PURCHASE AGREEMENT
by
and
between
HAL Antillen N.V.
and
Ambassadors International Cruise Group, LLC
Dated: February 21, 2007
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS...............................................................1
ARTICLE 2. PURCHASE AND SALE OF SHARES...............................................8
2.1 Purchase and Sale of Shares...............................8
2.2 Purchase Price............................................8
2.3 Adjustments to Purchase Price.............................8
2.4 The Closing...............................................9
2.5 Deliveries at the Closing.................................9
ARTICLE 3. REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLER AND BUYER...........11
3.1 Representations and Warranties of Seller.................11
3.2 Representations and Warranties of Buyer..................12
ARTICLE 4. REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY....................12
4.1 Entity Status............................................13
4.2 No Violation.............................................13
4.3 Brokers' Fees............................................13
4.4 Capitalization...........................................13
4.5 Acquired Subsidiaries....................................14
4.6 Financial Statements; Undisclosed Liabilities............14
4.7 Subsequent Events........................................14
4.8 Legal Compliance.........................................16
4.9 Tax Matters..............................................16
4.10 Real Property............................................17
4.11 Intellectual Property....................................17
4.12 Contracts................................................18
4.13 Insurance................................................19
4.14 Litigation...............................................20
4.15 Employees................................................20
4.16 Environmental, Health, and Safety Matters................20
4.17 Permits..................................................21
4.18 Vessels..................................................21
4.19 Title to Vessels.........................................22
4.20 Representations Complete.................................22
ARTICLE 5. INTENTIONALLY OMITTED....................................................22
ARTICLE 6. PRE-CLOSING COVENANTS....................................................22
6.1 General..................................................23
6.2 Notices and Consents.....................................23
6.3 Operation of Business....................................23
6.4 Full Access..............................................23
6.5 Notice of Developments...................................23
6.6 Exclusivity..............................................24
6.7 Confidentiality; Publicity...............................24
6.8 Affiliated Transactions..................................25
6.9 February Financial Statements............................25
6.10 Transfer of Wind Surf....................................25
6.11 Employee Matters.........................................25
6.12 Berthing Arrangements....................................25
6.13 Customer Information.....................................26
6.14 Contracts................................................26
ARTICLE 7. POST-CLOSING COVENANTS...................................................26
7.1 General..................................................26
7.2 Litigation Support.......................................26
7.3 Vessel Certificates......................................26
7.4 Drydock of Vessels.......................................27
7.5 Transfer Taxes...........................................27
7.6 Employment Matters.......................................27
7.7 Audited Financial Statements.............................27
ARTICLE 8. CLOSING CONDITIONS.......................................................28
8.1 Conditions Precedent to Obligation of Buyer..............28
8.2 Conditions Precedent to Obligation of Seller.............29
ARTICLE 9. TERMINATION..............................................................30
9.1 Termination of Agreement.................................30
9.2 Effect of Termination....................................30
ARTICLE 10. INDEMNIFICATION.........................................................31
10.1 Survival of Representations and Warranties...............31
10.2 Indemnification by Seller................................31
10.3 Indemnification by Buyer.................................31
10.4 Indemnification Claim Procedures.........................32
10.5 Limitations on Indemnification Liability.................33
ARTICLE 11. MISCELLANEOUS...........................................................34
11.1 Entire Agreement.........................................34
11.2 Successors...............................................34
11.3 Assignments..............................................34
11.4 Notices..................................................34
11.5 Specific Performance.....................................35
11.6 Submission to Jurisdiction; Venue........................35
11.7 Time.....................................................36
11.8 Counterparts.............................................36
11.9 Headings.................................................36
11.10 Governing Law............................................36
11.11 Amendments and Waivers...................................36
11.12 Severability.............................................36
11.13 Expenses.................................................36
11.14 Construction.............................................36
11.15 Incorporation of Exhibits, Annexes, and Schedules........37
11.16 Remedies.................................................37
Exhibits
--------
Exhibit A First Preferred Mortgages
Exhibit B Pledge Agreement
Exhibit C Security Agreement
Exhibit D Transition Services Agreement
Exhibit E Buyer Note
Exhibit F Seller's Certificate
Exhibit G Seller's Certificate by Attorney-in-Fact
Exhibit H Buyer's Officers' Certificate
Exhibit I Buyer's Secretary's Certificate
Exhibit J Legal Opinion of Buyer's Counsel
Exhibit K Deeds of Covenants
Exhibit L Subsidiary Guarantee
Exhibit M Parent Guarantee
Exhibit N Legal Opinion of Seller's Counsel
Exhibit O Trademark License Agreement
Purchase Agreement
This Purchase Agreement (this "Agreement"), dated as of February 21, 2007,
is by and between HAL Antillen N.V., a Netherlands Antilles corporation ("HAL
Antillen" or "Seller"), and Ambassadors International Cruise Group, LLC, a
Xxxxxxxx Islands limited liability company ("Buyer"). Together, Seller and Buyer
are referred to herein as the "Parties."
RECITALS:
A. HAL Antillen owns all of the issued and outstanding ordinary and
redeemable preference shares (together, the "Shares") of Windstar Sail Cruises
Limited (the "Company"). The Company indirectly owns, (i) through Wind Star
Limited, the "Wind Star" (a Bahamian vessel with Registration Number 710711 and
Call Sign C6CA9) (the "Wind Star") and (ii) through Wind Spirit Limited, the
"Wind Spirit" (a Bahamian vessel with Registration Number 711121 and Call Sign
C6CY9) (the "Wind Spirit" and, together with the Wind Star and Wind Surf
(defined below), the "Vessels").
B. HAL Antillen also owns the "Wind Surf" (a Netherlands Antilles vessel
with Registration Number 716016 and Call Sign PHHZ) (the "Wind Surf"). At or
prior to the closing of the transactions contemplated by this Agreement, as
further set forth herein, the Parties intend that HAL Antillen will transfer its
ownership in the Wind Surf to a newly formed Bahamas corporation that is a
wholly-owned subsidiary of the Company ("Surf Limited").
C. Seller desires to sell to Buyer, and Buyer desires to purchase from
Seller, the Shares in accordance with the terms and subject to the conditions
set forth in this Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants contained herein, Buyer and Seller agree as follows: ARTICLE 1.
DEFINITIONS
"Acquired Entities" means (a) the Company, (b) Wind Star Limited, (c) Wind
Spirit Limited and (d) Surf Limited.
"Acquired Subsidiaries" means Wind Star Limited, Wind Spirit Limited and
Surf Limited.
"Action" means any action, appeal, petition, plea, complaint, suit,
litigation, arbitration, mediation, hearing, or proceeding.
"Actuarial Study" is defined in Section 6.11(b).
"Affiliate" with respect to any specified Person means a Person that,
directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, such specified Person.
"Affiliated Group" means any affiliated group under Code Section
1504(a) or any similar group defined under provisions of applicable Law.
"Agreement" is defined in the preamble to this Agreement.
"Ancillary Agreements" means the Buyer Note, the Subsidiary Guarantee, the
Parent Guarantee, the Pledge Agreement, the Security Agreement, the First
Preferred Mortgages, the Deeds of Covenants, the Transition Services Agreement
and the Trademark License Agreement.
"Audit Notice" is defined in Section 2.3(b).
"Audited Financial Statements" is defined in Section 0.
"Audited March Financial Statements" is defined in Section 2.3(b).
"Auditor's Conclusive Cash Payment" is defined in Section 2.3(b).
"Balance Sheet Date" means the last day of the month immediately preceding
the date of execution of this Agreement.
"Buyer" is defined in the preamble to this Agreement.
"Buyer Indemnified Parties" means Buyer and its officers, directors,
managers, employees, agents, representatives, controlling Persons, and
stockholders, and their Affiliates.
"Buyer Note" is defined in Section 2.2(a).
"Buyer's Knowledge" means, with respect to Buyer, the actual conscious
knowledge of the following individuals: Xxx Xxxxxxxxx, Xxxxx Xxxxxxxxx, Xxxxx
Xxxxxxxxx, Xxxxxx XxXxxxxx and, as to the Vessels, in addition to the foregoing
individuals, the representatives of V-Ships retained by Buyer to conduct
inspections of the Vessels.
"Cash Payment" is defined in Section 2.2(b).
"Cash Payment Difference" is defined in Section 2.3(c).
"Closing" is defined in Section 2.4.
"Closing Date" is defined in Section 2.4.
"Code" means the Internal Revenue Code of 1986 as amended and any successor
thereto.
"Company" is defined in the recitals of this Agreement.
"Conclusive Cash Payment" is defined in Section 2.3(a).
"Confidential Information" means any information concerning the businesses
and affairs of Buyer, Seller or the Company.
"Consent" means any consent, approval, notification, waiver, or other
similar action.
"Contract" means any contract, agreement, arrangement or commitment.
"Crew Members" is defined in Section 4.15(a).
"Damages" means all damages, losses, Liabilities, or expenses, including
fines, penalties, and reasonable fees and expenses of outside attorneys,
accountants, and other professional advisors.
"Deeds of Covenants" means the Deeds of Covenants relating to the First
Preferred Mortgages, in substantially the form of Exhibit K.
"Disclosure Schedule" is defined in ARTICLE 4.
"Encumbrance" means any lien, pledge, charge, easement, security interest,
deed of trust, mortgage, right-of-way, encumbrance or other similar right of
third parties.
"Environmental, Health, and Safety Requirements" means all Laws concerning
or relating to public health and safety, worker/occupational health and safety,
and pollution or protection of the environment, including those relating to the
presence, use, manufacturing, refining, production, generation, handling,
transportation, treatment, recycling, transfer, storage, disposal, distribution,
importing, labeling, testing, processing, discharge, release, control, or other
action or failure to act involving cleanup of any hazardous materials,
substances or wastes, chemical substances or mixtures, pesticides, pollutants,
contaminants, toxic chemicals, petroleum products or byproducts, asbestos,
polychlorinated biphenyls, noise, or radiation.
"Equity Interest" means (a) with respect to a corporation, any and all
shares of capital stock, (b) with respect to a partnership, limited liability
company, trust or similar Person, any and all units, interests or other
partnership/limited liability company interests, and (c) any other direct equity
ownership or participation in a Person.
"Expiration Date" means April 3, 2007.
"February Financial Statements" is defined in Section 6.9.
"Final Purchase Price" is defined in Section 2.3(e).
"First Preferred Mortgages" means the First Preferred Mortgages evidencing
a security interest in the Vessels following the Closing to secure payment of
the Buyer Note and the other obligations of Buyer and the Acquired Entities set
forth in the applicable security documents, in substantially the form of Exhibit
A.
"GAAP" means United States generally accepted accounting principles as in
effect at the time any applicable financial statements were or are prepared.
"Governmental Body" means any legislature, agency, bureau, branch,
department, division, commission, court, tribunal, magistrate, justice,
multi-national organization, quasi-governmental body, or other similar
recognized organization or body of any federal, state, county, municipal, local,
or foreign government or other similar recognized organization or body
exercising similar powers or authority.
"HAL Antillen" is defined in the preamble to this Agreement.
"HSR Act" is defined in Section 3.1(c).
"Indemnification Claim" is defined in Section 10.4(a).
"Indemnified Parties" means, individually and as a group, the Seller
Indemnified Parties and the Buyer Indemnified Parties.
"Indemnitor" means any Party having any Liability to any Indemnified Party
with respect to an Indemnification Claim under this Agreement.
"Intellectual Property" means any: (a) copyrights in both published works
and unpublished works, (b) fictitious business names, trading names, corporate
names, registered and unregistered trademarks, service marks, and applications
for such registrations, (c) any (i) patents and patent applications, and (ii)
business methods, inventions, and discoveries that may be patentable, (d)
computer software or middleware, and (e) know-how, trade secrets, confidential
information, customer lists, software (source code and object code), technical
information, data, process technology, plans, drawings, and blue prints.
"Xxxxxx Litigation" is defined in Section 10.2(c).
"Law" means any law (statutory, common, or otherwise), constitution,
treaty, convention, ordinance, equitable principle, code, rule, regulation,
executive order, or other similar authority enacted, adopted, promulgated, or
applied by any Governmental Body, each as amended.
"Liability" means any liability, claim, loss, or obligation, whether known
or unknown, asserted or unasserted, absolute or contingent or otherwise, matured
or unmatured, secured or unsecured, conditional or unconditional, accrued or
unaccrued, or due or to become due.
"March Financial Statements" is defined in Section 2.3(a).
"Material Adverse Effect" means a change in the condition (financial or
otherwise), properties, assets, Liabilities, rights, obligations or operations,
which change (or effect), individually or in the aggregate, could reasonably be
expected to be materially adverse to the business of the relevant Person or to
the ability of any party to consummate the Transactions contemplated under this
Agreement. In the case of a Material Adverse Effect with respect to the Company,
it will be viewed in the context of the Acquired Entities (assuming the transfer
of the Wind Surf to Wind Spirit Limited has already occurred) taken together.
"Order" means any order, ruling, decision, verdict, award, decree, writ,
mandate, judgment, injunction, or other similar determination or finding by,
before, or under the supervision of any Governmental Body, arbitrator, or
mediator.
"Organizational Documents" means the articles of incorporation, certificate
of incorporation, charter, bylaws, articles of formation, regulations, operating
agreement, certificate of limited partnership, partnership agreement, and all
other similar documents, instruments or certificates executed, adopted, or filed
in connection with the creation, formation, or organization of a Person,
including any amendments thereto.
"Parent Guarantee" means the Performance Guarantee by Ambassadors
International, Inc., guaranteeing certain obligations, in substantially the form
of Exhibit M.
"Parties" is defined in the preamble to this Agreement.
"Permit" means any permit, license, certificate, approval, consent, notice,
franchise, registration, waiver, filing, or other similar authorization required
by any Law or Governmental Body.
"Permitted Encumbrances" means:
(a) Encumbrances for crew wages (including wages of the Master) accrued for
not more than thirty (30) days;
(b) Encumbrances for Taxes, assessments, governmental charges, fines and
penalties not at the time delinquent;
(c) mechanics', carriers', workers' and repairers' and other similar
Encumbrances;
(d) pledges or deposits in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other social security
legislation;
(e) deposits to secure the performance of bids, trade contracts and leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
(f) Encumbrances for tort claims covered by insurance, subject to
applicable deductibles;
(g) Port, canal and other waterway dues and pilotage accrued for not more
than thirty (30) days; and
(f) any other Encumbrances which Buyer has approved in writing;
provided that any of the foregoing that are required under GAAP to be reflected
in the February Financial Statements are in fact reflected in such financial
statements.
"Person" means any individual, partnership, limited liability company,
corporation, association, joint stock company, trust, entity, joint venture,
labor organization, unincorporated organization, or Governmental Body.
"Pledge Agreement" means the Pledge Agreement relating to pledge of the
Shares by Buyer at the Closing to secure payment of the Buyer Note and the other
obligations of Buyer and the Acquired Entities set forth in the applicable
security documents, in substantially the form of Exhibit B.
"Purchase Price" is defined in Section 2.2.
"Security Agreement" means the Security Agreement relating to the security
interest in the Vessels and the Shares following the Closing to secure payment
of the Buyer Note and the other obligations of Buyer and the Acquired Entities
set forth in the applicable security documents, in substantially the form of
Exhibit C.
"Seller" is defined in the preamble to this Agreement.
"Seller Indemnified Parties" means Seller and its officers, directors,
managers, employees, agents, representatives, controlling Persons, stockholders,
and their Affiliates.
"Seller's Knowledge" means the actual conscious knowledge of the following
individuals: Xxxxx Xxxxx, Xxx Xxxxxx, Xxxxx Xxxxxxx and Xxxxx Xxxxx.
"Shares" is defined in the recitals of this Agreement.
"Subsidiary Guarantee" means the Guarantee by each of the Acquired
Entities, guaranteeing the obligations of Buyer under the Buyer Note and other
Security Documents, in substantially the form of Exhibit L.
"Surf Limited" is defined in the recitals of this Agreement.
"Tax" means (i) any federal, provincial, territorial, state, municipal,
local, foreign or other income, gross receipts, license, payroll, employment,
excise, severance, stamp, documentary stamp, occupation, premium, windfall
profits, environmental (including taxes under Code Section 59A), customs, ad
valorem, duties, capital stock, franchise, profits, withholding, social
security, unemployment, disability, real property, mortgage recording, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, in each case, whether disputed or not, (ii)
liability for the payment of any amounts of the type described in clause (i) as
a result of being or having been a member of an affiliated, consolidated,
combined or unitary group, and (iii) liability for the payment of any amounts as
a result of being party to any tax sharing agreement or as a result of any
express or implied obligation to indemnify any other person with respect to the
payment of any amounts of the type described in clause (i) or (ii).
"Tax Parent" means the first entity in the chain of ownership above HAL
Antillen which is the 100% beneficial owner of HAL Antillen and which is treated
as a taxpayer for U.S. Federal Tax purposes.
"Tax Return" means any return, declaration, report, claim for refund,
information return or statement or other forms or documents relating to Taxes
required to be filed or maintained with any Governmental Body, including any
schedule or attachment thereto, and including any amendment thereof.
"Termination Date" means the earlier to occur of (a) the Expiration Date
and (b) the date on which this Agreement is terminated pursuant to Section 9.1
(other than Section 9.1(a)).
"Threshold Amount" is defined in Section 10.5(a).
"Transaction Documents" means this Agreement and the Ancillary Agreements.
"Trademark License Agreement" means the Trademark License Agreement between
HAL Antillen and the Company in substantially the form of Exhibit O.
"Transactions" means (a) the sale of the Shares by Seller to Buyer and
Buyer's delivery of the Purchase Price therefor, (b) the execution, delivery,
and performance of all of the documents, instruments and agreements to be
executed, delivered, and performed in connection herewith, and (c) the
performance by Buyer and Seller of their respective covenants and obligations
under this Agreement.
"Transition Services Agreement" means the Transition Services Agreement
between Holland America Line Inc. and Buyer containing the terms and conditions
of certain services that Holland America Line Inc. will provide to Buyer in
connection with the operation of the Company after the Closing, in substantially
the form of Exhibit D.
"Treas. Reg." means the proposed, temporary and final regulations
promulgated under the Code.
"Vessels" is defined in the recitals of this Agreement.
"Wind Spirit" is defined in the recitals of this Agreement.
"Wind Star" is defined in the recitals of this Agreement.
"Wind Surf" is defined in the recitals of this Agreement.
"Windstar Passenger Records" are any records of Persons who have only been
passengers on one or more of the Wind Star, Wind Spirit or Wind Surf, but have
not been passengers on any other vessel of Seller or its Affiliates.
"Windstar Plan" is defined in Section 6.11(b).
"Windstar Plan Eligible Employees" is defined in Section 6.11(b).
ARTICLE 2.
PURCHASE AND SALE OF SHARES
2.1 Purchase and Sale of Shares. On the terms and subject to the conditions
of this Agreement, for the consideration specified in Section 2.2, Buyer agrees
to purchase from HAL Antillen, and HAL Antillen agrees to sell to Buyer, the
Shares.
2.2 Purchase Price. As consideration for the sale of the Shares to Buyer,
Buyer shall deliver (or cause to be delivered) to Seller the following
(together, the "Purchase Price"):
(a) a promissory note, executed by Buyer in favor of the Person
designated by Seller, in the amount of sixty million dollars ($60,000,000),
substantially in the form of Exhibit E (the "Buyer Note"); and
(b) cash by wire transfer to the account designated in writing by
Seller in an amount (the "Cash Payment") equal to (i) the amount reflected
as shareholders' equity on the balance sheet contained in the February
Financial Statements, minus (ii) sixty million dollars ($60,000,000), plus
(iii) any payables owed by any Acquired Entity to HAL Antillen or its other
Affiliates reflected on the balance sheet contained in the February
Financial Statements, minus (iv) any payables owed by HAL Antillen or its
other Affiliates to any Acquired Entity reflected on the balance sheet
contained in the February Financial Statements, plus (v) any amounts owing
to Seller pursuant to Section 6.10.
2.3 Adjustments to Purchase Price. The Purchase Price may be adjusted in
the following manner:
(a) Within 60 days after Closing, Seller will deliver to Buyer
unaudited consolidated balance sheets and statements of income, changes in
stockholders' equity, and cash flow for the Company and with respect to the
Wind Surf as of and for the period ended March 31, 2007 (the "March
Financial Statements"), together with a recalculation of the Cash Payment
based on the balance sheet contained in the March Financial Statements
(instead of the February Financial Statements) (the "Conclusive Cash
Payment"). If the Conclusive Cash Payment is different than the Cash
Payment, then, within two business days of the determination of the
Conclusive Cash Payment, Seller (Buyer) will pay to Buyer (Seller), as
appropriate, an amount equal to the difference between the Cash Payment and
the Conclusive Cash Payment, together with interest thereon at the rate of
7.0% per annum during the period commencing on and including the Closing
Date and continuing through but excluding the date such payment is made.
(b) Within 60 days after receipt of the March Financial Statements,
Buyer may demand, by written notice to Seller (an "Audit Notice"), that the
March Financial Statements be audited by the same accounting firm preparing
the Audited Financial Statements delivered pursuant to Section 0. Such
accounting firm will (i) prepare such audited financial statements within
60 days of referral to such firm (the "Audited March Financial Statements")
and (ii) recalculate the Cash Payment based on the balance sheet contained
in the Audited March Financial Statements (instead of the March Financial
Statements) (the "Auditor's Conclusive Cash Payment"), which in each case
will be final and binding on Buyer and Seller, in the absence of manifest
error, for the purposes of this Section 2.3(a). If Buyer does not deliver
an Audit Notice to Seller within such 60-day period, there will be no
additional adjustment of the Purchase Price.
(c) If the Auditor's Conclusive Cash Payment is different than the
Conclusive Cash Payment, then, within two business days of the
determination of the Auditor's Conclusive Cash Payment, Seller (Buyer) will
pay to Buyer (Seller), as appropriate, an amount equal to the difference
between the Conclusive Cash Payment and the Auditor's Conclusive Cash
Payment (the "Cash Payment Difference"), together with interest thereon at
the rate of 7.0% per annum during the period commencing on and including
the Closing Date and continuing through but excluding the date such payment
is made.
(d) Buyer will be solely responsible for the costs of the audit of the
March Financial Statements if (i) the Cash Payment Difference is less than
or equal to $50,000, or (ii) the Cash Payment Difference that Buyer is
required to pay to Seller exceeds $50,000. Seller will be solely
responsible for the costs of the audit of the March Financial Statements if
the Cash Payment Difference that Seller is required to pay to Buyer exceeds
$50,000.
(e) The "Final Purchase Price" is the Purchase Price, increased or
decreased, as applicable, by the amount paid by Buyer or Seller pursuant to
this Section 2.3. Each of Buyer and Seller agree (i) prior to Closing, to
reasonably cooperate to prepare a schedule allocating the Final Purchase
Price among the assets acquired hereunder in accordance with Section 1060
of the Code and the regulations thereunder, and, after Closing, to prepare
any necessary adjustments thereto, (ii) to file IRS Form 8594, and all
federal, state, local and foreign Tax Returns, in accordance with such
allocation schedule (as adjusted) and (iii) to provide the other promptly
with any other information required to complete IRS Form 8594.
2.4 The Closing. The closing of the purchase and sale of the Shares (the
"Closing") will take place at the offices of Xxxxxxxxxxx & Xxxxxxxx Xxxxxxx
Xxxxx Xxxxx LLP in Seattle, Washington, commencing at 9:00 a.m., local time, on
the second business day following the satisfaction or waiver of all conditions
to the obligations of the Parties to consummate the purchase and sale of the
Shares (other than conditions with respect to actions the respective Parties
will take at the Closing itself) or such other date, time or location as Buyer
and Seller may mutually determine (the "Closing Date").
2.5 Deliveries at the Closing. At the Closing:
(a) Seller will deliver to Buyer:
(i) certificates representing the Shares, free and clear of any
Encumbrances, transfer restrictions or restrictive legends (other than
as contemplated by the Security Documents), registered in such names
and in such denominations as may be requested by Buyer (provided that
such Shares upon reissue will be subject to the Security Agreement and
Pledge Agreement), duly endorsed or accompanied by duly executed stock
powers;
(ii) a duly executed Seller's certificate, substantially in the
form of Exhibit F, as to whether each condition specified in Sections
8.1(a)-(c) has been satisfied;
(iii) a duly executed Seller's certificate by Attorney-in-Fact,
substantially in the form of Exhibit G;
(iv) resignations, effective as of the Closing, of the directors
and officers of the Acquired Entities;
(v) the Transition Services Agreement, duly executed by Holland
America Line Inc.;
(vi) the Trademark License Agreement, duly executed by HAL
Antillen;
(vii) the Security Agreement, duly executed by HAL Antillen; and
(viii) the Pledge Agreement, duly executed by HAL Antillen.
(b) Buyer will deliver to Seller:
(i) the Buyer Note, duly executed by Buyer;
(ii) the Cash Payment;
(iii) a duly executed Officers' certificate, substantially in the
form of Exhibit H, as to whether each condition specified in Sections
8.2(a)-(c) has been satisfied;
(iv) a duly executed Secretary's certificate, substantially in
the form of Exhibit I;
(v) the Transition Services Agreement, duly executed by Buyer;
(vi) the Security Agreement, duly executed by Buyer, the Company,
Wind Star Limited, Wind Spirit Limited and Surf Limited;
(vii) the First Preferred Mortgages, each duly executed by the
relevant parties identified therein;
(viii) the Deeds of Covenants, each duly executed by the relevant
parties identified therein;
(ix) the Pledge Agreement, duly executed by Buyer; (x) the
Trademark License Agreement, duly executed by the Company;
(xi) the Subsidiary Guarantee, duly executed by the relevant
parties; and
(xii) the Parent Guarantee, duly executed by Ambassadors
International, Inc.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
CONCERNING THE SELLER AND BUYER
3.1 Representations and Warranties of Seller. Seller represents and
warrants to Buyer that the statements contained in this Section 3.1 are correct
and complete as of the date of this Agreement and will be correct and complete
as of the Closing Date.
(a) Status of Seller. Seller is an entity validly existing and in
good standing under the Laws of the jurisdiction of its creation,
formation, or organization and is duly qualified to conduct business
and is in good standing in each jurisdiction where such qualification
is required.
(b) Power and Authority; Enforceability. Seller, and each
Affiliate of Seller, has the entity power and authority to execute and
deliver each Transaction Document to which it is a party, and to
perform and consummate the Transactions. Seller, and each Affiliate of
Seller, has taken all actions necessary to authorize the execution and
delivery of each Transaction Document to which it is party, the
performance of its obligations thereunder, and the consummation of the
Transactions. Each Transaction Document to which Seller, and each
Affiliate of Seller, is a party has been duly authorized, executed,
and delivered by, and is enforceable against, such party, except as
such enforceability may be subject to the effects of bankruptcy,
insolvency, reorganization, moratorium, or other Laws relating to or
affecting the rights of creditors, and general principles of equity.
(c) No Violation. The execution and the delivery of the
Transaction Documents by Seller and the performance and consummation
of the Transactions by Seller will not (i) breach any provision of its
Organizational Documents, (ii) breach any Law, Order, material
Contract, or material Permit to which Seller is a party or by which
Seller is bound, or (iii) require any Consent, in each case except as
set forth on Schedule 3.1(c) and except for any Consent required in
connection, or in compliance, with the provisions of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR Act").
(d) Brokers' Fees. Seller does not have any Liability to pay any
compensation to any broker, finder, or agent with respect to the
Transactions for which Buyer or the Company could become directly or
indirectly liable.
3.2 Representations and Warranties of Buyer. Buyer represents and warrants
to Seller that the statements contained in this Section 3.2 are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date (in each case, except as expressly provided in a representation
or warranty).
(a) Entity Status. Buyer is an entity validly existing and in
good standing under the Laws of the jurisdiction of its creation,
formation or organization.
(b) Power and Authority; Enforceability. Buyer, and each
Affiliate of Buyer, has the relevant entity power and authority to
execute and deliver each Transaction Document to which it is party,
and to perform and consummate the Transactions. Buyer, and each
Affiliate of Buyer, has taken all action necessary to authorize the
execution and delivery of each Transaction Document to which it is
party, the performance of its obligations thereunder, and the
consummation of the Transactions. Each Transaction Document to which
Buyer, and each Affiliate of Buyer, is a party has been duly
authorized, executed and delivered by, and is enforceable against,
such party, except as such enforceability may be subject to the
effects of bankruptcy, insolvency, reorganization, moratorium, or
other Laws relating to or affecting the rights of creditors, and
general principles of equity.
(c) No Violation. The execution and delivery of the Transaction
Documents to which Buyer is a party by Buyer and the performance and
consummation of the Transactions by Buyer will not (i) breach any
provision of its Organizational Documents; (ii) breach any Law, Order,
material Contract, or material Permit to which Buyer is a party or by
which it is bound or to which any of its assets is subject; or (iii)
require any Consent, in each case except as set forth on Schedule
3.2(c) and except for any Consent required in connection, or in
compliance, with the provisions of the HSR Act.
(d) Brokers' Fees. Buyer has no liability to pay any compensation
to any broker, finder, or agent with respect to the Transactions for
which any Seller (or, if the Closing does not occur, the Company)
could become liable.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
CONCERNING THE COMPANY
HAL Antillen represents and warrants to Buyer that the statements contained
in this ARTICLE 4 are correct and complete as of the date of this Agreement and
will be correct and complete as of the Closing Date (in each case except as
expressly provided in a representation or warranty), except as set forth in the
schedules HAL Antillen has delivered to Buyer (as amended in accordance with
this Agreement, the "Disclosure Schedule"). The Parties acknowledge that any
representations relating to the Acquired Entities will refer (a) as of the date
hereof, only to the Acquired Entities that are in existence on the date hereof;
and (b) as of the Closing Date, to the Acquired Entities that are in existence
on the Closing Date. In addition, the Parties acknowledge and agree that prior
to Closing Seller (i) will amend and supplement the Disclosure Schedule, as
applicable, to reflect the formation of Surf Limited pursuant to Section 6.10,
and (ii) within five business days from the date of this Agreement may amend and
supplement the Disclosure Schedule as necessary with respect to any other
matters to properly reflect all exceptions to the representations and warranties
herein. Any such amendment or supplement to the Disclosure Schedule will be
deemed to be disclosed as of the Closing Date for purposes of the accuracy of
the representations and warranties made in this Agreement as of the Closing
Date. The Disclosure Schedule will identify exceptions to representations and
warranties with reasonable particularity and describe the relevant facts in
reasonable detail. Without limiting the generality of the foregoing, the mere
listing (or inclusion of a copy) of a document or other item will not be deemed
adequate to disclose an exception to a representation or warranty made herein
(unless the representation or warranty addresses the existence of the document
or other item itself). Buyer acknowledges that it has conducted a due diligence
review with respect to the Acquired Entities and that, to Buyer's Knowledge, as
of the date of this Agreement, the Disclosure Schedule identifies all exceptions
to representations and warranties with reasonable particularity and describes
the relevant facts in reasonable detail. The Disclosure Schedule is arranged in
paragraphs corresponding to the numbered and lettered paragraphs contained in
this Agreement.
4.1 Entity Status. Each Acquired Entity is an entity validly existing and
in good standing under the Laws of the jurisdiction of its creation, formation
or organization. Each Acquired Entity is duly authorized to conduct its business
and is in good standing under the laws of each jurisdiction where such
qualification is required. Each Acquired Entity has the requisite power and
authority necessary to own or lease its properties and to carry on its
businesses as currently conducted. HAL Antillen has provided to Buyer correct
and complete copies of each Acquired Entity's Organizational Documents, as
amended to date, and the minute books containing the records of meetings and
actions of shareholders for each Acquired Entity. No Acquired Entity is in
breach of any provision of its Organizational Documents, which breach could have
a Material Adverse Effect on Buyer or any Acquired Entity.
4.2 No Violation. Except as listed on Schedule 4.2, neither the execution
and the delivery of any Transaction Document, nor the consummation of the
Transactions contemplated thereby, will (a) breach any provision of the
Organizational Documents of any Acquired Entity; (b) breach any Law, Order,
material Contract, or material Permit to which any Acquired Entity is a party or
by which it is bound or to which any of its assets is subject; (c) require any
Consent other than as may be required in connection, or in compliance, with the
provisions of the HSR Act; or (d) trigger any rights of first refusal,
preferential purchase, or similar rights.
4.3 Brokers' Fees. Except as may have been created by or through Buyer or
any of its Affiliates, no Acquired Entity has any Liability to pay any
compensation to any broker, finder, or agent with respect to the Transactions
for which Buyer or any Acquired Entity could become directly or indirectly
Liable.
4.4 Capitalization. The authorized Equity Interests of the Company are set
forth on Schedule 4.4. All of the Shares: (a) have been duly authorized and are
validly issued, fully paid, and nonassessable, (b) were issued in compliance
with all applicable securities Laws, (c) were not issued in breach of any
contractual obligation, and (d) are owned beneficially by HAL Antillen free and
clear of any Encumbrances. There is no outstanding subscription, option,
warrant, call, right or other agreement or commitment obligating HAL Antillen to
issue, sell, deliver, transfer, repurchase, redeem or otherwise acquire
(including any right of conversion or exchange under any outstanding security or
instrument) any security or other evidence of any Equity Interest of the
Company. There are no Contracts with respect to the voting of the Shares.
4.5 Acquired Subsidiaries. Set forth on Schedule 4.5 for each Acquired
Subsidiary is (a) its jurisdiction of creation, formation, or organization, (b)
the number of authorized Equity Interests of each class of its Equity Interests,
(c) the number of issued and outstanding Equity Interests of each class of its
Equity Interests and the names of the holders thereof, and (d) the number of
Equity Interests held in treasury. All of the issued and outstanding Equity
Interests of each Acquired Subsidiary have been duly authorized and are validly
issued, fully paid, and nonassessable. The Company owns beneficially all of the
outstanding Equity Interests of the Acquired Subsidiaries, free and clear of any
Encumbrances (other than restrictions under applicable securities Laws). There
is no outstanding subscription, option, warrant, call, right or other agreement
or commitment obligating the Company to issue, sell, deliver, transfer,
repurchase, redeem or otherwise acquire (including any right of conversion or
exchange under any outstanding security or instrument) any security or other
evidence of any Equity Interest of any Acquired Subsidiary. Except as set forth
on Schedule 4.5, there are no Contracts with respect to the voting of the Equity
Interests of any Acquired Subsidiary. No Acquired Entity controls, directly or
indirectly, or has any direct or indirect Equity Interest in any Person that is
not an Acquired Subsidiary.
4.6 Financial Statements; Undisclosed Liabilities.
(a) Seller has delivered to Buyer unaudited consolidated balance
sheets and statements of income, changes in stockholders' equity, and
cash flow as of and for the fiscal years ended November 30, 2005 and
2006 for the Company. The foregoing financial statements, and, at
Closing, any financial statements delivered pursuant to Section 6.9,
(A) have been (or will have been) prepared in accordance with GAAP
applied on a consistent basis throughout the periods covered thereby,
(B) present (or will present) fairly and accurately the financial
condition of the Company and its subsidiaries as of such dates in all
material respects and the results of operations of the Company and its
subsidiaries for such periods in all material respects, (C) are (or
will be) correct and complete in all material respects, and (D) are
(or will be) consistent with the books and records of the Company;
provided, however, that such unaudited financial statements are
subject to normal year-end adjustments and lack footnotes and other
presentation items.
(b) Other than as to discrepancies for which there has been an
adjustment to the Cash Payment pursuant to Section 2.3, no Acquired
Entity has any Liability except for (i) Liabilities reflected in the
February Financial Statements and not heretofore paid or discharged,
and (ii) Liabilities that have arisen after the Balance Sheet Date in
the ordinary course of business which, individually or in the
aggregate, are not material or have otherwise arisen in compliance
with this Agreement.
4.7 Subsequent Events. Except as set forth in Schedule 4.7, as consented to
by Buyer pursuant to Section 6.3, or as otherwise contemplated herein, during
the period from the Balance Sheet Date through the Closing, the Acquired
Entities have been operated in the ordinary course of business and there have
been no events, series of events or the lack of occurrence thereof which,
singularly or in the aggregate, could reasonably be expected to have a Material
Adverse Effect on the Company. Without limiting the foregoing, during that
period, except as set forth in Schedule 4.7 or as otherwise contemplated herein,
and except for events, series of events or the lack of occurrence thereof that
could not reasonably be expected to have (singularly or in the aggregate) a
Material Adverse Effect on the Company, none of the following have occurred:
(a) no Acquired Entity has sold, leased, transferred, or assigned
any assets other than for a fair consideration in the ordinary course
of business;
(b) other than voyage charters of the type typically entered into
by Company in the ordinary course of business and other than Contracts
necessary to enable the Company to proceed with the scheduled 2007
drydocking of the Wind Spirit (copies of which will be promptly
provided to Buyer), no Acquired Entity has entered into any Contract
(or series of related Contracts) involving more than $100,000 or that
is outside the ordinary course of business;
(c) no Encumbrance has been imposed upon any assets of any
Acquired Entity other than Permitted Encumbrances; (d) other than
capital expenditures necessary to enable the Company to proceed with
the scheduled 2007 drydocking of the Wind Spirit, no Acquired Entity
has made any capital expenditure (or series of related capital
expenditures) involving more than $50,000 individually or in the
aggregate;
(e) no Acquired Entity has made any capital investment in, any
loan to, or any acquisition of the securities or assets of, any other
Person;
(f) no Acquired Entity has issued any note, bond, or other debt
security or created, incurred, assumed, or guaranteed any Liability
for borrowed money or capitalized lease Contract;
(g) no Acquired Entity has canceled, compromised, waived, or
released any Action (or series of related Actions) involving more than
$50,000;
(h) no Acquired Entity has granted any Contracts or any rights
under or with respect to any Intellectual Property, other than such
rights as the Company ordinarily grants in the execution of routine
sales and marketing agreements;
(i) there has been no change made or authorized to be made to any
Acquired Entity's Organizational Documents; (j) no Acquired Entity has
declared, set aside, or paid any dividend or made any distribution
with respect to its Equity Interests (whether in cash or in kind), or
redeemed, purchased, or otherwise acquired any of its Equity Interests
except dividends and other transactions solely among the Acquired
Entities or;
(k) no Acquired Entity has experienced any damage, destruction,
or loss (whether or not covered by insurance) to its properties;
(l) no Acquired Entity has effected any change in any method of
accounting or accounting practice, except for any such change required
because of a concurrent change in GAAP or to conform a subsidiary's
accounting policies and practices to the Company's;
(m) no Acquired Entity has entered into any employment,
collective bargaining or similar Contract or modified the terms of any
such existing Contract; provided that the foregoing shall not be
construed to prevent the Company from entering into standard form
individual employment contracts, consistent with past practice, as may
be required from time to time in the routine management of the
Vessels;
(n) there has not been any other occurrence, event, incident,
action, failure to act or transaction with respect to any Acquired
Entity outside the ordinary course of business and involving amounts
in excess of $50,000; and
(o) no Acquired Entity has committed to any of the foregoing.
4.8 Legal Compliance. Except as set forth in Schedule 4.14, the Acquired
Entities have materially complied with all applicable Laws, and no Action is
pending, or to the Knowledge of Seller threatened, against any of them alleging
any failure to so comply. Notwithstanding the foregoing, no representation or
warranty is made in this Section 4.8 with respect to Environmental, Health, and
Safety Requirements, which are covered exclusively in Section 4.16.
