Exhibit
4.1.1


 




 


 





TRUST INDENTURE


 


 


Relating to United States Government
Guaranteed


Ship Financing Obligations


K-Sea Series 2002-1


K-Sea Series 2002-2


K-Sea Series 2002-3


K-Sea Series 2002-4


 


Among


 


K-SEA TRANSPORTATION LLC,


 


and


 


EW HOLDING CORP.,


 


Shipowners


 


and


 


JPMORGAN CHASE BANK,


 


Indenture Trustee


 


Dated as of June 7, 2002




 


 





 

















 


TABLE OF CONTENTS TO SPECIAL PROVISIONS OF
THE INDENTURE*


 


	
  SPECIAL
  PROVISIONS

  	
   

  
	
  RECITALS

  	
   

  
	
  ARTICLE FIRST

  	
   

  
	
  Incorporation
  of General Provisions

  	
   

  
	
  ARTICLE SECOND

  	
   

  
	
  The Obligations

  	
   

  
	
  ARTICLE THIRD

  	
   

  
	
  (a)

  	
  Concerning
  Section 2.07(c)

  	
   

  
	
  (b)

  	
  Concerning
  Section 2.09

  	
   

  
	
  (c)

  	
  Concerning
  Payment of the Obligations.

  	
   

  
	
  (d)

  	
  Concerning
  Section 3.01

  	
   

  
	
  (d)

  	
  Concerning
  Section 3.02(b)

  	
   

  
	
  (e)

  	
  Concerning
  Section 3.02(c)

  	
   

  
	
  (f)

  	
  Concerning
  Section 3.03

  	
   

  
	
  (g)

  	
  Concerning
  Registered and Beneficial Ownership of the Obligations; Legends

  	
   

  
	
  (h)

  	
  Concerning
  Section 3.05

  	
   

  
	
  (i)

  	
  Concerning
  Section 3.06

  	
   

  
	
  (j)

  	
  Concerning
  Section 3.07

  	
   

  
	
  (k)

  	
  Concerning Section 4.02.

  	
   

  
	
  (l)

  	
  Concerning
  Section 6.02

  	
   

  
	
  (m)

  	
  Concerning
  Section 6.04

  	
   

  
	
  (n)

  	
  Concerning
  Section 6.05

  	
   

  
	
  (o)

  	
  Concerning
  Section 6.06(a)

  	
   

  
	
  (p)

  	
  Concerning Section 6.09(a)

  	
   

  
	
  (q)

  	
  Concerning Section 6.09

  	
   

  



 












*
This Table of Contents is not a part of the Indenture and has no bearing upon
the interpretation of any of its terms and provisions.


 


i

















 


	
  (r)

  	
  Concerning
  Section 7.02(b)

  	
   

  
	
  (s)

  	
  Concerning
  Section 7.04.

  	
   

  
	
  (t)

  	
  Concerning Section 8.01

  	
   

  
	
  (u)

  	
  Concerning
  Section 9.01(c)

  	
   

  
	
  (v)

  	
  Concerning
  Section 10.04(b)

  	
   

  
	
  (w)

  	
  Concerning Notices

  	
   

  
	
  (x)

  	
  Governing Law

  	
   

  
	
  (y)

  	
  Execution of Counterparts

  	
   

  
	
  ARTICLE FOURTH

  	
   

  
	
  Definitions

  	
   

  
	
  ARTICLE FIFTH

  	
   

  
	
  Representations

  	
   

  



 


 


EXHIBITS TO TRUST INDENTURE


 


	
  SCHEDULE A

  	
  -

  	
  Schedule of
  Definitions to Trust Indenture

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  1

  	
  -

  	
  General
  Provisions Incorporated into the Trust Indenture by Reference

  
	
   

  	
   

  	
   

  
	
  EXHIBIT 2.1

  	
  -

  	
  Form of Obligation, Guarantee and Trustee’s Authentication
  Certificate for K-Sea Series 2002-1

  
	
   

  	
   

  	
   

  
	
  EXHIBIT 2.2

  	
  -

  	
  Form of Obligation, Guarantee and Trustee’s Authentication
  Certificate for K-Sea Series 2002-2

  
	
   

  	
   

  	
   

  
	
  EXHIBIT 2.3

  	
  -

  	
  Form of Obligation, Guarantee and Trustee’s Authentication
  Certificate for K-Sea Series 2002-3

  
	
   

  	
   

  	
   

  
	
  EXHIBIT 2.4

  	
  -

  	
  Form of Obligation, Guarantee and Trustee’s Authentication
  Certificate for K-Sea Series 2002-4

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  3

  	
  -

  	
  Form
  of Authorization Agreement

  



 


ii

















 


TRUST
INDENTURE


 


Special Provisions


 


THIS TRUST INDENTURE, dated as of June 7,
2002 (as the same may be amended, modified or supplemented from time to time,
the “Indenture”), among K-SEA TRANSPORTATION LLC, a Delaware limited liability
company (“K-Sea”) and EW HOLDING CORP., a New York corporation (“EW Holding”
and with K-Sea collectively, the “Shipowners” and each a “Shipowner”), and
JPMORGAN CHASE BANK (with any successors or assigns the “Indenture Trustee”).


 


RECITALS


 


WHEREAS:


 


A.                                   Upon
delivery thereof, EW Holding will be the sole owner of the whole of a
100,000-barrel capacity double-hull barge constructed by Bollinger Gretna, LLC,
a Louisiana limited liability company (the “Shipyard” or “Builder”) and
identified as Builder’s Hull No. 416 to be named DBL-101  (the “EW Vessel”);


 


B.                                     Upon
delivery thereof, K-Sea, will be the sole owner of the whole of (i) the two (2)
80,000-barrel capacity double-hull barges constructed by the Shipyard and
identified as Builder’s Hulls Nos. 417 and 421, to be named DBL-81 and 

DBL-82, respectively, and (ii) the one (1) 100,000-barrel capacity double-hull
barge constructed by the Shipyard and identified as Builder’s Hull No. 422 to
be named DBL-102 (the “K-Sea Vessels” and each a “K-Sea Vessel”; collectively,
with the EW Vessel, the “Vessels”) on their respective Delivery Dates;


 


C.                                     To
aid in financing the construction costs of each of the Vessels, the Shipowners
have duly executed this Indenture, have duly authorized the issuance hereunder
of the Obligations, as defined below, and have entered into a bond purchase
agreement (the “Bond Purchase Agreement”) with the purchasers named therein,
providing for the sale and delivery of up to the aggregate principal amount of
Forty Million Four Hundred Forty-One Thousand United States Dollars (US
$40,441,000) to be issued in four (4) series of bonds (collectively the
“Obligations”) duly issued by the Shipowners pursuant to Section 2.01 of
Exhibit 1 of this Indenture, designated “United States Government Guaranteed
Ship Financing Obligations, K-Sea Series 2002-1, 2002-2, 2002-3 and 2002-4”,
having the maturity dates and interest rate set forth therein.  In no event shall the aggregate outstanding
principal amount of each Series of the Obligations exceed eighty-seven and one
half percent (87.5%) of the Actual Cost of the Vessels with respect to which
such Series is issued; and


 


D.                                    The
Secretary, on behalf of the United States, has agreed to Guarantee the payment
of the unpaid interest to the date of such payment on, and the unpaid balance
of the principal of, such Obligations under the provisions of Title XI of the


 

















 


Act, and has authorized the Indenture
Trustee to cause the Guarantees to be imprinted on the Obligations pursuant to
the Authorization Agreement, Contract No. 13780.


 


NOW THEREFORE, in consideration of the premises,
of the mutual covenants herein contained, of the purchase of the Obligations by
the Holders thereof, and of other good and valuable consideration, the receipt
and adequacy of which the parties hereby acknowledge, and for the equal and
proportionate benefit of all the present and future Holders of the Obligations,
the parties hereto agree as follows:


 


ARTICLE FIRST


 


Incorporation of
General Provisions


 


This Indenture shall consist of two parts: the
Special Provisions and the General Provisions attached hereto as Exhibit 1, and
they shall be treated as one instrument. 
In the event of a conflict, the terms of the Special Provisions shall prevail.


 


All references in the General Provisions to
“Shipowner” and “Shipowner’s” in the singular shall be deemed to mean
“Shipowners” and “Shipowners’”, respectively, in the plural for both K-Sea and
EW Holding.


 


ARTICLE SECOND


 


The Obligations


 


(a)                                  The
initial series of Obligations issued hereunder shall be designated “United
States Government Guaranteed Ship Financing Obligations, K-Sea Series” and
shall be in the forms of Exhibits 2.1, 2.2, 2.3 and 2.4 to this Indenture.  The Obligations shall be issued in four (4)
series (each a “Series”) designated as (i) K-Sea Series 2002-1, in the
principal amount of Ten Million Nine Hundred Five Thousand Dollars
($10,905,000), issued to finance a portion of the construction cost of the EW
Vessel, DBL-101, (ii) K-Sea Series 2002-2, in the principal amount of Nine
Million Six Hundred Thirty-Two Thousand Dollars ($9,632,000) issued to finance
a portion of the construction cost of the K-Sea Vessel DBL-81, (iii) K-Sea
Series 2002-3, in the principal amount of Nine Million Three Hundred
Seventy-Six Thousand Dollars ($9,376,000) issued to finance a portion of the
construction cost of the K-Sea Vessel DBL-82, and (iv) K-Sea Series 2002-4, in
the principal amount of Ten Million Five Hundred Twenty-Eight Thousand Dollars
($10,528,000) issued to finance a portion of the construction cost of the K-Sea
Vessel DBL-102.  The stated maturity for
each Series is the 25th anniversary of the date (the “Transition
Date”) which is the earlier of (i) the Delivery Date of the Vessel with respect
to which such Series has been issued or (ii) the following dates with respect
to each Series:


 


2

















 


	
  Series

  	
   

  	
  Date

  
	
  K-Sea Series 2002-1

  	
   

  	
  October 23, 2002

  
	
  K-Sea Series 2002-2

  	
   

  	
  July 23, 2003

  
	
  K-Sea Series 2002-3

  	
   

  	
  March 23, 2004

  
	
  K-Sea Series 2002-4

  	
   

  	
  November 23, 2004

  



 


The aggregate principal
amount of Obligations which may be issued under this Indenture shall not exceed
Forty Million Four Hundred Forty-One Thousand United States Dollars
(US$40,441,000).


 


(b)                                 The
denominations of the Obligations shall be in integral multiples of One Thousand
United States Dollars (US$1,000).


 


(c)                                  The
Shipowners shall at all times cause to be maintained in the City of New York,
State of New York an office or agency for the purposes specified in
Section 5.03 of Exhibit 1  to this
Indenture, which shall be the Corporate Trust Office.


 


(d)                                 The
Indenture Trustee shall at all times have its Corporate Trust Office in the
City of New York, State of New York.


 


ARTICLE THIRD


 


Additions, Deletions and Amendments to
Exhibit 1


 


The following additions, deletions and
amendments are hereby made to Exhibit 1 to this Indenture.


 


(a)                                  Concerning Section 2.07(c).  The first sentence of Section 2.07(c)
is hereby amended by deleting it in its entirety and substituting the following
therefor:


 


“(c)
The Indenture Trustee shall not be required to register transfers or make
exchanges of (1) the Obligations of any Series for a period of 15 days
immediately prior to (A) an Interest Payment Date related to such Series or (B)
any selection of Obligations of such Series to be redeemed, (2) the Obligations
of any Series after demand for payment of the Guarantees related to such Series
and prior to the payment thereof or rescission of such demand pursuant to
Section 6.02(a) or (3) any Obligation which has been selected for
redemption in whole or in part.”


 


(b)                                 Concerning Section 2.09.  With respect to clause (1) of the proviso to
Section 2.09 of Exhibit 1 to this Indenture, a written agreement of
indemnity which is satisfactory in form and substance to the Secretary, the
Shipowners and the Indenture Trustee executed and delivered by an institutional
Holder having a 


 


3

















 


capital and surplus of at
least One Hundred Million United States Dollars (US$100,000,000) shall be
considered sufficient indemnity to the Secretary, the Shipowners and the
Indenture Trustee in connection with the execution, authentication and delivery
of any new Obligation or the making of any payment as contemplated by said
Section 2.09.


 


(c)                                  Concerning Payment of the
Obligations.  Notwithstanding
anything to the contrary in Exhibit 1 hereto, the Obligations to be issued
hereunder shall be payable as to principal, premium (if any), and interest, at
an office or agency maintained by the Shipowners for such purpose at the
Corporate Trust Office of the Indenture Trustee, or, at the option of the
Shipowners, as to payments of principal, premium (if any), or interest by check
mailed by the Indenture Trustee to the addresses of the Obligees as such
addresses shall appear in the Obligation Register on the applicable Record
Date, subject in any event to the provisions hereof concerning home office
payment and the provisions of the Letter of Representations dated June 6,
2002 (the “Letter of Representations”) between the Shipowners and the Indenture
Trustee and accepted by The Depository Trust Company (“DTC”).  The Indenture Trustee agrees that within 30
days from the date of any payment of principal or interest when the same shall
become due and payable by reason of maturity or redemption, a Responsible
Officer in the Corporate Trust Office of the Indenture Trustee shall ascertain
to his satisfaction that checks in payment of such amounts have been mailed by
the Indenture Trustee to the addresses of the Obligees as provided above, if
payment is to be made by check or, if payment is to be made by wire transfer or
by credit to an account maintained by the Obligee with the Indenture Trustee,
that such funds have been wired or credited or, if payment is to be made at the
Corporate Trust Office, that funds were held by the Indenture Trustee for such
payment on the date the payment was due. 
The Indenture Trustee shall have no obligation to determine whether such
checks or payments were received by the Obligees.  If required by DTC, the Indenture Trustee may classify any
sinking fund payment as a principal repayment for purposes of notice to DTC.


 


(d)                                 Concerning Section 3.01.  Section 3.01 is hereby amended by
deleting it in its entirety and substituting the following therefor:


 


“SECTION 3.01.  Redemptions Suspended During Default.  Notwithstanding the following provisions of
this Article III, neither the Shipowners nor the Indenture Trustee shall
redeem any Obligations of a Series, except pursuant to Sections 3.04 or 3.05,
during the continuance of any Indenture Default with respect to such Series,
except that, where the mailing of notice of redemption of any Obligations of
such Series shall have theretofore been made, the Indenture Trustee shall
redeem or cause to be redeemed such Obligations if it shall have received a sum
sufficient for such redemption.  Except
as aforesaid, any moneys received by the Indenture Trustee for the redemption
of such Obligations which may 


 


4

















 


 


not be applied to the redemption thereof shall be held
in trust by the Indenture Trustee and applied in the following  manner: 
(1) in case such Indenture Default or such event as to such Series shall
no longer be continuing, such moneys shall thereafter be applied to the
redemption of Obligations of such Series in accordance with the applicable
provisions of the Obligations of such Series and of this Article III, (2)
in the event the Secretary shall have assumed the Obligation of such Series
pursuant to Section 6.09 or shall have paid the amounts due under the
Guarantees of any Series, such moneys shall be paid over by the Indenture
Trustee to the Secretary, provided, however, that any such moneys in excess of
the amount remaining due the Secretary pursuant to the Secretary’s Note or the
Security Agreement shall be paid over to the Shipowners, or (3) if no
Obligations shall be Outstanding, and the Secretary shall not have been
required to pay any Guarantees, such moneys shall be paid to the Shipowners.”


 


(d)                                 Concerning Section 3.02(b).  Section 3.02(b) is hereby amended by
adding at the end thereto the following sentence:


 


“Obligations
optionally redeemed, purchased or otherwise acquired by the Shipowners and
delivered at least forty (40) days prior to the date for such sinking fund
redemption in accordance with the terms of the Indenture to the Indenture
Trustee for cancellation shall be applied at the principal amount thereof pro
rata to succeeding mandatory sinking fund redemptions and at maturity.”


 


(e)                                  Concerning Section 3.02(c).  Section 3.02(c) is hereby deleted in
its entirety.


