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EXHIBIT 10(iv)(8)
MEMORANDUM OF AGREEMENT
This Memorandum of Agreement ("Agreement") is made as of the 5th day of
August, 1999, by and between AMERICAN CLASSIC VOYAGES CO., a Delaware
corporation ("Buyer"), and HAL ANTILLEN N.V., a Netherlands Antilles corporation
("Seller").
W I T N E S S E T H
WHEREAS, Seller is the owner of the Vessel commonly referred to as the
M/S NIEUW AMSTERDAM, as more fully described on Exhibit A attached hereto (the
"Vessel"); and
WHEREAS, Buyer desires to purchase and acquire from Seller, and Seller
desires to sell to Buyer, the Vessel, all on the terms described herein.
NOW, THEREFORE, for good and valuable consideration, the receipt,
adequacy and sufficiency of which is hereby acknowledged, and intending to be
legally bound hereby, the parties hereto hereby AGREE as follows:
1. PURCHASE AND SALE/SMS MANUALS. At the Closing (as hereinafter
defined), upon and subject to the terms and conditions of this Agreement: (a)
Seller shall sell, convey, assign, transfer and deliver to Buyer all Seller's
right, title and interest in and to the Vessel; (b) Buyer shall purchase the
Vessel from Seller; and (c) Seller shall provide Buyer with one set of Seller's
Safety Management System manuals applicable to the Vessel for use by Buyer in
accordance with Section 17 below (the "SMS Manuals").
2. PURCHASE PRICE. The all cash purchase price shall be ONE HUNDRED
FOURTEEN MILLION, FIVE HUNDRED THOUSAND DOLLARS ($114,500,000.00) payable in
accordance with this Agreement.
3. REGULATORY APPROVAL.
(a) As a condition precedent to the obligation of the parties to
proceed with the purchase and sale of the Vessel, Buyer, within sixty (60) days
following execution of this Agreement, shall obtain, for the benefit of both
Buyer and Seller and at Buyer's expense, the requisite regulatory approval from
the United States Coast Guard and United States Department of Transportation
acting through the
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Maritime Administration (the "Coast Guard/MARAD Approvals"). The Coast
Guard/MARAD Approvals will ensure that (i) the Vessel will be eligible for U.S.
documentation with coastwise privileges at the time of delivery hereunder, and
(ii) in the event Buyer were to relinquish title to the Vessel, whether by
mortgage foreclosure or otherwise, the Vessel could be removed from U.S.
registry. The Coast Guard/MARAD Approvals must be addressed, and be in form and
substance reasonably satisfactory, to both Buyer and Seller.
(b) Buyer shall keep Seller regularly informed as to the status of
obtaining the Coast Guard/MARAD Approvals and shall provide a copy of same to
Seller as soon as they are received. In the event Buyer does not obtain the
Coast Guard/MARAD Approvals within 60 days following execution of this
Agreement, or such later date as the parties shall mutually agree upon in
writing, either party may terminate this Agreement upon providing written notice
to the other party at any time following said 60-day period and prior to the
Coast Guard/MARAD Approvals having been obtained. In such event, the Deposit
shall be delivered to Buyer.
4. INSPECTION.
(a) Contemporaneously with the Coast Guard/MARAD Approval period
described in Section 3(a) above, Buyer may conduct a preliminary inspection of
the Vessel and its documents (the "Preliminary Inspection"). As part of the
Preliminary Inspection, immediately following execution of this Agreement,
Seller shall: (i) provide written authorization to enable Buyer to inspect
Classification Society and flag-state (Netherlands) authority records for the
Vessel and the xx Xxxxxxx, the sister ship to the Vessel (the "Noordam"); (ii)
permit Buyer's representatives to inspect the Vessel's and the Noordam's records
situated in Seller's corporate offices which are reasonably requested by Buyer
(i.e., which a reasonable person would deem necessary to evaluate the condition
of the Vessel and the Noordam); and (iii) permit Buyer's representatives to
conduct a walking tour of the Vessel for up to eight hours while in port in
Vancouver, B.C. Buyer shall undertake the Preliminary Inspection without delay
to the Vessel and without physical damage to the Vessel. If the Preliminary
Inspection is not acceptable to Buyer, Buyer shall provide Seller written notice
of non-acceptance within 72 hours after completion of the Preliminary
Inspection. Should notice of non-acceptance be received by Seller as aforesaid,
the Deposit shall be delivered to Buyer and this Agreement shall terminate
except for those provisions which, by their terms, survive the termination of
this Agreement. Buyer's failure to give notice of non-acceptance of the
Preliminary Inspection shall be without prejudice to Buyer's right to
subsequently reject the Vessel following the Final Inspection provided for
below.
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(b) Furthermore, as a condition precedent to the obligation of the
parties to proceed with the purchase and sale of the Vessel, Buyer shall have
fourteen (14) days following receipt of the Coast Guard/MARAD Approvals in
accordance with Section 3(a) above to conduct a physical inspection of the
Vessel, the scope of which shall be determined by Buyer in its sole discretion
(the "Final Inspection"). Buyer shall undertake the Final Inspection with the
Vessel underway, without delay to the Vessel, and without physical damage to the
Vessel. During the Final Inspection, Seller shall make available to Buyer's
representatives the Vessel's deck and engine log-books, its repair and
maintenance history, its xxxxxxx manifest, all certificates and documents
required to enable the Vessel to engage in the carrying of passengers for hire,
and any other Vessel information in Seller's possession which is reasonably
requested by Buyer (i.e., which a reasonable person would deem necessary to
evaluate the condition of the Vessel). Upon Buyer's request, the same
information shall be made available by Seller with respect to the Noordam,
concurrently with it being made available as to the Vessel.
(c) If the Final Inspection is acceptable to Buyer, Buyer shall
provide Seller written notice of acceptance within 72 hours after completion of
the Final Inspection. Should notice of acceptance of the Vessel not be received
by Seller as aforesaid, the Deposit shall be delivered to Buyer and this
Agreement shall terminate except for those provisions which, by their terms,
survive the termination of this Agreement. If Buyer accepts the Vessel after
such Final Inspection, this Agreement shall become fully effective, subject only
to the terms and conditions herein.
(d) For purposes of the Final Inspection, Seller will make 6 cabins
(double occupancy) on the Vessel available to Buyer for one scheduled 3-day
cruise. Buyer may have a maximum of 12 people on the Vessel for the Final
Inspection. Buyer will ensure that its representatives settle their onboard
accounts before leaving the Vessel. Buyer is solely responsible for any amounts
due Buyer's representatives as a consequence of their time on the Vessel (either
for the Preliminary Inspection or the Final Inspection) including, without
limitation, maintenance and cure and any other amounts due as the result of
personal injury, death or illness, regardless of the cause thereof. All Buyer's
representatives for both the Preliminary Inspection and Final Inspection are
required to comply with rules of conduct established by Seller. The provisions
of this Section 4(d) shall survive the termination of this Agreement.
(e) Upon the termination of this Agreement for any reason whatsoever,
Buyer shall: (i) immediately deliver to Seller all records, documents,
correspondence, files, data, plans, drawings, and any other information or
materials relating to the Vessel or the Noordam received from or through Seller
or the Classification Society during or in connection with the Preliminary
Inspection
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or the Final Inspection, the review of the Noordam documentation or otherwise
pursuant to or in connection with this Agreement, together with all copies
thereof; and (ii) not make any further use thereof. The provisions of this
Section 4(e) shall survive the termination of this Agreement.
5. XXXXXXX MONEY DEPOSIT. For purposes of this Agreement, the "Escrow
Amount" shall mean:
(i) $1,000,000 beginning five (5) business days after the
execution of this Agreement and continuing until four (4) business days after
Buyer has notified Seller of its acceptance of the Vessel pursuant to Section
4(c) of this Agreement;
(ii) $9,000,000 beginning five (5) business days after Buyer
has notified Seller of its acceptance of the Vessel pursuant to Section 4(c) of
this Agreement and continuing until October 16, 1999;
(iii) $18,000,000 beginning October 17, 1999 and continuing
until January 16, 2000; and
(iv) $30,000,000 beginning January 17, 2000 and continuing
until the earlier of delivery of the Vessel or termination of this Agreement,
subject to the terms of the Escrow Agreement.
Provided that the Contract has not terminated prior to such time, Buyer shall
cause the applicable Escrow Amount to be on deposit with Commonwealth Land Title
Insurance Company ("Escrow Agent") at and for the times set forth above. The
deposit may be in the form of cash or one or more letter(s) of credit, or a
combination of both, so long as the aggregate amount on deposit equals the
applicable Escrow Amount. Each letter of credit must be in the form of Exhibit B
attached hereto, must be issued by The Chase Manhattan Bank or another bank
approved by Seller ("Issuer"), and must expire no earlier than December 1, 2000
(each a "Letter of Credit"). All deposits under this Section, including earnings
thereon (collectively referred to as the "Deposit"), shall be held, invested and
disbursed by the Escrow Agent pursuant to the provisions of the Escrow Agreement
attached hereto as Exhibit C (the "Escrow Agreement"), which shall be executed
by Buyer, Seller and Escrow Agent concurrently with the initial deposit under
this Section.
6. REGISTRATION MATTERS AND EXPENSES.
(a) Seller shall be responsible for removing the Vessel from its
existing registry. Any taxes, fees and expenses in connection with such removal
shall be for Seller's account.
(b) At delivery, the Vessel will be registered under the flag of the
United States with any taxes, fees and expenses in connection therewith to be
for Buyer's account.
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(c) Unless otherwise expressly provided, each party hereto shall pay
its own expenses incidental to the preparation of this Agreement, the carrying
out of the provisions of this Agreement and the consummation of the transactions
contemplated hereby.
7. TIME AND PLACE OF DELIVERY. For purposes of this Agreement, the
"Delivery Port" shall be a suitable port in California, Oregon or Washington
that is selected by Buyer and approved by Seller, such approval not to be
unreasonably withheld. Buyer shall notify Seller of its selection as soon as is
feasible but in no event later than July 1, 2000; such notice shall also specify
the Shipyard selected by Buyer pursuant to Section 8. Seller shall notify Buyer
of its approval or disapproval within fifteen (15) days after said notice from
Buyer. Either party may request an at-sea delivery by notice to the other party
given not later than fifteen (15) days after the determination of the Delivery
Port. In the event of such election:
(i) delivery of the Vessel shall occur in international
waters at a place designated by Seller in close proximity to the
Delivery Port;
(ii) delivery shall occur on October 17, 18 or 19, 2000, as
designated by Seller, and otherwise concurrently with the Closing; and
(iii) immediately following delivery, the Vessel shall proceed
directly to the Delivery Port, under the command and control of Buyer,
for immediate drydocking in order to conduct the inspection required
under Section 8.
If neither party makes a timely request under the immediately preceding
sentence, delivery shall occur in the Delivery Port following completion of all
inspections and any work on the Vessel resulting therefrom under Section 8 below
and concurrently with the Closing. For three (3) business days following
delivery (whether at sea or in the Delivery Port), Buyer will cause the Vessel
to remain docked at the Delivery Port so as to enable Seller's crew to disembark
the Vessel and to enable Seller to remove from the Vessel any property that is
not included in the sale.
8. DRY-DOCKING UPON DELIVERY.
(a) The delivery inspection shall occur in dry-dock at a suitable
shipyard selected and arranged for by Buyer, and subject to Seller's reasonable
approval, located at the Delivery Port (the "Shipyard"). If the delivery of the
Vessel is to occur in the Delivery Port and not at sea, then on October 17, 18
or 19, 2000, as selected by Seller, Seller shall place the Vessel in drydock at
the Shipyard. If the delivery is to occur at sea, then Buyer shall place the
Vessel in drydock at the Shipyard immediately upon its arrival in the Delivery
Port following the at-sea delivery. Seller's Classification Society shall
inspect the Vessel's underwater parts below the deepest load line, the extent of
the inspection being in
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accordance with the Classification Society's rules. If the rudder, propeller,
bottom or other underwater parts below the deepest load line are found broken,
damaged or defective so as to affect the Vessel's class, such defects shall be
made good at the Seller's expense to the satisfaction of the Classification
Society without condition or recommendation. Buyer's representatives shall have
the right to be present in the dry-dock, but without interfering with the work
or decisions of the Classification Society's surveyor.
(b) The Classification Society may require the tail-shaft be drawn and
surveyed, the extent of any such survey to be at the discretion of the
Classification Society. If such survey is not required by the Classification
Society, Buyer shall have the right to require the tail-shaft to be drawn and
surveyed by the Classification Society, the extent of such survey to be in
accordance with the Classification Society's rules for tail-shaft survey and
consistent with the current stage of the Vessel's survey cycle. Buyer shall
declare whether it requires the tail-shaft to be drawn and surveyed not later
than completion of the inspection by the Classification Society described in
8(a) above. The drawing and refitting of the tail-shaft shall be arranged by
Seller. Should any parts of the tail-shaft system be condemned or found
defective so as to affect the Vessel's class, those parts shall be renewed or
made good at the Seller's expense to the satisfaction of the Classification
Society without condition or recommendation.
(c) Expenses in connection with putting the Vessel in and taking her
out of dry-dock, including Shipyard and Classification Society fees, shall be
paid by Seller if the Classification Society issues any condition or
recommendation as a result of the survey or if it requires a survey of the
tail-shaft system. In all other cases Buyer shall pay the aforesaid expenses and
fees unless Buyer requires a survey of the tail-shaft system and parts of the
system are condemned or found defective or broken so as to affect the Vessel's
class, in which case Seller shall be responsible for such expenses and fees.
(d) Buyer shall have the right to have work performed including having
the underwater parts of the Vessel cleaned and painted, at Buyer's risk and
expense without interfering with Seller's or the Classification Society's
surveyor's work, if any, and without affecting the Vessel's timely delivery. If,
however, Buyer's work in dry-dock is still in progress when Seller completes the
work which Seller is required to perform, the additional docking time needed to
complete Buyer's work shall be for Buyer's account and the parties shall proceed
with Closing (if it has not previously occurred) notwithstanding that the Vessel
is still in dry-dock.
9. RISK OF LOSS.
(a) Until Closing, all risk of loss of, damage to, or destruction of,
the Vessel, whether by fire or other casualty (any such event, a "Casualty")
shall belong to and be borne by the Seller. Upon
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Closing and for all periods thereafter, all risk of loss, damage to, or
destruction of, the Vessel shall belong to and be borne by Buyer. Seller
represents that the Vessel is fully insured consistent with good industry
practice and agrees to maintain the Vessel insured consistent with good industry
practice until Closing. Such insurance and the proceeds thereof shall be and
remain the sole property of Seller.
(b) If, prior to Closing, a Casualty shall occur as to the Vessel the
result of which is damage to the Vessel in excess of $500,000 or will be a delay
in the timely delivery of the Vessel to Buyer, Seller shall promptly so notify
Buyer.
(c) If a Casualty results in damage to the Vessel but the Vessel is
not a total loss (actual, constructive, agreed, arranged or compromised) and
Seller determines that the damage can be repaired so as to enable the Vessel to
be delivered to Buyer in accordance with the provisions of this Agreement, then
Seller shall repair such damage and Closing shall occur in accordance with this
Agreement. If Seller reasonably determines that the damage can be repaired but
that doing so will require a delay in the Closing and Buyer consents to such
delay: (i) the date for Closing shall be extended to permit the damage to be
repaired; (ii) Seller, at its expense, shall repair the damage; and (iii)
Closing shall then occur, such Closing to otherwise be in accordance with this
Agreement. For these purposes, Buyer shall not withhold its consent to a delay
in the Closing that would involve thirty (30) days or less. If the repairs will
require a delay in the Closing, Seller shall use its best efforts to expedite
the completion of the repairs.
(d) If the Casualty results in a total loss to the Vessel or if
repairing the damage will require a delay in the Closing in excess of thirty
(30) days to which Buyer refuses to consent, then Buyer shall have the right, by
so notifying Seller within ten (10) days after being advised by Seller of the
Casualty, to require Seller to sell to Buyer the Noordam. In such event, the
Noordam shall be substituted for the Nieuw Amsterdam for all purposes of this
Agreement and Closing shall proceed in accordance with this Agreement except
that Seller may defer the Closing for up to thirty (30) days if necessary for
commercial or logistical reasons. If Buyer fails to give timely notice that it
will require Seller to sell the Noordam to Buyer, then the Deposit shall be
refunded to Buyer and this Agreement shall terminate.
10. ITEMS INCLUDED / EXCLUDED FROM SALE.
(a) General Rule: Except as otherwise provided, Seller shall deliver
the Vessel to the Buyer with everything belonging to her on board or on shore
except that, for these purposes, items on shore that have been placed there
prior to the date of this Agreement so as to be available if needed for either
the Vessel or the Noordam are not included in the sale. Following execution of
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this Agreement and prior to delivery, Seller shall: (i) operate the Vessel
consistent with Seller's current practices; and (ii) order and maintain spare
parts and spare equipment consistent with Classification Society requirements
and Seller's current practices.
(b) Spare Parts/Spare Equipment: All on board spare parts and spare
equipment belonging to the Vessel at the time of delivery, used or unused, shall
become the Buyer's property.
(c) Radio Equipment: The radio installation and navigational equipment
shall be included in the sale without extra payment, unless such items belong to
an unaffiliated third party (e.g., MTN equipment).
(d) Excluded Items: Excluded from the sale are:
(i) any items which have on them the name "Holland America
Line," "Holland America," "Nieuw Amsterdam," or any
other Seller trademark or logo, or otherwise commemorate
other Holland America Line ships, prior Vessel voyages
or voyages of other Holland America Line ships.
(ii) all property leased by Seller from unaffiliated third
parties or owned by concessionaires or unaffiliated
third parties, including: photography, beauty, massage
and fitness, retail shops, casino, port lecturer and art
auctioneer (a listing of which Seller shall provide to
Buyer during the Preliminary Inspection period). Casino
equipment, even though owned by an affiliated third
party, is excluded from the sale.
(iii) all computer software other than (y) programs that are
integral to the technical or nautical operations or
maintenance of the Vessel (e.g., stability and alarm
programs); and (z) programs which are used on the Vessel
and which Seller is able to provide to Buyer without
obtaining the prior consent or approval of the owner or
licensor thereof.
(iv) all removable artwork that is of a proprietary nature to
Seller, library contents and slop chest as well as such
additional artwork as is listed in Exhibit H hereto.
(v) all financial, business, marketing and accounting
records, files, data and materials, and any other
proprietary information used in or developed during the
operation of the Vessel.
(vi) unused stores and unused provisions that Buyer elects
not to purchase at Seller's cost, such election to be
made at least seven days prior to delivery. Stores and
provisions shall be considered unused so long as they
are in unopened boxes, containers, bottles or crates or,
if in opened boxes, containers or crates, if they have
not yet been placed in actual service.
(vii) crew uniforms and personal belongings of crewmembers.
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(viii) any firearms, alcoholic beverages, prescription drugs or
other controlled substances or items.
(ix) any rights with respect to the name of the Vessel. At
delivery, Buyer shall be responsible for changing the
name of the Vessel in accordance with Section 14.
(x) any rights under any insurance policies maintained by
Seller.
(xi) any copyrights, trademarks, service marks, trade names
or any other intangible or intellectual rights or
property of Seller or any of its affiliates, unless
otherwise expressly included in the sale.
(xii) cash and cash equivalents (including receivables).
(e) Bunkers/Oils: the Buyer shall take over the remaining bunkers and
unused lubricating oils in storage tanks and sealed drums and pay for the same
based on the last price paid by Seller.
(f) Certificates, Log Books, Plans and Manuals: the sale includes all
Classification Society certificates as well as all plans and other technical
drawings in or under Seller's custody or control pertaining to the Vessel except
that: (i) if Seller has only one set of plans and/or drawings for both the
Vessel and the Noordam, Seller's obligation shall be limited to providing Buyer
with a true and correct copy thereof; and (ii) nothing contained in this
Agreement shall be construed as limiting any rights Seller may have to continue
its ownership and use of all plans, drawings and other technical documentation
with respect to the Noordam (or the Nieuw Amsterdam if Buyer shall acquire the
Noordam) even though they may be identical to those for the Vessel. All
certificates which are on board the Vessel shall also be handed over to the
Buyer unless the Seller is required to retain same, in which case the Buyer has
the right to take copies. Other technical documentation, which may be in the
Seller's possession, shall be promptly forwarded to the Buyer at Buyer's
expense, if Buyer so requests. The Seller may keep the Vessel's log books, but
the Buyer has the right to take copies of the same.
11. CLOSING.
(a) The Closing of the purchase and sale of the Vessel (the "Closing")
shall take place concurrently with the Seller's delivery of the Vessel in
accordance with Section 7. The Closing shall be conducted at the Delivery Port
or such other place as the parties shall mutually agree.
(b) At Closing and subject to Section 11(d) below, Buyer shall pay the
Purchase Price, less
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any Cash Deposit previously distributed to Seller, by wire transfer to such
bank account designated in writing by Seller.
(c) In exchange for payment of the Purchase Price, Seller shall
furnish Buyer with delivery documents, namely:
(i) Legal Xxxx of Sale in recordable form for the United
States Coast Guard, warranting that the Vessel is free
from all encumbrances, mortgages and maritime liens or
any other debts or claims whatsoever (other than those
arising by, through or under Buyer), duly notarially
attested by a notary public in the United States;
(ii) Current Certificate of Ownership issued by the competent
authorities of the flag state of the Vessel showing
Seller as the owner of the Vessel;
(iii) Confirmation of Class issued within 72 hours prior to
delivery;
(iv) Current Certificate issued by the competent authorities
stating that the Vessel is free from registered
encumbrances;
(v) Certificate of Deletion of the Vessel from the Vessel's
registry or other official evidence of deletion
appropriate to the Vessel's registry at the time of
delivery, which shall be duly notarially attested and
legalized if required for purposes of registering the
Vessel in the United States; and
(vi) Any such additional documents as may reasonably be
required by the competent authorities for the purpose of
registering the Vessel, provided Buyer notifies Seller of
any such documents as soon as possible after the date of
this Agreement and in any event prior to the obtaining of
the Coast Guard/MARAD Approvals.
