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4.(ii)(d)(12)
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GREAT INDEPENDENCE SHIP CO.
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United States Government Guaranteed
Ship Financing Obligations, Independence Series B
Floating Rate Notes Due December 7, 2005
7.46% Sinking Fund Bonds Due December 7, 2015
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PURCHASE AGREEMENT
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Dated as of March 28, 1996
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GREAT INDEPENDENCE SHIP CO.
$6,903,000
UNITED STATES GOVERNMENT GUARANTEED
SHIP FINANCING OBLIGATIONS, INDEPENDENCE SERIES B
CONSISTING OF
$3,363,000 FLOATING RATE NOTES DUE DECEMBER 7, 2005
$3,540,000 7.46% SINKING FUND BONDS DUE DECEMBER 7, 2015
PURCHASE AGREEMENT
Chemical Securities Inc.
270 Park Avenue
New York, New York 10017-2070
March 28, 1996
Dear Sirs:
The undersigned, Great Independence Ship Co., a Delaware corporation
(the "Shipowner"), hereby agrees with you (the "Purchaser") as follows:
1. The Obligations. The United States Government Guaranteed Ship
Financing Obligations, Independence Series B, consisting of $3,363,000
principal amount of Floating Rate Notes due December 7, 2005 (the "Additional
2005 Notes") and $3,540,000 principal amount of 7.46% Sinking Fund Bonds due
December 7, 2015 (the "Additional 2015 Bonds", and together with the Additional
2005 Notes, collectively the "Obligations") are proposed to be issued and sold
by the Shipowner upon fulfillment of the terms and conditions set forth herein.
The Obligations will be issued and sold to aid in the financing of the
reconstruction of the passenger cruise vessel named INDEPENDENCE (the
"Vessel"). The Obligations will be in fully registered form only and will bear
interest from the date of issuance, in the case of the Additional 2005 Notes at
a variable rate determined by reference to the London interbank offered rate
for six (6) month Eurodollar deposits plus 0.27% (but not to exceed 11.70% per
annum) and in the case of the Additional 2015 Bonds, at the rate per annum set
forth above, all payable semi-annually, on
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June 7 and December 7 of each year until maturity, commencing December 7, 1996.
The Obligations will be issued under the Trust Indenture dated as of
December 7, 1995, as supplemented by Supplemental Indenture No. 1 dated the
date hereof and as may be further amended from time to time (as supplemented,
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
Obligations will be fully and unconditionally guaranteed by the United States
of America pursuant to the guarantee imprinted on each of the Obligations (the
"Guarantee" or, collectively, the "Guarantees") under Title XI ("Title XI") of
the Merchant Marine Act, 1936 (the "Act"), as amended and in effect on December
7, 1995, issued by the United States of America and accepted by the Shipowner.
The aggregate principal amount of Obligations, together with any obligations
issued by the Shipowner on December 7, 1995 and designated as United States
Government Guaranteed Ship Financing Obligations, Independence Series A (the
"Original Obligations"), shall not exceed the aggregate principal amount of
obligations eligible for the Guarantees, as determined by the Secretary of
Transportation, acting by and through the Maritime Administrator (the
"Secretary"). The Guarantees will be endorsed on the Obligations by the
Indenture Trustee on behalf of the United States of America pursuant to the
authorization contained in the Authorization Agreement, dated as of December 7,
1995, as amended by Amendment No. 1 to Authorization Agreement dated the date
hereof, by the Secretary's Determination dated the date hereof, and as may be
further amended from time to time (as amended, the "Authorization Agreement")
between the United States of America and the Indenture Trustee.
Title XI provides that the full faith and credit of the United States
of America is pledged to the payment of the Guarantees; that the Guarantees are
conclusive evidence of the eligibility of the Obligations for such Guarantees
and that the Secretary must find, prior to entering into a commitment to
guarantee obligations, that the property or project financed by the Obligations
will be, in his opinion, economically sound. Title XI also provides that the
Secretary, prior to guaranteeing the Obligations, must approve the Shipowner as
being responsible
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and possessing the ability, experience, financial resources, and other
qualifications necessary for the adequate operation and maintenance of the
Vessel. Accordingly, it is understood that the Purchaser will not examine or
review independently the financial condition (including the financial
statements) of the Shipowner and will rely completely on the Secretary's
determination regarding such financial matters. In regard to the sufficiency
of instruments (other than the Authorization Agreement, the Indenture, the
Guarantees and the Obligations), documents (other than those addressed to the
Purchaser or required by the Purchaser pursuant to the terms of this Agreement)
and other formalities of the closing, it is further understood that the
Purchaser will rely on the Secretary's determination that the same are
sufficient for the Secretary to execute the Guarantees.