 


(f)                                    Concerning Section 3.03.  Section 3.03 is hereby amended by
deleting it in its entirety and substituting the following therefor:


 


“Section 3.03. 
Optional Redemptions of Obligations at Premium


 


At its option, the
Shipowners may redeem the Obligations of any Series prior to Maturity, in whole
or in part, at any time on or after the first semi-annual anniversary of the
Transition Date with respect to such Series, at a Redemption Price equal to one
hundred percent (100%) of the then outstanding principal amount of such
Obligations being so redeemed, together with the interest accrued thereon, plus
the Make Whole Premium (as defined in Schedule A).  The Shipowners may redeem such Obligations
on a date at least forty (40) days but not more than sixty (60) days from the
Indenture Trustee’s receipt of a Request to make such an optional redemption
and specifying the 


 


5

















 


Redemption Date of the Series and the principal amount
of Obligations which the Shipowners intend to redeem.  Obligations redeemed by the Shipowners will be applied at the
principal amount thereof pro rata to succeeding mandatory sinking fund
redemptions and at maturity.”


 


(g)                                 Concerning Registered and
Beneficial Ownership of the Obligations; Legends.  Notwithstanding anything in Exhibit 1 to
this Indenture to the contrary, including without limitation Section 2.07
(which shall only apply in the event the Obligations are not at any time Global
Obligations):


 


(i)                                     The
Obligations with respect to each Series shall be issued initially in the form
of one permanent global Obligation for such Series in definitive, fully
registered form without interest coupons (the “Global Obligation”).  Except as provided in paragraph (ii) below,
owners of beneficial interests in such Global Obligation (“Obligation Owners”)
will not be entitled to receive separate certificated Obligations (“Definitive
Obligations”) for such Series and will not be considered the Holders
thereof.  Such Global Obligation shall
be deposited with The Depository Trust Company (“DTC”) or the Indenture
Trustee, as custodian for DTC, registered in the name of DTC or a nominee of
DTC, and duly executed by the Shipowners and authenticated by the Indenture
Trustee as provided in the Indenture, and DTC or such nominee of DTC shall be
the sole Holder for purposes of this Indenture until such Global Obligation
becomes exchangeable for such Definitive Obligations in accordance with
paragraph (ii)(2) below.  Such Global
Obligation shall bear such legend as DTC may require.


 


(ii)                                  (1)                                  The
transfer and exchange of any beneficial interest in a Global Obligation shall
be effected through DTC or the Indenture Trustee, as the custodian for DTC, in
accordance with the Indenture.


 


(2)                                  The Global
Obligation for a Series shall be exchangeable for Definitive Obligations for
such Series registered in the names of the Obligation Owners only if any of the
following events shall have occurred: 
(1) DTC notifies the Shipowners that it is unwilling or unable to
continue as depository for such Global Obligation or DTC ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, at a time when DTC is required to be so registered in order to act as
depository, and a successor depository is not appointed by the Shipowners
within ninety (90) days thereafter, (2) the Shipowners elect to terminate DTC’s
service or the book-entry system, (3) the Secretary assumes the Obligations for
such Series, or (4) the Secretary instructs the Shipowners and the Indenture
Trustee to terminate the Letter of Representations dated June ____, 2002,
between the Shipowners and the Indenture Trustee and accepted by DTC.


 


(3)                                  Any Global
Obligation for a Series that is exchangeable for Definitive Obligations for
such Series registered in the name of the 


 


6

















 


Obligation Owners pursuant to this
paragraph (ii) shall be surrendered by DTC to the Indenture Trustee to be so
exchanged, without charge, and the Shipowners shall execute and the Indenture
Trustee shall authenticate and deliver, upon such exchange of such Global
Obligation, an equal aggregate principal amount of Definitive Obligations for
such Series of authorized denominations. 
Definitive Obligations issued in exchange for a beneficial interest in a
Global Obligation pursuant hereto shall be registered in such names and in such
authorized denominations as DTC, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Indenture Trustee in
writing.  The Indenture Trustee shall
deliver such Definitive Obligations to the Obligation Owners in whose names
such Obligations are so registered in accordance with the instructions of DTC.


 


(4)                                  The
registered Holder of a Global Obligation for a Series may grant proxies and
otherwise authorize any Obligation Owner of such Series, including the DTC’s
members and participants and Obligation Owners that may hold interests through
such members and participants, to take any action which a Holder is entitled to
take under the Indenture or such Obligation.


 


(5)                                  In the
event of the occurrence of any of the events specified in paragraph (ii)(2),
the Shipowners will promptly make available to the Indenture Trustee a
reasonable supply of Definitive Obligations for such Series.


 


(6)                                  Notwithstanding
any other provision of the Indenture, the Global Obligation may not be
transferred except as a whole by DTC to a nominee of DTC or by a nominee of DTC
to DTC or another nominee of DTC.


 


(iii)                               At such
time as all beneficial interests in the Global Obligation of a Series have
either been exchanged for Definitive Obligations in such Series, redeemed,
repurchased or canceled, such Global Obligation shall be returned to the
Indenture Trustee for cancellation or retained and canceled by the Indenture
Trustee.


 


(iv)                              The
Indenture Trustee shall have no responsibility or obligation to any Obligation
Owner, a member of, or a participant in DTC with respect to the accuracy of the
records of DTC or its nominee or of any participant or member thereof, with
respect to any ownership interest in the Obligations or with respect to the
delivery to any participant, member, or other Obligation Owner (other than DTC)
of any notice (including any notice of redemption) or the payment of any amount
or delivery of any Obligations (or other security or property) under or with
respect to such Obligations.  All
notices and communications to be given to the Holders and all payments to be
made to Holders with  respect to the
Obligations for a particular Series shall be given or made only to or upon the
order of the registered Holders (which shall be DTC or its nominee in the case
of the Global Obligation for such Series). 
The rights of owners of beneficial interest in any Global Obligation 


 


7

















 


shall be exercised only through DTC
subject to the applicable rules and procedures of DTC.  The Indenture Trustee may rely and shall be
fully protected in relying upon information furnished by DTC with respect to
its members, participants and any Obligation Owner.


 


(v)                                 Members of,
or participants in, DTC shall have no rights under this Indenture with respect
to any Global Obligation held on their behalf by DTC or by the Indenture
Trustee as the custodian of DTC or under such Global Obligation, and DTC may be
treated by the Shipowners, the Indenture Trustee and any agent of the
Shipowners or the Indenture Trustee as the absolute owner of such Global
Obligation for all purposes whatsoever. 
Notwithstanding the foregoing, nothing herein shall prevent the
Shipowners, the Indenture Trustee or any agent of the Shipowners or the
Indenture Trustee from giving effect to any written certification, proxy or
other authorization furnished by DTC or impair, as between DTC and its members
and participants, the operation of customary practices of DTC governing the
exercise of the rights of any owner of a beneficial interest in any Global Obligation.


 


(h)                                 Concerning Section 3.05.  Section 3.05 is hereby amended by
deleting it in its entirety and substituting the following therefor:


 


“SECTION 3.05.  Redemption After Total Loss, Requisition
of Title, Seizure or Forfeiture of a Vessel or Termination of Certain Contracts.  The Shipowners and the Secretary may Request
a Redemption Date, at least 40 days but not more than 60 days from the
Indenture Trustee’s receipt of the Request, for the redemption of certain
Obligations of a Series because of (1) an actual, constructive, agreed or
compromised total loss of the Vessel with respect to which such Series was
issued, (2) requisition of title to, or seizure or forfeiture of such Vessel or
(3) termination of a primary Construction Contract with respect to such
Vessel.  Upon receipt, the Indenture
Trustee shall promptly give notice to the Holders of the Obligations for such
Series of the Redemption Date as provided in Section 3.08 and on that date
shall redeem such principal amount of such Obligations together with the
interest accrued thereon.”


 


(i)                                     Concerning Section 3.06.  Section 3.06 is hereby amended by
deleting it in its entirety and substituting the following therefor:


 


“SECTION 3.06.  Redemption After Assumption by the
Secretary.  At any time after the
Secretary has assumed the Obligations of any Series under Section 6.09 of
the Indenture, the Secretary may Request a Redemption Date, at least 40 days
but not more than 60 days from the Indenture Trustee’s receipt of the Request,
for the redemption of all or part of the Obligations of such Series.  


 


8

















 


Upon receipt, the Indenture Trustee shall promptly
give notice to the Holders of the Redemption Date as provided in
Section 3.08 and on that date the Secretary shall redeem such principal
amount of Obligations of such Series together with the interest accrued
thereon.”


 


(j)                                     Concerning Section 3.07.  Section 3.07 is hereby amended by
deleting it in its entirety and substituting the following therefor:


 


“SECTION 3.07.  Determination of Obligations to be
Redeemed.  If less than all the
Obligations of a Series are to be redeemed pursuant to Sections 3.03, 3.04 or
3.05, the Indenture Trustee shall select the particular Obligations of such
Series to be redeemed by multiplying the total principal amount to be redeemed
by a fraction, the numerator of which is the amount each Holder of an
Outstanding Obligation of such Series is owed and the denominator is the total
principal amount of the Outstanding Obligations of such Series, 


 


making adjustment so that the principal amount of any
such Obligation to be redeemed shall be $1,000 or an integral multiple
thereof.”


 


(k)                                  Concerning Section 4.02.


 


(i)                                     With respect to Section 4.02(a), the
appointment of a Paying Agent by the Shipowners is subject to the prior written
consent of the Secretary and Indenture Trustee, which consent shall not be
unreasonably withheld.


 


(ii)                                  Section 4.02(a)(3)
is hereby amended by deleting the words “ten days” and inserting “five (5)
days” therein.


 


(l)                                     Concerning Section 6.02.  Section 6.02 is hereby amended by
deleting it in its entirety and substituting the following therefor:


 


“SECTION 6.02.  Demand for Payment of Guarantees.  (a) If an Indenture Default as to any Series
shall have occurred and be continuing, the Indenture Trustee shall, no later
than 60 days from the date of such Indenture Default, demand payment by the
Secretary of the unpaid interest to the date of such payment on, and the unpaid
balance of the principal of, all Outstanding Obligations of such Series,
whereupon the entire unpaid principal amount of the Outstanding Obligations of
such Series and all unpaid interest thereon shall become due and payable no
later than 30 days from the date of such demand; provided that, in the
case of a demand made as a result of a Payment Default, as to such Series, if,
prior to the expiration of 30 days from the date of such demand and prior to
any payment of the Guarantees as to such Series by the Secretary, the Secretary
shall find, and give written notice to the Shipowners and the Indenture Trustee
to the effect that 


 


9

















 


there was no Payment Default or that such Payment
Default was remedied prior to such demand, such demand and the Indenture Default
shall be of no legal effect or consequence. 
In each such case, the Guarantees shall remain in full force and effect
as to such Series.  The Indenture
Trustee shall give to each Obligee of such Series and to the Shipowners prompt
written notice of any demand made by the Indenture Trustee pursuant to this
paragraph (a), any such notice to Obligees to be given as provided in
Section 13.01.


 


(b)                                 If
the Indenture Trustee shall not have made the demand referred to in paragraph
(a) of this Section on or before the 30th day following an
Indenture Default (as to any Series) which shall have occurred and be
continuing and if the Holders of all Outstanding Obligations of such Series
shall not have theretofore elected to terminate the Guarantees as to such
Series as provided in Section 6.04(a)(2), any Holder of an Outstanding
Obligation of such Series, by an Act of Obligees delivered to the Secretary
(with copies thereof to the Indenture Trustee and the Shipowner), may, in place
of the Indenture Trustee and on behalf of all Holders of Outstanding
Obligations of such Series make such demand, subject to all the provisions of,
and with the effect provided in paragraph (a) of this Section.”


 


(m)                               Concerning Section 6.04.  Section 6.04 is hereby amended by
deleting it in its entirety and substituting the following therefor:


 


“SECTION 6.04.  Termination and Payment of the Guarantees.  (a) Except as otherwise provided in
Section 6.08, the Guarantee with respect to any Obligation shall only
terminate in case of the occurrence of one or more for the following events:


 


(1)                                  Such
Obligation shall have been Retired or Paid;


 


(2)                                  The
Holders of all Outstanding Obligations of such Series shall have elected, by
Act of Obligees delivered to the Secretary, to terminate the Guarantees;


 


(3)                                  Such
Guarantee shall have been paid in full in cash by the Secretary; or


 


(4)                                  The
Indenture Trustee and each Obligee of a particular Series of Obligations shall
have failed to demand payment of such Guarantee as provided herein or in such
Guarantee or in the Act.


 


10

















 


(b)                                 Subject
to the provisions of Section 6.08, when the Secretary shall pay the
Guarantees with respect to any Series in full in cash to the Indenture Trustee:


 


(1)                                  The
Indenture Trustee shall hold the entire amount thereof in trust for the sole
purpose of providing for the payments specified in subparagraph (5) below with
respect to such Series;


 


(2)                                  No
Obligation or Obligations of such Series shall thereafter be issued:


 


(3)                                  The
Obligations of such Series (A) shall represent only the right to receive the
payments from the Indenture Trustee specified in subparagraph (5) below, (B)
shall otherwise no longer constitute or represent an obligation of the
Shipowners and (C) shall not be entitled to any other rights or benefits under
this Indenture.


 


(4)                                  The
Indenture Trustee shall forthwith give written notice to the Shipowners and to
each of the Obligees of such Series stating that it has received payment of the
Guarantees in full in cash from the Secretary and that the same is available
for distribution to the Obligees of such Series on the manner specified in
subparagraph (5) below (and the Indenture Trustee shall give like notice to the
Holders of the Obligations of such Series at least annually thereafter for a
period of 6 years or until all Obligations of such Series shall have been
cancelled, whichever is earlier); and


 


(5)                                  Upon
the surrender for cancellation of any Obligation of a Series, the Indenture
Trustee shall forthwith pay to the Holder of such Obligation in cash an amount
(less the amount, if any, required to be withheld with respect to transfer or
other taxes on payment to such Holder) equal to the unpaid principal amount of
such Obligation and the unpaid interest accrued thereon to the date on which
the Secretary shall have paid the Guarantees as to such Series in full in cash
to the Indenture Trustee.


 


(c)                                  If
the Secretary shall not have paid the Guarantees with respect to any Series in
full in cash to the Indenture Trustee within 30 days after any demand therefor
pursuant to Section 6.02 (whether or not because the Secretary makes any
of the findings or takes the action referred to in the proviso of
Section 6.02(a)), the Indenture Trustee 


 


11

















 


shall give prompt written notice of such nonpayment to
each Obligee of such Series and the Shipowners.  If the Indenture Trustee shall have received notice of any of
these findings or actions, such notice to each Obligee of such Series shall so
state.”


 


(n)                                 Concerning Section 6.05.  Section 6.05 is hereby amended by
deleting it in its entirety and substituting the following therefor:


 


“SECTION 6.05.  Rights of Indenture Trustee After
Indenture Default.  Unless the
Guarantees have terminated as provided herein, after an Indenture Default as to
any Series the Indenture Trustee’s sole right shall be to demand and receive
payment of the Guarantees as to such Series from the Secretary and to take all
action, on behalf of itself and each Holder of such Series to enforce its
rights against the Secretary under the Guarantees as to such Series including
but not limited to the institution and prosecution of all judicial and other
proceedings.  If the Guarantees as to
such Series have terminated under Section 6.04(a)(4) without payment by
the Secretary, the Indenture Trustee shall have the right on behalf of itself
and each Holder of such Series to take all action to enforce its rights
directly against the Shipowners (but not the Secretary), including but not limited
to the institution and prosecution of all judicial and other proceedings with
respect to such Series.”


