Document:

Consulting Agreement/Eustace

 Exhibit 10.29 
  
 TECO ENERGY, INC. 
 AGREEMENT FOR CONSULTING SERVICES 
  
 THIS
CONSULTING AGREEMENT (the “Consulting Agreement”), made and entered into this      day of
                    , 2004 by and between TECO ENERGY, INC., a Florida corporation, which has its business address at 702 North
Franklin Street, Tampa, Florida 33602, hereinafter referred to as “Company”, and ROYSTON K. EUSTACE, hereinafter referred to as “Consultant”, whose address is 132 Baltic Circle, Tampa, Florida 33606. 
  
 WITNESSETH: THAT 
  
 WHEREAS, the Consultant has retired from his position as Senior Vice
President – Business Development effective at the close of business on November 30, 2003. 
  
 WHEREAS, the Company proposes to contract for the Consultant’s services on an “as required” basis to be directed and administered by the Chief Executive Officer, his successor and/or his
designee, hereinafter referred to collectively as “Company Representative.” 
  
 WHEREAS, the Company desires to engage the Consultant to perform certain professional services in accordance with this Consulting Agreement. 
  
 WHEREAS, the Consultant desires to provide such professional services in accordance with this Consulting Agreement.

  
 NOW, THEREFORE, the valuable considerations and the
mutual benefits which will accrue to the parties, the parties agree as follows: 
  
 1. PURPOSE. The purpose of this Consulting Agreement is to set forth the obligations, responsibilities, terms and conditions applicable to the parties in the event the Consultant performs work for the
Company. This Consulting Agreement does not authorize the Consultant to perform any work for the Company, but the terms and conditions of this Consulting Agreement shall be considered a part of any work performed by the Consultant when requested by
the Company Representative. 
  
 2. THE WORK. 
  
 (a) The Consultant shall perform all of the work for the Company which is
assigned orally or in writing by the Company Representative. Said work shall be generally related to Consultant’s background and experience. During the term of this Consulting Agreement the Consultant shall not be authorized to act as an agent
for the Company and shall not have the authority to bind the Company unless such authority is specifically given to the Consultant in writing by the Company Representative in connection with his duties and responsibilities assigned to him pursuant
to this Consulting Agreement. 
  
 (b) During the term of this
Consulting Agreement, the Consultant agrees to make himself available to perform the work requested by the Company. Further, Consultant agrees to conduct himself in a manner consistent with Company policy and to refrain from engaging in any conduct
which holds the Company up to ridicule in the community or which jeopardizes or adversely affects the business or reputation of the Company. 

 3. TERM. This Consulting Agreement shall commence on December 1, 2003, and remain in full
force and effect for a period of twelve (12) months unless terminated pursuant to another provision of this Consulting Agreement and shall expire automatically at the end of the business day on November 30, 2004. 
  
 4. COMPENSATION. 
  
 (a) Monthly Payments. 
  

	 	(i)	During the first six months of the Term, Consultant shall work a minimum, average of 150 hours per month and shall be paid monthly payments of $25,000. 

  

	 	(ii)	During the remaining months of the Term, Consultant shall work a minimum of 75 hours per month and shall be paid monthly payments of $12,500. Additionally, Consultant shall be paid
$150.00 per hour worked in excess of 100 hours during any such month. 

  
 (b) Consultant acknowledges receipt of an upfront payment of $274,850 to be retained by Consultant so long as he performs the work required by the Company under this Consulting Agreement for the full term of this
Consulting Agreement. 
  
 (c) During the Term the Consultant shall
be reimbursed for direct out-of-pocket expenses which are approved and reasonable and necessary for the performance of the work authorized herein and supported by the appropriate documentation. Consultant shall invoice the Company for his direct
out-of-pocket expenses monthly and for any additional hours worked pursuant to Section 4(a)(ii). 
  
 (d) Upon the successful completion of a major project listed on Exhibit A, or a later project assigned by the Company Representative, the Consultant shall
be eligible for the payment of a bonus. The award of and amount of such bonus shall be in the complete discretion of the Company Representative. The parties anticipate that the total potential bonus awarded would be equal to 40% of Consultant’s
final base salary when he was an employee of the Company. If any major project is completed during the month of December 2003, then the total bonus amount available will be increased by 1/12th of the 40% of Consultant’s final base salary. 
  
 (e) The Company shall not provide Consultant any pension, insurance, workers’ compensation insurance, medical coverage or similar benefits in
connection with work performed hereunder, nor shall it be responsible for the payment of any taxes on behalf of the Consultant as more fully described in Section 7. hereof. 
  
 5. CONFIDENTIALITY AND CONFLICT OF INTEREST 
  
 (a) The Consultant recognizes and acknowledges that during the course of his consulting engagement with the Company covered
by this Consulting Agreement, he has been exposed to, has had access to, and has had disclosed to him information and material developed specifically by and for the benefit of the Company and sensitive and/or proprietary information, 
  

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 operations procedures and information, financial, rate design, rate base and rate making information and procedures and
specific Company procedures related thereto, business and strategic plans, existing or potential commercial or other business arrangements, and to other matters, including without limitation, trade secrets, financial and data processing information,
data bases, interfaces, and/or source codes, Company procedures, specifications, commercial information, technological improvements or other Company or Customer records as described in Tampa Electric Company Administrative Policies I.8.7 and 001,
including any information or material, belonging to others which has been provided to the Company on a confidential basis, all of which are hereinafter referred to as “Confidential Information.” 
  
