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EXHIBIT 4.(ii)(d)(11)
Contract No. MA-13068
AMENDMENT TO
COMMITMENT TO GUARANTEE OBLIGATIONS
BY
THE UNITED STATES OF AMERICA
UNDER TITLE XI
OF THE MERCHANT MARINE ACT, 1936, AS AMENDED
ACCEPTED BY
GREAT INDEPENDENCE SHIP CO.
Dated as of March 28, 1996
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AMENDMENT TO
COMMITMENT TO GUARANTEE OBLIGATIONS
by
THE UNITED STATES OF AMERICA
Accepted by
GREAT INDEPENDENCE SHIP CO.
Shipowner
___________________
THIS AMENDMENT TO COMMITMENT TO GUARANTEE OBLIGATIONS, dated as of
March 28, 1996 (the "Guarantee Commitment"), made and entered into by the
UNITED STATES OF AMERICA (the "United States"), represented by the SECRETARY OF
TRANSPORTATION, acting by and through the MARITIME ADMINISTRATOR (the
"Secretary"), and accepted on said date by GREAT INDEPENDENCE SHIP CO., a
Delaware corporation (the "Shipowner").
RECITALS:
A. The Shipowner is the sole owner of the INDEPENDENCE, which is
more fully described in Table A hereto (the "Vessel"), which was
reconditioned/reconstructed pursuant to certain construction contracts (the
"Construction Contracts") with Newport News Shipbuilding and Drydock Company
("Newport News") and Hopeman Brothers, Inc. (collectively, the "Shipyards").
B. 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 15, 1996, the parties to the Litigation reached a settlement and
the Secretary has approved additional Actual Costs relating to the Vessel.
C. On December 7, 1995, the Secretary made and entered, and the
Shipowner accepted, a Commitment to Guarantee Obligations (the "Original
Commitment") wherein the Secretary committed to guarantee the United States
Government Guaranteed Ship Financing Obligations, Independence Series A (the
"Original Obligations"). The Original Obligations, in the aggregate principal
amount of $26,429,000, were issued by the Shipowner on December 7, 1995. The
Secretary, in a
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letter to the Shipowner dated November 17, 1995, committed to guarantee
additional obligations which will be designated United States Government
Guaranteed Ship Financing Obligations, Independence Series B (the "Additional
Obligations"), provided that the Secretary determine that the costs related to
such Additional Obligations are eligible, fair and reasonable pursuant to Title
XI (as hereinafter defined). Settlement of the Litigation has enabled the
Secretary to make such determination.
D. The Shipowner has issued the Original Obligations and will
issue the Additional Obligations to aid in financing the reconditioning and
reconstruction of the Vessel. To issue the Additional Obligations, the
Shipowner will borrow an aggregate principal amount which, when aggregated with
the Original Obligations, will approximately equal, but in no event will
exceed, 87 1/2% of the Depreciated Actual Cost of the
reconditioning/reconstruction, as of the Closing Date, of the Vessel. As used
herein, the "Closing Date" refers to the date for the execution and delivery of
the Additional Obligations as provided in the Purchase Agreement annexed
hereto, subject to the conditions contained in Article V hereof.
E. As one means of such financing, the Shipowner has entered into
a purchase agreement (the "Purchase Agreement") with the purchaser named
therein providing for the sale and delivery, on the Closing Date, of not in
excess of $6,903,000 aggregate principal amount of Additional Obligations
consisting of the Additional 2005 Notes and the Additional 2015 Bonds having
the maturity dates and interest rates set forth in the Purchase Agreement and
the Additional Obligations.
F. The Shipowner will, on the Closing Date, execute and deliver
Supplemental Indenture No. 1 ("Supplemental Indenture No. 1"), between the
Shipowner and The Bank of New York, as Indenture Trustee (the "Indenture
Trustee"), in connection with the Additional Obligations to be issued in
respect of the Vessel, in the aggregate amount, with the maturities and bearing
interest at the rates specified in Supplemental Indenture No. 1.