 


(o)                                 Concerning Section 6.06(a).  Section 6.06(a) is hereby amended by
deleting it in its entirety and substituting the following therefor:


 


“SECTION 6.06.  Obligees’ Right to Direct Indenture
Trustee After Indenture Default. 
(a) During the continuance of any Indenture Default as to a Series, the
Holders of a majority in principal amount of the Outstanding Obligations of
such Series shall have the right, by an Act of Obligees, to direct the
Indenture Trustee:  (1) to exercise or
to refrain from exercising any right or to enforce any remedy granted to it by
this Indenture as to such Series and (2) to direct the time, method and place
of the exercise of any such right or the enforcement of any such remedy; provided
that subject to Section 7.03 the Indenture Trustee shall have the
right not to take any such action if it shall determine in good faith that the
action would involve it in personal liability, would subject it to expenses
against which it has not been offered adequate security and indemnity, or would
be unjustly prejudicial to the Obligees not parties to such direction; and provided
further that, notwithstanding any other provision of this Indenture to the
contrary, the Indenture Trustee shall be obligated to demand payment of the
Guarantees with respect to a Series as provided in 


 


12

















 


Section 6.02(a) unless the Holders of all the
Outstanding Obligations of such Series hall have directed him not to make
demand.”


 


(p)                                 Concerning Section 6.09(a).  Section 6.09(a) is hereby amended by
deleting it in its entirety and substituting the following therefor:


 


“SECTION 6.09.  Assumption of Obligations by Secretary.  (a) Notwithstanding anything to the contrary
contained herein, in the absence of a demand under Section 6.02 hereof and
upon the occurrence of a default in the payment of any principal or interest
due under the Obligations of any Series which has continued for 25 days or more
or upon the Secretary’s giving a Secretary’s notice under this Indenture, the
Secretary may, in its sole discretion, prior to receipt by the Secretary of
demand for payment of the Guarantees as to such Series in accordance with this
Indenture, assume the rights and obligations of the Shipowners under this
Indenture with respect to such Series and the Obligations of such Series by (i)
giving to the Shipowners and Indenture Trustee a signed notice stating that it
has assumed the Obligations of such Series and the Indenture and (ii) making
any payment of principal or interest which is due under the Obligations of such
Series.”


 


(q)                                 Concerning Section 6.09.  Section 6.09 of Exhibit 1 hereto is
hereby amended by adding at the end thereof a new subsection (c) as
follows:


 


“(c)  In the event that the Obligations are
registered in the name of The Depository Trust Company (“DTC”), Cede & Co.
(“Cede”) or another nominee of DTC or Cede pursuant to a Letter of
Representations (“LOR”) which is executed among the Shipowners, the Indenture
Trustee and DTC, and if the Secretary (i) assumes the Obligations pursuant to
Section 6.09(a) hereof or (ii) instructs the Shipowners and the Indenture
Trustee to terminate the LOR, then the Shipowners and the Indenture Trustee,
immediately upon receipt of notice of such assumption or upon receipt of notice
of such termination, as applicable, shall terminate or cause the termination of
the LOR in accordance with Section 18 thereof.  The Indenture Trustee shall, within 30 days from receipt of
notice of such assumption or termination from the Secretary, also instruct DTC
to notify its direct and indirect participants of the need to re-register the
Obligations in the names of the beneficial owners.  Upon surrender by DTC of the Obligations issued in its name, the
name of Cede or another nominee, the Shipowners shall issue at their sole
expense; and the Indenture Trustee shall authenticate, Obligations in the names
provided to the Indenture Trustee by DTC.”


 


13

















 


(r)                                    Concerning Section 7.02(b).  Section 7.02(b) is hereby amended and
restated in its entirety as follows:


 


“(b)                           Should
the Indenture Trustee at any time cease to be eligible, pursuant to this
Section 7.02, to act as trustee, it shall promptly notify the Obligees,
each of the Shipowners and the Secretary of such fact; and should any of the
Shipowners obtain knowledge of such ineligibility, it shall promptly advise the
Indenture Trustee, the Secretary, and the Obligees of such fact.


 


Any such notice
(i) shall set forth all the relevant facts known to the Indenture Trustee, or
any of the Shipowners, as the case may be, (ii) if to the Secretary, or any of
the Shipowners, shall be registered or certified mail, postage prepaid, and
(iii) if to Obligees, shall be sent to each Obligee by first class mail,
postage prepaid at his address as it appears on the Obligation Register, or at
such other address as such Obligee may have furnished to the Indenture Trustee
for such purpose.”


 


(s)                                  Concerning Section 7.04.  The following sentence is added at the end
of Section 7.04: “The obligations of the Shipowners under this
Section 7.04 shall survive the resignation or removal of the Indenture
Trustee.”


 


(t)                                    Concerning Section 8.01.  Section 8.01 is hereby amended by
deleting it in its entirety and substituting the following therefor:


 


“SECTION 8.01.  Consolidation or Merger of a Shipowner or
Sale of Vessel.  (a) Nothing in this
Indenture shall prevent any lawful consolidation or merger of either Shipowner
with or into any other Person, or any sale of a Vessel by either Shipowner, the
Secretary or a court of law to any other Person lawfully entitled to acquire
and operate such Vessel or any sale by either Shipowner, the Secretary, or a
court of law of all or substantially all of its assets to any other Person; provided
that, except where such Shipowner shall be the Person surviving a merger
or consolidation, either (1) the Person formed by or surviving such
consolidation or merger shall expressly assume, by Supplemental Indenture, the
payment of the principal of and interest (and premium, if any) on the
Outstanding Obligations and expressly assume such Shipowner’s duties under the
Indenture, or (2) to the extent that the Secretary determines that the
Outstanding Obligations and the duties under the Indenture are not so assumed,
such Shipowner shall redeem the principal amount of those unassumed Obligations
in accordance with the terms of the Obligations and of the Indenture.  Notwithstanding the foregoing, neither
Shipowner  may sell or otherwise convey
any Vessel to any 


 


14

















 


other
Person (y) without prior written consent of the Secretary, upon such terms and
conditions as the Secretary may impose in his sole discretion.


 


(b)                                 When
a Person so assumes this Indenture and such Outstanding Obligations, the
Shipowners and the Indenture Trustee shall execute a Supplemental Indenture to
discharge and release such consolidated or merged Shipowner from any and all
obligations thereunder relating to such Outstanding Obligations.”


 


(u)                                 Concerning Section 9.01(c).  Section 9.01(c) is hereby amended by
deleting it in its entirety and substituting the following therefor:


 


“(c)  Any Act of Obligees taken by the Holder of
any Obligation of a Series shall bind every future Holder of any of the
Obligations of such Series with respect to anything done or suffered to be done
by the Indenture Trustee, any Paying Agent or the Shipowner in reliance
thereon, whether or not notation of such action is made upon such Obligation.”


 


(v)                                 Concerning Section 10.04(b).  Section 10.04(b) is hereby amended by
deleting its first paragraph in its entirety and substituting the following
therefor:


 


“(b)  Without the consent of all Obligees (1)
terminate or modify any of the Guarantees or the Obligations of any Series of
the Secretary thereunder, (2) reduce the amount of any of the Guarantees, (3)
eliminate, modify or condition the duties of the Indenture Trustee to demand
payment of the Guarantees or otherwise to comply with the provisions of
Section 6.02 and 6.04, (4) eliminate or reduce any of the eligibility
requirements for the Indenture Trustee stated in Section 7.02, or (5)
reduce the percentage in principal amount of the Outstanding Obligations of
such Series, the consent of whose Holders is required for any such Supplemental
Indenture, or required for any waiver provided herein or to modify any of the
provisions of this Section.”


 


(w)                               Concerning Notices.  (1) 
Subject to the provisions of Section 13.01 of Exhibit 1 to this
Indenture, any notice, request, demand, direction, consent, waiver, approval or
other communication to be given to a party hereto or the Secretary shall be
deemed to have been sufficiently given or made when addressed to:


 


15

















 


The Indenture Trustee as:


 


JPMorgan Chase Bank

450 West 33rd Street, 15th Floor

New York, New York 10001

Attention: Institutional Trust Services


 


The Shipowners as:


 


K-Sea Transportation LLC

EW Holding Corp.

Attn.: Chief Financial Officer

3245 Richmond Terrace

Staten Island, NY 10303


 


The Secretary as:


 


SECRETARY OF TRANSPORTATION

c/o Maritime Administrator

Department of Transportation 

400 Seventh Street, SW

Washington, D.C. 20590


 


(x)                                   Governing Law. 
This Indenture and each Obligation shall be construed, enforced, and
governed by the laws of the United States of America, but to the extent they
are inapplicable, then by the laws of the State of New York of the United
States of America without regard to its conflict of laws provisions (other than
Section 5-1401 of the New York General Obligations Law).


 


(y)                                 Execution of Counterparts.  This Indenture may be executed in any number
of counterparts.  All such counterparts
shall be deemed to be originals, and shall constitute but one and the same
instrument.


 


ARTICLE FOURTH


 


Definitions


 


For all purposes of this Indenture, unless
otherwise expressly provided or unless the context otherwise requires:


 


(1)                                  All
references herein to Articles, Sections or other subdivisions, unless otherwise
specified, refer to the corresponding Articles, Sections and other subdivisions
of this Indenture;


 


16

















 


(2)                                  The
Terms “hereof,” “herein,” “hereby,” “hereto,” “hereunder” and “herewith” refer
to this Indenture.


 


ARTICLE FIFTH


 


Representations


 


Each of the Shipowners, and the Indenture Trustee,
respectively, represents that it has duly authorized, executed and delivered
this Indenture and that this Indenture constitutes the legal, valid, and
binding obligations of each of them, enforceable against each of them in
accordance with the terms hereof and of the Obligations, except as such
enforcement may be limited by all applicable bankruptcy, insolvency, moratorium
or other similar laws affecting the rights of creditors generally.


 


[signatures on next
page]


 


17

















 


IN WITNESS WHEREOF, this Trust Indenture has
been duly executed by the parties hereto as of the day and year first above
written.


 


	
  [Seal]

  	
  K-SEA TRANSPORTATION LLC,

  
	
   

  	
  Shipowner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  [Seal]

  	
  EW HOLDING CORP.,

  
	
   

  	
  Shipowner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [Seal]

  	
  JPMORGAN CHASE BANK,

  	
   

  
	
   

  	
  Indenture Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
				



 

















 


	
  STATE OF NEW YORK

  	
  )

  
	
   

  	
  )  ss:

  
	
  COUNTY OF NEW YORK

  	
  )

  



 


 


On this 4th day of June, 2002, before me
personally appeared John J. Nicola to me known, who being by me duly sworn, did
depose and say that he is the Chief Financial Officer of K-SEA TRANSPORTATION
LLC and resides at 4 Crane Road, Mountain Lakes, NJ  07046; that he is authorized by authority of the Board of
Representatives of said entities, and that he signed his name thereto by like
authority.


 


In testimony whereof, I have hereunto set my
hand and seal this 4th day of June, 2002.


 


	
   

  	
   

  	
   

  
	
   

  	
  NOTARY PUBLIC

  	
   

  



(Notarial Stamp and Seal)


 


 


	
  STATE OF NEW YORK

  	
  )

  
	
   

  	
  )  ss:

  
	
  COUNTY OF NEW YORK

  	
  )

  



 


 


On this 4th day of June, 2002, before me
personally appeared John J. Nicola to me known, who being by me duly sworn, did
depose and say that he is the Chief Financial Officer of EW HOLDING CORP. and
resides at 4 Crane Road, Mountain Lakes, NJ 
07046; that he is authorized by authority of the Board of Directors of
said entities, and that he signed his name thereto by like authority.


 


In testimony whereof, I have hereunto set my
hand and seal this 4th day of June, 2002.


 


	
   

  	
   

  	
   

  
	
   

  	
  NOTARY PUBLIC

  	
   

  



(Notarial Stamp and Seal)


 

















 


	
  STATE OF NEW YORK

  	
  )

  
	
   

  	
  )  ss:

  
	
  COUNTY OF NEW YORK

  	
  )

  



 


 


Be it known this      
day of June, 2002, personally appeared before me
                  ,
who after being duly sworn, deposed and said that s/he is a
                 
of JPMORGAN CHASE BANK, a banking corporation which is described in and
executed the within instrument, and that s/he signed the within instrument by
order of the Board of Directors of the said banking association and
acknowledged the within instrument to be the free act and deed of the said
banking association.


 


In testimony whereof, I have hereunto set my
hand and seal this         day of June,
2002.


 


	
   

  	
   

  	
   

  
	
   

  	
  NOTARY PUBLIC

  	
   

  



 


(Notarial Stamp and Seal)


 

















 


SCHEDULE A

to Trust Indenture


 


Schedule of Definitions to Trust
Indenture


 

















 


EXHIBIT 1

to Trust Indenture


 


 


General Provision Incorporated into the

Trust Indenture by Reference


 

















 


EXHIBIT 2

to Trust Indenture


 


 


Forms of Obligation, Guarantee and

Trustee’s Authentication Certificate


 

















 


EXHIBIT 3

to Trust Indenture


 


 


Form of Authorization Agreement


 

















 


Schedule A to Indenture


 


Indenture
Definitions


 


“Act” means the Merchant
Marine Act, 1936, as amended and in effect on the Closing Date.


 


“Act of Obligees” means
any request, demand, authorization, direction, notice, consent, waiver or other
action to be given or taken by the Obligees and embodied in one or more
documents as required by the Indenture.


 


“Actual Cost” means the
actual cost of a Vessel or Vessels as determined and re-determined by the
Secretary pursuant to Sections 1101(f) and 1104A(b)(2) of the Act.


 


“Actual Knowledge” or
“actual knowledge” means actual knowledge of a Responsible Officer of a Person,
or when so indicated, actual knowledge only of a certain Responsible Officer of
a Person.


 


“Affiliate” or
“Affiliated” means any Person directly or indirectly controlling, controlled
by, or under common control with, another Person.


 


“Authorization
Agreement” means the Authorization Agreement, Contract No. MA-13780, dated the
Closing Date, between the Secretary and the Indenture Trustee, whereby the
Secretary authorizes the Guarantee of the United States to be endorsed on each
of the Obligations, as the same is originally executed, or as modified, amended
or supplemented in accordance with the applicable provisions thereof.


 


“Authorized Newspaper”
means The Wall Street Journal or if it ceases to exist, then in such
other newspaper as the Secretary may designate.


 


“Bond Purchase
Agreement” means the agreement for the purchase of the Obligations executed by
the Shipowners and the purchaser named therein, as originally executed or as
amended, modified or supplemented in accordance with the applicable provisions
thereof.


 


“Builder” means
Bollinger Gretna, LLC, a Louisiana limited liability company.


 


“Business Day” means a
day which is not a Saturday, Sunday or a bank holiday under the laws of the
United States or the State of New York.


 


“Closing Date” or
“Closing” means the date when the Security Agreement is executed and delivered
by the Shipowners.


 

















 


“Corporate Trust Office”
means the principal office of the Indenture Trustee at which at any time its
corporate trust business is administered, which office is currently located at
JPMorgan Chase Bank, 450 West 33rd Street, 15th Floor, New York, New York
10001, Attention: Institutional Trust Services, or at any other time at such
other address as the Trustee may designate from time to time by notice to the
parties hereto.


 


“Delivery Date” means
the date on which a Vessel or Vessels were delivered by the Shipyard and
accepted by a Shipowner.


 


“Dollars,” “U.S.
Dollars,” “U.S.D.” or “$” means the lawful currency of the United States of
America.


 


“EW Holding” means EW
Holding Corp., a New York corporation, or its successors.


 


“EW Vessel” means the
100,000-barrel tank barge built for EW Holding by the Shipyard and identified
with Builder’s Hull No. 416 to be known as DBL-101.


 


“Fleet Mortgage” means
the first preferred fleet mortgage on the K-Sea Vessels, Contract No. MA-13783,
by K-Sea to the Secretary, as originally executed, amended, modified or
supplemented.


 


“Guarantee” means each,
and the “Guarantees” means every, guarantee of an Obligation by the United
States pursuant to Title XI of the Act, as provided in the Authorization
Agreement.


 


“Holder” means each, and
“Holders” means every registered holder of an Obligation.


