5. Compliance with Warranties, No Default, etc 47
SECTION 5.1.6. Loan Request 47
SECTION 5.1.7. Foreign Exchange Counterparty Confirmations 47
SECTION 5.1.8. Protocol of delivery 47
SECTION 5.1.9. Title to Purchased Vessel 47
SECTION 5.1.10. Interest Stabilisation. 48
SECTION 5.1.11. Escrow Account Security 49
ARTICLE VI REPRESENTATIONS AND WARRANTIES
SECTION 6.1. Organization, etc 49
SECTION 6.2. Due Authorization, Non-Contravention, etc 49
SECTION 6.3. Government Approval, Regulation, etc 50
SECTION 6.4. Compliance with Environmental Laws 50
SECTION 6.5. Validity, etc 50
SECTION 6.6. No Default, Event of Default or Prepayment Event 50
SECTION 6.7. Litigation 50
SECTION 6.8. The Purchased Vessel 50
SECTION 6.9. Obligations rank pari passu; Liens 51
SECTION 6.10. Withholding, etc 51
SECTION 6.11. No Filing, etc. Required 51
SECTION 6.12. No Immunity 51
SECTION 6.13. Investment Company Act 51
SECTION 6.14. Regulation U 51
SECTION 6.15. Accuracy of Information 51
SECTION 6.16. Compliance with Laws 52
ARTICLE VII COVENANTS
SECTION 7.1. Affirmative Covenants 52
SECTION 7.1.1. Financial Information, Reports, Notices, etc 52
SECTION 7.1.2. Approvals and Other Consents 54
SECTION 7.1.3. Compliance with Laws, etc 54
SECTION 7.1.4. The Purchased Vessel 54
SECTION 7.1.5. Insurance 55
SECTION 7.1.6. Books and Records 55
SECTION 7.1.7. BpiFAE Insurance Policy/French Authority Requirements 55
SECTION 7.2. Negative Covenants 55
SECTION 7.2.1. Business Activities 56
SECTION 7.2.2. Indebtedness 56
SECTION 7.2.3. Liens 56
SECTION 7.2.4. Financial Condition 58
SECTION 7.2.5. [Intentionally Omitted] 59
SECTION 7.2.6. Consolidation, Merger, etc 59
SECTION 7.2.7. Asset Dispositions, etc 60
SECTION 7.3. Lender incorporated in the Federal Republic of Germany 60
ARTICLE VIII EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default 60
SECTION 8.1.1. Non-Payment of Obligations 60
SECTION 8.1.2. Breach of Warranty 60
SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations 60
SECTION 8.1.4. Default on Other Indebtedness 61
SECTION 8.1.5. Bankruptcy, Insolvency, etc 61
SECTION 8.2. Action if Bankruptcy 62
SECTION 8.3. Action if Other Event of Default 62
ARTICLE IX PREPAYMENT EVENTS
SECTION 9.1. Listing of Prepayment Events 62
SECTION 9.1.1. Change of Control 62
SECTION 9.1.2. Unenforceability 63
SECTION 9.1.3. Approvals 63
SECTION 9.1.4. Non-Performance of Certain Covenants and Obligations 63
SECTION 9.1.6. Condemnation, etc 63
SECTION 9.1.7. Arrest 63
SECTION 9.1.8. Sale/Disposal of the Purchased Vessel 63
SECTION 9.1.9. BpiFAE Insurance Policy 63
SECTION 9.1.10. Illegality 63
SECTION 9.2. Mandatory Prepayment 64
SECTION 9.3. Mitigation 64
ARTICLE X THE FACILITY AGENT AND THE ECA AGENT
SECTION 10.1. Actions 64
SECTION 10.2. Indemnity 65
SECTION 10.3. Funding Reliance, etc 65
SECTION 10.4. Exculpation 65
SECTION 10.5. Successor 66
SECTION 10.6. Loans by the Facility Agent 67
SECTION 10.7. Credit Decisions 67
SECTION 10.9. The Agents’ Rights 67
SECTION 10.10. The Facility Agent’s Duties 68
SECTION 10.11. Employment of Agents 68
SECTION 10.12. Distribution of Payments 68
SECTION 10.13. Reimbursement 68
SECTION 10.14. Instructions 69
SECTION 10.16. “Know your customer” Checks 69
SECTION 10.17. No Fiduciary Relationship 69
SECTION 10.18. Illegality 69
ARTICLE XI MISCELLANEOUS PROVISIONS
SECTION 11.1. Waivers, Amendments, etc 70
SECTION 11.2. Notices 71
SECTION 11.3. Payment of Costs and Expenses 72
SECTION 11.4. Indemnification 72
SECTION 11.5. Survival 74
SECTION 11.6. Severability 74
SECTION 11.7. Headings 74
SECTION 11.8. Execution in Counterparts, Effectiveness, etc 74
SECTION 11.9. Third Party Rights 75
SECTION 11.10. Successors and Assigns 75
SECTION 11.11. Sale and Transfer of the Loan; Participations in the Loan 75
SECTION 11.11.1. Assignments 75
SECTION 11.11.2. Participations 77
SECTION 11.11.3. Register 78
SECTION 11.11.4. Rights of BpiFAE to payments 78
SECTION 11.12. Other Transactions 79
SECTION 11.13. BpiFAE Insurance Policy 79
SECTION 11.13.1. Terms of BpiFAE Insurance Policy 79
SECTION 11.13.2. Obligations of the Borrower. 79
SECTION 11.13.3. Obligations of the ECA Agent and the Lenders 79
SECTION 11.14. Law and Jurisdiction 80
SECTION 11.14.1. Governing Law 80
SECTION 11.14.2. Jurisdiction 80
SECTION 11.14.3. Alternative Jurisdiction 81
SECTION 11.14.4. Service of Process 81
SECTION 11.15. Confidentiality 81
SECTION 11.16. French Authority Requirements 82
SECTION 11.17. Waiver of immunity 82
SECTION 11.18. Acknowledgement and Consent to Bail-In of EEA Financial Institutions 82
EXHIBITS
Exhibit A - Form of Loan Request
Exhibit B-1 - Form of Opinion of Liberian Counsel to Borrower
Exhibit B-2 - Form of Opinion of English Counsel to the Facility Agent and the Lenders
Exhibit B-3 - Form of Opinion of French Counsel to the Facility Agent and the Lenders
Exhibit B-4 - Form of Opinion of US Tax Counsel to the Lenders Exhibit C - Form of Lender Assignment Agreement
Exhibit D - Form of Certificate of French Content
Exhibit E-1 - Form of Delivery Non-Yard Costs Certificate Exhibit E-2 - Form of Final Non-Yard Costs Certificate
CREDIT AGREEMENT
HULL NO. C34 CREDIT AGREEMENT, dated 24 July 2017 as novated, amended and restated on the Actual Delivery Date (as defined below), is among Royal Caribbean Cruises Ltd., a Liberian corporation (the “Borrower”), Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch in its capacity as agent for the Lenders referred to below in respect of BpiFAE-related matters (in such capacity, the “ECA Agent”), Citibank Europe plc, UK Branch in its capacity as facility agent (in such capacity, the “Facility Agent”) and the financial institutions listed in Schedule 1 to the Novation Agreement (as defined below) as lenders (in such capacity, together with each of the other Persons that shall become a “Lender” in accordance with clause 12 of the Novation Agreement or Section 11.11.1 hereof, each of them individually a “Lender” and, collectively, the “Lenders”).
W I T N E S S E T H:
WHEREAS,
1.The Borrower and Chantiers de l’Atlantique (previously known as STX France S.A.) (the “Builder”) have entered on 30 September 2016 into a Contract for the Construction and Sale of Hull No. C34 (as amended from time to time, the “Construction Contract”) pursuant to which the Builder has agreed to design , construct, equip, complete, sell and deliver the passenger cruise vessel bearing Builder’s hull number C34 which shall be owned by the Nominated Owner (the “Purchased Vessel”);
2.The Lenders have agreed to make available to the Borrower, upon the terms and conditions contained herein, a US dollar loan facility calculated on the amount (the “Maximum Loan Amount”) equal to the EUR sum of:
a.eighty per cent (80%) of the Contract Price (as defined below) of the Purchased Vessel, and including Non-Yard Costs of up to EUR 150,000,000 (the “Maximum Non-Yard Costs Amount”), and the Other Basic Contract Price Increases (as defined below) for the Purchased Vessel of up to EUR 68,000,000, (but which, when aggregated with the Non-Yard Costs, shall not exceed an amount equal to EUR 175,000,000), and all of which amounts shall not exceed in aggregate EUR 1,272,411,000;
b.eighty per cent (80%) of the change orders of up to EUR 117,541,100 effected in accordance with the Construction Contract; and
c.100% of the BpiFAE Premium (as defined below),
being an amount no greater than EUR1,145,320,530 and being made available in the US Dollar Equivalent of that Maximum Loan Amount (as such Dollar amount may be adjusted pursuant to clause 5.3 of the Novation Agreement);
3.Of the amounts referred to in recital (B)(i) and (ii) above, the Lenders have made certain amounts available to the Original Borrower during the period prior to the Actual Delivery Date pursuant to this Agreement (the liability for which
amount has been assumed by the Borrower following the novation of this Agreement pursuant to the Novation Agreement) and, in relation to the amount referred to in recital (B)(i), the balance has been or shall be made available to the Borrower as an Additional Advance pursuant to the Novation Agreement and this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms (whether or not underscored) when used in this Agreement, including its preamble and recitals, shall, when capitalized, except where the context otherwise requires, have the following meanings (such meanings to be equally applicable to the singular and plural forms thereof):
“Accumulated Other Comprehensive Income (Loss)” means at any date the Borrower’s accumulated other comprehensive income (loss) on such date, determined in accordance with GAAP.
“Actual Delivery Date” means the date on which the Purchased Vessel is delivered by the Builder to, and accepted by, the Borrower under the Construction Contract, being also the date on which the final balance of the Loan is advanced by way of the Additional Advances.
“Additional Advances” is defined in the Novation Agreement.
“Affiliate” of any Person means any other Person which, directly or indirectly, controls, is controlled by or is under common control with such Person. A Person shall be deemed to be “controlled by” any other Person if such other Person possesses, directly or indirectly, power to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
“Agent” means either the ECA Agent or the Facility Agent and “Agents” means both of them.
“Agreement” means, on any date, this credit agreement as originally in effect on the Signing Date and as novated, amended and restated by the Novation Agreement and as thereafter from time to time amended, supplemented, amended and restated, or otherwise modified and in effect on such date.
“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or any of its Affiliates from time to time concerning or relating to bribery or corruption.
“Anticipated Delivery Date” means the Expected Delivery Date (as defined in the Receivable Purchase Agreement) as at the Signing Date, namely 20 May 2021.
“Applicable Commitment Rate” means (x) from the Signing Date up to and including the date falling two years prior to the Anticipated Delivery Date, 0.15% per annum, (y) from
the day following the date falling two years prior to the Anticipated Delivery Date up to and including the date falling one year prior to the Anticipated Delivery Date, 0.28% per annum, and (z) from the day following the date falling one year prior to the Anticipated Delivery Date until the Commitment Fee Termination Date, 0.33% per annum.
“Applicable Jurisdiction” means the jurisdiction or jurisdictions under which the Borrower is organized, domiciled or resident or from which any of its business activities are conducted or in which any of its properties are located and which has jurisdiction over the subject matter being addressed.
“Approved Appraiser” means any of the following: Barry Rogliano Salles, Paris, H Clarkson & Co. Ltd., London, R.S. Platou Shipbrokers, Norway, or Fearnley AS, Norway.
“Assignee Lender” is defined in Section 11.11.1.
“Authorized Officer” means those officers of the Borrower authorized to act with respect to the Loan Documents and whose signatures and incumbency shall have been certified to the Facility Agent by the Secretary or an Assistant Secretary of the Borrower.
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an EEA Financial Institution.
“Bail-In Legislation” means: (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule; and (b) in relation to any state other than such an EEA Member Country or (to the extent that the United Kingdom is not such an EEA Member Country) the United Kingdom, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation.
“Bank of Nova Scotia Agreement” means the U.S. $1,428,000,000 amended and restated credit agreement dated as of 4 December 2017 (as further amended on 5 April 2019 in order to, amongst other things, increase the loan amount to U.S. $1,725,000,000) among the Borrower, as borrower, the various financial institutions as are or shall become parties thereto, as lenders, and The Bank of Nova Scotia, as administrative agent, as amended, restated, supplemented or otherwise modified from time to time.
“Basic Contract Price” is as defined in the Construction Contract. “Borrower” is defined in the preamble.
“BpiFAE” means BpiFrance Assurance Export, the French export credit agency, a French société par action simplifiée à associé unique with its registered office at 27-31, avenue du Général Leclerc, 94710 Maisons-Alfort Cedex, France, registered at the trade and companies registry of Créteil under number 815 276 308 and includes its successors in title or any other person succeeding to BpiFrance Assurance Export in the role as export credit agency of the Republic of France to manage and provide under its control, on its behalf and in its name the public export guarantees as provided by article L 432-1 of the French insurance code.
“BpiFAE Enhanced Guarantee” means the enhanced guarantee (garantie rehaussée) issued or to be issued by BpiFAE to the benefit of CAFFIL in accordance with article 84 of the French Amending Finance Law 2012 (as amended) in relation to the refinancing of SFIL’s participation and Commitments under the Loan, and any other documents (including any security) entered into or to be entered into by SFIL with CAFFIL and/or BpiFAE in relation thereto.
“BpiFAE Insurance Policy” means the export credit insurance policy in respect of the Loan issued by BpiFAE for the benefit of the Lenders.
“BpiFAE Premium” means the premium payable to BpiFAE under and in respect of the BpiFAE Insurance Policy.
“Builder” is defined in the preamble.
“Business Day” means any day which is neither a Saturday or Sunday nor a legal holiday on which banks are authorized or required to be closed in New York City, London, Madrid or Paris, and if the applicable Business Day relates to an advance of all or part of the Loan, an Interest Period, prepayment or conversion, in each case with respect to the Loan bearing interest by reference to the LIBO Rate, a day on which dealings in deposits in Dollars are carried on in the London interbank market.
“B34 Facility Amendment Date” means 20 March 2018, the effective date of the third supplemental agreement dated 16 March 2018 to (among other things) a credit facility supported by BpiFAE (pertaining to Hull No. B34) reflecting the alignment of certain provisions and covenants with the Borrower’s revolving credit facility refinanced on 12 October 2017.
“CAFFIL” means Caisse Française de Financement Local, a French société anonyme, with its registered office at 1-3 rue du Passeur de Boulogne, 92130 Issy-les- Moulineaux, France, registered at the trade and companies registry of Nanterre under number 421 318 064.
“Capital Lease Obligations” means obligations of the Borrower or any Subsidiary of the Borrower under any leasing or similar arrangement which, in accordance with GAAP, would be classified as capitalized leases.
“Capitalization” means, at any date, the sum of (a) Net Debt on such date, plus (b) Stockholders’ Equity on such date.
“Capitalized Lease Liabilities” means the principal portion of all monetary obligations of the Borrower or any of its Subsidiaries under any leasing or similar arrangement which, in accordance with GAAP, would be classified as capitalized leases, and, for purposes of this Agreement and each other Loan Document, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.
“Cash Equivalents” means all amounts other than cash that are included in the “cash and cash equivalents” shown on the Borrower’s balance sheet prepared in accordance with GAAP.
“Change of Control” means an event or series of events by which (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of 50% or more of the equity securities of the Borrower entitled to vote for members of the board of directors or equivalent governing body of the Borrower on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right); or (b) during any period of 24 consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Borrower cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body.
“CIRR” means 2.56% per annum being the Commercial Interest Reference Rate determined in accordance with the OECD Arrangement for Officially Supported Export Credits to be applicable to the Loan hereunder.
“Code” means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time.
“Commitment” is defined in Section 2.2 and means, relative to any Lender, such Lender’s obligation to make the Loan pursuant to Section 2.1.
“Commitment Fees” is defined in Section 3.4.
“Commitment Fee Termination Date” is defined in Section 3.4.
“Commitment Termination Date” means the Back Stop Date (as defined in the Receivable Purchase Agreement) (or such later date as the Lenders and BpiFAE may agree).
“Construction Contract” is defined in the preamble.
“Contract Price” is as defined in the Construction Contract and which includes a lump sum amount in respect of the Non-Yard Costs.
“Contractual Delivery Date” means, at any time, the date which at such time is the date specified for delivery of the Purchased Vessel under the Construction Contract, as such date may be modified from time to time pursuant to the terms of the Construction Contract.
“Covered Taxes” is defined in Section 4.6.
“Default” means any Event of Default or any condition, occurrence or event which, after notice or lapse of time or both, would constitute an Event of Default.
“Delivery Non-Yard Costs Certificate” means the certificate to be provided to the Facility Agent in the form of Exhibit E-1 on or prior to the Actual Delivery Date certifying the amount in EUR of the Paid Non-Yard Costs and the Unpaid Non-Yard Costs as at the Actual Delivery Date, duly signed by the Borrower and endorsed by the Builder.
“Dollar” and the sign “$” mean lawful money of the United States. “ECA Agent” is defined in the preamble.
“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of a Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or
(b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“Effective Date” means the date this Agreement becomes effective pursuant to Section 11.8.
“Effective Time” means the Novation Effective Time as defined in the Novation Agreement.
“Environmental Laws” means all applicable federal, state, local or foreign statutes, laws, ordinances, codes, rules and regulations (including consent decrees and administrative orders) relating to the protection of the environment.
“Escrow Account” means the Dollar escrow account of the Borrower opened or to be opened with the Escrow Account Bank for the purpose of receiving the relevant amount of the Additional Advances in respect of Unpaid Non-Yard Costs in accordance with Section 2.3f).
“Escrow Account Bank” means Citibank N.A., London Branch of Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB.
“Escrow Account Security” means the account security in respect of the Escrow Account executed or, as the context may require, to be executed by the Borrower in favour of the Security Trustee in the form agreed by the Lenders and the Borrower on or about the Restatement Date.
“Escrow Agency and Trust Deed” means the agency and trust deed executed or, as the context may require, to be executed by, amongst others, the Borrower, the parties to this Agreement and the Security Trustee.
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.
“EUR”, “Euro” and the sign “€” mean the currency of participating member states of the European Monetary Union pursuant to Council Regulation (EC) 974/98 of 3 May 1998, as amended from time to time.
“Event of Default” is defined in Section 8.1.
“Existing Principal Subsidiaries” means each Subsidiary of the Borrower that is a Principal Subsidiary on the Signing Date.
“Facility Agent” is defined in the preamble and includes each other Person as shall have subsequently been appointed as the successor Facility Agent, and as shall have accepted such appointment, pursuant to Section 10.5.
“FATCA” means (a) Sections 1471 through 1474 of the Code, as in effect at the date hereof, and any current or future regulations promulgated thereunder or official interpretations thereof, (b) any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph
(a)above; or (c) any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.
“FATCA Deduction” means a deduction or withholding from a payment under a Loan Document required by FATCA.
“FATCA Exempt Party” means a party to this Agreement that is entitled to receive payments free from any FATCA Deduction.
“Fee Letter” means any letter entered into by reference to this Agreement between any or all of the Facility Agent, the Mandated Lead Arrangers, the Arrangers, the Lenders and/or the Borrower setting out the amount of certain fees referred to in, or payable in connection with, this Agreement.
“Final Maturity” means twelve (12) years after the Actual Delivery Date.
“Final Non-Yard Costs Certificate” means the certificate to be provided to the Facility Agent in the form of Exhibit E-2 on or prior to the NYC Cut Off Date certifying the amount in Euro of the Paid Non-Yard Costs as at the date of that certificate, duly signed by the Borrower.
“Fiscal Quarter” means any quarter of a Fiscal Year.
“Fiscal Year” means any annual fiscal reporting period of the Borrower.
“Fixed Charge Coverage Ratio” means, as of the end of any Fiscal Quarter, the ratio computed for the period of four consecutive Fiscal Quarters ending on the close of such Fiscal Quarter of:
i.net cash from operating activities (determined in accordance with GAAP) for such period, as shown in the Borrower’s consolidated statement of cash flow for such period, to
ii.the sum of:
1.dividends actually paid by the Borrower during such period (including, without limitation, dividends in respect of preferred stock of the Borrower); plus
2.scheduled payments of principal of all debt less New Financings (determined in accordance with GAAP, but in any event including Capitalized Lease Liabilities) of the Borrower and its Subsidiaries for such period.
“Fixed Rate” means a rate per annum equal to the sum of the CIRR plus the Fixed Rate Margin.
“Fixed Rate Margin” means 0.62% per annum.
“Floating Rate” means a rate per annum equal to the sum of the LIBO Rate plus the Floating Rate Margin.
“Floating Rate Margin” means, for each Interest Period 1.05% per annum.
“F.R.S. Board” means the Board of Governors of the Federal Reserve System or any successor thereto.
“French Authorities” means the Direction Générale du Trésor of the French Ministry of Economy and Finance, any successors thereto, or any other governmental authority in or of France involved in the provision, management or regulation of the terms, conditions and issuance of export credits including, among others, such entities to whom authority in respect of the extension or administration of export financing matters have been delegated, such as BpiFAE and Natixis DAI.
“Funding Losses Event” is defined in Section 4.4.1. “GAAP” is defined in Section 1.4.
“Government-related Obligations” means obligations of the Borrower or any Subsidiary of the Borrower under, or Indebtedness incurred by the Borrower or any Subsidiary of the Borrower to satisfy obligations under, any governmental requirement imposed by any Applicable Jurisdiction that must be complied with to enable the Borrower and its Subsidiaries to continue their business in such Applicable Jurisdiction, excluding, in any event, any taxes imposed on the Borrower or any Subsidiary of the Borrower.
“Hedging Instruments” means options, caps, floors, collars, swaps, forwards, futures and any other agreements, options or instruments substantially similar thereto or any series or combination thereof used to hedge interest, foreign currency and commodity exposures.
“herein”, “hereof”, “hereto”, “hereunder” and similar terms contained in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular Section, paragraph or provision of this Agreement or such other Loan Document.
“Historic Screen Rate” means, in relation to the Loan, the most applicable recent rate which appeared on Thomson Reuters LIBOR 01 Page (or any replacement page) for the currency of the Loan and for a period equal to the applicable Interest Period for the Loan and which is no more than 7 days before the commencement of the applicable Interest Period for which such rate may be applicable.
“Illegality Notice” is defined in Section 3.2(b).
“Indebtedness” means, for any Person: (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of property or services, other than (i) trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business so long as such trade accounts payable are payable within 180 days of the date the respective goods are delivered or the respective services are rendered and (ii) any purchase price adjustment, earnout or deferred payment of a similar nature incurred in connection with an acquisition (but only to the extent that no payment has at the time accrued pursuant to such purchase price adjustment, earnout or deferred payment obligation); ( c)Indebtedness of others secured by a Lien on the property of such Person, whether or not the respective indebtedness so secured has been assumed by such Person; (d) obligations of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for the account of such Person; (e) Capital Lease Obligations of such Person; (f) guarantees by such Person of Indebtedness of others, up to the amount of Indebtedness so guaranteed; (g) obligations of such Person in respect of surety bonds and similar obligations; and (h) liabilities arising under Hedging Instruments.
“Indemnified Liabilities” is defined in Section 11.4. “Indemnified Parties” is defined in Section 11.4.
“Interest Payment Date” means each Repayment Date.
“Interest Period” means the period between the Actual Delivery Date and the first Repayment Date, and subsequently each succeeding period between two consecutive Repayment Dates.
“Interest Stabilisation Agreement” means an agreement on interest stabilisation entered into between Natixis and each Lender (other than BpiFAE or CAFFIL as assignee of all or any of SFIL’s rights as Lender following the enforcement of any security granted
pursuant to paragraph (iv) of Section 11.11.1 in connection with the BpiFAE Enhanced Guarantee, subject as provided in Section 11.11.1) in connection with the Loan.
“Investment Grade” means, with respect to Moody’s, a Senior Debt Rating of Baa3 or better and, with respect to S&P, a Senior Debt Rating of BBB- or better.
“Lender Assignment Agreement” means any Lender Assignment Agreement substantially in the form of Exhibit C.
“Lender” and “Lenders” are defined in the preamble.
“Lending Office” means, relative to any Lender, the office of such Lender designated as such below its signature hereto or designated in a Lender Assignment Agreement or such other office of a Lender as designated from time to time by notice from such Lender to the Borrower and the Facility Agent, whether or not outside the United States but subject in all cases to the agreement of Natixis DAI in relation to the CIRR, which shall be making or maintaining the Loan of such Lender hereunder.
“LIBO Rate” means the rate per annum of the offered quotation for deposits in Dollars for six months (or for such other period as shall be agreed by the Borrower and the Facility Agent) which appears on Thomson Reuters LIBOR01 Page (or any successor page) at or about 11:00 a.m. (London time) two (2) Business Days before the commencement of the relevant Interest Period; provided that:
iii.subject to Section 3.3.6, if no such offered quotation appears on Thomson Reuters LIBOR01 Page (or any successor page) at the relevant time the LIBO Rate shall be the Historic Screen Rate or, if it is not possible to calculate an Historic Screen Rate, it shall be the rate per annum certified by the Facility Agent to be the average of the rates quoted by the Reference Banks as the rate at which each of the Reference Banks was (or would have been) offered deposits of Dollars by prime banks in the London interbank market in an amount approximately equal to the amount of the Loan and for a period of six months;
iv.for the purposes of determining the post-maturity rate of interest under Section 3.3.4, the LIBO Rate shall be determined by reference to deposits on an overnight or call basis or for such other period or periods as the Facility Agent may determine after consultation with the Lenders, which period shall be no longer than one month unless the Borrower otherwise agrees; and
v.if that rate is less than zero, the LIBO Rate shall be deemed to be zero. “Lien” means any security interest, mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or otherwise), charge against or interest in property to secure payment of a debt or performance of an obligation or other priority or preferential arrangement of any kind or nature whatsoever.
“Lien Basket Amount” is defined in Section 7.2.3.b).
“Loan” means the advances made by the Lenders under this Agreement from time to time or, as the case may be, the aggregate outstanding amount of such advances from time to time.
“Loan Documents” means this Agreement, the Novation Agreement, the Escrow Agency and Trust Deed, the Fee Letters and the Escrow Account Security.
“Loan Request” means the loan request and certificate duly executed by an Authorized Officer of the Borrower, substantially in the form of Exhibit A hereto.
“Material Adverse Effect” means a material adverse effect on (a) the business, operations or financial condition of the Borrower and its Subsidiaries taken as a whole, (b) the rights and remedies of the Facility Agent or any Lender under the Loan Documents or (c) the ability of the Borrower to perform its payment Obligations under the Loan Documents.
“Material Litigation” is defined in Section 6.7.
“Maximum Loan Amount” is defined in the preamble.
“Maximum Non-Yard Costs Amount” is defined in the preamble. “Moody's” means Moody's Investors Service, Inc.
“Natixis” means Natixis, a French société anonyme with its registered office at 30, avenue Pierre Mendès France, 75013 Paris, France, registered with the Paris Commercial and Companies Registry under number 542 044 524 RCS Paris.
“Natixis DAI” means Natixis DAI Direction des Activités Institutionnelles.
“Net Debt” means, at any time, the aggregate outstanding principal amount of all debt (including, without limitation, the principal portion of all capitalized leases) of the Borrower and its Subsidiaries (determined on a consolidated basis in accordance with GAAP) less the sum of (without duplication);
a)all cash on hand of the Borrower and its Subsidiaries; plus
b)all Cash Equivalents.
“Net Debt to Capitalization Ratio” means, as at any date, the ratio of (a) Net Debt on such date to (b) Capitalization on such date.
“New Financings” means proceeds from:
a)borrowed money (whether by loan or issuance and sale of debt securities), including drawings under this Agreement and any revolving credit facilities of the Borrower, and
b)the issuance and sale of equity securities.
“Nominated Owner” means a Subsidiary of the Borrower to be nominated by the Borrower prior to the Actual Delivery Date to take delivery of the Vessel under the Construction Contract.
“Non-Yard Costs” has the meaning assigned to “NYC Allowance” in paragraph 1.5 of Article II of the Construction Contract and, when such expression is prefaced by the word “incurred”, shall mean such amount of the Non-Yard Costs not exceeding EUR 150,000,000 and, when aggregated with the Other Basic Contract Price Increases, in an amount not exceeding EUR 175,000,000, as shall at the relevant time have been paid, or become payable, to the Builder by the Borrower under the Construction Contract as part of the Contract Price.
“Nordea Agreement” means the U.S. $1,150,000,000 amended and restated credit agreement dated as of October 12, 2017, among the Borrower, as the borrower, the various financial institutions as are or shall become parties thereto and Nordea Bank AB (publ), New York Branch as administrative agent, as amended, restated, supplemented or otherwise modified from time to time.
“Novated Loan Balance” is as defined in the Novation Agreement.
“Novation Agreement” means the novation agreement dated 24 July 2017 and made between the Original Borrower and the parties hereto pursuant to which (amongst other things) this Agreement was novated, amended and restated.
“NYC Cut Off Date” means the date falling 60 days after the Actual Delivery Date or such later date as the Lenders (with the approval of BpiFAE) may agree.
“Obligations” means all obligations (payment or otherwise) of the Borrower arising under or in connection with this Agreement.
"Option Period" is defined in Section 3.2(c).
“Organic Document” means, relative to the Borrower, its articles of incorporation (inclusive of any articles of amendment to its articles of incorporation) and its by-laws.
“Original Borrower” means Hibisyeu Finance Limited of Cayman Corporate Centre, 27 Hospital Road, George Town, Grand Cayman KY1-9008, Cayman Islands.
“Other Basic Contract Price Increases” is defined in the Novation Agreement.
“Paid Non-Yard Costs” means as at any relevant date, the amount in Euro of the Non- Yard Costs which have been paid for by the Borrower and, where applicable, supplied, installed and completed on the Purchased Vessel and as determined in accordance with the relevant amounts certified in the Delivery Non-Yard Costs Certificate or, as the case may be, the Final Non-Yard Costs Certificate as at such time.
“Participant” is defined in Section 11.11.2.
“Participant Register” is defined in Section 11.11.2.
“Percentage” means, relative to any Lender, the percentage set forth opposite its signature hereto or as set out in the applicable Lender Assignment Agreement, as such percentage may be adjusted from time to time pursuant to Section 4.9 or pursuant to Lender Assignment Agreement(s) executed by such Lender and its Assignee Lender(s) and delivered pursuant to Section 11.11.1.
“Person” means any natural person, corporation, limited liability company, partnership, firm, association, trust, government, governmental agency or any other entity, whether acting in an individual, fiduciary or other capacity.
“Prepayment Event” is defined in Section 9.1.
“Principal Subsidiary” means any Subsidiary of the Borrower that owns a Vessel. “Purchased Vessel” is defined in the preamble.
“Receivable Purchase Agreement” is as defined in the Novation Agreement.
“Reference Banks” means Société Générale and Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch and such other Lender as shall be so named by the Borrower and agrees to serve in such role and each additional Reference Bank and/or each replacement Reference Bank appointed by the Facility Agent pursuant to Section 3.3.6.
“Register” is defined in Section 11.11.3.
“Repayment Date” means, subject to Section 4.8(c), each of the dates for payment of the repayment installments of the Loan pursuant to Section 3.1.
“Required Lenders” means (a) at any time when SFIL is a Lender, SFIL and at least one other Lender that in the aggregate with SFIL hold more than 50% of the aggregate unpaid principal amount of the Loan or (b) or at any other time, Lenders that in the aggregate hold more than 50% of the aggregate unpaid principal amount of the Loan, and in each case, if no such principal amount is then outstanding, Lenders that in the aggregate have more than 50% of the Commitments.
“Resolution Authority” means any body which has authority to exercise any Write- down and Conversion Powers.
“Restatement Date” means 2020, being the date on which the form of this Agreement was amended and restated.
