* Application to be filed with the Securities and Exchange
Commission, pursuant to Exchange Act Rule 24b-2, for
confidential treatment of certain portions of this exhibit.
AGREEMENT TO
ACQUIRE AND CHARTER
BY AND AMONG
AMERICAN PRESIDENT LINES, LTD.,
Transferor,
APL NEWBUILDINGS, LTD.,
Transferee,
KREDITANSTALT FUR WIEDERAUFBAU
(as Agent and Lender),
COMMERZBANK AG, HAMBURG
(as Syndicate Agent),
COMMERZBANK AG (KIEL BRANCH),
DRESDNER BANK AG (HAMBURG),
VEREINS-und WEST BANK AG,
DEUTSCHE SCHIFFSBANK AG
NORDDEUTSCHE LANDESBANK-GIROZENTRALE and
DEUTSCHE VERKEHRS-BANK AG
BANQUE INTERNATIONALE A LUXEMBOURG S.A.
(as the Syndicate)
Dated March 14, 1994
TABLE OF CONTENTS
Page
RECITALS 1
SECTION 1. DEFINITIONS 2
SECTION 2. TRANSFER AND CHARTER OF THE VESSELS 3
SECTION 3. CONDITIONS PRECEDENT TO
TRANSFEREE'S
OBLIGATIONS ON A DELIVERY DATE 4
SECTION 4. REPRESENTATIONS AND WARRANTIES OF TRANSFEREE 6
SECTION 5. COVENANTS 9
SECTION 6. NOTICES 12
SECTION 7. COUNTERPARTS 13
SECTION 8. MODIFICATION 13
SECTION 9. SUCCESSORS AND ASSIGNS 13
SECTION 10. GOVERNING LAW 13
SECTION 11. ASSIGNMENT 13
SECTION 12. SEVERABILITY 13
SECTION 13. TABLE OF CONTENTS; HEADINGS 14
EXHIBIT A. FORM OF DAEWOO CHARTER OR HDW CHARTER
EXHIBIT B. FORM OF CERTIFICATE OF DELIVERY
AND ACCEPTANCE
EXHIBIT C. FORM OF CHARTER ASSIGNMENT AND SECOND
CHARTER ASSIGNMENT AND CONSENT
SCHEDULE 1 NAMES AND ADDRESSES OF SYNDICATE MEMBERS
AGREEMENT TO
ACQUIRE AND CHARTER
THIS AGREEMENT TO ACQUIRE AND CHARTER ("Acquisition
Agreement") dated this 14th day of March, 1994 by and among AMERICAN
PRESIDENT LINES, LTD., a Delaware corporation (the "Transferor"), APL
NEWBUILDINGS, LTD., a Nevada corporation (the "Transferee"),
KREDITANSTALT FUR WIEDERAUFBAU, a public law corporation incorporated in
the Federal Republic of Germany ("KfW"); COMMERZBANK AG (Hamburg), a
banking corporation incorporated in the Federal Republic of Germany (the
"Syndicate Agent") and the banks listed in Schedule 1 which is attached
hereto (each a "Syndicate Member" and, collectively, "the Syndicate").
WITNESSETH:
WHEREAS, the Transferor has ordered three (3)container
vessels (the "HDW Vessels") from Howaldtswerke-Deutsche Werft AG ("HDW")
as is more specifically set forth in a certain Shipbuilding Agreement
dated May 10, 1993, as amended (the "HDW Shipbuilding Agreement")
between the Transferor and HDW;
WHEREAS, the Transferor has also ordered three (3)
container vessels (the "Daewoo Vessels") from Daewoo Shipbuilding &
Heavy Machinery, Ltd. ("Daewoo") as is more specifically set forth in a
certain Shipbuilding Agreement dated May 10, 1993, as amended (the
"Daewoo Shipbuilding Agreement") between the Transferor and Daewoo (the
HDW Vessels and the Daewoo Vessels being individually referred to as a
Vessel and, collectively, as the "Vessels");
WHEREAS, the Transferor, KfW, the Syndicate Agent and the
Syndicate entered into a Loan Agreement dated March 14, 1994, 1994
providing a loan facility in respect of the HDW Vessels and the Daewoo
Vessels under which the Transferor may borrow from KfW up to *
(the "HDW Tranche") for the purchase of the HDW Vessels; and may borrow
from the Syndicate up to *
(the "Daewoo Tranche") for the purchase of the Daewoo Vessels;
WHEREAS, in order to induce KfW and the Syndicate to make
available to the Transferor the HDW Tranche and the Daewoo Tranche,
respectively, American President Companies, Ltd., a Delaware
corporation, and the corporate parent of the Transferor and the
Transferee, has, under the Guarantee, guaranteed the obligations of the
Transferor under the Loan Agreement and the other Loan Documents;
WHEREAS, concurrently with the sale of any Vessel from
HDW or Daewoo, as the case may be, to the Transferor, the Transferor may
transfer all of its right, title and interest in the Vessel to the
Transferee, and the Transferee shall thereupon assume all of the
obligations relating to the Vessel Indebtedness in respect of that
Vessel, including but not limited to the execution and delivery of all
of the Security Documents relevant to such Vessel;
WHEREAS, concurrently, with the transfer of each Vessel
in each of the Daewoo and HDW Tranche to the Transferee, the Transferor
shall enter into a Charter for such Vessels to be so transferred, as
evidenced by the execution of the Daewoo Charter or the HDW Charter,
respectively, with respect to each Vessel delivered under such Tranche
each in the form of Exhibit A to this Acquisition Agreement;
WHEREAS, concurrently with, the execution and delivery of
each Charter the Transferee will assign all of its right, title and
interest in and to (i) such Charter to KfW if it relates to an HDW
Vessel, (ii) such Charter to the Syndicate Agent and the Syndicate if it
is a Daewoo Vessel, and (iii) a second priority assignment of the
Charter to KfW if it is a Daewoo Vessel, as security for its obligations
assumed under the Loan Documents to which it is a party with respect to
the related Vessel Indebtedness;
WHEREAS, concurrently with the transfer to the Transferee
of the first Vessel delivered under a Charter, the Guarantor will
execute and deliver to the Lenders the Guarantee which shall guarantee
all obligations of the Transferee as Borrower under the Loan Agreement
and the other Loan Documents;
NOW, THEREFORE, in consideration of mutual agreements
herein contained, the portion hereto agree as follows:
SECTION 1. Definitions.
A. The terms "hereof," "herein," "hereby," "hereto,"
"hereunder" and "herewith" refer to this Agreement as the same
may be supplemented or amended;
B. Reference to a given agreement or instrument is a
reference to that agreement or instrument as originally executed,
and as modified, amended, supplemented and restated through the
date as of which reference is made to that agreement or
instrument.
C. All capitalized terms used in this Acquisition
Agreement including the Whereas clauses hereof which are not
defined herein shall have the meanings ascribed to them in the
Loan Agreement and in the Schedules and Appendices to the Loan
Agreement. In addition, the following capitalized terms shall
have the meanings set forth below:
"Bill of Sale" means, with respect to a given Vessel, a
valid and sufficient bill of sale in recordable form in the Republic of
The Marshall Islands made by the Transferor in favor of the Transferee,
dated the relevant Delivery Date, and transferring title to the Vessel
(including its equipment) free and clear of all liens, claims and
encumbrances.
"Certificate of Delivery and Acceptance" means, with
respect to a given Vessel, a certificate in the form of Exhibit B-1 or B-
2, as the case may be, to this Acquisition Agreement dated on the
Vessel's Delivery Date, evidencing the delivery of that Vessel to the
Transferee and its acceptance by the Transferee.
"Charter Assignment" means each, and "Charter
Assignments" means every, first priority assignment of each HDW Charter
and each Daewoo Charter by the Transferee to KfW and to the Syndicate
Agent and the Syndicate, respectively, as security for the Transferee's
obligations under the Loan Documents to which it is a party with respect
to the corresponding Vessel Indebtedness and in the form of Exhibit C to
this Acquisition Agreement.
"Charter Documents" means this Acquisition Agreement the
Interest Equalization Agreement Assignment, the Bills of Sale, the
Certificates of Delivery and Acceptance, the Charters, the Charter
Assignments and the Second Charter Assignments.
*
"Second Charter Assignment and Consent" means each, and
"Second Charters Assignments" means every, second priority assignment of
a Daewoo Charter by the Transferee to KfW as security for the
Transferee's obligations under the Loan Documents with respect to the
Vessel Indebtedness under the HDW Tranche relating to the Vessel covered
by such Daewoo Charter and in the form of Exhibit C to this Acquisition
Agreement.
"Solvent" means, with respect to the Transferee on a
Delivery Date, that on such date each of the following is true: (1) the
fair market value of the assets of the Transferee is greater than the
total amount of liabilities (including contingent liabilities) of the
Transferee, (ii) the present fair salable value of the assets of the
Transferee is greater than the amount that will be required to pay the
probable liabilities of the Transferee for its debts as they become
absolute and matured, (iii) the Transferee is able to realize upon its
assets and pay its debts and any other liabilities, including contingent
obligations, as they mature and (iv) the Transferee does not have
unreasonably small capital. In making the determinations required by
(i) and (ii) hereof, it will be deemed that (a) the fair market value or
fair salable value, as the case may be, of any Vessels owned by the
Transferee is at least 85% of the purchase price of such Vessels, and
(b) any loan made to the Transferee by the Guarantor or the Transferor
in connection with the purchase of the Vessels is treated for purposes
of this definition only as a capital contribution to the Transferee.
SECTION 2. Transfer and Charter of the Vessels.
A. On each Delivery Date, upon the satisfaction of
all conditions precedent set forth in Section 7 of the Loan
Agreement and Sections 2 and 3 of this Acquisition Agreement, the
Lenders shall make their Commitment available and the Transferor
shall purchase the relevant Vessel from HDW or Daewoo, as the
case may be.
B. Simultaneously with the actions specified in Section
2.A, the Transferor shall transfer the Vessel to the Transferee
pursuant to the terms of this Acquisition Agreement. The Vessel
will be registered under the laws of the Republic of The Marshall
Islands in the name of the Transferee, and the Transferee will
record a first preferred mortgage in substantially the form
attached to the Loan Agreement, and with respect to the Daewoo
Vessels, a second preferred mortgage in substantially the form
attached to the Loan Agreement covering the Vessel in favor of
the relevant Lenders.
C. Simultaneously with the actions specified in Section
2.B, the Transferor shall charter each such Vessel from the
Transferee and the Transferee shall charter such Vessel to the
Transferor, pursuant to the relevant Charter.
D. Simultaneously with the actions specified in Section
2.B, the Transferee shall undertake the Vessel Indebtedness
corresponding to the Vessel.
E. Delivery and presentation of all documents to
complete the transactions contemplated herein shall be made at
the Closing to be held on a Delivery Date convened pursuant to
the Loan Agreement.
SECTION 3. Conditions Precedent to Transferee's Obligations on a
Delivery Date.
