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The portion of this Exhibit 10.19 marked “******” has been omitted and
confidentially filed with the Securities and Exchange Commission pursuant to
Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as amended.

NOTICE AND ACKNOWLEDGMENT OF
COLLATERAL ASSIGNMENT OF TIME CHARTER AND
SUBORDINATION AGREEMENT

TO: ******

PLEASE BE ADVISED that Waterman Steamship Corporation (“Waterman”) has entered
into a sale/leaseback transaction with Wells Fargo Bank Northwest, National
Association, a national banking association organized under the laws of the
United States of America, with offices at 299 South Main Street, 12th Floor,
Salt Lake City, Utah 84111, not in its individual capacity, but solely as the
Trustee of The Green Bay Vessel Trust (together with its successors and assigns,
the “Trustee”), involving the M/V GREEN BAY, Official Number 1204654 (the
“Vessel”), under the terms of that certain Bareboat Charter Agreement dated
February 22, 2012 between Waterman, as “Charterer”, and the Trustee, as “Owner”
(the “Bareboat Charter”).  As security for the payment and performance of the
obligations of Waterman under the Bareboat Charter and the Charter Documents (as
defined in the Bareboat Charter) related thereto, Waterman has collaterally
assigned and granted a security interest in (a) all of its right, title and
interest in and to that certain Time Charter of the Vessel, dated June 24, 2010
(the “Time Charter”), between Waterman and ****** (hereinafter “you” or
“******”), and (b) all charter hire, freights, subfreights, earnings, demurrage,
detention and other earnings, accounts and general intangibles payable under the
Time Charter, to and in favor of the Trustee (the “Assignment”).  A copy of the
Assignment is attached hereto for your files.

The assignment of the Time Charter is only for the purposes of security, and
Waterman will continue to perform all of its obligations under the Time
Charter.  Until such time, if any, that you receive written notice from the
Trustee of a default by Waterman under the Bareboat Charter, and a demand by the
Trustee for the payment of charter hire and other sums due from ****** to
Waterman under the Time Charter directly to the Trustee, you may continue to
tender all performance due under the Time Charter to Waterman.  Upon receipt of
written notice from the Trustee of a default by Waterman under the Bareboat
Charter, and a written demand from the Trustee to tender all further payments of
charter hire and other sums payable under the Time Charter directly to the
Trustee, you are hereby authorized and directed immediately, without further
consent or authorization from Waterman, to tender all further payments and
performance under the Time Charter to the Trustee, in accordance with and
subject to the terms and conditions of the Time Charter.  Any tender of
performance to the Trustee pursuant to this authorization shall be deemed to
satisfy any and all of the obligations of ****** to Waterman under the Time
Charter, to the extent of such performance, as fully as if such performance had
been tendered directly to Waterman.

It is a condition to the consummation of the sale/leaseback transaction that
****** agree to subordinate all of its right, title and interest in and to the
Vessel under the Time Charter to the interests of the Trustee under the Bareboat
Charter.  By signing below, ****** agrees that, under the terms of this
subordination, notwithstanding the effective date of the Time Charter and the
delivery of the Vessel thereunder, all right, title and interest of the Trustee
in and to the Vessel, and all right, title, interest, liens and security
interests of the Trustee arising from the Bareboat Charter, shall, for all times
and for all purposes, be superior in rank, preference and priority to any right,
interest, claim, lien or security interest in or against the Vessel, whether now
existing or hereafter arising, in favor of ******, whether arising under the
Time Charter or otherwise.  Without limiting the foregoing, ****** agrees that
at no time and under no circumstance shall it seek to challenge, invalidate or
assert priority over any right, title or interest of the Trustee in and to the
Vessel, or any right, title, interest, liens and security interests of the
Trustee under the Bareboat Charter or the Assignment.  ****** further agrees
that, so long as the Bareboat Charter remains in effect, it will forbear from
exercising any lien rights against the Vessel arising under the Time Charter or
under applicable law and that it will not foreclose on any claim, lien and/or
security interest created in its favor under the Time Charter or otherwise
without the prior written consent of the Trustee first being obtained.  In the
event of foreclosure by ******, ****** shall not accept any proceeds from any
foreclosure (or sale) of the Vessel unless and until the indebtedness and other
obligations of Waterman (including all interest, fees and expenses) to the
Trustee under the Bareboat Charter and related Charter Documents have been fully
paid.