(d) In the event Buyer notifies Seller at least thirty (30) days prior
to the Closing, Buyer may elect to use Seller financing for up to Eighty-Four
Million, Five Hundred Thousand Dollars ($84,500,000) of the Purchase Price, in
which case Buyer shall execute and deliver, in addition to the items listed in
(c) above, the following:
(i) The Promissory Note substantially in the form attached as
Exhibit D hereto;
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(ii) The First Preferred Ship Mortgage in the form attached as
Exhibit E hereto;
(iii) The General Assignment of Insurance in the form attached
as Exhibit F hereto;
(iv) The Guarantee, executed by American Classic Voyages, Co.,
in the form attached as Exhibit G hereto (in the event
Buyer exercises its rights under Section 20 to assign the
right to take title to the Vessel under this Agreement to
one of its affiliates).
(e) At the time of delivery, Buyer and Seller shall sign and deliver
to each other a Protocol of Delivery and Acceptance confirming the date and time
of delivery of the Vessel from Seller to Buyer.
(f) Either party shall, from time to time at or after the Closing, at
the reasonable request of the other party, and without further consideration but
without the obligation to incur expense of any kind, use its reasonable efforts
to execute, acknowledge and deliver such other instruments of conveyance and
transfer and will take such other actions and execute and deliver such other
documents, and certifications as are reasonably required to effect the
transactions contemplated under this Agreement.
12. ENCUMBRANCES AND LIABILITIES. Subject to Buyer's obligations under
Section 8(c): (i) Seller warrants that the Vessel, at the time of delivery, is
free from all charters, encumbrances, mortgages, rights in rem and maritime
liens or any other debts whatsoever created by Seller or any one claiming by,
through or under Seller, excluding any such items created by, through or under
Buyer; and (ii) Seller hereby undertakes to indemnify Buyer against all
consequences of claims (including reasonable attorney's fees) made against the
Vessel which have accrued prior to the time of delivery (e.g., a personal injury
claim based on a pre-delivery accident or a collection matter based on a
pre-delivery purchase). Notwithstanding anything to the contrary herein
contained: (i) Buyer shall not assume, pay, discharge, perform or in any way be
obligated for any claims, liabilities, charges or obligations of Seller; and
(ii) Seller shall not assume, pay, discharge, perform or in any way be obligated
for any claims, liabilities, charges or obligations of Buyer.
13. CONDITION ON DELIVERY.
(a) At time of delivery, the Vessel will be in class, free of all
conditions and recommendations affecting class and free and clear of any claims
for crew's wages or damages arising out of tort, salvage or general average,
except: that:
(i) if any such conditions or recommendations do exist at
delivery, the Closing shall
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proceed so long as the conditions or recommendations do
not preclude the placement of the Vessel into normal
passenger service and Seller executes an undertaking, in
form and substance satisfactory to Buyer, to pay the
costs of remedying same as soon as practicable or, if
appropriate, at the Vessel's next scheduled drydock or
wetdock, as applicable, with the costs to only include
incremental costs and not those that would otherwise be
incurred at the drydock or wetdock; and
(ii) if any such claims for crew's wages or damages exist at
delivery, the Closing shall proceed so long as Seller has
executed an undertaking, in form and substance
satisfactory to Buyer, to satisfy same before such time
as they may result in the arrest of the Vessel.
Notes, if any, in the surveyor's report, as well as memoranda in the
Classification Society records, which are accepted by the Classification Society
without condition or recommendation affecting class are not to be taken into
account. If the provisions of (i) or (ii) apply, Seller shall also be obligated
to provide written assurances to Buyer, in form and substance satisfactory to
Buyer, that it will not use the existence of such condition, recommendation or
claim as a basis for claiming a default by Buyer or its permitted assigns under
any of the agreements or instruments executed by Buyer pursuant to Section
11(d).
(B) The Vessel will be delivered with her classification certificates
and national certificates, as well as all other certificates the Vessel had at
the time of the Final Inspection, valid and unextended. All survey cycles shall
be unextended except that if any survey has been extended, the delivery shall
proceed so long as:
(i) the extension does not preclude the placement of the
Vessel into normal passenger service; and
(ii) Seller executes an undertaking, in form and substance
satisfactory to Buyer, to pay the costs of performing the
survey, as well as paying the costs of performing any
remedial work resulting therefrom, at the Vessel's next
scheduled drydock or wetdock, as applicable, with the
costs to only include incremental costs and not those
that would otherwise be incurred at the drydock or
wetdock.
(C) All determinations under this Section shall be made with reference
to Seller's
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Classification Society and its requirements.
(D) EXCEPT AS HEREIN PROVIDED, THE VESSEL IS BEING SOLD AS IS, WHERE
IS, AND WITH ALL FAULTS, WITH NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR
IMPLIED, AS TO THE DESIGN, CONDITION, SEAWORTHINESS, QUALITY OF MATERIAL,
EQUIPMENT OR WORKMANSHIP, FREEDOM FROM LATENT DEFECTS, MERCHANTABILITY, OR
FITNESS FOR A PARTICULAR PURPOSE OR TRADE, ALL OF WHICH ARE EXPRESSLY
DISCLAIMED.
14. NAME/MARKINGS. Upon delivery, Buyer shall change the name of the
Vessel, alter the funnel markings and remove from the Vessel any and all
references to Holland America, Nieuw Amsterdam as well as all logos and
trademarks of Seller. Buyer agrees that it will not, nor will it permit anyone
acting by or at its direction to, refer to the name "Nieuw Amsterdam" (including
in the context of the "former Nieuw Amsterdam" or the "ex-Nieuw Amsterdam") or
"Amsterdam" in any written advertising, promotion, marketing or sales in
connection with the Vessel. If Buyer transfers ownership of the Vessel, it shall
use its best efforts to place a similar obligation in the purchase agreement
with the succeeding owner which obligation, by its terms, shall be stated as
being for the benefit of Seller.
15. BUYERS' DEFAULT.
(A) Should the Purchase Price not be paid in accordance with Section
11 or should Buyer fail to deliver to the Escrow Agent any payment or Letter of
Credit pursuant to Section 5, Seller shall have the right to terminate this
Agreement. In such event, Seller shall be entitled to receive the Deposit as
liquidated damages and as its sole and exclusive remedy, and hereby waives any
claim for monetary damages or specific performance of this Agreement as a
consequence of such default.
(B) As to a default by Buyer under this Agreement not referred to in
Section 15(a), Seller shall be entitled to its actual damages (and not
consequential, special or punitive damages) incurred. Seller shall not have the
right to claim against the Deposit for damages to which it is entitled under
this Section 15(b).
(C) Nothing contained in this Section shall be construed as limiting
Seller's remedies in the event Buyer shall default in any of its obligations
under any instrument or agreement executed pursuant to Section 11(d).
16. SELLERS' DEFAULT. The parties acknowledge that no remedy at law
would be adequate to
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compensate Buyer upon Seller's failure to deliver the Vessel in accordance with
Section 7 or failure to be ready to validly complete a legal transfer at the
Closing. Accordingly, in the event of such default, Buyer shall be entitled to
xxx for specific performance of this Agreement and/or recover actual damages
(and not consequential, special or punitive damages); if Buyer, however, waives
its right to seek specific performance, the Deposit shall immediately be
delivered to Buyer. In the event of any other default under this Agreement by
Seller, Buyer shall be entitled to its actual damages (and not consequential,
special or punitive damages) incurred.
17. SMS MANUALS. As to the SMS Manuals, it is agreed as follows:
(A) nothing contained in this Agreement is intended to convey to Buyer
any right, title and/or interest in or to the SMS Manuals other than the
non-assignable right to use same for the limited purpose of assisting in the
operation of the Vessel, it being agreed that all other ownership rights in and
to the SMS Manuals remain with Seller;
(B) the SMS Manuals are being provided without any express or implied
warranties of any nature whatsoever, all of which are expressly disclaimed by
Seller including, without limitation, any warranty of merchantability or fitness
for a particular purpose or trade. ACCORDINGLY, BUYER IS USING THE SMS MANUALS
AS IS, WITH ALL FAULTS AND AT ITS OWN RISK AND WITHOUT ANY RECOURSE WHATSOEVER
TO SELLER WITH RESPECT THERETO, WHETHER BASED ON CONTRACT, TORT OR OTHERWISE;
and
(C) nothing contained in this Agreement is intended to obligate Seller
to provide Buyer following Closing with any updates, corrections or revisions to
the SMS Manuals or with any information that may come to Seller's attention with
respect to problems or deficiencies therein, except that the SMS Manuals as
delivered to Buyer shall be those in effect as of Closing.
18. OTHER AGREEMENTS.
(A) For up to 2 months prior to delivery, Buyer may place up to 7
representatives on the Vessel. Buyer shall pay Seller, in advance, a per person
charge of $25/day for its representatives. Buyer's representatives are on board
at their sole risk and expense, solely for the purpose of familiarization and in
the capacity of observers only. They shall not interfere in any respect with the
operation of the Vessel. Buyer will ensure that its representatives settle their
onboard accounts on a weekly basis. Buyer is solely responsible for any amounts
due its representatives as a
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consequence of their time on the Vessel including, without limitation,
maintenance and cure and any other amounts due as the result of personal injury,
death or illness, regardless of the cause thereof. All representatives are
required to comply with rules of conduct established by Seller. The obligations
under this Section 18(a) shall survive the termination of this Agreement.
(B) Seller shall, if required by Buyer, use its best efforts to have
up to 7 Seller employees remain with the Vessel for up to 2 months following the
delivery in order to assist Buyer to familiarize its crew with the operation of
the Vessel. Seller's employees shall act in the capacity of advisors only and
will not have any operational control or responsibility as to the Vessel. Buyer
will pay Seller, in advance at Closing, the payroll costs that will be incurred
by Seller for these employees. Buyer shall notify Seller as far in advance of
delivery as is feasible as to its xxxxxxx requirements under this provision.
19. BROKERS' AND FINDERS' FEES. Buyer warrants to Seller that it has
not retained or authorized any investment banker, broker, finder or other
intermediary who might be entitled to any fee or commission in connection with
the transactions contemplated under this Agreement. Seller warrants to Buyer
that it has not retained or authorized any investment banker, broker, finder or
other intermediary who might be entitled to any fee or commission in connection
with the transactions contemplated under this Agreement. Buyer, on the one hand,
and Seller, on the other hand each agree to indemnify, defend and hold the other
and their respective affiliates harmless from and against any losses, claims,
liabilities, costs or expenses incurred by it as a result of Buyer's or Seller's
breach of the foregoing warranty.
20. ASSIGNMENT AND BINDING EFFECT. This Agreement may not be assigned
prior to the Closing by any party hereto without the prior written consent of
the other parties; provided, however, Buyer may assign the right to take title
to the Vessel under this Agreement to an affiliate of Buyer without obtaining
Seller's consent so long as Buyer continues to be obligated in accordance with
the terms of this Agreement and agrees to cause such affiliate to perform
Buyer's obligations under this Agreement.
21. NOTICES. All notices required to be given under the terms of this
Agreement or which any of the parties desires to give hereunder shall be in
writing and delivered personally, by overnight delivery with a nationally
recognized delivery service or sent by registered or certified mail, postage
prepaid, return receipt requested with an additional copy sent by facsimile (and
confirmed by registered or certified mail or overnight delivery), each addressed
as follows:
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As to Seller: c/o Holland America Line - Westours, Inc., 000
Xxxxxxx Xxx. Xxxx, Xxxxxxx, XX 00000 - Attention: Xxx
Xxxxxx, Vice President and General Counsel, Fax:
(000) 000-0000;
As to Buyer: American Classic Voyages Co., Xxx Xxxxx Xxxxxxxxx
Xxxxx, Xxxxx 000, Xxxxxxx, XX 00000 - Attention:
Jordan X. Xxxxx, Esq., Executive Vice President and
General Counsel, Fax: (000) 000-0000;
or to such other address and to the attention of such other person as the party
to whom such notice is to be given may have theretofore designated in a notice
to the other party hereto. Any notice given in accordance with the foregoing
shall be deemed to have been given when delivered in person or by overnight
delivery against receipt or received by facsimile or, if mailed, on the third
business day next following the date on which it shall have been deposited in
the mails.
22. GOVERNING LAW AND JURISDICTION. This Agreement shall be governed
by and construed in accordance with Title 9 of the United States Code and the
Law of the State of New York and should any dispute arise out of this Agreement,
the matter in dispute shall be referred to three persons at New York, one to be
appointed by each of the parties hereto, and the third by the two so chosen;
their decision or that of any two of them shall be final, and for purpose of
enforcing any award, this Agreement may be made a rule of the Court. The
proceedings shall be conducted in accordance with the rules of the Society of
Maritime Arbitrators, Inc. New York.
23. NO THIRD PARTY BENEFICIARIES. The representations, warranties,
covenants and agreements contained in this Agreement are for the sole benefit of
the parties hereto and they shall not be construed as conferring any rights on
any other persons.
24. INTERPRETATION. All section headings contained in this Agreement
are for convenience of reference only, do not form a part of this Agreement and
shall not affect in any way the meaning or interpretation of this Agreement.
Words used herein, regardless of the number and gender specifically used, shall
be deemed and construed to include any other number, singular or plural, and any
other gender, masculine, feminine, or neuter, as the context requires. Any
reference to a "person" herein shall include an individual, firm, corporation,
partnership, trust, governmental authority or body, association, unincorporated
organization or any other entity; any use of the term "include" or "including"
shall mean "including without limitation"; and any use of "hereof," "hereto,"
"herein" or "hereunder" shall mean this Agreement.
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25. EXHIBITS. The exhibits referred to herein and listed below are
intended to be and hereby are specifically made a part of this Agreement:
Exhibit A Vessel Details
Exhibit B Form of Letter of Credit
Exhibit C Form of Letter of Credit Escrow Agreement
Exhibit D Form of Promissory Note
Exhibit E Form of First Preferred Ship Mortgage
Exhibit F Form of General Assignment of Insurance
Exhibit G Form of AMCV Guarantee
Exhibit H Excluded Art
26. COUNTERPARTS AND FACSIMILE EXECUTION. This Agreement may be
executed in any number of counterparts and any party hereto may execute any such
counterpart, each of which when executed and delivered shall be deemed to be an
original and all of which counterparts taken together shall constitute but one
and the same instrument. The parties hereto agree that facsimile transmission of
original signatures shall constitute and be accepted as original signatures.
This Agreement shall become binding when one or more counterparts taken together
shall have been executed and delivered by the parties. It shall not be necessary
in making proof of this Agreement or any counterpart hereof to produce or
account for any of the other counterparts.
27. ENTIRE AGREEMENT. This Agreement and the Exhibits hereto sets
forth the entire understanding of the parties hereto with respect to the
transactions contemplated hereby. It shall not be amended or modified except by
written instrument duly executed by all of the parties hereto. Any and all
previous agreements and understandings between or among the parties regarding
the subject matter hereof, whether written or oral, are superseded by this
Agreement.
27. FURTHER ASSURANCES. Each party agrees to execute, acknowledge,
deliver and cause to be done, executed, acknowledged and delivered all such
further documents and perform such acts as shall reasonably be requested of it
in order to carry out this Agreement and give effect hereto. Accordingly,
without in any manner limiting the specific rights and obligations set forth in
this Agreement, the parties declare their intention to cooperate with each other
in effecting the terms of this Agreement.
28. CONFIDENTIALITY. Unless and until Buyer gives Seller written
notice of acceptance pursuant to Section 4(c), neither party shall disclose the
terms or existence of this Agreement to any other person or entity. The
provisions of this Section shall not preclude Buyer from making such disclosures
as are necessary:
(i) to the United States Coast Guard and United States
Department of
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Transportation acting through the Maritime Administration
in order to obtain the Coast Guard/MARAD Approvals; or
(ii) to such third parties as Buyer may require the services
of in order to enable Buyer to undertake the inspections
provided for under Section 4 so long as such third
parties agree in writing to maintain the terms and
existence of this Agreement in strict confidence.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
HAL ANTILLEN N.V.
By: /s/ A. Xxxx Xxxxxxxxx
-------------------------------
Title: Proxyholder
----------------------------
AMERICAN CLASSIC VOYAGES CO.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Title: President and CEO
----------------------------
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EXHIBIT A
VESSEL DETAILS
Vessel Name: ms Nieuw Amsterdam
-----------
Classification Society: Lloyds Register of Shipping
----------------------
Class: "LR 100 A1 LMC" Passenger Ship
-----
Built: 1983 by Chantiers de L'Atlantique
-----
Flag: Netherlands and Netherlands Antilles
----
Call Sign: PGGQ
---------
Grt/Nrt: 33,930/16,027
-------
Registry Number: Netherlands: 26
--------------- Netherlands Antilles: 1983-M-57
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EXHIBIT B
FORM OF LETTER OF CREDIT
No.______
[Date of issuance of
Letter of Credit]
Commonwealth Land Title Insurance Company
00 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Ladies and Gentlemen:
We hereby establish, at the request and for the account of
American Classic Voyages Co., a Delaware corporation (the "Company"), in your
favor, in connection with the Escrow Agreement, dated _______, 1999 between the
Company, you and HAL Antillen N.V. (the "Contract"), our Irrevocable Letter of
Credit No. ______, in the amount of $________, effective immediately and
expiring at the close of banking business at our office at The Chase Manhattan
Bank, 00 Xxxxx Xxxxxx, Xxxxx Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, New York 10041
("L/C Office") on ____, ____ (the "Stated Termination Date").
We hereby irrevocably authorize you to draw on us, in an
aggregate amount not to exceed the amount of this Letter of Credit set forth
above and in accordance with the terms and conditions and subject to the
reductions in amount as hereinafter set forth, in one or more drawings against
presentation of your written and completed certificate signed by you in
substantially the form of Annex A attached hereto (the "Payment Document"). Each
such Payment Document shall be dated the date of its presentation, and shall be
presented at our L/C Office, Attention: Standby Letter of Credit Department,
which presentation may be by telecopier (at telecopier number 212-363-5656), on
or before 12:00 noon (New York City time) on the day (which shall be the banking
day) of our making funds available to you hereunder. If we receive your Payment
Document at such office, all in strict conformity with the terms and conditions
of this Letter of Credit, not later than 12:00 noon (New York City time) on a
banking day prior to the termination hereof, we will honor the same on the same
day in accordance with your payment instructions. If we receive your Payment
Document at such office, all in strict conformity with the terms and conditions
of this Letter of Credit, after 12:00 noon (New York City time) on a banking day
prior to the termination hereof, we will honor the same on the next succeeding
banking day in accordance with your payment instructions.
Upon our honoring any drawing hereunder, the amount of this
Letter of Credit shall be automatically decreased by an amount equal to the
amount of such drawing. Upon the earlier of (i) the date on which this Letter of
Credit is surrendered to us for cancellation and (ii) the Stated Termination
Date, this Letter of Credit shall automatically terminate.
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Communications with respect to this Letter of Credit shall be
in writing, or shall be transmitted by telecopier (212-363-5656) and promptly
confirmed in writing, and shall be addressed to us at our L/C Office, Attention:
Standby Letter of Credit Department, specifically referring to the number of
this Letter of Credit.
This Letter of Credit shall be governed by, and constructed in
accordance with, the internal laws of the State of New York, including, without
limitation, Article 5 of the Uniform Commercial Code as in effect in the State
of New York. This Letter of Credit shall be supplemented by the provisions (to
the extent that such provisions are not inconsistent with this Letter of Credit
or said Article 5) of the Uniform Customs and Practice for Documentary Credits
(1993 Revision), International Chamber of Commerce Publication No. 500.
This Letter of Credit sets forth in full the terms of our
undertaking, and such undertaking shall not in any way be modified, amended,
amplified, or limited by reference to any other document, instrument, or
agreement referred to herein (including, without limitation, the Contract),
except only the Payment Documents referred to herein; and any such reference
shall not be deemed to incorporate herein by reference any document, instrument
or agreement.
Very truly yours,
THE CHASE MANHATTAN BANK
By:___________________________
Name:_________________________
Title:__________________________
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ANNEX A
CERTIFICATE FOR DRAWING UNDER IRREVOCABLE LETTER OF CREDIT NO.
________ DATED _________, _____.
The Chase Manhattan Bank
00 Xxxxx Xxxxxx
Xxxxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 10041
Attention: Standby Letter of Credit Department
The undersigned, a duly authorized officer of the undersigned
(the "Beneficiary"), hereby certifies to The Chase Manhattan Bank (the "Bank"),
with reference to Irrevocable Letter of Credit No. ______ (the "Letter of
Credit", the terms defined therein and not otherwise defined herein being used
herein as therein defined) issued by the Bank in favor of the Beneficiary, as
follows:
(1) The Beneficiary is making a drawing under the Letter
of Credit in the amount of $ _________ pursuant to the
Contract.
(2) The Beneficiary has determined that it is required
under the Contract to make a drawing under the Letter of
Credit.
(3) Payment by the Bank pursuant to this drawing shall be
made to _____________, ABA Number _____________, Account
Number ___________________, Attention: _______________, Ref:
____________________.
IN WITNESS WHEREOF, the Beneficiary has executed and
delivered this Certificate as of the ______ day of ________, 19____.
[NAME OF BENEFICIARY]
By: ____________________
[Name and Title]
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EXHIBIT C
FORM OF ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made as of the 5th
day of August, 1999, by and between AMERICAN CLASSIC VOYAGES CO., a Delaware
corporation ("Buyer"), HAL ANTILLEN N.V.. a Netherlands Antilles corporation
("Seller"), and COMMONWEALTH LAND TITLE INSURANCE COMPANY ("Escrowee").
