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EXHIBIT 4.(ii)(d)(17)
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Contract No. MA-13070
AMENDMENT NUMBER 1 TO
SECURITY AGREEMENT
Relating to United States Government
Guaranteed Ship Financing Obligations
between
GREAT INDEPENDENCE SHIP CO.
Shipowner
and
THE UNITED STATES OF AMERICA
Dated as of March 28, 1996
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AMENDMENT NUMBER 1 TO
SECURITY AGREEMENT
THIS AMENDMENT NUMBER 1 TO SECURITY AGREEMENT, dated as of March 28,
1996 ("Amendment Number 1 to Security Agreement"), between GREAT INDEPENDENCE
SHIP CO., a Delaware corporation (the "Shipowner") and THE UNITED STATES OF
AMERICA (the "United States"), represented by the Secretary of Transportation,
acting by and through the Maritime Administrator (the "Secretary"), pursuant to
the provisions of Title XI of the Merchant Marine Act, 1936, as amended.
W I T N E S S E T H:
A. On December 7, 1995, the Shipowner and the Secretary entered
into the Security Agreement, Contract No. MA-13070 (the "Security Agreement");
B. The Shipowner is the sole owner of the whole of the
INDEPENDENCE O.N. 261147 (the "Vessel") reconditioned/reconstructed pursuant
to certain construction contracts with Newport News Shipbuilding and Drydock
Company ("Newport News") and Hopeman Brothers, Inc.;
C. To finance part of the cost of reconditioning/reconstruction
of the Vessel, the Shipowner, on December 7, 1995, issued its United States
Government Guaranteed Ship Financing Obligations, Independence Series A, in the
aggregate principal amount of $26,429,000 (the "Original Obligations");
D. The Shipowner, the Vessel, Great Hawaiian Properties
Corporation, dba American Hawaii Cruises ("Great Hawaiian"), American Classic
Voyages Co. (formerly known as The Delta Queen Steamboat Co.) and Newport News
were parties in an action originally brought by Newport News in the United
States District Court for the Eastern District of Virginia (the "Court") as
Civil Action No. 4:94CV148 (the "Litigation") because of disagreement as to the
amounts required to be paid to Newport News by or for the account of the
Shipowner in connection with the reconditioning/reconstruction of the Vessel.
On February __, 1996, the parties to the Litigation reached a settlement (the
"Settlement");
E. The Settlement has enabled the Secretary to make a
redetermination of Actual Cost and, on the date hereof, the Shipowner has duly
created and authorized the issuance of $6,903,000 in principal amount of its
notes and bonds designated "United States Government Guaranteed Ship Financing
Obligations, Independence Series B", consisting of the Additional 2005 Notes
and the Additional 2015 Bonds (collectively, the "Additional
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Obligations"), which when duly executed and delivered pursuant to Supplemental
Indenture No. 1 between it and the Indenture Trustee, dated as of the date
hereof, will constitute the legal, valid and binding obligations of the
Shipowner (the Original Obligations and the Additional Obligation shall,
collectively, be referred to as the "Obligations");
F. The Secretary has authorized the issuance of the Additional
Obligations under the provisions of Title XI of the Merchant Marine Act, 1936,
as amended ("Title XI") and will authorize a Guarantee to be endorsed upon each
of the Additional Obligations. Pursuant to the terms of the Secretary's
Determination dated as of the date hereof, entered into between the Secretary
and the Indenture Trustee, the Indenture Trustee is authorized to endorse and
execute by means of a facsimile signature of the Secretary and a facsimile seal
of the Department of Transportation, and to authenticate on each of the
Additional Obligations, a Guarantee of the payment in full of all the unpaid
interest to the date of payment, and all the unpaid principal, of such
Obligations (individually, a "Guarantee" and collectively, the "Guarantees").
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and of other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE FIRST
ACTUAL COST, DEPRECIATED ACTUAL COST
(a) Pursuant to Sections 1101(f), 1101(g) and 1104(b)(2) of the Act,
the Secretary has determined as follows:
The aggregate Actual Cost of the Vessel is $40,006,036 and the
Depreciated Actual Cost of the Vessel is $38,096,433, comprised of the amounts
set forth in Table A, annexed hereto and by this reference made a part hereof,
which amounts are itemized in said Table. The Secretary shall from time to
time hereafter redetermine the above-stated Actual Cost for the Vessel and may
from time to time hereafter redetermine the above-stated Depreciated Actual
Cost for the Vessel.
(b) The aggregate principal amount of the Obligations will equal, but
not exceed, 87 1/2% of the Depreciated Actual Cost of the Vessel as of the
Closing Date.
