UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
(Mark One)
(x) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE
ACT OF 1934 (Fee Required)
For the fiscal year ended December 29, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934 (No Fee Required)
For the transition period from __________________ to
__________________
Commission File Number 1-8544
AMERICAN PRESIDENT COMPANIES, LTD.
(Exact name of registrant as specified in its charter)
Delaware 94-2911022
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1111 Broadway
Oakland, CA 94607
(Address of principal executive offices)
Registrant's telephone number: (510) 272-8000
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TABLE OF CONTENTS
Page
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K 3
SIGNATURES 4
This amendment to the Annual Report on Form 10-K for the year
ended December 29, 1995 is being filed solely for the purposes of
re-filing Exhibit 10.28. The remainder of the Form 10-K, as
previously filed, is unchanged.
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
(a) Documents filed as part of this report:
3.Exhibits required by Item 601 of Regulation S-K
The following document is an exhibit to this Form 10-K
Exhibit No. Description of Document
10.28 Amendment No. 1 dated May 19, 1995 to the Loan Agreement
dated March 14, 1994 by and among Kreditanstalt fur
Wiederaufbau (as Agent and Lender); Commerzbank AG,
Hamburg (as Syndicate Agent); Commerzbank AG (Kiel
Branch), Dresdner Bank AG in Hamburg, Vereins-und Westbank
AG, Deutsche Schiffsbank AG, Norddeutsche Landesbank-
Girozentrale, Deutsche Verkehrs-Bank AG, Banque
Internationale a Luxembourg S.A. (as the Syndicate); and
American President Lines, Ltd. (as Borrower).
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, the registrant has
duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
AMERICAN PRESIDENT COMPANIES, LTD.
(Registrant)
By /s/ William J. Stuebgen
William J. Stuebgen
Vice President,
Controller and
Chief Accounting Officer
May 2, 1996
* 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.
EXECUTION VERSION
AMENDMENT NO. 1
DATED MAY 19, 1995
By and Among
KREDITANSTALT FUR WIEDERAUFBAU
(as Agent and Lender)
COMMERZBANK AG, HAMBURG
(as Syndicate Agent)
COMMERZBANK AG (KIEL BRANCH)
DRESDNER BANK AG in HAMBURG
VEREINS- und WESTBANK AG
DEUTSCHE SCHIFFSBANK AG
NORDDEUTSCHE LANDESBANK-GIROZENTRALE
DEUTSCHE VERKEHRS-BANK AG (HAMBURG BRANCH)
BANQUE INTERNATIONALE A LUXEMBOURG S.A.
(as the Syndicate)
THE CORPORATIONS LISTED IN SCHEDULE A
and
AMERICAN PRESIDENT LINES, LTD.
to
LOAN AGREEMENT
DATED MARCH 14, 1994
Loan Facility
-in respect of the purchase financing-
six (6) container vessels
three (3) contracted with Howaldtswerke-Deutsche Werft AG
three (3) contracted with Daewoo Shipbuilding
& Heavy Machinery, Ltd.
THIS AMENDMENT NO. 1 TO LOAN AGREEMENT is made this __ of
May, 1995 by and among KREDITANSTALT FUR WIEDERAUFBAU, a public
law Corporation incorporated in the Federal Republic of Germany,
whose address is Palmengartenstrasse 5-9, D-60325 Frankfurt am
Main ("KfW"); COMMERZBANK AG, Hamburg, a banking corporation
incorporated in the Federal Republic of Germany whose address is
Ness 7-9, D-20457 Hamburg (the "Syndicate Agent"); the banks
listed in Schedule 1 which is attached hereto (each a "Syndicate
Member" and, collectively, the "Syndicate"); each of the
corporations listed in Schedule A hereto whose address is 1111
Broadway, Oakland, California 94607, and AMERICAN PRESIDENT
LINES, LTD., a Delaware corporation, whose address is 1111
Broadway, Oakland, California 94607 ("APL").
W I T N E S S E T H:
A. Reference is made to that certain Loan Agreement dated
March 14, 1994 among KfW, the Syndicate Agent, the Syndicate and
APL (the "Loan Agreement"). Capitalized terms used herein and not
otherwise defined have the meanings provided therefor in the Loan
Agreement as amended by this Amendment No. 1.
B. The three (3) HDW Vessels will be named as follows: (i)
APL CHINA (Builder's Hull No. 297), (ii) APL JAPAN (Builder's
Hull No. 298) and (iii) APL THAILAND (BuilderOs Hull No. 299).
C. The three (3) Daewoo Vessels will be named as follows:
(i) APL KOREA (Builder's Hull No. 4028), (ii) APL PHILIPPINES
(Builder's Hull No. 4033) and (iii) APL SINGAPORE (Builder's Hull
No. 4029).
D. With respect to APL PHILIPPINES, APL desires to provide
for the transfer of that Vessel, by way of a partial assignment
of the Daewoo Shipbuilding Agreement (to the extent such
Shipbuilding Agreement relates to APL PHILIPPINES), to APL M.V.
Philippines, Ltd., a Delaware corporation and a wholly-owned
Subsidiary of APL ("APL-Philippines"), such that APL-Philippines
would acquire the Vessel directly from Daewoo, whereupon APL-
Philippines would be the OTransfereeO with respect to that vessel
hereunder.
E. With respect to the Vessels other than APL PHILIPPINES,
APL desires instead to provide:
(1) for the partial assignment of the Vessels to five
wholly-owned Subsidiaries of the Guarantor (each an
"Original Owner" and, collectively, the "Original
Owners"), of the appropriate Shipbuilding Agreement(in
each case to the extent such Shipbuilding Agreement
relates to the Vessel in question), as follows, such
that each of the Original Owners would acquire its
Vessel directly from HDW or Daewoo, as the case may be:
(a) APL CHINA to be Transferred to APL
Newbuildings, Ltd., a Delaware corporation;
(b) APL JAPAN to be transferred to APL M.V.