PRELIMINARY STATEMENT
Buyer and Seller have entered into a certain Memorandum of Agreement
(the "Contract") dated as of August 5, 1999, relating to the purchase and sale
of the vessel commonly referred to as the M/S NIEUW AMSTERDAM ("Vessel").
Capitalized terms used herein shall have the meanings ascribed to them in the
Contract unless expressly provided otherwise herein. The Contract requires Buyer
to deposit cash and/or one or more letters of credit in escrow with the
Escrowee. Buyer and Seller now desire to enter into an agreement with Escrowee
with respect to said deposits.
NOW THEREFORE, the parties hereto agree as follows:
1. Deposit of the Cash and Letters of Credit. For purposes of this
Agreement, the "Escrow Amount" shall mean:
(i) $1,000,000 beginning five (5) business days after the
execution of the Contract and continuing until four (4) business days after
Buyer has notified Seller of its acceptance of the Vessel pursuant to Section
4(c) of the Contract.
(ii) $9,000,000 beginning five (5) business days after Buyer
has notified Seller of its acceptance of the Vessel pursuant to Section 4(c) of
the Contract and continuing until October 16, 1999;
(iii) $18,000,000 beginning October 17, 1999 and continuing
until January 16, 2000; and
(iv) $30,000,000 beginning January 17, 2000 and continuing
thereafter, subject to the terms of this Agreement.
Provided that the Contract has not terminated prior to such time, Buyer shall
cause the applicable Escrow Amount to be on deposit with Escrowee at and for the
times set forth above. The deposit may be in the form of cash or one or more
letter(s) of credit, or a combination of both, so long as the aggregate amount
on deposit equals the applicable Escrow Amount. Each letter of credit must be in
the form, and issued by the issuer, specified in the Contract (each a "Letter of
Credit"). The cash and/or Letter(s) of Credit on deposit are collectively
referred to as the "Deposit," the cash portion of the Deposit is referred to as
the "Cash Deposit" and the Letter(s) of Credit portion of the Deposit is
referred to as the "LC Deposit".
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2. Creation of Escrow. Buyer and Seller hereby request Escrowee, and
Escrowee hereby agrees, to accept the Deposit from time to time and hold the
same in escrow pursuant to the terms and conditions set forth herein.
3. Administration of Escrow.
(a) Subject to Section 3(f) below, upon written notice from
Buyer to Escrowee certifying that Buyer is entitled to a return of the Deposit
pursuant to the Contract, Escrowee shall notify Seller of Escrowee's receipt of
said notice by delivering a copy thereof to Seller, and Escrowee shall return
the Deposit to Buyer ten (10) business days after Escrowee has delivered said
notice to Seller (the "Return Date") unless prior to the Return Date, Seller has
delivered to Escrowee written notice certifying that Buyer is not entitled to
the Deposit, in which case Escrowee is hereby directed to continue to hold the
Deposit until directed otherwise by either a joint direction from Buyer and
Seller or a court order. Escrowee shall comply with all such joint directions.
(b) Upon written notice from Seller to Escrowee certifying
that pursuant to the Contract, Seller is entitled to the proceeds of the
Deposit, Escrowee shall notify Buyer of Escrowee's receipt of said notice by
delivering a copy thereof to Buyer, and Escrowee shall draw upon the LC Deposit
and deliver the proceeds of the Deposit to Seller ten (10) business days after
Escrowee has delivered said notice to Buyer (the "Pay Date") unless prior to the
Pay Date, Buyer has delivered to Escrowee written notice certifying that Seller
is not entitled to such proceeds, in which case Escrowee is hereby directed to
continue to hold the Deposit until directed otherwise by either a joint
direction from Buyer and Seller or a court order. Escrowee shall comply with all
such joint directions.
(c) Upon Closing of the transaction contemplated by the
Contract and notice thereof to Escrowee from both Buyer and Seller, Escrowee
shall return the LC Deposit to Buyer and deliver the Cash Deposit, if any, to
the Closing, as Buyer and Seller shall jointly direct.
(d) If, for any reason, Escrowee holds any LC Deposit in
escrow on the date which is five (5) business days prior to the expiry date
thereof (as such expiry date may be extended from time to time by amendment(s)
to the Letter(s) of Credit delivered to Escrowee pursuant to the terms hereof),
Escrowee shall, prior to the expiry date thereof, draw upon each Letter of
Credit that is then part of the LC Deposit and thereafter hold the proceeds
thereof as a Cash Deposit pursuant to the terms hereof.
(e) Buyer shall have the right, but not the obligation, at
its sole option, (i) at any time that Escrowee is holding any Letter of Credit
in escrow, to (A) deliver to Escrowee an amendment to such Letter of Credit
extending the expiry date thereof or (B) deliver to Escrowee a substitute letter
of credit, containing the same terms and conditions as such Letter of Credit
then held by Escrowee except for the expiry date of said substitute letter of
credit, which shall be subsequent to the expiry date of such Letter of Credit
then held by Escrowee, and upon receipt of said substitute letter of credit,
Escrowee shall return to Buyer such Letter of Credit then held by Escrowee, and
said substitute letter of credit shall be considered part of the LC Deposit for
all purposes hereunder, and (ii) at any time, to replace Letters of Credit
constituting part of the Deposit with cash (in the amount of the aggregate
stated amount of such replaced Letters of Credit) or to replace cash
constituting part of the Deposit with Letters of Credit (in the aggregate stated
amount of such cash) so long as the Buyer remains in compliance with Section 1
above.
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(f) Notwithstanding anything contained herein or in the
Contract to the contrary, upon written notice from Buyer to Escrowee (the
"Termination Notice") on or before the earlier of (i) the date on which Escrowee
receives from Seller the $9,000,000 Deposit set forth in clause (ii) of the
defined term "Escrow Amount" in Section 1 above, or (ii) the date on which
Escrowee receives from Seller a copy of the written notice pursuant to which
Buyer accepts the Vessel (after completion of the Final Inspection) pursuant to
Section 4(c) of the Contract, pursuant to which Termination Notice Buyer
certifies to Escrowee that Buyer has validly terminated the Contract, Escrowee
shall immediately return the Deposit to Buyer notwithstanding any contrary
instructions from Seller or any other person. At any time and from time to time,
Escrowee shall immediately pay all interest and other earnings on the Deposit
(collectively, the "Earnings") to Buyer on demand from Buyer, notwithstanding
any contrary instructions from Seller or any other person, except that such
payment of Earnings shall not be made to Buyer if Buyer's demand for such
Earnings is received by Escrowee after Escrowee has received a notice from
Seller pursuant to Section 3(b) above.
(g) Subject to Section 3(d) above, Seller and Buyer
acknowledge and agree that Seller shall only be entitled to direct Escrowee
(pursuant to Section 3(b) hereof or otherwise) to draw on the Letter(s) of
Credit and/or deliver the Deposit (including any Cash Deposit) to Seller or its
nominee, and Seller shall only be entitled to receive such Deposit, at the times
and under the conditions set forth in the Contract.
(h) Seller and Buyer further acknowledge and agree that Buyer
shall only be entitled to direct Escrowee (pursuant to Section 3(a) hereof or
otherwise) to return the Deposit to Buyer, and Buyer shall only be entitled to
have the Deposit so returned at the times and under the conditions set forth in
the Contract, including without limitation: (i) if, pursuant to Sections 4(a) or
4(c) of the Contract, Buyer does not accept the Vessel after completion of the
Preliminary Inspection or Final Inspection, as the case may be, and the Contract
terminates, or (ii) if, pursuant to Section 3(b) of the Contract, Buyer fails to
obtain the Coast Guard/MARAD Approvals and the Contract terminates.
4. Investment of Proceeds of Deposit. (a) At all times that the
Deposit and/or the proceeds of the Deposit are held by Escrowee in the form of
cash, Escrowee is hereby directed to the fullest extent possible to invest such
proceeds in short-term U.S. Treasury Bills, or if Seller and Buyer shall jointly
direct, similar cash equivalent securities. Escrowee shall not be held
responsible for any loss of principal or interest which may be incurred as a
result of making said investments or redeeming said investments for the purposes
of this escrow. All Earnings on the Deposit shall subject to Section 3(f) above,
(a) be for the account of Buyer until and unless Seller delivers to escrowee a
notice under Section 3(b) above, in which case such Earnings then remaining in
this escrow shall be treated for all purposes as part of the Deposit and for the
account of the party entitled to receive the Deposit, and (b) be reported under
Buyer's federal tax identification number.
(b) To the extent that any portion of the Deposit and/or
proceeds of the Deposit (collectively, "Undirected Deposits") are uninvested
after Escrowee has complied with the direction in Section 4(a) above, the
parties hereto agree that Escrowee shall be under no duty to invest or reinvest
such Undirected Deposits at any time held by it hereunder, and further, that
Escrowee may commingle such Undirected Deposits with other deposits or with its
own funds in the manner provided for the administration of funds under Section
2-8 of the Corporate Fiduciary Act (Ill. Rev. Stat. ch. 17
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26
par. 1551-1) and may use any part or all such funds for its own benefit without
obligation to any party for interest or earnings derived thereby, if any,
provided, however, nothing herein shall diminish Escrowee's obligation to apply
the full amount of the Deposits in accordance with the terms of this Agreement.
5. Notices. Notices which any party is required, or may wish, to give
to any other party in connection with this Agreement shall be in writing and
directed to Seller, Buyer and Escrowee as follows:
As to Seller: Holland America Line - Westours, Inc., 000 Xxxxxxx Xxx.
------------ Xxxx, Xxxxxxx, XX 00000 - Attention: Xxx Xxxxxx, Vice
President and General Counsel, Fax: (000) 000-0000.
As to Buyer: American Classic Voyages Co., Xxx Xxxxx Xxxxxxxxx Xxxxx,
----------- Xxxxx 000, Xxxxxxx, XX 00000 - Attention: Jordan X. Xxxxx,
Esq., Executive Vice President and General Counsel,
Fax: (000) 000-0000.
As to Escrowee: Commonwealth Land Title Insurance Company, 10 South
-------------- LaSalle Street, Suite 2500, Xxxxxxx, Xxxxxxxx 00000 -
Attention: Xxxxxx Xxxxxxx, Fax: (000) 000-0000.
All notices given in accordance with the terms hereof shall be deemed given
and received when sent by facsimile, with a copy sent by overnight delivery.
Either party hereto may change the address for receiving notices, requests,
demands or other communication by notice sent in accordance with the terms of
this Section 5.
6. Compliance. Escrowee is expressly authorized to regard and to
comply with any and all court orders, judgments or decrees entered or issued by
any court, with or without jurisdiction, and in case Escrowee obeys or complies
with any such order, judgment or decree of any court, it shall not be liable to
any of the parties hereto or any other person, firm or corporation by reason of
such compliance, notwithstanding any such order, judgment or decree be entered
without jurisdiction or be subsequently reversed, modified, annulled, set aside
or vacated.
7. Entire Agreement; Conflicts. This Agreement constitutes the entire
agreement between Escrowee, on the one hand, and Seller and Buyer, on the other
hand with respect to the subject matter hereof. Conflicts and inconsistencies
between the terms of this Agreement and the terms of the Contract shall be
governed by the terms of this Agreement.
8. Headings. The headings herein are for convenience of reference
only and in no way should be deemed to affect the construction of this
Agreement.
9. Binding Effect. This Agreement shall be binding upon, and inure to
the benefit of, the parties hereto, and their respective heirs, successors and
assigns.
10. Counterparts. This Agreement may be executed in counterparts and
shall constitute an agreement binding on all parties notwithstanding that all
parties are not signatories to the original or the same counterpart.
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11. Costs. The fees of the Escrowee hereunder shall be paid one-half by
Buyer and one-half by Seller.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year first above written.
SELLER:
HAL ANTILLEN N.V.,
a Netherlands Antilles corporation
By: ____________________________
Name ____________________________
Title: ____________________________
BUYER:
AMERICAN CLASSIC VOYAGES CO.,
a Delaware corporation
By: ____________________________
Name: ____________________________
Title: ____________________________
ESCROWEE:
COMMONWEALTH LAND TITLE INSURANCE
COMPANY
By: ____________________________
Name: ____________________________
Title: ____________________________
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EXHIBIT D
FORM OF PROMISSORY NOTE
PROMISSORY NOTE
$______________ Date: ___________, 2000
FOR VALUE RECEIVED, the undersigned, _______________________________, a
________________ corporation (the "Maker") hereby promises to pay to the order
of HAL ANTILLEN N.V., a Netherlands Antilles corporation (the "Holder") the
principal amount of _________________________________ and No/100 Dollars
($__________), together with interest on the unpaid principal amount thereof at
a rate per annum equal from time to time to the Reference Rate (as hereafter
defined) and, if default shall occur in the payment when due (whether by
acceleration or otherwise) of any principal or interest amount hereunder, from
the maturity of that amount until it is paid in full at a rate per annum equal
to the Reference Rate plus two percent (2.0%) per annum. As used herein,
"Reference Rate" means, on any date, the rate of interest publicly announced
from time to time by U.S. Bank, National Association ("Bank") in Seattle,
Washington, as its "reference rate" or any similar successor rate announced from
time to time by Bank or its successor (the "Reference Rate"). Any change in the
Reference Rate shall take effect at the opening of business on the day specified
in the public announcement of a change in the Bank's reference rate or any
similar successor rate announced from time to time by Bank or its successor.
Notwithstanding anything herein to the contrary, interest shall not accrue at a
rate in excess of the maximum rate permitted by applicable law. Holder shall
provide notice to Maker of each change in the Reference Rate. Interest shall be
calculated based on a 360 day year, for actual days elapsed.
1. Maker shall repay to Holder the principal amount of the loan
evidenced by this Note in equal consecutive semi-annual installments commencing
on March 31, 2001, and continuing on each September 30th and March 31st
thereafter in an amount equal to Five Million, Seventy Thousand and No/100
Dollars ($5,070,000.00), and shall repay the balance of the principal
outstanding hereunder on or before ________, 2007 [75 months after date of
Note].
2. Maker shall pay interest on the unpaid principal amount of this
Note from the date hereof until all amounts due hereunder are fully paid, in
arrears on the first business day of each calendar month, commencing on
_________1, 2000 [first calendar month after date of Note], except that interest
shall be payable on demand after and during the continuance of a default in the
payment of any amount when due hereunder.
3. All payments of principal and of interest on this Note shall be
made to Holder in United States Dollars in immediately available funds at c/o
Holland America Line-Westours Inc., 000 Xxxxxxx Xxx. Xxxx, Xxxxxxx, XX 00000, or
at such other address as Holder shall from time to time designate. Holder may
require all payments hereunder to be made by wire transfer to such account as
Holder may designate.
4. Maker shall have the right to prepay this Note or any portion
hereof at any time,
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without premium or penalty. Prepayments of principal shall be applied in inverse
order of maturity.
5. Payments made hereunder shall be applied: first, against fees and
expenses due hereunder; second, against interest due on amounts in default, if
any; third, against interest due hereunder; and fourth, against principal due
hereunder.
6. Each maker, surety, guarantor and endorser of this Note expressly
waives all notices, demands for payment, presentations for payment, notices of
intention to accelerate the maturity, protest and notice of protest as to this
Note, except for notices expressly provided for in this Note, the Preferred Ship
Mortgage referred to below and any other document securing this Note, if any.
7. It is expressly provided that upon
(a) default in the payment of principal hereunder, as the
same shall become due and payable, or
(b) default in the payment of interest hereunder, as the same
shall become due and payable, which default shall continue for five (5)
or more business days,
the entire remaining unpaid balance of the principal and interest may, at the
option of Holder, be declared to be immediately due and payable.
8. If a default shall occur in the payment when due of any amount
hereunder, and this Note is placed in the hands of an attorney for collection,
or suit is brought on the same, or the same is collected through bankruptcy or
other judicial proceedings, then Maker agrees and promises to reimburse Holder
for actual costs incurred in connection therewith, including reasonable
attorney's fee, collection costs and all out-of-pocket expenses incurred by
Holder.
9. Maker's obligations under this Note are secured by that certain
Preferred Ship Mortgage executed and delivered on the date of this Note by Maker
to Holder with respect to the United States flag vessel ms ________________,
Official Number ___________ and an Assignment of Insurances executed and
delivered on the date of this Note by Maker to Holder with respect to said
vessel.
10. Maker will keep a register of this note wherein the name of
________________ will be entered as the holder of the Note. Only the registered
holder of the Note on a payment date shall be entitled to receive payment of
principal and/or interest on the Note. A holder of the Note can transfer the
right to receive payments of principal and/or interest on the Note only by
providing notice of the intended transfer to the Maker and such transfer shall
become effective only upon entry by the Maker of the transferee's name in the
register as the holder of the Note. Any transfer shall only be made to or for
the benefit of an affiliate of Holder except that if a default shall be
continuing in the payment when due of any amount hereunder and Holder shall
reasonably determine that it is necessary or desirable to transfer its rights
under this Note to a citizen of the United States as defined in the Shipping
Act, 1916, as amended, it may do so even if such citizen is not an affiliate of
Holder.
11. This Note has been executed and delivered in and shall be governed
by and construed in accordance with the laws of the State of Washington, without
regard to its conflicts of law rules, it
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being the intent that the substantive laws of Washington shall always apply.
Maker hereby irrevocably submits to the non-exclusive jurisdiction of any state
or federal court sitting in Seattle, King County, Washington, in any action or
proceeding brought to enforce or otherwise arising out of or relating to this
Note and irrevocably waives to the fullest extent permitted by law any objection
which it may now or hereafter have to the laying of venue in any such action or
proceeding in any such forum, and hereby further irrevocably waives any claim
that any such forum is an inconvenient forum.
NOTICE TO MAKER: ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN
MONEY, EXTEND CREDIT OR TO FOREBEAR FROM COLLECTION OF A DEBT
ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
IN WITNESS WHEREOF, Maker has executed this Note the day and year first
above written.
_______________________., a _________________
By __________________________
Its __________________________
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EXHIBIT E
FORM OF FIRST PREFERRED SHIP MORTGAGE
PREFERRED SHIP MORTGAGE
Vessel Name: ___________________________
Official Number: ___________________________
Name and Address of ___________________________, 100%
Shipowner: ___________________________
___________________________
___________________________
___________________________
Name and Address of HAL ANTILLEN N.V., 100%
Mortgagee: c/o Holland America Line-Westours Inc.
000 Xxxxxxx Xxx. Xxxx
Xxxxxxx, XX 00000 X.X.X.
Attn: General Counsel
Date of Mortgage: ____________, 2000
Amount of Mortgage: $___________ excluding interest, expenses and fees, as
contemplated by 46 X.X.X.xx. 31321(b)(3)
THIS PREFERRED SHIP MORTGAGE (the "Mortgage") is made as of this ____
day of _______, 2000, by _______________________________, a
_____________________ corporation (the "Shipowner"), in favor of HAL ANTILLEN
N.V., a Netherlands Antilles corporation (the "Mortgagee").
RECITALS:
A. Shipowner is the sole owner of the whole of the vessel
_____________, Official Number ______________ (the "Vessel") which vessel is
duly documented in the name of Shipowner under the laws and flag of the United
States of America.
B. Mortgagee has made a loan to Shipowner in the principal amount of
________________________ Dollars (the "Loan") which loan is evidenced by a
promissory note, dated ___________, 2000, in the amount of the Loan, payable to
the order of Mortgagee (the "Note"). A Copy of the form of the Note is attached
hereto and incorporated herein as Exhibit A.
C. In consideration of Mortgagee having agreed to advance the Loan,
Shipowner has agreed to execute and deliver this Mortgage to Mortgagee for
purposes of securing payment to
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Mortgagee of the sums payable by Shipowner under the Note and the performance of
Shipowner of its obligations thereunder in accordance with the terms thereof and
of this Mortgage.
NOW THEREFORE, THIS MORTGAGE WITNESSETH:
That in consideration of the premises and of the credit extended by
Mortgagee to Shipowner as above recited and of other good and valuable
consideration, the receipt whereof is hereby acknowledged, and in order to
secure the payment of the Loan evidenced by the Note and the payment of all such
other sums as may hereafter become secured by this Mortgage in accordance with
the terms hereof (the "Obligations"), and to secure the performance and
observance of and compliance with the covenants, terms and conditions herein and
in the Note, Shipowner does by these presents grant, convey, mortgage, pledge,
assign, transfer, set over and confirm the whole of the Vessel unto Mortgagee
and its successors and permitted assigns, together with all of the Earnings (as
hereafter defined) of the Vessel and all of Shipowner's right, title and
interest in and to the boilers, engines, machinery, masts, spars, sails,
rigging, boats, anchors, nets, chains, cables, tackle, apparel, furniture,
fittings, navigation equipment, propulsion equipment, fuel, lubricating and
other oils, consumables and other stores and equipment and all other
appurtenances to the Vessel appertaining or belonging, whether now owned or
hereafter acquired, whether on board or not, and all additions, improvements and
replacements hereafter made in or to the Vessel, or any part thereof, or in or
to the equipment and appurtenances aforesaid and including Shipowner's rights
under any leases in connection therewith, all of which property shall, including
the Earnings, be deemed to be included in the term "Vessel" as used in this
Mortgage.
As further security for the satisfaction of the Obligations, Shipowner
does also grant, convey, mortgage, pledge, assign, transfer, set over and
confirm to Mortgagee absolutely all rights and interests of every kind which now
or at any later time it has to, or in connection with, the Insurances and
Requisition Compensation (as such terms are hereafter defined).
This Mortgage is granted in order to secure the payment of all sums
payable by Shipowner under the Note and the performance by Shipowner of all
obligations thereunder in accordance with the terms thereof and of this
Mortgage, whether now existing or hereafter created. Anything herein to the
contrary notwithstanding, the maximum amount of the direct or contingent
obligations that is or may be secured by this Mortgage at any time is
_________________________________ and No/100 Dollars excluding interest,
expenses, and fees, as contemplated by 46 U.S.C. ss. 31321(b)(3).
