Document:

Exhibit 4.1

 

 

 

K-SEA TRANSPORTATION PARTNERS L.P.

as Issuer

 

and

 

K-SEA OPERATING PARTNERSHIP L.P.

 

K-SEA TRANSPORTATION INC.

 

NORFOLK ENVIRONMENTAL SERVICES, INC.

 

K-SEA ACQUISITION1, LLC

 

and

 

K-SEA ACQUISITION2, LLC

as Potential Subsidiary Guarantors

 

and

 

[                                                  ]

as Trustee

 

 

Indenture

Dated as of                                   ,
2005

 

 

Debt Securities

 

 

 

 

K-SEA TRANSPORTATION PARTNERS L.P.

Reconciliation and tie between Trust Indenture Act of 1939

and Indenture, dated as of                           ,
2005

 

 

	
  Section
  of

  	
   

  	
   

  
	
  Trust
  Indenture

  	
   

  	
  Section(s) of

  
	
  Act
  of 1939

  	
   

  	
  Indenture

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  § 310

  	
   

  	
  (a)(1)

  	
   

  	
  7.10

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
  7.10

  
	
   

  	
   

  	
  (a)(3)

  	
   

  	
  Not Applicable

  
	
   

  	
   

  	
  (a)(4)

  	
   

  	
  Not Applicable

  
	
   

  	
   

  	
  (a)(5)

  	
   

  	
  7.10

  
	
   

  	
   

  	
  (b)

  	
   

  	
  7.08, 7.10

  
	
  § 311

  	
   

  	
  (a)

  	
   

  	
  7.11

  
	
   

  	
   

  	
  (b)

  	
   

  	
  7.11

  
	
   

  	
   

  	
  (c)

  	
   

  	
  Not Applicable

  
	
  § 312

  	
   

  	
  (a)

  	
   

  	
  2.07

  
	
   

  	
   

  	
  (b)

  	
   

  	
  11.03

  
	
   

  	
   

  	
  (c)

  	
   

  	
  11.03

  
	
  § 313

  	
   

  	
  (a)

  	
   

  	
  7.06

  
	
   

  	
   

  	
  (b)

  	
   

  	
  7.06

  
	
   

  	
   

  	
  (c)

  	
   

  	
  7.06

  
	
   

  	
   

  	
  (d)

  	
   

  	
  7.06

  
	
  § 314

  	
   

  	
  (a)

  	
   

  	
  4.03, 4.04

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Not Applicable

  
	
   

  	
   

  	
  (c)(1)

  	
   

  	
  11.04

  
	
   

  	
   

  	
  (c)(2)

  	
   

  	
  11.04

  
	
   

  	
   

  	
  (c)(3)

  	
   

  	
  Not Applicable

  
	
   

  	
   

  	
  (d)

  	
   

  	
  Not Applicable

  
	
   

  	
   

  	
  (e)

  	
   

  	
  11.05

  
	
  § 315

  	
   

  	
  (a)

  	
   

  	
  7.01(b)

  
	
   

  	
   

  	
  (b)

  	
   

  	
  7.05

  
	
   

  	
   

  	
  (c)

  	
   

  	
  7.01(a)

  
	
   

  	
   

  	
  (d)

  	
   

  	
  7.01(c)

  
	
   

  	
   

  	
  (d)(1)

  	
   

  	
  7.01(c)(1)

  
	
   

  	
   

  	
  (d)(2)

  	
   

  	
  7.01(c)(2)

  
	
   

  	
   

  	
  (d)(3)

  	
   

  	
  7.01(c)(3)

  
	
   

  	
   

  	
  (e)

  	
   

  	
  6.11

  
	
  § 316

  	
   

  	
  (a)(1)(A)

  	
   

  	
  6.05

  
	
   

  	
   

  	
  (a)(1)(B)

  	
   

  	
  6.04

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
  Not Applicable

  
	
   

  	
   

  	
  (a)(last sentence)

  	
   

  	
  2.11

  
	
   

  	
   

  	
  (b)

  	
   

  	
  6.07

  
	
  § 317

  	
   

  	
  (a)(1)

  	
   

  	
  6.08

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
  6.09

  
	
   

  	
   

  	
  (b)

  	
   

  	
  2.06

  
	
  § 318

  	
   

  	
  (a)

  	
   

  	
  11.01

  

 

Note:                   This
reconciliation and tie shall not, for any purpose, be deemed to be a part of
the Indenture.

 

i

 

TABLE OF CONTENTS

 

	
  ARTICLE I DEFINITIONS AND INCORPORATION BY
  REFERENCE

  	
   

  
	
   

  	
   

  
	
  SECTION 1.01

  	
  Definitions

  	
   

  
	
  SECTION 1.02

  	
  Other
  Definitions

  	
   

  
	
  SECTION 1.03

  	
  Incorporation
  by Reference of Trust Indenture Act

  	
   

  
	
  SECTION 1.04

  	
  Rules
  of Construction

  	
   

  
	
  SECTION 1.05

  	
  Non-Recourse
  to the General Partner; No Personal Liability of Officers, Directors,
  Employees or Partners

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II THE SECURITIES

  	
   

  
	
   

  	
   

  
	
  SECTION 2.01

  	
  Amount
  Unlimited; Issuable in Series

  	
   

  
	
  SECTION 2.02

  	
  Denominations

  	
   

  
	
  SECTION 2.03

  	
  Forms
  Generally

  	
   

  
	
  SECTION 2.04

  	
  Execution,
  Authentication, Delivery and Dating

  	
   

  
	
  SECTION 2.05

  	
  Registrar
  and Paying Agent

  	
   

  
	
  SECTION 2.06

  	
  Paying
  Agent to Hold Money in Trust

  	
   

  
	
  SECTION 2.07

  	
  Holder
  Lists

  	
   

  
	
  SECTION 2.08

  	
  Transfer
  and Exchange

  	
   

  
	
  SECTION 2.09

  	
  Replacement
  Securities

  	
   

  
	
  SECTION 2.10

  	
  Outstanding
  Securities

  	
   

  
	
  SECTION 2.11

  	
  Original
  Issue Discount and Treasury Securities

  	
   

  
	
  SECTION 2.12

  	
  Temporary
  Securities

  	
   

  
	
  SECTION 2.13

  	
  Cancellation

  	
   

  
	
  SECTION 2.14

  	
  Payments;
  Defaulted Interest

  	
   

  
	
  SECTION 2.15

  	
  Persons
  Deemed Owners

  	
   

  
	
  SECTION 2.16

  	
  Computation
  of Interest

  	
   

  
	
  SECTION 2.17

  	
  Global
  Securities; Book-Entry Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III REDEMPTION

  	
   

  
	
   

  	
   

  
	
  SECTION 3.01

  	
  Applicability
  of Article

  	
   

  
	
  SECTION 3.02

  	
  Notice
  to the Trustee

  	
   

  
	
  SECTION 3.03

  	
  Selection
  of Securities To Be Redeemed

  	
   

  
	
  SECTION 3.04

  	
  Notice
  of Redemption

  	
   

  
	
  SECTION 3.05

  	
  Effect
  of Notice of Redemption

  	
   

  
	
  SECTION 3.06

  	
  Deposit
  of Redemption Price

  	
   

  
	
  SECTION 3.07

  	
  Securities
  Redeemed in Part

  	
   

  
	
  SECTION 3.08

  	
  Purchase
  of Securities

  	
   

  
	
  SECTION 3.09

  	
  Mandatory
  and Optional Sinking Funds

  	
   

  
	
  SECTION 3.10

  	
  Satisfaction
  of Sinking Fund Payments with Securities

  	
   

  
	
  SECTION 3.11

  	
  Redemption
  of Securities for Sinking Fund

  	
   

  

 

ii

 

	
  ARTICLE IV COVENANTS

  	
   

  
	
   

  	
   

  
	
  SECTION 4.01

  	
  Payment
  of Securities

  	
   

  
	
  SECTION 4.02

  	
  Maintenance
  of Office or Agency

  	
   

  
	
  SECTION 4.03

  	
  SEC
  Reports; Financial Statements

  	
   

  
	
  SECTION 4.04

  	
  Compliance
  Certificate

  	
   

  
	
  SECTION 4.05

  	
  Existence

  	
   

  
	
  SECTION 4.06

  	
  Waiver
  of Stay, Extension or Usury Laws

  	
   

  
	
  SECTION 4.07

  	
  Additional
  Amounts

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V SUCCESSORS

  	
   

  
	
   

  	
   

  
	
  SECTION 5.01

  	
  Limitations
  on Mergers and Consolidations

  	
   

  
	
  SECTION 5.02

  	
  Successor
  Person Substituted

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI DEFAULTS AND REMEDIES

  	
   

  
	
   

  	
   

  
	
  SECTION 6.01

  	
  Events
  of Default

  	
   

  
	
  SECTION 6.02

  	
  Acceleration

  	
   

  
	
  SECTION 6.03

  	
  Other Remedies

  	
   

  
	
  SECTION 6.04

  	
  Waiver of Defaults

  	
   

  
	
  SECTION 6.05

  	
  Control by Majority

  	
   

  
	
  SECTION 6.06

  	
  Limitations on Suits

  	
   

  
	
  SECTION 6.07

  	
  Rights of Holders to Receive Payment

  	
   

  
	
  SECTION 6.08

  	
  Collection Suit by Trustee

  	
   

  
	
  SECTION 6.09

  	
  Trustee May File Proofs of Claim

  	
   

  
	
  SECTION 6.10

  	
  Priorities

  	
   

  
	
  SECTION 6.11

  	
  Undertaking for Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII TRUSTEE

  	
   

  
	
   

  	
   

  
	
  SECTION 7.01

  	
  Duties of Trustee

  	
   

  
	
  SECTION 7.02

  	
  Rights of Trustee

  	
   

  
	
  SECTION 7.03

  	
  May Hold Securities

  	
   

  
	
  SECTION 7.04

  	
  Trustee’s Disclaimer

  	
   

  
	
  SECTION 7.05

  	
  Notice of Defaults

  	
   

  
	
  SECTION 7.06

  	
  Reports by Trustee to Holders

  	
   

  
	
  SECTION 7.07

  	
  Compensation and Indemnity

  	
   

  
	
  SECTION 7.08

  	
  Replacement of Trustee

  	
   

  
	
  SECTION 7.09

  	
  Successor Trustee by Merger, etc.

  	
   

  
	
  SECTION 7.10

  	
  Eligibility; Disqualification

  	
   

  
	
  SECTION 7.11

  	
  Preferential Collection of Claims Against
  the Partnership or a Subsidiary Guarantor

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII DISCHARGE OF INDENTURE

  	
   

  
	
   

  	
   

  
	
  SECTION 8.01

  	
  Termination of the Partnership’s and the
  Subsidiary Guarantors’ Obligations

  	
   

  
	
  SECTION 8.02

  	
  Application of Trust Money

  	
   

  
	
  SECTION 8.03

  	
  Repayment to Partnership or Subsidiary
  Guarantor

  	
   

  

 

iii

 

	
  SECTION 8.04

  	
  Reinstatement

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX SUPPLEMENTAL INDENTURES AND
  AMENDMENTS

  	
   

  
	
   

  	
   

  
	
  SECTION 9.01

  	
  Without Consent of Holders

  	
   

  
	
  SECTION 9.02

  	
  With Consent of Holders

  	
   

  
	
  SECTION 9.03

  	
  Compliance with the Trust Indenture Act

  	
   

  
	
  SECTION 9.04

  	
  Revocation and Effect of Consents

  	
   

  
	
  SECTION 9.05

  	
  Notation on or Exchange of Securities

  	
   

  
	
  SECTION 9.06

  	
  Trustee to Sign Amendments, etc.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X GUARANTEE

  	
   

  
	
   

  	
   

  
	
  SECTION 10.01

  	
  Guarantee

  	
   

  
	
  SECTION 10.02

  	
  Execution and Delivery of Guarantees

  	
   

  
	
  SECTION 10.03

  	
  Limitation on Liability of the Subsidiary
  Guarantors

  	
   

  
	
  SECTION 10.04

  	
  Release of Subsidiary Guarantors from
  Guarantee

  	
   

  
	
  SECTION 10.05

  	
  Contribution

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XI MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  SECTION 11.01

  	
  Trust Indenture Act Controls

  	
   

  
	
  SECTION 11.02

  	
  Notices

  	
   

  
	
  SECTION 11.03

  	
  Communication by Holders with Other
  Holders

  	
   

  
	
  SECTION 11.04

  	
  Certificate and Opinion as to Conditions
  Precedent

  	
   

  
	
  SECTION 11.05

  	
  Statements Required in Certificate or
  Opinion

  	
   

  
	
  SECTION 11.06

  	
  Rules by Trustee and Agents

  	
   

  
	
  SECTION 11.07

  	
  Legal Holidays

  	
   

  
	
  SECTION 11.08

  	
  No Recourse Against Others

  	
   

  
	
  SECTION 11.09

  	
  Governing Law

  	
   

  
	
  SECTION 11.10

  	
  No Adverse Interpretation of Other
  Agreements

  	
   

  
	
  SECTION 11.11

  	
  Successors

  	
   

  
	
  SECTION 11.12

  	
  Severability

  	
   

  
	
  SECTION 11.13

  	
  Counterpart Originals

  	
   

  
	
  SECTION 11.14

  	
  Table of Contents, Headings, etc.

  	
   

  

 

iv

 

INDENTURE (this “Indenture”) dated as of                           ,
2005 among K-Sea Transportation Partners L.P., a Delaware limited partnership
(the “Partnership”), K-Sea Operating Partnership L.P., a Delaware limited
partnership and indirect wholly owned subsidiary of the Partnership (“OLP”),
K-Sea Transportation Inc., a Delaware corporation and indirect wholly owned
subsidiary of the Partnership (“Transportation”), Norfolk Environmental
Services, Inc., a Delaware corporation and indirect wholly owned subsidiary of
the Partnership (“Norfolk”), K-Sea Acquisition1, LLC, a Delaware limited
liability company and indirect wholly owned subsidiary of the Partnership
(“Acquisition1”), K-Sea Acquisition2, LLC, a Delaware limited liability company
and indirect wholly owned subsidiary of the Partnership (“Acquisition2” and
together with OLP, Transportation, Norfolk and Acquisition1, the “Potential
Subsidiary Guarantors”), and [                ],
a                       ,
as trustee (the “Trustee”).

 

The Partnership and the Potential Subsidiary
Guarantors have duly authorized the execution and delivery of this Indenture to
provide for the issuance from time to time of the Partnership’s debentures,
notes, bonds or other evidences of indebtedness to be issued in one or more
series unlimited as to principal amount (herein called the “Securities”), and
the related Guarantees (as hereinafter defined), if any, as provided in this
Indenture.

 

The Partnership and the Potential Subsidiary
Guarantors are members of the same consolidated group of companies.  The Potential Subsidiary Guarantors will
derive direct and indirect economic benefit from the issuance of the
Securities.  Accordingly, each Potential
Subsidiary Guarantor has duly authorized the execution and delivery of this
Indenture in light of the possibility that such Potential Subsidiary Guarantor
will provide its full and unconditional guarantee of a series of the Securities
to the extent provided in this Indenture.

 

All things necessary to make this Indenture a valid
agreement of the Partnership, in accordance with its terms, have been done.

 

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

 

For and in consideration of the premises and the
purchase of the Securities by the Holders thereof, it is mutually covenanted
and agreed, for the equal and proportionate benefit of all Holders of the
Securities or of any series thereof, as follows:

 

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

 

SECTION 1.01                                            Definitions.

 

“Additional Amounts” means any additional amounts
required by the express terms of a Security or by or pursuant to a Board
Resolution, under circumstances specified therein or pursuant thereto, to be
paid by the Partnership or any Subsidiary Guarantor, as the case may be, with
respect to certain taxes, assessments or other governmental charges imposed on
certain Holders and that are owing to such Holders.

 

“Affiliate” of any specified Person means any other
Person directly or indirectly controlling or controlled by, or under direct or
indirect common control with, such specified Person.  For purposes of this definition, “control” of
a Person shall mean the power to direct the

 

1

 

management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise, and the terms “controlling” and “controlled” shall have meanings
correlative to the foregoing.

 

“Agent” means any Registrar or Paying Agent.

 

“Bankruptcy Law” means Title 11 of the United States
Code or any similar federal, state or foreign law for the relief of debtors.

 

“Board of Directors” means the Board of Directors of
K-Sea General Partner GP LLC, the general partner of the General Partner or any
authorized committee of the Board of Directors of K-Sea General Partner GP LLC or
any directors and/or officers of K-Sea General Partner GP LLC to whom such
Board of Directors or such committee shall have duly delegated its authority to
act hereunder.

 

“Board Resolution” means a copy of a resolution
certified by the Secretary or an Assistant Secretary of K-Sea General Partner
GP LLC to have been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification, and delivered to the
Trustee.

 

“Business Day” means any day that is not a Legal Holiday.

 

“Corporate Trust Office of the Trustee” means the
office of the Trustee located at                                                                 ,
Attention:                                         ,
and as may be located at such other address as the Trustee may give notice to
the Partnership and the Subsidiary Guarantors.

 

 “Debt” of any
Person at any date means any obligation created or assumed by such Person for
the repayment of borrowed money and any guarantee thereof.

 

“Default” means any event, act or condition that is,
or after notice or the passage of time or both would be, an Event of Default.

 

“deliver” or “delivery” means, in the context of
certificated Securities, actual physical delivery of the certificated
Securities to the relevant Person required hereunder, together with all
endorsements, and in the context of Global Securities, the designation on the
records of the Depositary of a change in the beneficial interests of a holder
in a Global Security.

 

“Depositary” means, with respect to the Securities of
any series issuable or issued in whole or in part in global form, the Person
specified pursuant to Section 2.01 hereof as the initial Depositary with
respect to the Securities of such series, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and thereafter “Depositary” shall mean or include such successor.

 

“Dollar” or “$” means a dollar or other equivalent
unit in such coin or currency of the United States as at the time shall be
legal tender for the payment of public and private debt.

 

2

 

“Exchange Act” means the Securities Exchange Act of
1934, as amended, and any successor statute.

 

“GAAP” means generally accepted accounting principles
in the United States set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession of the United
States, as in effect from time to time.

 

“General Partner” means K-Sea General Partner L.P., a
Delaware limited partnership.

 

“Global Security” means a Security that is issued in
global form in the name of the Depositary with respect thereto or its nominee.

 

“Government Obligations” means, with respect to a
series of Securities, (i) direct obligations of a government that issues
the currency in which the Securities of the series are payable for the payment
of which the full faith and credit of such government is pledged, or
(ii) obligations of a Person controlled or supervised by and acting as an
agency or instrumentality of such government, the payment of which is
unconditionally guaranteed as a full faith and credit obligation by such
government, which, in either case under clause (i) or (ii) above, are not
callable or redeemable at the option of the issuer thereof; or (iii) depository
receipts issued by a bank or trust company as custodian with respect to any
such Government Obligations or a specific payment of interest on or principal
of any such Government Obligation held by such custodian for the account of the
holder of a depository receipt, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the Government Obligation
evidenced by such depository receipt.

 

“Guarantee” means the guarantee of the Partnership’s
obligations under the Securities of a series by a Subsidiary Guarantor
(specified with respect to such series as contemplated by Section 2.01(9)) as
provided in Article X.

 

“Holder” means a Person in whose name a Security is
registered.

 

“Indenture” means this Indenture as amended or
supplemented from time to time pursuant to the provisions hereof, and includes
the terms of a particular series of Securities established as contemplated by
Section 2.01.

 

“interest” means, with respect to an Original Issue
Discount Security that by its terms bears interest only after Maturity,
interest payable after Maturity.

 

“Interest Payment Date,” when used with respect to any
Security, shall have the meaning assigned to such term in the Security as
contemplated by Section 2.01.

 

“Issue Date” means, with respect to Securities of a
series, the first date on which the Securities of such series are originally
issued under this Indenture.

 

3

 

“K-Sea General Partner GP LLC” means K-Sea General
Partner GP LLC, a Delaware limited liability company.

 

“Legal Holiday” means a Saturday, a Sunday or a day on
which banking institutions in any of The City of New York, New York or a Place
of Payment are authorized or obligated by law, regulation or executive order to
remain closed.

 

“Maturity” means, with respect to any Security, the
date on which the principal of such Security or an installment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity thereof, or by declaration of acceleration, call for redemption or
otherwise.

 

“Officer” means the Chief Executive Officer, the
President, the Chief Operating Officer, any Vice President, the Chief Financial
Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary
or any Assistant Secretary of a Person.

 

“Officers’ Certificate” means a certificate signed by
two Officers of a Person.

 

“Opinion of Counsel” means a written opinion from
legal counsel who is acceptable to the Trustee. 
Such counsel may be an employee of or counsel to the Partnership, the
General Partner, K-Sea General Partner GP LLC, a Subsidiary Guarantor or the
Trustee.

 

“Original Issue Discount Security” means any Security
that provides for an amount less than the principal amount thereof to be due
and payable upon a declaration of acceleration of the Maturity thereof pursuant
to Section 6.02.

 

“Partnership” means the Person named as the
“Partnership” in the first paragraph of this Indenture until a successor Person
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter “Partnership” shall mean such successor Person; provided, however, that for purposes of any provision
contained herein which is required by the TIA, “Partnership” shall also mean
each other obligor (if any), other than a Subsidiary Guarantor, on the
Securities of a series.

 

“Partnership Order” and “Partnership Request” mean,
respectively, a written order or request signed in the name of the Partnership
and each Subsidiary Guarantor by two Officers of K-Sea General Partner GP LLC
and delivered to the Trustee.

 

“Person” means any individual, corporation,
partnership, limited liability company, joint venture, incorporated or
unincorporated association, joint stock company, trust, unincorporated
organization or government or other agency, instrumentality or political
subdivision thereof or other entity of any kind.

 

“Place of Payment” means, with respect to the
Securities of any series, the place or places where the principal of, premium
(if any) and interest on and any Additional Amounts with respect to the
Securities of that series are payable as specified in accordance with Section
2.01 subject to the provisions of Section 4.02.

 

4

 

“principal” of a Security means the principal of the
Security plus, when appropriate, the premium, if any, on the Security.

 

“Redemption Date” means, with respect to any Security
to be redeemed, the date fixed for such redemption by or pursuant to this
Indenture.

 

“Redemption Price” means, with respect to any Security
to be redeemed, the price at which it is to be redeemed pursuant to this
Indenture.

 

“Responsible Officer” means any officer within the
corporate trust department of the Trustee having direct responsibility for the
administration of this Indenture or any other officer to whom any corporate
trust matter is referred because of such person’s knowledge of and familiarity
with the particular subject and who shall have direct responsibility for the
administration of this Indenture.

 

“Rule 144A Securities” means Securities of a series
designated pursuant to Section 2.01 as entitled to the benefits of
Section 4.03(b).

 

“SEC” means the Securities and Exchange Commission.

 

“Securities” has the meaning stated in the preamble of
this Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.

 

“Security Custodian” means, with respect to Securities
of a series issued in global form, the Trustee for Securities of such series,
as custodian with respect to the Securities of such series, or any successor
entity thereto.

 

“Significant Subsidiary” means a Subsidiary of the
Partnership that is a “significant subsidiary” of the Partnership as such term
is defined in Rule 1-02(w) of Regulation S-X as of the date hereof.

 

“Stated Maturity” means, when used with respect to any
Security or any installment of principal thereof or interest thereon, the date
specified in such Security as the fixed date on which the principal of such
Security or such installment of principal or interest is due and payable.

 

“Subsidiary” of any Person means:

 

(1)                                  any
corporation, association or other business entity of which more than 50% of the
total voting power of equity interests entitled, without regard to the
occurrence of any contingency, to vote in the election of directors, managers,
trustees or equivalent Persons thereof is at the time of determination owned or
controlled, directly or indirectly, by such Person or one or more of the other
Subsidiaries of such Person or any combination thereof; or

 

(2)                                  in
the case of a partnership, more than 50% of the partners’ equity interests,
considering all partners’ equity interests as a single class, is at

 

5

 

such time of
determination owned or controlled, directly or indirectly, by such Person or
one or more of the other Subsidiaries of such Person or any combination
thereof.

 

“Subsidiary Guarantors” means, with respect to any
series of Securities, the Person or Persons, if any, named in accordance with
Section 2.01(9) as the “Subsidiary Guarantors” (i) in or pursuant to a Board
Resolution, and set forth, or determined in the manner provided, in an
Officers’ Certificate of K-Sea General Partner GP LLC or in a Partnership
Order, or (ii) in an indenture supplemental hereto establishing the terms of
such series of Securities until a successor Person or Persons shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
“Subsidiary Guarantors” with respect to such series of Securities shall mean
such successor Person or Persons, and any other Subsidiary of the Partnership
who may execute this Indenture, or a supplement thereto, for the purpose of
providing a Guarantee for such series of Securities pursuant to this
Indenture.  If a series of Securities
does not have any Subsidiary Guarantors, all references in this Indenture to Subsidiary
Guarantors shall be ignored with respect to such series of Securities.

 

“surrender” shall have the same meaning as “deliver”
in the context of the surrender of a Security.

 

“TIA” means the Trust Indenture Act of 1939, as
amended, as in effect on the date hereof; provided, however,
that, in the event the Trust Indenture Act of 1939 is amended after such date,
“TIA” means, to the extent required by any such amendment, the Trust Indenture
Act of 1939 as so amended.

 

“Trustee” means the Person named as such above until a
successor replaces it in accordance with the applicable provisions of this
Indenture, and thereafter “Trustee” means each Person who is then a Trustee
hereunder, and if at any time there is more than one such Person, “Trustee” as
used with respect to the Securities of any series means the Trustee with
respect to Securities of that series.

 

“United States” means the United States of America
(including the District of Columbia) and its territories and possessions, which
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.

 

“U.S. Government Obligations” means Government
Obligations with respect to Securities payable in Dollars.

 

6

 

SECTION 1.02                                            Other
Definitions.

 

	
   

  	
   

  	
  Defined

  
	
  Term

  	
   

  	
  in Section

  
	
   

  	
   

  	
   

  
	
  “Agent Members”

  	
   

  	
  2.17

  
	
  “Bankruptcy Custodian”

  	
   

  	
  6.01

  
	
  “covenant defeasance”

  	
   

  	
  8.01

  
	
  “Event of Default”

  	
   

  	
  6.01

  
	
  “Funding Guarantor”

  	
   

  	
  10.05

  
	
  “Judgment Currency”

  	
   

  	
  6.1

  
	
  “legal defeasance”

  	
   

  	
  8.01

  
	
  “mandatory sinking fund
  payment”

  	
   

  	
  3.09

  
	
  “optional sinking fund
  payment”

  	
   

  	
  3.09

  
	
  “Paying Agent”

  	
   

  	
  2.05

  
	
  “Registrar”

  	
   

  	
  2.05

  
	
  “Required Currency”

  	
   

  	
  6.1

  
	
  “Successor”

  	
   

  	
  5.01

  

 

SECTION 1.03                                            Incorporation
by Reference of Trust Indenture Act.

 

Whenever this Indenture refers to a provision of the
TIA, the provision is incorporated by reference in and made a part of this
Indenture (and if the Indenture is not qualified under the TIA at the time, as
if it were so qualified unless otherwise provided).  The following TIA terms used in this
Indenture have the following meanings:

 

“Commission” means the SEC.

 

“indenture securities” means the Securities.

 

“indenture security holder” means a Holder.

 

“indenture to be qualified” means this Indenture.

 

“indenture trustee” or “institutional trustee” means
the Trustee.

 

“obligor” on the indenture securities means the
Partnership, any Potential Subsidiary Guarantor or any other obligor on the
Securities.

 

All terms used in this Indenture that are defined by
the TIA, defined by a TIA reference to another statute or defined by an SEC
rule under the TIA have the meanings so assigned to them.

 

SECTION 1.04                                            Rules
of Construction.

 

Unless the context otherwise requires:

 

(1)                                  a
term has the meaning assigned to it;

 

7

 

(2)                                  an
accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;

 

(3)                                  “or”
is not exclusive;

 

(4)                                  words
in the singular include the plural, and in the plural include the singular;

 

(5)                                  provisions
apply to successive events and transactions; and

 

(6)                                  all
references in this instrument to Articles and Sections are references to the
corresponding Articles and Sections in and of this instrument.

 

SECTION 1.05                                            Non-Recourse
to the General Partner; No Personal Liability of Officers, Directors, Employees
or Partners.

 

Obligations of the Partnership and a Subsidiary
Guarantor under this Indenture, the Securities and the related Guarantees, if
any, are non-recourse to the General Partner, and its respective Affiliates
(other than the Partnership and such Subsidiary Guarantor), and payable only
out of cash flow and assets of the Partnership and such Subsidiary
Guarantor.  The Trustee, and each Holder
of a Security by its acceptance thereof, will be deemed to have agreed in this
Indenture that (1) neither the General Partner nor its assets (nor any of its
respective Affiliates other than the Partnership and a Subsidiary Guarantor,
nor its respective assets) shall be liable for any of the obligations of the
Partnership and a Subsidiary Guarantor under this Indenture, such Securities or
such related Guarantees, and (2) no director, manager, officer, employee,
partner or unitholder, as such, of the Partnership, a Subsidiary Guarantor, the
Trustee, the General Partner, K-Sea General Partner GP LLC or any Affiliate of
any of the foregoing entities shall have any personal liability in respect of
the obligations of the Partnership and a Subsidiary Guarantor under this
Indenture, such Securities or such related Guarantees by reason of his, her or
its status.

 

ARTICLE II

THE SECURITIES

 

SECTION 2.01                                            Amount
Unlimited; Issuable in Series.

 

The aggregate principal amount of Securities that may
be authenticated and delivered under this Indenture is unlimited.

 

The Securities may be issued in one or more
series.  There shall be established in or
pursuant to a Board Resolution, and set forth, or determined in the manner
provided, in an Officers’ Certificate of K-Sea General Partner GP LLC or in a Partnership
Order, or established in one or more indentures supplemental hereto, prior to
the issuance of Securities of any series:

 

(1)           the title of the Securities of the
series (which shall distinguish the Securities of the series from the
Securities of all other series);

 

(2)           if there is to be a limit, the limit
upon the aggregate principal amount of the Securities of the series that may be
authenticated and delivered under this Indenture

 

8

 

(except for Securities
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Securities of the series pursuant to Section 2.08,
2.09, 2.12, 2.17, 3.07 or 9.05 and except for any Securities which, pursuant to
Section 2.04 or 2.17, are deemed never to have been authenticated and delivered
hereunder); provided, however, that unless otherwise
provided in the terms of the series, the authorized aggregate principal amount
of such series may be increased before or after the issuance of any Securities
of the series by a Board Resolution (or action pursuant to a Board Resolution)
to such effect;

 

(3)           whether any Securities of the series
are to be issuable initially in temporary global form and whether any
Securities of the series are to be issuable in permanent global form, as Global
Securities or otherwise, and, if so, whether beneficial owners of interests in
any such Global Security may exchange such interests for Securities of such
series and of like tenor of any authorized form and denomination and the
circumstances under which any such exchanges may occur, if other than in the
manner provided in Section 2.17, and the initial Depositary and Security
Custodian, if any, for any Global Security or Securities of such series;

 

(4)           the manner in which any interest
payable on a temporary Global Security on any Interest Payment Date will be
paid if other than in the manner provided in Section 2.14;

 

(5)           the date or dates on which the
principal of and premium (if any) on the Securities of the series is payable or
the method of determination thereof;

 

(6)           the rate or rates, or the method of
determination thereof, at which the Securities of the series shall bear
interest, if any, whether and under what circumstances Additional Amounts with
respect to such Securities shall be payable, the date or dates from which such
interest shall accrue, the Interest Payment Dates on which such interest shall
be payable and the record date for the interest payable on any Securities on
any Interest Payment Date, or if other than provided herein, the Person to whom
any interest on Securities of the series shall be payable;

 

(7)           the place or places where, subject to
the provisions of Section 4.02, the principal of, premium (if any) and interest
on and any Additional Amounts with respect to the Securities of the series
shall be payable;

 

(8)           the period or periods within which,
the price or prices (whether denominated in cash, securities or otherwise) at
which and the terms and conditions upon which Securities of the series may be
redeemed, in whole or in part, at the option of the Partnership, if the
Partnership is to have that option, and the manner in which the Partnership
must exercise any such option, if different from those set forth herein;

 

(9)           whether Securities of the series are
entitled to the benefits of any Guarantee of any Subsidiary Guarantor pursuant
to this Indenture, the identity of any such Subsidiary Guarantors and any terms
of such Guarantee with respect to the

 

9

 

Securities of the series
in addition to those set forth in Article X, or any exceptions to or changes to
those set forth in Article X;

 

(10)         the obligation, if any, of the
Partnership to redeem, purchase or repay Securities of the series pursuant to
any sinking fund or analogous provisions or at the option of a Holder thereof
and the period or periods within which, the price or prices (whether
denominated in cash, securities or otherwise) at which and the terms and
conditions upon which Securities of the series shall be redeemed, purchased or
repaid in whole or in part pursuant to such obligation;

 

(11)         if other than denominations of $1,000
and any integral multiple thereof, the denomination in which any Securities of
the series shall be issuable;

 

(12)         if other than Dollars, the form,
including equity securities, other debt securities (including Securities),
warrants or any other securities or property of the Partnership, any Subsidiary
Guarantor or any other Person, in which payment of the principal of, premium
(if any) and interest on and any Additional Amounts with respect to the
Securities of the series shall be payable;

 

(13)         if the amount of payments of principal
of, premium (if any) and interest on and any Additional Amounts with respect to
the Securities of the series may be determined with reference to any
commodities, currencies or indices, values, rates or prices or any other index
or formula, the manner in which such amounts shall be determined;

 

(14)         if other than the entire principal
amount thereof, the portion of the principal amount of Securities of the series
that shall be payable upon declaration of acceleration of the Maturity thereof
pursuant to Section 6.02;

 

(15)         any additional means of satisfaction
and discharge of this Indenture and any additional conditions or limitations to
discharge with respect to Securities of the series and the related Guarantees,
if any, pursuant to Article VIII or any modifications of or deletions from
such conditions or limitations;

 

(16)         any deletions or modifications of or
additions to the Events of Default set forth in Section 6.01 or covenants of
the Partnership or any Subsidiary Guarantor set forth in Article IV pertaining
to the Securities of the series;

 

(17)         any restrictions or other provisions
with respect to the transfer or exchange of Securities of the series, which may
amend, supplement, modify or supersede those contained in this Article II;

 

(18)         if the Securities of the series are to
be convertible into or exchangeable for common units, other debt securities
(including Securities), warrants, other equity securities or any other
securities or property of the Partnership, any Subsidiary Guarantor or any
other Person, at the option of the Partnership or the Holder or upon the
occurrence of any condition or event, the terms and conditions for such
conversion or exchange;

 

10

 

(19)         whether the Securities of the series
are to be entitled to the benefit of Section 4.03(b) (and accordingly
constitute Rule 144A Securities); and

 

(20)         any other terms of the series (which
terms shall not be prohibited by the provisions of this Indenture).

 

All Securities of any one series shall be
substantially identical except as to denomination and except as may otherwise
be provided in or pursuant to the Board Resolution referred to above and
(subject to Section 2.03) set forth, or determined in the manner provided, in
the Officers’ Certificate or Partnership Order referred to above or in any such
indenture supplemental hereto.

 

If any of the terms of the series are established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action, together with such Board Resolution, shall be set forth in an
Officers’ Certificate or certified by the Secretary or an Assistant Secretary
of K-Sea General Partner GP LLC and delivered to the Trustee at or prior to the
delivery of the Officers’ Certificate or Partnership Order setting forth the
terms of the series.

 

SECTION 2.02                                            Denominations.

 

The Securities of each series shall be issuable in
such denominations as shall be specified as contemplated by Section 2.01.  In the absence of any such provisions with
respect to the Securities of any series, the Securities of such series
denominated in Dollars shall be issuable in denominations of $1,000 and any
integral multiples thereof.

 

SECTION 2.03                                            Forms
Generally.

 

The Securities of each series shall be in fully
registered form and in substantially such form or forms (including temporary or
permanent global form) established by or pursuant to a Board Resolution or in
one or more indentures supplemental hereto. 
The Securities may have notations, legends or endorsements required by
law, securities exchange rule, the Partnership’s certificate of limited partnership,
agreement of limited partnership or other similar governing documents,
agreements to which the Partnership is subject, if any, or usage (provided that
any such notation, legend or endorsement is in a form acceptable to the
Partnership).  A copy of the Board
Resolution establishing the form or forms of Securities of any series shall be
delivered to the Trustee at or prior to the delivery of the Partnership Order
contemplated by Section 2.04 for the authentication and delivery of such
Securities.

 

The definitive Securities of each series shall be
printed, lithographed or engraved on steel engraved borders or may be produced
in any other manner, all as determined by the Officers executing such
Securities, as evidenced by their execution thereof.

 

11

 

The Trustee’s certificate of authentication shall be
in substantially the following form:

 

“This is one of
the Securities of the series designated therein referred to in the within-mentioned
Indenture.

 

	
   

  	
  [                                         ],
  as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory”.

  

 

SECTION 2.04                                            Execution,
Authentication, Delivery and Dating.

 

Two Officers of K-Sea General Partner GP LLC shall
sign the Securities on behalf of the Partnership and, with respect to any
related Guarantees, an Officer of each Subsidiary Guarantor shall sign the
Notation of Guarantee on behalf of such Subsidiary Guarantor, in each case by
manual or facsimile signature.

 

If an Officer of K-Sea General Partner GP LLC whose
signature is on a Security no longer holds that office at the time the Security
is authenticated, the Security shall be valid nevertheless.

 

A Security shall not be entitled to any benefit under
this Indenture or the related Guarantees, if any, or be valid or obligatory for
any purpose until authenticated by the manual signature of an authorized
signatory of the Trustee, which signature shall be conclusive evidence that the
Security has been authenticated under this Indenture.  Notwithstanding the foregoing, if any
Security has been authenticated and delivered hereunder but never issued and
sold by the Partnership, and the Partnership delivers such Security to the
Trustee for cancellation as provided in Section 2.13, together with a written
statement (which need not comply with Section 11.05 and need not be accompanied
by an Opinion of Counsel) stating that such Security has never been issued and
sold by the Partnership, for all purposes of this Indenture such Security shall
be deemed never to have been authenticated and delivered hereunder and shall
never be entitled to the benefits of this Indenture or the related Guarantees,
if any.