The Transferee's obligations to undertake all of the
payment and certain performance obligations relating to the Vessel's
Indebtedness in respect of a given Vessel is expressly conditioned upon
the following preconditions being satisfied and upon receipt by the
Agent or the Syndicate Agent, as the case may be, of the following
documents and evidenced on or before a closing to be held on the
Delivery Date at the offices of Haight, Gardner, Poor & Havens, 195
Broadway, New York, New York 10007, or at such other place as may be
agreed upon by the Transferor, Transferee, the Agent and the Syndicate
Agent:
(a) The Transferee shall be a corporation duly
organized and existing in good standing under the laws of
the jurisdiction of its incorporation; the Transferee
shall have full corporate power and authority to own its
assets, conduct its business as then being conducted, and
enter into and consummate the transactions contemplated
hereby and by the Charter Documents and the Security
Documents to which it is a party, and the Agent or the
Syndicate Agent, as the case may be, shall have received
(1) a certified copy of the certificate of incorporation
of the Transferee, (2) a certificate of the Secretary of
the Transferee attaching the minutes or resolutions of
its Board of Directors authorizing the transactions
contemplated herein, (3) a certificate from the Secretary
of the Transferee or evidencing the authority of the
persons executing the Security Documents and the Charter
Documents, to which it is a party, to execute and deliver
such Security Documents and Charter Documents and the
Transferee to perform under the Security Charter
Documents to which it is a party, and (4) a certificate
of good standing as to the Transferee, all in form and
substance reasonably satisfactory to the Agent or the
Syndicate Agent, as the case may be, and its special
counsel;
(b) the Agent and the Syndicate Agent shall have
received no later than sixty (60) days prior to the
above-referenced closing, written notice from the
Transferor of its intention of transferring the related
Vessel to the Transferee in accordance with the
provisions of this Acquisition Agreement;
(c) no Event of Default shall have occurred and
be continuing and no Incipient Default shall have
occurred and be continuing and the Transferee shall
provide an officer's certificate to such effect in form
and substance reasonably satisfactory to the Agent or the
Syndicate Agent, as the case may be, and its special
counsel;
(d) there shall not have occurred any material
adverse change in the financial condition of the
Transferee which in the reasonable opinion of the Agent
and/or the Syndicate would materially and adversely
affect the ability of the Transferee to perform its
obligations as to the repayment of the Facility by the
installments together with interests thereon herein set
out or to perform its obligations under the Loan
Documents, to which it is or will become a party;
(e) all representations and warranties of the
Transferee contained in this Acquisition Agreement being
true and correct in all material respects on that
Delivery Date, except insofar as they relate exclusively
to an earlier date, and the Transferee shall provide
officer's certificates confirming such matters;
(f) all governmental and other consents,
licenses, approvals and authorizations, if any, required
with respect to the performance of (i) the Transferee
under this Acquisition Agreement and the other Loan
Documents and Charter Documents and (ii) the Transferor
under this Acquisition Agreement and the other Loan
Documents and Charter Documents, to which it is a party
shall have been obtained and shall not have been revoked
and, if requested by the Agent or the Syndicate Agent or
its special counsel, copies of any of the same shall be
provided;
(g) all Uniform Commercial Code financing
statements or other document necessary, or reasonably
requested by the Agent or the Syndicate Agent, to perfect
its security interests under any of the Security
Documents and the Charter Documents in the United States
of America, jurisdiction of registration of such Vessel
or any other relevant jurisdiction;
(h) copies of the Bill of Sale to the relevant
Vessel from the Transferor to the Transferee;
(i) evidence that such Vessel is duly registered
in the name and ownership of the Transferee under the
laws and flag of the Republic of The Marshall Islands,
free of registered liens except the relevant Mortgage(s);
(j) each Loan Document and Charter Document, in
respect of such Vessel shall have been duly executed,
delivered and, where appropriate, registered or recorded
(together with any documents to be executed pursuant to
the terms thereof, including without limitation, notices
of the Assignment(s) of Insurance);
(k) each of the Lenders shall have received
executed originals of the opinions as to the Transferee
substantially in the form attached as Schedule 4 to the
Loan Agreement as well as such other opinions from such
counsel as each Lender shall reasonably request and each
of the Lenders shall have received from its special
counsel, Haight, Gardner, Poor & Havens, a favorable
opinion, in form and substance satisfactory to the
Lenders, as to such matters incident to the transactions
contemplated hereby as any such Lender may reasonably
request;
(l) all conditions precedent as set forth in
Section 7 of the Loan Agreement shall have been
satisfied.
SECTION 4. Representations and Warranties of Transferee.
The Transferee represents and warrants to each of the
Lenders that:
(a) the Transferee is a corporation duly
organized and validly existing in good standing under the
laws of its jurisdiction of incorporation with full
corporate power and authority to conduct its business as
the same is presently conducted;
(b) the Transferee has legal power and authority
to enter into and carry out the terms of this Acquisition
Agreement and each of the other Loan Documents and the
Charter Documents to which the Transferee will be a
party;
(c) each of this Acquisition Agreement, the other
Loan Documents and the Charter Documents to which the
Transferee will be a party has been duly authorized by
all necessary action, corporate or other, on the part of
the Transferee, and this Acquisition Agreement
constitutes, and upon due execution and delivery by the
Transferee, each of the other Loan Documents and the
Charter Documents will constitute, in accordance with
their respective terms, legal, valid and binding
instruments enforceable against the Transferee, except to
the extent limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other laws of
general application relating to or affecting the
enforcement of creditors' rights from time to time in
effect;
(d) except as previously disclosed to the
Syndicate Agent and the Agent in writing, there are no
actions, suits or proceedings pending or, to the
Transferee's knowledge, threatened against the
Transferee, any of its properties affecting this
Acquisition Agreement, the other Loan Documents, the
Charter Documents or the transactions contemplated
thereby which would materially and adversely affect the
performance of the Transferee of its obligations (if any)
thereunder;
(e) the consummation of the transactions
contemplated by, and compliance by the Transferee with
all the terms and provisions of, this Acquisition
Agreement, the other Loan Documents and the Charter
Documents to which the Transferee is or will be a party
will not violate any provisions of the Certificate of
Incorporation or Bylaws of the Transferee 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 Transferee or by which it or any of
its property is bound or any order of any court or
administrative agency entered in any proceedings binding
on the Transferee, or violate any applicable statute,
rule or regulation;
(f) the Transferee is not in default and no
condition exists which with notice or lapse of time or
both would constitute a default by the Transferee, in any
respect which would materially and adversely affect the
ability of the Transferee to perform its obligations
under this Acquisition Agreement, any other Loan
Document, any Charter Document, under any mortgage, loan
agreement, deed of trust, indenture or other agreement
with respect thereto or evidence of indebtedness to which
it is a party or by which it is bound, and is not in
violation of or in default, in any respect which would
materially and adversely affect the ability of the
Transferee to perform its obligations under this
Acquisition Agreement, any other Loan Document, or any
Charter Document, under any order, writ, judgment or
decree of any court, arbitrator or governmental
authority, commission, board, agency or instrumentality,
domestic or foreign;
(g) the Transferee has only one place of business
which is also the location of the place of business which
is its chief executive office is 1111 Broadway, Oakland,
California 94607;
(h) the Transferee has no knowledge of any actual
or proposed deficiency or additional assessment in
connection with any Taxes which either in any case or in
the aggregate would be materially adverse to the
Transferee and which would materially and adversely
affect the ability of the Transferee to perform its
obligations under this Acquisition Agreement, any of the
other Loan Documents or any of the Charter Documents;
(i) all Taxes (other than taxes based on or
measured by income and withholding taxes), liability for
the payment of which has been incurred by the Transferee
in connection with the execution, delivery and
performance by it of this Acquisition Agreement, each
other Loan Document and Charter Document to which it is
or will be a party, have been paid (or provided for in
its accounts if not payable on or prior to the Delivery
Date of the respective Vessel);
(j) all governmental consents, licenses,
permissions, approvals, registrations or authorizations
or declarations required (i) to enable it lawfully to
enter into and perform its respective obligations under
this Acquisition Agreement, each of the other Loan
Documents and each of the Charter Documents to which it
is or will be a party and (ii) to ensure that its
respective obligations hereunder and thereunder are
legal, valid and enforceable have been obtained or made
and are in full force and effect or will be obtained or
made and be in full force and effect on the date any such
document is executed and delivered; and all governmental
consents, licenses, permissions, approvals, registrations
or authorizations or declarations of the country of
registry of each vessel required (A) to enable it
lawfully to enter into and perform its obligations under
the Mortgages, (B) to ensure that its obligations
thereunder are legal, valid and enforceable and (C) to
make the Mortgages admissible in evidence in the country
in which each Vessel is registered and the United States
of America, will be obtained or made and be in full force
and effect on the date any such Mortgage is executed and
delivered;
(k) it has not taken any corporate action nor, to
its knowledge, have any other steps been taken or legal
proceedings been started or threatened against it for its
winding-up, dissolution or reorganization or for the
appointment of a receiver, administrative receiver,
administrator, trustee or similar officer of it or of any
or all of its respective assets and revenues;
(l) except as provided by applicable laws of
bankruptcy, insolvency, liquidation or similar laws of
general application, its obligations under this
Acquisition Agreement, each of the other Loan Documents,
and each of the Charter Documents rank and will rank at
least pari passu in priority of payment, and as to
security having the priority contemplated by the Loan
Documents and in all other respects with all its
respective other indebtedness;
(m) except for registration of the First Mortgage
on each Vessel and the Second Mortgage on each Daewoo
Vessel at the country of its registry (including any
other Loan Document or Charter Document required by the
laws of the country of its registry to be filed with the
Mortgage), it is not necessary to ensure the legality,
validity, enforceability or admissibility in evidence of
this Acquisition Agreement, any of the other Loan
Documents or any of the Charter Documents to which it is
or will be a party in the United States of America or, to
the best of its knowledge, elsewhere or that it be filed,
recorded or enrolled with any governmental authority or
agency in the United States of America or, to the best of
its knowledge, elsewhere, that it be stamped with any
stamp, registration or similar transaction tax in the
United States of America or, to the best of its
knowledge, elsewhere;
(n) the Transferee is a wholly owned Subsidiary
of the Guarantor;
(o) the Transferee does not maintain any Plans;
(p) none of the proceeds of the Loan will be
used to purchase or carry margin stock within the
meanings of Regulations G, T, U and X of the Board of
Governors of the Federal Reserve System. The Transferee
is not engaged in the business of extending credit for
the purpose of purchasing or carrying margin stock within
the meaning of Regulations G, T, U or X of the Board of
Governors of the Federal Reserve System;
(q) it is not an "investment company" or a
company "controlled" by an "investment company" (as each
of such terms is defined or used in the Investment
Company Act of 1940, as amended);
(r) each Vessel delivered will be duly
documented in the name of the Transferee under the flag
of the Republic of The Marshall Islands; and
(s) each Vessel delivered will be in the
absolute and unencumbered ownership of the Transferee
except as contemplated by this Acquisition Agreement, the
other Loan Documents and the Charter Documents.
(t) the Transferee is, and immediately after
the relevant Lender advances its Commitment will be,
Solvent.
SECTION 5. Covenants.