Japan, Ltd., a Delaware corporation;
(c) APL KOREA to be transferred to APL M.V.
Korea, Ltd., a Delaware corporation;
(d) APL SINGAPORE to be transferred to APL M.V.
Singapore, Ltd., a Delaware corporation; and
(e) APL THAILAND to be transferred to APL M.V.
Thailand, Ltd., a Delaware corporation; and
(2) thereafter, on each Delivery Date, following the
acquisition of the Vessel in question by the
appropriate Original Owner, for the transfer of such
Vessel by such Original Owner to one of the following
five wholly-owned Subsidiaries of APL pursuant to an
Exchange Agreement dated the date hereof between the
Original Owner and the Transferee of the Vessel (the
"Exchange Agreement") (such Subsidiaries, together with
APL Philippines, being referred to collectively as the
"Transferees" and, individually, as a "Transferee"),
whereupon the Transferee acquiring the Vessel in
question would be the OTransfereeO with respect to that
Vessel hereunder:
(a) M.V. President Kennedy, Ltd., a Delaware
corporation;
(b) M.V. President Adams, Ltd., a Delaware
corporation;
(c) M.V. President Jackson, Ltd., a Delaware
corporation;
(d) M.V. President Polk, Ltd., a Delaware
corporation; and
(e) M.V. President Truman, Ltd., a Delaware
corporation.
F. Concurrently with the execution and delivery of
this Amendment, APL, the Transferees and the Lenders are entering
into an Amended and Restated Agreement to Acquire and Charter
dated as of the date hereof, respecting, among other things, (i)
the assignment of the Shipbuilding Agreements to the Original
Owners and to APL-Philippines, (ii) the transfer of the Vessels
to the Transferees as set forth in Recitals D and E above, (iii)
each TransfereeOs liability for Vessel Indebtedness hereunder and
(iv) AFL's obligation to charter any Vessel transferred to a
Transferee from such Transferee.
G. Notwithstanding the intended Vessel transfers from
the Transferor to APL-Philippines and the Original Owners stated
in Recitals D and E above, APL shall retain the right under the
Loan Agreement to take delivery itself of any of the Vessels from
HDW or Daewoo, as the case may be, and to draw down the
applicable Subportion.
H. As more particularly provided herein:
(1) each of the Transferees, upon its execution of a
Note hereunder: (a) if it acquires a Daewoo
Vessel, will be jointly and severally liable as a
co-Borrower, together with all of the other
Transferees that have or thereafter shall execute
a Note hereunder, for all Vessel Indebtedness
respecting any or all of the Daewoo Vessels and
the HDW Vessels, and (b) if it acquires an HDW
Vessel, will be jointly and severally liable as a
co-Borrower, together with all of the other
Transferees that have or thereafter shall execute
an HDW Note hereunder, for all Vessel Indebtedness
respecting any or all of the HDW Vessels; and
(2) each Transferee's obligation to repay Vessel
Indebtedness under the Note executed by it or as a
joint and several co-Borrower under the terms
hereof shall be a non-recourse obligation, and
shall be limited to such Transferee's interest in
the Vessel acquired by it and the other assets and
property covered by the Security Documents to
which such Transferee is a party.
I. Concurrently with the execution and delivery of
this Amendment, the Guarantor will execute and deliver to the
Lenders an Amended and Restated Guarantee, amending and restating
in its entirety the Guarantee dated March 14, 1994, pursuant to
which, as more particularly provided therein, the Guarantor will
guarantee the obligations of APL and each of the Transferees, in
each case under the Loan Agreement, as amended hereby, and the
Security Documents to which it shall become a party.
J. In light of the foregoing, KfW, the Syndicate Agent,
the Syndicate, APL and the Transferees wish to make certain
amendments to the Loan Agreement.
NOW, THEREFORE, in consideration of the mutual
agreements herein contained, the parties hereto agree as follows:
Section 1. The following defined term is added to
Section 1 of the Loan Agreement:
OTransfereesO means the following six (6) corporations:
(1) M.V. President Kennedy, Ltd.; a Delaware
corporation;
(2) M.V. President Adams, Ltd., a Delaware
corporation;
(3) M.V. President Jackson, Ltd., a Delaware
corporation;
(4) M.V. President Polk, Ltd., a Delaware
corporation;
(5) M.V. President Truman, Ltd., a Delaware
corporation; and
(6) APL M.V. Philippines, Ltd., a Delaware
corporation.
and "Transferee" means, in respect of any Vessel, the corporation
named above that acquires that Vessel pursuant to an Exchange
Agreement or, in the case of APL PHILIPPINES, the Agreement to
Acquire and Charter.
This defined term shall supersede and replace the
definition of "Transferee" contained in Section 1 of the Loan
Agreement.
Section 2. The following definitions in Section 1 of
the Loan Agreement are amended to read as follows:
"Agreement to Acquire and Charter" means the Amended and
Restated Agreement to Acquire and Charter dated May 19, 1995
among APL, KfW, the Syndicate Agent, the Syndicate Members
and the Transferees respecting each Transferee's liability
for the Vessel Indebtedness for any of the Vessels delivered
to such Transferee and APL's obligation to charter any such
Vessel from such Transferee, together with all Exhibits
thereto.
OBorrowerO shall have the following meanings:
(i) Prior to any transfer of the Vessels pursuant
to the Agreement to Acquire and Charter, APL shall be
the Borrower; and
(ii) From and after the acquisition of any Vessel
by a Transferee pursuant to an Exchange Agreement or,
in the case of APL PHILIPPINES, the Agreement to
Acquire and Charter, the related Transferee shall be
the Borrower with respect to all payment and
performance obligations relating to Vessel Indebtedness
of that Vessel (including but not limited to, Sections
2.02(d), 3, 4, 5, 6, 10, 11, 12 and 15.09 of this
Agreement), and references to the Borrower in any of
such Sections shall be construed to mean such related
Transferee as Borrower, except that (x) references to
the "Borrower" in Section 11.03 shall mean the
Borrowers jointly and severally and (y) references to
the "Borrower" in Section 12.01 shall mean any of the
Borrowers. APL shall be the Borrower with respect to
all other provisions of this Agreement (including but
not limited to, Sections 8, 9 and 13.03).