4.9 Tax Matters.
(a) Other than as to discrepancies for which there has been an
adjustment to the Cash Payment pursuant to Section 2.3, no Acquired
Entity has outstanding any material Liability for Taxes, including
Taxes relating to prior periods, other than those set forth or
adequately reserved against in the February Financial Statements or
those incurred since the Balance Sheet Date in the ordinary course of
business.
(b) Each Acquired Entity (or an Affiliate of such Acquired
Entity) has duly filed when due all Tax reports and returns in
connection with and in respect of such Acquired Entity's business and
assets, and has timely paid and discharged all amounts shown as due
thereon.
(c) No Acquired Entity has an outstanding notice of any Tax
deficiency
(d) No Acquired Entity has now in effect any waiver of any
statute of limitations on the assessment or collection of any Tax, nor
has an Acquired Entity or Tax Parent executed or filed with any
Governmental Body any Contract now in effect extending the period for
assessment or collection of any Taxes against it.
(e) There are no Encumbrances for Taxes upon, or pending against,
any asset of any Acquired Entity. (f) No Acquired Entity is a party to
any Tax allocation or sharing Contract. (g) No Acquired Entity (i) has
been a member of an Affiliated Group filing a consolidated federal
income Tax Return (other than a group the common parent of which was
the Company) and (ii) has any Liability for the Taxes of any Person
(other than each Acquired Entity) under Treas. Reg. Section 1.1502-6
or similar Law, as a transferee or successor, by Contract, or
otherwise.
(h) Each Acquired Entity has made the appropriate election to be
recognized as a disregarded entity for U.S. Tax purposes and has filed
Internal Revenue Service Form 8832, a copy of which has been provided
to Buyer.
(i) Set forth on Schedule 4.9 is a list of all jurisdictions
where each Acquired Entity and each Tax Parent has paid Taxes, or
filed a Tax Return within the last three years.
(j) The Tax Parent has not been subject to any Tax examination by
any Governmental Body which relates to the business carried on by the
Acquired Entities.
4.10 Real Property. None of the Acquired Entities owns, or has ever owned,
any real property.
4.11 Intellectual Property.
(a) Schedule 4.11(a)(1) contains a complete and accurate list of
all of the material Intellectual Property owned by the Acquired
Entities as of the date hereof and that will continue to be owned by
the Acquired Entities as of the Closing. Schedule 4.11(a)(2) contains
a complete and accurate list of all of the material Intellectual
Property that is either (i) owned by the Acquired Entities as of the
date hereof that will not be owned by the Acquired Entities as of the
Closing or (ii) used or held for use by the Acquired Entities in the
conduct of their business but is not owned by an Acquired Entity,
other than reservations systems, accounting systems, purchasing and
inventory systems and shoreside based computer hardware and software.
For the avoidance of doubt, the Intellectual Property listed on
Schedule 4.11(a)(2) together with reservations systems, accounting
systems, purchasing and inventory systems and shoreside based computer
hardware and software are not included in the sale that is
contemplated by this Agreement, and the representations and warranties
contained in this Section 4.11 relate solely and exclusively to
Intellectual Property owned by the Acquired Entities that is
identified on Schedule 4.11(a)(1).
(b) Neither the license nor other use of any Intellectual
Property owned by the Acquired Entities has to Seller's Knowledge (i)
violated or infringed, and (ii) currently does not violate or
infringe, upon the Intellectual Property of any Person. Except as set
forth in Schedule 4.14, neither Seller nor any Acquired Entity has
been a defendant in any action, suit, investigation or proceeding
relating to, or otherwise has been notified of, any alleged claim of
infringement of any other Person's Intellectual Property, which
Actions are still active, and neither Seller nor any Acquired Entity
has any outstanding Actions for (or any knowledge of) any continuing
infringement of Intellectual Property by any other Person.
(c) Each Acquired Entity (i) is the sole and exclusive owner of,
with all right, title and interest in and to (free and clear of any
Encumbrances), any and all Intellectual Property owned by it, (ii) or
Seller or one of its Affiliates has rights to the use of all such
Intellectual Property used by the Acquired Entities pursuant to
license, sublicense, agreement, or permissions and, except as set
forth in Schedule 4.11(c), is not contractually obligated to pay any
compensation or grant any rights to any third party in respect thereof
and (iii) has the right to pursue an application to register any
Intellectual Property owned by it that constitutes an application for
registration, including all patent applications, trademark
applications, service xxxx applications, copyright applications and
mask work applications, and to transfer ownership to Buyer of such
application and of the registration once such registration issues.
(d) The Acquired Entities have taken appropriate measures to
protect the confidential and proprietary nature of any Intellectual
Property owned by them.
(e) Any and all Intellectual Property owned by the Acquired
Entities that are registrations, including all registered patents,
trademarks, service marks, copyrights and masks works, are valid,
subsisting and in full force and effect in the jurisdictions in which
the Acquired Entities currently conduct business except insofar as the
contrary would not have a Material Adverse Effect on the Company.
(f) None of the Intellectual Property owned by any Acquired
Entity is subject to any outstanding order or agreement restricting in
any manner the use or licensing thereof by any Acquired Entity.
(g) To the Seller's Knowledge, subject to the receipt of the
Consents set forth on Schedule 4.2, all of the Intellectual Property
set forth on Schedule 4.11(a)(1) (i) is freely assignable to Buyer and
will continue to be available for use by the relevant Acquired Entity
on identical terms following the consummation of the Transactions,
(ii) will be provided by HAL Antillen or its Affiliates to Buyer
pursuant to the Transition Services Agreement or (iii) is included on
Schedule 6.14(b).
4.12 Contracts. Schedule 4.12 lists the following Contracts to which any
Acquired Entity is a party:
(a) any Contract (or group of related Contracts) for the lease of
personal property to or from any Person providing for lease payments
in excess of $50,000 per annum;
(b) other than Contracts that will not be binding upon Buyer or
any Acquired Entity after Closing, any Contract (or group of related
Contracts) for the purchase or sale of raw materials, commodities,
supplies, products, or other personal property, or for the furnishing
or receipt of services, the performance of which will (i) extend over
a period of more than one year or (ii) involve consideration in excess
of $50,000;
(c) any Contract (or group of related Contracts) under which it
has created, incurred, assumed, or guaranteed any Liability for
borrowed money or any capitalized lease in excess of $50,000, or under
which it has imposed or suffered to exist an Encumbrance on any of its
assets;
(d) any Contract concerning noncompetition;
(e) any Contract with HAL Antillen or any other Affiliates of HAL
Antillen (other than the Acquired Entities); and
(f) any charter covering any Vessel.
HAL Antillen has provided to Buyer a correct and complete copy of each
written Contract (as amended to date) listed in Schedule 4.12 and a written
summary setting forth the terms and conditions of each oral Contract referred to
in Schedule 4.12. With respect to each such Contract:
(i) the Contract is the legal, valid, binding and enforceable
obligation of each Acquired Entity which is a party to such Contract
and is in full force and effect with respect to each Acquired Entity,
except as such enforceability may be subject to the effects of
bankruptcy, insolvency, reorganization, moratorium, or other Laws
relating to or affecting the rights of creditors, and general
principles of equity;
(ii) to the Seller's Knowledge, subject to the receipt of the
Consents set forth on Schedule 4.2, the Contract will continue to be
legal, valid and binding, and enforceable by the relevant Acquired
Entity, and in full force and effect, on identical terms following the
consummation of the Transactions, except as such enforceability may be
subject to the effects of bankruptcy, insolvency, reorganization,
moratorium, or other Laws relating to or affecting the rights of
creditors, and general principles of equity;
(iii) the Company is not and, to the Seller's Knowledge, no
counter-party is, in breach or default of such Contract, and no event
has occurred that, with notice or lapse of time, would constitute a
breach or default or permit termination, modification or acceleration
under the Contract;
(iv) no Person has provided HAL Antillen or any Acquired Entity
with written notice that it intends to terminate the Contract;
(v) there has not been any assignment by HAL Antillen or, to
Seller's Knowledge, any other Person of the Contract and there do not
exist any Encumbrances with respect to such Contract except as
provided by the terms thereof; and
(vi) there are no material disputes or, to Seller's Knowledge
threatened disputes, with any Person under any Contract.
4.13 Insurance. Schedule 4.13 lists (a) all insurance policies currently
carried by the Acquired Entities or covering the business of the Acquired
Entities and (b) all insurance loss runs or workers' compensation claims
received with respect to the Acquired Entities for the past three policy years.
With respect to each such insurance policy: (i) the policy is legal, valid,
binding, enforceable, and in full force and effect, except as such
enforceability may be subject to the effects of bankruptcy, insolvency,
reorganization, moratorium, or other Laws relating to or affecting the rights of
creditors, and general principles of equity; (ii) Seller or the Affiliate of
Seller which holds the policy is not in breach or default (including with
respect to the payment of premiums or the giving of notices) and no event has
occurred that, with notice or the lapse of time, would consititute such a breach
or default, or permit termination, modification or acceleration under the
policy; and (iii) the insurer has not repudiated any provision thereof. For the
avoidance of doubt, the policies listed on Schedule 4.13 will not be assigned or
otherwise transferred to Buyer and will terminate as of the close of business on
the Closing Date. No insurance that any Acquired Entity has ever carried has
been canceled as a consequence of a breach or default thereunder by any Acquired
Entity.
4.14 Litigation. Schedule 4.14 sets forth each instance in which an
Acquired Entity (a) is subject to any outstanding Order or (b) is a party to or
the subject of any Action. No Action set forth in Schedule 4.14 questions the
enforceability of this Agreement or the Transactions or would result in a
Material Adverse Effect on the Company. To the Seller's Knowledge, except as
disclosed on Schedule 4.14, no Action is pending or threatened against any
Acquired Entity.
4.15 Employees.
(a) Schedule 4.15(a) sets forth (i) each collective bargaining
Contract related to which any Acquired Entity is a party to or bound by, or
to which any Affiliate of Seller is a party to or bound by which relates to
members of the crew of any Vessel (the "Crew Members"), (ii) any existing
strikes, grievances, claims of unfair labor practices, or other collective
bargaining disputes with respect to the Acquired Entities or the Crew
Members and (iii) each form of employment agreement to which any Acquired
Entity is a party to or bound by not otherwise included in (i) above. No
Acquired Entity has committed any unfair labor practice (as determined
under any Law) that could result in a Liability to Company.
(b) Schedule 4.15(b) sets forth each employee benefit plan or
arrangement of any type (including plans described in Section 3(3) of
ERISA) under which any Acquired Entity has or in the future could have
directly, or indirectly through a commonly controlled entity (within the
meaning of Sections 414(b), (c), (m) and (o) of the Code), any Liability
with respect to any Acquired Entity's or commonly controlled entity's
current or former employees.
(c) Schedule 4.15(c) sets forth an employee census with respect to
each of the Vessels as of the date indicated thereon.
4.16 Environmental, Health, and Safety Matters.
(a) Each Acquired Entity has obtained all material Permits that are
required pursuant to Environmental, Health, and Safety Requirements for the
operation of its business, and has materially complied with, and is in
material compliance with, all such Permits. A list of all such Permits is
set forth in Schedule 4.16(a).
(b) Except as set forth in Schedule 4.16(b), no Acquired Entity has
received any written notice or report regarding any actual or alleged
violation of Environmental, Health, and Safety Requirements or any material
Liabilities, including any investigatory, remedial or corrective
Liabilities, relating to any of it or its assets arising under
Environmental, Health, and Safety Requirements.
4.17 Permits. The Acquired Entities possess all material Permits required to be
obtained for their business and operations. Schedule 4.17 sets forth a list of
all such Permits, other than Permits relating to berthing arrangements. Except
as set forth in Schedule 4.17, with respect to each such Permit:
(a) it is valid, subsisting and in full force and effect;
(b) there are no violations of such Permit that would result in a
termination of such Permit;
(c) no Acquired Entity has received written notice that such Permit
will not be renewed; and
(d) none of the Permits will be terminated or impaired or become
terminable, in whole or in part, as a result of the Transactions.
Notwithstanding the foregoing, no representation or warranty is made in
this Section 4.17 with respect to Environmental, Health, and Safety
Requirements, which are covered exclusively in Section 4.16. 4.18 Vessels.
(a) Schedule 4.18(a) lists all vessels owned, chartered, sub-chartered
or operated by each Acquired Entity and sets forth, for each such Vessel,
(i) its name, (ii) its owner, (iii) the arrangement (including
inter-company arrangements) pursuant to which such Vessel is chartered,
sub-chartered or operated by such Acquired Entity, (iv) its official number
and call sign, (v) its registration and flag, (vi) the vessel type, (vii)
its class description, (viii) the name of its classification society, (ix)
the shipyard and year in which the Vessel was constructed, (x) the date of
the Vessel's last special survey as of the date hereof, (xi) the date of
the Vessel's last dry-docking prior to the date hereof, and (xii) the
scheduled date of the Vessel's next dry-docking for purposes of the next
scheduled special survey as of the date hereof.
(b) Except as set forth in Schedule 4.18(b), each Vessel: (i) is free
and clear of all Encumbrances, charters, mortgages and maritime liens or
any other debts whatsoever, other than Permitted Encumbrances; (ii) to
Seller's Knowledge is adequate and suitable for use by its respective
Acquired Entity in its business as presently conducted in all material
respects, ordinary wear and tear and depreciation excepted; (iii) is
permanently registered in the name of its owner with the appropriate
maritime authorities under the law of its flag state free and clear of any
charters other than Permitted Encumbrances; (iv) to Seller's Knowledge is,
and will be delivered and taken over as it was at the time of inspection,
fair wear and tear excepted, with class maintained, free of any conditions,
recommendations, notations, visas and reservations by the classification
society in which it is entered, free of material average damage affecting
class, with all class and trading certificates, national and international,
clean, valid and unextended without condition by class and with each
Vessel's hull surveys and continuous machinery survey cycles up to date and
unextended; (v) to Seller's Knowledge is in conformity with current
requirements of the U.S. Coast Guard, IMO and SOLAS and all other national
and international Laws which are required to be complied with or observed
by such Vessel in order to allow such Vessel to operate in its business as
presently conducted and, subject to the next subclause, there are no
circumstances which indicate that any of the Permits relating to the
foregoing may be revoked or may not be renewed, in whole or in part, in the
ordinary course of events; (vi) to Seller's Knowledge has not received
notice of any Governmental Body regarding impending Laws that would prevent
such Vessel from operating in its business as presently conducted; and
(vii) to Seller's Knowledge has not been employed in any trade or business
which is unlawful under the Laws of any relevant jurisdiction or in
carrying illicit or prohibited goods, in each case to the extent such use
has or could have a continuing Material Adverse Effect on the Company or in
any manner whatsoever which may render it liable to destruction, seizure or
confiscation. For the purposes of this Section 4.18(b), the term "Seller's
Knowledge" shall also include the actual conscious knowledge of Xxx Xxxxxx.
4.19 Title to Vessels. Each Acquired Entity has good and marketable title
to its respective Vessel, as applicable, in each case free and clear from any
Encumbrances, other than Permitted Encumbrances. 4.20 Representations Complete.
Except as and to the extent set forth in this Agreement, Seller makes no
representations or warranties whatsoever (INCLUDING ANY IMPLIED OR EXPRESS
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE) to Buyer and
hereby disclaims all Liability and responsibility for any representation,
warranty, statement, or information not included herein that was made,
communicated, or furnished (orally or in writing) to Buyer or its
representatives (including any opinion, information, projection, or advice that
may have been or may be provided to Buyer by any director, officer, employee,
agent, consultant, or representative of Seller or any Affiliate of Seller).
Without limiting the generality of the foregoing, except as expressly provided
herein and without modifying the obligations of Seller under Section 7.3, Seller
makes no representations or warranties regarding the condition of any Vessel, it
being agreed that, at Closing, Buyer has no right to require that any Vessel be
in any condition other than AS IS, WITH ALL FAULTS, ALL WARRANTIES, WHETHER
EXPRESS OR IMPLIED, BEING DISCLAIMED BY SELLER.
ARTICLE 5.
INTENTIONALLY OMITTED
ARTICLE 6.
PRE-CLOSING COVENANTS
The Parties agree as follows with respect to the period between the
execution of this Agreement and the earlier of the Closing and the Termination
Date: 6.1 General. Each Party will use commercially reasonable best efforts to
take all actions and to do all things necessary to consummate, make effective,
and comply with all of the terms of this Agreement and the Transactions
applicable to it (including satisfaction, but not waiver, of the Closing
conditions for which it is responsible or otherwise in control, as set forth in
ARTICLE 8).
6.2 Notices and Consents.
(a) Seller will give any notices to third parties, and will use
commercially reasonable best efforts to obtain any third party Consents
listed on Schedule 3.1(c) or 4.2, or that Buyer reasonably may otherwise
request in connection with the matters referred to in Sections 3.2(c).
Seller will give any notices to, make any filings with, and use
commercially reasonable efforts to obtain any other Consents of
Governmental Bodies, if any, required or reasonably deemed advisable by
Buyer pursuant to any applicable Law in connection with the Transactions.
(b) Buyer will give any notices to third parties, and will use
commercially reasonable best efforts to obtain any third party Consents
listed on Schedule 3.2(c), or that the Company reasonably may otherwise
request in connection with the matters referred to in Section 3.1(c) or
4.2. Buyer will give any notices to, make any filings with, and use
commercially reasonable efforts to obtain any other Consents of
Governmental Bodies, if any, required or reasonably deemed advisable by the
Company pursuant to any applicable Law in connection with the Transactions.
(c) Seller will use commercially reasonable best efforts to provide
all of the documentation listed in Section 8.1(f) at or prior to Closing.
6.3 Operation of Business. Without the prior written consent of Buyer
(which consent shall not be unreasonably withheld or delayed), none of the
Acquired Entities will engage in any practice, take any action, or enter into
any transaction outside the ordinary course of business or engage in any
practice, take any action, or enter into any transaction of the sort described
in Section 4.7. Subject to compliance with applicable Law, Seller will confer on
a regular and frequent basis with one or more representatives of Buyer to report
on operational matters and the general status of the Acquired Entities' ongoing
business, operations and finances and will promptly provide to Buyer or its
representatives copies of all material filings the Company makes with any
Governmental Body during such period.
6.4 Full Access. Seller and the Acquired Entities will permit
representatives of Buyer (including financing providers), upon reasonable
notice, to have full access at reasonable times, and in a manner so as not to
interfere with the normal business operations of Seller or the Acquired
Entities, to the Vessels and to books, records, Contracts and documents
pertaining to the Acquired Entities or the Vessels and all financial, operating
and other data, and other information as Buyer may reasonably request solely for
the purpose of enabling Buyer to plan for the assumption of operations of the
Company.
6.5 Notice of Developments. Seller will give prompt written notice to Buyer
of any development occurring after the date of this Agreement which causes a
breach of any of the representations and warranties in Section 3.1 or ARTICLE 4.
Buyer will give prompt written notice to Seller of any development occurring
after the date of this Agreement which causes a breach of any of the
representations and warranties in Section 3.2. No disclosure by any Party
pursuant to this Section 6.5 will be deemed to amend or supplement the schedules
or to prevent or cure any misrepresentation or breach of any representation,
warranty, or covenant.
6.6 Exclusivity. Seller will not (a) solicit, initiate, or encourage the
submission of any proposal or offer from any Person relating to the acquisition
of any of the Shares or any substantial portion of the assets of the Company
(including any acquisition structured as a merger, consolidation, or share
exchange) or (b) participate in any discussions or negotiations regarding,
furnish any information with respect to, assist or participate in, or facilitate
in any other manner any effort or attempt by any Person to do or seek any of the
foregoing. Seller will notify Buyer immediately if any Person makes any
proposal, offer, inquiry, or contact with respect to any of the foregoing and
the terms of any such proposal, offer, inquiry, or contact. For the avoidance of
doubt, the obligations of Seller under this Section 6.6 shall not extend beyond
the Termination Date.
6.7 Confidentiality; Publicity. Except as may be required by Law or the
rules and regulations of any applicable stock exchange or as otherwise expressly
contemplated herein, no Party or their respective Affiliates, employees, agents,
and representatives will disclose to any third party the existence of this
Agreement, the subject matter or terms hereof or any Confidential Information
concerning the business or affairs of any other Party that it may have acquired
from such Party in the course of pursuing the Transactions without the prior
written consent of Seller or Buyer, as the case may be; provided, however, any
Party may disclose any such Confidential Information as follows: (a) to such
Party's Affiliates and its or its Affiliates' employees, lenders, counsel, or
accountants, the actions for which the applicable Party will be responsible; (b)
to comply with any applicable Law or Order or rule or regulation of any
applicable securities exchange, provided that prior to making any such
disclosure the Party making the disclosure notifies the other Party of any
Action of which it is aware which may result in disclosure and uses commercially
reasonable efforts to limit or prevent such disclosure; (c) to the extent that
the Confidential Information is or becomes generally available to the public
through no fault of the Party or its Affiliates making such disclosure; (d) to
the extent that the same information is in the possession (on a non-confidential
basis) of the Party making such disclosure prior to receipt of such Confidential
Information; (e) to the extent that the Party that received the Confidential
Information independently develops the same information without in any way
relying on any Confidential Information; or (f) to the extent that the same
information becomes available to the Party making such disclosure on a
nonconfidential basis from a source other than a Party or its Affiliates, which
source, to the disclosing Party's knowledge, is not prohibited from disclosing
such information by a legal, Contractual, or fiduciary obligation to the other
Party. If the Transactions are not consummated, each Party will return or
destroy as much of the Confidential Information concerning the other Party as
the Parties that have provided such information may reasonably request. At or
after execution of this Agreement, the Parties will issue a mutually agreed
press release; provided that neither Seller nor any of its Affiliates on the one
hand, nor Buyer nor any of its Affiliates on the other hand, will issue any
additional press release or other public announcement related to this Agreement
or the Transactions without the other Party's prior approval.
6.8 Affiliated Transactions. Except as set forth on Schedule 6.8, at or
prior to Closing and other than the Ancillary Agreements, Seller will cause all
Contracts and transactions by and between the Company, on one hand and the
Company's Affiliates (other than the Acquired Subsidiaries), on the other hand,
to be terminated effective as of the Closing, without any cost or continuing
obligation to the Company or Buyer.
6.9 February Financial Statements. Prior to the Closing, Seller will
deliver to Buyer unaudited consolidated balance sheets and statements of income,
changes in stockholders' equity, and cash flow for the Company and with respect
to the Wind Surf as of and for the period ended February 28, 2006 (the "February
Financial Statements").
6.10 Transfer of Wind Surf. At or prior to Closing, HAL Antillen will, at
Buyer's sole cost and expense, (a) form Surf Limited as a wholly-owned
subsidiary of the Company, and (b) transfer and convey ownership of the Wind
Surf to Surf Limited and reflag the Wind Surf to the Bahamian registry as
evidenced by documentation reasonably acceptable to Buyer. The obligations of
Buyer pursuant to this Section 6.10 apply whether or not Closing occurs.
6.11 Employee Matters.
(a) Prior to and after Closing, nothing in this Agreement will
prohibit Seller or its Affiliates from offering alternative employment to
any Persons who were party to or bound by any Contracts or collective
bargaining agreements with Seller or its Affiliates prior to Closing or to
other Crew Members so long as such offer of employment would not be for a
period that includes any portion of the Person's then-existing sailing
assignment. Nothing contained in this Section 6.11 or elsewhere in this
Agreement shall constitute a representation or warranty or covenant by
Seller or its Affiliates that any Crew Member will satisfy its obligations
under any such Contract or collective bargaining agreement or otherwise
remain as a Crew Member on a Vessel after Closing.
(b) Prior to Closing, Seller will engage Milliman Inc. to prepare an
actuarial study (the "Actuarial Study"), which will be at Buyer's sole cost
and expense (regardless of whether Closing occurs), to determine, as of
April 10, 2007, the lump sum equivalent present value for benefits accrued
to such date, whether or not vested, through participation in the Holland
America Line Key Officers' Retirement Plan (Windstar Cruises Key Officers)
(the "Windstar Plan") for benefits payable at age 65 by each of the
individuals identified in Schedule 6.11(b) (the "Windstar Plan Eligible
Employees"). The Actuarial Study shall determine the equivalent present
value separately for each Windstar Plan Eligible Employee. Prior to
Closing, Buyer will advise Seller in writing whether or not it will, after
Closing, assume and perform all liabilities and obligations under the
Windstar Plan with respect to all Windstar Plan Eligible Employees other
than those who elect to be employed after Closing by Seller or one of its
Affiliates or who otherwise cease employment with Buyer or its Affiliates
prior to July 15, 2007; provided that such assumption and performance shall
be effected by the creation by Buyer of its own plan, which plan shall
provide benefits at least as favorable to the participants as the Windstar
Plan and which will recognize prior service credited under the Windstar
Plan for purposes of vesting and benefit accrual.
6.12 Berthing Arrangements. At or prior to Closing, Seller will deliver to
Buyer a schedule of all existing berthing arrangements with respect to the
Vessels.
6.13 Customer Information. At or prior to closing, (a) Seller shall remove
from its records all Windstar Passenger Records and deliver such Windstar
Passenger Records to Buyer and (b) use its best efforts to cause Seller's
Affiliates (other than the Acquired Entities) to remove from their respective
records and destroy all Windstar Passenger Records.
6.14 Contracts. At or prior to Closing:
(a) Seller will (i) cause any rights and obligations of any Acquired
Entity under any Contract listed on Schedule 6.14(a) to be terminated and
(ii) use its commercially reasonable best efforts to assist Buyer in
entering into Contracts with the counterparties to the Contracts listed on
Schedule 6.14(a) to provide Buyer with substantially similar services as
are currently provided to the Acquired Entities under such Contracts.
(b) Seller will use its commercially reasonable best efforts to assist
Buyer in (i) obtaining assignments of the licenses or other use agreements
relating to the items set forth in Schedule 6.14(b) or (ii) entering into
new licenses or other use agreements with respect to the items set forth in
Schedule 6.14(b) to provide Buyer with substantially similar rights to use
such items as are currently available to the Acquired Entities.
ARTICLE 7.
POST-CLOSING COVENANTS
The Parties agree as follows with respect to the period following the
Closing:
7.1 General. In case at any time after the Closing any further action is
necessary to carry out the purposes of this Agreement, each Party will take such
further action (including executing and delivering such further instruments and
documents) as any other Party reasonably may request, all at the requesting
Party's sole cost and expense (unless the requesting Party is entitled to
indemnification therefor under ARTICLE 10).
7.2 Litigation Support. So long as any Party actively is contesting or
defending against any Action in connection with (a) the Transactions or (b) any
fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving the Company, the other Party will provide such
access to its books and records as will be necessary in connection with the
contest or defense, at the sole cost and expense of the contesting or defending
Party (unless the contesting or defending Party or one of its Affiliates is
entitled to indemnification therefor under ARTICLE 10).
7.3 Vessel Certificates. If Seller is unable to provide all of the
documentation listed in Section 8.1(f) at or prior to Closing due to remedial
work being required as to one or more of the Vessels, and the failure to deliver
such documentation does not prevent the Vessels from operating in the ordinary
course such that the Closing occurs nonetheless, then Seller will, after
Closing, pay the cost of, and will have the right to manage the performance of,
the remedial work; such costs shall only be paid by Seller to the extent such
costs exceed reserves included in the March Financial Statements (or the Audited
March Financial Statements, if applicable) that were established for such work.
For these purposes, the costs will include only the incremental costs of doing
the work and not those costs that would otherwise be incurred in drydock or
wetdock. Incremental costs are intended to mean those costs which are incurred
solely as a consequence of the need to perform the repairs and do not include
costs that would have been incurred in any event (e.g., if a propeller had to be
fixed and the Vessel is in drydock for its regularly scheduled drydock, HAL
Antillen would not have to reimburse the cost of taking the Vessel dry to repair
the propeller other than for additional days in drydock that are required solely
for the purpose of repairing the propeller). The work by Seller will be
performed no later than the next scheduled drydock or wetdock, as appropriate
unless it must be performed earlier in order to enable the Vessel to continue
operating in the ordinary course.
7.4 Drydock of Vessels. Buyer agrees to comply with, and cause the Acquired
Entities to comply with, the terms and conditions of the Contracts executed with
respect to the drydock of the Wind Spirit and Wind Star (each as further
described in the recitals of this Agreement) for remedial work purposes.
7.5 Transfer Taxes. HAL Antillen shall be responsible for any transfer
taxes associated with the Transactions.
7.6 Employment Matters.
(a) Buyer agrees to assume and perform, or cause the Acquired Entities
to assume and perform, the obligations of Seller and its Affiliates under
each individual employment Contract and collective bargaining agreement
that is applicable only to the Vessels with any Crew Member in respect of
any period beginning on or after Closing.
(b) If, prior to Closing, Buyer delivered notice to Seller pursuant to
Section 6.11(b) of its intent to assume and perform obligations under the
Windstar Plan, then (i) prior to July 15, 2007, Seller shall notify Buyer
as to which, if any, of the Windstar Plan Eligible Employees have notified
Seller that they intend to be employed by Seller or one of its Affiliates
and Buyer shall identify which Windstar Plan Eligible Employees have
otherwise decided not to remain employed with Buyer or one of its
Affiliates, (ii) on or promptly after July 15, 2007, Seller shall pay to
Buyer the equivalent present value as determined by the Actuarial Study as
to all other Windstar Plan Eligible Employees, and (iii) concurrently with,
and as a condition of such payment, Buyer shall execute and deliver to
Seller a writing reasonably satisfactory to Seller assuming and agreeing to
perform the liabilities and obligations as to the Windstar Plan as provided
for in Section 6.11(b). Buyer and the Company will, jointly and severally,
indemnify and hold the Seller Indemnified Parties harmless from and pay any
and all Damages, directly or indirectly, resulting from, relating to,
arising out of, or attributable to claims by each such Windstar Plan
Eligible Employee with respect to which a payment has been made by Seller
to Buyer as above provided and their successors and assigns respecting or
in connection with the Windstar Plan, including for benefits thereunder.
7.7 Audited Financial Statements. Within 60 days after the Closing Date,
HAL Antillen will deliver to Buyer audited consolidated balance sheets and
statements of income, changes in stockholders' equity, and cash flow as of and
for the fiscal years ended November 30, 2005 and 2006 for the Company and with
respect to the Wind Surf (collectively, the "Audited Financial Statements").
Buyer will, and will cause the Acquired Entities to, provide HAL Antillen and
its accountants and other representatives with access to the books and records
of the Acquired Entities and provide any other support necessary in connection
with the preparation of the Audited Financial Statements. Whether or not Closing
occurs, the cost of preparing the Audited Financial Statements will be borne
equally by the Parties, and Buyer agrees to pay its share of such costs within
30 days after receiving an invoice therefore from Seller.
ARTICLE 8.
CLOSING CONDITIONS
8.1 Conditions Precedent to Obligation of Buyer. Buyer's obligation to
consummate the Transactions contemplated to occur in connection with the Closing
and thereafter is subject to the satisfaction of each condition precedent listed
below, unless waived in writing by Buyer.
(a) Accuracy of Representations and Warranties. Each representation
and warranty set forth in Section 3.1 and ARTICLE 4 must be accurate and
complete in all material respects (for clarification, the foregoing shall
not be read to modify in any respect a representation and warranty which is
already qualified by its terms by a reference to materiality or Material
Adverse Effect) as of the Closing Date, as if made on the Closing Date
(except to the extent that any such representations or warranty is made as
of a specified date, in which case such representation or warranty will be
true and correct in all material respects as of such date).
(b) Compliance with Obligations. Seller must have performed and
complied with all of its covenants and obligations required by this
Agreement to be performed or complied with at or prior to Closing in all
material respects.
(c) No Order or Injunction. There must not be pending Order or Action
by or before any Governmental Body, arbitrator, or mediator seeking to
restrain, prohibit or invalidate the Transactions.
(d) Consents. Buyer must have obtained all of the Consents listed on
Schedule 3.2(c), other than those which if not obtained would not
individually or in the aggregate cause a Material Adverse Effect on Buyer
after the consummation of the Transactions. Seller must have obtained all
of the Consents listed on Schedules 3.1(c) and 4.2, other than those which
if not obtained would not individually or in the aggregate cause a Material
Adverse Effect on Seller or the Company, as the case may be.
(e) Liabilities. Prior to the Closing, Seller must have obtained and
delivered to Buyer evidence of the full satisfaction or release of all
Liabilities due to the Company from its Affiliates or due from the Company
to its Affiliates which are due to be satisfied or released under this
Agreement.
(f) Certificates. Seller must deliver to Buyer evidence that the
Vessels are free and clear of all conditions and recommendations affecting
class, with all of their classification certificates and international
certificates, as well as all other certificates required for worldwide
passenger service, which must be valid and unextended, and with all of
their survey cycles unextended; provided however, that this condition will
be deemed to be satisfied and Closing shall nonetheless occur if the
failure to achieve all of the foregoing does not prevent the Vessels from
operating in the ordinary course.
(g) Legal Opinion. Seller must have delivered to Buyer an opinion of
the outside counsel listed in Section 11.4, in form and substance as set
forth in Exhibit N, addressed to Seller and dated as of the Closing Date.
(h) HSR. Any waiting period (and any extension thereof) applicable to the
consummation of the Transactions under the HSR Act will have expired or been
terminated, if applicable.
8.2 Conditions Precedent to Obligation of Seller. Seller's obligation to
consummate the Transactions contemplated to occur in connection with the Closing
and thereafter is subject to the satisfaction of each condition precedent listed
below, unless waived in writing by Seller.
(a) Accuracy of Representations and Warranties. Each representation
and warranty set forth in Section 3.2 must be accurate and complete in all
material respects (for clarification, the foregoing shall not be read to
modify in any respect a representation and warranty which is already
qualified by its terms by a reference to materiality or a Material Adverse
Effect) as of the Closing Date, as if made on the Closing Date (except to
the extent that any such representations or warranty is made as of a
specified date, in which case such representation or warranty will be true
and correct in all material respects as of such date).
(b) Compliance with Obligations. Buyer must have performed and
complied with all its covenants and obligations required by this Agreement
to be performed or complied with at or prior to Closing in all material
respects.
(c) No Order or Injunction. There must not be pending Order or Action
by or before any Governmental Body, arbitrator, or mediator seeking to
restrain, prohibit or invalidate the Transactions.
(d) Consents. Buyer must have obtained all of the Consents listed on
Schedule 3.2(c), other than those which if not obtained would not
individually or in the aggregate cause a Material Adverse Effect on Buyer
after the consummation of the Transactions. Seller must have obtained all
of the Consents listed on Schedules 3.1(c) and 4.2, other than those which
if not obtained would not individually or in the aggregate cause a Material
Adverse Effect on Seller or the Company, as the case may be.
(e) Legal Opinion. Buyer must have delivered to Seller an opinion of
the outside counsel listed in Section 11.4, in form and substance as set
forth in Exhibit J, addressed to Buyer and dated as of the Closing Date.
(f) HSR. Any waiting period (and any extension thereof) applicable to
the consummation of the Transactions under the HSR Act will have expired or
been terminated, if applicable.
ARTICLE 9.
TERMINATION
9.1 Termination of Agreement. The Parties may terminate this Agreement as
provided below:
(a) Buyer and Seller may terminate this Agreement by mutual written
consent at any time prior to the Closing.
(b) Buyer or Seller may terminate this Agreement upon delivery of
notice if the Closing has not occurred prior to the Expiration Date, unless
such date is extended (i) by the mutual written consent of Buyer and Seller
or (ii) by either Buyer or Seller by giving notice to the other Party if
all other conditions to Closing set forth herein are satisfied except that
any waiting period (and any extension thereof) applicable to the
consummation of the Transactions under the HSR Act has not expired or been
terminated, if applicable, in which case the Expiration Date will
automatically be extended for 30 days; provided however that the right to
terminate this Agreement under this Section 9.1(b) will not be available to
any Party whose breach of any representation, warranty, covenant or
agreement under this Agreement (that has not been waived) has been the
cause of, or resulted in, the failure of the Closing to occur on or before
such date, after giving effect to any amendment or supplement to the
Disclosure Schedule.
(c) Buyer may terminate this Agreement by giving written notice to
Seller at any time prior to the Closing if Seller has breached any
representation, warranty, or covenant contained in this Agreement in any
material respect, after giving effect to any amendment or supplement to the
Disclosure Schedule.
(d) Seller may terminate this Agreement by giving notice to Buyer at
any time prior to the Closing if Buyer has breached any representation,
warranty, or covenant contained in this Agreement in any material respect.
(e) Buyer may terminate this Agreement by giving written notice to
Seller at any time prior to the Closing if Seller amends and supplements
the Disclosure Schedule delivered pursuant to ARTICLE 4 (other than to
reflect the formation of Surf Limited pursuant to Section 6.10), and such
amendments and supplements, in the aggregate, reveal facts or circumstances
which reflect in a material adverse way on the business of the Acquired
Entities taken as a whole.
9.2 Effect of Termination.
(a) Except for the obligations under Sections 6.7, the cost
obligations of Buyer under Sections 6.10, 6.11 and 7.7, this ARTICLE 9 and
ARTICLE 11, if this Agreement is terminated under Section 9.1, then, except
as provided in this Section 9.2 all further obligations of the Parties
under this Agreement will terminate.
(b) If Buyer terminates this Agreement pursuant to Section 9.1(c),
then the rights of Buyer to pursue all legal remedies for Damages Buyer
suffers will survive such termination unimpaired and no election of
remedies will have been deemed to have been made.
(c) If (i) Seller terminates this Agreement pursuant to Section 9.1(d)
on or after the date on which this Agreement is made public pursuant to
Section 6.7, or (ii) Buyer or Seller terminates this Agreement pursuant to
Section 9.1(b) and Closing failed to occur prior to the Expiration Date
(which is not otherwise extended by mutual agreement) due solely to the
failure of Buyer to deliver the items required of it pursuant to the first
sentence of Section 8.2(d) or Sections 8.2(e) or 2.5(b) (except that the
delivery of an Officers' certificate pursuant to Section 2.5(b)(iii) that
does not contain a certification that the condition specified in Section
8.2(c) has been satisfied will not constitute such a failure), then Buyer
will pay $5,000,000 to Seller within three business days following such
termination, by wire transfer in immediately available funds, to compensate
Seller for, among other things, its expenses and management time in
pursuing the transaction contemplated hereby and for lost opportunity
costs.
ARTICLE 10.
INDEMNIFICATION
10.1 Survival of Representations and Warranties. Each representation and
warranty contained herein will survive the Closing for a period of one year from
the Closing Date, except for (a) the representations and warranties in Sections
3.1 and 3.2 which will survive the Closing indefinitely and (b) the
representations and warranties in Section 4.6(b), which (i) for all matters
related to Taxes will survive the Closing for a period of five years from the
Closing Date and (ii) for all other matters will survive the Closing for a
period of three years from the Closing Date.
10.2 Indemnification by Seller. Seller will indemnify and hold the Buyer
Indemnified Parties harmless from and pay any and all Damages, directly or
indirectly, resulting from, relating to, arising out of, or attributable to any
one of the following:
(a) any breach of any representation or warranty Seller has made in
this Agreement as if such representation or warranty were made on and as of
the Closing Date;
(b) any breach by Seller of any covenant or obligation of such Seller
in this Agreement; and
(c) the Complaint and Jury Demand filed January 25, 2006 by plaintiffs
Xxxxx X. Xxxxxx et al. listed on Schedule 4.14 (the "Xxxxxx Litigation").
