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Exhibit 10.(iv)(7)
AMENDED AND RESTATED
REIMBURSEMENT AGREEMENT
THIS AMENDED AND RESTATED REIMBURSEMENT AGREEMENT (the "Agreement"), is
made and entered into as of this 15th day of October, 1999, by and among ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ REVOCABLE TRUST ("▇▇▇▇ Trust" and together with ▇▇. ▇▇▇▇
collectively referred to herein as "▇▇▇▇"), and AMERICAN CLASSIC VOYAGES CO., a
Delaware corporation ("AMCV").
W I T N E S S E T H:
A. AMCV has entered into a Memorandum of Agreement, dated as of
August 5, 1999 ("Vessel Purchase Agreement") with HAL Antillen
N.V. to acquire the M/S Nieuw Amsterdam (the "Vessel");
B. AMCV has assigned its rights under the Vessel Purchase Agreement
to Oceanic Ship Co.;
C. The Vessel Purchase Agreement requires AMCV to provide ▇▇▇▇▇▇▇
money deposits, from time to time, in amounts increasing up to $30
million, in the aggregate;
D. AMCV has entered into a Letter of Credit Agreement, dated as of
October 15, 1999 with The Chase Manhattan Bank ("Chase") pursuant
to which AMCV is seeking to obtain a $30 million Letter of Credit
Facility (the "Facility") from Chase;
▇. ▇▇▇▇ is a significant beneficial owner, indirectly, of the
outstanding shares of common stock of AMCV;
▇. ▇▇▇▇▇ is requiring that the Facility be guaranteed by ▇▇▇▇;
G. AMCV has requested ▇▇▇▇ to, and ▇▇▇▇ has agreed to, guarantee
AMCV's obligation to reimburse Chase for any payments made by
Chase under the Facility (the "Guarantee");
H. AMCV and ▇▇▇▇ acknowledge and agree that the issuance of the
Guarantee by ▇▇▇▇ specifically enables AMCV to satisfy a material
term and condition of the Vessel Purchase Agreement that it is
currently unable to satisfy without such Guarantee and that
potentially significant benefits may be derived by AMCV and its
stockholders as a result of such Guarantee;
I. As partial consideration for the Guarantee, ▇▇▇▇ desires to
receive and AMCV desires to provide to ▇▇▇▇ compensation for
providing the Guarantee and an opportunity, directly through stock
appreciation units, to
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benefit from any appreciation in the value of the AMCV common
stock following the issuance of the Guarantee;
▇. ▇▇▇▇ has required, and AMCV has agreed to use its good faith
efforts to obtain, alternative financing on commercially
reasonable terms acceptable to AMCV in its sole discretion which ,
if obtained, may be used to replace and terminate the Guarantee
(the "Alternate Financing");
▇. ▇▇▇▇ is concurrently herewith entering into that certain
Stockholders' Indemnification and Contribution Agreement with
▇▇▇▇▇▇ ▇. and ▇▇▇ ▇▇▇▇▇ Trust established pursuant to the ▇▇▇▇▇▇
▇▇▇▇▇ Revocable Trust dated December 19, 1989 ("▇▇▇▇▇") which also
holds, indirectly through affiliated entities, a significant
beneficial ownership interest in the common stock of AMCV pursuant
to which ▇▇▇▇▇ has agreed to contribute and share equally with
▇▇▇▇ the costs, risks, compensation and benefits of this
transaction, and has approved this Agreement and has required the
execution and delivery of this Agreement as a condition to the
execution and delivery of said Stockholders' Indemnification and
Contribution Agreement; and
▇. ▇▇▇▇ and AMCV have entered into that certain Reimbursement
Agreement dated as of October 15, 1999 (the "Original
Reimbursement Agreement"), and ▇▇▇▇ and AMCV wish to amend and
restate the terms of the Original Reimbursement Agreement on the
terms and conditions provided herein.
NOW, THEREFORE, for good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the parties hereto hereby agree as follows:
ARTICLE I
GUARANTEE AND GUARANTEE PAYMENTS
1.1 Guarantee. In consideration for the amounts payable pursuant to
Sections 1.3, and Article II hereof, ▇▇▇▇ hereby acknowledges and
agrees that as of the date of this Agreement, ▇▇▇▇ shall issue the
Guarantee to Chase, upon the terms and conditions set forth in the
form of the Guarantee attached hereto as Exhibit A, pursuant to
which ▇▇▇▇ agrees to guarantee to Chase, as the provider of the
Facility, the payment of certain obligations owing by AMCV under
the Facility, all as more particularly described in the Guarantee.
1.2 Reimbursement Obligations. In the event that pursuant to the
Guarantee, ▇▇▇▇ is required to and does make any payments to Chase
(individually a "Guarantee Payment" and, collectively, "Guarantee
Payments"), then AMCV shall be required hereunder to reimburse
▇▇▇▇, in the manner hereinafter set forth, for any and all such
Guarantee Payments (such
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reimbursement obligations of AMCV being hereinafter referred to as
the "Reimbursement Obligations").
1.3 Payment of Reimbursement Obligation. AMCV shall execute and
deliver to ▇▇▇▇ a promissory note(s) (each, a "Note") in the
amount of each Guarantee Payment made by ▇▇▇▇, from time to time,
pursuant to the Guarantee, which Note(s) shall be delivered
promptly following receipt by AMCV of (i) written notice from ▇▇▇▇
of such Guarantee Payment and (ii) a receipt executed by a Chase
representative or other reasonable evidence of payment setting
forth the amount of the Guarantee Payment received by Chase.
Failure by AMCV to deliver a Note will not affect or reduce AMCV's
Reimbursement Obligations hereunder.