G. Under the Secretary's Determination (the "Secretary's
Determination"), to be entered into on the Closing Date between the Secretary
and the Indenture Trustee, the Indenture Trustee will be authorized to endorse
and execute, by means of facsimile signature of the Secretary and the facsimile
seal of the Department of Transportation, on each of the Additional Obligations
issued and to authenticate a guarantee by the Secretary of the payment in full
of all the unpaid interest on, and the unpaid balance of the principal of, each
Additional Obligation, including interest accruing between the date of default
under such Obligation and the date of payment by the Secretary (individually, a
"Guarantee" and, collectively, the "Guarantees").
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H. The Shipowner, as security for the Guarantees, and as security
to the Secretary for the payment to the Secretary of the principal of, and the
interest due or to become due on, the Endorsement to the Secretary's Note in
accordance with the terms thereof, will, on the Closing Date, enter into an
Amendment Number 1 to Security Agreement with the Secretary ("Amendment Number
1 to Security Agreement"), Contract No. MA-13070.
I. The Shipowner will as further security to the Secretary,
execute and deliver on the Closing Date, Supplement Number 1 to First Preferred
Ship Mortgage, Contract MA-13071.
W I T N E S S E T H:
That under the provisions of Title XI of the Merchant Marine Act,
1936, as amended and in effect on the date hereof (said provisions, as so
amended and in effect on the date hereof, being called "Title XI") and in
consideration of (i) the covenants of the Shipowner contained herein, (ii) the
payment by the Shipowner to the Secretary of the charges for this Guarantee
Commitment pursuant to Section 1104(f) of Title XI and (iii) other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Secretary hereby commits itself as herein provided.
Amendment Number 1 to Security Agreement has been executed and is
annexed to each counterpart of this Guarantee Commitment.
Annexed to each counterpart of this Guarantee Commitment are forms of
the Purchase Agreement, Supplemental Indenture No. 1, the Additional
Obligations, the Secretary's Determination, Supplement Number 1 to the Mortgage
and the Endorsement to the Secretary's Note.
A Consent of Shipyard from Newport News will be requested to be
executed and delivered and the Purchase Agreement, Supplemental Indenture No.
1, the Additional Obligations, the Secretary's Determination, Supplement Number
1 to Mortgage and the Endorsement to the Secretary's Note (except as otherwise
required by the Secretary), shall be executed and delivered on or before the
date hereof, substantially in the respective forms annexed hereto, except that
the blanks therein, if any, shall be filled in as contemplated therein and
herein and, except further that the maturity dates and interest rates of the
Additional Obligations must be further approved by the Secretary.
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ARTICLE I
Findings and Determinations of Secretary
Pursuant to Section 1104(d) of Title XI, the Secretary has found that
the property or project with respect to which the Additional Obligations will
be executed will be, in his opinion, economically sound.
Pursuant to Sections 1101(f), 1101(g) and 1104(b)(2) of Title XI, the
Secretary has determined that the Actual Cost of the
reconditioning/reconstruction of the Vessel is $40,006,036 and the Depreciated
Actual Cost of reconditioning/reconstruction of the Vessel is $38,096,433. The
Depreciated Actual Cost of the reconditioning/reconstruction for the Vessel is
comprised of the amounts determined by the Secretary set forth in Table A
annexed hereto, and the Secretary has determined that the amounts set forth in
said Table A are itemized as also set forth therein. The Secretary may, at the
request of the Shipowner, make a redetermination of the Actual Cost and the
Depreciated Actual Cost of the reconditioning/reconstruction of the Vessel to
include, in addition to the items set forth or referred to in said Table A, any
other items or any increase in the amounts of the items set forth or referred
to therein.
On the Closing Date, the aggregate principal amount of the Obligations
will not exceed 87 1/2% of the Depreciated Actual Cost as of the Closing Date.
Pursuant to Section 1104(b)(3) and 1104(b)(5) of Title XI, respectively,
the Secretary has determined that the maturity dates of the Additional
Obligations are satisfactory and that the interest rates to be borne by the
Additional Obligations (exclusive of the charges for the Guarantee Fee and
service charges, if any) to be issued on the Closing Date are reasonable,
taking into account the range of interest rates prevailing in the private
market for similar loans and risks assumed by the Secretary.