"Delivery Date" means, in respect of each Vessel, the
date on which that Vessel is either delivered to and accepted by
APL pursuant to the relevant Shipbuilding Agreement or ownership
of that Vessel is acquired by a Transferee in accordance with an
Exchange Agreement or, in the case of APL PHILIPPINES, the
Agreement to Acquire and Charter.
OGuaranteeO shall have the following meanings:
(i) Prior to any transfer of the Vessels pursuant
to the Agreement to Acquire and Charter, the
"Guarantee" shall mean the Guarantee dated March 14,
1994 by the Guarantor guaranteeing APL's obligations
under the Loan Agreement and the Security Documents to
which it shall become a party substantially in the form
of Appendix E; and
(ii) From and after the transfer of any Vessel
pursuant to the Agreement to Acquire and Charter,
"Guarantee" shall mean the Amended and Restated
Guarantee dated the first Delivery Date on which a
Transferee shall acquire a Vessel by the Guarantor
guaranteeing the obligations of APL and the
Transferees, in each case under the Loan Agreement and
the Security Documents to which it shall become a
party, substantially in the form of Appendix E.
"Loan Documents" means this Agreement, the Agreement to
Acquire and Charter, each of the Notes, *, the HDW Security
Documents and the Daewoo Security Documents.
"Obligors" means APL, the Transferees (as such or as
Borrowers) and the Guarantor, and "Obligor" means any of them.
"Operative Documents" shall mean the Loan Documents and
the Charter Documents, collectively.
"Vessel Indebtedness" means, in respect of the HDW
Vessels and Daewoo Vessels, respectively, all sums owing,
actually or contingently, by the related Borrowers, jointly and
severally, to the relevant Lender(s) in respect of the
Subportions which relates to such Vessels under this Agreement;
whether by way of repayment of principal, payment of commitment
commission, payment of interest or default interest, payment upon
any indemnity, reimbursement for costs or otherwise howsoever).
Section 3. Section 2.01(a) of the Loan Agreement is
amended to read as follows:
2.01 The HDW Tranche (a) The HDW Subportion. Upon the terms
and subject to the conditions set forth in this
Agreement, KfW agrees to make available to APL or up to
three of the Transferees (not including APL M.V.
PHILIPPINES, Ltd.) as its Commitment up to three
(3)advances (one per Transferee) on a joint and several
liability basis in the aggregate principal amount of up
to the lesser of (i) * or (ii) * of the Total Contract
Price * of the three (3) HDW Vessels based on the
Contract Price of each such Vessel calculated as of
each VesselOs Delivery Date using the USD Exchange Rate
(the OHDW TrancheO). Such maximum loan amounts may be
reduced from time to time to take into account any
reductions in the Contract Price of any HDW Vessel
calculated using the USD Equivalent at the request of
APL prior to delivery of the Vessel, but any reductions
made in loan amounts shall not thereafter be eligible
for borrowing. The joint and several obligation of each
Borrower to repay each of the three (3) advances (the
OHDW Subportions A-CO) under the HDW Tranche shall be
evidenced by the HDW Notes. It is expressly understood
and agreed that a Borrower shall have no right to
receive, and KfW shall have no obligation to disburse,
any amount in respect of any HDW Subportion greater
than the lesser of (i) * or (ii) * of the * Contract
Price of a Vessel calculated as of such Vessel's
Delivery Date.
Section 4. The second paragraph of Section 2.01(b) of
the Loan Agreement is amended to read as follows:
Not later than 11:00 a.m. (New York City time) on
the Delivery Date, and upon the fulfillment of the
conditions in Section 7 hereof, the Agent will make
such HDW Subportion available to APL or the related
Transferee, as the case may be, in same day funds at
the account specified in the HDW Notice of Drawdown.
Section 5. Section 2.02(a) of the Loan Agreement is
amended to read as follows:
2.02 The Daewoo Tranche. (a) The Daewoo Subportions.
Upon the terms and subject to the conditions set forth
in this Agreement, each Syndicate Member agrees
severally but not jointly, to make available to APL or
up to three of the Transferees (including APL
PHILIPPINES, Ltd.) on a joint and several liability
basis as its Commitment up to three (3) advances (one
per Transferee), which together with the advances made
by the other Syndicate Members, shall be the lesser of
(i) an aggregate principal amount of up to * or (ii) *
of the Total Contract Price of the three Daewoo Vessels
based on the Contract Price of each such Vessel (the
"Daewoo Tranche"); provided, however, that the maximum
Subportion in each case shall not exceed the sum of *
of the Contract Price of each Daewoo Vessel as of its
Delivery Date. Such maximum loan amounts may be
reduced from time to time to take into account any
reductions in such Contract Price at the request of
APL, but any reductions made in loan amounts shall not
thereafter be eligible for borrowing. The total amount
of each Loan to be made available by each Syndicate
Member in respect of a Daewoo Subportion shall not
exceed at any time the Aggregate Amount for such
Syndicate Member and shall be equal to such MemberOs
Percentage Interest of the Daewoo Tranche. The joint
and several obligation of each Borrower to repay each
of the three advances (the "Daewoo Subportions A-C")
under the Daewoo Tranche shall be evidenced by the
Daewoo Notes. It is expressly understood and agreed
that a Borrower shall have no right to receive, and no
Syndicate Member shall have any obligation to disburse,
any amount in respect of any Daewoo Subportion greater
than such Member's Percentage Interest of the Contract
Price for each Daewoo Vessel. The failure of any
Syndicate Member to advance any amount which it is
obligated to advance hereunder in respect of any Daewoo
Subportion shall not relieve it or any other Syndicate
Member of the obligation to make such advances, but no
Syndicate Member or the Syndicate Agent shall be
responsible for the failure of any other Syndicate
Member to advance its Aggregate Amount to the Borrower
in respect of any Daewoo Subportion.