The Obligations, the Indenture, the Guarantees and the Authorization
Agreement shall conform in all material respects to the descriptions thereof
contained in the Offering Circular dated March 22, 1996 (the "Offering
Circular"), with such changes as may be approved by the Purchaser or its
special counsel.
2. Agreement to Purchase.
(A) Subject to the conditions hereinafter set forth, the
Shipowner agrees to sell to the Purchaser, and subject to the terms and
conditions hereof and in reliance on the representations and warranties of the
Shipowner contained herein, the Purchaser agrees to purchase from the Shipowner
on the Closing Date (as hereinafter defined) the Obligations (subject to
adjustment as set forth in Section 8 hereof) at 100% of such principal amount
thereof.
(B) It is understood that the Purchaser may sell, in
whole or in part, the Obligations acquired by it to one or more other
purchasers (each an "Ultimate Purchaser") as part of the direct placement
contemplated by the Offering Circular. Each such Ultimate Purchaser shall be
entitled to rely on the representations, warranties, and agreements of the
Shipowner set forth in Section 4 hereof and all of the provisions contained in
Section 7 hereof shall inure to the benefit of such Ultimate Purchaser.
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3. Closing. Delivery of the Obligations and payment therefor
shall be made at the office of Preston Gates Ellis & Rouvelas Meeds, 1735 New
York Avenue, N.W., Suite 500, Washington, D.C. 20006-4759, at a closing
commencing at 9:00 a.m., Eastern time, on March 28, 1996 (the "Closing Date",
which term includes any later date permitted hereby) or such other place or
such later business day (which, without the approval of the Purchaser shall not
be later than April 4, 1996) as the Shipowner shall designate by at least 3
days' prior written notice to the Indenture Trustee and to the Purchaser.
Delivery of the Obligations shall be made against payment by the Purchaser in
immediately available funds to the Shipowner, in Washington, D.C. or New York,
New York, as specified by the Shipowner in an amount equal to the principal
amount of Obligations to be delivered to the Purchaser on the Closing Date.
The Obligations shall be typewritten or printed, authenticated by the Indenture
Trustee, guaranteed by the United States of America and registered in such
names and issued in such denominations (of $1,000 and any multiple thereof) as
the Purchaser may request in writing to the Shipowner not less than three (3)
business days before the Closing Date. If no such request is received, a
single Obligation of each maturity dated the Closing Date, authenticated by the
Indenture Trustee, guaranteed by the United States of America, and registered
in the Purchaser's name and issued in a denomination equal to the principal
amount of each maturity of Obligations to be purchased by the Purchaser, will
be delivered to 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 New York.
4. Representations and Warranties by the Shipowner. The
Shipowner represents and warrants to the Purchaser that:
(A) The Shipowner is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
has been duly qualified to do business in, and is in good standing as a foreign
corporation in each jurisdiction in which the conduct of its business or the
ownership of its properties requires it to be so qualified, has full power,
authority and legal right to own its properties and conduct its
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business as it is presently conducted, and is a "citizen of the United States"
within the meaning of Section 2 of the Shipping Act, 1916, as amended, for the
purpose of operating the Vessel in the trades or manner in which the Shipowner
proposes to operate the Vessel.
(B) The consummation of the transactions contemplated by,
and compliance with the terms and provisions of, this Agreement, the Indenture
and the Obligations and any other documents and instruments referred to in any
of the foregoing will not result in a breach of any terms or provisions of, or
constitute a default under or conflict with or violate any existing indenture,
contract, agreement or undertaking of the Shipowner or by which the Shipowner
is bound or the Certificate of Incorporation or the By-laws of the Shipowner or
any applicable law, statute, decree, order, rule, judgment or regulation of any
court, regulatory body or administrative agency binding on the Shipowner.