Pursuant to Section 1104(b)(4) of Title XI, the Secretary has
determined that payments of principal required by the Additional Obligations
are satisfactory.
ARTICLE II
Commitment to Guarantee Additional Obligations
The United States, represented by the Secretary, HEREBY COMMITS ITSELF
TO GUARANTEE (as provided in the Additional Obligations) the payment of the
unpaid interest on, and the unpaid balance of the principal of, the Additional
Obligations, including interest accruing between the date of default under the
Additional Obligations and the payment in full of the Guarantees, and, to
effect this Guarantee Commitment,
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hereby commits itself to execute and deliver the Secretary's Determination,
Amendment Number 1 to Security Agreement and Supplement Number 1 to the
Mortgage on the Closing Date.
ARTICLE III
The Additional Obligations
The Additional Obligations shall be as provided in the Supplemental
Indenture and in the forms of the Additional Obligations annexed as Exhibits
2(a) and (b) to Supplemental Indenture No. 1. The Additional Obligations shall
be subject to all of the terms and conditions set forth in Supplemental
Indenture No. 1 and in the forms thereof. Supplemental Indenture No. 1, the
Additional Obligations, Amendment Number 1 to Security Agreement, the
Endorsement to the Secretary's Note and Supplement Number 1 to the Mortgage
shall be executed and delivered by the Shipowner on the Closing Date. The
forms of the Purchase Agreement, Supplemental Indenture No. 1, the Additional
Obligations, the Secretary's Determination, Amendment No. 1 to Authorization
Agreement, Amendment Number 1 to Security Agreement, Supplement Number 1 to the
Mortgage and the Endorsement to the Secretary's Note are hereby approved by the
Secretary.
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ARTICLE IV
Covenants of the Shipowner
The Shipowner represents and, until termination of this Guarantee
Commitment, agrees:
(a) that the Vessel has been reconditioned/reconstructed
substantially in accordance with the plans and specifications, as applicable,
pursuant to the Construction Contracts in a shipyard within the United States
approved by the Secretary and has been, shall remain, and on the Closing Date
will be documented under the laws of the United States;
(b) to furnish to the Secretary, promptly upon written
request, such reasonable, material and pertinent reports, evidence, proof or
information, in addition to that furnished pursuant to the further provisions
of this Guarantee Commitment or in the application for this Guarantee
Commitment under Title XI or otherwise available to the Secretary, as the
Secretary may reasonably deem necessary or appropriate in connection with the
performance by the Secretary of his duties and functions under the Act;
(c) to maintain records of all amounts paid or
obligated to be paid by or for the account of the Shipowner for the
reconditioning/reconstruction of the Vessel;
(d) to permit the Secretary, promptly upon request, to make
such reasonable, material and pertinent examination and audit of the
Shipowner's books, records and accounts and to take such information therefrom
and make such transcripts or copies thereof, as the Secretary may reasonably
deem necessary or appropriate in connection with the performance by the
Secretary of his duties and functions under the Act;
(e) to maintain its United States citizenship within the
meaning of Section 2 of the Shipping Act, 1916, as amended, for the purpose of
operation of the Vessel in the trade or trades in which the Shipowner proposes
to operate the Vessel, to the satisfaction of the Secretary and, at the time of
the execution and delivery of the Secretary's Determination, to submit to the
Secretary such supplemental proof of citizenship as the Secretary may deem
appropriate to evidence the continued United States citizenship of the
Shipowner for said purpose; and
(f) to execute and deliver, on the Closing Date, the Purchase
Agreement, the Additional Obligations, Amendment Number 1 to Security
Agreement, the Supplemental Indenture, the Endorsement to the Secretary's Note
and Supplement Number 1 to the Mortgage.