1.3.1 Terms of Note. Each Note shall (i) be in the form of
Exhibit B hereto, (ii) provide for the payment of the
principal amount of the Reimbursement Obligation
evidenced by such Note in full two years following the
date of the Note, (iii) be dated the date the Guarantee
Payment was received by Chase, (iv) provide for the
payment of interest on the unpaid principal balance
quarterly, in arrears, at the per annum rate of 15%, (v)
be prepayable in whole or in part, without penalty or
premium and (vi) state that it is secured by the
collateral described in that certain Pledge Agreement of
even date herewith (the "Pledge Agreement") (a copy of
which is attached hereto as Exhibit C).
1.3.2 Security for Note. In addition to any other legal or
equitable rights available to ▇▇▇▇, the Notes and other
obligations hereunder shall, until a Guarantee
Termination shall occur, be secured by a pledge of 100%
of the issued and outstanding capital stock of Oceanic
Ship Co., a Delaware corporation, the Assignee of AMCV's
rights under the Vessel Purchase Agreement and the
prospective owner of the Vessel, pursuant to the Pledge
Agreement. In the event that another entity (other than
Oceanic Ship Co.) which is directly and indirectly
controlled by AMCV becomes the owner of the Vessel, then
AMCV shall cause the capital stock of any such entity,
with the prior written consent or upon the request of
▇▇▇▇, to be pledged by AMCV (or the owner of the capital
stock of such entity) to secure such Note(s) and other
obligations hereunder as provided for pursuant to the
Pledge Agreement.
1.4 Termination of Guarantee. For purposes of this Agreement, the
Guarantee shall be deemed terminated (a "Guarantee Termination")
upon the earlier to occur of (a) the release by Chase of all
▇▇▇▇'▇ obligations and liabilities under the Guarantee and (b) the
termination of the Guarantee in accordance with its terms and, in
either case, provided that no "Guarantee Termination" shall be
deemed to have occurred unless and until the
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Note(s), if any shall have been issued, shall have been paid in
full, and any amounts due and owing under the Pledge Agreement and
under this Agreement (other than with respect to unexercised Stock
Appreciation Units or unexercised redemption rights as provided in
Article II hereof) shall have been fully satisfied, at which time,
the Guarantee Termination shall be deemed to have occurred.
ARTICLE II
COMPENSATION
2.1 Commitment Fee. As partial consideration for issuance of the
Guarantee, immediately following execution and delivery of this
Agreement and of the Guarantee, AMCV shall pay to ▇▇▇▇ a fee of
$500,000, payable via wire transfer of immediately available funds
to an account designated by ▇▇▇▇.
2.2 Stock Appreciation Payments. As partial consideration for the
issuance of the Guarantee, upon issuance of the Guarantee to
Chase, subject to the terms of this Agreement, ▇▇▇▇ will be
entitled to receive from AMCV certain payments to be calculated on
the basis of the appreciation in the Fair Market Value of the
common stock, par value $0.01 per share ("Common Stock") of AMCV,
as traded on the Nasdaq National Market (or such other market or
exchange if the AMCV Common Stock is no longer traded on the
Nasdaq National Market), measured from the date of this Agreement
(or as otherwise provided in Section 2.2.1 until the date upon
which AMCV receives delivery of a written notice requesting
payment of the applicable appreciation amount (the "Trigger
Date"); provided, however, that in no event may the Trigger Date
be earlier than one day after three years following the date of
this Agreement, nor later than five (5) years following the date
of this Agreement (the "Exercise Period"), and if such notice is
not given, the Trigger Date shall be deemed to be five (5) years
following the date of this Agreement.
2.2.1 Funded Appreciation Payment. In the event that on or
before the Trigger Date a Guarantee Payment is made or
the Guarantee remains outstanding on or after December
11, 2000 and the Trigger Date follows such date, then
AMCV shall be required to make an appreciation payment to
▇▇▇▇ ("Funded Appreciation Payment") equal to the
product of (a) the difference between the Fair Market
Value of the AMCV Common Stock determined as of the
Trigger Date minus the greater of (i) Current Fair Market
Value minus $5.00 and (ii) the lesser of (x) the Fair
Market Value of the AMCV Common Stock as of the earlier
of (aa) the date of the initial Guarantee Payment and
(bb) December 11, 2000 and (y) the Current Fair Market
Value (the "Funded Spread"), multiplied by (b) the number
of Vested Stock Appreciation Units (as hereinafter
defined) covered by the Appreciation Payment Notice (as
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hereinafter defined) determined as of the Trigger Date.
In no event shall the Funded Spread be less than $0.
2.2.2 Unfunded Appreciation Payment. In the event that no
Guarantee Payment has been made on or before the Trigger
Date and a Guarantee Termination occurred on or before
December 11, 2000, then AMCV shall be required to make an
appreciation payment to ▇▇▇▇ ("Unfunded Appreciation
Payment") equal to the product of (a) the difference
between the Fair Market Value of the AMCV Common Stock
determined as of the Trigger Date minus the Current Fair
Market Value (the "Unfunded Spread"), multiplied by (b)
the number of Vested Stock Appreciation Units covered by
the Appreciation Payment Notice. In no event shall the
Unfunded Spread be less than $0.
2.2.3 Notice of Appreciation Payment. In the event that ▇▇▇▇
elects to receive a Funded Appreciation Payment or an
Unfunded Appreciation Payment, as the case may be (an
"Appreciation Payment"), then at any time during the
Exercise Period, ▇▇▇▇ shall give written notice to AMCV
of its desire to receive an Appreciation Payment on all,
but not less than all, of the Vested Stock Appreciation
Units ("Appreciation Payment Notice").
2.2.4 Form of Appreciation Payment. AMCV shall make the
applicable Appreciation Payment to ▇▇▇▇ in cash within 30
days following receipt of an Appreciation Payment Notice
delivered within the Exercise Period. The failure to make
a timely Appreciation Payment shall constitute a default
under this Agreement and, in addition to other remedies
available at law or equity, the amount of any
Appreciation Payment which is not timely paid shall be
added to the principal amount of the Notes, if then
outstanding, to be secured and payable in accordance
therewith.