“S&P” means Standard & Poor's Financial Services LLC, a wholly-owned subsidiary of The McGraw-Hill Financial Inc.
“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, or (b) the United Nations Security Council, the European Union, any European Union member state or Her Majesty’s Treasury of the United Kingdom.
“Sanctioned Country” means, at any time, a country, region or territory which is itself the subject or target of any Sanctions.
“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions- related list of designated Persons maintained by the Office of Foreign Assets Control of the
U.S. Department of the Treasury, the U.S. Department of State, or by the United Nations Security Council, the European Union or any European Union member state, or any person owned or controlled by any such Person or Persons, or (b) any Person operating, organized or resident in a Sanctioned Country.
“SEC” means the United States Securities and Exchange Commission and any successor thereto.
“Security Trustee” means Citicorp Trustee Company Limited of Citigroup Centre, Canada Square, London E14 5LB in its capacity as security trustee for the purpose of the Escrow Account Security.
“Senior Debt Rating” means, as of any date, (a) the implied senior debt rating of the Borrower for debt pari passu in right of payment and in right of collateral security with the Obligations as given by Moody's and S&P or (b) in the event the Borrower receives an actual unsecured senior debt rating (apart from an implied rating) from Moody's and/or S&P, such actual rating or ratings, as the case may be (and in such case the Senior Debt Rating shall not be determined by reference to any implied senior debt rating from either agency).
“SFIL” means SFIL, a French société anonyme with is registered office at 1-3 rue du Passeur de Boulogne, 92130 Issy-les-Moulineaux, France, registered at the trade and companies registry of Nanterre under number 428 782 585.
“Signing Date” means the date of the Novation Agreement.
“Spot Rate of Exchange” is as defined in the Novation Agreement.
“Stockholders’ Equity” means, as at any date, the Borrower’s stockholders’ equity on such date, excluding Accumulated Other Comprehensive Income (Loss), determined in accordance with GAAP, provided that any non-cash charge to Stockholders’ Equity resulting (directly or indirectly) from a change after the Signing Date in GAAP or in the interpretation thereof shall be disregarded in the computation of Stockholders’ Equity such that the amount of any reduction thereof resulting from such change shall be added back to Stockholders’ Equity.
“Subsidiary” means, with respect to any Person, any corporation of which more than 50% of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned by such Person, by such Person and one or more other Subsidiaries of such Person, or by one or more other Subsidiaries of such Person.
“UK Bail-In Legislation” means (to the extent that the United Kingdom is not an EEA Member Country which has implemented, or implements, Article 55 of Directive
2014/59/EU) Part I of the United Kingdom Banking Act 2009 and any other law or regulation applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (otherwise than through liquidation, administration or other insolvency proceedings).
“Unpaid Non-Yard Costs” means, as at the Actual Delivery Date, the amount in Euro of the Non-Yard Costs which have not been paid for by the Borrower and/or where applicable, supplied, installed and completed on the Purchased Vessel as at the Actual Delivery Date and as determined in accordance with the relevant amounts certified in the Delivery Non-Yard Costs Certificate.
“US Dollar Equivalent” means (i) for all EUR amounts payable in respect of the Additional Advances for the amount of the Non-Yard Costs or the Other Basic Contract Price Increases referred to in clause 5.2(a) of the Novation Agreement (and disregarding for the purposes of this definition that the Additional Advance in respect of such amounts shall be drawn in Dollars), such EUR amounts converted to a corresponding Dollar amount at the Weighted Average Rate of Exchange and (ii) for the EUR amount payable in respect of the Additional Advance for the BpiFAE Premium referred to in clause 5.2(b) of the Novation Agreement and for the calculation and payment of the Novated Loan Balance (as defined in the Novation Agreement), the amount thereof in EUR converted to a corresponding Dollar amount as determined by the Facility Agent on the basis of the Spot Rate of Exchange. Such rate of exchange under (i) above shall be evidenced by foreign exchange counterparty confirmations to the extent applicable. The US Dollar Equivalent of the Maximum Loan Amount shall be calculated by the Borrower in consultation with the Facility Agent no less than two (2) Business Days prior to the proposed Actual Delivery Date.
“United States” or “U.S.” means the United States of America, its fifty States and the District of Columbia.
“Vessel” means a passenger cruise vessel owned by the Borrower or one of its Subsidiaries.
“Weighted Average Rate of Exchange” means the weighted average rate of exchange that the Borrower has agreed, either in the spot or forward currency markets, to pay its counterparties for the purchase of the relevant amounts of euro with Dollars for the payment of the euro amount of the Contract Price (including the portion thereof comprising the change orders, any Other Basic Contract Price Increases and the Non-Yard Costs) and including in such weighted average calculation (a) the NYC Applicable Rate (as defined in the Novation Agreement) in relation to the portion of the Contract Price comprising the Non-Yard Costs and (b) the spot rates for any other euro amounts that have not been hedged by the Borrower.
“Write-Down and Conversion Powers” means: (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule; and (b) in relation to any UK Bail-In Legislation: (i) any powers under that UK Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a
person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that UK Bail-In Legislation that are related to or ancillary to any of those powers; and (ii) any similar or analogous powers under that UK Bail-In Legislation.
SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the context otherwise requires, terms for which meanings are provided in this Agreement shall, when capitalized, have such meanings when used in the Loan Request and each notice and other communication delivered from time to time in connection with this Agreement or any other Loan Document.
SECTION 1.3. Cross-References. Unless otherwise specified, references in this Agreement and in each other Loan Document to any Article or Section are references to such Article or Section of this Agreement or such other Loan Document, as the case may be, and, unless otherwise specified, references in any Article, Section or definition to any clause are references to such clause of such Article, Section or definition.
SECTION 1.4. Accounting and Financial Determinations. Unless otherwise specified, all accounting terms used herein or in any other Loan Document shall be interpreted, all accounting determinations and computations hereunder or thereunder (including under Section 7.2.4) shall be made, and all financial statements required to be delivered hereunder or thereunder shall be prepared, in accordance with United States generally accepted accounting principles (“GAAP”) consistently applied (or, if not consistently applied, accompanied by details of the inconsistencies); provided that if the Borrower elects to apply or is required to apply International Financial Reporting Standards (“IFRS”) accounting principles in lieu of GAAP, upon any such election and notice to the Facility Agent, references herein to GAAP shall thereafter be construed to mean IFRS (except as otherwise provided in this Agreement); provided further that if, as a result of (i) any change in GAAP or IFRS or in the interpretation thereof or (ii) the application by the Borrower of IFRS in lieu of GAAP, in each case, after the date of the financial statements referred to in Section 6.15, there is a change in the manner of determining any of the items referred to herein or thereunder that are to be determined by reference to GAAP, and the effect of such change would (in the reasonable opinion of the Borrower or the Facility Agent) be such as to affect the basis or efficacy of the financial covenants contained in Section 7.2.4 in ascertaining the consolidated financial condition of the Borrower and its Subsidiaries and the Borrower notifies the Facility Agent that the Borrower requests an amendment to any provision hereof to eliminate such change occurring after the date hereof in GAAP or the application thereof on the operation of such provision (or if the Facility Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), then such item shall for the purposes of Section 7.2.4 continue to be determined in accordance with GAAP relating thereto as if GAAP were applied immediately prior to such change in GAAP or in the interpretation thereof until such notice shall have been withdrawn or such provision amended in accordance herewith. Notwithstanding the foregoing, all obligations of any person that are or would be characterized as operating lease obligations in accordance with GAAP on the B34 Facility Amendment Date (whether or not such operating lease obligations were in effect on such date) shall continue to be accounted for as operating lease obligations for the purposes of this Agreement regardless of any change in GAAP
following the B34 Facility Amendment Date that would otherwise require such obligations to be recharacterized (on a prospective or retroactive basis or otherwise) as capital leases, provided that, for clarification purposes, operating leases recorded as liabilities on the balance sheet due to a change in accounting treatment, or otherwise, shall for all purposes not be treated as Indebtedness, Capital Lease Obligations or Capitalized Lease Liabilities.
ARTICLE II
COMMITMENTS AND BORROWING PROCEDURES
SECTION 2.1. Commitment. On the terms and subject to the conditions of this Agreement (including Article V), each Lender severally agrees to make its portion of the Loan pursuant to its Commitment described in Section 2.2. No Lender’s obligation to make its portion of the Loan shall be affected by any other Lender’s failure to make its portion of the Loan.
SECTION 2.2. Commitment of the Lenders; Termination and Reduction of Commitments.
a)Each Lender will make its portion of the Loan available to the Borrower in accordance with Section 2.3 on the Actual Delivery Date. The commitment of each Lender described in this Section 2.2 (herein referred to as its “Commitment”) shall be the commitment of such Lender to make available to the Borrower its portion of the Loan hereunder expressed as the initial amount set forth opposite such Lender’s name on its signature page attached hereto or, in the case of any Lender that becomes a Lender pursuant to an assignment pursuant to Section 11.11.1, the amount set forth as such Lender’s Commitment in the related Lender Assignment Agreement, in each case as such amount may be reduced from time to time pursuant clause 10.2 of the Novation Agreement or reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 11.11.1. Notwithstanding the foregoing, each Lender’s Commitment shall terminate on the earlier of (i) the Commitment Termination Date if the Purchased Vessel is not delivered prior to such date and (ii) the Actual Delivery Date.
b)If any Lender shall default in its obligations under Section 2.1, the Facility Agent shall, at the request of the Borrower, use reasonable efforts to assist the Borrower in finding a bank or financial institution acceptable to the Borrower to replace such Lender.
SECTION 2.3. Borrowing Procedure.
a)Part of the Loan in an amount equal to the Novated Loan Balance shall be assumed by the Borrower and be deemed to be advanced to, and borrowed by the Borrower, pursuant to the provisions of clause 3 of the Novation Agreement and thereafter converted into Dollars pursuant to clause 5.1 of the Novation Agreement.
b)In relation to the amount of the Loan comprised by the Additional Advances, the Borrower shall deliver a Loan Request and the documents required to be delivered pursuant to Section 5.1.1(a) to the Facility Agent on or before 3:00 p.m., London
time, not less than two (2) Business Days prior to the anticipated Actual Delivery Date. The Additional Advances shall be drawn in Dollars.
c)The Facility Agent shall promptly notify each Lender of the Loan Request in respect of the Additional Advances by forwarding a copy thereof to each Lender, together with its attachments. On the terms and subject to the conditions of this Agreement, the portion of the Loan in respect of the Additional Advances shall be made on the Actual Delivery Date. On or before 11:00 a.m., London time, on the Actual Delivery Date, the Lenders shall, without any set-off or counterclaim, deposit with the Facility Agent same day funds in an amount equal to such Lender’s Percentage of the requested portion of the Additional Advances in Dollars. Such deposits will be made to such account which the Facility Agent shall specify from time to time by notice to the Lenders. To the extent funds are so received from the Lenders (and having regard, where applicable, to Sections 2.3d), e) and f) below), the Facility Agent shall, without any set-off or counterclaim, make such funds available to the Borrower on the Actual Delivery Date by wire transfer of same day funds to the accounts the Borrower shall have specified in its Loan Request.
d)If the Borrower elects to finance that part of the BpiFAE Premium payable by the Borrower with an Additional Advance under clause 5.2(b)(i) of the Novation Agreement, the Borrower shall indicate such election in the Loan Request. The amount of the advance in Dollars (the “US Dollar BpiFAE Advance Amount”) that will fund the BpiFAE Premium shall be equal to the Dollar amount that corresponds to the EUR amount of the BpiFAE Premium to be financed with such advance, which amount shall be determined by the Facility Agent based on the Spot Rate of Exchange. The Facility Agent shall notify the Borrower and the Lenders of the US Dollar BpiFAE Advance Amount on the date such Loan Request is delivered, and the Lenders shall deposit such US Dollar BpiFAE Advance Amount with the Facility Agent in accordance with Section 2.3.c). The Facility Agent shall furnish a certificate to the Borrower on the date such Loan Request is delivered setting forth such Spot Rate of Exchange, its derivation and the calculation of the US Dollar BpiFAE Advance Amount. If the Borrower elects to so finance the BpiFAE Premium, the Borrower will be deemed to have directed the Facility Agent to pay over directly to BpiFAE on behalf of the Borrower that portion of the EUR amount of the BpiFAE Premium to be financed with the proceeds of the advance on the Actual Delivery Date and to retain for its own account deposits made by the Lenders in Dollars in an amount equal to the portion of the US Dollar BpiFAE Advance Amount attributable to the BpiFAE Premium paid by the Facility Agent to BpiFAE on behalf of the Borrower.
e)If the Borrower elects to finance that part of the BpiFAE Premium payable by the Borrower with an Additional Advance under clause 5.2(b)(ii) of the Novation Agreement, the Borrower shall indicate such election in the Loan Request (and whether it wishes to receive such amount in EUR or in Dollars). The amount of the advance in Dollars (the “US Dollar BpiFAE Balance Amount”) that will fund the BpiFAE Premium shall be equal to the Dollar amount that corresponds to the EUR amount of the BpiFAE Premium to be financed with such advance, which amount shall be determined by the Facility Agent based on the Spot Rate of Exchange. The Facility Agent shall notify the Borrower and the Lenders of the US Dollar BpiFAE
Balance Amount on the date such Loan Request is delivered, and the Lenders shall deposit such US Dollar BpiFAE Balance Amount with the Facility Agent in accordance with Section 2.3.c). The Facility Agent shall furnish a certificate to the Borrower on the date such Loan Request is delivered setting forth such Spot Rate of Exchange, its derivation and the calculation of the US Dollar BpiFAE Balance Amount. If the Borrower elects to so finance the BpiFAE Premium and receive the proceeds in EUR, the Borrower will be deemed to have directed the Facility Agent to pay over to the Borrower that portion of the EUR amount of the BpiFAE Premium to be financed with the proceeds of the advance on the Actual Delivery Date and to retain for its own account deposits made by the Lenders in Dollars in an amount equal to the US Dollar BpiFAE Balance Amount.
f)In relation to any Additional Advance that is to be advanced to the Borrower in respect of the Non-Yard Costs it is agreed that:
i)an amount equal to the US Dollar Equivalent of eighty per cent (80%) of the Paid Non-Yard Costs shall be advanced to the Borrower on the Actual Delivery Date in accordance with the provisions of Section 2.3 c), which amount shall be determined by the Facility Agent based on the amounts contained in the Delivery Non-Yard Costs Certificate; and
ii)an amount equal to the US Dollar Equivalent of eighty per cent (80%) of the Unpaid Non-Yard Costs, which amount shall be determined by the Facility Agent based on the amounts contained in the Delivery Non-Yard Costs Certificate (the “Escrow Amount”), shall be remitted by the Facility Agent (and the Borrower hereby instructs the Facility Agent to make such remittance) to the Escrow Account and such amount shall be regulated in accordance with the following provisions of this Section 2.3 f) and the Escrow Account Security,
subject to the aggregate of the amounts referred to in i) and ii) above not exceeding the Maximum Non-Yard Costs Amount.
Where an Escrow Amount payment is made to the Escrow Account pursuant to ii) above, the Borrower shall be entitled at any time prior to the NYC Cut Off Date to provide the Facility Agent with the Final Non-Yard Cost Certificate setting out the final amount of the Paid Non-Yard Costs. Where the Final Non-Yard Costs Certificate is so received by the Facility Agent, the Facility Agent shall determine promptly the US Dollar Equivalent of the EUR amount of the Paid Non-Yard Costs and within one Business Day thereafter shall authorize the release of the Escrow Amount (or, if less, an amount equal to the US Dollar Equivalent of eighty per cent of the final amount of the Paid Non-Yard Costs (as determined above) less the amount previously advanced to the Borrower under i) above) to the Borrower. Any interest accruing on the Escrow Account shall be released to the Borrower at the same time as the release of the Escrow Amount (or, if applicable, part thereof) to the Borrower pursuant to this provision.
If any amount of the Escrow Amount remains on the Escrow Account on the day falling immediately after the NYC Cut Off Date (having regard to any applicable permitted release of moneys from the Escrow Account to the Borrower referred to
above) then on the Business Day thereafter the Facility Agent shall be entitled to request the withdrawal of that amount from the Escrow Account and shall apply the amount so received, on behalf of the Borrower, in or towards prepayment of the Loan.
The basis on which the Escrow Account Security is held by the Security Trustee for the benefit of the Lenders is regulated under the Escrow Agency and Trust Deed.
SECTION 2.4. Funding. Each Lender may, if it so elects, fulfill its obligation to make or continue its portion of the Loan hereunder by causing a branch or Affiliate (or an international banking facility created by such Lender) other than that indicated next to its signature to this Agreement or, as the case may be, in the relevant Lender Assignment Agreement, to make or maintain such portion of the Loan; provided that such portion of the Loan shall nonetheless be deemed to have been made and to be held by such Lender, and the obligation of the Borrower to repay such portion of the Loan shall nevertheless be to such Lender for the account of such foreign branch, Affiliate or international banking facility; provided, further, that the Borrower shall not be required to pay any amount under Sections 4.2(c), 4.3, 4.4, 4.5, 4.6 and 4.7 that is greater than the amount which it would have been required to pay had the Lender not caused such branch or Affiliate (or international banking facility) to make or maintain such portion of the Loan.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments.
a)The Borrower shall repay the Loan in 24 equal semi-annual installments, with the first installment to fall due on the date falling six (6) months after the Actual Delivery Date and the final installment to fall due on the date of Final Maturity.
b)No such amounts repaid by the Borrower pursuant to this Section 3.1 may be re- borrowed under the terms of this Agreement.
SECTION 3.2. Prepayment.
a)The Borrower
i)may, from time to time on any Business Day, make a voluntary prepayment, in whole or in part, of the outstanding principal amount of the Loan; provided that:
(A)all such voluntary prepayments shall require at least five (5) Business Days’ prior written notice to the Facility Agent; and
(B)all such voluntary partial prepayments shall be in an aggregate minimum amount of $10,000,000 and a multiple of $1,000,000 (or in the remaining amount of the Loan) and shall be applied in inverse order of maturity or ratably among all remaining installments, as the Borrower shall designate to the Facility Agent, in satisfaction of the remaining repayment installments of the Loan; and
ii)shall, immediately upon any acceleration of the repayment of the installments of the Loan pursuant to Section 8.2 or 8.3 or the mandatory prepayment of the Loan pursuant to Section 9.2, repay the Loan.
b)If it becomes unlawful in any jurisdiction for any Lender to perform any of its obligations under the Loan Documents or to maintain or fund its portion of the Loan, the affected Lender may give written notice (the "Illegality Notice") to the Borrower and the Facility Agent of such event, including reasonable details of the relevant circumstances.
c)If an affected Lender delivers an Illegality Notice, the Borrower, the Facility Agent and the affected Lender shall discuss in good faith (but without obligation) what steps may be open to the relevant Lender to mitigate or remove such circumstances but, if they are unable to agree such steps within 20 Business Days or if the Borrower so elects, the Borrower shall have the right, but not the obligation, exercisable at any time within 50 days after receipt of such Illegality Notice or, if earlier, the date upon which the unlawful event referred to in (b) above will apply (but not being a date falling earlier than the end of the 20 Business Day period referred to above) (the "Option Period"), either (1) to prepay the portion of the Loan held by such Lender in full on or before the expiry of the Option Period, together with all unpaid interest and fees thereon accrued to but excluding the date of such prepayment, or (2) to replace such Lender on or before the expiry of the Option Period with one or more financial institutions (I) acceptable to the Facility Agent (such consent not to be unreasonably withheld or delayed) and (II) where relevant, eligible to benefit from an Interest Stabilisation Agreement, pursuant to assignment(s) notified to and consented in writing by BpiFAE and, where relevant Natixis DAI, provided that (x) in the case of a single assignment, any such assignment shall be either an assignment of all of the rights and obligations of the assigning Lender under this Agreement or, in the case of more than one assignment, an assignment of a portion of such rights and obligations made concurrently with another such assignment or other such assignments that collectively cover all of the rights and obligations of the assigning Lender under this Agreement and (y) no Lender shall be obliged to make any such assignment as a result of an election by the Borrower pursuant to this Section 3.2(c) unless and until such Lender shall have received one or more payments from one or more Assignee Lenders and/or the Borrower in an aggregate amount at least equal to the portion of the Loan held by such Lender, together with all unpaid interest and fees thereon accrued to but excluding the date of such assignment (and all other amounts then owing to such Lender under this Agreement).
Each prepayment of the Loan made pursuant to this Section shall be without premium or penalty, except as may be required by Section 4.4. No amounts prepaid by the Borrower may be re-borrowed under the terms of this Agreement.
SECTION 3.3. Interest Provisions. Interest on the outstanding principal amount of the Loan shall accrue and be payable in accordance with this Section 3.3.
SECTION 3.3.1. Rates. The Loan shall accrue interest from the Actual Delivery Date to the date of repayment or prepayment of the Loan in full to the Lenders at either the Fixed Rate or, where the proviso to Section 5.1.10 applies, the Floating
Rate. Interest calculated at the Fixed Rate or the Floating Rate shall be payable in arrears on each Repayment Date. The Loan shall bear interest from and including the first day of the applicable Interest Period to (but not including) the last day of such Interest Period at the interest rate determined as applicable to the Loan. All interest shall be calculated on the basis of the actual number of days elapsed over a year comprised of 360 days.
SECTION 3.3.2. [Intentionally omitted]
SECTION 3.3.3. Interest stabilisation. Each Lender who is a party hereto on the Restatement Date represents and warrants to the Borrower that it has entered into an Interest Stabilisation Agreement and any Lender not a party hereto on the Restatement Date (other than BpiFAE or CAFFIL as assignee of all or any of SFIL’s rights as Lender following the enforcement of the security granted pursuant to paragraph (iv) of Section 11.11.1 in connection with the BpiFAE Enhanced Guarantee, subject as provided in Section 11.11.1(iv)) represents and warrants to the Borrower on the date that such Lender becomes a party hereto that it has entered into an Interest Stabilisation Agreement on or prior to becoming a party hereto.
SECTION 3.3.4. Post-Maturity Rates. After the date any principal amount of the Loan is due and payable (whether on any Repayment Date, upon acceleration or otherwise), or after any other monetary Obligation of the Borrower shall have become due and payable, the Borrower shall pay, but only to the extent permitted by law, interest (after as well as before judgment) on such amounts for each day during the period of such default at a rate per annum certified by the Facility Agent to the Borrower (which certification shall be conclusive in the absence of manifest error) to be equal to the sum of the Floating Rate plus 1.5% per annum.
SECTION 3.3.5. Payment Dates. Interest accrued on the Loan shall be payable, without duplication, on the earliest of:
a)each Interest Payment Date;
b)each Repayment Date;
c)the date of any prepayment, in whole or in part, of principal outstanding on the Loan (but only on the principal so prepaid); and
d)on that portion of the Loan the repayment of which is accelerated pursuant to Section 8.2 or Section 8.3, immediately upon such acceleration.
SECTION 3.3.6. Interest Rate Determination; Replacement Reference Banks. Where Section 3.3.4 or the Floating Rate applies, the Facility Agent shall
obtain from each Reference Bank timely information for the purpose of determining the LIBO Rate in the event that no offered quotation appears on Thomson Reuters LIBOR01 Page (or any successor page) and the LIBO Rate is to be determined by reference to quotations supplied by the Reference Banks and not by reference to the Historic Screen Rate. If any one or more of the Reference Banks shall fail to furnish in a timely manner such information to the Facility Agent for any such interest rate, the Facility Agent shall determine such interest rate on the basis of the information furnished by the remaining Reference
Banks. If the Borrower elects to add an additional Reference Bank hereunder or a Reference Bank ceases for any reason to be able and willing to act as such, the Facility Agent shall, at the direction of the Required Lenders and after consultation with the Borrower and the Lenders, appoint a replacement for such Reference Bank reasonably acceptable to the Borrower, and such replaced Reference Bank shall cease to be a Reference Bank hereunder. The Facility Agent shall furnish to the Borrower and to the Lenders each determination of the LIBO Rate made by reference to quotations of interest rates furnished by Reference Banks (it being understood that the Facility Agent shall not be required to disclose to any party hereto (other than the Borrower) any information regarding any Reference Bank or any rate quoted by a Reference Bank, including, without limitation, whether a Reference Bank has provided a rate or the rate provided by any individual Reference Bank).
Interest accrued on the Loan or other monetary Obligations arising under this Agreement or any other Loan Document after the date such amount is due and payable (whether upon acceleration or otherwise) shall be payable upon demand.
SECTION 3.3.7. Unavailability of the LIBO Rate.
Notwithstanding anything to the contrary in this Agreement or any other Loan Documents, if the Facility Agent determines (which determination shall, in the absence of manifest error, be conclusive) or the Borrower or the Required Lenders notify the Facility Agent (with, in the case of the Required Lenders, a copy to Borrower) that the Borrower or the Required Lenders (as applicable) have determined that:
a)adequate and reasonable means would not exist for ascertaining (should the Floating Rate apply) the LIBO Rate for the relevant Interest Period including, without limitation, because the LIBO Rate is not available or published on a current basis and such circumstances are unlikely to be temporary; or
b)the administrator of the LIBO Rate or a governmental authority having jurisdiction over the Facility Agent has made a public statement identifying a specific date after which the LIBO Rate shall no longer be made available or used for determining the interest rate of loans (such specific date, the “Scheduled Unavailability Date”); or
c)syndicated loans currently being executed, or existing syndicated loans that include language similar to that contained in this section 3.3.7, are being executed and/or amended (as applicable) to incorporate or adopt a new benchmark interest rate to replace the LIBO Rate,
then, reasonably promptly after such determination by the Facility Agent or receipt by the Facility Agent of such notice, as applicable, or if the Borrower otherwise requests, the Facility Agent and the Borrower may amend this Agreement to replace the LIBO Rate with an alternate benchmark rate (including any mathematical or other adjustments to the benchmark (if any) incorporated therein), giving due consideration to any evolving or then existing convention for similar U.S. dollar denominated syndicated credit facilities for such alternative benchmarks (any such proposed rate, a “LIBO Successor Rate”), and also together with any proposed LIBO Successor Rate Conforming Changes (as defined below) and any such amendment shall become
effective at 5:00 P.M. (London time) on the fifth (5) Business Day after the Facility Agent shall have posted such proposed amendment to all Lenders and the Borrower unless, prior to such time, Lenders comprising the Required Lenders have delivered to the Facility Agent written notice that such Required Lenders do not accept such amendment. Such LIBO Successor Rate shall be applied in a manner consistent with market practice; provided that to the extent such market practice is not administratively feasible for the Facility Agent, such LIBO Successor Rate shall be applied in a manner as otherwise reasonably determined by the Facility Agent.
If no LIBO Successor Rate has been determined and the circumstances under paragraph a) above exist or the Scheduled Unavailability Date has occurred (as applicable), the Facility Agent will promptly notify the Borrower and each Lender. Thereafter, the obligation of the Lenders to fund or maintain the relevant portion of the Loan at the LIBO Rate (to the extent of the affected part of the Loan or Interest Periods) shall be suspended. Upon receipt of such notice, the Borrower may revoke any pending request for a borrowing of, conversion to or continuation of any part of the Loan (to the extent of the affected part of the Loan or Interest Periods).
Notwithstanding anything else herein, any definition of LIBO Successor Rate shall provide that in no event shall such LIBO Successor Rate be less than zero for purposes of this Agreement.
For the purposes of this Agreement, “LIBO Successor Rate Conforming Changes” means, with respect to any proposed LIBO Successor Rate, any conforming changes to the definition of Floating Rate, Interest Period, timing and frequency of determining rates and making payments of interest and other administrative matters as may be appropriate, in the discretion of the Facility Agent in consultation with the Borrower, to reflect the adoption of such LIBO Successor Rate and to permit the administration thereof by the Facility Agent in a manner substantially consistent with market practice (or, if the Facility Agent determines that adoption of any portion of such market practice is not administratively feasible or that no market practice for the administration of such LIBO Successor Rate exists, in such other manner of administration as the Facility Agent determines is reasonably necessary in connection with the administration of this Agreement).
SECTION 3.4. Commitment Fees. Subject to clause 10.1 of the Novation Agreement, the Borrower agrees to pay to the Facility Agent for the account of each Lender a commitment fee (the “Commitment Fee”) on its daily unused portion of Maximum Loan Amount (as such amount may be adjusted from time to time), for the period commencing on the Signing Date and continuing through the earliest to occur (the “Commitment Fee Termination Date”) of (i) the Actual Delivery Date, (ii) the date upon which the Facility Agent has provided the Borrower with written notice that the Lenders will not advance the Loan because the Commitments have been terminated pursuant to Section 8.2 or 8.3, (iii) the Commitment Termination Date and (iv) the date the Commitments shall have been terminated in full pursuant to clause 10.2 of the Novation Agreement.
SECTION 3.4.1. Payment. The Commitment Fee shall be payable by the Borrower to the Facility Agent for the account of each Lender six-monthly in arrears, with the first such payment (the “First Commitment Fee Payment”) to be made on the day
falling six months following the Signing Date and the final such payment to be made on the Commitment Fee Termination Date (each date on which a Commitment Fee payment is required to be made in accordance with this Section 3.4.1 referred to herein as a “Commitment Fee Payment Date”). The Commitment Fee shall be in the amount in EUR equal to the product of the Applicable Commitment Rate, multiplied by, for each day elapsed since the preceding Commitment Fee Payment Date (or, in the case of the First Commitment Fee Payment, the Signing Date), 75% of the daily unused portion of Maximum Loan Amount (as such amount may be adjusted from time to time), divided by 360 days.
SECTION 3.5. Other Fees. The Borrower agrees to pay to the Facility Agent the agreed-upon fees set forth in the Fee Letters on the dates and in the amounts set forth therein.
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1. LIBO Rate Lending Unlawful. If after the Signing Date the introduction of or any change in or in the interpretation of any law makes it unlawful, or any central bank or other governmental authority having jurisdiction over such Lender asserts that it is unlawful for such Lender to make, continue or maintain its portion of the Loan where the relevant Lender has funded itself in the interbank market at a rate based on the LIBO Rate, the obligation of such Lender to make, continue or maintain its portion of the Loan shall, upon notice thereof to the Borrower, the Facility Agent and each other Lender, forthwith be suspended until the circumstances causing such suspension no longer exist, provided that such Lender’s obligation to make, continue and maintain its portion of the Loan hereunder shall be automatically converted into an obligation to make, continue and maintain its portion of the Loan bearing interest at a rate to be negotiated between such Lender and the Borrower that is the equivalent of the sum of the LIBO Rate for the relevant Interest Period plus the Floating Rate Margin.
SECTION 4.2. Deposits Unavailable. If any Lender has funded itself in the interbank market and the Facility Agent shall have determined that:
a)Dollar deposits in the relevant amount and for the relevant Interest Period are not available to each Reference Bank in its relevant market, or
b)by reason of circumstances affecting the Reference Banks’ relevant markets, adequate means do not exist for ascertaining the interest rate applicable hereunder to LIBO Rate loans for the relevant Interest Period, or
c)the cost to Lenders that in the aggregate hold more than 50% of the aggregate outstanding principal amount of the Loan then held by Lenders of obtaining matching deposits in the relevant interbank market for the relevant Interest Period would be in excess of the LIBO Rate, (provided, that no Lender may exercise its rights under this Section 4.2.c) for amounts up to the difference between such Lender’s cost of obtaining matching deposits on the date such Lender becomes a Lender hereunder less the LIBO Rate on such date),
then the Facility Agent shall give notice of such determination (hereinafter called a “Determination Notice”) to the Borrower and each of the Lenders. The Borrower, the Lenders and the Facility Agent shall then negotiate in good faith in order to agree upon a mutually satisfactory interest rate and interest period (or interest periods) to be substituted for those which would otherwise have applied under this Agreement. If the Borrower, the Lenders and the Facility Agent are unable to agree upon an interest rate (or rates) and interest period (or interest periods) prior to the date occurring fifteen (15) Business Days after the giving of such Determination Notice, the Facility Agent shall (after consultation with the Lenders) set an interest rate and an interest period (or interest periods), in each case to take effect at the end of the Interest Period current at the date of the Determination Notice, which rate (or rates) shall be equal to the sum of the Floating Rate Margin and the weighted average of the corresponding interest rates at or about 11:00 a.m. (London time) two (2) Business Days before the commencement of the relevant Interest Period on Thomson Reuters’ pages KLIEMMM, GARBIC01 and FINA01 (or such other pages as may replace Thomson Reuters’ pages KLIEMMM, GARBIC01 or FINA01 on Thomson Reuters’ service) (or, in the case of clause (c) above, the lesser of (x) the respective cost to the Lenders of funding the respective portions of the Loan held by the Lenders and (y) such weighted average). The Facility Agent shall furnish a certificate to the Borrower as soon as reasonably practicable after the Facility Agent has given such Determination Notice setting forth such rate(s). In the event that the circumstances described in this Section 4.2 shall extend beyond the end of an interest period agreed or set pursuant hereto, the foregoing procedure shall be repeated as often as may be necessary.
