MATSON NAVIGATION COMPANY, INC.
$15,000,000 SERIES A SENIOR SECURED NOTES DUE AUGUST 19, 2010
and
$105,000,000 SERIES B SENIOR SECURED NOTES DUE MAY 19, 2020
AMENDED AND RESTATED
NOTE AGREEMENT
May 19, 2005
<PAGE>
TABLE OF CONTENTS
Page
1. AUTHORIZATION OF ISSUE OF
NOTES......................................1
1A. Authorization and Issuance of Series A
Notes...............1
1B. Authorization of Issue of Series B
Notes...................2
2. PURCHASE AND SALE OF SERIES B NOTES;
AMENDMENT AND RESTATEMENT.......2
2A. Purchase and Sale of Series B
Notes........................2
2B. Amendment and
Restatement..................................2
3. CONDITIONS OF
CLOSING................................................3
3A. Certain
Documents..........................................3
3B. Representations and Warranties; No
Default.................4
3C. Purchase Permitted by Applicable
Laws......................4
3D. Perfection of Liens and Security
Interests.................5
3E. Shipbuilding Contract;
Citizenship.........................5
3F. Certificates of
Insurance..................................5
3G. Lien
Searches..............................................5
3H. Material Adverse
Change....................................5
3I. Fees and
Expenses..........................................5
4.
PREPAYMENTS..........................................................5
4A. Required Prepayments of
Notes..............................5
4B. Optional Prepayment With Yield-Maintenance
Amount..........6
4C. Notice of Optional
Prepayment..............................6
4D. Application of
Prepayments.................................7
4E. Retirement of
Notes........................................7
5. AFFIRMATIVE
COVENANTS................................................7
5A. Financial
Statements.......................................7
5B. Inspection of
Property.....................................8
5C. Deliveries; Further
Assurances.............................9
5D. Information Required by Rule
144A.........................10
5E. Maintenance of Properties;
Insurance......................10
6. NEGATIVE
COVENANTS..................................................10
6A. Financial
Covenants.......................................10
6B. Dividend and Investment
Limitation........................10
6C. Lien, Debt and Other
Restrictions.........................11
7. EVENTS OF
DEFAULT...................................................15
7A.
Acceleration..............................................15
7B. Rescission of
Acceleration................................17
7C. Notice of Acceleration or
Rescission......................18
7D. Other
Remedies............................................18
8. REPRESENTATIONS, COVENANTS AND
WARRANTIES...........................18
8A.
Organization..............................................18
8B. Financial
Statements......................................18
8C. Actions
Pending...........................................19
8D. Outstanding
Debt..........................................19
8E. Title to
Properties.......................................19
8F.
Taxes.....................................................19
8G. Conflicting Agreements and Other
Matters..................19
8H. Offering of the
Notes.....................................20
8I. Use of Proceeds; Regulation U,
etc........................20
8J.
ERISA.....................................................20
8K. Governmental
Consent......................................21
8L. Holding Company and Investment Company
Status.............21
8M. Possession of Franchises, Licenses,
etc...................21
8N. Environmental and Safety
Matters..........................22
8O. Establishment of Security
Interest........................22
8P. Employee
Relations........................................22
8Q. Regulations and
Legislation...............................22
8R.
Disclosure................................................22
9. REPRESENTATIONS OF THE
PURCHASERS...................................23
9A. Nature
of Purchase........................................23
9B. Source of
Funds...........................................23
10. DEFINITIONS; ACCOUNTING
MATTERS....................................24
10A. Yield-Maintenance
Terms..................................24
10B. Other
Terms..............................................26
10C. Accounting Principles, Terms and
Determinations..........32
11.
MISCELLANEOUS......................................................32
11A. Note
Payments............................................32
11B.
Expenses.................................................32
11C. Consent to
Amendments....................................33
11D. Form, Registration, Transfer and Exchange of
Notes.......33
11E. Persons Deemed Owners;
Participations....................34
11F. Survival of Representations and Warranties;
Entire Agreement.........................................34
11G. Successors and
Assigns...................................34
11H. Independence of
Covenants................................34
11I.
Notices..................................................35
11J. Descriptive
Headings.....................................35
11K. Satisfaction
Requirement.................................35
11L. Governing
Law............................................35
11M. Payments Due on Non-Business
Days........................35
11N.
Severability.............................................35
11O. Severalty of
Obligations.................................35
11P. Consent to
Forum.........................................36
11Q.
Counterparts.............................................36
11R. Binding
Agreement........................................37
Schedules and Exhibits
Exhibit A-1 -- Form of Series A Note
Exhibit A-2 -- Form of Amended and Restated
Series B Note
Exhibit B -- Form of Disbursement Direction
Letter
Exhibit C -- Form of Intercreditor
Agreement
Exhibit D -- Form of Mortgage
Exhibit E
Form of Security Agreement
Exhibit F-1 -- Form of Opinion of Company's
General Counsel
Exhibit F-2 -- Form of Opinion of Company's
Maritime Counsel
Exhibit F-3 -- Form of Opinion of Company's
Special Hawaiian Counsel
Schedule 8G -- Agreements Restricting Incurrence
of Debt
Schedule 8K -- Filings and Recordings
Schedule 8O -- Locations
<PAGE>
MATSON NAVIGATION COMPANY, INC.
555 12th Street
Oakland, California 94607
As of May 19, 2005
Each of the Persons named in the Purchaser
Schedule
attached hereto as a holder of the Series A
Notes
(the "Existing Holders")
and
Each of the Persons named in the Purchaser
Schedule
attached hereto as a purchaser of the
Series B Notes
(the "Purchasers")
c/o Prudential Capital Group
Four Embarcadero Center
Suite 2700
San Francisco, CA 94111
Ladies and Gentlemen:
The undersigned, Matson Navigation Company, Inc. (the "Company")
hereby agrees with you as set forth below.
Reference is made to
paragraph 10
hereof for definitions of capitalized terms
used herein and not otherwise
defined:
INTRODUCTION
The Company and the Existing Holders are parties to the Private
Shelf
Agreement, dated June 29, 2001 (as
heretofore amended, the "Existing
Agreement"), under which the Company issued
and sold to the Existing Holders,
and there are now outstanding, the
Company's Series A Senior Notes due August
19, 2010 (the "Series A Notes") in the
outstanding principal amount of
$15,000,000. The Company and the Purchasers
are desirous of entering into this
Agreement under which, subject to the terms
and conditions hereof, the Company
would issue and sell to the Purchasers the
Series B Notes, which will be secured
by the Collateral. The Company and the
Existing Holders are desirous of, subject
to the terms and conditions hereof,
amending and restating the Existing
Agreement to read as set forth herein,
amending and restating the form of the
Series A Notes to be in the form of Exhibit
A-1 to this Agreement and to provide
that the Series A Notes will be secured by
the Collateral on a pari passu basis
with the Series B Notes.
Accordingly, the parties agree as follows:
1.
AUTHORIZATION OF ISSUE OF NOTES.
1A.
Authorization and Issuance of Series A Notes. Under the
Existing Agreement the Company authorized
the issue of, and issued and sold to
the Existing Holders, the Series A Notes,
which bear interest on the unpaid
balance thereof from the date thereof until
the principal thereof shall have
become due and payable at the rate of 4.31%
per annum and on overdue payments at
the rate per annum set forth therein, and
have such other particular terms as
are set forth in the Series A Notes, and
which will, after the effectiveness of
the amendment and restatement of the
Existing Agreement be substantially in the
form of Exhibit A-1 attached hereto. The
terms "Series A Note" and "Series A
-----------
Notes" as used herein shall include each
Series A Note delivered pursuant to the
Existing Agreement, each Series A Note
delivered pursuant to any provision of
this Agreement and each Series A Note
delivered in substitution or exchange for
any such Series A Note pursuant to any such
provision.
1B.
Authorization of Issue of Series B Notes. The Company has
authorized the issue of its senior secured
promissory notes (the "Series B
Notes") in the aggregate principal amount
of $105,000,000, to be dated the date
of issue thereof, to mature May 19, 2020,
to bear interest on the unpaid balance
thereof from the date thereof until the
principal thereof shall have become due
and payable at the rate of 4.79% per annum
and on overdue payments at the rate
per annum set forth therein, and to be
substantially in the form of Exhibit A-2
-----------
attached hereto. The term "Series B Notes"
as used herein shall include each
such Series B Note delivered pursuant to
any provision of this Agreement and
each such Series B Note delivered in
substitution or exchange for any other
Series B Note pursuant to any such
provision and the term "Notes" as used herein
shall include each Series A Note and each
Series B Note.
2.
PURCHASE AND SALE OF SERIES B NOTES; AMENDMENT AND
RESTATEMENT.
2A. Purchase
and Sale of Series B Notes. The Company hereby agrees
to sell to each Purchaser and, subject to
the terms and conditions herein set
forth, each Purchaser agrees to purchase
from the Company the aggregate
principal amount of Series B Notes set
forth opposite such Purchaser's name in
the Purchaser Schedule attached hereto at
100% of such aggregate principal
amount. The Company will deliver to each
Purchaser, at the offices of Schiff
Hardin LLP at 6600 Sears Tower, Chicago,
Illinois 60606, one or more Series B
Notes registered in such Purchaser's name
(or, if specified in the Purchaser
Schedule, in the name of the nominee(s) for
such Purchaser specified in the
Purchaser Schedule), evidencing the
aggregate principal amount of Series B Notes
to be purchased by such Purchaser and in
the denomination or denominations
specified with respect to such Purchaser in
the Purchaser Schedule against
payment of the purchase price thereof by
transfer of immediately available funds
on the date of closing, which shall be May
19, 2005 (herein called the "closing"
or the "date of closing"), for credit to
the account or accounts as shall be
specified in a letter on the Company's
letterhead, in substantially the form of
Exhibit B attached hereto, from the Company
to the Purchasers delivered prior to
---------
the date of closing.
2B. Amendment
and Restatement. Subject to the terms and conditions
herein set forth, the Company and the
Existing Holders agree that, effective on
the date of closing, the Existing Agreement
shall be amended and restated in its
entirety to read as set forth in this
Agreement and each Series A Note
outstanding as of the date of closing shall
be amended and restated in its
entirety to be a like principal amount of
Series A Notes in the form of Exhibit
-------
A-1 attached to this Agreement. The Series
A Notes issued pursuant to paragraph
---
3A(i) are (i) given in exchange and
substitution for, and not as payment of the
indebtedness evidenced by, the outstanding
Series A Notes held by the Existing
Holders as of the date of closing that are
being amended and restated pursuant
to this paragraph 2B, (ii) merely a
re-evidence of the indebtedness evidenced by
such outstanding Series A Notes, and (iii)
are not intended to constitute a
novation or discharge of the indebtedness
evidenced by such outstanding Series A
Notes. Any Series A Note issued pursuant to
paragraph 3A(i) in exchange for any
such outstanding Series A Note shall be
dated the interest payment date up to
which interest has been paid on such
outstanding Series A Note and shall carry
the rights to unpaid interest which was
carried on the outstanding Series A Note
for which such Series A Note was issued in
exchange, so that neither gain nor
loss of interest shall result from any such
exchange.
3.
CONDITIONS OF CLOSING. The obligation of each Purchaser to
purchase and pay for the Series B Notes to
be purchased by such Purchaser
hereunder, and the effectiveness of the
amendment and restatement of the
Existing Agreement and the form of the
outstanding Series A Notes hereby, are
subject to the satisfaction, on or before
the date of closing, of the following
conditions:
3A. Certain
Documents. Such Purchaser and each Existing Holder
shall have received the following, each
dated the date of closing:
(i) The Series B Note(s) to be purchased by such Purchaser or
an amended and restated Series A Notes in the form of Exhibit
A-1
-----------
hereto in a like principal amount as the outstanding principal
amount
of the Series A Note held by such Existing Holder, as the case may
be.
(ii) An Intercreditor and Collateral Agency Agreement among
the Purchasers, the Existing Holders and the Collateral Agent in
the
form of Exhibit C hereto (herein, as the same may be amended,
modified
---------
or supplemented from time to time in accordance with the
provisions
thereof, called the "Intercreditor Agreement").
(iii) A copy of a First Preferred Ship Mortgage made by the
Company in favor of the Collateral Agent for the benefit of the
holders
of the Notes in the form of Exhibit D hereto (herein, as the same
may
---------
be
amended, modified or supplemented from time to time in
accordance
with the provisions thereof, the "Mortgage").
(iv) A Security Agreement between the Company and the
Collateral Agent for the benefit of the holders of the Notes in
the
form of Exhibit E hereto (as the same may be amended, modified
or
---------
supplemented from time to time in accordance with the
provisions
thereof, called the "Security Agreement").
(v) Certified copies of the resolutions of the Board of
Directors of the Company authorizing the execution and delivery of
this
Agreement and the other Transaction Documents and the issuance of
the
Notes, and of all documents evidencing other necessary corporate
action
and governmental approvals, if any, with respect to this Agreement,
the
Notes and the other Transaction Documents.