2.3 Definitions. For purposes of this Agreement, the following terms
as defined as follows:
2.3.1 Current Fair Market Value. "Current Fair Market Value"
means the Fair Market Value of AMCV Common Stock as of
the date hereof, which the parties acknowledge to be
$21.90.
2.3.2 Fair Market Value of AMCV Common Stock. The "Fair Market
Value of the AMCV Common Stock" as of any applicable date
shall be mean the average of the closing prices of the
AMCV Common Stock on the Nasdaq National Market (or such
other market or exchange if the AMCV Common Stock is no
longer traded on the Nasdaq National Market), for the ten
trading days immediately preceding such applicable date.
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2.3.3 Stock Appreciation Units. "Stock Appreciation Units"
shall mean the units with respect to which appreciation
payments have been granted under this Article II and
shall equal 800,000 in the aggregate.
2.3.4 Vested Stock Appreciation Units. "Vested Stock
Appreciation Units" shall mean that number of Stock
Appreciation Units which have vested as determined by the
following vesting schedule, commencing upon the date of
this Agreement and continuing through December 11, 2000,
which vesting shall terminate upon a Guarantee
Termination as to unvested Stock Appreciation Units.
---------------------------- ---------------------------
NUMBER OF INCREMENTAL
DATE OF GUARANTE STOCK APPRECIATION UNITS
TERMINATION VESTING ON SPECIFIED DATES
---------------------------- ---------------------------
Execution of this 100,000
Agreement
---------------------------- ---------------------------
On 10-31-99 46,667
---------------------------- ---------------------------
On 11-30-99 46,667
---------------------------- ---------------------------
On 12-31-99 46,667
---------------------------- ---------------------------
On 1-31-00 46,667
---------------------------- ---------------------------
On 2-29-00 46,667
---------------------------- ---------------------------
On 3-31-00 46,667
---------------------------- ---------------------------
On 4-30-00 46,667
---------------------------- ---------------------------
On 5-31-00 46,667
---------------------------- ---------------------------
On 6-30-00 46,667
---------------------------- ---------------------------
On 7-31-00 46,667
---------------------------- ---------------------------
On 8-31-00 46,666
---------------------------- ---------------------------
On 9-30-00 46,666
---------------------------- ---------------------------
On 10-31-00 46,666
---------------------------- ---------------------------
On 11-30-00 46,666
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On 12-11-00 46,666
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2.4 Certain AMCV "Call" Rights. In the event that on or before three
(3) years from the date hereof, a Guarantee Termination shall have
occurred, then, during such three (3) year period, AMCV shall have
the right to redeem all but not less than all of the Vested Stock
Appreciation Units by payment in cash of an amount (the
"Redemption Payment") equal to the "Applicable Redemption Price"
multiplied by the number of Vested Stock Appreciation Units
subject to redemption. For purposes hereof, the "Applicable
Redemption Price" shall equal (i) $11.00 from and after the date
hereof and prior to the first anniversary of the date hereof; (ii)
$13.00 from and after the first anniversary of the date hereof and
prior to the second anniversary of the date hereof; and (iii)
$15.00 from and after the
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second anniversary of the date hereof until on or prior to the
third anniversary of the date hereof.
Notwithstanding the foregoing, in the event AMCV provides written
notice to ▇▇▇▇ of the exercise of its rights under this Section
2.4 and ▇▇▇▇ asserts that such exercise is improper due to the
fact that a Guarantee Termination has not occurred by reason of
the failure to make payment in full of all amounts required by
Section 1.4, then in such event, AMCV shall be granted an
additional ten (10) business days to pay such additional amounts,
and the applicable period referred to in this Section 2.4 shall be
extended for such additional ten (10) business days.
2.5 Equitable Adjustments.
2.5.1 Sale or Reorganization. In case AMCV is merged or
consolidated with another corporation, or in case the
property or stock of AMCV is acquired by another
corporation, or in case of a reorganization or
liquidation of AMCV or in case of any extraordinary
transaction, AMCV and the board of directors of any
corporation assuming the obligations of AMCV hereunder,
shall provide for the continuation of the Stock
Appreciation Units and provide equitable adjustments as
determined by the parties for the protection of the value
of the Stock Appreciation Units, which may include the
substitution on an equitable basis of references to
appropriate stock of AMCV, or of the merged, consolidated
or otherwise reorganized corporation.
2.5.2 Recapitalization. If the AMCV Common Stock should, as a
result of any stock dividend, stock split, other
subdivision or combination of shares of Common Stock, or
any reclassification, recapitalization or otherwise, be
increased or decreased, the number of Stock Appreciation
Units and the base price of each Stock Appreciation Units
shall be equitably adjusted as determined by the parties.
2.5.3 Effective Date. Any adjustments required pursuant to this
Section 2.5 shall not be deemed effective prior to the
commencement of the Exercise Period.
2.6 ▇▇▇▇ Guarantee Performance. ▇▇▇▇ acknowledges the substantial
benefits being provided hereunder in consideration of ▇▇▇▇'▇
execution and delivery of, and performance under, the Guarantee.
Accordingly, ▇▇▇▇ agrees for the benefit of AMCV to perform its
obligation under the Guarantee.
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ARTICLE III
COVENANTS
3.1 Definitions. The following terms used in this Article III shall
have the following meanings:
3.1.1 "Capital Lease" shall mean any lease of property which in
accordance with GAAP would be capitalized on the lessee's
balance sheet.
3.1.2 "Change of Control" shall occur if a person or a group of
persons (within the meaning of Sections 13 or 14 of the
Securities and Exchange Act of 1934, and regulations
promulgated thereunder), other than Zell, Lurie, Equity
Group Investments, Inc., or their respective affiliates
(collectively, "EGI"), acquires beneficial ownership of
such number of shares of Common Stock which exceeds the
number of shares of Common Stock then beneficially owned
by EGI, which acquisition shall have occurred other than
by reason of sale of shares of Common Stock, directly or
indirectly, by EGI.