SECTION 4.3. Increased LIBO Rate Loan Costs, etc. If after the Signing Date a change in any applicable treaty, law, regulation or regulatory requirement or in the interpretation thereof or in its application to the Borrower, or if compliance by any Lender with any applicable direction, request, requirement or guideline (whether or not having the force of law) of any governmental or other authority including, without limitation, any agency of the European Union or similar monetary or multinational authority insofar as it may be changed or imposed after the date hereof, shall:
a)subject any Lender to any taxes, levies, duties, charges, fees, deductions or withholdings of any nature with respect to its portion of the Loan or any part thereof imposed, levied, collected, withheld or assessed by any jurisdiction or any political subdivision or taxing authority thereof (other than taxation on overall net income and, to the extent such taxes are described in Section 4.6, withholding taxes); or
b)change the basis of taxation to any Lender (other than a change in taxation on the overall net income of any Lender) of payments of principal or interest or any other payment due or to become due pursuant to this Agreement; or
c)impose, modify or deem applicable any reserve or capital adequacy requirements (other than the increased capital costs described in Section 4.5 and the reserve costs described in Section 4.7) or other banking or monetary controls or requirements which affect the manner in which a Lender shall allocate its capital resources to its obligations hereunder or require the making of any special deposits against or in respect of any assets or liabilities of, deposits with or for the account of, or loans by, any Lender (provided that such Lender shall, unless
prohibited by law, allocate its capital resources to its obligations hereunder in a manner which is consistent with its present treatment of the allocation of its capital resources); or
d)impose on any Lender any other condition affecting its portion of the Loan or any part thereof,
and the result of any of the foregoing is either (i) to increase the cost to such Lender of making its portion of the Loan or maintaining its portion of the Loan or any part thereof, (ii) to reduce the amount of any payment received by such Lender or its effective return hereunder or on its capital or (iii) to cause such Lender to make any payment or to forego any return based on any amount received or receivable by such Lender hereunder, then and in any such case if such increase or reduction in the opinion of such Lender materially affects the interests of such Lender, (A) such Lender shall (through the Facility Agent) notify the Borrower of the occurrence of such event and use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions and the terms of the BpiFAE Insurance Policy and (if the Fixed Rate applies) the arrangements with Natixis DAI relating to the CIRR) to designate a different Lending Office if the making of such a designation would avoid the effects of such law, regulation or regulatory requirement or any change therein or in the interpretation thereof and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender and (B) the Borrower shall forthwith upon such demand pay to the Facility Agent for the account of such Lender such amount as is necessary to compensate such Lender for such additional cost or such reduction and ancillary expenses, including taxes, incurred as a result of such adjustment. Such notice shall (i) describe in reasonable detail the event leading to such additional cost, together with the approximate date of the effectiveness thereof, (ii) set forth the amount of such additional cost, (iii) describe the manner in which such amount has been calculated, (iv) certify that the method used to calculate such amount is such Lender’s standard method of calculating such amount, (v) certify that such request is consistent with its treatment of other borrowers that are subject to similar provisions, and (vi) certify that, to the best of its knowledge, such change in circumstance is of general application to the commercial banking industry in such Lender’s jurisdiction of organization or in the relevant jurisdiction in which such Lender does business. Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that in relation to increased costs or reductions arising after the Effective Date the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than three months prior to the date that such Lender notifies the Borrower of the circumstance giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the circumstance giving rise to such increased costs or reductions is retroactive, then the three-month period referred to above shall be extended to include the period of retroactive effect thereof, but not more than six months prior to the date that such Lender notifies the Borrower of the circumstance giving rise to such cost or reductions and of such Lender’s intention to claim compensation therefor.
It is acknowledged that the Borrower shall have no liability to compensate any Lender under this Section for amounts of increased costs that accrue before the Effective Time on the Actual Delivery Date (with any such amounts arising before the Effective Time being the responsibility of the Original Borrower).
SECTION 4.4. Funding Losses.
SECTION 4.4.1. Indemnity. In the event any Lender shall incur any loss or expense (for the avoidance of doubt excluding loss of profit) by reason of the liquidation or re-employment (at not less than the market rate) of deposits or other funds acquired by such Lender, to make, continue or maintain any portion of the principal amount of its portion of the Loan as a result of:
i)any repayment or prepayment or acceleration of the principal amount of such Lender’s portion of the Loan, other than any repayment made on the date scheduled for such repayment or (if the Floating Rate applies) any repayment or prepayment or acceleration on a date other than the scheduled last day of an Interest Period or otherwise scheduled date for repayment or payment; or
ii)the relevant portion of the Loan not being made in accordance with the Loan Request therefor due to the fault of the Borrower or as a result of any of the conditions precedent set forth in clause 6.1(c) of the Novation Agreement and Article V not being satisfied,
(a “Funding Losses Event”) then, upon the written notice of such Lender to the Borrower (with a copy to the Facility Agent), the Borrower shall, within three (3) days of its receipt thereof:
a)if at that time interest is calculated at the Floating Rate on such Lender’s portion of the Loan, pay directly to the Facility Agent for the account of such Lender an amount equal to the amount by which:
(i)interest calculated at the Floating Rate (excluding the Floating Rate Margin) which such Lender would have received on its share of the amount of the Loan subject to such Funding Losses Event for the period from the date of receipt of any part of its share in the Loan to the last day of the applicable Interest Period,
exceeds:
(ii)the amount which such Lender would be able to obtain by placing an amount equal to the amount received by it on deposit with a leading bank in the appropriate interbank market for a period starting on the Business Day following receipt and ending on the last day of the applicable Interest Period; or
b)if at that time interest is calculated at the Fixed Rate on such Lender’s portion of the Loan, pay to the Facility Agent the amount notified to it following the calculation referred to in the next paragraph.
Since the Lenders commit themselves irrevocably to the French Authorities in charge of monitoring the CIRR mechanism, any prepayment (whether voluntary, involuntary or mandatory, including following the acceleration of the Loan) will be subject to the mandatory payment by the Borrower of the amount calculated in
liaison with the French Authorities two (2) Business Days prior to the prepayment date by taking into account the differential (the “Rate Differential”) between the CIRR and the prevailing market yield (currently ISDAFIX) for each installment to be prepaid and applying such Rate Differential to the remaining residual period of such installment and discounting to the net present value as described below. Each of these Rate Differentials will be applied to the corresponding installment to be prepaid during the period starting on the date on which such prepayment is required to be made and ending on the original Repayment Date (as adjusted following any previous prepayments) for such installment and:
(A)the net present value of each corresponding amount resulting from the above calculation will be determined at the corresponding market yield; and
(B)if the cumulated amount of such present values is negative, no amount shall be due to the Borrower or from the Borrower.
Such written notice shall include calculations in reasonable detail setting forth the loss or expense to such Lender.
SECTION 4.4.2. Exclusion In the event that a Lender’s wilful misconduct or gross negligence has caused the loss or cancellation of the BpiFAE Insurance Policy, the Borrower shall not be liable to indemnify that Lender under Section 4.4.1 for its loss or expense arising due to the occurrence of the Prepayment Event referred to in Section 9.1.9.
SECTION 4.5. Increased Capital Costs. If after the Signing Date any change in, or the introduction, adoption, effectiveness, interpretation, reinterpretation or phase-in of, any law or regulation, directive, guideline, decision or request (whether or not having the force of law) of any court, central bank, regulator or other governmental authority increases the amount of capital required to be maintained by any Lender or any Person controlling such Lender, and the rate of return on its or such controlling Person’s capital as a consequence of its Commitment or its portion of the Loan made by such Lender is reduced to a level below that which such Lender or such controlling Person would have achieved but for the occurrence of any such change in circumstance, then, in any such case upon notice from time to time by such Lender to the Borrower, the Borrower shall immediately pay directly to such Lender additional amounts sufficient to compensate such Lender or such controlling Person for such reduction in rate of return. Any such notice shall (i) describe in reasonable detail the capital adequacy requirements which have been imposed, together with the approximate date of the effectiveness thereof, (ii) set forth the amount of such lowered return, (iii) describe the manner in which such amount has been calculated, (iv) certify that the method used to calculate such amount is such Lender’s standard method of calculating such amount, (v) certify that such request for such additional amounts is consistent with its treatment of other borrowers that are subject to similar provisions and (vi) certify that, to the best of its knowledge, such change in circumstances is of general application to the commercial banking industry in the jurisdictions in which such Lender does business. In determining such amount, such Lender may use any method of averaging and attribution that it shall, subject to the foregoing sentence, deem applicable. Each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions and
the terms of the BpiFAE Insurance Policy and (if the Fixed Rate applies) the arrangements with Natixis DAI relating to the CIRR) to designate a different Lending Office if the making of such a designation would avoid such reduction in such rate of return and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender. Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that in relation to increased costs or reductions arising after the Effective Date the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than three months prior to the date that such Lender notifies the Borrower of the circumstance giving rise to such reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the circumstance giving rise to such reductions is retroactive, then the three-month period referred to above shall be extended to include the period of retroactive effect thereof, but not more than six months prior to the date that such Lender notifies the Borrower of the circumstance giving rise to such reductions and of such Lender’s intention to claim compensation therefor.
It is acknowledged that the Borrower shall have no liability to compensate any Lender under this Section for reduced returns that accrue before the Effective Time on the Actual Delivery Date (with any compensation liability to the Lenders arising before the Effective Time being the responsibility of the Original Borrower).
SECTION 4.6. Taxes. All payments by the Borrower of principal of, and interest on, the Loan and all other amounts payable hereunder shall be made free and clear of and without deduction for any present or future income, excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or other charges of any nature whatsoever imposed by any taxing authority, but excluding franchise taxes and taxes imposed on or measured by any Lender’s net income or receipts of such Lender and franchise taxes imposed in lieu of net income taxes or taxes on receipts, by the jurisdiction under the laws of which such Lender is organized or any political subdivision thereof or the jurisdiction of such Lender’s Lending Office or any political subdivision thereof or any other jurisdiction unless such net income taxes are imposed solely as a result of the Borrower’s activities in such other jurisdiction, and any taxes imposed under FATCA (such non-excluded items being called “Covered Taxes”). In the event that any withholding or deduction from any payment to be made by the Borrower hereunder is required in respect of any Covered Taxes pursuant to any applicable law, rule or regulation, then the Borrower will:
a)pay directly to the relevant authority the full amount required to be so withheld or deducted;
b)promptly forward to the Facility Agent an official receipt or other documentation satisfactory to the Facility Agent evidencing such payment to such authority; and
c)pay to the Facility Agent for the account of the Lenders such additional amount or amounts as is necessary to ensure that the net amount actually received by each Lender will equal the full amount such Lender would have received had no such withholding or deduction been required.
Moreover, if any Covered Taxes are directly asserted against the Facility Agent or any Lender with respect to any payment received or paid by the Facility Agent or such Lender
hereunder, the Facility Agent or such Lender may pay such Covered Taxes and the Borrower will promptly pay such additional amounts (including any penalties, interest or expenses) as is necessary in order that the net amount received by such person after the payment of such Covered Taxes (including any Covered Taxes on such additional amount) shall equal the amount such person would have received had no such Covered Taxes been asserted.
Any Lender claiming any additional amounts payable pursuant to this Section agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions and the terms of the BpiFAE Insurance Policy and (if the Fixed Rate applies) the arrangements with Natixis DAI relating to the CIRR) to change the jurisdiction of its Lending Office if the making of such a change would avoid the need for, or reduce the amount of, any such additional amounts that may thereafter accrue and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.
If the Borrower fails to pay any Covered Taxes when due to the appropriate taxing authority or fails to remit to the Facility Agent for the account of the respective Lenders the required receipts or other required documentary evidence, the Borrower shall indemnify the Lenders for any incremental withholding Covered Taxes, interest or penalties that may become payable by any Lender as a result of any such failure (so long as such amount did not become payable as a result of the failure of such Lender to provide timely notice to the Borrower of the assertion of a liability related to the payment of Covered Taxes). For purposes of this Section 4.6, a distribution hereunder by the Facility Agent or any Lender to or for the account of any Lender shall be deemed a payment by the Borrower.
If any Lender is entitled to any refund, credit, deduction or other reduction in tax by reason of any payment made by the Borrower in respect of any Covered Tax under this Section 4.6 or by reason of any payment made by the Borrower pursuant to Section 4.3, such Lender shall use reasonable efforts to obtain such refund, credit, deduction or other reduction and, promptly after receipt thereof, will pay to the Borrower such amount (plus any interest received by such Lender in connection with such refund, credit, deduction or reduction) as is equal to the net after-tax value to such Lender of such part of such refund, credit, deduction or reduction as such Lender reasonably determines is allocable to such Covered Tax or such payment (less out-of-pocket expenses incurred by such Lender), provided that no Lender shall be obligated to disclose to the Borrower any information regarding its tax affairs or tax computations.
Each Lender (and each Participant) agrees with the Borrower and the Facility Agent that it will (i) in the case of a Lender or a Participant organized under the laws of a jurisdiction other than the United States (a) provide to the Facility Agent and the Borrower an appropriately executed copy of Internal Revenue Service Form W-8ECI certifying that any payments made to or for the benefit of such Lender or such Participant are effectively connected with a trade or business in the United States (or alternatively, an Internal Revenue Service Form W-8BEN claiming the benefits of a tax treaty, but only if the applicable treaty described in such form provides for a complete exemption from U.S. federal income tax withholding), or any successor form, on or prior to the date hereof (or, in the case of any Assignee Lender or Participant, on or prior to the date of the relevant assignment or participation), in each case attached to an Internal Revenue Service Form W-8IMY, if appropriate, (b) notify the Facility Agent and the Borrower if the certifications made on any form provided pursuant to this paragraph are no longer accurate and true in all material
respects and (c) without prejudice to its obligations under Section 4.13, provide such other tax forms or other documents as shall be prescribed by applicable law, if any, or as otherwise reasonably requested, to demonstrate, to the extent applicable, that payments to such Lender Party (or Participant) hereunder are exempt from withholding under FATCA, and (ii) in all cases, provide such forms, certificates or other documents, as and when reasonably requested by the Borrower, necessary to claim any applicable exemption from, or reduction of, Covered Taxes or any payments made to or for benefit of such Lender Party or such Participant, provided that the Lender Party or Participant is legally able to deliver such forms, certificates or other documents. For any period with respect to which a Lender (or Assignee Lender or Participant) has failed to provide the Borrower with the foregoing forms (other than if such failure is due to a change in law occurring after the date on which a form originally was required to be provided (which, in the case of an Assignee Lender, would be the date on which the original assignor was required to provide such form) or if such form otherwise is not required hereunder) such Lender (or Assignee Lender or Participant) shall not be entitled to the benefits of this Section 4.6 with respect to Covered Taxes imposed by reason of such failure.
All fees and expenses payable pursuant to Section 11.3 shall be paid together with value added tax or any similar tax (if any) properly chargeable thereon. Any value added tax chargeable in respect of any services supplied by a Lender or an Agent under this Agreement shall, on delivery of the value added tax invoice, be paid in addition to any sum agreed to be paid hereunder.
SECTION 4.7. Reserve Costs. Without in any way limiting the Borrower’s obligations under Section 4.3, the Borrower shall, with effect from the Effective Time, pay to the Facility Agent for the account of each Lender on the last day of each Interest Period, so long as the relevant Lending Office of such Lender is required to maintain reserves against “Eurocurrency liabilities” under Regulation D of the F.R.S. Board, upon notice from such Lender, an additional amount equal to the product of the following for the Loan for each day during such Interest Period:
(i)the principal amount of the Loan outstanding on such day; and
(ii)the remainder of (x) a fraction the numerator of which is the rate (expressed as a decimal) at which interest accrues on the Loan for such Interest Period as provided in this Agreement (less, if applicable, the Floating Rate Margin) and the denominator of which is one minus any increase after the Signing Date in the effective rate (expressed as a decimal) at which such reserve requirements are imposed on such Lender minus (y) such numerator; and
(iii)1/360.
Such notice shall (i) describe in reasonable detail the reserve requirement that has been imposed, together with the approximate date of the effectiveness thereof, (ii) set forth the applicable reserve percentage, (iii) certify that such request is consistent with such Lender’s treatment of other borrowers that are subject to similar provisions and (iv) certify that, to the best of its knowledge, such requirements are of general application in the commercial banking industry in the United States.
Each Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions and the terms of the BpiFAE Insurance Policy and (if the Fixed Rate applies) the arrangements with Natixis DAI relating to the CIRR) to avoid the requirement of maintaining such reserves (including by designating a different Lending Office) if such efforts would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.
SECTION 4.8. Payments, Computations, etc.
a)Unless otherwise expressly provided, all payments by the Borrower pursuant to this Agreement or any other Loan Document shall be made by the Borrower to the Facility Agent for the pro rata account of the Lenders entitled to receive such payment. All such payments required to be made to the Facility Agent shall be made, without set-off, deduction or counterclaim, not later than 11:00 a.m., New York time, on the date due, in same day or immediately available funds through the New York Clearing House Interbank Payments System (or such other funds as may be customary for the settlement of international banking transactions in Dollars), to such account as the Facility Agent shall specify from time to time by notice to the Borrower. Funds received after that time shall be deemed to have been received by the Lenders on the next succeeding Business Day.
b)Each Lender hereby instructs the Facility Agent, with respect to any portion of the Loan held by such Lender, to pay directly to such Lender interest thereon at the Fixed Rate or (if the proviso to Section 5.1.10 applies) the Floating Rate, on the basis that (if the Fixed Rate applies) such Lender will, where amounts are payable to Natixis by that Lender under the Interest Stabilisation Agreement, account directly to Natixis for any such amounts payable by that Lender under the Interest Stabilisation Agreement to which such Lender is a party.
c)The Facility Agent shall promptly (but in any event on the same Business Day that the same are received or, as contemplated in clause (a) of this Section, deemed received) remit in same day funds to each Lender its share, if any, of such payments received by the Facility Agent for the account of such Lender without any set-off, deduction or counterclaim. All interest and fees shall be computed on the basis of the actual number of days (including the first day but excluding the last day) occurring during the period for which such interest or fee is payable over a year comprised of 360 days. Whenever any payment to be made shall otherwise be due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall be included in computing interest and fees, if any, in connection with such payment.
SECTION 4.9. Replacement Lenders, etc. If the Borrower shall be required to make any payment to any Lender pursuant to Section 4.2(c), 4.3, 4.4, 4.5, 4.6 or 4.7, the Borrower shall be entitled at any time (so long as no Default and no Prepayment Event shall have occurred and be continuing) within 180 days after receipt of notice from such Lender of such required payment to (a) terminate such Lender’s Commitment (where upon the Percentage of each other Lender shall automatically be adjusted to an amount equal to such Lender’s ratable share of the remaining Commitments), (b) prepay the affected portion of such Lender’s Loan in full, together with accrued interest thereon through the date
of such prepayment (provided that the Borrower shall not terminate any Lender’s Commitment pursuant to clause (a) or prepay any such Lender pursuant to this clause (b) without replacing such Lender pursuant to the following clause (c) until a 30-day period shall have elapsed during which the Borrower and the Facility Agent shall have attempted in good faith to replace such Lender), and/or (c) replace such Lender with another financial institution reasonably acceptable to the Facility Agent and (if the Fixed Rate applies) Natixis DAI, provided that (i) each such transfer shall be either a transfer of all of the rights and obligations of the transferring Lender under this Agreement or a transfer of a portion of such rights and obligations made concurrently with another such transfer or other such transfers that together cover all of the rights and obligations of the transferring Lender under this Agreement and (ii) no Lender shall be obligated to make any such transfer as a result of a demand by the Borrower pursuant to this Section unless and until such Lender shall have received one or more payments from either the Borrower or one or more Assignee Lenders in an aggregate amount at least equal to the aggregate outstanding principal amount of the Loan owing to such Lender, together with accrued interest thereon to the date of payment of such principal amount and all other amounts payable to such Lender under this Agreement. Each Lender represents and warrants to the Borrower that, as of the Signing Date (or, with respect to any Lender not a party hereto on the Signing Date, on the date that such Lender becomes a party hereto), there is no existing treaty, law, regulation, regulatory requirement, interpretation, directive, guideline, decision or request pursuant to which such Lender would be entitled to request any payments under any of Sections 4.3, 4.4, 4.5, 4.6 and 4.7 to or for account of such Lender.
SECTION 4.10. Sharing of Payments.
SECTION 4.10.1. Payments to Lenders. If a Lender (a "Recovering Lender") receives or recovers any amount from the Borrower other than in accordance with Section 4.8 (Payments, Computations, etc.) (a "Recovered Amount") and applies that amount to a payment due under the Loan Documents then:
a)the Recovering Lender shall, within three (3) Business Days, notify details of the receipt or recovery to the Facility Agent;
b)the Facility Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Lender would have been paid had the receipt or recovery been received or made by the Facility Agent and distributed in accordance with the said Section 4.8, without taking account of any taxes which would be imposed on the Facility Agent in relation to the receipt, recovery or distribution; and
c)the Recovering Lender shall, within three (3) Business Days of demand by the Facility Agent, pay to the Facility Agent an amount (the "Sharing Payment") equal to such receipt or recovery less any amount which the Facility Agent determines may be retained by the Recovering Lender as its share of any payment to be made, in accordance with any applicable provisions of this Agreement.
SECTION 4.10.2. Redistribution of payments. The Facility Agent shall treat the Sharing Payment as if it had been paid by the Borrower and distribute it between the
Lenders (other than the Recovering Lender) (the "Sharing Lenders") in accordance with the provisions of this Agreement towards the obligations of the Borrower to the Sharing Lenders.
SECTION 4.10.3. Recovering Lender's rights. On a distribution by the Facility Agent under Section 4.10.2 of a payment received by a Recovering Lender from the Borrower, as between the Borrower and the Recovering Lender, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by the Borrower.
SECTION 4.10.4. Reversal of redistribution If any part of the Sharing Payment received or recovered by a Recovering Lender becomes repayable and is repaid by that Recovering Lender, then:
a)each Sharing Lender shall, upon request of the Facility Agent, pay to the Facility Agent for the account of that Recovering Lender an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Lender for its proportion of any interest on the Sharing Payment which that Recovering Lender is required to pay) (the "Redistributed Amount"); and
b)as between the Borrower and each relevant Sharing Lender, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by the Borrower.
SECTION 4.10.5. Exceptions.
a)This Section 4.10 shall not apply to the extent that the Recovering Lender would not, after making any payment pursuant to this Section 4.10, have a valid and enforceable claim against the Borrower.
b)A Recovering Lender is not obliged to share with any other Lender any amount which the Recovering Lender has received or recovered as a result of taking legal or arbitration proceedings, if:
(i)it notified the other Lender of the legal or arbitration proceedings; and
(ii)the other Lender had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.
SECTION 4.11. Set-off. Upon the occurrence and during the continuance of an Event of Default or a Prepayment Event, each Lender shall have, to the extent permitted by applicable law, the right to appropriate and apply to the payment of the Obligations then due and owing to it any and all balances, credits, deposits, accounts or moneys of the Borrower then or thereafter maintained with such Lender; provided that any such appropriation and application shall be subject to the provisions of Section 4.10. Each Lender agrees promptly to notify the Borrower and the Facility Agent after any such set-off and application made by such Lender; provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of set-off under applicable law or otherwise) which such Lender may have.
SECTION 4.12. Use of Proceeds. The Borrower shall apply the proceeds of the Loan made available to the Borrower in respect of the Additional Advances for the purpose of making payments of, or reimbursing the Borrower for payments already made for, the amounts referred to in clauses 5.2, 5.3 and/or 5.4 of the Novation Agreement and, without limiting the foregoing, no proceeds of the Loan will be used to acquire any equity security of a class which is registered pursuant to Section 12 of the Securities Exchange Act of 1934 or any “margin stock”, as defined in F.R.S. Board Regulation U.
SECTION 4.13. FATCA Information.
a)Subject to paragraph c) below, each party (other than the Borrower) shall, within ten Business Days of a reasonable request by another party (other than the Borrower):
(i)confirm to that other party whether it is:
(A)a FATCA Exempt Party; or
(B)not a FATCA Exempt Party;
(ii)supply to that other party such forms, documentation and other information relating to its status under FATCA as that other party reasonably requests for the purposes of that other party's compliance with FATCA;
(iii)supply to that other party such forms, documentation and other information relating to its status as that other party reasonably requests for the purposes of that other party's compliance with any other law, regulation, or exchange of information regime.
b)If a party confirms to another party pursuant to paragraph (a)(i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not or has ceased to be a FATCA Exempt Party, that party shall notify that other party reasonably promptly.
c)Paragraph a) above shall not oblige any Lender or the Facility Agent to do anything, and paragraph a)(iii) above shall not oblige any other party to do anything, which would or might in its reasonable opinion constitute a breach of:
(i)any law or regulation;
(ii)any fiduciary duty; or
(iii)any duty of confidentiality.
d)If a party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with paragraph
(a)(i) or (ii) above (including, for the avoidance of doubt, where paragraph (c) above applies), then such party shall be treated for the purposes of the Loan Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the party in question provides the requested confirmation, forms, documentation or other information.
e)Each party may make a FATCA Deduction from a payment under this Agreement that it is required to be made by FATCA, and any payment required in connection with that FATCA Deduction, and no party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.
SECTION 4.14. Resignation of the Facility Agent. The Facility Agent shall resign (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Facility Agent) if, either:
a)the Facility Agent fails to respond to a request under Section 4.13 and a Lender reasonably believes that the Facility Agent will not be (or will have ceased to be) a FATCA Exempt Party;
b)the information supplied by the Facility Agent pursuant to Section 4.13 indicates that the Facility Agent will not be (or will have ceased to be) a FATCA Exempt Party; or
c)the Facility Agent notifies the Lenders that the Facility Agent will not be (or will have ceased to be) a FATCA Exempt Party;
and (in each case) a Lender reasonably believes that a party to this Agreement will be required to make a FATCA Deduction that would not be required if the Facility Agent were a FATCA Exempt Party, and that Lender, by notice to the Facility Agent, requires it to resign.
ARTICLE V CONDITIONS TO BORROWING
SECTION 5.1. Advance of the Loan. The obligation of the Lenders
to fund the relevant portion of the Loan to be made available on the Actual Delivery Date shall be subject to the prior or concurrent satisfaction of each of the conditions precedent set forth in this Section 5.1. The Facility Agent shall advise the Lenders of the satisfaction of the conditions precedent set forth in this Section 5.1 prior to funding on the Actual Delivery Date.
SECTION 5.1.1. Resolutions, etc. The Facility Agent shall have received from the Borrower:
a)a certificate of its Secretary or Assistant Secretary as to the incumbency and signatures of those of its officers authorized to act with respect to this Agreement and each other Loan Document and as to the truth and completeness of the attached:
(x) resolutions of its Board of Directors then in full force and effect authorizing the execution, delivery and performance of this Agreement and each other Loan Document, and
(y) Organic Documents of the Borrower,
and upon which certificate the Lenders may conclusively rely until the Facility Agent shall have received a further certificate of the Secretary or Assistant Secretary of the Borrower canceling or amending such prior certificate; and
b)a Certificate of Good Standing issued by the relevant Liberian authorities in respect of the Borrower.
SECTION 5.1.2. Opinions of Counsel. The Facility Agent shall have received opinions, addressed to the Facility Agent, the Security Trustee (in relation to a) and b) below) and each Lender from:
a)Watson Farley & Williams LLP, counsel to the Borrower, as to Liberian Law, covering the matters set forth in Exhibit B-1 hereto (and which shall be updated to include reference to the Escrow Account Security);
b)Norton Rose Fulbright LLP, counsel to the Facility Agent and the Lenders, covering the matters set forth in Exhibit B-2 hereto (and which shall be updated to include reference to the Escrow Account Security) and, if the BpiFAE Insurance Policy is to be re-issued or replaced on or about the Actual Delivery Date, Exhibit B-3 hereto; and
c)Clifford Chance US LLP, United States tax counsel to the Facility Agent for the benefit of the Lenders, covering the matters set forth in Exhibit B-4 hereto,
each such opinion to be updated to take into account all relevant and applicable Loan Documents at the time of issue thereof.
SECTION 5.1.3. BpiFAE Insurance Policy. The Facility Agent or the ECA Agent shall have received the BpiFAE Insurance Policy duly issued and BpiFAE shall not have, prior to the advance of the Loan, delivered to the Facility Agent or the ECA Agent any notice seeking the cancellation, suspension or termination of the BpiFAE Insurance Policy or the suspension of the drawing of the Additional Advances under this Agreement.
SECTION 5.1.4. Closing Fees, Expenses, etc. The Facility Agent shall have received for its own account, or for the account of each Lender or BpiFAE, as the case may be, all fees that the Borrower shall have agreed in writing to pay to the Facility Agent (whether for its own account or for the account of any of the Lenders) that are due and owing as of the date of such funding and all invoiced expenses of the Facility Agent (including the agreed fees and expenses of counsel to the Facility Agent and the BpiFAE Premium) required to be paid by the Borrower pursuant to Section 11.3 or that the Borrower has otherwise agreed in writing to pay to the Facility Agent, in each case on or prior to the date of such funding.
SECTION 5.1.5. Compliance with Warranties, No Default, etc. Both before and after giving effect to the funding of the Loan the following statements shall be true and correct:
a)the representations and warranties set forth in Article VI (excluding, however, those set forth in Section 6.10) shall be true and correct in all material respects except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct, with the same effect as if then made; and
b)no Default and no Prepayment Event and no event which (with notice or lapse of time or both) would become a Prepayment Event shall have then occurred and be continuing.
SECTION 5.1.6. Loan Request. The Facility Agent shall have received a Loan Request duly executed by the Borrower together with:
a)where an Additional Advance is requested in respect of the Non-Yard Costs, the Delivery Non-Yard Costs Certificate;
b)certified as true (by the Builder) copies of the invoice and supporting documents received by the Builder from the Borrower pursuant to Appendix C of the Construction Contract in relation to the Paid Non-Yard Costs to be financed as at the time of issue and a declaration from the Borrower in substantially the form set forth in Exhibit D hereto that the requirements for a minimum 15% French content in respect of Non-Yard Costs have been fulfilled;
c)a copy of the final commercial invoice from the Builder showing the amount of the Contract Price (including the Non-Yard Costs and the Other Basic Contract Price Increases) and the portion thereof payable to the Builder on the Actual Delivery Date under the Construction Contract; and
d)copies of the wire transfers for all payments by the Borrower to the Builder under the Construction Contract in respect of the Basic Contract Price to the extent not already provided as part of the drawdown conditions for drawdowns made by the Original Borrower.
SECTION 5.1.7. Foreign Exchange Counterparty Confirmations. The Facility Agent shall have received the documentation and other information referred to in clause 5.6 of the Novation Agreement.