Section 6. Section 3.05(c) of the Loan Agreement to
amended to read as follows:
(c) The Agent shall, upon the written request of
each Borrower, grant * of *. Such * will be calculated
on an amount representing * of the * for any HDW Vessel
on * equal semiannual installments of principal
starting * following the Delivery Date of the related
HDW Vessel. The terms and conditions with respect to
such * are to be set forth in the * Agreement, which
was executed and delivered on March 14, 1994 by the
Agent and APL. In connection with the acquisition of
an HDW Vessel by a Transferee the * payable in respect
of the related subportion of the HDW Tranche and the
other related rights and obligations under the *
Agreement shall be automatically assigned to such
Transferee, and such Transferee shall on the related
Delivery Date execute and deliver a confirmation of
such assignment in form and substance satisfactory to
the Agent.
Section 7. Sections 5.03 and 5.04 of the Loan Agreement
are amended to read as follows:
5.03 *. (a) HDW *. Until the sixth anniversary of any
Delivery Date and so long as no Event of Default and no
Incipient Default shall have occurred and be
continuing, any Transferee (which, for purposes of
Section 5.03 and 5.04, shall include APL if it is then
a Borrower in respect of an HDW Vessel) in respect of
an HDW Vessel (an "HDW Transferee") may upon ten (10)
Business Days' written notice to the Agent, * in
respect of the related HDW Subportion in full, but no
more than a total of * for the related Subportion of
the HDW Tranche may be so *. The Agent, upon receipt
of such HDW Transferee's notice, shall notify each
relevant Holder as to the amount of * which each Holder
shall cause to be noted on its Note or Notes. During
years seven (7) through * running from the anniversary
of such Delivery Date, an HDW Transferee may, upon
giving such notice, so * for the related HDW Subportion
equal to * for the related Subportion of HDW Tranche
and the number of * taken by such HDW Transferee for
that Subportion of the Tranche in the * period, so that
if such HDW Transferee shall have opted for * in the *
period, no * shall be allowed in the * period. All *
so taken shall be aggregated as to principal amount and
become due and payable at such time as the remaining
final HDW * for the related Vessel shall become due and
payable, whether at final maturity, or acceleration,
prepayment, or otherwise. Notwithstanding anything
stated herein to the contrary, the ability of each
Borrower to exercise the * is further conditioned on
the terms and conditions set forth in Section 5.04(d).
(b) Daewoo *. Until the sixth anniversary of any
Delivery Date and so long as no Event of Default or
Incipient Default shall have occurred and be
continuing, any Transferee (which, for purposes of
Section 5.03 and 5.04, shall include APL if it is then
a Borrower with respect of a Daewoo Vessel) in respect
of a Daewoo Vessel (a "Daewoo Transferee") may, upon
ten (10)) Business Days' written notice to the
Syndicate Agent, * in respect of the related Daewoo
Subportion in full (but no more than a total of * for
the related Subportion of the Daewoo Tranche may be so
*). The Syndicate Agent, upon receipt of such Daewoo
Transferee's notice, shall notify each relevant Holder
as to the amount of * which each Holder shall cause to
be noted on its Note or Notes. During years seven (7)
through * running from the anniversary of such Delivery
Date, a Daewoo Transferee may, upon giving such notice,
so * a number of Daewoo * for the related Daewoo
Subportion equal to the * for the related Subportion of
the Daewoo Tranche and the number of * taken by such
Daewoo Transferee for that Subportion of the Tranche in
the * period, so that if such Daewoo Transferee shall
have opted for * in the * period, no * shall be allowed
in the * period. All * so taken shall be aggregated as
to principal amount and become due and payable at such
time as the remaining final Daewoo * for the related
Vessel shall become due and payable, whether at final
maturity, or upon acceleration, prepayment, or
otherwise.
(c) The ability of each Daewoo Transferee to
exercise the * provided for in Section 5.03(b) above is
subject to the following additional conditions: (i)
For the first * years following delivery of the related
Vessel, each Daewoo Transferee may exercise up to * of
the Daewoo * provided in Section 5.03(b) with respect
to such Vessel provided above so long as the Guarantor
shall maintain a senior unsecured credit rating of * or
higher with Moody's Investors Service. If at any time
during such * period the Guarantor does not maintain
such ratings, then each Daewoo Transferee may exercise
the number of Daewoo * permitted pursuant to Section
5.03(b) if at the time such * is to be taken, the fair
market value of the Daewoo Vessel chosen for such *
shall be at least * of the remaining principal amount
of the Daewoo Subportion applicable to that Vessel (the
"Value Test"); provided, however, if a Daewoo
Transferee shall have exercised a * with respect to a
Daewoo Vessel under such circumstances, then the next *
which may be exercised by any Borrower shall relate to
an HDW Vessel, and vice verse; and (ii) After the
period of * years running from the Delivery Date of
each Daewoo Vessel or after * shall have been exercised
with respect to such Vessel, each Daewoo Transferee
shall be required to observe the Value Test prior to
exercising any further * with respect to such Daewoo
Vessel, and it shall be a condition to the ability of
any Daewoo Transferee to exercise any such further *
that the Borrowers collectively shall continue to
alternate future * between first Daewoo Vessels and
then HDW Vessels, or vice versa. Any appraisals so
required shall be made by an appraiser selected by the
related Borrower and approved by the Syndicate Agent in
its reasonable discretion with all appraisal fees to be
paid by such Borrower. For purposes of this Section
5.03(c), the appraisal of any one Daewoo Vessel shall
be applicable to any other Daewoo Vessel for a period
of three (3) months after the date of any such
appraisal.