3.1.3 "Customary Liens" shall mean (i) Liens for claims, taxes,
assessments or charges of any governmental authority not
yet due or which are being contested in good faith by
appropriate proceedings and with respect to which
adequate reserves or other appropriate provisions are
being maintained in accordance with GAAP, (ii) statutory
Liens of landlords, bankers, carriers, warehousemen,
mechanics, materialmen, and other Liens imposed by law,
including without limitation preferred maritime liens
(including Liens for crew wages), arising in the ordinary
course of business and for amounts which (a) are not yet
due, (b) are not more than thirty (30) days past due as
long as no notice of default has been given or other
action taken to enforce such Liens, or (c) (1) are not
more than thirty (30) days past due and a notice of
default has been given or other action taken to enforce
such Liens, or (2) are more than thirty (30) days past
due, and, in the case of clause (1) or (2), are being
contested in good faith by appropriate proceedings which
are sufficient to prevent imminent foreclosure of such
Liens and with respect to which adequate reserves or
other appropriate provisions are being maintained in
accordance with GAAP, (iii) Liens incurred or deposits
made in the ordinary course of business (including
without limitation surety bonds and appeal bonds) in
connection with workers' compensation, unemployment
insurance and other types of employment benefits or to
secure the performance of tenders, bids, leases,
contracts (other than for the
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repayment of Debt), statutory obligations and other
similar obligations or arising as a result of progress
payments under government contracts, (iv) easements
(including without limitation reciprocal easement
agreements and utility agreements), rights-of-way,
covenants, consent rights of landlords, reservations,
encroachments, variations and other restrictions, charges
or encumbrances (whether or not recorded) affecting the
use of real property, which do not materially interfere
with the ordinary conduct of the business of AMCV or any
of its Subsidiaries taken as a whole, (v) Liens in favor
of customs and revenue authorities arising as a matter of
law to secure payment of customs duties in connection
with the importation of goods, and (vi) precautionary
filings of financing statements in connection with
operating leases or permitted purchase money Debt or
Capital Leases entered into the ordinary course of
business. Notwithstanding the foregoing, neither
governmental environmental Liens, Liens imposed under
ERISA, nor Liens in connection with enforceable judgments
(meaning judgments which are not covered by insurance or
adequate reserves, unless enforcement thereof has been
stayed (unless such stay must be secured with a bond or
collateral equal to or greater than $2,500,000)) shall be
Customary Liens.
3.1.4 "Debt" of any person or entity shall mean, without
duplication, (i) all liabilities for borrowed money
which, in accordance with GAAP, would be included in
determining total liabilities, (ii) obligations in
respect of any Capital Lease, and (iii) any guarantee of
the foregoing, but, as to AMCV and its Subsidiaries, Debt
shall exclude such liabilities, obligations and
guarantees if owed or guaranteed by a Subsidiary of AMCV
to AMCV or another Subsidiary of AMCV (excluding from
this exception debt owed by Oceanic Ship Co. to another
Subsidiary of AMCV) or by AMCV to one of its
Subsidiaries.
3.1.5 "Distributions" shall mean (i) dividends or other
distributions or payments on capital stock or other
equity interest of a corporation, association or other
business entity (except distributions in such stock or
other equity interest); and (ii) the redemption or
acquisition of such stock or other equity interests or of
warrants, rights or other options to purchase such stock
or other equity interests (except when solely in exchange
for such stock or other interests).
3.1.6 "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time, and
any successor statute.
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3.1.7 "GAAP" shall mean generally accepted accounting
principles set forth in the opinions and pronouncements
of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards
Board, or in such other statements by such other entity
as may be in general use by significant segments of the
accounting profession, which are applicable to the
circumstances as of the date of determination.
3.1.8 "Investments" shall mean any advance, loan, extension of
credit or capital contribution to, or purchase of any
stock, bonds, notes, debentures or other securities of,
or other investment in, any person or entity.
3.1.9 "Lien" shall mean as to any person or entity, any
mortgage, lien, pledge, adverse charge, security interest
or other encumbrance in or on, or interest of title of
any vendor, lessor, lender or other secured party to or
of such person or entity under conditional sale or other
title retention agreement or Capital Lease with respect
to, any property or asset of such person or entity.
3.1.10 "Material Adverse Effect" shall mean a material adverse
effect upon (i) the business, assets or other properties,
liabilities or condition (financial or otherwise) or
results of operations of AMCV or its Subsidiaries taken
as a whole, or (ii) the ability of AMCV to perform its
obligations hereunder, under any Note or under the Pledge
Agreement in any material respect.
3.1.11 "Permitted Liens" shall mean (i) Liens to secure
Permitted Debt, (ii) Customary Liens, (iii) Liens in
connection with vendor financing associated with vessels
under construction by AMCV or its Subsidiaries (such
secured vendor financing not to exceed $7,500,000 at any
one time outstanding), and (iv) the Lien of the Pledge
Agreement.
3.1.12 "Property" shall mean any interest in any kind of
property or asset, whether real, personal or mixed, or
tangible or intangible.
3.1.13 "Restricted Payments" shall mean: (i) any Distribution by
AMCV or any Subsidiary of AMCV (other than by such a
Subsidiary to AMCV or another Subsidiary of AMCV),
including without limitation any Distribution resulting
in the acquisition by AMCV of securities of AMCV which
would constitute treasury stock of AMCV, and (ii) any
payment, repayment, redemption, retirement, repurchase or
other acquisition, direct or indirect, by AMCV, on
account of, or in respect of, the principal of any
Subordinated Debt
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(or any installment thereof) prior to the regularly
scheduled maturity date thereof (as in effect on the date
such Subordinated Debt was originally incurred).