SECTION 5.1.8. Protocol of delivery. The Facility Agent shall have received a copy of the protocol of delivery and acceptance under the Construction Contract duly signed by the Builder and the Borrower or the Nominated Owner to be notified to the Facility Agent.
SECTION 5.1.9. Title to Purchased Vessel. The Facility Agent shall have received evidence that the Purchased Vessel is legally and beneficially owned by the Borrower or the Nominated Owner (as the case may be), free of all recorded Liens, other
than Liens permitted by Section 7.2.3 and, to the extent not yet discharged, the Mortgage (as defined in the Novation Agreement).
SECTION 5.1.10. Interest Stabilisation. The ECA Agent shall have received a duly executed fixed rate approval from Natixis DAI issued to the Lenders in respect of the CIRR applicable to the Loan and shall have been informed by the French Authorities of the conditions of the interest make-up mechanisms (stabilisation du taux d'intérêt) applicable to the Loan under the applicable Interest Stabilisation Agreement in respect of the Lenders, such conditions to specify, among other things, that the CIRR has been retained under the interest make-up mechanisms applicable to the Loan.
In relation to Section 5.1.10, if a Lender (an “Ineligible Lender”) becomes ineligible or otherwise ceases to be a party to an Interest Stabilisation Agreement, it shall promptly upon becoming aware thereof (and by no later than 15 Business Days before the anticipated Actual Delivery Date) notify the Borrower, the ECA Agent and the Facility Agent.
Following receipt of such a notice, the ECA Agent (through the Facility Agent) shall give to the Borrower at least 10 Business Days’ prior notice stating if the condition precedent in Section 5.1.10 will not be satisfied due to the Ineligible Lender but would be satisfied by the replacement of the Ineligible Lender as set out below, with such replacement to take effect for the purpose of this Section on the Actual Delivery Date.
On its receipt of such notice from the ECA Agent, the Borrower shall be entitled, at any time thereafter and without prejudice to any rights and remedies it may have against such Ineligible Lender pursuant to Section 3.3.3,to replace such Ineligible Lender with another bank or financial institution reasonably acceptable to the Facility Agent, BpiFAE and Natixis DAI with effect from the Actual Delivery Date, provided that (i) each such transfer shall be either a transfer of all of the rights and obligations of the Ineligible Lender under this Agreement or a transfer of a portion of such rights and obligations made concurrently with another such transfer or other such transfers that together cover all of the rights and obligations of the Ineligible Lender under this Agreement and (ii) no Lender shall be obligated to make effective any such transfer as a result of a demand by the Borrower pursuant to this Section unless and until such Lender shall have received one or more payments from one or more Assignee Lenders in an aggregate amount equal to the aggregate outstanding principal amount of the portion of the Novated Loan Balance which, immediately following the Novation Effective Time, would have been owing to such Lender pursuant to Section 2.3(a) had that Lender not been replaced prior to the Novation Effective Time. The ECA Agent and the Facility Agent shall, at the request of the Borrower, use reasonable efforts to assist the Borrower in finding a bank or financial institution acceptable to the Borrower to replace such Ineligible Lender, and taking such other steps that may be reasonably required and which are within the control of the ECA Agent and the Facility Agent to assist with the satisfaction of the condition precedent in Section 5.1.10 prior to funding on the Actual Delivery Date.
Provided however the Borrower shall be entitled, without prejudice to its rights and remedies pursuant to Section 3.3.3, to elect that if at the Actual Delivery Date the condition precedent in Section 5.1.10 is not satisfied the Floating Rate should apply to the Loan, such election to be made by notice in writing to the Facility Agent not less than five (5) Business Days prior to the anticipated Actual Delivery Date in which event, subject to the approval of
BpiFAE, the Loan shall bear interest at the Floating Rate and the condition set out in Section 5.1.10 shall be deemed waived by the Lenders.
The ECA Agent (through the Facility Agent) shall, promptly after the Borrower’s request, advise the Borrower whether it is aware (based solely on information obtained from Natixis DAI and other French Authorities and/or received from the Lenders at the time of any such request and without any liability on the ECA Agent for the accuracy of that information) that the condition precedent in Section 5.1.10 will not or may not be satisfied as required by Section 5.1.10.
SECTION 5.1.11. Escrow Account Security. The Facility Agent shall have received the Escrow Account Security duly executed by the Borrower together with a duly executed notice of charge and acknowledgement thereto executed by the Borrower and the Escrow Account Bank respectively.
ARTICLE VI REPRESENTATIONS AND WARRANTIES
To induce the Lenders and the Facility Agent to enter into this Agreement and to
make the Loan hereunder, the Borrower represents and warrants to the Facility Agent and each Lender as set forth in this Article VI as of the Actual Delivery Date (except as otherwise stated).
SECTION 6.1. Organization, etc. The Borrower is a corporation validly organized and existing and in good standing under the laws of its jurisdiction of incorporation; the Borrower is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the nature of its business requires such qualification, except where the failure to be so qualified would not have a Material Adverse Effect; and the Borrower has full power and authority, has taken all corporate action and holds all governmental and creditors’ licenses, permits, consents and other approvals necessary to enter into each Loan Document and to perform the Obligations.
SECTION 6.2. Due Authorization, Non-Contravention, etc. The execution, delivery and performance by the Borrower of this Agreement and each other Loan Document, are within the Borrower’s corporate powers, have been duly authorized by all necessary corporate action, and do not:
a)contravene the Borrower’s Organic Documents;
b)contravene any law or governmental regulation of any Applicable Jurisdiction except as would not reasonably be expected to result in a Material Adverse Effect;
c)contravene any court decree or order binding on the Borrower or any of its property except as would not reasonably be expected to result in a Material Adverse Effect;
d)contravene any contractual restriction binding on the Borrower or any of its property except as would not reasonably be expected to result in a Material Adverse Effect; or
e)result in, or require the creation or imposition of, any Lien on any of the Borrower’s properties except as would not reasonably be expected to result in a Material Adverse Effect.
SECTION 6.3. Government Approval, Regulation, etc. No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or other Person is required for the due execution, delivery or performance by the Borrower of this Agreement or any other Loan Document (except for authorizations or approvals not required to be obtained on or prior to the Actual Delivery Date or that have been obtained or actions not required to be taken on or prior to the Actual Delivery Date or that have been taken). The Borrower holds all governmental licenses, permits and other approvals required to conduct its business as conducted by it on the Actual Delivery Date, except to the extent the failure to hold any such licenses, permits or other approvals would not have a Material Adverse Effect.
SECTION 6.4. Compliance with Environmental Laws. The Borrower is in compliance with all applicable Environmental Laws, except to the extent that the failure to so comply would not have a Material Adverse Effect.
SECTION 6.5. Validity, etc. This Agreement constitutes the legal, valid and binding obligation of the Borrower enforceable in accordance with its terms, except as the enforceability hereof may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally or by general equitable principles.
SECTION 6.6. No Default, Event of Default or Prepayment Event.
No Default, Event of Default or Prepayment Event has occurred and is continuing.
SECTION 6.7. Litigation. There is no action, suit, litigation, investigation or proceeding pending or, to the knowledge of the Borrower, threatened against the Borrower, that (i) except as set forth in filings made by the Borrower with the SEC in the Borrower’s reasonable opinion might reasonably be expected to materially adversely affect the business, operations or financial condition of the Borrower and its Subsidiaries (taken as a whole) (collectively, “Material Litigation”) or (ii) purports to affect the legality, validity or enforceability of the Loan Documents or the consummation of the transactions contemplated hereby.
SECTION 6.8. The Purchased Vessel. Immediately following the delivery of the Purchased Vessel to the Borrower under the Construction Contract, the Purchased Vessel will be:
a)legally and beneficially owned by the Borrower or one of the Borrower’s wholly owned Subsidiaries,
b)registered in the name of the Borrower or one of the Borrower’s wholly owned Subsidiaries under the Bahamian or Maltese flag or such other flag as the parties may mutually agree,
c)classed as required by Section 7.1.4(b),
d)free of all recorded Liens, other than Liens permitted by Section 7.2.3,
e)insured against loss or damage in compliance with Section 7.1.5, and
f)exclusively operated by or chartered to the Borrower or one of the Borrower’s wholly owned Subsidiaries.
SECTION 6.9. Obligations rank pari passu; Liens.
a)The Obligations rank at least pari passu in right of payment and in all other respects with all other unsecured unsubordinated Indebtedness of the Borrower other than Indebtedness preferred as a matter of law.
b)As at the date of this Agreement, the provisions of this Agreement which permit or restrict the granting of Liens are no less favorable than the provisions permitting or restricting the granting of Liens in any other agreement entered into by the Borrower with any other person providing financing or credit to the Borrower.
SECTION 6.10. Withholding, etc.. As of the Signing Date, no payment to be made by the Borrower under any Loan Document is subject to any withholding or like tax imposed by any Applicable Jurisdiction.
SECTION 6.11. No Filing, etc. Required. No filing, recording or registration and no payment of any stamp, registration or similar tax is necessary under the laws of any Applicable Jurisdiction to ensure the legality, validity, enforceability, priority or admissibility in evidence of this Agreement or the other Loan Documents (except for filings, recordings, registrations or payments not required to be made on or prior to the Actual Delivery Date or that have been made).
SECTION 6.12. No Immunity. The Borrower is subject to civil and commercial law with respect to the Obligations. Neither the Borrower nor any of its properties or revenues is entitled to any right of immunity in any Applicable Jurisdiction from suit, court jurisdiction, judgment, attachment (whether before or after judgment), set-off or execution of a judgment or from any other legal process or remedy relating to the Obligations (to the extent such suit, court jurisdiction, judgment, attachment, set-off, execution, legal process or remedy would otherwise be permitted or exist).
SECTION 6.13. Investment Company Act. The Borrower is not required to register as an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
SECTION 6.14. Regulation U. The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock, and no proceeds of the Loan will be used for a purpose which violates, or would be inconsistent with, F.R.S. Board Regulation U. Terms for which meanings are provided in F.R.S. Board Regulation U or any regulations substituted therefor, as from time to time in effect, are used in this Section with such meanings.
SECTION 6.15. Accuracy of Information. The financial and other information (other than financial projections or other forward looking information) furnished to the Facility Agent and the Lenders in writing by or on behalf of the Borrower by its chief
financial officer, treasurer or corporate controller in connection with the negotiation of this Agreement is, when taken as a whole, to the best knowledge and belief of the Borrower, true and correct and contains no misstatement of a fact of a material nature. All financial projections, if any, that have been furnished to the Facility Agent and the Lenders in writing by or on behalf of the Borrower by its chief financial officer, treasurer or corporate controller in connection with this Agreement have been or will be prepared in good faith based upon assumptions believed by the Borrower to be reasonable at the time made (it being understood that such projections are subject to significant uncertainties and contingencies, many of which are beyond the Borrower’s control, and that no assurance can be given that the projections will be realized). All financial and other information furnished to the Facility Agent and the Lenders in writing by or on behalf of the Borrower by its chief financial officer, treasurer or corporate controller after the date of this Agreement shall have been prepared by the Borrower in good faith.
SECTION 6.16. Compliance with Laws. The Borrower is in compliance with all applicable laws, rules, regulations and orders, except to the extent that the failure to so comply does not and could not reasonably be expected to have a Material Adverse Effect, and the Borrower has implemented and maintains in effect policies and procedures designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions. The Borrower and its Subsidiaries and, to the knowledge of the Borrower, their respective officers, employees, directors and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions, in all material respects and are not knowingly engaged in any activity that would reasonably be expected to result in Borrower being designated as a Sanctioned Person. None of (a) the Borrower, any Subsidiary or to the knowledge of the Borrower or such Subsidiary any of their respective directors, officers or employees, or (b) to the knowledge of the Borrower, any agent of the Borrower or any Subsidiary that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person.
ARTICLE VII COVENANTS
SECTION 7.1. Affirmative Covenants. The Borrower agrees with
the Facility Agent and each Lender that, from the Effective Date (or, where applicable, from such time as may be stated in any applicable provision below) until all Commitments have terminated and all Obligations have been paid in full, the Borrower will perform the obligations set forth in this Section 7.1.
SECTION 7.1.1. Financial Information, Reports, Notices, etc. The Borrower will furnish, or will cause to be furnished, to the Facility Agent (with sufficient copies for distribution to each Lender) the following financial statements, reports, notices and information:
a)as soon as available and in any event within 60 days after the end of each of the first three Fiscal Quarters of each Fiscal Year of the Borrower, a copy of the Borrower’s report on Form 10-Q (or any successor form) as filed by the Borrower with the SEC for such Fiscal Quarter, containing unaudited consolidated financial
statements of the Borrower for such Fiscal Quarter (including a balance sheet and profit and loss statement) prepared in accordance with GAAP, subject to normal year-end audit adjustments;
b)as soon as available and in any event within 120 days after the end of each Fiscal Year of the Borrower, a copy of the Borrower’s annual report on Form 10-K (or any successor form) as filed by the Borrower with the SEC for such Fiscal Year, containing audited consolidated financial statements of the Borrower for such Fiscal Year prepared in accordance with GAAP (including a balance sheet and profit and loss statement) and audited by PricewaterhouseCoopers LLP or another firm of independent public accountants of similar standing;
c)together with each of the statements delivered pursuant to the foregoing clause (a) or (b), a certificate, executed by the chief financial officer, the treasurer or the corporate controller of the Borrower, showing, as of the last day of the relevant Fiscal Quarter or Fiscal Year compliance with the covenants set forth in Section
7.2.4 (in reasonable detail and with appropriate calculations and computations in all respects reasonably satisfactory to the Facility Agent);
d)as soon as possible after the occurrence of a Default or Prepayment Event, a statement of the chief financial officer of the Borrower setting forth details of such Default or Prepayment Event (as the case may be) and the action which the Borrower has taken and proposes to take with respect thereto;
e)as soon as the Borrower becomes aware thereof, notice of any Material Litigation except to the extent that such Material Litigation is disclosed by the Borrower in filings with the SEC;
f)as soon as the Borrower becomes aware thereof, notice of any event which, in its reasonable opinion, would be expected to materially adversely affect the business, operations or financial condition of the Borrower and its Subsidiaries taken as a whole;
g)promptly after the sending or filing thereof, copies of all reports which the Borrower sends to all holders of each security issued by the Borrower, and all registration statements which the Borrower or any of its Subsidiaries files with the SEC or any national securities exchange; and
h)such other information respecting the condition or operations, financial or otherwise, of the Borrower or any of its Subsidiaries as any Lender through the Facility Agent may from time to time reasonably request (including an update to any information and projections previously provided to the Lenders where these have been prepared and are available);
provided that information required to be furnished to the Facility Agent under subsections (a), (b) and (g) of this Section 7.1.1 shall be deemed furnished to the Facility Agent when available free of charge on the Borrower’s website at http://www.rclinvestor.com or the SEC’s website at http://www.sec.gov.
SECTION 7.1.2. Approvals and Other Consents. The Borrower will obtain (or cause to be obtained) all such governmental licenses, authorizations, consents, permits and approvals as may be required for (a) the Borrower to perform its obligations under this Agreement and the other Loan Documents and (b) the operation of the Purchased Vessel in compliance with all applicable laws, except, in each case, to the extent that failure to obtain (or cause to be obtained) such governmental licenses, authorizations, consents, permits and approvals would not be expected to have a Material Adverse Effect.
SECTION 7.1.3. Compliance with Laws, etc. The Borrower will, and will cause each of its Subsidiaries to, comply in all material respects with all applicable laws, rules, regulations and orders, except (other than as described in clauses (a) and (f) below) to the extent that the failure to so comply would not have a Material Adverse Effect, which compliance shall in any case include (but not be limited to):
a)in the case of the Borrower, the maintenance and preservation of its corporate existence (subject to the provisions of Section 7.2.6);
b)in the case of the Borrower, maintenance of its qualification as a foreign corporation in the State of Florida;
c)the payment, before the same become delinquent, of all taxes, assessments and governmental charges imposed upon it or upon its property, except to the extent being diligently contested in good faith by appropriate proceedings;
d)compliance with all applicable Environmental Laws;
e)compliance with all anti-money laundering and anti-corrupt practices laws applicable to the Borrower, including by not making or causing to be made any offer, gift or payment, consideration or benefit of any kind to anyone, either directly or indirectly, as an inducement or reward for the performance of any of the transactions contemplated by this agreement to the extent the same would be in contravention of such applicable laws; and
f)the Borrower will maintain in effect policies and procedures designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers and employees with Anti-Corruption Laws and applicable Sanctions.
SECTION 7.1.4. The Purchased Vessel. The Borrower will:
a)cause the Purchased Vessel to be exclusively operated by or chartered to the Borrower or one of the Borrower’s wholly owned Subsidiaries, provided that the Borrower or such Subsidiary may charter out the Purchased Vessel (i) to entities other than the Borrower and the Borrower’s wholly owned Subsidiaries and (ii) on a time charter with a stated duration not in excess of one year;
b)cause the Purchased Vessel to be kept in such condition as will entitle her to classification by a classification society of recognized standing;
c)provide the following to the Facility Agent with respect to the Purchased Vessel:
(i)evidence as to the ownership of the Purchased Vessel by the Borrower or one of the Borrower’s wholly owned Subsidiaries; and
(ii)evidence of no recorded Liens on the Purchased Vessel, other than Liens permitted pursuant to Section 7.2.3;
d)within seven days after the Actual Delivery Date, provide the following to the Facility Agent with respect to the Purchased Vessel:
(i)evidence of the class of the Purchased Vessel; and
(ii)evidence as to all required insurance being in effect with respect to the Purchased Vessel.
SECTION 7.1.5. Insurance. The Borrower will maintain or cause to be maintained with responsible insurance companies insurance with respect to the Purchased Vessel against such casualties, third-party liabilities and contingencies and in such amounts, in each case, as is customary for other businesses of similar size in the passenger cruise line industry (provided that in no event will the Borrower or any Subsidiary be required to obtain any business interruption, loss of hire or delay in delivery insurance) and will, upon request of the Facility Agent, furnish to the Facility Agent (with sufficient copies for distribution to each Lender) at reasonable intervals a certificate of a senior officer of the Borrower setting forth the nature and extent of all insurance maintained by the Borrower and certifying as to compliance with this Section.
SECTION 7.1.6. Books and Records. The Borrower will keep books and records that accurately reflect all of its business affairs and transactions and permit the Facility Agent and each Lender or any of their respective representatives, at reasonable times and intervals and upon reasonable prior notice, to visit each of its offices, to discuss its financial matters with its officers and to examine any of its books or other corporate records.
SECTION 7.1.7. BpiFAE Insurance Policy/French Authority Requirements. The Borrower shall, on the reasonable request of the ECA Agent
or the Facility Agent, provide such other information as required under the BpiFAE Insurance Policy and/or the Interest Stabilisation Agreement as necessary to enable the ECA Agent or the Facility Agent to obtain the full support of the relevant French Authority pursuant to the BpiFAE Insurance Policy and/or the Interest Stabilisation Agreement (as the case may be). The Borrower must pay to the ECA Agent or the Facility Agent the amount of all reasonable costs and expenses reasonably incurred by the ECA Agent or the Facility Agent in connection with complying with a request by any French Authority for any additional information necessary or desirable in connection with the BpiFAE Insurance Policy or the Interest Stabilisation Agreement (as the case may be); provided that the Borrower is consulted before the ECA Agent or Natixis incurs any such cost or expense.
SECTION 7.2. Negative Covenants. The Borrower agrees with the Facility Agent and each Lender that, from the Effective Date until all Commitments have terminated and all Obligations have been paid and performed in full, the Borrower will perform the obligations set forth in this Section 7.2.
SECTION 7.2.1. Business Activities. The Borrower will not, and will not permit any of its Subsidiaries to, engage in any principal business activity other than those engaged in by the Borrower and its Subsidiaries on the date hereof and other business activities reasonably related, ancillary or complimentary thereto or that are reasonable extensions thereof.
SECTION 7.2.2. Indebtedness. The Borrower will not permit any of the Existing Principal Subsidiaries to create, incur, assume or suffer to exist or otherwise become or be liable in respect of any Indebtedness, other than, without duplication, the following:
a)Indebtedness secured by Liens of the type described in Section 7.2.3;
b)Indebtedness owing to the Borrower or a direct or indirect Subsidiary of the Borrower;
c)Indebtedness incurred to finance, refinance or refund the cost (including the cost of construction) of assets acquired after the Effective Date;
d)Indebtedness in an aggregate principal amount, together with (but without duplication of) Indebtedness permitted to be secured under Section 7.2.3(b), at any one time outstanding not exceeding (determined at the time of creation of such Lien or the incurrence by any Existing Principal Subsidiary of such Indebtedness, as applicable) 10% of the total assets of the Borrower and its Subsidiaries taken as a whole as determined in accordance with GAAP as at the last day of the most recent ended Fiscal Quarter; and
e)obligations in respect of Hedging Instruments entered into for the purpose of managing interest rate, foreign currency exchange or commodity exposure risk and not for speculative purposes.
SECTION 7.2.3. Liens. The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any of its property, revenues or assets, whether now owned or hereafter acquired, except:
a)Liens on assets (including, without limitation, shares of capital stock of corporations and assets owned by any corporation that becomes a Subsidiary of the Borrower after the Effective Date) acquired after the Effective Date (whether by purchase, construction or otherwise) by the Borrower or any of its Subsidiaries (other than (x) an Existing Principal Subsidiary or (y) any other Principal Subsidiary which, at any time, after three months after the acquisition of a Vessel, owns a Vessel free of any mortgage Lien), which Liens were created solely for the purpose of securing Indebtedness representing, or incurred to finance, refinance or refund, the cost (including the cost of construction) of such assets, so long as (i) the acquisition of such assets is not otherwise prohibited by the terms of this Agreement and (ii) each such Lien is created within three months after the acquisition of the relevant assets;
b)in addition to other Liens permitted under this Section 7.2.3, Liens securing Indebtedness in an aggregate principal amount, together with (but without
duplication of) Indebtedness permitted under Section 7.2.2(d), at any one time outstanding not exceeding (determined at the time of creation of such Lien or the incurrence by any Existing Principal Subsidiary of such indebtedness, as applicable) 10% of the total assets of the Borrower and its Subsidiaries (the “Lien Basket Amount”) taken as a whole as determined in accordance with GAAP as at the last day of the most recent ended Fiscal Quarter; provided, however that, if, at any time, the Senior Debt Rating of the Borrower is less than Investment Grade as given by both Moody’s and S&P, the Lien Basket Amount shall be the greater of
(x) 5.0% of the total assets of the Borrower and its Subsidiaries taken as a whole as determined in accordance with GAAP as at the last day of the most recent ended Fiscal Quarter and (y) $735,000,000;
c)Liens on assets acquired after the Effective Date by the Borrower or any of its Subsidiaries (other than by (x) any Subsidiary that is an Existing Principal Subsidiary or (y) any other Principal Subsidiary which, at any time, owns a Vessel free of any mortgage Lien) so long as (i) the acquisition of such assets is not otherwise prohibited by the terms of this Agreement and (ii) each of such Liens existed on such assets before the time of its acquisition and was not created by the Borrower or any of its Subsidiaries in anticipation thereof;
d)Liens on any asset of any corporation that becomes a Subsidiary of the Borrower (other than a corporation that also becomes a Subsidiary of an Existing Principal Subsidiary) after the Effective Date so long as (i) the acquisition or creation of such corporation by the Borrower is not otherwise prohibited by the terms of this Agreement and (ii) such Liens are in existence at the time such corporation becomes a Subsidiary of the Borrower and were not created by the Borrower or any of its Subsidiaries in anticipation thereof;
e)Liens securing Government-related Obligations;
f)Liens for taxes, assessments or other governmental charges or levies not at the time delinquent or thereafter payable without penalty or being diligently contested in good faith by appropriate proceedings;
g)Liens of carriers, warehousemen, mechanics, material-men and landlords incurred in the ordinary course of business for sums not overdue by more than 60 days or being diligently contested in good faith by appropriate proceedings;
h)Liens incurred in the ordinary course of business in connection with workers’ compensation, unemployment insurance or other forms of governmental insurance or benefits;
i)Liens for current crew’s wages and salvage;
j)Liens arising by operation of law as the result of the furnishing of necessaries for any Vessel so long as the same are discharged in the ordinary course of business or are being diligently contested in good faith by appropriate proceedings;
k)Liens on Vessels that:
(i)secure obligations covered (or reasonably expected to be covered) by insurance;
(ii)were incurred in the course of or incidental to trading such Vessel in connection with repairs or other work to such Vessel; or
(iii)were incurred in connection with work to such Vessel that is required to be performed pursuant to applicable law, rule, regulation or order;
provided that, in each case described in this clause (k), such Liens are either (x) discharged in the ordinary course of business or (y) being diligently contested in good faith by appropriate proceedings;
l)normal and customary rights of set-off upon deposits of cash or other Liens originating solely by virtue of any statutory or common law provision relating to bankers’ liens, rights of set-off or similar rights in favor of banks or other depository institutions;
m)Liens in respect of rights of set-off, recoupment and holdback in favor of credit card processors securing obligations in connection with credit card processing services incurred in the ordinary course of business;
n)Liens on cash or Cash Equivalents or marketable securities securing obligations in respect of Hedging Instruments not incurred for speculative purposes or securing letters of credit that support such obligations;
o)deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business and deposits securing liabilities to insurance carriers under insurance or self-insurance arrangements;
p)easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Borrower or any Subsidiary; and
q)licenses, sublicenses, leases or subleases granted to other Persons not materially interfering with the conduct of the business of the Borrower or any of its Subsidiaries.
SECTION 7.2.4. Financial Condition. The Borrower will not permit
a)Net Debt to Capitalization Ratio, as at the end of any Fiscal Quarter, to be greater than 0.625 to 1.
b)Fixed Charge Coverage Ratio to be less than 1.25 to 1 as at the last day of any Fiscal Quarter.
In addition, if, at any time, the Senior Debt Rating of the Borrower is less than Investment Grade as given by both Moody’s and S&P, the Borrower will not permit Stockholders’ Equity to be less than, as at the last day of any Fiscal Quarter, the sum of (i) $4,150,000,000 plus (ii) 50% of the consolidated net income of the Borrower and its Subsidiaries for the period commencing on January 1, 2007 and ending on the last day of the Fiscal Quarter most recently ended (treated for these purposes as a single accounting period, but in any event excluding any Fiscal Quarters for which the Borrower and its Subsidiaries have a consolidated net loss).
SECTION 7.2.5. [Intentionally Omitted].
SECTION 7.2.6. Consolidation, Merger, etc. The Borrower will not, and will not permit any of its Subsidiaries to, liquidate or dissolve, consolidate with, or merge into or with, any other corporation, except:
a)any such Subsidiary may (i) liquidate or dissolve voluntarily into, and may merge with and into, the Borrower or any other Subsidiary, and the assets or stock of any Subsidiary may be purchased or otherwise acquired by the Borrower or any other Subsidiary or (ii) merge with and into another Person in connection with a sale or other disposition permitted by Section 7.2.7; and
b)so long as no Event of Default has occurred and is continuing or would occur after giving effect thereto, the Borrower or any of its Subsidiaries may merge into any other Person, or any other Person may merge into the Borrower or any such Subsidiary, or the Borrower or any of its Subsidiaries may purchase or otherwise acquire all or substantially all of the assets of any Person, in each case so long as:
(i)after giving effect thereto, the Stockholders’ Equity of the Borrower and its Subsidiaries is at least equal to 90% of such Stockholders’
Equity immediately prior thereto; and
(ii)in the case of a merger involving the Borrower where the Borrower is not the surviving corporation, (and without prejudice to the provisions of Sections 3.2b) and c) and 9.1.10, which shall not restrict the proposed merger but which can still apply to the extent that the proposed merger would give rise to any of the events or circumstances contemplated by such Sections):
(A)the surviving corporation shall have assumed in writing, delivered to the Facility Agent, all of the Borrower’s obligations hereunder and under the other Loan Documents; and
(B)the surviving corporation shall, promptly upon the request of the Facility Agent or any Lender, supply such documentation and other evidence as is reasonably requested by the Facility Agent
or any Lender in order for the Facility Agent or such Lender to carry out and be satisfied it has complied with the results of all necessary “know your customer” or other similar checks under all applicable laws and regulations.
SECTION 7.2.7. Asset Dispositions, etc. The Borrower will not, and will not permit any of its Subsidiaries to, sell, transfer, contribute or otherwise convey, or grant options, warrants or other rights with respect to, all or substantially all of the assets of
(a)the Borrower or (b) the Subsidiaries of the Borrower, taken as a whole, except sales of assets between or among the Borrower and Subsidiaries of the Borrower.
SECTION 7.3. Lender incorporated in the Federal Republic of Germany. The representations and warranties and covenants given in
Sections 6.16 and 7.1.3(f) respectively shall only be given, and be applicable to, a Lender incorporated in the Federal Republic of Germany insofar as the giving of and compliance with such representations and warranties do not result in a violation of or conflict with section 7 of the German Foreign Trade Regulation (Außenwirtschaftsverordnung) (in conjunction with section 4 paragraph 1 a no.3 foreign trade law (AWG) (Außenwirtschaftsgesetz)), any provision of Council Regulation (EC) 2271/1996 or any similar applicable anti-boycott law or regulation.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default. Each of the following
events or occurrences described in this Section 8.1 shall constitute an “Event of Default”.
SECTION 8.1.1. Non-Payment of Obligations. The Borrower shall default in the payment when due of any principal of or interest on the Loan or any Commitment Fee, or the Borrower shall default in the payment of any fee due and payable under the Fee Letter, provided that, in the case of any default in the payment of any interest on the Loan or of any Commitment Fee, such default shall continue unremedied for a period of at least five (5) Business Days after notice thereof shall have been given to the Borrower by the Facility Agent; and provided further that, in the case of any default in the payment of any fee due and payable under the Fee Letter, such default shall continue unremedied for a period of at least ten days after notice thereof shall have been given to the Borrower by the Facility Agent.
SECTION 8.1.2. Breach of Warranty. Any representation or warranty of the Borrower made or deemed to be made hereunder (including any certificates delivered pursuant to Article V) is or shall be incorrect in any material respect when made.
SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations. The Borrower shall default in the due performance and observance
of any other agreement contained herein or in any other Loan Document (other than the covenants set forth in Section 7.2.4 and the obligations referred to in Section 8.1.1) and such default shall continue unremedied for a period of five days after notice thereof shall have been given to the Borrower by the Facility Agent or any Lender (or, if (a) such default is
capable of being remedied within 30 days (commencing on the first day following such five- day period) and (b) the Borrower is actively seeking to remedy the same during such period, such default shall continue unremedied for at least 35 days after such notice to the Borrower).
SECTION 8.1.4. Default on Other Indebtedness. (a) The Borrower or any of its Principal Subsidiaries shall fail to pay any Indebtedness that is outstanding in a principal amount of at least $100,000,000 (or the equivalent in other currencies) in the aggregate (but excluding Indebtedness hereunder or with respect to Hedging Instruments) when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Indebtedness; (b) the occurrence under any Hedging Instrument of an Early Termination Date (as defined in such Hedging Instrument) resulting from (A) any event of default under such Hedging Instrument as to which the Borrower is the Defaulting Party (as defined in such Hedging Instrument) or (B) any Termination Event (as so defined) as to which the Borrower is an Affected Party (as so defined) and, in either event, the termination value with respect to any such Hedging Instrument owed by the Borrower as a result thereof is greater than
$100,000,000 and the Borrower fails to pay such termination value when due after applicable grace periods; or (c) any other event shall occur or condition shall exist under any agreement or instrument evidencing, securing or relating to any such Indebtedness and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to cause or permit the holder or holders of such Indebtedness to cause such Indebtedness to become due and payable prior to its scheduled maturity; or (d) any such Indebtedness shall be declared to be due and payable or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption or by voluntary agreement), purchased or defeased, or an offer to prepay, redeem, purchase or defease such Indebtedness is required to be made, in each case prior to the scheduled maturity thereof (other than as a result of any sale or other disposition of any property or assets under the terms of such Indebtedness); provided that any required prepayment or right to require prepayment triggered by terms that are certified by the Borrower to be unique to, but customary in, ship financings shall not constitute an Event of Default under this Section 8.1.4 so long as any required prepayment is made when due. For purposes of determining Indebtedness for any Hedging Instrument, the principal amount of the obligations under any such instrument at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or any Principal Subsidiary would be required to pay if such instrument were terminated at such time.
