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EXHIBIT 4.(ii)(d)(2)
PROJECT AMERICA SHIP I, INC.
$25,000,000
United States Government Guaranteed
Ship Financing Notes
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NOTE PURCHASE AGREEMENT
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Dated February 10, 2000
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PROJECT AMERICA SHIP I, INC.
$ 25,000,000
United States Government Guaranteed Ship Financing Notes
Variable Rate Notes due January 31, 2001
NOTE PURCHASE AGREEMENT
To each of the respective
Purchasers named in Schedule 1 hereto: Dated February 10, 2000
Dear Sirs:
The undersigned, Project America Ship I, Inc., a Delaware corporation
(the "Shipowner"), hereby agrees with each of you (each, a "Purchaser") as
follows:
1. The Notes. The United States Government Guaranteed Ship Financing
Notes, due January 31, 2001, referred to above (collectively the "Notes") in the
aggregate principal amount set forth above are proposed to be issued and sold by
the Shipowner upon fulfillment of the terms and conditions set forth herein. The
Notes will be issued and sold to aid in the financing of the construction of
Hull No. 7671 (the "Vessel"). The Notes will be in fully registered form only
and will bear interest from the date of issuance at LIBOR minus .05%, adjusted
quarterly, payable quarterly, on April 28, July 31 and October 31, 2000 and at
maturity, commencing April 28, 2000.
The Notes will be issued under a Trust Indenture (the "Indenture")
between the Shipowner and The Bank of New York, as Trustee (the "Indenture
Trustee"). Payment of the principal of and interest on the Notes will be fully
and unconditionally guaranteed by the United States of America pursuant to the
guarantee imprinted by the Indenture Trustee pursuant to an Authorization
Agreement, on each of the Notes (the "Guarantee") under Title XI of the Merchant
Marine Act, 1936, as amended and in effect on the date hereof (the "Act"). Since
the Notes are guaranteed with the full faith and credit of the United States of
America, it is understood that you will not independently review the financial
condition of the Shipowner and will rely completely on the Secretary's
Determination regarding the financial resources and maritime ability of the
Shipowner.
The capitalized terms used herein and not defined herein have the
meanings ascribed thereto in Schedule A to the Indenture.
The Notes, the Indenture and the Guarantees conform in all material
respects to the descriptions thereof contained in the Offering Circular dated
February 10, 2000 (the "Offering
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Circular"), which is being used by the Purchasers, with the consent of the
Shipowner, for resales of the Notes to investors.
2. Interest Rate on Notes. The rate of interest to be borne by the
Notes shall be determined in accordance with the provisions of the Notes and the
Indenture and in each case shall be equal to a per annum rate adjusted quarterly
for each Interest Period to LIBOR calculated on the Interest Determination Date
for such Interest Period minus .05% which rate is applicable until the next
Interest Payment Date provided, however, in no event shall the rate of interest
payable thereunder exceed 12% per annum, for any Interest Period. Prior to
authorizing the Guarantees, the rate of interest to be borne by the Notes must
be determined by the Secretary to be reasonable, taking into account the range
of interest rates prevailing in the private market for similar loans and the
risks assumed by the Secretary.
3. Agreement to Purchase. Subject to the conditions hereinafter set
forth, and the representations and warranties contained herein, the Shipowner
agrees to sell to you and you agree to purchase on the Note Closing Date the
Notes in the principal amount set forth opposite your name in Schedule 1 hereto
(subject to adjustment as set forth in Section 6 hereof) at 100% of such
principal amount thereof.
4. Closing. Delivery of the Notes shall be made at the office of the
Maritime Administration, 400 Seventh Street, S.W., Washington, D.C., at a
closing commencing at 9:00a.m., Eastern time, on February 10, 2000 (the "Note
Closing Date") or such other place or such later business day (which, without
the approval of Purchasers of at least 50% of the aggregate principal amount of
Notes, shall not be later than April 8, 2000) as the Shipowner shall designate
by at least 3 days' prior written notice to the Indenture Trustee and to you at
your address specified in Schedule 1 hereto. Delivery of the Notes shall be made
against payment therefor in funds immediately available to the Shipowner in
Washington, D.C. Except as you may otherwise direct three (3) business days
before the Note Closing Date, a single Note in global form dated the Note
Closing Date, authenticated by the Indenture Trustee, guaranteed by the United
States of America, and registered in the name of the Depository Trust Company
("DTC") or its nominee and issued in a denomination equal to the aggregate
principal amount of the Notes, will be delivered to DTC or its custodian for the
account of the Purchaser. For the purposes of this Agreement, a "business day"
is a day which is not a Saturday, Sunday or bank holiday under the laws of the
United States of America or the State of Illinois.