Finally, in addition to its right to collect charter hire payable by ******
under the terms of the Time Charter referenced above, following the occurrence
and during the continuance of a default by Waterman under the Bareboat Charter,
the Trustee is authorized, in its discretion, among other remedies, to terminate
the Bareboat Charter, recover possession of the Vessel and sell or re-charter
the Vessel under terms acceptable to the Trustee.  In consideration of the
agreement of ****** to subordinate and forbear from the enforcement of any lien
rights in its favor against the Vessel, the Trustee agrees that, should the
Trustee elect to terminate the Bareboat Charter and sell or re-charter the
Vessel following a default by Waterman, prior to any such termination and such
sale or re-charter, the Trustee will forward notice of the default and its
intention to terminate the Bareboat Charter and sell or re-charter the Vessel (a
“Notice of Intent”) to ******, and grant to ****** the following options which
shall be exercisable by ****** only so long as the Time Charter remains in force
in accordance with its terms.

If the Trustee elects to re-charter the Vessel, the Trustee in the Notice of
Intent shall request ****** to name a replacement operator to take over the
position of Waterman under the Bareboat Charter within ten (10) business days
following receipt of the Notice of Intent.  Any such replacement operator must
meet all approval requirements of the United States Maritime Administration or
any successor agency of the United States government charged with the
administration of United States vessel transfer restrictions (collectively,
“MARAD”), agree to assume all Bareboat Charter obligations of Waterman, and meet
all internal credit approval requirements of the Trustee.

In the event that the Trustee has elected to sell the Vessel (either at auction
or by private sale), the Notice of Intent shall disclose that intention, and
prior to any such sale or re-charter, ****** or its nominee shall have the
option to purchase the Vessel for a cash purchase price (the “Purchase Price”)
equal to (a) the stipulated loss value of the Vessel stated on the table
attached hereto determined as of one month prior to the last charter hire
installment date under the Bareboat Charter through which the Trustee has
received full payment of charter hire in good and indefeasible funds (either
from Waterman and/or by application of charter hire paid by ****** to the
Trustee under the Time Charter pursuant to the instructions of the Trustee) plus
(b) any taxes, duties, fees, assessments or charges of any nature imposed by any
governmental authority relating to the sale, registration, use, delivery of the
Vessel.  Any sale of the Vessel to ****** pursuant to the foregoing option is
subject to the prior written consent of MARAD, and shall be on an “AS IS, WHERE
IS” basis without any warranties whatsoever (other than a warranty that the
Trustee will transfer such title to the Vessel as was conveyed to the Trustee by
Waterman free and clear of any liens or other encumbrances imposed by the
Trustee).  If ****** elects to purchase the Vessel pursuant to the foregoing
option, ****** shall provide written notice to the Trustee of that election
within ten (10) business days following receipt by ****** of the Notice of
Intent issued by the Trustee.  Upon the timely receipt of such notice from
******, the Trustee will proceed to apply to MARAD for, and use commercially
reasonable efforts to obtain, permission to transfer the Vessel to ****** during
which time ****** shall finalize all board of director and shareholder approval
required for the purchase.  Should MARAD grant permission for the sale of the
Vessel to ******, the Trustee will forward notice of such approval to ******,
and ****** shall consummate the purchase by tender of the Purchase Price to the
Trustee, in U.S. Dollars, and in good and indefeasible funds, within ten (10)
business days following the receipt by ****** of notice from the Trustee of the
grant by MARAD of permission for the sale or sixty (60) business days from the
date of the Notice of Intent, whichever is later (the “Closing Date”).

If, as applicable, (i) ****** fails to name a replacement operator as provided
above, (ii) provide timely notice of its election to purchase the Vessel
pursuant to the foregoing purchase option and consummate the purchase of the
Vessel by the Closing Date, or (iii) the re-charter to ******’s suggested
operator or the sale of the Vessel to ****** is not approved by MARAD, the
Trustee may proceed to sell or re-charter the Vessel to any person free of any
liens or other interest arising in favor of ****** under the Time Charter.  Any
right, interest, claim, lien or security interest in or against the Vessel in
favor of ****** arising under the terms of the Time Charter shall remain subject
and subordinate to the rights of the Trustee as provided above and shall be
deemed to attach, if at all, only to any proceeds of the sale of the Vessel
remaining after the satisfaction of all indebtedness and other obligations of
Waterman (including all interest, fees and expenses) to the Trustee under the
Bareboat Charter.

Please acknowledge your receipt of this notice, your agreement to comply with
the instructions set forth above, your agreement to subordinate your interests
in the Vessel arising pursuant to the Time Charter and applicable law to the
interests of the Trustee in the Vessel arising pursuant to the Bareboat Charter
and related Charter Documents under the terms set forth above and your agreement
to and understanding of the terms of the purchase option granted above by
signing in the signature block below.  By signing below, you acknowledge that
the Trustee is relying on this Notice and Acknowledgment, and your agreement to
subordinate your rights with respect to the Vessel under the Time Charter as
provided herein, as an inducement to provide financing to Waterman.  Except as
provided above, your signature below is without prejudice to any rights which
****** may have under the Time Charter including but not limited to the right to
make deductions from the payment of charter hire to the extent of claims which
****** may have against Waterman or the Vessel to the extent permitted pursuant
to the terms of the Time Charter.