ARTICLE SECOND
THE SECRETARY'S NOTE
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On the date hereof the Shipowner has duly executed and delivered and
the Secretary has accepted the Endorsement to the Secretary's Note
substantially in the form of Exhibit 1 annexed hereto payable in an amount
equal to the principal amount of the Additional Obligations issued and sold
pursuant to Supplemental Indenture No. 1. Such promissory note, together with
any endorsements thereto, is herein called the "Endorsement to the Secretary's
Note".
ARTICLE THIRD
DEFINITIONS
For all purposes of the Security Agreement, unless otherwise expressly
provided or unless the context otherwise requires:
(1) All references herein to Articles, Sections or other
subdivisions, unless otherwise specified, refer to the corresponding Articles,
Sections and other subdivisions of the Security Agreement;
(2) The terms "hereof," "herein," "hereby," "hereto,"
"hereunder" and "herewith" refer to the Security Agreement;
(3) The terms defined in Schedule X to the Security Agreement
or by reference therein to other instruments shall have the respective meanings
stated in said Schedule X or such other instruments;
(4) Said Schedule X is hereby revised:
(a) by revising the following definitions:
"Closing Date" means, with respect to the Original Obligations, the
date on which the Security Agreement and Secretary's Note are executed and,
with respect to the Additional Obligations, means the date on which Amendment
Number 1 to the Security Agreement and the Endorsements to the Secretary's Note
are executed.
"Obligation" means each, and "Obligations" means every obligation of
the Shipowner bearing a Guarantee and authenticated and delivered pursuant to
the Indenture as amended by Supplemental Indenture No. 1 and the Authorization
Agreement as amended by the Secretary's Determination.
"Offering Circular" means the offering circular relating to the
issuance and sale of the Original Obligations or the Additional Obligations.
"Secretary's Note" means a promissory note or promissory notes issued
and delivered by the Shipowner to the Secretary described in Article Second of
the Special
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Provisions of the Security Agreement, as endorsed or supplemented, and shall
also mean any promissory note issued in substitution for and replacement
thereof pursuant to the Security Agreement; and
(b) and by adding the following new definitions:
"Additional Obligations" means each, and "Additional Obligations"
means every, obligation of the Shipowner bearing a Guarantee and authenticated
and delivered pursuant to Supplemental Indenture No. 1 and the Secretary's
Determination, designated United States Government Guaranteed Ship Financing
Obligations, Independence Series B.
"Secretary's Determination" means the Secretary's Determination dated
the date of Supplemental Indenture No. 1, between the Secretary and the
Indenture Trustee, whereby the Secretary authorizes the Guarantee of the United
States to be endorsed on each of the Additional Obligations.
"Supplemental Indenture No. 1" means the Supplemental Indenture, dated
the Closing Date relating to the Additional Obligations, between the Shipowner
and the Indenture Trustee.
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ARTICLE FOURTH
MISCELLANEOUS
(a) Notwithstanding any provision herein, in the event there are
any inconsistencies between the original of this document held by the Secretary
and the original of this document held by any other party hereto, the
provisions of the original of this document held by the Secretary shall
prevail.
(b) Except as modified and expressly amended by this Amendment
Number 1 to Security Agreement, the Security Agreement is in all respects
ratified and confirmed and all the terms, provisions and conditions thereof
shall be and remain in full force and effect.
(c) This instrument may be executed in any number of counterparts
and all such counterparts executed and delivered, each as an original, shall
constitute but one and the same instrument.
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IN WITNESS WHEREOF, this Amendment Number 1 to Security Agreement has
been executed by the parties as of the day and year first written.
GREAT INDEPENDENCE SHIP CO.
as Shipowner
BY: /s/ Jordan B. Allen
_________________________
Vice President
Attest:
/s/ Robin Mariella
__________________________
Assistant Secretary
UNITED STATES OF AMERICA
SECRETARY OF TRANSPORTATION
MARITIME ADMINISTRATOR
BY: /s/ Joel C. Richard
_________________________
Secretary
Maritime Administration
(SEAL)
Attest:
/s/ Sarah J. Johnson
_____________________
Assistant Secretary
Maritime Administration
TABLE A
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The Actual Cost of the Vessel INDEPENDENCE, O.N. 261147, as of the date
hereof, as determined by the Secretary, for the reconditioning/reconstruction
of the INDEPENDENCE, is $40,006,036, and the Depreciated Actual Cost, as of the
date hereof, as determined by the Secretary, is $38,096,433, both calculated
and itemized as follows:
Amount
Obligated Total Actual
Amount (or otherwise) Cost/Depreciated
Paid To Be Paid Actual Cost
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Shipyard Price $11,815,167 $40,006,036
Owner Furnished Items 14,737,980
Design, Engineering
& Inspection 3,496,181
Changes and Extras 9,871,500
Net Interest During
Construction 85,208
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Total Actual Cost $40,006,036 $40,006,036
Less Depreciation
to March 28, 1996: $ 1,909,603
Total Depreciation $ 1,909,603
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Total Depreciated Actual Cost $38,096,433
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