Notwithstanding the foregoing, none of the following
shall constitute Restricted Payments hereunder: (a)
Appreciation Payments, (b) any Redemption Payment owing
under Section 2.4 above, (c) tax-sharing payments or
allocated overhead payments to AMCV or any of its
affiliates, (d) without duplication of clause (c) above,
any payment to members of a Subsidiary which is a limited
liability company made to enable such member to pay
income taxes, and (e) payments in the nature of loan
payments with respect to Permitted Debt by a Subsidiary
of AMCV to AMCV or another Subsidiary of AMCV or by AMCV
to a Subsidiary of AMCV.
3.1.14 "Restricted Investments" shall mean all Investments other
than Permitted Investments. Permitted Investments
include:
(i) existing Restricted Investments;
(ii) Property to be used, accounts and notes
receivable arising, and intercompany charges, in
each case in the ordinary course of business of
AMCV and its Subsidiaries;
(iii) certificates of deposit with final maturities of
one year or less issued by U.S. commercial banks
having capital and surplus in excess of US
$100,000,000;
(iv) commercial paper with a minimum rating for the
issuer thereof of A-2/P-2 (Standard & Poor's
Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc., or any successor thereto
("S&P"), ▇▇▇▇▇'▇ Investors Services, Inc. or any
successor thereto ("Moody's")) or if neither S&P
nor ▇▇▇▇▇'▇ is rating such obligations, the
second highest rating from another nationally
recognized rating service, and maturing not more
than two hundred seventy (270) days from the
date of acquisition;
(v) marketable direct obligations issued or
unconditionally guaranteed by the United States
of America or issued by any agency thereof and
backed by the full faith and credit of the
United States of America, in each such case
maturing within one year after the date of
acquisition thereof;
(vi) Investments in repurchase agreements;
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(vii) deposits or escrow amounts in relation to a
purchase or construction of a vessel (including
the Vessel);
(viii) loans or advances to employees in the ordinary
course of business not in excess of an aggregate
amount of $500,000 outstanding at any one time;
(ix) guarantees which constitute Permitted Debt;
(x) Investments in the nature of interest rate or
fuel hedging agreements not entered into for
speculative purposes; and
(xi) other Investments not in excess of an aggregate
amount of $5,000,000 outstanding at any one
time.
3.1.15 "Subordinated Debt" shall mean any Debt of AMCV which is
expressly subordinate to the Debt evidenced (or which may
become evidenced) by the Notes.
3.1.16 "Subsidiary" shall mean, as to any person or entity, any
corporation, association or other business entity in
which such person or entity or one or more of its
Subsidiaries or such person or entity and one or more of
its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily,
in the absence of contingencies, to elect a majority of
the directors (or persons performing similar functions)
of such entity, and any partnership or joint venture if
more than a fifty percent (50%) interest in the profits
or capital thereof is owned by such person or entity or
one or more of its Subsidiaries or such person or entity
and one or more of its Subsidiaries (unless such
partnership or joint venture can and does ordinarily take
major business actions without the prior approval of such
person or entity or one or more of its Subsidiaries).
Unless the context otherwise clearly requires, any
reference to a "Subsidiary" is a reference to a
Subsidiary of AMCV.
3.2 Covenants. AMCV covenants and agrees that, on and after the date
hereof and until such time as a Guarantee Termination shall occur:
3.2.1 Limitation on Debt. Except for Debt incurred under or
pursuant to this Agreement or the Notes, AMCV will not,
and will not permit any Subsidiary, to create, assume,
incur, guarantee or otherwise become liable in respect of
any Debt, except for the following (collectively,
"Permitted Debt"):
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(a) Preferred Ship Mortgage (the "Mortgage") on the
Vessel in a maximum principal amount not to
exceed $84,500,000;
(b) Debt incurred under or pursuant to that certain
Credit Agreement dated as of February 25, 1999
executed by The Delta Queen Steamboat Co.
("Delta Queen"), The Financial Institutions
Listed on the Signature Pages Thereof and Which
From Time to Time Become Parties Thereto, The
Chase Manhattan Bank, as Issuing Bank and as
Administrative Agent, and Hibernia National
Bank, as Documentation Agent, (subject to
paragraph (j) below) as amended from time to
time;
(c) Project America MARAD Debt in a principal amount
not to exceed $1,100,000,000 at any one time
outstanding;
(d) additional MARAD Debt incurred in connection
with Coastal Cruisers, in a principal amount not
to exceed $75,000,000 at any one time
outstanding;
(e) guarantees associated with vendor financing for
vessels under construction by AMCV or its
Subsidiaries in an amount not to exceed
$50,000,000 at any one time outstanding;
(f) Debt owing by a Subsidiary to AMCV or another
Subsidiary (other than Debt owed by Oceanic Ship
Co. to another subsidiary of AMCV) or by AMCV to
a Subsidiary;
(g) the unsecured guarantee by AMCV of the Debt
secured by the Mortgage;
(h) additional Debt incurred by AMCV or its
Subsidiaries which is either unsecured Debt or
Subordinated Debt;
(i) additional Debt incurred by AMCV or its
Subsidiaries in an amount not to exceed
$50,000,000 at any one time outstanding; and
(j) any amendment, extension, renewal, refinancing,
refunding or replacement of any of the foregoing
Debt, provided that neither the maturity nor the
average life of such Debt is shortened and the
annual required debt service thereunder is not
increased.
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3.2.2 Restricted Payments and Investments. AMCV shall not make
any Restricted Investments or Restricted Payments.
3.2.3 Liens. Except for Permitted Liens, AMCV will not, and
will not permit any Subsidiary to incur liens on, or
pledge to any third party, assets which (a) are not, as
of the date hereof, pledged or committed to be pledged to
such third party, or (b) which become free of Liens after
the date hereof.