A. Affirmative Covenants. The Transferee covenants
with each of the Lenders that it shall:
(a) do all that is necessary to maintain in full
force and effect its corporate existence in good standing
under the laws of its jurisdiction of incorporation and
use its best efforts to obtain, comply with the terms of
and do all that is necessary to maintain in full force
and effect all authorizations, approvals, licenses and
consents required in or by the laws of its jurisdiction
of incorporation and the United States of America and any
other relevant jurisdiction to enable the Transferee to
enter into and perform its obligations under the Loan
Documents and the Charter Documents to which the
Transferee is or will become a party and to ensure the
legality, validity, enforceability or admissibility in
evidence in the United States of America of the Loan
Documents and the Charter Documents to which the
Transferee is or will become a party and to comply with
the terms of and to do all that is necessary to maintain
in full force and effect all authorizations, approvals,
licenses and consents required in or by the national laws
of the Republic of The Marshall Islands to enable the
Transferee to enter into and perform its obligations
under the Mortgages and to ensure the legality, validity,
enforceability and admissibility in evidence in such
country of each Mortgage;
(b) from time to time on the request of the
Lenders, but at the expense of the Transferee, do all
such acts and execute or procure the execution of all
such assurances and documents as the Agent or the
Syndicate Agent may reasonably consider necessary for
giving full effect to the Loan Documents and the Charter
Documents to which it is or will become a party or for
more effectively subjecting the security interests under
the Security Documents and Charter Documents to which it
is or will be a party to the liens of such Security
Documents or more effectively subject such security
interests to the performance of the provisions thereof;
(c) promptly inform the Agent and the Syndicate
Agent of the occurrence of any Incipient Default or an
Event of Default and upon receipt of a written request
from the Agent or the Syndicate Agent to do so, confirm
to the Agent or the Syndicate Agent, as the case may be,
that save as previously notified to the Agent or the
Syndicate Agent, as the case may be, to the best of the
knowledge of the Transferee, no Event of Default has
occurred;
(d) if the Transferee's agent for service of
process referred to in Section 10 shall for any reason
cease to be validly appointed, ensure that another such
agent is appointed (and ensure that such agent
acknowledges such appointment to the Agent or Syndicate
Agent, as the case may be) in a manner reasonably
satisfactory to the Agent or the Syndicate Agent, as the
case may be;
(e) the Transferee shall send to the Agent and
the Syndicate Agent as soon as possible, (i) but in no
event later than one hundred twenty (120) days after the
end of each fiscal year, its accounts of all financial
statements of the Transferee, such financial statements
to be prepared in accordance with generally accepted
United States of America accounting principles at such
time consistently applied all certified as true and
correct by a senior financial officer of the Transferee,
(ii) as soon as the same is instituted (or, to the
knowledge of the Transferee threatened), details of any
litigation, arbitration or administrative proceedings
against or involving it or the Vessels which if adversely
determined would have a material adverse effect on the
Transferee, or operation of the Vessels, (iv) together
with the annual financial statements to be provided in
accordance with clause (i) above a certificate of a
financial officer of the Transferee that no Event of
Default and Incipient Default has occurred and is
continuing, and (v) from time to time, and on demand,
such additional financial or other information relating
to the Transferee and the Vessels as may be reasonably
requested by the Agent or the Syndicate Agent;
B. Negative Covenants.
(1) The Transferee shall not without prior
consent of the Agent and the Syndicate
Agent consolidate or amalgamate with, or
merge into, any other entity, or sell,
convey, transfer, lease, or otherwise
dispose of all or substantially all of its
assets, including but not limited to, by
dividend (whether by one transaction or a
series of transactions and whether related
or not); provided, however, that it may
consolidate or amalgamate with, or merge
into, any other entity, or sell, convey,
transfer, lease, or otherwise dispose of
all or substantially all of its assets if
the buyer, assignee or transferee
corporation (the "Assignee") shall be a
solvent corporation organized and existing
under the laws of the United States of
America or any state thereof following
such transaction and shall have executed
and delivered an agreement, in form and
substance reasonably satisfactory to the
Agent and the Syndicate Agent, containing
an assumption by the Assignee of the due
and punctual performance and observance of
all covenants and obligations of the
Transferee hereunder and under the other
Loan Documents and the Charter Documents
to which it is or shall be a party, and
confirming the accuracy of any
representations and warranties made herein
and in each such other Loan Document and
Charter Document as of the dates herein or
therein required with respect to such
Assignee; and provided further, that
immediately following such transaction, no
Incipient Default or Event of Default
shall have occurred and be continuing.
(2) Except for the Charters, the Transferee
shall not charter any HDW Vessel or Daewoo
Vessel without the prior written approval
of the Agent and the Syndicate Agent,
respectively.
(3) The Transferee will not create or permit
to subsist any lien on the whole or any
part of its present or future assets
except for liens permitted under Section
14 of the Mortgage.
(4) The Transferee shall not make or threaten
to make any substantial changes in its
business as presently conducted, namely
that of a single purpose corporation
owning any of the HDW or Daewoo Vessels
and chartering such Vessels to the
Transferor, and the Transferee shall not
form any subsidiaries.
(5) The Transferee will not create, incur,
assume or allow to exist any Financial
Indebtedness, nor enter into any financing
lease or undertake any material capital
commitment (including but not limited to
the purchase of any capital asset), except
as contemplated hereby.
(6) The Transferee will not make any loan or
advance or extend credit to any Person or
issue or enter into any guarantee or
indemnity or otherwise become directly or
contingently liable for the obligations,
stocks or dividends of, or own, purchase,
repurchase or acquire (or agree
contingently to do so) any stock,
obligations or securities of, or any other
interest in, or make any capital
contribution to, or any other investment
in, any Person, firm or corporation. The
Transferee will not issue any capital
stock or any options, warrants or other
rights with respect to, or securities
convertible into, its capital stock,
except to the Guarantor.
(7) The Transferee will not acquire any
equity, share capital, assets or
obligations of any corporation or other
entity, except as contemplated hereby, and
it will not permit any of its voting
shares or capital stock to be held by any
party other than the Guarantor.
(8) Without the consent of the Agent in the
case of the HDW Vessels and the Syndicate
Agent in the case of the Daewoo Vessels,
the Transferee will not amend, repeal or
modify, its Articles of Incorporation or
other similar documents relating to the
governance of the Transferee.
SECTION 6. Notices.
Notices required or permitted by the terms of this
Acquisition Agreement or any other Loan Document or Charter Document
shall be made in accordance with Section 15.04 of the Loan Agreement.
SECTION 7. Counterparts.
This agreement may be executed in separate counterparts,
each of which, when executed and delivered shall be an original, but all
such counterparts shall together constitute but one and the same
instrument.
SECTION 8. Modification.
Neither this Acquisition Agreement nor any of its terms
may be terminated, amended, supplemented, waived or modified orally, but
only by an instrument in writing signed by the party against which the
enforcement of the termination, amendment, supplement, waiver or
modification is sought.
So long as any Vessel is subject to a Mortgage, neither
this Acquisition Agreement nor any of its terms as the same relate to
that Vessel may be terminated, amended, supplemented, waived or modified
without the prior written consent of KfW or the Syndicate Agent or the
Syndicate, as the case may be.
SECTION 9. Successors and Assigns.
The terms of this Acquisition Agreement shall be binding
upon, and inure to the benefit of, each of the parties hereto, and their
respective successors and assigns.
SECTION 10. Governing Law.
This Acquisition Agreement shall be construed and enforced in
accordance with and governed by the applicable law of the State of New
York (other than the law of the State of New York governing choice of
law), and the Transferee hereby submits itself to New York jurisdiction
and agrees to observe and perform the agreements and covenants and shall
have the rights contained in Section 15.08 of the Loan Agreement to the
same extent and under the same terms and conditions so provided in said
Section 15.08.
SECTION 11. Assignment.
The rights of any Party hereunder may not be assigned,
whether by operation of law or otherwise, except to the extent permitted
by Sections 5.B.(1) of this Acquisition Agreement and Section 10 of the
Loan Agreement, without the consent of the other parties hereto.
SECTION 12. Severability.
If any provision hereof is invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions, and of such provisions in
other jurisdictions, shall not be affected or impaired thereby.
SECTION 13. Table of Contents; Headings.
The Table of Contents and the headings of the Sections
herein are for convenience only and shall not affect the construction or
meaning of any provision of this Acquisition Agreement.
IN WITNESS WHEREOF, the parties have caused this
Acquisition Agreement to be duly executed by their respective officers
as of the day and year first above written.
KREDITANSTALT FUR WIEDERAUFBAU
/s/ Hans Reich / Peter Klaus
By: Hans Reich / Peter Klaus
Title: Board Member / Director
COMMERZBANK AG, HAMBURG
/s/ Joachim Hagemann
By: Joachim Hagemann
Title: Senior Vice-President
/s/ Stefan Kuch
By: Stefan Kuch
Title: Vice-Presient
COMMERZBANK AG (KIEL BRANCH)
/s/ Franz-Josef Cleas
By: Franz-Josef Claes
Title: Director
/s/
By:
Title:
DRESDNER BANK AG in HAMBURG
/s/ Gerhard Roller
By: Gerhard Roller
Title: Senior Manager
/s/ Claus-Dieter Bottcher
By: Claus-Dieter Bottcher
Title: Assistant Manager
VEREINS- und WESTBANK AG
/s/ Suzzane Martens
By: Suzzane Martens
Title: Assistent Vice-President
/s/ Jorgen Kopcke
By: Jorgen Kopcke
Title: Senior Vice-President
DEUTSCHE SCHIFFSBANK AG
/s/ Wulf-Peter Schiering
By: Wulf-Peter Schiering
Title: Senior General Manager and
Attorney-in-Fact
NORDDEUTSCHE LANDESBANK -
GIROZENTRALE
/s/ Friedrich Huech
By: Friedrich Huech
Title: Senior Vice-President
/s/ Jurgen Hartmann
By: Jurgen Hartmann
Title: Vice-President
DEUTSCHE VERKEHRS-BANK AG
/s/ Peter Spincke
By: Peter Spincke
Title: Director
/s/ Joachim Winkler
By: Joachim Winkler
Title: Director
BANQUE INTERNATIONALE A LUXEMBOURG
S.A.
/s/ Jean-Pierre Vernier
By: Jean-Pierre Vernier
Title: First Vice-President
AMERICAN PRESIDENT LINES, LTD.
/s/ Will M. Storey
By: Will M. Storey
Title: Executive Vice-President
APL NEWBUILDINGS, LTD.
/s/ Will M. Storey
By: Will M. Storey
Title: Executive Vice-President
SCHEDULE 1
NAMES AND ADDRESSES OF SYNDICATE MEMBERS
Syndicate Member Address
Commerzbank AG (Kiel Branch) Holstenstrasse 64
D-24103 Kiel
Federal Republic of Germany
Attention: Mr. Claes
Telex: 292898 CBKD
Telecopy: 49-431-9974-372
Dresdner Bank AG in Hamburg Jungfernstieg 22
D-20354 Hamburg
Federal Republic of Germany
Attention: Mr. Roller
Mr.
Bottcher
Telex: 2157170 DR D
Telecopy: 49-40-3501-3818
Vereins- und Westbank AG Alter Wall 22
D-20457 Hamburg
Federal Republic of Germany
Attention: Mr. Kopcke
Mrs.