 


“Indenture” means the
Trust Indenture dated as of the Closing Date among the Shipowners and the
Indenture Trustee, as the same is originally executed or as amended, modified
or supplemented in accordance with the applicable provisions thereof.


 


“Indenture Default” has
the meaning specified in Article VI of Exhibit 1 to the Indenture.


 


“Indenture Trustee”
means JPMorgan Chase Bank, and any successor trustee permitted under the
Indenture.


 


“Interest Payment Date”
means with respect to any Obligation, the date when any interest on such
Obligation is due and payable.


 


“K-Sea” means K-Sea
Transportation LLC, a Delaware limited liability company, or its successors.


 


2

















 


“K-Sea Vessel” means
each or any of and “K-Sea Vessels” means all of each of the 80,000-barrel tank
barges built for K-Sea by the Shipyard and identified as Builder’s Hulls Nos.
417 and 421, to be known as DBL-81 and DBL-82, respectively, and the
100,000-barrel tank barge built for K-Sea by the Shipyard and identified as
Builder’s Hull No. 422, to be known as DBL-102.


 


“Make Whole Premium”
means the amount with respect to any optional redemption of the Obligations of
any Series as shall be determined by J.P. Morgan Securities Inc. two (2)
business days prior to the date fixed for such redemption and shall be equal to
the excess, if any, of (i) the sum of the respective Present Values (as
defined below) of the amount of such redemption over (ii) one hundred
percent (100%) of the aggregate principal amount being redeemed on such date,
provided that, the Make Whole Premium shall in no event be less than zero.  The “Present Value” of each optional
redemption shall be determined by discounting on a semi-annual basis each
“Prospective Payment” (as defined below) at (i) the Treasury Rate plus
(ii) one quarter percent (0.25%) for the period from the date on which
such Prospective Payment was scheduled to be paid to the applicable date of
redemption.  “Prospective Payment”
means, with respect to any redemption: (i) each scheduled interest payment
on the scheduled principal amount being redeemed, excluding any portion of such
interest payment accrued as of the date of redemption plus (ii) the
scheduled principal amount being redeemed.


 


“Maturity” when used
with respect to any Obligation means the date on which the principal of such
Obligation becomes due and payable as therein provided, whether at the Stated
Maturity or by redemption or declaration of acceleration or otherwise.


 


“Mortgage” means any of,
and “Mortgages” means all of the Ship Mortgage and the Fleet Mortgage,
including any supplements to the Fleet Mortgage.


 


“Mortgage Supplement”
means any supplement to the Fleet Mortgage, as originally executed, amended,
modified or supplemented.


 


“Obligation” means each,
and “Obligations” mean every, obligation of the Shipowners bearing a Guarantee
and authenticated and delivered pursuant to the Indenture and the Authorization
Agreement, which consist of four Series identified as “K-Sea Series 2002-1”,
“K-Sea Series 2002-2”, “K-Sea Series 2002-3”, and “K-Sea Series 2002-4”,
provided, however, that when used in the text of any Obligation itself,
“Obligation” or “Obligations” shall mean the Obligations of that Series only,
and not the obligations of any other Series.


 


“Obligation Register”
has the meaning specified in Section 2.07 of Exhibit 1 to the Indenture.


 


“Obligee” means each,
and “Obligees” means every, Holder  of
an Obligation.


 


3

















 


“Officer’s Certificate”
means a certificate conforming to Section 1.02 of Exhibit 1 to the Indenture.


 


“Opinion of Counsel”
means an opinion of counsel conforming to Section 1.02 of the Indenture.


 


“Original Issue Date”
means a date on which an Obligation was initially authenticated by the
Indenture Trustee even if the Obligation is subsequently given a later date by
reason of transfer, exchange or substitution.


 


“Outstanding” when used
with reference to the Obligations of any Series, shall mean all Obligations of
such Series theretofore issued under the Indenture, except:  (1) Obligations of a particular Series that
are Retired or Paid; and (2) Obligations of any Series in lieu of which other
Obligations have been issued under the Indenture.  Obligations which are not Outstanding shall not be entitled to
any rights or benefits provided in the Indenture.  For the purpose of Articles VI and X of the Indenture, and also
in determining whether the Holders of a stated percentage of the principal
amount of Outstanding Obligations of a Series have made an Act of Obligees
required or permitted by the Indenture, Obligations of a particular Series
owned by the Shipowners or by any Affiliate of the Shipowners shall be
disregarded and deemed not to be Outstanding; provided that, for the
purpose of determining whether the Indenture Trustee shall be protected in
relying on any such Act of Obligees of a Series, only Obligations of such
Series which the Indenture Trustee has actual knowledge are so owned shall be
so disregarded and deemed not to be Outstanding.


 


“Paying Agent” means any
bank or trust company meeting the qualifications in Sections 7.02(a) of the
Indenture and appointed by the Shipowners under Section 4.02 of the Indenture
to pay the principal of (and premium if any) or interest on the Obligations on
behalf of the Shipowners.


 


“Payment Default” has
the meaning specified in Section 6.01 of Exhibit 1 to the Indenture.


 


“Person”  or “Persons” means any individual,
corporation, partnership, joint venture, association, limited liability
company, joint-stock company, trust, unincorporated organization, government or
any agency or political subdivision thereof.


 


“Proportionate Part,”
means 100 percent of the Outstanding Obligations of the Series issued with
respect to the Vessel to which the respective section refers.


 


“Redemption Date” means
a date fixed for the redemption of an Obligation by the Indenture.


 


4

















 


“Redemption Price” means
the price at which an Obligation is redeemed under the Indenture.


 


“Remaining Dollar Years”
means the sum of the products obtained by multiplying: (i) the amount of
each remaining scheduled payment of principal of the Series of Obligations
being redeemed without giving effect to such redemption by (ii) the number
of years (rounded to the nearest one-twelfth of a year) which will elapse
between the date of redemption and the applicable mandatory redemption date for
the principal amount being redeemed.


 


“Request” means a
written request to a Person for the action therein specified, signed by a
Responsible Officer of the Person making such request.


 


“Responsible Officer”
means (i) in the case of any business entity, the chairman of the board of
directors, the president, any vice president, the secretary or assistant
secretary, the treasurer or assistant treasurer, or their equivalents, (ii) in
the case of any commercial bank, the chairman or vice-chairman of the executive
committee of the board of directors or trustees, the president, any vice
president, the secretary, the treasurer, any trust officer, any executive or
senior or second or assistant vice president, or any other officer or assistant
officer customarily performing functions similar to those performed by the
persons who at the time shall be such officers, or to whom any corporate trust
matter is referred because of his knowledge of and familiarity with the
particular subject, (iii) with respect to the signing or authentication of
Obligations and Guarantees by the Indenture Trustee, any person specifically
authorized by the Indenture Trustee to sign or authenticate Obligations, and
(iv) when used with respect to the Indenture Trustee, any officer within
the Corporate Trust Office, including any vice president, managing director,
assistant vice president, secretary, assistant secretary or assistant treasurer
or any other officer of the Indenture Trustee customarily performing functions
similar to those performed by any of the above designated officers with direct
responsibility for the administration of the Indenture and also, with respect
to a particular matter, any other officer to whom such matter is referred
because of such officer’s knowledge and familiarity with the particular
subject.


 


“Retired or Paid”, as
applied to Obligations and the indebtedness evidenced thereby, means that such
Obligations shall be deemed to have been so retired or paid and shall no longer
be entitled to any rights or benefits provided in the Indenture if:


 


(1)  such
Obligations shall have been paid in full;


 


(2)  such
Obligations shall have been cancelled by the Indenture Trustee and shall have
been delivered to the Indenture Trustee for cancellation; or


 


5

















 


(3)  such
Obligations shall have become due and payable at Maturity and funds sufficient
for the payment of such Obligations (including interest to the date of Maturity,
or, in the case of a payment after Maturity, to the date of payment, together
with any premium thereon) and available for such payment (whether as a result
of payment pursuant to the Guarantees or otherwise) shall be held by the
Indenture Trustee or any Paying Agent in trust for the purpose or with
irrevocable directions to it to so apply the same;


 


provided, that the foregoing
definition is subject to the provisions of Section 6.08 of Exhibit 1 to the
Indenture.


 


“Secretary” means the
Secretary of Transportation or any officials duly authorized to perform the
duties and functions of the Secretary of Transportation under Title XI of the
Act.


 


“Secretary’s Notice”
means a notice from the Secretary to the Indenture Trustee that a Default,
within the meaning of Section 6.01(b) of the Security Agreement has occurred.


 


“Secretary’s
Supplemental Indenture” means a Supplemental Indenture, pursuant to Section
6.09 of the Indenture, evidencing the succession of the Secretary to the
Shipowners, and the Secretary’s assumption of the Shipowners’ obligations under
the Indenture.


 


“Security Agreement”
means the security agreement, Contract No. MA-13781, dated as of the Closing
Date, consisting of the special provisions, the general provisions and Schedule
X thereto, executed by the Shipowners as security for the Secretary, as
originally executed or as modified, amended or supplemented.


 


“Series” means each of
the four bonds subject to the Guarantees, including each of K-Sea Series
2002-1, K-Sea Series 2002-2, K-Sea Series 2002-3 and K-Sea Series 2002-4.


 


“Ship Mortgage” means
the first preferred ship mortgage on the EW Vessel, Contract No. MA-13782, by
EW Holding to the Secretary, as originally executed, amended, modified or
supplemented.


 


“Shipowner” means each
of and “Shipowners” means both of K-Sea and EW Holding, and shall also include
their successors and assigns.


 


“Shipyard” means
Bollinger Gretna, LLC, a Louisiana limited liability company, and its
successors and assigns.


 


6

















 


“Stated Maturity” means
the date determinable as set forth in any Obligation as the final date on which
the principal of such Obligation is due and payable.


 


“Supplemental Indenture”
shall mean any indenture supplement to the Indenture entered into pursuant to
Article X thereof.


 


“Title XI” means Title
XI of the Act.


 


“Transition Date” as to
each of the Vessels, respectively, and as to the Series issued to finance in
part the construction cost of such Vessel, and each Obligation of such Series, respectively,
shall mean the earlier of (i) the date such Vessel is delivered to EW Holding
in the case of the EW Vessel or to K-Sea in the case of each K-Sea Vessel and
documented under the laws of the United States, with the respective Mortgage
for such Vessel having been duly recorded with the National Vessel
Documentation Center of the United States Coast Guard, or (ii) the following
dates with respect to each Vessel:


 


	
  Series

  	
   

  	
  Vessel

  	
   

  	
  Date

  
	
  K-Sea
  2002-1

  	
   

  	
  EW
  Vessel, Hull No. 416, DBL-101

  	
   

  	
  October
  23, 2002

  
	
  K-Sea
  2002-2

  	
   

  	
  K-Sea
  Vessel, Hull No. 417, DBL-81

  	
   

  	
  July
  23, 2003

  
	
  K-Sea
  2002-3

  	
   

  	
  K-Sea
  Vessel, Hull No. 421, DBL-82

  	
   

  	
  March
  23, 2004

  
	
  K-Sea
  2002-4

  	
   

  	
  K-Sea
  Vessel, Hull No. 422. DBL-102

  	
   

  	
  November
  23, 2004

  



 


“Treasury Rate” means
the rate per annum (expressed as a semi-annual equivalent) determined by J.P.
Morgan Securities Inc. to be the per annum rate equal to the semi-annual yields
to maturity of the issue of actively traded United States Treasury securities
having a maturity equal to the Weighted Average Life to Final Maturity;
provided, however, that if such Weighted Average Life to Final Maturity is not
equal to the maturity of an actively traded United States Treasury security
(rounded to the nearest one-twelfth of a year), such yield shall be obtained by
linear interpolation from the yields of actively traded United States Treasury
securities having the greater maturity closest to and the lesser maturity
closest to such Weighted Average Life to Final Maturity.  The yields shall be determined by reference
to the yields as indicated by Telerate Access Service (page 500 or the relevant
page at the date of determination indicating such yields) or, if such data
cease to be available, any publicly available sources of similar market data
selected by J.P. Morgan Securities Inc. as of the applicable time of
determination.


 


“United States” means
the United States of America.


 


“Vessel” means any of
and “Vessels” means all of the EW Vessel and the K-Sea Vessels, as completed in
accordance with the Construction Contract, together with all related
appurtenances, additions, improvements and replacements, which are further
identified in the Mortgages.


 


7

















 


“Weighted Average Life
to Final Maturity” means the number of years (rounded up to the nearest
one-twelfth of a year) obtained by dividing: (i) the then-Remaining Dollar
Years by (ii) the total amount of the then remaining aggregate unpaid
principal amount of the Series of Obligations being redeemed without giving
effect to such redemption.


 


8

















 


Exhibit 1 to Indenture


GENERAL PROVISIONS


 


TABLE OF CONTENTS


 


	
  ARTICLE I

  
	
  DEFINITIONS; OFFICER’S
  CERTIFICATES  AND OPINIONS OF COUNSEL

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.01.

  	
   

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.02.

  	
   

  	
  Officer’s Certificate and Opinions of
  Counsel

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  
	
  THE OBLIGATIONS

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.01.

  	
   

  	
  Issuance of Obligations of Initial
  Series

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.02.

  	
   

  	
  Additional Obligations; Obligations
  of Additional Series

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.03.

  	
   

  	
  Legends on Obligations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.04.

  	
   

  	
  Dates of Obligations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.05.

  	
   

  	
  Execution of Obligations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.06.

  	
   

  	
  Authentication of Obligations and
  Guarantees

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.07.

  	
   

  	
  Registration, Transfer and Exchange

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.08.

  	
   

  	
  Who Treated as Owners

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.09.

  	
   

  	
  Lost, Stolen, Destroyed or Mutilated
  Obligations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.10.

  	
   

  	
  Reacquired Obligations; Cancellation
  and Disposition of Obligations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  
	
  REDEMPTION OF
  OBLIGATIONS

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.01.

  	
   

  	
  Redemptions Suspended During Default

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.02.

  	
   

  	
  Redemptions Without Premium

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)

  	
  Mandatory Sinking
  Fund Redemptions

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
  Credit Against Mandatory
  Sinking Fund Redemptions

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (c)

  	
  Optional Sinking Fund
  Redemptions

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (d)

  	
  Mandatory Redemptions Without
  Premium

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (e)

  	
  Adjustments of Redemption
  Payments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.03.

  	
   

  	
  Optional Redemptions of Obligations
  at Premium

  	
   

  



 


i

















 


	
  SECTION 3.04.

  	
   

  	
  Redemptions to Comply with
  Section 1104A(b)(2) of the Act

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.05.

  	
   

  	
  Redemption After Total Loss,
  Requisition of Title, Seizure or Forfeiture of a Vessel or Termination of
  Certain Contracts

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.06.

  	
   

  	
  Redemption After Assumption by the
  Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.07.

  	
   

  	
  Determination of Obligations to be
  Redeemed

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.08.

  	
   

  	
  Notices of Redemption

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.09.

  	
   

  	
  Deposit of Redemption Moneys

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.10.

  	
   

  	
  Payment of Redemption Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  
	
  CASH HELD BY
  INDENTURE TRUSTEE OR PAYING AGENTS

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.01.

  	
   

  	
  Generally

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.02.

  	
   

  	
  Paying Agents

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.03.

  	
   

  	
  Unclaimed Amounts

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.04.

  	
   

  	
  Application of Funds

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  
	
  SHIPOWNER’S
  REPRESENTATIONS AND AGREEMENTS

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
   

  	
  Authorization, Execution and Delivery
  of Indenture

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.02.

  	
   

  	
  Payment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.03.

  	
   

  	
  Offices or Agencies of Shipowner

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  
	
  INDENTURE DEFAULTS
  AND REMEDIES

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.01.

  	
   

  	
  What Constitutes “Indenture Defaults”

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.02.

  	
   

  	
  Demand for Payment of Guarantees

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.03.