5. Representations and Warranties by the Shipowner. The Shipowner
represents and warrants to you that this Agreement, the Indenture, and the Notes
have been duly authorized, executed and delivered by the Shipowner and
constitute, each in accordance with their terms, a legal, valid and binding
instrument enforceable against the Shipowner, except as limited by bankruptcy,
insolvency, or other laws affecting the enforcement of creditors' rights
generally. On the Note Closing Date, the Indenture and the Notes will have been
duly authorized, executed and delivered by the Shipowner and will constitute
legal, valid and binding instruments enforceable against the Shipowner, and the
Notes will be entitled to the benefits of the Indenture, the Guarantees and the
Authorization Agreement. The Shipowner represents that the Notes, the Indenture,
and the Authorization Agreement conform in all material respects to the
descriptions
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thereof contained in the Offering Circular dated February 10, 2000 unless you
consent to a change.
6. Conditions to Purchaser's Obligations. Your obligation under this
Agreement to purchase Notes on the Note Closing Date is subject to the accuracy
of the representations and warranties of the Shipowner contained in Section 4
hereof on and as of the Note Closing Date and to the following further
conditions:
(A) Opinion of Counsel for the Shipowner. On the Note Closing Date, the
Shipowner shall have furnished an opinion of its counsel addressed to you and
satisfactory to you and the Indenture Trustee regarding the representations and
warranties set out in Item 4 of this Agreement;
(B) Opinion of the Chief Counsel of the Maritime Administration. On the
Note Closing Date, your counsel shall have received a copy of a legal opinion
from the Maritime Administration addressed to the Purchasers and the Indenture
Trustee to the effect that the Guarantees and the Authorization Agreement have
been duly authorized, executed and delivered by the United States of America,
and constitute the legal, valid and binding obligations of the United States of
America; and
(C) Opinion of Counsel for the Purchasers. On the Note Closing Date,
you shall have received an opinion from your counsel satisfactory to you as to
the sufficiency of this Agreement, the Indenture, the Notes, the Authorization
Agreement and the Guarantee.
(D) Certificate of Officer of the Shipowner. On the Note Closing Date,
you shall have received a certificate signed by an authorized representative of
the Shipowner to the effect that (a) the Shipowner has performed all agreements
and satisfied all conditions on its part to be performed or satisfied hereunder
on or prior to the Note Closing Date, (b) the representations and warranties of
the Shipowner herein contained are true and correct in all material respects to
the same extent as if made on and as of the Note Closing Date, and (c) the terms
of the Indenture have been complied with by the Shipowner, and as of the Note
Closing Date, there shall not exist any condition or event which constitutes, or
which after lapse of time or notice or both would constitute, an Indenture
Default as defined in the Indenture.
If any of the conditions specified in this Section 5 shall not have
been fulfilled by the Shipowner when and as required by this Agreement, you may
cancel this Agreement and all of your obligations hereunder on, or at any time
prior to, the Note Closing Date. Notice of such cancellation shall be given to
the Shipowner in writing.
7. Conditions of Shipowner's Obligations. The obligations of the
Shipowner to sell and deliver the Notes under this Agreement on the Note Closing
Date are subject to all of the following conditions: (A) on the Note Closing
Date all the Notes to be delivered by the Shipowner shall have simultaneously
been purchased by the Purchasers; and (B) on or before the Note Closing Date (i)
the Secretary shall have duly authorized the execution and delivery of the
Guarantee of the Notes and shall have duly executed and delivered the
Authorization Agreement;
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and (ii) the Indenture Trustee shall have duly executed and delivered the
Indenture and the Authorization Agreement.
8. Expenses. Whether or not the transactions contemplated hereby are
consummated, the Shipowner agrees to pay all reasonable fees and expenses
incident to the transactions contemplated hereby and by the Offering Circular,
including without limitation, reasonable fees and expenses (i) of the
Purchaser's special counsel in connection with the transactions contemplated
hereby and in connection with any future modifications requested by the
Shipowner of this Agreement, the Notes or the Indenture or any waiver or consent
under or in respect of any thereof; (ii) relating to the preparation, printing
and filing of, and the performance by the Shipowner of its obligations under the
Offering Circular, this Agreement, and the Indenture (including all instruments
constituting exhibits or appendices thereto or annexed thereto); (iii) for
payment of necessary stamp and other taxes, if any, in connection with the
original issuance of the Notes (the Shipowner hereby agrees to hold the
Purchaser harmless in respect thereof, such agreement to survive any disposition
or payment of the Notes), (iv) of the Indenture Trustee and its counsel, (v) of
the Purchaser, as agreed between such firm and the Shipowner in connection with
the sale of the Notes, and (vii) otherwise relating to the issuance and delivery
of the Notes.