10.3 Indemnification by Buyer. Buyer will indemnify and hold the Seller
Indemnified Parties harmless from and pay any and all Damages, directly or
indirectly, resulting from, relating to, arising out of, or attributable to any
of the following:
(a) any breach of any representation or warranty Buyer has made in
this Agreement as if such representation or warranty were made on and as of
the Closing Date; and
(b) any breach by Buyer of any covenant or obligation of Buyer in this
Agreement.
10.4 Indemnification Claim Procedures.
(a) If any Action is commenced in which any Indemnified Party is a
party that may give rise to a claim for indemnification against any
Indemnitor (an "Indemnification Claim") then such Indemnified Party will
promptly give notice to the Indemnitor. Failure to notify the Indemnitor
will not relieve the Indemnitor of any Liability that it may have to the
Indemnified Party, except to the extent the defense of such Action is
materially and irrevocably prejudiced by the Indemnified Party's failure to
give such notice.
(b) An Indemnitor will have the right to defend against an
Indemnification Claim, with counsel of its choice reasonably satisfactory
to the Indemnified Party if (i) within 15 days following the receipt of
notice of the Indemnification Claim the Indemnitor notifies the Indemnified
Party in writing that the Indemnitor will indemnify the Indemnified Party
from and against the entirety of any Damages the Indemnified Party may
suffer resulting from, relating to, arising out of, or attributable to the
Indemnification Claim, (ii) the Indemnitor provides the Indemnified Party
with evidence reasonably acceptable to the Indemnified Party that the
Indemnitor will have the financial resources to defend against the
Indemnification Claim and pay, in cash, all Damages the Indemnified Party
may suffer resulting from, relating to, arising out of, or attributable to
the Indemnification Claim, (iii) the Indemnification Claim involves only
money Damages and does not seek an injunction or other equitable relief,
(iv) settlement of, or an adverse judgment with respect to, the
Indemnification Claim is not in the good faith judgment of the Indemnified
Party likely to establish a precedential custom or practice materially
adverse to the continuing business interests of the Indemnified Party, and
(v) the Indemnitor continuously conducts the defense of the Indemnification
Claim actively and diligently.
(c) So long as the Indemnitor is conducting the defense of the
Indemnification Claim in accordance with Section 10.4(b), (i) the
Indemnified Party may retain separate co-counsel at its sole cost and
expense and participate in the defense of the Indemnification Claim, (ii)
the Indemnified Party will not consent to the entry of any Order with
respect to the Indemnification Claim without the prior written Consent of
the Indemnitor (not to be withheld unreasonably), and (iii) the Indemnitor
will not Consent to the entry of any Order with respect to the
Indemnification Claim without the prior written Consent of the Indemnified
Party (not to be withheld unreasonably, provided that it will not be deemed
to be unreasonable for an Indemnified Party to withhold its Consent (A)
with respect to any finding of or admission (1) of any breach of any Law,
Order or Permit, (2) of any violation of the rights of any Person, or (3)
which Indemnified Party believes could have a Material Adverse Effect on
any other Actions to which the Indemnified Party or its Affiliates are
party or to which Indemnified Party has a good faith belief it may become
party, or (B) if any portion of such Order would not remain sealed).
(d) If an Indemnitor determines not to defend against an
Indemnification Claim pursuant to Section 10.4(b), such Indemnitor will
have the right to participate in any defense of the Indemnification Claim
through counsel of its choice, at such Indemnitor's sole cost and expense,
and the Indemnified Party will not consent to the entry of any Order with
respect to the Indemnification Claim without the prior written Consent of
such Indemnitor (not to be withheld unreasonably).
(e) For the avoidance of doubt, after Closing, Seller or its
Affiliates will continue to conduct the defense, on behalf of the Acquired
Entities, with respect to the Xxxxxx Litigation in accordance with this
Section 10.4.
10.5 Limitations on Indemnification Liability.
(a) The aggregate Liability for money Damages payable by either Seller
or Buyer under this Agreement related to breaches of the representations,
warranties, and covenants herein (other than the representations and
warranties in Sections 3.1 and 3.2, which will not be limited by this
Section 10.5(a)) will not exceed an amount equal to the Cash Payment,
provided that the limitation contemplated hereby will not be applicable
with respect to instances of actual fraud or as otherwise set forth in the
Ancillary Agreements.
(b) Neither Buyer nor Seller will have Liability for money Damages
under this ARTICLE 10 unless and until the aggregate Damages claimed
exceeds $200,000 (the "Threshold Amount"); provided, however, once such
amount exceeds the Threshold Amount, the relevant Party will be entitled to
recover all amounts to which they are entitled in excess of the Threshold
Amount.
(c) Any claims any Indemnified Party makes under this ARTICLE 10 will
be limited as follows:
(i) The amount of Damages required to be paid for Damages will be
reduced to the extent of any amounts an Indemnified Party actually
receives pursuant to the terms of the insurance policies (if any)
covering such Indemnification Claim.
(ii) All indemnification obligations will be limited to actual
Damages and will exclude incidental, consequential, lost profits,
indirect, punitive, or exemplary Damages.
(d) Except for equitable remedies and injunctive and other judicial
relief to enforce the provisions hereof or to preserve the status quo
pending resolution, or in the case of actual fraud or as otherwise set
forth in the Ancillary Agreements, the sole remedy of any party relating to
the matters for which such party may be indemnified in this ARTICLE 10 will
be the indemnity provided in this ARTICLE 10.
(e) For the avoidance of doubt, the indemnification provided for in
this ARTICLE 10 is in addition to the indemnification set forth in Section
7.6, and the limitations of liability set forth in this Section 10.5 shall
not apply to the indemnification set forth in Section 7.6.
ARTICLE 11.
MISCELLANEOUS
11.1 Entire Agreement. This Agreement, together with the exhibits and
schedules hereto and the certificates, documents, instruments and writings that
are delivered pursuant hereto, constitutes the entire agreement and
understanding of the Parties in respect of its subject matters and supersedes
all prior understandings, agreements, or representations by or among the
Parties, written or oral, to the extent they relate in any way to the subject
matter hereof or the Transactions, including the letter of intent, dated
November 21, 0000, xxxxxxx Xxxxxxx Xxxxxxx Line Inc. and Ambassadors
International, Inc. Except as expressly contemplated by ARTICLE 10, there are no
third party beneficiaries having rights under or with respect to this Agreement.
11.2 Successors. All of the terms, agreements, covenants, representations,
warranties, and conditions of this Agreement are binding upon, and inure to the
benefit of and are enforceable by, the Parties and their respective successors.
If the principal business, operations or a majority or substantial portion of
the assets of Seller are assigned, conveyed, allocated or otherwise transferred,
including, by sale, merger, consolidation, amalgamation, conversion or similar
transactions, such receiving Person or Persons will automatically become bound
by the subject to the provisions of this Agreement.
11.3 Assignments. Neither Party may assign either this Agreement or any of
its rights, interests, or obligations hereunder without the prior written
approval of the other party. 11.4 Notices. All notices, requests, demands,
claims and other communications hereunder will be in writing. Any notice,
request, demand, claim or other communication hereunder will be deemed duly
given if (and then three business days after) it is sent by registered or
certified mail, return receipt requested, postage prepaid, and addressed to the
intended recipient as set forth below:
If to Seller:
Holland America Line Inc.
Attn: Xxxxx Xxxxx
000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxx, XX 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
Copy (which will not constitute notice) to:
Xxxxxxxxxxx & Xxxxxxxx Xxxxxxx Xxxxx Xxxxx LLP
Attn: Xxxxx Xxxx
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Tel: (000)000-0000
Fax: (000) 000-0000
If to Buyer:
Ambassador International, Inc.
Attn: Xxxxxx XxXxxxxx
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Copy (which will not constitute notice) to:
Xxxxxx & Xxxxxx LLP
Attn: Xxxxxx X. Xxxxx
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth above
using any other means (including personal delivery, expedited courier, messenger
service, telecopy, telex, ordinary mail, or electronic mail), but no such
notice, request, demand, claim, or other communication will be deemed to have
been duly given unless and until it actually is received by the intended
recipient. Any Party may change the address to which notices, requests, demands,
claims, and other communications hereunder are to be delivered by giving the
other Party notice in the manner herein set forth.
11.5 Specific Performance. Each Party acknowledges and agrees that the
other Party would be damaged irreparably if any provision of this Agreement is
not performed in accordance with its specific terms or is otherwise breached.
Accordingly, each Party agrees that the other Party will be entitled to an
injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and its terms and
provisions in any Action instituted in any court of the United States or any
state thereof having jurisdiction over the Parties and the matter, subject to
Sections 11.6 and 11.10, in addition to any other remedy to which they may be
entitled, at Law or in equity.
11.6 Submission to Jurisdiction; Venue. Each Party submits to the
jurisdiction of any state or federal court sitting in Seattle, Washington, in
any Action arising out of or relating to this Agreement and agrees that all
claims in respect of the Action may be heard and determined in any such court.
Each Party also agrees not to bring any Action arising out of or relating to
this Agreement in any other court. Each Party agrees that a final judgment in
any Action so brought will be conclusive and may be enforced by Action on the
judgment or in any other manner provided at Law or in equity. Each Party waives
any defense of inconvenient forum to the maintenance of any Action so brought
and waives any bond, surety, or other security that might be required of any
other Party with respect thereto.
11.7 Time. Time is of the essence in the performance of this Agreement.
11.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original but all of which together
will constitute one and the same instrument.
11.9 Headings. The article and section headings contained in this Agreement
are inserted for convenience only and will not affect in any way the meaning or
interpretation of this Agreement.
11.10 Governing Law. This Agreement and the performance of the Transactions
and obligations of the Parties hereunder will be governed by and construed in
accordance with the laws of the State of Washington, without giving effect to
any choice of Law principles that would require the application of the Law of
another jurisdiction.
11.11 Amendments and Waivers. No amendment, modification, replacement,
termination or cancellation of any provision of this Agreement will be valid,
unless the same will be in writing and signed by Buyer and Seller. No waiver by
any Party of any default, misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, may be deemed to extend to any prior or
subsequent default, misrepresentation, or breach of warranty or covenant
hereunder or affect in any way any rights arising because of any prior or
subsequent such occurrence.
11.12 Severability. The provisions of this Agreement will be deemed
severable and the invalidity or unenforceability of any provision will not
affect the validity or enforceability of the other provisions hereof; provided
that if any provision of this Agreement, as applied to any Party or to any
circumstance, is adjudged by a Governmental Body, arbitrator, or mediator not to
be enforceable in accordance with its terms, the Parties agree that the
Governmental Body, arbitrator, or mediator making such determination will have
the power to modify the provision in a manner consistent with its objectives
such that it is enforceable, and/or to delete specific words or phrases, and in
its reduced form, such provision will then be enforceable and will be enforced.
11.13 Expenses. Except as otherwise expressly provided in this Agreement,
each Party will bear its own costs and expenses incurred in connection with the
preparation, execution and performance of this Agreement and the Transactions
including all fees and expenses of agents, representatives, financial advisors,
legal counsel and accountants; provided that each Party will equally bear any
filing fees in connection with any required filing under the HSR Act. Seller
agrees that the Company has not borne and will not bear any costs and expenses
(including any legal fees and expenses of Seller) in connection with this
Agreement or any of the Transactions.
11.14 Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. If an ambiguity or question of
intent or interpretation arises, this Agreement will be construed as if drafted
jointly by the Parties and no presumption or burden of proof will arise favoring
or disfavoring any Party because of the authorship of any provision of this
Agreement. Any reference to any federal, state, local, or foreign Law will be
deemed also to refer to the Law as amended and all rules and regulations
promulgated thereunder, unless the context requires otherwise. The words
"include," "includes," and "including" will be deemed to be followed by "without
limitation." 11.15 Incorporation of Exhibits, Annexes, and Schedules. The
exhibits, annexes, schedules, and other attachments identified in this Agreement
are incorporated herein by reference and made a part hereof. 11.16 Remedies.
Except as expressly provided herein, the rights, obligations and remedies
created by this Agreement are cumulative and in addition to any other rights,
obligations, or remedies otherwise available at Law or in equity. Except as
expressly provided herein, nothing herein will be considered an election of
remedies.
[Signature page follows]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written.
HAL ANTILLEN N.V.
By: /s/ Xxxxx Xxxxx
-----------------------------------------
Name: Xxxxx Xxxxx
Title: President and Chief Executive Officer of
Holland America Line, Proxyholder for
the Seller
AMBASSADORS INTERNATIONAL CRUISE GROUP, LLC
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President
R208 - Mortgage Registration Form - Version 1.1
--------------------------------------------------------------------------------
THE COMMONWEALTH OF THE BAHAMAS
[GRAPHIC OMITTED] MORTGAGE REGISTRATION FORM
(Page 1 of 2)
--------------------------------------------------------------------------------
Official Number IMO Number Name of Ship Port of Registry
--------------------------------------------------------------------------------
710711 8420878 WIND STAR NASSAU
--------------------------------------------------------------------------------
Propulsion and Engine Details Vessel Dimensions
--------------------------------------------------------------------------------
Propulsion: Single Propeller Length: 111.738 metres
Type of Engines: Electric Diesel Breadth: 15.80 metres
Total Power: 1400 kw Depth: 6.65 metres
--------------------------------------------------------------------------------
Particulars of Tonnage
--------------------------------------------------------------------------------
GROSS TONNAGE: 5,703 tons NET TONNAGE: 1,710 tons
--------------------------------------------------------------------------------
WHEREAS there is an Account Current between Wind Star Limited, a Bahamas
corporation whose registered office is at Sassoon House, Xxxxxxx Street and
Victoria Avenue, Nassau, Bahamas (hereinafter sometimes called the "Mortgagor"),
and HAL Antillen N.V., a Netherlands Antilles corporation acting through its
offices at 000 Xxxxxxx Xxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxx, 00000-0000 (hereinafter
sometimes called the "Mortgagee"), the terms and conditions whereof are
regulated by (1) a Purchase Agreement dated as of February 21, 2007 among
Ambassadors International Cruise Group, LLC, a Xxxxxxxx Islands limited
liability company ("Buyer"), and Mortgagee (the "Purchase Agreement"), (2) a
promissory note in the principal amount of US$60,000,000 (sixty million U.S.
dollars) bearing even date herewith made by Buyer in favor of Mortgagee as
contemplated by the Purchase Agreement (the "Buyer Note"), (3) a Guarantee
bearing even date herewith made by Mortgagor and certain other affiliates of
Mortgagor in favor of Buyer (the "Guarantee") and (4) a Deed of Covenant bearing
even date herewith and made between the Mortgagor and the Mortgagee (the "Deed
of Covenant"), and
WHEREAS the amount of principal and interest due at any given time can be
ascertained by reference to the said Purchase Agreement, Buyer Note, Guarantee
and/or Deed of Covenant (each as so amended, varied or supplemented) and/or to
the books of account or other accounting records of the Mortgagee.
Now we Wind Star Limited in consideration of the premises for ourselves and
our successors, covenants with the said HAL Antillen N.V. and it assigns to pay
to him or them or it the sums for the time being due on this security whether by
way of principal or interest, at the times and manner aforesaid. And for the
purpose of better securing to the said HAL Antillen N.V. the payment of such
sums as last aforesaid, we do hereby mortgage to the said HAL Antillen N.V.
64/64 shares of which we are the Owners in the Ship above particularly
described, and in her boats, guns, ammunition, small arms and appurtenances.
Lastly, we for ourselves and our successors, covenant with the said HAL Antillen
N.V. and it assigns that we have the power to mortgage in manner aforesaid the
above mentioned shares, and that the same are free from encumbrances.
It witness whereof we have affixed our common seal this 2 of April 2007.
--------------------------------------------------------------------------------
Seal Individual/Corporation Attestation
--------------------------------------------------------------------------------
I, (f) Xxxxxxx Xxxxxxxx
name of individual/corporation -----------------------------
of (g) Seattle, WA, USA
per Wind Star Ltd -----------------------------
-------------------------- hereby testify that in my presence
(i) this Mortgage was signed by
Xxxxx Xxxxxxxxx
signature as Officer (h) ------------------------------------
as Officer (h)and Xxxxxx XxXxxxxx
--------------------------------
/s/ Xxxxx Xxxxxxxxx as Secretary (h)
----------------------
signature as Secretary (h)
and
/s/ Xxxxxx XxXxxxxx (ii) the corporate seal (h) of the
---------------------- transferor was affixed this 2 day of
in the presence of the April
witness whose attestation
is given opposite
Signature of
witness /s/ Xxxxxxx Xxxxxxxx
--------------------------------------------------------------------------------
(a) Here state by way of recital that there is an account current between the
Mortgagor (describing the company and its address) and the Mortgagee (giving
full title, address and description, including all joint mortgages), and
describe the nature of the transaction so as to show how the amount of principal
and interest due at any given time is to be ascertained, and the manner and time
of payment, (b) Name of company, (c) Full name of Mortgagee, (d) "his", "hers"
or "its", (e) If any prior encumbrance add "save as appears by the registry of
the ship", (f) name of witness, (g) address of witness, (h) delete as
applicable.
NOTE: The witness to the execution of the document must be a disinterested
party, independent of the body corporate or individual executing it e.g. Notary
Public, Consular Officer, Magistrate, Justice of Peace. A director,officer or
employee of a transferor which is a body corporate should not be an attesting
witness.
--------------------------------------------------------------------------------
R208 - Mortgage Registration Form - Version 1.1
--------------------------------------------------------------------------------
THE COMMONWEALTH OF THE BAHAMAS
[GRAPHIC OMITTED] MORTGAGE REGISTRATION FORM
(Page 2 of 2)
--------------------------------------------------------------------------------
Official Number IMO Number Name of Ship Port of Registry
--------------------------------------------------------------------------------
710711 8420878 WIND STAR NASSAU
--------------------------------------------------------------------------------
TRANSFER OF MORTGAGE
I/we, the within mentioned
in consideration of
this day paid to me/us (a) by ____________________________________
hereby transfer to it/him/her/them (a) the benefit of the within-written
security. In witness whereof I/we (a) have hereto affixed our seal this __ day
of __________
--------------------------------------------------------------------------------
Seal Individual/Corporation Attestation
--------------------------------------------------------------------------------
I, (b) _______________________
name of individual/corporation
of (c) _______________________
per _____________________
hereby testify that in my presence
(i) this Transfer of Mortgage was
signed by
signature as ______________________________
Individual/Director/Secretary/ as Individual/Director/Secretary/
Officer/Attorney-in-fact Officer/Attorney-in-fact (a)
and ______________________________
_______________________ as Individual/Director/Secretary/
signature as Officer/Attorney-in-fact (a)
Individual/Director/Secretary
Officer/Attorney-in-fact
and
__________________________ (ii) the corporate seal/personal
in the presence of the seal (a) of the transferor was
witness whose attestation affixed this __ day of ________
is given opposite
Signature of witness _______________
--------------------------------------------------------------------------------
MEMORANDUM OF DISCHARGE
By individual or Joint Mortgagees
Received the sum of ________________________
in discharge of this within-written security. Dated at _____________ this __ day
of _____________
In witness whereof we have hereto affixed our common seal this __ day of _______
--------------------------------------------------------------------------------
I, (b) _______________________
name of individual/corporation
of (c) _______________________
per _____________________
hereby testify that in my presence
(i) this Discharge of Mortgage was
signed by
signature as ______________________________
Individual/Director/Secretary/ as Individual/Director/Secretary/
Officer/Attorney-in-fact Officer/Attorney-in-fact (a)
and ______________________________
_______________________ as Individual/Director/Secretary/
signature as Officer/Attorney-in-fact (a)
Individual/Director/Secretary
Officer/Attorney-in-fact
and
__________________________ (ii) the corporate seal/personal
in the presence of the seal (a) of the mortgagee was
witness whose attestation affixed this __ day of ________
is given opposite
Signature of witness _______________
--------------------------------------------------------------------------------
(a) delete as appropriate, (b) insert name of witness, (c) insert address of
witness
NOTE: The witness to the execution of the document must be a disinterested
party, independent of the body corporate or individual executing it e.g. Notary
Public, Consular Officer, Magistrate, Justice of Peace. A director, officer or
employee of a transferor which is a body corporate should not be an attesting
witness.
--------------------------------------------------------------------------------
R208 - Mortgage Registration Form - Version 1.1
--------------------------------------------------------------------------------
THE COMMONWEALTH OF THE BAHAMAS
[GRAPHIC OMITTED] MORTGAGE REGISTRATION FORM
(Page 1 of 2)
--------------------------------------------------------------------------------
Official Number IMO Number Name of Ship Port of Registry
--------------------------------------------------------------------------------
711121 8603509 WIND SPIRIT NASSAU
--------------------------------------------------------------------------------
Propulsion and Engine Details Vessel Dimensions
--------------------------------------------------------------------------------
Propulsion: Single Propeller Length: 111.738 metres
Type of Engines: Electric Diesel Breadth: 15.80 metres
Total Power: 1700 kw Depth: 6.65 metres
--------------------------------------------------------------------------------
Particulars of Tonnage
--------------------------------------------------------------------------------
GROSS TONNAGE: 5,736 tons NET TONNAGE: 1,788 tons
--------------------------------------------------------------------------------
WHEREAS there is an Account Current between Wind Spirit Limited, a Bahamas
corporation whose registered office is at Sassoon House, Xxxxxxx Street and
Victoria Avenue, Nassau, Bahamas (hereinafter sometimes called the "Mortgagor"),
and HAL Antillen N.V., a Netherlands Antilles corporation acting through its
offices at 000 Xxxxxxx Xxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxx, 00000-0000 (hereinafter
sometimes called the "Mortgagee"), the terms and conditions whereof are
regulated by (1) a Purchase Agreement dated as of February 21, 2007 among
Ambassadors International Cruise Group, LLC, a Xxxxxxxx Islands limited
liability company ("Buyer"), and Mortgagee (the "Purchase Agreement"), (2) a
promissory note in the principal amount of US$60,000,000 (sixty million U.S.
dollars) bearing even date herewith made by Buyer in favor of Mortgagee as
contemplated by the Purchase Agreement (the "Buyer Note"), (3) a Guarantee
bearing even date herewith made by Mortgagor and certain other affiliates of
Mortgagor in favor of Buyer (the "Guarantee") and (4) a Deed of Covenant bearing
even date herewith and made between the Mortgagor and the Mortgagee (the "Deed
of Covenant"), and
WHEREAS the amount of principal and interest due at any given time can be
ascertained by reference to the said Purchase Agreement, Buyer Note, Guarantee
and/or Deed of Covenant (each as so amended, varied or supplemented) and/or to
the books of account or other accounting records of the Mortgagee.
Now we Wind Spirit Limited in consideration of the premises for ourselves
and our successors, covenants with the said HAL Antillen N.V. and it assigns to
pay to him or them or it the sums for the time being due on this security
whether by way of principal or interest, at the times and manner aforesaid. And
for the purpose of better securing to the said HAL Antillen N.V. the payment of
such sums as last aforesaid, we do hereby mortgage to the said HAL Antillen N.V.
64/64 shares of which we are the Owners in the Ship above particularly
described, and in her boats, guns, ammunition, small arms and appurtenances.
Lastly, we for ourselves and our successors, covenant with the said HAL Antillen
N.V. and it assigns that we have the power to mortgage in manner aforesaid the
above mentioned shares, and that the same are free from encumbrances.
It witness whereof we have affixed our common seal this 2 of April 2007.
--------------------------------------------------------------------------------
Seal Individual/Corporation Attestation
--------------------------------------------------------------------------------
I, (f) Xxxxxxx Xxxxxxxx
name of individual/corporation -----------------------------
of (g) Seattle, WA, USA
per Wind Spirit Ltd -----------------------------
-------------------------- hereby testify that in my presence
(i) this Mortgage was signed by
Xxxxx Xxxxxxxxx
signature as Officer (h) ------------------------------------
as Officer (h)and Xxxxxx XxXxxxxx
------------------------------------
/s/ Xxxxx Xxxxxxxxx as Secretary (h)
----------------------
signature as Secretary (h)
and
/s/ Xxxxxx XxXxxxxx (ii) the corporate seal (h) of the
---------------------- transferor was affixed this 2 day of
in the presence of the April
witness whose attestation
is given opposite
Signature of
witness /s/ Xxxxxxx Xxxxxxxx
--------------------------------------------------------------------------------
(a) Here state by way of recital that there is an account current between the
Mortgagor (describing the company and its address) and the Mortgagee (giving
full title, address and description, including all joint mortgages), and
describe the nature of the transaction so as to show how the amount of principal
and interest due at any given time is to be ascertained, and the manner and time
of payment, (b) Name of company, (c) Full name of Mortgagee, (d) "his", "hers"
or "its", (e) If any prior encumbrance add "save as appears by the registry of
the ship", (f) name of witness, (g) address of witness, (h) delete as
applicable.
NOTE: The witness to the execution of the document must be a disinterested
party, independent of the body corporate or individual executing it e.g. Notary
Public, Consular Officer, Magistrate, Justice of Peace. A director,officer or
employee of a transferor which is a body corporate should not be an attesting
witness.
--------------------------------------------------------------------------------
R208 - Mortgage Registration Form - Version 1.1
--------------------------------------------------------------------------------
THE COMMONWEALTH OF THE BAHAMAS
[GRAPHIC OMITTED] MORTGAGE REGISTRATION FORM
(Page 2 of 2)
--------------------------------------------------------------------------------
Official Number IMO Number Name of Ship Port of Registry
--------------------------------------------------------------------------------
711121 8603509 WIND SPIRIT NASSAU
--------------------------------------------------------------------------------
TRANSFER OF MORTGAGE
I/we, the within mentioned
in consideration of
this day paid to me/us (a) by ____________________________________
hereby transfer to it/him/her/them (a) the benefit of the within-written
security. In witness whereof I/we (a) have hereto affixed our seal this __ day
of __________
--------------------------------------------------------------------------------
Seal Individual/Corporation Attestation
--------------------------------------------------------------------------------
I, (b) _______________________
name of individual/corporation
of (c) _______________________
per _____________________
hereby testify that in my presence
(i) this Transfer of Mortgage was
signed by
signature as ______________________________
Individual/Director/Secretary/ as Individual/Director/Secretary/
Officer/Attorney-in-fact Officer/Attorney-in-fact (a)
and ______________________________
_______________________ as Individual/Director/Secretary/
signature as Officer/Attorney-in-fact (a)
Individual/Director/Secretary
Officer/Attorney-in-fact
and
__________________________ (ii) the corporate seal/personal
in the presence of the seal (a) of the transferor was
witness whose attestation affixed this __ day of ________
is given opposite
Signature of witness _______________
--------------------------------------------------------------------------------
MEMORANDUM OF DISCHARGE
By individual or Joint Mortgagees
Received the sum of ________________________
in discharge of this within-written security. Dated at _____________ this __ day
of _____________
In witness whereof we have hereto affixed our common seal this __ day of _______
--------------------------------------------------------------------------------
I, (b) _______________________
name of individual/corporation
of (c) _______________________
per _____________________
hereby testify that in my presence
(i) this Discharge of Mortgage was
signed by
signature as ______________________________
Individual/Director/Secretary/ as Individual/Director/Secretary/
Officer/Attorney-in-fact Officer/Attorney-in-fact (a)
and ______________________________
_______________________ as Individual/Director/Secretary/
signature as Officer/Attorney-in-fact (a)
Individual/Director/Secretary
Officer/Attorney-in-fact
and
__________________________ (ii) the corporate seal/personal
in the presence of the seal (a) of the mortgagee was
witness whose attestation affixed this __ day of ________
is given opposite
Signature of witness _______________
--------------------------------------------------------------------------------
(a) delete as appropriate, (b) insert name of witness, (c) insert address of
witness
NOTE: The witness to the execution of the document must be a disinterested
party, independent of the body corporate or individual executing it e.g. Notary
Public, Consular Officer, Magistrate, Justice of Peace. A director, officer or
employee of a transferor which is a body corporate should not be an attesting
witness.
--------------------------------------------------------------------------------
R208 - Mortgage Registration Form - Version 1.1
--------------------------------------------------------------------------------
THE COMMONWEALTH OF THE BAHAMAS
[GRAPHIC OMITTED] MORTGAGE REGISTRATION FORM
(Page 1 of 2)
--------------------------------------------------------------------------------
Official Number IMO Number Name of Ship Port of Registry
--------------------------------------------------------------------------------
716016 8700785 WIND SURF NASSAU
--------------------------------------------------------------------------------
Propulsion and Engine Details Vessel Dimensions
--------------------------------------------------------------------------------
Propulsion: Twin or more propeller Length: 163.17 metres
Type of Engines: Diesel electric Breadth: 20.00 metres
Total Power: 3680 kw Depth: 10.90 metres
--------------------------------------------------------------------------------
Particulars of Tonnage
--------------------------------------------------------------------------------
GROSS TONNAGE: 14,745 tons NET TONNAGE: 5,056 tons
--------------------------------------------------------------------------------
WHEREAS there is an Account Current between Degrees Limited, a Bahamas
corporation whose registered office is at Sassoon House, Xxxxxxx Street and
Victoria Avenue, Nassau, Bahamas (hereinafter sometimes called the "Mortgagor"),
and HAL Antillen N.V., a Netherlands Antilles corporation acting through its
offices at 000 Xxxxxxx Xxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxx, 00000-0000 (hereinafter
sometimes called the "Mortgagee"), the terms and conditions whereof are
regulated by (1) a Purchase Agreement dated as of February 21, 2007 among
Ambassadors International Cruise Group, LLC, a Xxxxxxxx Islands limited
liability company ("Buyer"), and Mortgagee (the "Purchase Agreement"), (2) a
promissory note in the principal amount of US$60,000,000 (sixty million U.S.
dollars) bearing even date herewith made by Buyer in favor of Mortgagee as
contemplated by the Purchase Agreement (the "Buyer Note"), (3) a Guarantee
bearing even date herewith made by Mortgagor and certain other affiliates of
Mortgagor in favor of Buyer (the "Guarantee") and (4) a Deed of Covenant bearing
even date herewith and made between the Mortgagor and the Mortgagee (the "Deed
of Covenant"), and
WHEREAS the amount of principal and interest due at any given time can be
ascertained by reference to the said Purchase Agreement, Buyer Note, Guarantee
and/or Deed of Covenant (each as so amended, varied or supplemented) and/or to
the books of account or other accounting records of the Mortgagee.
Now we Degrees Limited in consideration of the premises for ourselves and
our successors, covenants with the said HAL Antillen N.V. and it assigns to pay
to him or them or it the sums for the time being due on this security whether by
way of principal or interest, at the times and manner aforesaid. And for the
purpose of better securing to the said HAL Antillen N.V. the payment of such
sums as last aforesaid, we do hereby mortgage to the said HAL Antillen N.V.
64/64 shares of which we are the Owners in the Ship above particularly
described, and in her boats, guns, ammunition, small arms and appurtenances.
Lastly, we for ourselves and our successors, covenant with the said HAL Antillen
N.V. and it assigns that we have the power to mortgage in manner aforesaid the
above mentioned shares, and that the same are free from encumbrances.
It witness whereof we have affixed our common seal this 2 of April 2007.
--------------------------------------------------------------------------------
Seal Individual/Corporation Attestation
--------------------------------------------------------------------------------
I, (f) Xxxxxxx Xxxxxxxx
name of individual/corporation -----------------------------
of (g) Seattle, WA, USA
per Degrees Ltd -----------------------------
-------------------------- hereby testify that in my presence
(i) this Mortgage was signed by
Xxxxx Xxxxxxxxx
signature as Officer (h) ------------------------------------
) Officer (h) and Xxxxxx XxXxxxxx
--------------------------------
/s/ Xxxxx Xxxxxxxxx as Secretary (h)
----------------------
signature as Secretary (h)
and
/s/ Xxxxxx XxXxxxxx (ii) the corporate seal (h)of the
---------------------- transferor was affixed this 2 day of
in the presence of the April
witness whose attestation
is given opposite
Signature of
witness /s/ Xxxxxxx Xxxxxxxx
--------------------------------------------------------------------------------
(a) Here state by way of recital that there is an account current between the
Mortgagor (describing the company and its address) and the Mortgagee (giving
full title, address and description, including all joint mortgages), and
describe the nature of the transaction so as to show how the amount of principal
and interest due at any given time is to be ascertained, and the manner and time
of payment, (b) Name of company, (c) Full name of Mortgagee, (d) "his", "hers"
or "its", (e) If any prior encumbrance add "save as appears by the registry of
the ship", (f) name of witness, (g) address of witness, (h) delete as
applicable.
NOTE: The witness to the execution of the document must be a disinterested
party, independent of the body corporate or individual executing it e.g. Notary
Public, Consular Officer, Magistrate, Justice of Peace. A director,officer or
employee of a transferor which is a body corporate should not be an attesting
witness.
--------------------------------------------------------------------------------
R208 - Mortgage Registration Form - Version 1.1
--------------------------------------------------------------------------------
THE COMMONWEALTH OF THE BAHAMAS
[GRAPHIC OMITTED] MORTGAGE REGISTRATION FORM
(Page 2 of 2)
--------------------------------------------------------------------------------
Official Number IMO Number Name of Ship Port of Registry
--------------------------------------------------------------------------------
716016 8700785 WIND SURF NASSAU
--------------------------------------------------------------------------------
TRANSFER OF MORTGAGE
I/we, the within mentioned
in consideration of
this day paid to me/us (a) by ____________________________________
hereby transfer to it/him/her/them (a) the benefit of the within-written
security. In witness whereof I/we (a) have hereto affixed our seal this __ day
of __________
--------------------------------------------------------------------------------
Seal Individual/Corporation Attestation
--------------------------------------------------------------------------------
I, (b) _______________________
name of individual/corporation
of (c) _______________________
per _____________________
hereby testify that in my presence
(i) this Transfer of Mortgage was
signed by
signature as ______________________________
Individual/Director/Secretary/ as Individual/Director/Secretary/
Officer/Attorney-in-fact Officer/Attorney-in-fact (a)
and ______________________________
_______________________ as Individual/Director/Secretary/
signature as Officer/Attorney-in-fact (a)
Individual/Director/Secretary
Officer/Attorney-in-fact
and
__________________________ (ii) the corporate seal/personal
in the presence of the seal (a) of the transferor was
witness whose attestation affixed this __ day of ________
is given opposite
Signature of witness _______________
--------------------------------------------------------------------------------
MEMORANDUM OF DISCHARGE
By individual or Joint Mortgagees
Received the sum of ________________________
in discharge of this within-written security. Dated at _____________ this __ day
of _____________
In witness whereof we have hereto affixed our common seal this __ day of _______
--------------------------------------------------------------------------------
I, (b) _______________________
name of individual/corporation
of (c) _______________________
per _____________________
hereby testify that in my presence
(i) this Discharge of Mortgage was
signed by
signature as ______________________________
Individual/Director/Secretary/ as Individual/Director/Secretary/
Officer/Attorney-in-fact Officer/Attorney-in-fact (a)
and ______________________________
_______________________ as Individual/Director/Secretary/
signature as Officer/Attorney-in-fact (a)
Individual/Director/Secretary
Officer/Attorney-in-fact
and
__________________________ (ii) the corporate seal/personal
in the presence of the seal (a) of the mortgagee was
witness whose attestation affixed this __ day of ________
is given opposite
Signature of witness _______________
--------------------------------------------------------------------------------
(a) delete as appropriate, (b) insert name of witness, (c) insert address of
witness
NOTE: The witness to the execution of the document must be a disinterested
party, independent of the body corporate or individual executing it e.g. Notary
Public, Consular Officer, Magistrate, Justice of Peace. A director, officer or
employee of a transferor which is a body corporate should not be an attesting
witness.
--------------------------------------------------------------------------------
PLEDGE AGREEMENT
This Pledge Agreement dated as of April 2, 2007 (this "Agreement") is by
and between HAL Antillen N.V., a Netherlands Antilles corporation ("HAL
Antillen"), and Ambassadors International Cruise Group, LLC, a Xxxxxxxx Islands
limited liability company ("Buyer"). HAL Antillen and Buyer are referred to
individually as a "Party" and together as the "Parties."
RECITALS:
A. HAL Antillen and Buyer have entered into a Purchase Agreement (the
"Purchase Agreement") dated as of February 21, 2007 pursuant to which HAL
Antillen and certain of its affiliates have agreed to sell to Buyer, and Buyer
has agreed to purchase from HAL Antillen and such affiliates, all of the shares
of capital stock of Windstar Sail Cruises Limited (the "Company") in accordance
with the terms and subject to the conditions set forth in the Purchase
Agreement.
B. As partial payment of the purchase price of such shares, Buyer is
delivering to HAL Antillen a promissory note, executed by Buyer in favor of HAL
Antillen, in the amount of sixty million dollars ($60,000,000) (the "Buyer
Note").
C. The Parties have entered into a Security Agreement, dated as of the date
hereof (the "Security Agreement"), pursuant to which the Parties have agreed to
enter into this Pledge Agreement to secure the obligations under the Security
Documents (as defined in the Security Agreement).
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants contained herein, the Parties agree as follows:
1. Definitions.
(a) "Lien" means a mortgage, deed of trust, pledge, hypothecation,
assignment, encumbrance, lien (statutory or otherwise, including any Lien
for taxes), security interest, preference, participation interest,
attachment, garnishment, priority or security agreement, claim, charge,
restriction, easement, license or preferential arrangement of any kind or
nature whatsoever, including any conditional sale or other title retention
agreement, any financing lease having substantially the same economic
effect as any of the foregoing and the filing of any document under the
law of any applicable jurisdiction to evidence any of the foregoing.
(b) Capitalized terms not otherwise defined herein have the meanings
given in the Uniform Commercial Code of the State of Washington, as
amended from time to time (the "UCC").
2. Security Interest, Collateral and Obligation. Buyer hereby pledges,
assigns and grants to HAL Antillen, to secure the full and timely payment and
performance of the Obligations (defined below), a security interest in all of
Buyer's right, title, and interest in the following property (collectively, the
"Collateral"):
(a) the shares of capital stock of the Company listed on Schedule A
and any additional shares of capital stock, and stock rights, warrants,
options or other rights to subscribe for or receive additional shares of
capital stock, of the Company as may be issued from time to time hereafter
to Buyer (collectively, the "Shares"); and
(b) all cash and non-cash proceeds of all of the foregoing
Collateral.
3. Obligations Secured. The pledge, assignment and grant of security
interest made pursuant to this Agreement secures the full and timely payment and
performance of the following indebtedness, liabilities and obligations
(collectively, the "Obligations"):
(a) all indebtedness, liabilities and obligations of Buyer to HAL
Antillen now or hereafter existing, whether joint or several, direct or
indirect, absolute or contingent or due or to become due, howsoever
evidenced, created, incurred or owing and whether or not evidenced by
promissory notes or other evidences of indebtedness, and all
modifications, renewals, extensions and rearrangements thereof and
substitutions and replacements therefor, arising under or in connection
with the Buyer Note;
(b) all indebtedness, liabilities and obligations of Buyer now or
hereafter existing under this Agreement and the other Security Documents;
and
(c) all accrued interest on any of the foregoing indebtedness,
liabilities and obligations, whether accruing prior to or subsequent to
the commencement of a bankruptcy or similar proceeding.