TO HAVE AND TO HOLD the same unto Mortgagee and its successors and
assigns, as trustee, upon the terms herein set forth for the enforcement of the
payment of the Obligations and all interest thereon and to secure the
performance and observance of and compliance with the covenants, terms and
conditions in this Mortgage and in the Note contained;
PROVIDED, these presents are upon the condition that if Shipowner or
its successors or assigns shall pay or cause to be paid to the holders of the
Obligations, the principal of the indebtedness aforesaid and interest thereon as
and when the same shall become due and payable in accordance with the terms of
this Mortgage and of the Note, and all other such sums as may hereafter become
secured by this Mortgage in accordance with the terms hereof, and Shipowner
shall perform, observe and comply with all the covenants, terms and conditions
in the Note and in this Mortgage, expressed or
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implied, to be performed, then these presents and the rights hereunder shall
cease, determine and be void, otherwise to be and remain in full force and
effect.
IT IS HEREBY COVENANTED, DECLARED AND AGREED that the Vessel is to be
held subject to the further covenants, conditions, provisions, terms and uses
hereinafter set forth.
ARTICLE 1
COVENANTS OF SHIPOWNER
Shipowner covenants and agrees with Mortgagee as follows;
SECTION 1.1 DEFINITIONS. In this Mortgage, unless the contrary
intention appears:
"affiliate" means a person controlled by, controlling or under common
control with another person with "control" for these purposes meaning ownership,
beneficial or otherwise, of 51% or more of the voting or owner equity.
"AMCV" refers to American Classic Voyages Co., a Delaware corporation.
"asset" includes every kind of property, asset, interest or right,
including any present, future or contingent right to any revenues or other
payment.
"company" includes, without limitation, any partnership, joint venture,
corporation, sole proprietorship or unincorporated association.
"Default Rate" means the Reference Rate plus two percent (2.0%).
"Earnings" means all hire, earnings, ticket receipts, issues, revenues,
income and profits of the Vessel, return premiums, salvage awards and
recoveries, recoveries general average or other amounts due and owing as a
consequence of the operation or ownership of the Vessel.
"Environmental Approvals" means all approvals, licenses, permits,
exemptions or authorizations required under applicable Environmental Laws in
connection with the ownership and operation of the Vessel.
"Environmental Claim" means (i) any claim by, or directive from, any
governmental, judicial or other regulatory authority having jurisdiction over
Shipowner alleging breach of, or non-compliance with, any Environmental Laws or
Environmental Approvals or otherwise howsoever relating to or arising out of an
Environmental Incident, or (ii) any claim by any other third party howsoever
relating to or arising out of an Environmental Incident (and, in each such case,
"claim" shall mean a claim for damages, clean-up costs, compliance, remedial
action or otherwise).
"Environmental Incident" means (i) any release of Environmentally
Sensitive Material from the Vessel, (ii) any incident resulting from a collision
between the Vessel and another vessel or some other incident of navigation or
operation in which Environmentally Sensitive Material is released from a vessel
other than the Vessel and, in either case, where the Vessel, Shipowner or the
approved
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manager of the Vessel is at fault or otherwise liable (in whole or in part), or
(iii) any incident in which Environmentally Sensitive Material is released from
a vessel other than the Vessel and where the Vessel is arrested as a result
and/or where Shipowner or the approved manager of the Vessel are at fault or
otherwise liable.
"Environmental Laws" means all laws relating to pollution, protection
of the environment, prevention and cleanup of environmental pollution, and the
regulation of shipowners and vessels with respect to environmental matters
(including, without limitation, the United States Oil Pollution Act of 1990, the
United States Clean Water Act and the United States Resource Conservation and
Recovery Act).
"Environmentally Sensitive Material" means oil, oil products, any other
substance which is polluting, toxic or hazardous or any substance the release of
which into the environment is regulated, prohibited or penalized by or pursuant
to any Environmental Law.
"Event of Default" shall have the meaning given in Section 2.1 below.
"excess risks" means the proportion of the claims for general average,
salvage and salvage charges not recoverable under the hull and machinery
policies in respect of the Vessel in consequence of her insured value being less
than the value at which the Vessel is assessed for the purpose of such claims.
"expense" means any kind of cost, charge or expense (including all
reasonable attorneys' fees, costs and expenses including at or before trial and
on appeal) and any applicable value added, sales or other tax thereon.
"Insurances" means all policies and contracts of insurance (which
expression includes all entries of the Vessel in a protection and indemnity or
war risks association) which are from time to time taken out or entered into in
respect of the Vessel or her Earnings or otherwise howsoever in connection with
the Vessel or her Earnings.
"law" includes all statutes, rules, regulations, treaties,
requirements, conventions, directives, decisions and other pronouncements having
the force of law of any governmental or other regulatory authority.
"liability" includes every kind of debt or liability, present or
future, certain or contingent, whether incurred as principal, surety or
otherwise.
"Major Casualty" means any casualty to the Vessel in respect whereof
the claim or the aggregate of the claims against all insurers, before adjustment
for any relevant franchise or deductible, exceeds Three Million, Two Hundred
Fifty Thousand Dollars ($3,250,000) or the equivalent in any other currency.
"Outstanding Loan" means, as of any given time, the outstanding
principal balance of the Loan together with all accrued and unpaid interest
thereon.
"Permitted Lien" shall have the meaning given in Section 1.7(b) below.
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"person" includes any individual, company, authority, political
subdivision, international organization or other entity.
"protection and indemnity risks" means the usual risks covered by a
protection and indemnity association managed in London including pollution risks
and the proportion (if any) of any sums payable to any other person or persons
in case of collision which are not recoverable under the hull and machinery
policies by reason of the incorporation therein of Clause 8 of the Institute
Time Clauses (Hulls) (1/11/1995) or the Institute Amending Running Down Clause
(I/ 1 0/7 1) or any equivalent provision.
"Receiver" means any receiver and/or manager (or joint receivers and/or
managers) appointed under Section 2.6.
"Reference Rate" has the meaning set forth in the Note.
"Requisition Compensation" includes all moneys or other compensation
payable by reason of requisition of title or for hire or other compulsory
acquisition of the Vessel.
"Security Interest" means (a) a mortgage, charge (whether fixed or
floating) or pledge, any maritime or other lien, encumbrance or any other
security interest of any kind, maritime or non-maritime including, without
limitation, claims of or liability to possession or forfeiture, or (b) the
rights of the plaintiff under an action in rem in which the Vessel has been
arrested or a writ has been issued or similar step taken.
"tax" includes any present or future tax, duty, impost, levy or charge
or any kind which is imposed by any governmental authority and includes all
related penalties, interest and fines.
"Total Loss" means:
(a) actual, constructive, compromised, agreed or arranged total loss of
the Vessel;
(b) any expropriation, confiscation, requisition or compulsory
acquisition of the Vessel, whether for full consideration, a consideration less
than her proper value, a nominal consideration or without any consideration,
which is effected by any government or official authority or by any person or
persons claiming to be or to represent a government or official authority,
excluding a requisition for hire for a fixed period not exceeding the final
maturity of the Note, including any extension of such final maturity;
(c) any arrest, capture, seizure, or detention of the Vessel (including
any hijacking or theft) unless she is within 30 days (90 days in the case in
hijacking or theft) redelivered to Shipowner's full control.
"Total Loss Date" means:
(a) in the case of an actual Total Loss of the Vessel, the date on
which it occurred or, if that is unknown, the date when the Vessel was last
heard of;
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(b) in the case of a constructive, compromised, agreed or arranged
Total Loss of the Vessel, the earliest of:
(i) the date on which a notice of abandonment is given to the
insurers; and
(ii) the date of any compromise, arrangement or agreement made by
or on behalf of Shipowner with the Vessel's insurers in which
the insurers agree to treat the Vessel as a Total Loss; and
(c) in the case of any other type of Total Loss, on the date (or the
most likely date) on which it appears to Mortgagee that the event constituting
the Total Loss occurred.
"war risks" includes the risk of mines and all risks excluded by Clause
23 of the Institute Time Clauses (Hulls) (10/1/83).
SECTION 1.2 PERFORMANCE OF OBLIGATIONS/VALID MORTGAGE. Shipowner will
pay the indebtedness evidenced by the Note and this Mortgage with interest
pursuant to the terms of the Note and this Mortgage, and shall observe, perform
and comply with each and every one of the covenants, terms and conditions herein
and in the Note on its part to be observed, performed or complied with.
Shipowner will comply with and satisfy in all material respects the provisions
of Chapter 313 of Title 46 of the United States Code, as amended, and execute
and deliver all other documents and take all other actions Mortgagee reasonably
deems necessary in order to establish, perfect and maintain this Mortgage as a
valid, enforceable, and duly perfected preferred mortgage thereunder upon the
Vessel and upon all renewals, improvements and replacements made in or to the
same. Shipowner shall remain liable to perform all its respective obligations
connected with the Vessel, it being agreed that Mortgagee shall not, in any
circumstances, have or incur any obligation of any kind in connection with the
Vessel except to the extent expressly provided herein, including upon the
exercise of Mortgagee's remedies hereunder and other than as required by 46 CFR
xx.xx. 221.17 and 221.19.
SECTION 1.3 VESSEL DOCUMENTATION. Shipowner represents, warrants and
covenants that:
(a) it is now, and shall remain during the life of this Mortgage, a
citizen of the United States as defined in 46 U.S.C. ss. 12102(a) and under
Section 2 of the Shipping Act, 1916, as amended;
(b) it will keep the Vessel documented in its name as a United States
of America ship and will not do or allow to be done anything whereby such
documentation may be forfeited or imperiled; and
(c) it will not without the previous consent in writing of Mortgagee
change the name of the Vessel or change or transfer the flag of the Vessel.
SECTION 1.4 REPRESENTATIONS AND WARRANTIES. Shipowner represents,
warrants and covenants to Mortgagee as follows.
(a) Shipowner is duly incorporated and validly existing and in good
standing under the laws of the State of _________________________ and shall so
remain during the life of this Mortgage;
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(b) Shipowner has the corporate capacity, and has taken all corporate
action and obtained all consents of its directors and shareholders necessary for
it to execute and comply with this Mortgage and the Note;
(c) all consents, governmental or otherwise, required to enable
Mortgagee to execute this Mortgage and the Note and comply with the terms hereof
and thereof have been obtained, remain valid and in full force and effect and
are not subject to revocation;
(d) this Mortgage and the Note constitute Shipowner's legal, valid and
binding obligations enforceable against Shipowner in accordance with their
respective terms except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
transfer or similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles; and
(e) the execution by Shipowner of the Note and this Mortgage and its
compliance with the terms thereof and hereof will not involve or lead to a
contravention, breach or default of or under the constitutional documents of
Shipowner or any contractual or other obligation or restriction which is binding
on Shipowner or any of its assets.
SECTION 1.5 OWNERSHIP AND SECURITY INTERESTS; MORTGAGEE'S RIGHT TO
PROTECTION.
(a) Shipowner represents and warrants that it lawfully owns and is
lawfully possessed of the Vessel free from all Security Interests including,
without limitation, claims of or liability to possession, forfeiture or penalty,
except (a) the lien of this Mortgage, and (b) the Permitted Liens. Except as
otherwise provided herein, Shipowner warrants and shall defend title to and
possession of the Vessel and to every part thereof for the benefit of Mortgagee
against the claims and demands of all persons whomsoever.
(b) Mortgagee shall be entitled to take any action which it may
reasonably think necessary for the purpose of protecting or maintaining the
security created by this Mortgage except that Mortgagee, prior to taking any
such action, shall give Shipowner a reasonable opportunity to perform same.
Without limiting the generality of the foregoing, to effectuate the foregoing
Mortgagee may:
(i) effect, replace and renew any Insurances required hereby;
(ii) arrange for the carrying out of such surveys and/or repairs
of the Vessel as are required hereby; and
(iii) discharge any liabilities charged on the Vessel, or otherwise
relating to or affecting her, which, if unpaid, may become a Security
Interest on the Vessel, and/or take any measures which Mortgagee may
deem reasonably necessary for the purpose of securing her release
therefrom. Notwithstanding the above, no liability shall be discharged
if (i) Shipowner shall contest such liability in good faith through
appropriate proceedings, (ii) Shipowner sets aside with Mortgagee
adequate reserves reasonably acceptable to Mortgagee in accordance with
generally accepted accounting principles, or otherwise obtains a
protection and indemnity
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club letter of assurance reasonably acceptable to Mortgagee, with
respect to any such liability so contested, and (iii) the non-discharge
thereof does not in any way hinder the operation or trading of the
Vessel or impair Shipowner's ownership of the Vessel or the rights of
Mortgagee under this Mortgage.
SECTION 1.6 NOTICE OF MORTGAGE. Shipowner will place, and at all
times will retain, a properly certified copy of this Mortgage on board the
Vessel with her papers and will cause such certified copy and such papers to be
exhibited to any and all persons having business therewith which might give rise
to any Security Interest thereon other than Permitted Liens, and to any
representative of Mortgagee; and will place and keep prominently displayed in
the chart room and in the Master's cabin of the Vessel a framed printed notice
in plain type of such size that the paragraph of reading matter shall cover a
space not less than 6 inches wide by 9 inches high, and reading as follows:
"NOTICE OF MORTGAGE
This Vessel is owned by ________________________, a
________________ _______, and is covered by a Preferred Ship
Mortgage in favor of ________________________, a
_______________________, under authority of Chapter 313 of
Title 46 of the United States Code, as amended. Under the
terms of said Mortgage, neither the owner, any charterer, the
Master of this Vessel, any operator nor any other person has
the right, power or authority to create, incur or permit to be
imposed upon this Vessel any lien whatsoever other than liens
expressly permitted thereby."
SECTION 1.7 DISCHARGE OF SECURITY INTERESTS.
(a) Except for the lien of this Mortgage and Permitted Liens,
Shipowner will not create or suffer to be continued any Security Interest on the
Vessel and in due course and in any event within thirty (30) days after the same
becomes due and payable will pay or cause to be discharged all claims or demands
which, if not paid or discharged, might result in the creation of a Security
Interest on the Vessel and will cause the Vessel to be released or discharged
from each such Security Interest. Similarly, if a Security Interest is filed
against the Vessel or if the Vessel is otherwise attached, levied upon, or taken
into custody or detained by any proceeding in any court or tribunal or by any
government or other authority, Shipowner will promptly notify Mortgagee thereof
and will, within fourteen (14) days of said event, cause the Vessel to be
released and all Security Interests thereon other than that of this Mortgage and
the Permitted Liens, to be discharged. Notwithstanding the above, no Security
Interest need be discharged if (i) Shipowner shall contest such Security
Interest in good faith through appropriate proceedings, (ii) Shipowner sets
aside with Mortgagee adequate reserves reasonably acceptable to Mortgagee in
accordance with generally accepted accounting principles, or otherwise obtains a
protection and indemnity club letter of assurance reasonably acceptable to
Mortgagee, with respect to any such Security Interest so contested, and (iii)
the non-discharge thereof does not in any way hinder the operation or trading of
the Vessel or impair Shipowner's ownership of the Vessel or the rights of
Mortgagee under this Mortgage.
(b) As used in this Mortgage, "Permitted Liens" means:
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(i) liens for crew wages (including wages of the Master to the
extent provided by 46 U.S.C. ss. 11112) accrued for not more than
thirty (30) days;
(ii) liens for taxes, assessments, governmental charges, fines
and penalties not at the time delinquent;
(iii) liens incurred in the ordinary course of trading the
Vessel not exceeding $1,500,000 at any time outstanding;
(iv) liens created by or through Mortgagee prior to the date
of this Mortgage but only until such time as Mortgagee has discharged
same;
(v) liens to which Mortgagee has given its prior written
consent.
Nothing in this Section 1.7(b) shall be deemed a waiver of the preferred lien
status of this Mortgage or of Mortgagee's rights under Sections 1.7(a) and 1.8.
(c) Shipowner shall not without the previous consent in writing of
Mortgagee (not to be unreasonably withheld) put the Vessel into the possession
of any person for the purpose of work being done upon her in an amount exceeding
or likely to exceed Three Million, Two Hundred Fifty Thousand Dollars
($3,250,000) (or the equivalent in any other currency) unless such person shall
first have given to Mortgagee and in terms reasonably satisfactory to it a
written undertaking not to exercise any lien on the Vessel or her Insurances for
the cost of such work In lieu of providing such undertaking, Shipowner may
instead provide Mortgagee with an opinion of counsel, from a law firm and in
form and substance reasonably satisfactory to Mortgagee, that any such lien
would not have priority over the lien of this Mortgage.
SECTION 1.8 ARREST OF VESSEL. If the Vessel is attached or arrested,
Shipowner shall promptly notify Mortgagee by telephone, facsimile transmission,
telex or telegraph, confirmed by letter, and shall, if the Vessel is attached or
arrested, within fourteen (14) days cause the Vessel to be released and all
Security Interests thereon other than the lien of this Mortgage and the
Permitted Liens to be discharged, and shall promptly notify Mortgagee concerning
such release and discharge; provided, however, any Permitted Liens that have
resulted in the libel, complaint, attachment or arrest must also be discharged
forthwith. Notwithstanding the above, no Security Interest need be discharged if
(i) Shipowner shall contest such Security Interest in good faith through
appropriate proceedings, (ii) Shipowner sets aside with Mortgagee adequate
reserves reasonably acceptable to Mortgagee in accordance with generally
accepted accounting principles, or otherwise obtains a protection and indemnity
club letter of assurance reasonably acceptable to Mortgagee, with respect to any
such Security Interest so contested, and (iii) the non-discharge thereof does
not in any way hinder the operation or trading of the Vessel or impair
Shipowner's ownership of the Vessel or the rights of Mortgagee under this
Mortgage. Upon any unreasonable delay by Shipowner to act promptly and
appropriately with respect thereto, Shipowner authorizes and empowers Mortgagee
to appear in the name of Shipowner in any court of any country or other
jurisdiction where an action is pending against the Vessel because of or on
account of any alleged Security Interest thereon from which it has not been so
released, and to take such actions as to it as Mortgagee may deem proper towards
the defense of such action, the purchase or discharge of such alleged Security
Interest, or the release of the Vessel, including, without limitation, posting
adequate security therefor. All reasonable expenditures made or
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incurred by Mortgagee for the purpose of such defense, purchase or discharge
shall be a debt due from Shipowner to Mortgagee and shall be secured by the lien
of this Mortgage, and shall bear interest at a rate per annum equal from time to
time to the Default Rate.
SECTION 1.9 MAINTENANCE AND OPERATION OF VESSEL. Shipowner covenants
and agrees to:
(a) maintain and preserve the Vessel in good running order and repair,
so that the Vessel shall be, in so far as due diligence can make her so, tight,
staunch, strong and well and sufficiently tackled, appareled, furnished,
equipped and in every respect seaworthy and in good operating condition;
(b) maintain and preserve the Vessel consistent with first-class
ship-ownership and management practice and so as to maintain her present class
(namely ___________ at _____________[Lloyds Register of Shipping/American Bureau
of Shipping]) or an equivalent class with _________________ [Lloyds Register of
Shipping/American Bureau of Shipping] or another classification society approved
by Mortgagee, which approval shall not be unreasonably withheld, free of
recommendations and qualifications affecting class save those notified to and
approved in writing by Mortgagee and so as to comply with all applicable laws
from time to time applicable to vessels documented under the laws and flag of
the United States of America. Mortgagee shall not withhold its approval as to
those recommendations or qualifications affecting class which do not prevent the
Vessel from remaining in normal passenger service so long as Shipowner executes
an undertaking, in form and substance satisfactory to Mortgagee, to take such
actions as are necessary to remove same at the Vessel's next scheduled drydock
or wetdock but in no event subsequent to a sale of the Vessel pursuant to
Section 2.2;
(c) not make any modification to the Vessel which would, or would be
reasonably likely to, materially alter the structure, type or performance
characteristics of the Vessel or materially reduce the value of the Vessel;
(d) procure that all repairs to or replacement of any damaged, worn or
lost parts or equipment be effected in such manner (both as regards workmanship
and quality of materials) as to not materially diminish the value of the Vessel;
(e) not remove any material part of, or item of equipment installed on,
the Vessel unless the part or item so removed is no longer required for the
operation of the Vessel or is forthwith replaced by a suitable part or item
which is in the same condition as or better condition than the part or item
removed, is free from any Security Interest in favor of any person other than
Mortgagee (and other than Permitted Liens) and becomes an installation on the
Vessel and the property of Shipowner and subject to the lien constituted by this
Mortgage;
(f) submit the Vessel regularly to such periodical or other surveys as
may be required for classification purposes and supply to Mortgagee copies of
all survey reports issued in respect thereof;
(g) permit Mortgagee by surveyors or other persons appointed by it for
that purpose to board the Vessel at all reasonable times and on reasonable prior
notice, for the purpose of inspecting her condition or papers or for the purpose
of satisfying themselves in regard to proposed or executed repairs and to afford
all proper facilities for such inspections, provided Mortgagee does not
materially interfere with the schedule or operation of the Vessel;
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(h) promptly furnish to Mortgagee copies of all such information in the
possession or under the control of Shipowner or any of its affiliates, as
Mortgagee may from time to time reasonably require regarding the Vessel, her
employment, position and engagements, particulars of all towages and salvages
and, upon Mortgagee's request in writing, copies of all charters and other
contracts for her employment or otherwise howsoever concerning her;
(i) notify Mortgagee forthwith of:
(i) any casualty to the Vessel which is or is likely to be
a Major Casualty;
(ii) any occurrence in consequence whereof the Vessel has
become or is, by the passing of time or otherwise, likely to become a
Total Loss;
(iii) any requirement or recommendation made by any insurer
or classification society or by any competent authority affecting class
or which would or would be reasonably likely to materially affect the
operation of the Vessel;
(iv) any arrest of the Vessel or the exercise or purported
exercise of any Security Interest on the Vessel or her Insurances or
any requisition of the Vessel;
(v) any intended drydocking or wetdocking of the Vessel;
(vi) an incident of salvage or general average with respect
to the Vessel;
(vii) any Environmental Claim being or made against Shipowner
or otherwise in connection with the Vessel; or
(viii) any Environmental Incident occurring,
(j) keep proper books of account in respect of the Vessel and as and
when Mortgagee may so reasonably require make such books available for
inspection on behalf of Mortgagee at reasonable times and on reasonable notice,
and furnish satisfactory evidence that the wages and allotments and the
insurance and pension contributions of the Master and crew are being regularly
paid and that all deductions from crew's wages in respect of tax and/or social
security liability are being properly accounted for and that the Master has no
claim for disbursements other than those incurred by him in the ordinary course
of trading on the voyage then in progress;
(k) comply in all material respects, or procure such compliance, with
all Environmental Laws and Environmental Approvals relating to the Vessel, its
operation or management and the business of Shipowner from time to time; and
(l) keep Mortgagee advised, in writing on such regular basis and in
such detail as Mortgagee shall reasonably require, of Shipowner's response to
every Environmental Claim and Environmental Incident.