(vi) A certificate of the Secretary or an Assistant Secretary
and one other officer of the Company certifying the names and
true
signatures of the officers of the Company authorized to sign
this
Agreement, the Notes, the other Transaction Documents and the
other
documents to be delivered hereunder.
(vii) Certified copies of the Certificate of Incorporation and
By-laws of the Company.
(viii) A favorable opinion of the Company's general counsel
(or such other counsel designated by the Company and acceptable to
the
Purchaser(s) and the Existing Holders) satisfactory to such
Purchaser
and each Existing Holder and substantially in the form of Exhibit
F-1
-----------
attached hereto and as to such other matters as such Purchaser or
any
Existing Holder may reasonably request. The Company hereby directs
such
counsel, and the counsel referred to in paragraph 5C(1), to
deliver
such opinion and the opinions described in paragraph 5C(1), agrees
that
the issuance and sale of any Notes will constitute a reconfirmation
of
such direction, and understands and agrees that each Purchaser
and
Existing Holder
receiving such opinions will and is hereby authorized
to rely on such opinions.
(ix) A good standing certificate for the Company from the
secretaries of state of Hawaii and California, in each case dated
as of
a recent date and such other evidence of the status of each Company
as
such Purchaser or any Existing Holder may reasonably request.
(x) Additional documents or certificates with respect to legal
matters or corporate or other proceedings related to the
transactions
contemplated hereby as may be reasonably requested by such
Purchaser or
any Existing Holder.
3B.
Representations and Warranties; No Default. The
representations and warranties contained in
paragraph 8 hereof and in each
Transaction Document shall be true on and
as of the date of closing, except to
the extent of changes caused by the
transactions herein contemplated; there
shall exist on the date of closing no Event
of Default, Default, Event of Loss
or event or condition which, with notice or
lapse of time, or both, would
constitute an Event of Loss; and the
Company shall have delivered to such
Purchaser and each Existing Holder an
Officer's Certificate, dated the date of
closing, to such effects.
3C. Purchase
Permitted by Applicable Laws. The purchase of and
payment for the Series B Notes to be
purchased by such Purchaser on the terms
and conditions herein provided (including
the use of the proceeds of such Series
B Notes by each Company) shall not violate
any applicable law or governmental
regulation (including, without limitation,
Section 5 of the Securities Act or
Regulation T, U or X of the Board of
Governors of the Federal Reserve System)
and shall not subject such Purchaser to any
tax, penalty, liability or other
onerous condition under or pursuant to any
applicable law or governmental
regulation, and such Purchaser shall have
received such certificates or other
evidence as it may request to establish
compliance with this condition. This
paragraph 3C is a closing condition and
shall not be construed as a tax
indemnity.
3D. Perfection
of Liens and Security Interests. All documents or
instruments, including Uniform Commercial
Code financing statements, necessary,
or deemed by such Purchaser or any Existing
Holder to be desirable to be made,
to perfect a first priority security
interest in the Collateral in favor of the
Collateral Agent shall have been executed
and delivered to the Collateral Agent
and the Mortgage shall have been delivered
to Marine Documentation, Inc. to be
held for filing with the United States
Coast Guard.
3E.
Shipbuilding Contract; Citizenship. The Shipbuilding Contract
shall be in full force and effect. Such
Purchaser and each Existing Holder shall
have received a copy of the Shipbuilding
Contract. The Company shall be a
citizen of the United States, within the
meaning of Section 2 of the Shipping
Act, 1916, as amended, qualified to own and
operate vessels engaged in the
coastwise trade.
3F.
Certificates of Insurance. The Company shall have delivered
from insurance carriers acceptable to such
Purchaser and each Existing Holder
certificates of insurance evidencing
insurance required to be maintained under
Section 1.13 of the Mortgage under
insurance policies with loss payable clauses
in favor of the Collateral Agent and
acceptable to such Purchaser and each
Existing Holder, together with a
certificate of the chief financial officer of
the Company, dated the date of closing,
describing the insurance obtained and
stating that such insurance is in full
force and effect and that all premiums
then due thereon have been paid, and that,
in the opinion of such officer, such
insurance complies with the provisions of
Section 1.13 of the Mortgage.
3G. Lien
Searches. Such Purchaser and each Existing Holder shall
have received (i) a certificate of
ownership (CG-1330) issued by the United
States Coast Guard showing the Company as
the owner of the vessel, free and
clear of all liens and encumbrances except
the Mortgage and (ii) certified
copies of Requests for Information or
Copies (Form UCC-11) or equivalent reports
listing all effective financing statements
which name the Company (under its
present name and previous names) as debtor
and which are filed in the office of
the Secretary of State in the states of
Hawaii and California.
3H. Material
Adverse Change. No material adverse change in the
business, condition (financial or
otherwise), operations or prospects of the
Company and its Subsidiaries, taken as a
whole, since December 31, 2004 shall
have occurred.
3I. Fees and
Expenses. Without limiting the provisions of
paragraph 11B hereof, the Company shall
have paid the reasonable fees, charges
and disbursements of special counsel and
special maritime counsel to the
Purchasers and the Existing Holders to the
extent invoiced by no later than one
(1) day prior to the date of closing.
4.
PREPAYMENTS. The Notes shall be subject to required prepayment
as and to the extent provided in paragraph
4A. The Notes shall also be subject
to prepayment under the circumstances set
forth in paragraph 4B. Any prepayment
made by the Company pursuant to any other
provision of this paragraph 4 shall
not reduce or otherwise affect its
obligation to make any required prepayment as
specified in paragraph 4A.
4A. Required
Prepayments of Notes.
4A(1). Required
Prepayments of Series A Notes. As set forth in the
Series A Notes, until the Series A Notes
shall be paid in full, the Company
shall apply to the prepayment of the Series
A Notes, without premium, the sum of
(i) $2,000,000 on August 19 in each of the
years 2005 to 2007, inclusive, and
(ii) $3,000,000 on August 19 in each of the
years 2008 and 2009, and such
principal amounts of the Series A Notes,
together with interest thereon to the
prepayment date, shall become due on such
prepayment dates. The remaining
outstanding principal amount of the Series
A Notes, together with any accrued
and unpaid interest thereon, shall become
due on August 19, 2010, the maturity
date of the Series A Notes.
4A(2). Required
Prepayments of the Series B Notes. Until the Series B
Notes shall be paid in full, the Company
shall apply to the prepayment of the
Notes, without premium, the sum of
$3,500,000 on May 19 and November 19 in each
of the years 2005 to 2019, inclusive, and
such principal amounts of the Series B
Notes, together with interest thereon to
the prepayment dates, shall become due
on such prepayment dates. The remaining
outstanding principal amount of the
Notes, together with any accrued and unpaid
interest thereon, shall become due
on May 19, 2020, the maturity date of the
Series B Notes.
4A(3).
Required
Prepayment Upon Event of Loss or Collateral Event.
Within thirty (30) days after the
occurrence of an Event of Loss and within ten
(10) days after the occurrence of a
Collateral Event, the Company shall prepay
the entire outstanding principal of the
Notes and the entire outstanding
principal amount of the Notes, together
with interest thereon to such date and
together with the Yield-Maintenance Amount,
if any, with respect to each Note,
shall be due and payable on such date.
4B. Optional
Prepayment With Yield-Maintenance Amount. The Notes
of each Series shall be subject to
prepayment, in whole at any time or from time
to time in part (in integral multiples of
$100,000 and in a minimum amount of
$1,000,000), at the option of the Company,
at 100% of the principal amount so
prepaid plus interest thereon to the
prepayment date and the Yield-Maintenance
Amount, if any, with respect to each such
Note. Any partial prepayment of a
Series of the Notes pursuant to this
paragraph 4B shall be applied in
satisfaction of required payments of
principal in inverse order of their
scheduled due dates.
4C. Notice of
Optional Prepayment. The Company shall give the
holder of each Note of a Series to be
prepaid pursuant to paragraph 4B
irrevocable written notice of such
prepayment not less than five Business Days
prior to the prepayment date, specifying
such prepayment date, the aggregate
principal amount of the Notes of such
Series to be prepaid on such date, the
principal amount of the Notes of such
Series held by such holder to be prepaid
on that date and that such prepayment is to
be made pursuant to paragraph 4B.
Notice of prepayment having been given as
aforesaid, the principal amount of the
Notes specified in such notice, together
with interest thereon to the prepayment
date and together with the
Yield-Maintenance Amount, if any, herein provided,
shall become due and payable on such
prepayment date. The Company shall, on or
before the day on which it gives written
notice of any prepayment pursuant to
paragraph 4B, give telephonic notice of the
principal amount of the Notes to be
prepaid and the prepayment date to each
Significant Holder which shall have
designated a recipient for such notices in
the Purchaser Schedule attached
hereto or by notice in writing to the
Company.
4D.
Application of Prepayments. In the case of each prepayment of
less than the entire unpaid principal
amount of all outstanding Notes of any
Series pursuant to paragraph 4A or 4B, the
amount to be prepaid shall be applied
pro rata to all outstanding Notes of such
Series (including, in the case of
prepayments pursuant to paragraph 4A(1) or
4A(2) for the purpose of this
paragraph 4D only, all Notes of such Series
prepaid or otherwise retired or
purchased or otherwise acquired by the
Company or any of its Subsidiaries or
Affiliates other than by prepayment
pursuant to paragraph 4A or 4B) according to
the respective unpaid principal amounts
thereof.
4E. Retirement
of Notes. The Company shall not, and shall not
permit any of its Subsidiaries or
Affiliates to, prepay or otherwise retire in
whole or in part prior to their stated
final maturity (other than by prepayment
pursuant to paragraphs 4A or 4B, or upon
acceleration of such final maturity
pursuant to paragraph 7A), or purchase or
otherwise acquired, directly or
indirectly, Notes of any Series held by any
holder unless the Company or such
Subsidiary or Affiliate shall have offered
to prepay or otherwise retire or
purchase or otherwise acquire, as the case
may be, the same proportion of the
aggregate principal amount of Notes of such
Series held by each other holder of
Notes of such Series at the time
outstanding upon the same terms and conditions.
Any Notes so prepaid or otherwise retired
or purchased or otherwise acquired by
the Company or any of its Subsidiaries or
Affiliates shall not be deemed to be
outstanding for any purpose under this
Agreement, except as provided in
paragraph 4D.
5.
AFFIRMATIVE COVENANTS. So long as any Note is outstanding and
unpaid, the Company covenants as
follows:
5A. Financial
Statements. The Company covenants that it will
deliver to each holder of the Notes in
duplicate:
(i) as soon as practicable and in any event within 60 days
after the end of each quarterly period (other than the last
quarterly
period) in each fiscal year, consolidated statements of income and
cash
flows of the Company and its Subsidiaries for the period from
the
beginning of the current fiscal year to the end of such
quarterly
period, and a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarterly period, setting forth
in
each case in comparative form figures for the corresponding period
in
the preceding fiscal year, all in reasonable detail and certified
by an
authorized financial officer of the Company, subject only to
changes
resulting from year-end adjustments;
(ii) as soon as practicable and in any event within 120 days
after the end of each fiscal year, consolidated statements of
income
and cash flows of the Company and its Subsidiaries for such year
and a
consolidated balance sheet of the Company and its Subsidiaries as
at
the end of such year, setting forth in each case in comparative
form
corresponding figures from the preceding annual audit, all in
reasonable detail and reasonably satisfactory in scope to the
Required
Holder(s) and certified by independent public accountants of
recognized
national standing whose opinion shall be unqualified and
otherwise
satisfactory in scope and substance to the Required Holder(s);
(iii) promptly upon transmission thereof, copies of all such
financial, proxy and information statements, notices and other
reports
as are sent to the Company's public stockholders and copies of
all
registration statements (without exhibits) and all reports which
are
filed with the Securities and Exchange Commission (or any
governmental
body or agency succeeding to the functions of the Securities
and
Exchange Commission);
(iv) promptly upon receipt thereof, a copy of each other
report submitted to the Company or any of its Subsidiaries by
independent accountants in connection with any material annual,
interim
or special audit made by them of the books of such Company or
such
Subsidiary;
(v) together with the delivery of any financial statements
pursuant to clause (ii) above, the certificate or certificates
described in Section 1.10(b) of the Mortgage and the report and
opinion
described in Section 1.13(b) of the Mortgage; and
(vi) with reasonable promptness, such other financial data as
any holder of Notes may reasonably request.
Together with each delivery of financial
statements required by clauses (i) and
(ii) above, the Company will deliver to
each holder of Notes an Officers'
Certificate (a) demonstrating (with
computations in reasonable detail)
compliance with the covenants in paragraphs
6A(1), 6A(2), 6B, 6C(2), 6C(4) and
(b) stating that there exists no Default,
Event of Default, Event of Loss or
event or condition which, with notice or
lapse of time, or both, would
constitute an Event of Loss, or if any such
Default, Event of Default, Event of
Loss or event or condition exists,
specifying the nature and period of existence
thereof and what action the Company
proposes to take with respect thereto.