4. Transfer of Instruments, Etc. Buyer agrees to deliver to HAL Antillen
all instruments and stock certificates pertaining to the Collateral now owned
and to deliver to HAL Antillen promptly upon receipt thereof all instruments and
stock certificates pertaining to the Collateral hereafter acquired. Without
limiting the foregoing or the restrictions set forth under the Security
Agreement, if Buyer shall become entitled to receive or shall receive, in
connection with any of the Collateral, any: (i) stock certificate, including
without limitation any certificate representing a stock dividend or in
connection with any increase or reduction of capital, reclassification, merger,
consolidation, sale of assets, combination of shares, stock split, spin-off,
split-off, split-up or liquidation; (ii) option, warrant, or right, whether as
an addition to or in substitution or in exchange for any of its securities, or
otherwise; or (iii) dividend (provided that Buyer shall be entitled to retain
any cash dividend declared and paid at a time when no Event of Default has
occurred and is continuing) or distribution payable in property, including
securities issued by other than the issuer of any of its securities, then in
each case the foregoing shall become part of the Collateral and Buyer shall
accept the same as HAL Antillen's agent, in trust for HAL Antillen, and shall
deliver them forthwith to HAL Antillen in the exact form received, with, as
applicable, Buyer's endorsement when necessary, or appropriate stock powers duly
executed in blank, to be held by HAL Antillen, subject to the terms hereof, as
part of the Collateral. This Agreement does not xxxxx XXX Antillen power to
control the voting or disposition of the securities prior to the occurrence of
an Event of Default.
5. Certain Representations, Warranties and Agreements Regarding the
Collateral. Buyer represents and warrants to HAL Antillen and agrees that:
(a) Ownership; No Liens. Buyer is the legal and beneficial owner of
all of the shares of capital stock of the Company listed on Schedule A,
and is ---------- not prohibited by contract, law or otherwise from
subjecting such shares to the security interest created hereby. Buyer
confirms that such stock constitutes all of the capital stock or other
equity interests held by Buyer in the Company. The Collateral is not
subject to any Lien other than Liens created hereunder in favor of HAL
Antillen. Buyer will defend the Collateral against the claims and demands
of all third persons.
(b) Payment. Buyer will have no right to dispose of any Collateral.
Buyer will account fully and faithfully to HAL Antillen for all proceeds
from disposition of Collateral and will upon demand pay or turn over
promptly all proceeds from the Collateral, including money, instruments
and drafts.
(c) Covenants Concerning the Collateral. Except as set forth in
Section 4, the Collateral will remain in Buyer's possession or control. At
all times Buyer will bear all expenses and risk of loss with respect to
the Collateral.
(d) Voting Rights. So long as no Event of Default has occurred and
is continuing, Buyer will be entitled to exercise any voting rights
incident to the Shares. Upon the occurrence and continuation of an Event
of Default, at the option of HAL Antillen and upon notice to Buyer,
Buyer's right to exercise such voting rights will immediately cease and
terminate and all voting rights with respect to the Shares will thereupon
rest solely and exclusively in HAL Antillen. The foregoing sentence will
constitute and grant to HAL Antillen an irrevocable proxy coupled with an
interest to vote the Shares upon the occurrence and continuation of such
an Event of Default, and any officer of any corporation whose voting stock
constitutes Shares, including any inspectors of elections or tellers, may
rely hereon and on any written notice from HAL Antillen as to the
existence of an Event of Default and HAL Antillen's right to vote the
Shares.
(e) Distributions. Until an Event of Default occurs, any stock
certificate (including any certificate representing a stock dividend or a
distribution in connection with any reclassification, increase, or
reduction of capital or issued in connection with any reorganization or
merger), option or rights with respect to the Collateral will belong to
Buyer in its own right; provided, however, that if any such --------
distribution is in substitution of or in exchange for any Collateral,
Buyer agrees to accept the same as HAL Antillen's agent and to hold the
same in trust for HAL Antillen, and to deliver the same forthwith to HAL
Antillen in the exact form received, with the appropriate endorsement of
Buyer when necessary and/or appropriate updated stock powers duly executed
in blank, to be held by HAL Antillen as substituted or exchanged
Collateral for the Obligations, subject to the terms hereof. Until an
Event of Default occurs, all cash dividends and any cash sums paid upon or
in respect of the Shares will be paid to Buyer for its own account.
(f) Payment of Taxes or Liens by HAL Antillen. At its option, HAL
Antillen may make payments to discharge taxes or Liens at any time levied
or placed on the Collateral and take any other action necessary to obtain,
preserve, and enforce the security interest and the rights and remedies
granted in this Agreement and maintain and preserve the Collateral. Such
payments and any other expenses incurred by HAL Antillen in taking such
action will become part of the Obligations. Buyer agrees to reimburse HAL
Antillen on demand for any such payments made or expenses incurred by HAL
Antillen, plus interest thereon at the greater of the rate of 7% per annum
and the maximum interest rate allowed by law.
(g) Further Assurances. Buyer will do, make, procure, execute and
deliver all acts, things, writings and assurances as HAL Antillen may at
any time request to protect, assure or enforce its interest, rights and
remedies created by or arising in connection with this Agreement,
including the execution of financing statements and stock powers in blank.
6. Events of Default. The occurrence of any Event of Default as defined in
the Buyer Note will constitute an "Event of Default" hereunder.
7. Rights of HAL Antillen upon Event of Default.
(a) If an Event of Default occurs, HAL Antillen will have all
remedies which may be available in law or equity and, without limiting the
generality of the foregoing or the remedies provided in any other section
of this Agreement, will have the following rights and remedies:
(i) the remedies of a secured party under the UCC or the law of
any other state or country where Collateral is located, including the
right to sell or otherwise dispose of any or all of the Collateral in
any manner allowed by the UCC or by such other law. Buyer will be
liable for all expenses, including reasonable attorneys' fees and
court costs, actually incurred by HAL Antillen in repossessing,
storing, preparing for sale or other disposition, or selling or
otherwise disposing of the Collateral. The Collateral may be sold or
otherwise disposed of as an entirety or in such parcels as HAL
Antillen may elect. HAL Antillen may deliver to the purchasers or
transferees of the Collateral a xxxx of sale or transfer, binding
Buyer forever to warrant and defend title to such Collateral;
(ii) the right to exercise all voting rights incident to the
Collateral as provided in Section 4(e);
(iii) the right to transfer or register any of the Collateral in
the name of HAL Antillen and to take possession, without prior notice
to Buyer, of all or any part of the Collateral or any security
therefor and of all books, records, papers and documents of the Buyer
or in Buyer's possession or control relating to the Collateral;
(iv) the right to receive all payments, income, property, rights,
dividends and all other distributions of any kind on account of all or
any of the Collateral;
(v) the right to take control of proceeds and use cash proceeds
to reduce the Obligations, whether or not due and payable;
(vi) the right to bring any action at law or in equity to protect
its interest in the Collateral;
(vii) the right to make demand for payment of, file suit on, make
any compromise or settlement with respect to, collect, compromise,
endorse or otherwise deal with the Collateral; and
(viii) the right to exercise any and all rights of collection,
conversion or exchange, and any and all other rights, privileges,
options or powers of Buyer pertaining or relating to the Collateral
(Buyer hereby irrevocably constituting and appointing HAL Antillen her
proxy and attorney-in-fact with full power of substitution so to do),
although HAL Antillen shall not have any duty to exercise any such
rights, privileges, options or powers or to sell or to otherwise
realize upon any of the Collateral, as hereinafter authorized, or to
preserve the same, and HAL Antillen shall not be responsible for any
failure to do so or delay in so doing.
(b) Upon HAL Antillen's request, Buyer agrees to execute and deliver
to HAL Antillen a deed in lieu of foreclosure or other instrument or
instruments necessary to xxxx XXX Antillen with all of Buyer's rights to
the Collateral. Upon the execution and delivery of such instrument or
instruments, Buyer's obligations under this Agreement will terminate
(except as otherwise set forth herein).
(c) HAL Antillen may waive any Event of Default without waiving any
other Event of Default. The remedies of HAL Antillen are cumulative and
not exclusive of any right, power or remedy provided by law or any other
agreement (including the Mortgages and Deeds of Covenant, each dated the
date hereof, relating to the mortgages of the Vessels (as defined in the
Purchase Agreement)) and the exercise or partial exercise of one or more
right, power or remedy will not be construed as a cure or waiver of any
Event of Default nor prejudice the right of HAL Antillen in the exercise
of any other right, power or remedy. No delay of HAL Antillen in
exercising any right, power or remedy will operate as a waiver thereof.
(d) After the occurrence of an Event of Default, HAL Antillen may
execute, sign, endorse, transfer or deliver in its own name or in the name
of Buyer, notes, checks, drafts or other instruments for the payment of
money or any other documents necessary to evidence, perfect or realize
upon the security interest and obligations created by this Agreement.
8. Buyer's Waivers. Buyer waives any action on delinquency in respect of
the Obligations or any part thereof, including any right to require HAL Antillen
to xxx Buyer or any guarantor or surety obligated with respect to the
Obligations or any part thereof, or otherwise to enforce payment thereof against
any collateral securing the Obligations or the obligations of any guarantor of
surety or any part thereof. Buyer further waives notice of (a) HAL Antillen's
acceptance of this Agreement or its intention to act or its actions in reliance
hereon; (b) the present existence or future incurring of any Obligations or any
terms or amounts thereof or any change therein; (c) any default by Buyer or any
surety or guarantor; (d) the obtaining of any guaranty or surety agreement (in
addition to this Agreement); (e) the obtaining of any pledge, assignment or
other security for any Obligations; (f) the release of any surety or guarantor
(including Buyer); (g) the release of any Collateral; (h) any change in Buyer's
business or financial condition; (i) any renewal, extension or modification of
the terms of any Obligation or of the obligations or liabilities of any surety
or guarantor or any instruments or agreements evidencing the same; and (j) any
other demands or notices whatsoever with respect to the Obligations or this
Agreement. Buyer further waives notice of presentment, demand, protest, notice
of nonpayment and notice of protest in relation to any instrument or agreement
evidencing any Obligation.
9. Hold Harmless. Buyer will indemnify and hold HAL Antillen and its
officers, directors, managers, employees, agents, representatives, controlling
persons, stockholders, and each of their affiliates (each an "Indemnified
Party") harmless from all liability, loss, damage or expense, including
reasonable attorneys' fees and costs, that the Indemnified Party may incur
resulting from, arising out of or relating to the Indemnified Party's good faith
efforts to comply with or enforce the terms of this Agreement, provided,
however, that such indemnification will not apply to the extent that any such
liability, loss, damage or expense arises out of or is based solely upon the
Indemnified Party's willful misconduct or gross negligence. The covenants set
forth in this Section 8 will survive the termination of this Agreement.
10. Execution and Filing of Financing Statements. HAL Antillen may execute
and file, on behalf of Buyer, any financing statements or other instruments
which in HAL Antillen's opinion may be necessary or desirable to perfect or
protect HAL Antillen's position with respect to the Collateral.
11. Notices. All notices, requests, demands, claims and other
communications hereunder will be in writing and delivered pursuant to Section 9
of the Security Agreement.
12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original but all of which together
will constitute one and the same instrument.
13. Amendments and Waivers. No amendment, modification, replacement,
termination or cancellation of any provision of this Agreement will be valid,
unless the same will be in writing and signed by Buyer and HAL Antillen. No
waiver by any Party of any default, misrepresentation, or breach of warranty or
covenant hereunder, whether intentional or not, may be deemed to extend to any
prior or subsequent default, misrepresentation, or breach of warranty or
covenant hereunder or affect in any way any rights arising because of any prior
or subsequent such occurrence.
14. Governing Law. This Agreement and the performance of the obligations of
the Parties hereunder will be governed by and construed in accordance with the
laws of the State of Washington, without giving effect to any choice of law
principles that would require the application of the law of another
jurisdiction.
15. Submission to Jurisdiction; Venue. Each Party submits to the
jurisdiction of any state or federal court sitting in Seattle, Washington, in
any Action arising out of or relating to this Agreement and agrees that all
claims in respect of the Action may be heard and determined in any such court.
Each Party also agrees not to bring any Action arising out of or relating to
this Agreement in any other court. Each Party agrees that a final judgment in
any Action so brought will be conclusive and may be enforced by Action on the
judgment or in any other manner provided at Law or in equity. Each Party waives
any defense of inconvenient forum to the maintenance of any Action so brought
and waives any bond, surety, or other security that might be required of any
other Party with respect thereto.
16. Entire Agreement. This Agreement, together with the exhibits and
schedules hereto and the certificates, documents, instruments and writings that
are delivered pursuant hereto, constitutes the entire agreement and
understanding of the Parties in respect of its subject matters and supersedes
all prior understandings, agreements, or representations by or among the
Parties, written or oral, to the extent they relate in any way to the subject
matter hereof or the Transactions, including the letter of intent, dated
November 21, 0000, xxxxxxx Xxxxxxx Xxxxxxx Line Inc. and Ambassadors
International, Inc. There are no third party beneficiaries having rights under
or with respect to this Agreement.
17. Assignment. This Agreement and HAL Antillen's rights hereunder may be
assigned by HAL Antillen and its successors and assigns from time to time (a) to
any Affiliate thereof and (b) with Buyer's prior written consent (which will not
be unreasonably withheld), to any other Person, and in any such case the
assignee will be entitled to all of the rights, privileges and remedies granted
in this Agreement to HAL Antillen. Buyer will not assign this Agreement or any
of Buyer's rights under this Agreement, or delegate any of its duties or
obligations under this Agreement.
18. Severability. The provisions of this Agreement will be deemed severable
and the invalidity or unenforceability of any provision will not affect the
validity or enforceability of the other provisions hereof; provided that if any
provision of this Agreement, as applied to any Party or to any circumstance, is
adjudged by a Governmental Body, arbitrator, or mediator not to be enforceable
in accordance with its terms, the Parties agree that the Governmental Body,
arbitrator, or mediator making such determination will have the power to modify
the provision in a manner consistent with its objectives such that it is
enforceable, and/or to delete specific words or phrases, and in its reduced
form, such provision will then be enforceable and will be enforced.
19. Successors. All of the terms, agreements, covenants, representations,
warranties, and conditions of this Agreement are binding upon, and inure to the
benefit of and are enforceable by, the Parties and their respective successors.
20. Attorneys' Fees. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement or any other agreement or
document to be executed or delivered pursuant hereto, the prevailing Party will
be entitled to reasonable attorneys' and experts' fees, costs, and disbursements
in addition to any other relief to which such Party may be entitled.
21. Headings. The article and section headings contained in this Agreement
are inserted for convenience only and will not affect in any way the meaning or
interpretation of this Agreement.
22. Construction. The Parties have participated jointly in the negotiation
and drafting of this Agreement. If an ambiguity or question of intent or
interpretation arises, this Agreement will be construed as if drafted jointly by
the Parties and no presumption or burden of proof will arise favoring or
disfavoring any Party because of the authorship of any provision of this
Agreement. Any reference to any federal, state, local, or foreign Law will be
deemed also to refer to Law as amended and all rules and regulations promulgated
thereunder, unless the context requires otherwise. The words "include,"
"includes," and "including" will be deemed to be followed by "without
limitation."
[Signature page follows]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day
and year first above written.
HAL ANTILLEN N.V.
By: /s/ Xxxxx Xxxxx
-------------------------
Name: Xxxxx Xxxxx
Title: Proxyholder
[Signature Page to Pledge Agreement]
AMBASSADORS INTERNATIONAL CRUISE GROUP, LLC
By: Ambassadors International Xxxxxxxx
Islands, LLC, its Sole Member
By: /s/ Xxxxxx X. XxXxxxxx
----------------------
Name: Xxxxxx X. XxXxxxxx
Title: Vice President
Schedule A
------------------------------------------------------------------
Equity Interest Issued and Outstanding
Equity Interests
------------------------------------------------------------------
------------------------------------------------------------------
Ordinary Shares 15,996 Ordinary Shares, with
a par value of $1.00, held by
Ambassadors International Cruise
Group, LLC, and evidenced by
certificate number 25.
4 Ordinary Shares, with a par value
of $1.00, held by Grahamco Limited,
with ownership and beneficial
interest vested in Ambassadors
International Cruise Group, LLC,
and evidenced by certificate number
26.
------------------------------------------------------------------
------------------------------------------------------------------
Redeemable Preference 12,000 Redeemable Preference
Shares Shares, with a par value of $1.00,
held by Ambassadors International
Cruise Group, LLC and evidenced by
certificate number 5.
------------------------------------------------------------------
SECURITY AGREEMENT
This Security Agreement dated as of April 2, 2007 (this "Agreement") is by
and among HAL Antillen N.V., a Netherlands Antilles corporation ("HAL
Antillen"), Ambassadors International Cruise Group, LLC, a Xxxxxxxx Islands
limited liability company ("Buyer"), Wind Star Sail Cruises Limited (the
"Company"), Wind Star Limited, a Bahamas corporation ("Wind Star"), Wind Spirit
Limited, a Bahamas corporation ("Wind Spirit"), and Degrees Limited, a Bahamas
corporation ("Degrees Limited" and, together with Buyer, Wind Star and Wind
Spirit, the "Buyer Parties"). HAL Antillen, Buyer, the Company, Wind Star, Wind
Spirit and Degrees Limited are referred to individually as a "Party" and
together as the "Parties."
RECITALS:
A. HAL Antillen and Buyer have entered into a Purchase Agreement (the
"Purchase Agreement") dated as of February 21, 2007 pursuant to which HAL
Antillen has agreed to sell to Buyer, and Buyer has agreed to purchase from HAL
Antillen, all of the shares of capital stock of the Company in accordance with
the terms and subject to the conditions set forth in the Purchase Agreement.
B. As partial payment of the purchase price of such shares, Buyer is
delivering to HAL Antillen a promissory note, executed by Buyer in favor of HAL
Antillen, in the amount of sixty million dollars ($60,000,000) (the "Buyer
Note"). Contemporaneously therewith, the Company, Wind Star, Wind Spirit and
Degrees Limited are delivering to HAL Antillen a Guarantee of Buyer's
obligations under the Buyer Note (the "Subsidiary Guarantee") and Ambassadors
International, Inc., a Delaware Corporation, is delivering to HAL a Performance
Guarantee to provide additional support for certain obligations of the Buyer
Parties (the "Performance Guarantee").
C. Company, Wind Star, Wind Spirit and Degrees Limited, as wholly-owned
subsidiaries of Buyer after the transactions contemplated by the Purchase
Agreement, will derive substantial direct and indirect benefit from the
consummation of the transactions contemplated by the Purchase Agreement and HAL
Antillen's agreement to accept the Buyer Note as partial payment of the purchase
price thereunder.
D. In connection with the execution and delivery of the Buyer Note, the
Parties desire to enter into this Agreement to evidence certain agreements among
the Parties, as further set forth herein.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants contained herein, the Parties agree as follows:
1. Definitions. Any capitalized terms not defined herein will have the
meaning assigned to such terms in the Purchase Agreement.
2. Security. Buyer's indebtedness to HAL Antillen under the Buyer Note will
be secured by the following:
(a) a first preferred mortgage in each of the Vessels (as defined in
the Deeds of Covenants (defined below)) and a security interest in the
Insurances and Requisition Compensation (each as defined in the Deeds of
Covenants), to be evidenced by the forms of Mortgages (the "Mortgages") and
Deeds of Covenants (the "Deeds of Covenants") attached as Exhibits A and B,
respectively;
(b) Buyer's pledge of all of the shares of capital stock of the
Company as further set forth in the Pledge Agreement attached as Exhibit C
(the "Pledge Agreement" and, collectively with this Agreement, the
Mortgages, the Deeds of Covenants, the Subsidiary Guarantee and the
Performance Guarantee, the "Security Documents"); and
(c) Buyer's grant of a security interest, as further set forth in
Section 3 below, in all of the Intellectual Property listed on Schedule
4.11(a)(1) (the "Intellectual Property Collateral") to the Purchase
Agreement.
3. Grant of Security Interest in Intellectual Property Collateral. For good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, to secure Buyer's indebtedness to HAL Antillen under the Buyer
Note, Buyer does hereby mortgage, pledge, bargain, convey and hypothecate to HAL
Antillen and grant to HAL Antillen a security interest in, for its benefit, all
of Buyer's right, title and interest in and to the Intellectual Property
Collateral. The lien, pledge and security interest in the Intellectual Property
Collateral is granted in conjunction with the security interests granted to HAL
Antillen under the Security Documents, and the rights and remedies of HAL
Antillen granted hereby are in addition to those set forth in the Security
Documents.
4. Intellectual Property Collateral License. Without in any way limiting
Section 3 of this Agreement, Buyer hereby grants to HAL Antillen, as security
for Buyer's indebtedness to HAL Antillen under the Buyer Note, a worldwide,
royalty-free, irrevocable, perpetual, transferable and sub-licensable license
and right to use all of the Intellectual Property Collateral: (a) in connection
with any foreclosure or other realization by HAL Antillen pursuant to the
Security Documents and (b) without limiting the generality of the foregoing,
during any period when an Event of Default (as that term is defined on Schedule
1 attached hereto) is continuing. The license and right granted HAL Antillen
hereby shall be without any royalty or fee or charge whatsoever.
5. Registration of Security Interest. This Agreement has been executed and
delivered by Buyer for the purpose of, among other things, registering with the
United States Patent and Trademark Office, and corresponding offices in other
countries of the world, the security interest of HAL Antillen in any and all of
the following types of Intellectual Property Collateral: trademarks, trade
names, corporate names, company names, business names, fictitious business
names, trade styles, service marks, logos, and other business identifiers,
prints and labels on which any of the foregoing have appeared or appear, all
registrations and recordings thereof, all applications in connection therewith,
all renewals thereof, and all of the goodwill of the business connected with the
use of, and symbolized by, each trademark, trademark registration and trademark
application.
6. Fraudulent Conveyances. Notwithstanding any provision of any of the
Security Documents to the contrary, it is intended that the Security Documents,
and any interests, liens and security interests granted as security by the
Security Documents, not constitute a Fraudulent Conveyance (as defined below) in
the event that the Security Documents or such interest is subject to the United
States Bankruptcy Code (the "Bankruptcy Code") or any applicable fraudulent
conveyance or fraudulent transfer law or similar law of any state or
jurisdiction. Consequently, the Parties agree that if the Security Documents, or
any such interests, liens or security interests securing the Security Documents,
would, but for the application of this sentence, constitute a Fraudulent
Conveyance, the Security Documents and each such lien and security interest
shall be valid and enforceable only to the maximum extent that would not cause
the Security Documents or such interest, lien or security interest to constitute
a Fraudulent Conveyance, and the Security Documents shall automatically be
deemed to have been amended accordingly at all relevant times. For purposes
hereof, "Fraudulent Conveyance" means a fraudulent conveyance under Section 548
of the Bankruptcy Code or a fraudulent conveyance or fraudulent transfer under
the provisions of any applicable fraudulent conveyance or fraudulent transfer
law or similar law of any state or jurisdiction, as in effect from time to time.
7. Certain Representations and Warranties of the Buyer Parties. Each of the
Buyer Parties represents and warrants to HAL Antillen as follows:
(a) such Buyer Party is an entity validly existing and in good
standing under the Laws of the jurisdiction of its creation, formation or
organization;
(b) such Buyer Party has the relevant entity power and authority to
execute and deliver each Security Document to which it is party, and to
perform its obligations contemplated thereby. Such Buyer Party has taken
all action necessary to authorize the execution and delivery of each
Security Document to which it is party, the performance of its obligations
thereunder, and the consummation of the Transactions. Each Security
Document to which such Buyer Party is a party has been duly authorized,
executed and delivered by, and is enforceable against, such Buyer Party,
except as such enforceability may be subject to the effects of bankruptcy,
insolvency, reorganization, moratorium, or other Laws relating to or
affecting the rights of creditors, and general principles of equity;
(c) the execution and delivery of the Security Documents to which such
Buyer Party is a party by such Buyer Party and the performance of its
obligations thereunder does not now and will not in the future (i) breach
any provision of its Organizational Documents; (ii) breach any Law, Order,
material Contract, or material Permit to which such Buyer Party is a party
or by which it is bound or to which any of its assets is subject; or (iii)
require any Consent; and
(d) immediately after the Closing, the execution and delivery of the
Security Documents to which such Buyer Party is a party by such Buyer Party
will not cause such Buyer Party's total liabilities to exceed total assets.
8. Operations of Buyer and the Acquired Entities. In addition to and
without limiting any agreements set forth in any other Security Document, until
all obligations of Buyer under the Buyer Note are paid in full, without the
prior written consent of HAL Antillen, which consent will not be unreasonably
withheld, Buyer will (and, to the extent such provisions are applicable to the
other Buyer Parties, such Buyer Parties will) comply with the following:
(a) None of the Acquired Entities will engage in any practice, take
any action, or enter into any transaction that is either outside the
ordinary course of business or inconsistent with industry practice within
the luxury cruise industry.
(b) Buyer will preserve and maintain, and will cause each Acquired
Entity to preserve and maintain, its corporate existence, rights,
franchises and privileges in the jurisdiction of its incorporation, and
cause each Acquired Entity to qualify and remain qualified as a foreign
corporation in each jurisdiction in which such qualification is necessary
or desirable in view of its business and operations or the ownership or
lease of its properties; provided, however, Buyer may change any Acquired
Entity's jurisdiction of incorporation from the Bahamas to the Xxxxxxxx
Islands or any other comparable jurisdiction that affords Buyer the
appropriate rights to operate in the ordinary course of business and
otherwise in compliance with the Security Documents so long as: (i) Buyer
provides prior written notice to HAL Antillen, (ii) Buyer pays for any
expenses related to any necessary changes in the Security Documents or
re-registration or filing thereof resulting from such change of
jurisdiction as determined by HAL Antillen, and (iii) such does not impair
or otherwise adversely impact the rights of HAL Antillen under any of the
Security Documents, the interest of HAL Antillen in the Intellectual
Property Collateral or any other collateral provided under any of the
Security Documents or the obligations of any Buyer Party under any Security
Document.
(c) Buyer will use reasonable efforts to preserve and maintain, and
will cause each of the Acquired Entities to use reasonable efforts to
preserve and maintain, all of its properties and assets necessary for the
proper conduct of the business of the Acquired Entities, in good repair,
working order and condition, ordinary wear and tear excepted and, from time
to time, make all necessary and proper repairs, renewals and replacements
thereto, and any additions and improvements thereto that may be (i)
required by law (including current requirements of the U.S. Coast Guard,
IMO and SOLAS and all other national and international rules, regulations,
requirements, treaties and conventions) in order to operate its business as
conducted as of the date hereof, provided that the foregoing shall not be
construed to require Buyer or any Acquired Entity to comply with any such
requirements that are retroactive in effect and that require a material
modification to any Vessel or (ii) necessary to operate in the ordinary
course of business or to maintain any relevant classifications.
(d) Without modifying the obligations of the Buyer Parties under the
Deeds of Covenants, Buyer will cause each of the Acquired Entities to
maintain, as to its respective properties and business, with financially
sound and reputable insurers, insurance against such casualties and
contingencies and of such types and in such amounts as set forth on
Schedule 2.
(e) Neither Buyer nor any of its Affiliates will become a party to any
agreement that by its terms restricts its performance of any Transaction
Document.
(f) Buyer will cause each Acquired Entity to pay and discharge all
Taxes imposed upon it or upon its income, profits or business, or upon any
properties belonging to it, prior to the date on which penalties attach
thereto, and all lawful claims which, if unpaid, might become a lien or
charge upon any properties of any Acquired Entity; provided, however,
-------- ------- that no Acquired Entity will be required to pay any such
Tax which is being contested or extended in good faith and by appropriate
proceedings if any Acquired Entity will have set aside sufficient reserves,
if any, with respect thereto. Buyer will cause each Acquired Entity to pay,
when due, or in conformity with customary trade terms, all lease
obligations, all trade debt, and all other indebtedness incident to the
operations of any Acquired Entity, except such as are being contested in
good faith and by proper proceedings if the Acquired Entity concerned will
have set aside sufficient reserves, if any, with respect thereto.
(g) Buyer will not itself, or permit any Acquired Entity to,
consolidate or merge, or sell or transfer all or substantially all its
assets, except that Buyer or any Acquired Entity may (i) consolidate or
merge into or with or sell or transfer assets to any other Acquired Entity,
(ii) merge into or sell or transfer assets to an Acquired Entity or (iii)
merge into a newly formed subsidiary an Acquired Entity for the purposes of
changing any Acquired Entity's domicile from the Bahamas to the Xxxxxxxx
Islands or any other comparable jurisdiction that affords Buyer the
appropriate rights to operate in the ordinary course of business and
otherwise in compliance with the Security Documents so long as the
requirements of Section 8(b) of this Agreement are complied with.
(h) Buyer will not sell, pledge or otherwise transfer any Equity
Interests (or any option or rights to subscribe for, purchase or acquire
any Equity Interests) of any Acquired Entity, or permit any Acquired Entity
to issue, sell, pledge or otherwise transfer any of its Equity Interests
(or any option or rights to subscribe for, purchase or acquire any Equity
Interests), or the Equity Interests (or any option or rights to subscribe
for, purchase or acquire any Equity Interests) of any other Acquired
Entity.
(i) Buyer will cause each Acquired Entity to comply with all
applicable Laws and Orders, unless such noncompliance would not be
reasonably expected to have a material adverse effect on the business of
the Acquired Entities, the obligations of the Buyer Parties under the
Security Documents or on the rights of HAL Antillen under any of the
Security Documents.
(j) Buyer will cause each Acquired Entity to keep adequate records and
books of account, in which complete entries will be made in accordance with
GAAP consistently applied, reflecting all financial transactions of the
Acquired Entities, and in which, for each fiscal year, all proper reserves
for depreciation, depletion, obsolescence, amortization, Taxes, bad debts
and other purposes in connection with its business will be made.
(k) Buyer will not permit any Acquired Entity to make any material
change in the nature of its business as conducted by Buyer immediately
following the Closing.
9. Buyer's Information Delivery Requirements. Until all obligations of
Buyer under the Buyer Note are paid in full, Buyer will deliver the following
financial records of the Buyer Parties to HAL Antillen, in each case certified
by Buyer's Chief Financial Officer: (a) quarterly unaudited balance sheets and
statements of income, changes in stockholders' equity, and cash flow within
thirty days after the end of each fiscal quarter; (b) annual unaudited balance
sheets and statements of income, changes in stockholders' equity, and cash flow
within ninety days after the end of each fiscal year; and (c) records of capital
expenditures in excess of $250,000, provided quarterly.
All of the foregoing financial statements will be prepared in accordance
with GAAP, applied consistently with GAAP as used for purposes of the Financial
Statements provided pursuant to Section 6.9 of the Purchase Agreement; provided,
however, that such financial statements may be subject to normal year-end
adjustment and lack footnotes and other presentation items.
10. HAL Antillen's Rights. Until all obligations of Buyer under the Buyer
Note are paid in full, HAL Antillen will have the right, once per calendar year,
upon reasonable notice to Buyer, to have access (or arrange for its agents or
representatives to have access) at reasonable times, and in a manner so as not
to interfere with the normal business operations of Buyer or the Acquired
Entities, to conduct physical inspections of the Vessels and to review and copy
the books, records, Contracts and documents pertaining to the Vessels. If such
inspection as to any Vessel cannot be completed during the time the Vessel is in
port, HAL Antillen shall be allowed further access at one or more subsequent
ports as necessary to complete such inspection.
11. Execution and Filing of Financing Statements. HAL Antillen may execute
and file, on behalf of any Buyer Party, any financing statements or other
instruments which in HAL Antillen's opinion may be necessary or desirable to
perfect or protect HAL Antillen's position with respect to any collateral
covered by the Security Documents, and each Buyer Party hereby irrevocably
makes, constitutes, and appoints HAL Antillen (and any of HAL Antillen's
officers, employees, or agents designated by HAL Antillen) as such Buyer Party's
true and lawful attorney, with power to execute and file such financing
statements or other instruments.
12. Further Assurances. Each Buyer Party will do, make, procure, execute
and deliver all acts, things, writings and assurances as HAL Antillen may at any
time request to protect, assure or enforce its interest, rights and remedies
created by or arising in connection with this Agreement or any other Security
Document, including the execution of financing statements and stock powers in
blank.
13. HAL Antillen's Right to Injunction. Notwithstanding other provisions of
this Agreement, Buyer agrees that, in the event of a breach by Buyer of this
Agreement or any of the Security Documents, HAL Antillen, in addition to and
without limiting any other remedy or right it may have, shall have the right to
an immediate injunction or other equitable remedy enjoining any such threatened
or actual breach, without any requirement to post bond or provide similar
security. The existence of this right shall not preclude HAL Antillen from
pursuing any other rights and remedies at law or in equity that HAL Antillen may
have, including recovery of damages, if such remedy is available, for any breach
of such sections. The prevailing party in any such action brought by HAL
Antillen seeking an injunction or other equitable remedy shall be entitled to
its reasonable attorneys' fees and costs.
14. Notices. All notices, requests, demands, claims and other
communications hereunder will be in writing. Any notice, request, demand, claim
or other communication hereunder will be deemed duly given if (and then three
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to HAL Antillen:
Holland America Line Inc.
Attn: General Counsel
000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxx, XX 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
Copy (which will not constitute notice) to:
Xxxxxxxxxxx & Xxxxxxxx Xxxxxxx Xxxxx Xxxxx LLP
Attn: Xxxxx Xxxx
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
If to any Buyer Party:
Ambassador International, Inc.
Attn: Xxxxxx XxXxxxxx
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Copy (which will not constitute notice) to:
Xxxxxx & Xxxxxx LLP
Attn: Xxxxxx X. Xxxxx
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth above
using any other means (including personal delivery, expedited courier, messenger
service, telecopy, telex, ordinary mail, or electronic mail), but no such
notice, request, demand, claim, or other communication will be deemed to have
been duly given unless and until it actually is received by the intended
recipient. Any Party may change the address to which notices, requests, demands,
claims, and other communications hereunder are to be delivered by giving the
other Parties notice in the manner herein set forth.
15. Counterparts. This Agreement may be executed in counterparts, each of
which will be deemed an original but all of which together will constitute one
and the same instrument.
16. Amendments and Waivers. No amendment, modification, replacement,
termination or cancellation of any provision of this Agreement will be valid,
unless the same will be in writing and signed by each of the Parties. No waiver
by any Party of any default, misrepresentation, or breach of warranty or
covenant hereunder, whether intentional or not, may be deemed to extend to any
prior or subsequent default, misrepresentation, or breach of warranty or
covenant hereunder or affect in any way any rights arising because of any prior
or subsequent such occurrence.
17. Governing Law. This Agreement and the performance of the obligations of
the Parties hereunder will be governed by and construed in accordance with the
laws of the State of Washington, without giving effect to any choice of law
principles that would require the application of the law of another
jurisdiction. Notwithstanding the foregoing, HAL Antillen may, at its sole
discretion, elect to enforce the Mortgage and Deeds of Covenants with respect to
any Buyer Party under the laws of the Bahamas or any other jurisdiction that may
be applicable with respect to the Mortgages.
18. Submission to Jurisdiction; Venue. Each Party submits to the
jurisdiction of any state or federal court sitting in Seattle, Washington, in
any Action arising out of or relating to this Agreement and agrees that all
claims in respect of the Action may be heard and determined in any such court.
Each Party also agrees not to bring any Action arising out of or relating to
this Agreement in any other court. Each Party agrees that a final judgment in
any Action so brought will be conclusive and may be enforced by Action on the
judgment or in any other manner provided at Law or in equity. Each Party waives
any defense of inconvenient forum to the maintenance of any Action so brought
and waives any bond, surety, or other security that might be required of any
other Party with respect thereto. Nothing contained in this Section 18 shall be
construed so as to prevent or limit HAL Antillen from taking any and all actions
necessary to realize on any collateral under the Security Documents wherever
such collateral may, from time to time, be located.
19. Entire Agreement. This Agreement, together with the exhibits and
schedules hereto and the certificates, documents, instruments and writings that
are delivered pursuant hereto, constitutes the entire agreement and
understanding of the Parties in respect of its subject matters and supersedes
all prior understandings, agreements, or representations by or among the
Parties, written or oral, to the extent they relate in any way to the subject
matter hereof or the Transactions, including the letter of intent, dated
November 21, 0000, xxxxxxx Xxxxxxx Xxxxxxx Line Inc. and Ambassadors
International, Inc. There are no third party beneficiaries having rights under
or with respect to this Agreement.
20. Assignment. This Agreement and HAL Antillen's rights hereunder may be
assigned by HAL Antillen and its successors and assigns from time to time (a) to
any Affiliate of HAL Antillen and (b) with Buyer's prior written consent (which
will not be unreasonably withheld), to any other Person and any such assignee
will be entitled to all of the rights, privileges and remedies granted in this
Agreement to HAL Antillen. No Buyer Party may assign this Agreement or any of
its rights under this Agreement, or delegate any of its duties or obligations
under this Agreement.
21. Severability. The provisions of this Agreement will be deemed severable
and the invalidity or unenforceability of any provision will not affect the
validity or enforceability of the other provisions hereof; provided that if any
provision of this Agreement, as applied to any Party or to any circumstance, is
adjudged by a Governmental Body, arbitrator, or mediator not to be enforceable
in accordance with its terms, the Parties agree that the Governmental Body,
arbitrator, or mediator making such determination will have the power to modify
the provision in a manner consistent with its objectives such that it is
enforceable, and/or to delete specific words or phrases, and in its reduced
form, such provision will then be enforceable and will be enforced.
22. Successors. All of the terms, agreements, covenants, representations,
warranties, and conditions of this Agreement are binding upon, and inure to the
benefit of and are enforceable by, the Parties and their respective successors.
23. Attorneys' Fees. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement or any other agreement or
document to be executed or delivered pursuant hereto, the prevailing Party will
be entitled to reasonable attorneys' and experts' fees, costs, and disbursements
in addition to any other relief to which such Party may be entitled.
24. Headings. The article and section headings contained in this Agreement
are inserted for convenience only and will not affect in any way the meaning or
interpretation of this Agreement.
25. Construction. The Parties have participated jointly in the negotiation
and drafting of this Agreement. If an ambiguity or question of intent or
interpretation arises, this Agreement will be construed as if drafted jointly by
the Parties and no presumption or burden of proof will arise favoring or
disfavoring any Party because of the authorship of any provision of this
Agreement. Any reference to any federal, state, local, or foreign Law will be
deemed also to refer to Law as amended and all rules and regulations promulgated
thereunder, unless the context requires otherwise. The words "include,"
"includes," and "including" will be deemed to be followed by "without
limitation."
[Signature page follows]
[Signature page to Security Agreement]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day
and year first above written.
HAL ANTILLEN N.V.
