15.1. The Concessionaire is hereby granted the right to establish,
subsequently modify, and collect Toll Charges for all classes of Vehicles
utilizing the Project, subject to the provisions of the Toll Roads Law, any
instruction issued in accordance thereto and the provisions of this
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Agreement. The Concessionaire may change Toll Charges in respect of
any class of Vehicles not more frequently than every 90 days.
15.2. Toll Charges will be collected in NIS.
15.3. Maximum Toll Charge
15.3.1. Toll Charges for any class of Vehicle established by the
Concessionaire in accordance with the provisions of the Toll
Roads Law and this Agreement shall not exceed the
Maximum Toll Charge for such class of Vehicle as established
from time to time.
15.3.2. The Maximum Toll Charge levied for a single passage
through one of the Tunnels of all Vehicles other than a Public
Vehicle or a Truck shall not exceed the Base Toll Charge; the
maximum toll levied for a single passage through one of the
Tunnels of a Public Vehicle shall not exceed three (3) times
the Base Toll Charge; the maximum toll levied for a single
passage through one of the Tunnels of a Truck shall not
exceed five (5) times the Base Toll Charge (for each class of
Vehicle, their ”Maximum Toll Charge”).
15.3.3. The Base Toll Charge, and accordingly the Maximum Toll
Charge for each class of Vehicle established in accordance
with the provisions of Section 15.3.2, shall be escalated in
accordance with the provisions of Section 43.14 for each 3-month period ending March 31, June 30, September 30 and
December 31, commencing on the date of issuance of the
Permit to Operate.
15.3.4. The Base Toll Charge may be escalated by the
Concessionaire at certain intervals or following the issuance
of the Permit to Operate or by the CTA as set forth in Annex
EE.
15.4. Change of Toll Charges
15.4.1. Subject to the provisions of Section 15.3:
15.4.1.1 Toll Charges set by the Concessionaire in
accordance with the provisions of Section 15.4.1.2 can
be set in relation to the distance traveled, and can vary
during certain hours, on certain days or according to the
type of Vehicle.
15.4.1.2 The Concessionaire may grant discounts or
exempt Vehicles from paying Toll Charges, all according
to uniform criteria determined by the Concessionaire
provided that the criteria shall be published in such
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manner as shall be determined by the Minister of
Transportation.
15.4.1.2A The Concessionaire shall inform the CTA of the
Toll Charges determined by it, including any criteria
referred to in Sections 15.4.1.1 and 15.4.1.2 and each new
Toll Charge at least 3 (three) weeks prior to its application
and publication in accordance with the provisions of
Section 15.4.1.3 .
15.4.1.3 The Concessionaire shall inform the general
public of the criteria referred to in Section 15.4.1.2 and
each new Toll Charge by publication in Rashumot and in
such manner as shall be determined by the Minister of
Transportation.
15.4.2 Subject to the provisions of this Section 15 and the
provisions of Section 4 of Annex Y (Method of Determining
Revenues from Tolls), the Concessionaire, at its own discretion,
may modify all Toll Charges.
15.4.3 The Concessionaire shall collect Toll Charges for its own
account.
15.5 Toll Charges for Certain Vehicles
15.5.1 Vehicles belonging to the Israel Defense Force and the Israel
Police Force shall not be required to pay Toll Charges applicable
to such Vehicles as they pass through the Project; however, such
Toll Charges shall be periodically paid by the respective
ministries. The method for implementing the foregoing shall be
mutually agreed by the Concessionaire and the respective
ministries. Such method shall ensure the minimum possible
delay in the passage through the Project of such Vehicles.
15.5.2 Israel Police Force Vehicles designated for traffic control in
the Tunnels shall be exempt from Toll Charges. The method for
implementing the foregoing shall be mutually agreed by the
Concessionaire and the applicable ministry.
15A. Revenue Guarantee
15A1. Annual Revenue Guarantee
At the end of each Calendar Year following the issuance of a Permit to Operate,
the CTA shall provide the Concessionaire, during the Revenue Guarantee
Period, with an annual Revenue Guarantee as set forth in Annex X in
accordance with the terms and conditions specified therein (“Annual Revenue
Guarantee”). Where a Concessionaire Termination Event shall have occurred,
the CTA shall be entitled to reduce the payment of the Annual Revenue
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Guarantee without issuing a Notice of Termination, according to the following
provisions:
15A1.1 Notice Period. The CTA shall provide the Concessionaire with a
written notice in accordance with the provisions of Section 25.5.2
requesting the Concessionaire to remedy the Concessionaire
Termination Event within the period specified therein which shall be no
less than 90 days following receipt of such notice (” Notice Period”). A
copy of the notice shall be provided by the CTA to the Senior Debt
Funders.