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ARTICLE V
Conditions to Execution and Delivery of the
Secretary's Determination and Amendment Number 1
to Security Agreement
On the Closing Date, the Secretary's Determination shall be executed and
delivered by the United States and the Indenture Trustee; Amendment Number 1 to
Security Agreement and Supplement Number 1 to the Mortgage shall be executed
and delivered by the Shipowner and the Secretary; Supplemental Indenture No. 1
shall be executed and delivered by the Shipowner and the Indenture Trustee; the
Endorsement to the Secretary's Note shall be executed and delivered and the
Additional Obligations shall be issued and delivered by the Shipowner; and the
Purchase Agreement shall be executed and delivered by the Shipowner and the
purchaser of the Additional Obligations. The obligation of the United States
represented by the Secretary to execute and deliver the Secretary's
Determination, Amendment No. 1 to Authorization Agreement, Amendment Number 1
to Security Agreement and Supplement Number 1 to the Mortgage on the Closing
Date shall be subject to the following conditions unless waived in writing by
the Secretary:
(a) the Closing Date shall occur prior to May 30, 1996, unless
otherwise extended by the Secretary;
(b) on the Closing Date, the Vessel shall be free of any
claim, lien, charge, mortgage or other encumbrance of any character (except the
Mortgage, the Security Agreement, and liens otherwise permitted by Section 2.04
of Exhibit 1 to the Security Agreement); and the Purchase Agreement shall have
been executed and delivered on or prior to the Closing Date and Supplemental
Indenture No. 1 and the Additional Obligations shall have been duly executed
and delivered on the Closing Date;
(c) on the Closing Date, the Shipowner shall be a citizen of the
United States within the meaning of Section 2 of the Shipping Act 1916, as
amended, and shall have furnished to the Secretary affidavits setting forth
data showing such citizenship to the Secretary's satisfaction at least 20 days
prior to the Closing Date and shall have submitted pro forma affidavits at
least ten days prior to the Closing Date;
(d) on the Closing Date (i) there shall have been delivered to the
Secretary one executed counterpart and three copies of the Purchase Agreement,
and two executed counterparts of the Supplemental Indenture; (ii) two specimen
copies of the Additional Obligations issued under the Indenture; and (iii) two
copies of all other documents delivered by the Shipowner or the Indenture
Trustee on the Closing Date;
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(e) the following representations and warranties shall have been made
to the Secretary in writing and shall be true as of the Closing Date:
(i) the Shipowner is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware, has not failed to qualify to do business in any
jurisdiction in the United States in which its business or
properties require such qualification, and had and has full
legal right, corporate power and authority to own its own
properties and assets and conduct its business as it is
presently conducted;
(ii) the Shipowner had and has legal power and authority to
enter into and carry out the terms of this Guarantee
Commitment, the Purchase Agreement, the Additional
Obligations, Supplemental Indenture No. 1, Amendment Number 1
to Security Agreement, the Endorsement to Secretary's Note and
Supplement Number 1 to the Mortgage;
(iii) each and all of the documents and instruments referred
to in clause (ii) hereof have been duly authorized, executed
and delivered by the Shipowner and constitute, in accordance
with their respective terms, legal, valid and binding
instruments enforceable against the Shipowner;
(iv) the consummation of the transactions contemplated by and
compliance by the Shipowner of all the terms and provisions of
the documents and instruments referred to in clause (ii)
hereof will not violate any provisions of the Certificate of
Incorporation or By-laws of the Shipowner and will not result
in a breach of the terms and provisions of, or constitute a
default under any other agreement or undertaking by the
Shipowner or by which the Shipowner is bound or any order of
any court or administrative agency entered in any proceedings
to which the Shipowner is or has been a party;
(v) the Offering Circular, containing a description of the
Additional Obligations (the "Offering Circular"), of which the
Secretary shall have received a conformed copy, does not
contain any untrue statements or omit to state a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and
(vi) there is no litigation, proceeding or investigation
pending or, to the best of the Shipowner's knowledge,
threatened, involving the Shipowner or any of its property
which could prevent or jeopardize the performance
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by the Shipowner of the documents and instruments referred to
in clause (ii) hereof.