The Company also covenants that forthwith upon the chief
executive
officer, chief financial officer, treasurer
or controller of the Company
obtaining actual knowledge of an Event of
Default, Default, Event of Loss or
event or condition which, with notice or
lapse of time, or both, would
constitute an Event of Loss, it will
deliver to each holder of Notes an
Officers' Certificate specifying the nature
and period of existence thereof and
what action the Company proposes to take
with respect thereto.
5B. Inspection
of Property. The Company covenants that it will
permit any Person designated by any
Significant Holder in writing, at such
Significant Holder's expense, to visit and
inspect any of the properties of the
Company and its Subsidiaries, to examine
their books and financial records and
to make copies thereof or extracts
therefrom and to discuss their affairs,
finances and accounts with the principal
officers and the Company's independent
certified public accountants, all at such
reasonable times and as often as such
Significant Holder may reasonably request;
provided that a principal financial
officer of the Company shall have prior
notice of, and may elect to be present
during, discussions with the Company's
independent public accountants.
5C.
Deliveries; Further Assurances. The Company covenants to, at
its sole expense:
5C(1). Vessel
Delivery and Mortgage Filing. On or before May 23,
2005: (a) the construction of the Vessel
shall have been completed substantially
in accordance with the plans and
specifications of the Shipbuilding Contract and
the Vessel shall have successfully
completed its trial run in accordance with
the provisions of the Shipbuilding
Contract; (b) all material conditions
precedent to the Company's obligations to
acquire the Vessel under the
Shipbuilding Contract shall have been
satisfied (except to the extent waived by
the Company with the consent of the
Purchasers and each Existing Holder), the
Company shall have accepted delivery of the
Vessel and, at the time the Company
shall have accepted delivery of the Vessel,
the Vessel shall not have suffered
any material damage and the Vessel shall
have received the highest
classification and rating of the American
Bureau of Shipping for vessels of the
same age and type as the Vessel without any
outstanding recommendations that
would offset such class; (c) the Company
shall have caused the Mortgage and the
Bill of Sale to be duly filed with the
United States Coast Guard at the National
Vessel Documentation Center in Falling
Waters, West Virginia and shall have paid
all fees in connection therewith; (d) the
Vessel shall have been duly documented
under the laws of the United States in the
name of the Company with coastwise
and registry endorsements; (e) the Company
shall have taken good, indefeasible,
marketable, and insurable title to the
Vessel free and clear of all Liens (other
than Permitted Liens as defined in the
Mortgage); (f) the Company shall have
caused each Purchaser and each Existing
Holder to receive a favorable opinion of
(i) Nixon Peabody LLP, the Company's
special maritime counsel, satisfactory to
each Purchaser and each Existing Holder and
substantially in the form of Exhibit
-------
F-2 attached hereto and as to such other
matters as any Purchaser or any
---
Existing Holder may reasonably request, and
(ii) the Company's special Hawaiian
counsel, satisfactory to each Purchaser and
each Existing Holder and
substantially in the form of Exhibit F-3
attached hereto and as to such other
-----------
matters as any Purchaser or any Existing
Holder may reasonably request; (g)
pursuant to Article VII (3) of the
Shipbuilding Contract the Purchasers and each
Existing Holder shall have received a copy
of (i) the Protocol of Delivery and
Acceptance, and (ii) a copy of the Bill of
Sale in the form of a Builder's
Certificate; (h) the Company shall have
made all filings and recordings referred
to in paragraph 3D and the Company shall
have paid all fees in connection
therewith; and (i) the Purchasers and the
Existing Holders shall have received
evidence of each of the foregoing.
5C(2).
Additional Filings. In addition to the filing required in
paragraph 5C(2), promptly execute and
deliver, or cause to be executed and
delivered, to the holders of the Notes or
the Collateral Agent, in due form for
filing or recording (the Company hereby
agrees to pay the cost of filing or
recording the same (including without
limitation any and all filing fees and
recording taxes)) in all public offices
necessary or deemed necessary by the
Required Holder(s) or the Collateral Agent,
such other collateral assignments,
security agreements, pledge agreements,
mortgages, and other instruments and
documents, and do such other acts and
things, including, without limitation, all
acts and things as the Required Holder(s)
or the Collateral Agent may from time
to time reasonably request, to establish
and maintain to the satisfaction of the
Required Holder(s) and the Collateral Agent
a valid and perfected first priority
security interest in favor of the
Collateral Agent in all of the present and/or
future Collateral free of all other Liens
(other than Permitted Liens, as
defined in the Mortgage) whatsoever and to
deliver to the Collateral Agent or
the holders of the Notes such certificates,
documents, instruments and opinions
in connection therewith as may be
reasonably requested by the Collateral Agent
or the Required Holder(s), each in form and
substance reasonably satisfactory to
the Collateral Agent and the Required
Holder(s). The Company hereby irrevocably
makes, constitutes and appoints the
Collateral Agent (and all other persons
designated by the Collateral Agent for that
purpose) as the Company's true and
lawful agent and attorney-in-fact to, if
the Company fails to make any filing or
recording required in this paragraph 5C,
sign the Company's name on any such
agreements, instruments and documents
referred to in the preceding sentences and
to deliver such agreements, instruments and
documents to such Persons as the
Required Holder(s) or the Collateral Agent
in their sole discretion may elect.
5D.
Information Required by Rule 144A. The Company covenants that
it will, upon the request of the holder of
any Note, provide such holder, and
any qualified institutional buyer
designated by such holder, such financial and
other information as such holder may
reasonably determine to be necessary in
order to permit compliance with the
information requirements of Rule 144A under
the Securities Act in connection with the
resale of Notes, except at such times
as the Company is subject to and in
compliance with the reporting requirements
of section 13 or 15(d) of the Exchange Act.
For the purpose of this paragraph
5D, the term "qualified institutional
buyer" shall have the meaning specified in
Rule 144A under the Securities Act.
5E.
Maintenance of Properties; Insurance. The Company covenants
that it and each Subsidiary will (i)
maintain or cause to be maintained in good
repair, working order and condition all
properties used or useful at that time
in its business and from time to time will
make or cause to be made all
appropriate repairs, renewals and
replacements thereof and (ii) in addition to
and without limiting the requirements
contained in any Collateral Document,
maintain insurance with reputable and
financially sound insurers in such amounts
and against such liabilities and hazards as
is customarily maintained by other
companies operating similar businesses.
6.
NEGATIVE COVENANTS. So long thereafter as any Note or amount
due hereunder or under any other
Transaction Document is outstanding and unpaid,
the Company covenants as follows:
6A. Financial
Covenants. The Company
will not permit:
6A(1). Working
Capital Requirement. Consolidated Working Capital at
any time to be less than $1; or
6A(2). Net Worth
Requirement. Consolidated Net Worth at any time to
be less than the greater of (i)
$250,000,000 or (ii) an amount equal to 65% of
Consolidated Net Worth as of the end of the
fiscal year of the Company most
recently ended prior to the date of
determination of compliance with this
paragraph 6A(2);
6B. Dividend
and Investment Limitation. The Company covenants that
it will not pay or declare any dividend on
any class of stock or make any other
distribution on account of any class of its
stock, or redeem, purchase or
otherwise acquire, directly or indirectly,
any shares of its stock or make any
Restricted Investment (all of the foregoing
being herein called "Restricted
Payments") if at the time any proposed
Restricted Payment is to be made, or
after giving effect to any proposed
Restricted Payment, a Default or an Event of
Default exists or would exist.
6C. Lien, Debt
and Other Restrictions. The Company covenants that
it will not and will not permit any
Subsidiary to:
6C(1). Liens.
Create, assume or suffer to exist any Lien upon any of
its property or assets, whether now owned
or hereafter acquired, except
(i) Liens for taxes not yet due or which are being actively
contested in good faith by appropriate proceedings,
(ii) Liens (other than Liens pursuant to ERISA) incidental to
the conduct of its business or the ownership of its property and
assets
which were not incurred in connection with the borrowing of money
or
the obtaining of advances or credit, and which do not in the
aggregate
materially detract from the value of its property or assets or
materially impair the use thereof in the operation of its
business,
(iii) Liens on property or assets of a Subsidiary securing
obligations of such Subsidiary to the Company or another
Subsidiary,
(iv) Liens on container(s) and equipment acquired subsequent
to December 31, 2000 (including Liens in connection with financing
or
capitalized leases), securing Funded Debt of the Company or any
Subsidiary permitted by paragraph 6C(2); provided that any such
Lien
may arise at any time after the date on which the encumbered
container(s) or equipment were acquired if such Lien relates to a
cross
border lease of such container(s) or equipment where (A) the lease
or
financing agreement provides that in the event of the bankruptcy
or
insolvency of the lessor, lessee, trustee or other lease
transaction
party, a default or casualty, or any other type of lease
termination
event (whether scheduled or otherwise), title to the leased
containers
or equipment reverts to the Company or such Subsidiary, (B) the
aggregate amount of lease payments and consideration paid to
obtain
reconveyance of title to the leased containers or equipment does
not
exceed the original cost thereof, (C) no security interest,
financing
statement or similar filings are made in the United States of
America
in respect of the leased containers or equipment for the benefit of
any
Person other than the Company or such Subsidiary and (D) prior to
such
Lien becoming effective, the Company or such Subsidiary receives
a
legal opinion of counsel to the lessor and trustee, if any, to
the
effect
that the agreements referred to in subclause (A) of this clause
(iv) are valid and legally binding agreements, enforceable against
the
lessor or trustee, if any, in accordance with their respective
terms,
(v) Liens on Capital Assets acquired subsequent to December
31, 2000 (excluding any asset consisting of, or acquired with,
insurance proceeds received in connection with any asset owned
on
December 31, 2000) securing Funded Debt of the Company and
Subsidiaries
permitted by clause (iii) of paragraph 6C(2),
(vi) Liens encumbering the Company's Capital Construction Fund
to the extent incurred in connection with Company's financing
of
obligations constituting "qualified withdrawals" under
regulations
adopted by the Maritime Administration under the Merchant Marine
Act,
1936, as amended,
(vii) any Lien existing on any property of any Person at the
time it becomes a Subsidiary, or existing prior to the time of
acquisition upon any property acquired by the Company or any
Subsidiary
through purchase, merger or consolidation or otherwise, whether or
not
assumed by the Company or such Subsidiary; provided that (a) any
such
Lien shall not encumber any other property of the Company or
such
Subsidiary, and (b) the aggregate amount of Funded Debt secured by
all
such Liens is at all times permitted by paragraph 6C(2),
(viii) Permitted Liens, as defined in the Mortgage; and
(ix) Liens in the Collateral in favor of the Collateral Agent
to secure the Notes,
provided that, other than Permitted Liens
(as defined in the Mortgage), no Liens
shall be permitted in or on the
Collateral;
6C(2). Funded
Debt. Create, incur,
assume or suffer to exist any
Funded Debt, except
(i) Funded Debt of any Subsidiary to the Company or another
Subsidiary,
(ii) Funded Debt of Subsidiaries in an aggregate principal
amount at no time in excess of $25,000,000 (exclusive of Funded
Debt
permitted by clause (i) or (iii) hereof),
(iii) Funded Debt of Subsidiaries described in clause (v) of
paragraph 6C(1) and Funded Debt of the Company; provided that
the
aggregate principal amount thereof shall at no time exceed an
amount
equal to 200% of Consolidated Net Worth at such time;
6C(3). Merger.