(C) All authorizations, approvals, orders, registrations
or filings from or with any governmental or public regulatory body or authority
(other than those required under state securities or "blue sky" laws) required
for the execution, delivery and performance of this Agreement, the Indenture
and the Obligations and for the issuance and sale by the Shipowner of the
Obligations to the Purchaser, have been duly obtained or made, or duly applied
for and are, or on the Closing Date will be, in full force and effect, and if
such further authorizations, approvals, orders, registrations or filings should
hereafter become necessary, the Shipowner will obtain or make all such
authorizations, approvals, orders, registrations or filings.
(D) This Agreement has been duly authorized, executed and
delivered by the Shipowner and constitutes, in accordance with its 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 Closing Date, the Indenture and the
Obligations will have been duly authorized, executed and delivered by the
Shipowner and will constitute, in accordance with their respective terms,
legal, valid and binding instruments enforceable against the Shipowner, except
as limited by
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bankruptcy, insolvency, or other laws affecting the enforcement of creditors'
rights generally, and the Obligations will be entitled to the benefits of the
Indenture, the Guarantees and the Authorization Agreement.
(E) The Shipowner has full power, authority and legal
right (i) to execute and deliver this Agreement, the Indenture and the
Obligations, (ii) to perform and observe the terms and provisions of each of
said documents to be performed or observed by it, (iii) to consummate the
transactions contemplated thereby and (iv) to own its properties (including,
without limitation, the Vessel) and conduct its business as presently
conducted.
(F) No part of the proceeds of sale of the Obligations
will be used by the Shipowner, directly or indirectly, for the purpose of
purchasing or carrying any margin security within the meaning of Regulation G
(12 C.F.R. Part 207) of the Board of Governors of the Federal Reserve System.
(G) 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 properties which could, if adversely determined,
materially and adversely affect the issuance and sale to the Purchaser or the
validity of the Obligations and the Guarantees or the performance by the
Shipowner of its obligations under this Agreement, the Indenture or the
Obligations.
(H) All federal taxes or taxes assessed by any State or
any political subdivision thereof payable by the Shipowner in connection with
the issuance of the Obligations, the delivery of the Obligations to the
Purchaser, or the execution and delivery of this Agreement or the Indenture by
the Shipowner have been paid or no such taxes are payable.
(I) The Offering Circular, copies of which have
heretofore been furnished to the Purchaser, is and as of the Closing Date will
be true and correct in all material respects and does not, and as of the
Closing Date will not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
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5. 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 (including disbursements) in connection with the
transactions contemplated hereby and in connection with any future
modifications requested by the Shipowner of this Agreement, the Obligations 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) of preparing any future modification
requested by the Shipowner of this Agreement, the Obligations or the Indenture
or any waiver or consent under or in respect of any thereof, and of all
certificates on behalf of the Shipowner, (iv) for payment of necessary stamp
and other taxes, if any, in connection with the original issuance of the
Obligations (the Shipowner hereby agrees to hold the Purchaser harmless in
respect thereof, such agreement to survive any disposition or payment of the
Obligations), (v) of the Indenture Trustee, (vi) of the Purchaser, as agreed
between such firm and the Shipowner in connection with the sale of the
Obligations and (vii) otherwise relating to the issuance and delivery of the
Obligations. If the transactions contemplated hereby are consummated, the
Shipowner agrees to pay to the Purchaser as the exclusive agent of the
Shipowner for arranging for the sale of the Obligations, the fee agreed upon by
the Purchaser and the Shipowner. In the event that for any reason the
transactions contemplated hereby are not consummated, the Purchaser shall not
be entitled to such fees, but the Shipowner shall reimburse it for its
reasonable costs and expenses. In the event that the Purchaser's funds shall
have been forwarded for delivery on a proposed Closing Date and the Obligations
are not delivered on such Closing Date because of nonfulfillment of the
conditions set forth in Section 6, or because of the Shipowner's failure to
comply on or before such Closing Date with the conditions precedent set forth
herein, provided that such nonfulfillment and failure is not caused by a breach
of any of the obligations of the Purchaser under this
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Agreement, the Shipowner agrees to pay interest on such funds at the rate to be
borne by the Obligations to be purchased by the Purchaser for the period from
the proposed Closing Date to the date on which such funds are returned to the
Purchaser or the date on which the Obligations are actually issued, whichever
first occurs.