15A1.2 Traffic Related Events. In the event that the Concessionaire
Termination Event has an adverse effect on traffic in one or more of the
Tunnels (“Traffic Related Event”), and the Concessionaire will not
remedy the Traffic Related Event within 45 days, for each day beyond
the 45 days period during which the Traffic Related Event has not been
remedied, the Annual Revenue Guarantee shall be reduced by 1/365 of
the Annual Revenue Guarantee payment applicable to that year. For
the removal of doubt, the CTA shall not be entitled to reduce the
Annual Revenue Guarantee with respect to the first 45 days of the
relevant Notice Period.
In the event that the duration of the Traffic Related Events which were
not remedied by the Concessionaire exceeds an aggregate of 90 days,
for each day beyond the 90 day period during which the Traffic Related
Events have not been remedied, the CTA shall pay the Annual
Revenue Guarantee which would have been paid had the Traffic
Related Events not occurred. For the removal of doubt, the CTA shall
not be entitled to reduce the Annual Revenue Guarantee with respect
to 90 days in aggregate during which any Traffic Related Events have
not been remedied.
15A1.3 Other Concessionaire Termination Events; Remedy During the
Notice Period. in the event that the Concessionaire will remedy the
Concessionaire Termination Event (other than a Traffic Related Event)
within the Notice Period, following such remedy, the Concessionaire
shall be entitled to the part of the Annual Revenue Guarantee payment
which was due with respect to the Notice Period.
15A1.4 No Remedy during the Notice Period. In the event that the
Concessionaire did not remedy the Concessionaire Termination Event
(other than a Traffic Related Event) within the Notice Period, for each
day beyond the Notice Period during which the Concessionaire
Termination Event has not been remedied, the Annual Revenue
Guarantee shall be reduced by 1/365 of the Annual Revenue
Guarantee payment applicable to that year (provided, however, that the
CTA shall not be entitled to exercise such right to reduce payment with
respect to the Notice Period).
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15A1.5 For the avoidance of doubt the provisions of this Section do not
derogate from all other provisions of the Agreement, including the rights
of the CTA pursuant to Sections 25.4, 25.5 and/or 27.3.
15A2 Revenue Sharing
In the event that during any Calendar Year following the issuance of the
Permit to Operate, the Actual Revenues exceed the projected revenues
as detailed in Annex X, the Concessionaire shall pay the CTA an
amount equal to the applicable percentage of the Actual Revenues as
set forth in Annex X (“Revenue Sharing”).
15A3. Method of Determining Revenues from Tolls
For purposes of this Agreement, revenues from Toll Charges will be
recorded in accordance with the provisions of Annex Y.
The provisions of Annex Y with respect to the number of traffic
measuring devices are to be finalized within 120 days as of the
Amendment Closing Date. In the absence of an agreed upon Annex Y
within the 120-days period, the provisions of Annex Y as attached on
the Amendment Closing Date shall apply.
15A4 Right to Offset
The CTA shall be entitled to offset any payment which it is entitled to
receive from the Concessionaire pursuant to this Agreement from any
payment due to the Concessionaire under this Agreement, provided,
however, that the provisions of this Section will not grant rights which
override, contradict or undermine the provisions of Section 16.3 (Order
of Payments). A 30 (thirty) days’ prior written notice of the intended
offset will be provided by the CTA to the Concessionaire and to the
Senior Debt Funders. Prior to exercising its right to offset under this
Section and as a condition thereto, the CTA shall first collect any sums
in question by way of forfeiture of any of the bank guar antees available
to it pursuant to this Agreement (provided however that this order of
collection of funds shall not be deemed to limit the amounts which the
CTA is entitled to offset, exceeding the amount of any bank guarantees
available to it pursuant to this Agreement).
16 Royalties
16.1 A copy of Section 4 of Volume 1 of the Bid Documents submitted in
July 1998 relating to the payment of Royalties, as accepted by the Tender
Committee pursuant to the Tender Process, is attached to this Agreement
as Annex I (“Royalties Offer”).
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16.2 The amount of Royalties is NIS 217,669,000
5
(two hundred and
seventeen million six hundred and sixty nine thousand New Israeli
Shekels), which shall be paid by the Concessionaire to the State as follows:
(i) NIS 28,500,000 (twenty eight million five hundred thousand New Israeli
Shekels), in one single payment no later than 60 days following the
issuance of a Notice to Proceed (the “First Royalty Payment”),
(ii) the remaining amount shall be deemed to constitute State
Subordinated Debt of the Concessionaire. For the avoidance of doubt, the
remaining amount shall be the amount of Royalties as set forth in Section
16.2 less the amount of the First Royalty Payment including interest at a
rate equal to the Reference Rate plus the applicable Ma rgin as of the first
Drawdown Date, which shall be accruing as of 60 days following the
issuance of a Notice to Proceed and until the ” End Date” which will be the
the earlier of: (a) 50 (fifty) months thereafter; or (b) the date of issuance of
a Permit to Operate) (“State Subordinated Debt”). The CTA shall extend
the End Date in the event that the CTA shall issue a Change Order
pursuant to the provisions of section 7.1 of Annex G.