Enter into any transaction of merger, consolidation or
other combination with any other Person;
provided that
(i) any Subsidiary may merge with the Company; provided that
the Company shall be the continuing or surviving corporation and
no
Default or Event of Default will result therefrom,
(ii) any Subsidiary may merge with another Subsidiary, and
(iii) the Company may merge, consolidate or combine with any
other corporation; provided that (a) immediately after such
merger,
consolidation or combination, no Default or Event of Default
shall
exist and (b) if the Company is not the continuing or surviving
corporation, the successor corporation shall be a solvent
corporation
organized under the laws of any state of the United States of
America
and shall expressly assume in writing all of the obligations of
the
Company under this Agreement, including all covenants herein
contained,
and such successor or acquiring corporation shall be substituted
for
the Company with the same effect as if it had been named herein as
a
party hereto;
6C(4). Sale of
Assets. Sell, lease or transfer or otherwise dispose
of any Capital Asset to any Person, except
that during any rolling twelve-month
period, the Company may sell or otherwise
dispose of Capital Assets (other than
Capital Assets constituting part of the
Collateral unless the Notes are prepaid
in full prior to or concurrently with such
sale pursuant to paragraph 4B) which
constituted up to 10% of the total value of
the assets of the Company as of
December 31, 2004, so long as (A) such
Capital Assets sold contributed less than
25% of the Consolidated Net Earnings in
each of the three fiscal years
immediately preceding any such sale and (B)
such Capital Assets, when considered
together with all other Capital Assets sold
or otherwise disposed of subsequent
to December 31, 2004, do not constitute in
excess of 30% of the total value of
the assets of the Company as of December
31, 2004;
6C(5). Sale of
Stock and Debt of Subsidiaries. Sell or otherwise
dispose of, or part with control of, any
shares of stock or Debt of any
Subsidiary, except to the Company or
another Subsidiary, and except that all
shares of stock and Debt of any Subsidiary
at the time owned by or owed to the
Company and all Subsidiaries may be sold as
an entirety for a cash consideration
which represents their fair value (as
determined in good faith by the Board of
Directors of the Company), at the time of
sale of the shares of stock and Debt
so sold, and provided that at the time of
such sale, such Subsidiary shall not
own, directly or indirectly, any shares of
stock or Debt of any other Subsidiary
(unless all of the shares of stock and Debt
of such other Subsidiary owned,
directly or indirectly, by the Company and
all Subsidiaries are simultaneously
being sold as permitted by this paragraph
6C(5));
6C(6). Sale and
Lease-Back. Enter into any arrangement with any
lender or investor or to which such lender
or investor is a party providing for
the leasing by the Company or any
Subsidiary of real or personal property owned
by the Company or any Subsidiary as of
December 31, 2004 (including any such
property acquired with insurance proceeds
received in connection with any real
or personal property owned by the Company
or any Subsidiary on such date), which
has been or is to be sold or transferred by
the Company or any Subsidiary to
such lender or investor or to any Person to
whom funds have been or are to be
advanced by such lender or investor on the
security of such property or rental
obligations of the Company or any
Subsidiary;
6C(7).
Transactions with Affiliates and Stockholders. Directly or
indirectly, purchase, acquire or lease any
property from, or sell, transfer or
lease any property to, or otherwise deal
with, in the ordinary course of
business or otherwise (i) any Affiliate,
(ii) any Person owning, beneficially or
of record, directly or indirectly, either
individually or together with all
other Persons to whom such Person is
related by blood, adoption or marriage,
stock of the Company or stock of any Person
owning stock of the Company (of any
class having ordinary voting power for the
election of directors) aggregating 5%
or more of such voting power or (iii) any
Person related by blood, adoption or
marriage to any Person described or coming
within the provisions of clause (i)
or (ii) of this paragraph 6C(7); provided
that the Company and Subsidiaries may
enter into such transactions on terms no
less favorable to the Company or
Subsidiary than if no such relationship
existed, including (subject in each case
to the limitations of paragraph 6B))
Restricted Payments and transactions of the
Company involving the sale or purchase of
shares of the Company's stock;
6C(8). Loans,
Advances and Investments. Make or permit to remain
outstanding any loan or advance to, or own,
purchase or acquire any stock,
obligations or securities of, or any other
interest in, or make any capital
contribution to, any Person, except that
the Company or any Subsidiary may
(i) make or permit to remain outstanding loans or advances to
any
Subsidiary;
(ii) own, purchase or acquire stock, obligations or securities
of a Subsidiary or of a Person which immediately after such
purchase or
acquisition will be a Subsidiary;
(iii) acquire and own stock, obligations or securities
received in settlement of debt (created in the ordinary course
of
business) owing to the Company or any Subsidiary,
(iv) make investments in accordance with the resolutions of
the Board of Directors of the Company; provided that such
resolutions
authorize only investments rated investment grade by Standard &
Poor's
Corporation, Moody's Investors Services, or any other
nationally
recognized credit rating agency,
(v) make Restricted Investments to the extent permitted by
paragraph 6B; and
(vi) make other investments, loans and advances (other than
Restricted Investments which may be made only to the extent
permitted
by paragraph 6B) which in aggregate (at original cost) do not
exceed
$30,000,000;
Notwithstanding the foregoing, amounts in
the Capital Construction Fund may be
invested only as provided in clause (iv)
above; or
6C(9). Terrorism
Sanctions Regulations. Become, or permit any
Subsidiary to become, a Person described or
designated in the Specially
Designated Nationals and Blocked Persons
List of the Office of Foreign Assets
Control or in Section 1 of the
Anti-Terrorism Order, or to knowingly engage, or
permit any Subsidiary to knowingly engage,
in any dealings or transactions with
any such Person.
7.
EVENTS OF DEFAULT.
7A.
Acceleration. If any of the following events shall occur and
be continuing for any reason whatsoever
(and whether such occurrence shall be
voluntary or involuntary or come about or
be effected by operation of law or
otherwise):
(i) the Company defaults in the payment of any principal of,
or interest or Yield-Maintenance Amount on, any Note for more than
two
Business Days after the same shall become due, either by the
terms
thereof or otherwise as herein provided; or
(ii) the Company or any Subsidiary defaults in any payment of
principal of, or premium or interest on, any obligation for
money
borrowed (or of any obligation under conditional sale or other
title
retention agreement or of any obligation issued or assumed as full
or
partial payment for property whether or not secured by a purchase
money
mortgage or of any obligation under notes payable or drafts
accepted
representing extensions of credit) other than the Notes beyond
any
period of grace provided with respect thereto, or the Company or
any
Subsidiary fails to perform or observe any other agreement, term
or
condition contained in any agreement (or any other event thereunder
or
under any such agreement occurs and is continuing) and the effect
of
such default, failure or other event is to cause, or permit the
holder
or holders of such obligation (or a trustee on behalf of such
holder or
holders) to cause, such obligation to become due (or to be
repurchased
by the Company or any Subsidiary) prior to any stated maturity;
provided that the aggregate amount of all obligations as to which
such
a payment default shall occur or such a failure or other event
causing
or permitting acceleration (or resale to a Company or any
Subsidiary)
shall occur and be continuing exceeds $25,000,000; or
(iii) any representation or warranty made by the Company in
the Existing Agreement, herein or in any other Transaction Document
or
by the Company or any of its officers in any writing furnished
in
connection with or pursuant to this Agreement or any other
Transaction
Document shall be false or misleading in any material respect on
the
date as of which made; or
(iv) the Company fails to perform or observe any agreement
contained in paragraph 6 or 5C(1) hereof; or
(v) the Company or any Subsidiary fails to perform or observe
any other agreement, term or condition contained herein and
such
failure shall not be remedied within 30 days after any officer of
the
Company obtains actual knowledge thereof, or the Company or any
Subsidiary fails to perform or observe any agreement contained in
any
other Transaction Document and such failure shall not be
remedied
within the grace period, if any, provided therefor in such
Transaction
Document (or, if no such grace period is provided for in such
Transaction Document, within 30 days after any officer of the
Company
obtains actual knowledge thereof); or
(vi) the Company or any Material Subsidiary makes an
assignment for the benefit of creditors or is generally not paying
its
debts as such debts become due; or
(vii) any decree or order for relief in respect of the Company
or any Material Subsidiary is entered under any bankruptcy,
reorganization, compromise, arrangement, insolvency, readjustment
of
debt, dissolution, liquidation or similar law, whether now or
hereafter
in effect (herein called the "Bankruptcy Law"), of any
jurisdiction; or
(viii) the Company or any Material Subsidiary petitions or
applies to any tribunal for, or consents to, the appointment of,
or
taking possession by, a trustee, receiver, custodian, liquidator
or
similar official of the Company or any such Material Subsidiary, or
of
any substantial part of the assets of the Company or any such
Material
Subsidiary, or commences a voluntary case under the Bankruptcy Law
of
the United States or any proceedings (other than proceedings for
the
voluntary liquidation and dissolution of a Material Subsidiary)
relating to the Company or any Material Subsidiary under the
Bankruptcy
Law of any other jurisdiction; or
(ix) any petition or application of the type described in
clause (viii) of this paragraph 7A is filed, or any such
proceedings
are commenced, against the Company or any Material Subsidiary and
the
Company or such Material Subsidiary by any act indicates its
approval
thereof, consent thereto or acquiescence therein, or an order,
judgment
or decree is entered appointing any such trustee, receiver,
custodian,
liquidator or similar official, or approving the petition in any
such
proceedings, and such order, judgment or decree remains unstayed
and in
effect for more than 30 days; or
(x) any order, judgment or decree is entered in any
proceedings against the Company decreeing the dissolution of
the
Company and such order, judgment or decree remains unstayed and
in
effect for more than 60 days; or
(xi) any order, judgment or decree is entered in any
proceedings against the Company or any Material Subsidiary
decreeing a
split-up of the Company or such Material Subsidiary which requires
the
divestiture of (A) assets representing a substantial part, or the
stock
of, or other ownership interest in, a Material Subsidiary whose
assets
represent a substantial part of the consolidated assets of the
Company
or a Material Subsidiary or (B) assets or the stock of or other
ownership interest in a Subsidiary that has contributed a
substantial
part of consolidated net income of the Company or a Material
Subsidiary
for any of the three fiscal years then most recently ended, and
such
order, judgment or decree remains unstayed and in effect for more
than
60 days; or
(xii) (a) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or
a
waiver of such standards or extension of any amortization period
is
sought or granted under section 412 of the Code, (b) a notice of
intent
to terminate any Plan shall have been or is reasonably expected to
be
filed with the PBCG or the PBGC shall have instituted proceedings
under
ERISA section 4042 to terminate or appoint a trustee to administer
any
Plan or the PBGC shall have notified the Company or any ERISA
Affiliate
that a Plan may become a subject of such proceedings, (c) the
aggregate
"amount of unfunded benefit liabilities" (within the meaning of
section
4001(a)(18) of ERISA) under all Plans, determined in accordance
with
Title IV of ERISA, shall exceed $25,000,000, (d) the Company or
any
ERISA Affiliate shall have incurred or is reasonably expected to
incur
any liability pursuant to Title I or IV or ERISA or the penalty
or
excise tax provisions of the Code relating to employee benefit
plans,
(e) the Company or any ERISA Affiliate withdraws from any
Multiemployer
Plan, or (f) the Company or any Subsidiary establishes or amends
any
employee welfare benefit plan that provides post-employment
welfare
benefits in a manner that would increase the liability of the
Company
or any Subsidiary thereunder; and any such event or events
described in
clauses (a) through (f) above, either individually or together with
any
other such event or events, could reasonably be expected to have
a
material adverse effect on the business or condition (financial
or
otherwise) of the Company; or
(xiii) any judgment(s) or decree(s) in the aggregate amount of
$25,000,000 or more shall be entered against the Company or any of
its
Subsidiaries that are not paid or fully covered (beyond any
applicable
deductibles) by insurance and such judgment(s) or decree(s) shall
not
have been vacated, discharged or stayed or bonded pending appeal
within
60 days from the entry thereof; or
(xiv) an "event of default", as defined in the Mortgage, has
occurred;
then (a) if such event is an Event of
Default specified in clause (vii), (viii)
or (ix) of this paragraph 7A with respect
to the Company, all of the Notes at
the time outstanding shall automatically
become immediately due and payable
together with interest accrued thereon and
the Yield-Maintenance Amount with
respect thereto, without presentment,
demand, protest or notice of any kind, all
of which are hereby waived by the Company,
and (b) with respect to any event
constituting an Event of Default, the
Required Holder(s) of any Series of Notes
may at its or their option, by notice in
writing to the Company, declare all of
the Notes of such Series to be, and all of
the Notes of such Series shall
thereupon be and become, immediately due
and payable together with interest
accrued thereon and together with the
Yield-Maintenance Amount, if any, with
respect to each Note of such Series,
without presentment, demand, protest or
other notice of any kind, all of which are
hereby waived by the Company.
7B. Rescission
of Acceleration. At any time after any or all of
the Notes of a Series shall have been
declared immediately due and payable
pursuant to paragraph 7A, the Required
Holder(s) of such Series may, by notice
in writing to the Company, rescind and
annul such declaration and its
consequences if (i) the Company shall have
paid all overdue interest on the
Notes of such Series, the principal of and
Yield-Maintenance Amount, if any,
payable with respect to any Notes of such
Series which have become due otherwise
than by reason of such declaration, and
interest on such overdue interest and
overdue principal and Yield-Maintenance
Amount at the rate specified in the
Notes of such Series, (ii) the Company
shall not have paid any amounts which
have become due solely by reason of such
declaration, (iii) all Events of
Default and Defaults, other than
non-payment of amounts which have become due
solely by reason of such declaration, shall
have been cured or waived pursuant
to paragraph 11C, and (iv) no judgment or
decree shall have been entered for the
payment of any amounts due pursuant to the
Notes of such Series or this
Agreement (as this Agreement pertains to
the Notes of such Series). No such
rescission or annulment shall extend to or
affect any subsequent Event of
Default or Default or impair any right
arising therefrom.
7C. Notice of
Acceleration or Rescission. Whenever any Note shall
be declared immediately due and payable
pursuant to paragraph 7A or any such
declaration shall be rescinded and annulled
pursuant to paragraph 7B, the
Company shall forthwith give written notice
thereof to the holder of each Note
at the time outstanding.