By: /s/ Xxxxx Xxxxx
------------------------
Name: Xxxxx Xxxxx
Title:
Proxyholder
AMBASSADORS INTERNATIONAL CRUISE
GROUP, LLC
By: Ambassadors International
Xxxxxxxx Islands, LLC, its Sole
Member
By: /s/ Xxxxxx X. XxXxxxxx
---------------------------------
Name: Xxxxxx X. XxXxxxxx
Title: Vice President and Secretary
WIND STAR SAIL CRUISES LIMITED
By: /s/ Xxxxxx X. XxXxxxxx
---------------------------------
Name: Xxxxxx X. XxXxxxxx
-------------------------------
Title: Vice President
------------------------------
WIND STAR LIMITED
By: /s/ Xxxxxx X. XxXxxxxx
---------------------------------
Name: Xxxxxx X. XxXxxxxx
-------------------------------
Title: Vice President
------------------------------
WIND SPIRIT LIMITED
By: /s/ Xxxxxx X. XxXxxxxx
---------------------------------
Name: Xxxxxx X. XxXxxxxx
-------------------------------
Title: Vice President
------------------------------
DEGREES LIMITED
By: /s/ Xxxxxx X. XxXxxxxx
---------------------------------
Name: Xxxxxx X. XxXxxxxx
-------------------------------
Title: Vice President
------------------------------
Schedule 2
Required Insurance
1. Hull and Machinery
Insurance to cover physical loss or damage to the vessel under the American
Institute Hull Clauses for partial, constructive, and/or agreed total loss up to
the agreed Insured Value.
Vessel Insured Value Deductible
---------------------------------------------------------------------------
Wind Surf $44,000,000 $500,000
Wind Spirit $20,000,000 $500,000
Wind Star $20,000,000 $500,000
---------------------------------------------------------------------------
2. Increased Value of Hull and Machinery
As above, but only to pay in the event of a total, constructive, or agreed total
loss up to the agreed Insured Value.
Vessel Insured Value Deductible
---------------------------------------------------------------------------
Wind Surf $11,000,000 $0
Wind Spirit $5,000,000 $0
Wind Star $5,000,000 $0
---------------------------------------------------------------------------
3. War Risks Hull and Machinery and Protection and Indemnity War Risks
Insurance to cover physical loss or damage to the vessel in accordance with the
Institute War Risks Hull Clauses up to the agreed Insured Value.
Vessel Insured Value Deductible
---------------------------------------------------------------------------
Wind Surf $55,000,000 $500,000
Wind Spirit $25,000,000 $500,000
Wind Star $25,000,000 $500,000
---------------------------------------------------------------------------
4. Protection and Indemnity
Insurance to protect and indemnify for shipowner's legal liabilities in
accordance with the insured vessel's Class 1 Terms of Entry in a shipowner's
mutual protection and indemnity association. Deductible is $500,000 for any one
accident.
Vessel GRT Built Flag Pax Capacity
---------------------------------------------------------------------------
Wind Surf 14,745 1989 Bahamas 312
Wind Spirit 5,736 1988 Bahamas 148
Wind Star 5,703 1986 Bahamas 148
---------------------------------------------------------------------------
5. Freight, Demurrage and Defence
Insurance to protect and indemnify shipowner's for costs in accordance with the
insured vessel's Class 2 Terms of Entry in a shipowner's mutual freight,
demurrage and defence association. Deductible is $10,000 for any one accident.
Vessel GRT Built Flag Pax Capacity
---------------------------------------------------------------------------
Wind Surf 14,745 1989 Bahamas 312
Wind Spirit 5,736 1988 Bahamas 148
Wind Star 5,703 1986 Bahamas 148
---------------------------------------------------------------------------
SECURED PROMISSORY NOTE
$60,000,000 April 2, 2007
FOR VALUE RECEIVED, the undersigned, Ambassadors International Cruise
Group, LLC, a Xxxxxxxx Islands limited liability company ("Maker"), hereby
unconditionally promises to pay to HAL Antillen N.V., a Netherlands Antilles
corporation, or to its order ("Payee" and, together with Maker, the "Parties"),
in lawful money of the United States of America, the principal sum of Sixty
Million Dollars ($60,000,000), together with interest on the unpaid principal
balance from time to time outstanding, from the date hereof until the principal
balance is paid in full, at a rate of 7.0% per annum. Interest will be
calculated on the basis of a year of 365 or 366 days, as applicable, and charged
for the actual number of days elapsed.
This Note has been executed and delivered pursuant to the Purchase
Agreement dated as of February 21, 2007 by and among Maker and Payee (the
"Purchase Agreement") that provides for the purchase of assets by Maker from
Payee. Undefined capitalized terms herein are defined in the Purchase Agreement.
The following security documents have been executed in connection with this Note
(collectively, the "Security Documents"): (a) a pledge of certain assets of
Maker as further set forth in a Pledge Agreement, dated as of the date hereof,
between Maker and Payee (the "Pledge Agreement"); (b) a mortgage with respect to
each of the Vessels, as further set forth in individual Mortgages (collectively,
the "Mortgages") and Deeds of Covenants (collectively, the "Deeds of
Covenants"), dated as of the date hereof, between Wind Star Limited, a Bahamas
corporation, and Payee, and Wind Spirit Limited, a Bahamas corporation, and
Payee, and Degrees Limited, a Bahamas corporation and Payee; (c) a security
agreement, dated as of the date hereof, by and among Payee, Maker, Windstar Sail
Cruises Limited, a Bahamas corporation, Wind Star Limited, Wind Spirit Limited
and Degrees Limited (together with Wind Star Sail Cruises Limited, Wind Star
Limited, and Wind Spirit Limited, the "Subsidiary Guarantors") (the "Security
Agreement"); (d) a guarantee, dated as of the date hereof, by the Subsidiary
Guarantors in favor of Payee (the "Subsidiary Guarantee"); and (e) a performance
guarantee, dated as of the date hereof, by Ambassadors International, Inc. in
favor of Payee (the "Performance Guarantee").
1. Payments of Principal and Interest. The principal amount of this Note
will be due and payable in quarterly installments in the amounts set forth on
Schedule 2 hereto, the first of which will be made on July 1, 2007 and the last
of which will be made on April 1, 2017, as further set forth on Schedule 2
attached hereto (each such date being a "Payment Date"). Interest on this Note
will be due and payable quarterly in arrears on each Payment Date, as further
set forth on Schedule 2 attached hereto. Maker will have the right, at any time,
to prepay all or any portion of the outstanding principal amount without premium
or penalty, such prepayment to reduce pro rata any further obligation hereunder.
All payments on this Note will be applied in the following order: first, to any
fees and expenses due hereunder; second, to interest due on amounts in default;
third, to interest due hereunder; and fourth, to principal due hereunder.
Payments not made within five (5) days of a Payment Date will be subject to a
late charge of 9% of the overdue payment (or if such 9% charge is not permitted
by Law, the maximum amount permitted by Law).
2. Manner of Payment. Principal, interest, and all other amounts due under
this Note will be payable, in U.S. dollars, to Payee by wire transfer in
immediately available funds to an account designated by Payee in writing. If any
payment of principal or interest on this Note is due on a day that is not a
Business Day, such payment will be due on the next succeeding Business Day, and
such extension of time will be taken into account in calculating the amount of
interest payable under this Note. "Business Day" means any day other than a
Saturday, Sunday or a day on which banking institutions in the State of
Washington are authorized or obligated by Law or executive order to close. All
amounts due from Maker to Payee under this Note will be made without benefit of
any setoff, counterclaim or other defense.
3. Events of Default. The occurrence of any one or more of the events set
forth on Schedule 1 attached hereto will constitute an event of default
hereunder ("Event of Default").
4. Notice; Remedies upon Events of Default. Maker will notify Payee in
writing within two Business Days after the occurrence of any Event of Default.
Upon the occurrence of an Event of Default, Payee may, at its option, (a) by
written notice to Maker, declare the entire unpaid principal balance of this
Note, together with all accrued interest thereon, immediately due and payable or
(b) exercise any and all rights and remedies available to it under Law and in
equity or as set forth in the Security Agreement, Subsidiary Guarantee, Pledge
Agreement, Mortgages, Deeds of Covenants and Performance Guarantee, including
the right to collect from Maker all sums due under this Note. Payee will have
full recourse against Maker, and will not be required to proceed against any
collateral in the Event of a Default. Maker will pay all costs and expenses
incurred by or on behalf of Payee in connection with Payee's exercise of any or
all of its rights and remedies under this Note, including reasonable attorneys'
fees and experts' fees, costs and disbursements. Maker hereby, waives
presentment, demand, protest and notice of dishonor and protest.
5. Assignment. This Note and Payee's rights hereunder may be assigned by
Payee and its successors and assigns from time to time (a) to any Affiliate of
Payee and (b) with Maker's prior written consent (which will not be unreasonably
withheld), to any other Person and any such assignee will be entitled to all of
the rights, privileges and remedies granted in this Note to Payee. Maker will
not assign this Note or any of Maker's rights hereunder or delegate any of its
duties or obligations hereunder.
6. Successors. All of the terms, agreements, covenants, representations,
warranties, and conditions of this Note are binding upon, and inure to the
benefit of and are enforceable by, the Parties and their respective successors.
If the principal business, operations or a majority or substantial portion of
the assets of Maker are assigned, conveyed, allocated or otherwise transferred,
including, by sale, merger, consolidation, amalgamation, conversion or similar
transactions, such receiving Person or Persons will automatically become bound
by and subject to the provisions of this Note, and Maker will cause the
receiving Person(s) to expressly assume its obligations hereunder.
7. Notices. All notices, requests, demands, claims and other communications
hereunder will be in writing and delivered pursuant to Section 9 of the Security
Agreement.
8. Submission to Jurisdiction; Venue. Each Party submits to the jurisdiction of
any state or federal court sitting in Seattle, Washington, in any Action arising
out of or relating to this Agreement and agrees that all claims in respect of
the Action may be heard and determined in any such court. Each Party also agrees
not to bring any Action arising out of or relating to this Agreement in any
other court. Each Party agrees that a final judgment in any Action so brought
will be conclusive and may be enforced by Action on the judgment or in any other
manner provided at Law or in equity. Each Party waives any defense of
inconvenient forum to the maintenance of any Action so brought and waives any
bond, surety, or other security that might be required of any other Party with
respect thereto. Nothing contained in this Section 8 shall be construed so as to
prevent or limit Payee from taking any and all actions necessary to realize on
any collateral under the Security Documents wherever such collateral may, from
time to time, be located.
9. Headings. The article and section headings contained in this Note are
inserted for convenience only and will not affect in any way the meaning or
interpretation of this Note.
10. Governing Law. This Note and the performance of the obligations of the
Parties hereunder will be governed by and construed in accordance with the laws
of the State of Washington, without giving effect to any choice of Law
principles that would require the application of the Law of another
jurisdiction. Notwithstanding the foregoing, Payee may, at its sole discretion,
elect to enforce the Mortgages and Deeds of Covenants under the laws of the
Bahamas or any other jurisdiction that may be applicable with respect to the
Mortgages.
11. Amendments and Waivers. No amendment, modification, replacement,
termination, or cancellation of any provision of this Note will be valid unless
it is in writing and signed by each Party. No waiver by any Party of any
default, misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, may be deemed to extend to any prior or subsequent default,
misrepresentation, or breach of warranty or covenant hereunder or affect in any
way any rights arising because of any prior or subsequent such occurrence.
12. Construction. The Parties have participated jointly in the negotiation
and drafting of this Note. If an ambiguity or question of intent or
interpretation arises, this Note will be construed as if drafted jointly by the
Parties and no presumption or burden of proof will arise favoring or disfavoring
any Party because of the authorship of any provision of this Note. The words
"include," "includes," and "including" will be deemed to be followed by "without
limitation."
13. Remedies. Except as expressly provided herein, the rights, obligations
and remedies created by this Note are cumulative and in addition to any other
rights, obligations or remedies otherwise available at Law or in equity or under
the Pledge Agreement, Mortgages, Deeds of Covenants, Security Agreement,
Subsidiary Guarantee, and Performance Guarantee. Except as expressly provided
herein, nothing herein will be considered an election of remedies.
[Signature page follows]
IN WITNESS WHEREOF, Maker has executed and delivered this Note as of the
date first above written.
AMBASSADORS INTERNATIONAL CRUISE GROUP, LLC
By: Ambassadors International Xxxxxxxx
Islands, LLC,its Sole Member
By: /s/ Xxxxx Xxxxxxxxx
---------------------------------------
Name: Xxxxx Xxxxxxxxx
--------------------------------
Title: President
--------------------------------
[Signature Page to Secured Promissory Note]
Schedule 2
Payments
Compound Period: Quarterly
Nominal Annual Rate: 7.000%
CASH FLOW DATA
--------------------------------------------------------------------------------
Event Date Amount Number Period End Date
--------------------------------------------------------------------------------
1 Loan 4/1/2007 60,000,000.00 1
2 Payment 7/1/2007 2,098,325.46 40 Quarterly 4/1/2017
AMORTIZATION SCHEDULE - Normal Amortization
Date Payment Interest Principal Balance
----------- ---------- ------------ -------------- -------------- --------------
Loan 4/1/2007 60,000,000.00
1 7/1/2007 2,098,325.46 1,050,000.00 1,048,325.46 58,951,674.54
2 10/1/2007 2,098,325.46 1,031,654.30 1,066,671.16 57,885,003.38
2007 Totals 4,196,650.92 2,081,654.30 2,114,996.62
3 1/1/2008 2,098,325.46 1,012,987.56 1,085,337.90 56,799,665.48
4 4/1/2008 2,098,325.46 993,994.15 1,104,331.31 55,695,334.17
5 7/1/2008 2,098,325.46 974,668.35 1,123,657.11 54,571,677.06
6 10/1/2008 2,098,325.46 955,004.35 1,143,321.11 53,428,355.95
2008 Totals 8,393,301.84 3,936,654.41 4,456,647.43
7 1/1/2009 2,098,325.46 934,996.23 1,163,329.23 52,265,026.72
8 4/1/2009 2,098,325.46 914,637.97 1,183,687.49 51,081,339.23
9 7/1/2009 2,098,325.46 893,923.44 1,204,402.02 49,876,937.21
10 10/1/2009 2,098,325.46 872,846.40 1,225,479.06 48,651,458.15
2009 Totals 8,393,301.84 3,616,404.04 4,776,897.80
11 1/1/2010 2,098,325.46 851,400.52 1,246,924.94 47,404,533.21
12 4/1/2010 2,098,325.46 829,579.33 1,268,746.13 46,135,787.08
13 7/1/2010 2,098,325.46 807,376.27 1,290,949.19 44,844,837.89
14 10/1/2010 2,098,325.46 784,784.66 1,313,540.80 43,531,297.09
2010 Totals 8,393,301.84 3,273,140.78 5,120,161.06
15 1/1/2011 2,098,325.46 761,797.70 1,336,527.76 42,194,769.33
16 4/1/2011 2,098,325.46 738,408.46 1,359,917.00 40,834,852.33
17 7/1/2011 2,098,325.46 714,609.92 1,383,715.54 39,451,136.79
18 10/1/2011 2,098,325.46 690,394.89 1,407,930.57 38,043,206.22
2011 Totals 8,393,301.84 2,905,210.97 5,488,090.87
19 1/1/2012 2,098,325.46 665,756.11 1,432,569.35 36,610,636.87
20 4/1/2012 2,098,325.46 640,686.15 1,457,639.31 35,152,997.56
21 7/1/2012 2,098,325.46 615,177.46 1,483,148.00 33,669,849.56
22 10/1/2012 2,098,325.46 589,222.37 1,509,103.09 32,160,746.47
2012 Totals 8,393,301.84 2,510,842.09 5,882,459.75
23 1/1/2013 2,098,325.46 562,813.06 1,535,512.40 30,625,234.07
24 4/1/2013 2,098,325.46 535,941.60 1,562,383.86 29,062,850.21
25 7/1/2013 2,098,325.46 508,599.88 1,589,725.58 27,473,124.63
26 10/1/2013 2,098,325.46 480,779.68 1,617,545.78 25,855,578.85
2013 Totals 8,393,301.84 2,088,134.22 6,305,167.62
27 1/1/2014 2,098,325.46 452,472.63 1,645,852.83 24,209,726.02
28 4/1/2014 2,098,325.46 423,670.21 1,674,655.25 22,535,070.77
29 7/1/2014 2,098,325.46 394,363.74 1,703,961.72 20,831,109.05
30 10/1/2014 2,098,325.46 364,544.41 1,733,781.05 19,097,328.00
2014 Totals 8,393,301.84 1,635,050.99 6,758,250.85
31 1/1/2015 2,098,325.46 334,203.24 1,764,122.22 17,333,205.78
32 4/1/2015 2,098,325.46 303,331.10 1,794,994.36 15,538,211.42
33 7/1/2015 2,098,325.46 271,918.70 1,826,406.76 13,711,804.66
34 10/1/2015 2,098,325.46 239,956.58 1,858,368.88 11,853,435.78
2015 Totals 8,393,301.84 1,149,409.62 7,243,892.22
35 1/1/2016 2,098,325.46 207,435.13 1,890,890.33 9,962,545.45
36 4/1/2016 2,098,325.46 174,344.55 1,923,980.91 8,038,564.54
37 7/1/2016 2,098,325.46 140,674.88 1,957,650.58 6,080,913.96
38 10/1/2016 2,098,325.46 106,415.99 1,991,909.47 4,089,004.49
2016 Totals 8,393,301.84 628,870.55 7,764,431.29
39 1/1/2017 2,098,325.46 71,557.58 2,026,767.88 2,062,236.61
40 4/1/2017 2,098,325.46 36,088.85 2,062,236.61 0.00
2017 Totals 4,196,650.92 107,646.43 4,089,004.49
Grand Totals 83,933,018.40 23,933,018.40 60,000,000.00
Last interest amount decreased by 0.29 due to rounding.
DEED OF COVENANTS
TO ACCOMPANY FIRST PRIORITY
STATUTORY MORTGAGE OF A SHIP
M/S WIND SPIRIT
executed by
WIND SPIRIT LIMITED,
as Shipowner
in favor of
HAL ANTILLEN N.V., AS TRUSTEE AND MORTGAGEE
APRIL 2, 2007
TABLE OF CONTENTS
Page
----
ARTICLE 1 COVENANTS OF SHIPOWNER...............................................3
Section 1.1 Performance of Obligations/Valid Mortgage................3
Section 1.2 Vessel Documentation. ..................................3
Section 1.3 Representations and Warranties...........................4
Section 1.4 Notice of Mortgage.......................................4
Section 1.5 Discharge of Security Interests..........................4
Section 1.6 Maintenance and Operation of Vessel......................5
Section 1.7 Location of Vessel.......................................6
Section 1.8 Insurances...............................................6
Section 1.9 No Set-Off or Tax Deduction..............................7
ARTICLE 2 EVENTS OF DEFAULT AND REMEDIES.......................................7
Section 2.1 Events of Default........................................7
Section 2.2 Consequences of Default..................................8
Section 2.3 Sale of Vessel...........................................9
Section 2.4 Conveyance..............................................10
Section 2.5 Receiver/Manager........................................10
Section 2.6 Expenses................................................11
Section 2.7 Cumulative Rights, Powers and Remedies..................11
Section 2.8 Application of Proceeds.................................12
Section 2.9 Possession of Vessel....................................13
Section 2.10 No Requirement to Commence Proceedings
Against Shipowner.......................................13
Section 2.11 Application of Sums Received or Recovered...............13
Section 2.12 Rights Regarding Security Interests.....................13
ARTICLE 3 SUNDRY PROVISIONS...................................................13
Section 3.1 Currency................................................13
Section 3.2 Amendments..............................................13
Section 3.3 Successors and Assigns..................................13
Section 3.4 Reimbursement...........................................14
Section 3.5 Notices.................................................14
Section 3.6 Agents..................................................15
Section 3.7 Discharge of Mortgage...................................15
Section 3.8 No Liability of Lender or Receiver......................15
Section 3.9 Further Assurances......................................15
Section 3.10 Power of Attorney.......................................17
Section 3.11 Governing Law...........................................17
Section 3.12 Consent to Jurisdiction/Agent for Service of Process....17
Section 3.13 Waiver of Jury Trial....................................17
Section 3.14 Recorded Amount.........................................17
Section 3.15 No Waiver of Preferred Status...........................18
Section 3.16 Counterparts............................................18
Section 3.17 Exhibits................................................18
Section 3.18 Captions................................................18
Schedule 1 Events of Default
Schedule 2 Required Insurance
Schedule 3 Defined Terms Used in the Deed
Exhibit A Promissory Note
This Deed of Covenants (as amended or supplemented from time to time, the
"Deed") is made the 2nd day of April, 2007, from Wind Spirit Limited, a Bahamian
corporation (the "Shipowner"), to HAL ANTILLEN N.V., a Netherlands Antilles
corporation (the "Mortgagee," which expression shall include its successors and
assigns).
W I T N E S S E T H That:
1. Shipowner is the absolute owner of 64/64ths shares of and in the
Bahamian flag vessel M/S Wind Spirt, registered in the name of Shipowner under
the laws and flag of The Commonwealth of the Bahamas on April 13, 1988, built
Xxxxx 00, 0000 xx Xx Xxxxx, Xxxxxx by Societe Nouvelle des Ateliers et Chantiers
de Havre, having the following approximate dimensions and tonnages: length
111.74 meters, breadth 15.8 meters, depth 6.65 meters, gross tonnage 5,736, net
tonnage 1,788, and more particularly described in Certificate of Registration
with Official Number 711121 and with International Code Signal C6CY9, and home
port of Nassau, Bahamas, which together with all shares and interest therein and
the engines, machinery, boats, tackle, outfits, spare gear, fuels, consumable
and other stores, belongings and appurtenances, whether on board or ashore, now
owner or hereafter acquired, including those which may hereafter be put on board
or become appurtenant to or intended to be used for the said vessel if on shore,
is hereinafter referred to as the "Vessel."
2. Pursuant to a Purchase Agreement, dated as of February 21, 2007 between
Ambassadors International Cruise Group, LLC, a Xxxxxxxx Islands limited
liability company ("Buyer"), and Mortgagee (the "Purchase Agreement"), Buyer
purchased from Mortgagee certain shares and assets, which indirectly included
the Vessel. As partial payment of the purchase price under the Purchase
Agreement, Buyer delivered to Mortgagee a promissory note, executed by Buyer in
favor of Mortgagee (the "Note"), in the principal amount of Sixty Million United
States Dollars (the "Loan"). A copy of the form of the Note is attached hereto
and incorporated herein as Exhibit A.
3. To provide Mortgagee with security in connection with the execution and
delivery of the Note, contemporaneously with the execution of this Deed there
has been executed (a) a Performance Guarantee by Ambassadors International, Inc.
in favor of Mortgagee (the "Parent Guarantee"), (b) a Guarantee by Shipowner and
certain other subsidiaries of Buyer in favor of Mortgagee guaranteeing Buyer's
obligations under the Note (the "Subsidiary Guarantee"), (c) a Security
Agreement among Buyer, Shipowner, Mortgagee, Wind Star Limited, Degrees Limited
and Windstar Sail Cruises Limited (the "Security Agreement"), (d) a Pledge
Agreement between Buyer and Mortgagee pursuant to which Buyer has pledged
certain shares to Mortgagee (the "Pledge Agreement"), and (e) a First Priority
Statutory Bahamian Mortgage (to secure an account current) by Shipowner in favor
of Mortgagee (the "Statutory Mortgage") constituting a first preferred mortgage
of 64/64th shares in the said Vessel, and Shipowner has agreed to execute this
Deed collateral thereto and to the security thereby created.
4. Immediately after executing and delivering the Statutory Mortgage and
this Deed, Shipowner will have sufficient assets and remain able to pay its
debts as they come due.
5. In order to secure the prompt and due payment to Mortgagee of
Shipowner's obligations pursuant to the Subsidiary Guarantee and any and all
other sums which may be or become due to Mortgagee by Shipowner under or
pursuant to the Security Documents and any other security document and also to
secure the exact performance and observance and compliance with all and any of
the covenants and agreements and terms and conditions contained in the Security
Documents and in the other security documents that are applicable to Shipowner,
Shipowner has duly authorized the execution and delivery of this Deed and the
Statutory Mortgage in favor of Mortgagee under and pursuant to the laws of the
Commonwealth of the Bahamas.
NOW THIS DEED WITNESSETH AS FOLLOWS:
IN CONSIDERATION of the premises, the Loan and of other good and valuable
consideration, the adequacy and receipt whereof are hereby acknowledged,
SHIPOWNER HEREBY COVENANTS with Mortgagee to satisfy its obligations under the
Subsidiary Guarantee and to pay each and every sum of money that may be or
become owing to Mortgagee from Shipowner under the terms of the Security
Documents to which it is a party or any of them at the time and in the manner
specified therein, such amounts together hereinafter referred to as the
"Obligations."
Shipowner agrees to pay all other sums comprising the Obligations in
accordance with the terms, conditions and provisions in the Security Documents
and to perform, observe and comply with the covenants, terms and obligations and
conditions on its part to be performed, observed and complied with contained or
implied herein and in the Security Documents.
Shipowner shall also pay to Mortgagee upon Mortgagee's first written demand
all stamp duties, registration and/or recording fees and charges for
certificates incurred by Mortgagee in connection with the registration of this
Deed and the Statutory Mortgage and all other claims, expenses, costs, payments,
disbursements, losses, damages or liabilities which may be incurred by Mortgagee
by reason of the covenants and conditions applicable to Shipowner contained in
the Security Documents, together with interest thereon as herein or therein
provided, and confirms that such obligations are secured by this Deed and the
Statutory Mortgage.
By way of security for payment of the Obligations, SHIPOWNER HEREBY
MORTGAGES, CHARGES, GRANTS, CONVEYS, PLEDGES, ASSIGNS, TRANSFERS, SETS OVER AND
CONFIRMS the whole of the Vessel unto Mortgagee and its successors and permitted
assigns, together with 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 and
charters in connection therewith, all of which property shall be deemed to be
included in the term "Vessel" as used in this Deed, which Shipowner hereby
warrants to be free at the date hereof from any other charge or encumbrance
whatsoever (other than charges or encumbrances in existence immediately prior to
the Closing (as defined in the Purchase Agreement)).
Shipowner hereby covenants that the security created by this Deed and the
Statutory Mortgage shall be held by Mortgagee as continuing security, and that
the security so created shall not be satisfied by any intermediate payment of
any part of the Obligations.
Upon the Obligations having been unconditionally and irrevocably paid and
discharged in full, and following a written request therefore from Shipowner,
Mortgagee will release the security created by the Statutory Mortgage and this
Deed.
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).
It is hereby covenanted, declared and agreed that the property above
described is to be held subject to the further covenants, conditions,
provisions, terms and uses hereinafter set forth.
Without prejudice to the provisions of Section 36 of the Merchant Shipping
Xxx 0000, Shipowner shall remain liable to fulfill all obligations assumed by it
in relation to the Vessel and Mortgagee shall be under no obligation of any kind
whatsoever in respect thereof or be under any liability whatsoever in event of
any failure by Shipowner to perform its obligations in respect thereof.
ARTICLE 1
COVENANTS OF SHIPOWNER
Shipowner covenants and agrees with Mortgagee as follows:
Section 1.1 Performance of Obligations/Valid Mortgage. In consideration of
Mortgagee's agreement to accept the Note, as guaranteed by the Subsidiary
Guarantee, as partial payment of the purchase price under the Purchase
Agreement, and in recognition of the fact that Shipowner, as a wholly-owned
subsidiary of Buyer after the transactions contemplated by the Purchase
Agreement, will derive substantial direct and indirect benefit from the
consummation of the transactions contemplated by the Purchase Agreement and
Mortgagee's agreement to accept the Note as partial payment of the purchase
price thereunder,, Shipowner hereby covenants to observe, perform and comply
with each and every one of the covenants, terms and conditions in the Security
Documents on its part to be observed, performed or complied with. Shipowner will
execute and deliver all other documents and take all other actions Mortgagee
reasonably deems necessary in order to establish, perfect and maintain the
Statutory Mortgage and this Deed as a valid, enforceable, and duly perfected
preferred mortgage 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.
Section 1.2 Vessel Documentation. Shipowner covenants that it will keep the
Vessel documented in its name as a Bahamian ship and will not do or allow to be
done anything whereby such documentation may be forfeited or imperiled;
provided, however, Shipowner may change the Flag State authority for the Vessel
from the Bahamas to the Xxxxxxxx Islands or any other comparable jurisdiction
that affords Shipowner the appropriate rights to operate in the ordinary course
of business and otherwise in compliance with the Security Documents so long as
Shipowner (i) provides prior written notice to Mortgagee, (ii) pays for any
expenses related to any necessary changes in the Security Documents or
re-registration or filing thereof resulting from such change of jurisdiction as
determined by Mortgagee, and (iii) such does not impair or otherwise adversely
impact the rights of Mortgagee under any of the Security Documents, the interest
of Mortgagee in the Vessel or any other collateral provided under any of the
Security Documents, or the obligations of Shipowner under any Security Document,
and, if the jurisdiction of incorporation is so changed, Shipowner covenants
that it will keep the Vessel documented in its name as a ship under the laws of
such new Flag State and will not do or allow to be done anything whereby such
documentation may be forfeited or imperiled. Likewise, Shipowner shall not
change the Classification Society for the Vessel without consent of Mortgagee,
which consent shall not be unreasonably withheld.
Section 1.3 Representations and Warranties. Shipowner represents and
warrants that it lawfully owns and is lawfully possessed of the Vessel free from
all Security Interests (other than Security Interests in existence immediately
prior to the Closing (as defined in the Purchase Agreement)) including, without
limitation, claims of or liability to possession, forfeiture or penalty, except
(i) the lien of the Statutory Mortgage and this Deed, and (ii) 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.
Section 1.4 Notice of Mortgage. Shipowner will place, and at all times will
retain, a properly certified copy of the Statutory Mortgage and a duly certified
copy of this Deed on board the Vessel with her papers and will cause the same
and all 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 navigation 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 Wind Spirit Limited, a Bahamian corporation,
and is subject to a Statutory Mortgage and Deed of Covenants
collateral thereto in favor of HAL ANTILLEN N.V., a Netherlands
Antilles corporation, under the laws of the Commonwealth of the
Bahamas, as Mortgagee. Under the terms of said Mortgage and Deed,
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 1.5 Discharge of Security Interests. Except for the lien of the
Statutory Mortgage, this Deed and Permitted Liens, Shipowner will not create or
suffer to be continued any Security Interest on the Vessel and will cause the
Vessel to be released or discharged from each such Security Interest. If the
Vessel is 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 twenty-one
(21) days of said event, cause the Vessel to be released and all such Security
Interests to be discharged. Notwithstanding the above, no Security Interest need
be discharged if (i) Shipowner is contesting such Security Interest in good
faith through appropriate proceedings and (ii) 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 the
Statutory Mortgage and this Deed.
Section 1.6 Maintenance and Operation of Vessel. Shipowner covenants and
agrees to:
(a) maintain the Vessel adequately and so that it is suitable for use
in its business as presently conducted in all material respects, ordinary wear
and tear and depreciation excepted;
(b) maintain the Vessel, fair wear and tear excepted, free of any
conditions or recommendations by the classification society in which it is
entered, free of material average damage affecting class, with all class and
trading certificates, national and international, clean and valid without
condition by class and with the Vessel's hull surveys and continuous machinery
survey cycles up to date;
(c) maintain the Vessel such that it conforms with then-existing
requirements of the U.S. Coast Guard, IMO and SOLAS and all other national and
international rules, regulations, requirements, treaties and conventions which
are required to be complied with or observed by the Vessel in order to allow the
Vessel to operate in its business as presently conducted, provided that the
foregoing shall not be construed to require Shipowner to cause the Vessel to
comply with any such requirements that are retroactive in effect and that
require a material modification to the Vessel, and notify Mortgagee forthwith of
any circumstances which indicate that any of the licenses, permissions,
authorizations and consents relating to the foregoing may be revoked or may not
be renewed, in whole or in part, in the ordinary course of events;
(d) notify Mortgagee forthwith of any receipt of any notice from any
Governmental Body regarding impending rules, regulations or requirements that
would prevent the Vessel from operating in its business as presently conducted
in any material respect;
(e) not employ the Vessel in any trade or business which is unlawful
under the Laws of any relevant jurisdiction or in carrying illicit or prohibited
goods, in each case to the extent such use has or could have a continuing
material adverse effect on the Shipowner or in any manner whatsoever which may
render it liable to destruction, seizure or confiscation; and
(f) notify Mortgagee forthwith of:
(i) any occurrence in consequence whereof the Vessel has become
or is, by the passing of time or otherwise, likely to become a Total
Loss;
(ii) 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; and
(iii) any material Environmental Incident occurring.
Section 1.7 Location of Vessel. Without limiting the right of Shipowner to
perform work on the Vessel in accordance with the requirements of the Statutory
Mortgage and this Deed, the Vessel shall not be (a) deactivated or laid up
without the consent of Mortgagee which consent shall not be withheld so long as
the Vessel is in a port or place located in a jurisdiction where Mortgagee's
rights hereunder or any of Mortgagee's rights as a mortgagee of the Vessel under
applicable law are not impaired or restricted and Shipowner is taking reasonable
steps to secure and otherwise protect the condition of the Vessel, or (b)
abandoned.
Section 1.8 Insurances.
(a) Shipowner will maintain, with financially sound and reputable
insurers, brokers, underwriters, funds, mutual insurance associations and clubs,
Insurances against such casualties and contingencies and of such types and in
such amounts as set forth on Schedule 2 ("Required Insurances").
(b) All Insurances other than protection and indemnity insurance shall
be taken out in the names of Shipowner and Mortgagee as an additional assured
and a loss payee as their respective interests may appear. 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 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. 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. 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.
(c) In the event that any of the Required Insurances have not been
obtained at least thirty (30) days prior to the expiration date of the then
existing policy or are at any time not in effect as required hereunder,
Shipowner shall immediately notify Shipowner. If thereafter Shipowner fails to
secure such Required Insurances prior to the expiration date of the then
existing policy, 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.
(d) 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.
(e) All hull and machinery and mortgagee's interest insurance policies
or certificates shall provide that losses thereunder shall be payable to
Mortgagee in accordance with this Deed in the event of a Total Loss. In the
event of a Total Loss, Mortgagee shall be entitled to the lesser of (i) the
Specified Amount and (ii) all amounts payable therefor from the Insurances.
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.
(f) 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 Deed for such voyage or the carriage
of such cargo.
Section 1.9 No Set-Off or Tax Deduction.
(a) All amounts due from Shipowner under the Security Documents 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) If requested by Mortgagee, 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.
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) any event set forth on Schedule 1 hereto; or
(b) this Deed and the Statutory Mortgage or any material provision
hereof or thereof shall be deemed invalidated in whole or in part by any present
or future law of the Bahamas or decision of any competent court; provided that
if it is possible to reinstate this Deed and the Statutory Mortgage or any
material provision hereof or thereof that is deemed invalidated by moving this
Deed and the Statutory Mortgage to another jurisdiction or by taking any other
action, in each case that will not result in unreasonable delay or expense,
Shipowner and Mortgagee will take all further action required to do so, and no
Event of Default shall be deemed to have occurred.
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) exercise all the rights and remedies in foreclosure and otherwise
given to mortgagees by the laws of the Bahamas or of any other jurisdiction
where the Vessel may be found;
(b) 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 the Statutory Mortgage and this Deed or
not;
(c) take and enter into possession of the Vessel, wherever the same
may be, without court decision or other legal process and without being
responsible for loss or damage remove the Vessel to any port or place selected
by Mortgagee and Mortgagee may, without being responsible for loss or damage,
hold, lay-up, lease, charter, operate or otherwise use such Vessel for such time
and upon such terms as it may deem to be for its best advantage, and demand,
collect and retain all hire, freights, earnings, issues, revenues, income,
profits, return premiums, salvage awards or recoveries, recoveries in general
average, and all other sums due or to become due in respect of such Vessel or in
respect of any insurance thereon from any person whomsoever, accounting only for
the net profits, if any, arising from such use of the Vessel and charging upon
all receipts from use of the Vessel or from the sale thereof by court
proceedings or by private sale all costs, expenses, charges, damages or losses
by reason of such use, and if at any time Mortgagee avails itself of the right
given to it to take the Vessel: (i) Mortgagee shall have the right to dock the
Vessel for a reasonable time at any dock, pier or other premises of Shipowner
without charge, or to dock her at any other place at the cost and expense of
Shipowner, and (ii) Mortgagee shall have the right to require Shipowner to
deliver, and Shipowner shall on demand, at its own cost and expense, deliver to
Mortgagee the Vessel as demanded; and Shipowner shall irrevocably instruct the
Master of the Vessel so long as the Deed and the Statutory Mortgage are
outstanding to deliver the Vessel to Mortgagee as demanded. 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 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;
(d) sell the Vessel or any share therein with or without the benefit
of any charter party or other engagement by public auction, after publishing
notice of such auction at least ten (10) days prior to such auction in a daily
newspaper of general circulation published in New York City, with a copy sent to
Shipowner on the day of publication, or by private contract, after giving ten
(10) days prior notice to the Shipowner, without legal process at any place in
the world and upon such terms as Mortgagee may deem to be appropriate in order
to satisfy the Obligations, with power to postpone any such sale and without
being answerable for any loss occasioned by such sale or resulting from the
postponement thereof and at any such public auction Mortgagee may become the
purchaser and shall have the right to set off the purchase price against the
Obligations;
(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;
(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
(i) 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.
Shipowner hereby waives presentment, demand, protest, notice of nonpayment,
notice of dishonor or any other notice of any kind.
Section 2.3 Sale of Vessel. A sale of the Vessel made in pursuance of this
Deed, 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 and shall bar Shipowner its
successors and assigns and all persons claiming by through or under them
provided such sale is by auction and that nothing herein shall be deemed to
derogate from Shipowner's duty to Mortgagee. 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 Mortgagee's power of sale has arisen in the
manner provided by the Deed and the Statutory Mortgage, 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
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.
Section 2.4 Conveyance. Upon an Event of Default, Shipowner hereby
irrevocably appoints Mortgagee and its assigns as its true and lawful
attorney-in-fact coupled with an interest with full power to act alone and with
full power 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 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 Deed or the Statutory 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;
(b) Mortgagee may exercise any of the powers conferred by this Deed or
the Statutory 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 Deed or the Statutory
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
(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 2.6 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 2.6 shall be applied by
Mortgagee in accordance with the provisions of Section 2.8 hereof.
Section 2.7 Cumulative Rights, Powers and Remedies. Each and every right,
power and remedy herein given to Mortgagee shall be cumulative and shall be in
addition to every other right, power and remedy herein given or now or hereafter
existing at law, in equity, in admiralty or by statute, or by contract
(including without limitation under the other Security Documents), and each and
every right, 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
right, power or remedy shall not be construed to be a waiver of the right to
exercise at the same time or thereafter any other right, 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 2.8 Application of Proceeds. The proceeds of any sale of the Vessel
made either under the power of sale hereby granted to Mortgagee or under a
judgment or decree in any judicial proceeding for the foreclosure of this Deed
and the Statutory Mortgage or for the enforcement of any remedy granted to
Mortgagee hereunder, insurance pertaining to the Vessel, and all other sums
received by Mortgagee pursuant to or under the provisions of this Deed or the
Statutory Mortgage or in any proceedings hereunder or thereunder, 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 the Statutory Mortgage and this Deed;
THIRD: To the payment of interest on the Loan;
FOURTH: To the payment of principal on the Loan;
FIFTH: To the payment of the other Obligations and all other sums
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;
SIXTH: 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 Deed and the Statutory 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
SEVENTH: To the payment of any surplus thereafter remaining to
Mortgagee.