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SECTION 1.10 LEGAL COMPLIANCE. Shipowner will cause the Vessel and its
operations to comply at all times and in all material respects with (i) all laws
of the United States applicable to the Vessel, as in effect from time to time,
and (ii) all laws applicable to the Vessel and its operation in all trades and
locations in which it operates or is located from time to time; and the Vessel
shall have on board as and when required thereby valid certificates of
inspection and all other certificates evidencing compliance therewith. The
Vessel shall not engage in any unlawful trade or violate or be operated in
violation of any applicable law, or carry any passenger, cargo, or other matter
that will expose it to penalty, forfeiture or capture. Shipowner shall obtain
and file all certificates of financial responsibility legally required in all
jurisdictions in which the Vessel is located from time to time. Shipowner shall
prepare and file all environmental pollution prevention and contingency plans
and other matters required under all applicable Environmental Laws. Shipowner
shall ensure that all reasonable precautions are taken to ensure that no illegal
drugs or drug paraphernalia are used or kept on board the Vessel. Without
limiting the generality of the foregoing, Shipowner shall take all reasonable
precautions to prevent any infringements of the Anti-Drug Abuse Act of 1986 of
the United States of America (as the same may be amended and/or re-enacted from
time to time hereafter) or any similar legislation applicable to the Vessel in
any jurisdiction in which the Vessel shall trade. For this purpose, Shipowner
shall enter into such sea carrier initiative agreement with the United States
Customs Service as shall be reasonably satisfactory to Mortgagee where such
agreement is required by the laws of the United States or such agreement is
recommended by the United States Customs Service, and shall otherwise comply
with the zero tolerance anti-drug policy of the United States Government.
SECTION 1.11 LOCATION OF VESSEL. Without limiting the right of
Shipowner to perform work on the Vessel in accordance with the requirements of
this Mortgage, the Vessel shall not be abandoned, deactivated or laid up in any
port or place. Without the prior written consent of Mortgagee, the Vessel shall
not depart the United States of America, the Exclusive Economic Zone surrounding
it, or Canada, except for nonstop voyages between points therein.
SECTION 1.12. INSURANCES
(a) Shipowner will at its own expense insure the Vessel and keep the
same insured (in lawful money of the United States) for hull and machinery (fire
and usual marine risks, including excess risks), general mortgagee's interest,
and against protection and indemnity risks and war risks. Such insurances shall
be in form, in amounts, and with deductibles generally insured against by, and
otherwise generally consistent with, the practices of prudent operators of
luxury cruise ships, and with reputable and financially sound insurance
companies, brokers, underwriters, funds, mutual insurance associations and
clubs. Shipowner shall reimburse Mortgagee within ten (10) days of demand for
any costs or expenses reasonably incurred by Mortgagee in obtaining reports from
time to time (but not more than once per year) from an independent marine
insurance broker as to the compliance with this Section of the Insurances
effected or proposed to be effected by Shipowner pursuant to this Section 1.12.
Shipowner shall promptly deliver to such broker any and all such information in
relation to the said Insurances as such broker may reasonably require.
(b) Unless Mortgagee shall object in its reasonable discretion, the
protection and indemnity, hull and machinery and mortgagee's interest insurance
required by this Section 1.12 may be on the American Institute forms current at
the time such insurance takes effect with deductibles or franchises no higher
than the following: Hull and Machinery; All claims, each accident or occurrence
- $750,000.
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(c) Protection and indemnity insurance in respect to the Vessel shall
be by unlimited entry in an insurance association or placed with brokers or
underwriters reasonably acceptable to Mortgagee and shall include pollution
liabilities (including coverage for third party claims, statutory and
governmental cleanup liabilities, penalties and fines in the minimum amount of
$500,000,000 for any one occurrence), and full passenger liability cover, with
deductibles or franchises no higher than $200,000.
(d) For the purposes of insurance against Total Loss, the Vessel shall
be insured for and valued at an amount of at least equal to the full commercial
value of the Vessel but in no event less than the lower of $120,000,000 or 120%
of the Outstanding Loan. For purposes of broker's reports and opinions, the
broker giving the same may rely on a statement as to the full commercial value
of the Vessel and the gross tonnage of the Vessel as furnished annually by
Shipowner to such broker and Mortgagee at the time insurance is negotiated with
underwriters or insurance providers.
(e) All insurance other than protection and indemnity insurance shall
be taken out in the names of Shipowner and Mortgagee as their respective
interests may appear; the policies or certificates shall provide that there
shall be no recourse against Mortgagee for payment of premiums, contributions or
calls; and all insurance shall provide for at least ten (10) days' prior notice
to be given to Mortgagee by the underwriters or other insurance providers in
event of cancellation or any material change in coverage. Protection and
indemnity insurance cover notes shall indicate the interest of Mortgagee.
Shipowner shall pay all premiums, calls, contributions or other sums owing on
such insurance before they become delinquent and shall produce all relevant
receipts when so required by Mortgagee.
(f) The interest of Mortgagee shall be duly endorsed upon all slips,
cover notes, policies, certificates of entry or other instruments of insurance
issued or to be issued in connection with the Insurances by means of a loss
payable clause reflecting the terms of Section 1.17 and a notice of assignment
(signed by Shipowner) each in such form as shall from time to time be reasonably
approved in writing by Mortgagee. Copies of all such slips and other items above
referred to shall be provided by Shipowner to Mortgagee promptly upon request.
(g) Shipowner shall, upon request, authorize the brokers to provide
Mortgagee with all such information that is available to them regarding the
Insurances as Mortgagee may reasonably require. Shipowner shall, upon request
from Mortgagee, ensure that the brokers furnish Mortgagee with a letter or
letters or undertaking in such form as may from time to time be reasonably
required by Mortgagee, such letter or letters to include undertakings by the
brokers that:
(i) they will hold the instruments of insurance, and the
benefit of the Insurances thereunder, to the order of Mortgagee in
accordance with the terms of the loss payable clause referred to in
Section 1.12(f);
(ii) they will have endorsed on each and every policy as and
when the same is issued the loss payable clause and the notice of
assignment referred to in Section 1.12(f);
(iii) they will advise Mortgagee within ten (10) days of any
material changes which may be made to the terms of the Insurances and
notify Mortgagee, not less than ten (10) days prior to the expiry or
cancellation of the said insurance, in the event of their not having
received notice of renewal instructions from Shipowner and/or its
agents;
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(iv) they will not set off against any sum recoverable in
respect of a claim against the Vessel under the Insurances any premiums
or other amounts due to the brokers or any other person in respect of
any other vessel nor cancel the Insurances as to Mortgagee by reason of
non-payment of such premiums or other amounts prior to giving the
requisite notice provided for above; and
(v) they will not permit any assured or loss payee to be
added to any policy without obtaining the prior written consent of
Mortgagee.
(h) All hull and machinery and mortgagee's interest insurance policies
or certificates shall provide that losses thereunder shall be payable to
Mortgagee, and all insurance proceeds received by Mortgagee or Shipowner shall
be distributed, as provided below in Section 1.17.
(i) Shipowner shall not, without the prior written consent of Mortgagee
(not to be unreasonably withheld), settle, compromise or abandon any claim under
the Insurances for a Total Loss or for a Major Casualty.
(j) Shipowner agrees that it will not do any act, or voluntarily suffer
or permit any act to be done, whereby any insurance required hereunder shall or
may be invalidated, voided, suspended, impaired or defeated and will not suffer
or permit the Vessel to engage in any voyage or to carry any cargo not permitted
under the policies of insurance in effect, without first covering the Vessel
with insurance required by this Mortgage for such voyage or the carriage of such
cargo.
(k) In the event that any claim or lien is asserted against the Vessel
for loss, damage or expense which is covered by insurance hereunder, and it is
necessary for Shipowner to obtain a bond or supply other security to prevent the
arrest of the Vessel or to release the Vessel from arrest on account of such
claim or lien, Mortgagee may, in its sole discretion, and upon notice to
Shipowner, assign to any person executing a surety or guarantee bond or other
agreement to save or release the Vessel from such arrest, all right, title and
interest of Mortgagee in and to said insurance covering said loss, damage or
expense, as collateral security to indemnify such person against liability under
said bond or agreement.
(l) At least thirty days before the relevant policies or contracts
expire, Shipowner shall renew the expiring Insurances, and upon the renewal of
the said Insurances, ensure that the brokers and/or the war risks and protection
and indemnity risks associations with which any such renewal is effected shall
notify Mortgagee in writing of the terms and conditions of such renewal.
(m) Shipowner shall obtain and maintain a Certificate of Financial
Responsibility as required by the United States Oil Pollution Act of 1990 and
make all such quarterly or other voyage declarations as may from time to time be
required by the protection and indemnity risks association in order to maintain
cover for trading to the United States of America and Exclusive Economic Zone
(as defined in the said United States Oil Pollution Act of 1990) and promptly
deliver to Mortgagee copies of all such declarations.
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SECTION 1.13 REQUISITION. Shipowner agrees that in the event of the
requisition of title to or use (but only if the period of use exceeds 180 days)
of the Vessel, all amounts which are owed or payable as compensation for the
Vessel or for its use are hereby assigned to and shall be paid over to Mortgagee
to be applied toward payment of the Obligations and all sums otherwise owing
under or secured by this Mortgage, whether or not the same are then due and
payable, in which event the balance shall be applied as provided in Section 2.9,
and to that end Shipowner agrees to execute and deliver all other and further
instruments reasonably requested by Mortgagee. Mortgagee is hereby irrevocably
and individually appointed Shipowner's attorney-in-fact coupled with an interest
to execute all such instruments which Shipowner is required to execute and
deliver in this Section 1.13 but fails to execute and deliver promptly on
request.
SECTION 1.14 TRANSFER/CHARTER OF VESSEL. Shipowner will not sell,
mortgage, transfer, assign, convey, transfer or demise charter the Vessel,
without the prior written consent of Mortgagee, and any such written consent to
any one such event shall not be construed to be a waiver of this provision with
respect to any subsequent proposed sale, mortgage, transfer, assignment,
conveyance or demise charter. Any such sale, mortgage, transfer, assignment,
conveyance or demise charter of the Vessel shall be subject to the provisions of
this Mortgage and the lien it creates. Mortgagee shall not withhold its consent
in the event of a proposed sale, assignment, conveyance, transfer or demise
charter to an affiliate of Shipowner so long as both Shipowner and the vendee,
assignee, transferee or charterer (as the case may be) remain liable for the
Obligations and for the performance and observance of and compliance with the
covenants, terms and conditions in this Mortgage. Shipowner shall not let the
Vessel by any time or consecutive voyage charter(s) for a term which exceeds, or
which by virtue of any optional extensions therein contained is likely to
exceed, six months' duration. Shipowner shall not let the Vessel on terms
whereby more than two months' hire (or the equivalent) is payable in advance.
Shipowner shall not let the Vessel otherwise than on bona fide arm's length
terms. Shipowner shall not appoint a manager of the Vessel other than one
approved by Mortgagee in writing, which approval shall not be unreasonably
withheld. Forthwith upon being required so to do by Mortgagee, Shipowner shall
enter into an assignment to Mortgagee, as further security for the Obligations,
of the benefit, but not the burden, of any letting of the Vessel whether or not
Mortgagee's consent thereof is required under this Section 1.14.
SECTION 1.15 BONDS. Shipowner warrants that all surety bonds or other
undertakings or instruments required by any applicable law to secure the payment
of wages or the payment of any other sum in respect to the operation of the
Vessel shall be obtained, effective and filed in the required amounts and in
accordance with applicable law. In the event that any such bond, undertaking or
instrument has not been obtained or is at any time not in effect as required by
any applicable law, then, after notice to Shipowner and a reasonable opportunity
for Shipowner to obtain the bond, undertaking or instrument, Mortgagee may
obtain the same, and the expense thereof shall be paid forthwith to Mortgagee
after notice of such expense has been given and, together with interest thereon
at the Default Rate, shall be added to the sums secured hereby as of the date
notice is given that such expense has been incurred. Shipowner shall use its
best efforts to ensure that all such surety bonds and all parties liable on or
in respect of them, by guaranty or otherwise, waive the right to be subrogated
to the rights against the Vessel, if any, of those who receive funds or who are
paid out of the proceeds of such surety bonds or other undertakings.
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SECTION 1.16 NO SET-OFF OR TAX DEDUCTION
(a) All amounts due from Shipowner under this Mortgage and the Note
shall be paid (i) without any form of set-off, counterclaim, cross-claim or
condition, and (ii) free and clear of any tax deduction except a tax deduction
which Shipowner is required by law to make. In this Section, "tax deduction"
means any deduction or withholding for or on account of any present or future
tax.
(b) If Shipowner is required by law to make a tax deduction from any
payment:
(i) it shall notify Mortgagee as soon as it becomes aware of
the requirement; and
(ii) it shall pay the tax deducted to the appropriate taxation
authority promptly, and in any event before any fine or penalty arises.
(c) Within one (1) month after making the payment referred to in
(b)(ii) above in this Section, Shipowner shall deliver to Mortgagee documentary
evidence satisfactory to Mortgagee that the tax concerned has been paid to the
appropriate taxation authority.
SECTION 1.17. RECEIPTS OF INSURANCES
(a) The policies or certificates of the Insurances may provide that,
unless the underwriters or insurance providers shall have been otherwise
instructed by notice in writing from Mortgagee that an Event of Default shall
have occurred and is continuing, and Mortgagee agrees that during any period in
which an Event of Default is not continuing, sums recoverable in respect of
Insurances shall be payable as follows (and Mortgagee and Shipowner shall take
all necessary actions to cause such payments to be so made):
(i) any loss under any insurance on the Vessel with respect to
protection and indemnity or collision liability risks may be paid
directly to the person to whom any liability covered by such insurance
has been incurred, or to Shipowner to reimburse it for any loss, damage
or expense incurred by it and covered by such insurance, provided that
in the latter event the underwriter or insurance provider shall have
first received evidence that the liability insured against has been
discharged;
(ii) in the case of any loss (other than a loss covered by
subparagraph (i) above in this subsection (a) or by subsection (e) of
this Section 1.17 or a loss involving a Major Casualty) under any
insurance with respect to the Vessel involving any damage to the Vessel
or liability of the Vessel, the underwriters or insurance providers may
pay directly for the repair, salvage, liability or other charges
involved, or may pay same directly to Shipowner which shall apply it in
making good the loss and/or satisfying the liability, and fully
repairing all damage in respect of which that insurance money was
received; and
(iii) in the case of any loss involving a Major Casualty
(other than a loss covered by subparagraph (i) above in this subsection
(a) or by subsection (e) of this Section 1.17) the underwriters or
insurance providers shall make payments of the proceeds of Insurances
from time to time to Mortgagee which shall, in turn and from time to
time as requested by Shipowner, pay same to Shipowner so long as
Shipowner is in compliance with the Repair Guidelines (as defined
below).
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(b) No payment shall be made to or retained by Shipowner if there shall
have occurred and be continuing an Event of Default, and payment of proceeds of
insurances in such case shall be paid to Mortgagee and applied against the
Obligations or, at Mortgagee's option, paid to Shipowner to reimburse Shipowner
for costs and expenses incurred in repairing the Vessel from such casualty.
(c) Any loss which is paid to Mortgagee but which should have been
paid, in accordance with the provisions of this Section, directly to Shipowner,
shall be paid by Mortgagee to or as directed by Shipowner, but only if there
shall not have occurred any Event of Default. Any loss which is paid to
Shipowner but which should have been paid, in accordance with the provisions of
this Section, directly to Mortgagee, shall be paid by Shipowner to or as
directed by Mortgagee.
(d) As used above, "compliance with the Repair Guidelines" shall mean
in respect of a Major Casualty, each of the following shall have occurred or
been satisfied in Mortgagee's discretion, to be reasonably exercised;
(i) the plans and specifications, cost breakdown, construction
contract, construction schedule and contractors for the work of repair
or reconstruction of the Vessel must all be reasonably acceptable to
Mortgagee, and the work on the Vessel must be carried out in accordance
therewith;
(ii) Mortgagee must receive evidence reasonably satisfactory
to it that after repair or reconstruction, the Vessel would be in
substantially similar condition as existed prior to the Major Casualty
(or as Mortgagee shall otherwise reasonably approve);
(iii) the proceeds of the Insurances must be sufficient in
Mortgagee's reasonable determination to pay for the total cost of
repair or reconstruction, or Shipowner must provide its own funds
prorata with proceeds of the Insurances to ensure that such aggregate
funds are sufficient for the completion of the repair or
reconstruction; and
(iv) Shipowner shall obtain customary lien waivers from
contractors in connection with such repair or construction, such
waivers to be reasonably satisfactory to Mortgagee.
(e) In the event of a Total Loss, all amounts payable therefor from
insurance required hereunder shall be paid to Mortgagee and shall be applied
against the Obligations in accordance with Section 2.9 below.
ARTICLE 2
EVENTS OF DEFAULT AND REMEDIES
SECTION 2.1 EVENTS OF DEFAULT. The occurrence of any of the following
events shall constitute an "Event of Default" hereunder:
(a) default in the payment of the whole or any part of the principal of
the Loan when the same shall become due and payable, whether at maturity, by
acceleration or otherwise;
(b) default in the payment of any other of the Obligations or any
interest thereon when and as the same shall become due and payable as provided
in the Note and this Mortgage, whether at maturity, by acceleration or
otherwise, and such default shall continue for at least five (5) business days;
or
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(c) default in the due and punctual observance and performance of any
provision of Sections 1.3, 1.7, 1.8, 1.11, 1.12, 1.14 or 3.4 hereof; or
(d) default in the due observance or performance of any of the other
covenants and conditions herein required to be kept and performed by Shipowner
and continuance of such default for thirty (30) days after notice of default is
received from Mortgagee; or
(e) Shipowner or AMCV shall (i) file a petition seeking relief for
itself under Title 11 of the United States Code, as now constituted or hereafter
amended, or (ii) fail to timely controvert a petition filed against it seeking
relief under Title 11 of the United States Code, as now constituted or hereafter
amended; or
(f) an order for relief shall be entered against Shipowner or AMCV
under Title 11 of the United States Code, as now constituted or hereafter
amended, which order is not vacated, stayed or dismissed within 90 days; or
(g) the appointment of a receiver, liquidator, or custodian of
Shipowner or AMCV or a substantial part of Shipowner's or AMCV's property which
remains undismissed or not vacated for 90 days;
(h) upon the expiration of 120 days after the filing of any involuntary
petition against Shipowner or AMCV seeking any of the relief specified in
subsection (e) or (f) above without the petition being vacated, discharged or
dismissed prior to that time; or
(i) Shipowner or AMCV shall (i) make a general assignment for the
benefit of its creditors, or (ii) consent to the appointment of or taking
possession by a receiver, liquidator, or custodian of all or a substantial part
of its property, or (iii) admits its insolvency or inability to pay its debts as
they become due, or (iv) fail generally to pay its debts as they become due.
SECTION 2.2 CONSEQUENCES OF DEFAULT. If any Event of Default shall
occur and be continuing, then in any such case and at any time thereafter
Mortgagee may exercise all rights, powers, privileges and remedies hereunder or
otherwise existing or arising by agreement, at law, or in equity, in admiralty,
or otherwise (including, without limitation, the exercise of all powers
possessed by it as mortgagee, chargee and assignee of the Vessel, Insurances and
Requisition Compensation conferred by the law of any country or territory the
courts of which have or claim any jurisdiction in respect of Shipowner, the
Vessel, the Insurances or Requisition Compensation), and without limiting the
foregoing, Mortgagee shall have the right to:
(a) declare the Loan and any of the other Obligations to be due and
payable immediately, and upon such declaration the entire unpaid principal of
and interest on the Loan and the other Obligations to date of declaration shall
become and be immediately due and payable, and thereafter shall bear interest at
the Default Rate;
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(b) exercise all the rights and remedies in foreclosure and otherwise
given to mortgagees by the provisions of Chapter 313 of Title 46 of the United
States Code, as at any time amended, subject to 46 CFR xx.xx. 221.17 and 221.19;
(c) bring suit at law, in equity or in admiralty, as it may deem
advisable, to recover judgment for any and all amounts due under the
Obligations, or otherwise hereunder, and collect the same out of any and all
property of Shipowner whether covered by this Mortgage or not;
(d) take the Vessel, wherever the same may be, without legal process
and remove the Vessel to any port or place selected by Mortgagee. To the extent
permitted by law, Shipowner or any other person in possession shall, forthwith
upon demand of Mortgagee, and at Shipowner's expense, surrender possession of
the Vessel as demanded by Mortgagee, and Mortgagee may hold, lay up, charter,
operate, or otherwise use the Vessel, subject always to 46 CFR xx.xx. 221.17 and
221.19, for such time and upon such terms as it may deem to be for its best
advantage, accounting for the net profits, if any, arising from such use and
charging upon all receipts from such use or from the sale of the Vessel by court
proceedings or pursuant to subsection (e) below, all reasonable costs, charges,
damages, losses or other expenses incurred by reason of such use or sale;
(e) sell the Vessel in compliance with applicable law at a properly
conducted public sale at any place and at such time as Mortgagee may reasonably
specify, and in such manner as Mortgagee may reasonably deem advisable, free
from all claims by Shipowner, after first giving notice of the time and place of
sale with a general description of the property in the following manner: (i) by
publishing such notice for not less than ten (10) days in The Wall Street
Journal or The Journal of Commerce and in such other newspaper(s), if any, as
may be required by the court or court rules; (ii) by mailing (and facsimile
transmission or delivering) a similar notice to Shipowner at least ten (10) days
prior to the scheduled date of the sale; and (iii) by posting notice of sale on
the Vessel;
(f) require that all policies and other documents relating to the
Insurances (including details of and correspondence concerning outstanding
claims) be forthwith delivered to or to the order of Mortgagee;
(g) collect, recover and give a good discharge for any monies or claims
forming part of, or arising in relation to, the Vessel, the Insurances or the
Requisition Compensation, and to permit any brokers through whom collection or
recovery is effected to charge the usual brokerage therefor;
(h) to take over or commence or defend (if necessary using the name of
Shipowner) any claims or proceedings relating to, or affecting, the Vessel, the
Insurances or the Requisition Compensation which Mortgagee may think fit and to
abandon, release or settle in any way any such claims or proceedings; and/or
(j) to enter into any other transaction or arrangement of any kind not
described above or to do anything in relation to the Vessel, the Insurances or
the Requisition Compensation which Mortgagee acting reasonably may think fit.