(f) there shall have been delivered to the Secretary a copy of each
document and legal opinion delivered to the purchaser of the Additional
Obligations on the Closing Date;
(g) the Secretary shall have received the initial Guarantee Fee
payable under the Security Agreement;
(h) all charges levied or assessed by the Secretary under Section
1104(f) of Title XI shall have been paid by the Shipowner;
(i) the Shipowner shall have performed without material breach its
agreements under Article IV hereof, and the further terms, conditions and
provisions of this Guarantee Commitment shall have been complied with in all
material respects;
(j) there shall not have occurred any event which constitutes (or
after any period of time or any notice, or both, would constitute) a "Default"
under the Security Agreement;
(k) there shall have been executed and delivered to the Secretary an
opinion of counsel to the effect stated in the form annexed hereto as Schedule
One;
(l) the Secretary shall have received a letter agreement from the
Shipowner to provide the Secretary within a reasonable time after the Closing
Date, with six conformed copies of the Guarantee Commitment and each of the
Appendices and Exhibits thereto executed on or prior to such date;
(m) the Secretary shall have received satisfactory evidence that the
Vessel is in class according to the standards of the American Bureau of
Shipping and that the Vessel has a current certificate of inspection issued by
the U.S. Coast Guard;
(n) on the Closing Date, the Shipowner shall certify that all
non-Title XI loans to the Shipowner relating to the Vessel have been
discharged; and
(o) at least ten days prior to the Closing Date the Shipowner shall
have provided the Secretary with satisfactory evidence of marine insurance as
required by the Security Agreement.
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ARTICLE VI
Variation of Guarantee Commitment
No variation from the terms and conditions hereof shall be permitted
except pursuant to an amendment executed by the Secretary and accepted by the
Shipowner.
ARTICLE VII
Termination or Assignment of Guarantee Commitment
This Guarantee Commitment may terminate and the parties hereto shall have
no further rights or obligations hereunder, upon written notice by the
Secretary, after the earlier of (a) the termination of the obligations of the
United States pursuant to the Shipowner's failure to satisfy one or more
conditions set forth in Article V hereof or (b) the execution and delivery of
Amendment Number 1 to the Security Agreement and the Secretary's Determination.
This Guarantee Commitment may not be assigned by the Shipowner without the
prior written approval of the Secretary and any attempt to do so shall be null
and void ab initio.
ARTICLE VIII
Conformity with Regulations
The Secretary hereby affirms that, with respect to the rights of the
Indenture Trustee and the Holders of the Additional Obligations, this Guarantee
Commitment conforms to its existing regulations governing the issuance of
commitments to guarantee and guarantees under Title XI of the Act and that this
Guarantee Commitment contains a complete list of conditions required for the
execution and delivery of the Guarantees.
ARTICLE IX
Miscellaneous
(a) The table of contents and the titles of the Articles are inserted
as a matter of convenient reference and shall not be construed as a part of
this Guarantee Commitment. This Guarantee Commitment may be executed in any
number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
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(b) For all purposes of this Guarantee Commitment, unless otherwise
expressly provided or unless the context shall otherwise require:
(i) The terms "hereof", "herein", "hereby", "hereto",
"hereunder", "hereinafter" and "herewith" refer to this Guarantee
Commitment as the same may be supplemented or amended as herein
provided;
(ii) Terms defined in Schedule X of the Security Agreement
as amended by Amendment Number 1 to Security Agreement annexed hereto
or by reference therein to other instruments shall have the respective
meanings stated in Schedule X, as amended, or such other instruments;
and
(iii) 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.
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IN WITNESS WHEREOF, this Commitment to Guarantee Obligations has been
executed by the United States and accepted by the Shipowner, all as of the day
and year first above written.
UNITED STATES OF AMERICA,
SECRETARY OF TRANSPORTATION
BY: MARITIME ADMINISTRATION
(SEAL)
BY: /s/ Joel C. Richard
__________________________
Secretary
Maritime Administration
Attest:
/s/ Sarah J. Johnson
_______________________
Assistant Secretary
Maritime Administration
ACCEPTED BY:
GREAT INDEPENDENCE SHIP CO.
as Shipowner
BY: /s/ Jordan B. Allen
_______________________
Vice President
Attest:
BY: /s/ Robin Mariella
______________________
Assistant Secretary
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TABLE A
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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