If at the end of any such * period the Guarantor's
senior unsecured credit rating with Moody's Investors
Service exceeds that specified in the preceding
paragraph, then each Daewoo Transferee may continue for
up to * to exercise * in respect of each Vessel without
being required to satisfy the Value Test so long as the
Guarantor shall maintain a higher credit rating than *
with Moody's Investors Service during any such * year
period.
5.04 Prepayment. (a) Voluntary Prepayment. Subject to no
Event of Default, or Incipient Default, having occurred
and being continuing, each Borrower may prepay at its
option the outstanding principal amount of any
Subportion, in accordance with Section 5.06 or 5.07, as
applicable, in whole or in part, but any partial
prepayment may be made only in inverse order of
maturity; * on the date set for such repayment set
forth below, together with (i) interest accrued thereon
to such date; (ii) a prepayment commission of * of the
principal amount of each such Subportion so prepaid in
respect of any * Notes and/or * Notes during the period
running from the Delivery Date of the related Vessel
and ending on the sixth anniversary thereof with no
such commission to be charged thereafter; and (iii) any
amounts owed under Section 11 hereof, with respect to
the Subportion being prepaid; provided that, unless the
Agent or the Syndicate Agent, as the case may be, shall
otherwise agree, partial prepayments may only be made
in amounts aggregating not less than * or integral
multiples thereof. If a Borrower shall elect to make
any such optional prepayment, such Borrower shall
deliver a notice conforming to the requirements of
Section 15.04, at least ten (10) Business Days prior to
the date it selects for such prepayment, to the Agent
and the Syndicate Agent. If prepayment is made in
respect of any Daewoo Subportion, the Commitment of
each Syndicate Member shall be reduced pro rata by the
amount of such prepayment, and each one of the Dollar
amounts set forth in Schedule 3 hereto shall be reduced
accordingly. Any notice of prepayment given as
aforesaid shall be irrevocable and shall oblige the
Borrower to make such prepayment on the date specified
in the notice. Any Note or part thereof so prepaid may
not be reissued.
(b) Mandatory Prepayment.
(i) If an Event of Loss shall occur with respect
to any Vessel after its delivery, the related
Borrower shall give prompt written notice
thereof to the Agent or the Syndicate Agent,
as the case may be, and as soon as
practicable thereafter, such Borrower shall
give such parties written notice of the date
on which all of the Notes pertaining to that
Subportion shall be redeemed (the "Redemption
Date"), which date shall be a Business Day
and shall be not earlier than ten (10)
Business Days after the date notice of the
Redemption Date is given and not later than
the one hundred eightieth (180th) day after
the date of such Event of Loss; provided,
however, that for purposes of a requisition
of use, confiscation, seizure or forfeiture
of such Vessel as set forth in clause (iv) of
the definition for "Event of Loss," the
Redemption Date shall be no later than the
sixtieth (60th) day after the date of such
Event of Loss.
(ii) On the Redemption Date, the Borrower shall
pay to the Agent or the Syndicate Agent, as
the case may be, funds equal to the (x)
principal amount outstanding under the
relevant Subportion plus interest accrued
thereon, and (y) any amounts owed under
Section 11 hereof, with respect to the
Subportion relating to the Vessel having
suffered an Event of Loss.
(iii) All monies received under this Section
5.04(b) prior to the Redemption Date by the
Agent, the Syndicate Agent or any Lender
shall be credited against the payment
obligations of the Borrower under Section
5.04(b)(ii) hereof.
(iv) Subject to no Event of Default, or Incipient
Default, having occurred and being
continuing, if any of the Lenders receives
any proceeds from insurance or compensation
as to such Event of Loss, in excess of the
payment obligations to it of the Borrower
under Section 5.04(b)(ii) hereof, the balance
of such proceeds shall be paid to the
Borrower.
(c) Release of Mortgage After Prepayment. Upon
prepayment by the Borrower of any HDW or Daewoo
Subportion in full, the Agent and/or the Syndicate
Agent, as the case may be, shall release the
Mortgage(s) on the Vessel relating to such Subportion
so long as no Event of Default or Incipient Default
shall have then occurred and be continuing. All costs
and expenses reasonably incurred by the Agent, the
Syndicate Agent and any Lender (excluding any legal
fees and expenses by any Lender other than the Agent or
the Syndicate Agent) in connection with such release
and discharge of such Mortgage(s), including, but not
limited to, any indemnity payments set forth in Section
11 hereof then due and payable, shall be for the
account of, and payable by, the related Borrower.
(d) Prepayment of HDW *. The HDW Transferees
collectively shall be required from time to time to
prepay as many of its HDW * as may be necessary so that
the number of outstanding HDW * does not exceed * times
the number of Daewoo Vessels covered by Second
Mortgages. The HDW * to be prepaid in accordance with
this Section 5.04(d) shall be paid in the order to be
determined by the Borrowers and be prepaid in
accordance with this Section 5.04.
In addition to the provisions set forth in Section
5.03(a), HDW Transferees' ability to take HDW * is
further conditioned upon: (i) until the sixth
anniversary of any Delivery Date and so long as no
Event of Default and no Incipient Default shall have
occurred and be continuing, the total number of HDW *
which may be * may at no time exceed * times the
aggregate number of Daewoo Vessels then covered by
Second Mortgages in favor of the Agent; and (ii) during
years seven (7) through * running from the anniversary
of such Delivery Date, the HDW Transferees collectively
may * up to that number of HDW * which equals * times
the number of Daewoo Vessels with Second Mortgages in
favor of the Agent, and (iii) if and so long as the
number of outstanding HDW * is equal to or more than *
times the number of Daewoo Vessels with such Second
Mortgages, then no further HDW * may be taken. If
there is any inconsistency between this Section 5.04(d)
and the provisions of Section 5.03(a), then the terms
set forth herein shall control.