  	
   

  	
  Appointment of Indenture Trustee and
  Holders of Outstanding Obligations as Attorneys-in-Fact

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.04.

  	
   

  	
  Termination and Payment of the
  Guarantees

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.05.

  	
   

  	
  Rights of Indenture Trustee After
  Indenture Default

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.06.

  	
   

  	
  Obligees’ Right to Direct Indenture
  Trustee After Indenture Default

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.07.

  	
   

  	
  Attorneys’ Fees and Costs

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.08.

  	
   

  	
  Rescission of Payments

  	
   

  



 


ii

















 


	
  SECTION 6.09.

  	
   

  	
  Assumption of Obligations by
  Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  
	
  THE INDENTURE
  TRUSTEE

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.01.

  	
   

  	
  Acceptance of Trusts

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.02.

  	
   

  	
  Eligibility of Indenture Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.03.

  	
   

  	
  Rights and Duties of Indenture
  Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.04.

  	
   

  	
  Compensation, Expenses and
  Indemnification of Indenture Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.05.

  	
   

  	
  Resignation and Removal of Indenture
  Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.06.

  	
   

  	
  Appointment of Successor Indenture
  Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.07.

  	
   

  	
  Effect of Appointment of Successor
  Indenture Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.08.

  	
   

  	
  Merger, Consolidation or Sale of
  Indenture Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  
	
  CONSOLIDATION OR
  MERGER OF SHIPOWNER OR SALE OF VESSEL

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.01.

  	
   

  	
  Consolidation or Merger of Shipowner
  or Sale of Vessel

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  
	
  ACTS OF OBLIGEES

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.01.

  	
   

  	
  Acts of Obligees

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X

  
	
  SUPPLEMENTAL INDENTURES

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.01.

  	
   

  	
  Permissible Without Action by
  Obligees

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.02.

  	
   

  	
  Protection of Indenture Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.03.

  	
   

  	
  Reference in Obligations to
  Supplemental Indentures

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.04.

  	
   

  	
  Waivers and Supplemental Indentures
  with Consent of Obligees

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.05.

  	
   

  	
  Consent of Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.06.

  	
   

  	
  Continued Validity of the Guarantees

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI

  
	
  PERFORMANCE OF
  OBLIGATIONS TO SECRETARY

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11.01.

  	
   

  	
  Performance of Obligations to
  Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII

  
	
  SATISFACTION AND
  DISCHARGE OF INDENTURE

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 12.01.

  	
   

  	
  Satisfaction and Discharge of
  Indenture

  	
   

  



 


iii

















 


	
  ARTICLE XIII

  
	
  MISCELLANEOUS

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13.01.

  	
   

  	
  Notices and Demands

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13.02.

  	
   

  	
  Waivers of Notice

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13.03.

  	
   

  	
  Benefit of Indenture

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13.04.

  	
   

  	
  Execution of Counterparts

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13.05.

  	
   

  	
  Table of Contents; Titles and
  Headings

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13.06.

  	
   

  	
  Immunity of Incorporators,
  Stockholders, Limited Partners, Members, Officers and Directors

  	
   

  



 


iv

















 


ARTICLE I

DEFINITIONS; OFFICER’S CERTIFICATES 

AND OPINIONS OF COUNSEL


 


SECTION 1.01.            Definitions.  For the purposes of this Indenture,
capitalized terms shall have the meanings specified in Schedule A to the
Indenture unless otherwise expressly provided.


 


SECTION 1.02.            Officer’s Certificate
and Opinions of Counsel.  The
Responsible Officer of the Person executing an Officer’s Certificate with
respect to a covenant or condition provided for in this Indenture shall certify
that the officer (a) has read such covenant or condition; (b) has
made or caused to be made such independent examination or investigation as is
necessary to enable him to express an informed opinion with respect to such
covenant or condition; and (c) believes to the best of his knowledge that
such condition or covenant has been met. 
A lawyer issuing an Opinion of Counsel shall include the same
representations, except that insofar as it relates to factual matters, if it is
in the lawyer’s professional opinion that reliance upon a certificate or an
Opinion of Counsel is appropriate, the lawyer may so rely upon such certificate
or opinion.  Each Officer’s Certificate
and Opinion of Counsel shall set forth the pertinent supporting information and
shall be subject to the Secretary’s review of its adequacy and accuracy.


 


ARTICLE II

THE OBLIGATIONS


 


SECTION 2.01.            Issuance of
Obligations of Initial Series. 
(a)  At any time and from time to
time after the execution and delivery of this Indenture, the Shipowner may
deliver to the Indenture Trustee Obligations of the initial series issuable
under this Indenture duly executed by the Shipowner, accompanied by a Request
of the Shipowner, and thereupon the Indenture Trustee shall authenticate such
Obligations, after endorsing thereon and authenticating the Guarantees of the
United States in accordance with the Authorization Agreement, and shall deliver
such Obligations and Guarantees in accordance with such Request.  Each such Request shall specify the
principal amounts, interest rates and Stated Maturities of the Obligations to
be authenticated and the names and addresses of the Persons in whose name the
Obligations are to be registered.


 


(b)  The initial series of Obligations shall set
forth their respective principal amounts (in the denominations provided in the
Special Provisions), interest rates per annum, and Stated Maturities, and shall
be payable as to principal and interest and premium, if any, in any legal coin
or currency of the United States and shall be subject to redemption as provided
in Article III.


 


(c)  The principal and interest and any premium
due on the Obligations shall be paid by (i) the Corporate Trust Office or
(ii) a Paying Agent by (x) certified or


 

















 


official
bank check mailed by first class postage prepaid to the addresses of the
Obligees appearing on the Obligation Register or (y) at the request of an
Obligee, received by the Indenture Trustee at least three Business Days prior
to the date of payment, by wire transfer to a commercial bank in the United
States or by credit to an account maintained by the Obligee with the Indenture
Trustee without presentment of the Obligation. 
Prior to any sale, assignment or transfer of such Obligation, the Holder
is required to present the Obligation to the Indenture Trustee so that a proper
notation of all principal payments under subparagraph (y) above are made on the
Obligation.


 


(d)  The Indenture Trustee agrees that within 30
days from the date of any payment of principal or interest when the same shall
become due and payable by reason of Maturity or redemption, a Responsible
Officer in the Corporate Trust Office of the Indenture Trustee shall ascertain
to his satisfaction that checks in payment of such amounts have been mailed to
the addresses of the Obligees as provided above, if payment is to be made by
check, or if payment is to be made by wire transfer, or by credit to an account
maintained by the Obligee with the Indenture Trustee, that such funds have been
wired or credited, or if payment is to be made at the Corporate Trust Office,
that funds were held by the Indenture Trustee for such payment on the date the
payment was due.  The Indenture Trustee
shall have no obligation to determine whether such checks or payments were
received by the Obligees.


 


(e)  If the Maturity of any Obligation or an
Interest Payment Date for any Obligation shall be a day other than a Business
Day, then such payment may be made on the next succeeding Business Day, with
the same force and effect as if made on the nominal date for such payment, and
no interest shall accrue thereon for the period after said nominal date.


 


SECTION 2.02.            Additional
Obligations; Obligations of Additional Series.  At any time, the Shipowner may, with the approval of the
Secretary, issue additional Obligations of any series and Stated Maturity
theretofor issued or of one or more additional series, which shall be for the
purpose of aiding in financing or refinancing the construction, reconstruction
or reconditioning of one or more of the Vessels and shall be (i) in such
principal amount, and mature on such dates, bear interest at such rate or
rates, be in such form or forms and have such other terms and provisions, as
shall be set forth in a Supplemental Indenture providing for the issue thereof,
and (ii) guaranteed by the United States under the Act pursuant to a
supplement to the Authorization Agreement.


 


SECTION 2.03.            Legends on Obligations.  Any Obligation may have imprinted or stamped
thereon any legend, consistent herewith, which is prescribed by the Shipowner
and approved by the Indenture Trustee, and approved by the Secretary.


 


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SECTION 2.04.            Dates of Obligations.  Each Obligation of any series shall be dated
the date of its authentication by the Indenture Trustee.


 


SECTION 2.05.            Execution of
Obligations.  The Obligations shall
from time to time be executed on behalf of the Shipowner by a Responsible
Officer thereof (whose signature may be a facsimile), and its corporate seal
(which may be a facsimile), if any, shall be imprinted thereon and attested by
its secretary, assistant secretary or assistant trust officer (whose signature
may be a facsimile).  If a Shipowner’s
officer, whose signature appears on any Obligation, shall cease to be such an
officer before such Obligation shall have been authenticated by the Indenture
Trustee, the Obligation nevertheless may be delivered with the same force and
effect as though the person had not ceased to be a Shipowner’s officer.


 


SECTION 2.06.            Authentication of
Obligations and Guarantees.  No
Obligation or the Guarantee of the United States thereon shall be valid unless
such Obligation shall bear thereon an authentication certificate, executed by
the Indenture Trustee in accordance with the terms and conditions of the
Authorization Agreement.  A duly
executed authentication certificate shall be conclusive evidence, and the only
competent evidence, that such Obligation and such Guarantee have been duly
executed, authenticated and delivered hereunder.


 


SECTION 2.07.            Registration, Transfer
and Exchange.  (a)  The Indenture Trustee shall keep an
Obligation Register at the Corporate Trust Office for the registration of
ownership, transfers and exchanges of Obligations.


 


(b)  A registered Obligee may transfer an
Obligation, at the Corporate Trust Office, by surrender of such Obligation for
cancellation, accompanied by an instrument of transfer in form satisfactory to
the Shipowner and the Indenture Trustee, duly executed by the Obligee or its
duly authorized attorney, and thereupon the Shipowner shall execute, and the
Indenture Trustee shall authenticate and deliver in the name of the transferee,
a new Obligation, and the Guarantee of the United States thereon, in authorized
denominations of like series, tenor, interest accrual date and Stated Maturity
and for the same aggregate principal amount.


 


(c)  The Indenture Trustee shall not be required
to register transfers or make exchanges of (1) Obligations for a period of
15 days immediately prior to (A) an Interest Payment Date or (B) any
selection of Obligations to be redeemed, (2) Obligations after demand for
payment of the Guarantees and prior to the payment thereof or rescission of
such demand pursuant to Section 6.02(a), or (3) any Obligation which
has been selected for redemption in whole or in part.  If any Obligation surrendered for transfer or exchange has been
selected for redemption in whole or in part, there may be endorsed on any
Obligation issued therefor an appropriate notation of such fact.


 


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(d)  Any Obligation may be exchanged for a like
principal amount of Obligations of the same series, tenor, interest accrual
date and Stated Maturity but of different authorized denominations.  Obligations to be exchanged shall be
surrendered at the Corporate Trust Office, and the Shipowner shall execute, and
the Indenture Trustee shall authenticate and deliver in exchange therefor, the
Obligation or Obligations, and the Guarantee or Guarantees of the United States
thereon, requested by the Obligee in accordance with this paragraph.


 


(e)  As a condition precedent to any transfer or
exchange of Obligations, the Shipowner may require the payment of a sum
sufficient to reimburse it for any taxes or other governmental charges that may
be imposed with respect thereto and a sum not exceeding $2.00 for each
Obligation delivered upon any such transfer or exchange.


 


SECTION 2.08.            Who Treated as Owners.  The Shipowner, the Indenture Trustee, the
Secretary, and any Paying Agent for the payment of principal of (and premium,
if any) or interest on the Obligations may deem the Person in whose name any
Obligation is registered in the Obligation Register as the absolute owner of
such Obligation for all purposes, and neither the Shipowner, the Indenture
Trustee, the Secretary, nor any such Paying Agent shall be affected by any
notice to the contrary, whether such Obligation shall be past due or not.  All payments of or on account of principal
(and premium, if any) or interest, or pursuant to the Guarantee, to such
registered Obligee shall be valid and effectual to satisfy and discharge the
liability of the Shipowner and the Secretary to the extent of the sum or sums
so paid, except as otherwise provided in Section 6.08.


 


SECTION 2.09.            Lost, Stolen,
Destroyed or Mutilated Obligations. 
Upon receipt by the Shipowner and the Indenture Trustee of evidence
satisfactory to them of the loss, theft, destruction or mutilation of any
Outstanding Obligation (“Lost Obligation”), the Shipowner may execute, and upon
request of the Shipowner, the Indenture Trustee shall authenticate and deliver,
a new replacement Obligation, with the Guarantee of the United States thereon,
of like series, tenor, interest accrual date, principal amount and Stated
Maturity (which may bear such notation as may be required by the Indenture
Trustee and which shall bear a serial number different from that of the Lost
Obligation) and in the event such Lost Obligation has or is about to become due
and payable, the Indenture Trustee may deem the applicant with respect thereto
to be the owner of said Obligation for the purpose of receiving any payments
due on account thereof; provided  that (1) the Shipowner, the
Indenture Trustee and the Secretary shall receive an indemnity satisfactory to
the Shipowner, the Indenture Trustee and the Secretary, (2) the Shipowner
shall be reimbursed for all reasonable expenses (including any fees or expenses
of the Indenture Trustee) incident thereto, and (3) a mutilated Obligation
shall be surrendered.  Once the
Shipowner has issued and the Indenture Trustee has authenticated a replacement
Obligation, the Lost Obligation shall not be enforceable.  The provisions of this Section are
exclusive and shall preclude (to the


 


4

















 


extent
lawful) all other rights and remedies with respect to the replacement or
payment of Lost Obligations.


 


SECTION 2.10.            Reacquired
Obligations; Cancellation and Disposition of Obligations.  In the event the Shipowner shall reacquire
any Obligations (whether by purchase or otherwise), such Obligations shall
forthwith be delivered to the Indenture Trustee for cancellation.  Except as provided in Section 3.10(b),
all Obligations surrendered for the purpose of payment, redemption, transfer,
exchange, or substitution, or in discharge in whole or in part of any sinking
fund payment shall, if surrendered to the Shipowner or any Paying Agent, be
delivered to the Indenture Trustee and shall be cancelled by it.  No Obligation shall be authenticated in lieu
of or in exchange for any Obligation cancelled as provided in this Section,
except as may be expressly permitted by this Indenture.  Obligations cancelled by the Indenture
Trustee shall be delivered or disposed of as directed by a Request of the
Shipowner.


 


ARTICLE III

REDEMPTION OF OBLIGATIONS


 


SECTION 3.01.            Redemptions Suspended
During Default.  Notwithstanding the
following provisions of this Article III, neither the Shipowner nor the
Indenture Trustee shall redeem any Obligations, except pursuant to Sections
3.04 or 3.05, during the continuance of any Indenture Default, except that,
where the mailing of notice of redemption of any Obligations shall have
theretofore been made, the Indenture Trustee shall redeem or cause to be
redeemed such Obligations if it shall have received a sum sufficient for such
redemption.  Except as aforesaid, any
moneys received by the Indenture Trustee for the redemption of Obligations
which may not be applied to the redemption thereof shall be held in trust by
the Indenture Trustee and applied in the following manner: (1) in case
such Indenture Default or such event shall no longer be continuing, such moneys
shall thereafter be applied to the redemption of Obligations in accordance with
the applicable provisions of the Obligations and of this Article III,
(2) in the event the Secretary shall have assumed the Obligations pursuant
to Section 6.09 or shall have paid the amounts due under the Guarantees,
such moneys shall be paid over by the Indenture Trustee to the Secretary, or
(3) if no Obligation shall be Outstanding, and the Secretary shall not
have been required to pay the Guarantees, such moneys shall be paid to the
Shipowner.


 


SECTION 3.02.            Redemptions Without
Premium.  (a)  Mandatory Sinking Fund Redemptions.  The Obligations are subject to redemption at
a Redemption Price equal to 100% of the principal amount thereof, together with
interest accrued thereon to the Redemption Date, through the operation of a
mandatory sinking fund providing for semi-annual redemption commencing and
continuing on the dates and in the principal amounts specified in the
Obligations, plus interest accrued thereon to the applicable sinking fund
Redemption Date; provided, however, that in the


 


5

















 


event of
any special redemption pursuant to Sections 3.04, 3.05 or 3.06 below, the
principal amount of Obligations to be redeemed on each subsequent mandatory
sinking fund Redemption Date shall be reduced by an amount equal to the
principal amount of the Obligations retired by reason of such special
redemption divided by the number of mandatory sinking fund Redemption Dates
(including the Stated Maturity of the Obligations) scheduled thereafter.