 

At any time and from time to time after the execution
and delivery of this Indenture, the Partnership may deliver Securities of any
series executed by the Partnership to the Trustee for authentication, and the
Trustee shall authenticate and deliver such Securities for original issue upon
a Partnership Order for the authentication and delivery of such Securities or
pursuant to such procedures acceptable to the Trustee as may be specified from
time to time by Partnership Order.  Such
order shall specify the amount of the Securities to be authenticated, the date
on which the original issue of Securities is to be authenticated, the name or
names of the initial Holder or Holders and any other terms of the Securities of
such series not otherwise determined.  If
provided for in such procedures, such Partnership Order may authorize (1)
authentication and delivery of Securities of such series for original issue
from time to time, with certain terms (including, without limitation, the
Maturity dates or dates, original issue date or dates and interest rate or
rates) that differ from Security to Security and (2) may authorize
authentication and delivery pursuant to oral or electronic instructions from
the Partnership or its duly authorized agent, which instructions shall be
promptly confirmed in writing.

 

12

 

If the form or terms of the Securities of the series
have been established in or pursuant to one or more Board Resolutions as
permitted by Section 2.01, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive (in addition to the
Partnership Order referred to above and the other documents required by Section
11.04), and (subject to Section 7.01) shall be fully protected in relying upon:

 

(a)           an Officers’ Certificate of K-Sea
General Partner GP LLC setting forth the Board Resolution and, if applicable,
an appropriate record of any action taken pursuant thereto, as contemplated by
the last paragraph of Section 2.01; and

 

(b)           an Opinion of Counsel to the effect
that:

 

(i)            the form of such Securities has been
established in conformity with the provisions of this Indenture;

 

(ii)           the terms of such Securities have
been established in conformity with the provisions of this Indenture; and

 

(iii)          that such Securities and the related
Guarantees, if any, when authenticated and delivered by the Trustee and issued
by the Partnership in the manner and subject to any conditions specified in
such Opinion of Counsel, will constitute valid and binding obligations of the
Partnership and the Subsidiary Guarantors, respectively, enforceable against
the Partnership and the Subsidiary Guarantors, respectively, in accordance with
their respective terms, except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws in effect from time to time affecting the
rights of creditors generally, and the application of general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).

 

If all the Securities of any series are not to be
issued at one time, it shall not be necessary to deliver an Officers’
Certificate and Opinion of Counsel at the time of issuance of each such
Security, but such Officers’ Certificate and Opinion of Counsel shall be delivered
at or before the time of issuance of the first Security of the series to be
issued.

 

The Trustee shall not be required to authenticate such
Securities if the issuance of such Securities pursuant to this Indenture would
affect the Trustee’s own rights, duties or immunities under the Securities and
this Indenture or otherwise in a manner not reasonably acceptable to the
Trustee.

 

The Trustee may appoint an authenticating agent
acceptable to the Partnership to authenticate Securities.  Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so.  Each reference in
this Indenture to authentication by the Trustee includes authentication by such
agent.  An authenticating agent has the
same rights as an Agent to deal with the Partnership, any Subsidiary Guarantor
or an Affiliate of the Partnership or any Subsidiary Guarantor.

 

13

 

Each Security shall be dated the date of its
authentication.

 

SECTION 2.05                                            Registrar
and Paying Agent.

 

The Partnership shall maintain an office or agency for
each series of Securities where Securities of such series may be presented for
registration of transfer or exchange (“Registrar”) and an office or agency
where Securities of such series may be presented for payment (“Paying
Agent”).  The Registrar shall keep a
register of the Securities of such series and of their transfer and
exchange.  The Partnership may appoint
one or more co-registrars and one or more additional paying agents.  The term “Registrar” includes any
co-registrar and the term “Paying Agent” includes any additional paying agent.

 

The Partnership shall enter into an appropriate agency
agreement with any Registrar or Paying Agent not a party to this Indenture.  The agreement shall implement the provisions
of this Indenture that relate to such Agent. 
The Partnership shall notify the Trustee of the name and address of any
Agent not a party to this Indenture.  The
Partnership may change any Paying Agent or Registrar without notice to any
Holder.  If the Partnership fails to
appoint or maintain another entity as Registrar or Paying Agent, the Trustee
shall act as such.  The Partnership, any
Subsidiary Guarantor or any other Subsidiary may act as Paying Agent or
Registrar.

 

The Partnership initially appoints the Trustee as
Registrar and Paying Agent.

 

SECTION 2.06                                            Paying
Agent to Hold Money in Trust.

 

The Partnership shall require each Paying Agent other
than the Trustee to agree in writing that the Paying Agent will hold in trust
for the benefit of Holders or the Trustee all money held by the Paying Agent
for the payment of principal of, premium, if any, or interest on or any
Additional Amounts with respect to Securities and will notify the Trustee of
any default by the Partnership in making any such payment.  While any such default continues, the Trustee
may require a Paying Agent to pay all money held by it to the Trustee and to
account for any funds disbursed.  The
Partnership at any time may require a Paying Agent to pay all money held by it
to the Trustee and to account for any funds disbursed.  Upon payment over to the Trustee and upon
accounting for any funds disbursed, the Paying Agent (if other than the Partnership,
a Subsidiary Guarantor or another Subsidiary of the Partnership) shall have no
further liability for the money.  If the
Partnership, a Subsidiary Guarantor or another Subsidiary of the Partnership
acts as Paying Agent, it shall segregate and hold in a separate trust fund for
the benefit of the Holders all money held by it as Paying Agent.  Each Paying Agent shall otherwise comply with
TIA § 317(b).

 

SECTION 2.07                                            Holder
Lists.

 

The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Holders and shall otherwise comply with TIA § 312(a).  If the Trustee is not the Registrar with
respect to a series of Securities, the Partnership shall furnish to the Trustee
at least five Business Days before each Interest Payment Date with respect to
such series of Securities, and at such other times as the Trustee may request
in writing, a list in such form and as of such date as the Trustee may
reasonably require of the

 

14

 

names and addresses of Holders of such series, and the
Partnership shall otherwise comply with TIA § 312(a).

 

SECTION 2.08                                            Transfer
and Exchange.

 

Except as set forth in Section 2.17 or as may be
provided pursuant to Section 2.01:

 

When Securities of any series are presented to the
Registrar with the request to register the transfer of such Securities or to
exchange such Securities for an equal principal amount of Securities of the
same series of like tenor and of other authorized denominations, the Registrar
shall register the transfer or make the exchange as requested if its
requirements and the requirements of this Indenture for such transactions are
met; provided, however, that the Securities
presented or surrendered for registration of transfer or exchange shall be duly
endorsed or accompanied by a written instruction of transfer in form reasonably
satisfactory to the Registrar duly executed by the Holder thereof or by his
attorney, duly authorized in writing, on which instruction the Registrar can
rely.

 

To permit registrations of transfers and exchanges,
the Partnership shall execute and the Trustee shall authenticate Securities at
the Registrar’s written request and submission of the Securities or Global
Securities.  No service charge shall be
made to a Holder for any registration of transfer or exchange (except as
otherwise expressly permitted herein), but the Partnership may require payment
of a sum sufficient to cover any transfer tax or similar governmental charge
payable in connection therewith (other than such transfer tax or similar
governmental charge payable upon exchanges pursuant to Section 2.12, 3.07 or
9.05). The Trustee shall authenticate Securities in accordance with the
provisions of Section 2.04.  Notwithstanding
any other provisions of this Indenture to the contrary, the Partnership shall
not be required to register the transfer or exchange of (a) any Security
selected for redemption in whole or in part pursuant to Article III, except the
unredeemed portion of any Security being redeemed in part, or (b) any Security
during the period beginning 15 Business Days prior to the mailing of notice of
any offer to repurchase Securities of the series required pursuant to the terms
thereof or of redemption of Securities of a series to be redeemed and ending at
the close of business on the day of mailing.

 

SECTION 2.09                                            Replacement
Securities.

 

If any mutilated Security is surrendered to the
Trustee, or if the Holder of a Security claims that the Security has been
destroyed, lost or stolen and the Partnership and the Trustee receive evidence
to their satisfaction of the destruction, loss or theft of such Security, the
Partnership shall issue and the Trustee shall authenticate a replacement
Security of the same series if the Trustee’s requirements are met.  If any such mutilated, destroyed, lost or
stolen Security has become or is about to become due and payable, the
Partnership in its discretion may, instead of issuing a new Security, pay such
Security.  If required by the Trustee,
any Subsidiary Guarantor or the Partnership, such Holder must furnish an
indemnity bond that is sufficient in the judgment of the Trustee and the
Partnership to protect the Partnership, each Subsidiary Guarantor, the Trustee,
any Agent or any authenticating agent from any loss that any

 

15

 

of them may suffer if a Security is replaced.  The Partnership and the Trustee may charge a
Holder for their expenses in replacing a Security.

 

Every replacement Security is an additional obligation
of the Partnership.

 

SECTION 2.10                                            Outstanding
Securities.

 

The Securities outstanding at any time are all the
Securities authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation, those reductions in the interest in a Global
Security effected by the Trustee hereunder and those described in this
Section 2.10 as not outstanding.

 

If a Security is replaced pursuant to Section 2.09, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it that
the replaced Security is held by a bona fide purchaser.

 

If the principal amount of any Security is considered
paid under Section 4.01, it ceases to be outstanding and interest on it ceases
to accrue.

 

A Security does not cease to be outstanding because
the Partnership, a Subsidiary Guarantor or an Affiliate of the Partnership or a
Subsidiary Guarantor holds the Security.

 

SECTION 2.11                                            Original
Issue Discount and Treasury Securities.

 

In determining whether the Holders of the required
principal amount of Securities have concurred in any direction, amendment,
supplement, waiver or consent, (a) the principal amount of an Original
Issue Discount Security shall be the principal amount thereof that would be due
and payable as of the date of such determination upon acceleration of the
Maturity thereof pursuant to Section 6.02 and (b) Securities owned by the
Partnership, a Subsidiary Guarantor or any other obligor upon the Securities or
any Affiliate of the Partnership, of a Subsidiary Guarantor or of such other
obligor shall be disregarded, except that, for the purpose of determining
whether the Trustee shall be protected in relying upon any such direction,
amendment, supplement, waiver or consent, only Securities that a Responsible
Officer of the Trustee actually knows are so owned shall be so disregarded.

 

SECTION 2.12                                            Temporary
Securities.

 

Until definitive Securities of any series are ready
for delivery, the Partnership may prepare and execute and the Trustee shall
authenticate temporary Securities. 
Temporary Securities shall be substantially in the form of definitive
Securities, but may have variations that the Partnership considers appropriate
for temporary Securities.  Without
unreasonable delay, the Partnership shall prepare and execute and the Trustee
shall authenticate definitive Securities in exchange for temporary
Securities.  Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.

 

16

 

SECTION 2.13                                            Cancellation.

 

The Partnership or any Subsidiary Guarantor at any
time may deliver Securities to the Trustee for cancellation.  The Registrar and the Paying Agent shall
forward to the Trustee any Securities surrendered to them for registration of
transfer, exchange, payment or redemption or for credit against any sinking
fund payment.  The Trustee shall cancel
all Securities surrendered for registration of transfer, exchange, payment,
redemption, replacement or cancellation or for credit against any sinking
fund.  Unless the Partnership shall
direct in writing that canceled Securities be returned to it, after written
notice to the Partnership all canceled Securities held by the Trustee shall be
disposed of in accordance with the usual disposal procedures of the Trustee,
and the Trustee shall maintain a record of their disposal.  The Partnership may not issue new Securities
to replace Securities that have been paid or that have been delivered to the
Trustee for cancellation.

 

SECTION 2.14                                            Payments;
Defaulted Interest.

 

Unless otherwise provided as contemplated by
Section 2.01, interest (except defaulted interest) on any Security that is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Persons who are registered Holders of that Security
at the close of business on the record date next preceding such Interest
Payment Date, even if such Securities are canceled after such record date and
on or before such Interest Payment Date. 
The Holder must surrender a Security to a Paying Agent to collect
principal payments.  Unless otherwise
provided with respect to the Securities of any series, the Partnership will pay
the principal of, premium (if any) and interest on and any Additional Amounts
with respect to the Securities in Dollars. 
Such amounts shall be payable at the offices of the Trustee or any
Paying Agent, provided that at the option of
the Partnership, the Partnership may pay such amounts (1) by wire transfer with
respect to Global Securities or (2) by check payable in such money mailed to a
Holder’s registered address with respect to any Securities.

 

If the Partnership defaults in a payment of interest
on the Securities of any series, the Partnership shall pay the defaulted interest
in any lawful manner plus, to the extent lawful, interest on the defaulted
interest, in each case at the rate provided in the Securities of such series
and in Section 4.01.  The Partnership may
pay the defaulted interest to the Persons who are Holders on a subsequent
special record date.  At least 15 days
before any special record date selected by the Partnership, the Partnership (or
the Trustee, in the name of and at the expense of the Partnership upon 20 days’
prior written notice from the Partnership setting forth such special record
date and the interest amount to be paid) shall mail to Holders a notice that
states the special record date, the related payment date and the amount of such
interest to be paid.

 

SECTION 2.15                                            Persons
Deemed Owners.

 

The Partnership, the Subsidiary Guarantors, the
Trustee, any Agent and any authenticating agent may treat the Person in whose
name any Security is registered as the owner of such Security for the purpose
of receiving payments of principal of, premium (if any) or interest on or any
Additional Amounts with respect to such Security and for all other
purposes.  None of the Partnership, any
Subsidiary Guarantor, the Trustee, any Agent or any authenticating agent shall
be affected by any notice to the contrary.

 

17

 

SECTION 2.16                                            Computation
of Interest.

 

Except as otherwise specified as contemplated by
Section 2.01 for Securities of any series, interest on the Securities of each
series shall be computed on the basis of a year comprising twelve 30-day
months.

 

SECTION 2.17                                            Global
Securities; Book-Entry Provisions.

 

If Securities of a series are issuable in global form
as a Global Security, as contemplated by Section 2.01, then,
notwithstanding clause (11) of Section 2.01 and the provisions of
Section 2.02, any such Global Security shall represent such of the
outstanding Securities of such series as shall be specified therein and may
provide that it shall represent the aggregate amount of outstanding Securities
from time to time endorsed thereon and that the aggregate amount of outstanding
Securities represented thereby may from time to time be reduced or increased,
as appropriate, to reflect exchanges, transfers or redemptions.  Any endorsement of a Global Security to reflect
the amount, or any increase or decrease in the amount, of outstanding
Securities represented thereby shall be made by the Trustee (i) in such manner
and upon instructions given by such Person or Persons as shall be specified in
such Security or in a Partnership Order to be delivered to the Trustee pursuant
to Section 2.04 or (ii) otherwise in accordance with written instructions
or such other written form of instructions as is customary for the Depositary
for such Security, from such Depositary or its nominee on behalf of any Person
having a beneficial interest in such Global Security.  Subject to the provisions of Section 2.04
and, if applicable, Section 2.12, the Trustee shall deliver and redeliver any
Security in permanent global form in the manner and upon instructions given by
the Person or Persons specified in such Security or in the applicable
Partnership Order.  With respect to the
Securities of any series that are represented by a Global Security, the Partnership
and the Subsidiary Guarantors authorize the execution and delivery by the
Trustee of a letter of representations or other similar agreement or instrument
in the form customarily provided for by the Depositary appointed with respect
to such Global Security.  Any Global
Security may be deposited with the Depositary or its nominee, or may remain in
the custody of the Trustee or the Security Custodian therefor pursuant to a
FAST Balance Certificate Agreement or similar agreement between the Trustee and
the Depositary.  If a Partnership Order has
been, or simultaneously is, delivered, any instructions by the Partnership with
respect to endorsement or delivery or redelivery of a Security in global form
shall be in writing but need not comply with Section 11.05 and need not be
accompanied by an Opinion of Counsel.

 

Members of, or participants in, the Depositary (“Agent
Members”) shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depositary, or the Trustee or the Security
Custodian as its custodian, or under such Global Security, and the Depositary
may be treated by the Partnership, any Subsidiary Guarantor, the Trustee or the
Security Custodian and any agent of the Partnership, any Subsidiary Guarantor,
the Trustee or the Security Custodian as the absolute owner of such Global
Security for all purposes whatsoever. 
Notwithstanding the foregoing, (i) the registered holder of a Global
Security of a series may grant proxies and otherwise authorize any Person, including
Agent Members and Persons that may hold interests through Agent Members, to
take any action that a Holder of Securities of such series is entitled to take
under this Indenture or the Securities of such series and (ii) nothing herein
shall prevent the Partnership, any Subsidiary Guarantor, the

 

18

 

Trustee or the Security Custodian, or any agent of the
Partnership, any Subsidiary Guarantor, the Trustee or the Security Custodian,
from giving effect to any written certification, proxy or other authorization
furnished by the Depositary or shall impair, as between the Depositary and its
Agent Members, the operation of customary practices governing the exercise of
the rights of a beneficial owner of any Security.

 

Notwithstanding Section 2.08, and except as otherwise
provided pursuant to Section 2.01, transfers of a Global Security shall be
limited to transfers of such Global Security in whole, but not in part, to the
Depositary, its successors or their respective nominees.  Interests of beneficial owners in a Global
Security may be transferred in accordance with the rules and procedures of the
Depositary.  Securities shall be
transferred to all beneficial owners in exchange for their beneficial interests
in a Global Security if, and only if, either (1) the Depositary notifies the
Partnership that it is unwilling or unable to continue as Depositary for the
Global Security and a successor Depositary is not appointed by the Partnership
within 90 days of such notice, (2) an Event of Default has occurred with
respect to such series and is continuing and the Registrar has received a
request from the Depositary to issue Securities in lieu of all or a portion of
the Global Security (in which case the Partnership shall deliver Securities
within 30 days of such request) or (3) the Partnership in its sole discretion
determines not to have the Securities represented by a Global Security.

 

In connection with any transfer of a portion of the
beneficial interests in a Global Security to beneficial owners pursuant to this
Section 2.17, the Registrar shall reflect on its books and records the date and
a decrease in the principal amount of the Global Security in an amount equal to
the principal amount of the beneficial interests in the Global Security to be
transferred, and the Partnership shall execute, and the Trustee upon receipt of
a Partnership Order for the authentication and delivery of Securities shall
authenticate and deliver, one or more Securities of the same series of like
tenor and amount.

 

In connection with the transfer of all of the
beneficial interests in a Global Security to beneficial owners pursuant to this
Section 2.17, the Global Security shall be deemed to be surrendered to the
Trustee for cancellation, and the Partnership shall execute, and the Trustee
shall authenticate and deliver, to each beneficial owner identified by the
Depositary in exchange for its beneficial interests in the Global Security, an
equal aggregate principal amount of Securities of authorized denominations.

 

None of the Partnership, any Subsidiary Guarantor or
the Trustee will have any responsibility or liability for any aspect of the
records relating to, or payments made on account of, Securities by the
Depositary, or for maintaining, supervising or reviewing any records of the
Depositary relating to such Securities. 
None of the Partnership, any Subsidiary Guarantor or the Trustee shall
be liable for any delay by the Holder of the Global Security or the Depositary
in identifying the beneficial owners, and each such Person may conclusively
rely on, and shall be protected in relying on, instructions from such Holder of
the Global Security or the Depositary for all purposes (including with respect
to the registration and delivery, and the respective principal amounts, of the
Securities to be issued).

 

The provisions of the last sentence of the third
paragraph of Section 2.04 shall apply to any Global Security if such Global
Security was never issued and sold by the

 

19

 

Partnership and the Partnership or a Subsidiary
Guarantor delivers to the Trustee the Global Security together with written
instructions (which need not comply with Section 11.05 and need not be
accompanied by an Opinion of Counsel) with regard to the cancellation or reduction
in the principal amount of Securities represented thereby, together with the
written statement contemplated by the last sentence of the third paragraph of
Section 2.04.

 

Notwithstanding the provisions of Sections 2.03
and 2.14, unless otherwise specified as contemplated by Section 2.01, payment
of principal of, premium (if any) and interest on and any Additional Amounts
with respect to any Global Security shall be made to the Depositary.

 

The Partnership in issuing Securities of any series
may use CUSIP numbers (if then generally in use), and, if so, the Trustee shall
use CUSIP numbers in notices of redemption as a convenience to Holders of
Securities of such series; provided that
any such notice may state that no representation is made as to the correctness
of such numbers either as printed on the Securities of such series or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities of such series, and
any such redemption shall not be affected by any defect in or omission of such
numbers.  The Partnership will promptly
notify the Trustee in writing of any change in the CUSIP numbers.

 

Notwithstanding anything herein to the contrary,
delivery or surrender of a Security shall not be required in the case of Global
Securities in order to obtain the rights or benefits provided hereunder upon
the delivery or surrender of a Security.

 

ARTICLE III

REDEMPTION

 

SECTION 3.01                                            Applicability
of Article.

 

Securities of any series that are redeemable before
their Stated Maturity shall be redeemable in accordance with their terms and
(except as otherwise specified as contemplated by Section 2.01 for Securities
of any series) in accordance with this Article III.

 

SECTION 3.02                                            Notice
to the Trustee.

 

If the Partnership elects to redeem Securities of any
series pursuant to this Indenture, it shall notify the Trustee of the
Redemption Date and the principal amount of Securities of such series to be
redeemed.  The Partnership shall so
notify the Trustee at least 45 days before the Redemption Date (unless a
shorter notice shall be satisfactory to the Trustee) by delivering to the
Trustee an Officers’ Certificate stating that such redemption will comply with
the provisions of this Indenture and of the Securities of such series.  Any such notice may be canceled at any time
prior to the mailing of such notice of such redemption to any Holder and shall
thereupon be void and of no effect.

 

SECTION 3.03                                            Selection
of Securities To Be Redeemed.

 

If less than all of the Securities of any series are
to be redeemed (unless all of the Securities of such series of a specified
tenor are to be redeemed), the particular Securities to be

 

20

 

redeemed shall be selected not more than 60 days prior
to the Redemption Date by the Trustee from the outstanding Securities of such
series (and tenor) not previously called for redemption, either pro rata, by
lot or by such other method as the Trustee shall deem appropriate in accordance
with industry standards at the time of such redemption and that may provide for
the selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series or of the
principal amount of Global Securities of such series; provided
that, if at the time of redemption such Securities are registered as a Global
Security, the Depositary shall determine, in accordance with its procedures,
the principal amount of such Securities held by each beneficial owner of
Securities to be redeemed.

 

The Trustee shall promptly notify the Partnership and
the Registrar in writing of the Securities selected for redemption and, in the
case of any Securities selected for partial redemption, the principal amount
thereof to be redeemed.

 

For purposes of this Indenture, unless the context
otherwise requires, all provisions relating to redemption of Securities shall
relate, in the case of any of the Securities redeemed or to be redeemed only in
part, to the portion of the principal amount thereof which has been or is to be
redeemed.

 

SECTION 3.04                                            Notice
of Redemption.

 

Notice of redemption shall be given by first-class
mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to
the Redemption Date, to each Holder of Securities to be redeemed, at the
address of such Holder appearing in the register of Securities maintained by
the Registrar.

 

All notices of redemption shall identify the
Securities to be redeemed and shall state:

 

(1)           the Redemption Date;

 

(2)           the Redemption Price (or the method
of calculating or determining the Redemption Price);

 

(3)           that, unless the Partnership and the
Subsidiary Guarantors default in making the redemption payment, interest on
Securities called for redemption ceases to accrue on and after the Redemption
Date, and the only remaining right of the Holders of such Securities is to
receive payment of the Redemption Price upon surrender to the Paying Agent of
the Securities redeemed;

 

(4)           if any Security is to be redeemed in
part, the portion of the principal amount thereof to be redeemed and that on
and after the Redemption Date, upon surrender for cancellation of such Security
to the Paying Agent, a new Security or Securities in the aggregate principal
amount equal to the unredeemed portion thereof will be issued without charge to
the Holder;

 

21

 

(5)           that Securities called for redemption
must be surrendered to the Paying Agent to collect the Redemption Price and the
name and address of the Paying Agent;

 

(6)           that the redemption is for a sinking
or analogous fund, if such is the case; and

 

(7)           the CUSIP number, if any, relating to
such Securities.

 

Notice of redemption of Securities to be redeemed at
the election of the Partnership shall be given by the Partnership or, at the
Partnership’s written request, by the Trustee in the name and at the expense of
the Partnership.

 

SECTION 3.05                                            Effect
of Notice of Redemption.

 

Once notice of redemption is mailed, Securities called
for redemption become due and payable on the Redemption Date and at the
Redemption Price.  Upon surrender to the
Paying Agent, such Securities called for redemption shall be paid at the
Redemption Price, but interest installments whose maturity is on or prior to
such Redemption Date will be payable on the relevant Interest Payment Dates to
the Holders of record at the close of business on the relevant record dates
specified pursuant to Section 2.01.

 

SECTION 3.06                                            Deposit
of Redemption Price.

 

On or prior to 11:00 a.m., New York City time, on any
Redemption Date, the Partnership or a Subsidiary Guarantor shall deposit with
the Trustee or the Paying Agent (or, if the Partnership or such Subsidiary
Guarantor is acting as the Paying Agent, segregate and hold in trust as
provided in Section 2.06) an amount of money in same day funds sufficient
to pay the Redemption Price of, and (except if the Redemption Date shall be an
Interest Payment Date) accrued interest on and any Additional Amounts with
respect to, the Securities or portions thereof which are to be redeemed on that
date, other than Securities or portions thereof called for redemption on that
date which have been delivered by the Partnership or a Subsidiary Guarantor to
the Trustee for cancellation.

 

If the Partnership or a Subsidiary Guarantor complies
with the preceding paragraph, then, unless the Partnership and the Subsidiary
Guarantors default in the payment of such Redemption Price, interest on the
Securities to be redeemed will cease to accrue on and after the applicable
Redemption Date, whether or not such Securities are presented for payment, and
the Holders of such Securities shall have no further rights with respect to
such Securities except for the right to receive the Redemption Price upon
surrender of such Securities.  If any
Security called for redemption shall not be so paid upon surrender thereof for
redemption, the principal, premium, if any, any Additional Amounts, and, to the
extent lawful, accrued interest thereon shall, until paid, bear interest from
the Redemption Date at the rate specified pursuant to Section 2.01 or provided
in the Securities or, in the case of Original Issue Discount Securities, such
Securities’ yield to maturity.

 

22

 

SECTION 3.07                                            Securities
Redeemed in Part.

 

Upon surrender to the Paying Agent of a Security to be
redeemed in part, the Partnership shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge
a new Security or Securities, of the same series and of any authorized
denomination as requested by such Holder in aggregate principal amount equal
to, and in exchange for, the unredeemed portion of the principal of the
Security so surrendered that is not redeemed.

 

SECTION 3.08                                            Purchase
of Securities.

 

Unless otherwise specified as contemplated by Section
2.01, the Partnership, any Subsidiary Guarantor and any Affiliate of the
Partnership or any Subsidiary Guarantor may at any time purchase or otherwise
acquire Securities in the open market or by private agreement.  Any such acquisition shall not operate as or
be deemed for any purpose to be a redemption of the indebtedness represented by
such Securities.  Any Securities
purchased or acquired by the Partnership or a Subsidiary Guarantor may be
delivered to the Trustee and, upon such delivery, the indebtedness represented thereby
shall be deemed to be satisfied.  Section
2.13 shall apply to all Securities so delivered.

 

SECTION 3.09                                            Mandatory
and Optional Sinking Funds.

 

The minimum amount of any sinking fund payment
provided for by the terms of Securities of any series is herein referred to as
a “mandatory sinking fund payment,” and any payment in excess of such minimum
amount provided for by the terms of Securities of any series is herein referred
to as an “optional sinking fund payment.” 
Unless otherwise provided by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 3.10.  Each sinking fund
payment shall be applied to the redemption of Securities of any series as
provided for by the terms of Securities of such series and by this
Article III.

 

SECTION 3.10                                            Satisfaction
of Sinking Fund Payments with Securities.

 

The Partnership or a Subsidiary Guarantor may deliver
outstanding Securities of a series (other than any previously called for redemption)
and may apply as a credit Securities of a series that have been redeemed either
at the election of the Partnership pursuant to the terms of such Securities or
through the application of permitted optional sinking fund payments pursuant to
the terms of such Securities, in each case in satisfaction of all or any part
of any sinking fund payment with respect to the Securities of such series
required to be made pursuant to the terms of such series of Securities; provided that such Securities have not been previously so
credited.  Such Securities shall be
received and credited for such purpose by the Trustee at the Redemption Price
specified in such Securities for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.

 

SECTION 3.11                                            Redemption
of Securities for Sinking Fund.

 

Not less than 45 days prior (unless a shorter period
shall be satisfactory to the Trustee) to each sinking fund payment date for any
series of Securities, the Partnership will

 

23

 

deliver to the Trustee an Officers’ Certificate of
K-Sea General Partner GP LLC specifying the amount of the next ensuing sinking
fund payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivery of or by crediting
Securities of that series pursuant to Section 3.10 and will also deliver or
cause to be delivered to the Trustee any Securities to be so delivered.  Failure of the Partnership to timely deliver
or cause to be delivered such Officers’ Certificate and Securities specified in
this paragraph, if any, shall not constitute a default but shall constitute the
election of the Partnership (i) that the mandatory sinking fund payment for
such series due on the next succeeding sinking fund payment date shall be paid
entirely in cash without the option to deliver or credit Securities of such
series in respect thereof and (ii) that the Partnership will make no optional
sinking fund payment with respect to such series as provided in this Section 3.11.

 

If the sinking fund payment or payments (mandatory or
optional or both) to be made in cash on the next succeeding sinking fund
payment date plus any unused balance of any preceding sinking fund payments
made in cash shall exceed $100,000 or a lesser sum if the Partnership shall so
request with respect to the Securities of any particular series, such cash
shall be applied on the next succeeding sinking fund payment date to the
redemption of Securities of such series at the sinking fund redemption price
together with accrued interest to the date fixed for redemption.  If such amount shall be $100,000 or less and
the Partnership makes no such request then it shall be carried over until a sum
in excess of $100,000 is available.  Not
less than 30 days before each such sinking fund payment date, the Trustee shall
select the Securities to be redeemed upon such sinking fund payment date in the
manner specified in Section 3.03 and cause notice of the redemption thereof to
be given in the name of and at the expense of the Partnership in the manner
provided in Section 3.04.  Such notice
having been duly given, the redemption of such Securities shall be made upon
the terms and in the manner stated in Sections 3.05, 3.06 and 3.07.

 

ARTICLE IV

COVENANTS

 

SECTION 4.01                                            Payment
of Securities.

 

The Partnership shall pay the principal of, premium
(if any) and interest on and any Additional Amounts with respect to the
Securities of each series on the dates and in the manner provided in the
Securities of such series and in this Indenture.  Principal, premium, interest and any
Additional Amounts shall be considered paid on the date due if the Paying Agent
(other than the Partnership, a Subsidiary Guarantor or a Subsidiary) holds by
11:00 a.m., New York City time, on that date money deposited by the Partnership
or a Subsidiary Guarantor designated for and sufficient to pay all principal,
premium, interest and any Additional Amounts then due.

 

The Partnership shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal and premium (if any), at a rate equal to the then applicable interest
rate on the Securities to the extent lawful; and it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law)
on overdue installments of interest and any Additional Amount (without regard
to any applicable grace period) at the same rate to the extent lawful.

 

24

 

SECTION 4.02                                            Maintenance
of Office or Agency.

 

The Partnership will maintain in each Place of Payment
for any series of Securities an office or agency (which may be an office of the
Trustee, the Registrar or the Paying Agent) where Securities of that series may
be presented for registration of transfer or exchange, where Securities of that
series may be presented for payment and where notices and demands to or upon the
Partnership or a Subsidiary Guarantor in respect of the Securities of that
series and this Indenture may be served. Unless otherwise designated by the
Partnership by written notice to the Trustee and the Subsidiary Guarantors,
such office or agency shall be the office of the Trustee in The City of New
York, which on the date hereof is located at                                                             .  The Partnership will give prompt written
notice to the Trustee and the Subsidiary Guarantors of the location, and any
change in the location, of such office or agency.  If at any time the Partnership shall fail to
maintain any such required office or agency or shall fail to furnish the
Trustee and the Subsidiary Guarantors with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.

 

The Partnership may also from time to time designate
one or more other offices or agencies where the Securities of one or more
series may be presented or surrendered for any or all such purposes and may
from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner
relieve the Partnership of its obligation to maintain an office or agency in
each Place of Payment for Securities of any series for such purposes.  The Partnership will give prompt written
notice to the Trustee of any such designation or rescission and of any change
in the location of any such other office or agency.

 

SECTION 4.03                                            SEC
Reports; Financial Statements.

 

(a)           If
the Partnership is subject to Section 13 or 15(d) of the Exchange Act, the
Partnership shall file with the Trustee, within 15 days after it files the same
with the SEC, copies of the annual reports and the information, documents and
other reports (or copies of such portions of any of the foregoing as the SEC
may by rules and regulations prescribe) that the Partnership is required to
file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act.  If this Indenture is qualified under the TIA,
but not otherwise, the Partnership shall also comply with the provisions of TIA
§ 314(a).

 

(b)           If
the Partnership is not subject to the requirements of Section 13 or 15(d) of
the Exchange Act, the Partnership shall furnish to all Holders of Rule 144A
Securities and prospective purchasers of Rule 144A Securities designated by the
Holders of Rule 144A Securities, promptly upon their request, the information
required to be delivered pursuant to Rule 144A(d)(4) promulgated under the
Securities Act of 1933, as amended.

 

(c)           The
Partnership intends to file the reports, information and documents referred to
in Section 4.03(a) hereof with the SEC in electronic form pursuant to
Regulation S-T promulgated by the SEC using the SEC’s Electronic Data
Gathering, Analysis and Retrieval (“EDGAR”) system.  The Partnership shall notify the Trustee in
the manner prescribed herein of each such filing.  The Trustee is hereby authorized and directed
to access the EDGAR system for purposes of retrieving the reports so
filed.  Compliance with the foregoing
shall constitute

 

25

 

delivery by the Partnership of such reports to the Trustee in
compliance with the provisions of TIA § 314(a). 
The Trustee shall have no duty to search for or obtain any electronic or
other filings that the Partnership makes with the SEC, regardless of whether
such filings are periodic, supplemental or otherwise.  Delivery of the reports, information and
documents to the Trustee pursuant to this Section 4.03 shall be solely for the
purposes of compliance with this Section 4.03 and with TIA § 314(a).  The Trustee’s receipt of such reports,
information and documents shall not constitute notice to it of the content
thereof or of any matter determinable from the content thereof, including the
Partnership’s and any Subsidiary Guarantor’s compliance with any of their
covenants hereunder, as to which the Trustee is entitled to rely upon Officers’
Certificates.

 

SECTION 4.04                                            Compliance
Certificate.

 

(a)           Each
of the Partnership and the Subsidiary Guarantors shall deliver to the Trustee,
within 120 days after the end of each fiscal year of the Partnership and the
Subsidiary Guarantors, a statement signed by an Officer of K-Sea General
Partner GP LLC or such Subsidiary Guarantor, as the case may be, which need not
constitute an Officers’ Certificate, complying with TIA § 314(a)(4) and stating
that in the course of performance by the signing Officer of his duties as such
Officer of K-Sea General Partner GP LLC or such Subsidiary Guarantor, as the
case may be, he would normally obtain knowledge of the keeping, observing,
performing and fulfilling by the Partnership or such Subsidiary Guarantor, as
the case may be, of its obligations under this Indenture, and further stating
that to the best of his knowledge the Partnership or such Subsidiary Guarantor,
as the case may be, has kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and is not in default in the performance
or observance of any of the terms, provisions and conditions hereof (or, if a
Default or Event of Default shall have occurred, describing all such Defaults
or Events of Default of which such Officer may have knowledge and what action
the Partnership or such Subsidiary Guarantor, as the case may be, is taking or
proposes to take with respect thereto).

 

(b)           The
Partnership or any Subsidiary Guarantor shall, so long as Securities of any
series are outstanding, deliver to the Trustee, as soon as practicable, but in
no event more than five Business Days, after any Officer of K-Sea General
Partner GP LLC or such Subsidiary Guarantor, as the case may be, becoming aware
of any Default or Event of Default under this Indenture, an Officers’ Certificate
specifying such Default or Event of Default and what action the Partnership or
such Subsidiary Guarantor, as the case may be, is taking or proposes to take
with respect thereto.

 

SECTION 4.05                                            Existence.

 

Subject to Article V, the Partnership and each of the
Subsidiary Guarantors that is a Significant Subsidiary shall do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence.  This Section 4.05 shall not
prohibit or restrict the Partnership or any Subsidiary Guarantor from
converting into a different form of legal entity.

 

SECTION 4.06                                            Waiver
of Stay, Extension or Usury Laws.

 

Each of the Partnership and the Subsidiary Guarantors
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner

 

26

 

whatsoever claim or take the benefit or advantage of,
any stay or extension law or any usury law or other law that would prohibit or
forgive it from paying all or any portion of the principal of or interest on
the Securities as contemplated herein, wherever enacted, now or at any time
hereafter in force, or which may affect the covenants or the performance of
this Indenture; and (to the extent that it may lawfully do so) each of the
Partnership and the Subsidiary Guarantors hereby expressly waives all benefit
or advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.

 

SECTION 4.07                                            Additional
Amounts.

 

If the Securities of a series expressly provide for
the payment of Additional Amounts, the Partnership will pay to the Holder of
any Security of such series Additional Amounts as expressly provided
therein.  Whenever in this Indenture
there is mentioned, in any context, the payment of the principal of or any
premium or interest on, or in respect of, any Security of any series or the net
proceeds received from the sale or exchange of any Security of any series, such
mention shall be deemed to include mention of the payment of Additional Amounts
provided for in this Section 4.07 to the extent that, in such context,
Additional Amounts are, were or would be payable in respect thereof pursuant to
the provisions of this Section 4.07 and express mention of the payment of
Additional Amounts (if applicable) in any provisions hereof shall not be
construed as excluding Additional Amounts in those provisions hereof where such
express mention is not made.

 

ARTICLE V

SUCCESSORS

 

SECTION 5.01                                            Limitations
on Mergers and Consolidations.