Section 8. Section 7 of the Loan Agreement is amended
to read as follows:
7. CONDITIONS PRECEDENT TO ADVANCE
Each Lender's obligation to make its part of the HDW
and the Daewoo Subportions available to APL or the
related Transferee on each Delivery Date 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 evidence, as the case may be, on or
before a closing to be held on the Delivery Date at the
offices of Height, Gardener, Poor & Havens, 195
Broadway, New York, New York 10007, or at such other
place as may be agreed upon by the Borrower, the Agent
and the Syndicate Agent:
(a) Each of APL, such Transferee and the Guarantor
shall be a corporation duly organized and existing in
good standing under the laws of the jurisdiction of its
incorporation; each of APL, such Transferee and the
Guarantor 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 other Loan
Documents and Charter Documents to which it is a party,
and the Agent or the Syndicate Agent, as the case may
be, shall have received (i) a certified copy of the
certificate of incorporation of each of APL, such
Transferee and the Guarantor, (ii) a certificate of the
Secretary of each of APL, such Transferee and the
Guarantor attaching the minutes or resolutions of its
Board of Directors authorizing the transactions
contemplated herein, (iii) a certificate from the
Secretary of each of APL, such Transferee and the
Guarantor or evidencing the authority of the persons
executing the Loan Documents and Charter Documents, to
which it is a party, to execute and deliver such Loan
Documents and Charter Documents and such Obligor to
perform under the Loan Documents and Charter Documents
to which it is a party, and (iv) a certificate of good
standing as to each of APL, such Transferee and the
Guarantor, all in form and substance reasonably
satisfactory to the Agent or the Syndicate Agent, as
the case may be, and its special counsel;
(b) not less than five (5) days (or such shorter
period as the Agent or the Syndicate Agent, as the case
may be, may agree) before the proposed date for the
making of each such Subportion, the Agent or the
Syndicate Agent, as the case may be, shall have
received an HDW or a Daewoo Notice of Drawdown, as the
case may be, from APL and the Transferee if it is to be
the owner of the related Vessel;
(c) no Event of Default shall have occurred and be
continuing and no Incipient Default shall have occurred
and be continuing and APL, the related Transferee and
the Guarantor 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 any of
APL, the related Transferee or the Guarantor which in
the reasonable opinion of the Agent and/or the
Syndicate Agent would materially and adversely affect
the ability of (x) the Transferees and the Borrowers,
individually and collectively to perform its
obligations as to the repayment of the Facility by the
installments together with interests thereon herein set
out or to perform any of their respective obligations
under the Loan Agreement, the Charter Documents and the
Security Documents to which any of them is or will
become a party, or (y) the Guarantor to perform its
obligations under the Guarantee;
(e) all representations and warranties of each of
the Obligors contained in this Agreement, the Charter
Documents and each of the Loan Documents to which each
of them is, respectively, a party being true and
correct in all material respects on that Delivery Date,
except insofar as they relate exclusively to an earlier
date, and each Obligor 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 APL, the related
Transferee and the Guarantor under the 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, true and complete 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 in the United States of America, the
Republic of The Marshall Islands or any other relevant
jurisdiction;
(h) certificate of APL or the related Transferee
that it has delivered to each of the Agent and the
Syndicate Agent a complete copy of the relevant
Shipbuilding Agreement to the relevant Vessel including
any subsequent amendments or supplements thereto not
previously furnished;
(i) copies of the Bill of Sale and the Builder's
Commercial Invoice and the Builder's Certificate to the
relevant Vessel from HDW or Daewoo, as the case may be;
(j) all fees under Section 13 hereof accrued and
due to the relevant Lenders have been paid in full and
confirmation from HDW or Daewoo, as the case may be, of
payment as to all amounts then due under the relevant
Shipbuilding Contract as to the Vessel being delivered;
(k) (x) if the Vessel is to be transferred to a
Transferee pursuant to an Exchange Agreement or, in the
case of APL PHILIPPINES, the Agreement to Acquire and
Charter, then evidence that such Vessel is duly
registered in the name and ownership of the Transferee
under the law and flag of the Republic of The Marshall
Islands, free of registered liens except the relevant
Mortgage(s); and (y) if the Vessel is not to be
transferred to the Transferee, then evidence that such
Vessel is duly registered in the name and ownership of
APL under the laws and flag of its registry, free of
registered liens except the relevant Mortgage(s);
provided that, notwithstanding anything to the contrary
in this Loan Agreement or any other Loan Document, any
Vessel may be initially documented upon its Delivery
Date under the laws and flag of the United States, if
written notice of the intention to so document such
Vessel is given to the Agent or the Syndicate Agent, as
the case may be, not less than sixty (60) days prior to
such Delivery Date, and the parties hereto shall make
such changes to the Loan Documents and take such action
(including, but not limited to, the selection of an
approved trustee to act as mortgagee for the relevant
Lenders and appropriate modification of the Loan
Documents) which are consistent with the Loan Documents
and which such parties may reasonably deem necessary to
effectuate this proviso clause, and provided further
that, notwithstanding anything to the contrary in this
Loan Agreement or any other Loan Document, APL may,
prior to the Delivery Date of such Vessel, assign the
related HDW Shipbuilding Agreement or Daewoo
Shipbuilding Agreement, as the case may be, to the
extent the same relates to such Vessel, to the
Transferee;
(l) each Loan Document and Charter Document, in
respect of such Vessel 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 Insurances);
(m) unless the mortgagor under the related
mortgage is not the party accepting delivery under the
Shipbuilding Agreement, confirmation from HDW or
Daewoo, as the case may be, in the form set forth in
Schedule 5-A or 5-B, respectively;
(n) confirmation from the Borrower in the form set
forth in Schedules 5-C or 5-D, as the case may be;
(o) Protocol of Delivery and Acceptance of the
relevant Vessel as required under the related
Shipbuilding Agreement, and, if the mortgagor under the
related mortgage is not the party accepting delivery
under the Shiphuilding Agreement, a certificate of
acceptance executed by the related Transferee;
(p) an independent broker's report, in form and
substance reasonably satisfactory to the Agent or the
Syndicate Agent, as the case may be, describing all
insurance then carried and maintained with respect to
the Vessel and the expiration date thereof, together
with certificates of insurance in accordance with
Section 29(f)(i) of the Vessel's Mortgage(s), including
a written confirmation from such broker in a form and
substance reasonably satisfactory to the Agent or the
Syndicate Agent, as the case may be, that such
insurance complies with the terms of Section 29 of the
Vessel's Mortgage(s);
(q) Interim class certificate (dated not more
than then (10) days prior to the relevant Delivery
Date) evidencing chat such Vessel is in class and
classed in the highest classification for vessels of
the same age and type by the Classification Society;
(r) copies of all documents to be delivered by HDW
or Daewoo, as the case may be, under Article 17(a)(ii)
of the relevant Shipbuilding Agreement;
(s) each of the Lenders shall have received
executed originals of the opinions set forth as
Schedules 4A and 4B hereto 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; and
(t) if the Vessel is to be transferred to a
Transferee pursuant to the Agreement to Acquire and
Charter, then all conditions precedent to such
Transferee's obligations on the related Delivery Date
set forth in Section 3 of the Agreement to Acquire and
Charter shall have been satisfied.