SECTION 8.1.5. Bankruptcy, Insolvency, etc. The Borrower or any of the Principal Subsidiaries (or any of its other Subsidiaries to the extent that the relevant event described below would have a Material Adverse Effect) shall:
a)generally fail to pay, or admit in writing its inability to pay, its debts as they become due;
b)apply for, consent to, or acquiesce in, the appointment of a trustee, receiver, sequestrator or other custodian for it or any of its property, or make a general assignment for the benefit of creditors;
c)in the absence of such application, consent or acquiescence, permit or suffer to exist the appointment of a trustee, receiver, sequestrator or other custodian for it or for a substantial part of its property, and such trustee, receiver, sequestrator or other custodian shall not be discharged within 60 days, provided that in the case of such an event in respect of the Borrower, the Borrower hereby expressly authorizes the Facility Agent and each Lender to appear in any court conducting any relevant proceeding during such 60-day period to preserve, protect and defend their respective rights under the Loan Documents;
d)permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law, or any dissolution, winding up or liquidation proceeding, in respect of the Borrower or any of such Subsidiaries, and, if any such case or proceeding is not commenced by the Borrower or such Subsidiary, such case or proceeding shall be consented to or acquiesced in by the Borrower or such Subsidiary or shall result in the entry of an order for relief or shall remain for 60 days undismissed, provided that the Borrower hereby expressly authorizes the Facility Agent and each Lender to appear in any court conducting any such case or proceeding during such 60-day period to preserve, protect and defend their respective rights under the Loan Documents; or
e)take any corporate action authorizing, or in furtherance of, any of the foregoing.
SECTION 8.2. Action if Bankruptcy. If any Event of Default described in clauses (b) through (d) of Section 8.1.5 shall occur with respect to the Borrower, the Commitments (if not theretofore terminated) shall automatically terminate and the outstanding principal amount of the Loan and all other Obligations shall automatically be and become immediately due and payable, without notice or demand.
SECTION 8.3. Action if Other Event of Default. If any Event of Default (other than any Event of Default described in clauses (b) through (d) of Section 8.1.5 with respect to the Borrower) shall occur for any reason, whether voluntary or involuntary, and be continuing, the Facility Agent, upon the direction of the Required Lenders (after consultation with BpiFAE who shall have the right to instruct the Lenders to waive such Event of Default), shall by notice to the Borrower declare all of the outstanding principal amount of the Loan and other Obligations to be due and payable and/or the Commitments (if not theretofore terminated) to be terminated, whereupon the full unpaid amount of the Loan and other Obligations shall be and become immediately due and payable, without further notice, demand or presentment, and/or, as the case may be, the Commitments shall terminate.
ARTICLE IX PREPAYMENT EVENTS
SECTION 9.1. Listing of Prepayment Events. Each of the
following events or occurrences described in this Section 9.1 shall constitute a “Prepayment Event”.
SECTION 9.1.1. Change of Control. There occurs any Change of
Control.
SECTION 9.1.2. Unenforceability. Any Loan Document shall cease to be the legally valid, binding and enforceable obligation of the Borrower (in each case, other than with respect to provisions of any Loan Document (i) identified as unenforceable in the form of the opinion of the Borrower’s counsel set forth as Exhibit B-1 or (ii) that a court of competent jurisdiction has determined are not material) and such event shall continue unremedied for 15 days after notice thereof has been given to the Borrower by the Facility Agent.
SECTION 9.1.3. Approvals. Any material license, consent, authorization, registration or approval at any time necessary to enable the Borrower or any Principal Subsidiary to conduct its business shall be revoked, withdrawn or otherwise cease to be in full force and effect, unless the same would not have a Material Adverse Effect.
SECTION 9.1.4. Non-Performance of Certain Covenants and Obligations. The Borrower shall default in the due performance and observance
of any of the covenants set forth in Sections 4.12 or 7.2.4.
SECTION 9.1.5. Judgments. Any judgment or order for the payment of money in excess of $100,000,000 shall be rendered against the Borrower or any of the Principal Subsidiaries by a court of competent jurisdiction and the Borrower or such Principal Subsidiary shall have failed to satisfy such judgment and either:
a)enforcement proceedings in respect of any material assets of the Borrower or such Principal Subsidiary shall have been commenced by any creditor upon such judgment or order and shall not have been stayed or enjoined within five (5) Business Days after the commencement of such enforcement proceedings; or
b)there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect.
SECTION 9.1.6. Condemnation, etc.. The Purchased Vessel shall be condemned or otherwise taken under color of law or requisitioned and the same shall continue unremedied for at least 20 days, unless such condemnation or other taking would not have a Material Adverse Effect.
SECTION 9.1.7. Arrest. The Purchased Vessel shall be arrested and the same shall continue unremedied for at least 20 days, unless such arrest would not have a Material Adverse Effect.
SECTION 9.1.8. Sale/Disposal of the Purchased Vessel. The Purchased Vessel is sold to a company which is not the Borrower or any other Subsidiary of the Borrower (other than for the purpose of a lease back to the Borrower or any other Subsidiary of the Borrower).
SECTION 9.1.9. BpiFAE Insurance Policy. The BpiFAE Insurance Policy is cancelled for any reason or ceases to be in full force and effect.
SECTION 9.1.10. Illegality. No later than the close of business on the last day of the Option Period related to the giving of any Illegality Notice by an affected
Lender pursuant to Section 3.2(b), either: (x) the Borrower has not elected to take an action specified in clause (1) or (2) of Section 3.2(c) or (y) if any such election shall have been made, the Borrower has failed to take the action required in respect of such election. In such circumstances the Facility Agent (at the direction of the affected Lender) shall by notice to the Borrower require the Borrower to prepay in full all principal and interest and all other Obligations owing to such Lender either (i) forthwith or, as the case may be, (ii) on a future specified date not being earlier than the latest date permitted by the relevant law.
SECTION 9.2. Mandatory Prepayment. If any Prepayment Event (other than a Prepayment Event under Section 9.1.10) shall occur and be continuing, the Facility Agent, upon the direction of the Required Lenders, shall by notice to the Borrower require the Borrower to prepay in full on the date of such notice all principal of and interest on the Loan and all other Obligations (and, in such event, the Borrower agrees to so pay the full unpaid amount of the Loan and all accrued and unpaid interest thereon and all other Obligations).
SECTION 9.3. Mitigation. If the ECA Agent, the Facility Agent or any of the Lenders become aware that an event or circumstance has arisen which will cause the BpiFAE Insurance Policy to be cancelled for any reason or no longer remain in full force and effect they shall notify the Borrower and the Lenders, the Borrower, the ECA Agent and the Facility Agent shall negotiate in good faith for a period of up to 30 days or, if less, the date by which the BpiFAE Insurance Policy shall be terminated or cease to be in full force and effect to determine whether the facility can be restructured and/or the Loan refinanced in a manner acceptable to each of the Lenders in their absolute discretion. The Lenders will use reasonable efforts to involve BpiFAE in such negotiations.
ARTICLE X
THE FACILITY AGENT AND THE ECA AGENT
SECTION 10.1. Actions. Each Lender hereby appoints Citibank Europe plc, UK Branch, as Facility Agent and Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch as ECA Agent, as its agent under and for purposes of this Agreement and each other Loan Document (for purposes of this Article X, the Facility Agent and the ECA Agent are referred to collectively as the “Agents”). Each Lender authorizes the Agents to act on behalf of such Lender under this Agreement and each other Loan Document and, in the absence of other written instructions from the Required Lenders received from time to time by the Agents (with respect to which each Agent agrees that it will comply, except as otherwise provided in this Section 10.1 or as otherwise advised by counsel or as otherwise instructed by any French Authority, it being understood and agreed that any instructions provided by a French Authority shall prevail), to exercise such powers hereunder and thereunder as are specifically delegated to or required of the Agents by the terms hereof and thereof, together with such powers as may be reasonably incidental thereto. Neither Agent shall be obliged to act on the instructions of any Lender or the Required Lenders if to do so would, in the opinion of such Agent, be contrary to any provision of this Agreement or any other Loan Document or the BpiFAE Insurance Policy or to any law or the conflicting instructions of any French Authority, or would expose such Agent to any actual or potential liability to any third party. As between the Lenders and the Agents, it is acknowledged that
each Agent’s duties under this Agreement and the other Loan Documents are solely mechanical and administrative in nature.
SECTION 10.2. Indemnity. Each Lender hereby indemnifies (which indemnity shall survive any termination of this Agreement) each Agent, pro rata according to such Lender’s Percentage, from and against any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and disbursements of counsel) that be incurred by or asserted or awarded against, such Agent in any way relating to or arising out of this Agreement and any other Loan Document or any action taken or omitted by such Agent under this Agreement or any other Loan Document; provided that no Lender shall be liable for the payment of any portion of such claims, damages, losses, liabilities and expenses which have resulted from such Agent’s gross negligence or willful misconduct. Without limitation of the foregoing, each Lender agrees to reimburse each Agent promptly upon demand for its ratable share of any out-of-pocket expenses (including reasonable counsel fees) incurred by such Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, to the extent that such Agent is not reimbursed for such expenses by the Borrower. In the case of any investigation, litigation or proceeding giving rise to any such indemnified costs, this Section applies whether any such investigation, litigation or proceeding is brought by any Agent, any Lender or a third party. Neither Agent shall be required to take any action hereunder or under any other Loan Document, or to prosecute or defend any suit in respect of this Agreement or any other Loan Document, unless it is expressly required to do so under this Agreement or is indemnified hereunder to its satisfaction. If any indemnity in favor of an Agent shall be or become, in such Agent’s determination, inadequate, such Agent may call for additional indemnification from the Lenders and cease to do the acts indemnified against hereunder until such additional indemnity is given.
SECTION 10.3. Funding Reliance, etc. Each Lender shall notify the Facility Agent by 4:00 p.m., London time, one day prior to the advance of the Loan if it is not able to fund the following day. Unless the Facility Agent shall have been notified by telephone, confirmed in writing, by any Lender by 4:00 p.m., London time, on the day prior to the advance of the Loan that such Lender will not make available the amount which would constitute its Percentage of the Loan on the date specified therefor, the Facility Agent may assume that such Lender has made such amount available to the Facility Agent and, in reliance upon such assumption, may, but shall not be obliged to, make available to the Borrower a corresponding amount. If and to the extent that such Lender shall not have made such amount available to the Facility Agent, such Lender and the Borrower severally agree to repay the Facility Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date the Facility Agent made such amount available to the Borrower to the date such amount is repaid to the Facility Agent, at the interest rate applicable at the time to the Loan without premium or penalty.
SECTION 10.4. Exculpation. Neither of the Agents nor any of their respective directors, officers, employees or agents shall be liable to any Lender for any action taken or omitted to be taken by it under this Agreement or any other Loan Document, or in connection herewith or therewith, except for its own willful misconduct or gross negligence. Without limitation of the generality of the foregoing, each Agent (i) may consult with legal
counsel (including counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it and in accordance with the advice of such counsel, accountants or experts, (ii) makes no warranty or representation to any Lender and shall not be responsible to any Lender for any statements, warranties or representations (whether written or oral) made in or in connection with this Agreement, (iii) shall not have any duty to ascertain or to inquire as to the performance, observance or satisfaction of any of the terms, covenants or conditions of this Agreement on the part of the Borrower or the existence at any time of any Default or Prepayment Event or to inspect the property (including the books and records) of the Borrower, (iv) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto, (v) shall incur no liability under or in respect of this Agreement by action upon any notice, consent, certificate or other instrument or writing (which may be by telecopier) believed by it to be genuine and signed or sent by the proper party or parties, and (vi) shall have no responsibility to the Borrower or any Lender on account of (A) the failure of a Lender or the Borrower to perform any of its obligations under this Agreement or any Loan Document; (B) the financial condition of the Borrower; (C) the completeness or accuracy of any statements, representations or warranties made in or pursuant to this Agreement or any Loan Document, or in or pursuant to any document delivered pursuant to or in connection with this Agreement or any Loan Document; or (D) the negotiation, execution, effectiveness, genuineness, validity, enforceability, admissibility in evidence or sufficiency of this Agreement or any Loan Document or of any document executed or delivered pursuant to or in connection with any Loan Document.
SECTION 10.5. Successor. The Facility Agent may resign as such at any time upon at least 30 days’ prior notice to the Borrower and all Lenders and shall resign where required to do in accordance with Section 4.14, provided that any such resignation shall not become effective until a successor Facility Agent has been appointed as provided in this Section 10.5 and such successor Facility Agent has accepted such appointment. If the Facility Agent at any time shall resign, the Required Lenders shall, subject to the immediately preceding proviso and subject to the consent of the Borrower (such consent not to be unreasonably withheld), appoint another Lender as a successor to the Facility Agent which shall thereupon become such Facility Agent’s successor hereunder (provided that the Required Lenders shall, subject to the consent of the Borrower unless an Event or Default or a Prepayment Event shall have occurred and be continuing (such consent not to be unreasonably withheld or delayed) offer to each of the other Lenders in turn, in the order of their respective Percentages of the Loan, the right to become successor Facility Agent). If no successor Facility Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30 days after the Facility Agent’s giving notice of resignation, then the Facility Agent may, on behalf of the Lenders, appoint a successor Facility Agent, which shall be one of the Lenders or a commercial banking institution having a combined capital and surplus of at least $1,000,000,000 (or the equivalent in other currencies), subject, in each case, to the consent of the Borrower (such consent not to be unreasonably withheld). Upon the acceptance of any appointment as Facility Agent hereunder by a successor Facility Agent, such successor Facility Agent shall be entitled to receive from the resigning Facility Agent such documents of transfer and assignment as such successor Facility Agent may reasonably request, and shall thereupon succeed to and become vested with all rights, powers, privileges and duties of the resigning Facility Agent, and the resigning Facility Agent shall be discharged from its duties and obligations under this
Agreement. After any resigning Facility Agent’s resignation hereunder as the Facility Agent, the provisions of:
a)this Article X shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Facility Agent under this Agreement; and
b)Section 11.3 and Section 11.4 shall continue to inure to its benefit.
If a Lender acting as the Facility Agent assigns its Loan to one of its Affiliates, such Facility Agent may, subject to the consent of the Borrower (such consent not to be unreasonably withheld or delayed) assign its rights and obligations as Facility Agent to such Affiliate.
SECTION 10.6. Loans by the Facility Agent. The Facility Agent shall have the same rights and powers with respect to the Loan made by it or any of its Affiliates. The Facility Agent and its Affiliates may accept deposits from, lend money to, and generally engage in any kind of business with the Borrower or any Affiliate of the Borrower as if the Facility Agent were not the Facility Agent hereunder and without any duty to account therefor to the Lenders. The Facility Agent shall have no duty to disclose information obtained or received by it or any of its Affiliates relating to the Borrower or its Subsidiaries to the extent such information was obtained or received in any capacity other than as the Facility Agent.
SECTION 10.7. Credit Decisions. Each Lender acknowledges that it has, independently of each Agent and each other Lender, and based on such Lender’s review of the financial information of the Borrower, this Agreement, the other Loan Documents (the terms and provisions of which being satisfactory to such Lender) and such other documents, information and investigations as such Lender has deemed appropriate, made its own credit decision to extend its Commitment. Each Lender also acknowledges that it will, independently of each Agent and each other Lender, and based on such other documents, information and investigations as it shall deem appropriate at any time, continue to make its own credit decisions as to exercising or not exercising from time to time any rights and privileges available to it under this Agreement or any other Loan Document.
SECTION 10.8. Copies, etc. Each Agent shall give prompt notice to each Lender of each notice or request required or permitted to be given to such Agent by the Borrower pursuant to the terms of this Agreement (unless concurrently delivered to the Lenders by the Borrower). Each Agent will distribute to each Lender each document or instrument received for its account and copies of all other communications received by such Agent from the Borrower for distribution to the Lenders by such Agent in accordance with the terms of this Agreement.
SECTION 10.9. The Agents’ Rights. Each Agent may (i) assume that all representations or warranties made or deemed repeated by the Borrower in or pursuant to this Agreement or any Loan Document are true and complete, unless, in its capacity as the Facility Agent, it has acquired actual knowledge to the contrary, (ii) assume that no Default has occurred unless, in its capacity as an Agent, it has acquired actual knowledge to the contrary, (iii) rely on any document or notice believed by it to be genuine, (iv) rely as to legal or other professional matters on opinions and statements of any legal or other professional advisers selected or approved by it, (v) rely as to any factual matters which might reasonably be expected to be within the knowledge of the Borrower on a certificate
signed by or on behalf of the Borrower and (vi) refrain from exercising any right, power, discretion or remedy unless and until instructed to exercise that right, power, discretion or remedy and as to the manner of its exercise by the Lenders (or, where applicable, by the Required Lenders) and unless and until such Agent has received from the Lenders any payment which such Agent may require on account of, or any security which such Agent may require for, any costs, claims, expenses (including legal and other professional fees) and liabilities which it considers it may incur or sustain in complying with those instructions.
SECTION 10.10. The Facility Agent’s Duties. The Facility Agent shall (i) if requested in writing to do so by a Lender, make enquiry and advise the Lenders as to the performance or observance of any of the provisions of this Agreement or any Loan Document by the Borrower or as to the existence of an Event of Default and (ii) inform the Lenders promptly of any Event of Default of which the Facility Agent has actual knowledge.
The Facility Agent shall not be deemed to have actual knowledge of the falsehood or incompleteness of any representation or warranty made or deemed repeated by the Borrower or actual knowledge of the occurrence of any Default unless a Lender or the Borrower shall have given written notice thereof to the Facility Agent in its capacity as the Facility Agent. Any information acquired by the Facility Agent other than specifically in its capacity as the Facility Agent shall not be deemed to be information acquired by the Facility Agent in its capacity as the Facility Agent.
The Facility Agent may, without any liability to account to the Lenders, generally engage in any kind of banking or trust business with the Borrower or with the Borrower’s subsidiaries or associated companies or with a Lender as if it were not the Facility Agent.
SECTION 10.11. Employment of Agents. In performing its duties and exercising its rights, powers, discretions and remedies under or pursuant to this Agreement or the Loan Documents, each Agent shall be entitled to employ and pay agents to do anything which such Agent is empowered to do under or pursuant to this Agreement or the Loan Documents (including the receipt of money and documents and the payment of money); provided that, unless otherwise provided herein, including without limitation Section 11.3, the employment of such agents shall be for such Agent’s account, and to act or refrain from taking action in reliance on the opinion of, or advice or information obtained from, any lawyer, banker, broker, accountant, valuer or any other person believed by such Agent in good faith to be competent to give such opinion, advice or information.
SECTION 10.12. Distribution of Payments. The Facility Agent shall pay promptly to the order of each Lender that Lender’s Percentage share of every sum of money received by the Facility Agent pursuant to this Agreement or the Loan Documents (including, without limitation, any amounts payable pursuant to Section 4.4.1 but not including any amounts payable pursuant to the Fee Letter and any amounts which, by the terms of this Agreement or the Loan Documents, are paid to the Facility Agent for the account of the Facility Agent alone or specifically for the account of one or more Lenders) and until so paid such amount shall be held by the Facility Agent on trust absolutely for that Lender.
SECTION 10.13. Reimbursement. The Facility Agent shall have no liability to pay any sum to a Lender until it has itself received payment of that sum. If,
however, the Facility Agent does pay any sum to a Lender on account of any amount prospectively due to that Lender pursuant to Section 10.12 before it has itself received payment of that amount, and the Facility Agent does not in fact receive payment within two (2) Business Days after the date on which that payment was required to be made by the terms of this Agreement or the Loan Documents, that Lender will, on demand by the Facility Agent, refund to the Facility Agent an amount equal to the amount received by it, together with an amount sufficient to reimburse the Facility Agent for any amount which the Facility Agent may certify that it has been required to pay by way of interest on money borrowed to fund the amount in question during the period beginning on the date on which that amount was required to be paid by the terms of this Agreement or the Loan Documents and ending on the date on which the Facility Agent receives reimbursement.
SECTION 10.14. Instructions. Where an Agent is authorized or directed to act or refrain from acting in accordance with the instructions of the Lenders or of the Required Lenders each of the Lenders shall provide such Agent with instructions within three (3) Business Days of such Agent’s request (which request may be made orally or in writing). If a Lender does not provide such Agent with instructions within that period, that Lender shall be bound by the decision of such Agent. Nothing in this Section 10.14 shall limit the right of such Agent to take, or refrain from taking, any action without obtaining the instructions of the Lenders or the Required Lenders if such Agent in its discretion considers it necessary or appropriate to take, or refrain from taking, such action in order to preserve the rights of the Lenders under or in connection with this Agreement or the Loan Documents. In that event, such Agent will notify the Lenders of the action taken by it as soon as reasonably practicable, and the Lenders agree to ratify any action taken by the Facility Agent pursuant to this Section 10.14.
SECTION 10.15. Payments. All amounts payable to a Lender under this Section 10 shall be paid to such account at such bank as that Lender may from time to time direct in writing to the Facility Agent.
SECTION 10.16. “Know your customer” Checks. Each Lender shall promptly upon the request of the Facility Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Facility Agent (for itself) in order for the Facility Agent to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in this Agreement or the Loan Documents.
SECTION 10.17. No Fiduciary Relationship. Except as provided in Section 10.12, no Agent shall have any fiduciary relationship with or be deemed to be a trustee of or for any other person and nothing contained in this Agreement or any Loan Document shall constitute a partnership between any two or more Lenders or between either Agent and any other person.
SECTION 10.18. Illegality. The Agent shall refrain from doing anything which it reasonably believes would be contrary to any law of any jurisdiction (including but not limited to England and Wales, the United States of America or any jurisdiction forming part of it) or any regulation or directive of any agency of such state or jurisdiction or which would or might render it liable to any person and may without liability
do anything which is, in its opinion, necessary to comply with any such law, directive or regulation.
ARTICLE XI MISCELLANEOUS PROVISIONS
SECTION 11.1. Waivers, Amendments, etc. The provisions of this
Agreement and of each other Loan Document may from time to time be amended, modified or waived, if such amendment, modification or waiver is in writing and consented to by the Borrower and the Required Lenders; provided that no such amendment, modification or waiver which would:
a)contravene or be in breach of the terms of the BpiFAE Insurance Policy or the arrangements with Natixis DAI relating to the CIRR (if the Fixed Rate applies) shall be effective unless consented to by, as applicable, BpiFAE and/or Natixis DAI;
b)modify any requirement hereunder that any particular action be taken by all the Lenders or by the Required Lenders shall be effective unless consented to by each Lender;
c)modify this Section 11.1 or change the definition of “Required Lenders” shall be made without the consent of each Lender;
d)increase the Commitment of any Lender shall be made without the consent of such Lender;
e)reduce any fees described in Article III payable to any Lender shall be made without the consent of such Lender;
f)extend the Commitment Termination Date of any Lender shall be made without the consent of such Lender;
g)extend the due date for, or reduce the amount of, any scheduled repayment or prepayment of principal of or interest on the Loan (or reduce the principal amount of or rate of interest on the Loan) owed to any Lender shall be made without the consent of such Lender; or
h)affect adversely the interests, rights or obligations of the Facility Agent in its capacity as such shall be made without consent of the Facility Agent.
No failure or delay on the part of the Facility Agent or any Lender in exercising any power or right under this Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right. No notice to or demand on the Borrower in any case shall entitle it to any notice or demand in similar or other circumstances. No waiver or approval by any the Facility Agent or any Lender under this Agreement or any other Loan Document shall, except as may be otherwise stated in such waiver or approval, be applicable to subsequent transactions. No waiver or approval
hereunder shall require any similar or dissimilar waiver or approval thereafter to be granted hereunder. The Lenders hereby agree, at any time and from time to time that the Nordea Agreement or the Bank of Nova Scotia Agreement is amended or refinanced, to negotiate in good faith to amend this Agreement to conform any representations, warranties, covenants or events of default in this Agreement to the amendments made to any substantively comparable provisions in the Nordea Agreement or the Bank of Nova Scotia Agreement or any refinancing thereof.
Neither the Borrower’s rights nor its obligations under the Loan Documents shall be changed, directly or indirectly, as a result of any amendment, supplement, modification, variance or novation of the BpiFAE Insurance Policy, except any amendments, supplements, modifications, variances or novations, as the case may be, which occur (i) with the Borrower’s consent, (ii) at the Borrower’s request or (iii) in order to conform to amendments, supplements, modifications, variances or novations effected in respect of the Loan Documents in accordance with their terms.
SECTION 11.2. Notices.
a)All notices and other communications provided to any party hereto under this Agreement or any other Loan Document shall be in writing, by facsimile or by electronic mail and addressed, delivered or transmitted to such party at its address, facsimile number or electronic mail address set forth below its signature hereto or set forth in the Lender Assignment Agreement or at such other address, or facsimile number as may be designated by such party in a notice to the other parties. Any notice, if mailed and properly addressed with postage prepaid or if properly addressed and sent by pre-paid courier service, shall be deemed given when received; any notice, if transmitted by facsimile, shall be deemed given when transmitted provided it is received in legible form; any notice, if transmitted by electronic mail, shall be deemed given upon acknowledgment of receipt by the recipient.
b)So long as Citibank Europe plc, UK Branch is the Facility Agent, the Borrower may provide to the Facility Agent all information, documents and other materials that it furnishes to the Facility Agent hereunder or any other Loan Document (and any guaranties, security agreements and other agreements relating thereto), including, without limitation, all notices, requests, financial statements, financial and other reports, certificates and other materials, but excluding any such communication that (i) relates to a request for a new, or a conversion of an existing advance or other extension of credit (including any election of an interest rate or interest period relating thereto), (ii) relates to the payment of any principal or other amount due hereunder or any other Loan Document prior to the scheduled date therefor, (iii) provides notice of any Default or Event of Default or
(iv) is required to be delivered to satisfy any condition precedent to the effectiveness of the Agreement and/or any advance or other extension of credit hereunder (all such non-excluded communications being referred to herein collectively as “Communications”), by transmitting the Communications in an electronic/soft medium in a format acceptable to the Facility Agent to such email address notified by the Facility Agent to the Borrower; provided that any
Communication requested pursuant to Section 7.1.1(h) shall be in a format acceptable to the Borrower and the Facility Agent.
c)The Borrower agrees that the Facility Agent may make such items included in the Communications as the Borrower may specifically agree available to the Lenders by posting such notices, at the option of the Borrower, on Intralinks or any similar such platform (the “Platform”) acceptable to the Borrower. Although the primary web portal is secured with a dual firewall and a User ID/Password Authorization System and the Platform is secured through a single user per deal authorization method whereby each user may access the Platform only on a deal-by-deal basis, the Borrower acknowledges that (i) the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution, (ii) the Platform is provided “as is” and “as available” and (iii) neither the Facility Agent nor any of its Affiliates warrants the accuracy, adequacy or completeness of the Communications or the Platform and each expressly disclaims liability for errors or omissions in the Communications or the Platform. No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third party rights or freedom from viruses or other code defects, is made by the Facility Agent or any of its Affiliates in connection with the Platform.
d)The Facility Agent agrees that the receipt of Communications by the Facility Agent at its e-mail address set forth above shall constitute effective delivery of such Communications to the Facility Agent for purposes hereunder and any other Loan Document (and any guaranties, security agreements and other agreements relating thereto).
SECTION 11.3. Payment of Costs and Expenses. The Borrower agrees to pay on demand all reasonable expenses of the Facility Agent (including the reasonable fees and out-of-pocket expenses of counsel to the Facility Agent and of local counsel, if any, who may be retained by counsel to the Facility Agent) in connection with any amendments, waivers, consents, supplements or other modifications to, this Agreement or any other Loan Document as may from time to time hereafter be required, whether or not the transactions contemplated hereby are consummated. The Borrower further agrees to pay, and to save the Facility Agent and the Lenders harmless from all liability for, any stamp, recording, documentary or other similar taxes arising from the execution, delivery or enforcement of this Agreement or the borrowing hereunder or any other Loan Documents. The Borrower also agrees to reimburse the Facility Agent and each Lender upon demand for all reasonable out-of-pocket expenses (including reasonable attorneys’ fees and legal expenses) incurred by the Facility Agent or such Lender in connection with (x) the negotiation of any restructuring or “work-out”, whether or not consummated, of any Obligations and (y) the enforcement of any Obligations.
SECTION 11.4. Indemnification. In consideration of the execution and delivery of this Agreement by each Lender and the extension of the Commitments, the Borrower hereby indemnifies and holds harmless the Facility Agent, each Lender and each of their respective Affiliates and their respective officers, advisors, directors and employees (collectively, the “Indemnified Parties”) from and against any and all claims, damages,
losses, liabilities and expenses (including, without limitation, reasonable fees and disbursements of counsel), joint or several, that may be incurred by or asserted or awarded against any Indemnified Party (including, without limitation, in connection with any investigation, litigation or proceeding or the preparation of a defense in connection therewith), in each case arising out of or in connection with or by reason of this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby or any actual or proposed use of the proceeds of the Loans (collectively, the “Indemnified Liabilities”), except to the extent such claim, damage, loss, liability or expense is found in a final, non- appealable judgment by a court of competent jurisdiction to have resulted primarily from such Indemnified Party’s gross negligence or willful misconduct or the material breach by such Indemnified Party of its obligations under this Agreement, any other Loan Document, the BpiFAE Insurance Policy or Interest Stabilisation Agreement and which breach is not attributable to the Borrower’s own breach of the terms of this Agreement or any other Loan Document or is a claim, damage, loss, liability or expense which would have been compensated under other provisions of the Loan Documents but for any exclusions applicable thereunder.
In the case of an investigation, litigation or other proceeding to which the indemnity in this paragraph applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by the Borrower, any of its directors, security holders or creditors, an Indemnified Party or any other person or an Indemnified Party is otherwise a party thereto. Each Indemnified Party shall (a) furnish the Borrower with prompt notice of any action, suit or other claim covered by this Section 11.4, (b) not agree to any settlement or compromise of any such action, suit or claim without the Borrower’s prior consent, (c) shall cooperate fully in the Borrower’s defense of any such action, suit or other claim (provided that the Borrower shall reimburse such indemnified party for its reasonable out-of-pocket expenses incurred pursuant hereto) and (d) at the Borrower’s request, permit the Borrower to assume control of the defense of any such claim, other than regulatory, supervisory or similar investigations, provided that (i) the Borrower acknowledges in writing its obligations to indemnify the Indemnified Party in accordance with the terms herein in connection with such claims, (ii) the Borrower shall keep the Indemnified Party fully informed with respect to the conduct of the defense of such claim, (iii) the Borrower shall consult in good faith with the Indemnified Party (from time to time and before taking any material decision) about the conduct of the defense of such claim, (iv) the Borrower shall conduct the defense of such claim properly and diligently taking into account its own interests and those of the Indemnified Party, (v) the Borrower shall employ counsel reasonably acceptable to the Indemnified Party and at the Borrower’s expense, and (vi) the Borrower shall not enter into a settlement with respect to such claim unless either (A) such settlement involves only the payment of a monetary sum, does not include any performance by or an admission of liability or responsibility on the part of the Indemnified Party, and contains a provision unconditionally releasing the Indemnified Party and each other indemnified party from, and holding all such persons harmless, against, all liability in respect of claims by any releasing party or (B) the Indemnified Party provides written consent to such settlement (such consent not to be unreasonably withheld or delayed). Notwithstanding the Borrower’s election to assume the defense of such action, the Indemnified Party shall have the right to employ separate counsel and to participate in the defense of such action and the Borrower shall bear the fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the Borrower to represent the Indemnified Party would present such counsel with an actual or potential conflict of interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the Borrower and the Indemnified Party and the Indemnified Party shall have concluded that there may be legal defenses available to it which are different from or additional to those available to the Borrower and determined that it is necessary to employ separate counsel in order to pursue such defenses (in which case the Borrower shall not have the right to assume the defense of such action on the Indemnified Party’s behalf), (iii) the Borrower shall not have employed counsel reasonably acceptable to the Indemnified Party to represent the Indemnified Party within a reasonable time after notice of the institution of such action, or (iv) the Borrower authorizes the Indemnified Party to employ separate counsel at the Borrower’s expense. The Borrower acknowledges that none of the Indemnified Parties shall have any liability (whether direct or indirect, in contract, tort or otherwise) to the Borrower or any of its security holders or creditors for or in connection with the transactions contemplated hereby, except to the extent such liability is determined in a final non- appealable judgment by a court of competent jurisdiction to have resulted primarily from such Indemnified Party’s gross negligence or willful misconduct. In no event, however, shall any Indemnified Party be liable on any theory of liability for any special, indirect, consequential or punitive damages (including, without limitation, any loss of profits, business or anticipated savings). If and to the extent that the foregoing undertaking may be unenforceable for any reason, the Borrower hereby agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.