7D. Other
Remedies. If any Event of Default or Default shall occur
and be continuing, the holder of any Note
may proceed to protect and enforce its
rights under this Agreement, the other
Transaction Documents and such Note by
exercising such remedies as are available
to such holder in respect thereof
under applicable law, either by suit in
equity or by action at law, or both,
whether for specific performance of any
covenant or other agreement contained in
this Agreement or any other Transaction
Document or in aid of the exercise of
any power granted in this Agreement or any
other Transaction Document. No remedy
conferred in this Agreement or any other
Transaction Document upon the holder of
any Note or the Collateral Agent is
intended to be exclusive of any other
remedy, and each and every such remedy
shall be cumulative and shall be in
addition to every other remedy conferred
herein or now or hereafter existing at
law or in equity or by statute or
otherwise.
8.
REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company
represents, covenants and warrants as
follows:
8A.
Organization. The Company and each Subsidiary is duly
organized, validly existing and in good
standing under the laws of the state of
its organization. The Company and each
Subsidiary has the full power and
authority to own its properties and to
carry on its business as now being
conducted. The Company has full power,
authority and right to execute and
deliver, and to perform and observe, the
provisions of this Agreement, the Notes
and the other Transaction Documents and to
carry out the transactions
contemplated hereby and thereby. The
execution, delivery and performance of this
Agreement, the Notes and the other
Transaction Documents has been duly
authorized by all necessary corporate and
other action, and, when duly executed
and delivered, will be the legal, valid and
binding obligations of the Company,
enforceable against it in accordance with
their respective terms.
8B. Financial
Statements. The Company has furnished each Purchaser
and each Existing Holder with the following
financial statements, identified by
a principal financial officer of the
Company: (i) consolidated balance sheets of
the Company and its Subsidiaries as of:
December 31, 2004, December 26, 2003,
and December 27, 2002, and consolidated
statements of income, shareholders'
equity and cash flows of the Company and
its Subsidiaries for each such year,
certified by Deloitte & Touche; and
(ii) consolidated balance sheets of the
Company and its Subsidiaries as of April 1,
2005 and as of March 26, 2004 and
consolidated statements of income,
stockholders' equity and cash flows of the
Company and its Subsidiaries for the
three-month period ended on each such date,
in each case prepared by the Company. Such
financial statements (including any
related schedules and/or notes) are true
and correct in all material respects
(subject, as to interim statements, to
changes resulting from audits and
year-end adjustments), have been prepared
in accordance with GAAP consistently
followed throughout the periods involved
and show all liabilities, direct and
contingent, of the Company and its
Subsidiaries required to be shown in
accordance with such principles. The
balance sheets fairly present the condition
of the Company and its Subsidiaries as at
the dates thereof, and the statements
of income, shareholders' equity and cash
flows fairly present the results of the
operations and cash flows of the Company
and its Subsidiaries for the periods
indicated. As of the date of closing, there
has been no material adverse change
in the business, condition (financial or
otherwise) or operations of the Company
and its Subsidiaries taken as a whole since
December 31, 2004.
8C. Actions
Pending. There is no action, suit, investigation or
proceeding pending or, to the knowledge of
the Company, threatened against the
Company or any Subsidiary or any properties
or rights of the Company or any
Subsidiary, by or before any court,
arbitrator or administrative or governmental
body which could reasonably be expected to
result in any material adverse change
in the business, condition (financial or
otherwise) or operations of the Company
and its Subsidiaries taken as a whole.
8D.
Outstanding Debt. Neither the Company nor any Subsidiary has
any Funded Debt outstanding except as
permitted by paragraph 6C(2). There exists
no default under the provisions of any
instrument evidencing any Debt of the
Company or any Subsidiary or of any
agreement relating thereto.
8E.
Title to
Properties. The Company has and each Subsidiary has
good and indefeasible title to its
respective real properties (other than
properties which it leases) and good title
to all of its other properties and
assets, including the properties and assets
reflected in the most recent audited
balance sheet referred to in paragraph 8B
(other than properties and assets
disposed of in the ordinary course of
business), subject to no Liens of any kind
except Liens permitted by paragraph 6C(1).
There is no material default, nor any
event that, with notice or lapse of time or
both, would constitute such a
material default under any material lease
to which either the Company or any
Subsidiary is a lessee, lessor, sublessee
or sublessor.
8F. Taxes. The
Company has and each Subsidiary has filed all
Federal, state and other income tax and
informational returns which are required
to be filed by it. The Company and each
such Subsidiary has paid all taxes as
shown on its returns and on all assessments
received to the extent that such
taxes have become due, except such
assessments as are being contested in good
faith by appropriate proceedings for which
adequate reserves have been
established in accordance with GAAP.
8G.
Conflicting Agreements and Other Matters. Neither the
execution nor delivery of this Agreement,
the Notes or any other Transaction
Document, nor the offering, issuance and
sale of the Notes, nor fulfillment of
nor compliance with the terms and
provisions of this Agreement, the Notes or any
other Transaction Document will conflict
with, or result in a breach of the
terms, conditions or provisions of, or
constitute a default under, or result in
any violation of, or result in the creation
of any Lien upon any of the
properties or assets of the Company or any
Subsidiary (other than Liens in the
Collateral in favor of the Collateral Agent
pursuant to the Collateral
Documents) pursuant to, their respective
articles or incorporation or bylaws (or
other comparable governing documents, as
applicable), any award of any
arbitrator or any agreement, instrument,
order, judgment, decree, statute, law,
rule or regulation to which the Company or
any Subsidiary is subject. Neither
the Company nor any Subsidiary is a party
to, or otherwise subject to any
provision contained in, any instrument
evidencing any of their respective Debt,
any agreement relating thereto or any other
contract or agreement which
restricts or otherwise limits the incurring
of Debt pursuant hereto, except as
set forth on Schedule 8G hereto.
8H. Offering
of the Notes. Neither the Company nor any agent
acting on its behalf has, directly or
indirectly, offered the Notes or any
similar security of the Company for sale
to, or solicited any offers to buy the
Notes or any similar security of the
Company from, or otherwise approached or
negotiated with respect thereto with, any
Person or Persons other than the
Purchasers and the Existing Holders, and
neither the Company nor any agent
acting on its behalf has taken or will take
any action which would subject the
issuance or sale of the Notes to the
provisions of Section 5 of the Securities
Act or to the provisions of any securities
or blue sky law of any applicable
jurisdiction.
8I. Use of
Proceeds; Regulation U, etc. The proceeds of sale of
the Series B Notes will, on the date of
closing, be deposited into the Capital
Construction Fund of the Company and
withdrawn from the Capital Construction
Fund and used to pay the purchase price of
the Vessel under the Shipbuilding
Contract. None of the proceeds of the Notes
have been or will be used, directly
or indirectly, for the purpose, whether
immediate, incidental or ultimate, of
purchasing or carrying any "margin stock"
(as defined in Regulation U (12 CFR
Part 221) of the Board of Governors of the
Federal Reserve System (herein called
"margin stock")) or for the purpose of
maintaining, reducing or retiring any
indebtedness which was originally incurred
to purchase or carry any stock that
is currently a margin stock or for any
other purpose which might constitute this
transaction a "purpose credit" within the
meaning of such Regulation U. Neither
the Company nor any agent acting on its
behalf has taken or will take any action
which might cause this Agreement or the
Notes to violate Regulation U,
Regulation T or any other regulation of the
Board of Governors of the Federal
Reserve System or to violate the Exchange
Act, in each case as in effect now or
as the same may hereafter be in effect.
8J.
ERISA. No
accumulated funding deficiency (as defined in
section 302 of ERISA and section 412 of the
Code), whether or not waived, exists
with respect to any Plan (other than a
Multiemployer Plan). No liability to the
PBGC has been or is expected by the Company
or any ERISA Affiliate to be
incurred with respect to any Plan (other
than a Multiemployer Plan) by the
Company, any Subsidiary or any ERISA
Affiliate which is or would be materially
adverse to the business, condition
(financial or otherwise) or operations of the
Company and its Subsidiaries taken as a
whole. Neither the Company, any of its
Subsidiaries or any ERISA Affiliate has
incurred or presently expects to incur
any withdrawal liability under Title IV of
ERISA with respect to any
Multiemployer Plan which is or would be
materially adverse to the Company and
its Subsidiaries taken as a whole. The
execution and delivery of this Agreement
and the other Transaction Documents and the
issuance and sale of the Notes were
and will be exempt from, or did not and
will not involve any transaction which
is subject to the prohibitions of, section
406 of ERISA and did not and will not
involve any transaction in connection with
which a penalty could be imposed
under section 502(i) of ERISA or a tax
could be imposed pursuant to section 4975
of the Code. The representation by the
Company in the next preceding sentence is
made in reliance upon and subject to the
accuracy of each Existing Holder's
representation in paragraph 9B of the
Existing Agreement (with respect to the
Series A Notes) each Purchaser's
representation in paragraph 9B (with respect to
the Series B Notes).
8K.
Governmental Consent. Neither the nature of the Company or any
of its Subsidiaries, nor any of their
respective businesses or properties, nor
any relationship between the Company or a
Subsidiary and any other Person, nor
any circumstance in connection with the
offering, issuance, sale or delivery of
the Notes is such as to require on the part
of the Company or any Subsidiary any
authorization, consent, approval, exemption
or other action by, notice to or
filing with any court, administrative or
governmental body (other than routine
filings after the date of closing with the
Securities and Exchange Commission
and/or state blue sky authorities, the
filings and recordings necessary to
perfect the Liens in the Collateral
intended to be created by the Collateral
Documents and any filings described on
Schedule 8K hereto) in connection with
(i) the execution and delivery of this
Agreement or the other Transaction
Documents, (ii) the offering, issuance,
sale or delivery of the Notes or (iii)
fulfillment of or compliance with the terms
and provisions of this Agreement,
the Notes or the other Transaction
Documents.
8L. Holding
Company and Investment Company Status. Except as set
forth in the next succeeding sentence,
neither the Company nor any of its
Subsidiaries is a "holding company," or a
"subsidiary company" of a "holding
company," or an "affiliate" of a "holding
company" or of a "subsidiary company,"
or a "public utility," within the meaning
of the Public Utility Holding Company
Act of 1935, as amended, or a "Public
utility" within the meaning of the Federal
Power Act, as amended, or an "investment
company" within the meaning of the
Investment Company Act of 1940, as amended,
or an "Investment adviser" within
the meaning of the Investment Advisers Act
of 1940, as amended. The Company and
its Subsidiaries are not a "holding
company" or a "subsidiary" or an "affiliate"
of a "holding company" as such term is
defined in the Public Utility Holding
Company Act of 1935, as amended, and are
not regulated thereunder. On each date
as of which this representation is made or
confirmed, the Parent has on file
with the Securities and Exchange Commission
such an exemption statement, which
is in full force and effect.
8M. Possession
of Franchises, Licenses, etc. The Company and its
Subsidiaries possess all material
franchises, certificates, licenses,
development and other permits and other
authorizations from governmental
political subdivisions or regulatory
authorities and all patents, trademarks,
service marks, trade names, copyrights,
licenses, easements, rights of way and
other rights (collectively, "Material
Rights"), free from burdensome
restriction, that are necessary in the
judgment of the Company in any material
respect for the ownership, maintenance and
operation of their business,
properties and assets, and neither the
Company nor any of its Subsidiaries is in
violation of any Material Rights in any
material respect. No event has occurred
which permits, or after notice or lapse of
time or both would permit, the
revocation or termination of any such
Material Rights, or which materially and
adversely affects the rights of the Company
or its Subsidiaries thereunder.
8N.
Environmental and Safety Matters. The Company and its
Subsidiaries and all of their respective
properties and facilities have complied
at all times and in all respects with all
Environmental and Safety Laws except
where failure to comply would not result in
a material adverse effect on the
business, condition (financial or
otherwise) or operations of the Company and
its Subsidiaries taken as a whole.
8O.
Establishment of Security Interest. Schedule 8O hereto sets
forth as of the date of closing (i) the
jurisdiction of incorporation and
organizational number of the Company, and
(ii) the location of the chief
executive office of the Company. Upon the
delivery of the Vessel and the filing
of the Mortgage with the United States
Coast Guard and the filing of the
Financing Statement with the Bureau of
Conveyances of the State of Hawaii, (i)
all filings, assignments, pledges and
deposits of documents or instruments will
have been made, and all other actions have
been taken, that are necessary under
applicable law and are required to be made
or taken on or prior to the date of
closing under the provisions of this
Agreement and the other Transaction
Documents to create and perfect a first
priority lien on and security interest
in the Collateral (subject only to
Permitted Liens, as defined in the Mortgage)
in favor of the Collateral Agent to secure
the Notes; (ii) the Collateral and
the Collateral Agent's rights with respect
to the Collateral will not be subject
to any setoff, claims, withholdings or
other defenses (except any such setoff,
claim or defense which could not,
individually or in the aggregate, materially
impair the rights of the Collateral Agent
with respect to the Collateral) (iii)
the Company will be the owner of the
Collateral described in the Collateral
Documents free from any Lien, security
interest, encumbrance and any other claim
or demand, other than Permitted Liens (as
defined in the Mortgage).