 

Neither the Partnership nor any Subsidiary Guarantor
shall, in any transaction or series of transactions, consolidate with or merge
into any Person, or sell, lease, convey, transfer or otherwise dispose of all
or substantially all of its assets to any Person (other than a consolidation or
merger of the Partnership and one or more Subsidiary Guarantors or two or more
Subsidiary Guarantors, or a sale, lease, conveyance, transfer or other
disposition of all or substantially all of the assets of the Partnership to a
Subsidiary Guarantor, a Subsidiary Guarantor to the Partnership or of a
Subsidiary Guarantor to another Subsidiary Guarantor), unless:

 

(1)           either (a) the Partnership or such
Subsidiary Guarantor, as the case may be, shall be the continuing Person or (b)
the Person (if other than the Partnership or such Subsidiary Guarantor) formed
by such consolidation or into which the Partnership or such Subsidiary
Guarantor is merged, or to which such sale, lease, conveyance, transfer or
other disposition shall be made (collectively, the “Successor”), is organized
and validly existing under the laws of the United States of America, any political
subdivision thereof or any State thereof or the District of Columbia, and
expressly assumes by supplemental indenture, in the case of the Partnership,
the due and punctual payment of the principal of, premium (if any) and interest
on and any Additional Amounts with respect to all the Securities and the
performance of the Partnership’s covenants and

 

27

 

obligations under this
Indenture and the Securities, or, in the case of such Subsidiary Guarantor, the
performance of the Guarantee and such Subsidiary Guarantor’s covenants and
obligations under this Indenture and the Securities;

 

(2)           immediately after giving effect to
such transaction or series of transactions, no Default or Event of Default
shall have occurred and be continuing or would result therefrom; and

 

(3)           in the case of clause (1)(b) above,
the Successor delivers to the Trustee an Officers’ Certificate and an Opinion
of Counsel, each stating that the transaction and such supplemental indenture
comply with this Indenture.

 

SECTION 5.02                                            Successor
Person Substituted.

 

Upon any consolidation or merger of the Partnership or
a Subsidiary Guarantor, as the case may be, or any sale, lease, conveyance,
transfer or other disposition of all or substantially all of the assets of the
Partnership or such Subsidiary Guarantor in accordance with Section 5.01, the
Successor formed by such consolidation or into or with which the Partnership or
such Subsidiary Guarantor is merged or to which such sale, lease, conveyance,
transfer or other disposition is made shall succeed to, and be substituted for,
and may exercise every right and power of the Partnership or such Subsidiary
Guarantor, as the case may be, under this Indenture and the Securities with the
same effect as if such Successor had been named as the Partnership or such
Subsidiary Guarantor, as the case may be, herein and the predecessor
Partnership or Subsidiary Guarantor, in the case of a sale, conveyance,
transfer or other disposition, shall be released from all obligations under
this Indenture, the Securities and, in the case of a Subsidiary Guarantor, its
Guarantee.

 

ARTICLE VI

DEFAULTS AND REMEDIES

 

SECTION 6.01                                            Events
of Default.

 

Unless either inapplicable to a particular series or
specifically deleted or modified in or pursuant to the supplemental indenture
or Board Resolution establishing such series of Securities or in the form of
Security for such series, an “Event of Default,” wherever used herein with
respect to Securities of any series, occurs if:

 

(1)           there is a default in the payment of
interest on or any Additional Amounts with respect to any Security of that
series when the same becomes due and payable and such default continues for a
period of 30 days;

 

(2)           there is a default in the payment of
the principal of or premium, if any, on any Securities of that series as and
when the same shall become due and payable, whether at Stated Maturity, upon
redemption, by declaration, upon required repurchase or otherwise;

 

28

 

(3)           there
is a default in the payment of any sinking fund payment with respect to any
Securities of that series as and when the same shall become due and payable;

 

(4)           there
is a failure on the part of the Partnership, or if any series of Securities
outstanding under this Indenture is entitled to the benefits of a Guarantee,
any of the Subsidiary Guarantors, duly to observe or perform any other of the
covenants or agreements on the part of the Partnership, or if applicable, any
of the Subsidiary Guarantors, in the Securities of that series, in any
resolution of the Board of Directors authorizing the issuance of that series of
Securities, in this Indenture with respect to such series or in any
supplemental Indenture with respect to such series (other than a default in the
performance of a covenant which is specifically dealt with elsewhere in this
Section 6.01), continuing for a period of 60 days after the date on which
written notice specifying such failure and requiring the Partnership, or if
applicable, the Subsidiary Guarantors, to remedy the same shall have been
given, by registered or certified mail, to the Partnership, or if applicable,
the Subsidiary Guarantors, by the Trustee or to the Partnership, or if
applicable, the Subsidiary Guarantors, and the Trustee by the Holders of at
least 25% in aggregate principal amount of the Securities of that series at the
time outstanding;

 

(5)           the
Partnership, or if that series of Securities is entitled to the benefits of a
Guarantee by the Subsidiary Guarantors, any of such Subsidiary Guarantors that
is a Significant Subsidiary, pursuant to or within the meaning of any
Bankruptcy Law:

 

(A)          commences
a voluntary case,

 

(B)           consents
to the entry of an order for relief against it in an involuntary case,

 

(C)           consents
to the appointment of a Bankruptcy Custodian of it or for all or substantially
all of its property, or

 

(D)          makes
a general assignment for the benefit of its creditors;

 

(6)           a
court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that remains unstayed and in effect for 60 days and that:

 

(A)          is
for relief against the Partnership or any Subsidiary Guarantor that is a
Significant Subsidiary as debtor in an involuntary case,

 

(B)           appoints
a Bankruptcy Custodian of the Partnership or any Subsidiary Guarantor that is a
Significant Subsidiary or a Bankruptcy Custodian for all or substantially all
of the property of the Partnership or any Subsidiary Guarantor that is a
Significant Subsidiary, or

 

(C)           orders
the liquidation of the Partnership or any Subsidiary Guarantor that is a
Significant Subsidiary;

 

29

 

(7)           that
series of Securities is entitled to the benefits of a Guarantee by the
Subsidiary Guarantors, the Guarantee of any of such Subsidiary Guarantors that
is a Significant Subsidiary ceases to be in full force and effect with respect
to Securities of that series (except as otherwise provided in this Indenture)
or is declared null and void in a judicial proceeding, or any such Subsidiary
Guarantor denies or disaffirms its obligations under this Indenture or such
Guarantee; or

 

(8)           any
other Event of Default provided with respect to Securities of that series
occurs.

 

The term “Bankruptcy Custodian” means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.

 

The Trustee shall not be deemed to know or have notice
of any Default or Event of Default unless a Responsible Officer of the Trustee
has actual knowledge thereof or unless written notice of any event which is in
fact such a Default or Event of Default is received by the Trustee at the
Corporate Trust Office of the Trustee, and such notice references the
Securities and this Indenture.

 

When a Default is cured, it ceases.

 

A Default under clause (4) or (8) of this Section 6.01
is not an Event of Default until the Trustee notifies the Partnership and the
Subsidiary Guarantors, or the Holders of at least 25% in principal amount of
the then outstanding Securities of the series affected by such Default (or, in
the case of a Default under clause (4) of this Section 6.01, if outstanding
Securities of other series are affected by such Default, then at least 25% in
principal amount of the then outstanding Securities so affected) notify the
Partnership, the Subsidiary Guarantors and the Trustee, of the Default, and the
Partnership or the applicable Subsidiary Guarantor, as the case may be, fails
to cure the Default within 60 days after receipt of the notice.  The notice must specify the Default, demand
that it be remedied and state that the notice is a “Notice of Default.”

 

SECTION 6.02                                            Acceleration.

 

If an Event of Default with respect to any Securities
of any series at the time outstanding (other than an Event of Default specified
in clause (5) or (6) of Section 6.01) occurs and is continuing, the Trustee by
notice to the Partnership and the Subsidiary Guarantors, or the Holders of at
least 25% in principal amount of the then outstanding Securities of the series
affected by such Event of Default (or, in the case of an Event of Default
described in clause (4) of Section 6.01, if outstanding Securities of
other series are affected by such Event of Default, then at least 25% in
principal amount of the then outstanding Securities so affected) by notice to
the Partnership, the Subsidiary Guarantors and the Trustee, may declare the
principal of (or, if any such Securities are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) and all accrued and unpaid interest on all then
outstanding Securities of such series or of all series, as the case may be, to
be due and payable.  Upon any such
declaration, the amounts due and payable on the Securities shall be due and payable
immediately.  If an Event of Default
specified in clause (5) or (6) of Section 6.01 hereof occurs, such amounts
shall ipso facto become and be immediately due
and payable without any

 

30

 

declaration, notice or
other act on the part of the Trustee or any Holder.  The Holders of a majority in principal amount
of the then outstanding Securities of the series affected by such Event of
Default or all series so affected, as the case may be, by written notice to the
Trustee may rescind an acceleration and its consequences (other than nonpayment
of principal of or premium or interest on or any Additional Amounts with
respect to the Securities) if the rescission would not conflict with any
judgment or decree and if all existing Events of Default with respect to
Securities of that series (or of all series, as the case may be) have been
cured or waived, except nonpayment of principal, premium, interest or any
Additional Amounts that has become due solely because of the acceleration.

 

SECTION 6.03                                            Other
Remedies.

 

If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy to collect the payment of principal of,
or premium, if any, or interest on the Securities or to enforce the performance
of any provision of the Securities or this Indenture.

 

The Trustee may maintain a proceeding even if it does
not possess any of the Securities or does not produce any of them in the
proceeding.  A delay or omission by the
Trustee or any Holder in exercising any right or remedy accruing upon an Event
of Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. 
All remedies are cumulative to the extent permitted by law.

 

SECTION 6.04                                            Waiver
of Defaults.

 

Subject to Sections 6.07 and 9.02, the Holders of a
majority in principal amount of the then outstanding Securities of any series
or of all series affected thereby (acting as one class) by notice to the
Trustee may waive an existing or past Default or Event of Default with respect
to such series or all series so affected, as the case may be, and its
consequences (including waivers obtained in connection with a tender offer or
exchange offer for Securities of such series or all series so affected or a
solicitation of consents in respect of Securities of such series or all series
so affected, provided that in each case such
offer or solicitation is made to all Holders of then outstanding Securities of
such series or all series so affected (but the terms of such offer or
solicitation may vary from series to series)), except (1) a continuing
Default or Event of Default in the payment of the principal of, or premium, if
any, or interest on or any Additional Amounts with respect to any Security or
(2) a continued Default in respect of a provision that under
Section 9.02 cannot be amended or supplemented without the consent of each
Holder affected.  Upon any such waiver,
such Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.

 

SECTION 6.05                                            Control
by Majority.

 

With respect to Securities of any series, the Holders
of a majority in principal amount of the then outstanding Securities of such
series may direct in writing the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it relating to or arising under an Event of Default
described in

 

31

 

clause (1), (2), (3)
or (8) of Section 6.01, and with respect to all Securities, the Holders of
a majority in principal amount of all the then outstanding Securities affected
may direct in writing the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on it not relating to or arising under such an Event of Default.  However, the Trustee may refuse to follow any
direction that conflicts with applicable law or this Indenture, that the
Trustee determines may be unduly prejudicial to the rights of other Holders, or
that may involve the Trustee in personal liability; provided,
however, that the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction.  Prior to taking any action hereunder, the
Trustee shall be entitled to indemnification satisfactory to it in its sole discretion
from Holders directing the Trustee against all losses and expenses caused by
taking or not taking such action.

 

SECTION 6.06                                            Limitations
on Suits.

 

Subject to Section 6.07 hereof, a Holder of a Security
of any series may pursue a remedy with respect to this Indenture or the
Securities of such series or the related Guarantees, if any, only if:

 

(1)           the
Holder gives to the Trustee written notice of a continuing Event of Default
with respect to such series;

 

(2)           the
Holders of at least 25% in principal amount of the then outstanding Securities
of such series make a written request to the Trustee to pursue the remedy;

 

(3)           such
Holder or Holders offer to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;

 

(4)           the
Trustee does not comply with the request within 60 days after receipt of the
request and the offer of indemnity; and

 

(5)           during
such 60-day period the Holders of a majority in principal amount of the
Securities of that series do not give the Trustee a direction inconsistent with
the request.

 

A Holder may not use this Indenture to prejudice the
rights of another Holder or to obtain a preference or priority over another
Holder.

 

SECTION 6.07                                            Rights
of Holders to Receive Payment.

 

Notwithstanding any other provision of this Indenture,
the right of any Holder of a Security to receive payment of principal of and
premium, if any, and interest on and any Additional Amounts with respect to the
Security, on or after the respective due dates expressed in the Security, or to
bring suit for the enforcement of any such payment on or after such respective
dates, is absolute and unconditional and shall not be impaired or affected
without the consent of the Holder.

 

32

 

SECTION 6.08                                            Collection
Suit by Trustee.

 

If an Event of Default specified in clause (1) or (2)
of Section 6.01 hereof occurs and is continuing, the Trustee is authorized to
recover judgment in its own name and as trustee of an express trust against the
Partnership or a Subsidiary Guarantor for the amount of principal, premium (if
any), interest and any Additional Amounts remaining unpaid on the Securities of
the series affected by the Event of Default, and interest on overdue principal
and premium, if any, and, to the extent lawful, interest on overdue interest,
and such further amount as shall be sufficient to cover the costs and expenses
of collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.

 

SECTION 6.09                                            Trustee
May File Proofs of Claim.

 

The Trustee is authorized to file such proofs of claim
and other papers or documents and to take such actions, including participating
as a member, voting or otherwise, of any committee of creditors, as may be
necessary or advisable to have the claims of the Trustee (including any claim
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and the Holders allowed in any judicial
proceedings relative to the Partnership or a Subsidiary Guarantor or their
respective creditors or properties and shall be entitled and empowered to
collect, receive and distribute any money or other property payable or
deliverable on any such claims and any Bankruptcy Custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments
to the Trustee, and in the event that the Trustee shall consent to the making
of such payments directly to the Holders, to pay to the Trustee any amount due
to it for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 7.07. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
and any other amounts due the Trustee under Section 7.07 out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties which the Holders of the
Securities may be entitled to receive in such proceeding whether in liquidation
or under any plan of reorganization or arrangement or otherwise.  Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf
of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.

 

SECTION 6.10                                            Priorities.

 

If the Trustee collects any money pursuant to this
Article VI, it shall pay out the money in the following order:

 

First:  to the
Trustee for amounts due under Section 7.07;

 

Second:  to Holders for amounts due and unpaid on the
Securities in respect of which or for the benefit of which such money has been
collected, for principal, premium (if any), interest and any Additional Amounts
ratably, without preference or priority of any kind,

 

33

 

according to the amounts due and payable on such
Securities for principal, premium (if any), interest and any Additional
Amounts, respectively; and

 

Third:  to the
Partnership.

 

The Trustee, upon prior written notice to the
Partnership, may fix record dates and payment dates for any payment to Holders
pursuant to this Article VI.

 

To the fullest extent allowed under applicable law, if
for the purpose of obtaining a judgment against the Partnership or a Subsidiary
Guarantor in any court it is necessary to convert the sum due in respect of the
principal of, premium (if any) or interest on or Additional Amounts with
respect to the Securities of any series (the “Required Currency”) into a currency
in which a judgment will be rendered (the “Judgment Currency”), the rate of
exchange used for purposes of rendering the judgment shall be the rate at which
in accordance with normal banking procedures the Trustee could purchase in The
City of New York the Required Currency with the Judgment Currency on the
Business Day in The City of New York next preceding that on which final
judgment is given.  None of the
Partnership, any Subsidiary Guarantor or the Trustee shall be liable for any
shortfall nor shall it benefit from any windfall in payments to Holders of
Securities under this Section 6.10 caused by a change in exchange rates between
the time the amount of a judgment against it is calculated as above and the
time the Trustee converts the Judgment Currency into the Required Currency to
make payments under this Section 6.10 to Holders of Securities, but payment of
such judgment shall discharge all amounts owed by the Partnership and the
Subsidiary Guarantors on the claim or claims underlying such judgment.

 

SECTION 6.11                                            Undertaking
for Costs.

 

In any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for any action taken or
omitted by it as a trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys’ fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant.  This Section 6.11 does not
apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07, or
a suit by a Holder or Holders of more than 10% in principal amount of the then
outstanding Securities of any series.

 

ARTICLE VII

TRUSTEE

 

SECTION 7.01                                            Duties
of Trustee.

 

(a)           If an Event of Default has occurred
and is continuing, the 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
such exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person’s own affairs.

 

34

 

(b)           Except during the continuance of an
Event of Default with respect to the Securities of any series:

 

(1)           the
Trustee need perform only those duties that are specifically set forth in this
Indenture and no others, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and

 

(2)           in
the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture. 
However, the Trustee shall examine such certificates and opinions to
determine whether, on their face, they appear to conform to the requirements of
this Indenture.

 

(c)           The Trustee may not be relieved from
liabilities for its own negligent action, its own negligent failure to act or
its own willful misconduct, except that:

 

(1)           this
paragraph does not limit the effect of Section 7.01(b);

 

(2)           the
Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and

 

(3)           the
Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to
Section 6.05.

 

(d)           Whether or not therein expressly so
provided, every provision of this Indenture that in any way relates to the
Trustee is subject to the provisions of this Section 7.01.

 

(e)           No provision of this Indenture shall
require the Trustee to expend or risk its own funds or incur any
liability.  The Trustee may refuse to
perform any duty or exercise any right or power unless it receives indemnity
satisfactory to it against any loss, liability or expense.

 

(f)            The Trustee shall not be liable for
interest on any money received by it except as the Trustee may agree in writing
with the Partnership and the Subsidiary Guarantors.  Money held in trust by the Trustee need not
be segregated from other funds except to the extent required by law.  All money received by the Trustee shall,
until applied as herein provided, be held in trust for the payment of the
principal of, premium (if any) and interest on and Additional Amounts with
respect to the Securities.

 

SECTION 7.02                                            Rights
of Trustee.

 

(a)           The Trustee may conclusively rely on
any document believed by it to be genuine and to have been signed or presented
by the proper Person.  The Trustee need
not investigate any fact or matter stated in the document.

 

35

 

(b)           Before the Trustee acts or refrains
from acting, it may require instruction, an Officers’ Certificate or an Opinion
of Counsel or both to be provided.  The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such instruction, Officers’ Certificate or Opinion of
Counsel.  The Trustee may consult at the
Partnership’s expense with counsel of its selection and the advice of such
counsel or any 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 reliance thereon.

 

(c)           The Trustee may act through agents
and shall not be responsible for the misconduct or negligence of any agent
appointed with due care.

 

(d)           The Trustee shall not be liable for
any action it takes or omits to take in good faith which it believes to be
authorized or within its rights or powers conferred upon it by this Indenture.

 

(e)           Unless otherwise specifically
provided in this Indenture, any demand, request, direction or notice from the
Partnership or any Subsidiary Guarantor shall be sufficient if signed by an
Officer of K-Sea General Partner GP LLC.

 

(f)            The Trustee shall not be charged
with knowledge of any Default or Event of Default with respect to the
Securities, unless either (1) a Responsible Officer shall have actual knowledge
of such Default or Event of Default or (2) written notice of such Default or
Event of Default shall have been given to the Trustee by the Partnership, any
Subsidiary Guarantor or by any Holder of the Securities, and such notice
references the Securities and this Indenture.

 

(g)           The permissive rights of the Trustee
enumerated herein shall not be construed as duties.

 

SECTION 7.03                                            May
Hold Securities.

 

The Trustee in its individual or any other capacity
may become the owner or pledgee of Securities and may otherwise deal with the
Partnership, any Subsidiary Guarantor or any of their respective Affiliates
with the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights and duties. 
However, the Trustee is subject to Sections 7.10 and 7.11.

 

SECTION 7.04                                            Trustee’s
Disclaimer.

 

The Trustee makes no representation as to the validity
or adequacy of this Indenture or the Securities, it shall not be accountable
for the Partnership’s use of the proceeds from the Securities or any money paid
to the Partnership or any Subsidiary Guarantor or upon the Partnership’s or
such Subsidiary Guarantor’s direction under any provision hereof, it shall not
be responsible for the use or application of any money received by any Paying
Agent other than the Trustee and it shall not be responsible for any statement
or recital herein or any statement in the Securities other than its certificate
of authentication.

 

36

 

SECTION 7.05                                            Notice
of Defaults.

 

If a Default or Event of Default with respect to the
Securities of any series occurs and is continuing and it is known to the
Trustee, the Trustee shall mail to Holders of Securities of such series a
notice of the Default or Event of Default within 90 days after it occurs.  Except in the case of a Default or Event of
Default in payment of principal of, premium (if any) and interest on and
Additional Amounts or any sinking fund installment with respect to the
Securities of such series, the Trustee may withhold the notice if and so long
as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of Holders of Securities of such
series.

 

SECTION 7.06                                            Reports
by Trustee to Holders.

 

Within 60 days after each January 15 of each year
after the execution of this Indenture, the Trustee shall mail to Holders of a
series, the Subsidiary Guarantors and the Partnership a brief report dated as
of such reporting date that complies with TIA § 313(a); provided, however, that if no event described in TIA
§ 313(a) has occurred within the twelve months preceding the reporting
date with respect to a series, no report need be transmitted to Holders of such
series.  The Trustee also shall comply
with TIA § 313(b).  The Trustee
shall also transmit by mail all reports if and as required by TIA
§§ 313(c) and 313(d).

 

A copy of each report at the time of its mailing to
Holders of a series of Securities shall be filed by the Partnership or a
Subsidiary Guarantor with the SEC and each securities exchange, if any, on
which the Securities of such series are listed. The Partnership shall notify
the Trustee if and when any series of Securities is listed on any securities
exchange.

 

SECTION 7.07                                            Compensation
and Indemnity.

 

The Partnership agrees to pay to the Trustee for its
acceptance of this Indenture and services hereunder such compensation as the
Partnership and the Trustee shall from time to time agree in writing. The
Trustee’s compensation shall not be limited by any law on compensation of a
trustee of an express trust.  The
Partnership agrees to reimburse the Trustee upon request for all reasonable
disbursements, advances and expenses incurred by it.  Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee’s agents and counsel.

 

The Partnership hereby indemnifies the Trustee and any
predecessor Trustee against any and all loss, liability, damage, claim or
expense, including taxes (other than taxes based upon, measured by or
determined by the income of the Trustee), incurred by it arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, except as set forth in the next following paragraph.  The Trustee shall notify the Partnership and
the Subsidiary Guarantors promptly of any claim for which it may seek
indemnity.  The Partnership shall defend
the claim and the Trustee shall cooperate in the defense.  The Trustee may have separate counsel and the
Partnership shall pay the reasonable fees and expenses of such counsel.  The Partnership need not pay for any
settlement made without its consent.

 

37

 

The Partnership shall not be obligated to reimburse
any expense or indemnify against any loss or liability incurred by the Trustee
through the Trustee’s negligence, willful misconduct or bad faith.

 

To secure the payment obligations of the Partnership
in this Section 7.07, the Trustee shall have a lien prior to the Securities on
all money or property held or collected by the Trustee, except that held in
trust to pay principal of, premium (if any) and interest on and any Additional
Amounts with respect to Securities of any series.  Such lien and the Partnership’s obligations
under this Section 7.07 shall survive the resignation or removal of the Trustee
and the satisfaction and discharge of this Indenture.

 

When the Trustee incurs expenses or renders services after
an Event of Default specified in Section 6.01(5) or (6) occurs, the expenses
and the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.

 

SECTION 7.08                                            Replacement
of Trustee.

 

A resignation or removal of the Trustee and
appointment of a successor Trustee shall become effective only upon the
successor Trustee’s acceptance of appointment as provided in this Section 7.08.

 

The Trustee may resign and be discharged at any time
with respect to the Securities of one or more series by so notifying the
Partnership and the Subsidiary Guarantors. 
The Holders of a majority in principal amount of the then outstanding
Securities of any series may remove the Trustee with respect to the Securities
of such series by so notifying the Trustee, the Partnership and the Subsidiary
Guarantors.  The Partnership may remove
the Trustee if:

 

(1)           the
Trustee fails to comply with Section 7.10;

 

(2)           the
Trustee is adjudged a bankrupt or an insolvent or an order for relief is
entered with respect to the Trustee under any Bankruptcy Law;

 

(3)           a
Bankruptcy Custodian or public officer takes charge of the Trustee or its
property; or

 

(4)           the
Trustee otherwise becomes incapable of acting.

 

If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, with respect to the Securities
of one or more series, the Partnership shall promptly appoint a successor
Trustee or Trustees with respect to the Securities of that or those series (it
being understood that any such successor Trustee may be appointed with respect
to the Securities of one or more or all of such series and that at any time
there shall be only one Trustee with respect to the Securities of any
particular series).  Within one year
after the successor Trustee with respect to the Securities of any series takes
office, the Holders of a majority in principal amount of the Securities of such
series then outstanding may appoint a successor Trustee to replace the
successor Trustee appointed by the Partnership.

 

38

 

If a successor Trustee with respect to the Securities
of any series does not take office within 30 days after the retiring or removed
Trustee resigns or is removed, the retiring or removed Trustee (at the expense
of the Partnership), the Partnership, any Subsidiary Guarantor or the Holders
of at least 10% in principal amount of the then outstanding Securities of such
series may petition any court of competent jurisdiction for the appointment of
a successor Trustee with respect to the Securities of such series.

 

If the Trustee with respect to the Securities of a
series fails to comply with Section 7.10, any Holder of Securities of such
series may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee with respect to the
Securities of such series.

 

In case of the appointment of a successor Trustee with
respect to all Securities, each such successor Trustee shall deliver a written
acceptance of its appointment to the retiring Trustee, to the Partnership and
to the Subsidiary Guarantors.  Thereupon
the resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
retiring Trustee under this Indenture. 
The successor Trustee shall mail a notice of its succession to
Holders.  The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee,
subject to the lien provided for in Section 7.07.

 

In case of the appointment of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Partnership,
the Subsidiary Guarantors, the retiring Trustee and each successor Trustee with
respect to the Securities of one or more (but not all) series shall execute and
deliver an indenture supplemental hereto in which each successor Trustee shall
accept such appointment and that (1) shall confer to each successor Trustee all
the rights, powers and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates, (2) if the retiring Trustee is not retiring with respect to
all Securities, shall confirm that all the rights, powers and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee and (3) shall add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee. 
Nothing herein or in such supplemental indenture shall constitute such
Trustees as co-trustees of the same trust, and each such Trustee shall be
trustee of a trust or trusts hereunder separate and apart from any trust or
trusts hereunder administered by any other such Trustee.  Upon the execution and delivery of such
supplemental indenture, the resignation or removal of the retiring Trustee
shall become effective to the extent provided therein and each such successor
Trustee shall have all the rights, powers and duties of the retiring Trustee
with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates.  On
request of the Partnership or any successor Trustee, such retiring Trustee
shall transfer to such successor Trustee all property held by such retiring
Trustee as Trustee with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates.  Such retiring Trustee shall, however, have
the right to deduct its unpaid fees and expenses, including attorneys’ fees.

 

39

 

Notwithstanding replacement of the Trustee or Trustees
pursuant to this Section 7.08, the obligations of the Partnership under
Section 7.07 shall continue for the benefit of the retiring Trustee or
Trustees.

 

SECTION 7.09                                            Successor
Trustee by Merger, etc.

 

Subject to Section 7.10, if the Trustee consolidates,
merges or converts into, or transfers all or substantially all of its corporate
trust business to, another corporation, the successor corporation without any
further act shall be the successor Trustee; provided, however,
that in the case of a transfer of all or substantially all of its corporate
trust business to another corporation, the transferee corporation expressly
assumes all of the Trustee’s liabilities hereunder.

 

In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated; and in case at that
time any of the Securities shall not have been authenticated, any successor to
the Trustee may authenticate such Securities either in the name of any
predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee shall have.

 

SECTION 7.10                                            Eligibility;
Disqualification.

 

There shall at all times be a Trustee hereunder which
shall be a corporation or banking association organized and doing business
under the laws of the United States, any State thereof or the District of
Columbia and authorized under such laws to exercise corporate trust power,
shall be subject to supervision or examination by federal or state (or the
District of Columbia) authority and shall have, or be a subsidiary of a bank or
bank holding company having, a combined capital and surplus of at least $50
million as set forth in its most recent published annual report of condition.

 

The Indenture shall always have a Trustee who
satisfies the requirements of TIA §§ 310(a)(1), 310(a)(2) and 310(a)(5).  The Trustee is subject to and shall comply
with the provisions of TIA § 310(b) during the period of time required by
this Indenture. Nothing in this Indenture shall prevent the Trustee from filing
with the SEC the application referred to in the penultimate paragraph of TIA
§ 310(b).

 

SECTION 7.11                                            Preferential
Collection of Claims Against the Partnership or a Subsidiary Guarantor.

 

The Trustee is subject to and shall comply with the
provisions of TIA § 311(a), excluding any creditor relationship listed in
TIA § 311(b).  A Trustee who has
resigned or has been removed shall be subject to TIA § 311(a) to the
extent indicated therein.

 

40

 

ARTICLE VIII

DISCHARGE OF INDENTURE

 

SECTION 8.01                                            Termination
of the Partnership’s and the Subsidiary Guarantors’ Obligations.

 

(a)           This Indenture shall cease to be of
further effect with respect to the Securities of a series (except that the
Partnership’s obligations under Section 7.07, the Trustee’s and Paying Agent’s
obligations under Section 8.03 and the rights, powers, protections and
privileges accorded the Trustee under Article VII shall survive), and the
Trustee, on demand of the Partnership, shall execute proper instruments
acknowledging the satisfaction and discharge of this Indenture with respect to
the Securities of such series, when:

 

(1)           either:

 

(A)          all
outstanding Securities of such series theretofore authenticated and issued
(other than destroyed, lost or stolen Securities that have been replaced or
paid) have been delivered to the Trustee for cancellation; or

 

(B)           all
outstanding Securities of such series not theretofore delivered to the Trustee
for cancellation:

 

(i)                                     have
become due and payable, or

 

(ii)                                  will
become due and payable at their Stated Maturity within one year, or

 

(iii)                               are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the name, and at the
expense, of the Partnership,

 

and, in the case of clause (i), (ii) or (iii) above,
the Partnership or a Subsidiary Guarantor has irrevocably deposited or caused
to be deposited with the Trustee as funds (immediately available to the Holders
in the case of clause (i)) in trust for such purpose (x) cash in an
amount, or (y) Government Obligations with respect to such series,
maturing as to principal and interest at such times and in such amounts as will
ensure the availability of cash in an amount or (z) a combination thereof,
which will be sufficient, in the opinion (in the case of clauses (y) and (z))
of a nationally recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee, to pay and discharge
the entire indebtedness on the Securities of such series for principal and
interest to the date of such deposit (in the case of Securities which have
become due and payable) or for principal, premium, if any, and interest to the
Stated Maturity or Redemption Date, as the case may be; or

 

41

 

(C)           the
Partnership and the Subsidiary Guarantors have properly fulfilled such other
means of satisfaction and discharge as is specified, as contemplated by Section
2.01, to be applicable to the Securities of such series;

 

(2)           the
Partnership or a Subsidiary Guarantor has paid or caused to be paid all other
sums payable by them hereunder with respect to the Securities of such series; and

 

(3)           the
Partnership has delivered to the Trustee an Officers’ Certificate stating that
all conditions precedent to satisfaction and discharge of this Indenture with
respect to the Securities of such series have been complied with, together with
an Opinion of Counsel to the same effect.

 

(b)           Unless this Section 8.01(b) is
specified as not being applicable to Securities of a series as contemplated by
Section 2.01, the Partnership may, at its option, terminate certain of its
and the Subsidiary Guarantors’ respective obligations under this Indenture
(“covenant defeasance”) with respect to the Securities of a series if:

 

(1)           the
Partnership or a Subsidiary Guarantor has irrevocably deposited or caused to be
irrevocably deposited with the Trustee as trust funds in trust for the purpose
of making the following payments, specifically pledged as security for and
dedicated solely to the benefit of the Holders of Securities of such series,
(i) money in the currency in which payment of the Securities of such series
is to be made in an amount, or (ii) Government Obligations with respect to
such series, maturing as to principal and interest at such times and in such
amounts as will ensure the availability of money in the currency in which
payment of the Securities of such series is to be made in an amount or
(iii) a combination thereof, that is sufficient, in the opinion (in the
case of clauses (ii) and (iii)) of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to
the Trustee, to pay the principal of and premium (if any) and interest on all
Securities of such series on each date that such principal, premium (if any) or
interest is due and payable and (at the Stated Maturity thereof or upon
redemption as provided in Section 8.01(e)) to pay all other sums payable by it
hereunder; provided that the Trustee shall have
been irrevocably instructed to apply such money and/or the proceeds of such
Government Obligations to the payment of said principal, premium (if any) and
interest with respect to the Securities of such series as the same shall become
due;

 

(2)           the
Partnership has delivered to the Trustee an Officers’ Certificate stating that
all conditions precedent to satisfaction and discharge of this Indenture with
respect to the Securities of such series have been complied with, and an
Opinion of Counsel to the same effect;

 

(3)           no
Default or Event of Default with respect to the Securities of such series shall
have occurred and be continuing on the date of such deposit;

 

(4)           the
Partnership shall have delivered to the Trustee an Opinion of Counsel from a
nationally recognized counsel acceptable to the Trustee or a private letter
ruling issued by the United States Internal Revenue Service to the effect that
the Holders will

 

42

 

not recognize income, gain or loss for United States Federal income tax
purposes as a result of the Partnership’s exercise of its option under this
Section 8.01(b) and will be subject to United States Federal income tax on the
same amount and in the same manner and at the same times as would have been the
case if such option had not been exercised;

 

(5)           the
Partnership and the Subsidiary Guarantors have complied with any additional
conditions specified pursuant to Section 2.01 to be applicable to the discharge
of Securities of such series pursuant to this Section 8.01; and

 

(6)           such
deposit and discharge shall not cause the Trustee to have a conflicting
interest as defined in TIA § 310(b).

 

In such event, this Indenture shall cease to be of
further effect (except as set forth in this paragraph), and the Trustee, on
demand of the Partnership, shall execute proper instruments acknowledging
satisfaction and discharge under this Indenture.  However, the Partnership’s and the Subsidiary
Guarantors’ respective obligations in Sections 2.05, 2.06, 2.07, 2.08, 2.09,
4.01, 4.02, 7.07, 7.08, 8.04 and 10.01, the Trustee’s and Paying Agent’s
obligations in Section 8.03 and the rights, powers, protections and
privileges accorded the Trustee under Article VII shall survive until all
Securities of such series are no longer outstanding.  Thereafter, only the Partnership’s
obligations in Section 7.07 and the Trustee’s and Paying Agent’s obligations in
Section 8.03 shall survive with respect to Securities of such series.

 

After such irrevocable deposit made pursuant to this
Section 8.01(b) and satisfaction of the other conditions set forth herein, the
Trustee upon request shall acknowledge in writing the discharge of the
Partnership’s and the Subsidiary Guarantors’ obligations under this Indenture
with respect to the Securities of such series except for those surviving
obligations specified above.

 

In order to have money available on a payment date to
pay principal of or premium (if any) or interest on the Securities, the
Government Obligations shall be payable as to principal or interest on or
before such payment date in such amounts as will provide the necessary
money.  Government Obligations shall not
be callable at the issuer’s option.

 

(c)           If the Partnership and the Subsidiary
Guarantors have previously complied or are concurrently complying with Section
8.01(b) (other than any additional conditions specified pursuant to
Section 2.01 that are expressly applicable only to covenant defeasance)
with respect to Securities of a series, then, unless this Section 8.01(c) is
specified as not being applicable to Securities of such series as contemplated
by Section 2.01, the Partnership may elect that its and the Subsidiary Guarantors’
respective obligations to make payments with respect to Securities of such
series be discharged (“legal defeasance”), if:

 

(1)           no
Default or Event of Default under clauses (5) and (6) of Section 6.01 hereof
shall have occurred at any time during the period ending on the 91st day after
the date of deposit contemplated by Section 8.01(b) (it being understood that
this condition shall not be deemed satisfied until the expiration of such
period);

 

(2)           unless
otherwise specified with respect to Securities of such series as contemplated
by Section 2.01, the Partnership has delivered to the Trustee an Opinion of

 

43

 

Counsel from a nationally recognized counsel acceptable to the Trustee
to the effect referred to in Section 8.01(b)(4) with respect to such legal
defeasance, which opinion is based on (i) a private letter ruling issued by the
United States Internal Revenue Service addressed to the Partnership, (ii) a
published ruling of the Internal Revenue Service pertaining to a comparable
form of transaction or (iii) a change in the applicable federal income tax law
(including regulations) after the date of this Indenture;

 

(3)           the
Partnership and the Subsidiary Guarantors have complied with any other conditions
specified pursuant to Section 2.01 to be applicable to the legal defeasance of
Securities of such series pursuant to this Section 8.01(c); and

 

(4)           the
Partnership has delivered to the Trustee a Partnership Request requesting such
legal defeasance of the Securities of such series and an Officers’ Certificate
stating that all conditions precedent with respect to such legal defeasance of
the Securities of such series have been complied with, together with an Opinion
of Counsel to the same effect.

 

In such event, the Partnership and the Subsidiary
Guarantors will be discharged from their respective obligations under this
Indenture and the Securities of such series to pay principal of, premium (if
any) and interest on, and any Additional Amounts with respect to, Securities of
such series, the Partnership’s and the Subsidiary Guarantors’ obligations under
Sections 4.01, 4.02 and 10.01 shall terminate with respect to such Securities,
and the entire indebtedness of the Partnership evidenced by such Securities and
of the Subsidiary Guarantors evidenced by the related Guarantees shall be
deemed paid and discharged.

 

(d)           If and to the extent additional or
alternative means of satisfaction, discharge or defeasance of Securities of a
series are specified to be applicable to such series as contemplated by Section
2.01, each of the Partnership and the Subsidiary Guarantors may terminate any
or all of its obligations under this Indenture with respect to Securities of a
series and any or all of its obligations under the Securities of such series if
it fulfills such other means of satisfaction and discharge as may be so
specified, as contemplated by Section 2.01, to be applicable to the Securities
of such series.

 

(e)           If Securities of any series subject
to subsection (a), (b), (c) or (d) of this Section 8.01 are to be redeemed
prior to their Stated Maturity, whether pursuant to any optional redemption
provisions or in accordance with any mandatory or optional sinking fund
provisions, the terms of the applicable trust arrangement shall provide for
such redemption, and the Partnership shall make such arrangements as are
reasonably satisfactory to the Trustee for the giving of notice of redemption
by the Trustee in the name, and at the expense, of the Partnership.

 

SECTION 8.02                                            Application
of Trust Money.

 

The Trustee or a trustee satisfactory to the Trustee
and the Partnership shall hold in trust money or Government Obligations
deposited with it pursuant to Section 8.01 hereof.  It shall apply the deposited money and the
money from Government Obligations through the Paying Agent and in accordance
with this Indenture to the payment of principal of, premium (if

 

44

 

any) and interest on and
any Additional Amounts with respect to the Securities of the series with
respect to which the deposit was made.

 

SECTION 8.03                                            Repayment
to Partnership or Subsidiary Guarantor.

 

The Trustee and the Paying Agent shall promptly pay to
the Partnership or any Subsidiary Guarantor any excess money or Government
Obligations (or proceeds therefrom) held by them at any time upon the written
request of the Partnership.