Mertens
Telex: 215164 VH D
Telecopy: 49-40-3692-3696
Deutsche Schiffsbank AG Domshof 17
D-28195 Bremen
Federal Republic of Germany
Attention: Mr. Pieper
Mr. Onnen
Telex: 244870 DSBR D
Telecopy: 49-421-323539
Norddeutsche Landesbank - Georgsplatz 1
Girozentrale D-30159 Hannover
Federal Republic of Germany
Attention: Mr. Hartmann
Telex: 921634 GZH D
Telecopy: 49 511 36 14785
Deutsche Verkehrs-Bank AG Filiale Hamburg
Ballindamm 6
D-20095 Hamburg
Federal Republic of Germany
Attention: Mr. Spincke
Telex: 402077 DVB
Telecopy: 49-40-308004-12
Banque Internationale a
Luxembourg S.A. 2 Boulevard Royal
L-2953 Luxembourg
Attention: Mr. Jean Pierre
Vernier
Telex: 3326 BIL LU
Telecopy: 35-2-4590-2010
TO THE EXTENT THAT THIS BAREBOAT CHARTER PARTY CONSTITUTES CHATTEL PAPER
(AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN
ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS BAREBOAT
CHARTER PARTY MAY BE CREATED OR PERFECTED THROUGH THE TRANSFER OR
POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL EXECUTED
COUNTERPART CONTAINING THE ACKNOWLEDGEMENT THEREOF EXECUTED BY
[KREDITANSTALT FUR WIEDERAUFBAU AS AGENT] [COMMERZBANK AG AS SYNDICATE
AGENT] ON THE SIGNATURE PAGE THEREOF.
EXHIBIT A
FORM OF [HDW] [DAEWOO]
BAREBOAT CHARTER PARTY
THIS BAREBOAT CHARTER PARTY (the "Charter") dated this
___ day of ______________, 19 , between ______________________, a
corporation organized and existing under the laws of _________
(hereinafter "Owner") and American President Lines, Ltd., a corporation
organized and existing under the laws of Delaware (hereinafter called
"Charterer" or "APL").
W I T N E S S E T H:
WHEREAS, APL has heretofore entered into that certain
Loan Agreement dated ________, 1994 (the "Loan Agreement"), by and among
APL, as Borrower, Kreditanstalt fur Wiederaufbau ("KfW"), Commerzbank AG
(Hamburg) (the "Syndicate Agent"), and the banks listed on Schedule ___
thereto (each, a "Syndicate Member" and, collectively, the "Syndicate"),
as Lenders, with respect to the purchase financing of six (6) container
vessels, including the Vessel described below, and American President
Companies, Ltd. ("APC") has heretofore entered into that certain
Guarantee dated ________, 199 (the "Guarantee"), relating to Owner's
obligations under the Loan Agreement as established pursuant to the
below-defined Acquisition Agreement;
WHEREAS, the date hereof is the Delivery Date of the
below-described Vessel pursuant to the Loan Agreement;
WHEREAS, as contemplated by Section 7(k) of the Loan
Agreement, APL has entered into that certain Agreement to Acquire and
Charter (the "Acquisition Agreement") among Owner and the parties to the
Loan Agreement, pursuant to which APL has transferred to Owner, and
Owner has accepted title to, and is currently the disponent owner of,
the Republic of The Marshall Islands flag vessel PRESIDENT
______________, Official Number _________ (the "Vessel") which term
shall include all the boilers, engines, machinery, bowsprits, masts,
spars, sails, riggings, boats, anchors, cables, apparel, furniture,
fittings, equipment and all other appurtenances to the Vessel
appertaining or belonging, whether now owned or hereafter acquired,
whether on board or not on board, and all additions, improvements and
replacements hereafter made in and to the Vessel, or any part thereof,
or in or to the appurtenances and equipment aforesaid, but shall exclude
leased equipment), and Owner has undertaken all of the payment and
certain of the performance obligations relating to Vessel Indebtedness
in respect of the Vessel under the Loan Agreement, as Borrower (as such
term is defined in the Loan Agreement) (the "Owner Obligations");
WHEREAS, pursuant to the Acquisition Agreement, APL is
permitted, at its option, to transfer to Owner, and Owner has agreed
upon the exercise of such option by APL, to accept title to any or all
of the other [HDW] [Daewoo] Vessels (each of such other [HDW] [Daewoo]
Vessels which is so transferred, together with the above-referenced
Vessel, referred to individually herein as a "Vessel" and collectively
as the "Vessels"), on their respective Delivery Dates pursuant to the
Loan Agreement;
WHEREAS, Owner has simultaneously herewith entered into a
First Mortgage on the Vessel in favor of [KfW] [the Syndicate Agent or
the Syndicate Members] (the "Vessel Lender") [and has also entered into
a Second Mortgage on the Vessel in favor of KfW], in substantially the
form of the First Mortgage set forth in Appendix B-1 [and Appendix B-2,
respectively] to the Loan Agreement as security for the Owner
Obligations in respect of the Vessel, and all other Loans made under the
[Daewoo Tranche] [HDW Tranche] (as such term is defined in the Loan
Agreement) (individually, a "Mortgage" and collectively, the
"Mortgages");
WHEREAS, as contemplated by Section 9.02(h) of the Loan
Agreement and by the Acquisition Agreement, as a condition to the
transfer of the Vessel and any other Vessels pursuant to the Acquisition
Agreement, Owner has agreed to let and demise the Vessel and Charterer
has agreed to hire the Vessel from Owner, on the terms and conditions
set forth in this Charter, such charter of the Vessel to be effective
upon the execution and delivery of this Charter;
WHEREAS, as further contemplated by the Acquisition
Agreement, as further conditions to the transfer of the Vessel and the
other Vessels pursuant to the Acquisition Agreement simultaneously
herewith Owner is entering into the Charter Assignment relating to the
Charter in favor of the Vessel Lender [and the Second Charter Assignment
in favor of [KfW], and Charterer is consenting to such Charter
Assignment [and such Second Charter Assignment] pursuant to this
Charter; and
WHEREAS, capitalized terms used herein but not defined
herein shall have the meanings assigned to them in the Loan Agreement
and the Acquisition Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the receipt and adequacy of which is
hereby acknowledged, Owner and Charterer hereby agree as follows:
1. REPRESENTATIONS OF CHARTERER.
(a) Charterer is a corporation duly organized and
validly existing in good standing under the laws of Delaware with full
corporate power and authority to conduct its business as the same is
presently conducted.
(b) Charterer has legal power and authority to enter
into and carry out the terms of this Charter.
(c) This Charter has been duly authorized by all
necessary action, corporate or other, on the part of Charterer, and this
Charter constitutes, and upon due execution and delivery by Charterer,
the Charter will constitute, in accordance with its respective terms, a
legal, valid and binding instrument enforceable against Charterer,
except to the extent limited by applicable bankruptcy, reorganization,
insolvency, moratorium or other laws of general application relating to
or affecting the enforcement of creditors' rights from time-to-time in
effect.
(d) Except as previously disclosed to Owner, the Agent
and the Syndicate Agent in writing, there are no actions, suits or
proceedings pending or, to Charterer's knowledge, threatened against
Charterer, or any of its properties affecting the Charter or the
transactions contemplated thereby which would, if adversely determined,
materially and adversely affect the performance of Charterer of its
obligations hereunder.
(e) The consummation of the transactions contemplated
by, and compliance by Charterer with all the terms and provisions of,
the Charter will not violate any provisions of the Certificate of
Incorporation or bylaws of Charterer and will not result in a breach of
the terms and provisions of, or constitute a default under, any other
agreement or undertaking by Charterer or by which it or any of its
property is bound or any order of any court or administrative agency
entered in any proceedings binding on Charterer, or violate any
applicable statute, rule or regulation.
(f) Charterer is not in default and no condition exists
which with notice or lapse of time or both would constitute a default by
Charterer, in any respect which would materially and adversely affect
the ability of Charterer to perform its obligations under this Charter,
under any mortgage, loan agreement, deed of trust, indenture or other
agreement with respect thereto or evidence of indebtedness to which it
is a party or by which it is bound, and is not in violation of or in
default, in any respect which would materially and adversely affect the
ability of Charterer to perform its obligations under this Charter,
under any order, writ, judgment or decree of any court, arbitrator or
governmental authority, commission, board, agency or instrumentality,
domestic or foreign.
(g) Charterer has more than one place of business and
the location of the place of business which is its chief executive
office is 1111 Broadway, Oakland, California 94607.
(h) All taxes (other than taxes based on or measured by
income and withholding taxes), liability for the payment of which has
been incurred by Charterer as such in connection with the execution,
delivery and performance by it of the Charter, have been paid (or
provided for in its accounts if not payable) on or prior to the delivery
date of the Vessel.
(i) All consents, licenses, permissions, approvals,
registrations or authorizations or declarations required by United
States of America federal, state and local governments and the
government of the jurisdiction of incorporation of Charterer and any
applicable foreign jurisdiction (1) to enable it lawfully to enter into
and perform its respective obligations under this Charter, (2) to ensure
that its obligations hereunder are legal, valid and enforceable, and (3)
to make this Charter admissible in evidence in the United States of
America and such country of Charterer's incorporation have been obtained
or made and are in full force and effect.
(j) It has not taken any corporate action nor to its
knowledge has any other steps been taken or legal proceedings been
started or threatened against it for its winding-up, dissolution or
reorganization or for the appointment of a receiver, administrative
receiver, administrator, trustee or similar officer of it or of any or
all of its respective assets and revenues.
2. PERIOD OF CHARTER AND BASIS OF CHARTER HIRE.
(a) Owner agrees to charter and Charterer agrees to hire
the Vessel delivered hereunder on the terms and conditions herein set
forth for a period from the date hereof with respect to the Vessel,
until payment in full on the due date of the final installment of
principal and interest with respect to the Subportion relating to the
Vessel pursuant to Section 5 of the Loan Agreement (together with all
other amounts relating to such Subportion payable in accordance with the
terms of the Loan Agreement, unless earlier terminated in accordance
with the terms hereof upon payment of all such principal and interest
and such other amounts (said period with respect to each Vessel
hereinafter referred to as its "Charter Period").
(b) Subject to the provisions of Section 24(b)(i)
hereof, Charter hire ("Charter Hire") shall be paid by Charterer to
Owner in amount of (i) principal and interest due with respect to the
Subportion relating to the Vessel from the Borrower to the Agent
pursuant to Sections 3, 4, 5, 6 and 12 of the Loan Agreement, and the
related [HDW] [Daewoo] Notes issued by Owner pursuant to Section 4 of
the Loan Agreement, at the times and places, in the manner and to the
parties set forth in said sections and such Notes, [including without
limitation the provisions of Section 3.05(a) with respect to subsidized
interest]1, Section 3.08 with respect to default interest, Section 5.03
with respect to deferrals, and Section 5.04 with respect to prepayment
and (ii) all indemnity payments required under Section 11 of the Loan
Agreement when due and payable. Upon payment in full (upon maturity or
through prepayment pursuant to Section 5.04 of the Loan Agreement), of
all such amounts with respect to any Subportion, together with any
Supplemental Charter Hire required to be paid with respect thereto
pursuant to clause (d) of this Section 2, this Charter shall terminate
with respect to the Vessel.
(c) This Charter may not be cancelled or terminated,
except in accordance with the expressed provisions hereof, for any
reason whatsoever and Charterer shall have no right to be relieved or
discharged from obligation or liability under this Charter except as
otherwise expressly provided herein for any reason whatsoever.
Charterer hereby waives, to the extent permitted by applicable law, any
and all rights which it may now have or which at any time hereafter may
be conferred upon it by statute or otherwise, to terminate, cancel, quit
or surrender this Charter except as otherwise expressly provided herein.