6. Conditions to Purchaser's Obligations. The Purchaser's
obligation under this Agreement to purchase Obligations on the Closing Date is
subject to the accuracy of and compliance with the representations and
warranties of the Shipowner contained in Section 4 hereof on and as of the date
hereof and on and as of the Closing Date and to the following further
conditions:
(A) Opinion of Counsel for the Shipowner. The Shipowner
shall have furnished to the Purchaser the opinion or opinions, addressed to the
Purchaser and the Indenture Trustee and dated the Closing Date of Rosenberg &
Liebentritt, P.C., general counsel for the Shipowner, which opinion or opinions
shall be satisfactory in form and substance to the Purchaser, to the effect
that:
(1) The Shipowner is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Delaware, has been duly qualified to do business in
and is in good standing in each jurisdiction in which a
failure to do so would materially and adversely affect this
transaction and has full power, authority and legal right to
own its properties and conduct its business as it is presently
conducted.
(2) The Shipowner has full corporate power, authority and
legal right to issue and sell the Obligations to the
Purchaser, and to enter into and carry out the terms of this
Agreement, the Indenture and the Obligations.
(3) The Shipowner has duly authorized distribution of the
Offering Circular to prospective purchasers of the
Obligations. This Agreement, the Indenture and the
Obligations (a) have each been duly authorized by the
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Shipowner and duly executed and delivered by an officer of the
Shipowner authorized to execute and deliver such agreements
and instruments on behalf of the Shipowner, (b) constitute,
in accordance with their respective terms, legal, valid and
binding instruments enforceable against the Shipowner, and (c)
in the case of the Obligations, have been duly authenticated
by the Indenture Trustee and are entitled to the benefits of
the Indenture, the Authorization Agreement and the Guarantees.
(4) The execution, delivery and performance by the
Shipowner of the agreements and instruments referred to in
clause (3) hereof do not contravene any provision of the
Certificate of Incorporation or By-laws of the Shipowner or
any provision of any existing law, statute, decree, order,
judgment, rule or regulation applicable to the Shipowner or
result in any violation of, or default under, any existing
indenture, contract, agreement or other instrument known to
such counsel to be binding on the Shipowner.
(5) No approval, consent, order or authorization of, or
registration with, or notice to any governmental or public
body or authority is required to be obtained, effected or
given by the Shipowner in connection with the execution or
delivery of, or the performance by the Shipowner of the
agreements or instruments referred to in clause (3) hereof
(except such approvals, consents, orders or authorizations
as shall have been duly obtained, effected or given and are in
full force and effect).
(6) The Shipowner is a "citizen of the United States"
within the meaning of Section 2 of the Shipping Act, 1916, as
amended, for the purpose of operating the Vessel in the trades
or manner in which the Shipowner proposes to operate the
Vessel.
(7) To the best of such counsel's knowledge, there is no
action, suit, proceeding or investigation pending or
threatened, before any court, administrative agency,
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arbitrator or governmental body against, or which relates to,
the Shipowner which could, if adversely determined, prevent or
materially and adversely affect the performance by the
Shipowner of any of the agreements or instruments referred to
in clause (3) hereof.
(8) No federal taxes or taxes assessed by any State or
any political subdivision thereof are or will be payable by
the Shipowner in connection with the issuance of the
Obligations, the delivery of the Obligations to the Purchaser,
or the execution and delivery of this Agreement or the
Indenture by the Shipowner.
(9) The Obligations, as guaranteed, and the Guarantees
constitute exempted securities under Section 3(a)(2) of the
Securities Act of 1933, as amended, and, accordingly, it is
not necessary to register the Obligations or the Guarantees
under said Securities Act or to qualify the Indenture under
the Trust Indenture Act of 1939, as amended, either for the
purpose of the sale of such Obligations to the Purchaser or,
as such laws are now in effect, for the purpose of resale of
such Obligations by the Purchaser.
(10) The Guarantees and the Authorization Agreement have
been duly authorized, executed and delivered by the United
States of America pursuant to Title XI and constitute legal,
valid and binding obligations of the United States of America
enforceable in accordance with their respective terms.