In the event of an order for relief with respect to Shipowner under the United
States Bankruptcy Code, as amended, the entire, aggregate unpaid principal
balance of the Loan, all accrued and unpaid interest with respect to the Loan,
and all other amounts payable with respect to the Loan or under this
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Mortgage, the Note and the other documents, instruments, agreements, and
certificates delivered thereunder relating to the Loan or other Obligations,
automatically shall become and be due and payable, without presentment, demand,
protest, notice of nonpayment, notice of dishonor or any notice of any kind, all
of which are hereby expressly waived by Shipowner.
SECTION 2.3 SALE OF VESSEL. A sale of the Vessel made in pursuance of
this Mortgage, whether under the power of sale hereby granted or any judicial
proceedings, shall operate to divest all right, title and interest of any nature
whatsoever of Shipowner therein and thereto. Nevertheless, the Vessel shall not
be sold to any parties who are not lawfully entitled to acquire it. No purchaser
shall be bound to inquire whether notice has been given or whether any default
has occurred, or as to the propriety of the sale, or as to the application of
the proceeds thereof. In case of such sale, Mortgagee shall be entitled, for the
purpose of making settlement or payment for the property purchased, to use and
apply the Obligations in order that there may be credited against the amount
remaining due and unpaid thereon the sums payable out of the net proceeds of
such sale to the holder of the Obligations after allowing for the costs and
expense of sale and other charges. Such purchaser shall be credited, on account
of such purchase price, with the net proceeds that shall have been credited upon
the Obligations. At such sale, Mortgagee or any holder of the Obligations may
bid for and purchase such property, and upon compliance with the terms of sale
may hold, retain and dispose of such property, subject always to 46 CFR xx.xx.
221.17 and 221.19, without further accountability therefor. Mortgagee shall not
have any liability to Shipowner in connection with any disposition of the Vessel
hereunder, nor shall Shipowner be entitled to any set-off, counterclaim, or
recoupment with respect to any claim of such a liability. Shipowner shall have
no liability to Mortgagee for any failure of Mortgagee to comply with 46 CFR
xx.xx. 221.17 and 221.19.
SECTION 2.4 CONVEYANCE. Mortgagee is hereby appointed Shipowner's
attorney-in-fact coupled with an interest to execute and deliver to any
purchaser aforesaid, and shall be vested with full power and authority to make,
in the name and on behalf of Shipowner, good conveyance of the title to the
Vessel to any person lawfully entitled to hold such title. In the event of a
sale of the Vessel under any power herein contained, Shipowner shall, if and
when required by Mortgagee, execute such form of conveyance of the Vessel as
Mortgagee may direct, and Mortgagee is hereby irrevocably appointed Shipowner's
attorney-in-fact coupled with an interest to execute such form upon Shipowner's
failure to do so forthwith upon request.
SECTION 2.5 EARNINGS OF VESSEL. Mortgagee is hereby appointed
attorney-in-fact of Shipowner upon the occurrence of any Event of Default that
is continuing to act in the name of Shipowner to demand, collect, receive,
compromise and xxx for, so far as may be permitted by law, all Earnings and all
amounts due from underwriters under any insurance thereon as payment of losses
or otherwise, and all other sums due or to become due at the time of the
occurrence of any Event of Default that is continuing, or in respect of any
insurance thereon from any person whomsoever, and, to the extent permitted by
applicable law, to make, give and execute in the name of Shipowner acquittances,
receipts, releases or other discharges for the same, whether under seal or
otherwise, and to endorse and accept in the name of Shipowner all checks, notes,
drafts, warrants, agreements and all other instruments in writing with respect
to the foregoing. Notwithstanding the foregoing, so long as Shipowner has not
received notice from Mortgagee that an Event of Default has occurred and is
continuing, Shipowner shall be entitled to collect and retain all Earnings.
Mortgagee agrees to return to Shipowner any misdirected payment not relating to
the Vessel which Mortgagee receives.
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SECTION 2.6 RECEIVER/MANAGER. Whenever any right to enter and take
possession of the Vessel accrues to Mortgagee, it may require Shipowner to
deliver, and Shipowner shall on demand, at its own cost and expense, deliver, to
Mortgagee the Vessel as demanded. If any legal proceedings shall be taken to
enforce any right under this Mortgage, Mortgagee shall be entitled as a matter
of right to request a court of competent jurisdiction to appoint a Receiver of
the Vessel. In the event of such appointment:
(a) all liabilities, costs and other expenses reasonably incurred by
the Receiver shall be for the account of Shipowner but shall first be paid from
Earnings to the extent of the Earnings;
(b) Mortgagee may exercise any of the powers conferred by this Mortgage
while a Receiver is in office and is acting;
(c) an appointment of such Receiver shall be by action of such court;
(d) the remuneration of such Receiver shall be fixed by such court;
(e) to the fullest extent permitted by law, such Receiver shall be
Shipowner's agent (in relation to Shipowner's rights and interests in the
Vessel) provided that, unless such court provides otherwise, Shipowner shall be
responsible, to the exclusion of any liability on the part of Mortgagee, for the
Receiver's remuneration and for its contracts, acts and defaults both in its
capacity and as Shipowner's agent;
(f) the Receiver shall have all the powers conferred by Section 2.2 as
if the reference to Mortgagee in Section 2.2 were a reference to the Receiver;
(g) Shipowner irrevocably and by way of security irrevocably appoints
such Receiver its attorney on its behalf and in its name or otherwise to execute
or sign any document and do any act or thing which such Receiver considers
necessary or desirable with a view to or in connection with any exercise or
proposed exercise of any of its powers;
(h) if approved by such court, such Receiver may delegate to any person
or persons any of the powers (including any discretionary authority) conferred
on it and may do so on terms authorizing successive sub-delegations;
(i) in the case of joint Receivers any of the powers (including any
discretionary authority) conferred by such court or this Mortgage or by general
law may be exercised by any one or more of them, unless their appointment
specifically states the contrary;
(j) if approved by such court, Mortgagee may remove such Receiver, with
or without appointing another Receiver. Such a removal may be effected by a
document signed by any of Mortgagee's officers;
(k) if approved by such court, Mortgagee may appoint a Receiver to
replace a Receiver who has resigned or for any other reason ceased to hold
office; and
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(l) such Receiver shall account to the court for any monies received by
it and, with the approval of the court, shall be entitled to retain out of any
such monies received by it such amounts in respect of its expenses (or to cover
estimated future expenses) as is approved by such court.
SECTION 2.7 EXPENSES. Shipowner covenants that upon the occurrence of
any Event of Default that is continuing, then, upon written demand of Mortgagee,
Shipowner will pay to Mortgagee the whole amount due and payable on the
Obligations; and in case Shipowner shall fail to pay the same forthwith upon
such demand, Mortgagee shall be entitled to recover judgment for the whole
amount so due and unpaid, together with the reasonable costs and expenses of
collection, including a reasonable compensation to the attorneys of Mortgagee
plus any necessary advances, expenses and liabilities made or incurred by them.
All monies collected by Mortgagee under this Section 2.7 shall be applied by
Mortgagee in accordance with the provisions of Section 2.9 hereof.
SECTION 2.8 CUMULATIVE REMEDIES. Each and every power and remedy
herein given to Mortgagee shall be cumulative and shall be in addition to every
other power and remedy herein given or now or hereafter existing at law, in
equity, in admiralty or by statute, and each and every power and remedy whether
herein given or otherwise existing may be exercised from time to time and as
often and in such order as may be deemed expedient by Mortgagee, and the
exercise or the beginning of the exercise of any power or remedy shall not be
construed to be a waiver of the right to exercise at the same time or thereafter
any other power or remedy. No delay or omission by Mortgagee or by the holder of
the Obligations in the exercise of any right or power or in the pursuance of any
remedy accruing upon any default or Event of Default shall impair any such
right, power or remedy or be construed to be a waiver of any such default or
Event of Default or to be an acquiescence therein; nor shall the acceptance by
Mortgagee of any security or of any payment of or on account of any part of the
Obligations maturing after any default or Event of Default or of any payment on
account of any past default be construed to be a waiver of any right to take
advantage of any future Event of Default or of any past Event of Default not
completely cured thereby.
SECTION 2.9 APPLICATION OF PROCEEDS. The proceeds of a sale of the
Vessel, insurance pertaining to the Vessel, and all other sums received by
Mortgagee pursuant to or under the provisions of this Mortgage or in any
proceedings hereunder, including Earnings received by Mortgagee, the application
of which has not otherwise been specifically provided for, shall, except as
otherwise provided by law, be applied as follows:
FIRST: To the payment of all reasonable expenses, including
the expenses of any sale, the expenses of any retaking, attorneys' fees, court
costs, and other expenses incurred by Mortgagee in the protection of its rights,
powers, and privileges or the pursuance of its remedies, with interest thereon
at the Default Rate;
SECOND: To the payment of all amounts as required by law or
otherwise at Mortgagee's sole option, to the payment of or to provide adequate
indemnity against Security Interests known to Mortgagee and having or claiming
priority over the lien of this Mortgage;
THIRD: To the payment of the Loan and the payment of the other
Obligations and all other sums evidenced by the Note or evidenced or secured
hereby from time to time and not already paid pursuant to the foregoing
subsection, whether due or not, owed to Mortgagee, together with interest
thereon at the Default Rate;
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FOURTH: To the payment of all amounts secured by means of
preferred mortgage or other Security Interests in and to the Vessel in favor of
Mortgagee that is or are junior in priority to this Mortgage, allocated amongst
such secured obligations as Mortgagee may choose, in its sole discretion, and,
at Mortgagee's sole option to the payment of or to provide adequate indemnity
against Security Interests known to Mortgagee and having or claiming priority
over the lien of such junior preferred mortgage(s); and
FIFTH: To the payment of any surplus thereafter remaining to
Shipowner or to whomsoever else may be entitled thereto.
SECTION 2.10 POSSESSION OF VESSEL. Until the occurrence of any Event
of Default that is continuing, Shipowner shall be suffered and permitted to
retain actual possession and use of the Vessel.
SECTION 2.11 NO REQUIREMENT TO COMMENCE PROCEEDINGS AGAINST SHIPOWNER.
Mortgagee will not need to commence any proceedings under, or enforce any
Security Interest created by, any other agreement or by law before commencing
proceedings under, or enforcing any Security Interest created by, this Mortgage.
SECTION 2.12 SUSPENSE ACCOUNT. Mortgagee, for the purpose of claiming
or proving in a bankruptcy of Shipowner or any other person, may place any sum
received or recovered from Shipowner under or by virtue of this Mortgage or any
Security Interest connected with it in a separate suspense or other nominal
account without applying it in satisfaction of the Obligations.
ARTICLE 3
SUNDRY PROVISIONS
SECTION 3.1 AMOUNT OF MORTGAGE. For purposes of filing and recording
this Mortgage as required by the provisions of Chapter 313 of Title 46 of the
United States Code, as amended, the total amount of this Mortgage is
_________________________________ and No/100 Dollars, plus interest, fees,
expenses and performance of mortgage covenants. The discharge amount is the same
as the total amount.
SECTION 3.2 AMENDMENTS. No waiver, termination, amendment or other
modification of any provision of this Mortgage, and no consent to any departure
by Shipowner from any provision thereof, shall in any event be effective unless
the same shall be in writing and signed by Mortgagee and Shipowner, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it is given; provided that no such consent,
waiver, termination, amendment or other modification, unless in writing and
signed by Mortgagee shall affect the rights or duties of Mortgagee under this
Mortgage.
SECTION 3.3 SUCCESSORS AND ASSIGNS. All covenants, promises,
stipulations and agreements of Shipowner in this Mortgage shall bind Shipowner
and its successors and assigns and all persons claiming by, through or under it
and shall inure to the benefit of Mortgagee and its successors and permitted
assigns and all persons claiming by, through or under it. Shipowner recognizes
that Mortgagee may, consistent with applicable law, assign or otherwise transfer
its rights under the Note
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and/or this Mortgage. Any such assignment or transfer shall only be made to or
for the benefit of an affiliate of Mortgagee except that if, during the
continuation of an Event of Default, Mortgagee shall reasonably determine that
it is necessary or desirable to assign or otherwise transfer its rights under
the Note and/or this Mortgage to a citizen of the United States as defined in
the Shipping Act, 1916, as amended, it may do so even if such citizen is not an
affiliate of Mortgagee.
SECTION 3.4 REIMBURSEMENT. Shipowner shall reimburse Mortgagee on
demand for all reasonable attorneys' fees the payment of which is otherwise
secured hereby, and for all reasonable expenses and fees which Mortgagee may
incur from time to time in providing insurance coverage, in discharging the
Vessel from arrest or the like, or providing security therefor, salvage, general
average and tort claim expenses, for Security Interests, for mortgage recording
and duplication expenses and fees, in providing repairs, moving the Vessel and
for such other matters as Shipowner is obligated herein to provide, but fails to
provide, all to the extent provided for herein. Such obligation of Shipowner to
reimburse Mortgagee shall be an additional indebtedness due from Shipowner and
secured by this Mortgage, and shall accrue interest at the Default Rate from the
date of notice that such amount is due or is unpaid. Mortgagee, though
privileged to do, shall be under no obligation to Shipowner to make any such
expenditures, nor shall the making thereof relieve Shipowner of any default in
that respect.
SECTION 3.5 NOTICES. Any notice, demand, consent, authorization,
approval, instruction, waiver or other communication pursuant to the terms of
this Mortgage shall only be valid if in writing and in English (unless otherwise
specified) and shall be mailed by certified mail, return receipt requested (with
first class postage prepaid) or sent or delivered to each party by facsimile or
courier service at the address or facsimile number set forth below, or at such
other address as shall be designated by such party in a written notice to the
other parties. Except as otherwise specified all notices sent by certified mail,
if duly given, shall be effective three (3) "Business Days" (being a day other
than Saturday, Sunday or other day on which banks are authorized or obligated to
close in Chicago, Illinois or Seattle, Washington) after deposit into the mails,
all notices sent by a nationally recognized courier service, if duly given,
shall be effective one Business Day after delivery to such courier service, and
all other notices and communications if duly given or made shall be effective
upon receipt. For purposes of this clause, the addresses are as follows:
If to Shipowner: ____________________________________
c/o American Classic Voyages Co.
Two Xxxxx Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
(000) 000-0000 (fax)
If to Mortgagee: HAL Antillen N.V.
c/o Holland America Line-Westours Inc.
000 Xxxxxxx Xxx. Xxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: General Counsel
(000) 000-0000 (fax)
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Shipowner or Mortgagee may change their address by giving notice of such change
in the manner stated above. The provisions relating to the delivery or sending
of copies of notices is for convenience only and failure to send a copy of any
notice shall not invalidate that notice.
SECTION 3.6 AGENTS. Wherever and whenever herein any right, power or
authority is granted or given to Mortgagee, such right, power or authority may
be exercised in all cases by Mortgagee or such agent or agents as it may
appoint, and the act or acts of such agent or agents when taken shall constitute
the act of Mortgagee; provided, that any such agent shall be a citizen of the
United States as defined in the Shipping Act, 1916, as amended, as that Act may
require. Shipowner acknowledges that any such agent is the agent of Mortgagee
entitled to act on behalf of Mortgagee.
SECTION 3.7 DISCHARGE OF MORTGAGE. Mortgagee, upon payment of all
principal and interest and of all sums otherwise due under the Note and this
Mortgage, shall, at the expense of Shipowner, forthwith cause this Mortgage to
be discharged and transfer or release to Shipowner all insurance policies and
other documents relating to the Vessel.
SECTION 3.8 NO LIABILITY OF LENDER OR RECEIVER. Absent gross
negligence, neither Mortgagee nor any Receiver shall be obliged to check the
nature or sufficiency of any payment received by it under this Mortgage or the
Note or to preserve, exercise or enforce any right forming part of, or relating
to, the Vessel.
SECTION 3.9 FURTHER ASSURANCES.
(a) Shipowner shall execute and deliver to Mortgagee (or as it may
direct) any assignment, mortgage, power of attorney, proxy or other document as
Mortgagee may, in any particular case, reasonably specify, and/or shall effect
any registration or notarization, give any notice or take any other step, which
Mortgagee may, by notice to Shipowner, reasonably specify for any of the
purposes described in subsection (b) of this Section or for any similar or
related purpose.
(b) The purposes referred to in subsection (a) of this Section are to:
(i) validly and effectively to create the Security Interest
and rights intended to be created by or pursuant to this Mortgage;
(ii) create a specific mortgage or assignment of any
particular asset contemplated by this Mortgage;
(iii) protect the priority in any jurisdiction of any Security
Interest which is created, or intended to be created, by or pursuant to
this Mortgage;
(iv) enable or assist Mortgagee or a Receiver to sell or
otherwise deal with the Vessel, Insurances or Requisition Compensation,
to transfer title to, or grant any interest or right relating to, the
Vessel, Insurances or Requisition Compensation or otherwise to
exercise, during the continuance of an Event of Default, any power or
right which is referred to in Section 2.2; and
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(v) enable or assist Mortgagee to enter into any transaction
to commence, defend or conduct any proceedings and/or to take any other
action relating to the Vessel, the Insurances or the Requisition
Compensation in any country or under the law of any country, to the
extent Mortgagee is entitled to do so pursuant to the terms of this
Mortgage.
(c) Mortgagee may specify the terms of any document to be executed by
Shipowner under this Section and those terms may include any covenants, powers
and provisions consistent with this Mortgage which Mortgagee reasonably
considers appropriate to protect its or a Receiver's interests.
(d) Shipowner shall comply with a notice under this Section by the date
reasonably specified in the notice.
(e) At the same time as Shipowner delivers to Mortgagee any document
executed under this Section, Shipowner shall also deliver to Mortgagee a
certificate signed by the Secretary of Shipowner which shall:
(i) set out the text of a resolution of Shipowner's directors
specifically authorizing the execution of the document specified by
Mortgagee; and
(ii) state that either the resolution was duly passed at a
meeting of the directors validly convened and held throughout which a
quorum of directors entitled to vote on the resolution was present or
that the resolution has been signed by all the directors and is valid
under Shipowner's articles of incorporation or other constitutional
documents.
SECTION 3.10 POWER OF ATTORNEY. For the purpose of securing
Mortgagee's interest in the Vessel, Insurances and Requisition Compensation and
the due and punctual performance of its obligations to Mortgagee under this
Mortgage and the Note, Shipowner irrevocably and by way of security appoints
Mortgagee its attorney, on behalf of Shipowner and in its name or otherwise,
with full power of substitution, to execute, sign or deliver any document and do
any act or thing which Shipowner is obliged to do under this Mortgage, it being
agreed that such power of attorney is coupled with an interest and shall only be
operative during the continuance of an Event of Default.
SECTION 3.11 GOVERNING LAW. To the extent not governed by the laws of
the United States, this Mortgage shall be governed by and construed in
accordance with the laws of the State of Washington, without regard to its
conflicts of law rules, it being the intent that the substantive laws of
Washington shall always apply. Nothing in this Section shall exclude or limit
any right which the Mortgagee may have with regard to the bringing of
proceedings, the service of process, the recognition or enforcement of a
judgment or any similar or related matter in any jurisdiction.
SECTION 3.12 CONSENT TO JURISDICTION/AGENT FOR SERVICE OF PROCESS.
Shipowner hereby irrevocably submits to the non-exclusive jurisdiction of any
state or federal court sitting in Seattle, King County, Washington, in any
action or proceeding brought to enforce or otherwise arising out of or relating
to this Mortgage and irrevocably waives to the fullest extent permitted by law
any objection which it may now or hereafter have to the laying of venue in any
such action or proceeding in any such forum, and hereby further irrevocably
waives any claim that any such forum is an inconvenient forum. Shipowner agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in any other jurisdiction by suit on the judgment or in any
other manner provided by law. Nothing herein shall impair the right of Mortgagee
to bring any action or proceeding against
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Shipowner or its property in the courts of any other jurisdiction. The Shipowner
irrevocably appoints ___________________ for the time being presently at
__________________________ to act as its agent to receive and accept on its
behalf any process or other document relating to any proceedings in any court
which are connected with this Mortgage or the Note.
SECTION 3.13 WAIVER OF JURY TRIAL. EACH PARTY HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
THIS MORTGAGE, THE NOTE OR ANY OTHER AGREEMENT ENTERED INTO IN CONNECTION
THEREWITH, ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR ANY OF THE ACTIONS OF
ANY PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
THEREOF.