8P. Employee
Relations. Neither the Company nor any Subsidiary is
the subject of (i) any material strike,
work slowdown or stoppage, union
organizing drive or other similar activity
or (ii) any material action, suit,
investigation or other proceeding involving
alleged employment discrimination,
unfair termination, employee safety or
similar matters or, to the best knowledge
of the Company, is any such event imminent
or likely to occur except those
which, individually or in aggregate, could
not reasonably be expected to have a
material adverse effect on the business,
condition (financial or otherwise) or
operations of the Company and its
Subsidiaries taken as a whole.
8Q.
Regulations and Legislation. To the best knowledge of the
Company, no law, regulation, interpretation
or legislation has been enacted or
issued that could reasonably be expected to
have a material adverse effect on
the business, condition (financial or
otherwise) or operations of the Company
and its Subsidiaries taken as a whole.
8R.
Disclosure. Neither this Agreement, any other Transaction
Document nor any other document,
certificate or statement furnished to any
Purchaser or any Existing Holder by or on
behalf of the Company in connection
herewith contains any untrue statement of a
material fact or omits to state a
material fact necessary in order to make
the statements contained herein and
therein not misleading. There is no fact
peculiar to the Company or any
Subsidiary which materially adversely
affects, or in the future may (so far as
the Company can now foresee) materially
adversely affect, the consolidated
business, property, assets, prospects or
financial condition of the Company and
the Subsidiaries and which has not been set
forth in this Agreement or in the
other documents, certificates and
statements furnished to each Purchaser and
each Existing Holder by or on behalf of the
Company prior to the date this
representation is made or confirmed in
connection with the transactions
contemplated hereby.
9.
REPRESENTATIONS OF THE PURCHASERS.
Each Purchaser represents as follows:
9A. Nature of
Purchase. Such Purchaser is acquiring the Series B
Notes purchased by it hereunder for the
purpose of investment for its own
account or for the account of funds that it
manages for investment purposes and
not with a view to or for sale in
connection with any distribution thereof
within the meaning of the Securities Act,
provided that the disposition of such
Purchaser's property shall at all times be
and remain within its control. Such
Purchaser has no present intention of
selling, granting participation in, or
otherwise distributing any of the Series B
Notes to be issued to it in any
transaction which would be in violation of
the securities laws of the United
States of America or any state or other
jurisdiction thereof, without prejudice,
however, to Purchaser's rights at all times
to sell or otherwise dispose of all
or any part of such securities under a
registration under Securities Act or
under an exemption from such registration
available under the Securities Act and
subject, nevertheless, to the disposition
of such Purchaser's property being at
all times within its control. Such
Purchaser acknowledges that the Series B
Notes will not, on the Closing Date, be
registered under the Securities Act, on
the grounds that the sale provided for in
this Agreement and the issuance of
securities hereunder is exempt from
registration under the Securities Act, and
that the Company's reliance on such
exemption is predicated on the
representations set forth in this Article
9.
9B. Source of
Funds. At least one of the following statements is
an accurate representation as to each
source of funds (a "Source") to be used by
such Purchaser to pay the purchase price of
the Series B Notes to be purchased
by such Purchaser hereunder:
(i) the Source is an "insurance company general account" (as
that term is defined in the United States Department of Labor's
Prohibited Transaction Exemption ("PTE") 95-60) in respect of which
the
reserves and liabilities (as defined by the annual statement for
life
insurance companies approved by the National Association of
Insurance
Commissioners (the "NAIC Annual Statement")) for the general
account
contract(s) held by or on behalf of any employee benefit plan
together
with the amount of the reserves and liabilities for the general
account
contract(s) held by or on behalf of any other employee benefit
plans
maintained by the same employer (or affiliate thereof as defined in
PTE
95-60) or by the same employee organization in the general account
do
not exceed 10% of the total reserves and liabilities of the
general
account (exclusive of separate account liabilities) plus surplus as
set
forth in the NAIC Annual Statement filed with such Purchaser's
state of
domicile; or
(ii) the Source is a separate account that is maintained
solely in connection with such Purchaser's fixed contractual
obligations under which the amounts payable, or credited, to
any
employee benefit plan (or its related trust) that has any interest
in
such separate account (or to any participant or beneficiary of
such
plan (including any annuitant)) are not affected in any manner by
the
investment performance of the separate account; or
(iii) the Source is either (a) an insurance company pooled
separate account, within the meaning of PTE 90-1, or (b) a bank
collective investment fund, within the meaning of the PTE 91-38
and,
except as disclosed by such Purchaser to the Company in writing
pursuant to this clause (iii), no employee benefit plan or group
of
plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such
pooled
separate account or collective investment fund; or
(iv) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of PTE 84-14 (the "QPAM
Exemption"))
managed by a "qualified professional asset manager" or "QPAM"
(within
the meaning of Part V of the QPAM Exemption), no employee
benefit
plan's assets that are included in such investment fund, when
combined
with the assets of all other employee benefit plans established
or
maintained by the same employer or by an affiliate (within the
meaning
of Section V(c)(1) of the QPAM Exemption) of such employer or by
the
same employee organization and managed by such QPAM, exceed 20% of
the
total client assets managed by such QPAM, the conditions of Part
I(c)
and (g) of the QPAM Exemption are satisfied, neither the QPAM nor
a
person controlling or controlled by the QPAM (applying the
definition
of "control" in Section V(e) of the QPAM Exemption) owns a 5% or
more
interest in the Company and (a) the identity of such QPAM and (b)
the
names of all employee benefit plans whose assets are included in
such
investment fund have been disclosed to the Company in writing
pursuant
to this clause (iv); or
(v) the Source constitutes assets of a "plan(s)" (within the
meaning of Section IV of PTE 96-23 (the "INHAM Exemption")) managed
by
an "in-house asset manager" or "INHAM" (within the meaning of Part
IV
of the INHAM Exemption), the conditions of Part I(a), (g) and (h)
of
the INHAM Exemption are satisfied, neither the INHAM nor a
person
controlling or controlled by the INHAM (applying the definition
of
"control" in Section IV(h) of the INHAM Exemption) owns a 5% or
more
interest in the Company and (a) the identity of such INHAM and (b)
the
name(s) of the employee benefit plan(s) whose assets constitute
the
Source have been disclosed to the Company in writing pursuant to
this
clause (v); or
(vi) the Source is a governmental plan; or
(vii) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more
employee
benefit plans, each of which has been identified to the Company
in
writing pursuant to this clause (vii); or
(viii) the Source does not include assets of any employee
benefit plan, other than a plan exempt from the coverage of
ERISA.
As used in this paragraph 9B, the terms
"employee benefit plan", "governmental
plan", and "separate account" shall have
the respective meanings assigned to
such terms in Section 3 of ERISA.
9C. Experience
and Information. Such Purchaser (a) is an
"accredited investor" as defined in Rule
501 of Regulation D promulgated under
the Securities Act; (b) understands that
the Series B Notes have not been
registered under the Securities Act, or
under any state securities laws, and are
being offered and sold in reliance upon
federal and state exemptions for
transactions not involving any public
offering; (c) by and through its officers
(each of whom has such knowledge and
experience in financial and business
matters as to be capable of evaluating such
Purchaser's investment), has such
knowledge and experience in financial and
business matters as to be capable of
evaluating its investment, and such
Purchaser has the ability to bear the
economic risks of its investment; (d) by
and through its officers, has reviewed
this Agreement, including all exhibits and
schedules hereto, and has received
(i) consolidated balance sheets of the
Company and its Subsidiaries as of
December 31, 2004, December 26, 2003, and
December 27, 2002, and consolidated
statements of income, shareholders' equity
and cash flows of the Company and its
Subsidiaries for each such year, certified
by Deloitte & Touche, and (ii)
consolidated balance sheets of the Company
and its Subsidiaries as of April 1,
2005 and as of March 26, 2004 and
consolidated statements of income,
stockholders' equity and cash flows of the
Company and its Subsidiaries for the
three-month period ended on each such date,
in each case prepared by the
Company; and (e) by and through its
officers, has had, during the course of the
transactions contemplated hereby and prior
to its receipt of the Series B Notes,
the opportunity to ask questions of, and
has received answers from, the Company
concerning the transactions contemplated
hereby and to obtain any additional
information which the Company possesses or
could acquire without unreasonable
effort or expense; provided, however, that
nothing in this representation nor
any such investigation by such Purchaser or
by its officers shall limit,
diminish, or constitute a waiver of any
representation or warranty made under
this Agreement or any Transaction Document
by the Company or impair any rights
which such Purchaser may have with respect
thereto.
9D. Rule 144.
Such Purchaser understands that the Series B Notes
may not be sold, transferred, or otherwise
disposed of without registration
under the Securities Act or the
availability of an exemption therefrom and that
in the absence of such registration or
exemption, the Series B Notes must be
held indefinitely. In particular, such
Purchaser is aware that the Series B
Notes may not be sold pursuant to Rule 144
promulgated under the Securities Act
unless all of the applicable conditions of
that Rule are met, and that the
Company is making no representation that
such conditions will be met in the
future. Such Purchaser represents that, in
the absence of an effective
registration statement covering the Series
B Notes, it will sell, transfer, or
otherwise dispose of the Series B Notes
only in a manner consistent with its
representations set forth in paragraph
9A.
9E. Legends.
Such Purchaser understands that the certificates
evidencing the Series B Notes will bear the
following legends, in addition to
any legend required by applicable state
securities laws:
"THE SECURITIES REPRESENTED BY THIS NOTE
HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"). THEY MAY NOT BE SOLD, OFFERED
FOR SALE, TRANSFERRED OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT OR
PURSUANT TO AN EXEMPTION FROM THE
REQUIREMENT FOR SUCH A REGISTRATION
STATEMENT."
10.
DEFINITIONS; ACCOUNTING MATTERS. For the purpose of this
Agreement, the terms defined in paragraphs
10A and 10B (or within the text of
any other paragraph) shall have the
respective meanings specified therein and
all accounting matters shall be subject to
determination as provided in
paragraph 10C.
10A.
Yield-Maintenance Terms.
"Business Day" shall mean any day other than a Saturday, a Sunday
or a
day on which commercial banks in New York
City or San Francisco, California are
required or authorized to be closed.
"Called Principal" shall mean, with respect to any Note, the
principal
of such Note that (i) is to be prepaid
pursuant to paragraph 4B or (ii) is
declared to be immediately due and payable
pursuant to paragraph 7A, as the
context requires.
"Designated Spread" shall mean 50 basis points.
"Discounted Value" shall mean, with respect to the Called Principal
of
any Note, the amount obtained by
discounting all Remaining Scheduled Payments
with respect to such Called Principal from
their respective scheduled due dates
to the Settlement Date with respect to such
Called Principal, in accordance with
accepted financial practice and at a
discount factor (converted to reflect the
periodic basis on which interest on such
Note is payable, if payable other than
on a semiannual basis) equal to the
Reinvestment Yield with respect to such
Called Principal.
"Reinvestment Yield" shall mean, with respect to the Called
Principal
of any Note, the Designated Spread over the
yield to maturity implied by (i) the
yields reported, as of 10:00 a.m. (New York
City time) on the Business Day next
preceding the Settlement Date with respect
to such Called Principal, on the
display designated as "Page PX1" on the
Bloomberg Financial Services Screen (or
such other display as may replace Page PX1
on the Bloomberg Financial Services
Screen or, if Bloomberg Financial Services
shall cease to report such yields or
shall cease to be Prudential Capital
Group's customary source of information for
calculating yield-maintenance amounts on
privately placed notes, then such
source as is then Prudential Capital
Group's customary source of such
information), for actively traded U.S.
Treasury securities having a maturity
equal to the Remaining Average Life of such
Called Principal as of such
Settlement Date, or if such yields shall
not be reported as of such time or the
yields reported as of such time shall not
be ascertainable, (ii) the Treasury
Constant Maturity Series yields reported,
for the latest day for which such
yields shall have been so reported as of
the Business Day next preceding the
Settlement Date with respect to such Called
Principal, in Federal Reserve
Statistical Release H.15 (519) (or any
comparable successor publication) for
actively traded U.S. Treasury securities
having a constant maturity equal to the
Remaining Average Life of such Called
Principal as of such Settlement Date. Such
implied yield shall be determined, if
necessary, by (a) converting U.S. Treasury
bill quotations to bond-equivalent yields
in accordance with accepted financial
practice and (b) interpolating linearly
between yields reported for various
maturities. The Reinvestment Yield shall be
rounded to the same number of
decimal places as appears in the coupon of
the applicable Note.