Charterer acknowledges and agrees that its obligation to pay all Charter
Hire and Supplemental Charter Hire pursuant to this Section 2 and all
other amounts payable on behalf of Owner to [the Agent] [the Syndicate
Agent] and the [Holders of the Daewoo Notes] pursuant to the terms of
this Charter shall be absolute and unconditional under any and all
circumstances, shall not be subject to any counterclaim, set-off,
deduction, abatement or defense based upon any claim Charterer may have
against Owner, the Agent, the Syndicate Agent or any other Lender or any
other Person whatsoever, and shall remain in full force and effect
without regard to, and shall not be released, discharged or in any way
effected by any circumstance or condition (whether or not Charterer
shall have knowledge or notice thereof), including, without limitation:
(i) any amendment or modification of this Charter, the Loan Agreement,
any agreements relating to any thereof or any other instrument or
agreement applicable to the Vessel or any part thereof or any assignment
or transfer of any thereof or any furnishing or acceptance of additional
security, or any release of any security, or any failure or inability to
perfect any security; (ii) any failure on the part of the Owner to
perform or comply with any term of this Charter or any failure on the
part of the Agent, the Syndicate Agent or any other Lender to perform or
comply with the terms of the Loan Agreement or any other instrument
agreement applicable thereto; (iii) any waiver, consent, change,
extension, indulgence or other action or inaction under or in respect to
this Charter or any other such instrument or agreement, or any exercise
or nonexercise of any right, remedy, power or privilege under or in
respect of any such instrument or agreement; (iv) any bankruptcy,
insolvency, reorganization, arrangement, readjustment, composition,
liquidation or similar proceeding with respect to Owner, the Agent, the
Syndicate Agent, the Guarantor, any Lender or any affiliate of any of
them, or their respective properties or creditors, or any action taken
by any court, trustee, receiver or liquidating agent in any such
proceeding, including, without limitation, any termination or rejection
of this Charter or any assignment of either thereof by any court,
trustee, receiver or liquidating agent of Charterer or Owner or of any
of their respective properties in any such proceeding; (v) limitation on
the liability or obligations of Charterer under this Charter or any
termination, or cancellation (except as expressly provided in this
Charter), frustration, invalidity, irregularity or unenforceability, in
whole or in part, of this Charter or any term hereof or any lack of
power or authority of Charterer or Owner to enter into this Charter;
(vi) any assignment or other transfer of this Charter by Owner (whether
pursuant to Section 30 hereof or otherwise) or any lien, charge or
encumbrance, from whatever source arising, on or affecting Charterer's
estate in, or any subchartering of, all or any part of the Vessel
(whether or not pursuant to the express provisions of this Charter or
otherwise); (vii) any damage to, or loss, destruction, requisition,
seizure, forfeiture or marshal's or other sale of, the Vessel or any
exercise of rights with respect to the Vessel under the Mortgage[s];
(viii) any libel, attachment, levy, detention, sequestration or taking
into custody of the Vessel, or any interruption or prevention of or
restriction on or interference with the use or possession of the Vessel;
(ix) any title defect or encumbrance or any dispossession from the
Vessel by title paramount or otherwise; (x) any act, omission,
misrepresentation or breach on the part of Owner under this Charter or
any other agreement at any time existing between Owner and Charterer, or
under any statute, law or governmental regulation; (xi) any other
circumstance whatsoever which might otherwise constitute a legal or
equitable discharge or defense of a charterer and irrespective of any
other circumstance which might otherwise limit the recourse against
Charterer; (xii) any defect in the seaworthiness, condition, design,
operation or fitness for use of the Vessel or the ineligibility of the
Vessel for any particular trade; or (xiii) any other occurrence or
condition whatsoever, foreseen or unforeseen, whether similar or
dissimilar to the foregoing, now existing or hereafter occurring.
Even though Charterer shall be deprived of or limited in
the use of the Vessel in any respect or for any length of time, whether
or not by reason of some act, omission or breach on the part of Owner,
Charterer or any other party, whether or not resulting from accident and
whether or not without fault on the part of Charterer, Charterer will
continue to make all payments required of Charterer by the terms of this
Charter, whether for Charter Hire, Supplemental Charter Hire or
otherwise, without interruption or abatement, unless and until this
Charter shall have terminated with respect to the Vessel in accordance
with the express provisions hereof. If, for any reason whatsoever, this
Charter shall be terminated in whole or in part by operation of law or
otherwise, except as specifically provided herein, Charterer nonetheless
agrees to pay an amount equal to each payment of Charter Hire,
Supplemental Charter Hire or other amounts, at the time such payment
would have become due and payable in accordance with the terms hereof
had this Charter not been terminated in whole or in part.
Nothing contained in this clause (c) shall be construed
to be a waiver, modification, alteration or release of any claims which
Charterer may have at any time during the Charter Period or subsequent
thereto for damages or equitable relief, for breach by Owner or APL of
any provisions in any of the Charter Documents or the Loan Documents, or
by the Vessel Lender of any provisions in any of the Loan Documents, or
for any loss due to any acts taken by any of the parties hereto or
thereto.
(d) As supplemental charter hire ("Supplemental Charter
Hire"), Charterer shall pay as and when due any and all amounts (other
than principal and interest on the [HDW] [Daewoo] Notes, including
interest at the Default Interest Rate) payable by Owner pursuant to the
Loan Agreement with respect to the Subportion relating to each Vessel,
at the times and places, and in the manner and to the parties set forth
in such agreements.
3. DELIVERY AND ACCEPTANCE.
Owner hereby lets, demises and delivers the Vessel to
Charterer and Charterer hereby accepts delivery of the Vessel, pursuant
to the terms of this Charter. IT IS AGREED THAT OWNER MAKES NO WARRANTY
OR REPRESENTATION, EITHER EXPRESSED OR IMPLIED, AS TO TITLE TO, AS TO
THE DESIGN, CONDITION, MERCHANTABILITY OR SEAWORTHINESS OF, AS TO THE
QUALITY OF THE MATERIAL, EQUIPMENT OR WORKMANSHIP IN OR AS TO THE
CONSUMABLE STORES ON BOARD THE VESSEL, OR AS TO THE FITNESS OF THE
VESSEL FOR ANY PARTICULAR PURPOSE OR AS TO THE ELIGIBILITY OF THE VESSEL
FOR ANY PARTICULAR TRADE, OR ANY OTHER WARRANTY OR REPRESENTATION
WHATSOEVER.
4. REDELIVERY.
At the expiration of its Charter Period, the Vessel
(unless lost) shall be redelivered by Charterer to Owner at the end of
the voyage then in progress at a safe berth to be selected by Owner at a
port to be designated by Owner or another mutually agreed port.
5. OPERATING LIMITS.
Charterer shall have the full use of the Vessel, and may
operate the Vessel throughout the world, for the carriage of any lawful
cargoes in any lawful trade on voyages for which the Vessel is suitable
and for which insurance is procured by Charterer and in effect prior to
entering such trades. All necessary insurance required for the trades
in which the Vessel is engaged will be procured by Charterer pursuant to
Section 17 hereof and paid for by Charterer.
6. CONDITION OF VESSEL ON DELIVERY.
(a) The Vessel, upon its delivery hereunder, shall be
documented under the laws of the Republic of The Marshall Islands. No
change will be made in the registry of the Vessel without the approval
of Owner and compliance by Owner with the terms of Section (20)(b) of
the applicable [Mortgage] [Mortgages].
(b) On its delivery, the Vessel is classed _________. On
its delivery, the Vessel shall be in good running order and repair, and
will be, insofar as due diligence shall make it so, strong and well and
sufficiently tackled, apparelled, furnished, equipped and in good
operating condition, ordinary wear and tear and depreciation excepted.
(c) By its acceptance of delivery of the Vessel,
Charterer acknowledges that the Vessel is in all respects satisfactory
to Charterer and such delivery shall constitute full performance by
Owner of all of Owner's obligations hereunder, relating to the condition
of the Vessel, required to be performed by Owner prior to the delivery.
7. INSPECTIONS.
(a) Owner and Charterer shall agree on a single surveyor
appointed for the purpose of determining and stating in writing the
condition of the Vessel at the time of redelivery. If not less than ten
(10) days prior to redelivery, Owner and Charterer shall fail to have
agreed on the surveyor to be appointed for such purpose, either party
may request The American Bureau of Shipping, New York, to make such
appointment, and the surveyor so appointed shall perform such survey.
The expense of the aforesaid surveyor shall be shared equally by Owner
and Charterer. Owner and Charterer may have their own representative in
attendance at all surveys.
(b) Prior to redelivery of the Vessel, the auxiliary
machinery, generators, main propulsion units and boilers may be opened
for inspection only by mutual agreement between Owner and Charterer, in
which event any damage disclosed shall be repaired as may be required
prior to redelivery. The expense of repair shall be paid by Charterer.
If no repairs are found necessary as a result of opening said machinery,
the cost of opening will be borne by the party requesting the opening.
8. MAINTENANCE AND CLASSIFICATION.
Charterer shall be charged with full responsibility for
maintenance and repair of the Vessel throughout the Charter Period and
shall at all times, without expense to Owner, maintain and preserve the
Vessel in good running order and repair, so that the Vessel shall be,
insofar as due diligence can make it so, strong and well and
sufficiently tackled, apparelled, furnished, equipped and supplied and
in every respect seaworthy and good operating condition, ordinary wear
and tear excepted. Furthermore, Charterer shall maintain the Vessel so
as to enable it to the highest classification and rating of The American
Bureau of Shipping for vessels of the same age and type. On redelivery,
any outstanding requirements shall be taken care of by Charterer, or as
Charterer may otherwise mutually agree with Owner in respect thereto.
Owner will authorize The American Bureau of Shipping to release all
records to Charterer relating to the Vessel.
9. INVENTORY.
A complete inventory of the Vessel's entire outfit,
equipment, furniture, furnishings, appliances, spare and replacement
parts whether owned, pooled or shared with other operators, and of all
unbroached consumable stores and slop chest is warranted by Owner at
delivery. An inventory shall be taken and mutually agreed upon by
representatives of Charterer and Owner at the time of redelivery. The
cost of taking such inventory shall be borne equally by Charterer and
Owner. Charterer shall pay all shortfalls from the delivery inventory at
the current market prices at the port of redelivery, except as may be
otherwise mutually agreed.
10. FUEL AND LUBRICANTS.
Charterer shall accept and pay for all fuel and
lubricants in storage tanks on board at the time of the Vessel's
delivery hereunder and, correspondingly, Owner shall accept and pay for
all such fuel and lubricants in storage tanks left on board at the time
of redelivery. Each shall pay for fuel and lubricants in storage tanks
at the last invoiced price paid therefor.
11. USE OF EQUIPMENT.
(a) Charterer shall have the use of the Vessel and its
outfit, equipment (including cabin, crew, galley and container lashing
equipment), furniture, furnishings, appliances, spare and replacement
parts on board the Vessel or ashore as available and shown in the
inventory at delivery under this Charter, and Charterer shall at all
times, and at its own expense, comply with and discharge Owner's
obligations, and shall be entitled to all the benefits and rights of
Owner, under Section (25)(a) of the [Mortgage] [Mortgages] as to
maintenance of the Vessel and its classification and compliance with all
applicable laws, treaties, conventions, rules and regulations of
[state/country of flag], all in accordance with the terms of said
Section (25)(a).
(b) Charterer furnished outfit, equipment (including
cabin, crew, galley and container lashing equipment), furniture,
furnishings, appliances, spare and replacement parts on board the Vessel
and not shown in the inventory or supplemental inventories as Owner
furnished at the time of delivery shall remain the property of
Charterer, and Charterer at the time of redelivery shall have the right
to remove such items or at its option may leave such items on board the
Vessel. All items left aboard the Vessel at the termination of the
Charter with respect to the Vessel shall be deemed abandoned to Owner.