Section 2.9 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 2.10 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, the Statutory
Mortgage and this Deed.
Section 2.11 Application of Sums Received or Recovered. At any time
following the occurrence and during the continuance of an Event of Default,
Mortgagee shall have the right to apply and reapply any sum received or
recovered from Shipowner under or by virtue of the Statutory Mortgage or this
Deed or any Security Interest connected with it and provide notice to Shipowner
of such application or reapplication and cause to be applied (subject to
collection) the balance from time to time outstanding to the payment of the
Obligations in the manner specified in Section 2.8 hereof.
Section 2.12 Rights Regarding Security Interests. Upon any unreasonable
delay by Shipowner to act promptly and appropriately with respect to any alleged
Security Interest pursuant to Section 1.5, Shipowner authorizes and empowers
Mortgagee to appear in the name of Shipowner in any court or tribunal of any
jurisdiction where an action is pending against the Vessel because of or on
account of any alleged Security Interest thereon from which Vessel has not been
so released and to take such actions as Mortgagee may deem appropriate to defend
such action, to purchase or discharge such alleged Security Interest or to
release the Vessel, including, without limitation, posting adequate security
therefor. Shipowner shall reimburse Mortgagee for all reasonable expenses
incurred by Mortgagee for such defense, purchase or discharge, and any such
amounts to which Mortgagee is entitled to reimbursement from Shipowner shall be
secured by the lien of the Statutory Mortgage and this Deed and shall bear
interest at a rate per annum equal to the Default Rate.
ARTICLE 3
SUNDRY PROVISIONS
Section 3.1 Currency. Unless otherwise specifically stated, all references
to Dollars in this Deed shall be deemed to refer to United States Dollars.
Section 3.2 Amendments. No waiver, termination, amendment or other
modification of any provision of the Statutory Mortgage or this Deed, 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 the Statutory Mortgage and this Deed.
Section 3.3 Successors and Assigns. All covenants, promises, stipulations
and agreements of Shipowner in the Statutory Mortgage and this Deed 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 Statutory Mortgage and/or this Deed. Any
such assignment or transfer may be made (a) to or for the benefit of an
affiliate of Mortgagee or (b) with Shipowner's prior written consent (which
shall not be unreasonably withheld) to any other Person.
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 the Statutory Mortgage and this Deed, 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. All notices, requests, demands, claims and other
communications hereunder will be in writing. Any notice, request, demand, claim
or other communication hereunder will be deemed duly given if (and then three
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to Mortgagee:
Holland America Line Inc.
Attn: General Counsel
000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxx, XX 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
Copy (which will not constitute notice) to:
Xxxxxxxxxxx & Xxxxxxxx Xxxxxxx Xxxxx Xxxxx LLP
Attn: Xxxxx Xxxx
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Tel: (000)000-0000
Fax: (000) 000-0000
If to Shipowner:
Ambassador International, Inc.
Attn: Xxxxxx XxXxxxxx
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Copy (which will not constitute notice) to:
Xxxxxx & Xxxxxx LLP
Attn: Xxxxxx X. Xxxxx
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth above
using any other means (including personal delivery, expedited courier, messenger
service, telecopy, telex, ordinary mail, or electronic mail), but no such
notice, request, demand, claim, or other communication will be deemed to have
been duly given unless and until it actually is received by the intended
recipient. Any Party may change the address to which notices, requests, demands,
claims, and other communications hereunder are to be delivered by giving the
other Parties notice in the manner herein set forth.
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. 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 Security Documents, shall,
at the expense of Shipowner, forthwith cause this Deed and the Statutory
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 the Statutory Mortgage, this
Deed 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 Section 3.9(b) or for any similar or related purpose.
(b) The purposes referred to in Section 3.9(a) are to:
(i) validly and effectively to create the Security Interest and
rights intended to be created by or pursuant to the Statutory Mortgage
and this Deed;
(ii) create a specific mortgage or assignment of any particular
asset contemplated by the Statutory Mortgage and this Deed;
(iii) protect the priority in any jurisdiction of any Security
Interest which is created, or intended to be created, by or pursuant
to the Statutory Mortgage and this Deed;
(iv) during the continuance of an Event of Default, 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
(v) during the continuance of an Event of Default, 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 the Statutory Mortgage and
this Deed.
(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 the Statutory Mortgage and this Deed 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, if requested, 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 the Statutory
Mortgage, this Deed 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 the
Statutory Mortgage or this Deed, 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. The Statutory Mortgage and this Deed shall be
governed by and construed in accordance with the laws of the Commonwealth of the
Bahamas and the obligations, rights and remedies of the parties hereunder shall
be determined in accordance with such laws, without giving effect to principles
of conflicts of law. Nothing in this Section shall exclude or limit any right
which 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 the Statutory Mortgage, this Deed or the 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. 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
Shipowner or its property in the courts of any other jurisdiction. Shipowner
irrevocably appoints GTC Corporate Services Ltd., for the time being presently
at Sassoon House, Xxxxxxx Street and Victoria Avenue, P.O. Box SS-5383, Nassau,
Bahamas, 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 Deed, the Statutory 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 DEED, THE
STATUTORY 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 Recorded Amount. For the purposes of the recording this First
Priority Statutory Mortgage under the law of the Bahamas, the total amount of
this Deed and the Statutory Mortgage is Sixty Million United States Dollars
(US$60,000,000), and interest and the performance of the Deed and Statutory
Mortgage covenants; the maturity date is the 2nd day of April, 2017, and the
discharge amount is the same as the total amount. It is not intended that this
Deed and the Statutory Mortgage shall include property other than the Vessel,
and it shall not include property other than the Vessel as the term "vessel" is
used in the provisions of the law of the Bahamas. Notwithstanding the foregoing,
for property other than the Vessel, if any should be determined to be covered by
this Deed and the Statutory Mortgage, the discharge amount is zero point zero
one percent (0.01%) of the total amount.
Section 3.15 No Waiver of Preferred Status. No provision of this Deed and
the Statutory Mortgage shall be deemed to be a stipulation that Mortgagee waives
the priority status of the Statutory Mortgage given by the laws of the Bahamas.
Any provision of this Mortgage which would otherwise constitute such a
stipulation, to such extent, shall have no force or effect.
Section 3.16 Counterparts. This Deed 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 3.17 Exhibits. All exhibits referred to herein are attached hereto
and incorporated herein by this reference.
Section 3.18 Captions. The captions of the articles and sections and
subsections of this Deed are included for convenience of reference only, and
shall not constitute a part of this Deed for any other purpose.
[Signature page follows]
IN WITNESS WHEREOF, Shipowner has executed this Deed the 2nd day of April,
2007.
Signed, Sealed and Delivered by
WIND SPIRIT LIMITED
By /s/ Xxxxx Xxxxxxxxx
------------------------------
Name Xxxxx Giersdorf_
------------------------------
Its President
------------------------------
In the presence of:
/s/ Xxxxxx X. XxXxxxxx
------------------------------
Name Xxxxxx X. XxXxxxxx
------------------------------
Its Secretary
------------------------------
EXHIBITS:
Exhibit A - Note
STATE OF Washington )
) ss.
COUNTY OF King )
On this 2nd day of April, 2007, before me, a Notary Public in and for the
State of Washington, personally appeared Xxxxx Xxxxxxxxx and Xxxxxx XxXxxxxx,
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 President and
Secretary of Wind Spirit Limited, 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.
/s/ Xxx X. Xxxxxx
----------------------------------------
NOTARY PUBLIC in and for the State of
Washington, residing at Seattle, WA
My appointment expires 6/9/10
Signature Page to Wind Spirit Limited Deed of Covenants
SCHEDULE 2
REQUIRED INSURANCE
1. Hull and Machinery
Insurance to cover physical loss or damage to the vessel under the American
Institute Hull Clauses for partial, constructive, and/or agreed total loss up to
the agreed Insured Value.
Vessel Insured Value Deductible
--------------------------------------------------------------------------------
Wind Surf $44,000,000 $500,000
Wind Spirit $20,000,000 $500,000
Wind Star $20,000,000 $500,000
2. Increased Value of Hull and Machinery
As above, but only to pay in the event of a total, constructive, or agreed total
loss up to the agreed Insured Value.
Vessel Insured Value Deductible
--------------------------------------------------------------------------------
Wind Surf $11,000,000 $0
Wind Spirit $5,000,000 $0
Wind Star $5,000,000 $0
3. War Risks Hull and Machinery and Protection and Indemnity War Risks
Insurance to cover physical loss or damage to the vessel in accordance with the
Institute War Risks Hull Clauses up to the agreed Insured Value.
Vessel Insured Value Deductible
--------------------------------------------------------------------------------
Wind Surf $55,000,000 $500,000
Wind Spirit $25,000,000 $500,000
Wind Star $25,000,000 $500,000
4. Protection and Indemnity
Insurance to protect and indemnify for shipowner's legal liabilities in
accordance with the insured vessel's Class 1 Terms of Entry in a shipowner's
mutual protection and indemnity association. Deductible is $500,000 for any one
accident.
Vessel GRT Built Flag Pax Capacity
--------------------------------------------------------------------------------
Wind Surf 14,745 1989 Bahamas 312
Wind Spirit 5,736 1988 Bahamas 148
Wind Star 5,703 1986 Bahamas 148
5. Freight, Demurrage and Defence
Insurance to protect and indemnify shipowner's for costs in accordance with the
insured vessel's Class 2 Terms of Entry in a shipowner's mutual freight,
demurrage and defence association. Deductible is $10,000 for any one accident.
Vessel GRT Built Flag Pax Capacity
--------------------------------------------------------------------------------
Wind Surf 14,745 1989 Bahamas 312
Wind Spirit 5,736 1988 Bahamas 148
Wind Star 5,703 1986 Bahamas 148
SCHEDULE 3
DEFINED TERMS USED IN THE DEED
In this Deed, 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.
"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 eleven percent (11%).
"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
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 set forth on Schedule 1 attached
hereto.
"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.
"Governmental Body" means any legislature, agency, bureau, branch,
department, division, commission, court, tribunal, magistrate, justice,
multi-national organization, quasi-governmental body, or other similar
recognized organization or body of any federal, state, county, municipal, local,
or foreign government or other similar recognized organization or body
exercising similar powers or authority.
"Insurances" means all policies and contracts of insurance (which
expression includes without limitation hull and machinery insurances and 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 otherwise howsoever in connection with the Vessel.
"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.
"Permitted Liens" means:
(i) liens for crew wages (including wages of the Master) 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 $250,000 at any time outstanding;
(iv) liens created by or through Mortgagee prior to the date of
the Statutory Mortgage but only until such time as Mortgagee has
discharged same;
(v) liens to which Mortgagee has given its prior written consent;
(vi) liens for tort claims covered by insurance, subject to
applicable deductibles; and
(vii) port, canal and other waterway dues and pilotage accrued
for not more than thirty (30) days.
"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 2.5.
"Requisition Compensation" includes all moneys or other compensation
payable by reason of requisition of title or other compulsory acquisition of
title of the Vessel.
"Security Documents" means the Note, this Deed, the Statutory Mortgage, the
Subsidiary Guarantee, the Parent Guarantee, the Security Agreement and the
Pledge Agreement.
"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.
"Specified Amount" means a percentage of the then-outstanding principal
amount plus accrued and unpaid interest due under the Note equal to 25% in the
case of Wind Star, 25% in the case of Wind Spirit and 50% in the case of Wind
Surf. If the Specified Amount is required to be calculated subsequent to a Total
Loss of any of the foregoing vessels, the percentages applicable to the
remaining vessels shall be proportionately increased.
"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.
"War risks" includes the risk of mines and all risks excluded by Clause 23
of the Institute Time Clauses (Hulls) (10/1/83).
DEED OF COVENANTS
TO ACCOMPANY FIRST PRIORITY
STATUTORY MORTGAGE OF A SHIP
M/S WIND SURF
executed by
DEGREES LIMITED,
as Shipowner
in favor of
HAL ANTILLEN N.V., AS TRUSTEE AND MORTGAGEE
APRIL 2, 2007
TABLE OF CONTENTS
Page
ARTICLE 1 COVENANTS OF SHIPOWNER.............................................3
Section 1.1 Performance of Obligations/Valid Mortgage.....................3
Section 1.2 Vessel Documentation. .......................................3
Section 1.3 Representations and Warranties................................4
Section 1.4 Notice of Mortgage............................................4
Section 1.5 Discharge of Security Interests...............................4
Section 1.6 Maintenance and Operation of Vessel...........................5
Section 1.7 Location of Vessel............................................6
Section 1.8 Insurances....................................................6
Section 1.9 No Set-Off or Tax Deduction...................................7
ARTICLE 2 EVENTS OF DEFAULT AND REMEDIES.....................................7
Section 2.1 Events of Default.............................................7
Section 2.2 Consequences of Default.......................................8
Section 2.3 Sale of Vessel................................................9
Section 2.4 Conveyance...................................................10
Section 2.5 Receiver/Manager.............................................10
Section 2.6 Expenses.....................................................11
Section 2.7 Cumulative Rights, Powers and Remedies.......................11
Section 2.8 Application of Proceeds......................................12
Section 2.9 Possession of Vessel.........................................13
Section 2.10No Requirement to Commence Proceedings Against Shipowner.....13
Section 2.11Application of Sums Received or Recovered....................13
Section 2.12Rights Regarding Security Interests..........................13
ARTICLE 3 SUNDRY PROVISIONS.................................................13
Section 3.1 Currency.....................................................13
Section 3.2 Amendments...................................................13
Section 3.3 Successors and Assigns.......................................13
Section 3.4 Reimbursement................................................14
Section 3.5 Notices......................................................14
Section 3.6 Agents.......................................................15
Section 3.7 Discharge of Mortgage........................................15
Section 3.8 No Liability of Lender or Receiver...........................15
Section 3.9 Further Assurances...........................................15
Section 3.10Power of Attorney............................................17
Section 3.11Governing Law................................................17
Section 3.12Consent to Jurisdiction/Agent for Service of Process.........17
Section 3.13Waiver of Jury Trial.........................................17
Section 3.14Recorded Amount..............................................17
Section 3.15No Waiver of Preferred Status................................18
Section 3.16Counterparts.................................................18
Section 3.17Exhibits.....................................................18
Section 3.18Captions.....................................................18
Schedule 1 Events of Default
Schedule 2 Required Insurance
Schedule 3 Defined Terms Used in the Deed
Exhibit A Promissory Note
This Deed of Covenants (as amended or supplemented from time to time, the
"Deed") is made the 2nd day of April, 2007, from Degrees Limited, a Bahamian
corporation (the "Shipowner"), to HAL ANTILLEN N.V., a Netherlands Antilles
corporation (the "Mortgagee," which expression shall include its successors and
assigns).
W I T N E S S E T H That:
1. Shipowner is the absolute owner of 64/64ths shares of and in the
Bahamian flag vessel M/S Wind Surf, registered in the name of Shipowner under
the laws and flag of The Commonwealth of the Bahamas on March 21, 2007, built
Xxxxxxxx 00, 0000 xx Xx Xxxxx, Xxxxxx by Societe Nouvelle des Ateliers et
Chantiers de Havre, having the following approximate dimensions and tonnages:
length 163.17 meters, breadth 20.00 meters, depth 10.90 meters, gross tonnage
14,745, net tonnage 5,056, and more particularly described in Certificate of
Registration with Official Number 716016 and with International Code Signal
C6IO6, and home port of Nassau, Bahamas, which together with all shares and
interest therein and the engines, machinery, boats, tackle, outfits, spare gear,
fuels, consumable and other stores, belongings and appurtenances, whether on
board or ashore, now owner or hereafter acquired, including those which may
hereafter be put on board or become appurtenant to or intended to be used for
the said vessel if on shore, is hereinafter referred to as the "Vessel."
2. Pursuant to a Purchase Agreement, dated as of February 21, 2007 between
Ambassadors International Cruise Group, LLC, a Xxxxxxxx Islands limited
liability company ("Buyer"), and Mortgagee (the "Purchase Agreement"), Buyer
purchased from Mortgagee certain shares and assets, which indirectly included
the Vessel. As partial payment of the purchase price under the Purchase
Agreement, Buyer delivered to Mortgagee a promissory note, executed by Buyer in
favor of Mortgagee (the "Note"), in the principal amount of Sixty Million United
States Dollars (the "Loan"). A copy of the form of the Note is attached hereto
and incorporated herein as Exhibit A.
3. T To provide Mortgagee with security in connection with the execution
and delivery of the Note, contemporaneously with the execution of this Deed
there has been executed (a) a Performance Guarantee by Ambassadors
International, Inc. in favor of Mortgagee (the "Parent Guarantee"), (b) a
Guarantee by Shipowner and certain other subsidiaries of Buyer in favor of
Mortgagee guaranteeing Buyer's obligations under the Note (the "Subsidiary
Guarantee"), (c) a Security Agreement among Buyer, Shipowner, Mortgagee, Wind
Star Limited, Wind Spirit Limited and Windstar Sail Cruises Limited (the
"Security Agreement"), (d) a Pledge Agreement between Buyer and Mortgagee
pursuant to which Buyer has pledged certain shares to Mortgagee (the "Pledge
Agreement"), and (e) a First Priority Statutory Bahamian Mortgage (to secure an
account current) by Shipowner in favor of Mortgagee (the "Statutory Mortgage")
constituting a first preferred mortgage of 64/64th shares in the said Vessel,
and Shipowner has agreed to execute this Deed collateral thereto and to the
security thereby created.
4. Immediately after executing and delivering the Statutory Mortgage and
this Deed, Shipowner will have sufficient assets and remain able to pay its
debts as they come due.
5. In order to secure the prompt and due payment to Mortgagee of
Shipowner's obligations pursuant to the Subsidiary Guarantee and any and all
other sums which may be or become due to Mortgagee by Shipowner under or
pursuant to the Security Documents and any other security document and also to
secure the exact performance and observance and compliance with all and any of
the covenants and agreements and terms and conditions contained in the Security
Documents and in the other security documents that are applicable to Shipowner,
Shipowner has duly authorized the execution and delivery of this Deed and the
Statutory Mortgage in favor of Mortgagee under and pursuant to the laws of the
Commonwealth of the Bahamas.
NOW THIS DEED WITNESSETH AS FOLLOWS:
IN CONSIDERATION of the premises, the Loan and of other good and valuable
consideration, the adequacy and receipt whereof are hereby acknowledged,
SHIPOWNER HEREBY COVENANTS with Mortgagee to satisfy its obligations under the
Subsidiary Guarantee and to pay each and every sum of money that may be or
become owing to Mortgagee from Shipowner under the terms of the Security
Documents to which it is a party or any of them at the time and in the manner
specified therein, such amounts together hereinafter referred to as the
"Obligations."
Shipowner agrees to pay all other sums comprising the Obligations in
accordance with the terms, conditions and provisions in the Security Documents
and to perform, observe and comply with the covenants, terms and obligations and
conditions on its part to be performed, observed and complied with contained or
implied herein and in the Security Documents.
Shipowner shall also pay to Mortgagee upon Mortgagee's first written demand
all stamp duties, registration and/or recording fees and charges for
certificates incurred by Mortgagee in connection with the registration of this
Deed and the Statutory Mortgage and all other claims, expenses, costs, payments,
disbursements, losses, damages or liabilities which may be incurred by Mortgagee
by reason of the covenants and conditions applicable to Shipowner contained in
the Security Documents, together with interest thereon as herein or therein
provided, and confirms that such obligations are secured by this Deed and the
Statutory Mortgage.
By way of security for payment of the Obligations, SHIPOWNER HEREBY
MORTGAGES, CHARGES, GRANTS, CONVEYS, PLEDGES, ASSIGNS, TRANSFERS, SETS OVER AND
CONFIRMS the whole of the Vessel unto Mortgagee and its successors and permitted
assigns, together with 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 and
charters in connection therewith, all of which property shall be deemed to be
included in the term "Vessel" as used in this Deed, which Shipowner hereby
warrants to be free at the date hereof from any other charge or encumbrance
whatsoever (other than charges or encumbrances in existence immediately prior to
the Closing (as defined in the Purchase Agreement)).
Shipowner hereby covenants that the security created by this Deed and the
Statutory Mortgage shall be held by Mortgagee as continuing security, and that
the security so created shall not be satisfied by any intermediate payment of
any part of the Obligations.
Upon the Obligations having been unconditionally and irrevocably paid and
discharged in full, and following a written request therefore from Shipowner,
Mortgagee will release the security created by the Statutory Mortgage and this
Deed.
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).
It is hereby covenanted, declared and agreed that the property above
described is to be held subject to the further covenants, conditions,
provisions, terms and uses hereinafter set forth.
Without prejudice to the provisions of Section 36 of the Merchant Shipping
Xxx 0000, Shipowner shall remain liable to fulfill all obligations assumed by it
in relation to the Vessel and Mortgagee shall be under no obligation of any kind
whatsoever in respect thereof or be under any liability whatsoever in event of
any failure by Shipowner to perform its obligations in respect thereof.
ARTICLE 1
COVENANTS OF SHIPOWNER
Shipowner covenants and agrees with Mortgagee as follows:
Section 1.1 Performance of Obligations/Valid Mortgage. In consideration of
Mortgagee's agreement to accept the Note, as guaranteed by the Subsidiary
Guarantee, as partial payment of the purchase price under the Purchase
Agreement, and in recognition of the fact that Shipowner, as a wholly-owned
subsidiary of Buyer after the transactions contemplated by the Purchase
Agreement, will derive substantial direct and indirect benefit from the
consummation of the transactions contemplated by the Purchase Agreement and
Mortgagee's agreement to accept the Note as partial payment of the purchase
price thereunder,, Shipowner hereby covenants to observe, perform and comply
with each and every one of the covenants, terms and conditions in the Security
Documents on its part to be observed, performed or complied with. Shipowner will
execute and deliver all other documents and take all other actions Mortgagee
reasonably deems necessary in order to establish, perfect and maintain the
Statutory Mortgage and this Deed as a valid, enforceable, and duly perfected
preferred mortgage 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.
Section 1.2 Vessel Documentation. Shipowner covenants that it will keep the
Vessel documented in its name as a Bahamian ship and will not do or allow to be
done anything whereby such documentation may be forfeited or imperiled;
provided, however, Shipowner may change the Flag State authority for the Vessel
from the Bahamas to the Xxxxxxxx Islands or any other comparable jurisdiction
that affords Shipowner the appropriate rights to operate in the ordinary course
of business and otherwise in compliance with the Security Documents so long as
Shipowner (i) provides prior written notice to Mortgagee, (ii) pays for any
expenses related to any necessary changes in the Security Documents or
re-registration or filing thereof resulting from such change of jurisdiction as
determined by Mortgagee, and (iii) such does not impair or otherwise adversely
impact the rights of Mortgagee under any of the Security Documents, the interest
of Mortgagee in the Vessel or any other collateral provided under any of the
Security Documents, or the obligations of Shipowner under any Security Document,
and, if the jurisdiction of incorporation is so changed, Shipowner covenants
that it will keep the Vessel documented in its name as a ship under the laws of
such new Flag State and will not do or allow to be done anything whereby such
documentation may be forfeited or imperiled. Likewise, Shipowner shall not
change the Classification Society for the Vessel without consent of Mortgagee,
which consent shall not be unreasonably withheld.
Section 1.3 Representations and Warranties. Shipowner represents and
warrants that it lawfully owns and is lawfully possessed of the Vessel free from
all Security Interests (other than Security Interests in existence immediately
prior to the Closing (as defined in the Purchase Agreement)) including, without
limitation, claims of or liability to possession, forfeiture or penalty, except
(i) the lien of the Statutory Mortgage and this Deed, and (ii) 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.
Section 1.4 Notice of Mortgage. Shipowner will place, and at all times will
retain, a properly certified copy of the Statutory Mortgage and a duly certified
copy of this Deed on board the Vessel with her papers and will cause the same
and all 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 navigation 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 Degrees Limited, a Bahamian corporation, and
is subject to a Statutory Mortgage and Deed of Covenants collateral
thereto in favor of HAL ANTILLEN N.V., a Netherlands Antilles
corporation, under the laws of the Commonwealth of the Bahamas, as
Mortgagee. Under the terms of said Mortgage and Deed, 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 1.5 Discharge of Security Interests. Except for the lien of the
Statutory Mortgage, this Deed and Permitted Liens, Shipowner will not create or
suffer to be continued any Security Interest on the Vessel and will cause the
Vessel to be released or discharged from each such Security Interest. If the
Vessel is 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 twenty-one
(21) days of said event, cause the Vessel to be released and all such Security
Interests to be discharged. Notwithstanding the above, no Security Interest need
be discharged if (i) Shipowner is contesting such Security Interest in good
faith through appropriate proceedings and (ii) 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 the
Statutory Mortgage and this Deed.
Section 1.6 Maintenance and Operation of Vessel. Shipowner covenants and
agrees to:
(a) maintain the Vessel adequately and so that it is suitable for use
in its business as presently conducted in all material respects, ordinary wear
and tear and depreciation excepted;
(b) maintain the Vessel, fair wear and tear excepted, free of any
conditions or recommendations by the classification society in which it is
entered, free of material average damage affecting class, with all class and
trading certificates, national and international, clean and valid without
condition by class and with the Vessel's hull surveys and continuous machinery
survey cycles up to date;
(c) maintain the Vessel such that it conforms with then-existing
requirements of the U.S. Coast Guard, IMO and SOLAS and all other national and
international rules, regulations, requirements, treaties and conventions which
are required to be complied with or observed by the Vessel in order to allow the
Vessel to operate in its business as presently conducted, provided that the
foregoing shall not be construed to require Shipowner to cause the Vessel to
comply with any such requirements that are retroactive in effect and that
require a material modification to the Vessel, and notify Mortgagee forthwith of
any circumstances which indicate that any of the licenses, permissions,
authorizations and consents relating to the foregoing may be revoked or may not
be renewed, in whole or in part, in the ordinary course of events;
(d) notify Mortgagee forthwith of any receipt of any notice from any
Governmental Body regarding impending rules, regulations or requirements that
would prevent the Vessel from operating in its business as presently conducted
in any material respect;
(e) not employ the Vessel in any trade or business which is unlawful
under the Laws of any relevant jurisdiction or in carrying illicit or prohibited
goods, in each case to the extent such use has or could have a continuing
material adverse effect on the Shipowner or in any manner whatsoever which may
render it liable to destruction, seizure or confiscation; and
(f) notify Mortgagee forthwith of:
(i) any occurrence in consequence whereof the Vessel has become
or is, by the passing of time or otherwise, likely to become a Total
Loss;
(ii) 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; and
(iii) any material Environmental Incident occurring.
Section 1.7 Location of Vessel. Without limiting the right of Shipowner to
perform work on the Vessel in accordance with the requirements of the Statutory
Mortgage and this Deed, the Vessel shall not be (a) deactivated or laid up
without the consent of Mortgagee which consent shall not be withheld so long as
the Vessel is in a port or place located in a jurisdiction where Mortgagee's
rights hereunder or any of Mortgagee's rights as a mortgagee of the Vessel under
applicable law are not impaired or restricted and Shipowner is taking reasonable
steps to secure and otherwise protect the condition of the Vessel, or (b)
abandoned.
Section 1.8 Insurances.
(a) Shipowner will maintain, with financially sound and reputable
insurers, brokers, underwriters, funds, mutual insurance associations and clubs,
Insurances against such casualties and contingencies and of such types and in
such amounts as set forth on Schedule 2 ("Required Insurances").
(b) All Insurances other than protection and indemnity insurance shall
be taken out in the names of Shipowner and Mortgagee as an additional assured
and a loss payee as their respective interests may appear. 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 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. 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. 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.
(c) In the event that any of the Required Insurances have not been
obtained at least thirty (30) days prior to the expiration date of the then
existing policy or are at any time not in effect as required hereunder,
Shipowner shall immediately notify Shipowner. If thereafter Shipowner fails to
secure such Required Insurances prior to the expiration date of the then
existing policy, 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.
(d) 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.
(e) All hull and machinery and mortgagee's interest insurance policies
or certificates shall provide that losses thereunder shall be payable to
Mortgagee in accordance with this Deed in the event of a Total Loss. In the
event of a Total Loss, Mortgagee shall be entitled to the lesser of (i) the
Specified Amount and (ii) all amounts payable therefor from the Insurances.
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.
(f) 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 Deed for such voyage or the carriage
of such cargo.
Section 1.9 No Set-Off or Tax Deduction.
(a) All amounts due from Shipowner under the Security Documents 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) If requested by Mortgagee, 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.
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) any event set forth on Schedule 1 hereto; or
(b) this Deed and the Statutory Mortgage or any material provision
hereof or thereof shall be deemed invalidated in whole or in part by any present
or future law of the Bahamas or decision of any competent court; provided that
if it is possible to reinstate this Deed and the Statutory Mortgage or any
material provision hereof or thereof that is deemed invalidated by moving this
Deed and the Statutory Mortgage to another jurisdiction or by taking any other
action, in each case that will not result in unreasonable delay or expense,
Shipowner and Mortgagee will take all further action required to do so, and no
Event of Default shall be deemed to have occurred.
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) exercise all the rights and remedies in foreclosure and otherwise
given to mortgagees by the laws of the Bahamas or of any other jurisdiction
where the Vessel may be found;
(b) 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 the Statutory Mortgage and this Deed or
not;
(c) take and enter into possession of the Vessel, wherever the same
may be, without court decision or other legal process and without being
responsible for loss or damage remove the Vessel to any port or place selected
by Mortgagee and Mortgagee may, without being responsible for loss or damage,
hold, lay-up, lease, charter, operate or otherwise use such Vessel for such time
and upon such terms as it may deem to be for its best advantage, and demand,
collect and retain all hire, freights, earnings, issues, revenues, income,
profits, return premiums, salvage awards or recoveries, recoveries in general
average, and all other sums due or to become due in respect of such Vessel or in
respect of any insurance thereon from any person whomsoever, accounting only for
the net profits, if any, arising from such use of the Vessel and charging upon
all receipts from use of the Vessel or from the sale thereof by court
proceedings or by private sale all costs, expenses, charges, damages or losses
by reason of such use, and if at any time Mortgagee avails itself of the right
given to it to take the Vessel: (i) Mortgagee shall have the right to dock the
Vessel for a reasonable time at any dock, pier or other premises of Shipowner
without charge, or to dock her at any other place at the cost and expense of
Shipowner, and (ii) Mortgagee shall have the right to require Shipowner to
deliver, and Shipowner shall on demand, at its own cost and expense, deliver to
Mortgagee the Vessel as demanded; and Shipowner shall irrevocably instruct the
Master of the Vessel so long as the Deed and the Statutory Mortgage are
outstanding to deliver the Vessel to Mortgagee as demanded. 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 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;
(d) sell the Vessel or any share therein with or without the benefit
of any charter party or other engagement by public auction, after publishing
notice of such auction at least ten (10) days prior to such auction in a daily
newspaper of general circulation published in New York City, with a copy sent to
Shipowner on the day of publication, or by private contract, after giving ten
(10) days prior notice to the Shipowner, without legal process at any place in
the world and upon such terms as Mortgagee may deem to be appropriate in order
to satisfy the Obligations, with power to postpone any such sale and without
being answerable for any loss occasioned by such sale or resulting from the
postponement thereof and at any such public auction Mortgagee may become the
purchaser and shall have the right to set off the purchase price against the
Obligations;
(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;
(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
(i) 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.
Shipowner hereby waives presentment, demand, protest, notice of nonpayment,
notice of dishonor or any other notice of any kind.
Section 2.3 Sale of Vessel. A sale of the Vessel made in pursuance of this
Deed, 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 and shall bar Shipowner its
successors and assigns and all persons claiming by through or under them
provided such sale is by auction and that nothing herein shall be deemed to
derogate from Shipowner's duty to Mortgagee. 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 Mortgagee's power of sale has arisen in the
manner provided by the Deed and the Statutory Mortgage, 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
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.
Section 2.4 Conveyance. Upon an Event of Default, Shipowner hereby
irrevocably appoints Mortgagee and its assigns as its true and lawful
attorney-in-fact coupled with an interest with full power to act alone and with
full power 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 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 Deed or the Statutory 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;
(b) Mortgagee may exercise any of the powers conferred by this Deed or
the Statutory 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 Deed or the Statutory
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
(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 2.6 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 2.6 shall be applied by
Mortgagee in accordance with the provisions of Section 2.8 hereof.
Section 2.7 Cumulative Rights, Powers and Remedies. Each and every right,
power and remedy herein given to Mortgagee shall be cumulative and shall be in
addition to every other right, power and remedy herein given or now or hereafter
existing at law, in equity, in admiralty or by statute, or by contract
(including without limitation under the other Security Documents), and each and
every right, 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
right, power or remedy shall not be construed to be a waiver of the right to
exercise at the same time or thereafter any other right, 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 2.8 Application of Proceeds. The proceeds of any sale of the Vessel
made either under the power of sale hereby granted to Mortgagee or under a
judgment or decree in any judicial proceeding for the foreclosure of this Deed
and the Statutory Mortgage or for the enforcement of any remedy granted to
Mortgagee hereunder, insurance pertaining to the Vessel, and all other sums
received by Mortgagee pursuant to or under the provisions of this Deed or the
Statutory Mortgage or in any proceedings hereunder or thereunder, 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 the Statutory Mortgage and this Deed;
THIRD: To the payment of interest on the Loan;
FOURTH: To the payment of principal on the Loan;
FIFTH: To the payment of the other Obligations and all other sums
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;
SIXTH: 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 Deed and the Statutory 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
SEVENTH: To the payment of any surplus thereafter remaining to
Mortgagee.
Section 2.9 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 2.10 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, the Statutory
Mortgage and this Deed.
Section 2.11 Application of Sums Received or Recovered. At any time
following the occurrence and during the continuance of an Event of Default,
Mortgagee shall have the right to apply and reapply any sum received or
recovered from Shipowner under or by virtue of the Statutory Mortgage or this
Deed or any Security Interest connected with it and provide notice to Shipowner
of such application or reapplication and cause to be applied (subject to
collection) the balance from time to time outstanding to the payment of the
Obligations in the manner specified in Section 2.8 hereof.
Section 2.12 Rights Regarding Security Interests. Upon any unreasonable
delay by Shipowner to act promptly and appropriately with respect to any alleged
Security Interest pursuant to Section 1.5, Shipowner authorizes and empowers
Mortgagee to appear in the name of Shipowner in any court or tribunal of any
jurisdiction where an action is pending against the Vessel because of or on
account of any alleged Security Interest thereon from which Vessel has not been
so released and to take such actions as Mortgagee may deem appropriate to defend
such action, to purchase or discharge such alleged Security Interest or to
release the Vessel, including, without limitation, posting adequate security
therefor. Shipowner shall reimburse Mortgagee for all reasonable expenses
incurred by Mortgagee for such defense, purchase or discharge, and any such
amounts to which Mortgagee is entitled to reimbursement from Shipowner shall be
secured by the lien of the Statutory Mortgage and this Deed and shall bear
interest at a rate per annum equal to the Default Rate.
ARTICLE 3
SUNDRY PROVISIONS
Section 3.1 Currency. Unless otherwise specifically stated, all references
to Dollars in this Deed shall be deemed to refer to United States Dollars.
Section 3.2 Amendments. No waiver, termination, amendment or other
modification of any provision of the Statutory Mortgage or this Deed, 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 the Statutory Mortgage and this Deed.
Section 3.3 Successors and Assigns. All covenants, promises, stipulations
and agreements of Shipowner in the Statutory Mortgage and this Deed 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 Statutory Mortgage and/or this Deed. Any
such assignment or transfer may be made (a) to or for the benefit of an
affiliate of Mortgagee or (b) with Shipowner's prior written consent (which
shall not be unreasonably withheld) to any other Person.
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 the Statutory Mortgage and this Deed, 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. All notices, requests, demands, claims and other
communications hereunder will be in writing. Any notice, request, demand, claim
or other communication hereunder will be deemed duly given if (and then three
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to Mortgagee:
Holland America Line Inc.
Attn: General Counsel
000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxx, XX 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
Copy (which will not constitute notice) to:
Xxxxxxxxxxx & Xxxxxxxx Xxxxxxx Xxxxx Xxxxx LLP
Attn: Xxxxx Xxxx
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Tel: (000)000-0000
Fax: (000) 000-0000
If to Shipowner:
Ambassador International, Inc.
Attn: Xxxxxx XxXxxxxx
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Copy (which will not constitute notice) to:
Xxxxxx & Xxxxxx LLP
Attn: Xxxxxx X. Xxxxx
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth above
using any other means (including personal delivery, expedited courier, messenger
service, telecopy, telex, ordinary mail, or electronic mail), but no such
notice, request, demand, claim, or other communication will be deemed to have
been duly given unless and until it actually is received by the intended
recipient. Any Party may change the address to which notices, requests, demands,
claims, and other communications hereunder are to be delivered by giving the
other Parties notice in the manner herein set forth.
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. 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 Security Documents, shall,
at the expense of Shipowner, forthwith cause this Deed and the Statutory
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 the Statutory Mortgage, this
Deed 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 Section 3.9(b) or for any similar or related purpose.
(b) The purposes referred to in Section 3.9(a) are to:
(i) validly and effectively to create the Security Interest and
rights intended to be created by or pursuant to the Statutory Mortgage
and this Deed;
(ii) create a specific mortgage or assignment of any particular
asset contemplated by the Statutory Mortgage and this Deed;
(iii) protect the priority in any jurisdiction of any Security
Interest which is created, or intended to be created, by or pursuant
to the Statutory Mortgage and this Deed;
(iv) during the continuance of an Event of Default, 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
(v) during the continuance of an Event of Default, 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 the Statutory Mortgage and
this Deed.
(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 the Statutory Mortgage and this Deed 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, if requested, 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 the Statutory
Mortgage, this Deed 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 the
Statutory Mortgage or this Deed, 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. The Statutory Mortgage and this Deed shall be
governed by and construed in accordance with the laws of the Commonwealth of the
Bahamas and the obligations, rights and remedies of the parties hereunder shall
be determined in accordance with such laws, without giving effect to principles
of conflicts of law. Nothing in this Section shall exclude or limit any right
which 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 the Statutory Mortgage, this Deed or the 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. 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
Shipowner or its property in the courts of any other jurisdiction. Shipowner
irrevocably appoints GTC Corporate Services Ltd., for the time being presently
at Sassoon House, Xxxxxxx Street and Victoria Avenue, P.O. Box SS-5383, Nassau,
Bahamas, 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 Deed, the Statutory 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 DEED, THE
STATUTORY 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 Recorded Amount. For the purposes of the recording this First
Priority Statutory Mortgage under the law of the Bahamas, the total amount of
this Deed and the Statutory Mortgage is Sixty Million United States Dollars
(US$60,000,000), and interest and the performance of the Deed and Statutory
Mortgage covenants; the maturity date is the 2nd day of April, 2017, and the
discharge amount is the same as the total amount. It is not intended that this
Deed and the Statutory Mortgage shall include property other than the Vessel,
and it shall not include property other than the Vessel as the term "vessel" is
used in the provisions of the law of the Bahamas. Notwithstanding the foregoing,
for property other than the Vessel, if any should be determined to be covered by
this Deed and the Statutory Mortgage, the discharge amount is zero point zero
one percent (0.01%) of the total amount.
Section 3.15 No Waiver of Preferred Status. No provision of this Deed and
the Statutory Mortgage shall be deemed to be a stipulation that Mortgagee waives
the priority status of the Statutory Mortgage given by the laws of the Bahamas.