"Remaining Average Life" shall mean, with respect to the Called
Principal of any Note, the number of years
(calculated to the nearest
one-twelfth year) obtained by dividing (i)
such Called Principal into (ii) the
sum of the products obtained by multiplying
(a) each Remaining Scheduled Payment
of such Called Principal (but not of
interest thereon) by (b) the number of
years (calculated to the nearest
one-twelfth year) which will elapse between the
Settlement Date with respect to such Called
Principal and the scheduled due date
of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" shall mean, with respect to the
Called
Principal of any Note, all payments of such
Called Principal and interest
thereon that would be due on or after the
Settlement Date with respect to such
Called Principal if no payment of such
Called Principal were made prior to its
scheduled due date.
"Settlement Date" shall mean, with respect to the Called Principal
of
any Note, the date on which such Called
Principal (i) is to be prepaid pursuant
to paragraph 4B or (ii) is declared to be
immediately due and payable pursuant
to paragraph 7A, as the context
requires.
"Yield-Maintenance Amount" shall mean, with respect to any Note,
an
amount equal to the excess, if any, of the
Discounted Value of the Called
Principal of such Note over the sum of (i)
such Called Principal plus (ii)
interest accrued thereon as of (including
interest due on) the Settlement Date
with respect to such Called Principal. The
Yield-Maintenance Amount shall in no
event be less than zero.
10B.
Other Terms.
"Affiliate" shall mean any Person directly or indirectly
controlling,
controlled by, or under direct or indirect
common control with, the Company,
except a Subsidiary. A Person shall be
deemed to control another Person if such
first Person possesses, directly or
indirectly, the power to direct or cause the
direction of the management and policies of
such other Person, whether through
the ownership of voting securities, by
contract or otherwise.
"Agreement" shall have the meaning specified in paragraph 11C.
"Anti-Terrorism Order" means Executive Order No. 13,224 of
September
24, 2001, Blocking Property and Prohibiting
Transactions with Persons Who
Commit, Threaten to Commit or Support
Terrorism, 66 U.S. Fed. Reg. 49,
079 (2001), as amended.
"Assignment" shall have the meaning specified in paragraph
3A(v).
"Authorized Officer" shall mean any officer of the Company
designated
as an "Authorized Officer" in the
Information Schedule or any officer of the
Company designated as an "Authorized
Officer" for the purpose of this Agreement
in a certificate executed by one of the
Company's Authorized Officers.
"Bankruptcy Law" shall have the meaning specified in clause (vii)
of
paragraph 7A.
"Builder" shall mean Kvaerner Philadelphia Shipyard Inc., a
Pennsylvania corporation.
"Business Day" shall have the meaning specified in paragraph
10A.
"Capital Assets" shall mean all assets other than current assets,
and
shall not include any amounts in the
Capital Construction Fund.
"Capital Construction Fund" shall mean the fund established and
maintained by Company in accordance with
Section 607 of the Merchant Marine Act,
1936, as amended.
"Capitalized Lease Obligation" shall mean, with respect to any
Person,
any rental obligation of such Person which,
under GAAP, is or will be required
to be capitalized on the books of such
Person, taken at the amount thereof
accounted for as indebtedness (net of
interest expense) in accordance with such
principles.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C.
Section 9601 et. seq.), as amended,
and the regulations promulgated
thereunder.
"closing" or "date of closing" shall have the meaning specified
in
paragraph 2A hereof.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Collateral" shall mean the Vessel and all other tangible or
intangible
property in which a Lien is purported to be
granted pursuant to the Collateral
Documents, whether now owned or hereafter
acquired and whether now or hereafter
existing.
"Collateral Agent" shall mean The Prudential Insurance Company
of
America, in its capacity as collateral
agent under the Intercreditor Agreement,
and its successor and assigns in that
capacity.
"Collateral Documents" shall mean the Mortgage, the Assignment,
the
Security Agreement and any other agreement,
document or instrument in effect on
the date of closing or executed by the
Company after the date of closing under
which the Company has granted a lien upon
or security interest in any property
or assets to the Collateral Agent to secure
all or any part of the obligations
of the Company under this Agreement or the
Notes, and all financing statements,
certificates, documents and instruments
relating thereto or executed or provided
in connection therewith, each as amended,
restated, supplemented or otherwise
modified from time to time.
"Collateral Event" shall mean (i) any Collateral Document shall
cease
to be in full force and effect, or the
Company shall contest or deny the
validity or enforceability of, or deny that
it has any liability or obligations
under, any Collateral Document, or (ii) the
Collateral Agent does not have or
ceases to have a valid first priority
perfected security interest (subject only
to Permitted Liens, as defined in the
Mortgage) in any material Collateral for
the benefit of the holders of the
Notes.
"Consolidated
Net Earnings" shall mean, for any period, the
consolidated net income of the Company and
Subsidiaries as determined in
accordance with GAAP.
"Consolidated Net Worth" shall mean, as of the time of any
determination, the sum of (i) the par value
(or value stated on the books of the
Company) of the capital stock of all
classes of the Company, plus (or minus in
the case of a surplus deficit) (ii) the
amount of the consolidated surplus,
whether capital or earned, of the Company
and its Subsidiaries.
"Consolidated Tangible Net Worth" shall mean, as of the time of
any
determination, Consolidated Net Worth minus
the sum of treasury stock,
unamortized debt discount and expense,
goodwill, trademarks, trade names,
patents, deferred charges and other
intangible assets of the Company and
Subsidiaries on a consolidated basis and
any write-up of the value of any of
their assets after December 31, 2000.
"Consolidated Total Capital" shall mean, as of the time of any
determination, the sum of (i) consolidated
Funded Debt of the Company and
Subsidiaries, (ii) Consolidated Net Worth
and (iii) Deferred Income Taxes.
"Consolidated Working Capital" shall mean the excess of
consolidated
current assets over consolidated current
liabilities of the Company and
Subsidiaries.
"Current Debt" shall mean any obligation for borrowed money (and
any
notes payable and drafts accepted
representing extensions of credit whether or
not representing obligations for borrowed
money) payable on demand or within a
period of one year from the date of the
creation thereof; provided that any
obligation shall be treated as Funded Debt,
regardless of its term, if such
obligation is renewable pursuant to the
terms thereof or of a revolving credit
or similar agreement effective for more
than one year after the date of the
creation of such obligation, or may be
payable out of the proceeds of a
revolving credit or similar agreement
effective for more than one year after the
date such agreement was entered into
pursuant to the terms of such agreement.
"Debt" shall mean Funded Debt and/or Current Debt, as the case may
be.
"Deferred Income Taxes" shall mean as of the time of any
determination,
the liability for deferred income taxes of
the Company and Subsidiaries on a
consolidated basis.
"Environmental and Safety Laws" shall mean all Federal, state
and
local laws, regulations and ordinances,
relating to the discharge, handling,
disposition or treatment of Hazardous
Materials and other substances or the
protection of the environment or of
employee health and safety, including,
without limitation, CERCLA, the Hazardous
Materials Transportation Act
(49 U.S.C. Section 1901 et. Seq.), the
Resource Conservation and Recovery Act
(42 U.S.C. Section 6901 et. Seq.), the
Federal Water Pollution Control Act
(33 U.S.C. Section 1251 et. Seq.), the
Clean Air Act (42 U.S.C. Section 7401
et. seq.), the Toxic Substances Control Act
(15 U.S.C. Section 2601 et. seq.),
the Occupational Safety and Health Act (29
U.S.C. Section 651 et. seq.) and the
Emergency Planning and Community
Right-To-Know Act (42 U.S.C. Section 11001
et. seq.), each as the same may be amended
and supplemented.
"ERISA" shall mean the Employment Retirement Income Security Act
of
1974, as amended.
"ERISA Affiliate" shall mean any corporation which is a member of
the
same controlled group of corporations as
the Company within the meaning of
section 414(b) of the Code, or any trade or
business which is under common
control with the Company within the meaning
of section 414(c) of the Code.
"Event of Default" shall mean any of the events specified in
paragraph
7A, provided that there has been satisfied
any requirement in connection with
such event for the giving of notice, or the
lapse of time, or the happening of
any further condition, event or act, and
"Default" shall mean any of such
events, whether or not any such requirement
has been satisfied.
"Event of Loss" with respect to the Vessel shall mean the
occurrence of
any of the following events at any time:
(i) the Vessel shall be either totally
destroyed or damaged beyond repair or any
other event shall occur that results
in the Vessel being permanently rendered
unfit for its intended use, including
but not limited to damage that is not
susceptible to repair within the earlier
of the final maturity of the Series B Notes
or two (2) years from the date the
damage occurred, (ii) the entire Vessel or
any substantial and essential portion
thereof shall have been condemned,
confiscated, or seized or shall have been
requisitioned for use for a period of 18
months or for a period which extends
beyond the final maturity of the Series B
Notes, (iii) there shall be a
requisition or taking of title to the
entire Vessel or any substantial and
essential portion thereof, or (iv) the
seizure of the Vessel by the United
States or any other country or nation. For
the avoidance of doubt, use of the
Vessel by the Company under a Voluntary
Intermodal Sealift Agreement shall not
constitute a requisition for use or a
taking of title.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as
amended.
"Existing Agreement" shall have the meaning specified in the
Introduction to this Agreement.
"Existing Holders" shall have the meaning specified in the
address
block to this Agreement.
"Funded Debt" shall mean and include, without duplication, (i)
any
obligation payable more than one year from
the date of creation thereof, which
is shown on the balance sheet as a
liability in accordance with GAAP (including
Capitalized Lease Obligations but excluding
reserves for deferred income taxes
and other reserves to the extent that such
reserves do not constitute an
obligation), (ii) endorsements (other than
endorsements of negotiable
instruments for collection in the ordinary
course of business), guarantees and
other contractually incurred contingent
liabilities (whether direct or indirect)
in connection with the obligations of any
Person, to the extent that such
obligations are payable more than one year
from the date of creation thereof
(including all guarantees of Funded Debt of
another Person) and (iii)
obligations under any contract providing
for the making of loans, advances or
capital contributions to any Person, or for
the purchase of any property from
any Person, in each case in order to enable
such Person primarily to maintain
working capital, net worth or any other
balance sheet condition or to pay debts,
dividends or expenses, to the extent that
such obligations are payable more than
one year from the date of creation thereof;
provided that any obligation shall
be treated as Funded Debt, regardless of
its term, if such obligation is
renewable pursuant to the terms thereof or
of a revolving credit or similar
agreement effective for more than one year
after the date of the creation of
such obligation, or may be payable out of
the proceeds of a revolving credit or
similar agreement effective for more than
one year after the date such agreement
was entered into pursuant to the terms of
such agreement.
"GAAP" shall have the meaning provided in paragraph 10C.
"including" shall mean, unless the context clearly requires
otherwise,
"including without limitation".
"Intercreditor Agreement" shall have the meaning specified in
paragraph
3A(ii) hereof.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance,
deposit arrangement, lien (statutory or
otherwise) or charge of any kind
(including any agreement to give any of the
foregoing, any conditional sale or
other title retention agreement, any lease
in the nature thereof, and the filing
of or agreement to give any financing
statement (exclusive of financing
statements field for precautionary purposes
only) under the Uniform Commercial
Code of any jurisdiction) or any other type
of preferential arrangement for the
purpose, or having the effect, of
protecting a creditor against loss or securing
the payment or performance of an
obligation.
"margin stock" shall have the meaning specified in paragraph
8I.
"Material Subsidiary" shall mean any Subsidiary, the tangible net
worth
of which is, on the date of determination,
5% or more of Consolidated Tangible
Net Worth.
"Mortgage"
shall have the meaning specified in paragraph 3A(iii).
"Multiemployer Plan" shall mean any Plan which is a
"multiemployer
plan" (as such term is defined in section
4001(a)(3) of ERISA).
"Notes" shall have the meaning specified in paragraph 1B.
"Officer's Certificate" shall mean a certificate signed in the name
of
the Company by its Chief Executive Officer,
Chief Financial Officer, President,
one of its Vice Presidents or its
Treasurer.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or
any
successor or replacement entity thereto
under ERISA.
"Person" shall mean and include an individual, a partnership, a
joint
venture, a corporation, a trust, a limited
liability company, an unincorporated
organization and a government or any
department or agency thereof.
"Plan" shall mean any "employee pension benefit plan" (as such term
is
defined in section 3 of ERISA) which is or
has been established or maintained,
or to which contributions are or have been
made, by either Company or any ERISA
Affiliate.
"Prohibited Transaction" shall mean any transaction described
in
section 406 of ERISA which is not exempt by
reason of section 408 of ERISA or
the transitional rules set forth in section
414(c) of ERISA and any transaction
described in section 4975(c) of the Code
which is not exempt by reason of
section 4975(c) (2) or section 4975(d) of
the Code, or the transitional rules of
section 2003(c) of ERISA.
"Purchasers" shall have the meaning given in the Address Block to
this
Agreement.
"Required Holder(s)" shall mean the holder or holders of at least
51%
of the aggregate principal amount of the
Notes or of a Series of Notes, as the
context may require, from time to time
outstanding.