(11) The descriptions in the Offering Circular of
statutes, the Indenture, the Guarantees and the Obligations
are accurate and fairly summarize the principal terms of such
statutes and documents.
(12) Such other matters as the Purchaser or its special
counsel may reasonably request.
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(B) Opinion of the Chief Counsel of the Maritime
Administration. The Purchaser shall have received a reproduction copy of the
opinion of the Chief Counsel of the Maritime Administration dated the Closing
Date, signed by or on behalf of such Chief Counsel, addressed to the Purchaser
and the Indenture Trustee, executed copies of which will be delivered to the
Indenture Trustee and the Purchaser's special counsel, 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 legal, valid and
binding obligations of the United States of America, enforceable in accordance
with their respective terms.
(C) Opinion of Special Counsel for the Purchaser. All
corporate proceedings and other legal matters incident to the sale of the
Obligations shall be satisfactory in form and substance to Thompson & Mitchell,
special counsel for the Purchaser, and the Purchaser shall have received the
opinion, addressed to the Purchaser and dated the Closing Date of such special
counsel to the effect that:
(1) The Shipowner has full corporate power, authority and
legal right to issue and sell the Obligations to the Purchaser
and to enter into and carry out the terms of this Agreement,
the Indenture and the Obligations.
(2) This Agreement, the Indenture and the Obligations (a)
have each been duly authorized by the Shipowner and duly
executed and delivered by an officer of the Shipowner
authorized to execute and deliver such agreements and
instruments on behalf of the Shipowner, (b) constitute, in
accordance with their respective terms, legal, valid and
binding instruments enforceable against the Shipowner, and (c)
in the case of the Obligations, have been duly authenticated
by the Indenture Trustee and are entitled to the benefits of
the Indenture, the Authorization Agreement and the Guarantees.
(3) No approval, consent, order or authorization of, or
registration with, or notice to any governmental or public
body or authority is required to be obtained,
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effected or given by the Shipowner in connection with the
execution or delivery of, or the performance by the Shipowner
of the agreements or instruments referred to in clause 2
hereof (except such approvals, consents, orders or
authorizations as shall have been duly obtained, effected or
given and are in full force and effect).
(4) The Obligations, as guaranteed, and the Guarantees
constitute exempted securities under Section 3(a)(2) of the
Securities Act of 1933, as amended, and, accordingly, it is
not necessary to register the Obligations or the Guarantees
under said Securities Act or to qualify the Indenture under
the Trust Indenture Act of 1939, as amended, either for the
purpose of the sale of such Obligations to the Purchaser or,
as such laws are now in effect, for the purpose of resale of
such Obligations by the Purchaser.
(5) The Guarantees and the Authorization Agreement have
been duly authorized, executed and delivered by the United
States of America pursuant to Title XI and constitute legal,
valid and binding obligations of the United States of America
enforceable in accordance with their respective terms.
(6) The descriptions in the Offering Circular of
statutes, the Indenture, the Guarantees and the Obligations
are accurate and fairly summarize the principal terms of such
statutes and documents.
(D) Qualification of Opinions of Counsel. In rendering
the opinions required by paragraphs (A) and (C) above, general counsel for the
Shipowner and special counsel for the Purchaser, respectively, may (i) state
that the enforceability of the rights and remedies provided in any agreement or
instrument against any particular party is subject to any applicable
bankruptcy, reorganization, insolvency, moratorium or other similar laws of
general application relating to or affecting the enforcement of creditors'
rights from time to time in effect, (ii) state that the availability of the
remedy of specific performance or of injunctive relief or of any other
equitable
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remedy is subject to the discretion of the court before which any proceeding
therefor may be brought, (iii) state that no opinion whatsoever is expressed
with respect to the securities laws of any state in which the Obligations have
been offered or sold, (iv) assume, insofar as the opinion concerns the
legality, validity and binding effect of any agreement or instrument, that such
agreement or instrument constitutes a legal, valid and binding obligation of
the other parties purportedly obligated thereunder and (v) as to matters
covered by clause (3) of paragraph 6(A) and clause (2) of paragraph 6(C) above,
may rely upon certificates of officers of the Indenture Trustee delivered on
the Closing Date to the effect that the Obligations and the Guarantees have
been duly authenticated. Special counsel for the Purchaser may rely, as to
matters covered by clauses (1), (2) and (3) of paragraph 6(C) above, to the
extent the same relates to matters of state law (other than New York law), upon
the opinion of Rosenberg & Liebentritt, P.C., general counsel to the Shipowner.