 


(b)           Credit Against Mandatory Sinking Fund
Redemptions.  In lieu of making all
or any part of any such mandatory sinking fund redemption of the Obligations,
the Shipowner may, at its option, receive 100% credit for Obligations that have
been (1) redeemed by the Shipowner pursuant to the optional redemption
provision provided in subsection (c) below, or (2) purchased or
acquired by the Shipowner (other than by redemption) and delivered to the
Indenture Trustee for cancellation pursuant to Section 2.10 above.  These Obligations shall be credited by the
Indenture Trustee only under the following conditions: at least 40 days but not
more than 60 days prior to the due date for such mandatory sinking fund
redemption, the Shipowner delivers a Request to the Indenture Trustee, (i) specifying
the principal amount of Obligations to be credited, (ii) certifying that
none of the Obligations have previously been made the basis of any credit and
that the Shipowner is not restricted by contract from seeking the requested credit,
and (iii) presenting the uncancelled Obligations to be credited.


 


(c)           Optional Sinking Fund Redemptions.  At its option, the Shipowner may redeem on
any mandatory sinking fund Redemption Date, at a redemption price equal to 100%
of the principal amount thereof, an additional principal amount of Obligations
up to the principal amount of the Obligations required to be redeemed under
subsection (a) above on such date, and before any reduction pursuant to
the proviso of that subsection.  The
right to make any such optional sinking fund redemption shall not be
cumulative.  If the Shipowner shall
elect to make any such optional sinking fund redemption, the Shipowner shall,
at least 40 days but not more than 60 days prior to such mandatory sinking fund
Redemption Date, deliver to the Indenture Trustee a Request stating that the
Shipowner intends to exercise its right as set forth in this subsection to
make such optional sinking fund redemption and specifying the additional
principal amount of Obligations which the Shipowner intends to redeem on such
mandatory sinking fund Redemption Date.


 


(d)           Mandatory Redemptions Without Premium.  The Obligations of each series shall be
subject to redemption without premium when redemption is required by the
conditions specified in Sections 3.02, 3.04, 3.05 and 3.06.


 


(e)           Adjustments of Redemption Payments.  If there is an adjustment in mandatory
redemption payments as a result of redemptions under this Section or any
other provision of the Indenture, the Shipowner shall recompute the remaining
mandatory redemption payments pursuant to such provisions, and shall, at least
60 days prior to the next Interest Payment Date, submit to the Secretary for
his review


 


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such
recomputation to ascertain compliance with the provisions of this Indenture,
and a table of revised mandatory redemption payments on the Obligations of such
series reflecting the adjustments made pursuant to such provisions as a result
of such redemption. Upon advice by the Secretary that he finds such
recomputation to comply with such provisions, the Shipowner shall submit said
table to the Indenture Trustee and the Indenture Trustee shall promptly submit
a copy thereof to each Holder of an Obligation of such series.


 


SECTION 3.03.            Optional Redemptions
of Obligations at Premium.  At its
option, the Shipowner may redeem the Obligations, in whole or in part, at any
time, at the redemption prices specified in the Obligations, together with the
interest accrued thereon; provided  that no such redemption shall
be made prior to the date specified in the Special Provisions, directly or
indirectly with the proceeds of, or in anticipation of, borrowing by or for the
account of the Shipowner if such borrowing has an effective interest cost (calculated
in accordance with generally accepted financial practice) of less than the rate
of interest borne by the Obligations. 
The Shipowner may redeem such Obligations on a date at least 40 days but
not more than 60 days from the Indenture Trustees receipt of the Request to
make such an optional redemption and specifying the Redemption Date and the
principal amount of Obligations which the Shipowner intends to redeem.  If this Request proposes a redemption prior
to the date specified in the Special Provisions, the Shipowner shall include
with the Request an Officer’s Certificate stating that the redemption complies
with the proviso relating to early redemptions.


 


SECTION 3.04.            Redemptions to Comply
with Section 1104A(b)(2) of the Act. 
The Shipowner and the Secretary may Request a Redemption Date, at least
40 days but not more than 60 days from the Indenture Trustees receipt of the
Request, for the redemption of certain Obligations because the principal amount
of the Outstanding Obligations are in excess of the amount eligible for
guarantee by the United States under Section 1104A(b)(2) of the Act.  Upon receipt, the Indenture Trustee shall
promptly give notice to the Holders of the Redemption Date as provided in
Section 3.08 and on that date shall redeem the principal amount of
Obligations specified in the instruction together with the interest accrued
thereon.


 


SECTION 3.05.            Redemption After Total
Loss, Requisition of Title, Seizure or Forfeiture of a Vessel or Termination of
Certain Contracts.  The Shipowner
and the Secretary may Request a Redemption Date, at least 40 days but not more
than 60 days from the Indenture Trustee’s receipt of the Request, for the
redemption of certain Obligations because of (1) an actual, constructive,
agreed or compromised total loss of a Vessel, (2) requisition of title to,
or seizure or forfeiture of a Vessel or (3) termination of a primary
Construction Contract.  Upon receipt,
the Indenture Trustee shall promptly give notice to the Holders of the
Redemption Date as provided in Section 3.08 and on that date shall redeem
such principal amount of Obligations together with the interest accrued
thereon.


 


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SECTION 3.06.            Redemption After
Assumption by the Secretary.  At any
time after the Secretary has assumed the Obligations under Section 6.09 of
the Indenture, the Secretary may Request a Redemption Date, at least 40 days
but not more than 60 days from the Indenture Trustees receipt of the Request,
for the redemption of all or part of the Obligations.  Upon receipt, the Indenture Trustee shall promptly give notice to
the Holders of the Redemption Date as provided in Section 3.08 and on that
date shall redeem such principal amount of Obligations together with the
interest accrued thereon.


 


SECTION 3.07.            Determination of
Obligations to be Redeemed.  If less
than all the Obligations are to be redeemed pursuant to Sections 3.03, 3.04 or
3.05, the Indenture Trustee shall select the particular Obligations to be
redeemed by multiplying the total principal amount to be redeemed by a
fraction, the numerator of which is the amount each Holder of an Outstanding
Obligation is owed and the denominator is the total principal amount of the
Outstanding Obligations, making adjustment so that the principal amount of any
Obligation to be redeemed shall be $1,000 or an integral multiple thereof.


 


SECTION 3.08.            Notices of Redemption.  (a) 
In case of any redemption of Obligations, whether mandatory or optional,
the Indenture Trustee shall send a notice of redemption indicating (1) the
Redemption Date, (2) the Redemption Price, (3) if only a part of such
Obligations is to be redeemed, the numbers or other identification of the
Obligations and the principal amount thereof to be redeemed, (4) the place of
payment upon redemption and (5) that interest shall cease to accrue after the
Redemption Date if the Indenture Trustee or any Paying Agent shall have in fact
received the required moneys.  A copy of
the notice shall be mailed by first class mail, postage prepaid, at least 30
days prior to the Redemption Date, to each Holder of an Outstanding Obligation
that is to be redeemed in whole or in part, at the last address appearing upon
the Obligation Register.


 


SECTION 3.09.            Deposit of Redemption
Moneys.  Prior to the opening of
business on any Redemption Date, the Shipowner shall cause to be deposited with
the Indenture Trustee or with any Paying Agent an amount sufficient for such
redemption with irrevocable directions to it to so apply the same.  Failure to so deposit the amounts with the
Indenture Trustee or the Paying Agent shall render any notice to redeem of no
effect.


 


SECTION 3.10.            Payment of Redemption
Price.  (a)  If notice of redemption shall have been
given as provided above, the Obligations or portions thereof specified in such
notice shall become due and payable on the Redemption Date and at the place of
payment and the Redemption Price stated in such notice, and on and after said
Redemption Date (unless the Shipowner shall default in payment of the Redemption
price or shall decide to cancel the notice of optional redemption) interest on
the Obligations or portions thereof so called for redemption shall cease to
accrue.  Upon presentation and surrender
of such Obligations in accordance with


 


8

















 


such notice, such
Obligations or the specified portions thereof shall be paid and redeemed at the
applicable Redemption Price.


 


(b)  Upon presentation of any Obligation redeemed
in part only, the Shipowner shall execute and the Indenture Trustee shall
authenticate and deliver to the order of the Holder thereof, at the expense of
the Shipowner, a new Obligation or Obligations of like series and Stated
Maturity, of authorized denominations, having endorsed thereon a Guarantee
executed by the Secretary, in principal amount equal to the unredeemed portion
of the Obligation so presented, or, at the option of such Holder, there may be
noted thereon by the Indenture Trustee or, at its direction, by any Paying
Agent the payment of the portion of the principal amount of such Obligation so
called for redemption.


 


ARTICLE IV

CASH HELD BY INDENTURE TRUSTEE OR PAYING AGENTS


 


SECTION 4.01.            Generally.  (a) 
To the extent required by the Obligations, cash received by the
Indenture Trustee or a Paying Agent shall be promptly paid to the Holders of
the Outstanding Obligations and all other cash shall be held by the Indenture
Trustee or a Paying Agent as a special deposit in trust for application in
accordance with this Indenture.


 


(b)  Cash held by the Indenture Trustee or any
Paying Agent (other than the Shipowner) under this Indenture: (1) need not be
segregated; (2) shall not be invested; and (3) shall not bear interest except
to the extent the Shipowner and the Indenture Trustee or Paying Agent may
agree.


 


SECTION 4.02.            Paying Agents.  (a) 
A Paying Agent appointed in writing by the Shipowner shall enter into a
contract with the Indenture Trustee, agreeing that the Paying Agent will:


 


(1)  hold in trust all sums held by it for the
payment of the principal of (and premium, if any) or interest on Obligations
for the benefit of the Holders of such Obligations, and for the benefit of the
Indenture Trustee;


 


(2)  forthwith give written notice to a
Responsible Officer in the Corporate Trust Office signed by a Responsible
Officer of the Paying Agent of (A) any payment by the Shipowner of the
principal of (and premium, if any) or interest on Obligations, specifying the
amount paid, segregated as to principal (premium, if any) and interest, and identifying
each Obligation on which any payment was made by number, date, series, Stated
Maturity and the name of the Obligee, and (B) any failure of the Shipowner
to make any such payment when the same shall be due and payable; and


 


(3)  promptly, and in no event later than ten
days after any payment made by it hereunder, give written notice to a
Responsible Officer in the Corporate


 


9

















 


Trust
Office of all payments of Obligations made by it, including and identifying all
endorsements of payment made on Obligations by it, signed and containing the
specified information as provided in subparagraph (2) above, and deliver for
cancellation to the Indenture Trustee all Obligations surrendered to the Paying
Agent.


 


(b)  The Shipowner may at any time cause to be
paid to the Indenture Trustee all sums held in trust by any Paying Agent
pursuant to this Section, such sums to be held by the Indenture Trustee upon
the same trusts.


 


SECTION 4.03.            Unclaimed Amounts.  Subject to applicable law, including State
escheat laws, any moneys received by the Indenture Trustee or a Paying Agent,
for the payment of Obligations or Guarantees and remaining unclaimed by the
Holders thereof for 6 years after the date of the Maturity of said Obligations
shall be paid to the Shipowner upon its delivery of a Request to the Indenture
Trustee, unless the Secretary has previously paid the Guarantees, in which case
it shall be paid only upon a request of the Secretary.  In such event, such Holders shall thereafter
be entitled to look only to the Person that received the unclaimed amounts for
the payment thereof, and the Indenture Trustee or such Paying Agent, as the
case may be, shall thereupon be relieved from all responsibility to such
Holders.  No such Request or payment
shall be construed to extend any statutory period of limitations, which would
have been applicable in the absence of such Request or payment.


 


SECTION 4.04.            Application of Funds.  If at any time the Indenture Trustee shall
hold funds under Section 4.03, the application, distribution or payment of
which is not governed by a Request of the Shipowner or the Secretary delivered
pursuant to any provision of the Indenture, the Indenture Trustee shall give
written notice thereof, in the absence of an Indenture Default, to the
Shipowner and to the Secretary, or, if an Indenture Default exists or the
Secretary has paid the Guarantees, to the Secretary.  The Shipowner or the Secretary, as applicable, shall promptly
thereafter deliver to the Indenture Trustee a Request.


 


ARTICLE V

SHIPOWNER’S REPRESENTATIONS AND AGREEMENTS


 


The
Shipowner hereby represents and agrees, so long as Obligations are Outstanding,
as follows:


 


SECTION 5.01.            Authorization,
Execution and Delivery of Indenture. 
The Shipowner has duly authorized the execution and delivery of this
Indenture.


 


SECTION 5.02.            Payment.  The Shipowner will duly and punctually pay
the principal of (and premium, if any) and interest on the Obligations
according to the terms thereof and of this Indenture.


 


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SECTION 5.03.            Offices or Agencies of
Shipowner.  The Shipowner shall at
all times maintain an office in the location within the United States specified
in Section 2 of the Special Provisions. 
Obligations and demands to or upon the Shipowner may be presented for
payment, registration of transfer and exchange at this office.  The Corporate Trust Office and a Paying
Agent shall also be deemed offices for such purpose.


 


ARTICLE VI

INDENTURE DEFAULTS AND REMEDIES


 


SECTION 6.01.            What Constitutes
“Indenture Defaults.”  (a)  Each of the following events shall
constitute an “Indenture Default”: (1) default in the payment of the whole
or any part of the principal or interest on any of the Outstanding Obligations
when the same shall become due and payable, whether by reason of Maturity,
redemption, acceleration or otherwise, or any default referred to in
Section 6.08, and continuation of any such default for a period of 30 days
(herein called a “Payment Default”); and (2) the giving of a Secretary’s
Notice to the Indenture Trustee.


 


(b)  The Indenture Trustee shall give to the
Obligees, the Secretary and the Shipowner prompt notice in writing of any
Indenture Default (unless such default shall have been remedied prior to the
giving of such notice); provided that, the Indenture Trustee shall have
no duty to give any such notice until a Responsible Officer of the Corporate
Trust Office, has actual knowledge of such Indenture Default.  The notice of an Indenture Default to the
Obligees shall (1) specify the nature of such Indenture Default, (2) state
that, by reason thereof, the Indenture Trustee is entitled under the Indenture
to demand payment by the Secretary of the Guarantees, (3) set forth the
provisions of Section 6.04(b)(3) and
(5), and (4) advise the Obligees of the provisions of Section 6.02.


 


SECTION 6.02.            Demand for Payment of
Guarantees.  (a)  If an Indenture Default shall have occurred
and be continuing, the Indenture Trustee shall, no later than 60 days from the
date of such Indenture Default, demand payment by the Secretary of the unpaid
interest to the date of such payment on, and the unpaid balance of the
principal of, all Outstanding Obligations, whereupon the entire unpaid
principal amount of the Outstanding Obligations and all unpaid interest thereon
shall become due and payable no later than 30 days from the date of such
demand; provided that, in the case of a demand made as a result of a
Payment Default, if, prior to the expiration of 30 days from the date of such
demand and prior to any payment of the Guarantees by the Secretary, the
Secretary shall find, and give written notice to the Shipowner and the
Indenture Trustee to the effect that, there was no Payment Default or that such
Payment Default was remedied prior to such demand, such demand and the
Indenture Default shall be of no legal effect or consequence.  In each such case, the Guarantees shall
remain in full force and effect.  The
Indenture Trustee shall give to each Obligee and to the Shipowner


 


11

















 


prompt written notice of
any demand made by the Indenture Trustee pursuant to this paragraph (a), any
such notice to Obligees to be given as provided in Section 13.01.