The State Subordinated Debt shall be repaid in accordance with the terms
and conditions set forth in this Section and Annex W.
The provisions of this Section are intended to replace the provisions of the
Royalties Offer.
16.3 Order of Payment
Any payment and/or repayment by the Concessionaire shall be
allocated towards the following obligations of the Concessionaire in the
following order:
16.3.1 Without derogating from the generality of the provisions of
Section 2 of Part II of Annex X, payment of the State’s Revenues (if
applicable), pursuant to the Revenue Sharing mechanism.
16.3.2 Operating Costs as defined under the Senior Debt Funding
Agreement; all up to an amount not to exceed the Operating Costs
set forth in the Approved Budget; or the Operating Costs as
specifically approved by the CTA pursuant to section 16.3A2(2).
16.3.3 Mandatory tax Payments
16.3.4 Revenue Guarantee Overpayments
16.3.5 the scheduled repayment under the Revised Senior Debt
Funding Agreement, consisting only of Financing Principal, interest
5
See footnote no. 1
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and Linkage Differential, and the scheduled Secondary Debt
repayment consisting only of principal, linkage and interest not
exceeding the Interest rate determined under the Revised Senior
Debt Funding Agreement, pro rata between the Bank and the
Secondary Debt Funders;
16.3.6 the scheduled payments into the Debt Service Reserve
Account and the Major Maintenance Reserve Account in
accordance with Clause 18.5 (Debt Service Reserve Account) and
18.6 (Major Maintenance Reserve Account) and the scheduled
payments into the Secondary Debt debt service reserve, provided
that the total amount of all such payments into the Secondary Debt
debt service reserve shall not exceed the aggregate amount of the
scheduled payments under section 16.3.5 above with respect to
Secondary Debt, expected to accrue over the following six months.
Where there are insufficient funds to discharge all amounts due and
payable by the Borrower under this paragraph 16.3.6, then the
existing funds shall be applied pro rata between the reserve
accounts;
16.3.7 DELETED
16.3.8 DELETED
16.3.9 the Scheduled Royalty Repayment consisting of principal,
linkage and Interest Rate;
16.3.10 Senior Debt overdue payments (principal and default
interest), if any, and Secondary Debt overdue payments (principal
and default interest), if any, pro rata between the Bank and
Secondary Debt Funders (provided, however, that: (i) during the first
4 (four) years of the Operation Period and; (ii) for a period of 2 (two)
years prior to the end of the term of the Senior Debt Funding
Agreement and until the end of this Concession Period; principal
and default interest pursuant to the Senior Debt Funding Agreement
shall be repaid before the Scheduled Royalty Repayment);
16.3.11
16.3.12 all other payments, fees and penalties payable pursuant to
the Senior Debt Funding Agreement and the Secondary Debt
Funding Agreement, pro rata between the Bank and Secondary
Debt Funders;
16.3.13
16.3.14 all other payments including payments to Equity Participants
(without derogating from the provisions of the Senior Debt Funding
Agreement).
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(“Order of Payment”)
16.3A1 In the event that the internal order of the payments payable pursuant to
the provisions of sub-sections 16.3.5, 16.3.6, 16.3.7 and 16.3.8 above
(as opposed to their order of priority with respect to any other payment
pursuant to Section 16.3), under the Senior Debt Funding Agreement
as amended by the Deferred Date shall differ from the order of such
sub-sections pursuant to this Section 16.3, the internal order of the said
sub-sections under this Section 16.3 shall be amended to mirror the
order of such sub-sections as shall be determined under the Senior
Debt Funding Agreement as amended by the Deferred Date. For the
removal of doubt, the foregoing shall not be interpreted or inferred to
imply any change to content of the provisions of sub -sections 16.3.5,
16.3.6, 16.3.7 and 16.3.8 above, nor to the order of their payment with
respect to any other payment pursuant to the other sub -sections of this
Section 16.3.
In the event that the payment pursuant to the provisions of sub -section
16.3.8 above shall be placed below sub-section 16.3.10 16.3.10, under
the Senior Debt Funding Agreement as amended by the Deferred Date,
the order of the said sub-sections under this Section 16.3 shall be
amended to mirror the order of such sub-sections as shall be
determined under the Senior Debt Funding Agreement as amended by
the Deferred Date.