(c) Charterer shall be at liberty to fit any additional
equipment required for the services of Charterer, beyond what is on
board at commencement of Charter with respect to the Vessel, such work
to be done at its time and expense, and such equipment to be considered
its property, and Charterer shall be at liberty to remove such equipment
at its time and expense during or prior to the expiry of this Charter
with respect to the Vessel; provided that such removal shall in no way
significantly alter the condition of the Vessel at the time of its
redelivery to Owner. All additional equipment left aboard the Vessel at
the termination of the Charter shall be deemed abandoned to Owner.
Charterer shall make no substantial change in the structure, type or
speed of the Vessel or change its rig without first obtaining the
written approval of Owner and the Vessel Lender; provided, however, that
no such approval need be obtained in respect of any change which shall
be necessary to comply with the requirements of the United States Coast
Guard, [state/country of flag], or The American Bureau of Shipping in
order to entitle the Vessel to the classification and rating required
above.
12. WARRANTY CLAIMS.
Charterer has retained, and not assigned to Owner, its
rights under the [HDW] [Daewoo] Shipbuilding Agreement with respect to
the Vessel with [Howaldtswerke-Deutsche Werft AG] [Daewoo Shipbuilding &
Heavy Machinery Ltd.] (the "Shipyard") relating to the condition and
performance of the Vessel, including its replacement and repair warranty
rights under said contract, and its rights with respect to the standby
letter of credit relating to such warranty rights, and it is agreed
that:
(a) Charterer may negotiate and process all warranty
claims directly with the Shipyard and shall provide Owner with prior
notice of all warranty claims whenever reasonably practicable;
(b) Owner will cooperate with Charterer in processing
all Vessel warranty claims against the Shipyard if requested by
Charterer; and
(c) All fees and expenses incurred to prosecute or
litigate Vessel warranty claims against the Shipyard shall be borne by
Charterer.
13. OWNER AND VESSEL LENDER INSPECTIONS.
Charterer shall at all reasonable times afford Owner and
the Vessel Lender, or their respective authorized representatives, full
and complete access to the Vessel for the purpose of inspecting or
surveying the same and its papers and, at the request and expense of
Owner or the Vessel Lender, Charterer shall deliver for inspection by
such requesting party copies of any and all contracts and documents
relating to the Vessel, whether on board or not on board.
14. LAY-UP.
Notwithstanding anything to the contrary in this Charter,
Charterer may at any time during the period of this Charter, lay-up the
Vessel at a safe place so long as permitted by the applicable Mortgage
in which case Charterer's obligations under this Charter shall include,
during the period of lay-up, taking the customary precautions for the
maintenance and safety of the Vessel and of paying, in addition to all
other amounts required under this Charter, all other expenses
attributable to such precautions and to the laying-up of the Vessel.
15. CHARTERER TO MAN.
During the period of this Charter, Charterer shall at its
expense, and by its own procurement, man, victual, navigate, operate,
supply, and fuel the Vessel and shall pay all charges and expenses of
every kind and nature whatsoever incident to the use and operation of
the Vessel under this Charter.
16. CONDITION ON REDELIVERY OF VESSEL.
(a) The Vessel shall be redelivered to Owner (unless
lost) pursuant to the terms of this Charter in all respects in the same
condition of operation and repair as when delivered, except as otherwise
provided herein or mutually agreed, ordinary wear and tear not affecting
class excepted. Unless otherwise agreed between the parties and, except
as provided in paragraph (b) of this Section 16, Charterer shall repair
all damages to the Vessel occurring during the Charter Period, and shall
replace all lost, worn out or otherwise non-operating items, to the
extent necessary to put each Vessel in all respects in the same
condition of operation and repair as when delivered, ordinary wear and
tear not affecting class excepted. If, at the time of redelivery,
repairs, renewals, replacements or other obligations for which Charterer
is liable remain to be accomplished and it is mutually agreed between
the parties that such items need not be accomplished before redelivery,
Charterer shall pay the agreed upon cost of such items. At the
redelivery survey provided for in Section 7 hereof, the surveyor
representing both Charterer and Owner shall determine and state the
repairs or work necessary to place the Vessel on the date of redelivery
in the condition and class required in this Charter, which statement
shall include all repairs or work required by outstanding classification
requirements of The American Bureau of Shipping or marine inspection
requirements of the United States Coast Guard, if applicable, in effect
with respect to the Vessel as of the date of the redelivery to place it
in such condition.
(b) Owner agrees that upon the redelivery Charterer
shall have no obligation to renew or repair the Vessel's cell guides,
which shall be returned in "as is, where is" condition.
17. RISK OF LOSS, INSURANCE.
Charterer hereby assumes all of the risks and liability
resulting from or arising out of Charterer's possession, use, operation
or storage of the Vessel, and Charterer shall at all times, at its own
expense, comply with and discharge Owner's obligations under Section
(29) of the [Mortgage] [Mortgages] as to the maintenance of insurance on
the Vessel, and shall be entitled to all the benefits and rights of
Owner under said section, during the Charter Period (and shall, along
with Owner and the Vessel Lender, be named as an assured, additional
assured, and loss payee, as applicable), all in accordance with the
provisions of said section. In any case where Charterer shall be
obligated to give notice to the Vessel Lender pursuant to this Section
17, Charterer shall also give simultaneous notice to Owner.
18. ACTUAL OR CONSTRUCTIVE TOTAL LOSS.
If an Event of Loss shall occur, Charterer shall (i) give
prompt written notice thereof to Owner and the Vessel Lender, (ii)
deposit with the Vessel Lender for the account of Owner, on or before
the Redemption Date, all amounts required to be paid by Owner to the
Vessel Lender on such date pursuant to Section 5.04(b)(ii) of the Loan
Agreement, (iii) pay to Owner any insurance proceeds or other
compensation, in excess of its payment obligations pursuant to subclause
(ii) hereof, and (iv) be entitled to the credit referred to in Section
5.04(b)(iii) with respect to its payment obligations pursuant to
subclause (ii) hereof. Upon Charterer's payment pursuant to subclause
(ii) hereof (to the extent modified by subclause (iv) hereof), this
Charter shall terminate.
19. BILLS OF LADING.
Charterer shall utilize its customary contracts of
affreightment, including its long form and short form bills of lading,
the standard form of Military Sealift Command Shipping Agreement, and
cargo charter parties all of which foregoing documents shall include
Clause Paramount, Liberties Clause, General Average Clause, New Jason
Clause, and Both-to-Blame Collision Clause.
20. GENERAL AND PARTICULAR AVERAGE.
Average adjusters, appointed by Charterer from a list of
adjusters satisfactory to Owner, shall attend to the settlement and
collection of both general and particular average losses subject to the
customary charges. Charterer agrees to assist the adjuster in preparing
the average statement and to take all other possible measures to protect
the interests of the Vessel and Owner.
21. SALVAGE.
All earned salvage will be for Charterer's account.
22. LIENS.
(a) Neither Charterer nor the Master of the Vessel nor
any other Person shall have the right, power, or authority to create,
incur or permit to be placed upon the Vessel any liens whatsoever other
than those permitted by Section 14 of the Mortgage, and shall hold
harmless and indemnify Owner and the Vessel Lender against the claims
and demands of all Persons whomsoever arising as a result of any
mortgage, security interest, lien or charge whatsoever on the Vessel,
except that such undertaking by Charterer shall not apply to the lien of
the [Mortgage] [Mortgages].
(b) Charterer shall at all times, at its own cost and
expense, comply with and discharge Owner's obligations under Sections
(15), (16) and (22) of the [Mortgage] [Mortgages] with respect to the
release and discharge of any lien or levy against the Vessel, and shall
give notice to Owner if it shall be required to give notice to the
Vessel Lender pursuant to said Section (16).
(c) Charterer agrees to carry a properly certified copy
of this Charter and the [Mortgage] [Mortgages] with the ship's papers on
board the Vessel, and agrees to exhibit the same to any person having
business with such Vessel and to any representative of the Vessel
Lender, and agrees also to exhibit the same to any representative of
Owner on demand.
(d) Charterer further agrees to fasten in the Vessel in
a prominent place, and to maintain during the Charter Period a framed
printed or typewritten notice in plain type and which shall cover a
space of not less than six (6) inches wide by nine (9) inches high (or
of such other dimensions as may be required by law) reading
substantially as follows:
"NOTICE OF FIRST [AND SECOND] PREFERRED
SHIP MORTGAGE[S] AND CHARTER
THIS VESSEL IS OWNED BY APL NEWBUILDINGS, LTD., A NEVADA
CORPORATION (THE "SHIPOWNER"), AND IS CHARTERED BY AMERICAN
PRESIDENT LINES, LTD., A DELAWARE CORPORATION, AND IS COVERED BY
A FIRST PREFERRED SHIP MORTGAGE IN FAVOR OF [KREDITANSTALT FUR
WIEDERAUFBAU] [SYNDICATE AGENT OR SYNDICATE MEMBERS] [AND A
SECOND PREFERRED SHIP MORTGAGE IN FAVOR OF KREDITANSTALT FUR
WIEDERAUFBAU], UNDER AUTHORITY OF THE REPUBLIC OF THE MARSHALL
ISLANDS. UNDER THE TERMS OF SAID MORTGAGE[S] AND CHARTER,
NEITHER THE SHIPOWNER, ANY CHARTERER, THE MASTER OF THE VESSEL
NOR ANY OTHER PERSON, HAS ANY RIGHT, POWER OR AUTHORITY TO
CREATE, INCUR OR PERMIT TO BE PLACED OR IMPOSED UPON THIS VESSEL
ANY LIEN WHATSOEVER OTHER THAN THE LIEN OF SAID MORTGAGE[S] AND
LIENS FOR WAGES OF A STEVEDORE WHEN EMPLOYED DIRECTLY BY THE
SHIPOWNER, OPERATOR, MASTER, OR ANY AGENT OF THE VESSEL, FOR
CREW'S WAGES, FOR GENERAL AVERAGE, FOR SALVAGE, AND, TO THE
EXTENT SUBORDINATE TO THE LIEN OF SAID MORTGAGE[S], FOR CERTAIN
LIENS INCIDENT TO CURRENT OPERATIONS OR FOR REPAIRS OR CHANGES
PERMITTED BY THE MORTGAGE[S]."
23. TRANSFER OF ASSIGNMENT.
Charterer shall not, without Owner's and the Vessel
Lender's prior written consent, sell, demise, charter, transfer, or
assign this Charter or any interest therein, or, without such consent,
make any arrangement whereby the maintenance, management, or operation
of the Vessel is to be performed by any other person, except with
respect to requisition or other governmental taking, and except that
Charterer may subcharter the Vessel on a time basis as long as Charterer
shall, at its own cost and expense, comply with Section 9.02(b) of the
Loan Agreement; provided that, notwithstanding such subcharter,
Charterer remains fully liable for all of its obligations under the
Charter Documents. Charterer shall have the right to voyage charter the
Vessel, or to arrange for space or slot charters of a portion of the
Vessel in connection with Charterer's normal liner service.