3.2.4 Sale of Assets. Except for Permitted Liens, AMCV will not
permit Oceanic Ship Co. to sell, lease (other than
leasing of the Vessel in the ordinary course of business)
or transfer or otherwise dispose of the Vessel or
contract rights under the Vessel Purchase Agreement
without ▇▇▇▇'▇ prior approval.
3.2.5 Mergers and Consolidations. AMCV will not merge into or
consolidate with or sell or convey all or substantially
all of its assets to any other person or entity unless
(a) AMCV is the surviving entity or the surviving entity
expressly assumes all obligations under the Notes, the
Pledge Agreement and this Agreement, including the
obligations under Section 2.5 hereof, (b) the surviving
entity shall not, immediately after such merger,
consolidation, sale or conveyance, be in default under
the Notes, and (c) the surviving entity shall be
incorporated in the United States, except that,
notwithstanding the foregoing, any Subsidiary (other than
Oceanic Ship Co.) may merge with or into AMCV (provided
that AMCV shall be the surviving entity) or with or into
any one or more other Subsidiaries.
3.2.6 Future Restrictions. Except in connection with Permitted
Debt, AMCV will not enter into any new agreements on or
after the date hereof, or modify existing agreements,
which agreements or modifications restrict the payment of
dividends or intercompany advances between any
Subsidiaries and AMCV.
3.2.7 Financial Statements. AMCV shall deliver (or cause to be
delivered) to ▇▇▇▇:
(a) with respect to AMCV, annual audited
consolidated financial statements within ninety
(90) days after the end of each fiscal year,
certified by an authorized officer of AMCV as
fairly presenting the financial condition of
AMCV on a consolidated basis, together with a
compliance certificate stating that no default
exists under the Agreement;
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(b) with respect to AMCV, quarterly unaudited
consolidated financial statements within sixty
(60) days after the end of each fiscal quarter
(for the first three fiscal quarters of AMCV's
fiscal year), certified by an authorized officer
of AMCV as fairly presenting (subject to normal
year-end adjustments) the financial condition of
AMCV on a consolidated basis, together with a
compliance certificate stating that no default
exists under this Agreement;
(c) with respect to Delta Queen, annual audited
consolidated financial statements within one
hundred (100) days after the end of each fiscal
year; and
(d) with respect to Delta Queen, quarterly unaudited
consolidated financial statements within sixty
(60) days after the end of each fiscal quarter
(for the first three fiscal quarters of Delta
Queen's fiscal year).
3.2.8 Notice of Defaults. AMCV shall notify ▇▇▇▇ promptly upon
AMCV obtaining knowledge of any condition or event which
constitutes a default hereunder or an Event of Default
under the Pledge Agreement.
3.2.9 Corporate Existence, Etc. Except as permitted in Section
3.2.5 above or expressly set forth elsewhere in this
Agreement, AMCV shall, and shall cause each of its
Subsidiaries to, at all times, maintain its existence as
a corporation or limited liability company, as
applicable, and preserve and keep in full force and
effect all licenses, franchises, permits and other rights
necessary for the operation of its business, except where
the failure to obtain or maintain such existence,
licenses, franchises, permits or rights could not
reasonably be expected to have a Material Adverse Effect.
3.2.10 Compliance with Laws. AMCV shall, and shall cause each of
its Subsidiaries to, comply with all laws, rules and
regulations applicable to or binding on AMCV or its
Subsidiaries or any of their respective Property or to
which AMCV or its Subsidiaries or such Property is
subject, including without limitation ERISA and
environmental laws, rules and regulations, except where
the failure so to comply could not reasonably be expected
to have a Material Adverse Effect.
3.2.11 Payment of Taxes and Claims. AMCV shall, and shall cause
each of its Subsidiaries to, pay (a) all taxes,
assessments and other
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16
governmental charges imposed upon it or on any of its
properties or assets or in respect of any of its
franchises, business, income or property before any
penalty or interest accrues thereon, and (b) all claims
(including without limitation claims for labor, services,
materials and supplies) for sums which have become due
and payable and which by law have or may become a Lien
(other than a Customary Lien) upon any of its properties
or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; provided that no
such taxes, assessments and governmental charges referred
to in clause (a) above or claims referred to in clause
(b) above need to paid (i) if being contested in good
faith by appropriate proceedings promptly instituted and
diligently conducted and if such reserve or other
appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor or
(ii) if adequate reserves in the absence of a contest are
maintained therefor in accordance with GAAP.
3.2.12 Maintenance of Properties; Insurance. AMCV shall, and
shall cause each of its Subsidiaries to, maintain or
cause to be maintained in good repair, working order and
condition, excepting ordinary wear and tear and damage,
due to casualty or condemnation, all Property material to
its operations (which shall in any event include each
vessel, whether subject to a ship mortgage or not) and
will make or cause to be made all appropriate repairs,
renewals and replacements thereof. AMCV shall, and shall
cause each of its Subsidiaries to, maintain with
financially sound insurance companies insurance policies
and programs insuring all Property and other assets
material to the operations of AMCV and its Subsidiaries
(which shall in any event include each vessel, whether
subject to a ship mortgage or not) against loss or damage
by fire, theft, burglary, pilferage and loss in transit
and business interruption, together with such other
hazards as are reasonably consistent with prudent
industry practice, and maintain liability insurance
consistent with prudent industry practice with
financially sound insurance companies.
3.2.13 Inspection of Property, Books and Records. AMCV shall
permit, and shall cause each of its Subsidiaries to
permit, any representative(s) designated by ▇▇▇▇ to visit
and inspect any of its properties, all upon reasonable
notice and at such reasonable time and as often as may be
reasonably requested. Each such visitation and inspection
made by or on behalf of ▇▇▇▇ shall be at ▇▇▇▇'▇ expense
if no Event of Default under the Pledge Agreement shall
have occurred and be continuing and at all other times at
AMCV's expense.