Section 9. The following new Sections 2.03 and 2.04 are
hereby added to the Loan Agreement, immediately following Section
2.02 thereof:
2.03 Joint and Several Liability. Notwithstanding anything
herein or in any other Loan Document to the contrary,
each of the Transferees agrees that, upon its execution
of a Note: (i) if the Transferee acquires a Daewoo
Vessel, it shall be jointly and severally, directly and
primarily liable as a co-Borrower, together with all of
the other Transferees that have or thereafter shall
execute a Note hereunder, for payment in full of all
Vessel Indebtedness respecting any or all of the Daewoo
Vessels and the HDW Vessels, and (ii) if the Transferee
acquires an HDW Vessel, it shall be jointly and
severally, directly and primarily liable as a co-
Borrower, together with all of the other Transferees
that have or thereafter shall execute an HDW Note
hereunder for payment in full of all Vessel
Indebtedness respecting any or all of the HDW Vessels.
In order to evidence its joint and several liability,
each Transferee agrees that, on the related Delivery
Date, it shall execute an endorsement to then
outstanding Notes upon which it is jointly and
severally liable. The liability of each Transferee
shall be independent of the duties, obligations and
liabilities of each and all of the other joint and
several Transferees. The Lenders (subject to the
provisions hereof) may bring a separate action or
actions on each, any or all of the Vessel Indebtedness
against each, any or all of the Transferees liable
therefor hereunder, whether action is brought against
any other or all of such Transferees, or any one or
more of the Transferees is or is not joined therein.
2.04 Nonrecourse Liability. Notwithstanding anything herein,
in the Notes or in any other Loan Document to the
contrary, the Lenders agree that they will look solely
to the assets and property covered by the Security
Documents (collectively, the "Recourse Assets") for all
amounts coming due from the Transferees (or any
Transferee) hereunder, under the Notes or under any of
the other Loan Documents, and for the performance of
all covenants, agreements and obligations and for the
breach of representations and warranties or covenants
of the Transferees (or any Transferee) hereunder or
under the Notes or any of the other Loan Documents, or
under any certificate or other documents executed and
delivered by any Transferee as contemplated by the Loan
Documents, and, therefore, notwithstanding anything
contained in any of the aforesaid documents, no
judgment or recourse (except a judgment against the
Recourse Assets or any of them) shall be sought or
enforced for the payment or performance of the
Transferees' (or any Transferee's) obligations under
this Agreement, the Notes, any other Loan Document or
any such other certificate or document: (a) against any
Transferee in its individual or personal capacity,
other than in connection with the enforcement of
remedies against the Recourse Assets or (b) against any
assets or property of any Transferee other than the
Recourse Assets; provided, however, that nothing in
this Section shall (x) limit or otherwise prejudice in
any way the rights of the Lenders to proceed against
the Guarantor under the Guarantee or (y) constitute or
be deemed to be a release of the obligations secured
by, or impair the enforceability of, the liens,
mortgage interests or other security interests created
by the Security Documents, or to restrict the remedies
available to the Lenders to realize upon the Security
Documents or enforce the Guarantee.
Section 10. Section 12.02(a) of the Loan Agreement is amended to
read as follows:
(a) any Obligor fails to pay to the Agent or the
Syndicate Agent, as the case may be, on the due date
for payment thereof in the currency and in the manner
specified herein or therein any sum of principal,
interest, commission or fees payable by the Borrower
under the terms of this Agreement or under any of the
Notes and such default remains unremedied for three (3)
Business Days after the due date; or
Section 11. Sections 12.02(d) and (e) of the Loan
Agreement are amended to read as follows:
(d) any of the Obligors is in breach in the
performance or observance of any other terms or
conditions of this Agreement or in any of the Loan
Documents, the Charter Documents or the Security
Documents (other than the Mortgage(s) to which any of
them is a party (not being a default which falls within
paragraphs (a), (b) or (c) of this Section) and if it
is capable of being remedied such breach is not
remedied within thirty (30) days after receipt by the
Borrower of notice of such breach from the Agent or the
Syndicate Agent, as the case may be; provided, however,
that an Event of Default under Section 24(a)(i) of the
Charter caused by the failure of the Charterer to pay
Additional Charter Hire shall not be an Event of
Default under this Agreement; or
(e) there occurs any event which constitutes an
Event of Default under any Mortgage on any Vessel under
any of the Charters; or
Section 12. Appendix A-1A, Appendix A-1B, Appendix A-2A
and Appendix A-2B of the Loan Agreement (forms of Notes) are each
amended and restated as set forth in Exhibits A-1, A-2, A-3 and A-
4 hereto, respectively.