 

Subject to the requirements of any applicable
abandoned property laws, the Trustee and the Paying Agent shall pay to the
Partnership upon written request any money held by them for the payment of
principal, premium (if any), interest or any Additional Amounts that remain
unclaimed for two years after the date upon which such payment shall have
become due.  After payment to the
Partnership, Holders entitled to the money must look to the Partnership for
payment as general creditors unless an applicable abandoned property law
designates another Person, and all liability of the Trustee and the Paying
Agent with respect to such money shall cease.

 

SECTION 8.04                                            Reinstatement.

 

If the Trustee or the Paying Agent is unable to apply
any money or Government Obligations deposited with respect to Securities of any
series in accordance with Section 8.01 by reason of any legal proceeding or by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the
obligations of the Partnership and the Subsidiary Guarantors under this
Indenture with respect to the Securities of such series and under the
Securities of such series shall be revived and reinstated as though no deposit
had occurred pursuant to Section 8.01 until such time as the Trustee or
the Paying Agent is permitted to apply all such money or Government Obligations
in accordance with Section 8.01; provided, however, that
if the Partnership or any Subsidiary Guarantor has made any payment of
principal of, premium (if any) or interest on or any Additional Amounts with
respect to any Securities because of the reinstatement of its obligations, the
Partnership or such Subsidiary Guarantor, as the case may be, shall be
subrogated to the rights of the Holders of such Securities to receive such
payment from the money or Government Obligations held by the Trustee or the
Paying Agent.

 

ARTICLE IX

SUPPLEMENTAL INDENTURES AND AMENDMENTS

 

SECTION 9.01                                            Without
Consent of Holders.

 

The Partnership, the Subsidiary Guarantors and the
Trustee may amend or supplement this Indenture or the Securities or waive any
provision hereof or thereof without the consent of any Holder:

 

(1)           to
cure any ambiguity, omission, defect or inconsistency;

 

(2)           to
comply with Section 5.01;

 

45

 

(3)           to
provide for uncertificated Securities in addition to or in place of certificated
Securities, or to provide for the issuance of bearer Securities (with or
without coupons);

 

(4)           to
provide any security for, or to add any guarantees of or additional obligors
on, any series of Securities or the related Guarantees;

 

(5)           to
comply with any requirement in order to effect or maintain the qualification of
this Indenture under the TIA;

 

(6)           to
add to the covenants of the Partnership or any Subsidiary Guarantor for the
benefit of the Holders of all or any series of Securities (and if such covenants
are to be for the benefit of less than all series of Securities, stating that
such covenants are expressly being included solely for the benefit of such
series), or to surrender any right or power herein conferred upon the
Partnership or any Subsidiary Guarantor;

 

(7)           to
add any additional Events of Default with respect to all or any series of the
Securities (and, if any such Event of Default is applicable to less than all
series of Securities, specifying the series to which such Event of Default is applicable);

 

(8)           to
change or eliminate any of the provisions of this Indenture; provided that any such change or elimination shall become
effective only when there is no outstanding Security of any series created
prior to the execution of such amendment or supplemental indenture that is
adversely affected in any material respect by such change in or elimination of
such provision;

 

(9)           to
establish the form or terms of Securities of any series as permitted by Section
2.01;

 

(10)         to
supplement any of the provisions of this Indenture to such extent as shall be
necessary to permit or facilitate the defeasance and discharge of any series of
Securities pursuant to Section 8.01; provided, however,
that any such action shall not adversely affect the interest of the Holders of
Securities of such series or any other series of Securities in any material
respect; or

 

(11)         to
evidence and provide for the acceptance of appointment hereunder by a successor
Trustee with respect to the Securities of one or more series and to add to or
change any of the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 7.08.

 

Upon the request of the Partnership, accompanied by a
Board Resolution, and upon receipt by the Trustee of the documents described in
Section 9.06, the Trustee shall, subject to Section 9.06, join with the
Partnership and the Subsidiary Guarantors in the execution of any supplemental
indenture authorized or permitted by the terms of this Indenture and make any
further appropriate agreements and stipulations that may be therein contained.

 

46

 

SECTION 9.02                                            With
Consent of Holders.

 

Except as provided below in this Section 9.02, the
Partnership, the Subsidiary Guarantors and the Trustee may amend or supplement
this Indenture with the written consent (including consents obtained in
connection with a tender offer or exchange offer for Securities of any one or
more series or all series or a solicitation of consents in respect of
Securities of any one or more series or all series, provided
that in each case such offer or solicitation is made to all Holders of then
outstanding Securities of each such series (but the terms of such offer or
solicitation may vary from series to series)) of the Holders of at least a
majority in principal amount of the then outstanding Securities of all series
affected by such amendment or supplement (acting as one class).

 

Upon the request of the Partnership, accompanied by a
Board Resolution, and upon the filing with the Trustee of evidence of the
consent of the Holders as aforesaid, and upon receipt by the Trustee of the
documents described in Section 9.06, the Trustee shall, subject to Section
9.06, join with the Partnership and the Subsidiary Guarantors in the execution
of such amendment or supplemental indenture.

 

It shall not be necessary for the consent of the
Holders under this Section 9.02 to approve the particular form of any proposed
amendment, supplement or waiver, but it shall be sufficient if such consent
approves the substance thereof.

 

The Holders of a majority in principal amount of the
then outstanding Securities of one or more series or of all series (acting as
one class) may waive compliance in a particular instance by the Partnership or
any Subsidiary Guarantor with any provision of this Indenture with respect to
Securities of such series (including waivers obtained in connection with a
tender offer or exchange offer for Securities of such series or a solicitation
of consents in respect of Securities of such series, provided
that in each case such offer or solicitation is made to all Holders of then
outstanding Securities of such series (but the terms of such offer or
solicitation may vary from series to series)).

 

However, without the consent of each Holder affected,
an amendment, supplement or waiver under this Section 9.02 may not:

 

(1)           reduce
the amount of Securities whose Holders must consent to an amendment, supplement
or waiver;

 

(2)           reduce
the rate of or change the time for payment of interest, including default
interest, on any Security;

 

(3)           reduce
the principal of, any premium on or any mandatory sinking fund payment with
respect to, or change the Stated Maturity of, any Security or reduce the amount
of the principal of an Original Issue Discount Security that would be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 6.02;

 

(4)           reduce
the premium, if any, payable upon the redemption of any Security or change the
time at which any Security may or shall be redeemed;

 

47

 

(5)           change
any obligation of the Partnership or any Subsidiary Guarantor to pay Additional
Amounts with respect to any Security;

 

(6)           change
the coin or currency or currencies (including composite currencies) in which
any Security or any premium, interest or Additional Amounts with respect
thereto are payable;

 

(7)           impair
the right to institute suit for the enforcement of any payment of principal of,
premium (if any) or interest on or any Additional Amounts with respect to any
Security pursuant to Sections 6.07 and 6.08, except as limited by Section 6.06;

 

(8)           make
any change in the percentage of principal amount of Securities necessary to
waive compliance with certain provisions of this Indenture pursuant to
Section 6.04 or 6.07 or make any change in this sentence of Section 9.02;

 

(9)           waive
a continuing Default or Event of Default in the payment of principal of,
premium (if any) or interest on or Additional Amounts with respect to the
Securities; or

 

(10)         except
as provided in Section 10.04, release any Subsidiary Guarantor or modify the
related Guarantees in any manner materially adverse to the Holders.

 

A supplemental indenture that changes or eliminates
any covenant or other provision of this Indenture which has expressly been
included solely for the benefit of one or more particular series of Securities,
or which modifies the rights of the Holders of Securities of such series with
respect to such covenant or other provision, shall be deemed not to affect the
rights under this Indenture of the Holders of Securities of any other series.

 

The right of any Holder to participate in any consent
required or sought pursuant to any provision of this Indenture (and the
obligation of the Partnership or any Subsidiary Guarantor to obtain any such
consent otherwise required from such Holder) may be subject to the requirement
that such Holder shall have been the Holder of record of any Securities with
respect to which such consent is required or sought as of a date identified by
the Partnership or such Subsidiary Guarantor in a notice furnished to Holders
in accordance with the terms of this Indenture.

 

After an amendment, supplement or waiver under this
Section 9.02 becomes effective, the Partnership shall mail to the Holders of
each Security affected thereby a notice briefly describing the amendment,
supplement or waiver.  Any failure of the
Partnership to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver.

 

SECTION 9.03                                            Compliance
with the Trust Indenture Act.

 

Every amendment or supplement to this Indenture or the
Securities shall comply in form and substance with the TIA as then in effect.

 

48

 

SECTION 9.04                                            Revocation
and Effect of Consents.

 

Until an amendment, supplement or waiver becomes
effective, a consent to it by a Holder is a continuing consent by the Holder
and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder’s Security, even if notation
of the consent is not made on any Security. 
However, any such Holder or subsequent Holder may revoke the consent as
to his or her Security or portion of a Security if the Trustee receives written
notice of revocation before a date and time therefor identified by the
Partnership or any Subsidiary Guarantor in a notice furnished to such Holder in
accordance with the terms of this Indenture or, if no such date and time shall
be identified, the date the amendment, supplement or waiver becomes
effective.  An amendment, supplement or
waiver becomes effective in accordance with its terms and thereafter binds
every Holder.

 

The Partnership or any Subsidiary Guarantor may, but
shall not be obligated to, fix a record date (which need not comply with TIA
§ 316(c)) for the purpose of determining the Holders entitled to consent
to any amendment, supplement or waiver or to take any other action under this
Indenture.  If a record date is fixed,
then notwithstanding the provisions of the immediately preceding paragraph,
those Persons who were Holders at such record date (or their duly designated
proxies), and only those Persons, shall be entitled to consent to such
amendment, supplement or waiver or to revoke any consent previously given,
whether or not such Persons continue to be Holders after such record date.  No consent shall be valid or effective for
more than 90 days after such record date unless consents from Holders of the
principal amount of Securities required hereunder for such amendment or waiver
to be effective shall have also been given and not revoked within such 90-day
period.

 

After an amendment, supplement or waiver becomes
effective, it shall bind every Holder, unless it is of the type described in
any of clauses (1) through (9) of Section 9.02 hereof.  In such case, the amendment, supplement or
waiver shall bind each Holder who has consented to it and every subsequent
Holder that evidences the same debt as the consenting Holder’s Security.

 

SECTION 9.05                                            Notation
on or Exchange of Securities.

 

If an amendment or supplement changes the terms of an
outstanding Security, the Partnership may require the Holder of the Security to
deliver it to the Trustee.  The Trustee
may place an appropriate notation on the Security at the request of the
Partnership regarding the changed terms and return it to the Holder.  Alternatively, if the Partnership so
determines, the Partnership in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.  Failure to make the appropriate notation or
to issue a new Security shall not affect the validity of such amendment or
supplement.

 

Securities of any series authenticated and delivered
after the execution of any amendment or supplement may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any
matter provided for in such amendment or supplement.

 

SECTION 9.06                                            Trustee
to Sign Amendments, etc.

 

The Trustee shall sign any amendment or supplement
authorized pursuant to this Article if the amendment or supplement does not
adversely affect the rights, duties, liabilities or

 

49

 

immunities of the
Trustee.  If it does, the Trustee may,
but need not, sign it.  In signing or
refusing to sign such amendment or supplement, the Trustee shall be entitled to
receive, in addition to the documents required by Section 11.04, and, subject
to Section 7.01 hereof, shall be fully protected in relying upon, an Opinion of
Counsel provided at the expense of the Partnership or a Subsidiary Guarantor to
the effect that such amendment or supplement is authorized or permitted by this
Indenture.

 

ARTICLE X

GUARANTEE

 

SECTION 10.01                                      Guarantee.

 

(a)           Notwithstanding any provision of this
Article X to the contrary, the provisions of this Article X relating to the
Subsidiary Guarantors shall be applicable only to, and inure solely to the
benefit of, the Securities of any series designated, pursuant to Section 2.01,
as entitled to the benefits of the related Guarantee of each of the Subsidiary
Guarantors.

 

(b)           For value received, each of the
Subsidiary Guarantors hereby fully, unconditionally and absolutely guarantees
(the “Guarantee”) to the Holders and to the Trustee the due and punctual
payment of the principal of, and premium, if any, and interest on the
Securities and all other amounts due and payable under this Indenture and the
Securities by the Partnership, when and as such principal, premium, if any, and
interest shall become due and payable, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise, according to the
terms of the Securities and this Indenture, subject to the limitations set
forth in Section 10.03.

 

(c)           Failing payment when due of any
amount guaranteed pursuant to the related Guarantee, for whatever reason, each
of the Subsidiary Guarantors will be jointly and severally obligated to pay the
same immediately.  Each of the Guarantees
hereunder is intended to be a general, unsecured, unsubordinated obligation of
the related Subsidiary Guarantor and will rank pari passu in right of payment
with all Debt of such Subsidiary Guarantor that is not, by its terms, expressly
subordinated in right of payment to such Guarantee.  Each of the Subsidiary Guarantors hereby
agrees that its obligations hereunder shall be full, unconditional and
absolute, irrespective of the validity, regularity or enforceability of the
Securities, its Guarantee, the Guarantee of any other Subsidiary Guarantor or
this Indenture, the absence of any action to enforce the same, any waiver or
consent by any Holder of the Securities with respect to any provisions hereof
or thereof, the recovery of any judgment against the Partnership or any
Subsidiary Guarantor, or any action to enforce the same or any other
circumstances which might otherwise constitute a legal or equitable discharge
or defense of the Subsidiary Guarantors. 
Each of the Subsidiary Guarantors hereby agrees that in the event of a
default in payment of the principal of, or premium, if any, or interest on the
Securities of such series, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise, legal proceedings may be
instituted by the Trustee on behalf of the Holders or, subject to Section 6.06,
by the Holders, on the terms and conditions set forth in this Indenture,
directly against such Subsidiary Guarantor to enforce such Guarantee without
first proceeding against the Partnership or any other Subsidiary Guarantor.

 

50

 

(d)           The obligations of each of the
Subsidiary Guarantors under this Article X shall be as aforesaid full,
unconditional and absolute and shall not be impaired, modified, released or
limited by any occurrence or condition whatsoever, including, without
limitation, (i) any compromise, settlement, release, waiver, renewal,
extension, indulgence or modification of, or any change in, any of the
obligations and liabilities of the Partnership or any of the Subsidiary
Guarantors contained in the Securities or this Indenture, (ii) any impairment,
modification, release or limitation of the liability of the Partnership, any of
the Subsidiary Guarantors or any of their estates in bankruptcy, or any remedy
for the enforcement thereof, resulting from the operation of any present or
future provision of any applicable Bankruptcy Law, as amended, or other statute
or from the decision of any court, (iii) the assertion or exercise by the
Partnership, any of the Subsidiary Guarantors or the Trustee of any rights or
remedies under the Securities or this Indenture or their delay in or failure to
assert or exercise any such rights or remedies, (iv) the assignment or the
purported assignment of any property as security for the Securities, including
all or any part of the rights of the Partnership or any of the Subsidiary Guarantors
under this Indenture, (v) the extension of the time for payment by the
Partnership or any of the Subsidiary Guarantors of any payments or other sums
or any part thereof owing or payable under any of the terms and provisions of
the Securities or this Indenture or of the time for performance by the
Partnership or any of the Subsidiary Guarantors of any other obligations under
or arising out of any such terms and provisions or the extension or the renewal
of any thereof, (vi) the modification or amendment (whether material or
otherwise) of any duty, agreement or obligation of the Partnership or any of
the Subsidiary Guarantors set forth in this Indenture, (vii) the voluntary or
involuntary liquidation, dissolution, sale or other disposition of all or substantially
all of the assets, marshaling of assets and liabilities, receivership,
insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of, or other similar
proceeding affecting, the Partnership or any of the Subsidiary Guarantors or
any of their respective assets, or the disaffirmance of the Securities, the
Guarantee or this Indenture in any such proceeding, (viii) the release or
discharge of the Partnership or any of the Subsidiary Guarantors from the
performance or observance of any agreement, covenant, term or condition
contained in any of such instruments by operation of law, (ix) the
unenforceability of the Securities of such series, the related Guarantees or
this Indenture or (x) any other circumstances (other than payment in full or
discharge of all amounts guaranteed pursuant to the related Guarantees) which
might otherwise constitute a legal or equitable discharge of a surety or
guarantor.

 

(e)           Each of the Subsidiary Guarantors hereby
(i) waives diligence, presentment, demand of payment, filing of claims with a
court in the event of the merger, insolvency or bankruptcy of the Partnership
or any of the Subsidiary Guarantors, and all demands whatsoever, (ii)
acknowledges that any agreement, instrument or document evidencing its
Guarantee may be transferred and that the benefit of its obligations hereunder
shall extend to each holder of any agreement, instrument or document evidencing
its Guarantee without notice to it and (iii) covenants that its Guarantee will
not be discharged except by complete performance of such Guarantee.  Each of the Subsidiary Guarantors further
agrees that if at any time all or any part of any payment theretofore applied by
any Person to its Guarantee is, or must be, rescinded or returned for any
reason whatsoever, including, without limitation, the insolvency, bankruptcy or
reorganization of the Partnership or any of the Subsidiary Guarantors, such
Guarantee shall, to the extent that such payment is or must be rescinded or
returned, be deemed to have continued in existence notwithstanding such
application, and such Guarantee

 

51

 

shall continue to be effective or be reinstated, as
the case may be, as though such application had not been made.

 

(f)            Each of the Subsidiary Guarantors
shall be subrogated to all rights of the Holders and the Trustee against the
Partnership in respect of any amounts paid by such Subsidiary Guarantor
pursuant to the provisions of this Indenture; provided,
however, that such Subsidiary Guarantor, shall not be entitled to
enforce or to receive any payments arising out of, or based upon, such right of
subrogation until all of the Securities of such series and the related
Guarantees shall have been paid in full or discharged.

 

SECTION 10.02                                      Execution
and Delivery of Guarantees.

 

To further evidence its Guarantee set forth in Section
10.01, each of the Subsidiary Guarantors hereby agrees that a notation relating
to such Guarantee, substantially in the form attached hereto as Annex A, shall
be endorsed on each Security of the series entitled to the benefits of such
Guarantee authenticated and delivered by the Trustee, which notation of
Guarantee shall be executed by either manual or facsimile signature of an
Officer of such Subsidiary Guarantor. 
Each of the Subsidiary Guarantors hereby agrees that its Guarantee set
forth in Section 10.01 shall remain in full force and effect notwithstanding
any failure to endorse on each Security a notation relating to such
Guarantee.  If any Officer of such
Subsidiary Guarantor, whose signature is on this Indenture or a notation of
Guarantee no longer holds that office at the time the Trustee authenticates
such Security or at any time thereafter, the Guarantee of such Security shall
be valid nevertheless.  The delivery of
any Security of a series entitled to the benefits of a Guarantee under this
Article X by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of the Guarantee set forth in this Indenture on behalf
of each Subsidiary Guarantor.

 

SECTION 10.03                                      Limitation
on Liability of the Subsidiary Guarantors.

 

Each Subsidiary Guarantor and by its acceptance hereof
each Holder of a Security of a series entitled to the benefits of a Guarantee
under this Article X hereby confirms that it is the intention of all such
parties that the guarantee by such Subsidiary Guarantor pursuant to its
Guarantee not constitute a fraudulent transfer or conveyance for purposes of
any federal or state law.  To effectuate
the foregoing intention, the Holders of a Security entitled to the benefits of
such Guarantee and the Subsidiary Guarantors hereby irrevocably agree that the
obligations of each Subsidiary Guarantor under its Guarantee shall be limited to
the maximum amount as will, after giving effect to all other contingent and
fixed liabilities of such Subsidiary Guarantor and to any collections from or
payments made by or on behalf of any other Subsidiary Guarantor in respect of
the obligations of such other Subsidiary Guarantor under its Guarantee, result
in the obligations of such Subsidiary Guarantor under its Guarantee not
constituting a fraudulent conveyance or fraudulent transfer under federal or
state law.

 

SECTION 10.04                                      Release
of Subsidiary Guarantors from Guarantee.

 

(a)           Notwithstanding any other provisions
of this Indenture, the Guarantee of any Subsidiary Guarantor may be released
upon the terms and subject to the conditions set forth in this Section
10.04.  Provided that no Default shall have
occurred and shall be continuing under

 

52

 

this Indenture, any Guarantee incurred by a Subsidiary
Guarantor pursuant to this Article X shall be unconditionally released and
discharged (i) automatically upon (A) any sale, exchange or transfer, whether
by way of merger or otherwise, to any Person that is not an Affiliate of the
Partnership, of all of the Partnership’s direct or indirect equity interests in
such Subsidiary Guarantor (provided such
sale, exchange or transfer is not prohibited by this Indenture) or (B) the
merger of such Subsidiary Guarantor into the Partnership or any other
Subsidiary Guarantor or the liquidation and dissolution of such Subsidiary
Guarantor (in each case to the extent not prohibited by this Indenture) or (ii)
following delivery of a written notice of such release or discharge by the
Partnership to the Trustee, upon the release or discharge of all guarantees by
such Subsidiary Guarantor of any Debt of the Partnership other than obligations
arising under this Indenture and any Securities issued hereunder, except a
discharge or release by or as a result of payment under such guarantees.

 

(b)           The Trustee shall deliver an
appropriate instrument evidencing any release of a Subsidiary Guarantor from
its Guarantee upon receipt of a written request of the Partnership accompanied
by an Officers’ Certificate and an Opinion of Counsel that the Subsidiary
Guarantor is entitled to such release in accordance with the provisions of this
Indenture. If the Subsidiary Guarantor is not so released it shall remain
liable for the full amount of principal of (and premium, if any, on) and
interest on the Securities entitled to the benefits of such Guarantee as
provided in this Indenture, subject to the limitations of Section 10.03.

 

SECTION 10.05                                      Contribution.

 

In order to provide for just and equitable
contribution among the Subsidiary Guarantors, the Subsidiary Guarantors hereby
agree, inter se, that in the event any payment or distribution is made by any
Subsidiary Guarantor (a “Funding Guarantor”) under its Guarantee, such Funding
Guarantor shall be entitled to a contribution from each other Subsidiary
Guarantor (as applicable) in a pro rata amount based on the net assets of each
Subsidiary Guarantor (including the Funding Guarantor) for all payments,
damages and expenses incurred by that Funding Guarantor in discharging the
Partnership’s obligations with respect to the Securities of a series entitled
to the benefits of a Guarantee under this Article X or any other Subsidiary
Guarantor’s obligations with respect to its Guarantee of such series of
Securities.

 

ARTICLE XI

MISCELLANEOUS

 

SECTION 11.01                                      Trust
Indenture Act Controls.

 

If any provision of this Indenture limits, qualifies
or conflicts with the duties imposed by operation of TIA § 318(c), the imposed
duties shall control.

 

SECTION 11.02                                      Notices.

 

Any notice or communication by the Partnership, any
Subsidiary Guarantor or the Trustee to the others is duly given if in writing
and delivered in person or mailed by first-class mail (registered or certified,
return receipt requested), telex, facsimile or overnight air courier
guaranteeing next day delivery, to the other’s address:

 

53

 

If to the Partnership or any Subsidiary Guarantor:

K-Sea Transportation Partners L.P.

3245 Richmond Terrace

Staten Island, New York 10303

Attn:  John J.
Nicola

Telephone: (718) 720-7207

Facsimile: (718) 815-4650

 

If to the Trustee:

 

Attn:   

Telephone:      

Facsimile:

 

The Partnership, any Subsidiary Guarantor or the
Trustee by notice to the others may designate additional or different addresses
for subsequent notices or communications.

 

All notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt acknowledged, if by facsimile; and
the next Business Day after timely delivery to the courier, if sent by
overnight air courier guaranteeing next day delivery.

 

Any notice or communication to a Holder shall be
mailed by first-class mail, postage prepaid, to the Holder’s address shown on
the register kept by the Registrar. 
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders.

 

If a notice or communication is mailed in the manner
provided above within the time prescribed, it is duly given, whether or not the
addressee receives it, except in the case of notice to the Trustee, it is duly
given only when received.

 

If the Partnership or a Subsidiary Guarantor mails a
notice or communication to Holders, it shall mail a copy to the Partnership and
the other Subsidiary Guarantors, as the case may be, and to the Trustee and
each Agent at the same time.

 

All notices or communications, including, without
limitation, notices to the Trustee, the Partnership or a Subsidiary Guarantor
by Holders, shall be in writing, except as otherwise set forth herein.

 

In case by reason of the suspension of regular mail
service, or by reason of any other cause, it shall be impossible to mail any
notice required by this Indenture, then such method of notification as shall be
made with the approval of the Trustee shall constitute a sufficient mailing of
such notice.

 

54

 

SECTION 11.03                                      Communication
by Holders with Other Holders.

 

Holders may communicate pursuant to TIA § 312(b) with
other Holders with respect to their rights under this Indenture or the
Securities.  The Partnership, the
Subsidiary Guarantors, the Trustee, the Registrar and anyone else shall have
the protection of TIA § 312(c).

 

SECTION 11.04                                      Certificate
and Opinion as to Conditions Precedent.

 

Upon any request or application by the Partnership or
a Subsidiary Guarantor to the Trustee to take any action under this Indenture,
the Partnership or such Subsidiary Guarantor, as the case may be, shall, if
requested by the Trustee, furnish to the Trustee at the expense of the
Partnership or such Subsidiary Guarantor, as the case may be:

 

(1)           an
Officers’ Certificate (which shall include the statements set forth in
Section 11.05) stating that, in the opinion of the signers, all conditions
precedent and covenants, if any, provided for in this Indenture relating to the
proposed action have been complied with; and

 

(2)           an
Opinion of Counsel (which shall include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been complied with.

 

SECTION 11.05                                      Statements
Required in Certificate or Opinion.

 

Each certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture (other than a
certificate provided pursuant to TIA § 314(a)(4)) shall comply with the
provisions of TIA § 314(e) and shall include:

 

(1)           a
statement that the Person making such certificate or opinion has read such
covenant or condition;

 

(2)           a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based;

 

(3)           a
statement that, in the opinion of such Person, he or she has made such
examination or investigation as is necessary to enable him or her to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and

 

(4)           a
statement as to whether or not, in the opinion of such Person, such condition
or covenant has been complied with.

 

SECTION 11.06                                      Rules
by Trustee and Agents.

 

The Trustee may make reasonable rules for action by or
at a meeting of Holders.  The Registrar
or the Paying Agent may make reasonable rules and set reasonable requirements
for its functions.

 

55

 

SECTION 11.07                                      Legal
Holidays.

 

If a payment date is a Legal Holiday at a Place of
Payment, payment may be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue for the intervening period.

 

SECTION 11.08                                      No
Recourse Against Others.

 

A director, manager, officer, employee, stockholder,
partner or other owner of the Partnership, a Subsidiary Guarantor, the General
Partner, K-Sea General Partner GP LLC or the Trustee, as such, shall not have
any liability for any obligations of the Partnership under the Securities, for
any obligations of any Subsidiary Guarantor under the Guarantee, or for any
obligations of the Partnership, any Subsidiary Guarantor or the Trustee under this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation.  Each
Holder by accepting a Security waives and releases all such liability.  The waiver and release shall be part of the
consideration for the issuance of Securities.

 

SECTION 11.09                                      Governing
Law.

 

THIS INDENTURE, THE SECURITIES
AND THE GUARANTEES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES
OF CONFLICTS OF LAWS TO THE EXTENT THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.

 

SECTION 11.10                                      No
Adverse Interpretation of Other Agreements.

 

This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Partnership, any Subsidiary Guarantor
or any other Subsidiary of the Partnership. 
Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.

 

SECTION 11.11                                      Successors.

 

All agreements of the Partnership and the Subsidiary
Guarantors in this Indenture and the Securities shall bind its successors.  All agreements of the Trustee in this
Indenture shall bind its successors.

 

SECTION 11.12                                      Severability.

 

In case any provision in this Indenture or in the
Securities or in any Guarantee shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall, to the
fullest extent permitted by applicable law, not in any way be affected or
impaired thereby.

 

56

 

SECTION 11.13                                      Counterpart
Originals.

 

The parties may sign any number of copies of this
Indenture.  Each signed copy shall be an
original, but all of them together represent the same agreement.

 

SECTION 11.14                                      Table
of Contents, Headings, etc.

 

The table of contents, cross-reference table and
headings of the Articles and Sections of this Indenture have been inserted for
convenience of reference only, are not to be considered a part hereof and shall
in no way modify or restrict any of the terms or provisions hereof.

 

57

 

IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed as of the day and year first above written.

 

	
   

  	
  K-SEA TRANSPORTATION PARTNERS L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  K-Sea General Partner L.P.,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  K-Sea General Partner GP LLC,

  
	
   

  	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  K-SEA OPERATING PARTNERSHIP L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  K-Sea OLP GP, LLC,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  K-SEA TRANSPORTATION INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NORFOLK ENVIRONMENTAL SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
															

 

S-1

 

	
   

  	
  K-SEA ACQUISITION1, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  K-SEA ACQUISITION2, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [                                           ],
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
								

 

S-2

 

ANNEX A

 

NOTATION
OF GUARANTEE

 

Each of the Subsidiary Guarantors (which term includes
any successor Person under the Indenture) has fully, unconditionally and
absolutely guaranteed, to the extent set forth in the Indenture and subject to
the provisions in the Indenture, the due and punctual payment of the principal
of, and premium, if any, and interest on the Securities and all other amounts
due and payable under the Indenture and the Securities by the Partnership.

 

The obligations of the Subsidiary Guarantors to the
Holders of Securities and to the Trustee pursuant to the Guarantee and the
Indenture are expressly set forth in Article X of the Indenture and reference
is hereby made to the Indenture for the precise terms of the Guarantee.

 

	
   

  	
  [NAME OF SUBSIDIARY GUARANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [NAME OF SUBSIDIARY GUARANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [NAME OF SUBSIDIARY GUARANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
								

 

A-1Exhibit 4.2

 

 

K-SEA TRANSPORTATION PARTNERS L.P.

as Issuer

 

and

 

K-SEA OPERATING PARTNERSHIP L.P.

 

K-SEA TRANSPORTATION INC.

 

NORFOLK ENVIRONMENTAL SERVICES, INC.

 

K-SEA ACQUISITION1, LLC

 

and

 

K-SEA ACQUISITION2, LLC

as Potential Subsidiary Guarantors

 

and

 

[                          ]

as Trustee

 

 

 

Indenture

 

Dated as of                  ,
2005

 

Subordinated Debt Securities

 

 

 

K-SEA TRANSPORTATION PARTNERS L.P.

 

Reconciliation and tie between Trust Indenture Act of 1939

and Indenture, dated as of              ,
2005

 

 

	
  Section of

  	
   

  	
   

  	
   

  
	
  Trust Indenture

  	
   

  	
   

  	
  Section(s) of

  
	
  Act of 1939

  	
   

  	
   

  	
  Indenture

  
	
   

  	
   

  	
   

  
	
  § 310

  	
   

  	
  (a)(1)

  	
   

  	
  7.10

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
  7.10

  
	
   

  	
   

  	
  (a)(3)

  	
   

  	
  Not Applicable

  
	
   

  	
   

  	
  (a)(4)

  	
   

  	
  Not Applicable

  
	
   

  	
   

  	
  (a)(5)

  	
   

  	
  7.10

  
	
   

  	
   

  	
  (b)

  	
   

  	
  7.08, 7.10

  
	
  § 311

  	
   

  	
  (a)

  	
   

  	
  7.11

  
	
   

  	
   

  	
  (b)

  	
   

  	
  7.11

  
	
   

  	
   

  	
  (c)

  	
   

  	
  Not Applicable

  
	
  § 312

  	
   

  	
  (a)

  	
   

  	
  2.07

  
	
   

  	
   

  	
  (b)

  	
   

  	
  12.03

  
	
   

  	
   

  	
  (c)

  	
   

  	
  12.03

  
	
  § 313

  	
   

  	
  (a)

  	
   

  	
  7.06

  
	
   

  	
   

  	
  (b)

  	
   

  	
  7.06

  
	
   

  	
   

  	
  (c)

  	
   

  	
  7.06

  
	
   

  	
   

  	
  (d)

  	
   

  	
  7.06

  
	
  § 314

  	
   

  	
  (a)

  	
   

  	
  4.03, 4.04

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Not Applicable

  
	
   

  	
   

  	
  (c)(1)

  	
   

  	
  12.04

  
	
   

  	
   

  	
  (c)(2)

  	
   

  	
  12.04

  
	
   

  	
   

  	
  (c)(3)

  	
   

  	
  Not Applicable

  
	
   

  	
   

  	
  (d)

  	
   

  	
  Not Applicable

  
	
   

  	
   

  	
  (e)

  	
   

  	
  12.05

  
	
  § 315

  	
   

  	
  (a)

  	
   

  	
  7.01(b)

  
	
   

  	
   

  	
  (b)

  	
   

  	
  7.05

  
	
   

  	
   

  	
  (c)

  	
   

  	
  7.01(a)

  
	
   

  	
   

  	
  (d)

  	
   

  	
  7.01(c)

  
	
   

  	
   

  	
  (d)(1)

  	
   

  	
  7.01(c)(1)

  
	
   

  	
   

  	
  (d)(2)

  	
   

  	
  7.01(c)(2)

  
	
   

  	
   

  	
  (d)(3)

  	
   

  	
  7.01(c)(3)

  
	
   

  	
   

  	
  (e)

  	
   

  	
  6.11

  
	
  § 316

  	
   

  	
  (a)(1)(A)

  	
   

  	
  6.05

  
	
   

  	
   

  	
  (a)(1)(B)

  	
   

  	
  6.04

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
  Not Applicable

  
	
   

  	
   

  	
  (a)(last sentence)

  	
   

  	
  2.11

  
	
   

  	
   

  	
  (b)

  	
   

  	
  6.07

  
	
  § 317

  	
   

  	
  (a)(1)

  	
   

  	
  6.08

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
  6.09

  
	
   

  	
   

  	
  (b)

  	
   

  	
  2.06

  
	
  § 318

  	
   

  	
  (a)

  	
   

  	
  12.01

  
						

 

Note:                   This
reconciliation and tie shall not, for any purpose, be deemed to be a part of
the Indenture.

 

i

 

TABLE OF CONTENTS

 

	
  ARTICLE I DEFINITIONS AND INCORPORATION BY
  REFERENCE

  	
   

  
	
   

  	
   

  
	
  SECTION 1.01

  	
  Definitions

  	
   

  
	
  SECTION 1.02

  	
  Other
  Definitions

  	
   

  
	
  SECTION 1.03

  	
  Incorporation
  by Reference of Trust Indenture Act

  	
   

  
	
  SECTION 1.04

  	
  Rules
  of Construction

  	
   

  
	
  SECTION 1.05

  	
  Non-Recourse
  to the General Partner; No Personal Liability of Officers, Directors,
  Employees or Partners

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II THE SECURITIES

  	
   

  
	
   

  	
   

  
	
  SECTION 2.01

  	
  Amount
  Unlimited; Issuable in Series

  	
   

  
	
  SECTION 2.02

  	
  Denominations

  	
   

  
	
  SECTION 2.03

  	
  Forms
  Generally

  	
   

  
	
  SECTION 2.04

  	
  Execution,
  Authentication, Delivery and Dating

  	
   

  
	
  SECTION 2.05

  	
  Registrar
  and Paying Agent

  	
   

  
	
  SECTION
  2.06

  	
  Paying
  Agent to Hold Money in Trust

  	
   

  
	
  SECTION 2.07

  	
  Holder Lists

  	
   

  
	
  SECTION 2.08

  	
  Transfer and
  Exchange

  	
   

  
	
  SECTION 2.09

  	
  Replacement
  Securities

  	
   

  
	
  SECTION 2.10

  	
  Outstanding
  Securities

  	
   

  
	
  SECTION
  2.11

  	
  Original
  Issue Discount and Treasury Securities

  	
   

  
	
  SECTION 2.12

  	
  Temporary Securities

  	
   

  
	
  SECTION 2.13

  	
  Cancellation

  	
   

  
	
  SECTION 2.14

  	
  Payments;
  Defaulted Interest

  	
   

  
	
  SECTION 2.15

  	
  Persons Deemed
  Owners

  	
   

  
	
  SECTION 2.16

  	
  Computation of
  Interest

  	
   

  
	
  SECTION
  2.17

  	
  Global
  Securities; Book-Entry Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III REDEMPTION

  	
   

  
	
   

  	
   

  
	
  SECTION 3.01

  	
  Applicability of
  Article

  	
   

  
	
  SECTION 3.02

  	
  Notice to the
  Trustee

  	
   

  
	
  SECTION
  3.03

  	
  Selection
  of Securities To Be Redeemed

  	
   

  
	
  SECTION 3.04

  	
  Notice of Redemption

  	
   

  
	
  SECTION
  3.05

  	
  Effect of
  Notice of Redemption

  	
   

  
	
  SECTION 3.06

  	
  Deposit of
  Redemption Price

  	
   

  
	
  SECTION 3.07

  	
  Securities
  Redeemed in Part

  	
   

  
	
  SECTION 3.08

  	
  Purchase of
  Securities

  	
   

  
	
  SECTION
  3.09

  	
  Mandatory
  and Optional Sinking Funds

  	
   

  
	
  SECTION
  3.10

  	
  Satisfaction
  of Sinking Fund Payments with Securities

  	
   

  
	
  SECTION
  3.11

  	
  Redemption
  of Securities for Sinking Fund

  	
   

  

 

ii

 

	
  ARTICLE IV COVENANTS

  	
   

  
	
   

  	
   

  
	
  SECTION 4.01

  	
  Payment of
  Securities

  	
   

  
	
  SECTION
  4.02

  	
  Maintenance
  of Office or Agency

  	
   

  
	
  SECTION
  4.03

  	
  SEC
  Reports; Financial Statements

  	
   

  
	
  SECTION 4.04

  	
  Compliance
  Certificate

  	
   

  
	
  SECTION 4.05

  	
  Existence

  	
   

  
	
  SECTION
  4.06

  	
  Waiver
  of Stay, Extension or Usury Laws

  	
   

  
	
  SECTION 4.07

  	
  Additional Amounts

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V SUCCESSORS

  	
   

  
	
   

  	
   

  
	
  SECTION
  5.01

  	
  Limitations
  on Mergers and Consolidations

  	
   

  
	
  SECTION 5.02

  	
  Successor
  Person Substituted

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI DEFAULTS AND REMEDIES

  	
   

  
	
   

  	
   

  
	
  SECTION 6.01

  	
  Events of Default

  	
   

  
	
  SECTION 6.02

  	
  Acceleration

  	
   

  
	
  SECTION 6.03

  	
  Other Remedies

  	
   

  
	
  SECTION 6.04

  	
  Waiver of Defaults

  	
   

  
	
  SECTION 6.05

  	
  Control by Majority

  	
   

  
	
  SECTION 6.06

  	
  Limitations on Suits

  	
   

  
	
  SECTION
  6.07

  	
  Rights
  of Holders to Receive Payment

  	
   

  
	
  SECTION 6.08

  	
  Collection
  Suit by Trustee

  	
   

  
	
  SECTION
  6.09

  	
  Trustee
  May File Proofs of Claim

  	
   

  
	
  SECTION 6.10

  	
  Priorities

  	
   

  
	
  SECTION 6.11

  	
  Undertaking for
  Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII TRUSTEE

  	
   

  
	
   

  	
   

  
	
  SECTION 7.01

  	
  Duties of Trustee

  	
   

  
	
  SECTION 7.02

  	
  Rights of Trustee

  	
   

  
	
  SECTION 7.03

  	
  May Hold Securities

  	
   

  
	
  SECTION 7.04

  	
  Trustee’s Disclaimer

  	
   

  
	
  SECTION 7.05

  	
  Notice of Defaults

  	
   

  
	
  SECTION
  7.06

  	
  Reports by
  Trustee to Holders

  	
   

  
	
  SECTION 7.07

  	
  Compensation
  and Indemnity

  	
   

  
	
  SECTION 7.08

  	
  Replacement of
  Trustee

  	
   

  
	
  SECTION
  7.09

  	
  Successor
  Trustee by Merger, etc.