 


(b)  If the Indenture Trustee shall not have made
the demand referred to in paragraph (a) of this Section on or before the
30th day following an Indenture Default which shall have occurred and be
continuing and if the Holders of all Outstanding Obligations shall not have theretofore
elected to terminate the Guarantees as provided in Section 6.04(a)(2), any
Holder of an Outstanding Obligation, by an Act of Obligees delivered to the
Secretary (with copies thereof to the Indenture Trustee and the Shipowner),
may, in place of the Indenture Trustee and on behalf of all Holders of
Outstanding Obligations, make such demand, subject to all the provisions of,
and with the effect provided in, paragraph (a) of this Section.


 


SECTION 6.03.            Appointment of
Indenture Trustee and Holders of Outstanding Obligations as Attorneys-in-Fact.  Each Holder of an Outstanding Obligation by
the purchase and acceptance of its Obligation, irrevocably appoints the
Indenture Trustee and each other Holder of an Outstanding Obligation its agent
and attorney-in-fact for the purpose of making the demand provided for in
Section 6.02 and (in the case of the Indenture Trustee) of receiving and
distributing any payment or payments by the Secretary made pursuant to any such
demand.


 


SECTION 6.04.            Termination and
Payment of the Guarantees.  (a)  Except as otherwise provided in
Section 6.08, the Guarantee with respect to any Obligation shall only
terminate in case of the occurrence of one or more of the following events:


 


(1)  Such Obligation shall have been Retired or
Paid;


 


(2)  The Holders of all Outstanding Obligations
shall have elected, by Act of Obligees delivered to the Secretary, to terminate
the Guarantees;


 


(3)  Such Guarantee shall have been paid in full
in cash by the Secretary; or


 


(4)  The Indenture Trustee and each Obligee shall
have failed to demand payment of such Guarantee as provided herein or in such
Guarantee or in the Act.


 


(b)  Subject to the provisions of
Section 6.08, when the Secretary shall pay the Guarantees in full in cash
to the Indenture Trustee:


 


(1)
The Indenture Trustee shall hold the entire amount thereof in trust for the
sole purpose of providing for the payments specified in subparagraph (5) below;


 


(2)  No Obligation or Obligations shall
thereafter be issued;


 


12

















 


(3)  The Obligations (A) shall represent
only the right to receive the payments from the Indenture Trustee specified in
subparagraph (5) below, (B) shall otherwise no longer constitute or
represent an obligation of the Shipowner, and (C) shall not be entitled to
any other rights or benefits under this Indenture;


 


(4)  The Indenture Trustee shall forthwith give
written notice to the Shipowner and to each of the Obligees, stating that it
has received payment of the Guarantees in full in cash from the Secretary and
that the same is available for distribution to the Obligees in the manner
specified in subparagraph (5) below (and the Indenture Trustee shall give like
notice to the Holders of the Obligations at least annually thereafter for a period
of 6 years or until all Obligations shall have been cancelled, whichever is
earlier); and


 


(5)  Upon the surrender for cancellation of any
Obligation, the Indenture Trustee shall forthwith pay to the Holder of such
Obligation in cash an amount (less the amount, if any, required to be withheld
in respect of transfer or other taxes on payment to such Holder) equal to the
unpaid principal amount of such Obligation and the unpaid interest accrued
thereon to the date on which the Secretary shall have paid the Guarantees in
full in cash to the Indenture Trustee.


 


(c)  If the Secretary shall not have paid the
Guarantees in full in cash to the Indenture Trustee within 30 days after any
demand therefor pursuant to Section 6.02 (whether or not because the Secretary
makes any of the findings or takes the action referred to in the proviso of
Section 6.02(a)), the Indenture Trustee shall give prompt written notice
of such nonpayment to each Obligee and the Shipowner.  If the Indenture Trustee shall have received notice of any of
these findings or actions, such notice to each Obligee shall so state.


 


SECTION 6.05.            Rights of Indenture
Trustee After Indenture Default. 
Unless the Guarantees have terminated as provided herein, the Indenture
Trustee’s sole right shall be to demand and receive payment of the Guarantees
from the Secretary and to take all action, on behalf of itself and each Holder,
to enforce its rights against the Secretary under the Guarantees, including but
not limited to the institution and prosecution of all judicial and other
proceedings.  If the Guarantees have
terminated under Section 6.04(a)(4) without payment by the Secretary, the
Indenture Trustee shall have the right on behalf of itself and each Holder to
take all action to enforce its rights directly against the Shipowner (but not
the Secretary), including but not limited to the institution and prosecution of
all judicial and other proceedings.


 


SECTION 6.06.            Obligees’ Right to
Direct Indenture Trustee After Indenture Default.  During the continuance of any Indenture Default, the Holders of a
majority in principal amount of the Outstanding Obligations shall have the
right, by an Act of Obligees, to direct the Indenture Trustee: (1) to
exercise or to refrain from exercising any right or to enforce any remedy
granted to it by this


 


13

















 


Indenture; and
(2) to direct the time, method and place of the exercise of any such right
or the enforcement of any such remedy; provided that, subject to
Section 7.03, the Indenture Trustee shall have the right not to take any
such action if it shall determine in good faith that the action would involve
it in personal liability, would subject it to expenses against which it has not
been offered adequate security and indemnity, or would be unjustly prejudicial
to the Obligees not parties to such direction; and provided further that,
notwithstanding any other provision of this Indenture to the contrary, the
Indenture Trustee shall be obligated to demand payment of the Guarantees as
provided in Section 6.02(a) unless the Holders of all the Outstanding
Obligations shall have directed him not to make demand.


 


(b)  Nothing in paragraph (a) shall affect the
right of any Obligee to institute any judicial or other proceeding, if the
Indenture Trustee declines to do so, against the Secretary while the Guarantees
are in effect or against the Shipowner or the Indenture Trustee if the
guarantees have terminated under Section 6.04(a)(4); provided however,
that such action does not seek to obtain priority or preference over any other
Obligees or to enforce any right under this Indenture, except for the equal and
ratable benefit of all the Obligees.


 


SECTION 6.07.            Attorneys’ Fees and
Costs.  In any proceeding for the
enforcement of any right or remedy under this Indenture, or in any proceeding
against the Indenture Trustee for any action taken or omitted by it as
Indenture Trustee, the court may in its discretion assess reasonable costs,
including reasonable attorneys’ fees, against any party litigant, having due
regard to the merits and good faith of the claims or defense made by such party
litigant.  The provisions of this
Section shall not apply to any proceeding instituted by the Indenture Trustee
or any proceeding instituted by any Obligee against the Secretary or the
Shipowner for the payment of the principal of (and premium, if any) and
interest on the Obligations.


 


SECTION 6.08.            Rescission of Payments.  Notwithstanding any other provision of this
Indenture, or of the Obligations, in the event that any payment to or on behalf
of an Obligee of the principal of or interest due under any Obligation, or any
portion of any such payment, shall at any time be repaid by such Obligee in
compliance with a final order of a court of competent jurisdiction pursuant to
any provision of the Bankruptcy Code or any Federal Law replacing or
superseding such Code, or applicable state law, and regardless of whether there
has been any previous Indenture Default and any payment pursuant thereto, or
whether such Obligation shall theretofore have been acquired by the Shipowner
or cancelled, or whether an instrument satisfying and discharging this
Indenture shall have been executed and delivered, (1) such Obligation
shall not be deemed to have been Retired or Paid and shall be deemed to be
Outstanding, (2) the return of such payment in whole or in part in
compliance with the order of such court shall constitute a default in payment
of such Obligation within the meaning of Section 6.01(a), which default shall
be deemed to have occurred on the date of such


 


14

















 


repayment and which
default, if continued for 30 days, will constitute a Payment Default,
(3) the Guarantee of such Obligation and (to the extent necessary to enforce
such Obligation and Guarantee) this Indenture shall be in full force and
effect, and (4) the Person required to return such payment or portion
thereof shall be deemed for all purposes to be a Holder of such Obligation and
entitled to enforce such Obligation and Guarantee to the extent of such
repayment and, if there shall not be any Indenture Trustee hereunder then in
office, such Person shall also be entitled to exercise on his own behalf all
the rights of the Indenture Trustee hereunder necessary for such enforcement; provided
that, in the event the Guarantee of any Obligation shall have terminated
for reasons set forth in Section 6.04(a)(2) or (4) of this Indenture prior
to the aforesaid date of repayment the provisions of this Section shall
not apply to such Obligation.


 


SECTION 6.09.            Assumption of
Obligations by Secretary.  (a)  Notwithstanding anything to the contrary
contained herein, in the absence of a demand under Section 6.02 hereof and
upon the occurrence of a default in the payment of any principal or interest
due under the Obligations which has continued for 25 days or more or upon the
Secretary’s giving a Secretary’s notice under this Indenture, the Secretary
may, in its sole discretion, prior to receipt by the Secretary of demand for payment
of the Guarantees in accordance with this Indenture, assume the rights and
obligations of the Shipowner under this Indenture and the Obligations by
(i) giving to the Shipowner and Indenture Trustee a signed notice stating
that it has assumed the Obligations and the Indenture and (ii) making any
payment of principal or interest which is due under the Obligations.


 


(b)  The Indenture Trustee and the Shipowner
hereby agree that, upon the Indenture Trustee’s receipt of the notice and
payments referred to in paragraph (a)(i) and (ii) of this section, the
Secretary’s assumption shall, as of the date of the Secretary’s execution of
the notice, be effective and binding upon the Indenture Trustee and the
Shipowner and their respective successors or assigns without further act or
deed.  Upon an assumption by the
Secretary, the Secretary shall succeed to and be substituted for and may
exercise every right and power of the Shipowner under this Indenture and the
Obligation with the same force and effect as if the Secretary has been named as
the Shipowner herein and therein.  The
Secretary may exercise its rights under this section as often as it deems
appropriate in its sole discretion.


 


ARTICLE VII

THE INDENTURE TRUSTEE


 


SECTION 7.01.            Acceptance of Trusts.  The Indenture Trustee hereby accepts the
trusts of this Indenture.


 


SECTION 7.02.            Eligibility of
Indenture Trustee.  (a)  The Indenture Trustee shall at all times be
a bank with corporate trust powers or trust company


 


15

















 


which (1) is organized
and doing business under the laws of the United States, any state or territory
thereof, (2) has a combined capital and surplus (as set forth in its most
recent published report of condition) of at least $25,000,000, and (3) shall
not have become incapable of acting or have been adjudged a bankrupt or an
insolvent nor have had a receiver appointed for itself or for any of its
property, nor have had a public officer take charge or control of it or its
property or affairs for the purpose of rehabilitation, conservation or
liquidation.


 


(b)  Should the Indenture Trustee at any time
cease to be eligible, pursuant to this Section, to act as trustee, it shall
promptly notify the Obligees, the Shipowner and the Secretary of such fact; and
should the Shipowner obtain knowledge of such ineligibility, it shall promptly
advise the Indenture Trustee, the Secretary, and the Obligees of all the
relevant facts.


 


SECTION 7.03.            Rights and Duties of
Indenture Trustee.  (a)  The Indenture Trustee shall not be
responsible for the correctness of the Recitals in the Special Provisions
hereof or in the Obligations (except the Indenture Trustee’s authentication
certificate thereon), all of which Recitals are statements made solely by the
Shipowner.


 


(b)  The Indenture Trustee shall not be
responsible for the validity, execution by other parties thereto, or
sufficiency of this Indenture, the Authorization Agreement, the Obligations or
the Guarantees.


 


(c)  The Indenture Trustee shall exercise such of
the rights and powers vested in it by this Indenture, and use the same degree
of care and skill in their exercise, as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs.


 


(d)  Except during the continuance of any Indenture
Default, the Indenture Trustee shall perform such duties and only such duties
as are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Indenture Trustee.


 


(e)  No provision of this Indenture shall relieve
the Indenture Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct; provided  that:


 


(1)  Except during the continuance of an
Indenture Default, in the absence of bad faith on the part of the Indenture
Trustee, the Indenture Trustee may conclusively rely upon certificates or
opinions conforming to the requirements of this Indenture as to the truth of
the statements and the correctness of the opinions expressed therein; and


 


(2)  The Indenture Trustee shall not be liable
with respect to any action taken or omitted to be taken by it in good faith in
accordance with an Act of


 


16

















 


Obligees
relating to the time, method and place of conducting any proceeding for any
remedy available to the Indenture Trustee.


 


(f)  Subject to paragraph (i) of this Section,
the Indenture Trustee shall be under a duty to examine certificates and
opinions required by this Indenture to be furnished to it to determine whether
or not they conform to the requirements hereof.


 


(g)  Subject to paragraph (c) of this Section,
the Indenture Trustee may rely and shall be protected in acting upon any
resolution, certificate, opinion, notice, request, consent, order, appraisal,
report, bond, or other paper or document believed by it to be genuine, to have
been signed by the proper party or parties and to be in conformity with the
provisions of this Indenture.


 


(h)  Subject to paragraph (c) of this Section, in
all cases where this Indenture does not make express provision as to the
evidence on which the Indenture Trustee may act or refrain from acting, the
Indenture Trustee shall be protected in acting or refraining from acting
hereunder in reliance upon an Officer’s Certificate as to the existence or
nonexistence of any fact.


 


(i)  Subject to paragraph (c) of this Section,
the Indenture Trustee may consult with counsel satisfactory to the Indenture
Trustee, and an Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with such Opinion of Counsel.


 


(j)  Whenever it is provided that the Indenture
Trustee shall take any action, including the giving of any notice or the making
of any demand, or refrain from taking any action upon the happening or
continuation of a specified event (including an Indenture Default) or upon the
fulfillment of any condition or upon the Request of the Shipowner or of Obligees
or upon receipt of any notice, including a Secretary’s Notice, the Indenture
Trustee shall, subject to paragraph (c) of this Section, have no liability for
failure to take such action or for failure to refrain from taking such action
until a Responsible Officer in the Corporate Trust Office, has actual knowledge
of such event or continuation thereof or the fulfillment of such conditions or
shall have received such Request.


 


(k)  Subject to paragraph (c) of this Section,
the Indenture Trustee shall not be under any obligation to exercise any of the
trusts or powers hereof at the request, order or direction of any Obligees or
the Secretary, unless such Obligees or the Secretary shall have offered to the
Indenture Trustee security or indemnity satisfactory to it against the costs,
expenses and liabilities to be incurred thereby.


 


(1)  The Indenture Trustee, in its individual or
any other capacity, may become the owner or pledgee of Obligations with the
same rights it would have if it were not Indenture Trustee.


 


17

















 


(m)  Notwithstanding any other provision of this
Indenture, the Indenture Trustee shall not take any action contrary to the
terms of the Authorization Agreement, and any such purported action or any
attempt to take such action shall be void and of no effect.


 


(n)  No provision of this Indenture shall require
the Indenture Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.


 


(o)  Whether or not therein expressly so
provided, every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section.


 


(p)  Upon the execution and delivery of an instrument
satisfying and discharging this Indenture as provided in Section 12.01
hereof, all duties and obligations of the Indenture Trustee hereunder (except
with respect to the application of funds for the payment of Obligations then
held by the Indenture Trustee) shall cease and shall not thereafter be revived,
whether or not the Indenture shall thereafter be in full force and effect as
provided in Section 6.08.


 


(q)  Notwithstanding any other provision of this
Indenture or the Authorization Agreement, the Indenture Trustee shall have no
duty to exercise any of its rights or powers hereunder with respect to a
Payment Default by reason of a repayment referred to in Section 6.08
unless and until it shall have received notice of such default and information
concerning (1) the date thereof, (2) the Obligation to which such
repayment relates, (3) the Person making such repayment, (4) the
amounts of such repayment attributable to principal, premium and interest on
such Obligation, and (5) the Interest Payment Date or other date on which
the Obligee received the moneys to which the court order mentioned in
Section 6.08 relates.