24. EVENTS OF DEFAULT AND REMEDIES.
(a) The following shall constitute an event of default
under this Charter (hereinafter called a "Event of Default"):
(i) An Event of Default shall have occurred under the
Loan Agreement or [the Mortgage] [or the Second
Mortgage]; or
(ii) Charterer's failure to duly and punctually observe
and perform any of the covenants of Charterer herein and
the continuance of such failure for thirty (30) days
after written notice thereof from Owner to Charterer; or
(iii) Any representation or warranty made by or on
behalf of Charterer in this Charter or in any of the
Charter Documents, or by Charterer in any certificate,
statement or other document issued by or on behalf of
Charterer pursuant to this Charter shall prove to have
been incorrect or misleading in any material respect when
made or deemed made; or
(iv) Any license, authorization, consent or approval at
any time necessary to enable Charterer to comply with its
obligations under this Charter and/or any of the Charter
Documents with respect to the Vessel is revoked or not
granted or fails to remain in full force and effect for a
period of thirty (30) days after notice thereof from the
Vessel Lender.
(b) If an Event of Default shall have occurred and be
continuing:
(i) If the Vessel Lender shall have declared or shall
have been deemed to have declared the whole or any part
of the outstanding principal amount of the [HDW] [Daewoo]
Notes to be immediately due and payable by Owner pursuant
to Section 12.01 of the Loan Agreement and Section (31)
of the Mortgage[s], Charterer shall be immediately
obligated to pay Charter Hire in an amount equal to such
principal amount and interest thereon and interest
thereafter on overdue principal at the Default Interest
Rate;
(ii) Upon such declaration or deemed declaration of
acceleration pursuant to clause (i) hereof, Owner may:
(A) Institute and prosecute any judicial, extra-
judicial, or administrative proceedings as it may
consider appropriate to recover any or all sums due, or
declared due, with respect to Charter Hire and with
respect to any Supplemental Charter Hire due, with the
right to enforce payment of said sums against any assets
of Charterer;
(B) Owner may take possession of the Vessel, with
or without legal proceedings, at any place where the
Vessel may be found (and Charterer shall forthwith
surrender possession of the Vessel to Owner on demand);
and
(C) Owner may terminate Charterer's rights under
this Charter.
(c) In case there shall be pending proceedings for the
bankruptcy or for the reorganization of Charterer under any applicable
law or in connection with the insolvency of Charterer or in case a
receiver or trustee shall have been appointed for its property or its
creditors, Owner or the Vessel Lender as assignee of the Owner,
irrespective of whether Charter Hire shall then be due and payable as
herein expressed or by declaration of acceleration or otherwise, shall
be entitled and empowered to intervene in such proceedings or otherwise,
to file and prove a claim or claims for the whole amount of Charter Hire
or Supplemental Charter Hire owing and unpaid, and to file such other
papers or documents as may be necessary or advisable in order to have
the claims of Owner allowed in any judicial proceeding relative to
Charterer, its creditors, or its property, and to collect and receive
any money or other property payable or deliverable on any such claims,
and to have the same applied pursuant to Section 5.09 [(a)] [(b)] of the
Loan Agreement. Nothing contained in this Charter shall be deemed to
give Owner any right to accept or consent to any plan of reorganization
or otherwise by action of any character in any such proceeding to waive
or change in any way any right of any Holder.
(d) Any monies collected by Owner pursuant to
enforcement of any of its rights hereunder or under any other Charter
Document on account of the occurrence of an Event of Default by or on
behalf of Owner shall be payable to the Vessel Lender and distributed in
accordance with Section 5.09[(a)] [(b)] of the Loan Agreement.
(e) No right or remedy herein conferred upon or reserved
to Owner is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be
cumulative and, in addition to every other right and remedy given
hereunder or under the other Charter Documents or now or hereafter
existing at law, in equity, in admiralty, by statute or otherwise. The
assertion or employment of any right or remedy hereunder or otherwise
shall not prevent the concurrent or subsequent assertion or employment
of any other right or remedy hereunder or otherwise.
(f) No delay or omission of Owner to exercise any right
or remedy accruing upon any Event of Default nor any course of dealings
between Owner and Charterer shall impair any such right or remedy or
constitute a waiver of any Event of Default or an acquiescence therein
nor shall any single exercise or partial exercise of any such right or
remedy preclude any other exercise thereof or any exercise of any other
or further right or remedy; nor shall the acceptance by Owner of any
security or any payment of any part of Charter Hire or Supplemental
Charter Hire maturing after any Event of Default or of any payment on
account of any past default be construed to be a waiver of any right to
take advantage of any future Event of Default or of any past Event of
Default not completely cured thereby. Every right or remedy given by
this Charter or any other Charter Document or by law to Owner may be
exercised from time-to-time, and as often and in such order as may be
deemed expedient, by Owner.
(g) In case Owner shall have proceeded to enforce any
right, power or remedy under this Charter or under any other Charter
Document, and such proceeding shall have been discontinued or abandoned
for any reason or shall have been adversely determined to Owner, then,
and in every such case, Charterer and Owner shall be restored to their
former positions and rights hereunder with respect to the property
subject or intended to be subject to this Charter or any other Charter
Documents, as the case may be, and all rights, remedies and powers of
Owner shall continue as if no such proceedings had been taken.
(h) Subject to the provisions of Section 24(b) hereof,
Owner shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to Owner under this
Charter or any other Charter Document.
(i) Charterer hereby expressly waives demand and
presentment for payment, notice of nonpayment, protest, notice of
protest, notice of dishonor, bringing of suit, and diligence in taking
any action to collect amounts called for under this Charter at any time
in connection herewith.
(j) No right or remedy herein conferred upon or reserved
to Owner is intended to be exclusive, but cumulative and in addition to
any other right and remedy given hereunder or under the other Charter
Documents.
25. SPECIAL CONDITIONS; SUBORDINATION TO THE LIEN OF THE
MORTGAGE[S].
(a) During the period of this Charter, Charterer may
substitute its own stack marks and insignia for those of Owner on the
Vessel.
(b) Owner shall effect initial registry of the Vessel in
the official name designated by Charterer.
(c) This Charter and each and every provision hereof
shall be subject and subordinate to each and every provision of the
Mortgage[s] in each and every right and any remedy of any party hereto
is subject and subordinate to each and every right and remedy of any
party to the Mortgage[s]. Any lien of the Charterer against the Vessel
for breach of this Charter (whether pleaded and proved as a tort or
otherwise) shall be subject and subordinate to the lien of the
Mortgage[s]. Charterer agrees not to take any action under this Charter
or otherwise which would violate, or cause Owner to violate, any
provisions of the [Mortgage] [Mortgages]. Without limiting the
generality of the foregoing, and in addition to all other obligations
assumed by Charterer hereunder, Charterer will at all times, and at its
own expense, comply with and discharge Owner's obligations, and shall be
entitled to all the benefits and rights of Owner, under the following
sections of the [Mortgage] [Mortgages], all in accordance with the
provisions of said sections: (i) Section (18) with respect to notice of
Events of Default, (ii) Section (21) with respect to operation of the
Vessel in accordance with law, (iii) Section (23) with respect to the
maintenance of the [Mortgage] [Mortgages], (iv) Section 25(c) with
respect to dealing with the Vessel's equipment (in connection with which
Charterer may act without Owner's consent whenever Mortgagee consent is
not required), and (v) Sections (28), (50)(a) and (b) and (51) with
respect to the payment or reimbursement of expenses.
26. OWNERSHIP.
So long as this Charter shall be in effect, Charterer's
interest in the Vessel shall be solely that of a bareboat charterer.
There shall be no option to purchase or other right to acquire a legal
or equitable ownership interest in the Vessel permitted or impled so
long as this Charter shall be in effect. Any contract or implied right
of Charterer to a legal or equitable interest in the Vessel made or
given while this Charter is in effect shall be void and unenforceable.
27. AMENDMENT.
This Charter shall be binding upon, in or to the benefit
of and enforceable by the parties hereto and their respective successors
and assigns. Neither this Charter nor any provision hereof may be
amended, modified, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against which enforcement
of the amendment, modification, waiver, discharge or termination is
sought; provided that no such amendment, modification, waiver, discharge
or termination shall be made without the prior written consent of the
Vessel Lender.
28. APPLICABLE LAW.
This Charter shall be construed and governed in
accordance with the admiralty and maritime law of the United States of
America and where applicable the law of the State of New York (other
than the law of the State of New York governing choice of law).
29. NOTICES.
All notices or other communications by either party to
the other shall be in writing. If such notice is to the Charterer, it
shall be addressed to:
American President Lines, Ltd.
1111 Broadway
Oakland, CA 94607
Telephone: (510) 272-8000
Facsimile: (510) 272-8932
Telex: 671 4840
Answerback: APL OAK
Attention: Treasurer
If to Owner, it shall be addressed to:
APL Newbuildings, Ltd.
1111 Broadway
Oakland, CA 94607
Telephone: (510) 272-8000
Facsimile: (510) 272-8932
Telex: 671 4840
Answerback: APL OAK
Attention: Treasurer
Any notices or communications provided for herein shall
be deemed to have been given, unless otherwise expressly provided
herein, at the time of mailing when (in the case of telex) the
addressee's answerback shall have been received at the end of the
transmission thereof or (in the case of any letter) when
delivered to that address by facsimile or personally) or when
actually received by the relevant party after being deposited in
the post, first class, postage prepaid, in an envelope addressed
as above. Any party shall have the right to change the address
at which it is to receive notices upon fifteen (15) days prior
written notice.
30. CONSENT TO ASSIGNMENT.
Charterer hereby consents to the assignment of all of
Owner's rights, title and interest in and to this Charter to
[KfW] [Syndicate Agent or Syndicate Members] pursuant to the
[HDW] [Daewoo] Charter Assignment as security for the payment and
performance of the Owner Obligations with respect to the Vessel [and the
second priority security assignment of all such right, title and
interest in this KfW pursuant to the Second Charter Assignment, as
security for certain obligations of Owner to KfW under the Loan
Agreement] and agrees to make all payments due hereunder to the accounts
specified and otherwise in accordance with Section [5.06][5.07] of the
Loan Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Charter to be executed the day and year first above written.
OWNER
APL NEWBUILDINGS,
LTD.
By:
Its:
CHARTERER
AMERICAN PRESIDENT
LINES, LTD.
By:
Its:
RECEIPT OF ORIGINAL EXECUTED
COUNTERPART ACKNOWLEDGED:
[Name]
By:__________________________
EXHIBIT B-1 TO
THE AGREEMENT TO
ACQUIRE AND CHARTER
Kreditanstalt fur Wiederaufbau
Palmengartenstrasse 5-9
D - 60325 Frankfurt am Main
Date: 19
Re.: Container Vessel identified by Howaldtswerke-Deutsche Werft AG
(the "Builder") as Yard No. (297) (298) (299) ("the Vessel") -
B IV a F(W) 753
Dear Sirs,
We refer to an agreement ("the Acquisition Agreement") dated ( )
199_ and made between yourselves as Agent and Lender and ourselves as
Transferee. Terms defined in the Acquisition Agreement have the same
meanings herein.
In relation to the Vessel, we hereby confirm that we are ready to take
delivery of and accept the Vessel under the [Acquisition Agreement]
[Shipbuilding Agreement].
We also confirm that the Vessel is recommended for class " " with
The American Bureau of Shipping as per the photocopy or duplicate
provisional certificate attached hereto, and that there is no lien nor
encumbrance on the Vessel other than the lien in favor of the Builder in
respect of the final installment of the Contract Price under the
Shipbuilding Agreement in the amount of DM( ) for the
Vessel payable on delivery under the [Acquisition
Agreement][Shipbuilding Agreement].
Yours faithfully,
for and on behalf of
APL NEWBUILDINGS, LTD.