SECTION 11.5. Survival. The obligations of the Borrower under Sections 4.3, 4.4, 4.5, 4.6, 4.7, 11.3 and 11.4 and the obligations of the Lenders under Section 10.1, shall in each case survive any termination of this Agreement and the payment in full of all Obligations. The representations and warranties made by the Borrower in this Agreement and in each other Loan Document shall survive the execution and delivery of this Agreement and each such other Loan Document.
SECTION 11.6. Severability. Any provision of this Agreement or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement or such Loan Document or affecting the validity or enforceability of such provision in any other jurisdiction.
SECTION 11.7. Headings. The various headings of this Agreement and of each other Loan Document are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or such other Loan Document or any provisions hereof or thereof.
SECTION 11.8. Execution in Counterparts, Effectiveness, etc. This Agreement may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement. This Agreement, as a novated and amended Agreement, shall become effective upon the occurrence of the Novation Effective Time under, and as defined in, the Novation Agreement.
SECTION 11.9. Third Party Rights. Notwithstanding the provisions of the Contracts (Rights of Third Parties) Act 1999, no term of this Agreement is enforceable by a person who is not a party to it with the exception of BpiFAE and Natixis.
SECTION 11.10. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns; provided that:
a)except to the extent permitted under Section 7.2.6, the Borrower may not assign or transfer its rights or obligations hereunder without the prior written consent of the Facility Agent, each Lender and BpiFAE; and
b)the rights of sale, assignment and transfer of the Lenders are subject to Section 11.11.
SECTION 11.11. Sale and Transfer of the Loan; Participations in the Loan. Each Lender may assign its Percentage or portion of the Loan to
one or more other Persons (a “New Lender”), or sell participations in its Percentage or portion of the Loan to one or more other Persons; provided that, in the case of assignments where the Fixed Rate applies, such New Lender (other than BpiFAE or CAFFIL as assignee of all or any of SFIL’s rights as Lender following the enforcement of the security granted pursuant to paragraph (iv) of Section 11.11.1 in connection with the BpiFAE Enhanced Guarantee, and subject as provided in Section 11.11.1(iv)) enters into an Interest Stabilisation Agreement.
SECTION 11.11.1. Assignments
(i)Any Lender with the prior written consents of the Borrower and the Facility Agent (which consents shall not be unreasonably delayed or withheld and which consent, in the case of the Borrower, shall be deemed to have been given in the absence of a written notice delivered by the Borrower to the Facility Agent, on or before the fifth Business Day after receipt by the Borrower of such Lender’s request for consent, stating, in reasonable detail, the reasons why the Borrower proposes to withhold such consent) may at any time (and from time to time) assign or transfer to one or more commercial banks or other financial institutions all or any fraction of such Lender’s portion of the Loan.
(ii)Any Lender, with notice to the Borrower and the Facility Agent, and, notwithstanding the foregoing clause (i), without the consent of the Borrower, or the Facility Agent may assign or transfer (A) to any of its Affiliates, (B) to SFIL or (C) following the occurrence and during the continuance of an Event of Default under Sections 8.1.1, 8.1.4(a) or 8.1.5, to any other Person, in each case, all or any fraction of such Lender’s portion of the Loan.
(iii)Any Lender may (notwithstanding the foregoing clauses, and without notice to, or consent from, the Borrower or the Facility Agent) assign or charge all or any fraction of its portion of the Loan to any federal reserve or central bank as collateral security in connection with the extension of credit or support by such federal reserve or central bank to such Lender.
(iv)SFIL may (notwithstanding the foregoing clauses, and without notice to, or consent from, the Borrower or the Facility Agent) assign, charge or otherwise grant security over all
or any fraction of its portion of the Loan and of its rights as Lender to CAFFIL as collateral security in connection with the extension of credit or support by CAFFIL to SFIL in respect of this Agreement and the BpiFAE Enhanced Guarantee, provided that at the time of the assignment, charge or grant of security CAFFIL is an Affiliate of SFIL and that such assignment, charge or other security is on terms that (i) CAFFIL shall not have any rights to assign, charge or grant any security over such rights to any other person (other than to BpiFAE pursuant to and in accordance with the BpiFAE Enhanced Guarantee) without the prior written consent of the Borrower, (ii) CAFFIL shall only be entitled to enforce its rights under such assignment, charge or other security without the prior written consent of the Borrower if at that time it remains an Affiliate of SFIL, (iii) prior to any enforcement such assignment, charge or other security, the Borrower and the Facility Agent shall continue to deal solely and directly with SFIL in connection with its rights and obligations as Lender under this Agreement and other Loan Documents (subject to any payment instructions given by SFIL), (iv) for the avoidance of doubt, the Borrower’s rights and obligations under this Agreement shall not be increased or affected (including, without limitation, the right to pay Fixed Rate under Section 3.3.1) as a result of such assignment, charge or security or any enforcement thereof, (v) the Borrower shall not be liable to pay any amount under Sections 4.2(c), 4.3, 4.4, 4.5, 4.6 and 4.7 that is greater than the amount which it would have been required to pay to SFIL had no such assignment, charge or other security been granted and
(vi)without prejudice to SFIL’s obligations under that Section, CAFFIL shall be bound by the confidentiality provisions set forth in Section 11.15. in relation to any information to which it applies to the same extent as required of the Lenders. For the avoidance of doubt:
(1)if CAFFIL becomes a Lender under this Agreement in respect of any portion of the Loan following enforcement of any assignment, charge or other security granted to it by SFIL pursuant to this Section 11.11.1(iv), it shall have the same rights to assign or transfer all or any fraction of such portion of the Loan on and subject to the same terms and conditions as are set forth in this Agreement for assignments and transfers by other Lenders and (B) CAFFIL may not enforce its rights under any such assignment, charge or other security by assigning or transferring all or any fraction of SFIL’s portion of the Loan or any of its rights or obligations under this Agreement or other Loan Documents except pursuant to an assignment or transfer to a commercial bank or other financial institution on and subject to the same terms and conditions as are set forth in this Agreement for assignments and transfers by Lenders.
(v)No Lender may (notwithstanding the foregoing clauses) assign or transfer any of its rights under this Agreement unless it has given prior written notification of the transfer to BpiFAE and (if the Loan is accruing interest at the Fixed Rate) Natixis DAI and has obtained a prior written consent from BpiFAE and Natixis DAI and any Assignee Lender (other than BpiFAE and CAFFIL as assignee of all or any of SFIL’s rights as Lender following the enforcement of the security granted pursuant to paragraph (iv) of Section 11.11.1 in connection with the BpiFAE Enhanced Guarantee, subject as provided in Section 11.11.1(iv)) is, if the Fixed Rate applies, eligible to benefit from the CIRR stabilisation. Any assignment or transfer shall comply with the terms of the BpiFAE Insurance Policy.
(vi)Nothing in this Section 11.11.1 shall prejudice the right of the Lender to assign its rights under this Agreement to BpiFAE, if such assignment is required to be made by that Lender to BpiFAE in accordance with the BpiFAE Insurance Policy or the BpiFAE Enhanced Guarantee or, if the Lender is SFIL, to CAFFIL (but only if CAFFIL is, at that time, an Affiliate of SFIL) upon the enforcement of any security granted pursuant, and subject to the
provisions of paragraph (iv) of Section 11.11.1, in connection with the BpiFAE Enhanced Guarantee.
Each Person described in the foregoing clauses as being the Person to whom such assignment or transfer is to be made, is hereinafter referred to as an “Assignee Lender”. Assignments in a minimum aggregate amount of $25,000,000 (or, if less, all of such Lender’s portion of the Loan and Commitment) (which assignment or transfer shall be of a constant, and not a varying, percentage of such Lender’s portion of the Loan) are permitted; provided that the Borrower and the Facility Agent shall be entitled to continue to deal solely and directly with such Lender in connection with the interests so assigned or transferred to an Assignee Lender until:
a)written notice of such assignment or transfer, together with payment instructions, addresses and related information with respect to such Assignee Lender, shall have been given to the Borrower and the Facility Agent by such Lender and such Assignee Lender;
b)such Assignee Lender shall have executed and delivered to the Borrower and the Facility Agent a Lender Assignment Agreement, accepted by the Facility Agent and any other agreements required by the Facility Agent or, if the Fixed Rate applies, Natixis in connection therewith; and
c)the processing fees described below shall have been paid.
From and after the date that the Facility Agent accepts such Lender Assignment Agreement, (x) the Assignee Lender thereunder shall be deemed automatically to have become a party hereto and to the extent that rights and obligations hereunder have been assigned or transferred to such Assignee Lender in connection with such Lender Assignment Agreement, shall have the rights and obligations of a Lender hereunder and under the other Loan Documents, and (y) the assignor Lender, to the extent that rights and obligations hereunder have been assigned or transferred by it, shall be released from its obligations hereunder and under the other Loan Documents, other than any obligations arising prior to the effective date of such assignment. Except to the extent resulting from a subsequent change in law, in no event shall the Borrower be required to pay to any Assignee Lender any amount under Sections 4.2(c), 4.3, 4.4, 4.5, 4.6 and 4.7 that is greater than the amount which it would have been required to pay had no such assignment been made. Such assignor Lender or such Assignee Lender must also pay a processing fee to the Facility Agent upon delivery of any Lender Assignment Agreement in the amount of $5,000 (and shall also reimburse the Facility Agent and Natixis for any reasonable out-of-pocket costs, including reasonable attorneys’ fees and expenses, incurred in connection with the assignment).
SECTION 11.11.2. Participations. Any Lender may at any time sell to one or more commercial banks or other financial institutions (each of such commercial banks and other financial institutions being herein called a “Participant”) participating interests in its Loan; provided that:
a)no participation contemplated in this Section 11.11.2 shall relieve such Lender from its obligations hereunder;
b)such Lender shall remain solely responsible for the performance of its obligations hereunder;
c)the Borrower and the Facility Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and each of the other Loan Documents;
d)no Participant, unless such Participant is an Affiliate of such Lender, shall be entitled to require such Lender to take or refrain from taking any action hereunder or under any other Loan Document, except that such Lender may agree with any Participant that such Lender will not, without such Participant’s consent, take any actions of the type described in clauses (b) through (f) of Section 11.1;
e)the Borrower shall not be required to pay any amount under Sections 4.2(c), 4.3, 4.4, 4.5, 4.6 and 4.7 that is greater than the amount which it would have been required to pay had no participating interest been sold; and
f)each Lender that sells a participation under this Section 11.11.2 shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts of (and stated interest on) each of the Participant’s interest in that Lender’s portion of the Loan, Commitments or other interests hereunder (the “Participant Register”). The entries in the Participant Register shall be conclusive absent manifest error, and such Lender may treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes hereunder.
The Borrower acknowledges and agrees that each Participant, for purposes of Sections 4.2(c), 4.3, 4.4, 4.5, 4.6 and clause (e) of 7.1.1, shall be considered a Lender.
SECTION 11.11.3. Register. The Facility Agent shall maintain at its address referred to in Section 11.2 a copy of each Lender Assignment Agreement delivered to and accepted by it and a register for the recordation of the names and addresses of the Lenders and the Commitment(s) of, and principal amount of the Loan owing to, each Lender from time to time (the “Register”). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrower, the Facility Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice.
SECTION 11.11.4. Rights of BpiFAE to payments. The Borrower acknowledges that, immediately upon any payment by BpiFAE (i) of any amounts to a Lender under the BpiFAE Insurance Policy, BpiFAE will be automatically subrogated to the extent of such payment to the rights of that Lender under the Loan Documents or (ii) of any amount under the BpiFAE Enhanced Guarantee and the enforcement of any related security granted by SFIL to any of its Affiliates, which may benefit BpiFAE after payment by BpiFAE under the BpiFAE Enhanced Guarantee, BpiFAE will be automatically entitled to receive the payments normally due to SFIL under the Loan Documents( but, for the avoidance of doubt, such payments shall continue to be made by the Borrower to the Facility
Agent in accordance with the provisions of Section 4.8 or any other relevant provisions of this Agreement, as applicable).
SECTION 11.12. Other Transactions. Nothing contained herein shall preclude the Facility Agent or any Lender from engaging in any transaction, in addition to those contemplated by this Agreement or any other Loan Document, with the Borrower or any of its Affiliates in which the Borrower or such Affiliate is not restricted hereby from engaging with any other Person.
SECTION 11.13. BpiFAE Insurance Policy.
SECTION 11.13.1. Terms of BpiFAE Insurance Policy
a)The BpiFAE Insurance Policy will cover 100% of the Loan.
b)The BpiFAE Premium will equal 3% of the aggregate principal amount of the Loan as at the Actual Delivery Date.
c)If, after the Actual Delivery Date, the Borrower prepays all or part of the Loan in accordance with this Agreement, BpiFAE shall reimburse to the ECA Agent for the account of the Borrower an amount equal to 80% of all or a corresponding proportion of the unexpired portion of the BpiFAE Premium, having regard to the amount of the prepayment and the remaining term of the Loan, such amount to be calculated in accordance with the following formula:
R = P x (1 – (1 / (1+3%)) x (N / (12 * 365)) x 80%
where:
“R” means the amount of the refund;
“P” means the amount of the prepayment;
“N” means the number of days between the effective prepayment date and Final Maturity; and
P x (1 – (1 / (1+3%)) corresponds to the share of the financed BpiFAE Premium corresponding to P.
SECTION 11.13.2. Obligations of the Borrower. Provided that the BpiFAE Insurance Policy complies with Section 11.13.1 and remains in full force and effect, the Borrower shall pay the balance of the BpiFAE Premium calculated in accordance with Section 11.3.1(b) and still owing to BpiFAE on the Actual Delivery Date to BpiFAE on the Actual Delivery Date by directing the Agent in the Loan Request to pay the Additional Advance in respect of the BpiFAE Premium directly to BpiFAE.
SECTION 11.13.3. Obligations of the ECA Agent and the Lenders.
a)Promptly upon receipt of the BpiFAE Insurance Policy from BpiFAE, the ECA Agent shall (subject to any confidentiality undertakings given to BpiFAE by the
ECA Agent pursuant to the terms of the BpiFAE Insurance Policy) send a copy thereof to the Borrower.
b)The ECA Agent shall perform such acts or provide such information, which are, acting reasonably, within its power so to perform or so to provide, as required by BpiFAE under the BpiFAE Insurance Policy as necessary to ensure that the Lenders obtain the support of BpiFAE pursuant to the BpiFAE Insurance Policy.
c)Each Lender will co-operate with the ECA Agent, the Facility Agent and each other Lender, and take such action and/or refrain from taking such action as may be reasonably necessary, to ensure that the BpiFAE Insurance Policy and each Interest Stabilisation Agreement continues in full force and effect and shall indemnify and hold harmless each other Lender in the event that the BpiFAE Insurance Policy or such Interest Stabilisation Agreement (as the case may be) does not continue in full force and effect due to its gross negligence or willful default or due to a voluntary change in status which results in it no longer being eligible for CIRR interest stabilisation.
d)The ECA Agent shall, in conjunction with the Facility Agent:
(i)make written requests to BpiFAE seeking a reimbursement of the BpiFAE Premium in the circumstances described in Section 11.13.1(c) promptly after the relevant cancellation or prepayment and (subject to any confidentiality undertakings given to BpiFAE by the ECA Agent pursuant to the terms of the BpiFAE Insurance Policy) provide a copy of the request to the Borrower;
(ii)use its reasonable endeavours to seek any reimbursement of the BpiFAE Premium to which the ECA Agent is entitled;
(iii)pay to the Borrower (in the same currency as the refund received from BpiFAE) the full amount of any reimbursement of the BpiFAE Premium that the ECA Agent receives from BpiFAE within two (2) Business Days of receipt with same day value; and
(iv)relay the good faith concerns of the Borrower to BpiFAE regarding the amount of any reimbursement to which the ECA Agent is entitled, it being agreed that the ECA Agent’s obligation shall be no greater than simply to pass on to BpiFAE the Borrower’s concerns.
SECTION 11.14. Law and Jurisdiction
SECTION 11.14.1. Governing Law. This Agreement and any non- contractual obligations arising out of or in respect of this Agreement shall in all respects be governed by and interpreted in accordance with English Law.
SECTION 11.14.2. Jurisdiction. For the exclusive benefit of the Facility Agent and the Lenders, the parties to this Agreement irrevocably agree that the courts of England are to have jurisdiction to settle any disputes which may arise out of or in connection with this Agreement and that any proceedings may be brought in those courts. The Borrower irrevocably waives any objection which it may now or in the future have to the
laying of the venue of any proceedings in any court referred to in this Section, and any claim that those proceedings have been brought in an inconvenient or inappropriate forum.
SECTION 11.14.3. Alternative Jurisdiction. Nothing contained in this Section shall limit the right of the Facility Agent or the Lenders to commence any proceedings against the Borrower in any other court of competent jurisdiction nor shall the commencement of any proceedings against the Borrower in one or more jurisdictions preclude the commencement of any proceedings in any other jurisdiction, whether concurrently or not.
SECTION 11.14.4. Service of Process. Without prejudice to the right of the Facility Agent or the Lenders to use any other method of service permitted by law, the Borrower irrevocably agrees that any writ, notice, judgment or other legal process shall be sufficiently served on it if addressed to it and left at or sent by post to RCL Cruises Ltd., presently at Building 3, The Heights – Brooklands, Weybridge, Surrey, KT13 ONY, Attention: General Counsel, and in that event shall be conclusively deemed to have been served at the time of leaving or, if posted, at 9:00 am on the third Business Day after posting by prepaid first class registered post.
SECTION 11.15. Confidentiality. Each of the Facility Agent and the Lenders agrees to maintain and to cause its Affiliates to maintain the confidentiality of all information provided to it by the Borrower or any Subsidiary of the Borrower, or by the Facility Agent on the Borrower’s or such Subsidiary’s behalf, under this Agreement, and neither it nor any of its Affiliates shall use any such information other than in connection with or in enforcement of this Agreement or in connection with other business now or hereafter existing or contemplated with the Borrower or any Subsidiary, except to the extent such information (i) was or becomes generally available to the public other than as a result of disclosure by it or its Affiliates or their respective directors, officers, employees and agents, or (ii) was or becomes available on a non-confidential basis from a source other than the Borrower or any of its Subsidiaries so long as such source is not, to its knowledge, prohibited from disclosing such information by a legal, contractual or fiduciary obligation to the Borrower or any of its Affiliates; provided, however, that it may disclose such information (A) at the request or pursuant to any requirement of any self-regulatory body, governmental body, agency or official to which the Facility Agent, any Lender or any of their respective Affiliates is subject or in connection with an examination of the Facility Agent, such Lender or any of their respective Affiliates by any such authority or body, including without limitation the Republic of France and any French Authority; (B) pursuant to subpoena or other court process; (C) when required to do so in accordance with the provisions of any applicable requirement of law; (D) to the extent reasonably required in connection with any litigation or proceeding to which the Facility Agent, any Lender or their respective Affiliates may be party; (E) to the extent reasonably required in connection with the exercise of any remedy hereunder; (F) to the Facility Agent or such Lender’s independent auditors, counsel, and any other professional advisors of the Facility Agent or such Lender who are advised of the confidentiality of such information; (G) to any participant or assignee, provided that such Person agrees to keep such information confidential to the same extent required of the Facility Agent and the Lenders hereunder; (H) as to the Facility Agent, any Lender or their respective Affiliates, as expressly permitted under the terms of any other document or agreement regarding confidentiality to which the Borrower or any Subsidiary is party with the Facility Agent, such Lender or such Affiliate; (I) to its Affiliates and its Affiliates’
directors, officers, employees, professional advisors and agents, provided that each such Affiliate, director, officer, employee, professional advisor or agent shall keep such information confidential to the same extent required of the Facility Agent and the Lenders hereunder; (J) to any other party to the Agreement and (K) to the French Authorities and any Person to whom information is required to be disclosed by the French Authorities. Each of the Facility Agent and the Lenders shall be responsible for any breach of this Section 11.15 by any of its Affiliates or any of its or its Affiliates’ directors, officers, employees, professional advisors and agents.
SECTION 11.16. French Authority Requirements. The Borrower acknowledges that:
a)the Republic of France and any French Authority or any authorised representatives specified by these bodies shall be authorised at any time to inspect and make or demand copies of the records, accounts, documents and other deeds of any or all of the Lenders relating to this Agreement;
b)in the course of its activity as the Facility Agent, the Facility Agent may:
(i)provide the Republic of France and any French Authority with information concerning the transactions to be handled by it under this Agreement; and
(ii)disclose information concerning the subsidized transaction contemplated by this Agreement in the context of internationally agreed consultation/notification proceedings and statutory specifications, including information received from the Lenders relating to this Agreement.
SECTION 11.17. Waiver of immunity. To the extent that the Borrower has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its assets, the Borrower hereby irrevocably waives such immunity in respect of its obligations under this Agreement and the other Loan Documents.
SECTION 11.18. Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of a Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
a)the application of any Write-Down and Conversion Powers by a Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and
b)the effects of any Bail-in Action on any such liability, including, if applicable:
(i)a reduction in full or in part or cancellation of any such liability;
(ii)a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or
(iii)the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any Resolution Authority.
IN WITNESS WHEREOF, the parties hereto have caused this Hull No. C34 Credit Agreement to be executed by their respective officers thereunto duly authorized as of the day and year first above written.
ROYAL CARIBBEAN CRUISES LTD.
By
Name:
Title:
Address: 1050 Caribbean Way
Miami, Florida 33132
Facsimile No.: (305) 539-0562 Email: agibson@rccl.com
bstein@rccl.com
Attention: Vice President, Treasurer With a copy to: General Counsel
Citibank N.A., London Branch as Global Coordinator and a Lender
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Commitment
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5.3479946973% of the
Maximum Loan Amount
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By
Name:
Title:
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Citigroup Centre Canada Square London E14 5LB United Kingdom
Attention: Wei-Fong Chan
Kara Catt Romina Coates Antoine Paycha
Fax No: +44 20 7986 4881
Tel No: +44 20 7986 3036 /
+44 20 7508 0344
+44 20 7986 4824
+44 20 7500 0907 /
E-mail: weifong.chan@citi.com kara.catt@citi.com romina.coates@citi.com antoine.paycha@citi.com
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Banco Santander, S.A., Paris Branch as Lender
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Commitment
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5.0254557412% of the
Maximum Loan Amount
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By
Name:
Title:
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Lending Office:
374 rue Saint Honoré 75001 Paris
France
Operational address:
Ciudad Financiera Avenida de Cantabria s/n Edificio Encinar 2a planta 28600 Boadilla del Monte Spain
Attention: Elise Regnault
Julián Arroyo Angela Rabanal Ecaterina Mucuta Vanessa Berrio Ana Sanz Gómez
Fax No: +34 91 257 1682
Tel No: +34 912893722 /
+1 212-297-2919
+1 212-297-2942
+33 1 53 53 70 46
+34 91 289 10 28
+34 91 289 17 90
E-mail: elise.regnault@gruposantander.com Julian.Arroyo@santander.us arabanal@santander.us
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Ecaterina.mucuta@gruposantander.com vaberrio@gruposantander.com anasanz@gruposantander.com MiddleOfficeParis@gruposantander.com
BNP PARIBAS as Lender
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Commitment
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3.9306454510% of the
Maximum Loan Amount
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By
Name:
Title:
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Front Office to keep copied to all matters. BNPP SA
37 RUE DU MARCHE SAINT HONORE
75001 PARIS ACI : CHC03B1
Alexandre de VATHAIRE / Mauricio GONZALEZ alexandre.devathaire@bnpparibas.com mauricio.gonzalez@us.bnpparibas.com
Tel : 00 331 42 98 00 29/00 1212 841 38 88
Middle Office: For Operational / Servicing matters KHALID BOUITIDA / THIERRY ANEZO MILLENAIRE 4
35, RUE DE LA GARE
75019 PARIS ACI : CVA05A1
khalid.k.bouitida@bnpparibas.com thierry.anezo@bnpparibas.com
Tel : 00 331 42 98 58 69 / 00 331 43 16 81 57
Back Office : For Standard Settlement Instruction authentication/call-back
STEVE LOUISOR / VALERIE DUMOULIN MILLENAIRE 4
35, RUE DE LA GARE
75019 PARIS ACI : CVA03A1
paris.cib.boci.ca.3@bnpparibas.com valerie.dumoulin@bnpparibas.com steve.louisor@bnpparibas.com
Tel : 00 331 55 77 91 86 / 00 331 40 14 46 59
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HSBC FRANCE as Lender
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Commitment
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4.2645646367% of the
Maximum Loan Amount
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By
Name:
Title:
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HSBC France – Global Banking Agency Operations (GBAO) Transaction Manager Unit
103 avenue des Champs Elysées 75008 Paris
France
Attention:
Florencia Thomas Alexandra Penda
Fax No: +33 1 40 70 28 80
Tel No: +33 1 40 70 73 81 /
+33 1 41 02 67 50
Email: florencia.thomas@hsbc.fr alexandra.penda@hsbc.fr
Copy to:
HSBC France
103 avenue des Champs Elysées 75008 Paris
France
Attention: Julie Bellais
Celine Karsenty
Fax No: +33 1 40 70 78 93
Tel No: +33 1 40 70 28 59 /
+ 33 1 40 70 22 97
Email: julie.bellais@hsbc.fr celine.karesenty@hsbc.fr
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Société Générale as Lender
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Commitment
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9.9328353079% of the
Maximum Loan Amount
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By
Name:
Title:
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Société Générale Facility Office 29 Boulevard Haussmann
75009 Paris France
For operational/servicing matters:
Bouchra BOUMEZOUED / Tatiana BYCHKOVA Société Générale 189, rue d’Aubervilliers 75886
PARIS CEDEX 18 OPER/FIN/CAF/DMT6
Phone: +33 1 57 29 13 12 / +33 1 58 98 43 05
Email: bouchra.boumezoued@sgcib.com tatiana.bychkova@sgcib.com
par-oper-caf-mt6@sgcib.com For credit matters:
Francois Rolland / Tingting Yu / Muriel Baumann Société Générale 189, rue d’Aubervilliers 75886
PARIS CEDEX 18 OPER/FIN/SMO/EXT
Phone: +33 1 58 98 17 78 / +33 1 58 98 49 18 /
+33 1 58 98 22 76
Email: francois.rolland@sgcib.com tingting.yu@sgcib.com muriel.baumann@sgcib.com
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Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch as ECA Agent and a Lender
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Commitment
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2.7360453298% of the
Maximum Loan Amount
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By Name:
Title:
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1/3/5 rue Paul Cézanne, 75008 Paris, France Attention: Cedric Le Duigou
Guillaume Branco Herve Billi
Claire Lucien Helene Ly
Fax No: +33 1 44 90 48 01
Tel No:
Cedric Le Duigou: +33 1 44 90 48 83
Guillaume Branco: +33 1 44 90 48 71
Herve Billi: +33 1 44 90 48 48
Claire Lucien: +33 1 44 90 48 49
Helene Ly: +33 1 44 90 48 76
E-mail : cedric_leduigou@fr.smbcgroup.com guillaume_branco@fr.smbcgroup.com herve_billi@fr.smbcgroup.com helene_ly@fr.smbcgroup.com claire_lucien@fr.smbcgroup.com
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SFIL as Lender
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Commitment
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68.7624588361%
the Maximum Amount
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of Loan
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By
Name:
Title:
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1-3, rue de Passeur de Boulogne – CS
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80054
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92861 Issy-les-Moulineaux Cedex 9
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France
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Contact Person
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Loan Administration Department:
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Direction du Crédit Export:
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Pierre-Marie Debreuille / Anne Crépin
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Direction des Opérations:
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Dominique Brossard / Patrick Sick
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Telephone:
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Pierre-Marie Debreuille
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+33 1 73 28 87 64
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Anne Crépin +33 1 73 28 88 59
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Dominique Brossard +33 1 73 28 91 93
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Patrick Sick +33 1 73 28 87 66
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Email:
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pierre-marie.debreuille@sfil.fr
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anne.crepin@sfil.fr
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dominique.brossard@sfil.fr
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patrick.sick@sfil.fr
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refinancements-export@sfil.fr
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creditexport_ops@sfil.fr
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Fax: + 33 1 73 28 85 04
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Citibank Europe plc, UK Branch as Facility Agent
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By
Name:
Title:
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5th Floor Citigroup Centre Mail drop CGC2 05-65
25 Canada Square Canary Wharf London E14 5LB
U.K.
Fax no.: +44 20 7492 3980
Attention: EMEA Loans Agency
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EXECUTION PAGE – NOVATION AGREEMENT
Existing Borrower
SIGNED by )
for and on behalf of )
HIBISYEU FINANCE LIMITED ) …………………………….
) Attorney-in-Fact
New Borrower
SIGNED by )
for and on behalf of )
ROYAL CARIBBEAN CRUISES LTD. ) …………………………….
) Authorised Officer
Facility Agent
SIGNED by )
for and on behalf of )
CITIBANK EUROPE PLC, UK BRANCH ) …………………………….
) Attorney in-fact
Security Trustee
SIGNED by )
for and on behalf of )
CITICORP TRUSTEE COMPANY LIMITED ) …………………………….