"Restricted Investment" shall mean any loan or advance to, or
purchase
of or investment in any stock, notes,
obligations or securities or, or any other
interest in, or any capital contribution
to, any Affiliate or any Person with
any ownership interest in any
Affiliate.
"Restricted Payments" shall have the meaning specified in paragraph
6B.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Security Agreement" shall have the meaning specified in
paragraph
3A(iv).
"Series" of Notes shall mean Notes which have (i) the same
final
maturity, (ii) the same principal
prepayment dates, (iii) the same principal
prepayment amounts (as a percentage of the
original principal amount of each
Note), (iv) the same interest rate, (v) the
same interest payment periods and
(vi) the same date of issuance (which, in
the case of a Note issued in exchange
for another Note, shall be deemed for these
purposes the date on which such
Note's ultimate predecessor Note was
issued). The Series A Notes and the Series
B Notes each constitute a separate "Series"
of Notes.
"Series A Notes" shall have the meaning specified in the
Introduction
to this Agreement.
"Series B Notes" shall have the meaning specified in paragraph
1B.
"Shipbuilding Contract" shall mean the Shipbuilding Contract
(Hull003),
dated as of February 14, 2005, by and
between the Builder and the Company, as
amended, restated, supplemented or
otherwise modified from time to time.
"Significant Holder" shall mean (i) each Purchaser and each
Existing
Holder, so long as such Purchaser or
Existing Holder shall hold any Note, or
(ii) any other holder of at least 10% of
the aggregate principal amount of the
Notes of any Series from time to time
outstanding.
"Subsidiary" shall mean any Person, all of the stock (or other
equity
interests) of every class of which, except
directors' qualifying or residency
shares (or their equivalent) shall, at the
time as of which any determination is
being made, be owned by the Company either
directly or through Subsidiaries.
"Transaction Documents" shall mean this Agreement, the Notes,
the
Intercreditor Agreement, the Company's
Acknowledgment to Intercreditor
Agreement, the Collateral Documents and the
other agreements, documents,
certificates and instruments now or
hereafter executed or delivered by the
Company or any Subsidiary or Affiliate in
connection with this Agreement.
"Transferee" shall mean any direct or indirect transferee of all or
any
part of any Note purchased under this
Agreement.
"Vessel" a container vessel of the type Philadelphia CV 2600,
named
M.V. Manulani, official number 1168529, as
more full described in Article I to
the Shipbuilding Contract.
10C.
Accounting Principles, Terms and Determinations. All
references in this Agreement to "generally
accepted accounting principles" and
"GAAP" shall be deemed to refer to
generally accepted accounting principles in
effect in the United States at the time of
application thereof. Unless otherwise
specified herein, all accounting terms used
herein shall be interpreted, all
determinations with respect to accounting
matters hereunder shall be made, and
all unaudited financial statements and
certificates and reports as to financial
matters required to be furnished hereunder
shall be prepared, in accordance with
generally accepted accounting principles,
applied on a basis consistent with the
most recent audited consolidated financial
statements of the Company and its
Subsidiaries delivered pursuant to clause
(ii) of paragraph 5A or, if no such
statements have been so delivered, the most
recent audited financial statements
referred to in clause (i) of paragraph
8B.
11. MISCELLANEOUS.
11A.
Note Payments. The Company agrees that, so long as any
Purchaser or Existing Holder shall hold any
Note, it will make payments of
principal of, interest on, and any
Yield-Maintenance Amount payable with respect
to, such Note, which comply with the terms
of this Agreement, by wire transfer
of immediately available funds for credit
on the date due to the account or
accounts of such Purchaser or Existing
Holder specified in the Purchaser
Schedule attached hereto or such other
account or accounts in the United States
as such Purchaser or Existing Holder may
from time to time designate in writing,
notwithstanding any contrary provision
herein or in any Note with respect to the
place of payment. Each Purchaser and
Existing Holder agrees that, before
disposing of any Note, it will make a
notation thereon (or on a schedule
attached thereto) of all principal payments
previously made thereon and of the
date to which interest thereon has been
paid. The Company agrees to afford the
benefits of this paragraph 11A to any
Transferee which shall have made the same
agreement as the Purchasers and Existing
Holders have made in this paragraph
11A.
11B.
Expenses. The Company agrees, whether or not the transactions
contemplated hereby shall be consummated,
to pay, and save each Purchaser, each
Existing Holder and any Transferee harmless
against liability for the payment
of, all out-of-pocket expenses arising in
connection with such transactions,
including (i) all document production and
duplication charges and the fees and
expenses of any special counsel and any
maritime counsel engaged by the
Purchasers, the Existing Holders or any
Transferee in connection with this
Agreement on any other Transaction
Document, the transactions contemplated
hereby and thereby and any subsequent
proposed modification of, or proposed
consent under, this Agreement or any other
Transaction Document, whether or not
such proposed modification shall be
effected or proposed consent granted, (ii)
the reasonable costs and expenses,
including attorneys' fees, incurred by any
Purchaser, any Existing Holder or any
Transferee in enforcing any rights under
this Agreement, the Notes or any other
Transaction Document (including, without
limitation, to protect, collect, lease,
sell, take possession of, release or
liquidate any of the Collateral) or in
responding to any subpoena or other legal
process or informal investigative demand
issued in connection with this
Agreement or the transactions contemplated
hereby or by reason of any
Purchaser's, any Existing Holder's or any
Transferee's having acquired any Note,
including without limitation costs and
expenses incurred in any bankruptcy case,
and (iii) all costs and expenses, including
without limitation reasonable
attorneys' fees, preparing, recording and
filing all financing statements,
instruments and other documents to create,
perfect and fully preserve and
protect the Liens granted in the Collateral
Documents and the rights of the
holders of the Notes, provided however, the
Company will not be required to pay
the expenses of any holder of a Note or any
Transferee in connection with the
transfer of any Note by any holder of a
Note to any Transferee. The obligations
of the Company under this paragraph 11B
shall survive the transfer of any Note
or portion thereof or interest therein by
any Purchaser, any Existing Holder or
any Transferee and the payment of any
Note.
11C.
Consent to Amendments. This Agreement may be amended, and the
Company may take any action herein
prohibited, or omit to perform any act herein
required to be performed by it, if the
Company shall obtain the written consent
to such amendment, action or omission to
act, of the Required Holder(s) of the
Notes of each Series except that, (i) with
the written consent of the holders of
all Notes of a particular Series, and if an
Event of Default shall have occurred
and be continuing, of the holders of all
Notes of all Series, at the time
outstanding (and not without such written
consents), the Notes of such Series
may be amended or the provisions thereof
waived to change the maturity thereof,
to change or affect the principal thereof,
or to change or affect the rate or
time of payment of interest on or any
Yield-Maintenance Amount payable with
respect to the Notes of such Series, and
(ii) without the written consent of the
holder or holders of all Notes at the time
outstanding, no amendment to or
waiver of the provisions of this Agreement
shall change or affect the provisions
of paragraph 7A or this paragraph 11C
insofar as such provisions relate to
proportions of the principal amount of the
Notes of any Series, or the rights of
any individual holder of Notes, required
with respect to any declaration of
Notes to be due and payable or with respect
to any consent, amendment, waiver or
declaration. Each holder of any Note at the
time or thereafter outstanding shall
be bound by any consent authorized by this
paragraph 11C, whether or not such
Note shall have been marked to indicate
such consent, but any Notes issued
thereafter may bear a notation referring to
any such consent. No course of
dealing between the Company and the holder
of any Note nor any delay in
exercising any rights hereunder or under
any Note shall operate as a waiver of
any rights of any holder of such Note. As
used herein and in the Notes, the term
"this Agreement" and references thereto
shall mean this Agreement as it may from
time to time be amended or
supplemented.
11D.
Form, Registration, Transfer and Exchange of Notes. The Notes
are issuable as registered notes without
coupons in denominations of at least
$1,000,000, except as may be necessary to
reflect any principal amount not
evenly divisible by $1,000,000. The Company
shall keep at its principal office a
register in which the Company shall provide
for the registration of Notes and of
transfers of Notes. Upon surrender for
registration of transfer of any Note at
the principal office of the Company, the
Company shall, at its expense, execute
and deliver one or more new Notes of like
tenor and of a like aggregate
principal amount, registered in the name of
such transferee or transferees. At
the option of the holder of any Note, such
Note may be exchanged for other Notes
of like tenor and of any authorized
denominations, of a like aggregate principal
amount, upon surrender of the Note to be
exchanged at the principal office of
the Company. Whenever any Notes are so
surrendered for exchange, the Company
shall, at its expense, execute and deliver
the Notes which the holder making the
exchange is entitled to receive. Each
prepayment of principal payable on each
prepayment date upon each new Note issued
upon any such transfer or exchange
shall be in the same proportion to the
unpaid principal amount of such new Note
as the prepayment of principal payable on
such date on the Note surrendered for
registration of transfer or exchange bore
to the unpaid principal amount of such
Note. No reference need be made in any such
new Note to any prepayment or
prepayments of principal previously due and
paid upon the Note surrendered for
registration of transfer or exchange. Every
Note surrendered for registration of
transfer or exchange shall be duly
endorsed, or be accompanied by a written
instrument of transfer duly executed, by
the holder of such Note or such
holder's attorney duly authorized in
writing. Any Note or Notes issued in
exchange for any Note or upon transfer
thereof shall carry the rights to unpaid
interest and interest to accrue which were
carried by the Note so exchanged or
transferred, so that neither gain nor loss
of interest shall result from any
such transfer or exchange. Upon receipt of
written notice from the holder of any
Note of the loss, theft, destruction or
mutilation of such Note and, in the case
of any such loss, theft or destruction,
upon receipt of such holder's unsecured
indemnity agreement, or in the case of any
such mutilation upon surrender and
cancellation of such Note, the Company will
make and deliver a new Note, of like
tenor, in lieu of the lost, stolen,
destroyed or mutilated Note.
11E.
Persons Deemed Owners; Participations. Prior to due
presentment for registration of transfer,
the Company may treat the Person in
whose name any Note is registered as the
owner and holder of such Note for the
purpose of receiving payment of principal
of and Yield Maintenance Amount, if
any, and interest on such Note and for all
other purposes whatsoever, whether or
not such Note shall be overdue, and the
Company shall not be affected by notice
to the contrary. Subject to the preceding
sentence, the holder of any Note may
from time to time grant participations in
all or any part of such Note on such
terms and conditions as may be determined
by such holder in its sole and
absolute discretion.
11F.
Survival of Representations and Warranties; Entire Agreement.
All representations and warranties
contained herein in any other Transaction
Document or made in writing by or on behalf
of the Company in connection
herewith or therewith shall survive the
execution and delivery of this
Agreement, the Notes and the other
Transaction Document, the transfer of any
Note or portion thereof or interest therein
and the payment of any Note, and may
be relied upon by any Transferee,
regardless of any investigation made at any
time by or on behalf of any Purchaser, any
Existing Holder or any Transferee.
Subject to the preceding sentence, this
Agreement, the Notes, the other
Transaction Document and, until the
effectiveness of the amendment and
restatement thereof by this Agreement, the
Existing Agreement, embody the entire
agreement and understanding between the
parties hereto with respect to the
subject matter hereof and supersede all
prior agreements and understandings
relating to the subject matter hereof.
11G.
Successors and Assigns. All covenants and other agreements in
this Agreement contained by or on behalf of
either of the parties hereto shall
bind and inure to the benefit of the
respective successors and assigns of the
parties hereto (including, without
limitation, any Transferee) whether so
expressed or not.
11H.
Independence of Covenants. All covenants hereunder and in the
other Transaction Documents shall be given
independent effect so that if a
particular action or condition is
prohibited by any one of such covenants, the
fact that it would be permitted by an
exception to, or otherwise be in
compliance within the limitations of,
another covenant shall not (i) avoid the
occurrence of a Default or Event of Default
if such action is taken or such
condition exists or (ii) in any way
prejudice an attempt by the holder of any
Note to prohibit, through equitable action
or otherwise, the taking of any
action by the Company or any Subsidiary
which would result in a Default or Event
of Default.
11I.
Notices. All written communications provided for hereunder
shall be sent by first class mail or
nationwide overnight delivery service (with
charges prepaid) and (i) if to any
Purchaser or Existing Holder, addressed as
specified for such communications in the
Purchaser Schedule attached hereto or
at such other address as any such Purchaser
shall have specified to the Company
in writing, (ii) if to any other holder of
any Note, addressed to it at such
address as it shall have specified in
writing to the Company or, if any such
holder shall not have so specified an
address, then addressed to such holder in
care of the last holder of such Note which
shall have so specified an address to
the Company and (iii) if to the Company,
addressed to it at 555 12th Street,
Oakland, California 94607 Attention: Chief
Financial Officer or at such other
address as the Company shall have specified
to each holder of a Note in writing,
provided, however, that any such
communication to the Company may also, at the
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option of the Person sending such
communication, be delivered by any other means
either to the Company at its addre