SECTION 3.14 COUNTERPARTS. This Mortgage may be executed
simultaneously in any number of counterparts and all such counterparts executed
and delivered each as an original will constitute but one and the same
instrument.
SECTION 3.15 EXHIBITS. All exhibits referred to herein are attached
hereto and incorporated herein by this reference.
SECTION 3.16 CAPTIONS. The captions of the articles and sections and
subsections of this Mortgage are included for convenience of reference only, and
shall not constitute a part of this Mortgage for any other purpose.
SECTION 3.17 PREFERRED STATUS. Nothing contained herein will be
construed as a waiver by Shipowner of the preferred status of this Mortgage, and
any provision which would otherwise constitute such a waiver shall to such
extent be of no force or effect.
IN WITNESS WHEREOF, Shipowner has executed this Mortgage the day and
year first above written.
_______________________., a _________________
By
------------------------------------------
Its
-----------------------------------------
EXHIBITS:
---------
Exhibit A - Note
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STATE OF )
) ss.
COUNTY OF )
On this _____ day of, 200___, before me, a Notary Public in and for
the State of _______________________, personally appeared _____________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person who executed this instrument, on oath stated that he/she was
authorized to execute the instrument, and acknowledged it as the of, to be the
free and voluntary act and deed of said corporation for the uses and purposes
mentioned in the instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal the
day and year first above written.
_______________________________________
NOTARY PUBLIC in and for the State of
______________, residing at ___________
My appointment expires ________________
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EXHIBIT A
PROMISSORY NOTE
$______________ Date: ___________, 2000
FOR VALUE RECEIVED, the undersigned, _______________________________, a
________________ corporation (the "Maker") hereby promises to pay to the order
of HAL ANTILLEN N.V., a Netherlands Antilles corporation (the "Holder") the
principal amount of _________________________________ and No/100 Dollars
($__________), together with interest on the unpaid principal amount thereof at
a rate per annum equal from time to time to the Reference Rate (as hereafter
defined) and, if default shall occur in the payment when due (whether by
acceleration or otherwise) of any principal or interest amount hereunder, from
the maturity of that amount until it is paid in full at a rate per annum equal
to the Reference Rate plus two percent (2.0%) per annum. As used herein,
"Reference Rate" means, on any date, the rate of interest publicly announced
from time to time by U.S. Bank, National Association ("Bank") in Seattle,
Washington, as its "reference rate" or any similar successor rate announced from
time to time by Bank or its successor (the "Reference Rate"). Any change in the
Reference Rate shall take effect at the opening of business on the day specified
in the public announcement of a change in the Bank's reference rate or any
similar successor rate announced from time to time by Bank or its successor.
Notwithstanding anything herein to the contrary, interest shall not accrue at a
rate in excess of the maximum rate permitted by applicable law. Holder shall
provide notice to Maker of each change in the Reference Rate. Interest shall be
calculated based on a 360 day year, for actual days elapsed.
1. Maker shall repay to Holder the principal amount of the loan
evidenced by this Note in equal consecutive semi-annual installments commencing
on March 31, 2001, and continuing on each September 30th and March 31st
thereafter in an amount equal to Five Million, Seventy Thousand and No/100
Dollars ($5,070,000.00), and shall repay the balance of the principal
outstanding hereunder on or before ________, 2007 [75 months after date of
Note].
2. Maker shall pay interest on the unpaid principal amount of this Note
from the date hereof until all amounts due hereunder are fully paid, in arrears
on the first business day of each calendar month, commencing on _________1, 2000
[first calendar month after date of Note], except that interest shall be payable
on demand after and during the continuance of a default in the payment of any
amount when due hereunder.
3. All payments of principal and of interest on this Note shall be made
to Holder in United States Dollars in immediately available funds at c/o Holland
America Line-Westours Inc., 000 Xxxxxxx Xxx. Xxxx, Xxxxxxx, XX 00000, or at such
other address as Holder shall from time to time designate. Holder may require
all payments hereunder to be made by wire transfer to such account as Holder may
designate.
4. Maker shall have the right to prepay this Note or any portion hereof
at any time, without premium or penalty. Prepayments of principal shall be
applied in inverse order of maturity.
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5. Payments made hereunder shall be applied: first, against fees and
expenses due hereunder; second, against interest due on amounts in default, if
any; third, against interest due hereunder; and fourth, against principal due
hereunder.
6. Each maker, surety, guarantor and endorser of this Note expressly
waives all notices, demands for payment, presentations for payment, notices of
intention to accelerate the maturity, protest and notice of protest as to this
Note, except for notices expressly provided for in this Note, the Preferred Ship
Mortgage referred to below and any other document securing this Note, if any.
7. It is expressly provided that upon
(a) default in the payment of principal hereunder, as the same
shall become due and payable, or
(b) default in the payment of interest hereunder, as the same
shall become due and payable, which default shall continue for five (5)
or more business days,
the entire remaining unpaid balance of the principal and interest may, at the
option of Holder, be declared to be immediately due and payable.
8. If a default shall occur in the payment when due of any amount
hereunder, and this Note is placed in the hands of an attorney for collection,
or suit is brought on the same, or the same is collected through bankruptcy or
other judicial proceedings, then Maker agrees and promises to reimburse Holder
for actual costs incurred in connection therewith, including reasonable
attorney's fee, collection costs and all out-of-pocket expenses incurred by
Holder.
9. Maker's obligations under this Note are secured by that certain
Preferred Ship Mortgage executed and delivered on the date of this Note by Maker
to Holder with respect to the United States flag vessel ms ________________,
Official Number ___________ and an Assignment of Insurances executed and
delivered on the date of this Note by Maker to Holder with respect to said
vessel.
10. Maker will keep a register of this note wherein the name of
________________ will be entered as the holder of the Note. Only the registered
holder of the Note on a payment date shall be entitled to receive payment of
principal and/or interest on the Note. A holder of the Note can transfer the
right to receive payments of principal and/or interest on the Note only by
providing notice of the intended transfer to the Maker and such transfer shall
become effective only upon entry by the Maker of the transferee's name in the
register as the holder of the Note. Any transfer shall only be made to or for
the benefit of an affiliate of Holder except that if a default shall be
continuing in the payment when due of any amount hereunder and Holder shall
reasonably determine that it is necessary or desirable to transfer its rights
under this Note to a citizen of the United States as defined in the Shipping
Act, 1916, as amended, it may do so even if such citizen is not an affiliate of
Holder.
11. This Note has been executed and delivered in and shall be governed
by and construed in accordance with the laws of the State of Washington, without
regard to its conflicts of law rules, it being the intent that the substantive
laws of Washington shall always apply. Maker hereby irrevocably submits to the
non-exclusive jurisdiction of any state or federal court sitting in Seattle,
King County,
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Washington, in any action or proceeding brought to enforce or otherwise arising
out of or relating to this Note and irrevocably waives to the fullest extent
permitted by law any objection which it may now or hereafter have to the laying
of venue in any such action or proceeding in any such forum, and hereby further
irrevocably waives any claim that any such forum is an inconvenient forum.
NOTICE TO MAKER: ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY,
EXTEND CREDIT OR TO FOREBEAR FROM COLLECTION OF A DEBT ARE NOT
ENFORCEABLE UNDER WASHINGTON LAW.
IN WITNESS WHEREOF, Maker has executed this Note the day and year first
above written.
_______________________., a _________________
By
-------------------------------------------
Its
-----------------------------------------
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EXHIBIT F
FORM OF GENERAL ASSIGNMENT OF INSURANCE
ASSIGNMENT OF INSURANCES
THIS ASSIGNMENT OF INSURANCES ("Assignment") is made as of the ____ day
of _________, 2000, by _____________________________, a __________ corporation
(the "Assignor"), in favor of HAL ANTILLEN N.V., a Netherlands Antilles
corporation (the "Assignee").
RECITALS
A. Assignee has made a loan to Assignor in the principal amount of
________________________ Dollars (the "Loan") which loan is evidenced by a
promissory note (the "Note") dated of even date herewith in the amount of the
Loan, payable to the order of Assignee.
B. In consideration of Assignee having agreed to advance the Loan,
Assignor has executed and delivered a Preferred Ship Mortgage (as the same may
be amended, restated, supplemented or otherwise modified from time to time, the
"Mortgage") pursuant to which Assignor granted to Assignee a preferred ship
mortgage lien in and to the vessel _____________, Official Number _____________
(the "Vessel"), for purposes of securing payment to Assignee of the sums payable
by Assignor under the Note.
C. In consideration of Assignee having agreed to advance the Loan,
Shipowner has agreed to execute and deliver this Assignment to Assignee for
purposes of further securing payment to Assignee of the sums payable by Assignor
under the Note.
NOW, THEREFORE, in consideration thereof, and for other good and
valuable consideration, receipt of which is hereby acknowledged, the parties
agree as follows:
AGREEMENT
1. DEFINED TERMS. Capitalized terms not defined in this Assignment
shall have the meanings given in the Mortgage. In this Assignment, words
indicating the singular shall include the plural, and vice versa, and words
indicating gender shall include the masculine, feminine and neuter.
2. ASSIGNMENT. As security for the payment and performance when due,
whether at stated maturity, by acceleration, or otherwise, of all of the
Obligations, Assignor hereby assigns to Assignee all of its right, title, and
interest in, to, or under (a) all insurances now or hereafter in effect with
respect to the Vessel or any appurtenances thereof from time to time, including,
without limitation, hull and machinery, increased value, war risk, protection
and indemnity, pollution, workmen's liability and compensation, loss of
earnings, personal property, liability and all other insurances and association
memberships and entries, (b) all insurances now or hereafter in effect with
respect to equipment, inventory, proceeds of inventory, or other personal
property, not described above (the insurances in clause (a) and this clause (b)
referred to herein as the "Insurance Policies"), (c) all claims and all returns
of premiums, dues, calls, and assessments that are not immediately applied
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to premiums, dues, calls, and assessments that accrue from time to time, and all
other sums or claims for sums due or to become due under the Insurance Policies,
(d) all rights in, to, or under the foregoing, and (e) all proceeds of the
foregoing. The items referred to in (a) - (e) above are collectively referred to
as the "Assigned Property."
3. OBLIGATIONS SECURED. This Assignment secures the payment of the Loan
evidenced by the Note and the payment of all other Obligations and all accrued
interest on the foregoing, whether accruing prior to or subsequent to the
commencement of a bankruptcy or similar proceeding.
4. AGREEMENTS OF ASSIGNOR. It is expressly agreed that, anything herein
contained to the contrary notwithstanding:
(a) Assignor shall remain liable under the Insurance Policies
to perform all of the obligations assumed by it thereunder, and
Assignee shall not have any obligations or liabilities under the
Insurance Policies until such time as Assignee exercises its remedies
with respect thereto hereunder or under the Mortgage;
(b) To the extent permitted under the Mortgage, the
obligations of Assignor under the Insurance Policies may be performed
by Assignee or its nominee, without releasing Assignor therefrom;
(c) Without limiting the foregoing, Assignee shall not be
required or obligated in any manner to make any payments under the
Insurance Policies, to make any inquiries as to the nature or
sufficiency of any payments received, to present or file any claims, or
to take any other action to collect or enforce the payment of any
amounts assigned hereunder or to which Assignee may be entitled
hereunder at any time until such time as Assignee exercises its
remedies with respect thereto hereunder or under the Mortgage; and
(d) The proceeds of the Assigned Property shall be applied in
the manner set forth in the Mortgage.
5. APPOINTMENT OF ASSIGNEE. So long as any Obligations remains unpaid,
Assignor does hereby designate and appoint Assignee its true and lawful attorney
with power irrevocable, for it and in its name, place and stead, during the
continuance of an Event of Default:
(a) to ask for, require, demand, receive, compound and give
acquittance for any or all monies and claims for any monies due and to
become due under, or arising out of, the Insurance Policies;
(b) to endorse any or all checks or other instruments or
orders in connection therewith;
(c) to file any claims, institute any proceedings, and take
any or all other action which Assignee may deem to be necessary or
advisable;
(d) to send the notices and take the actions contemplated by
Section 6; and
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(e) to execute and file in Assignor's name any financing
statements or documents for similar purposes or effect relating to this
Assignment.
6. NOTICES TO INSURERS; ENDORSEMENTS.
(a) Assignor hereby agrees to promptly deliver notice of this
Assignment to all underwriters, hull and machinery insurance funds and
associations, and protection and indemnity clubs, underwriters and associations
with respect to the Insurance Policies, such notice to be in the form of Exhibit
A hereto or such other form as may be reasonably required by Assignee.
(b) Assignor shall procure that the interest of Assignee shall
be duly endorsed upon all slips, cover notes, policies, certificates of entry or
other instruments of insurance issued or to be issued in connection with the
Insurance Policies by means of a loss payable clause reflecting the terms of
Section 1.17 of the Mortgage and a notice of assignment (signed by Assignor)
each in such form as shall from time to time be reasonably approved in writing
by Assignee.
(c) Assignor shall, upon request, authorize the brokers to
provide Assignee with all such information that is available to them regarding
the Insurances as Assignee may reasonably require. Assignor shall, upon request
from Assignee, ensure that the brokers furnish Assignee with a letter or letters
or undertaking in such form as may from time to time be reasonably required by
Assignee, such letter or letters to include undertakings by the brokers that:
(i) they will hold the instruments of insurance, and the
benefit of the Insurances thereunder, to the order of Assignee in
accordance with the terms of the loss payable clause referred to in
Section 1.12(f) of the Mortgage;
(ii) they will have endorsed on each and every policy as and
when the same is issued the loss payable clause and the notice of
assignment referred to in Section 1.12(f) of the Mortgage;
(iii) they will advise Assignee within ten (10) days of any
material changes which may be made to the terms of the Insurances and
notify Assignee, not less than ten (10) days prior to the expiry or
cancellation of the said insurance, in the event of their not having
received notice of renewal instructions from Assignor and/or its
agents;
(iv) they will not set off against any sum recoverable in
respect of a claim against the Vessel under the Insurances any premiums
or other amounts due to the brokers or any other person in respect of
any other vessel nor cancel the Insurances as to Assignee by reason of
non-payment of such premiums or other amounts prior to giving the
requisite notice provided for above; and
(v) they will not permit any assured or loss payee to be added
to any policy without obtaining the prior written consent of Assignee.
(d) Where acknowledgement or consent of any underwriter or
association is required to give effect to this Assignment, Assignor shall obtain
the same in writing and shall deliver the same to Assignee forthwith upon the
placement of the relevant policy, entry or other contract.
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Assignee's rights and remedies herein shall not be limited by any endorsements
to, or other provisions of any Insurance Policies as actually issued and
received by Assignee from time to time, except to the extent that Assignee may
approve such endorsements or other provisions in writing (but Assignee's
approval at any one time of any endorsements or other provisions of any
Insurance Policies shall not prevent Assignee from later notifying and requiring
Assignor to provide the endorsements or other provisions of any Insurance
Policies as required hereunder or under the Mortgage).
(e) At least thirty days before the relevant policies or
contracts expire, Shipowner shall renew the expiring Insurances, and upon the
renewal of the said Insurances, ensure that the brokers and/or the war risks and
protection and indemnity risks associations with which any such renewal is
effected shall notify Mortgagee in writing of the terms and conditions of such
renewal.
(f) The obligations of Assignor under this Assignment are in
addition to any obligations of Assignor under the Mortgage with respect to the
Insurance Policies and the other Assigned Property.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS. Assignor represents,
warrants and covenants as follows:
(a) Other than Permitted Liens, Assignor has not assigned,
pledged, created any security interest in, or otherwise encumbered, the whole or
any part of the Assigned Property, nor has it agreed to do so under any
conditions, and shall not do so, except for the benefit of Assignee or as
otherwise permitted under the Mortgage. Assignor shall defend, at its own
expense, Assignee's rights hereunder against the claims or demands of all third
parties whomsoever.
(b) Assignor shall not, without the prior written consent of
Assignee, for so long as this Assignment shall remain in effect, amend or
terminate any of the Insurance Policies in a manner that would be materially
adverse to the interests of Assignee. Assignor shall not take or omit to take
any action, the taking or omission of which results in a material alteration or
impairment of the Insurance Policies or any of the rights arising thereunder.
(c) Assignor shall, as reasonably requested by Assignee from
time to time, promptly and duly execute and deliver all such further instruments
and documents as either may deem necessary or desirable for the purpose of
obtaining the full benefits of this Assignment and the rights and powers herein
granted.
8. NOTICES. Any notice, demand, consent, authorization, approval,
instruction, waiver or other communication pursuant to the terms of this
Assignment shall only be valid if in writing and in English (unless otherwise
specified) and shall be mailed by certified mail, return receipt requested (with
first class postage prepaid) or sent or delivered to each party by facsimile or
courier service at the address or facsimile number set forth below, or at such
other address as shall be designated by such party in a written notice to the
other parties. Except as otherwise specified all notices sent by certified mail,
if duly given, shall be effective three (3) "Business Days" (being a day other
than Saturday, Sunday or other day on which banks are authorized or obligated to
close in Chicago, Illinois or Seattle, Washington) after deposit into the mails,
all notices sent by a nationally recognized courier service, if duly given,
shall be effective one Business Day after delivery to such courier service, and
all other notices and communications if duly given or made shall be effective
upon receipt. For purposes of this clause, the addresses are as follows:
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If to Assignor: __________________________________
c/o American Classic Voyages Co.
Two Xxxxx Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
(000) 000-0000 (fax)
If to Assignee: HAL Antillen N.V.
c/o Holland America Line-Westours Inc.
000 Xxxxxxx Xxx. Xxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: General Counsel
(000) 000-0000 (fax)
Assignor or Assignee may change their address by giving notice of such change in
the manner stated above. The provisions relating to the delivery or sending of
copies of notices is for convenience only and failure to send a copy of any
notice shall not invalidate that notice.
9. WAIVERS. Assignor waives any requirement for acceptance of this
Assignment or the making or acknowledging receipt of notices thereof.
10. SUCCESSORS AND ASSIGNS. All covenants, promises, stipulations and
agreements of Assignor in this Assignment shall bind Assignor and its successors
and assigns and all persons claiming by, through or under it and shall inure to
the benefit of Assignee and its successors and permitted assigns and all persons
claiming by, through or under it. Assignor recognizes that Assignee may,
consistent with applicable law, assign or otherwise transfer its rights under
this Assignment. Any such assignment or transfer shall only be made to or for
the benefit of an affiliate of Assignee except that if, during the continuation
of an Event of Default, Assignee shall reasonably determine that it is necessary
or desirable to assign or otherwise transfer its rights under this Assignment to
a citizen of the United States as defined in the Shipping Act, 1916, as amended,
it may do so even if such citizen is not an affiliate of Assignee.
11. CUMULATIVE REMEDIES. Each right and remedy given to Assignee herein
or in any other agreement or document is cumulative, and is in addition to every
other right and remedy existing by agreement, at law, in equity or admiralty, or
otherwise. Each such right and remedy may be exercised, wholly or in part, from
time to time, as often, and in any order, as Assignee may choose. No delay or
omission by Assignee in the enforcement of any right or remedy shall be deemed
to constitute a waiver or election with respect to any rights or remedies.
12. SEVERABILITY. In case any one or more of the provisions contained
in this Assignment is invalid, illegal or unenforceable in any respect in any
jurisdiction, the validity, legality and enforceability of such provision or
provisions will not in any way be affected or impaired thereby in any other
jurisdiction; and the validity, legality and enforceability of the remaining
provisions contained herein will not in any way be affected or impaired thereby.
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13. GOVERNING LAW. This Assignment shall be construed and enforced in
accordance with the internal laws of the State of Washington (excluding its
conflict of laws rules), and may not be amended or otherwise modified or
terminated except by an instrument in writing. Assignee shall, in addition to
the rights, powers, privileges, and remedies hereby conferred, or otherwise
existing or arising by agreement, at law, in equity, in admiralty, or otherwise,
be entitled, with respect to the Assigned Property, to all the further rights of
a secured creditor generally provided under the Uniform Commercial Code as
enacted in the State of Washington, section 9-104 thereof as enacted in such
state notwithstanding.
14. CONSENT TO JURISDICTION/AGENT FOR SERVICE OF PROCESS. Assignor
hereby irrevocably submits to the non-exclusive jurisdiction of any state or
federal court sitting in Seattle, King County, Washington, in any action or
proceeding brought to enforce or otherwise arising out of or relating to this
Assignment and irrevocably waives to the fullest extent permitted by law any
objection which it may now or hereafter have to the laying of venue in any such
action or proceeding in any such forum, and hereby further irrevocably waives
any claim that any such forum is an inconvenient forum. Assignor agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in any other jurisdiction by suit on the judgment or in any other
manner provided by law. Nothing herein shall impair the right of Assignee to
bring any action or proceeding against Assignor or its property in the courts of
any other jurisdiction. The Assignor irrevocably appoints ___________________
for the time being presently at __________________________ to act as its agent
to receive and accept on its behalf any process or other document relating to
any proceedings in any court which are connected with this Assignment.
15. WAIVER OF JURY TRIAL. ASSIGNOR HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS ASSIGNMENT.
16. CAPTIONS. The captions of the sections of this Assignment are
included for convenience of reference only, and shall not constitute a part of
this Assignment for any other purpose.
17. REASSIGNMENT. Upon the condition that if Assignor or its successors
or assigns shall pay or cause to be paid to the holders of the Obligations, the
principal of the Loan and interest thereon as and when the same shall become due
and payable in accordance with the terms of the Mortgage and of the Note, and
all other such sums as may hereafter become secured by the Mortgage or this
Assignment in accordance with the terms thereof and hereof, and Assignor shall
perform, observe and comply with all the covenants, terms and conditions in the
Note and in the Mortgage and this Assignment, expressed or implied, to be
performed, then these presents and the rights hereunder shall cease, determine
and be void, otherwise to be and remain in full force and effect. Upon the
cessation of the rights hereunder, Assignee shall reassign to Assignor, or as
Assignor shall direct, the Assigned Property and any proceeds thereof then
remaining unapplied in accordance with the terms of this Agreement, and in such
event, Assignee, at the expense of Assignor, shall take such other actions and
deliver such notices to insurance providers, as Assignor shall reasonably
request.