) Attorney in-fact
Global Coordinator
SIGNED by )
for and on behalf of )
CITIBANK N.A., LONDON BRANCH ) ……………………………
) Attorney in-fact
The ECA Agent
SIGNED by )
for and on behalf of )
SUMITOMO MITSUI BANKING CORPORATION )
EUROPE LIMITED, PARIS BRANCH ) ……………………………
) Attorney in-fact
French Coordinating Bank
SIGNED by )
for and on behalf of )
HSBC FRANCE )……………………………
) Attorney in-fact
The Original Lenders
SIGNED by )
for and on behalf of )
CITIBANK N.A., LONDON BRANCH ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
BANCO SANTANDER, S.A. ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
BNP PARIBAS ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
HSBC FRANCE ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
SOCIÉTÉ GÉNÉRALE ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
SUMITOMO MITSUI BANKING CORPORATION EUROPE )
LIMITED, PARIS BRANCH ) ……………………………
) Attorney in-fact
The Mandated Lead Arrangers
SIGNED by )
for and on behalf of )
CITIBANK N.A., LONDON BRANCH ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
BANCO SANTANDER, S.A. ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
BNP PARIBAS ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
HSBC FRANCE ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
SOCIÉTÉ GÉNÉRALE ) ……………………………
) Attorney in-fact
SIGNED by )
for and on behalf of )
SUMITOMO MITSUI BANKING CORPORATION EUROPE )
LIMITED, PARIS BRANCH ) ……………………………
) Attorney in-fact
Schedule 6
Form of Amended and Restated Agency and Trust Deed
BD-#33675353-v5 20
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Private & Confidential
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Dated 24 July 2017
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(as amended and restated by a First Supplemental Agreement dated March 2020)
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CITIBANK EUROPE PLC, UK BRANCH (1)
as Facility Agent
CITICORP TRUSTEE COMPANY LIMITED (2)
as Security Trustee
CITIBANK N.A., LONDON BRANCH (3)
as Global Coordinator
SUMITOMO MITSUI BANKING CORPORATION (4) EUROPE LIMITED, PARIS BRANCH
as ECA Agent
CITIBANK N.A., LONDON BRANCH, BANCO SANTANDER, S.A., PARIS BRANCH, BNP PARIBAS, HSBC FRANCE, SOCIÉTÉ GÉNÉRALE and SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH
as Mandated Lead Arrangers (5)
THE BANKS AND FINANCIAL INSTITUTIONS LISTED IN SCHEDULE 1 (6)
as Lenders and
ROYAL CARIBBEAN CRUISES LTD. (7)
as Borrower
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AGENCY AND TRUST DEED
Hull C34
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Contents
Clause Page
THIS AGREEMENT is dated 24 July 2017 (as amended and restated by a first supplemental agreement dated 12 March 2020) and made BETWEEN:
(1)CITIBANK EUROPE PLC, UK BRANCH, as Facility Agent;
(2)CITICORP TRUSTEE COMPANY LIMITED, as Security Trustee;
(3)CITIBANK N.A., LONDON BRANCH as Global Coordinator;
(4)SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH as ECA Agent;
(5)CITIBANK N.A., LONDON BRANCH, BANCO SANTANDER, S.A., PARIS BRANCH, BNP PARIBAS, HSBC FRANCE, SOCIÉTÉ GÉNÉRALE and SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED, PARIS BRANCH as Mandated Lead Arrangers;
(6)THE BANKS AND FINANCIAL INSTITUTIONS LISTED IN SCHEDULE 1, as Lenders; and
(7)ROYAL CARIBBEAN CRUISES LTD., as Borrower.
1.Introduction, definitions and interpretation
Introduction
a.The parties are entering into this Agreement in connection with:
i.a facility agreement dated 24 July 2017 (the Original Facility Agreement) relating to a loan of up to an aggregate amount of €971,961,680 and made between (1) Hibisyeu Finance Limited as Borrower, (2) Citibank Europe plc, UK Branch as Facility Agent, (3) Citicorp Trustee Company Limited as Security Trustee, (4) Citibank, N.A., London Branch as Global Coordinator, (5) HSBC France as French Coordinating Bank, (6) Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch as ECA Agent, (7) the Mandated Lead Arrangers and (8) the banks and financial institutions listed in Schedule 1 as Lenders, as novated and amended and restated by the novation agreement dated 24 July 2017 (as supplemented and amended, the Novation Agreement (the Original Facility Agreement as novated and amended and restated by the Novation Agreement, the Facility Agreement)) between the parties to the Original Facility Agreement and the Borrower; and
ii.the Escrow Account Security,
in order, inter alia, to provide for the appointment of Citicorp Trustee Company Limited as Security Trustee.
Definitions
b.Words and expressions defined in the Facility Agreement (including words and expressions defined by reference to another document) shall, unless the context otherwise requires or unless otherwise defined herein, have the same meanings when used herein. In addition, in this Agreement:
Affiliate means in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.
Agents means each of the Facility Agent, the ECA Agent and the Security Trustee and Agent
shall mean any of them.
Charged Assets means any property, assets and/or rights over which security is granted and/or created under the Escrow Account Security.
ECA Agent means Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch acting as export credit agent pursuant to this Agreement for itself and any other banks or financial institutions who are or may become Lenders in the future and includes its successors in title.
Enforcement Date means the first date on which active steps are taken to enforce and/or realise the security or other assurances created or conferred by the Escrow Account Security.
Escrow Account Security shall have the meaning given to it in the Facility Agreement and shall, when used herein, be deemed to include any Further Assurance Deed.
Expenses means the aggregate at any relevant time (to the extent that the same has not been received or recovered by the Security Trustee) of:
i.all duly evidenced expenses (including, in particular, legal, insurance adviser, printing, out of pocket expenses and late payment interest) properly incurred and any cost, loss (excluding loss of profit) or liability sustained or incurred by the Security Trustee or any Receiver in connection with the exercise of the powers referred to in or granted by the Loan Documents or otherwise payable by the Borrower to the Security Trustee in accordance with any provision of any of the Loan Documents; and
ii.interest on all such unpaid expenses, costs, losses and liabilities from the date falling ten Business Days after the date on which a demand for the same was made by the Security Trustee until the date of receipt or recovery thereof (whether before or after judgment) at the Floating Rate plus two per cent per annum.
Facility Agent means Citibank Europe plc, UK Branch acting as agent pursuant to this Agreement for itself and any other banks or financial institutions who are or may become Lenders in the future and includes its successors in title.
Finance Parties means the Lenders, the Facility Agent, the ECA Agent, the Global Coordinator, and the Security Trustee.
Further Assurance Deed means any document executed or to be executed pursuant to a further assurance covenant or obligation contained in the Escrow Account Security.
Holding Company means, in relation to a person, any other person in respect of which it is a Subsidiary.
Receiver means and includes any receiver and/or manager of any of the Charged Assets appointed under the Escrow Account Security (and whether acting as agent for the Borrower or otherwise).
Release Date means the date, occurring promptly following the NYC Cut Off Date, on which the Facility Agent notifies the parties that the Escrow Account Security can be released following the withdrawal of all amounts standing to the credit of the Escrow Account in accordance with the provisions of Section 2.3f) of the Facility Agreement.
Secured Obligations means the obligations of the Borrower to the Finance Parties under the Facility Agreement and each of the other Loan Documents.
Security Trustee means Citicorp Trustee Company Limited acting as security trustee pursuant to this Agreement for itself and any banks or financial institutions who are or may become Lenders and includes its successors in title.
Trust Property means (a) the security, powers, rights, titles, benefits and interests (both present and future) constituted by and conferred on the Security Trustee under or pursuant to this Agreement and the Escrow Account Security and any notices or acknowledgements or undertakings given in connection with the Escrow Account Security (including, without limitation, the benefit of all covenants, undertakings, representations, warranties and obligations given, made or undertaken to the Security Trustee in the Escrow Account Security), (b) all moneys,
property and other assets payable, paid or transferred to or vested in the Security Trustee or any Receiver or receivable, received or recovered by the Security Trustee or any Receiver pursuant to, or in connection with, this Agreement and the Escrow Account Security and any notices or acknowledgements or undertakings given by the Borrower in connection with the Escrow Account Security from the Borrower or any other person and (c) all money, investments, property and other assets at any time representing or deriving from any of the foregoing, including all interest, income and other sums at any time received or receivable by the Security Trustee or any Receiver in respect of the same (or any part thereof).
Headings
c.Clause headings and the table of contents are inserted for convenience of reference only and shall be ignored in the interpretation of this Agreement.
Construction of certain terms
d.Clause 1.4 (Construction) of the Original Facility Agreement applies to this Agreement as if set out herein.
Capacity of parties
e.References in this Agreement to the Facility Agent, the Security Trustee, the ECA Agent, any Mandated Lead Arranger or any Lender and references to obligations or liabilities of any one or more such persons shall be strictly construed as references to any such person or (as the case may be) obligations or liabilities of any such person solely in its capacity as such.
Effectiveness of Required Lender decision
f.Where this Agreement, the Escrow Account Security or any Further Assurance Deed provides for any matter to be determined by reference to the opinion of the Required Lenders or to be subject to the consent or request of the Required Lenders or for any action to be taken on the instructions of the Required Lenders, such opinion, consent, request or instructions shall (as between the Lenders) only be regarded as having been validly given or issued by the Required Lenders if (a) given by the Facility Agent on their behalf and (b) all the Lenders shall have received prior notice of the matter on which such opinion, consent, request or instructions are required to be obtained and the relevant majority of Lenders shall have given or issued such opinion, consent, request or instructions but so that the Borrower and the Security Trustee shall be entitled (and bound) to assume that such notice shall have been duly received by each Lender and that the relevant majority shall have been obtained to constitute Required Lenders whether or not this is the case.
Fees, Indemnity and Costs of Security Trustee
g.It is agreed that the provisions of clause 4.6 (Taxes) of the Facility Agreement, clause 11.4 (Indemnification) of the Facility Agreement (subject to clause 1.8) and clause 5.4 (Value Added tax) of the Original Facility Agreement shall apply to the benefit of the Security Trustee, and the Borrower agrees to be bound by such provisions, as if the same were set out in full herein and on the basis that reference to Loan Documents therein or “amounts due thereunder” included this Agreement, the Escrow Account Security and any Further Assurance Deed or any amounts due under the foregoing. This clause 1.7 and clause 1.8 shall survive the termination of this Agreement, the Escrow Account Security and any Further Assurance Deed.
h.The following words in clause 11.4 (Indemnification) of the Facility Agreement are deemed deleted for the purposes of its incorporation herein under clause 1.7 and shall not apply to the Security Trustee:
i.“or the material breach by such Indemnified Party of its obligations under this Agreement, any other Loan Document, the BpiFAE Insurance Policy or Interest Stabilisation Agreement and which breach is not attributable to the Borrower’s own breach of the terms of this Agreement or any other Loan Document”;
ii.“Each Indemnified Party shall (a) furnish the Borrower with prompt notice of any action, suit or other claim covered by this Section 11.4, (b) not agree to any settlement or compromise of any such action, suit or claim without the Borrower’s prior consent, (c) shall cooperate fully in the Borrower’s defense of any such action, suit or other claim (provided that the Borrower shall reimburse such indemnified party for its reasonable out- of-pocket expenses incurred pursuant hereto) and (d) at the Borrower’s request, permit the Borrower to assume control of the defense of any such claim, other than regulatory, supervisory or similar investigations, provided that (i) the Borrower acknowledges in writing its obligations to indemnify the Indemnified Party in accordance with the terms herein in connection with such claims, (ii) the Borrower shall keep the Indemnified Party fully informed with respect to the conduct of the defense of such claim, (iii) the Borrower shall consult in good faith with the Indemnified Party (from time to time and before taking any material decision) about the conduct of the defense of such claim, (iv) the Borrower shall conduct the defense of such claim properly and diligently taking into account its own interests and those of the Indemnified Party, (v) the Borrower shall employ counsel reasonably acceptable to the Indemnified Party and at the Borrower’s expense, and (vi) the Borrower shall not enter into a settlement with respect to such claim unless either (A) such settlement involves only the payment of a monetary sum, does not include any performance by or an admission of liability or responsibility on the part of the Indemnified Party, and contains a provision unconditionally releasing the Indemnified Party and each other indemnified party from, and holding all such persons harmless, against, all liability in respect of claims by any releasing party or (B) the Indemnified Party provides written consent to such settlement (such consent not to be unreasonably withheld or delayed). Notwithstanding the Borrower’s election to assume the defense of such action, the Indemnified Party shall have the right to employ separate counsel and to participate in the defense of such action and the Borrower shall bear the fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the Borrower to represent the Indemnified Party would present such counsel with an actual or potential conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the Borrower and the Indemnified Party and the Indemnified Party shall have concluded that there may be legal defenses available to it which are different from or additional to those available to the Borrower and determined that it is necessary to employ separate counsel in order to pursue such defenses (in which case the Borrower shall not have the right to assume the defense of such action on the Indemnified Party’s behalf), (iii) the Borrower shall not have employed counsel reasonably acceptable to the Indemnified Party to represent the Indemnified Party within a reasonable time after notice of the institution of such action, or (iv) the Borrower authorizes the Indemnified Party to employ separate counsel at the Borrower’s expense.”.
2.Security Trustee
Appointment of the Security Trustee
a.Each of the Finance Parties appoints the Security Trustee as agent and trustee of the Trust Property on the terms set out in this Agreement. By virtue of such appointment, each of the Finance Parties authorises the Security Trustee (whether or not by or through employees or agents) to take such action on such Finance Party's behalf and to exercise such rights, remedies, powers and discretions as are specifically delegated to the Security Trustee by this Agreement and/or the Escrow Account Security and any Further Assurance Deed, together with such powers and discretions as are reasonably incidental thereto.
b.It is acknowledged that the appointment of the Facility Agent and the ECA Agent for the purpose of the Facility Agreement is regulated under Article X (The Facility Agent and the ECA Agent) of the Facility Agreement.
Duties
c.The Security Trustee shall not have any duties, obligations or liabilities to the Lenders beyond those expressly stated in this Agreement and/or any of the Loan Documents to which it may be or become a party.
d.The Security Trustee’s duties under this Agreement and the other Loan Documents are solely mechanical and administrative in nature.
Instructions to the Agents
e.Subject to clauses 2.6, 2.7 and 2.12 below, unless a contrary indication appears, the Security Trustee shall (a) exercise any right, power, authority or discretion vested in it as an agent or otherwise act in accordance with the written instructions given to it by the Required Lenders (or, if so instructed by the Required Lenders refrain from exercising any right, power, authority or discretion vested in it as Security Trustee), (b) not be liable to any person for any act or omission if it acts (or refrains from taking any action) in good faith in accordance with the instructions of the Required Lenders and (c) have no obligation to act and may refrain from acting until so instructed (without liability to any person). Any reference to the instructions of the Required Lenders to the Security Trustee herein or in the Escrow Account Security shall be construed as such instructions of the Facility Agent on behalf of such Required Lenders.
f.The Security Trustee shall be entitled to request instructions, or clarification of any direction, from the Facility Agent as to whether, and in what manner, it should exercise or refrain from exercising any rights, powers, authorities and discretions and the Security Trustee may refrain from acting unless and until those instructions or clarification are received by it (without liability to any person).
g.In the absence of instructions, the Security Trustee may act (or refrain from acting) as it considers to be in the best interest of the Finance Parties.
h.Clause 2.5 above shall not apply in respect of any provision which protects the Security Trustee’s own position in its personal capacity as opposed to its role as Security Trustee for the Finance Parties.
i.The Security Trustee may refrain from acting in accordance with the instructions of the Lenders or any other person until it has received any indemnification and/or security and/or prefunding that it may in its discretion require (which may be greater in extent than that contained in the Loan Documents and which may include payment in advance) for any cost, loss or liability which it may incur in complying with those instructions.
Execution of Escrow Account Security
j.Each Lender irrevocably authorises the Security Trustee to execute the Escrow Account Security in its capacity as trustee of the Trust Property thereby created.
Authority of Security Trustee
k.Subject to clause 2.12 and, where applicable, 2.14(c), the Security Trustee may, with the consent of the Required Lenders (or the Facility Agent on their behalf) or if and to the extent expressly authorised by the other provisions of this Agreement or the Escrow Account Security, concur with the Borrower to amend, modify or otherwise vary or waive breaches of, or defaults under, or otherwise excuse performance of, any provision of any of the Escrow Account Security. Any such action so authorised and effected by the Security Trustee shall be promptly notified to the other Agents and the Lenders and shall be binding on all the Lenders and, if necessary or appropriate, each Lender agrees to execute or re-execute any document, instrument or agreement required to give full effect to any such action. For the purposes of this clause 2.11 it is expressly agreed and acknowledged that the execution of a Further Assurance Deed shall not constitute an amendment or modification to, or variation of, the Escrow Account Security, and each Lender where applicable further agrees to execute any Further Assurance Deed promptly upon the request of the Security Trustee.
l.Except with the prior written consent of all the Lenders (or the Facility Agent on their behalf), the Security Trustee shall not have authority on behalf of the Lenders to agree with the Borrower any amendment to the Escrow Account Security which would:
1.change any provision of the Escrow Account Security which expressly or impliedly requires the approval or consent of all the Lenders such that the relevant approval or consent may be given otherwise than with the sanction of all the Lenders; or
2.change this clause 2.12 or clause 4.2; or
3.(save to the extent expressly required under this Agreement or any of the Loan Documents) release the Borrower from the security constituted by the Escrow Account Security; or
4.(save to the extent expressly required under this Agreement or any of the Loan Documents) release any of the Charged Assets from the security constituted by the Escrow Account Security; or
5.(save to the extent expressly required under this Agreement or any of the Loan Documents) release the Borrower from any of its indemnity or other assurance obligations under any of the Loan Documents.
m.Unless otherwise stated in any provision of the Loan Documents, any matter under the Escrow Account Security requiring the decision, agreement, determination, consent or approval of the Security Trustee, shall be construed as requiring the decision, agreement, determination, consent or approval of the Required Lenders.
Liability of Security Trustee
n.The Security Trustee shall not:
6.be obliged:
i.to request any certificate or opinion under any provision of the Escrow Account Security; or
ii.to make any enquiry as to any breach or default by the Borrower in the performance or observance of any of the provisions of any of this Agreement or the Escrow Account Security or as to the existence of a Default or as to whether any other event or circumstance has occurred as a result of which the security constituted by the Escrow Account Security shall have or may become enforceable unless it has actual knowledge thereof or has been notified in writing thereof by a Lender, in which case it shall promptly notify the Lenders of the relevant event or circumstance; or
7.be obliged to carry out any "know your customer" or other checks in relation to any person on behalf of any Lender and each Lender confirms to the Security Trustee that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Security Trustee; or
8.be liable to any Finance Party for any action taken or omitted under or in connection with this Agreement and the Escrow Account Security unless caused by its gross negligence or wilful misconduct for any delay (or any related consequences) in crediting an account with an amount required under this Agreement to be paid by the Security Trustee if it has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by it for that purpose.
Knowledge of Agents
o.For the purposes of this clause 2, the Security Trustee shall not be treated as having actual knowledge of any matter of which another department of the person for the time being acting as it may become aware in the context of corporate finance or advisory activities from time to time undertaken by the Security Trustee for the Borrower or any of its Affiliates or Subsidiaries.
Communications by the Security Trustee
p.The Security Trustee shall promptly notify the other Agents and each Lender of the contents of each notice, certificate, information or other document received by it from the Borrower under or pursuant to any provisions of any of the Escrow Account Security or this Agreement.
q.Except where the Escrow Account Security or this Agreement specifically provides otherwise, the Security Trustee is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another party.
r.If the Security Trustee receives notice from a party referring to this Agreement, describing a Default or an Event of Default and stating that the circumstance described is a Default or an Event of Default it shall promptly notify the other Finance Parties.
No independent action by Finance Parties
s.None of the Finance Parties shall have any independent power to enforce the Escrow Account Security, or to exercise any rights, discretions or powers or to grant any consents or releases under or pursuant to the Escrow Account Security or otherwise have direct recourse to the security or other assurances constituted by the Escrow Account Security except through the Security Trustee.
Reliance by Facility Agent
t.In considering at any time (and from time to time) the persons entitled to the benefit of any of the Secured Obligations:
9.the Facility Agent may deem and treat (i) each Lender as the person entitled to the benefit of the Loan of such Lender for all purposes of this Agreement unless and until a Lender Assignment Agreement relating to, such Lender's contribution to the Loan or any part thereof shall have been filed with the Facility Agent and (ii) the office set opposite the name of each Lender in the execution blocks to the Facility Agreement as such Lender's lending office unless and until a written notice of change of lending office shall have been received by the Facility Agent and the Facility Agent may act upon any such notice unless and until the same is superseded by a further such notice; and
10.the Facility Agent may to the extent that any such information is not inconsistent with notices referred to in clause 2.20(a) above, rely and act in reliance upon information provided to it pursuant to such clause so that it shall not have any liability or responsibility to any party as a consequence of placing reliance on and acting in reliance upon any such information unless it has actual knowledge that such information is inaccurate or incorrect.
Provision of information to Agents
u.Without prejudice to clause 2.20, the Lenders shall provide the Security Trustee with such written information as it may reasonably require for the purpose of carrying out its duties and obligations under this Agreement and/or the Escrow Account Security and, in particular, with such directions in writing as may reasonably be required so as to enable the Security Trustee to apply the proceeds of realisation of the Escrow Account Security as contemplated by clause 4.2. However no Lender shall be obliged pursuant to this clause 2.21 to disclose to the Security Trustee any information which it is obliged by law or contract to keep confidential.
Appraisal by Lenders
v.Each Finance Party acknowledges that it has not relied on any statement, opinion, forecast or other representation made by the Security Trustee to induce it to enter into this Agreement or the Facility Agreement.
Responsibility of Security Trustee
w.The Security Trustee shall not have any duty or responsibility, either initially or on a continuing basis, to any Finance Party:
11.to investigate or make any enquiry into the title of the Borrower to, or the existence, suitability or sufficiency of, the Charged Assets or any part thereof; or
12.on account of the failure of the Borrower to perform any of its obligations under any of the Loan Documents; or
13.for the financial condition of the Borrower; or
14.for the completeness or accuracy of any statements, representations or warranties in any of the Loan Documents or any document delivered under any of the Loan Documents unless expressly made by the Security Trustee; or
15.for the execution, effectiveness, adequacy, genuineness, validity, enforceability or admissibility in evidence of any of the Loan Documents or the Charged Assets or of any certificate, report or other document executed or delivered under any of the Loan Documents; or
16.for the failure to register or notify any of the Loan Documents or for otherwise perfecting or failing to perfect any of the security granted in its favour; or
17.for taking or omitting to take any other action under or in relation to any of the Loan Documents or any aspect of any of the Loan Documents; or
18.for the failure to take or require the Borrower to take any steps to render any of the Loan Documents effective as regards Charged Assets outside the jurisdiction in which they are incorporated or have their registered or principal office or to secure the creation of any ancillary charge under the laws of the jurisdiction concerned; or
19.otherwise in connection with the Facility Agreement or its negotiation or for acting in accordance with the instructions of the Lenders or the relevant group of Lenders or refraining from acting when instructed by the Lenders or the relevant group of Lenders, to refrain from acting when no instruction to act has been given to it by the Lenders or the relevant group of Lenders or where the instructions are unclear. The Security Trustee is entitled to seek directions as to the exercise of any of its powers from the Required Lenders or otherwise (as the case may be) the Lenders and to seek clarification of any instructions previously given; or
20.any loss to the Trust Property arising in consequence of the failure, depreciation or loss of any Charged Assets or any investments made or retained in good faith or by reason of any other matter or thing, including by virtue of the fact it may be held by a bank, or any damage to or any unauthorised dealing with the Charged Assets nor shall it have any responsibility or liability arising from the fact that the Charged Assets, or documents relating thereto, may be registered in its name or held by it or any other bank or agent selected by the Security Trustee.
x.The Security Trustee shall be entitled to rely on any communication, instrument or document believed by it to be genuine and correct and to have been signed or sent by the proper person.
y.No party to this Agreement (other than the Security Trustee) may take any proceedings against any officer, employee or agent of the Security Trustee in respect of any claim it might have against the Security Trustee or in respect of any act or omission of any kind by that officer, employee or agent in relation to this Agreement and any officer, employee or agent of the Security Trustee may rely on this clause.
No fiduciary duties
z.Nothing in any Loan Document constitutes the Security Trustee as a trustee or fiduciary of any other person other than the Finance Parties.
aa.The Security Trustee shall not be bound to account to any Finance Party for any sum or the profit element of any sum received by it for its own account.
Rights and discretions
ab.The Security Trustee may:
21.assume that:
iii.any instructions received by it from the Facility Agent on behalf of the Lenders or the Required Lenders or on behalf of any other Finance Party are duly given in accordance with the terms of the Facility Agreement; and
iv.unless it has received notice of revocation, that those instructions have not been revoked;
22.rely on a certificate from any person:
v.as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or
vi.to the effect that such person approves of any particular dealing, transaction, step, action or thing,
as sufficient evidence that that is the case and, in the case of paragraph (i) above, may assume the truth and accuracy of that certificate; and
23.assume (unless it has received notice to the contrary in its capacity as Security Trustee) that:
vii.no Default or Event of Default has occurred; and
viii.any right, power, authority or discretion vested in any party or any group of Finance Parties has not been exercised.
ac.The Security Trustee may engage and pay for the advice or services of any lawyers (who may be separate to counsel appointed by the Finance Parties), accountants, tax advisers, surveyors or other professional advisers or experts (whether such advice is obtained by the Security Trustee or by any other party and whether or not the advice contains a limit on liability by reference to monetary cap or otherwise) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying in good faith.
ad.Notwithstanding any provision of any Loan Document to the contrary, the Security Trustee is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it.
Other business
ae.The Security Trustee may, without any liability to account to the Lenders, accept deposits from, lend money to, and generally engage in any kind of banking or trust business with, the Borrower and any of its Affiliates or Subsidiaries or any of the Lenders as if it were not the Security Trustee.
Credit appraisal by the Finance Parties
af.Without affecting the responsibility of the Borrower for information supplied by it or on its behalf in connection with any Loan Document, each Finance Party confirms to each other Finance Party that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Loan Document including but not limited to:
24.the financial condition, status and nature of the Borrower;
25.the legality, validity, effectiveness, adequacy or enforceability of any Loan Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Loan Document;
26.whether any Finance Party has recourse, and the nature and extent of that recourse, against any party or any of its respective assets under or in connection with any Loan Document, the transactions contemplated by the Loan Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Loan Document or the Charged Assets;
27.the adequacy, accuracy and/or completeness of any information provided by the Facility Agent, any party or by any other person under or in connection with any Loan Document, the transactions contemplated by the Loan Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Loan Document; and
28.the right or title of any person in or to, or the value or sufficiency of, any part of the Charged Assets, the priority of the Escrow Account Security or the existence of any Lien affecting the Charged Assets.
ag.Without prejudice to the generality of any other provision of this Agreement or any other Loan Document, the entry into possession of the Charged Assets shall not render the Security Trustee or any Receiver liable to account as mortgagee in possession thereunder (or its equivalent in any other applicable jurisdiction) or take any action which would expose it to any liability in respect of which it has not been indemnified and/or secured and/or pre-funded to its satisfaction or to be liable for any loss on realisation or for any default or omission on realisation or for any default or omission for which a mortgagee in possession might be liable unless such loss, default or omission is caused by its own gross negligence or wilful misconduct.
ah.The Security Trustee shall have no responsibility whatsoever to the Borrower or any Finance Party as regards any deficiency which might arise because the Security Trustee is subject to any Tax in respect of all or any of the Charged Assets, the income therefrom or the proceeds thereof.
ai.The Security Trustee is not responsible for payment of any taxes or stamp duty (a) as a result of it holding security, (b) as a result of it enforcing any security held by it, or (c) in respect of any remuneration or other amounts payable to it for its own account.
aj.The Security Trustee is not responsible for making any deductions or withholding in respect of taxes or governmental charges in respect of any amounts paid by the Security Trustee from the proceeds of any enforcement of security.
Reimbursement of Agents’ expenses
ak.Without prejudice to clauses 1.7 and 5.1, each Lender shall reimburse the Security Trustee rateably in accordance with such Lender's Commitment (or if such Commitment is then zero, its Commitment immediately prior to such reduction), for the charges and expenses incurred by the Security Trustee in connection with the negotiation, preparation and execution of this Agreement and the Escrow Account Security or in contemplation of, or otherwise in connection with, the enforcement or attempted enforcement of, or the preservation or attempted
preservation of any rights under, or in carrying out its duties under, this Agreement and the Escrow Account Security or otherwise in connection with holding the Charged Assets and/or the Trust Property including (in each case) the reasonable fees and expenses of legal or other professional advisers. All such charges and expenses shall be paid together with value added tax or similar tax (if any) thereon.
Security Trustee’s indemnity
al.Without prejudice to clauses 1.7 and 5.1, each Lender shall indemnify the Security Trustee rateably in accordance with such Lender's Commitment against all liabilities, expenses, damages, costs, actions, demands and claims whatsoever suffered or incurred by the Security Trustee or any agent or other person appointed by the Security Trustee in connection with its appointment under this Agreement or in connection with the Loan Documents or the performance of its duties under this Agreement and/or the Escrow Account Security or any action taken or omitted by it under any of the Escrow Account Security or this Agreement, unless such liabilities, damages, costs or claims arise from the Security Trustee’s own gross negligence or wilful misconduct.
am.In no event shall the Security Trustee be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not it has been advised of the possibility of such loss or damages.
Retirement of Security Trustee
an.The Security Trustee:
29.may (without giving any reason and having given to the Borrower and the other Finance Parties not less than 30 Business Days’ notice of its intention to do so) retire;
30.shall, upon the request of the Required Lenders (after consultation with the Borrower), retire;
31.shall, upon the request of the Borrower in the event the Security Trustee is no longer a Lender or an Affiliate of a Lender, retire under this Agreement, the Facility Agreement and the other Loan Documents.
ao.No such retirement shall take effect unless there has been appointed by the Finance Parties as a successor security trustee:
32.(except where the Security Trustee has been required to retire by notice from the said Lenders) an Affiliate of the Security Trustee nominated by the Security Trustee or, failing such a nomination; or
33.a Lender or an Affiliate of a Lender nominated by the Required Lenders or, failing such a nomination; or
34.any reputable and experienced bank or financial institution nominated by the Security Trustee which appointment must be agreed to by the Lenders as contemplated above,
and such successor security trustee shall have duly accepted such appointment by delivering to the Facility Agent a written confirmation (in a form acceptable to the Facility Agent) of such acceptance agreeing to be bound by this Agreement in the capacity of Security Trustee as if it had been an original party to this Agreement.
ap.Upon any such successor as aforesaid being appointed, the retiring Security Trustee shall be discharged from any further obligation (except as otherwise provided in the Loan Documents) under this Agreement and each of the other Loan Documents and its successor and each of the other parties to this Agreement and any of the other Loan Documents shall have the same rights and obligations among themselves as they would have had if such successor had been a
party to this Agreement and any of the other Loan Documents in place of the retiring Security Trustee.
aq.Upon any successor to the Security Trustee being appointed the Trust Property will automatically vest in such successor without the need for any additional act by the Lenders or the Borrower, but without prejudice to clause 2.23(e).
ar.The retiring Security Trustee, each other Finance Party and the Borrower hereby undertake from time to time to execute, sign, perfect, do and (if required) register every such further assurance, document, act or thing as in the reasonable opinion of each of the successor security trustee and the Finance Parties may be necessary or desirable for the purpose of ensuring that the Trust Property is effectively vested in it so that it holds and enjoys the same rights, interests and powers in relation to the Trust Property as were held by the retiring Security Trustee.
as.The Lenders agree to appoint as successor security trustee the person nominated in accordance with clause 2.41 and to execute such documents as may be required to give effect to such appointment.
Consents and approvals
at.Each Lender agrees that it will respond reasonably promptly (and in any event within 15 Business Days) to any request for a consent, waiver, amendment of (or in relation to) any term of any Loan Document or any other vote of Lenders under the terms of this Agreement.
au.The Borrower shall be consulted as regards any proposed substitute security trustee prior to the appointment thereof and the Borrower’s consent to any proposed substitute shall be required.
3.Declaration of trust: supplementary provisions
Declaration of trust
a.The Security Trustee hereby accepts its appointment under clause 2.1 as trustee of the Trust Property and irrevocably acknowledges and declares that it holds the same on trust for itself and the Finance Parties and that it shall deal with and apply the same in accordance with the provisions of this Agreement and the Escrow Account Security.
Duration of trusts
b.The trusts constituted or evidenced in or by this Agreement shall, save as provided by law, remain in full force and effect until receipt by the Security Trustee of confirmation in writing by the Facility Agent that either (a) there is no longer outstanding any Indebtedness (actual or contingent) which is secured by or under any of the Loan Documents or (b) the Release Date has occurred. At the time that the trusts constituted or evidenced by this Agreement are no longer in full force and effect, it is agreed that, save in respect of clauses 1.7, 1.8, 2 and 5, this Agreement shall have no further force and effect. Promptly following the NYC Cut Off Date the Facility Agent shall notify the Borrower of the Release Date.