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3.2.14 Line of Business. AMCV shall not, and shall not permit
any of its Subsidiaries to, engage in any business other
than the business engaged in by AMCV and its Subsidiaries
on the date hereof and any business activities
substantially similar or related thereto, including
without limitation the operation of any vessel in its
cruise business.
3.2.15 Transactions with Affiliates. Except with respect to
Investments and Distributions and payments not prohibited
under Section 3.2.2 above, and except for transactions
with EGI, AMCV shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly enter into any
transaction (including without limitation the purchase,
sale, lease or exchange of any property or the rendering
of any service) with any of its affiliates (other than
AMCV or such Subsidiaries) on terms that are materially
less favorable to it than those fair and reasonable terms
that might be obtained in a comparable arms-length
transaction at the time.
ARTICLE IV
CERTAIN DEFAULTS
4.1 Defaults. Each of the following occurrences shall constitute a
default under this Agreement:
(a) AMCV shall fail to pay when due any Appreciation Payment,
any Redemption Payment owing under Section 2.4 above, or
any principal amounts due under any Note; or
(b) AMCV shall fail to pay when due any interest or other
amount (other than an Appreciation Payment or such
principal due under the Agreement or any Note) which
failure shall continue for five (5) business days after
receipt by AMCV of ▇▇▇▇'▇ notice of such failure; or
(c) any representation or warranty made or deemed made by
AMCV or herein shall prove to have been untrue or
incorrect in any material respect on or as of the date
made or deemed made; or
(d) AMCV shall default in the observance or performance of
any other agreement contained in this Agreement (other
than as provided in paragraphs (a) through (c) of this
Section 4.1, and such default shall continue unremedied
for a period of thirty (30) days after receipt by AMCV of
▇▇▇▇'▇ notice of such default; or
(e) a Change of Control shall occur;
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(f) AMCV or any of its Subsidiaries shall fail to make any
payment when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) on any
Debt of AMCV or any such Subsidiary, if the aggregate
outstanding amount of all such Debt is $15,000,000 or
more, or AMCV or any of its Subsidiaries shall default
under any instrument, agreement or indenture pertaining
to such Debt, if the effect thereof is to accelerate the
maturity of such Debt; or
(g) there shall occur an Event of Default under the Pledge
Agreement or any breach, default or event of default
(after the expiration of all applicable grace or cure
periods) by AMCV under or in connection with any Note.
ARTICLE V
MISCELLANEOUS
5.1 Expenses. AMCV shall pay its own expenses and ▇▇▇▇'▇ third party
legal fees and disbursements, incidental to the preparation of
this Agreement, the carrying out of the provisions of this
Agreement and the consummation of the transactions contemplated
hereby. Further AMCV shall pay all reasonable expenses incurred by
▇▇▇▇ in connection with enforcing its rights hereunder or
collecting amounts due ▇▇▇▇ hereunder.
5.2 Interest. Any amount due under this Agreement that is not
otherwise evidenced by a Note shall bear interest from and after
the due date thereof until paid in full at the rate set forth in
the Notes.
5.3 Entire Agreement This Agreement, together with the other
agreements referred to herein and/or executed and delivered
concurrently herewith, sets forth the entire understanding of the
parties hereto with respect to the transactions contemplated
hereby. It shall not be amended or modified except by written
instrument duly executed by all of the parties hereto. Any and all
previous agreements and understandings between or among the
parties regarding the subject matter hereof, whether written or
oral, are superseded by this Agreement.
5.4 Assignment and Binding Effect. This Agreement may not be assigned
by AMCV without the prior written consent of ▇▇▇▇. ▇▇▇▇ may assign
any of ▇▇▇▇'▇ rights and/or obligations under this Agreement, the
Notes and the Pledge Agreement.
5.5 Notices. All notices required to be given under the terms of this
Agreement or which any of the parties desires to give hereunder
shall be
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in writing and delivered personally, by overnight delivery with a
nationally recognized delivery service or sent by registered or
certified mail, postage prepaid, return receipt requested with an
additional copy sent by facsimile (and confirmed by registered or
certified mail or overnight delivery), each addressed as follows:
As to ▇▇▇▇: Equity Group Investments, L.L.C., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention: ▇▇▇▇▇▇▇
▇▇▇▇▇ Fax (▇▇▇) ▇▇▇-▇▇▇▇, with copies to: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq., ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Fax
(▇▇▇) ▇▇▇-▇▇▇▇; as to AMCV: American Classic Voyages Co., ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, attention:
Jordan ▇. ▇▇▇▇▇, Esq., Executive Vice President and General
Counsel, Fax: (▇▇▇) ▇▇▇-▇▇▇▇; with a copy to: Seyfarth, Shaw,
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., Fax:
(▇▇▇) ▇▇▇-▇▇▇▇ and to Altheimer & ▇▇▇▇, ▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention: ▇▇▇▇▇▇ ▇. Gold, Esq.,
Fax: (▇▇▇) ▇▇▇-▇▇▇▇; or to such other address and to the attention
of such other person as the party to whom such notice is to be
given may have theretofore designated in a notice to the other
party hereto. Any notice given in accordance with the foregoing
shall be deemed to have been given when delivered in person or by
overnight delivery against receipt or received by facsimile or, if
mailed, on the third business day next following the date on which
it shall have been deposited in the mails.
5.6 Governing Law. This Agreement shall be governed by and interpreted
and enforced in accordance with the internal laws (but not the
laws of conflict) of the State of Illinois.
5.7 Interpretation. All section headings contained in this Agreement
are for convenience of reference only, do not form a part of this
Agreement and shall not affect in any way the meaning or
interpretation of this Agreement. Words used herein, regardless of
the number and gender specifically used, shall be deemed and
construed to include any other number, singular or plural, and any
other gender, masculine, feminine, or neuter, as the context
requires. Any reference to a "person" herein shall include an
individual, firm, corporation, partnership, trust, governmental
authority or body, association, unincorporated organization or any
other entity; any use of the term "include" or "including" shall
mean "including without limitation"; and any use of "hereof,"
"hereto," "herein" or "hereunder" shall mean this Agreement.