  	
   

  
	
  SECTION
  7.10

  	
  Eligibility;
  Disqualification

  	
   

  
	
  SECTION
  7.11

  	
  Preferential
  Collection of Claims Against the Partnership or a Subsidiary Guarantor

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII DISCHARGE OF INDENTURE

  	
   

  
	
   

  	
   

  
	
  SECTION
  8.01

  	
  Termination
  of the Partnership’s and the Subsidiary Guarantors’ Obligations

  	
   

  
	
  SECTION 8.02

  	
  Application of
  Trust Money

  	
   

  
	
  SECTION
  8.03

  	
  Repayment
  to Partnership or Subsidiary Guarantor

  	
   

  

 

iii

 

	
  SECTION 8.04

  	
  Reinstatement

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX SUPPLEMENTAL INDENTURES AND
  AMENDMENTS

  	
   

  
	
   

  	
   

  
	
  SECTION 9.01

  	
  Without
  Consent of Holders

  	
   

  
	
  SECTION 9.02

  	
  With Consent of
  Holders

  	
   

  
	
  SECTION
  9.03

  	
  Compliance
  with the Trust Indenture Act

  	
   

  
	
  SECTION
  9.04

  	
  Revocation
  and Effect of Consents

  	
   

  
	
  SECTION
  9.05

  	
  Notation
  on or Exchange of Securities

  	
   

  
	
  SECTION
  9.06

  	
  Trustee
  to Sign Amendments, etc.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X SUBORDINATION OF SECURITIES AND
  GUARANTEE

  	
   

  
	
   

  	
   

  
	
  SECTION
  10.01

  	
  Applicability
  of Article; Agreement to Subordinate

  	
   

  
	
  SECTION
  10.02

  	
  Liquidation,
  Dissolution, Bankruptcy

  	
   

  
	
  SECTION
  10.03

  	
  Default
  on Senior Indebtedness

  	
   

  
	
  SECTION
  10.04

  	
  Acceleration
  of Payment of Securities

  	
   

  
	
  SECTION
  10.05

  	
  When
  Distribution Must Be Paid Over

  	
   

  
	
  SECTION 10.06

  	
  Subrogation

  	
   

  
	
  SECTION 10.07

  	
  Relative Rights

  	
   

  
	
  SECTION
  10.08

  	
  Subordination
  May Not Be Impaired by Partnership

  	
   

  
	
  SECTION
  10.09

  	
  Rights
  of Trustee and Paying Agent

  	
   

  
	
  SECTION
  10.10

  	
  Distribution
  or Notice to Representative

  	
   

  
	
  SECTION
  10.11

  	
  Article
  X Not to Prevent Defaults or Limit Right to Accelerate

  	
   

  
	
  SECTION
  10.12

  	
  Trust
  Moneys Not Subordinated

  	
   

  
	
  SECTION 10.13

  	
  Trustee
  Entitled to Rely

  	
   

  
	
  SECTION
  10.14

  	
  Trustee
  to Effectuate Subordination

  	
   

  
	
  SECTION
  10.15

  	
  Trustee
  Not Fiduciary for Holders of Senior Indebtedness

  	
   

  
	
  SECTION
  10.16

  	
  Reliance
  by Holders of Senior Indebtedness on Subordination Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI GUARANTEE

  	
   

  
	
   

  	
   

  
	
  SECTION 11.01

  	
  Guarantee

  	
   

  
	
  SECTION
  11.02

  	
  Execution
  and Delivery of Guarantees

  	
   

  
	
  SECTION
  11.03

  	
  Limitation
  on Liability of the Subsidiary Guarantors

  	
   

  
	
  SECTION
  11.04

  	
  Release
  of Subsidiary Guarantors from Guarantee

  	
   

  
	
  SECTION 11.05

  	
  Contribution

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  SECTION
  12.01

  	
  Trust
  Indenture Act Controls

  	
   

  
	
  SECTION 12.02

  	
  Notices

  	
   

  
	
  SECTION
  12.03

  	
  Communication
  by Holders with Other Holders

  	
   

  
	
  SECTION
  12.04

  	
  Certificate
  and Opinion as to Conditions Precedent

  	
   

  
	
  SECTION
  12.05

  	
  Statements
  Required in Certificate or Opinion

  	
   

  
	
  SECTION
  12.06

  	
  Rules by
  Trustee and Agents

  	
   

  
	
  SECTION 12.07

  	
  Legal Holidays

  	
   

  
	
  SECTION 12.08

  	
  No Recourse
  Against Others

  	
   

  

 

iv

 

	
  SECTION 12.09

  	
  Governing Law

  	
   

  
	
  SECTION
  12.10

  	
  No
  Adverse Interpretation of Other Agreements

  	
   

  
	
  SECTION 12.11

  	
  Successors

  	
   

  
	
  SECTION 12.12

  	
  Severability

  	
   

  
	
  SECTION 12.13

  	
  Counterpart
  Originals

  	
   

  
	
  SECTION
  12.14

  	
  Table
  of Contents, Headings, etc.

  	
   

  

 

v

 

INDENTURE (this “Indenture”) dated as of              ,
2005 among K-Sea Transportation Partners L.P., a Delaware limited partnership
(the “Partnership”), K-Sea Operating Partnership L.P., a Delaware limited
partnership and indirect wholly owned subsidiary of the Partnership (“OLP”),
K-Sea Transportation Inc., a Delaware corporation and indirect wholly owned
subsidiary of the Partnership (“Transportation”), Norfolk Environmental
Services, Inc., a Delaware corporation and indirect wholly owned subsidiary of
the Partnership (“Norfolk”), K-Sea Acquisition1, LLC, a Delaware limited
liability company and indirect wholly owned subsidiary of the Partnership (“Acquisition1”),
K-Sea Acquisition2, LLC, a Delaware limited liability company and indirect
wholly owned subsidiary of the Partnership (“Acquisition2” and together with
OLP, Transportation, Norfolk and Acquisition1, the “Potential Subsidiary
Guarantors”), and [        ],
a            , as
trustee (the “Trustee”).

 

The Partnership and the Potential Subsidiary
Guarantors have duly authorized the execution and delivery of this Indenture to
provide for the issuance from time to time of the Partnership’s debentures,
notes, bonds or other evidences of indebtedness to be issued in one or more
series unlimited as to principal amount (herein called the “Securities”), and
the related Guarantees (as hereinafter defined), if any, as provided in this
Indenture.

 

The Partnership and the Potential Subsidiary
Guarantors are members of the same consolidated group of companies. The Potential
Subsidiary Guarantors will derive direct and indirect economic benefit from the
issuance of the Securities. Accordingly, each Potential Subsidiary Guarantor
has duly authorized the execution and delivery of this Indenture in light of
the possibility that such Potential Subsidiary Guarantor will provide its full
and unconditional guarantee of a series of the Securities to the extent
provided in this Indenture.

 

All things necessary to make this Indenture a valid
agreement of the Partnership, in accordance with its terms, have been done.

 

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

 

For and in consideration of the premises and the
purchase of the Securities by the Holders thereof, it is mutually covenanted
and agreed, for the equal and proportionate benefit of all Holders of the
Securities or of any series thereof, as follows:

 

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

 

SECTION 1.01                                                                    Definitions.

 

“Additional Amounts” means any additional amounts
required by the express terms of a Security or by or pursuant to a Board
Resolution, under circumstances specified therein or pursuant thereto, to be
paid by the Partnership or any Subsidiary Guarantor, as the case may be, with
respect to certain taxes, assessments or other governmental charges imposed on
certain Holders and that are owing to such Holders.

 

1

 

“Affiliate” of any specified Person means any other
Person directly or indirectly controlling or controlled by, or under direct or
indirect common control with, such specified Person.  For purposes of this definition, “control” of
a Person shall mean the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms “controlling” and “controlled”
shall have meanings correlative to the foregoing.

 

“Agent” means any Registrar or Paying Agent.

 

“Bankruptcy Law” means Title 11 of the United States
Code or any similar federal, state or foreign law for the relief of debtors.

 

“Board of Directors” means the Board of Directors of K-Sea
General Partner GP LLC, the general partner of the General Partner or any
authorized committee of the Board of Directors of K-Sea General Partner GP LLC or
any directors and/or officers of K-Sea General Partner GP LLC to whom such
Board of Directors or such committee shall have duly delegated its authority to
act hereunder.

 

“Board Resolution” means a copy of a resolution
certified by the Secretary or an Assistant Secretary of K-Sea General Partner
GP LLC to have been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification, and delivered to the
Trustee.

 

“Business Day” means any day that is not a Legal
Holiday.

 

“Corporate Trust Office of the Trustee” means the
office of the Trustee located at                                 ,
Attention:                     ,
and as may be located at such other address as the Trustee may give notice to
the Partnership and the Subsidiary Guarantors.

 

“Debt” of any Person at any date means any obligation
created or assumed by such Person for the repayment of borrowed money and any
guarantee thereof.

 

“Default” means any event, act or condition that is,
or after notice or the passage of time or both would be, an Event of Default.

 

“deliver” or “delivery” means, in the context of certificated
Securities, actual physical delivery of the certificated Securities to the
relevant Person required hereunder, together with all endorsements, and in the
context of Global Securities, the designation on the records of the Depositary
of a change in the beneficial interests of a holder in a Global Security.

 

“Depositary” means, with respect to the Securities of
any series issuable or issued in whole or in part in global form, the Person
specified pursuant to Section 2.01 hereof as the initial Depositary with
respect to the Securities of such series, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and thereafter “Depositary” shall mean or include such successor.

 

2

 

“Designated Senior Indebtedness” means (i) any Senior
Indebtedness which, at the date of determination, has an aggregate principal
amount outstanding of, or under which, at the date of determination, the
holders thereof are committed to lend up to, at least $100 million and
(ii) any other Senior Indebtedness designated, as provided in Section 2.01, in
respect of any series of Securities.

 

“Dollar” or “$” means a dollar or other equivalent
unit in such coin or currency of the United States as at the time shall be
legal tender for the payment of public and private debt.

 

“Exchange Act” means the Securities Exchange Act of
1934, as amended, and any successor statute.

 

“GAAP” means generally accepted accounting principles
in the United States set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession of the United
States, as in effect from time to time.

 

“General Partner” means K-Sea General Partner L.P., a
Delaware limited partnership.

 

“Global Security” means a Security that is issued in
global form in the name of the Depositary with respect thereto or its nominee.

 

“Government Obligations” means, with respect to a
series of Securities, (i) direct obligations of a government that issues
the currency in which the Securities of the series are payable for the payment
of which the full faith and credit of such government is pledged, or (ii) obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of such government, the payment of which is unconditionally
guaranteed as a full faith and credit obligation by such government, which, in
either case under clause (i) or (ii) above, are not callable or redeemable at
the option of the issuer thereof; or (iii) depository receipts issued by a bank
or trust company as custodian with respect to any such Government Obligations
or a specific payment of interest on or principal of any such Government
Obligation held by such custodian for the account of the holder of a depository
receipt, provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
Government Obligation evidenced by such depository receipt.

 

“Guarantee” means the guarantee of the Partnership’s
obligations under the Securities of a series by a Subsidiary Guarantor
(specified with respect to such series as contemplated by Section 2.01(9)) as
provided in Article XI.

 

“Holder” means a Person in whose name a Security is
registered.

 

“Indenture” means this Indenture as amended or
supplemented from time to time pursuant to the provisions hereof, and includes
the terms of a particular series of Securities established as contemplated by
Section 2.01.

 

3

 

“interest” means, with respect to an Original Issue
Discount Security that by its terms bears interest only after Maturity,
interest payable after Maturity.

 

“Interest Payment Date,” when used with respect to any
Security, shall have the meaning assigned to such term in the Security as
contemplated by Section 2.01.

 

“Issue Date” means, with respect to Securities of a
series, the first date on which the Securities of such series are originally
issued under this Indenture.

 

“K-Sea General Partner GP LLC” means K-Sea General
Partner GP LLC, a Delaware limited liability company.

 

“Legal Holiday” means a Saturday, a Sunday or a day on
which banking institutions in any of The City of New York, New York or a Place
of Payment are authorized or obligated by law, regulation or executive order to
remain closed.

 

“Maturity” means, with respect to any Security, the
date on which the principal of such Security or an installment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity thereof, or by declaration of acceleration, call for redemption or
otherwise.

 

“Officer” means the Chief Executive Officer, the
President, the Chief Operating Officer, any Vice President, the Chief Financial
Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary
or any Assistant Secretary of a Person.

 

“Officers’ Certificate” means a certificate signed by
two Officers of a Person.

 

“Opinion of Counsel” means a written opinion from
legal counsel who is acceptable to the Trustee. 
Such counsel may be an employee of or counsel to the Partnership, the
General Partner, K-Sea General Partner GP LLC, a Subsidiary Guarantor or the
Trustee.

 

“Original Issue Discount Security” means any Security
that provides for an amount less than the principal amount thereof to be due
and payable upon a declaration of acceleration of the Maturity thereof pursuant
to Section 6.02.

 

“Partnership” means the Person named as the “Partnership”
in the first paragraph of this Indenture until a successor Person shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter “Partnership” shall mean such successor Person; provided,
however, that for purposes of any provision contained herein which
is required by the TIA, “Partnership” shall also mean each other obligor (if
any), other than a Subsidiary Guarantor, on the Securities of a series.

 

“Partnership Order” and “Partnership Request” mean,
respectively, a written order or request signed in the name of the Partnership and
each Subsidiary Guarantor by two Officers of K-Sea General Partner GP LLC and
delivered to the Trustee.

 

“Person” means any individual, corporation,
partnership, limited liability company, joint venture, incorporated or
unincorporated association, joint stock company, trust,

 

4

 

unincorporated
organization or government or other agency, instrumentality or political
subdivision thereof or other entity of any kind.

 

“Place of Payment” means, with respect to the
Securities of any series, the place or places where the principal of, premium
(if any) and interest on and any Additional Amounts with respect to the
Securities of that series are payable as specified in accordance with Section
2.01 subject to the provisions of Section 4.02.

 

“principal” of a Security means the principal of the
Security plus, when appropriate, the premium, if any, on the Security.

 

“Redemption Date” means, with respect to any Security
to be redeemed, the date fixed for such redemption by or pursuant to this
Indenture.

 

“Redemption Price” means, with respect to any Security
to be redeemed, the price at which it is to be redeemed pursuant to this
Indenture.

 

“Representative” means the trustee, agent or
representative (if any) for an issue of Senior Indebtedness.

 

“Responsible Officer” means any officer within the
corporate trust department of the Trustee having direct responsibility for the
administration of this Indenture or any other officer to whom any corporate
trust matter is referred because of such person’s knowledge of and familiarity
with the particular subject and who shall have direct responsibility for the
administration of this Indenture.

 

“Rule 144A Securities” means Securities of a series
designated pursuant to Section 2.01 as entitled to the benefits of
Section 4.03(b).

 

“SEC” means the Securities and Exchange Commission.

 

“Securities” has the meaning stated in the preamble of
this Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.

 

“Security Custodian” means, with respect to Securities
of a series issued in global form, the Trustee for Securities of such series,
as custodian with respect to the Securities of such series, or any successor
entity thereto.

 

“Senior Indebtedness,” unless otherwise provided with
respect to the Securities of a series as contemplated by Section 2.01, means,
with respect to a series of Securities,  (1) all
Debt of the Partnership and, in the case of a related Guarantee, the Subsidiary
Guarantors, whether currently outstanding or hereafter issued, unless, by the
terms of the instrument creating or evidencing such Debt, it is provided that
such Debt is not superior in right of payment to the Securities of such series,
in the case of the Partnership, or the related Guarantees, in the case of the
Subsidiary Guarantors, or to other Debt which is pari passu
with or subordinated to the Securities of such series, in the case of the
Partnership, or the related Guarantees, in the case of the Subsidiary
Guarantors, and (2) any modifications, refunding, deferrals, renewals, or
extensions of any such Debt or securities, notes or other evidence of Debt
issued in exchange for such Debt; provided that in no event shall “Senior
Indebtedness” include (a) Debt evidenced by

 

5

 

the Securities of such
series or any other series or any related Guarantees, (b) Debt of any of the
Subsidiary Guarantors or the Partnership owed or owing to any Subsidiary of the
Partnership, (c) Debt of any of the Subsidiary Guarantors owed or owing to
the Partnership, (d) Debt to trade creditors, or (e) any liability
for taxes owed or owing by the Subsidiary Guarantors or the Partnership.

 

“Significant Subsidiary” means a Subsidiary of the
Partnership that is a “significant subsidiary” of the Partnership as such term
is defined in Rule 1-02(w) of Regulation S-X as of the date hereof.

 

“Stated Maturity” means, when used with respect to any
Security or any installment of principal thereof or interest thereon, the date
specified in such Security as the fixed date on which the principal of such
Security or such installment of principal or interest is due and payable.

 

“Subsidiary” of any Person means:

 

(1)                                  any
corporation, association or other business entity of which more than 50% of the
total voting power of equity interests entitled, without regard to the
occurrence of any contingency, to vote in the election of directors, managers,
trustees or equivalent Persons thereof is at the time of determination owned or
controlled, directly or indirectly, by such Person or one or more of the other
Subsidiaries of such Person or any combination thereof; or

 

(2)                                  in
the case of a partnership, more than 50% of the partners’ equity interests,
considering all partners’ equity interests as a single class, is at such time
of determination owned or controlled, directly or indirectly, by such Person or
one or more of the other Subsidiaries of such Person or any combination
thereof.

 

“Subsidiary Guarantors” means, with respect to any
series of Securities, the Person or Persons, if any, named in accordance with
Section 2.01(9) as the “Subsidiary Guarantors” (i) in or pursuant to a Board
Resolution, and set forth, or determined in the manner provided, in an Officers’
Certificate of K-Sea General Partner GP LLC or in a Partnership Order, or (ii)
in an indenture supplemental hereto establishing the terms of such series of
Securities until a successor Person or Persons shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter “Subsidiary
Guarantors” with respect to such series of Securities shall mean such successor
Person or Persons, and any other Subsidiary of the Partnership who may execute
this Indenture, or a supplement thereto, for the purpose of providing a
Guarantee for such series of Securities pursuant to this Indenture.  If a series of Securities does not have any
Subsidiary Guarantors, all references in this Indenture to Subsidiary
Guarantors shall be ignored with respect to such series of Securities.

 

“Surrender” shall have the same meaning as “deliver” in
the context of the surrender of a Security.

 

“TIA” means the Trust Indenture Act of 1939, as
amended, as in effect on the date hereof; provided, however, that, in the event the Trust Indenture Act of 1939
is amended

 

6

 

after such date, “TIA”
means, to the extent required by any such amendment, the Trust Indenture Act of
1939 as so amended.

 

“Trustee” means the Person named as such above until a
successor replaces it in accordance with the applicable provisions of this
Indenture, and thereafter “Trustee” means each Person who is then a Trustee
hereunder, and if at any time there is more than one such Person, “Trustee” as
used with respect to the Securities of any series means the Trustee with
respect to Securities of that series.

 

“United States” means the United States of America
(including the District of Columbia) and its territories and possessions, which
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.

 

“U.S. Government Obligations” means Government
Obligations with respect to Securities payable in Dollars.

 

SECTION 1.02                                                                    Other Definitions.

 

	
   

  	
   

  	
  Defined

  
	
  Term

  	
   

  	
   

  	
  in Section

  
	
  “Agent Members”

  	
   

  	
  2.17

  
	
  “Bankruptcy Custodian”

  	
   

  	
  6.01

  
	
  “Blockage Notice”

  	
   

  	
  10.03

  
	
  “covenant defeasance”

  	
   

  	
  8.01

  
	
  “Event of Default”

  	
   

  	
  6.01

  
	
  “Funding Guarantor”

  	
   

  	
  11.05

  
	
  “Judgment Currency”

  	
   

  	
  6.10

  
	
  “legal defeasance”

  	
   

  	
  8.01

  
	
  “mandatory sinking fund payment”

  	
   

  	
  3.09

  
	
  “optional sinking fund payment”

  	
   

  	
  3.09

  
	
  “pay the Subordinated Securities”

  	
   

  	
  10.03

  
	
  “Paying Agent”

  	
   

  	
  2.05

  
	
  “Payment Blockage Period”

  	
   

  	
  10.03

  
	
  “Registrar”

  	
   

  	
  2.05

  
	
  “Required Currency”

  	
   

  	
  6.10

  
	
  “Successor”

  	
   

  	
  5.01

  
	
  “Subordinated Securities”

  	
   

  	
  10.01

  
				

 

SECTION 1.03                                                                    Incorporation by Reference of Trust Indenture Act.

 

Whenever this Indenture refers to a provision of the
TIA, the provision is incorporated by reference in and made a part of this
Indenture (and if the Indenture is not qualified under the TIA at the time, as
if it were so qualified unless otherwise provided).  The following TIA terms used in this
Indenture have the following meanings:

 

“Commission” means the SEC.

 

7

 

“indenture securities” means the Securities.

 

“indenture security holder” means a Holder.

 

“indenture to be qualified” means this Indenture.

 

“indenture trustee” or “institutional trustee” means
the Trustee.

 

“obligor” on the indenture securities means the
Partnership, any Potential Subsidiary Guarantor or any other obligor on the
Securities.

 

All terms used in this Indenture that are defined by
the TIA, defined by a TIA reference to another statute or defined by an SEC
rule under the TIA have the meanings so assigned to them.

 

SECTION 1.04                                                                    Rules of Construction.

 

Unless the context otherwise requires:

 

(1)                                  a
term has the meaning assigned to it;

 

(2)                                  an
accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;

 

(3)                                  “or”
is not exclusive;

 

(4)                                  words
in the singular include the plural, and in the plural include the singular;

 

(5)                                  provisions
apply to successive events and transactions; and

 

(6)                                  all
references in this instrument to Articles and Sections are references to the
corresponding Articles and Sections in and of this instrument.

 

SECTION 1.05                                                                    Non-Recourse to the General Partner; No Personal Liability of Officers,
Directors, Employees or Partners.

 

Obligations of the Partnership and a Subsidiary Guarantor
under this Indenture, the Securities and the related Guarantees, if any, are
non-recourse to the General Partner, and its respective Affiliates (other than
the Partnership and such Subsidiary Guarantor), and payable only out of cash
flow and assets of the Partnership and such Subsidiary Guarantor.  The Trustee, and each Holder of a Security by
its acceptance thereof, will be deemed to have agreed in this Indenture that
(1) neither the General Partner nor its assets (nor any of its respective
Affiliates other than the Partnership and a Subsidiary Guarantor, nor its
respective assets) shall be liable for any of the obligations of the
Partnership and a Subsidiary Guarantor under this Indenture, such Securities or
such related Guarantees, and (2) no director, manager, officer, employee,
partner or unitholder, as such, of the Partnership, a Subsidiary Guarantor, the
Trustee, the General Partner, K-Sea General Partner GP LLC or any Affiliate of
any of the foregoing entities shall have any

 

8

 

personal liability in respect of the obligations of
the Partnership and a Subsidiary Guarantor under this Indenture, such
Securities or such related Guarantees by reason of his, her or its status.

 

ARTICLE II

THE SECURITIES

 

SECTION 2.01                                                                    Amount Unlimited; Issuable in Series.

 

The aggregate principal amount of Securities that may
be authenticated and delivered under this Indenture is unlimited.

 

The Securities may be issued in one or more
series.  There shall be established in or
pursuant to a Board Resolution, and set forth, or determined in the manner
provided, in an Officers’ Certificate of K-Sea General Partner GP LLC or in a
Partnership Order, or established in one or more indentures supplemental
hereto, prior to the issuance of Securities of any series:

 

(1)                                  the
title of the Securities of the series (which shall distinguish the Securities
of the series from the Securities of all other series);

 

(2)                                  if
there is to be a limit, the limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 2.08, 2.09, 2.12, 2.17, 3.07 or 9.05 and except for
any Securities which, pursuant to Section 2.04 or 2.17, are deemed never to
have been authenticated and delivered hereunder); provided,
however, that unless otherwise provided in the terms of the series,
the authorized aggregate principal amount of such series may be increased
before or after the issuance of any Securities of the series by a Board
Resolution (or action pursuant to a Board Resolution) to such effect;

 

(3)                                  whether
any Securities of the series are to be issuable initially in temporary global
form and whether any Securities of the series are to be issuable in permanent
global form, as Global Securities or otherwise, and, if so, whether beneficial
owners of interests in any such Global Security may exchange such interests for
Securities of such series and of like tenor of any authorized form and
denomination and the circumstances under which any such exchanges may occur, if
other than in the manner provided in Section 2.17, and the initial
Depositary and Security Custodian, if any, for any Global Security or
Securities of such series;

 

(4)                                  the
manner in which any interest payable on a temporary Global Security on any
Interest Payment Date will be paid if other than in the manner provided in
Section 2.14;

 

(5)                                  the
date or dates on which the principal of and premium (if any) on the Securities
of the series is payable or the method of determination thereof;

 

(6)                                  the
rate or rates, or the method of determination thereof, at which the Securities
of the series shall bear interest, if any, whether and under what circumstances

 

9

 

Additional Amounts
with respect to such Securities shall be payable, the date or dates from which
such interest shall accrue, the Interest Payment Dates on which such interest
shall be payable and the record date for the interest payable on any Securities
on any Interest Payment Date, or if other than provided herein, the Person to
whom any interest on Securities of the series shall be payable;

 

(7)                                  the
place or places where, subject to the provisions of Section 4.02, the principal
of, premium (if any) and interest on and any Additional Amounts with respect to
the Securities of the series shall be payable;

 

(8)                                  the
period or periods within which, the price or prices (whether denominated in
cash, securities or otherwise) at which and the terms and conditions upon which
Securities of the series may be redeemed, in whole or in part, at the option of
the Partnership, if the Partnership is to have that option, and the manner in
which the Partnership must exercise any such option, if different from those
set forth herein;

 

(9)                                  whether
Securities of the series are entitled to the benefits of any Guarantee of any
Subsidiary Guarantor pursuant to this Indenture, the identity of any such
Subsidiary Guarantors and any terms of such Guarantee with respect to the
Securities of the series in addition to those set forth in Article XI, or any
exceptions to or changes to those set forth in Article XI;

 

(10)                            the
obligation, if any, of the Partnership to redeem, purchase or repay Securities
of the series pursuant to any sinking fund or analogous provisions or at the
option of a Holder thereof and the period or periods within which, the price or
prices (whether denominated in cash, securities or otherwise) at which and the
terms and conditions upon which Securities of the series shall be redeemed,
purchased or repaid in whole or in part pursuant to such obligation;

 

(11)                            if
other than denominations of $1,000 and any integral multiple thereof, the
denomination in which any Securities of the series shall be issuable;

 

(12)                            if
other than Dollars, the form, including equity securities, other debt
securities (including Securities), warrants or any other securities or property
of the Partnership, any Subsidiary Guarantor or any other Person, in which
payment of the principal of, premium (if any) and interest on and any
Additional Amounts with respect to the Securities of the series shall be
payable;

 

(13)                            if
the amount of payments of principal of, premium (if any) and interest on and
any Additional Amounts with respect to the Securities of the series may be
determined with reference to any commodities, currencies or indices, values,
rates or prices or any other index or formula, the manner in which such amounts
shall be determined;

 

(14)                            if
other than the entire principal amount thereof, the portion of the principal
amount of Securities of the series that shall be payable upon declaration of
acceleration of the Maturity thereof pursuant to Section 6.02;

 

10

 

(15)                            any
additional means of satisfaction and discharge of this Indenture and any
additional conditions or limitations to discharge with respect to Securities of
the series and the related Guarantees, if any, pursuant to Article VIII or
any modifications of or deletions from such conditions or limitations;

 

(16)                            any
deletions or modifications of or additions to the Events of Default set forth
in Section 6.01 or covenants of the Partnership or any Subsidiary Guarantor set
forth in Article IV pertaining to the Securities of the series;

 

(17)                            any
restrictions or other provisions with respect to the transfer or exchange of
Securities of the series, which may amend, supplement, modify or supersede
those contained in this Article II;

 

(18)                            if
the Securities of the series are to be convertible into or exchangeable for
common units, other debt securities (including Securities), warrants, other
equity securities or any other securities or property of the Partnership, any
Subsidiary Guarantor or any other Person, at the option of the Partnership or
the Holder or upon the occurrence of any condition or event, the terms and
conditions for such conversion or exchange;

 

(19)                            the
subordination, if any, of the Securities of the series pursuant to Article X
and any changes or additions to Article X or designation of any Designated
Senior Indebtedness;

 

(20)                            whether
the Securities of the series are to be entitled to the benefit of
Section 4.03(b) (and accordingly constitute Rule 144A Securities); and

 

(21)                            any
other terms of the series (which terms shall not be prohibited by the
provisions of this Indenture).

 

All Securities of any one series shall be
substantially identical except as to denomination and except as may otherwise
be provided in or pursuant to the Board Resolution referred to above and
(subject to Section 2.03) set forth, or determined in the manner provided, in
the Officers’ Certificate or Partnership Order referred to above or in any such
indenture supplemental hereto.

 

If any of the terms of the series are established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action, together with such Board Resolution, shall be set forth in an
Officers’ Certificate or certified by the Secretary or an Assistant Secretary
of K-Sea General Partner GP LLC and delivered to the Trustee at or prior to the
delivery of the Officers’ Certificate or Partnership Order setting forth the
terms of the series.

 

The Securities shall be subordinated in right of
payment to Senior Indebtedness as provided in Article X and/or as
specified as contemplated pursuant to this Section 2.01.

 

SECTION 2.02                                                                    Denominations.

 

The Securities of each series shall be issuable in
such denominations as shall be specified as contemplated by Section 2.01.  In the absence of any such provisions with
respect to the Securities of any series, the Securities of such series
denominated in Dollars shall be issuable in denominations of $1,000 and any
integral multiples thereof.

 

11

 

SECTION 2.03                                                                    Forms Generally.

 

The Securities of each series shall be in fully
registered form and in substantially such form or forms (including temporary or
permanent global form) established by or pursuant to a Board Resolution or in
one or more indentures supplemental hereto. 
The Securities may have notations, legends or endorsements required by
law, securities exchange rule, the Partnership’s certificate of limited
partnership, agreement of limited partnership or other similar governing
documents, agreements to which the Partnership is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
to the Partnership).  A copy of the Board
Resolution establishing the form or forms of Securities of any series shall be
delivered to the Trustee at or prior to the delivery of the Partnership Order
contemplated by Section 2.04 for the authentication and delivery of such
Securities.

 

The definitive Securities of each series shall be
printed, lithographed or engraved on steel engraved borders or may be produced
in any other manner, all as determined by the Officers executing such
Securities, as evidenced by their execution thereof.

 

The Trustee’s certificate of authentication shall be
in substantially the following form:

 

“This is one of the Securities of the series
designated therein referred to in the within-mentioned Indenture.

 

	
   

  	
  [                                     ],
  as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Authorized Signatory”.

  

 

SECTION 2.04                                                                    Execution, Authentication, Delivery and Dating.

 

Two Officers of K-Sea General Partner GP LLC shall
sign the Securities on behalf of the Partnership and, with respect to any
related Guarantees, an Officer of each Subsidiary Guarantor shall sign the Notation
of Guarantee on behalf of such Subsidiary Guarantor, in each case by manual or
facsimile signature.

 

If an Officer of K-Sea General Partner GP LLC whose
signature is on a Security no longer holds that office at the time the Security
is authenticated, the Security shall be valid nevertheless.

 

A Security shall not be entitled to any benefit under
this Indenture or the related Guarantees, if any, or be valid or obligatory for
any purpose until authenticated by the manual signature of an authorized
signatory of the Trustee, which signature shall be conclusive evidence that the
Security has been authenticated under this Indenture.  Notwithstanding the foregoing, if any
Security has been authenticated and delivered hereunder but never issued and
sold by the Partnership, and the Partnership delivers such Security to the
Trustee for cancellation as provided in Section 2.13, together with a written
statement (which need not comply with Section 12.05 and need not be accompanied
by an Opinion of Counsel) stating that such Security has never been issued and
sold by the Partnership, for all purposes of this Indenture such Security shall
be

 

12

 

deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture or the
related Guarantees, if any.

 

At any time and from time to time after the execution
and delivery of this Indenture, the Partnership may deliver Securities of any
series executed by the Partnership to the Trustee for authentication, and the
Trustee shall authenticate and deliver such Securities for original issue upon
a Partnership Order for the authentication and delivery of such Securities or
pursuant to such procedures acceptable to the Trustee as may be specified from
time to time by Partnership Order.  Such
order shall specify the amount of the Securities to be authenticated, the date
on which the original issue of Securities is to be authenticated, the name or
names of the initial Holder or Holders and any other terms of the Securities of
such series not otherwise determined.  If
provided for in such procedures, such Partnership Order may authorize (1)
authentication and delivery of Securities of such series for original issue
from time to time, with certain terms (including, without limitation, the
Maturity dates or dates, original issue date or dates and interest rate or
rates) that differ from Security to Security and (2) may authorize
authentication and delivery pursuant to oral or electronic instructions from
the Partnership or its duly authorized agent, which instructions shall be
promptly confirmed in writing.

 

If the form or terms of the Securities of the series
have been established in or pursuant to one or more Board Resolutions as
permitted by Section 2.01, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive (in addition to the
Partnership Order referred to above and the other documents required by Section
12.04), and (subject to Section 7.01) shall be fully protected in relying upon:

 

(a)                                  an
Officers’ Certificate of K-Sea General Partner GP LLC setting forth the Board
Resolution and, if applicable, an appropriate record of any action taken
pursuant thereto, as contemplated by the last paragraph of Section 2.01;
and

 

(b)                                 an
Opinion of Counsel to the effect that:

 

(i)                                     the
form of such Securities has been established in conformity with the provisions
of this Indenture;

 

(ii)                                  the
terms of such Securities have been established in conformity with the
provisions of this Indenture; and

 

(iii)                               that
such Securities and the related Guarantees, if any, when authenticated and
delivered by the Trustee and issued by the Partnership in the manner and
subject to any conditions specified in such Opinion of Counsel, will constitute
valid and binding obligations of the Partnership and the Subsidiary Guarantors,
respectively, enforceable against the Partnership and the Subsidiary Guarantors,
respectively, in accordance with their respective terms, except as the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws in
effect from time to time affecting the rights of creditors generally, and the
application of

 

13

 

general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).

 

If all the Securities of any series are not to be
issued at one time, it shall not be necessary to deliver an Officers’
Certificate and Opinion of Counsel at the time of issuance of each such
Security, but such Officers’ Certificate and Opinion of Counsel shall be
delivered at or before the time of issuance of the first Security of the series
to be issued.

 

The Trustee shall not be required to authenticate such
Securities if the issuance of such Securities pursuant to this Indenture would
affect the Trustee’s own rights, duties or immunities under the Securities and
this Indenture or otherwise in a manner not reasonably acceptable to the
Trustee.

 

The Trustee may appoint an authenticating agent
acceptable to the Partnership to authenticate Securities.  Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so.  Each reference in
this Indenture to authentication by the Trustee includes authentication by such
agent.  An authenticating agent has the
same rights as an Agent to deal with the Partnership, any Subsidiary Guarantor
or an Affiliate of the Partnership or any Subsidiary Guarantor.

 

Each Security shall be dated the date of its
authentication.

 

SECTION 2.05                                                                    Registrar and Paying Agent.

 

The Partnership shall maintain an office or agency for
each series of Securities where Securities of such series may be presented for
registration of transfer or exchange (“Registrar”) and an office or agency
where Securities of such series may be presented for payment (“Paying Agent”).  The Registrar shall keep a register of the
Securities of such series and of their transfer and exchange.  The Partnership may appoint one or more
co-registrars and one or more additional paying agents.  The term “Registrar” includes any
co-registrar and the term “Paying Agent” includes any additional paying agent.

 

The Partnership shall enter into an appropriate agency
agreement with any Registrar or Paying Agent not a party to this
Indenture.  The agreement shall implement
the provisions of this Indenture that relate to such Agent.  The Partnership shall notify the Trustee of
the name and address of any Agent not a party to this Indenture.  The Partnership may change any Paying Agent
or Registrar without notice to any Holder. 
If the Partnership fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such.  The Partnership, any Subsidiary Guarantor or
any other Subsidiary may act as Paying Agent or Registrar.

 

The Partnership initially appoints the Trustee as
Registrar and Paying Agent.

 

SECTION 2.06                                                                    Paying Agent to Hold Money in Trust.

 

The Partnership shall require each Paying Agent other
than the Trustee to agree in writing that the Paying Agent will hold in trust
for the benefit of Holders or the Trustee all money held by the Paying Agent
for the payment of principal of, premium, if any, or interest on

 

14

 

or any Additional Amounts with respect to Securities
and will notify the Trustee of any default by the Partnership in making any
such payment.  While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it
to the Trustee and to account for any funds disbursed.  The Partnership at any time may require a
Paying Agent to pay all money held by it to the Trustee and to account for any
funds disbursed.  Upon payment over to
the Trustee and upon accounting for any funds disbursed, the Paying Agent (if
other than the Partnership, a Subsidiary Guarantor or another Subsidiary of the
Partnership) shall have no further liability for the money.  If the Partnership, a Subsidiary Guarantor or
another Subsidiary of the Partnership acts as Paying Agent, it shall segregate
and hold in a separate trust fund for the benefit of the Holders all money held
by it as Paying Agent.  Each Paying Agent
shall otherwise comply with TIA § 317(b).