General counsel for the Shipowner may also rely, as to matters covered by
clause (6) of paragraph 6(A) above, upon the opinion of Preston Gates Ellis &
Rouvelas Meeds and as to matters covered by clause (3) of paragraph 6(A) above
to the extent the same relates to matters of New York law, upon the opinion of
Thompson & Mitchell. In addition, general counsel for the Shipowner and
special counsel for the Purchaser, respectively, may rely, as to factual
matters, upon certificates of officers of the Shipowner satisfactory to said
counsel. In rendering the opinion required by paragraphs 6(A) and 6(C) above,
general counsel for the Shipowner and special counsel for the Purchaser,
respectively, may rely as to the matters covered by clause (10) of paragraph
6(A) and clause (5) of paragraph 6(C) above, with respect to the due
authorization, execution and delivery of the Authorization Agreement and the
Guarantees, upon the opinion of the Chief Counsel of the Maritime
Administration required by paragraph 6(B) above.
(E) Officer's Certificate. The Purchaser shall have
received a certificate dated the Closing Date signed by the President or a Vice
President of the Shipowner to the effect that (1) the Shipowner has performed
all agreements and satisfied all conditions on its part to be performed or
satisfied hereunder on or prior to the Closing Date, (2) the representations
and warranties of the Shipowner herein contained are true and correct
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in all material respects to the same extent as if made on and as of the Closing
Date, and (3) the conditions specified in paragraph 6(H) below have been
fulfilled.
(F) Indenture Trustee Certificate. The Purchaser shall
have received a certificate, satisfactory in form and substance to the
Purchaser, dated the Closing Date, signed by a Vice President or an Assistant
Vice President or a Senior Corporate Trust Officer of the Indenture Trustee, to
the effect that:
(i) the Indenture Trustee has full corporate
power, authority and legal right to act as Indenture Trustee
under the Indenture and to enter into and carry out the terms
of the Indenture and the Authorization Agreement;
(ii) the Indenture and the Authorization Agreement
have each been duly executed and delivered by a duly
authorized officer of the Indenture Trustee and constitute
legal, valid and binding obligations of the Indenture Trustee
in accordance with their respective terms, except as limited
by applicable bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting enforcement of
creditors' rights generally; and
(iii) the Obligations and the Guarantees endorsed
thereon have been duly authenticated by the Indenture Trustee
under the Indenture.
(G) Legality of Purchase. The purchase of the
Obligations by the Purchaser shall not be prohibited under the law of any
jurisdiction of the United States to which the Purchaser is subject on the
Closing Date.
(H) No Indenture Defaults. The terms of the Indenture
shall have been complied with by the Shipowner, and, as of the 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.
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(I) Execution of Documents. The Indenture and the
Authorization Agreement shall have been duly executed and delivered, the
Obligations shall have been duly executed, delivered and authenticated pursuant
to the Indenture and the Authorization Agreement, and the Guarantees shall have
been endorsed upon the Obligations and each shall be in full force and effect
and shall conform in all material respects to the descriptions thereof
contained in the Offering Circular (with such changes as shall have been
approved by the Purchaser or its special counsel).
(J) Miscellaneous. All agreements herein contained to be
performed on the part of the Shipowner at or prior to the Closing Date shall
have been performed.
If any of the conditions specified in this Section 6 shall not have
been fulfilled by the Shipowner when and as required by this Agreement to be
fulfilled, this Agreement and all of the Purchaser's obligations hereunder may
be cancelled on, or at any time prior to, the Closing Date by the Purchaser.
Notice of such cancellation shall be given to the Shipowner in writing, or by
telegraph or telephone confirmed in writing.