9. Indemnification.
(A) The Shipowner shall indemnify Chase Securities, Inc. ("CSI") and
hold CSI and each person, if any, who controls CSI, harmless from and against
any loss, claim, damage or liability and any action in respect thereof, joint or
several, to which CSI or such controlling person may become subject, under any
statute or common law, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, any untrue statement or alleged untrue
statement of material fact contained in the Offering Circular dated February 10,
2000 (the "Offering Circular") or any preliminary version thereof given to CSI
or arises out of, or is based upon any omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and shall reimburse CSI and such controlling person for any legal
and other expenses reasonably incurred by CSI or such controlling person in
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action. The foregoing indemnity agreement is in addition to
any liability which the Shipowner may otherwise have to CSI or any person who
controls CSI.
(B) Promptly after receipt by CSI under this Section 9 of notice of any
claim or the commencement of any action, CSI shall, if a claim in respect
thereof is to be made against the Shipowner under this Section 9, notify the
Shipowner in writing of the claim or the commencement of that action, provided
that the failure to notify the Shipowner shall not relieve it from any liability
that it may have to CSI otherwise than under this Section 9 unless the Shipowner
is actually prejudiced by such delay. If any such claim or action shall be
brought against CSI, and it shall notify the Shipowner thereof, the Shipowner
shall be entitled to participate in or to assume the defense thereof with
counsel reasonably satisfactory to CSI unless and until CSI shall elect to
employ separate counsel as hereinafter provided. After notice from the Shipowner
to CSI of its election to assume the defense of such claim or action,
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the Shipowner shall not be liable to CSI of its election to assume the defense
of such claim or action, the Shipowner shall not be liable to CSI under this
Section 9 for any legal or other expenses subsequently incurred by CSI in
connection with the defense thereof other than reasonable costs of
investigation; provided that CSI shall have the right to employ counsel to
represent it if, in its reasonable judgment, it is advisable for it to be
represented by separate counsel, and in that event the fees and expenses of such
separate counsel shall be paid by the Shipowner. The Shipowner shall not be
required to indemnify CSI under this Section 9 for any payment made to any
claimant in settlement of any suit or claim unless such payment is approved by
the Shipowner.
10. Entire Agreement Embodied, Changes, etc. This Agreement embodies
the entire agreement and understanding among the Shipowner and you relating to
the subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter. Neither this Agreement nor any term hereof may
be changed, waived, discharged, or terminated orally, but only by an instrument
in writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought and with the written consent of the
Secretary.
11. Miscellaneous.
(A) Except as otherwise expressly provided in this Agreement, (i)
whenever notice is required by the provisions hereof to be given to the
Shipowner, such notice shall be in writing addressed to Project America Ship I,
Inc., c/o American Classic Voyages Company, 2 North Riverside Plaza, Chicago,
Illinois 60606, (ii) whenever notice is required by the provisions hereof to be
given to the Guarantor, such notice shall be in writing addressed to Project
America, Inc., c/o American Classic Voyages Company, 2 North Riverside Plaza,
Chicago, Illinois 60606, and (iii) whenever notice is required by the provisions
of this Agreement to be given to you, such notice shall be in writing addressed
to you at your address set forth in Schedule 1 hereto or any other address
specified in a written notice to the Shipowner;
(B) This Agreement is made solely for the benefit of and is binding
upon and enforceable by you, the Shipowner, and your respective successors and
assigns, and no other person shall acquire or have any right under, or by virtue
of, this Agreement;
(C) If this Agreement shall be canceled or terminated by you because of
nonfulfillment of the conditions set forth in Section 6 hereof or because of the
Shipowner's failure to comply on or before the Note Closing Date with the
conditions precedent set forth herein, the Shipowner shall have no further
obligations or liability hereunder to you except that the Shipowner will
reimburse you for out-of-pocket costs and expenses reasonably incurred by you
(including without limitation reasonable fees and other charges of your counsel
and other experts) in connection with the engagement of the Note Purchaser, the
purchase of the Notes, and any of the transactions contemplated therewith;
(D) This Agreement shall be governed and construed in accordance with
the laws of the State of New York.
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If you are in agreement with the foregoing, please sign the form of
acceptance on the accompany counterparts of this Agreement, retain one
counterpart for your records and return the other counterparts to the Shipowner,
whereupon this Agreement shall become a binding contract among you, the
Shipowner and Purchaser.
Very truly yours,
PROJECT AMERICA SHIP I, INC.
By: /s/ Randall L. Talcott
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Its Vice President - Finance
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The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Chase Securities Inc.
By: /s/ Michael K. Clare
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Its Managing Director
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SCHEDULE 1
Aggregate Principal
Amount of Notes To
Purchaser Be Purchased:
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Chase Securities Inc. $25,000,000
Address for all communications and
notices:
Chase Securities Inc.
270 Park Avenue
7th Floor
New York, NY 10017