 

SECTION 2.07                                                                    Holder Lists.

 

The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Holders and shall otherwise comply with TIA § 312(a).  If the Trustee is not the Registrar with
respect to a series of Securities, the Partnership shall furnish to the Trustee
at least five Business Days before each Interest Payment Date with respect to
such series of Securities, and at such other times as the Trustee may request
in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Holders of such series, and
the Partnership shall otherwise comply with TIA § 312(a).

 

SECTION 2.08                                                                    Transfer and Exchange.

 

Except as set forth in Section 2.17 or as may be
provided pursuant to Section 2.01:

 

When Securities of any series are presented to the
Registrar with the request to register the transfer of such Securities or to
exchange such Securities for an equal principal amount of Securities of the
same series of like tenor and of other authorized denominations, the Registrar
shall register the transfer or make the exchange as requested if its
requirements and the requirements of this Indenture for such transactions are
met; provided, however, that the Securities
presented or surrendered for registration of transfer or exchange shall be duly
endorsed or accompanied by a written instruction of transfer in form reasonably
satisfactory to the Registrar duly executed by the Holder thereof or by his
attorney, duly authorized in writing, on which instruction the Registrar can
rely.

 

To permit registrations of transfers and exchanges,
the Partnership shall execute and the Trustee shall authenticate Securities at
the Registrar’s written request and submission of the Securities or Global
Securities.  No service charge shall be
made to a Holder for any registration of transfer or exchange (except as
otherwise expressly permitted herein), but the Partnership may require payment
of a sum sufficient to cover any transfer tax or similar governmental charge
payable in connection therewith (other than such transfer tax or similar
governmental charge payable upon exchanges pursuant to Section 2.12, 3.07 or
9.05). The Trustee shall authenticate Securities in accordance with the
provisions of Section 2.04. 
Notwithstanding any other provisions of this Indenture to the contrary,
the Partnership shall not

 

15

 

be required to register the transfer or exchange of
(a) any Security selected for redemption in whole or in part pursuant to
Article III, except the unredeemed portion of any Security being redeemed in
part, or (b) any Security during the period beginning 15 Business Days prior to
the mailing of notice of any offer to repurchase Securities of the series
required pursuant to the terms thereof or of redemption of Securities of a series
to be redeemed and ending at the close of business on the day of mailing.

 

SECTION 2.09                                                                    Replacement Securities.

 

If any mutilated Security is surrendered to the
Trustee, or if the Holder of a Security claims that the Security has been
destroyed, lost or stolen and the Partnership and the Trustee receive evidence
to their satisfaction of the destruction, loss or theft of such Security, the
Partnership shall issue and the Trustee shall authenticate a replacement
Security of the same series if the Trustee’s requirements are met.  If any such mutilated, destroyed, lost or
stolen Security has become or is about to become due and payable, the
Partnership in its discretion may, instead of issuing a new Security, pay such Security.  If required by the Trustee, any Subsidiary Guarantor
or the Partnership, such Holder must furnish an indemnity bond that is
sufficient in the judgment of the Trustee and the Partnership to protect the
Partnership, each Subsidiary Guarantor, the Trustee, any Agent or any
authenticating agent from any loss that any of them may suffer if a Security is
replaced.  The Partnership and the
Trustee may charge a Holder for their expenses in replacing a Security.

 

Every replacement Security is an additional obligation
of the Partnership.

 

SECTION 2.10                                                                    Outstanding Securities.

 

The Securities outstanding at any time are all the
Securities authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation, those reductions in the interest in a Global
Security effected by the Trustee hereunder and those described in this
Section 2.10 as not outstanding.

 

If a Security is replaced pursuant to Section 2.09, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Security is held by a bona fide purchaser.

 

If the principal amount of any Security is considered
paid under Section 4.01, it ceases to be outstanding and interest on it ceases
to accrue.

 

A Security does not cease to be outstanding because
the Partnership, a Subsidiary Guarantor or an Affiliate of the Partnership or a
Subsidiary Guarantor holds the Security.

 

SECTION 2.11                                                                    Original Issue Discount and Treasury Securities.

 

In determining whether the Holders of the required
principal amount of Securities have concurred in any direction, amendment,
supplement, waiver or consent, (a) the principal amount of an Original
Issue Discount Security shall be the principal amount thereof that would be due
and payable as of the date of such determination upon acceleration of the Maturity
thereof pursuant to Section 6.02 and (b) Securities owned by the
Partnership, a Subsidiary Guarantor or

 

16

 

any other obligor upon the Securities or any Affiliate
of the Partnership, of a Subsidiary Guarantor or of such other obligor shall be
disregarded, except that, for the purpose of determining whether the Trustee
shall be protected in relying upon any such direction, amendment, supplement,
waiver or consent, only Securities that a Responsible Officer of the Trustee
actually knows are so owned shall be so disregarded.

 

SECTION 2.12                                                                    Temporary Securities.

 

Until definitive Securities of any series are ready
for delivery, the Partnership may prepare and execute and the Trustee shall
authenticate temporary Securities. 
Temporary Securities shall be substantially in the form of definitive
Securities, but may have variations that the Partnership considers appropriate
for temporary Securities.  Without
unreasonable delay, the Partnership shall prepare and execute and the Trustee
shall authenticate definitive Securities in exchange for temporary
Securities.  Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.

 

SECTION 2.13                                                                    Cancellation.

 

The Partnership or any Subsidiary Guarantor at any
time may deliver Securities to the Trustee for cancellation.  The Registrar and the Paying Agent shall
forward to the Trustee any Securities surrendered to them for registration of
transfer, exchange, payment or redemption or for credit against any sinking
fund payment.  The Trustee shall cancel
all Securities surrendered for registration of transfer, exchange, payment,
redemption, replacement or cancellation or for credit against any sinking
fund.  Unless the Partnership shall
direct in writing that canceled Securities be returned to it, after written
notice to the Partnership all canceled Securities held by the Trustee shall be
disposed of in accordance with the usual disposal procedures of the Trustee,
and the Trustee shall maintain a record of their disposal.  The Partnership may not issue new Securities
to replace Securities that have been paid or that have been delivered to the
Trustee for cancellation.

 

SECTION 2.14                                                                    Payments; Defaulted Interest.

 

Unless otherwise provided as contemplated by
Section 2.01, interest (except defaulted interest) on any Security that is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Persons who are registered Holders of that Security
at the close of business on the record date next preceding such Interest
Payment Date, even if such Securities are canceled after such record date and
on or before such Interest Payment Date. 
The Holder must surrender a Security to a Paying Agent to collect
principal payments.  Unless otherwise
provided with respect to the Securities of any series, the Partnership will pay
the principal of, premium (if any) and interest on and any Additional Amounts
with respect to the Securities in Dollars. 
Such amounts shall be payable at the offices of the Trustee or any
Paying Agent, provided that at the option of
the Partnership, the Partnership may pay such amounts (1) by wire transfer with
respect to Global Securities or (2) by check payable in such money mailed to a
Holder’s registered address with respect to any Securities.

 

If the Partnership defaults in a payment of interest
on the Securities of any series, the Partnership shall pay the defaulted
interest in any lawful manner plus, to the extent lawful,

 

17

 

interest on the defaulted interest, in each case at
the rate provided in the Securities of such series and in Section 4.01.  The Partnership may pay the defaulted
interest to the Persons who are Holders on a subsequent special record
date.  At least 15 days before any
special record date selected by the Partnership, the Partnership (or the
Trustee, in the name of and at the expense of the Partnership upon 20 days’
prior written notice from the Partnership setting forth such special record
date and the interest amount to be paid) shall mail to Holders a notice that
states the special record date, the related payment date and the amount of such
interest to be paid.

 

SECTION 2.15                                                                    Persons Deemed Owners.

 

The Partnership, the Subsidiary Guarantors, the
Trustee, any Agent and any authenticating agent may treat the Person in whose
name any Security is registered as the owner of such Security for the purpose
of receiving payments of principal of, premium (if any) or interest on or any
Additional Amounts with respect to such Security and for all other
purposes.  None of the Partnership, any
Subsidiary Guarantor, the Trustee, any Agent or any authenticating agent shall
be affected by any notice to the contrary.

 

SECTION 2.16                                                                    Computation of Interest.

 

Except as otherwise specified as contemplated by
Section 2.01 for Securities of any series, interest on the Securities of each
series shall be computed on the basis of a year comprising twelve 30-day
months.

 

SECTION 2.17                                                                    Global Securities; Book-Entry Provisions.

 

If Securities of a series are issuable in global form
as a Global Security, as contemplated by Section 2.01, then,
notwithstanding clause (11) of Section 2.01 and the provisions of Section 2.02,
any such Global Security shall represent such of the outstanding Securities of
such series as shall be specified therein and may provide that it shall
represent the aggregate amount of outstanding Securities from time to time
endorsed thereon and that the aggregate amount of outstanding Securities
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges, transfers or redemptions.  Any endorsement of a Global Security to
reflect the amount, or any increase or decrease in the amount, of outstanding
Securities represented thereby shall be made by the Trustee (i) in such manner
and upon instructions given by such Person or Persons as shall be specified in
such Security or in a Partnership Order to be delivered to the Trustee pursuant
to Section 2.04 or (ii) otherwise in accordance with written instructions
or such other written form of instructions as is customary for the Depositary
for such Security, from such Depositary or its nominee on behalf of any Person
having a beneficial interest in such Global Security.  Subject to the provisions of Section 2.04
and, if applicable, Section 2.12, the Trustee shall deliver and redeliver any
Security in permanent global form in the manner and upon instructions given by
the Person or Persons specified in such Security or in the applicable
Partnership Order.  With respect to the
Securities of any series that are represented by a Global Security, the
Partnership and the Subsidiary Guarantors authorize the execution and delivery
by the Trustee of a letter of representations or other similar agreement or
instrument in the form customarily provided for by the Depositary appointed
with respect to such Global Security. 
Any Global Security may be deposited with the Depositary or its nominee,
or may remain in the custody of the Trustee or the Security Custodian

 

18

 

therefor pursuant to a FAST Balance Certificate
Agreement or similar agreement between the Trustee and the Depositary.  If a Partnership Order has been, or
simultaneously is, delivered, any instructions by the Partnership with respect
to endorsement or delivery or redelivery of a Security in global form shall be
in writing but need not comply with Section 12.05 and need not be accompanied
by an Opinion of Counsel.

 

Members of, or participants in, the Depositary (“Agent
Members”) shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depositary, or the Trustee or the Security
Custodian as its custodian, or under such Global Security, and the Depositary
may be treated by the Partnership, any Subsidiary Guarantor, the Trustee or the
Security Custodian and any agent of the Partnership, any Subsidiary Guarantor,
the Trustee or the Security Custodian as the absolute owner of such Global
Security for all purposes whatsoever. 
Notwithstanding the foregoing, (i) the registered holder of a Global
Security of a series may grant proxies and otherwise authorize any Person,
including Agent Members and Persons that may hold interests through Agent
Members, to take any action that a Holder of Securities of such series is
entitled to take under this Indenture or the Securities of such series and (ii)
nothing herein shall prevent the Partnership, any Subsidiary Guarantor, the
Trustee or the Security Custodian, or any agent of the Partnership, any
Subsidiary Guarantor, the Trustee or the Security Custodian, from giving effect
to any written certification, proxy or other authorization furnished by the
Depositary or shall impair, as between the Depositary and its Agent Members,
the operation of customary practices governing the exercise of the rights of a
beneficial owner of any Security.

 

Notwithstanding Section 2.08, and except as otherwise
provided pursuant to Section 2.01, transfers of a Global Security shall be
limited to transfers of such Global Security in whole, but not in part, to the
Depositary, its successors or their respective nominees.  Interests of beneficial owners in a Global
Security may be transferred in accordance with the rules and procedures of the
Depositary.  Securities shall be
transferred to all beneficial owners in exchange for their beneficial interests
in a Global Security if, and only if, either (1) the Depositary notifies the
Partnership that it is unwilling or unable to continue as Depositary for the
Global Security and a successor Depositary is not appointed by the Partnership
within 90 days of such notice, (2) an Event of Default has occurred with
respect to such series and is continuing and the Registrar has received a
request from the Depositary to issue Securities in lieu of all or a portion of
the Global Security (in which case the Partnership shall deliver Securities
within 30 days of such request) or (3) the Partnership in its sole discretion determines
not to have the Securities represented by a Global Security.

 

In connection with any transfer of a portion of the
beneficial interests in a Global Security to beneficial owners pursuant to this
Section 2.17, the Registrar shall reflect on its books and records the date and
a decrease in the principal amount of the Global Security in an amount equal to
the principal amount of the beneficial interests in the Global Security to be
transferred, and the Partnership shall execute, and the Trustee upon receipt of
a Partnership Order for the authentication and delivery of Securities shall
authenticate and deliver, one or more Securities of the same series of like
tenor and amount.

 

In connection with the transfer of all of the
beneficial interests in a Global Security to beneficial owners pursuant to this
Section 2.17, the Global Security shall be deemed

 

19

 

to be surrendered to the Trustee for cancellation, and
the Partnership shall execute, and the Trustee shall authenticate and deliver,
to each beneficial owner identified by the Depositary in exchange for its
beneficial interests in the Global Security, an equal aggregate principal
amount of Securities of authorized denominations.

 

None of the Partnership, any Subsidiary Guarantor or
the Trustee will have any responsibility or liability for any aspect of the
records relating to, or payments made on account of, Securities by the
Depositary, or for maintaining, supervising or reviewing any records of the
Depositary relating to such Securities.  None
of the Partnership, any Subsidiary Guarantor or the Trustee shall be liable for
any delay by the Holder of the Global Security or the Depositary in identifying
the beneficial owners, and each such Person may conclusively rely on, and shall
be protected in relying on, instructions from such Holder of the Global
Security or the Depositary for all purposes (including with respect to the
registration and delivery, and the respective principal amounts, of the
Securities to be issued).

 

The provisions of the last sentence of the third
paragraph of Section 2.04 shall apply to any Global Security if such Global
Security was never issued and sold by the Partnership and the Partnership or a
Subsidiary Guarantor delivers to the Trustee the Global Security together with
written instructions (which need not comply with Section 12.05 and need not be
accompanied by an Opinion of Counsel) with regard to the cancellation or
reduction in the principal amount of Securities represented thereby, together
with the written statement contemplated by the last sentence of the third
paragraph of Section 2.04.

 

Notwithstanding the provisions of Sections 2.03
and 2.14, unless otherwise specified as contemplated by Section 2.01, payment
of principal of, premium (if any) and interest on and any Additional Amounts
with respect to any Global Security shall be made to the Depositary.

 

The Partnership in issuing Securities of any series
may use CUSIP numbers (if then generally in use), and, if so, the Trustee shall
use CUSIP numbers in notices of redemption as a convenience to Holders of
Securities of such series; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities of such series or as contained in any notice of a redemption
and that reliance may be placed only on the other identification numbers
printed on the Securities of such series, and any such redemption shall not be
affected by any defect in or omission of such numbers.  The Partnership will promptly notify the
Trustee in writing of any change in the CUSIP numbers.

 

Notwithstanding anything herein to the contrary,
delivery or surrender of a Security shall not be required in the case of Global
Securities in order to obtain the rights or benefits provided hereunder upon
the delivery or surrender of a Security.

 

20

 

ARTICLE III

REDEMPTION

 

SECTION 3.01                                                                    Applicability of Article.

 

Securities of any series that are redeemable before
their Stated Maturity shall be redeemable in accordance with their terms and
(except as otherwise specified as contemplated by Section 2.01 for Securities
of any series) in accordance with this Article III.

 

SECTION 3.02                                                                    Notice to the Trustee.

 

If the Partnership elects to redeem Securities of any
series pursuant to this Indenture, it shall notify the Trustee of the
Redemption Date and the principal amount of Securities of such series to be
redeemed.  The Partnership shall so
notify the Trustee at least 45 days before the Redemption Date (unless a
shorter notice shall be satisfactory to the Trustee) by delivering to the
Trustee an Officers’ Certificate stating that such redemption will comply with
the provisions of this Indenture and of the Securities of such series.  Any such notice may be canceled at any time
prior to the mailing of such notice of such redemption to any Holder and shall
thereupon be void and of no effect.

 

SECTION 3.03                                                                    Selection of Securities To Be Redeemed.

 

If less than all of the Securities of any series are
to be redeemed (unless all of the Securities of such series of a specified
tenor are to be redeemed), the particular Securities to be redeemed shall be
selected not more than 60 days prior to the Redemption Date by the Trustee from
the outstanding Securities of such series (and tenor) not previously called for
redemption, either pro rata, by lot or by such other method as the Trustee
shall deem appropriate in accordance with industry standards at the time of
such redemption and that may provide for the selection for redemption of
portions (equal to the minimum authorized denomination for Securities of that
series or any integral multiple thereof) of the principal amount of Securities
of such series of a denomination larger than the minimum authorized
denomination for Securities of that series or of the principal amount of Global
Securities of such series; provided that,
if at the time of redemption such Securities are registered as a Global Security,
the Depositary shall determine, in accordance with its procedures, the
principal amount of such Securities held by each beneficial owner of Securities
to be redeemed.

 

The Trustee shall promptly notify the Partnership and
the Registrar in writing of the Securities selected for redemption and, in the
case of any Securities selected for partial redemption, the principal amount
thereof to be redeemed.

 

For purposes of this Indenture, unless the context
otherwise requires, all provisions relating to redemption of Securities shall
relate, in the case of any of the Securities redeemed or to be redeemed only in
part, to the portion of the principal amount thereof which has been or is to be
redeemed.

 

21

 

SECTION 3.04                                                                    Notice of Redemption.

 

Notice of redemption shall be given by first-class
mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to
the Redemption Date, to each Holder of Securities to be redeemed, at the
address of such Holder appearing in the register of Securities maintained by
the Registrar.

 

All notices of redemption shall identify the
Securities to be redeemed and shall state:

 

(1)                                  the
Redemption Date;

 

(2)                                  the
Redemption Price (or the method of calculating or determining the Redemption
Price);

 

(3)                                  that,
unless the Partnership and the Subsidiary Guarantors default in making the
redemption payment, interest on Securities called for redemption ceases to
accrue on and after the Redemption Date, and the only remaining right of the
Holders of such Securities is to receive payment of the Redemption Price upon
surrender to the Paying Agent of the Securities redeemed;

 

(4)                                  if
any Security is to be redeemed in part, the portion of the principal amount
thereof to be redeemed and that on and after the Redemption Date, upon
surrender for cancellation of such Security to the Paying Agent, a new Security
or Securities in the aggregate principal amount equal to the unredeemed portion
thereof will be issued without charge to the Holder;

 

(5)                                  that
Securities called for redemption must be surrendered to the Paying Agent to
collect the Redemption Price and the name and address of the Paying Agent;

 

(6)                                  that
the redemption is for a sinking or analogous fund, if such is the case; and

 

(7)                                  the
CUSIP number, if any, relating to such Securities.

 

Notice of redemption of Securities to be redeemed at
the election of the Partnership shall be given by the Partnership or, at the
Partnership’s written request, by the Trustee in the name and at the expense of
the Partnership.

 

SECTION 3.05                                                                    Effect of Notice of Redemption.

 

Once notice of redemption is mailed, Securities called
for redemption become due and payable on the Redemption Date and at the
Redemption Price.  Upon surrender to the
Paying Agent, such Securities called for redemption shall be paid at the
Redemption Price, but interest installments whose maturity is on or prior to
such Redemption Date will be payable on the relevant Interest Payment Dates to
the Holders of record at the close of business on the relevant record dates
specified pursuant to Section 2.01.

 

22

 

SECTION 3.06                                                                    Deposit of Redemption Price.

 

On or prior to 11:00 a.m., New York City time, on any
Redemption Date, the Partnership or a Subsidiary Guarantor shall deposit with
the Trustee or the Paying Agent (or, if the Partnership or such Subsidiary Guarantor
is acting as the Paying Agent, segregate and hold in trust as provided in
Section 2.06) an amount of money in same day funds sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date) accrued interest on and any Additional Amounts with respect to,
the Securities or portions thereof which are to be redeemed on that date, other
than Securities or portions thereof called for redemption on that date which
have been delivered by the Partnership or a Subsidiary Guarantor to the Trustee
for cancellation.

 

If the Partnership or a Subsidiary Guarantor complies
with the preceding paragraph, then, unless the Partnership and the Subsidiary
Guarantors default in the payment of such Redemption Price, interest on the
Securities to be redeemed will cease to accrue on and after the applicable
Redemption Date, whether or not such Securities are presented for payment, and
the Holders of such Securities shall have no further rights with respect to
such Securities except for the right to receive the Redemption Price upon
surrender of such Securities.  If any
Security called for redemption shall not be so paid upon surrender thereof for
redemption, the principal, premium, if any, any Additional Amounts, and, to the
extent lawful, accrued interest thereon shall, until paid, bear interest from
the Redemption Date at the rate specified pursuant to Section 2.01 or provided
in the Securities or, in the case of Original Issue Discount Securities, such
Securities’ yield to maturity.

 

SECTION 3.07                                                                    Securities Redeemed in Part.

 

Upon surrender to the Paying Agent of a Security to be
redeemed in part, the Partnership shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge
a new Security or Securities, of the same series and of any authorized
denomination as requested by such Holder in aggregate principal amount equal
to, and in exchange for, the unredeemed portion of the principal of the
Security so surrendered that is not redeemed.

 

SECTION 3.08                                                                    Purchase of Securities.

 

Unless otherwise specified as contemplated by Section
2.01, the Partnership, any Subsidiary Guarantor and any Affiliate of the
Partnership or any Subsidiary Guarantor may at any time purchase or otherwise
acquire Securities in the open market or by private agreement.  Any such acquisition shall not operate as or
be deemed for any purpose to be a redemption of the indebtedness represented by
such Securities.  Any Securities
purchased or acquired by the Partnership or a Subsidiary Guarantor may be
delivered to the Trustee and, upon such delivery, the indebtedness represented
thereby shall be deemed to be satisfied. 
Section 2.13 shall apply to all Securities so delivered.

 

SECTION 3.09                                                                    Mandatory and Optional Sinking Funds.

 

The minimum amount of any sinking fund payment
provided for by the terms of Securities of any series is herein referred to as
a “mandatory sinking fund payment,” and any

 

23

 

payment in excess of such minimum amount provided for
by the terms of Securities of any series is herein referred to as an “optional
sinking fund payment.”  Unless otherwise
provided by the terms of Securities of any series, the cash amount of any
sinking fund payment may be subject to reduction as provided in Section
3.10.  Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series and by this Article III.

 

SECTION 3.10                                                                    Satisfaction of Sinking Fund Payments with Securities.

 

The Partnership or a Subsidiary Guarantor may deliver
outstanding Securities of a series (other than any previously called for
redemption) and may apply as a credit Securities of a series that have been
redeemed either at the election of the Partnership pursuant to the terms of
such Securities or through the application of permitted optional sinking fund
payments pursuant to the terms of such Securities, in each case in satisfaction
of all or any part of any sinking fund payment with respect to the Securities
of such series required to be made pursuant to the terms of such series of
Securities; provided that such Securities have not
been previously so credited.  Such
Securities shall be received and credited for such purpose by the Trustee at
the Redemption Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.

 

SECTION 3.11                                                                    Redemption of Securities for Sinking Fund.

 

Not less than 45 days prior (unless a shorter period
shall be satisfactory to the Trustee) to each sinking fund payment date for any
series of Securities, the Partnership will deliver to the Trustee an Officers’
Certificate of K-Sea General Partner GP LLC specifying the amount of the next
ensuing sinking fund payment for that series pursuant to the terms of that
series, the portion thereof, if any, which is to be satisfied by payment of
cash and the portion thereof, if any, which is to be satisfied by delivery of
or by crediting Securities of that series pursuant to Section 3.10 and will
also deliver or cause to be delivered to the Trustee any Securities to be so
delivered.  Failure of the Partnership to
timely deliver or cause to be delivered such Officers’ Certificate and
Securities specified in this paragraph, if any, shall not constitute a default
but shall constitute the election of the Partnership (i) that the mandatory
sinking fund payment for such series due on the next succeeding sinking fund
payment date shall be paid entirely in cash without the option to deliver or
credit Securities of such series in respect thereof and (ii) that the Partnership
will make no optional sinking fund payment with respect to such series as
provided in this Section 3.11.

 

If the sinking fund payment or payments (mandatory or
optional or both) to be made in cash on the next succeeding sinking fund
payment date plus any unused balance of any preceding sinking fund payments
made in cash shall exceed $100,000 or a lesser sum if the Partnership shall so
request with respect to the Securities of any particular series, such cash
shall be applied on the next succeeding sinking fund payment date to the
redemption of Securities of such series at the sinking fund redemption price
together with accrued interest to the date fixed for redemption.  If such amount shall be $100,000 or less and
the Partnership makes no such request then it shall be carried over until a sum
in excess of $100,000 is available.  Not
less than 30 days before each such sinking fund payment date, the Trustee shall
select the Securities to be redeemed upon such sinking fund payment date in the
manner specified in Section 3.03 and 

 

24

 

cause notice of the redemption thereof to be given in
the name of and at the expense of the Partnership in the manner provided in
Section 3.04.  Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 3.05, 3.06 and 3.07.

 

ARTICLE IV

COVENANTS

 

SECTION 4.01                                                                    Payment of Securities.

 

The Partnership shall pay the principal of, premium
(if any) and interest on and any Additional Amounts with respect to the
Securities of each series on the dates and in the manner provided in the
Securities of such series and in this Indenture.  Principal, premium, interest and any Additional
Amounts shall be considered paid on the date due if the Paying Agent (other
than the Partnership, a Subsidiary Guarantor or a Subsidiary) holds by 11:00
a.m., New York City time, on that date money deposited by the Partnership or a
Subsidiary Guarantor designated for and sufficient to pay all principal,
premium, interest and any Additional Amounts then due.

 

The Partnership shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal and premium (if any), at a rate equal to the then applicable interest
rate on the Securities to the extent lawful; and it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law)
on overdue installments of interest and any Additional Amount (without regard
to any applicable grace period) at the same rate to the extent lawful.

 

SECTION 4.02                                                                    Maintenance of Office or Agency.

 

The Partnership will maintain in each Place of Payment
for any series of Securities an office or agency (which may be an office of the
Trustee, the Registrar or the Paying Agent) where Securities of that series may
be presented for registration of transfer or exchange, where Securities of that
series may be presented for payment and where notices and demands to or upon
the Partnership or a Subsidiary Guarantor in respect of the Securities of that
series and this Indenture may be served. Unless otherwise designated by the
Partnership by written notice to the Trustee and the Subsidiary Guarantors,
such office or agency shall be the office of the Trustee in The City of New
York, which on the date hereof is located at                               .  The Partnership will give prompt written
notice to the Trustee and the Subsidiary Guarantors of the location, and any
change in the location, of such office or agency.  If at any time the Partnership shall fail to
maintain any such required office or agency or shall fail to furnish the
Trustee and the Subsidiary Guarantors with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.

 

The Partnership may also from time to time designate
one or more other offices or agencies where the Securities of one or more
series may be presented or surrendered for any or all such purposes and may
from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner
relieve the Partnership of its obligation to

 

25

 

maintain an office or agency in each Place of Payment
for Securities of any series for such purposes. 
The Partnership will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.

 

SECTION 4.03                                                                    SEC Reports; Financial Statements.

 

(a)                                  If
the Partnership is subject to Section 13 or 15(d) of the Exchange Act, the
Partnership shall file with the Trustee, within 15 days after it files the same
with the SEC, copies of the annual reports and the information, documents and
other reports (or copies of such portions of any of the foregoing as the SEC
may by rules and regulations prescribe) that the Partnership is required to
file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act.  If this Indenture is qualified under the TIA,
but not otherwise, the Partnership shall also comply with the provisions of TIA
§ 314(a).

 

(b)                                 If
the Partnership is not subject to the requirements of Section 13 or 15(d) of
the Exchange Act, the Partnership shall furnish to all Holders of Rule 144A
Securities and prospective purchasers of Rule 144A Securities designated by the
Holders of Rule 144A Securities, promptly upon their request, the information
required to be delivered pursuant to Rule 144A(d)(4) promulgated under the
Securities Act of 1933, as amended.

 

(c)                                  The
Partnership intends to file the reports, information and documents referred to
in Section 4.03(a) hereof with the SEC in electronic form pursuant to
Regulation S-T promulgated by the SEC using the SEC’s Electronic Data
Gathering, Analysis and Retrieval (“EDGAR”) system.  The Partnership shall notify the Trustee in
the manner prescribed herein of each such filing.  The Trustee is hereby authorized and directed
to access the EDGAR system for purposes of retrieving the reports so
filed.  Compliance with the foregoing
shall constitute delivery by the Partnership of such reports to the Trustee in
compliance with the provisions of TIA § 314(a). 
The Trustee shall have no duty to search for or obtain any electronic or
other filings that the Partnership makes with the SEC, regardless of whether
such filings are periodic, supplemental or otherwise.  Delivery of the reports, information and
documents to the Trustee pursuant to this Section 4.03 shall be solely for the
purposes of compliance with this Section 4.03 and with TIA § 314(a).  The Trustee’s receipt of such reports,
information and documents shall not constitute notice to it of the content
thereof or of any matter determinable from the content thereof, including the
Partnership’s and any Subsidiary Guarantor’s compliance with any of their
covenants hereunder, as to which the Trustee is entitled to rely upon Officers’
Certificates.

 

SECTION 4.04                                                                    Compliance Certificate.

 

(a)                                  Each
of the Partnership and the Subsidiary Guarantors shall deliver to the Trustee,
within 120 days after the end of each fiscal year of the Partnership and the
Subsidiary Guarantors, a statement signed by an Officer of K-Sea General
Partner GP LLC or such Subsidiary Guarantor, as the case may be, which need not
constitute an Officers’ Certificate, complying with TIA § 314(a)(4) and stating
that in the course of performance by the signing Officer of his duties as such
Officer of K-Sea General Partner GP LLC or such Subsidiary Guarantor, as the
case may be, he would normally obtain knowledge of the keeping, observing,
performing and fulfilling by the Partnership or such Subsidiary Guarantor, as
the case may be, of its obligations under this Indenture, and further stating
that to the best of his knowledge the

 

26

 

Partnership or such
Subsidiary Guarantor, as the case may be, has kept, observed, performed and
fulfilled each and every covenant contained in this Indenture and is not in
default in the performance or observance of any of the terms, provisions and
conditions hereof (or, if a Default or Event of Default shall have occurred,
describing all such Defaults or Events of Default of which such Officer may
have knowledge and what action the Partnership or such Subsidiary Guarantor, as
the case may be, is taking or proposes to take with respect thereto).

 

(b)                                 The
Partnership or any Subsidiary Guarantor shall, so long as Securities of any
series are outstanding, deliver to the Trustee, as soon as practicable, but in
no event more than five Business Days, after any Officer of K-Sea General
Partner GP LLC or such Subsidiary Guarantor, as the case may be, becoming aware
of any Default or Event of Default under this Indenture, an Officers’
Certificate specifying such Default or Event of Default and what action the
Partnership or such Subsidiary Guarantor, as the case may be, is taking or
proposes to take with respect thereto.

 

SECTION 4.05                                                                    Existence.

 

Subject to Article V, the Partnership and each of the Subsidiary
Guarantors that is a Significant Subsidiary shall do or cause to be done all
things necessary to preserve and keep in full force and effect its existence.  This Section 4.05 shall not prohibit or
restrict the Partnership or any Subsidiary Guarantor from converting into a
different form of legal entity.

 

SECTION 4.06                                                                    Waiver of Stay, Extension or Usury Laws.

 

Each of the Partnership and the Subsidiary Guarantors covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law or any usury law or other law that
would prohibit or forgive it from paying all or any portion of the principal of
or interest on the Securities as contemplated herein, wherever enacted, now or
at any time hereafter in force, or which may affect the covenants or the
performance of this Indenture; and (to the extent that it may lawfully do so)
each of the Partnership and the Subsidiary Guarantors hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.

 

SECTION 4.07                                                                    Additional Amounts.

 

If the Securities of a series expressly provide for
the payment of Additional Amounts, the Partnership will pay to the Holder of
any Security of such series Additional Amounts as expressly provided
therein.  Whenever in this Indenture
there is mentioned, in any context, the payment of the principal of or any
premium or interest on, or in respect of, any Security of any series or the net
proceeds received from the sale or exchange of any Security of any series, such
mention shall be deemed to include mention of the payment of Additional Amounts
provided for in this Section 4.07 to the extent that, in such context,
Additional Amounts are, were or would be payable in respect thereof pursuant to
the provisions of this Section 4.07 and express mention of the payment of
Additional Amounts (if applicable) in any

 

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provisions hereof shall not be construed as excluding
Additional Amounts in those provisions hereof where such express mention is not
made.

 

ARTICLE V

SUCCESSORS

 

SECTION 5.01                                                                    Limitations on Mergers and Consolidations.

 

Neither the Partnership nor any Subsidiary Guarantor
shall, in any transaction or series of transactions, consolidate with or merge
into any Person, or sell, lease, convey, transfer or otherwise dispose of all
or substantially all of its assets to any Person (other than a consolidation or
merger of the Partnership and one or more Subsidiary Guarantors or two or more Subsidiary
Guarantors, or a sale, lease, conveyance, transfer or other disposition of all
or substantially all of the assets of the Partnership to a Subsidiary Guarantor,
a Subsidiary Guarantor to the Partnership or of a Subsidiary Guarantor to
another Subsidiary Guarantor), unless:

 

(1)                                  either
(a) the Partnership or such Subsidiary Guarantor, as the case may be, shall be
the continuing Person or (b) the Person (if other than the Partnership or such
Subsidiary Guarantor) formed by such consolidation or into which the Partnership
or such Subsidiary Guarantor is merged, or to which such sale, lease,
conveyance, transfer or other disposition shall be made (collectively, the “Successor”),
is organized and validly existing under the laws of the United States of
America, any political subdivision thereof or any State thereof or the District
of Columbia, and expressly assumes by supplemental indenture, in the case of
the Partnership, the due and punctual payment of the principal of, premium (if
any) and interest on and any Additional Amounts with respect to all the
Securities and the performance of the Partnership’s covenants and obligations
under this Indenture and the Securities, or, in the case of such Subsidiary Guarantor,
the performance of the Guarantee and such Subsidiary Guarantor’s covenants and
obligations under this Indenture and the Securities;

 

(2)                                  immediately
after giving effect to such transaction or series of transactions, no Default
or Event of Default shall have occurred and be continuing or would result
therefrom; and

 

(3)                                  in
the case of clause (1)(b) above, the Successor delivers to the Trustee an
Officers’ Certificate and an Opinion of Counsel, each stating that the
transaction and such supplemental indenture comply with this Indenture.

 

SECTION 5.02                                                                    Successor Person Substituted.

 

Upon any consolidation or merger of the Partnership or
a Subsidiary Guarantor, as the case may be, or any sale, lease, conveyance,
transfer or other disposition of all or substantially all of the assets of the
Partnership or such Subsidiary Guarantor in accordance with Section 5.01, the
Successor formed by such consolidation or into or with which the Partnership or
such Subsidiary Guarantor is merged or to which such sale, lease, conveyance,
transfer or other disposition is made shall succeed to, and be substituted for,
and may exercise every right and power of the Partnership or such Subsidiary Guarantor,
as the case may be, under this

 

28

 

Indenture and the Securities with the same effect as
if such Successor had been named as the Partnership or such Subsidiary Guarantor,
as the case may be, herein and the predecessor Partnership or Subsidiary Guarantor,
in the case of a sale, conveyance, transfer or other disposition, shall be
released from all obligations under this Indenture, the Securities and, in the
case of a Subsidiary Guarantor, its Guarantee.

 

ARTICLE VI

DEFAULTS AND REMEDIES

 

SECTION 6.01                                                                    Events of Default.

 

Unless either inapplicable to a particular series or
specifically deleted or modified in or pursuant to the supplemental indenture
or Board Resolution establishing such series of Securities or in the form of
Security for such series, an “Event of Default,” wherever used herein with
respect to Securities of any series, occurs if:

 

(1)                                  there
is a default in the payment of interest on or any Additional Amounts with
respect to any Security of that series when the same becomes due and payable
and such default continues for a period of 30 days;

 

(2)                                  there
is a default in the payment of the principal of or premium, if any, on any
Securities of that series as and when the same shall become due and payable,
whether at Stated Maturity, upon redemption, by declaration, upon required
repurchase or otherwise;

 

(3)                                  there
is a default in the payment of any sinking fund payment with respect to any
Securities of that series as and when the same shall become due and payable;

 

(4)                                  there
is a failure on the part of the Partnership, or if any series of Securities
outstanding under this Indenture is entitled to the benefits of a Guarantee,
any of the Subsidiary Guarantors, duly to observe or perform any other of the
covenants or agreements on the part of the Partnership, or if applicable, any
of the Subsidiary Guarantors, in the Securities of that series, in any
resolution of the Board of Directors authorizing the issuance of that series of
Securities, in this Indenture with respect to such series or in any
supplemental Indenture with respect to such series (other than a default in the
performance of a covenant which is specifically dealt with elsewhere in this
Section 6.01), continuing for a period of 60 days after the date on which
written notice specifying such failure and requiring the Partnership, or if
applicable, the Subsidiary Guarantors, to remedy the same shall have been
given, by registered or certified mail, to the Partnership, or if applicable,
the Subsidiary Guarantors, by the Trustee or to the Partnership, or if
applicable, the Subsidiary Guarantors, and the Trustee by the Holders of at
least 25% in aggregate principal amount of the Securities of that series at the
time outstanding;

 

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(5)                                  the
Partnership, or if that series of Securities is entitled to the benefits of a
Guarantee by the Subsidiary Guarantors, any of such Subsidiary Guarantors that
is a Significant Subsidiary, pursuant to or within the meaning of any
Bankruptcy Law:

 

(A)                              commences
a voluntary case,

 

(B)                                consents
to the entry of an order for relief against it in an involuntary case,

 

(C)                                consents
to the appointment of a Bankruptcy Custodian of it or for all or substantially
all of its property, or

 

(D)                               makes
a general assignment for the benefit of its creditors;

 

(6)                                  a
court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that remains unstayed and in effect for 60 days and that:

 

(A)                              is
for relief against the Partnership or any Subsidiary Guarantor that is a
Significant Subsidiary as debtor in an involuntary case,

 

(B)                                appoints
a Bankruptcy Custodian of the Partnership or any Subsidiary Guarantor that is a
Significant Subsidiary or a Bankruptcy Custodian for all or substantially all
of the property of the Partnership or any Subsidiary Guarantor that is a
Significant Subsidiary, or

 

(C)                                orders
the liquidation of the Partnership or any Subsidiary Guarantor that is a
Significant Subsidiary;

 

(7)                                  that
series of Securities is entitled to the benefits of a Guarantee by the
Subsidiary Guarantors, the Guarantee of any of such Subsidiary Guarantors that
is a Significant Subsidiary ceases to be in full force and effect with respect
to Securities of that series (except as otherwise provided in this Indenture)
or is declared null and void in a judicial proceeding, or any such Subsidiary
Guarantor denies or disaffirms its obligations under this Indenture or such
Guarantee; or

 

(8)                                  any
other Event of Default provided with respect to Securities of that series
occurs.