7. Home Office Payment. So long as any Purchaser or the Ultimate
Purchasers shall hold any of the Obligations in its or their names (or in the
name of its or their nominee, if such Purchaser or the Ultimate Purchasers
shall have given the Shipowner and the Indenture Trustee written notice as to
the name and address of each such nominee), the Shipowner will cause to be paid
to such Purchaser or the Ultimate Purchasers (or to such nominees) all amounts
due on such Obligations in accordance with all of the following:
(A) Interest on all such Obligations shall, except as
provided below, be paid by mailing a check to such Purchaser or the Ultimate
Purchasers (or such nominees) at the last address appearing on the Obligation
Register (as defined in the Indenture) (or at the address of such nominee
furnished in writing as aforesaid) or at such other address as from time to
time such Purchaser or the Ultimate Purchasers have theretofore furnished in
writing, without presentment of such Obligations;
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(B) Upon redemption in whole of any such Obligation and
upon the maturity of any such Obligation, the principal (and premium, if any)
and interest due thereon shall be paid to such Purchaser or the Ultimate
Purchasers (or such nominees) upon surrender of such Obligation, by mail or
other means to the Indenture Trustee at the office of the Indenture Trustee set
forth in the Special Provisions of the Indenture;
(C) Upon the redemption in part of any such Obligation,
pursuant to any of the terms of the Indenture, the principal (and premium, if
any) and interest due upon such redemption shall, except as provided below, be
paid to such Purchaser or the Ultimate Purchasers (or such nominees) at the
address referred to in paragraph (A) above, without presentment of such
Obligation; and
(D) Payments referred to in the preceding paragraphs (A)
and (C) shall be made by the Indenture Trustee or any Paying Agent for the
Obligations by mailing to such Purchaser or the Ultimate Purchasers (or such
nominees) a bank check payable in New York Clearing House funds, first class
postage prepaid, unless such Purchaser or the Ultimate Purchasers so request by
written notice received by the Indenture Trustee at least three business days
prior to any such date of payment (which notice shall be effective until
rescinded or changed by like notice) such payments shall be made to such
Purchaser or the Ultimate Purchaser (or such nominees), without presentment of
such Obligations in immediately available funds by transferring such amount by
wire to such other commercial bank in the United States as shall be specified
in such written notice for credit to an account maintained by such Purchaser or
the Ultimate Purchaser (or such nominees) with such bank. Prior to any sale,
assignment or transfer by such Purchaser or the Ultimate Purchasers (or any
such nominees) of any such Obligation in respect to which a principal payment
has been made in the manner provided in paragraph (C), such Purchaser or the
Ultimate Purchaser agree to either (i) cause a proper notation of all such
principal payments to be made on such Obligation or (ii) present such
Obligation to the Indenture Trustee so that it may make such notation.
The provisions of this Section 7 shall apply to the Purchaser, to any
of its affiliates to whom the Purchaser shall
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transfer all or any part of the Obligations, and to any subsequent transferee
of all or any part of the Obligations.
8. Adjustment of Commitments. In the event that the Secretary
determines, pursuant to Title XI, that the aggregate principal amount of
Obligations eligible for Guarantees under the Act is greater or less than
$6,903,000 on the Closing Date, the Shipowner may increase or decrease, as the
case may be, the total principal amount of Obligations to be issued by not more
than 10 percent. In such event, the Shipowner shall have given the Purchaser
written or telephonic notice no later than the third day preceding the Closing
Date, specifying the principal amount of the Obligations to be purchased by it
rounded down to the nearest $1,000.
9. Conditions of Shipowner's Obligations. The obligations of the
Shipowner to sell and deliver the Obligations under this Agreement on the
Closing Date are subject to all of the following conditions:
(A) On the Closing Date all the Obligations
to be delivered on said date by the Shipowner shall have simultaneously
been purchased by the Purchaser, subject of the provisions of Section 2(B)
hereof.
(B) On or before the Closing Date (i) the Secretary shall
have duly authorized the execution and delivery of the Guarantees of the
Obligations and shall have duly executed and delivered the Authorization
Agreement; and (ii) the Indenture Trustee shall have duly executed and
delivered the Indenture and the Authorization Agreement relating to the
Obligations.
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10. Indemnification.