Powers and discretions as trustee
c.In its capacity as trustee in relation to the Loan Documents and the Trust Property, the Security Trustee shall, without prejudice to any of the powers, discretions and immunities conferred upon trustees by law (and to the extent not inconsistent with the provisions of this Agreement or any of the Loan Documents), have all the same powers and discretions as a natural person acting as the beneficial owner of such property and/or as are conferred upon the Security Trustee by this Agreement and/or any Loan Document.
d.The rights, powers and discretions conferred upon the Security Trustee by this Agreement shall be supplemental to the Trustee Act 1925 and the Trustee Act 2000 and in addition to any which may be vested in the Security Trustee by general law or otherwise. Section 1 of the Trustee Act
2000 shall not apply to the duties of the Security Trustee in relation to the trusts constituted by this Agreement. Where there are any inconsistencies between the Trustee Act 1925 or the Trustee Act 2000 and the provisions of this Agreement, the provisions of this Agreement shall, to the extent allowed by law, prevail and, in the case of any inconsistency with the Trustee Act 2000, the provisions of this Agreement shall constitute a restriction or exclusion for the purposes of that Act.
Determination by the Security Trustee
e.In its capacity as trustee in relation to the Loan Documents and in relation to the Trust Property, the Security Trustee shall have full power to determine all questions and doubts arising in relation to the interpretation or application of any of the provisions of this Agreement or any of the Loan Documents as it affects the Security Trustee or the Trust Property and every such determination (whether made upon a question actually raised or implied in the acts or proceedings of the Security Trustee) shall, in the absence of manifest error, be conclusive and shall bind all the other parties to this Agreement.
Employment of agents
f.The Security Trustee may, instead of acting personally, employ, pay for and rely on the advice of any agent (whether being a lawyer, chartered accountant or any other suitably qualified person) to transact or concur in transacting any business and to do or concur in doing any acts required to be done by the Security Trustee (including the receipt and payment of money) or may, with the consent of the Borrower, delegate to any person on any terms (including the power to sub-delegate) the costs of which shall be borne by the Borrower and be capable of being recoverable by the Security Trustee pursuant to clause 1.7. Any such agent or delegate engaged in any profession or business shall be entitled to be paid all usual reasonable professional and other charges for business transacted and acts done by him or any partner or employee of his in connection with such trusts. The Security Trustee shall not be bound to supervise or, only as between the Security Trustee on the one hand and the Finance Parties on the other hand, nor be responsible for any loss incurred by reason of any act or omission of, any such agent or delegate if the Security Trustee shall have exercised reasonable care in the selection of such agent or delegate (which, without limitation, shall conclusively be deemed to be the case in respect of any agent approved in writing by the Required Lenders).
Non-recognition of trust and amendments
g.It is agreed between all parties to this Agreement that:
i.in relation to any jurisdiction the courts of which would not recognise or give effect to the trusts expressed to be constituted by this Agreement the relationship of the Finance Parties to the Security Trustee shall be construed simply as one of principal and agent but, to the fullest extent permissible under the laws of each and every such jurisdiction, this Agreement shall have full force and effect as between the parties; and
ii.any of the provisions of this clause 3 or of clauses 2 or 4 may be amended by agreement between the Security Trustee and the other Finance Parties without the consent of the Borrower and each such party other than the Security Trustee irrevocably authorises the Facility Agent in its name and on its behalf to execute all documents necessary to effect any such amendment.
Appointment of new or additional trustees
h.Without prejudice to clause 2.40, the statutory power to appoint new or additional trustees of the trusts constituted by this Agreement shall be vested in the Security Trustee. The appointment by the Security Trustee of any such new or additional trustees shall terminate on the appointment of a replacement security trustee in accordance with the terms of clause 2.41.
Appointment of separate and co-trustees
i.The Security Trustee shall have power, by notice in writing given to each of the Finance Parties, to appoint any person who is a reputable bank or financial institution either to act as separate trustee or as co-trustee, jointly with the Security Trustee and, as the case may be:
i.if the Security Trustee (acting on the instructions of the Required Lenders) considers such appointment to be in the interests of the Finance Parties; or
ii.for the purpose of conforming with any legal requirement, restriction or condition in any jurisdiction in which any particular act is to be performed; or
iii.for the purpose of obtaining a judgement in any jurisdiction or the enforcement in any jurisdiction against any person of a judgement already obtained,
any person so appointed shall (subject to the provisions of this Agreement) have such rights (including as to reasonable remuneration), powers, duties and obligations as shall be conferred or imposed by the instrument of appointment. The Security Trustee shall have power to remove any person so appointed and shall notify the other Finance Parties of such removal. At the request of the Security Trustee, the other parties to this Agreement shall forthwith execute all such documents and do all such things as may be required to perfect such appointment or removal and each such party irrevocably authorises the Security Trustee in its name and on its behalf to do the same. Each and any such person shall (subject always to the provisions of this Agreement) have such trusts, powers, authorities and discretions (not exceeding those conferred on the Security Trustee by this Agreement and the Loan Documents) and such duties and obligations as shall be conferred or imposed by the instrument of appointment. The Security Trustee shall not be bound to supervise or, only as between the Security Trustee on one hand and the Lenders on the other hand, be responsible for any loss incurred by reason of any act or omission of, any such person if the Security Trustee shall have exercised reasonable care in the selection of such person (which, without limitation, shall conclusively be deemed to be the case in respect of any such person approved in writing by the Required Lenders). The appointment by the Security Trustee of any such new or additional trustees shall terminate on the appointment of a replacement security trustee in accordance with the terms of clause 2.41.
Majority decisions of trustees
j.Whenever there shall be more than two trustees having equal authority under this Agreement the majority of such trustees shall be competent to execute and exercise all the duties, powers, trusts, authorities and discretions vested by this Agreement in the Security Trustee generally.
4.Application of proceeds
Co-operation by Finance Parties
a.The Finance Parties shall co-operate with each other and any Receiver in realising the Charged Assets and in ensuring that the net proceeds realised under the Escrow Account Security are applied in accordance with clause 4.2.
Application of moneys
b.Moneys received by the Security Trustee or by a Receiver after the Enforcement Date pursuant to the exercise of any rights and powers under or pursuant to the Escrow Account Security shall be paid to the Facility Agent and shall, subject to the Facility Agent receiving written directions pursuant to clause 2.21 and save as otherwise provided by any of the Loan Documents, be applied by the Facility Agent together with any other moneys received by the Facility Agent pursuant to the exercise of any rights and powers under or pursuant to any of the Loan Documents (after providing for all costs, charges, expenses and liabilities and other payments ranking in priority to the Secured Obligations) in the following manner and order:
i.first, in or towards payment to the Security Trustee of any unpaid Expenses incurred and payments made by the Security Trustee and any Receiver and any other amounts due but unpaid under the Loan Documents (including any remuneration payable to them);
ii.secondly, in or towards payment or satisfaction of all Expenses incurred and payments made and all remuneration payable to the Facility Agent under or pursuant to the Loan Documents;
iii.thirdly, in or towards satisfaction of the Secured Obligations owing to the Finance Parties in such order and/or on such basis as may be agreed from time to time between the Facility Agent and the Lenders; and
iv.fourthly, the balance (if any) shall be paid to the Borrower.
Prompt distribution of proceeds
c.The Facility Agent shall make each application and/or distribution falling to be made in accordance with clause 4.2 as soon as is practicable after the relevant moneys are received by, or otherwise become available to, the Facility Agent save that (without prejudice to any other provision contained in any of the Loan Documents) each Agent or any Receiver may (subject to clause 4.4 below) credit any moneys received by it to an interest bearing suspense account for so long and in such manner as such Agent or such Receiver may from time to time reasonably determine with a view to preserving the rights of the Finance Parties or any of them to prove for the whole of their respective claims against the Borrower or any other person liable, provided always that any Lender may instruct the Agent or the Receiver to release to it its share of any such amounts (subject always to clause 4.2).
d.If at any time the aggregate amount of the funds standing to the suspense account referred to in clause 4.3 above, together with any other moneys then held by any of the Finance Parties and which are available to be applied in respect of the Secured Obligations, are in an amount sufficient to discharge the Secured Obligations in full, the relevant Agent or any Receiver (as applicable) shall promptly withdraw the funds from such suspense account and apply them in accordance with clause 4.2 above.
e.The Security Trustee shall not be under any duty to consider investing moneys elsewhere and the Security Trustee shall not be responsible for any loss due to interest rate or exchange rate fluctuations and shall not be liable to account for an amount of interest greater than the standard amount that would be payable to an independent customer.
f.If any party owes an amount to an Agent under this Agreement this Agent may, after giving notice to that party, deduct an amount not exceeding that amount from any payment to that party which this Agent would otherwise be obliged to make under this Agreement and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of this Agreement that party shall be regarded as having received any amount so deducted.
Waiver by Borrower
g.To the extent permitted by law and without prejudice to any duty the Agents and the other Finance Parties may have to mitigate any losses, the Borrower hereby unconditionally waives any rights it may have, whether at law or otherwise, to require demands to be made by any of the Finance Parties under any of the Loan Documents or for the security or any guarantee or other assurance created by the Loan Documents in favour of the Finance Parties (or any of them) to be enforced or realised in any specific order or manner or to require the proceeds thereof to be appropriated in any specific order or manner.
5.Agents’ and Finance Parties' indemnities
Indemnity from Trust Property
a.Without prejudice to any right to indemnity by law given to agents or trustees generally and to any provision of the Loan Documents entitling an Agent, any other Finance Party or any other person to indemnity in respect of, and/or reimbursement of, any liabilities, damages, costs, claims, charges or expenses incurred or suffered by it in connection with any of the Loan Documents or the performance of any duties under this Agreement or any of the Loan Documents, each Agent, each Finance Party and every agent or other person appointed by any of them in connection with this Agreement shall be entitled to be indemnified out of the Trust Property in respect of all liabilities, damages, reasonable costs and claims whatsoever incurred or suffered by it:
i.in the execution or exercise or bona fide purported execution or exercise of the rights, powers, authorities, discretions and duties created or conferred by or pursuant to this Agreement; and/or
ii.in respect of any matter or thing done or omitted or in any way relating to the Trust Property or the provisions of any of the Loan Documents.
Stamp taxes
b.The Borrower shall pay all stamp, documentary, registration or other like duties and taxes (including any duties or taxes payable by any Finance Party) to which this Agreement or any of the Loan Documents or any judgement given in connection therewith is, or at any time may be, subject and shall indemnify each Finance Party against any liabilities, costs, claims and expenses resulting from any failure to pay or any delay in paying such tax arising by reason of any delay or omission by the Borrower to pay such duties or taxes.
Expenses
c.Without prejudice to clause 1.7, the Borrower also agrees that the provisions of Section 11.3 (Payment of Costs and Expenses) of the Facility Agreement shall apply with equal effect to this Agreement as if set out in full in this Agreement to cover any expenses of the type referred to in that section of the Security Trustee arising in respect of this Agreement and the Escrow Account Security (including, without limitation, any Expenses) as if reference in that section to the Facility Agent was reference to the Security Trustee.
6.Custody of deeds; illegality
Custody of deeds
a.The Security Trustee shall be entitled to place all deeds, certificates and other documents relating to the Charged Assets deposited with it under or pursuant to the Loan Documents or any of them in any safe deposit, safe or receptacle selected by the Security Trustee or with any firm of lawyers and may make any such arrangements as it thinks fit for allowing the Borrower access to, or its lawyers or auditors possession of, such documents when necessary or convenient and the Security Trustee shall not be responsible for any loss incurred in connection with any such deposit, access or possession.
Illegality
b.The Security Trustee shall refrain from doing anything which would, or might in its opinion, be contrary to any law of any jurisdiction (including but not limited to England and Wales, the United States of America, the Republic of France, the European Union or any jurisdiction forming part of it) or any regulation or directive of any agency of such state or jurisdiction or which would or might render it liable to any person and may without liability do anything which is, in its opinion, necessary to comply with any such law, directive or regulation.
7.Assignments by the Lenders
Benefit and burden
a.This Agreement and the other Escrow Account Security shall be binding upon, and enure for the benefit of, the Finance Parties and the Borrower and their respective successors.
Transfers and sub-participations by Lenders
b.The provisions of Section 11.12 (Sale and Transfer of the Loan; Participations in the Loan) of the Facility Agreement shall apply, mutatis mutandis, to this Agreement in respect of the Borrower and the Lenders as if set out in full herein.
8.Effect of Agreement
Acknowledgement by Borrower
a.The Borrower joins in this Agreement for the purpose of acknowledging the provisions of this Agreement and undertakes with each Finance Party not in any way to prejudice or affect the enforcement of such provisions or do or suffer anything which would be in breach of the terms of this Agreement.
b.Nothing contained in this Agreement shall as between the Borrower and the Finance Parties or any of them affect or prejudice any rights or remedies of any such person against the Borrower in respect of any of the Secured Obligations.
9.Miscellaneous
Other securities unaffected
a.Nothing contained in this Agreement shall prejudice or affect the rights of the Finance Parties or any of them under any guarantee, lien, bill, note, charge or other security from any party other than the Borrower now or hereafter held by it in respect of any moneys, obligations or liabilities thereby secured and so that (without limitation) each and any such person may apply any moneys recovered under any such guarantee, lien, bill, note, charge or other security in or towards payment of any money, obligation or liability actual or contingent now or hereafter due, owing or incurred to it by the Borrower or may hold such moneys on a suspense account for such period as it may in its absolute discretion think fit.
Obligations of Lenders
b.The obligations of each Lender under this Agreement are several; the failure of any Lender to perform such obligations shall not relieve any other Lender or the Borrower of any of their respective obligations or liabilities under this Agreement or any of the Loan Documents nor shall any other Finance Party be responsible for the obligations of any Lender (except for its own obligations, if any, as a Lender) under this Agreement.
No partnership
c.This Agreement shall not and shall not be construed so as to constitute a partnership between the parties or any of them.
10.Agreement to provide power of attorney
Each of the Finance Parties (other than the Security Trustee) shall, if so requested in writing by the Security Trustee, appoint the Security Trustee, subject to any limitations on the powers of the Security Trustee imposed by this Agreement, to be its attorney generally for and in the name and on behalf of such Finance Party and as the act and deed or otherwise of such Finance Party to execute, seal and deliver and otherwise perfect and do all such deeds,
assurances, agreements, instruments, acts and things which may be required for the full exercise of all or any of the rights, powers or remedies conferred in favour of the Security Trustee by the Escrow Account Security or which may be deemed proper in or in connection with all or any of the purposes aforesaid. The power to be conferred by each Finance Party pursuant to this clause 10 shall be a general power of attorney under the Powers of Attorney Act 1971, and each Finance Party agrees that such power will be in terms that the relevant Finance Party will ratify and confirm, and agree to ratify and confirm, any deed, assurance, agreement, instrument, act or thing which the relevant Agent may execute or do pursuant thereto.
11.Notices and other matters
a.Section 11.2 (Notices) of the Facility Agreement shall apply with equal effect to this Agreement as if set out herein provided further that in the case of the Security Trustee, its address, facsimile number and email and contact person are:
Citigroup Centre Canada Square London E14 5LB
Fax: +44 207 500 5877
Email: issuerpfla@citi.com
Attn: Agency and Trust
b.Each of the parties to this Agreement represents and warranties to each of the other parties that it has duly authorised the execution hereof and that this Agreement constitutes its valid and legally binding obligations.
12.Contracts (Rights of Third Parties) Act 1999
a.With the exception of BpiFAE and the persons referred to in clause 2.25, no term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement.
b.Notwithstanding any term of any Loan Document, the consent of any person who is not a party to this Agreement is not required to amend or vary this Agreement at any time.
13.Governing law and jurisdiction
Law
a.This Agreement and any non-contractual obligations connected with it are governed by and shall be construed in accordance with English law.
Submission to jurisdiction
b.For their mutual benefit, each of the Finance Parties and the Borrower agree that any legal action or proceedings arising out of or in connection with this Agreement may be brought in the English courts, irrevocably and unconditionally submit to the exclusive jurisdiction of such courts and the Borrower irrevocably designates, appoints and empowers RCL Cruises Ltd. at present of Building 3, The Heights – Brooklands, Weybridge, Surrey KT13 0NY to receive for it and on its behalf, service of process issued out of the English courts in any legal action or proceedings.
IN WITNESS whereof the parties to this Agreement have caused this Agreement to be duly executed and, in the case of the Security Trustee, duly executed as a deed and delivered on the date first above written.
Schedule 1 The Lenders
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Lender
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Facility Office and contact details
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Commitment
%
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Citibank N.A., London Branch
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Citigroup Centre Canada Square London E14 5LB United Kingdom
Attention: Wei-Fong Chan
Kara Catt Romina Coates Antoine Paycha
Fax No: +44 20 7986 4881
Tel No: +44 20 7986 3036 /
+44 20 7508 0344
+44 20 7986 4824
+44 20 7500 0907 /
E-mail: weifong.chan@citi.com kara.catt@citi.com romina.coates@citi.com
antoine.paycha@citi.com
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5.3479946973
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Banco Santander,
S.A. Paris Branch
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Facility Office:
374, rue Saint-Honoré
75001 Paris France
Operational address:
Ciudad Financiera Avenida de Cantabria s/n Edificio Encinar 2a planta 28600 Boadilla del Monte Spain
Fax No: +34 91 257 1682
Attention: Elise Regnault
Julián Arroyo Angela Rabanal Ecaterina Mucuta
Vanessa Berrio Vélez Ana Sanz Gómez
Tel No: +34 912893722
+1 212-297-2919
+1 212-297-2942
+33 1 53 53 70 46
+34 91 289 10 28
+34 91 289 17 90
E-mail:
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5.0254557412
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Lender
|
Facility Office and contact details
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Commitment
%
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elise.regnault@gruposantander.com Julian.Arroyo@santander.us arabanal@santander.us ecaterina.mucuta@gruposantander.com vaberrio@gruposantander.com
anasanz@gruposantander.com MiddleOfficeParis@gruposantander.com
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BNP Paribas
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Front Office to keep copied to all matters. BNPP SA
37 RUE DU MARCHE SAINT HONORE
75001 PARIS ACI : CHC03B1
Alexandre de VATHAIRE / Mauricio GONZALEZ
alexandre.devathaire@bnpparibas.com mauricio.gonzalez@us.bnpparibas.com
Tel : 00 331 42 98 00 29/00 1212 841 38 88
Middle Office: For Operational / Servicing matters
KHALID BOUITIDA / THIERRY ANEZO MILLENAIRE 4
35, RUE DE LA GARE
75019 PARIS ACI : CVA05A1
khalid.k.bouitida@bnpparibas.com thierry.anezo@bnpparibas.com
Tel : 00 331 42 98 58 69 / 00 331 43 16 81 57
Back Office : For Standard Settlement Instruction authentication/call-back
STEVE LOUISOR / VALERIE DUMOULIN MILLENAIRE 4
35, RUE DE LA GARE
75019 PARIS ACI : CVA03A1
paris.cib.boci.ca.3@bnpparibas.com valerie.dumoulin@bnpparibas.com steve.louisor@bnpparibas.com
Tel : 00 331 55 77 91 86 / 00 331 40 14 46 59
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3.9306454510
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HSBC France
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HSBC France – Global Banking Agency Operations (GBAO) Transaction Manager Unit
103 avenue des Champs Elysées 75008 Paris
France
Attention: Florencia Thomas
Alexandra Penda
Fax No: +33 1 40 70 28 80
Tel No: +33 1 40 70 73 81 /
+33 1 41 02 67 50
Email: florencia.thomas@hsbc.fr
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4.2645646367
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Lender
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Facility Office and contact details
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Commitment
%
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alexandra.penda@hsbc.fr
Copy to:
HSBC France
103 avenue des Champs Elysées 75008 Paris
France
Attention: Celine Karsenty / Julie Bellais Fax No: +33 1 40 70 78 93
Tel No: +33 1 40 70 28 59 /
+33 1 40 70 22 97
Email: celine.karsenty@hsbc.fr
julie.bellais@hsbc.fr
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Société Générale
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Société Générale Facility Office
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9.9328353079
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29 Boulevard Haussmann
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75009 Paris
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France
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For operational/servicing matters:
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Bouchra BOUMEZOUED / Tatiana
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BYCHKOVA
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Société Générale 189, rue d’Aubervilliers
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75886
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PARIS CEDEX 18
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OPER/FIN/CAF/DMT6
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Phone: +33 1 57 29 13 12 / +33 1 58 98 43 05
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Email: bouchra.boumezoued@sgcib.com
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tatiana.bychkova@sgcib.com
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par-oper-caf-dmt6@sgcib.com
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For credit matters:
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Francois Rolland / Tingting Yu / Muriel
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Baumann
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Société Générale 189, rue d’Aubervilliers
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75886
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PARIS CEDEX 18
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OPER/FIN/SMO/EXT
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Phone: +33 1 58 98 17 78 / +33 1 58 98 49 18
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/ +33 1 58 98 22 76
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Email: francois.rolland@sgcib.com
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tingting.yu@sgcib.com
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muriel.baumann@sgcib.com
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Sumitomo Mitsui Banking
Corporation
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1/3/5 rue Paul Cézanne, 75008 Paris, France
Attention: Cedric Le Duigou
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2.7360453298
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Lender
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Facility Office and contact details
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Commitment
%
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Europe Limited, Paris Branch
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Guillaume Branco Herve Billi
Claire Lucien
Fax No: +33 1 44 90 48 01
Tel No:
Cedric Le Duigou: +33 1 44 90 48 83
Guillaume Branco: +33 1 44 90 48 71
Herve Billi: +33 1 44 90 48 48
Claire Lucien: +33 1 44 90 48 49
Helene Ly: +33 1 44 90 48 49
E-mail: cedric_leduigou@fr.smbcgroup.com guillaume_branco@fr.smbcgroup.com herve_billi@fr.smbcgroup.com claire_lucien@fr.smbcgroup.com helene_ly@fr.smbcgroup.com
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SFIL
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1-3, rue de Passeur de Boulogne – CS 80054 92861 Issy-les-Moulineaux Cedex 9
France
Contact Person
Loan Administration Department:
Direction du Crédit Export:
Pierre-Marie Debreuille / Anne Crépin Direction des Opérations:
Dominique Brossard / Patrick Sick
Telephone:
Pierre-Marie Debreuille +33 1 73 28 87 64
Anne Crépin +33 1 73 28 88 59
Dominique Brossard +33 1 73 28 91 93
Patrick Sick +33 1 73 28 87 66
Email:
pierre-marie.debreuille@sfil.fr anne.crepin@sfil.fr dominique.brossard@sfil.fr patrick.sick@sfil.fr refinancements-export@sfil.fr creditexport_ops@sfil.fr
Fax: + 33 1 73 28 85 04
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68.7624588361
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100
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Execution Page – Agency and Trust Deed
Facility Agent
SIGNED by )
for and on behalf of )
CITIBANK EUROPE PLC, UK BRANCH )
as Facility Agent ) .....................................
Attorney-in-fact
Security Trustee
EXECUTED as a DEED by )
for and on behalf of )
CITICORP TRUSTEE COMPANY LIMITED )
as Security Trustee ) .....................................
in the presence of: Attorney-in-fact
................................
Witness Name:
Address:
Occupation:
Global Coordinator
SIGNED by )
for and on behalf of )
CITIBANK N.A., LONDON BRANCH ) .....................................
as Global Coordinator ) Attorney-in-fact
ECA Agent
SIGNED by )
for and on behalf of )
SUMITOMO MITSUI BANKING CORPORATION )
EUROPE LIMITED, PARIS BRANCH )
as ECA Agent ) .....................................
Attorney-in-fact
Mandated Lead Arrangers
SIGNED by )
for and on behalf of )
CITIBANK N.A., LONDON BRANCH )
as Mandated Lead Arranger ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
BANCO SANTANDER, S.A., )
PARIS BRANCH )
as Mandated Lead Arranger ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
BNP PARIBAS )
as Mandated Lead Arranger ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
HSBC FRANCE )
as Mandated Lead Arranger ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
SOCIÉTÉ GÉNÉRALE )
as Mandated Lead Arranger ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
SUMITOMO MITSUI BANKING ) CORPORATION EUROPE LIMITED, ) PARIS BRANCH )
as Mandated Lead Arranger ) .....................................
Attorney-in-fact
Lenders
SIGNED by )
for and on behalf of )
CITIBANK N.A., LONDON BRANCH ) .....................................
as Lender ) Attorney-in-fact
SIGNED by )
for and on behalf of )
BANCO SANTANDER, S.A. )
PARIS BRANCH )
as Lender ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
BNP PARIBAS )
as Lender ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
HSBC FRANCE )
as Lender ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
SOCIÉTÉ GÉNÉRALE )
as Lender ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
SUMITOMO MITSUI BANKING ) CORPORATION EUROPE LIMITED, ) PARIS BRANCH )
as Lender ) .....................................
Attorney-in-fact
SIGNED by )
for and on behalf of )
SFIL )
as Lender ) .....................................
Attorney-in-fact
Borrower
SIGNED by )
for and on behalf of )
ROYAL CARIBBEAN CRUISES LTD. )
as Borrower ) .....................................
Attorney-in-fact
Schedule 7
Form of Effective Date certificate
To: The other parties to the First Supplemental Agreement referred to below
Dear Sirs,
Hull No. C34 at Chantiers de l’Atlantique – First Supplemental Agreement dated [] 2020 (the First Supplemental Agreement)
We refer to clause 5.4 of the First Supplemental Agreement and confirm that all conditions precedent in clause 5.1 of the First Supplemental Agreement (and, in relation to the Finance Parties, clause 5.2 of the First Supplemental Agreement) have been fulfilled or waived on [ ] 2020.
Accordingly, the “Effective Date” for the purposes of the First Supplemental Agreement is [] 2020.
Facility Agent
Signed by ………………………………………………………………..
For and on behalf of Citibank Europe plc, UK Branch
Seller
Signed by ………………………………………………………………..
For and on behalf of Chantiers de l’Atlantique
Buyer
Signed by ………………………………………………………………..
For and on behalf of Royal Caribbean Cruises Ltd.
21
EXECUTION PAGE – FIRST SUPPLEMENTAL AGREEMENT (OASIS 5)
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Borrower
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SIGNED by Colin Girgenti
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for and on behalf of
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/s/ COLIN GIRGENTI
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HOEDISCUS FINANCE LIMITED
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Attorney in-fact
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Seller
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SIGNED by Gilles Pinot de Villechenon
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for and on behalf of
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/s/ GILLES PINOT DE VILLECHENON
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CHANTIERS DE L’ATLANTIQUE
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Attorney in-fact
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Buyer
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SIGNED by Antje M. Gibson
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for and on behalf of
|
/s/ ANTJE M. GIBSON
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ROYAL CARIBBEAN CRUISES LTD.
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Attorney in-fact
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Facility Agent
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SIGNED by Robert Brodie
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for and on behalf of
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/s/ ROBERT BRODIE
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Citibank Europe plc, UK Branch
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Delegated Signatory
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Security Trustee
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SIGNED by Viola Japaul
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for and on behalf of
|
/s/ VIOLA JAPAUL
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CITICORP TRUSTEE COMPANY LIMITED
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Authorised Signatory
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Global Coordinator
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SIGNED by Alex C. Taylor
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for and on behalf of
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/s/ ALEX C. TAYLOR
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Citibank N.A., LOndon Branch
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Managing Director
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French Coordinating Bank
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SIGNED by
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/s/JULIE BELLAIS
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for and on behalf of
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Authorised Signatory
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HSBC FRANCE
|
/s/ GUY WOELFEL
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Authorised Signatory
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ECA Agent
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SIGNED by Matthew Bambury
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for and on behalf of
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SUMITOMO MITSUI BANKING CORPORATION
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/s/ MATTHEW BAMBURY
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EUROPE LIMITED, PARIS BRANCH
|
Attorney in-fact
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The Lenders
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SIGNED by Alex C. Taylor
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for and on behalf of
|
/s/ ALEX C. TAYLOR
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CITIBANK N.A., LONDON BRANCH
|
Managing Director
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SIGNED by
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/s/ CAROLINE PANTALEAO
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for and on behalf of
|
Caroline Pantaleao
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BANCO SANTANDER, S.A., PARIS BRANCH
|
Authorised Signatory
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/s/ PIERRE ROSEROT
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Pierre Roserot
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Authorised Signatory
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SIGNED by
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/s/ GEORGES CUREY
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for and on behalf of
|
Georges Curey
|
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BNP PARIBAS
|
Head of Structured Export Finance
|
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/s/ M. ALEXANDRE DE VATHAIRE
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M. Alexandre de Vathaire
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Head of France & UK Export Finance
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SIGNED by
|
/s/JULIE BELLAIS
|
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for and on behalf of
|
Julie Bellais
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HSBC FRANCE
|
Authorised Signatory
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/s/ GUY WOELFEL
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Guy Woelfel
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Authorised Signatory
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SIGNED by Agnes Deschenes Voirin
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for and on behalf of
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/s/ AGNES DESCHENES VOIRIN
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SOCIÉTÉ GÉNÉRALE
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Authorised Signatory
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SIGNED by Matthew Bambury
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for and on behalf of
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SUMITOMO MITSUI BANKING CORPORATION
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/s/ MATTHEW BAMBURY
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EUROPE LIMITED, PARIS BRANCH
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Attorney in-fact
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SIGNED by
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/s/ BENJAMIN PHILIPPAERTS
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for and on behalf of
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Benjamin Philippaerts
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SFIL
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Direction Credit Export
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/s/ EMILIE BOISSIER
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Emilie Boissier
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Direction Credit Export
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The Mandated Lead Arrangers
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SIGNED by Alex C. Taylor
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for and on behalf of
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/s/ ALEX C. TAYLOR
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Citibank N.A., LOndon Branch
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Managing Director
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SIGNED by
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for and on behalf of
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/s/ CAROLINE PANTALEAO
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BANCO SANTANDER, S.A., PARIS BRANCH
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Caroline Pantaleao
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Authorised Signatory
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/s/ PIERRE ROSEROT
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Pierre Roserot
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Authorised Signatory
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SIGNED by
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for and on behalf of
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/s/ GEORGES CUREY
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BNP PARIBAS
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Georges Curey
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Head of Structured Export Finance
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/s/ M. ALEXANDRE DE VATHAIRE
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M. Alexandre de Vathaire
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Head of France & UK Export Finance
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SIGNED by
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/s/JULIE BELLAIS
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for and on behalf of
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Julie Bellais
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HSBC FRANCE
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Authorised Signatory
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/s/ GUY WOELFEL
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Guy Woelfel
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Authorised Signatory
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SIGNED by Agnes Deschenes Voirin
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for and on behalf of
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/s/ AGNES DESCHENES VOIRIN
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SOCIÉTÉ GÉNÉRALE
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Authorised Signatory
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SIGNED by Matthew Bambury
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or and on behalf of
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SUMITOMO MITSUI BANKING CORPORATION
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/s/ MATTHEW BAMBURY
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EUROPE LIMITED, PARIS BRANCH
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Attorney in-fact
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CERTIFICATIONS
I, Richard D. Fain, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Royal Caribbean Cruises Ltd.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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May 21, 2020
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/s/ Richard D. Fain
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Richard D. Fain
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Chairman and
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Chief Executive Officer
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(Principal Executive Officer)
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CERTIFICATIONS
I, Jason T. Liberty, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Royal Caribbean Cruises Ltd.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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May 21, 2020
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/s/ Jason T. Liberty
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Jason T. Liberty
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Executive Vice President, Chief Financial Officer
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(Principal Financial Officer)
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In connection with the quarterly report on Form 10-Q for the quarterly period ended March 31, 2020 as filed by Royal Caribbean Cruises Ltd. with the Securities and Exchange Commission on the date hereof (the “Report”), Richard D. Fain, Chairman and Chief Executive Officer, and Jason T. Liberty, Chief Financial Officer, each hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:
1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Royal Caribbean Cruises Ltd.
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Date:
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May 21, 2020
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By:
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/s/ Richard D. Fain
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Richard D. Fain
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Chairman and
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Chief Executive Officer
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(Principal Executive Officer)
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By:
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/s/ Jason T. Liberty
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Jason T. Liberty
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Executive Vice President, Chief Financial Officer
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(Principal Financial Officer)
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