In the event that the internal order of the payments payable pursuant to
the provisions of sub-sections 16.3.10 16.3.10, 16.3.11 16.3.11, 16.3.12
and 16.3.13 above (as opposed to their order of priority with respect to
any and all other payment pursuant to Section 16.3), under the Senior
Debt Funding Agreement as amended by the Deferred Date shall differ
from the order of such sub-sections pursuant to this Section 16.3, the
internal order of the said sub -sections under this Section 16.3 shall be
amended to mirror the order of such sub-sections as shall be
determined under the Senior Debt Funding Agreement as amended by
the Deferred Date. For the removal of doubt, the foregoing shall not be
interpreted or inferred to imply any change to content of the provisions
of sub-sections 16.3.10 16.3.10, 16.3.11 16.3.11, 16.3.12 and 16.3.13
above, nor to the order of their payment with respect to any other
payment pursuant to the other sub-sections of this Section 16.3.
16.3A2 For purposes of this Section 16.3:
1) “Scheduled Royalty Repayment” shall be deemed to mean:
(i) during any given year, the Royalty Repayment scheduled to be
made in accordance with the repayment schedule which is in
effect during such year as per the provisions of Section 4.1 of
Annex W (Royalty Repayment Schedule); (“Original
Repayment Date”); and\or
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(ii) repayment of any or all Royalty Repayments, which have not
been made on their Original Repayment Date, which repayments
have been rescheduled in accordance with the provisions of
Section 4.2 of Annex W.
2) “Approved Budget” shall mean the budget for operations as
specified in the Base Case Financial Model (“income statement” sheet,
lines 40-54 inclusive) as approved by the CTA on the Amendment
Closing Date, attached hereto as Annex FF, as shall be adjusted to
reflect the actual number of Vehicles utilizing the Tunnels during the
immediately preceding Calendar Year. Without derogating from the
provisions of Section 5, on the Deferred Date, Annex FF shall be
replaced by the Base Case Financial Model which will constitute part of
the Senior Debt Funding Agreement, provided, however, that the
budget for operations as specified in the Base Case Financial Model
and the method of adjustment thereof shall remain unchanged.
Payment of actual Operating Costs in excess of the Operating Costs
under the Approved Budget shall be subject to the approval of the CTA.
16.4 Without derogating from the generality of the foregoing, the Order of
Payment shall apply to any and all repayments, including prepayments,
partial payments and payments following termination of this Agreement.
Furthermore, without derogating from the provisions of section 16.7 in the
event that Actual Revenues result in insufficient funds in accordance with
the Order of Payments, then such insufficient funds shall be applied
according to the above Order of Payment and not “pro rata”.
Notwithstanding the foregoing, and without derogating from the provisions
of Section 16.3.2, any Revenue Guarantee payment shall be made to the
Revenue Account (as defined under the Senior Debt Funding Agreement)
and further allocated to the Senior Debt Funders and the Secondary Debt
Funders, pro rata, according to their respective parts in the provision of
funding for the Project by the Senior Debt Funders and the Secondary
Debt Funders on the date of each Revenue Guarantee payment. In the
event that the portion of the Senior Debt and the Secondary Debt shall
constitute less than 85% of total funding required for the execution of the
Project, the Revenue Guarantee Line shall be reduced according to the
following mechanism: RRL=29,500,000+(RL-29,500,000)*((X%+S%)/85%); RRL – shall mean the reduced Revenue
Guarantee Line, RL – shall mean the Revenue Guarantee Line, X – shall
mean the portion of the Secondary Debt from the total funding required for
the execution of the Project.
16.5 The Concessionaire hereby confirms that, except as specifically stated
herein, there are no other conditions, financial or otherwise, affecting the
Royalties repayments (including, but not limited to, the existence of
minimum cover ratios) under any of the Funding Agreements. For the
avoidance of doubt, in the event of any conflict between the provision of
Section 16.3 and any other provisions in any of the Funding Agreements,
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then, subject t to the provisions of Section 16.3A1, the provisions of this
Section shall prevail.
16.6 The provisions of this Section will apply with respect to any Substituting
Entity approved by the CTA in accordance with the provisions of Section
31.
16.7 Without derogating from the generality of the foregoing or from the
provisions of Annex W, failure by the Concessionaire to make a Royalty
Repayment on the Original Repayment Date, by virtue of insufficient Actual
Revenues which result in insufficient funds in accordance with the Order of
Payments, shall not constitute a breach of the Concessionaire’s obligations
under the Agreement.