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IN WITNESS WHEREOF, Assignor has executed this Assignment the day and
year first above written.
ASSIGNOR: _______________________., a _________________
By
-------------------------------------------
Its
-----------------------------------------
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EXHIBIT A
NOTICE OF ASSIGNMENT
Please be advised that the undersigned, _____________________________,
a __________ corporation ("Shipowner") has assigned and granted a security
interest in favor of HAL ANTILLEN N.V., a Netherlands Antilles corporation
("Assignee"), in all of its right, title, and interest in, to, or under (i) all
insurances now or hereafter in effect with respect to the vessel
______________________, including, without limitation, hull and machinery,
increased value, war risk, protection and indemnity, pollution, workmen's
liability and compensation, loss of earnings (if any), personal property,
liability and all other insurances and association memberships and entries, (ii)
all insurances now or hereafter in effect with respect to equipment, inventory,
proceeds of inventory, or other personal property, not described above, (iii)
all claims and all returns of premiums, dues, calls, and assessments that are
not immediately applied to premiums, dues, calls, and assessments that accrue
from time to time, and all other sums or claims for sums due or to become due
thereunder, (iv) all rights of the undersigned under the foregoing, and (v) all
proceeds of the foregoing.
All interested parties are instructed to rely on this, or photocopies
of this signed Notice of Assignment.
Dated this ______ day of __________________, 200__.
SHIPOWNER: _______________________., a _________________
By
-------------------------------------------
Its
-----------------------------------------
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EXHIBIT G
FORM OF AMCV GUARANTEE
GUARANTEE
GUARANTEE, dated as of, 2000 made by American Classic Voyages
Co., a Delaware corporation ("Guarantor"), in favor of HAL ANTILLEN N.V., a
Netherlands Antilles corporation ("Lender").
WITNESSETH
WHEREAS, in connection with the purchase of the vessel
commonly known as M/S ___________________, f/k/a M/S NIEUW Amsterdam (the
"Vessel") by, a corporation ("Borrower") from Lender, Lender has made a loan
(the "Loan") in the principal amount of $ to satisfy a portion of the purchase
price for the Vessel; and
WHEREAS, the Loan is evidenced by a Promissory Note of even
date herewith in the principal amount of the Loan executed by Borrower and made
payable to Lender (the "Note"), and the Note is secured by, among other things,
a Preferred Ship Mortgage of even date herewith executed by Borrower in favor of
Lender (the "Mortgage"; and the Note, Mortgage and all other documents executed
by Borrower to evidence or secure the Loan are referred to collectively herein
as the "Loan Documents"); and
WHEREAS, the proceeds of the Loan will confer, directly or
indirectly, a benefit upon the Guarantor; and
WHEREAS, it is a condition precedent to the obligation of
Lender to make the Loan to the Borrower that the Guarantor shall have executed
and delivered this Guarantee to Lender.
NOW, THEREFORE, in consideration of the premises and to induce
Lender to make the Loan to the Borrower, Guarantor hereby agrees with Lender as
follows:
1. Defined Terms. Unless otherwise defined herein, terms that
are defined in the Mortgage and used herein are so used as so defined. As used
herein, "Obligations" shall mean the Obligations (as defined in the Mortgage)
and all unpaid principal of and interest on (including, without limitation,
interest accruing after the maturity of the Loan and interest accruing after the
filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to Borrower, whether or not a claim
for post-filing or post-petition interest is allowed in such proceeding) the
Note and all other obligations and liabilities of Borrower to Lender, whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with, the Loan Documents, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses (including,
without limitation, all reasonable fees and disbursements of counsel to Lender)
or otherwise.
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2. Guarantee. Guarantor hereby unconditionally and irrevocably
guarantees to Lender the prompt and complete payment and performance by the
Borrower when due (whether at the stated maturity, by acceleration or otherwise)
of the Obligations. The amounts payable by Guarantor under the foregoing
sentence shall be such amounts after giving effect to any payments to Lender by
any other guarantor of the Obligations, and after giving effect to all payments
whatsoever theretofore received by the Lender from the Borrower with respect to
the Obligations. Guarantor further agrees to pay any and all expenses
(including, without limitation, all reasonable fees and disbursements of
counsel) which may be reasonably paid or incurred by Lender in enforcing, or
obtaining advice of counsel in respect of, any of its rights under this
Guarantee. This Guarantee shall remain in full force and effect until the
Obligations are paid in full. This Guarantee constitutes a Guarantee of payment
when due and not of collection, and Guarantor specifically agrees that it shall
not be necessary or required that Lender exercise any right, assert any claim or
demand or enforce any remedy whatsoever against the Borrower before or as a
condition to the obligations of Guarantor hereunder.
3. No Subrogation, Contribution, Reimbursement or Indemnity.
Notwithstanding anything to the contrary in this Guarantee, Guarantor hereby
irrevocably waives all rights which may have arisen in connection with this
Guarantee to be subrogated to any of the rights (whether contractual, under the
Bankruptcy Code, including Section 509 thereof, under common law or otherwise)
of Lender against the Borrower for the payment of the Obligations until the
Obligations have been paid in full. Guarantor hereby further irrevocably waives
all contractual, common law, statutory or other rights of reimbursement,
contribution, exoneration or indemnity (or any similar right) from or against
the Borrower which may have arisen in connection with this Guarantee until the
Obligations have been paid in full. So long as the Obligations remain
outstanding, if any amount shall be paid by or on behalf of the Borrower to
Guarantor on account of any of the rights waived in this paragraph, such amount
shall be held by Guarantor in trust, segregated from other funds of Guarantor,
and shall, forthwith upon receipt by Guarantor, be turned over to Lender in the
form received by Guarantor (duly endorsed by Guarantor to Lender, if required),
to be applied against the Obligations, whether matured or unmatured, in such
order as Lender may determine. The provisions of this paragraph shall survive
the term of this Guarantee and the payment in full of the Obligations.
4. Amendments, etc., with respect to the Obligations.
Guarantor shall remain obligated hereunder notwithstanding that from time to
time, without any reservation of rights against Guarantor, and without notice to
or further assent by Guarantor, any demand for payment of any of the Obligations
made by Lender may be rescinded by Lender, or any of the Obligations made by
Lender may be rescinded by Lender, or any of the Obligations continued, or the
Obligations, or the liability of any other party upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
Lender, or the Note, the Mortgage or any other Loan Document be amended,
modified, supplemented or terminated, in whole or in part, as Lender may deem
advisable from time to time, or any collateral security, guarantee or right of
offset at any time held by Lender for the payment of the Obligations be sold,
exchanged, waived, surrendered or released. Lender shall have no obligation to
protect, secure, perfect or insure any lien at any time held by it as security
for the Obligations or for this Guarantee or any property subject thereto.
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5. Guarantee Absolute and Unconditional. Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by Lender upon this Guarantee or
acceptance of this Guarantee; the Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred in reliance
upon this Guarantee; and all dealings between the Borrower or the Guarantor, on
the one hand, and Lender, on the other, shall likewise be conclusively presumed
to have been had or consummated in reliance upon this Guarantee. Guarantor
waives promptness, diligence, presentment, protest, demand for payment and
notice of default or nonpayment to or upon the Borrower or Guarantor with
respect to the Obligations. This Guarantee shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (a) the lack
of validity or enforceability of the Note, the Mortgage or any other Loan
Document, any of the Obligations or any collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by Lender, (b) any defense, set-off, recoupment, deduction,
counterclaim or other right (other than a defense of payment or performance)
which may at any time be available to or be asserted by Borrower against Lender,
(c) any modification, extension, renewal, reduction, limitation, impairment or
termination of any Obligations for any reason, (d) any change in the name,
purpose, capital stock or constitution of Borrower, (e) any irregularity, defect
or unauthorized action by Borrower or any of its officers, directors or other
agents in executing and delivering any Loan Document or in carrying out or
attempting to carry out the terms of the Loan Documents, (f) any insolvency,
bankruptcy, reorganization or similar proceeding by or against Borrower, (g) the
amount which may be bid by Lender or any other person at any foreclosure sale,
or (h) any other circumstance whatsoever (with or without notice to or knowledge
of the Borrower or the Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower for the Obligations,
or of the Guarantor under this Guarantee, in bankruptcy or in any other
instance. Guarantor hereby waives all defenses of a surety to which it may be
entitled by statute or otherwise.
6. Reinstatement; Acceleration. This Guarantee shall continue
to be effective, or be reinstated, as the case may be, if at any time payment,
or any part thereof, of any of the Obligations is rescinded or must otherwise be
restored or returned by Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of Borrower or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, Borrower or any substantial part of its property, or otherwise, all
as though such payments had not been made.
7. Representations and Warranties. Guarantor represents and
warrants to Lender that:
(a) Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
formation and has the power and authority and the legal right to own
and operate its property and to conduct the business in which it is
currently engaged;
(b) Guarantor has the legal capacity and authority and the
legal right to execute and deliver, and to perform its obligations
under, this Guarantee, and has taken all necessary corporate action to
authorize its execution, deliver and performance of this Guarantee;
(c) this Guarantee constitutes a legal, valid and binding
obligation of Guarantor enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer or
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similar laws affecting the enforcement of creditors' rights generally
and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law) and an implied covenant of good faith
and fair dealing;
(d) the execution, delivery and performance of this Guarantee
will not violate any provision of any applicable law or material
contractual obligation of Guarantor and will not result in or require
the creation or imposition of any lien on any of the properties or
revenues of Guarantor pursuant to any applicable law or material
contractual obligation of Guarantor; and
(e) no litigation, investigation or proceeding of or before
any arbitrator or governmental authority is pending or, to the
knowledge of Guarantor, threatened by or against Guarantor or against
any of its properties or revenues (i) with respect to this Guarantee or
any of the transactions contemplated hereby, or (ii) which is
reasonably likely to have a material adverse effect on the business,
operations, property, or condition (financial or otherwise) of
Guarantor.
8. Guarantor's Knowledge of Borrower's Economic Conditions.
Guarantor represents and warrants to Lender that it has reviewed such documents
and other information as it has deemed appropriate in order to permit it to be
fully apprised of Borrower's financial condition and operations and has, in
entering into this Guarantee made its own credit analysis independently and
without reliance upon any information communicated to it by Lender. Guarantor
covenants for the benefit of Lender to remain apprised of all material economic
or other developments relating to or affecting Borrower, its property or its
business. Without limiting the foregoing, Guarantor agrees to enter into such
agreements and arrangements with Borrower as may be necessary to ensure its
receipt of notice of such material changes and of periodic financial statements.
Guarantor expressly waives any requirement that Lender advise, disclose, discuss
or deliver notice to Guarantor regarding Borrower's financial condition or
operations or with respect to any default by Borrower in its performance of the
Obligations whether or not knowledge of such condition, operations or default is
or reasonably could be in the possession of Guarantor and whether or not such
knowledge is in the possession of Lender before or after the extension of any
credit giving rise to Obligations by Borrower.
9. Severability. Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10. Paragraph Headings. The paragraph headings used in this
Guarantee are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
11. No Waiver; Cumulative Remedies. Lender shall not, by any
act (except by a written instrument pursuant to Section 12 hereof), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any default or in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of Lender any right, power or privilege hereunder shall
operate as a waiver thereof. No
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single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by Lender of any right or remedy hereunder
on any one occasion shall not be construed as a bar to any right or remedy that
Lender would otherwise have on any future occasion. The rights and remedies
herein provided are cumulative, may be exercised singly or concurrently and are
not exclusive of any rights or remedies provided by law.
12. Waivers and Amendments; Successors and Assigns. None of
the terms or provisions of this Guarantee may be waived, amended, supplemented
or otherwise modified except by a written instrument executed by Guarantor and
Lender. This Guarantee shall be binding upon the successors and assigns of
Guarantor and shall inure to the benefit of Lender and its successors and
permitted assigns, provided that Guarantor may not assign or delegate any of its
obligations hereunder without the prior written consent of Lender, and Lender
shall not assign its rights hereunder except pursuant to an assignment permitted
by the terms of the Mortgage.
13. Notices. All notices, requests and demands to or upon
Guarantor to be effective shall be in writing and given (and deemed received) in
the manner set forth in the Mortgage addressed or sent to the facsimile number
as set forth under its signature below, or to such other address or number as
may be hereafter notified by the Guarantor to Lender.
14. Integration. This Guarantee represents the entire
agreement of Guarantor with respect to the subject matter hereof, and there are
no promises, undertakings, representations or warranties by Lender relative to
the subject matter hereof not expressly set forth or referred to herein or in
the other Loan Documents.
15. GOVERNING LAW. THIS GUARANTEE AND THE RIGHTS AND
OBLIGATIONS OF GUARANTOR UNDER THIS GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
WASHINGTON, WITHOUT GIVING EFFECT TO WASHINGTON CHOICE OF LAW PRINCIPLES.
16. WAIVERS OF JURY TRIAL. GUARANTOR AND, BY ITS ACCEPTANCE
HEREOF, LENDER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE AND FOR ANY COUNTERCLAIM
THEREIN.
17. Consent to Jurisdiction; Waiver of Immunities. Guarantor
hereby irrevocably submits to the jurisdiction of any State or federal court
sitting in Seattle, Washington, in any action or proceeding brought to enforce
or otherwise arising out of or relating to this Guarantee and irrevocably waives
to the fullest extent permitted by law any objection which it may now or
hereafter have to the laying of venue in any such action or proceeding in any
such forum, and hereby further irrevocably waives any claim that any such forum
is an inconvenient forum. Guarantor agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in any other
jurisdiction by suit on the judgment or in any other manner provided by law.
Nothing herein shall impair the right of Lender to bring any action or
proceeding against Guarantor or its property in the courts of any other
jurisdiction and Guarantor irrevocably submits to the nonexclusive jurisdiction
of the appropriate courts sitting in any place where property of Guarantor is
located.
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IN WITNESS WHEREOF, the undersigned has caused this Guarantee
to be duly executed and delivered as of the date first above written.
American Classic Voyages Co.,
a Delaware corporation
By:
--------------------------------------
Its:
-------------------------------------
Address for Notices:
Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxx,
Executive Vice President
and General Counsel.
Phone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
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EXHIBIT H
EXCLUDED ART
1. All models of ships.
2. All pictures of Dutch ships or Dutch People.
3. All statutes/busts of Dutch royalty or famous Dutch people.
4. All Dutch and Indonesian memorabilia.
5. Historic nautical instruments (e.g., sextons, telescopes).
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AMENDMENT NUMBER ONE
TO
MEMORANDUM OF AGREEMENT
AMENDMENT NUMBER ONE, dated as of October 11, 1999, by and between
AMERICAN CLASSIC VOYAGES CO., a Delaware corporation ("Buyer"), and HAL ANTILLEN
N.V., a Netherlands Antilles corporation ("Seller").
W I T N E S S E T H
WHEREAS, the parties entered into that certain Memorandum of Agreement,
dated as of August 5, 1999, relating to the purchase and sale of the M/S NIEUW
AMSTERDAM, the terms of which are incorporated herein by this reference (the
"MOA"); and
WHEREAS, all terms defined in the MOA shall have the same meaning
herein as therein provided; and
WHEREAS, the parties desire to make certain acknowledgements under, and
amend, the MOA as herein provided.
NOW, THEREFORE, for good and valuable consideration, the receipt,
adequacy and sufficiency of which is hereby acknowledged, and intending to be
legally bound hereby, the parties hereto hereby AGREE as follows:
1. ACKNOWLEDGEMENT.
(a) The parties acknowledge that the Coast Guard/MARAD Approvals have
been obtained and are in form and substance reasonably satisfactory to both
Buyer and Seller. Accordingly, the condition precedent specified in Section 3 of
the MOA is hereby removed.
(b) Without limiting its rights under Section 2 of this Amendment,
Buyer acknowledges that for purposes of Sections 4(a) and 4(c) of the MOA, it
has accepted the Vessel following the Preliminary Inspection and the Final
Inspection. Concurrently with the execution of this Amendment, Buyer shall
provide Seller with written notice of its acceptance of the Vessel pursuant to
Sections 4(a) and 4(c) of the MOA for purposes of enabling Seller to provide
same to Escrow Agent pursuant to Section 3(f) of the Escrow Agreement.
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(c) The parties agree to disregard the provisions of clause (ii) in
Section 5 of the MOA. The provisions of clause (iii) in Section 5 shall continue
to apply, except that the parties agree that the due date shall be October 18,
1999 rather than October 17, 1999.
2. TRIM AND STABILITY REGULATORY APPROVAL AMENDMENT. The MOA is amended
by adding a new Section thereto, to be Section 4A, reading as follows:
4A. TRIM AND STABILITY REGULATORY APPROVAL
(a) Seller acknowledges that it is presently in the process
of preparing an updated Trim and Stability Book for the Vessel (the
"Stability Book") for submittal to the Netherlands Shipping
Inspectorate ("NSI"). The Stability Book, as presented to NSI, will be
based on Seller's 1999 lightship survey, assume no changes in the
existing physical attributes of the Vessel and that the Vessel will
bunker fuel every other week. Seller will request NSI to approve the
Stability Book as being in full compliance with SOLAS requirements that
are applicable to the Vessel as of the date of this Agreement (the "NSI
Approval"). Seller will use its best efforts to obtain the NSI Approval
by November 15, 1999 or as promptly as possible thereafter. Seller will
provide a copy of the NSI Approval to Buyer promptly upon receiving
same.
(b) If NSI fails to provide its response to the request for
the NSI Approval prior to December 31, 1999, Buyer shall have the right
to terminate this Agreement upon providing written notice to Seller at
any time prior to the response having been obtained. In such event, the
Deposit shall be delivered to Buyer.
(c) If the NSI Approval is obtained and is not conditioned
upon either a change being made in the existing physical attributes of
the Vessel or a change being made in the normal operating procedures
applicable to the Vessel (e.g., bunkering fuel more frequently than
every other week), Seller shall be deemed to have satisfied in full its
obligations under this Section 4A, subject, however, to subsection (e)
below.
(d) If the NSI Approval is obtained but it is conditioned
upon either a change being made in the existing physical attributes of
the Vessel and/or a change being made in the normal operating
procedures applicable to the Vessel, the following provisions in this
subsection (d) shall apply:
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(i) if NSI will accept either a change in the
existing physical attributes of the Vessel or a change in the
normal operating procedures or if NSI is only requiring a change
in the normal operating procedures, Seller will be deemed to have
satisfied in full its obligations under this Section 4(A) if:
(y) Seller is willing to accept the change in
normal operating procedures; and
(z) Buyer agrees to the change in normal
operating procedures, which agreement will only be
withheld if Buyer reasonably determines that the change
would materially and adversely impact Buyer's proposed
use of the Vessel and/or the residual value of the
Vessel.
If Buyer is entitled to and does refuse to agree to the change in
normal operating procedures, which refusal must be notified to
Seller within fifteen (15) days after Seller has requested
Buyer's agreement to the change, and the parties are thereafter
unable to agree upon a solution that is acceptable to NSI within
twenty (20) days after the end of said 15-day period, then either
party may terminate this Agreement. In such event, the Deposit
shall be delivered to Buyer.
(ii) if NSI is requiring a change in the existing
physical attributes of the Vessel as the only alternative,
Seller's obligations shall be as provided in Section 13(a) of
this Agreement as if the required change was a condition of class
provided, however, Buyer shall have the right to review and
approve the proposed change which approval shall not be withheld
unless Buyer reasonably determines that the change would
materially and adversely impact Buyer's proposed use of the
Vessel and/or the residual value of the Vessel. If Buyer is
entitled to and does refuse to approve the proposed change, which
refusal must be notified to Seller within fifteen (15) days after
Seller has requested Buyer's agreement to the change, and the
parties are thereafter unable to agree upon a solution that is
acceptable to NSI within twenty (20) days after the end of said
15-day period, then either party may terminate this Agreement. In
such event, the Deposit shall be delivered to Buyer.
(e) Concurrently with the delivery of the Stability Book to
NSI, Seller shall provide a copy thereof to Buyer for delivery to
Lloyds Register of Shipping ("LRS"). At Buyer's
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expense, LRS shall make its own determination as to whether the
Stability Book is in full compliance with SOLAS requirements that are
applicable to the Vessel as of the date of this Agreement (the "LRS
Determination"). The LRS Determination shall be made, and a copy
provided to Seller, within sixteen (16) days after Buyer's receipt of
the Stability Book from Seller, failing which the provisions of this
Section 4A(e) shall have no further applicability. If the LRS
Determination is inconsistent with the terms of the NSI Approval to the
effect that LRS believes actions need to be taken in addition to those
required by NSI, and the parties are unable to resolve the differences
between the LRS Determination and the NSI Approval within fifteen (15)
days after receipt of the NSI Approval, either party may terminate this
Agreement. In such event, the Deposit shall be returned to Buyer.
Notwithstanding the foregoing, if Seller believes the LRS Determination
is incorrect, it may require the matter to be resolved on an expedited
basis pursuant to an arbitration proceeding under Section 22 of this
Agreement. In such event, neither party may terminate this Agreement
under this subsection (e) pending the outcome of such arbitration
proceeding.
3. NO ADDITIONAL CHANGES. Except as above provided, the MOA shall
remain in full force and effect in accordance with its original terms.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
HAL ANTILLEN N.V.
By: /s/ A. Xxxx Xxxxxxxxx
-------------------------------
Title: Proxyholder
AMERICAN CLASSIC VOYAGES CO.
By: /s/ Jordan X. Xxxxx
-------------------------------
Title: Executive Vice President
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