EXHIBIT B-2
TO THE AGREEMENT TO
ACQUIRE AND CHARTER
Commerzbank AG
Ness 7-9
D-20457 Hamburg
Date: 19
Re.: Container Vessel identified by Daewoo Shipbuilding & Heavy
Machinery, Ltd. (the "Builder") as Yard No. ( ) ( ) (
) ("the Vessel")
Dear Sirs,
We refer to an agreement ("the Acquisition Agreement") dated ( )
199_ and made between yourselves as Syndicate Agent and ourselves as
Transferee. Terms defined in the Acquisition Agreement have the same
meanings herein.
In relation to the Vessel, we hereby confirm that we are ready to take
delivery of and accept the Vessel under the [Acquisition
Agreement][Shipbuilding Agreement].
We also confirm that the Vessel is recommended for class " " with
The American Bureau Shipping as per the photocopy or duplicate
provisional certificate attached hereto, and that there is no lien nor
encumbrance on the Vessel other than the lien in favor of the Builder in
respect of the final installment of the Contract Price under the
Shipbuilding Agreement in the amount of USD( ) for the
Vessel payable on delivery under the Shipbuilding Agreement.
Yours faithfully,
for and on behalf of
APL NEWBUILDINGS, LTD.
Exhibit C to
Agreement to
Acquire and Charter
[HDW] [DAEWOO] [SECOND] CHARTER ASSIGNMENT
FROM
APL NEWBUILDINGS, LTD., the Assignor
TO
[KREDITANSTALT FUR WIEDERAUFBAU, the Assignee]
[COMMERZBANK AG, HAMBURG, as Syndicate Agent, the Assignee]
Dated: __________, 19__
[HDW] [DAEWOO] [SECOND] CHARTER ASSIGNMENT
This [Second] Charter Assignment dated __________ __, 199_ is
made between (i) APL NEWBUILDINGS, LTD., a Nevada corporation (the
"Assignor") and (ii) KREDITANSTALT FUR WIEDERAUFBAU, a public law
company incorporated in the Federal Republic of Germany. [(ii)
COMMERZBANK AG, Hamburg, a banking corporation incorporated in the
Federal Republic of Germany.
W I T N E S S E T H:
WHEREAS, American President Lines, Ltd. ("APL") has
heretofore entered into that certain Loan Agreement dated ________, 1994
(the "Loan Agreement"), by and among APL, as Borrower, Kreditanstalt fur
Wiederaufbau ("KfW"), Commerzbank AG (Hamburg) (the Syndicate Agent),
and the banks listed on Schedule I thereto (each, a "Syndicate Member"
and, collectively, the "Syndicate"), as Lenders, with respect to the
purchase financing of six (6) container vessels, including the Vessel
described below, and American President Companies, Ltd. ("APC") has
heretofore entered into that certain Guarantee dated _______, 199_ (the
"Guarantee"), relating to APL's obligations under the Loan Agreement and
the Assignor's obligations under the Loan Agreement as established
pursuant to the below-defined Acquisition Agreement.
WHEREAS, the date hereof is the Delivery Date of the
below-described [HDW] [Daewoo] Vessel pursuant to the Loan Agreement;
WHEREAS, as contemplated by Section 7(k) of the Loan
Agreement, APL has entered into that certain Agreement to Acquire and
Charter (the "Acquisition Agreement") among the Assignor and the parties
to the Loan Agreement, pursuant to which APL has transferred to the
Assignor, and the Assignor has accepted title to, and is currently the
disponent owner of, the Republic of The Marshall Islands flag vessel
PRESIDENT _______________, Official Number __________ (the "Vessel"),
and the Assignor has undertaken all of the payment and certain of the
performance obligations relating to Vessel Indebtedness in respect of
the Vessel under the Loan Agreement, (the "Owner Obligations");
WHEREAS, pursuant to the Acquisition Agreement, APL is
permitted, at its option, to transfer to the Assignor, and the Assignor
has agreed, at its option, to accept, title to any and all of the other
[HDW] [Daewoo] Vessels (each of such other [HDW] [Daewoo] Vessels which
is so transferred together with the above-referenced Vessel, referred to
individually herein as a "Vessel" and collectively as the "Vessels", on
their respective Delivery Dates pursuant to the Loan Agreement;
WHEREAS, the Assignor has simultaneously herewith entered
into a First Mortgage on the Vessel in favor of [KfW] the Syndicate
and/or Agent or the Syndicate Members (the "Vessel Lender") [and has
also entered into a Second Mortgage on the Vessel in favor of KfW], as
security for the Owner Obligations in respect of the Vessel, and the
Assignor shall, upon their respective Delivery Dates, enter into a First
Mortgage in such form in favor of the Vessel Lender [and a Second
Mortgage thereon in favor of KfW with respect to each of the other
Vessels];
WHEREAS, as contemplated by Section 9.02(h) of the Loan
Agreement and by the Acquisition Agreement, as a condition to the
transfer of the Vessel and any other Vessels pursuant to the Acquisition
Agreement, the Assignor has let and demised the Vessel to American
President Lines, Ltd. as charterer, ("the Charterer") and Charterer has
hired the Vessel from the Assignor on the terms and conditions set forth
in the [HDW] [Daewoo] Charter, dated the date hereof, such charter of
the Vessel being effective upon the execution and delivery of the
Charter;
WHEREAS, as further contemplated by the Acquisition
Agreement, as further conditions to the transfer of the Vessel and the
other Vessels pursuant to the Acquisition Agreement the Assignor is
entering into this [Second] Charter Assignment relating to the [HDW]
[Daewoo] Charter in favor of the Vessel Lender [and the Second Charter
Assignment of the Daewoo Charter in favor of KfW], and the Charterer is
consenting to such Charter Assignment and such Second Charter Assignment
pursuant to the [HDW] [Daewoo] Charter;
WHEREAS, capitalized terms used herein but not defined
herein shall have the meanings assigned to them in the Loan Agreement
and the Acquisition Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
1. The Assignor hereby sells, pledges, hypothecates, assigns,
transfers and sets over unto the Assignee and unto the Assignee's
successors and assigns, not absolutely but as security only for the
performance by the Assignor of the Owner Obligations, and grants to the
Assignee a first priority security interest [second priority security
interest] in all right, title and interest of the Assignor in and to the
[HDW] [Daewoo] Charter, all monies due and to become due and claims for
monies due and to become due, and all claims for damages arising out of
the breach of, the [HDW] [Daewoo] Charter, together with any extensions,
renewals, modifications, changes or amendments of the
[HDW] [Daewoo] Charter and any and all proceeds of the foregoing.
2. The Assignor hereby agrees, represents and warrants that:
(a) The [HDW] [Daewoo] Charter is in full force and
effect and enforceable in accordance with its terms;
(b) The Assignor is not in default of any of the terms
of the [HDW] [Daewoo] Charter;
(c) Neither the whole nor any part of the right, title
and interest hereby assigned are the subject of any present assignment
or pledge other than the assignment contained herein [and the Second
Charter Assignment in favor of KfW], and so long as this Charter
Assignment [Second Charter Assignment] shall remain in effect, the
Assignor will not, without the prior written consent thereto of the
Assignee and, assign or pledge the whole or any part of the right, title
and interest hereby assigned to anyone other than the Assignee, its
successors or assigns;
(d) The Assignor will not take or omit to take any
action, the taking or omission of which might result in any alteration
or impairment of the [HDW] [Daewoo] Charter or this Charter Assignment
[Second Charter Assignment] or any of the rights created by the [HDW]
[Daewoo] Charter or this Charter Assignment [Second Charter Assignment];
(e) To the knowledge of the Assignor, the Charterer is
not in default of any of the terms of the [HDW] [Daewoo] Charter;
(f) [Subject to the rights of the Assignee under the
Charter Assignment] [The] Assignor will not enter into or consent to any
amendment, modification or other alteration of the [HDW] [Daewoo]
Charter without first obtaining the prior written consent of the
Assignee. Any amendment, modification or other alteration made without
the written consent of the Assignee shall be null and void.
3. Notwithstanding this Assignment, it is acknowledged,
understood and agreed that:
(a) The Assignor will remain liable to perform all of
the owner's obligations and duties under the [HDW] [Daewoo] Charter.
(b) The Assignor will be deemed the owner under the
[HDW] [Daewoo] Charter except as expressly set forth herein.
(c) The Assignee shall have no obligation or liability
under or pursuant to the [HDW] [Daewoo] Charter by reason of or arising
out of this Assignment, nor to present or file any claim, nor to take
any other action to collect or enforce the performance obligations of
the Charterer or payment of any amounts which have been assigned to them
or to which they may be entitled under this Charter Assignment [Second
Charter Assignment] at any time or times;
(d) So long as no Event of Default (as that term is
defined in the Loan Agreement and the First Mortgage [the Second
Mortgage]) has occurred, is continuing and shall not have been cured and
waived, neither the Assignee, the Assignor nor any successor thereof
shall interfere with the Charterer's possession and its peaceful and
quiet enjoyment of the Vessel.
4. The Assignor confirms to the Assignee its authorization and
direction to the Charterer in the [HDW] [Daewoo] Charter to make payment
of all monies due and to become due under or arising out of the [HDW]
[Daewoo] Charter at the time and in the manner set forth in Section 2(b)
of the [HDW] [Daewoo] Charter.
5. The Assignor does hereby constitute the Assignee, its
successors and assigns, the Assignor's true and lawful attorneys,
irrevocably, with full power (in the name of the Assignor or otherwise),
upon an Event of Default under the Loan Agreement or the First Mortgage
[the Second Mortgage], and in accordance therewith, to ask, require,
demand, receive, compound and give acquittance for any and all monies,
and claims for monies and rights hereby assigned, to endorse any checks
or other instruments or orders in connection therewith and to file any
claims or take any action or institute any proceedings which the
Assignee may deem to be necessary or advisable in the premises.
6. The Assignor hereby irrevocably authorizes the Assignee, at
the Assignor's expense, to file such financing and continuation
statements relating to this Charter Assignment [Second Charter
Assignment] without the Assignor's signature, as the Assignee at its
option may deem appropriate and appoints the Assignee as the Assignor's
attorney-in-fact to execute any such statements in the Assignor's name
and to perform all other acts which the Assignee may deem appropriate to
perfect and continue the security interest conferred hereby.
7. The assignment of the [HDW] [Daewoo] Charter to the Assignee
provided for herein shall take effect immediately upon the execution
hereof and the powers and authorities granted to the Assignee, its
successors or assigns herein, having been given for valuable
consideration, are hereby declared to be irrevocable.
8. The Assignor hereby agrees that at any time and from time to
time, upon the written request of the Assignee, its successors and
assigns, it will promptly and duly execute and deliver any and all such
further instruments and documents as the Assignee, its successors or
assigns, may reasonably require in order to obtain the full benefits of
this Second Charter Assignment and of the rights and powers herein
granted.
9. This [Second] Charter Assignment shall be governed by the
laws of the State of New York (other than the law of the State of New
York governing choice of law) and may not be amended or changed except
by an instrument in writing signed by the party against whom enforcement
is sought.
10. The Assignor hereby authorizes the Assignee to execute and file
financing statements and amendments thereto as provided in Article 9 of
the Uniform Commercial Code.
IN WITNESS WHEREOF, the Assignor has caused this
instrument to be duly executed as of the day and year first above
written.
By:
Title:
1 Insert in HDW Vessel Charter only.
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