Any provision of this Mortgage which would otherwise constitute such a
stipulation, to such extent, shall have no force or effect.
Section 3.16 Counterparts. This Deed 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 3.17 Exhibits. All exhibits referred to herein are attached hereto
and incorporated herein by this reference.
Section 3.18 Captions. The captions of the articles and sections and
subsections of this Deed are included for convenience of reference only, and
shall not constitute a part of this Deed for any other purpose.
[Signature page follows]
IN WITNESS WHEREOF, Shipowner has executed this Deed the 2nd day of April,
2007.
Signed, Sealed and Delivered by
DEGREES LIMITED
By /s/ Xxxxx Xxxxxxxxx
---------------------------
Name Xxxxx Xxxxxxxxx
---------------------------
Its President
---------------------------
In the presence of:
/s/ Xxxxxx X. XxXxxxxx
---------------------------
Name Xxxxxx X. XxXxxxxx
---------------------------
Its Secretary
---------------------------
EXHIBITS:
Exhibit A - Note
STATE OF Washington )
) ss.
COUNTY OF King )
On this 2nd day of April, 2007, before me, a Notary Public in and for the
State of Washington, personally appeared Xxxxx Xxxxxxxxx and Xxxxxx XxXxxxxx,
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 President and
Secretary of Degrees Limited, 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.
/s/ Xxx X. Xxxxxx
----------------------------------
NOTARY PUBLIC in and for the
State of Washington, residing at
Seattle, WA
---------------------------------
My appointment expires 6/9/10
Signature Page to Degrees Limited Deed of Covenants
SCHEDULE 2
REQUIRED INSURANCE
1. Hull and Machinery
Insurance to cover physical loss or damage to the vessel under the American
Institute Hull Clauses for partial, constructive, and/or agreed total loss up to
the agreed Insured Value.
Vessel Insured Value Deductible
--------------------------------------------------------------------------------
Wind Surf $44,000,000 $500,000
Wind Spirit $20,000,000 $500,000
Wind Star $20,000,000 $500,000
--------------------------------------------------------------------------------
2. Increased Value of Hull and Machinery
As above, but only to pay in the event of a total, constructive, or agreed total
loss up to the agreed Insured Value.
Vessel Insured Value Deductible
--------------------------------------------------------------------------------
Wind Surf $11,000,000 $0
Wind Spirit $5,000,000 $0
Wind Star $5,000,000 $0
--------------------------------------------------------------------------------
3. War Risks Hull and Machinery and Protection and Indemnity War Risks
Insurance to cover physical loss or damage to the vessel in accordance with the
Institute War Risks Hull Clauses up to the agreed Insured Value.
Vessel Insured Value Deductible
--------------------------------------------------------------------------------
Wind Surf $55,000,000 $500,000
Wind Spirit $25,000,000 $500,000
Wind Star $25,000,000 $500,000
--------------------------------------------------------------------------------
4. Protection and Indemnity
Insurance to protect and indemnify for shipowner's legal liabilities in
accordance with the insured vessel's Class 1 Terms of Entry in a shipowner's
mutual protection and indemnity association. Deductible is $500,000 for any one
accident.
Vessel GRT Built Flag Pax Capacity
-------------------------------------------------------------------------------
Wind Surf 14,745 1989 Bahamas 312
Wind Spirit 5,736 1988 Bahamas 148
Wind Star 5,703 1986 Bahamas 148
-------------------------------------------------------------------------------
5. Freight, Demurrage and Defence
Insurance to protect and indemnify shipowner's for costs in accordance with the
insured vessel's Class 2 Terms of Entry in a shipowner's mutual freight,
demurrage and defence association. Deductible is $10,000 for any one accident.
Vessel GRT Built Flag Pax Capacity
-------------------------------------------------------------------------------
Wind Surf 14,745 1989 Bahamas 312
Wind Spirit 5,736 1988 Bahamas 148
Wind Star 5,703 1986 Bahamas 148
-------------------------------------------------------------------------------
SCHEDULE 3
DEFINED TERMS USED IN THE DEED
In this Deed, 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.
"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 eleven percent (11%).
"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
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 set forth on Schedule 1 attached
hereto.
"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.
"Governmental Body" means any legislature, agency, bureau, branch,
department, division, commission, court, tribunal, magistrate, justice,
multi-national organization, quasi-governmental body, or other similar
recognized organization or body of any federal, state, county, municipal, local,
or foreign government or other similar recognized organization or body
exercising similar powers or authority.
"Insurances" means all policies and contracts of insurance (which
expression includes without limitation hull and machinery insurances and 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 otherwise howsoever in connection with the Vessel.
"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.
"Permitted Liens" means:
(i) liens for crew wages (including wages of the Master)
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 $250,000 at any time outstanding;
(iv) liens created by or through Mortgagee prior to the date
of the Statutory Mortgage but only until such time as Mortgagee has
discharged same;
(v) liens to which Mortgagee has given its prior written
consent;
(vi) liens for tort claims covered by insurance, subject to
applicable deductibles; and
(vii) port, canal and other waterway dues and pilotage
accrued for not more than thirty (30) days.
"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 2.5.
"Requisition Compensation" includes all moneys or other compensation
payable by reason of requisition of title or other compulsory acquisition of
title of the Vessel.
"Security Documents" means the Note, this Deed, the Statutory Mortgage, the
Subsidiary Guarantee, the Parent Guarantee, the Security Agreement and the
Pledge Agreement.
"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.
"Specified Amount" means a percentage of the then-outstanding principal
amount plus accrued and unpaid interest due under the Note equal to 25% in the
case of Wind Star, 25% in the case of Wind Spirit and 50% in the case of Wind
Surf. If the Specified Amount is required to be calculated subsequent to a Total
Loss of any of the foregoing vessels, the percentages applicable to the
remaining vessels shall be proportionately increased.
"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.
"War risks" includes the risk of mines and all risks excluded by Clause 23
of the Institute Time Clauses (Hulls) (10/1/83).
DEED OF COVENANTS
TO ACCOMPANY FIRST PRIORITY
STATUTORY MORTGAGE OF A SHIP
M/S WIND STAR
executed by
WIND STAR LIMITED,
as Shipowner
in favor of
HAL ANTILLEN N.V., AS TRUSTEE AND MORTGAGEE
APRIL 2, 2007
TABLE OF CONTENTS
Page
ARTICLE 1 COVENANTS OF SHIPOWNER..............................................3
Section 1.1 Performance of Obligations/Valid Mortgage....................3
Section 1.2 Vessel Documentation. ......................................3
Section 1.3 Representations and Warranties...............................4
Section 1.4 Notice of Mortgage...........................................4
Section 1.5 Discharge of Security Interests..............................4
Section 1.6 Maintenance and Operation of Vessel..........................5
Section 1.7 Location of Vessel...........................................6
Section 1.8 Insurances...................................................6
Section 1.9 No Set-Off or Tax Deduction..................................7
ARTICLE 2 EVENTS OF DEFAULT AND REMEDIES......................................7
Section 2.1 Events of Default............................................7
Section 2.2 Consequences of Default......................................8
Section 2.3 Sale of Vessel...............................................9
Section 2.4 Conveyance..................................................10
Section 2.5 Receiver/Manager............................................10
Section 2.6 Expenses....................................................11
Section 2.7 Cumulative Rights, Powers and Remedies......................11
Section 2.8 Application of Proceeds.....................................12
Section 2.9 Possession of Vessel........................................13
Section 2.10 No Requirement to Commence Proceedings Against Shipowner....13
Section 2.11 Application of Sums Received or Recovered...................13
Section 2.12 Rights Regarding Security Interests.........................13
ARTICLE 3 SUNDRY PROVISIONS..................................................13
Section 3.1 Currency....................................................13
Section 3.2 Amendments..................................................13
Section 3.3 Successors and Assigns......................................13
Section 3.4 Reimbursement...............................................14
Section 3.5 Notices.....................................................14
Section 3.6 Agents......................................................15
Section 3.7 Discharge of Mortgage.......................................15
Section 3.8 No Liability of Lender or Receiver..........................15
Section 3.9 Further Assurances..........................................15
Section 3.10 Power of Attorney...........................................17
Section 3.11 Governing Law...............................................17
Section 3.12 Consent to Jurisdiction/Agent for Service of Process........17
Section 3.13 Waiver of Jury Trial........................................17
Section 3.14 Recorded Amount.............................................17
Section 3.15 No Waiver of Preferred Status...............................18
Section 3.16 Counterparts................................................18
Section 3.17 Exhibits....................................................18
Section 3.18 Captions....................................................18
Schedule 1 Events of Default
Schedule 2 Required Insurance
Schedule 3 Defined Terms Used in the Deed
Exhibit A Promissory Note
This Deed of Covenants (as amended or supplemented from time to time, the
"Deed") is made the 2nd day of April, 2007, from Wind Star Limited, a Bahamian
corporation (the "Shipowner"), to HAL ANTILLEN N.V., a Netherlands Antilles
corporation (the "Mortgagee," which expression shall include its successors and
assigns).
W I T N E S S E T H That:
1. Shipowner is the absolute owner of 64/64ths shares of and in the
Bahamian flag vessel M/S Wind Star, registered in the name of Shipowner under
the laws and flag of The Commonwealth of the Bahamas on October 16, 1986, built
October 10, 1986 in Le Havre, France by Societe Nouvelle des Ateliers et
Chantiers de Havre, having the following approximate dimensions and tonnages:
length 11.74 meters, breadth 15.8 meters, depth 6.66 meters, gross tonnage
5,307, net tonnage 1,710, and more particularly described in Certificate of
Registration with Official Number 710711 and with International Code Signal
C6CA9, and home port of Nassau, Bahamas, which together with all shares and
interest therein and the engines, machinery, boats, tackle, outfits, spare gear,
fuels, consumable and other stores, belongings and appurtenances, whether on
board or ashore, now owner or hereafter acquired, including those which may
hereafter be put on board or become appurtenant to or intended to be used for
the said vessel if on shore, is hereinafter referred to as the "Vessel."
2. Pursuant to a Purchase Agreement, dated as of February 21, 2007 between
Ambassadors International Cruise Group, LLC, a Xxxxxxxx Islands limited
liability company ("Buyer"), and Mortgagee (the "Purchase Agreement"), Buyer
purchased from Mortgagee certain shares and assets, which indirectly included
the Vessel. As partial payment of the purchase price under the Purchase
Agreement, Buyer delivered to Mortgagee a promissory note, executed by Buyer in
favor of Mortgagee (the "Note"), in the principal amount of Sixty Million United
States Dollars (the "Loan"). A copy of the form of the Note is attached hereto
and incorporated herein as Exhibit A.
3. To provide Mortgagee with security in connection with the execution and
delivery of the Note, contemporaneously with the execution of this Deed there
has been executed (a) a Performance Guarantee by Ambassadors International, Inc.
in favor of Mortgagee (the "Parent Guarantee"), (b) a Guarantee by Shipowner and
certain other subsidiaries of Buyer in favor of Mortgagee guaranteeing Buyer's
obligations under the Note (the "Subsidiary Guarantee"), (c) a Security
Agreement among Buyer, Shipowner, Mortgagee, Wind Spirit, Degrees Limited and
Windstar Sail Cruises Limited (the "Security Agreement"), (d) a Pledge Agreement
between Buyer and Mortgagee pursuant to which Buyer has pledged certain shares
to Mortgagee (the "Pledge Agreement"), and (e) a First Priority Statutory
Bahamian Mortgage (to secure an account current) by Shipowner in favor of
Mortgagee (the "Statutory Mortgage") constituting a first preferred mortgage of
64/64th shares in the said Vessel, and Shipowner has agreed to execute this Deed
collateral thereto and to the security thereby created.
4. Immediately after executing and delivering the Statutory Mortgage and
this Deed, Shipowner will have sufficient assets and remain able to pay its
debts as they come due.
5. In order to secure the prompt and due payment to Mortgagee of
Shipowner's obligations pursuant to the Subsidiary Guarantee and any and all
other sums which may be or become due to Mortgagee by Shipowner under or
pursuant to the Security Documents and any other security document and also to
secure the exact performance and observance and compliance with all and any of
the covenants and agreements and terms and conditions contained in the Security
Documents and in the other security documents that are applicable to Shipowner,
Shipowner has duly authorized the execution and delivery of this Deed and the
Statutory Mortgage in favor of Mortgagee under and pursuant to the laws of the
Commonwealth of the Bahamas.
NOW THIS DEED WITNESSETH AS FOLLOWS:
IN CONSIDERATION of the premises, the Loan and of other good and valuable
consideration, the adequacy and receipt whereof are hereby acknowledged,
SHIPOWNER HEREBY COVENANTS with Mortgagee to satisfy its obligations under the
Subsidiary Guarantee and to pay each and every sum of money that may be or
become owing to Mortgagee from Shipowner under the terms of the Security
Documents to which it is a party or any of them at the time and in the manner
specified therein, such amounts together hereinafter referred to as the
"Obligations."
Shipowner agrees to pay all other sums comprising the Obligations in
accordance with the terms, conditions and provisions in the Security Documents
and to perform, observe and comply with the covenants, terms and obligations and
conditions on its part to be performed, observed and complied with contained or
implied herein and in the Security Documents.
Shipowner shall also pay to Mortgagee upon Mortgagee's first written demand
all stamp duties, registration and/or recording fees and charges for
certificates incurred by Mortgagee in connection with the registration of this
Deed and the Statutory Mortgage and all other claims, expenses, costs, payments,
disbursements, losses, damages or liabilities which may be incurred by Mortgagee
by reason of the covenants and conditions applicable to Shipowner contained in
the Security Documents, together with interest thereon as herein or therein
provided, and confirms that such obligations are secured by this Deed and the
Statutory Mortgage.
By way of security for payment of the Obligations, SHIPOWNER HEREBY
MORTGAGES, CHARGES, GRANTS, CONVEYS, PLEDGES, ASSIGNS, TRANSFERS, SETS OVER AND
CONFIRMS the whole of the Vessel unto Mortgagee and its successors and permitted
assigns, together with 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 and
charters in connection therewith, all of which property shall be deemed to be
included in the term "Vessel" as used in this Deed, which Shipowner hereby
warrants to be free at the date hereof from any other charge or encumbrance
whatsoever (other than charges or encumbrances in existence immediately prior to
the Closing (as defined in the Purchase Agreement)).
Shipowner hereby covenants that the security created by this Deed and the
Statutory Mortgage shall be held by Mortgagee as continuing security, and that
the security so created shall not be satisfied by any intermediate payment of
any part of the Obligations.
Upon the Obligations having been unconditionally and irrevocably paid and
discharged in full, and following a written request therefore from Shipowner,
Mortgagee will release the security created by the Statutory Mortgage and this
Deed.
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).
It is hereby covenanted, declared and agreed that the property above
described is to be held subject to the further covenants, conditions,
provisions, terms and uses hereinafter set forth.
Without prejudice to the provisions of Section 36 of the Merchant Shipping
Xxx 0000, Shipowner shall remain liable to fulfill all obligations assumed by it
in relation to the Vessel and Mortgagee shall be under no obligation of any kind
whatsoever in respect thereof or be under any liability whatsoever in event of
any failure by Shipowner to perform its obligations in respect thereof.
ARTICLE 1
COVENANTS OF SHIPOWNER
Shipowner covenants and agrees with Mortgagee as follows:
Section 1.1 Performance of Obligations/Valid Mortgage. In consideration of
Mortgagee's agreement to accept the Note, as guaranteed by the Subsidiary
Guarantee, as partial payment of the purchase price under the Purchase
Agreement, and in recognition of the fact that Shipowner, as a wholly-owned
subsidiary of Buyer after the transactions contemplated by the Purchase
Agreement, will derive substantial direct and indirect benefit from the
consummation of the transactions contemplated by the Purchase Agreement and
Mortgagee's agreement to accept the Note as partial payment of the purchase
price thereunder,, Shipowner hereby covenants to observe, perform and comply
with each and every one of the covenants, terms and conditions in the Security
Documents on its part to be observed, performed or complied with. Shipowner will
execute and deliver all other documents and take all other actions Mortgagee
reasonably deems necessary in order to establish, perfect and maintain the
Statutory Mortgage and this Deed as a valid, enforceable, and duly perfected
preferred mortgage 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.
Section 1.2 Vessel Documentation. Shipowner covenants that it will keep the
Vessel documented in its name as a Bahamian ship and will not do or allow to be
done anything whereby such documentation may be forfeited or imperiled;
provided, however, Shipowner may change the Flag State authority for the Vessel
from the Bahamas to the Xxxxxxxx Islands or any other comparable jurisdiction
that affords Shipowner the appropriate rights to operate in the ordinary course
of business and otherwise in compliance with the Security Documents so long as
Shipowner (i) provides prior written notice to Mortgagee, (ii) pays for any
expenses related to any necessary changes in the Security Documents or
re-registration or filing thereof resulting from such change of jurisdiction as
determined by Mortgagee, and (iii) such does not impair or otherwise adversely
impact the rights of Mortgagee under any of the Security Documents, the interest
of Mortgagee in the Vessel or any other collateral provided under any of the
Security Documents, or the obligations of Shipowner under any Security Document,
and, if the jurisdiction of incorporation is so changed, Shipowner covenants
that it will keep the Vessel documented in its name as a ship under the laws of
such new Flag State and will not do or allow to be done anything whereby such
documentation may be forfeited or imperiled. Likewise, Shipowner shall not
change the Classification Society for the Vessel without consent of Mortgagee,
which consent shall not be unreasonably withheld.
Section 1.3 Representations and Warranties. Shipowner represents and
warrants that it lawfully owns and is lawfully possessed of the Vessel free from
all Security Interests (other than Security Interests in existence immediately
prior to the Closing (as defined in the Purchase Agreement)) including, without
limitation, claims of or liability to possession, forfeiture or penalty, except
(i) the lien of the Statutory Mortgage and this Deed, and (ii) 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.
Section 1.4 Notice of Mortgage. Shipowner will place, and at all times will
retain, a properly certified copy of the Statutory Mortgage and a duly certified
copy of this Deed on board the Vessel with her papers and will cause the same
and all 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 navigation 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 Wind Star Limited, a Bahamian corporation, and
is subject to a Statutory Mortgage and Deed of Covenants collateral
thereto in favor of HAL ANTILLEN N.V., a Netherlands Antilles
corporation, under the laws of the Commonwealth of the Bahamas, as
Mortgagee. Under the terms of said Mortgage and Deed, 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 1.5 Discharge of Security Interests. Except for the lien of the
Statutory Mortgage, this Deed and Permitted Liens, Shipowner will not create or
suffer to be continued any Security Interest on the Vessel and will cause the
Vessel to be released or discharged from each such Security Interest. If the
Vessel is 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 twenty-one
(21) days of said event, cause the Vessel to be released and all such Security
Interests to be discharged. Notwithstanding the above, no Security Interest need
be discharged if (i) Shipowner is contesting such Security Interest in good
faith through appropriate proceedings and (ii) 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 the
Statutory Mortgage and this Deed.
Section 1.6 Maintenance and Operation of Vessel. Shipowner covenants and
agrees to:
(a) maintain the Vessel adequately and so that it is suitable for use
in its business as presently conducted in all material respects, ordinary wear
and tear and depreciation excepted;
(b) maintain the Vessel, fair wear and tear excepted, free of any
conditions or recommendations by the classification society in which it is
entered, free of material average damage affecting class, with all class and
trading certificates, national and international, clean and valid without
condition by class and with the Vessel's hull surveys and continuous machinery
survey cycles up to date;
(c) maintain the Vessel such that it conforms with then-existing
requirements of the U.S. Coast Guard, IMO and SOLAS and all other national and
international rules, regulations, requirements, treaties and conventions which
are required to be complied with or observed by the Vessel in order to allow the
Vessel to operate in its business as presently conducted, provided that the
foregoing shall not be construed to require Shipowner to cause the Vessel to
comply with any such requirements that are retroactive in effect and that
require a material modification to the Vessel, and notify Mortgagee forthwith of
any circumstances which indicate that any of the licenses, permissions,
authorizations and consents relating to the foregoing may be revoked or may not
be renewed, in whole or in part, in the ordinary course of events;
(d) notify Mortgagee forthwith of any receipt of any notice from any
Governmental Body regarding impending rules, regulations or requirements that
would prevent the Vessel from operating in its business as presently conducted
in any material respect;
(e) not employ the Vessel in any trade or business which is unlawful
under the Laws of any relevant jurisdiction or in carrying illicit or prohibited
goods, in each case to the extent such use has or could have a continuing
material adverse effect on the Shipowner or in any manner whatsoever which may
render it liable to destruction, seizure or confiscation; and (f) notify
Mortgagee forthwith of:
(i) any occurrence in consequence whereof the Vessel has become
or is, by the passing of time or otherwise, likely to become a Total
Loss;
(ii) 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; and
(iii) any material Environmental Incident occurring.
Section 1.7 Location of Vessel. Without limiting the right of Shipowner to
perform work on the Vessel in accordance with the requirements of the Statutory
Mortgage and this Deed, the Vessel shall not be (a) deactivated or laid up
without the consent of Mortgagee which consent shall not be withheld so long as
the Vessel is in a port or place located in a jurisdiction where Mortgagee's
rights hereunder or any of Mortgagee's rights as a mortgagee of the Vessel under
applicable law are not impaired or restricted and Shipowner is taking reasonable
steps to secure and otherwise protect the condition of the Vessel, or (b)
abandoned.
Section 1.8 Insurances.
(a) Shipowner will maintain, with financially sound and reputable
insurers, brokers, underwriters, funds, mutual insurance associations and clubs,
Insurances against such casualties and contingencies and of such types and in
such amounts as set forth on Schedule 2 ("Required Insurances").
(b) All Insurances other than protection and indemnity insurance shall
be taken out in the names of Shipowner and Mortgagee as an additional assured
and a loss payee as their respective interests may appear. 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 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. 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. 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.
(c) In the event that any of the Required Insurances have not been
obtained at least thirty (30) days prior to the expiration date of the then
existing policy or are at any time not in effect as required hereunder,
Shipowner shall immediately notify Shipowner. If thereafter Shipowner fails to
secure such Required Insurances prior to the expiration date of the then
existing policy, 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.
(d) 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.
(e) All hull and machinery and mortgagee's interest insurance policies
or certificates shall provide that losses thereunder shall be payable to
Mortgagee in accordance with this Deed in the event of a Total Loss. In the
event of a Total Loss, Mortgagee shall be entitled to the lesser of (i) the
Specified Amount and (ii) all amounts payable therefor from the Insurances.
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.
(f) 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 Deed for such voyage or the carriage
of such cargo.
Section 1.9 No Set-Off or Tax Deduction.
(a) All amounts due from Shipowner under the Security Documents 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) If requested by Mortgagee, 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.
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) any event set forth on Schedule 1 hereto; or
(b) this Deed and the Statutory Mortgage or any material provision
hereof or thereof shall be deemed invalidated in whole or in part by any present
or future law of the Bahamas or decision of any competent court; provided that
if it is possible to reinstate this Deed and the Statutory Mortgage or any
material provision hereof or thereof that is deemed invalidated by moving this
Deed and the Statutory Mortgage to another jurisdiction or by taking any other
action, in each case that will not result in unreasonable delay or expense,
Shipowner and Mortgagee will take all further action required to do so, and no
Event of Default shall be deemed to have occurred.
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) exercise all the rights and remedies in foreclosure and otherwise
given to mortgagees by the laws of the Bahamas or of any other jurisdiction
where the Vessel may be found;
(b) 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 the Statutory Mortgage and this Deed or
not;
(c) take and enter into possession of the Vessel, wherever the same
may be, without court decision or other legal process and without being
responsible for loss or damage remove the Vessel to any port or place selected
by Mortgagee and Mortgagee may, without being responsible for loss or damage,
hold, lay-up, lease, charter, operate or otherwise use such Vessel for such time
and upon such terms as it may deem to be for its best advantage, and demand,
collect and retain all hire, freights, earnings, issues, revenues, income,
profits, return premiums, salvage awards or recoveries, recoveries in general
average, and all other sums due or to become due in respect of such Vessel or in
respect of any insurance thereon from any person whomsoever, accounting only for
the net profits, if any, arising from such use of the Vessel and charging upon
all receipts from use of the Vessel or from the sale thereof by court
proceedings or by private sale all costs, expenses, charges, damages or losses
by reason of such use, and if at any time Mortgagee avails itself of the right
given to it to take the Vessel: (i) Mortgagee shall have the right to dock the
Vessel for a reasonable time at any dock, pier or other premises of Shipowner
without charge, or to dock her at any other place at the cost and expense of
Shipowner, and (ii) Mortgagee shall have the right to require Shipowner to
deliver, and Shipowner shall on demand, at its own cost and expense, deliver to
Mortgagee the Vessel as demanded; and Shipowner shall irrevocably instruct the
Master of the Vessel so long as the Deed and the Statutory Mortgage are
outstanding to deliver the Vessel to Mortgagee as demanded. 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 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;
(d) sell the Vessel or any share therein with or without the benefit
of any charter party or other engagement by public auction, after publishing
notice of such auction at least ten (10) days prior to such auction in a daily
newspaper of general circulation published in New York City, with a copy sent to
Shipowner on the day of publication, or by private contract, after giving ten
(10) days prior notice to the Shipowner, without legal process at any place in
the world and upon such terms as Mortgagee may deem to be appropriate in order
to satisfy the Obligations, with power to postpone any such sale and without
being answerable for any loss occasioned by such sale or resulting from the
postponement thereof and at any such public auction Mortgagee may become the
purchaser and shall have the right to set off the purchase price against the
Obligations;
(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;
(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
(i) 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.
Shipowner hereby waives presentment, demand, protest, notice of nonpayment,
notice of dishonor or any other notice of any kind.
Section 2.3 Sale of Vessel. A sale of the Vessel made in pursuance of this
Deed, 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 and shall bar Shipowner its
successors and assigns and all persons claiming by through or under them
provided such sale is by auction and that nothing herein shall be deemed to
derogate from Shipowner's duty to Mortgagee. 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 Mortgagee's power of sale has arisen in the
manner provided by the Deed and the Statutory Mortgage, 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
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.
Section 2.4 Conveyance. Upon an Event of Default, Shipowner hereby
irrevocably appoints Mortgagee and its assigns as its true and lawful
attorney-in-fact coupled with an interest with full power to act alone and with
full power 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 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 Deed or the Statutory 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;
(b) Mortgagee may exercise any of the powers conferred by this Deed or
the Statutory 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 Deed or the Statutory
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
(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 2.6 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 2.6 shall be applied by
Mortgagee in accordance with the provisions of Section 2.8 hereof.
Section 2.7 Cumulative Rights, Powers and Remedies. Each and every right,
power and remedy herein given to Mortgagee shall be cumulative and shall be in
addition to every other right, power and remedy herein given or now or hereafter
existing at law, in equity, in admiralty or by statute, or by contract
(including without limitation under the other Security Documents), and each and
every right, 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
right, power or remedy shall not be construed to be a waiver of the right to
exercise at the same time or thereafter any other right, 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 2.8 Application of Proceeds. The proceeds of any sale of the Vessel
made either under the power of sale hereby granted to Mortgagee or under a
judgment or decree in any judicial proceeding for the foreclosure of this Deed
and the Statutory Mortgage or for the enforcement of any remedy granted to
Mortgagee hereunder, insurance pertaining to the Vessel, and all other sums
received by Mortgagee pursuant to or under the provisions of this Deed or the
Statutory Mortgage or in any proceedings hereunder or thereunder, 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 the Statutory Mortgage and this Deed;
THIRD: To the payment of interest on the Loan;
FOURTH: To the payment of principal on the Loan;
FIFTH: To the payment of the other Obligations and all other sums
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;
SIXTH: 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 Deed and the Statutory 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
SEVENTH: To the payment of any surplus thereafter remaining to
Mortgagee.
Section 2.9 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 2.10 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, the Statutory
Mortgage and this Deed.
Section 2.11 Application of Sums Received or Recovered. At any time
following the occurrence and during the continuance of an Event of Default,
Mortgagee shall have the right to apply and reapply any sum received or
recovered from Shipowner under or by virtue of the Statutory Mortgage or this
Deed or any Security Interest connected with it and provide notice to Shipowner
of such application or reapplication and cause to be applied (subject to
collection) the balance from time to time outstanding to the payment of the
Obligations in the manner specified in Section 2.8 hereof.
Section 2.12 Rights Regarding Security Interests. Upon any unreasonable
delay by Shipowner to act promptly and appropriately with respect to any alleged
Security Interest pursuant to Section 1.5, Shipowner authorizes and empowers
Mortgagee to appear in the name of Shipowner in any court or tribunal of any
jurisdiction where an action is pending against the Vessel because of or on
account of any alleged Security Interest thereon from which Vessel has not been
so released and to take such actions as Mortgagee may deem appropriate to defend
such action, to purchase or discharge such alleged Security Interest or to
release the Vessel, including, without limitation, posting adequate security
therefor. Shipowner shall reimburse Mortgagee for all reasonable expenses
incurred by Mortgagee for such defense, purchase or discharge, and any such
amounts to which Mortgagee is entitled to reimbursement from Shipowner shall be
secured by the lien of the Statutory Mortgage and this Deed and shall bear
interest at a rate per annum equal to the Default Rate.
ARTICLE 3
SUNDRY PROVISIONS
Section 3.1 Currency. Unless otherwise specifically stated, all references
to Dollars in this Deed shall be deemed to refer to United States Dollars.
Section 3.2 Amendments. No waiver, termination, amendment or other
modification of any provision of the Statutory Mortgage or this Deed, 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 the Statutory Mortgage and this Deed.
Section 3.3 Successors and Assigns. All covenants, promises, stipulations
and agreements of Shipowner in the Statutory Mortgage and this Deed 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 Statutory Mortgage and/or this Deed. Any
such assignment or transfer may be made (a) to or for the benefit of an
affiliate of Mortgagee or (b) with Shipowner's prior written consent (which
shall not be unreasonably withheld) to any other Person.
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 the Statutory Mortgage and this Deed, 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. All notices, requests, demands, claims and other
communications hereunder will be in writing. Any notice, request, demand, claim
or other communication hereunder will be deemed duly given if (and then three
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to Mortgagee:
Holland America Line Inc.
Attn: General Counsel
000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxx, XX 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
Copy (which will not constitute notice) to:
Xxxxxxxxxxx & Xxxxxxxx Xxxxxxx Xxxxx Xxxxx LLP
Attn: Xxxxx Xxxx
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Tel: (000)000-0000
Fax: (000) 000-0000
If to Shipowner:
Ambassador International, Inc.
Attn: Xxxxxx XxXxxxxx
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Copy (which will not constitute notice) to:
Xxxxxx & Xxxxxx LLP
Attn: Xxxxxx X. Xxxxx
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth above
using any other means (including personal delivery, expedited courier, messenger
service, telecopy, telex, ordinary mail, or electronic mail), but no such
notice, request, demand, claim, or other communication will be deemed to have
been duly given unless and until it actually is received by the intended
recipient. Any Party may change the address to which notices, requests, demands,
claims, and other communications hereunder are to be delivered by giving the
other Parties notice in the manner herein set forth.
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. 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 Security Documents, shall,
at the expense of Shipowner, forthwith cause this Deed and the Statutory
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 the Statutory Mortgage, this
Deed 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 Section 3.9(b) or for any similar or related purpose.
(b) The purposes referred to in Section 3.9(a) are to:
(i) validly and effectively to create the Security Interest and
rights intended to be created by or pursuant to the Statutory Mortgage
and this Deed;
(ii) create a specific mortgage or assignment of any particular
asset contemplated by the Statutory Mortgage and this Deed;
(iii) protect the priority in any jurisdiction of any Security
Interest which is created, or intended to be created, by or pursuant
to the Statutory Mortgage and this Deed;
(iv) during the continuance of an Event of Default, 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
(v) during the continuance of an Event of Default, 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 the Statutory Mortgage and
this Deed.
(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 the Statutory Mortgage and this Deed 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, if requested, 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 the Statutory
Mortgage, this Deed 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 the
Statutory Mortgage or this Deed, 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. The Statutory Mortgage and this Deed shall be
governed by and construed in accordance with the laws of the Commonwealth of the
Bahamas and the obligations, rights and remedies of the parties hereunder shall
be determined in accordance with such laws, without giving effect to principles
of conflicts of law. Nothing in this Section shall exclude or limit any right
which 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 the Statutory Mortgage, this Deed or the 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. 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
Shipowner or its property in the courts of any other jurisdiction. Shipowner
irrevocably appoints GTC Corporate Services Ltd., for the time being presently
at Sassoon House, Xxxxxxx Street and Victoria Avenue, P.O. Box SS-5383, Nassau,
Bahamas, 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 Deed, the Statutory 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 DEED, THE
STATUTORY 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 Recorded Amount. For the purposes of the recording this First
Priority Statutory Mortgage under the law of the Bahamas, the total amount of
this Deed and the Statutory Mortgage is Sixty Million United States Dollars
(US$60,000,000), and interest and the performance of the Deed and Statutory
Mortgage covenants; the maturity date is the 2nd day of April, 2017, and the
discharge amount is the same as the total amount. It is not intended that this
Deed and the Statutory Mortgage shall include property other than the Vessel,
and it shall not include property other than the Vessel as the term "vessel" is
used in the provisions of the law of the Bahamas. Notwithstanding the foregoing,
for property other than the Vessel, if any should be determined to be covered by
this Deed and the Statutory Mortgage, the discharge amount is zero point zero
one percent (0.01%) of the total amount.
Section 3.15 No Waiver of Preferred Status. No provision of this Deed and
the Statutory Mortgage shall be deemed to be a stipulation that Mortgagee waives
the priority status of the Statutory Mortgage given by the laws of the Bahamas.
Any provision of this Mortgage which would otherwise constitute such a
stipulation, to such extent, shall have no force or effect.
Section 3.16 Counterparts. This Deed 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 3.17 Exhibits. All exhibits referred to herein are attached hereto
and incorporated herein by this reference.
Section 3.18 Captions. The captions of the articles and sections and
subsections of this Deed are included for convenience of reference only, and
shall not constitute a part of this Deed for any other purpose.
[Signature page follows]
IN WITNESS WHEREOF, Shipowner has executed this Deed the 2nd day of April,
2007.
Signed, Sealed and Delivered by
WIND STAR LIMITED
By /s/ Xxxxx Xxxxxxxxx
----------------------------
Name Xxxxx Xxxxxxxxx
----------------------------
Its President
----------------------------
In the presence of:
/s/ Xxxxxx X. XxXxxxxx
----------------------------
Name Xxxxxx X. XxXxxxxx
----------------------------
Its Secretary
----------------------------
EXHIBITS:
Exhibit A - Note
STATE OF Washington )
) ss.
COUNTY OF King )
On this 2nd day of April, 2007, before me, a Notary Public in and for the
State of Washington, personally appeared Xxxxx Xxxxxxxxx and Xxxxxx XxXxxxxx,
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 President and
Secretary of Wind Star Limited, 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.
/s/ Xxx X. Xxxxxx
-------------------------------------
NOTARY PUBLIC in and for the State
of Washington, residing
at Seattle, WA
My appointment expires 6/9/10
SCHEDULE 2
REQUIRED INSURANCE
1. Hull and Machinery
Insurance to cover physical loss or damage to the vessel under the American
Institute Hull Clauses for partial, constructive, and/or agreed total loss up to
the agreed Insured Value.
Vessel Insured Value Deductible
--------------------------------------------------------------------------------
Wind Surf $44,000,000 $500,000
Wind Spirit $20,000,000 $500,000
Wind Star $20,000,000 $500,000
2. Increased Value of Hull and Machinery
As above, but only to pay in the event of a total, constructive, or agreed total
loss up to the agreed Insured Value.
Vessel Insured Value Deductible
--------------------------------------------------------------------------------
Wind Surf $11,000,000 $0
Wind Spirit $5,000,000 $0
Wind Star $5,000,000 $0
3. War Risks Hull and Machinery and Protection and Indemnity War Risks
Insurance to cover physical loss or damage to the vessel in accordance with the
Institute War Risks Hull Clauses up to the agreed Insured Value.
Vessel Insured Value Deductible
--------------------------------------------------------------------------------
Wind Surf $55,000,000 $500,000
Wind Spirit $25,000,000 $500,000
Wind Star $25,000,000 $500,000
4. Protection and Indemnity
Insurance to protect and indemnify for shipowner's legal liabilities in
accordance with the insured vessel's Class 1 Terms of Entry in a shipowner's
mutual protection and indemnity association. Deductible is $500,000 for any one
accident.
Vessel GRT Built Flag Pax Capacity
--------------------------------------------------------------------------------
Wind Surf 14,745 1989 Bahamas 312
Wind Spirit 5,736 1988 Bahamas 148
Wind Star 5,703 1986 Bahamas 148
5. Freight, Demurrage and Defence
Insurance to protect and indemnify shipowner's for costs in accordance with the
insured vessel's Class 2 Terms of Entry in a shipowner's mutual freight,
demurrage and defence association. Deductible is $10,000 for any one accident.
Vessel GRT Built Flag Pax Capacity
--------------------------------------------------------------------------------
Wind Surf 14,745 1989 Bahamas 312
Wind Spirit 5,736 1988 Bahamas 148
Wind Star 5,703 1986 Bahamas 148
SCHEDULE 3
DEFINED TERMS USED IN THE DEED
In this Deed, 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.
"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 eleven percent (11%).
"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
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 set forth on Schedule 1 attached
hereto.
"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.
"Governmental Body" means any legislature, agency, bureau, branch,
department, division, commission, court, tribunal, magistrate, justice,
multi-national organization, quasi-governmental body, or other similar
recognized organization or body of any federal, state, county, municipal, local,
or foreign government or other similar recognized organization or body
exercising similar powers or authority.
"Insurances" means all policies and contracts of insurance (which
expression includes without limitation hull and machinery insurances and 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 otherwise howsoever in connection with the Vessel.
"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.
"Permitted Liens" means:
(i) liens for crew wages (including wages of the Master) 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 $250,000 at any time outstanding;
(iv) liens created by or through Mortgagee prior to the date of
the Statutory Mortgage but only until such time as Mortgagee has
discharged same;
(v) liens to which Mortgagee has given its prior written consent;
(vi) liens for tort claims covered by insurance, subject to
applicable deductibles; and
(vii) port, canal and other waterway dues and pilotage accrued
for not more than thirty (30) days.
"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 2.5.
"Requisition Compensation" includes all moneys or other compensation
payable by reason of requisition of title or other compulsory acquisition of
title of the Vessel.
"Security Documents" means the Note, this Deed, the Statutory Mortgage, the
Subsidiary Guarantee, the Parent Guarantee, the Security Agreement and the
Pledge Agreement.
"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.
"Specified Amount" means a percentage of the then-outstanding principal
amount plus accrued and unpaid interest due under the Note equal to 25% in the
case of Wind Star, 25% in the case of Wind Spirit and 50% in the case of Wind
Surf. If the Specified Amount is required to be calculated subsequent to a Total
Loss of any of the foregoing vessels, the percentages applicable to the
remaining vessels shall be proportionately increased.
"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.
"War risks" includes the risk of mines and all risks excluded by Clause 23
of the Institute Time Clauses (Hulls) (10/1/83).