 

The term “Bankruptcy Custodian” means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.

 

The Trustee shall not be deemed to know or have notice
of any Default or Event of Default unless a Responsible Officer of the Trustee
has actual knowledge thereof or unless written notice of any event which is in
fact such a Default or Event of Default is received by the Trustee at the
Corporate Trust Office of the Trustee, and such notice references the
Securities and this Indenture.

 

30

 

When a Default is cured, it ceases.

 

A Default under clause (4) or (8) of this Section 6.01
is not an Event of Default until the Trustee notifies the Partnership and the Subsidiary
Guarantors, or the Holders of at least 25% in principal amount of the then
outstanding Securities of the series affected by such Default (or, in the case
of a Default under clause (4) of this Section 6.01, if outstanding Securities
of other series are affected by such Default, then at least 25% in principal
amount of the then outstanding Securities so affected) notify the Partnership,
the Subsidiary Guarantors and the Trustee, of the Default, and the Partnership
or the applicable Subsidiary Guarantor, as the case may be, fails to cure the
Default within 60 days after receipt of the notice.  The notice must specify the Default, demand
that it be remedied and state that the notice is a “Notice of Default.”

 

SECTION 6.02                                                                    Acceleration.

 

If an Event of Default with respect to any Securities
of any series at the time outstanding (other than an Event of Default specified
in clause (5) or (6) of Section 6.01) occurs and is continuing, the Trustee by
notice to the Partnership and the Subsidiary Guarantors, or the Holders of at
least 25% in principal amount of the then outstanding Securities of the series
affected by such Event of Default (or, in the case of an Event of Default
described in clause (4) of Section 6.01, if outstanding Securities of
other series are affected by such Event of Default, then at least 25% in
principal amount of the then outstanding Securities so affected) by notice to
the Partnership, the Subsidiary Guarantors and the Trustee, may declare the
principal of (or, if any such Securities are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) and all accrued and unpaid interest on all then
outstanding Securities of such series or of all series, as the case may be, to
be due and payable.  Upon any such
declaration, the amounts due and payable on the Securities shall be due and
payable immediately.  If an Event of
Default specified in clause (5) or (6) of Section 6.01 hereof occurs, such
amounts shall ipso facto become and be
immediately due and payable without any declaration, notice or other act on the
part of the Trustee or any Holder.  The
Holders of a majority in principal amount of the then outstanding Securities of
the series affected by such Event of Default or all series so affected, as the
case may be, by written notice to the Trustee may rescind an acceleration and
its consequences (other than nonpayment of principal of or premium or interest
on or any Additional Amounts with respect to the Securities) if the rescission
would not conflict with any judgment or decree and if all existing Events of Default
with respect to Securities of that series (or of all series, as the case may
be) have been cured or waived, except nonpayment of principal, premium,
interest or any Additional Amounts that has become due solely because of the
acceleration.

 

SECTION 6.03                                                                    Other Remedies.

 

If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy to collect the payment of principal of,
or premium, if any, or interest on the Securities or to enforce the performance
of any provision of the Securities or this Indenture.

 

The Trustee may maintain a proceeding even if it does
not possess any of the Securities or does not produce any of them in the
proceeding.  A delay or omission by the
Trustee or any Holder in exercising any right or remedy accruing upon an Event
of Default shall

 

31

 

not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default.  All remedies are
cumulative to the extent permitted by law.

 

SECTION 6.04                                                                    Waiver of Defaults.

 

Subject to Sections 6.07 and 9.02, the Holders of a
majority in principal amount of the then outstanding Securities of any series
or of all series affected thereby (acting as one class) by notice to the
Trustee may waive an existing or past Default or Event of Default with respect
to such series or all series so affected, as the case may be, and its
consequences (including waivers obtained in connection with a tender offer or
exchange offer for Securities of such series or all series so affected or a
solicitation of consents in respect of Securities of such series or all series
so affected, provided that in each case such
offer or solicitation is made to all Holders of then outstanding Securities of
such series or all series so affected (but the terms of such offer or
solicitation may vary from series to series)), except (1) a continuing
Default or Event of Default in the payment of the principal of, or premium, if
any, or interest on or any Additional Amounts with respect to any Security or
(2) a continued Default in respect of a provision that under
Section 9.02 cannot be amended or supplemented without the consent of each
Holder affected.  Upon any such waiver,
such Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.

 

SECTION 6.05                                                                    Control by Majority.

 

With respect to Securities of any series, the Holders
of a majority in principal amount of the then outstanding Securities of such
series may direct in writing the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it relating to or arising under an Event of Default
described in clause (1), (2), (3) or (8) of Section 6.01, and with
respect to all Securities, the Holders of a majority in principal amount of all
the then outstanding Securities affected may direct in writing the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or exercising any trust or power conferred on it not relating to or arising
under such an Event of Default.  However,
the Trustee may refuse to follow any direction that conflicts with applicable
law or this Indenture, that the Trustee determines may be unduly prejudicial to
the rights of other Holders, or that may involve the Trustee in personal
liability; provided, however, that the Trustee may
take any other action deemed proper by the Trustee that is not inconsistent
with such direction.  Prior to taking any
action hereunder, the Trustee shall be entitled to indemnification satisfactory
to it in its sole discretion from Holders directing the Trustee against all
losses and expenses caused by taking or not taking such action.

 

32

 

SECTION 6.06                                                                    Limitations on Suits.

 

Subject to Section 6.07 hereof, a Holder of a Security
of any series may pursue a remedy with respect to this Indenture or the
Securities of such series or the related Guarantees, if any, only if:

 

(1)                                  the Holder gives to the Trustee written notice of a
continuing Event of Default with respect to such series;

 

(2)                                  the Holders of at least 25% in principal amount of the then
outstanding Securities of such series make a written request to the Trustee to
pursue the remedy;

 

(3)                                  such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;

 

(4)                                  the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and

 

(5)                                  during such 60-day period the Holders of a majority in
principal amount of the Securities of that series do not give the Trustee a
direction inconsistent with the request.

 

A Holder may not use this Indenture to prejudice the
rights of another Holder or to obtain a preference or priority over another
Holder.

 

SECTION 6.07                                                                    Rights of Holders to Receive Payment.

 

Notwithstanding any other provision of this Indenture,
the right of any Holder of a Security to receive payment of principal of and
premium, if any, and interest on and any Additional Amounts with respect to the
Security, on or after the respective due dates expressed in the Security, or to
bring suit for the enforcement of any such payment on or after such respective
dates, is absolute and unconditional and shall not be impaired or affected
without the consent of the Holder.

 

SECTION 6.08                                                                    Collection Suit by Trustee.

 

If an Event of Default specified in clause (1) or (2)
of Section 6.01 hereof occurs and is continuing, the Trustee is authorized to
recover judgment in its own name and as trustee of an express trust against the
Partnership or a Subsidiary Guarantor for the amount of principal, premium (if
any), interest and any Additional Amounts remaining unpaid on the Securities of
the series affected by the Event of Default, and interest on overdue principal
and premium, if any, and, to the extent lawful, interest on overdue interest,
and such further amount as shall be sufficient to cover the costs and expenses
of collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.

 

33

 

SECTION 6.09                                                                    Trustee May File Proofs of Claim.

 

The Trustee is authorized to file such proofs of claim
and other papers or documents and to take such actions, including participating
as a member, voting or otherwise, of any committee of creditors, as may be
necessary or advisable to have the claims of the Trustee (including any claim
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and the Holders allowed in any judicial
proceedings relative to the Partnership or a Subsidiary Guarantor or their
respective creditors or properties and shall be entitled and empowered to
collect, receive and distribute any money or other property payable or
deliverable on any such claims and any Bankruptcy Custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments
to the Trustee, and in the event that the Trustee shall consent to the making
of such payments directly to the Holders, to pay to the Trustee any amount due
to it for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 7.07. To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 7.07 out of the estate in any such
proceeding, shall be denied for any reason, payment of the same shall be
secured by a lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties which the Holders of the
Securities may be entitled to receive in such proceeding whether in liquidation
or under any plan of reorganization or arrangement or otherwise.  Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf
of any Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof, or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.

 

SECTION 6.10                                                                    Priorities.

 

If the Trustee collects any money pursuant to this
Article VI, it shall pay out the money in the following order:

 

First:  to the
Trustee for amounts due under Section 7.07;

 

Second:  to Holders for amounts due and unpaid on the
Securities in respect of which or for the benefit of which such money has been
collected, for principal, premium (if any), interest and any Additional Amounts
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Securities for principal, premium (if any), interest
and any Additional Amounts, respectively; and

 

Third:  to the
Partnership.

 

The Trustee, upon prior written notice to the
Partnership, may fix record dates and payment dates for any payment to Holders
pursuant to this Article VI.

 

To the fullest extent allowed under applicable law, if
for the purpose of obtaining a judgment against the Partnership or a Subsidiary
Guarantor in any court it is necessary to convert the sum due in respect of the
principal of, premium (if any) or interest on or Additional Amounts with
respect to the Securities of any series (the “Required Currency”) into a
currency in

 

34

 

which a judgment will be rendered (the “Judgment
Currency”), the rate of exchange used for purposes of rendering the judgment shall
be the rate at which in accordance with normal banking procedures the Trustee
could purchase in The City of New York the Required Currency with the Judgment
Currency on the Business Day in The City of New York next preceding that on
which final judgment is given.  None of
the Partnership, any Subsidiary Guarantor or the Trustee shall be liable for
any shortfall nor shall it benefit from any windfall in payments to Holders of
Securities under this Section 6.10 caused by a change in exchange rates between
the time the amount of a judgment against it is calculated as above and the
time the Trustee converts the Judgment Currency into the Required Currency to
make payments under this Section 6.10 to Holders of Securities, but payment of
such judgment shall discharge all amounts owed by the Partnership and the Subsidiary
Guarantors on the claim or claims underlying such judgment.

 

SECTION 6.11                                                                    Undertaking for Costs.

 

In any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for any action taken or
omitted by it as a trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys’ fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant.  This Section 6.11 does not
apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07, or
a suit by a Holder or Holders of more than 10% in principal amount of the then
outstanding Securities of any series.

 

ARTICLE VII

TRUSTEE

 

SECTION 7.01                                                                    Duties of Trustee.

 

(a)                                  If
an Event of Default has occurred and is continuing, the 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 such exercise, as a prudent person would exercise
or use under the circumstances in the conduct of such person’s own affairs.

 

(b)                                 Except
during the continuance of an Event of Default with respect to the Securities of
any series:

 

(1)                                  the
Trustee need perform only those duties that are specifically set forth in this
Indenture and no others, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and

 

(2)                                  in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture.  However, the Trustee shall examine such
certificates and opinions to determine whether, on their face, they appear to
conform to the requirements of this Indenture.

 

35

 

(c)                                  The
Trustee may not be relieved from liabilities for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:

 

(1)                                  this paragraph does not limit the effect of Section 7.01(b);

 

(2)                                  the
Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and

 

(3)                                  the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction received
by it pursuant to Section 6.05.

 

(d)                                 Whether
or not therein expressly so provided, every provision of this Indenture that in
any way relates to the Trustee is subject to the provisions of this Section 7.01.

 

(e)                                  No
provision of this Indenture shall require the Trustee to expend or risk its own
funds or incur any liability.  The
Trustee may refuse to perform any duty or exercise any right or power unless it
receives indemnity satisfactory to it against any loss, liability or expense.

 

(f)                                    The
Trustee shall not be liable for interest on any money received by it except as
the Trustee may agree in writing with the Partnership and the Subsidiary
Guarantors.  Money held in trust by the
Trustee need not be segregated from other funds except to the extent required
by law.  All money received by the
Trustee shall, until applied as herein provided, be held in trust for the
payment of the principal of, premium (if any) and interest on and Additional
Amounts with respect to the Securities.

 

SECTION 7.02                                                                    Rights of Trustee.

 

(a)                                  The
Trustee may conclusively rely on any document believed by it to be genuine and
to have been signed or presented by the proper Person.  The Trustee need not investigate any fact or
matter stated in the document.

 

(b)                                 Before
the Trustee acts or refrains from acting, it may require instruction, an
Officers’ Certificate or an Opinion of Counsel or both to be provided.  The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such instruction,
Officers’ Certificate or Opinion of Counsel. 
The Trustee may consult at the Partnership’s expense with counsel of its
selection and the advice of such counsel or any 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 reliance thereon.

 

(c)                                  The
Trustee may act through agents and shall not be responsible for the misconduct
or negligence of any agent appointed with due care.

 

(d)                                 The
Trustee shall not be liable for any action it takes or omits to take in good
faith which it believes to be authorized or within its rights or powers
conferred upon it by this Indenture.

 

36

 

(e)                                  Unless
otherwise specifically provided in this Indenture, any demand, request,
direction or notice from the Partnership or any Subsidiary Guarantor shall be
sufficient if signed by an Officer of K-Sea General Partner GP LLC.

 

(f)                                    The
Trustee shall not be charged with knowledge of any Default or Event of Default
with respect to the Securities, unless either (1) a Responsible Officer shall
have actual knowledge of such Default or Event of Default or (2) written notice
of such Default or Event of Default shall have been given to the Trustee by the
Partnership, any Subsidiary Guarantor or by any Holder of the Securities, and
such notice references the Securities and this Indenture.

 

(g)                                 The
permissive rights of the Trustee enumerated herein shall not be construed as
duties.

 

SECTION 7.03                                                                    May Hold Securities.

 

The Trustee in its individual or any other capacity
may become the owner or pledgee of Securities and may otherwise deal with the
Partnership, any Subsidiary Guarantor or any of their respective Affiliates
with the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights and duties. 
However, the Trustee is subject to Sections 7.10 and 7.11.

 

SECTION 7.04                                                                    Trustee’s Disclaimer.

 

The Trustee makes no representation as to the validity
or adequacy of this Indenture or the Securities, it shall not be accountable
for the Partnership’s use of the proceeds from the Securities or any money paid
to the Partnership or any Subsidiary Guarantor or upon the Partnership’s or such
Subsidiary Guarantor’s direction under any provision hereof, it shall not be
responsible for the use or application of any money received by any Paying
Agent other than the Trustee and it shall not be responsible for any statement
or recital herein or any statement in the Securities other than its certificate
of authentication.

 

SECTION 7.05                                                                    Notice of Defaults.

 

If a Default or Event of Default with respect to the
Securities of any series occurs and is continuing and it is known to the
Trustee, the Trustee shall mail to Holders of Securities of such series a
notice of the Default or Event of Default within 90 days after it occurs.  Except in the case of a Default or Event of
Default in payment of principal of, premium (if any) and interest on and
Additional Amounts or any sinking fund installment with respect to the
Securities of such series, the Trustee may withhold the notice if and so long
as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of Holders of Securities of such
series.

 

SECTION 7.06                                                                    Reports by Trustee to Holders.

 

Within 60 days after each January 15 of each year
after the execution of this Indenture, the Trustee shall mail to Holders of a
series, the Subsidiary Guarantors and the Partnership a brief report dated as
of such reporting date that complies with TIA § 313(a); provided, however, that if no event described in TIA
§ 313(a) has occurred within the twelve months preceding the reporting
date with respect to a series, no report need be transmitted to

 

37

 

Holders of such series.  The Trustee also shall comply with TIA
§ 313(b).  The Trustee shall also
transmit by mail all reports if and as required by TIA §§ 313(c) and 313(d).

 

A copy of each report at the time of its mailing to
Holders of a series of Securities shall be filed by the Partnership or a
Subsidiary Guarantor with the SEC and each securities exchange, if any, on
which the Securities of such series are listed. The Partnership shall notify
the Trustee if and when any series of Securities is listed on any securities
exchange.

 

SECTION 7.07                                                                    Compensation and Indemnity.

 

The Partnership agrees to pay to the Trustee for its
acceptance of this Indenture and services hereunder such compensation as the
Partnership and the Trustee shall from time to time agree in writing. The
Trustee’s compensation shall not be limited by any law on compensation of a
trustee of an express trust.  The
Partnership agrees to reimburse the Trustee upon request for all reasonable
disbursements, advances and expenses incurred by it.  Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee’s agents and counsel.

 

The Partnership hereby indemnifies the Trustee and any
predecessor Trustee against any and all loss, liability, damage, claim or
expense, including taxes (other than taxes based upon, measured by or
determined by the income of the Trustee), incurred by it arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, except as set forth in the next following paragraph.  The Trustee shall notify the Partnership and
the Subsidiary Guarantors promptly of any claim for which it may seek
indemnity.  The Partnership shall defend
the claim and the Trustee shall cooperate in the defense.  The Trustee may have separate counsel and the
Partnership shall pay the reasonable fees and expenses of such counsel.  The Partnership need not pay for any
settlement made without its consent.

 

The Partnership shall not be obligated to reimburse
any expense or indemnify against any loss or liability incurred by the Trustee
through the Trustee’s negligence, willful misconduct or bad faith.

 

To secure the payment obligations of the Partnership
in this Section 7.07, the Trustee shall have a lien prior to the Securities on
all money or property held or collected by the Trustee, except that held in
trust to pay principal of, premium (if any) and interest on and any Additional
Amounts with respect to Securities of any series.  Such lien and the Partnership’s obligations
under this Section 7.07 shall survive the resignation or removal of the Trustee
and the satisfaction and discharge of this Indenture.

 

When the Trustee incurs expenses or renders services
after an Event of Default specified in Section 6.01(5) or (6) occurs, the
expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.

 

SECTION 7.08                                                                    Replacement of Trustee.

 

A resignation or removal of the Trustee and
appointment of a successor Trustee shall become effective only upon the
successor Trustee’s acceptance of appointment as provided in this Section 7.08.

 

38

 

The Trustee may resign and be discharged at any time
with respect to the Securities of one or more series by so notifying the
Partnership and the Subsidiary Guarantors. 
The Holders of a majority in principal amount of the then outstanding
Securities of any series may remove the Trustee with respect to the Securities
of such series by so notifying the Trustee, the Partnership and the Subsidiary
Guarantors.  The Partnership may remove
the Trustee if:

 

(1)                                  the Trustee fails to comply with Section 7.10;

 

(2)                                  the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any Bankruptcy
Law;

 

(3)                                  a Bankruptcy Custodian or public officer takes charge of the
Trustee or its property; or

 

(4)                                  the Trustee otherwise becomes incapable of acting.

 

If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, with respect to the Securities
of one or more series, the Partnership shall promptly appoint a successor
Trustee or Trustees with respect to the Securities of that or those series (it
being understood that any such successor Trustee may be appointed with respect
to the Securities of one or more or all of such series and that at any time
there shall be only one Trustee with respect to the Securities of any
particular series).  Within one year
after the successor Trustee with respect to the Securities of any series takes
office, the Holders of a majority in principal amount of the Securities of such
series then outstanding may appoint a successor Trustee to replace the
successor Trustee appointed by the Partnership.

 

If a successor Trustee with respect to the Securities
of any series does not take office within 30 days after the retiring or removed
Trustee resigns or is removed, the retiring or removed Trustee (at the expense
of the Partnership), the Partnership, any Subsidiary Guarantor or the Holders
of at least 10% in principal amount of the then outstanding Securities of such
series may petition any court of competent jurisdiction for the appointment of
a successor Trustee with respect to the Securities of such series.

 

If the Trustee with respect to the Securities of a
series fails to comply with Section 7.10, any Holder of Securities of such
series may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee with respect to the
Securities of such series.

 

In case of the appointment of a successor Trustee with
respect to all Securities, each such successor Trustee shall deliver a written
acceptance of its appointment to the retiring Trustee, to the Partnership and
to the Subsidiary Guarantors.  Thereupon
the resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
retiring Trustee under this Indenture. 
The successor Trustee shall mail a notice of its succession to
Holders.  The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee,
subject to the lien provided for in Section 7.07.

 

39

 

In case of the appointment of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Partnership,
the Subsidiary Guarantors, the retiring Trustee and each successor Trustee with
respect to the Securities of one or more (but not all) series shall execute and
deliver an indenture supplemental hereto in which each successor Trustee shall
accept such appointment and that (1) shall confer to each successor Trustee all
the rights, powers and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates, (2) if the retiring Trustee is not retiring with respect to
all Securities, shall confirm that all the rights, powers and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee and (3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee.  Nothing herein or in such supplemental
indenture shall constitute such Trustees as co-trustees of the same trust, and
each such Trustee shall be trustee of a trust or trusts hereunder separate and
apart from any trust or trusts hereunder administered by any other such
Trustee.  Upon the execution and delivery
of such supplemental indenture, the resignation or removal of the retiring
Trustee shall become effective to the extent provided therein and each such
successor Trustee shall have all the rights, powers and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates. 
On request of the Partnership or any successor Trustee, such retiring
Trustee shall transfer to such successor Trustee all property held by such
retiring Trustee as Trustee with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.  Such retiring Trustee shall, however, have
the right to deduct its unpaid fees and expenses, including attorneys’ fees.

 

Notwithstanding replacement of the Trustee or Trustees
pursuant to this Section 7.08, the obligations of the Partnership under
Section 7.07 shall continue for the benefit of the retiring Trustee or
Trustees.

 

SECTION 7.09                                                                    Successor Trustee by Merger, etc.

 

Subject to Section 7.10, if the Trustee consolidates,
merges or converts into, or transfers all or substantially all of its corporate
trust business to, another corporation, the successor corporation without any
further act shall be the successor Trustee; provided, however,
that in the case of a transfer of all or substantially all of its corporate
trust business to another corporation, the transferee corporation expressly
assumes all of the Trustee’s liabilities hereunder.

 

In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated; and in case at that
time any of the Securities shall not have been authenticated, any successor to
the Trustee may authenticate such Securities either in the name of any
predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee shall have.

 

40

 

SECTION 7.10                                                                    Eligibility; Disqualification.

 

There shall at all times be a Trustee hereunder which
shall be a corporation or banking association organized and doing business
under the laws of the United States, any State thereof or the District of
Columbia and authorized under such laws to exercise corporate trust power, shall
be subject to supervision or examination by federal or state (or the District
of Columbia) authority and shall have, or be a subsidiary of a bank or bank
holding company having, a combined capital and surplus of at least $50 million
as set forth in its most recent published annual report of condition.

 

The Indenture shall always have a Trustee who
satisfies the requirements of TIA §§ 310(a)(1),
310(a)(2) and 310(a)(5).  The Trustee is
subject to and shall comply with the provisions of TIA § 310(b) during the
period of time required by this Indenture. Nothing in this Indenture shall
prevent the Trustee from filing with the SEC the application referred to in the
penultimate paragraph of TIA § 310(b).

 

SECTION 7.11                                                                    Preferential Collection of Claims Against the
Partnership or a Subsidiary Guarantor.

 

The Trustee is subject to and shall comply with the
provisions of TIA § 311(a), excluding any creditor relationship listed in
TIA § 311(b).  A Trustee who has
resigned or has been removed shall be subject to TIA § 311(a) to the
extent indicated therein.

 

ARTICLE VIII

DISCHARGE OF INDENTURE

 

SECTION 8.01                                                                    Termination of the Partnership’s and the Subsidiary Guarantors’
Obligations.

 

(a)                                  This
Indenture shall cease to be of further effect with respect to the Securities of
a series (except that the Partnership’s obligations under Section 7.07, the
Trustee’s and Paying Agent’s obligations under Section 8.03 and the rights,
powers, protections and privileges accorded the Trustee under Article VII shall
survive), and the Trustee, on demand of the Partnership, shall execute proper
instruments acknowledging the satisfaction and discharge of this Indenture with
respect to the Securities of such series, when:

 

(1)                                  either:

 

(A)                              all
outstanding Securities of such series theretofore authenticated and issued
(other than destroyed, lost or stolen Securities that have been replaced or
paid) have been delivered to the Trustee for cancellation; or

 

(B)                                all outstanding Securities of such series not theretofore
delivered to the Trustee for cancellation:

 

(i)                                     have become due and payable, or

 

41

 

(ii)                                  will become due and payable at their Stated Maturity within
one year, or

 

(iii)                               are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of redemption
by the Trustee in the name, and at the expense, of the Partnership,

 

and, in the case of clause (i), (ii) or (iii) above,
the Partnership or a Subsidiary Guarantor has irrevocably deposited or caused
to be deposited with the Trustee as funds (immediately available to the Holders
in the case of clause (i)) in trust for such purpose (x) cash in an
amount, or (y) Government Obligations with respect to such series,
maturing as to principal and interest at such times and in such amounts as will
ensure the availability of cash in an amount or (z) a combination thereof,
which will be sufficient, in the opinion (in the case of clauses (y) and (z))
of a nationally recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee, to pay and discharge
the entire indebtedness on the Securities of such series for principal and
interest to the date of such deposit (in the case of Securities which have become
due and payable) or for principal, premium, if any, and interest to the Stated
Maturity or Redemption Date, as the case may be; or

 

(C)                                the Partnership and the Subsidiary Guarantors have properly
fulfilled such other means of satisfaction and discharge as is specified, as
contemplated by Section 2.01, to be applicable to the Securities of such
series;

 

(2)                                  the
Partnership or a Subsidiary Guarantor has paid or caused to be paid all other
sums payable by them hereunder with respect to the Securities of such series;
and

 

(3)                                  the
Partnership has delivered to the Trustee an Officers’ Certificate stating that
all conditions precedent to satisfaction and discharge of this Indenture with
respect to the Securities of such series have been complied with, together with
an Opinion of Counsel to the same effect.

 

(b)                                 Unless
this Section 8.01(b) is specified as not being applicable to Securities of a
series as contemplated by Section 2.01, the Partnership may, at its
option, terminate certain of its and the Subsidiary Guarantors’ respective
obligations under this Indenture (“covenant defeasance”) with respect to the
Securities of a series if:

 

(1)                                  the
Partnership or a Subsidiary Guarantor has irrevocably deposited or caused to be
irrevocably deposited with the Trustee as trust funds in trust for the purpose
of making the following payments, specifically pledged as security for and
dedicated solely to the benefit of the Holders of Securities of such series,
(i) money in the currency in which payment of the Securities of such
series is to be made in an amount, or (ii) Government Obligations with
respect to such series, maturing as to principal and interest at such times and
in such amounts as will ensure the availability of money in the currency in
which payment of the Securities of such series is to be made in an amount or

 

42

 

(iii) a
combination thereof, that is sufficient, in the opinion (in the case of clauses
(ii) and (iii)) of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, to pay the principal of and premium (if any) and interest on all
Securities of such series on each date that such principal, premium (if any) or
interest is due and payable and (at the Stated Maturity thereof or upon
redemption as provided in Section 8.01(e)) to pay all other sums payable by it
hereunder; provided that the Trustee shall have
been irrevocably instructed to apply such money and/or the proceeds of such
Government Obligations to the payment of said principal, premium (if any) and
interest with respect to the Securities of such series as the same shall become
due;

 

(2)                                  the
Partnership has delivered to the Trustee an Officers’ Certificate stating that
all conditions precedent to satisfaction and discharge of this Indenture with
respect to the Securities of such series have been complied with, and an
Opinion of Counsel to the same effect;

 

(3)                                  no Default or Event of Default with respect to the
Securities of such series shall have occurred and be continuing on the date of
such deposit;

 

(4)                                  the
Partnership shall have delivered to the Trustee an Opinion of Counsel from a
nationally recognized counsel acceptable to the Trustee or a private letter
ruling issued by the United States Internal Revenue Service to the effect that
the Holders will not recognize income, gain or loss for United States Federal
income tax purposes as a result of the Partnership’s exercise of its option
under this Section 8.01(b) and will be subject to United States Federal income
tax on the same amount and in the same manner and at the same times as would
have been the case if such option had not been exercised;

 

(5)                                  the
Partnership and the Subsidiary Guarantors have complied with any additional
conditions specified pursuant to Section 2.01 to be applicable to the discharge
of Securities of such series pursuant to this Section 8.01; and

 

(6)                                  such deposit and discharge shall not cause the Trustee to
have a conflicting interest as defined in TIA § 310(b).

 

In such event, this Indenture shall cease to be of
further effect (except as set forth in this paragraph), and the Trustee, on
demand of the Partnership, shall execute proper instruments acknowledging
satisfaction and discharge under this Indenture.  However, the Partnership’s and the Subsidiary
Guarantors’ respective obligations in Sections 2.05, 2.06, 2.07, 2.08, 2.09,
4.01, 4.02, 7.07, 7.08, 8.04 and 11.01, the Trustee’s and Paying Agent’s
obligations in Section 8.03 and the rights, powers, protections and
privileges accorded the Trustee under Article VII shall survive until all
Securities of such series are no longer outstanding.  Thereafter, only the Partnership’s
obligations in Section 7.07 and the Trustee’s and Paying Agent’s obligations in
Section 8.03 shall survive with respect to Securities of such series.

 

After such irrevocable deposit made pursuant to this
Section 8.01(b) and satisfaction of the other conditions set forth herein, the
Trustee upon request shall acknowledge in writing the discharge of the
Partnership’s and the Subsidiary Guarantors’ obligations under

 

43

 

this
Indenture with respect to the Securities of such series except for those
surviving obligations specified above.

 

In order to have money available on a payment date to
pay principal of or premium (if any) or interest on the Securities, the
Government Obligations shall be payable as to principal or interest on or
before such payment date in such amounts as will provide the necessary
money.  Government Obligations shall not
be callable at the issuer’s option.

 

(c)                                  If
the Partnership and the Subsidiary Guarantors have previously complied or are
concurrently complying with Section 8.01(b) (other than any additional conditions
specified pursuant to Section 2.01 that are expressly applicable only to
covenant defeasance) with respect to Securities of a series, then, unless this
Section 8.01(c) is specified as not being applicable to Securities of such
series as contemplated by Section 2.01, the Partnership may elect that its and
the Subsidiary Guarantors’ respective obligations to make payments with respect
to Securities of such series be discharged (“legal defeasance”), if:

 

(1)                                  no
Default or Event of Default under clauses (5) and (6) of Section 6.01 hereof
shall have occurred at any time during the period ending on the 91st day after
the date of deposit contemplated by Section 8.01(b) (it being understood that
this condition shall not be deemed satisfied until the expiration of such
period);

 

(2)                                  unless
otherwise specified with respect to Securities of such series as contemplated
by Section 2.01, the Partnership has delivered to the Trustee an Opinion of
Counsel from a nationally recognized counsel acceptable to the Trustee to the
effect referred to in Section 8.01(b)(4) with respect to such legal defeasance,
which opinion is based on (i) a private letter ruling issued by the United
States Internal Revenue Service addressed to the Partnership, (ii) a published
ruling of the Internal Revenue Service pertaining to a comparable form of
transaction or (iii) a change in the applicable federal income tax law
(including regulations) after the date of this Indenture;

 

(3)                                  the
Partnership and the Subsidiary Guarantors have complied with any other
conditions specified pursuant to Section 2.01 to be applicable to the legal
defeasance of Securities of such series pursuant to this Section 8.01(c); and

 

(4)                                  the
Partnership has delivered to the Trustee a Partnership Request requesting such
legal defeasance of the Securities of such series and an Officers’ Certificate
stating that all conditions precedent with respect to such legal defeasance of
the Securities of such series have been complied with, together with an Opinion
of Counsel to the same effect.

 

In such event, the Partnership and the Subsidiary
Guarantors will be discharged from their respective obligations under this
Indenture and the Securities of such series to pay principal of, premium (if
any) and interest on, and any Additional Amounts with respect to, Securities of
such series, the Partnership’s and the Subsidiary Guarantors’ obligations under
Sections 4.01, 4.02 and 11.01 shall terminate with respect to such Securities,
and the entire indebtedness of the Partnership evidenced by such Securities and
of the Subsidiary Guarantors evidenced by the related Guarantees shall be
deemed paid and discharged.

 

44

 

(d)                                 If
and to the extent additional or alternative means of satisfaction, discharge or
defeasance of Securities of a series are specified to be applicable to such
series as contemplated by Section 2.01, each of the Partnership and the Subsidiary
Guarantors may terminate any or all of its obligations under this Indenture
with respect to Securities of a series and any or all of its obligations under
the Securities of such series if it fulfills such other means of satisfaction
and discharge as may be so specified, as contemplated by Section 2.01, to be
applicable to the Securities of such series.

 

(e)                                  If
Securities of any series subject to subsection (a), (b), (c) or (d) of this
Section 8.01 are to be redeemed prior to their Stated Maturity, whether
pursuant to any optional redemption provisions or in accordance with any
mandatory or optional sinking fund provisions, the terms of the applicable
trust arrangement shall provide for such redemption, and the Partnership shall
make such arrangements as are reasonably satisfactory to the Trustee for the
giving of notice of redemption by the Trustee in the name, and at the expense,
of the Partnership.

 

SECTION 8.02                                                                    Application of Trust Money.

 

The Trustee or a trustee satisfactory to the Trustee
and the Partnership shall hold in trust money or Government Obligations
deposited with it pursuant to Section 8.01 hereof.  It shall apply the deposited money and the
money from Government Obligations through the Paying Agent and in accordance
with this Indenture to the payment of principal of, premium (if any) and
interest on and any Additional Amounts with respect to the Securities of the
series with respect to which the deposit was made.

 

SECTION 8.03                                                                    Repayment to
Partnership or Subsidiary Guarantor.

 

The Trustee and the Paying Agent shall promptly pay to
the Partnership or any Subsidiary Guarantor any excess money or Government
Obligations (or proceeds therefrom) held by them at any time upon the written
request of the Partnership.

 

Subject to the requirements of any applicable
abandoned property laws, the Trustee and the Paying Agent shall pay to the
Partnership upon written request any money held by them for the payment of
principal, premium (if any), interest or any Additional Amounts that remain
unclaimed for two years after the date upon which such payment shall have
become due.  After payment to the Partnership,
Holders entitled to the money must look to the Partnership for payment as
general creditors unless an applicable abandoned property law designates
another Person, and all liability of the Trustee and the Paying Agent with
respect to such money shall cease.

 

SECTION 8.04                                                                    Reinstatement.

 

If the Trustee or the Paying Agent is unable to apply
any money or Government Obligations deposited with respect to Securities of any
series in accordance with Section 8.01 by reason of any legal proceeding or by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the
obligations of the Partnership and the Subsidiary Guarantors under this
Indenture with respect to the Securities of such series and under the
Securities of such series shall be revived and reinstated as though no deposit
had occurred pursuant to Section 8.01 until such time as the

 

45

 

Trustee or the Paying Agent is permitted to apply all
such money or Government Obligations in accordance with Section 8.01; provided, however, that if the Partnership or any Subsidiary
Guarantor has made any payment of principal of, premium (if any) or interest on
or any Additional Amounts with respect to any Securities because of the
reinstatement of its obligations, the Partnership or such Subsidiary Guarantor,
as the case may be, shall be subrogated to the rights of the Holders of such
Securities to receive such payment from the money or Government Obligations
held by the Trustee or the Paying Agent.

 

ARTICLE IX

SUPPLEMENTAL INDENTURES AND AMENDMENTS

 

SECTION 9.01                                                                    Without Consent of
Holders.

 

The Partnership, the Subsidiary Guarantors and the
Trustee may amend or supplement this Indenture or the Securities or waive any
provision hereof or thereof without the consent of any Holder:

 

(1)                                  to
cure any ambiguity, omission, defect or inconsistency;

 

(2)                                  to
comply with Section 5.01;

 

(3)                                  to
provide for uncertificated Securities in addition to or in place of
certificated Securities, or to provide for the issuance of bearer Securities
(with or without coupons);

 

(4)                                  to
provide any security for, or to add any guarantees of or additional obligors
on, any series of Securities or the related Guarantees;

 

(5)                                  to
comply with any requirement in order to effect or maintain the qualification of
this Indenture under the TIA;

 

(6)                                  to
add to the covenants of the Partnership or any Subsidiary Guarantor for the
benefit of the Holders of all or any series of Securities (and if such
covenants are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for the benefit
of such series), or to surrender any right or power herein conferred upon the
Partnership or any Subsidiary Guarantor;

 

(7)                                  to
add any additional Events of Default with respect to all or any series of the
Securities (and, if any such Event of Default is applicable to less than all
series of Securities, specifying the series to which such Event of Default is
applicable);

 

(8)                                  to
change or eliminate any of the provisions of this Indenture; provided that any such change or elimination shall become
effective only when there is no outstanding Security of any series created
prior to the execution of such amendment or supplemental indenture that is
adversely affected in any material respect by such change in or elimination of
such provision;

 

46

 

(9)                                  to
establish the form or terms of Securities of any series as permitted by Section
2.01;

 

(10)                            to
supplement any of the provisions of this Indenture to such extent as shall be
necessary to permit or facilitate the defeasance and discharge of any series of
Securities pursuant to Section 8.01; provided, however,
that any such action shall not adversely affect the interest of the Holders of
Securities of such series or any other series of Securities in any material
respect; or

 

(11)                            to
evidence and provide for the acceptance of appointment hereunder by a successor
Trustee with respect to the Securities of one or more series and to add to or
change any of the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 7.08.

 

Upon the request of the Partnership, accompanied by a
Board Resolution, and upon receipt by the Trustee of the documents described in
Section 9.06, the Trustee shall, subject to Section 9.06, join with the
Partnership and the Subsidiary Guarantors in the execution of any supplemental
indenture authorized or permitted by the terms of this Indenture and make any
further appropriate agreements and stipulations that may be therein contained.

 

SECTION 9.02                                                                    With Consent of
Holders.

 

Except as provided below in this Section 9.02, the
Partnership, the Subsidiary Guarantors and the Trustee may amend or supplement
this Indenture with the written consent (including consents obtained in
connection with a tender offer or exchange offer for Securities of any one or
more series or all series or a solicitation of consents in respect of
Securities of any one or more series or all series, provided
that in each case such offer or solicitation is made to all Holders of then
outstanding Securities of each such series (but the terms of such offer or
solicitation may vary from series to series)) of the Holders of at least a
majority in principal amount of the then outstanding Securities of all series
affected by such amendment or supplement (acting as one class).

 

Upon the request of the Partnership, accompanied by a
Board Resolution, and upon the filing with the Trustee of evidence of the
consent of the Holders as aforesaid, and upon receipt by the Trustee of the
documents described in Section 9.06, the Trustee shall, subject to Section
9.06, join with the Partnership and the Subsidiary Guarantors in the execution
of such amendment or supplemental indenture.