Section 13. Appendix B-1 and Appendix B-2 of the Loan
Agreement (forms of Mortgages) are each amended by (i) replacing
the existing recitals B and C with the following recitals B, C
and D (and changing recitals D and E to E and F, respectively):
B. This Mortgage is granted to secure certain
obligations of the Borrower under that certain Loan
Agreement dated March 14, 1994, as amended by Amendment No.1
thereto, dated May 19, 1995, among American President Lines,
Ltd. ("APL"), the Borrower, the other Transferees, the
Mortgagee and other lenders (the "Loan Agreement"; terms
used herein without definition shall have the respective
meanings provided in the Loan Agreement) (a copy of which
without Exhibits is attached hereto as Exhibit A).
C. The Mortgagee has agreed to make loans with
respect to three (3) vessels [insert names and official
numbers], including the Vessel, one of which is to be owned
by the Borrower, pursuant to the Loan Agreement and that
certain Amended and Restated Agreement to Acquire and
Charter, dated May 19, 1995, among APL, the Borrower, the
other Transferees, the Mortgagee and the other Lenders named
therein (a copy of which is attached hereto as Exhibit A-1),
such loans to be in an aggregate amount not to exceed
_____________ United States Dollars (USD _______________)
(collectively, the "Loans"). The total amount of the Loans
is or shall be evidenced by the [HDW] [Daewoo] Notes. The
portion of the Loans relating to the acquisition of the
Vessel is in the principal amount of United States Dollars
(USD ), which portion is evidenced by the specific [HDW]
[Daewoo] Notes dated May 19, 1995 (the "[HDW] [Daewoo
Notes"), (a form of which without Exhibits is attached
hereto as Exhibit B), and in order to induce the Mortgagee
to make the Loans, the Borrower has agreed to grant this
Mortgage to the Mortgagee to secure the [HDW] [Daewoo] Notes
and the Borrower's joint and several liability under the
Loan Agreement for the repayment of the remaining [HDW]
[Daewoo] Notes issued or to be issued by APL or any
remaining Transferee and the other obligations stated in
paragraph D below with respect to the acquisition of the
other [HDW] [Daewoo] Vessels other than the Vessel.
D. The term "Obligations" shall mean all of the
obligations of the Borrower to pay any amount to the
Mortgagee under this Mortgage, the [HDW] [Daewoo] __________
Notes and the Loan Agreement insofar as it relates to the
[HDW] [Daewoo] Tranche Loans (including, without limitation,
the Borrower's joint and several liability under the Loan
Agreement for the repayment of the remaining [HDW] [Daewoo]
Notes), whether by reason of reimbursement, interest,
indemnity or for any other reasons whatsoever.
and (ii) adding the following paragraph after clause (55):
(56) Notwithstanding anything herein, in the [HDW]
[Daewoo]__________ Notes or in any other Loan Document to
the contrary, by acceptance of this Mortgage, the Mortgagee
agrees that it will look solely to the Vessel and the other
assets and property covered by this Mortgage and the other
[HDW] [Daewoo] Security Documents (collectively, the
"Recourse Assets") for all amounts coming due from the
Borrower under this Mortgage, the [HDW] [Daewoo] _____ Notes
or any other Loan Documents, and for the performance of all
covenants, agreements and obligations and for the breach of
representations and warranties or covenants of the Borrower
hereunder or under the [HDW] [Daewoo] _____ Notes or any of
the other Loan Documents, or under any certificate or other
documents executed and delivered by the Borrower as
contemplated by the Loan Documents, and, therefore,
notwithstanding anything contained in any of the aforesaid
documents, no judgment or recourse (except a judgment
against the Recourse Assets or any of them) shall be sought
or enforced for the payment or performance of the Borrower's
obligations under this Mortgage, the [HDW] [Daewoo] _____
Notes, any other Loan Document or any such other certificate
or document: (a) against the Borrower in its individual or
personal capacity, other than in connection with the
enforcement of remedies against the Recourse Assets or
(b)against any assets or property of the Borrower other than
the Recourse Assets; provided, however, that nothing in this
paragraph shall (x) limit or otherwise prejudice in any way
the rights of the Mortgagee to proceed against the Guarantor
under the Guarantee, or (y) constitute or be deemed to be a
release of the obligations secured by, or impair the
enforceability of, the liens, mortgage interests or other
security interests created by the [HDW] [Daewoo] Security
Documents, or to restrict the remedies available to the
Mortgagee to realize upon the [HDW] [Daewoo] Security
Documents or enforce the Guarantee.
Section 14. Appendix E of the Loan Agreement (form of
Guarantee) is amended and restated as set forth in Exhibit B
hereto.
Section 15. Schedules 4A and 4B of the Loan Agreement
(forms of legal opinions) are amended and restated as set forth
in Exhibits C-1 and C-2 hereto, respectively.
Section 16. This Amendment No. 1 shall be governed by
and construed in accordance with laws of the State of New York
(other than the law of the State of New York governing choice of
law).
Section 17. Each 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, the provisions of which are
hereby incorporated herein by reference, to the same extent and
under the same terms and conditions so provided in said Section
15.08.
Section 18. Except as amended by this Amendment No. 1,
all other terms, conditions and covenants of the Loan Agreement
are hereby confirmed by the parties hereto and remain unchanged
and in full force and effect. From and after the date hereof, all
references to the Loan Agreement (i) in the Loan Agreement
(including references therein to "this Agreement", "hereof" and
"hereunder"), and (ii) in any of the other Loan Documents, shall
be deemed to be references to the Loan Agreement as amended by
this Amendment No. 1.
Section 19. This Amendment No. 1 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.
IN WITNESS WHEREOF, The parties have caused this
Amendment No. 1 to be duly executed by their respective officers
as the day and year first above written.
KREDITANSTALT FUR WIEDERAUFBAU
/s/
By:
Title:
COMMERZBANK AG, HAMBURG
/s/
By:
Title:
/s/
By:
Title:
COMMERZBANK AG (KIEL BRANCH)
/s/
By:
Title:
/s/
By:
Title:
[Signature Page to Amendment No. 1 to Loan Agreement]