(A) The Shipowner shall indemnify Chemical 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 a material fact contained in 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 10
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 10,
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 10
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, the Shipowner shall not be liable to CSI under this Section 10
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
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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 expense of such
separate counsel shall be paid by the Shipowner. The Shipowner shall not be
required to indemnify CSI under this Section 10 for any payment made to any
claimant in settlement of any suit or claim unless such payment is approved by
the Shipowner.
11. Free Exchange and Delivery of Obligations. Notwithstanding
anything in the Indenture to the contrary, the Shipowner will pay the costs of
all deliveries of Obligations from the Purchaser's home office to the Indenture
Trustee for any exchange provided for in Section 2.10 of Exhibit 1 to the
Indenture, and the cost of delivering to the Purchaser's home office all
Obligations issued on any such exchange. The cost of delivery shall include
the cost of insurance against loss or theft in amounts satisfactory to the
Purchaser, and, anything in the Indenture to the contrary notwithstanding, no
charge to the Purchaser (other than for transfer taxes, if any) shall be made
for any exchange or delivery provided for in this Section 11.
12. Survival of Agreements, Representations and Warranties. All
agreements, representations and warranties contained herein and in certificates
delivered pursuant hereto shall survive the execution and delivery of this
Agreement and the sale of the Obligations regardless of any investigation at
any time made by the Purchaser or on its behalf, and (except as provided in
Section 5 hereof) shall terminate upon the payment in full of all the
Obligations, whether by the Shipowner or by the United States of America in
accordance with the Guarantees, except for the Shipowner's obligations pursuant
to Sections 5 and 10 above if the same have not been satisfied.
13. Entire Agreement Embodied, Changes, etc. This Agreement
embodies the entire agreement and understanding among the Shipowner and the
Purchaser relating to the subject matter hereof and supersedes all prior
agreements and understandings relating to such subject matter. Except in the
case of a cancellation because of nonfulfillment of the conditions set forth in
Section 6 hereof, neither this Agreement nor any term hereof may be changed,
waived, discharged, or terminated orally, but may be changed, waived,
discharged, or terminated only by a
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written instrument signed by the party against whom enforcement of the change,
waiver, discharge or termination is sought and with the written consent of the
Secretary.
14. 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 Attention of the
President, Great Independence Ship Co., Two N. Riverside Plaza, Suite 200,
Chicago, Illinois 60606 and (ii) whenever notice is required by the provisions
of this Agreement to be given to the Purchaser, such notice shall be in writing
addressed to Chemical Securities Inc.-New York, 270 Park Avenue, Seventh Floor,
New York, New York 10017-2070 or any other address specified in a written
notice to the Shipowner.
(B) This Agreement is made solely for the benefit of the
Purchaser, the Ultimate Purchasers, the Purchaser's or the Ultimate Purchasers'
controlling persons, the Shipowner, and their 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 cancelled or terminated by
the Purchaser 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
Closing Date with the conditions precedent set forth herein, or for reasons
beyond the Shipowner's control, the Shipowner shall have no further obligations
or liability hereunder to the Purchaser except that the Shipowner will
reimburse the Purchaser for out-of-pocket expenses reasonably incurred by the
Purchaser (including reasonable fees and disbursements of its counsel and
interest on funds forwarded by the Purchaser for delivery on the Closing Date
to purchase Obligations, such interest to be at the rate borne by the
Obligations for the period from the proposed Closing Date to the date on which
such funds are returned to the Purchaser).
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(D) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(E) This Agreement shall be governed and construed in
accordance with the laws of the State of Illinois.
(F) This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(G) This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of the
parties hereto.
(H) Notwithstanding any provision herein, in the event
there are any inconsistencies between the original of this document held by the
Maritime Administration and the original of this document held by any other
party hereto, the provisions of the original of this document held by the
Maritime Administration shall prevail.
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If the Purchaser is in agreement with the foregoing, please sign the
form of acceptance on the accompanying counterparts of this letter, retain one
counterpart for your records and return the other counterparts to the
Shipowner, whereupon this Agreement shall become a binding contract between the
Purchaser and the Shipowner.
Very truly yours,
GREAT INDEPENDENCE SHIP CO.
By: /s/ Jordan B. Allen
_______________________________
Jordan B. Allen
Vice President
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
CHEMICAL SECURITIES INC.
By: /s/ Michael Malter
______________________________
Name: Michael Malter
Title: Managing Director
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