Dated:  February 22, 2012
WATERMAN STEAMSHIP CORPORATION

By:           /s/ D. B. Drake 
Name:                      D. B. Drake
Title:           Vice President and Treasurer

WELLS FARGO BANK NORTHWEST, N.A.,
 as Trustee of The Green Bay Vessel Trust

By:           /s/ Jon
Croasmun                                                                
Name:                      Jon Croasmun
Title:           Vice President
ACKNOWLEDGED, ACCEPTED AND
AGREED THIS 22ND DAY OF
FEBRUARY, 2012

******

By:           /s/           ******                                                      
Name:                      ******                                                      
Title:           ******                                                      

 

 
 
 

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STIPULATED LOSS VALUES

“SLV” means stipulated loss value

“Capitalized Owner’s Cost” is $59,000,000.00 (U.S. Dollars)

Payment Date
SLV as a % of Capitalized Owner’s Cost
 
Payment Date
SLV as a % of Capitalized Owner’s Cost
3/1/2012
105.11
 
4/1/2017
80.46
4/1/2012
104.76
 
5/1/2017
80.00
5/1/2012
104.40
 
6/1/2017
79.53
6/1/2012
104.05
 
7/1/2017
79.06
7/1/2012
103.70
 
8/1/2017
78.59
8/1/2012
103.34
 
9/1/2017
78.12
9/1/2012
102.98
 
10/1/2017
77.64
10/1/2012
102.62
 
11/1/2017
77.16
11/1/2012
102.26
 
12/1/2017
76.68
12/1/2012
101.90
 
1/1/2018
76.20
1/1/2013
101.54
 
2/1/2018
75.72
2/1/2013
101.17
 
3/1/2018
75.23
3/1/2013
100.80
 
4/1/2018
74.74
4/1/2013
100.43
 
5/1/2018
74.25
5/1/2013
100.06
 
6/1/2018
73.76
6/1/2013
99.69
 
7/1/2018
73.26
7/1/2013
99.31
 
8/1/2018
72.77
8/1/2013
98.94
 
9/1/2018
72.27
9/1/2013
98.56
 
10/1/2018
71.77
10/1/2013
98.18
 
11/1/2018
71.26
11/1/2013
97.79
 
12/1/2018
70.76
12/1/2013
97.41
 
1/1/2019
70.25
1/1/2014
97.02
 
2/1/2019
69.74
2/1/2014
96.64
 
3/1/2019
69.23
3/1/2014
96.25
 
4/1/2019
68.71
4/1/2014
95.85
 
5/1/2019
68.19
5/1/2014
95.46
 
6/1/2019
67.67
6/1/2014
95.07
 
7/1/2019
67.15
7/1/2014
94.67
 
8/1/2019
66.63
8/1/2014
94.27
 
9/1/2019
66.10
9/1/2014
93.87
 
10/1/2019
65.57
10/1/2014
93.47
 
11/1/2019
65.04
11/1/2014
93.06
 
12/1/2019
64.51
12/1/2014
92.65
 
1/1/2020
63.98
1/1/2015
92.25
 
2/1/2020
63.44
2/1/2015
91.83
 
3/1/2020
62.90
3/1/2015
91.42
 
4/1/2020
62.35
4/1/2015
91.01
 
5/1/2020
61.81
5/1/2015
90.59
 
6/1/2020
61.26
6/1/2015
90.17
 
7/1/2020
60.71
7/1/2015
89.75
 
8/1/2020
60.16
8/1/2015
89.33
 
9/1/2020
59.61
9/1/2015
88.90
 
10/1/2020
59.05
10/1/2015
88.48
 
11/1/2020
58.49
11/1/2015
88.05
 
12/1/2020
57.93
12/1/2015
87.62
 
1/1/2021
57.37
1/1/2016
87.19
 
2/1/2021
56.80
2/1/2016
86.75
 
3/1/2021
56.23
3/1/2016
86.32
 
4/1/2021
55.66
4/1/2016
85.88
 
5/1/2021
55.09
5/1/2016
85.44
 
6/1/2021
54.51
6/1/2016
85.00
 
7/1/2021
53.94
7/1/2016
84.55
 
8/1/2021
53.36
8/1/2016
84.11
 
9/1/2021
52.77
9/1/2016
83.66
 
10/1/2021
52.19
10/1/2016
83.21
 
11/1/2021
51.60
11/1/2016
82.76
 
12/1/2021
51.01
12/1/2016
82.30
 
1/1/2022
50.42
1/1/2017
81.84
 
2/1/2022
49.82
2/1/2017
81.39
 
3/1/2022
50.00
3/1/2017
80.92
     

                                                                  

 
 

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