SUBSIDIARY GUARANTEE
This Guarantee (this "Guarantee"), dated as of April 2, 2007, is by
Windstar Sail Cruises Limited (the "Company"), Wind Star Limited ("Wind Star"),
Wind Spirit Limited ("Wind Spirit") and Degrees Limited ("Degrees Limited" and,
collectively with Company, Wind Star and Wind Spirit, the "Guarantors"), in
favor of HAL Antillen N.V., a Netherlands Antilles corporation ("HAL Antillen").
RECITALS:
A. HAL Antillen and Ambassadors International Cruise Group, LLC, a Xxxxxxxx
Islands limited liability company ("Buyer"), have entered into a Purchase
Agreement (the "Purchase Agreement") dated as of February 21, 2007 pursuant to
which HAL Antillen has agreed to sell to Buyer, and Buyer has agreed to purchase
from HAL Antillen, all of the shares of capital stock of the Company in
accordance with the terms and subject to the conditions set forth in the
Purchase Agreement.
B. As partial payment of the purchase price of such shares, Buyer is
delivering to HAL Antillen a promissory note, executed by Buyer in favor of HAL
Antillen, in the amount of sixty million dollars ($60,000,000) (the "Buyer
Note").
C. Guarantors, as wholly-owned subsidiaries of Buyer after the transactions
contemplated by the Purchase Agreement, will derive substantial direct and
indirect benefit from the consummation of the transactions contemplated by the
Purchase Agreement and HAL Antillen's agreement to accept the Buyer Note as
partial payment of the purchase price thereunder.
D. Buyer, Guarantors and HAL Antillen have entered into a Security
Agreement, dated as of the date hereof (the "Security Agreement"), that
contemplates that Guarantors will execute and deliver this Guarantee to provide
additional support for the obligations of Buyer under the Buyer Note.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and in order to induce the
HAL Antillen to accept the Buyer Note, each Guarantor agrees as follows:
1. Definitions. Any capitalized terms not defined herein will have
the meaning assigned to such terms in the Purchase Agreement. In addition, the
following terms have the following meanings:
"Initial Pledged Shares" has the meaning specified in Section 1 of the
Pledge Agreement."Buyer Party" means each of Buyer and the Guarantors.
Additional Pledged Collateral" has the meaning specified in Section 1(a) of
the Pledge Agreement. "Obligations" means the following indebtedness,
liabilities and obligations:
(a) all indebtedness, liabilities and obligations of Buyer to HAL
Antillen now or hereafter existing, whether joint or several, direct or
indirect, absolute or contingent or due or to become due, howsoever
evidenced, created, incurred or owing and whether or not evidenced by
promissory notes or other evidences of indebtedness, and all modifications,
renewals, extensions and rearrangements thereof and substitutions and
replacements therefor, arising under or in connection with the Buyer Note;
(b) all indebtedness, liabilities and obligations of Buyer now or
hereafter existing in connection with the other Security Documents; and
(c) all accrued interest on any of the foregoing indebtedness,
liabilities and obligations, whether accruing prior to or subsequent to the
commencement of a bankruptcy or similar proceeding.
"Pledged Collateral" means any collateral pledged as security in connection
with the Buyer Note or any other Security Documents.
"Security Documents" has the meaning ascribed to such term in the Security
Agreement."Pledged Shares" has the meaning specified in Section 1(a) of the
Pledge Agreement
2. Guarantee. Each Guarantor hereby absolutely, unconditionally and
irrevocably guarantees, as primary obligor and not merely as surety, jointly and
severally with each other Guarantor, the punctual and complete payment and
performance when due, whether at stated maturity, by acceleration or otherwise,
of all of the Obligations, and agrees to pay any and all expenses (including
reasonable counsel fees and expenses) incurred by HAL Antillen in enforcing any
rights under this Guarantee and the other Security Documents and the ISDA
Facility Documents. Without limiting the generality of the foregoing, each
Guarantor's liability will extend to all amounts that constitute part of the
Obligations and would be owed by Buyer to HAL Antillen under the Security
Documents and the ISDA Facility Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving Buyer.
Notwithstanding any provision of this Guarantee to the contrary, it is
intended that this Guarantee, and any interests, liens and security interests
granted by the Guarantors as security for this Guarantee, not constitute a
Fraudulent Conveyance (as defined below) in the event that this Guarantee or
such interest is subject to the United States Bankruptcy Code (the "Bankruptcy
Code") or any applicable fraudulent conveyance or fraudulent transfer law or
similar law of any state or jurisdiction. Consequently, the Guarantors and HAL
Antillen agree that if this Guarantee, or any such interests, liens or security
interests securing this Guarantee, would, but for the application of this
sentence, constitute a Fraudulent Conveyance, this Guarantee and each such lien
and security interest shall be valid and enforceable only to the maximum extent
that would not cause this Guarantee or such interest, lien or security interest
to constitute a Fraudulent Conveyance, and this Guarantee shall automatically be
deemed to have been amended accordingly at all relevant times. For purposes
hereof, "Fraudulent Conveyance" means a fraudulent conveyance under Section 548
of the Bankruptcy Code or a fraudulent conveyance or fraudulent transfer under
the provisions of any applicable fraudulent conveyance or fraudulent transfer
Law or similar Law of any state or jurisdiction, as in effect from time to time.
Furthermore, the amount guaranteed hereunder and the payments to be made under
this Guarantee shall be limited to an amount and payments that will not result
in prohibited dividend or distribution under applicable Law.
3. Guarantee Absolute. Each Guarantor guarantees that the Obligations will
be paid strictly in accordance with the terms of the Security Documents,
regardless of any Law or Order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of HAL Antillen with respect thereto.
The obligations of each Guarantor under this Guarantee are independent of the
Obligations or any other obligations of Buyer under the Security Documents, and
a separate action or actions may be brought and prosecuted against each
Guarantor to enforce this Guarantee, irrespective of whether any action is
brought against Buyer or whether Buyer is joined in any such action or actions.
The liability of each Guarantor under this Guarantee will be irrevocable,
absolute and unconditional irrespective of, and each Guarantor hereby
irrevocably waives any defenses it may now or hereafter have in any way relating
to, any or all of the following:
(a) any lack of validity or enforceability of any Security Document or
any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations or any other obligations of
Buyer under the Security Documents, or any other amendment or waiver of or
any consent to departure from any Security Document, including any increase
in the Obligations resulting from the extension of additional credit to
Buyer or otherwise, or the acceptance of partial payments of the
Obligations;
(c) any taking, exchange, release or non-perfection of any Pledged
Collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Obligations;
(d) any manner of application of the Pledged Collateral, or proceeds
thereof, to all or any of the Obligations, or any manner of sale or other
disposition of any Pledged Collateral for all or any of the Obligations or
any other obligations of Buyer under the Security Documents or any other
assets of Buyer or any of its subsidiaries;
(e) any change, restructuring or termination of the organic structure
or existence of any Buyer Party or any of its subsidiaries;
(f) the taking or failure to take any action under the Security
Documents;
(g) the voluntary or involuntary liquidation, dissolution, sale or
other disposition of all or substantially all of the assets, marshaling of
assets and liabilities, receivership, insolvency, bankruptcy, assignment,
composition with creditors or readjustment of, or similar proceeds
affecting any Buyer Party or any other guarantor of any or all of the
Obligations;
(h) any act, election, remedy, occurrence or circumstance of any
nature, whether or not under HAL Antillen's control, that may affect or
impair any subrogation right of a Guarantor or the effectiveness or value
thereof;
(i) the default or failure of any Guarantor to perform fully any of
its obligations set forth herein;
(j) the failure of any other Person to execute or deliver any other
guaranty or agreement or the release or reduction of liability of any
guarantor or other surety with respect to the Obligations; or
(k) any existence of or reliance on any representation by HAL Antillen
or any other circumstance which might otherwise constitute a defense
available to, or a discharge of, any Buyer Party or any other guarantor or
surety other than payment and satisfaction in full of all of the
Obligations.
4. Reinstatement of Guarantee. This Guarantee will continue to be effective
or be reinstated, as the case may be, if at any time any payment of any of the
Obligations or any proceeds of any collateral or security which has been applied
in payment of any of the Obligations is rescinded or must otherwise be returned
by HAL Antillen or any other Person upon the insolvency, bankruptcy or
reorganization of Buyer or any Guarantor or for any other reason, all as though
such payment had not been made. Except as provided in the preceding sentence,
each Guarantor's obligations under this Guarantee will terminate when the
Obligations have been fully paid, performed and satisfied.
5. Contribution.
(a) In order to provide for just and equitable contribution among the
Guarantors, if any of Wind Star, Wind Spirit or Degrees Limited makes any
payment to HAL Antillen in respect of the Obligations (a "Paying
Guarantor"), the Paying Guarantor shall be entitled to contribution from
the other parties (the "Non-Paying Guarantors") for any Excess Payments,
damages, and expenses (including any legal or other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit, or
proceeding or other claims asserted, but after deducting any contribution
received by such Paying Guarantor, by persons other than the Non-Paying
Guarantors) (each such payment, a "Contribution Payment") incurred by such
Paying Guarantor in discharging, in whole or in part, the Obligations owed
to HAL Antillen, as set forth below.
(b) So long as any Obligations remain outstanding, no Paying Guarantor
may claim its right of contribution against a Non-Paying Guarantor except
to demand that a Non-Paying Guarantor make a payment to HAL Antillen in the
amount equal to (i) the aggregate of all payments made to HAL Antillen in
satisfaction of the Obligations (including the Paying Guarantor's Excess
Payment), times (ii) such Non-Paying Guarantor's Contribution Percentage,
minus (iii) the aggregate of all payments made to HAL Antillen in
satisfaction of the Obligations by such Non-Paying Guarantor.
(c) Once the Obligations no longer remain outstanding, a Paying
Guarantor shall have a right of contribution against each Non-Paying
Guarantor in the amount equal to (i) the aggregate of all payments made to
HAL Antillen in complete satisfaction of the Obligations, times (ii) such
Non-Paying Guarantor's Contribution Percentage, minus (iii) the aggregate
of all payments made to HAL Antillen in satisfaction of the Obligations by
such Non-Paying Guarantor. Each Paying Guarantor's right of contribution,
if any, pursuant to the preceding sentence in respect of any Excess Payment
made by it shall arise automatically at the time such Excess Payment is
made, subject to adjustment at the time such Paying Guarantor makes any
subsequent Excess Payment.
(d) The following definitions apply to this Section 5:
(i) "Excess Payment" means any payment made by a Paying Guarantor
that causes the aggregate of all payments made by such Paying Guarantor to
HAL Antillen in satisfaction of the Obligations to exceed the Paying
Guarantor's Contribution Percentage of the aggregate of all payments made
to HAL Antillen in satisfaction of the Obligations.
(ii) "Contribution Percentage" means, (i) with respect to Wind
Star, 25 percent, (ii) with respect to Wind Spirit, 25 percent and (iii)
with respect to Degrees Limited, 50 percent.
6. Waivers and Acknowledgements.
(a) Each Guarantor waives any right to require HAL Antillen to xxx
Buyer or any guarantor or surety obligated with respect to the Obligations
or any part thereof, or otherwise to enforce payment thereof against any
Pledged Collateral or any collateral securing the obligations of any
guarantor of surety or any part thereof.
(b) Each Guarantor waives notice of (i) presentment, demand, protest,
notice of nonpayment and notice of protest in relation to any instrument or
agreement evidencing any Obligation, (ii) HAL Antillen's acceptance of this
Guarantee or its intention to act or its actions in reliance hereon; (iii)
the present existence or future incurring of any Obligations or any terms
or amounts thereof or any change therein; (iv) any default by Buyer or any
surety or guarantor; (v) the obtaining of any guaranty or surety agreement
(in addition to this Guarantee); (vi) the obtaining of any pledge,
assignment or other security for any Obligations; (vii) the release of any
surety or guarantor (including Buyer); (viii) the release of any Pledged
Collateral; (ix) any change in Buyer's business or financial condition; (x)
any renewal, extension or modification of the terms of any Obligation or of
the obligations or liabilities of any surety or guarantor or any
instruments or agreements evidencing the same; and (xi) any other demands
or notices whatsoever with respect to the Obligations or this Guarantee.
(c) Each Guarantor hereby waives any right to revoke this Guarantee
and acknowledges that this Guarantee is continuing in nature and applies to
all Obligations, whether existing now or in the future.
(d) Each Guarantor hereby waives (i) any defense arising by reason of
any claim or defense based upon an election of remedies by HAL Antillen
which in any manner impairs, reduces, releases or otherwise adversely
affects the subrogation, reimbursement, exoneration, contribution or
indemnification rights of such Guarantor or other rights of such Guarantor
to proceed against Buyer, any other guarantor or any other Person or any
Pledged Collateral and (ii) any defense based on any right of set-off or
counterclaim against or in respect of the obligations of such Guarantor
hereunder to the same extent as to clause (i) as Buyer has so waived such
rights.
(e) Each Guarantor acknowledges that it will receive substantial
direct and indirect benefits from the financing arrangements contemplated
by the Security Documents and that the waivers set forth in this Guarantee
are knowingly made in contemplation of such benefits.
7. Subrogation and Subordination.
(a) No Guarantor will exercise any rights that it may now or hereafter
acquire against Buyer that arise from the existence, payment, performance
or enforcement of any Guarantor's obligations under this Guarantee or any
other Security Document, including any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate
in any claim or remedy of HAL Antillen against Buyer or any other Guarantor
or any Pledged Collateral, whether or not such claim, remedy or right
arises in equity or under Law, including the right to take or receive from
Buyer or any other insider guarantor, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim, remedy or right, unless and until all of the
Obligations and all other amounts payable under the Security Documents have
been paid in full in cash. If any amount is paid to any Guarantor in
violation of the preceding sentence in respect of the Obligations or any
other amount payable under the Security Documents at any time prior to the
payment in full in cash of the Obligations and all other amounts payable
under the Security Documents, then such amount will be held in trust for
the benefit of HAL Antillen and will forthwith be paid to HAL Antillen to
be credited and promptly applied to the Obligations and all other amounts
payable under the Security Documents, whether matured or unmatured, in
accordance with the terms of the Security Documents, or, if none are then
due, to be held by HAL Antillen as collateral for any Obligations or other
amounts payable under this Guarantee thereafter arising and promptly
applied. If (i) any Guarantor makes any payment to HAL Antillen of all or
any part of the Obligations and (ii) all of the Obligations and all other
amounts payable under the Security Documents are paid in full in cash, HAL
Antillen will, at such Guarantor's request and expense, execute and deliver
to such Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by
subrogation to such Guarantor of an interest in the Obligations resulting
from such payment by such Guarantor.
(b) Any indebtedness now or hereafter owing to any Guarantor by Buyer
or any other Guarantor will be subordinate to HAL Antillen's claim and
right to receive payment in full of the Obligations, for so long as any
claim on the part of HAL Antillen against Buyer or such Guarantor in
respect of the Obligations exists. Any claims of HAL Antillen against Buyer
or such Guarantor in respect of the Obligations first will be paid by Buyer
or such Guarantor before any payment will be made to or received by any
Guarantor from Buyer or such Guarantor. Such priority of payment will apply
during the ordinary course of Buyer's or such Guarantor's business and, in
any proceeding for the enforcement of claims against or for the relief of
Buyer or such Guarantor in respect of the Obligations, including any
assignment for the benefit of creditors, composition with creditors,
insolvency, reorganization or bankruptcy proceeding, HAL Antillen will be
entitled to be paid in full any indebtedness that may then be owing by
Buyer or such Guarantor in respect of the Obligations, with interest
accrued therein, before any payment on account of any indebtedness is made
to any Guarantor. Any trustee in bankruptcy, receiver, or other person in
charge of Buyer's assets or operations is hereby directed to pay to HAL
Antillen the full amount of HAL Antillen's claims against Buyer or such
Guarantor before making any payment to such Guarantor, and so far as may be
necessary to give effect to this Section 7, each Guarantor hereby transfers
and assigns to HAL Antillen all of its rights to any payments or
distributions which might otherwise be coming to such Guarantor. If Buyer's
indebtedness to a Guarantor is evidenced by a promissory note, such
promissory note will contain a legend that any payments thereon are subject
to the provisions of this Section 7. Each Guarantor understands that its
subordination hereunder may mean that it will receive less in a bankruptcy
or other insolvency proceeding of Buyer or such Guarantor than that to
which it would otherwise be entitled.
8. Events of Default. The occurrence of any Event of Default as defined on
Schedule 1 attached hereto will constitute an "Event of Default" hereunder. On
or after the occurrence of any Event of Default, HAL Antillenas described in
Section 4 of the Note,[HAL Antillen may immediately demand full payment of the
Obligations from one or more Guarantors by providing such Guarantors with
written notice (the "Demand Notice"), without first exhausting any other remedy
it may have and without resorting to any security or other guaranty held by HAL
Antillen. Upon receipt of the Demand Notice, a Guarantor will promptly pay such
Obligations to HAL Antillen in accordance with the instructions set forth in the
Demand Notice.
9. Taxes.
(a) Any and all payments made by any Guarantor hereunder will be made
free and clear of and without deduction for any and all present or future
Taxes. If any Guarantor is required by Law to deduct any Taxes from or in
respect of any sum payable hereunder to HAL Antillen, (i) the sum payable
by such Guarantor will be increased as may be necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this Section 9), HAL Antillen receives an
amount equal to the sum it would have received had no such deductions been
made, (ii) such Guarantor will make all such deductions and (iii) such
Guarantor will pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable Law.
(b) Each Guarantor will indemnify HAL Antillen for and hold it
harmless against the full amount of Taxes imposed on or paid by HAL
Antillen.
(c) If HAL Antillen receives a refund of any Taxes with respect to
which any Guarantor has made a payment of additional amounts under this
Section 9, HAL Antillen will pay over such refund to such Guarantor.
However, HAL Antillen will have sole discretion to determine whether to
contest the imposition of any Taxes, regardless of whether such Taxes were
correctly or legally asserted, and any expenses reasonably incurred by HAL
Antillen in seeking such refund (such expenses to be discussed with such
Guarantor in advance to the extent practical), to the extent such expenses
are reasonably attributable to the Obligations or payments made in respect
thereof, may be deducted from any refund owing to any Guarantor without
regard to whether such contest is successful.
10. Amendments; Waivers. No amendment, modification, replacement,
termination or cancellation of any provision of this Guarantee will be valid,
unless the same will be in writing and signed by HAL Antillen. No waiver by any
HAL Antillen of any default, misrepresentation, or breach of warranty or
covenant hereunder, whether intentional or not, may be deemed to extend to any
prior or subsequent default, misrepresentation, or breach of warranty or
covenant hereunder or affect in any way any rights arising because of any prior
or subsequent such occurrence. No delay of HAL Antillen in exercising any right,
power or remedy will operate as a waiver thereof.
11. Notices. All notices, requests, demands, claims and other
communications hereunder will be in writing and delivered pursuant to Section 9
of the Security Agreement.
12. Remedies. The remedies of HAL Antillen are cumulative and not exclusive
of any right, power or remedy provided by Law or any other agreement (including
the Security Documents) and the exercise or partial exercise of one or more
right, power or remedy will not be construed as a cure or waiver of any Event of
Default nor prejudice the right of HAL Antillen in the exercise of any other
right, power or remedy.
13. Indemnification. Each Guarantor will indemnify and hold HAL Antillen
and its officers, directors, managers, employees, agents, representatives,
controlling persons, stockholders, and each of their affiliates (each an
"Indemnified Party") harmless from all liability, loss, damage or expense,
including reasonable attorneys' fees and costs, that the Indemnified Party may
incur resulting from, arising out of or relating to the Indemnified Party's good
faith efforts to enforce the terms of this Guarantee, provided, however, that
such indemnification will not apply to the extent that any such liability, loss,
damage or expense arises out of or is based solely upon the Indemnified Party's
willful misconduct or gross negligence. The covenants set forth in this Section
13 will survive the termination of this Guarantee.
14. Successors and Assigns. This Guarantee is a continuing guaranty and
will be binding upon each Guarantor, its successors and assigns and inure to the
benefit of and be enforceable by HAL Antillen and its successors, transferees
and assigns.
15. Counterparts. This Guarantee may be executed in counterparts, each of
which will be deemed an original but all of which together will constitute one
and the same instrument.
16. Headings. The article and section headings contained in this Guarantee
are inserted for convenience only and will not affect in any way the meaning or
interpretation of this Guarantee.
17. Governing Law. This Guarantee and the performance of the obligations of
the parties hereunder will be governed by and construed in accordance with the
laws of the State of Washington, without giving effect to any choice of law
principles that would require the application of the law of another
jurisdiction. Notwithstanding the foregoing, HAL Antillen may, at its sole
discretion, elect to enforce the Mortgage and Deeds of Covenants with respect to
any Buyer Party under the laws of the Bahamas or any other jurisdiction that may
be applicable with respect to the Mortgages.
18. Submission to Jurisdiction; Venue. Each party hereto submits to the
jurisdiction of any state or federal court sitting in Seattle, Washington, in
any Action arising out of or relating to this Guarantee and agrees that all
claims in respect of the Action may be heard and determined in any such court.
Each party hereto also agrees not to bring any Action arising out of or relating
to this Guarantee in any other court. Each party hereto agrees that a final
judgment in any Action so brought will be conclusive and may be enforced by
Action on the judgment or in any other manner provided at Law or in equity. Each
party hereto waives any defense of inconvenient forum to the maintenance of any
Action so brought and waives any bond, surety, or other security that might be
required of any other party hereto with respect thereto. Nothing contained in
this Section 18 shall be construed so as to prevent or limit HAL Antillen from
taking any and all actions necessary to realize on any collateral under the
Security Documents wherever such collateral may, from time to time, be located.
19. Severability. The provisions of this Guarantee will be deemed severable
and the invalidity or unenforceability of any provision will not affect the
validity or enforceability of the other provisions hereof; provided that if any
provision of this Guarantee, as applied to any party hereto or to any
circumstance, is adjudged by a Governmental Body, arbitrator, or mediator not to
be enforceable in accordance with its terms, the parties hereto agree that the
Governmental Body, arbitrator, or mediator making such determination will have
the power to modify the provision in a manner consistent with its objectives
such that it is enforceable, and/or to delete specific words or phrases, and in
its reduced form, such provision will then be enforceable and will be enforced.
20. Construction. The parties hereto and HAL Antillen have participated
jointly in the negotiation and drafting of this Guarantee. If an ambiguity or
question of intent or interpretation arises, this Guarantee will be construed as
if drafted jointly by the parties hereto and HAL Antillen and no presumption or
burden of proof will arise favoring or disfavoring any party hereto because of
the authorship of any provision of this Guarantee. Any reference to any federal,
state, local, or foreign Law will be deemed also to refer to Law as amended and
all rules and regulations promulgated thereunder, unless the context requires
otherwise. The words "include," "includes," and "including" will be deemed to be
followed by "without limitation."
[Signature page follows]
IN WITNESS WHEREOF, each Guarantor has caused this Guarantee to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
WINDSTAR SAIL CRUISES LIMITED
By: /s/ Xxxxxx X. XxXxxxxx
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Name: Xxxxxx X. XxXxxxxx
----------------------------------
Title: Vice President
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WIND STAR LIMITED
By: /s/ Xxxxxx X. XxXxxxxx
----------------------------------
Name: Xxxxxx X. XxXxxxxx
----------------------------------
Title: Vice President
----------------------------------
WIND SPIRIT LIMITED
By: /s/ Xxxxxx X. XxXxxxxx
----------------------------------
Name: Xxxxxx X. XxXxxxxx
----------------------------------
Title: Vice President
----------------------------------
DEGREES LIMITED
By: /s/ Xxxxxx X. XxXxxxxx
----------------------------------
Name: Xxxxxx X. XxXxxxxx
----------------------------------
Title: Vice President
----------------------------------
Performance Guarantee
This Performance Guarantee (this "Guarantee"), dated as of April 2, 2007,
is by Ambassadors International, Inc., a Delaware corporation ("Ambassadors"),
in favor of HAL Antillen N.V., a Netherlands Antilles corporation ("HAL
Antillen").
RECITALS:
A. HAL Antillen and Ambassadors International Cruise Group, LLC, a
wholly-owned subsidiary of Ambassadors ("Buyer"), have entered into a Purchase
Agreement (the "Purchase Agreement") dated as of February 21, 2007 pursuant to
which HAL Antillen has agreed to sell to Buyer, and Buyer has agreed to purchase
from HAL Antillen, all of the shares of capital stock of Windstar Sail Cruises
Limited (the "Company") in accordance with the terms and subject to the
conditions set forth in the Purchase Agreement.
B. As partial payment of the purchase price of such shares, Buyer is
delivering to HAL Antillen a promissory note, executed by Buyer in favor of HAL
Antillen, in the amount of sixty million dollars ($60,000,000) (the "Buyer
Note"). In connection therewith, the following documents are being executed and
delivered as of the date hereof: (i) a Security Agreement among the Company,
Wind Star Limited, Wind Spirit Limited, Degrees Limited (collectively, the
"Subsidiary Guarantors"), Buyer and HAL Antillen (the "Security Agreement");
(ii) a Pledge Agreement between Buyer and HAL Antillen (the "Pledge Agreement");
(iii) First Preferred Vessel Mortgages by Wind Star Limited, Wind Spirit Limited
and Degrees Limited (the "Mortgages"); (iv) Deeds of Covenants by Wind Star
Limited, Wind Spirit Limited and Degrees Limited (the "Deeds of Covenants"); and
(v) a Guarantee by each of the Subsidiary Guarantors (the "Subsidiary
Guarantee").
C. Ambassadors, as the ultimate parent of Buyer, will derive substantial
direct and indirect benefit from the consummation of the transactions
contemplated by the Purchase Agreement and HAL Antillen's agreement to accept
the Buyer Note as partial payment of the purchase price thereunder.
D. HAL Antillen has required that, and Ambassadors has agreed that,
Ambassadors will execute and deliver this Guarantee to provide additional
support for the obligations of Buyer and the Acquired Entities in connection
with the Buyer Note.
AGREEMENT:
Now, therefore, in consideration of the premises and the agreements set
forth herein, the Parties agree as follows:
1. Definitions. Any capitalized terms not defined herein will have the
meaning assigned to such terms in the Purchase Agreement. In addition, the
following terms have the following meanings:
"Buyer Note Obligations" means all obligations of Buyer to pay principal
and interest under the Buyer Note.
Additional Pledged Collateral" has the meaning specified in Section 1(a) of
the Pledge Agreement.
"Event of Default" has the meaning set forth on Schedule 1 attached hereto.
"Insurances" as to any Vessel has the meaning set forth in the Deed of
Covenants as to that Vessel.
"Obligations" has the meaning set forth in Section 2 of this Guarantee.
"Pledged Collateral" means any collateral pledged as security in connection
with the Buyer Note or any other Security Documents.
"Specified Amount" means, at any time that it is required to be calculated
as to a Vessel, a percentage of the then-outstanding principal amount plus
accrued and unpaid interest due under the Buyer Note equal to 25% in the case of
Wind Star, 25% in the case of Wind Spirit and 50% in the case of Wind Surf. If
the Specified Amount is required to be calculated subsequent to a Total Loss of
a Vessel, the percentages applicable to the remaining Vessels shall be
proportionately increased. "Pledged Shares" has the meaning specified in Section
1(a) of the Pledge Agreement
"Total Loss" as to a Vessel has the meaning provided in the Deed of
Covenants applicable to such Vessel.
2. Guarantee. Subject to the terms and conditions set forth in this
Guarantee, Ambassadors hereby absolutely, unconditionally and irrevocably
guarantees that (the items set forth below are collectively referred to as the
"Obligations"):
(a) if an Event of Default shall occur under any Deed of Covenants and the
Mortgagee thereunder shall gain ownership of the Vessel through foreclosure or
otherwise, then: (i) there shall have been no Encumbrances, charters, mortgages,
maritime liens or any other debts whatsoever on the Vessel that had priority
over the lien of the Mortgage applicable to the Vessel that Mortgagee is
required to discharge or otherwise satisfy incident to the foreclosure, other
than liens created by HAL Antillen; (ii) at such time as the Mortgagee gains
ownership, there shall be no Encumbrances, charters, mortgages, maritime liens
or any other debts whatsoever on the Vessel or any right of any third party to
claim against the Mortgagee as the owner of the Vessel; (iii) at such time as
the Mortgagee gains ownership, the Vessel's class shall have been maintained,
free of any conditions, recommendations, notations, visas or reservations by any
classification society, free of material average damage affecting class, with
all class and trading certificates, national and international, clean, valid and
unextended without condition of class with the Vessel's hull surveys and
continuous machinery survey cycles up to date and unextended: and (iv) the
Vessel shall be in conformity with then-existing requirements of the U.S. Coast
Guard, IMO and SOLAS and all other national and international Laws which are
required to be complied with or observed by such Vessel in order to allow such
Vessel to operate its business as conducted on the date of this Guarantee,
provided that the foregoing shall not be construed to require Ambassadors to
cause any Vessel to comply with any such requirements that are retroactive in
effect and that require a material modification to such Vessel;
(b) if any of the Obligations set forth in Section 2(a) above are not
satisfied, Ambassadors shall reimburse HAL Antillen for all amounts reasonably
expended by HAL Antillen in order to remedy same;
(c) if a Total Loss shall occur as to a Vessel, Ambassadors shall pay to
HAL Antillen the lesser of the Specified Amount for that Vessel or all amounts
payable therefor from the Insurances as provided for by Section 1.8(e) in the
applicable Deed of Covenants, which amounts shall be applied against the Buyer
Note Obligations;
(d) if a Total Loss shall occur as to a Vessel, and if Shipowner (as that
term is defined in the Deed of Covenants) failed to comply with its obligations
under Section 1.8 of the Deed of Covenants or Shipowner or an Affiliate of
Shipowner breached or caused a default under such Insurances (including with
respect to the payment of premiums or the giving of notices), and as a result
thereof an insurer shall fail or refuse to pay or the Insurances shall not be in
force or effect, then Ambassadors shall pay to HAL Antillen the Specified
Amount; and
(e) if Closing (as that term is defined in the Purchase Agreement) does not
occur, Ambassadors shall satisfy the obligations of Buyer under Sections 6.10,
7.7 and 9.2(c) of the Purchase Agreement.
3. Guarantee Absolute. Ambassadors guarantees that the Obligations will be
performed strictly in accordance with the terms of the relevant agreements,
regardless of any Law or Order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of HAL Antillen with respect thereto.
The obligations of Ambassadors under this Guarantee are independent of the
Obligations or any other obligations of Buyer or any other party under the
Security Documents, and a separate action or actions may be brought and
prosecuted against Ambassadors to enforce this Guarantee, irrespective of
whether any action is brought against Buyer or whether Buyer or any other party
is joined in any such action or actions. The liability of Ambassadors under this
Guarantee will be irrevocable, absolute and unconditional irrespective of, and
Ambassadors hereby irrevocably waives any defenses it may now or hereafter have
in any way relating to, any or all of the items set forth in Section 3(a) - (k)
of the Subsidiary Guarantee.
4. Representations and Warranties. Ambassadors represents and warrants to
HAL Antillen as follows:
(a) Ambassadors is an entity validly existing and in good standing
under the Laws of the jurisdiction of its creation, formation or
organization;
(b) Ambassadors has the relevant entity power and authority to execute
and deliver this Guarantee, and to perform its obligations contemplated
hereby. Ambassadors has taken all action necessary to authorize the
execution and delivery of this Guarantee and the performance of its
obligations hereunder. This Guarantee has been duly authorized, executed
and delivered by, and is enforceable against, Ambassadors, except as such
enforceability may be subject to the effects of bankruptcy, insolvency,
reorganization, moratorium, or other Laws relating to or affecting the
rights of creditors, and general principles of equity; and
(c) the execution and delivery of this Guarantee and the performance
of Ambassadors' obligations hereunder will not (i) breach any provision of
its Organizational Documents; (ii) breach any Law, Order, material
Contract, or material Permit to which Ambassadors is a party or by which it
is bound or to which any of its assets is subject; or (iii) require any
Consent.
5. Reinstatement of Guarantee. This Guarantee will continue to be effective
or be reinstated, as the case may be, if at any time any payment of any of the
Buyer Note Obligations or any proceeds of any collateral or security which has
been applied in payment of any of the Buyer Note Obligations is rescinded or
must otherwise be returned by HAL Antillen or any other Person upon the
insolvency, bankruptcy or reorganization of Buyer or for any other reason, all
as though such payment had not been made. Except as provided in the preceding
sentence, Ambassadors' obligations under this Guarantee will terminate when the
Buyer Note Obligations have been fully paid, performed and satisfied.
6. Waivers and Acknowledgements.
(a) Ambassadors waives any right to require HAL Antillen to xxx Buyer
or any guarantor or surety obligated with respect to the Obligations or any
part thereof, or otherwise to enforce payment thereof against any Pledged
Collateral or any collateral securing the obligations of any guarantor of
surety or any part thereof.
(b) Ambassadors waives notice of (i) presentment, demand, protest,
notice of nonpayment and notice of protest in relation to any instrument or
agreement evidencing any Obligation, (ii) HAL Antillen's acceptance of this
Guarantee or its intention to act or its actions in reliance hereon; (iii)
the present existence or future incurring of any Obligations or any terms
or amounts thereof or any change therein; (iv) any default by Buyer or any
surety or guarantor; (v) the obtaining of any guaranty or surety agreement
(in addition to this Guarantee); (vi) the obtaining of any pledge,
assignment or other security for any Obligations; (vii) the release of any
surety or guarantor (including Buyer); (viii) the release of any Pledged
Collateral; (ix) any change in Buyer's business or financial condition; (x)
any renewal, extension or modification of the terms of any Obligation or of
the obligations or liabilities of any surety or guarantor or any
instruments or agreements evidencing the same; and (xi) any other demands
or notices whatsoever with respect to the Obligations or this Guarantee.
(c) Ambassadors hereby waives any right to revoke this Guarantee and
acknowledges that this Guarantee is continuing in nature and applies to all
Obligations, whether existing now or in the future.
(d) Ambassadors hereby waives (i) any defense arising by reason of any
claim or defense based upon an election of remedies by HAL Antillen which
in any manner impairs, reduces, releases or otherwise adversely affects the
subrogation, reimbursement, exoneration, contribution or indemnification
rights of Ambassadors or other rights of Ambassadors to proceed against
Buyer, any guarantor or any other Person or any Pledged Collateral and (ii)
any defense based on any right of set-off or counterclaim against or in
respect of the obligations of Ambassadors hereunder to the same extent as
to clause (i) as Buyer has so waived such rights.
(e) Ambassadors acknowledges that it will receive substantial direct
and indirect benefits from the financing arrangements contemplated by the
Security Documents and that the waivers set forth in this Guarantee are
knowingly made in contemplation of such benefits.
7. Notices. All notices, requests, demands, claims and other communications
hereunder will be in writing and delivered pursuant to Section 9 of the Security
Agreement using Buyer's contact information.
8. Amendments and Waivers. No amendment, modification, replacement,
termination or cancellation of any provision of this Guarantee will be valid,
unless the same will be in writing and signed by HAL Antillen and Ambassadors.
No waiver by HAL Antillen of any default, misrepresentation, or breach of
warranty or covenant hereunder, whether intentional or not, may be deemed to
extend to any prior or subsequent default, misrepresentation, or breach of
warranty or covenant hereunder or affect in any way any rights arising because
of any prior or subsequent such occurrence.
9. Governing Law. This Guarantee and the performance of the obligations of
Ambassadors hereunder will be governed by and construed in accordance with the
laws of the State of Washington, without giving effect to any choice of law
principles that would require the application of the law of another
jurisdiction.
10. Submission to Jurisdiction; Venue. Ambassadors submits to the
jurisdiction of any state or federal court sitting in Seattle, Washington, in
any Action arising out of or relating to this Guarantee and agrees that all
claims in respect of the Action may be heard and determined in any such court.
No Action arising out of or relating to this Guarantee may be brought in any
other court. Ambassadors agrees that a final judgment in any Action so brought
will be conclusive and may be enforced by Action on the judgment or in any other
manner provided at Law or in equity. Ambassadors waives any defense of
inconvenient forum to the maintenance of any Action so brought and waives any
bond, surety, or other security that might be required with respect thereto.
11. Severability. The provisions of this Guarantee will be deemed severable
and the invalidity or unenforceability of any provision will not affect the
validity or enforceability of the other provisions hereof; provided that if any
provision of this Guarantee, as applied to any circumstance, is adjudged by a
Governmental Body, arbitrator, or mediator not to be enforceable in accordance
with its terms, the Governmental Body, arbitrator, or mediator making such
determination will have the power to modify the provision in a manner consistent
with its objectives such that it is enforceable, and/or to delete specific words
or phrases, and in its reduced form, such provision will then be enforceable and
will be enforced.
12. Remedies. The remedies of HAL Antillen are cumulative and not exclusive
of any right, power or remedy provided by Law or any other agreement (including
the Security Documents) and the exercise or partial exercise of one or more
right, power or remedy will not be construed as a cure or waiver of any default
nor prejudice the right of HAL Antillen in the exercise of any other right,
power or remedy.
13. Indemnification. Ambassadors will indemnify and hold HAL Antillen and
its officers, directors, managers, employees, agents, representatives,
controlling persons, stockholders, and each of their affiliates (each an
"Indemnified Party") harmless from all liability, loss, damage or expense,
including reasonable attorneys' fees and costs, that the Indemnified Party may
incur resulting from, arising out of or relating to the Indemnified Party's good
faith efforts to enforce the terms of this Guarantee, provided, however, that
such indemnification will not apply to the extent that any such liability, loss,
damage or expense arises out of or is based solely upon the Indemnified Party's
willful misconduct or gross negligence. The covenants set forth in this Section
13 will survive the termination of this Guarantee.
14. Successors and Assigns. This Guarantee is a continuing guaranty and
will be binding upon Ambassadors, its successors and assigns and inure to the
benefit of and be enforceable by HAL Antillen and its successors, transferees
and assigns.
15. Attorneys' Fees. If any action at law or in equity is necessary by HAL
Antillen to enforce or interpret the terms of this Guarantee or any other
agreement or document to be executed or delivered pursuant hereto, HAL Antillen
(to the extent it prevails) will be entitled to reasonable attorneys' and
experts' fees, costs, and disbursements from Ambassadors in addition to any
other relief to which it may be entitled.
16. Headings. The article and section headings contained in this Guarantee
are inserted for convenience only and will not affect in any way the meaning or
interpretation of this Guarantee.
17. Construction. Ambassadors and HAL Antillen have participated jointly in
the negotiation and drafting of this Guarantee. If an ambiguity or question of
intent or interpretation arises, this Guarantee will be construed as if drafted
jointly by Ambassadors and HAL Antillen and no presumption or burden of proof
will arise favoring or disfavoring Ambassadors and HAL Antillen because of the
authorship of any provision of this Guarantee. Any reference to any federal,
state, local, or foreign Law will be deemed also to refer to Law as amended and
all rules and regulations promulgated thereunder, unless the context requires
otherwise. The words "include," "includes," and "including" will be deemed to be
followed by "without limitation."
[Signature page follows]
IN WITNESS WHEREOF, Ambassadors has executed this Guarantee as of the
date first written above.
AMBASSADORS INTERNATIONAL, INC.
By: /s/ Xxxxxx X. XxXxxxxx
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Name: Xxxxxx X. XxXxxxxx
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Title: Vice President
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