 

It shall not be necessary for the consent of the
Holders under this Section 9.02 to approve the particular form of any proposed
amendment, supplement or waiver, but it shall be sufficient if such consent
approves the substance thereof.

 

The Holders of a majority in principal amount of the
then outstanding Securities of one or more series or of all series (acting as
one class) may waive compliance in a particular instance by the Partnership or any
Subsidiary Guarantor with any provision of this Indenture with respect to
Securities of such series (including waivers obtained in connection with a tender
offer or exchange offer for Securities of such series or a solicitation of
consents in respect of

 

47

 

Securities of such series,  provided that in each case such offer or solicitation is
made to all Holders of then outstanding Securities of such series (but the
terms of such offer or solicitation may vary from series to series)).

 

However, without the consent of each Holder affected,
an amendment, supplement or waiver under this Section 9.02 may not:

 

(1)                                  reduce
the amount of Securities whose Holders must consent to an amendment, supplement
or waiver;

 

(2)                                  reduce the rate of or change the time for payment of
interest, including default interest, on any Security;

 

(3)                                  reduce the principal of, any premium on or any mandatory
sinking fund payment with respect to, or change the Stated Maturity of, any
Security or reduce the amount of the principal of an Original Issue Discount
Security that would be due and payable upon a declaration of acceleration of
the Maturity thereof pursuant to Section 6.02;

 

(4)                                  reduce the premium, if any, payable upon the redemption of
any Security or change the time at which any Security may or shall be redeemed;

 

(5)                                  change
any obligation of the Partnership or any Subsidiary Guarantor to pay Additional
Amounts with respect to any Security;

 

(6)                                  change the coin or currency or currencies (including
composite currencies) in which any Security or any premium, interest or
Additional Amounts with respect thereto are payable;

 

(7)                                  impair
the right to institute suit for the enforcement of any payment of principal of,
premium (if any) or interest on or any Additional Amounts with respect to any
Security pursuant to Sections 6.07 and 6.08, except as limited by Section 6.06;

 

(8)                                  make
any change in the percentage of principal amount of Securities necessary to
waive compliance with certain provisions of this Indenture pursuant to
Section 6.04 or 6.07 or make any change in this sentence of Section 9.02;

 

(9)                                  modify
the provisions of this Indenture with respect to the subordination of any
Security and any related Guarantee in a manner materially adverse to the Holder
thereof;

 

(10)                            waive
a continuing Default or Event of Default in the payment of principal of,
premium (if any) or interest on or Additional Amounts with respect to the
Securities; or

 

(11)                            except as provided in Section 11.04, release any Subsidiary Guarantor
or modify the related Guarantees in any manner materially adverse to the
Holders.

 

48

 

An amendment under this Section 9.02 may not make any
change that adversely affects the rights under Article X of any holder of an
issue of Senior Indebtedness unless the holders of the issue pursuant to its
terms consent to the change.

 

A supplemental indenture that changes or eliminates
any covenant or other provision of this Indenture which has expressly been
included solely for the benefit of one or more particular series of Securities,
or which modifies the rights of the Holders of Securities of such series with
respect to such covenant or other provision, shall be deemed not to affect the
rights under this Indenture of the Holders of Securities of any other series.

 

The right of any Holder to participate in any consent
required or sought pursuant to any provision of this Indenture (and the
obligation of the Partnership or any Subsidiary Guarantor to obtain any such
consent otherwise required from such Holder) may be subject to the requirement
that such Holder shall have been the Holder of record of any Securities with
respect to which such consent is required or sought as of a date identified by
the Partnership or such Subsidiary Guarantor in a notice furnished to Holders
in accordance with the terms of this Indenture.

 

After an amendment, supplement or waiver under this
Section 9.02 becomes effective, the Partnership shall mail to the Holders of
each Security affected thereby a notice briefly describing the amendment,
supplement or waiver.  Any failure of the
Partnership to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver.

 

SECTION 9.03                                                                    Compliance with the Trust Indenture Act.

 

Every amendment or supplement to this Indenture or the
Securities shall comply in form and substance with the TIA as then in effect.

 

SECTION 9.04                                                                    Revocation and Effect
of Consents.

 

Until an amendment, supplement or waiver becomes
effective, a consent to it by a Holder is a continuing
consent by the Holder and every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder’s Security, even
if notation of the consent is not made on any Security.  However, any such Holder or subsequent Holder
may revoke the consent as to his or her Security or portion of a Security if
the Trustee receives written notice of revocation before a date and time
therefor identified by the Partnership or any Subsidiary Guarantor in a notice
furnished to such Holder in accordance with the terms of this Indenture or, if
no such date and time shall be identified, the date the amendment, supplement
or waiver becomes effective.  An
amendment, supplement or waiver becomes effective in accordance with its terms
and thereafter binds every Holder.

 

The Partnership or any Subsidiary Guarantor may, but
shall not be obligated to, fix a record date (which need not comply with TIA
§ 316(c)) for the purpose of determining the Holders entitled to consent
to any amendment, supplement or waiver or to take any other action under this
Indenture.  If a record date is fixed,
then notwithstanding the provisions of the immediately preceding paragraph,
those Persons who were Holders at such record date (or their duly designated
proxies), and only those Persons, shall be entitled to consent to such
amendment,

 

49

 

supplement
or waiver or to revoke any consent previously given, whether or not such
Persons continue to be Holders after such record date.  No consent shall be valid or effective for
more than 90 days after such record date unless consents from Holders of the
principal amount of Securities required hereunder for such amendment or waiver
to be effective shall have also been given and not revoked within such 90-day
period.

 

After an amendment, supplement or waiver becomes
effective, it shall bind every Holder, unless it is of the type described in
any of clauses (1) through (9) of Section 9.02 hereof.  In such case, the amendment, supplement or waiver
shall bind each Holder who has consented to it and every subsequent Holder that
evidences the same debt as the consenting Holder’s Security.

 

SECTION 9.05                                                                    Notation on or
Exchange of Securities.

 

If an amendment or supplement changes the terms of an
outstanding Security, the Partnership may require the Holder of the Security to
deliver it to the Trustee.  The Trustee
may place an appropriate notation on the Security at the request of the
Partnership regarding the changed terms and return it to the Holder.  Alternatively, if the
Partnership so determines, the Partnership in exchange for the Security shall
issue and the Trustee shall authenticate a new Security that reflects the
changed terms.  Failure to make
the appropriate notation or to issue a new Security shall not affect the
validity of such amendment or supplement.

 

Securities of any series authenticated and delivered
after the execution of any amendment or supplement may,
and shall if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such amendment or supplement.

 

SECTION 9.06                                                                    Trustee to Sign
Amendments, etc.

 

The Trustee shall sign any amendment or supplement
authorized pursuant to this Article if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the
Trustee.  If it does, the Trustee may,
but need not, sign it.  In signing or
refusing to sign such amendment or supplement, the Trustee shall be entitled to
receive, in addition to the documents required by Section 12.04, and, subject to
Section 7.01 hereof, shall be fully protected in relying upon, an Opinion of
Counsel provided at the expense of the Partnership or a Subsidiary Guarantor to
the effect that such amendment or supplement is authorized or permitted by this
Indenture.

 

ARTICLE X

SUBORDINATION OF SECURITIES AND GUARANTEE

 

SECTION 10.01                                                              Applicability of Article; Agreement to Subordinate.

 

The provisions of this Article X shall only be
applicable to the Securities of any series (Securities of such series referred
to in this Article X as “Subordinated Securities”) designated, pursuant to
Section 2.01, as subordinated to Senior Indebtedness and any related Guarantees
of such Subordinated Securities. Each Holder by accepting a Subordinated
Security agrees that the Debt evidenced by such Subordinated Security and any
related Guarantees of such Subordinated Security is subordinated in right of
payment, to the extent and in the manner provided in this Article X, to the
prior payment of all Senior Indebtedness and that the

 

50

 

subordination
is for the benefit of and enforceable by the holders of Senior Indebtedness.
All provisions of this Article X shall be subject to Section 10.12.

 

SECTION 10.02                                                              Liquidation, Dissolution, Bankruptcy.

 

Upon any payment or distribution of the assets of the
Partnership or the Subsidiary Guarantors, as the case may be, to creditors,
upon a liquidation or a dissolution of the Partnership or the Subsidiary
Guarantors, as the case may be, or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Partnership or the
Subsidiary Guarantors, as the case may be, or their respective property:

 

(a)                                  holders
of Senior Indebtedness of the Partnership or any Subsidiary Guarantor, as the
case may be, shall be entitled to receive payment in full in cash of such
Senior Indebtedness of such Person (including interest (if any), accruing on or
after the commencement of a proceeding in bankruptcy, whether or not allowed as
a claim against the Partnership or the Subsidiary Guarantors, as the case may
be, in such bankruptcy proceeding) before Holders of Subordinated Securities
and any related Guarantees, if any, shall be entitled to receive any payment of
principal of, or premium, if any, or interest on, the Subordinated Securities
from the Partnership, or any payment in respect of such related Guarantees from
the Subsidiary Guarantors; and

 

(b)                                 until
the Senior Indebtedness of the Partnership or any Subsidiary Guarantor, as the
case may be, is paid in full, any distribution to which Holders of Subordinated
Securities and any related Guarantees would be entitled but for this Article X
shall be made to holders of Senior Indebtedness of the Partnership or the Subsidiary
Guarantors, as the case may be, as their interests may appear, except that such
Holders may receive capital stock and any debt securities that are subordinated
to Senior Indebtedness of the Partnership or the Subsidiary Guarantors, as the
case may be, to at least the same extent as the Subordinated Securities of the
Partnership or the related Guarantee of any Subsidiary Guarantor, respectively.

 

SECTION 10.03                                                              Default on Senior
Indebtedness.

 

The Partnership and the Subsidiary Guarantors may not
pay the principal of, or premium, if any, or interest on, the Subordinated
Securities or any related Guarantee or make any deposit pursuant to Article
VIII and may not repurchase, redeem or otherwise retire (except, in the case of
Subordinated Securities that provide for a mandatory sinking fund pursuant to
Section 3.11, by the delivery of Subordinated Securities by the Partnership to
the Trustee pursuant to the first paragraph of Section 3.11) any Subordinated
Securities (collectively, “pay the Subordinated Securities”) if any principal,
premium or interest in respect of Senior Indebtedness of such Person is not
paid within any applicable grace period (including at maturity) or any other
default on Senior Indebtedness of such Person occurs and the maturity of such
Senior Indebtedness is accelerated in accordance with its terms unless, in
either case, the default has been cured or waived and any such acceleration has
been rescinded or such Senior Indebtedness has been paid in full in cash; provided, however, that the Partnership and the Subsidiary
Guarantors may make payments on the Subordinated Securities or any related
Guarantee without regard to the foregoing if the Partnership and the Trustee
receive written notice approving such payment from the Representative of each
issue of Designated Senior Indebtedness. During the continuance of any other
default with respect to any Designated Senior Indebtedness pursuant to which
the

 

51

 

maturity thereof may be accelerated immediately
without further notice (except such notice as may be required to effect such
acceleration) or the expiration of any applicable grace periods, the
Partnership and the Subsidiary Guarantors may not make payments on the
Subordinated Securities or any related Guarantee for a period (a “Payment
Blockage Period”) commencing upon the receipt by the Partnership and the
Trustee (and if such Designated Senior Indebtedness is Debt of a Subsidiary Guarantor,
the Subsidiary Guarantor) of written notice of such default from the
Representative of any Designated Senior Indebtedness specifying an election to
effect a Payment Blockage Period (a “Blockage Notice”) and ending 179 days
thereafter (or earlier if such Payment Blockage Period is terminated by written
notice to the Trustee and the Partnership (and if such Designated Senior
Indebtedness is Debt of a Subsidiary Guarantor, the Subsidiary Guarantor) from
the Person or Persons who gave such Blockage Notice, by repayment in full in
cash of such Designated Senior Indebtedness or because the default giving rise
to such Blockage Notice is no longer continuing). Notwithstanding the
provisions described in the immediately preceding sentence (but subject to the
provisions contained in Section 10.02 and the first sentence of this Section
10.03), unless the holders of such Designated Senior Indebtedness or the
Representative of such holders shall have accelerated the maturity of such
Designated Senior Indebtedness, the Partnership and the Subsidiary Guarantors
may resume payments on the Subordinated Securities and any related Guarantee
after such Payment Blockage Period. Not more than one Blockage Notice may be
given in any consecutive 360-day period, irrespective of the number of defaults
with respect to any number of issues of Designated Senior Indebtedness during
such period, unless otherwise specified pursuant to Section 2.01 for the
Subordinated Securities of a series; provided, however,
that in no event may the total number of days during which any Payment Blockage
Period or Periods is in effect exceed 179 days in the aggregate during any 360
consecutive day period. For purposes of this Section 10.03, no default or event
of default which existed or was continuing on the date of the commencement of
any Payment Blockage Period with respect to the Designated Senior Indebtedness
initiating such Payment Blockage Period shall be, or be made, the basis of the
commencement of a subsequent Payment Blockage Period by the Representative of
such Designated Senior Indebtedness, whether or not within a period of 360 consecutive
days, unless such default or event of default shall have been cured or waived
for a period of not less than 90 consecutive days.

 

SECTION 10.04                                                              Acceleration of Payment of Securities.

 

If payment of the Subordinated Securities is
accelerated because of an Event of Default, the Partnership shall promptly
notify the holders of the Designated Senior Indebtedness (or their
Representatives) of the acceleration.

 

SECTION 10.05                                                              When Distribution Must Be Paid Over.

 

If a distribution is made to Holders of Subordinated
Securities or any related Guarantee that because of this Article X should not
have been made to them, the Holders who receive such distribution shall hold it
in trust for holders of Senior Indebtedness and pay it over to them as their
interests may appear.

 

52

 

SECTION 10.06                                                              Subrogation.

 

After all Senior Indebtedness is paid in full and
until the Subordinated Securities are paid in full, Holders thereof shall be
subrogated to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness. A distribution made under this
Article X to holders of Senior Indebtedness which otherwise would have been
made to Holders of Subordinated Securities is not, as between the Partnership
or the Subsidiary Guarantors, as the case may be, and such Holders, a payment
by the Partnership or the Subsidiary Guarantors, as the case may be, on Senior
Indebtedness.

 

SECTION 10.07                                                              Relative Rights.

 

This Article X defines the relative rights of Holders
of Subordinated Securities and holders of Senior Indebtedness. Nothing in this
Indenture shall:

 

(a)                                  impair,
as between the Partnership or the Subsidiary Guarantors, as the case may be,
and Holders of either Subordinated Securities or Securities, the obligation of
the Partnership or the Subsidiary Guarantors, as the case may be, which is
absolute and unconditional, to pay principal of, and premium, if any, and
interest on, the Subordinated Securities and the Securities in accordance with
their terms; or

 

(b)                                 prevent the Trustee or any Holder of either Subordinated
Securities or Securities from exercising its available remedies upon an Event
of Default, subject to the rights of holders of Senior Indebtedness to receive
distributions otherwise payable to Holders of Subordinated Securities.

 

SECTION 10.08                                                              Subordination May Not Be Impaired by Partnership.

 

No right of any holder of Senior Indebtedness to
enforce the subordination of the Debt evidenced by the Subordinated Securities
and any related Guarantee shall be impaired by any act or failure to act by the
Partnership or the Subsidiary Guarantors or by its or their failure to comply
with this Indenture.

 

SECTION 10.09                                                              Rights of Trustee and Paying Agent.

 

Notwithstanding Sections 10.02 and 10.03, the Trustee
or any Paying Agent may continue to make payments on Subordinated Securities
and shall not be charged with knowledge of the existence of facts that would
prohibit the making of any such payments unless, not less than two Business
Days prior to the date of such payment, a Responsible Officer of the Trustee
receives notice satisfactory to it that payments may not be made under this
Article X. The Partnership, the Registrar, any Paying Agent, a Representative
or a holder of Senior Indebtedness may give the notice; provided,
however, that, if an issue of Senior Indebtedness has a
Representative, only the Representative may give the notice on behalf of the holders
of the Senior Indebtedness of that issue.

 

The Trustee in its individual or any other capacity
may hold Senior Indebtedness with the same rights it would have if it were not the
Trustee. The Registrar and any Paying Agent may do the same with like rights.
The Trustee shall be entitled to all of the rights set forth in this

 

53

 

Article X with respect to any Senior Indebtedness
which may at any time be held by it, to the same extent as any other holder of
Senior Indebtedness; and nothing in Article VII shall deprive the Trustee of
any of its rights as such holder. Nothing in this Article X shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 7.07.

 

SECTION 10.10                                                              Distribution or Notice
to Representative.

 

Whenever a distribution
is to be made or a notice given to holders of Senior Indebtedness, the
distribution may be made and the notice given to their Representative (if any).

 

SECTION 10.11                                                              Article X Not to
Prevent Defaults or Limit Right to Accelerate.

 

The failure to make a payment pursuant to the
Subordinated Securities, whether directly or pursuant to the related Guarantees,
if any, by reason of any provision in this Article X shall not be construed as
preventing the occurrence of a Default or Event of Default. Nothing in this
Article X shall have any effect on the right of the Holders or the Trustee to
accelerate the maturity of either the Subordinated Securities or the
Securities, as the case may be.

 

SECTION 10.12                                                              Trust Moneys Not Subordinated.

 

Notwithstanding anything contained herein to the
contrary, payments from money or the proceeds of U.S. Government Obligations
held in trust under Article VIII by the Trustee for the payment of principal
of, and premium, if any, and interest on, the Subordinated Securities or the
Securities shall not be subordinated to the prior payment of any Senior
Indebtedness or subject to the restrictions set forth in this Article X, and
none of the Holders thereof shall be obligated to pay over any such amount to
the Partnership, the Subsidiary Guarantors or any holder of Senior Indebtedness
or any other creditor of the Partnership or the Subsidiary Guarantors.

 

SECTION 10.13                                                              Trustee Entitled to
Rely.

 

Upon any payment or distribution pursuant to this
Article X, the Trustee and the Holders shall be entitled to rely upon any order
or decree of a court of competent jurisdiction in which any proceedings of the
nature referred to in Section 10.02 are pending, upon a certificate of the
liquidating trustee or agent or other Person making such payment or
distribution to the Trustee or to such Holders or upon the Representatives for
the holders of Senior Indebtedness for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of the
Senior Indebtedness and other Debt of the Partnership or the Subsidiary
Guarantors, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
X. In the event that the Trustee determines, in good faith, that evidence is
required with respect to the right of any Person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article X, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and other facts pertinent to the rights of such
Person under this Article X, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such

 

54

 

Person to receive such
payment. The provisions of Sections 7.01 and 7.02 shall be
applicable to all actions or omissions of actions by the Trustee pursuant to
this Article X.

 

SECTION 10.14                                                              Trustee to
Effectuate Subordination.

 

Each Holder by accepting a Subordinated Security and
any related Guarantee authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination between the Holders of Subordinated Securities and the holders of
Senior Indebtedness as provided in this Article X and appoints the Trustee as
attorney-in-fact for any and all such purposes.

 

SECTION 10.15                                                              Trustee Not Fiduciary for Holders of Senior Indebtedness.

 

The Trustee shall not be deemed to owe any fiduciary
duty to the holders of Senior Indebtedness and shall not be liable to any such
holders if it shall mistakenly pay over or distribute to Holders of
Subordinated Securities or the Partnership or the Subsidiary Guarantors or any
other Person, money or assets to which any holders of Senior Indebtedness shall
be entitled by virtue of this Article X or otherwise.

 

SECTION 10.16                                                              Reliance by Holders of Senior Indebtedness on Subordination Provisions.

 

Each Holder by accepting a Subordinated Security and
any related Guarantee acknowledges and agrees that the foregoing subordination
provisions are, and are intended to be, an inducement and a consideration to
each holder of any Senior Indebtedness, whether such Senior Indebtedness was
created or acquired before or after the issuance of the Subordinated
Securities, to acquire and continue to hold, or to continue to hold, such
Senior Indebtedness and such holder of Senior Indebtedness shall be deemed
conclusively to have relied on such subordination provisions in acquiring and
continuing to hold, or in continuing to hold, such Senior Indebtedness.

 

ARTICLE XI

GUARANTEE

 

SECTION 11.01                                                              Guarantee.

 

(a)                                  Notwithstanding
any provision of this Article XI to the contrary, the provisions of this
Article XI relating to the Subsidiary Guarantors shall be applicable only to,
and inure solely to the benefit of, the Securities of any series designated,
pursuant to Section 2.01, as entitled to the benefits of the related Guarantee
of each of the Subsidiary Guarantors.

 

(b)                                 For
value received, each of the Subsidiary Guarantors hereby fully, unconditionally
and absolutely guarantees (the “Guarantee”) to the Holders and to the Trustee
the due and punctual payment of the principal of, and premium, if any, and
interest on the Securities and all other amounts due and payable under this
Indenture and the Securities by the Partnership, when and as such principal,
premium, if any, and interest shall become due and payable, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or otherwise,
according to the terms of the Securities and this Indenture, subject to the limitations

 

55

 

set
forth in Section 11.03 and the subordination provisions contained in Article X.

 

(c)                                  Failing
payment when due of any amount guaranteed pursuant to the related Guarantee,
for whatever reason, each of the Subsidiary Guarantors will be jointly and
severally obligated to pay the same immediately, subject to the subordination
provisions contained in Article X. Each of the Guarantees hereunder is intended
to be a general, unsecured obligation of the related Subsidiary Guarantor and
will be subordinated in right of payment to all unsecured and unsubordinated Debt
of such Subsidiary Guarantor.  Each of the
Subsidiary Guarantors hereby agrees that its obligations hereunder shall be
full, unconditional and absolute, irrespective of the validity, regularity or
enforceability of the Securities, its Guarantee, the Guarantee of any other Subsidiary
Guarantor or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Securities with respect to any
provisions hereof or thereof, the recovery of any judgment against the
Partnership or any Subsidiary Guarantor, or any action to enforce the same or
any other circumstances which might otherwise constitute a legal or equitable
discharge or defense of the Subsidiary Guarantors.  Each of the Subsidiary Guarantors hereby
agrees that in the event of a default in payment of the principal of, or
premium, if any, or interest on the Securities of such series, whether at the
Stated Maturity or by declaration of acceleration, call for redemption or
otherwise, legal proceedings may be instituted by the Trustee on behalf of the
Holders or, subject to Section 6.06, by the Holders, on the terms and
conditions set forth in this Indenture, directly against such Subsidiary Guarantor
to enforce such Guarantee without first proceeding against the Partnership or
any other Subsidiary Guarantor.

 

(d)                                 The
obligations of each of the Subsidiary Guarantors under this Article XI shall be
as aforesaid full, unconditional and absolute and shall not be impaired,
modified, released or limited by any occurrence or condition whatsoever,
including, without limitation, (i) any compromise, settlement, release, waiver,
renewal, extension, indulgence or modification of, or any change in, any of the
obligations and liabilities of the Partnership or any of the Subsidiary
Guarantors contained in the Securities or this Indenture, (ii) any impairment,
modification, release or limitation of the liability of the Partnership, any of
the Subsidiary Guarantors or any of their estates in bankruptcy, or any remedy
for the enforcement thereof, resulting from the operation of any present or
future provision of any applicable Bankruptcy Law, as amended, or other statute
or from the decision of any court, (iii) the assertion or exercise by the
Partnership, any of the Subsidiary Guarantors or the Trustee of any rights or
remedies under the Securities or this Indenture or their delay in or failure to
assert or exercise any such rights or remedies, (iv) the assignment or the
purported assignment of any property as security for the Securities, including
all or any part of the rights of the Partnership or any of the Subsidiary
Guarantors under this Indenture, (v) the extension of the time for payment by
the Partnership or any of the Subsidiary Guarantors of any payments or other
sums or any part thereof owing or payable under any of the terms and provisions
of the Securities or this Indenture or of the time for performance by the
Partnership or any of the Subsidiary Guarantors of any other obligations under
or arising out of any such terms and provisions or the extension or the renewal
of any thereof, (vi) the modification or amendment (whether material or
otherwise) of any duty, agreement or obligation of the Partnership or any of the
Subsidiary Guarantors set forth in this Indenture, (vii) the

 

56

 

voluntary or
involuntary liquidation, dissolution, sale or other disposition of all or
substantially all of the assets, marshaling of assets and liabilities,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of, or other similar
proceeding affecting, the Partnership or any of the Subsidiary Guarantors or
any of their respective assets, or the disaffirmance of the Securities, the
Guarantee or this Indenture in any such proceeding, (viii) the release or
discharge of the Partnership or any of the Subsidiary Guarantors from the
performance or observance of any agreement, covenant, term or condition
contained in any of such instruments by operation of law, (ix) the
unenforceability of the Securities of such series, the related Guarantees or
this Indenture or (x) any other circumstances (other than payment in full or
discharge of all amounts guaranteed pursuant to the related Guarantees) which
might otherwise constitute a legal or equitable discharge of a surety or
guarantor.

 

(e)                                  Each
of the Subsidiary Guarantors hereby (i) waives diligence, presentment, demand
of payment, filing of claims with a court in the event of the merger,
insolvency or bankruptcy of the Partnership or any of the Subsidiary Guarantors,
and all demands whatsoever, (ii) acknowledges that any agreement, instrument or
document evidencing its Guarantee may be transferred and that the benefit of
its obligations hereunder shall extend to each holder of any agreement,
instrument or document evidencing its Guarantee without notice to it and (iii)
covenants that its Guarantee will not be discharged except by complete
performance of such Guarantee.  Each of the
Subsidiary Guarantors further agrees that if at any time all or any part of any
payment theretofore applied by any Person to its Guarantee is, or must be,
rescinded or returned for any reason whatsoever, including, without limitation,
the insolvency, bankruptcy or reorganization of the Partnership or any of the Subsidiary
Guarantors, such Guarantee shall, to the extent that such payment is or must be
rescinded or returned, be deemed to have continued in existence notwithstanding
such application, and such Guarantee shall continue to be effective or be
reinstated, as the case may be, as though such application had not been made.

 

(f)                                    Each
of the Subsidiary Guarantors shall be subrogated to all rights of the Holders
and the Trustee against the Partnership in respect of any amounts paid by such
Subsidiary Guarantor pursuant to the provisions of this Indenture; provided, however, that such Subsidiary Guarantor, shall not
be entitled to enforce or to receive any payments arising out of, or based
upon, such right of subrogation until all of the Securities of such series and
the related Guarantees shall have been paid in full or discharged.

 

SECTION 11.02                                                              Execution and
Delivery of Guarantees.

 

To further evidence its Guarantee set forth in Section
11.01, each of the Subsidiary Guarantors hereby agrees that a notation relating
to such Guarantee, substantially in the form attached hereto as Annex A, shall
be endorsed on each Security of the series entitled to the benefits of such
Guarantee authenticated and delivered by the Trustee, which notation of
Guarantee shall be executed by either manual or facsimile signature of an
Officer of such Subsidiary Guarantor.  Each of the Subsidiary Guarantors hereby
agrees that its Guarantee set forth in Section 11.01 shall remain in full force
and effect notwithstanding any failure to endorse on each Security a notation
relating to such Guarantee. If any Officer of such Subsidiary Guarantor, whose
signature is on this Indenture or a notation of Guarantee
no longer holds that

 

57

 

office
at the time the Trustee authenticates such Security or at any time thereafter,
the Guarantee of such Security shall be valid nevertheless. The delivery of any
Security of a series entitled to the benefits of a Guarantee under this Article
XI by the Trustee, after the authentication thereof hereunder, shall constitute
due delivery of the Guarantee set forth in this Indenture on behalf of each Subsidiary
Guarantor.

 

SECTION 11.03                                                              Limitation on
Liability of the Subsidiary Guarantors.

 

Each Subsidiary Guarantor and by its acceptance hereof
each Holder of a Security of a series entitled to the benefits of a Guarantee under
this Article XI hereby confirms that it is the intention of all such parties
that the guarantee by such Subsidiary Guarantor pursuant to its Guarantee not
constitute a fraudulent transfer or conveyance for purposes of any federal or
state law. To effectuate the foregoing intention, the Holders of a Security
entitled to the benefits of such Guarantee and the Subsidiary Guarantors hereby
irrevocably agree that the obligations of each Subsidiary Guarantor under its
Guarantee shall be limited to the maximum amount as will, after giving effect
to all other contingent and fixed liabilities of such Subsidiary Guarantor and
to any collections from or payments made by or on behalf of any other
Subsidiary Guarantor in respect of the obligations of such other Subsidiary
Guarantor under its Guarantee, result in the obligations of such Subsidiary Guarantor
under its Guarantee not constituting a fraudulent conveyance or fraudulent
transfer under federal or state law.

 

SECTION 11.04                                                              Release of Subsidiary
Guarantors from Guarantee.

 

(a)                                  Notwithstanding
any other provisions of this Indenture, the Guarantee of any Subsidiary Guarantor
may be released upon the terms and subject to the conditions set forth in this
Section 11.04. Provided that no Default shall have occurred and shall be
continuing under this Indenture, any Guarantee incurred by a Subsidiary Guarantor
pursuant to this Article XI shall be unconditionally released and discharged
(i) automatically upon (A) any sale, exchange or transfer, whether by way of
merger or otherwise, to any Person that is not an Affiliate of the Partnership,
of all of the Partnership’s direct or indirect equity interests in such
Subsidiary Guarantor (provided such
sale, exchange or transfer is not prohibited by this Indenture) or (B) the
merger of such Subsidiary Guarantor into the Partnership or any other
Subsidiary Guarantor or the liquidation and dissolution of such Subsidiary Guarantor
(in each case to the extent not prohibited by this Indenture) or (ii) following
delivery of a written notice of such release or discharge by the Partnership to
the Trustee, upon the release or discharge of all guarantees by such Subsidiary
Guarantor of any Debt of the Partnership other than obligations arising under
this Indenture and any Securities issued hereunder, except a discharge or
release by or as a result of payment under such guarantees.

 

(b)                                 The
Trustee shall deliver an appropriate instrument evidencing any release of a
Subsidiary Guarantor from its Guarantee upon receipt of a written request of
the Partnership accompanied by an Officers’ Certificate and an Opinion of
Counsel that the Subsidiary Guarantor is entitled to such release in accordance
with the provisions of this Indenture. If the Subsidiary Guarantor is not so released,
it shall remain liable for the full amount of principal of (and premium, if
any, on) and interest on the Securities entitled to the benefits of such
Guarantee as provided in this Indenture, subject to the limitations of Section
11.03.

 

58

 

SECTION 11.05                                                              Contribution.

 

In order to provide for just and equitable
contribution among the Subsidiary Guarantors, the Subsidiary Guarantors hereby
agree, inter se, that in the event any payment or distribution is made by any
Subsidiary Guarantor (a “Funding Guarantor”) under its Guarantee, such Funding
Guarantor shall be entitled to a contribution from each other Subsidiary
Guarantor (as applicable) in a pro rata amount based on the net assets of each
Subsidiary Guarantor (including the Funding Guarantor) for all payments,
damages and expenses incurred by that Funding Guarantor in discharging the
Partnership’s obligations with respect to the Securities of a series entitled
to the benefits of a Guarantee under this Article XI or any other
Subsidiary Guarantor’s obligations with respect to its Guarantee to such series
of Securities.

 

ARTICLE XII

MISCELLANEOUS

 

SECTION 12.01                                                              Trust Indenture Act Controls.

 

If any provision of this Indenture limits, qualifies
or conflicts with the duties imposed by operation of TIA § 318(c), the imposed
duties shall control.

 

SECTION 12.02                                                              Notices.

 

Any notice or communication by the Partnership, any
Subsidiary Guarantor or the Trustee to the others is duly given if in writing
and delivered in person or mailed by first-class mail (registered or certified,
return receipt requested), telex, facsimile or overnight air courier
guaranteeing next day delivery, to the other’s address:

 

If to the Partnership or any Subsidiary Guarantor:

K-Sea Transportation Partners L.P.

3245 Richmond Terrace

Staten Island, New York 10303

Attn:  John J.
Nicola

Telephone: (718) 720-7207

Facsimile: (718) 815-4650

 

If to the Trustee:

 

Attn:   

Telephone:

Facsimile:

 

The Partnership, any Subsidiary Guarantor or the Trustee
by notice to the others may designate additional or different addresses for
subsequent notices or communications.

 

All notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if

 

59

 

by
facsimile; and the next Business Day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next day delivery.

 

Any notice or communication to a Holder shall be
mailed by first-class mail, postage prepaid, to the Holder’s address shown on
the register kept by the Registrar. 
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders.

 

If a notice or communication is mailed in the manner
provided above within the time prescribed, it is duly given, whether or not the
addressee receives it, except in the case of notice to the Trustee, it is duly
given only when received.

 

If the Partnership or a Subsidiary Guarantor mails a
notice or communication to Holders, it shall mail a copy to the Partnership and
the other Subsidiary Guarantors, as the case may be, and to the Trustee and
each Agent at the same time.

 

All notices or communications, including, without
limitation, notices to the Trustee, the Partnership or a Subsidiary Guarantor
by Holders, shall be in writing, except as otherwise set forth herein.

 

In case by reason of the suspension of regular mail
service, or by reason of any other cause, it shall be impossible to mail any
notice required by this Indenture, then such method of notification as shall be
made with the approval of the Trustee shall constitute a sufficient mailing of
such notice.

 

SECTION 12.03                                                              Communication by Holders
with Other Holders.

 

Holders may communicate pursuant to TIA § 312(b) with
other Holders with respect to their rights under this Indenture or the
Securities.  The Partnership, the Subsidiary
Guarantors, the Trustee, the Registrar and anyone else shall have the
protection of TIA § 312(c).

 

SECTION 12.04                                                              Certificate and Opinion
as to Conditions Precedent.

 

Upon any request or application by the Partnership or a
Subsidiary Guarantor to the Trustee to take any action under this Indenture,
the Partnership or such Subsidiary Guarantor, as the case may be, shall, if
requested by the Trustee, furnish to the Trustee at the expense of the
Partnership or such Subsidiary Guarantor, as the case may be:

 

(1)                                  an
Officers’ Certificate (which shall include the statements set forth in
Section 12.05) stating that, in the opinion of the signers, all conditions
precedent and covenants, if any, provided for in this Indenture relating to the
proposed action have been complied with; and

 

(2)                                  an Opinion of Counsel (which shall include the statements
set forth in Section 12.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been complied with.

 

60

 

SECTION 12.05                                                              Statements Required in Certificate or Opinion.

 

Each certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture (other than a
certificate provided pursuant to TIA § 314(a)(4))
shall comply with the provisions of TIA § 314(e) and shall include:

 

(1)                                  a statement that the Person making such certificate or
opinion has read such covenant or condition;

 

(2)                                  a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;

 

(3)                                  a
statement that, in the opinion of such Person, he or she has made such
examination or investigation as is necessary to enable him or her to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and

 

(4)                                  a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.

 

SECTION 12.06                                                              Rules by Trustee and Agents.

 

The Trustee may make reasonable rules for action by or
at a meeting of Holders.  The Registrar
or the Paying Agent may make reasonable rules and set reasonable requirements
for its functions.

 

SECTION 12.07                                                              Legal Holidays.

 

If a payment date is a Legal Holiday at a Place of
Payment, payment may be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue for the intervening period.

 

SECTION 12.08                                                              No Recourse Against Others.

 

A director, manager, officer, employee, stockholder,
partner or other owner of the Partnership, a Subsidiary Guarantor, the General
Partner, K-Sea General Partner GP LLC or the Trustee, as such, shall not have
any liability for any obligations of the Partnership under the Securities, for
any obligations of any Subsidiary Guarantor under the Guarantee, or for any
obligations of the Partnership, any Subsidiary Guarantor or the Trustee under
this Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation.  Each
Holder by accepting a Security waives and releases all such liability.  The waiver and release shall be part of the
consideration for the issuance of Securities.

 

SECTION 12.09                                                              Governing Law.

 

THIS INDENTURE, THE SECURITIES
AND THE GUARANTEES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO

 

61

 

APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS TO THE
EXTENT THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

 

SECTION 12.10                                                              No Adverse Interpretation of Other Agreements.

 

This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Partnership, any Subsidiary Guarantor
or any other Subsidiary of the Partnership. 
Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.

 

SECTION 12.11                                                              Successors.

 

All agreements of the Partnership and each of the Subsidiary
Guarantors in this Indenture and the Securities shall bind its successors.  All agreements of the Trustee in this
Indenture shall bind its successors.

 

SECTION 12.12                                                              Severability.

 

In case any provision in this Indenture or in the
Securities or in any Guarantee shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall, to the
fullest extent permitted by applicable law, not in any way be affected or
impaired thereby.

 

SECTION 12.13                                                              Counterpart Originals.

 

The parties may sign any number of copies of this
Indenture.  Each signed copy shall be an
original, but all of them together represent the same agreement.

 

SECTION 12.14                                                              Table of
Contents, Headings, etc.

 

The table of contents, cross-reference table and
headings of the Articles and Sections of this Indenture have been inserted for
convenience of reference only, are not to be considered a part hereof and shall
in no way modify or restrict any of the terms or provisions hereof.

 

62

 

IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed as of the day and year first above written.

 

	
   

  	
  K-SEA TRANSPORTATION PARTNERS L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  K-Sea General Partner L.P.,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  K-Sea General Partner GP LLC,

  
	
   

  	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  K-SEA OPERATING PARTNERSHIP L.P.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  K-Sea OLP GP, LLC,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  K-SEA TRANSPORTATION INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NORFOLK ENVIRONMENTAL SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  K-SEA ACQUISITION1, LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  K-SEA ACQUISITION2, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
															

 

S-1

 

	
   

  	
  [                                                            ],
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

S-2

 

ANNEX A

 

NOTATION OF GUARANTEE

 

Each of the Subsidiary Guarantors (which term includes
any successor Person under the Indenture) has fully, unconditionally and
absolutely guaranteed, to the extent set forth in the Indenture and subject to
the provisions in the Indenture, the due and punctual
payment of the principal of, and premium, if any, and interest on the
Securities and all other amounts due and payable under the Indenture and the
Securities by the Partnership.

 

The obligations of the Subsidiary Guarantors to the
Holders of Securities and to the Trustee pursuant to the Guarantee and the
Indenture are expressly set forth in Articles X and XI of the Indenture and
reference is hereby made to the Indenture for the precise terms of the
Guarantee.

 

	
   

  	
  K-SEA OPERATING PARTNERSHIP L.P.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  K-Sea OLP GP, LLC,

  
	
   

  	
   

  	
  Its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [NAME OF SUBSIDIARY GUARANTOR]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  [NAME OF SUBSIDIARY GUARANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
												

 

A-1

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