5.8 Severability. Wherever there is any conflict between any provision
of this Agreement and any statute, law, ordinance or regulation
contrary to which the parties have no legal right to contract, the
latter shall prevail, but in such event, the provisions of this
Agreement thus affected shall be curtailed and limited only to the
extent necessary to bring it within the
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requirement of such law, provided such curtailment does not
frustrate the commercial purposes of this Agreement. In the event
that any part, section, paragraph or clause of this Agreement
shall be held to be indefinite, invalid or otherwise
unenforceable, the balance of this Agreement shall continue in
full force and effect unless the severance of the portion thus
held unenforceable would unreasonably frustrate the commercial
purposes of this Agreement.
5.9 No Strict Construction. The language used in this Agreement shall
be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of strict construction
shall be applied against any party.
5.10 Exhibits. All exhibits referred to herein are intended to be and
hereby are specifically made a part of this Agreement.
5.11 Counterparts; Facsimile. This Agreement may be executed in any
number of counterparts and any party hereto may execute any such
counterpart, each of which when executed and delivered shall be
deemed to be an original and all of which counterparts taken
together shall constitute but one and the same instrument. The
parties hereto agree that facsimile transmission of original
signatures shall constitute and be accepted as original
signatures. This Agreement shall become binding when one or more
counterparts taken together shall have been executed and delivered
by the parties. It shall not be necessary in making proof of this
Agreement or any counterpart hereof to produce or account for any
of the other counterparts.
5.12 Representations. AMCV hereby represents and warrants to ▇▇▇▇ as
follows:
(a) Each of AMCV, Project America, Inc, ("PAI") and Oceanic
is a corporation duly organized, validly existing and in
good standing under the laws of Delaware and has the
requisite power and authority to carry on its business as
now being conducted. Each of AMCV, PAI and Oceanic is
duly qualified to do business, and is in good standing,
in each jurisdiction where the character of its
properties owned or held under lease or the nature of its
activities makes such qualification necessary, except
where the failure to obtain such qualification would not
have a material adverse effect on AMCV, PAI or Oceanic.
(b) AMCV has full right, power and authority to execute,
deliver and perform this Agreement and the Notes. This
Agreement has been duly executed and
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delivered by AMCV, and when issued by AMCV to ▇▇▇▇, each
Note will have been duly executed and delivered AMCV.
This Agreement constitutes, and when issued by AMCV to
▇▇▇▇, each Note will constitute, the valid and binding
obligations of AMCV enforceable against AMCV in
accordance with their respective terms, except as may be
limited by bankruptcy, reorganization and other laws
affecting creditors' rights generally.
(c) PAI has full right, power and authority to execute,
deliver and perform the Pledge Agreement. The Pledge
Agreement has been duly executed and delivered by PAI.
The Pledge Agreement constitutes the valid and binding
obligation of PAI enforceable against PAI in accordance
with its terms, except as may be limited by bankruptcy,
reorganization and other laws affecting creditors' rights
generally.
(d) The execution and delivery of this Agreement, the Pledge
Agreement and (when executed and delivered) the Notes do
not, and the consummation of the transactions
contemplated hereby and thereby and compliance with the
provisions hereof and thereof will not, conflict with,
result in any violation of, or default (with or without
notice or lapse of time, or both) under, or result in the
creation of any encumbrance upon any of the collateral
pledged under the Pledge Agreement (other than pursuant
to the Pledge Agreement), any provision of (i) the
certificate of incorporation or bylaws of AMCV, PAI or
Oceanic, (ii) any loan or credit agreement, note, bond,
mortgage, indenture, Guarantee, lease or other material
agreement, instrument, permit, concession, franchise or
license applicable to AMCV, PAI or Oceanic or their
respective properties or assets, or (iii) any judgment,
order, decree, statute, law, ordinance, rule or
regulation applicable to AMCV, PAI or Oceanic or any of
their respective properties or assets. No filing or
registration with, or authorization, consent or approval
of, any domestic (federal or state), foreign or
supranatural court, commission, governmental body,
regulatory agency, authority or tribunal is required by
or with respect to AMCV, PAI or Oceanic in connection
with the execution and delivery of this Agreement, the
Pledge Agreement or the Note or is necessary for the
consummation of the transactions contemplated hereby or
thereby.
(e) AMCV is not aware of any liabilities of Oceanic in excess
of reserves provided pursuant to its financial statements
dated as of September 30, 1999.
5.13 Termination. This Agreement and the Pledge Agreement shall
terminate on the later to occur of (i) the date of a Guarantee
Termination and (ii) the date all of ▇▇▇▇'▇ rights to receive
payments pursuant to Article II shall
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have been fully satisfied, or such rights shall have expired
unexercised.
5.14 Restatement. This Agreement amends and restates the Original
Reimbursement Agreement in its entirety.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
AMERICAN CLASSIC VOYAGES CO.
/s/ Jordan ▇. ▇▇▇▇▇
--------------------------------------
By: Jordan ▇. ▇▇▇▇▇
Its: Executive Vice President and General
Counsel
▇▇▇▇▇▇ ▇▇▇▇ REVOCABLE TRUST
/s/ ▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------
By: ▇▇▇▇▇▇ ▇▇▇▇
Its: Trustee
/s/ ▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------
▇▇▇▇▇▇ ▇▇▇▇, individually
▇▇▇▇▇▇ ▇. and ▇▇▇ ▇▇▇▇▇ Trust established
pursuant to the ▇▇▇▇▇▇ ▇▇▇▇▇ Revocable Trust
dated December 19, 1989 (not as a party to
the above Reimbursement Agreement but solely
for purposes of approving the terms and
conditions thereof.)
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
▇▇▇▇ ▇▇▇▇▇▇, Co-Trustee
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