 


SECTION 7.04.            Compensation, Expenses
and Indemnification of Indenture Trustee. 
The Shipowner shall (1) pay reasonable compensation to the Indenture
Trustee and reimburse it for its reasonable expenses and disbursements
(including counsel fees and expenses) and (2) indemnify the Indenture
Trustee for, and hold it harmless against, any loss, liability or expense which
it may incur or suffer without negligence or bad faith in acting under this
Indenture or the Authorization Agreement. 
The compensation of the Indenture Trustee shall not be limited to the
compensation provided by law for a trustee acting under an express trust.


 


SECTION 7.05.            Resignation and
Removal of Indenture Trustee. 
(a)  The Indenture Trustee may
resign at any time by giving written notice to the


 


18

















 


Shipowner.  Within 10 days thereafter, the resigning
Indenture Trustee shall give notice of such resignation to the Obligees in the
manner provided in Section 13.01. 
If the resigning Indenture Trustee fails to do so within such 10-day
period, within the next succeeding 10 days the Shipowner shall give such notice
in the same manner.


 


(b)  The Indenture Trustee may at any time be
removed by (1) written notice to the Indenture Trustee and the Shipowner
by the Holders of a majority in principal amount of the Outstanding
Obligations; or (2) written notice to the Indenture Trustee by the
Shipowner or the Secretary that the Indenture Trustee has ceased to be eligible
under Section 7.02(a).


 


(c)  Any resignation or removal of the Indenture
Trustee shall be effective only upon appointment of a successor Indenture
Trustee approved by the Secretary.


 


SECTION 7.06.            Appointment of
Successor Indenture Trustee.  (a) If
any notice of resignation or of removal shall have been given pursuant to
Section 7.05, then a successor Indenture Trustee may be appointed by the
Shipowner; provided  that, if such successor Indenture Trustee is
not so appointed (or has not accepted such appointment) within 15 calendar days
after the giving of any such notice, such appointment may be made (1) by
the Secretary or (2) by a court of competent jurisdiction upon the application
of the Secretary, the Shipowner, the retiring Indenture Trustee or any Person
who then is, and has been, the Holder of an Outstanding Obligation for at least
6 months.


 


(b)  No successor Indenture Trustee shall be
appointed without the prior written consent of the Secretary and until such
successor Indenture Trustee shall enter into an amendment to the Authorization
Agreement as provided therein.


 


(c)  If a successor Indenture Trustee is
appointed, approved by the Secretary and accepts such appointment, the
Shipowner shall give notice to the Obligees of such appointment in the manner
provided in Section 13.01.  The
failure of the Shipowner to give such notice shall not affect the validity of
any such appointment.


 


SECTION 7.07.            Effect of Appointment
of Successor Indenture Trustee. 
Each successor Indenture Trustee shall forthwith, without further act or
deed, succeed to all the rights and duties of its predecessor in trust under
this Indenture and the Authorization Agreement.  Upon the written request of the successor Indenture Trustee or
the Shipowner and upon payment by the Shipowner of all amounts due to such
predecessor under this Indenture, such predecessor shall promptly deliver to
such successor Indenture Trustee all sums held hereunder, together with all
records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Indenture Trustee under this
Indenture and shall transfer, assign and confirm to the successor Indenture
Trustee all its rights under this Indenture in such manner as deemed by


 


19

















 


such successor Indenture
Trustee or the Shipowner to be necessary or appropriate in connection
therewith.


 


SECTION 7.08.            Merger, Consolidation
or Sale of Indenture Trustee.  In
the event of any merger (including for the purposes of this Section, the
conversion of a state bank into a national banking association or vice versa)
or consolidation of the Indenture Trustee into any other Person or in the event
of the sale of all or substantially all the Indenture Trustee’s corporate trust
business, the Person resulting from such merger or consolidation, or the
transferee in the case of any such sale, shall forthwith notify the Shipowner
and, subject to Section 7.02(a) and 7.06(b), shall be the Indenture
Trustee under this Indenture and the Authorization Agreement without further
act or deed.


 


ARTICLE VIII

CONSOLIDATION OR MERGER OF SHIPOWNER OR SALE OF VESSEL


 


SECTION 8.01.            Consolidation or
Merger of Shipowner or Sale of Vessel. 
(a)  Nothing in this Indenture
shall prevent any lawful consolidation or merger of the Shipowner with or into
any other Person, or any sale of a Vessel by the Shipowner, the Secretary or a
court of law to any other Person lawfully entitled to acquire and operate such
Vessel or any sale by the Shipowner, the Secretary, or a court of law of all or
substantially all of its assets to any other Person; provided  that,
except where the Shipowner shall be the Person surviving a merger or consolidation,
either (1) the Person formed by or surviving such consolidation or merger,
or the Person to which the sale of such Vessel shall be made, shall expressly
assume, by Supplemental Indenture, the payment of the principal of and interest
(and premium, if any) on the Proportionate Part of the Outstanding Obligations,
as determined by the Secretary, relating to such Vessel and expressly assume
the Shipowner’s duties under the Indenture, or (2) to the extent that the
Secretary determines that the Outstanding Obligations and the duties under the
Indenture are not so assumed, the Shipowner shall redeem the principal amount
of those unassumed Obligations in accordance with the terms of the Obligations
and of the Indenture.


 


(b)  When a Person so assumes this Indenture and
such Proportionate Part of the Outstanding Obligations, the Supplemental
Indenture shall discharge and release the Shipowner from any and all
obligations thereunder relating to such Proportionate Part of the Outstanding
Obligations.  In the event of such an
assumption by a Person to whom a Vessel has been sold (1) such Person
shall succeed to, and be substituted for, and may exercise every right and
power of the original Shipowner with the same effect as if such successor
Shipowner had been named as the Shipowner herein and (2) such
Proportionate Part of the Outstanding Obligations shall be surrendered to the
Indenture Trustee for appropriate notation or for the issuance of new
Obligations in exchange for such Proportionate Part of the Outstanding Obligations
in the name of the successor Shipowner, as required by


 


20

















 


the
Secretary.  The principal amount of the
Proportionate Part of the Outstanding Obligations shall be determined by the
Secretary.


 


ARTICLE IX

ACTS OF OBLIGEES


 


SECTION 9.01.            Acts of Obligees.  (a) 
Except as herein otherwise expressly provided, an Act of Obligees shall
become effective when it is delivered to the Indenture Trustee and, where it is
expressly required, to the Shipowner and the Secretary.  Proof of execution of any instrument
appointing an agent or attorney to execute an Act of Obligees made in the
manner of subsection (b) below shall be sufficient for any purpose of this
Indenture.


 


(b)  The fact and date of the execution by any
Person of any instrument referred to in paragraph (a) of this Section may
be proved by the affidavit of a witness of such execution or by the certificate
or acknowledgment of any notary public, stating that the individual signing
such instrument acknowledged to him the execution thereof.  The fact and date of the execution of any
such instrument, or the authority of the Person executing the same, may also be
proved in any other manner which the Indenture Trustee (or, if such instrument
is addressed to the Secretary, the Secretary) deems sufficient.


 


(c)  Any Act of Obligees taken by the Holder of
any Obligation shall bind every future Holder of any of the Obligations in
respect of anything done or suffered to be done by the Indenture Trustee, any
Paying Agent or the Shipowner in reliance thereon, whether or not notation of
such action is made upon such Obligation.


 


ARTICLE X

SUPPLEMENTAL INDENTURES


 


SECTION 10.01.         Permissible Without
Action by Obligees.  The Shipowner,
the Indenture Trustee, or, where applicable, the Secretary, may at any time,
without the consent of or notice to any of the Obligees, subject to Sections
10.02 and 10.05, enter into an indenture or other instrument supplemental
hereto and which thereafter shall form a part hereof, for any one or more of
the following purposes:


 


(1)  to add to the covenants of the Shipowner;


 


(2)  to evidence, pursuant to Article VIII,
the succession of another corporation or entity to the Shipowner or any
assumption of all or part of the Obligations;


 


(3)  to eliminate any right reserved to or
conferred upon the Shipowner;


 


21

















 


(4)  to make such provisions for the purpose of
curing any ambiguity or correcting or supplementing any provisions in this
Indenture as the Shipowner or the Secretary may deem necessary or desirable,
provided such provisions are not inconsistent with this Indenture and shall not
adversely affect the interests of the Obligees;


 


(5)  to provide for the issuance of additional
Obligations of any series and Stated Maturity theretofore issued under this
Indenture or to set forth the terms and provisions of any one or more
additional series of Obligations in accordance with Section 2.04; or


 


(6)  to evidence the assumption pursuant to
Section 6.09 by the Secretary of the Shipowner’s obligations under this
Indenture and the Outstanding Obligations.


 


SECTION 10.02.         Protection of Indenture
Trustee.  Upon receipt of a Request
of the Shipowner that the Indenture Trustee execute any Supplemental Indenture
and upon receipt of any Act of Obligees required pursuant to Section 10.04
and the consent of the Secretary required pursuant to Section 10.05, the
Indenture Trustee shall enter into such Supplemental Indenture; provided
that, the Indenture Trustee shall not be obligated to enter into any
Supplemental Indenture which the Indenture Trustee believes adversely affects
the Indenture Trustee’s own rights, duties or immunities under this Indenture.


 


SECTION 10.03.         Reference in Obligations
to Supplemental Indentures. 
Obligations authenticated and delivered after the execution and delivery
of any Supplemental Indenture may, with the consent and approval of the
Shipowner and the Indenture Trustee, contain a text modified to conform to such
Supplemental Indenture or have imprinted or stamped thereon a legend with
respect to such Supplemental Indenture, but no such modification or legend
shall be necessary to make such Supplemental Indenture effective.


 


SECTION 10.04.         Waivers and Supplemental
Indentures with Consent of Obligees. 
With the consent of the Holders of not less than 60% in principal amount
of the Outstanding Obligations of each series affected thereby, by Act of
Obligees delivered to the Shipowner and the Indenture Trustee, (x) compliance
by the Shipowner with any of the terms of the Indenture may be waived or
(y) the Shipowner and the Indenture Trustee may enter into any
Supplemental Indenture for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of the Obligations issued
under this Indenture; provided  that, no such waiver or
Supplemental Indenture shall:


 


(a)  Without the consent of all Obligees affected
thereby (1) change the Stated Maturity or reduce the principal of any
Obligation, (2) extend the time of payment


 


22

















 


of,
or reduce the rate of, interest thereon, (3) change the due date of or reduce
the amount of any mandatory sinking fund payment, (4) reduce any premium
payable upon the redemption of any Obligation, or (5) change the coin or
currency in which any Obligation or the interest thereon is payable; or


 


(b)  Without the consent of all Obligees (1)
terminate or modify any of the Guarantees or the obligations of the Secretary
thereunder, (2) reduce the amount of any of the Guarantees, (3) eliminate,
modify or condition the duties of the Indenture Trustee to demand payment of
the Guarantees or otherwise to comply with the provisions of Sections 6.02 and
6.04, (4) eliminate or reduce any of the eligibility requirements for the
Indenture Trustee stated in Section 7.02, or (5) reduce the percentage in
principal amount of the Outstanding Obligations of any series, the consent of whose
Holders is required for any such Supplemental Indenture, or required for any
waiver provided herein or to modify any of the provisions of this Section.


 


It
shall not be necessary for any Act of Obligees under this Section to
approve the particular form of any proposed Supplemental Indenture, but it
shall be sufficient if such Act of Obligees shall approve the substance
thereof.  Promptly after the execution
of any Supplemental Indenture pursuant to this Section, the Shipowner shall
give notice thereof to the Obligees in the manner provided in
Section 13.01.  Any failure of the
Shipowner to give such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such Supplemental Indenture.


 


SECTION 10.05.         Consent of Secretary.  Subject to the provisions of
Section 11.01, no waiver pursuant to Section 10.04 shall be
effective, and neither the Shipowner nor the Indenture Trustee shall enter into
any Supplemental Indenture, without the prior written consent of the Secretary,
and any purported action or attempt to take such action forbidden to be taken
by this Section shall be null and void ab  initio and of  legal effect.


 


SECTION 10.06.         Continued Validity of the
Guarantees.  Notwithstanding
anything herein to the contrary, this Indenture, the Guarantees and the
Authorization Agreement shall each remain in full force and effect
notwithstanding the assumption by the Secretary of the Obligations pursuant to
Section 6.09, and pursuant to Section 1103(e) of the Act, the
validity of the Guarantee of any Obligation shall be unaffected.


 


ARTICLE XI

PERFORMANCE OF OBLIGATIONS TO SECRETARY


 


SECTION 11.01.         Performance of
Obligations to Secretary. 
Notwithstanding any provisions of this Indenture to the contrary, upon
termination of the Guarantees pursuant to Section 6.04(a), each of the
provisions of the Indenture


 


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which refers to the
rights and duties of the Secretary shall not be effective and the Sections
containing such provisions shall be read as though there were no such rights or
duties.


 


ARTICLE XII

SATISFACTION AND DISCHARGE OF INDENTURE


 


SECTION 12.01.         Satisfaction and
Discharge of Indenture.  Whenever
all Outstanding Obligations authenticated and delivered hereunder shall have
been Retired or Paid the Indenture Trustee shall forthwith deliver to the
Shipowner and the Secretary a duly executed instrument, in form submitted to it
by the Shipowner and reasonably satisfactory to the Secretary, satisfying and
discharging this Indenture and, at the time such form of instrument is
submitted to the Indenture Trustee the Shipowner shall deliver to the Indenture
Trustee an Officer’s Certificate and an Opinion of Counsel each stating that
all conditions precedent herein provided relating to the satisfaction and
discharge of this Indenture have been complied with.  Notwithstanding the satisfaction and discharge of this Indenture,
the Obligations of the Shipowner to the Indenture Trustee under Section 7.04
shall survive.


 


ARTICLE XIII

MISCELLANEOUS


 


SECTION 13.01.         Notices and Demands.  Any communication to the Indenture Trustee,
the Shipowner or the Secretary shall be deemed to have been sufficiently given
or made by being mailed, registered or certified mail, postage prepaid,
addressed to the Indenture Trustee, the Shipowner or the Secretary at their
respective addresses appearing in the Special Provisions of this Indenture or
at such other address as any of them may advise the others in writing from time
to time.  Any communication to, the Obligees
shall be deemed to have been sufficiently given or made by being mailed, in the
same manner, to the address of each Obligee last appearing on the Obligation
Register.


 


SECTION 13.02.         Waivers of Notice.  In any case where notice by mail or otherwise
is provided herein, such notice may be waived in writing by the Person entitled
to receive such notice, either before or after the event.  Waivers of notice shall be filed with the
Indenture Trustee, but such filing shall not be a condition precedent to the
validity of any action taken thereon in reliance upon any such waiver.


 


SECTION 13.03.         Benefit of Indenture.  This Indenture is for the sole benefit of
the Shipowner, the Indenture Trustee, the Holders and (until the obligations to
the Secretary shall have terminated as provided in Article XI) the
Secretary.


 


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SECTION 13.04.         Execution of Counterparts.  This Indenture may be executed in any number
of counterparts.  All such counterparts
shall be deemed to be original and shall together constitute but one and the
same instrument.


 


SECTION 13.05.         Table of Contents; Titles
and Headings.  Any table of
contents, the titles of the Articles and the headings of the Sections are not a
part of this Indenture and shall not be deemed to affect the meaning or
construction of any of its provisions.


 


SECTION 13.06.         Immunity of
Incorporators, Stockholders, Limited Partners, Members, Officers and Directors.  No recourse shall be had for any payment
regarding any Obligation, or upon any provision of this Indenture, against any
past, present or future incorporator, stockholder, limited partner, member,
officer or director of the Shipowner or of any successor company, either
directly or indirectly.  It is expressly
agreed that this Indenture and the Obligations are solely the obligations of
the Shipowner.


 


Indenture
Trustee an Officer’s Certificate and an Opinion of Counsel each stating that
all conditions precedent herein provided relating to the satisfaction and
discharge of this Indenture have been complied with.  Notwithstanding the satisfaction and discharge of this Indenture,
the Obligations of the Shipowner to the Indenture Trustee under
Section 7.04 shall survive.


 


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