 (b) The Consultant agrees to maintain, in strict confidence, the Confidential
Information and agrees not to disclose to any third party or to use same to benefit himself or any third party (other than Consultant’s financial and legal advisors) the Confidential Information or the fact of, the terms of or the amount of the
consideration paid as part of this Consulting Agreement. The Consultant shall be prohibited from using, duplicating, reproducing, copying, distributing, disclosing such Confidential Information regardless of form or purpose, including without
limitation, verbal disclosure, data, documents, electronic media or any other media form. Any other information of a confidential or sensitive nature acquired by the Consultant during the course of his employment and not defined herein as
Confidential Information shall not be disclosed by the Consultant or used for the benefit of the Consultant or others for a period of two (2) years from the expiration of this Consulting Agreement. Consultant agrees to continue to abide by the
non-disclosure and non-use obligations relating to Company records, information and property contained in the Company’s Standards of Integrity. 
  
 (c) The restrictions on the Consultant’s disclosure of Confidential Information set out herein do not apply to such information which (i) is now, or
which hereafter, through no act or failure to act on the part of the Consultant, becomes generally known or available to the public; or (ii) is required to be disclosed by a court of competent jurisdiction or by an administrative or quasi-judicial
body having jurisdiction over the subject matter after the Consultant has given the Company reasonable prior notice of such disclosure requirement. 
  
 (d) For the purpose of this Section the term “Company” shall mean TECO Energy, Inc., Tampa Electric Company, and their respective subsidiaries
and affiliates. 
  
 (e) Consultant represents that there is no
actual or potential conflict of interest to his best information and belief between the Company and the Consultant, Consultant’s family, business or financial interest as defined in the Standards of Integrity. 
  

	 	(i)	In the event of any change in the Consultant’s status with respect to conflicts of interest, any actual or potential conflicts shall be reported to the Company as soon as
Consultant becomes aware of them in the manner required by the Standards of Integrity. 

  

	 	(ii)	Consultant shall not employ any employee of the Company to perform any part of this Consulting Agreement. 

  

	 	(iii)	Consultant agrees that during the term of this Consulting Agreement he shall not perform any work or services for any person, firm or corporation having a claim against the Company.

  

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 6. REMEDY AT LAW INSUFFICIENT. Consultant acknowledges that damages at law will be an
insufficient remedy if Consultant violates the terms of this Agreement, and that the Company would suffer a decrease in value and irreparable damage as a result of such violation. Accordingly, on a violation of any of the covenants set forth herein,
particularly those contained in Sections 2. and 5., the Company, without excluding or limiting any other available remedy, shall be entitled to the following remedies: 
  
 (1) Upon posting a reasonable bond and filing with a court of competent jurisdiction an appropriate pleading and affidavit
specifying each obligation breached by Consultant, automatic entry by a court in accordance with Florida Statute §542.335(1)(j) having jurisdiction of an order granting an injunction or specific performance compelling Consultant to comply with
that obligation, without proof of monetary damage or an inadequate remedy at law; and 
  
 (2) Reimbursement of all costs and expenses incurred by the Company in enforcing those obligations or otherwise defending or prosecuting any litigation arising out of Consultant’s obligations, including premiums
for bonds, fees for experts and investigators, and legal fees, cost, and expenses incurred before a lawsuit is filed and in trial, appellate, bankruptcy and judgment-execution proceedings. 
  
 The foregoing remedies are cumulative to all other remedies afforded by law or in equity, and
the Company may exercise any such remedy concurrently, independently or successively. If for any reason a court of competent jurisdiction determines that the Company is not entitled to an injunction based on a breach of a material obligation under
this Agreement as described above, Consultant shall pay to the Company as liquidated damages, on demand in immediately available legal tender of the United States of America, a sum equal to all profits, remuneration, or other consideration
Consultant gains from all activities in breach or contravention of any of Consultant’s obligations. 
  
 7. INDEPENDENT CONTRACTOR. It is mutually understood and agreed between the parties that the Consultant in doing this work under the provisions of
this Consulting Agreement shall act as an independent contractor and not as a subcontractor, agent or employee of the Company maintaining complete control and responsibility for his own employees and operations and those of his subcontractors, if
any. The means and methods employed for performing any of the work under this Consulting Agreement shall be at the option of the Consultant subject to the provisions of this Consulting Agreement. The Company shall have no liability for and the
Consultant agrees that he is responsible for the payment of all required Federal taxes pursuant to the Federal Insurance Contributions Act (including self-employment taxes), the Social Security Act, the Federal Unemployment Tax Act, and all income
tax withholding and shall obtain and maintain a tax identification number. Further the parties agree that the Company shall not provide any employee benefits pursuant to any federal or state law or regulation. Consultant agrees to indemnify and hold
the Company harmless of and from any claims of the Consultant or third party, including governmental taxing authorities, for taxes, FICA, self-employment taxes, or employee benefits of any kind. 
  
 8. DISPUTE RESOLUTION. The parties recognize and agree that resolving
controversies through litigation in the federal and state courts of the United Stated is costly, time consuming and a burden to their resources. Therefore, in an effort to eliminate the need for litigation and reduce the costs of resolving any
controversy which may arise between the parties under this Consulting Agreement, the parties agree to use any reasonable and recognized form of alternative dispute resolution to which they may mutually agree. However, as a condition precedent to
entering into such form of dispute resolution, the Consultant and the Company Representative shall enter into 
  

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 good faith discussions designed to reach a resolution of any dispute hereunder, which resolution shall be memorialized in
writing. The requirement of this paragraph are conditions precedent to either party bringing suit in any court of competent jurisdiction. 
  
 9. ASSIGNMENT. Except for assignment to the Consultant’s wholly-owned consulting company, if any, the Consultant agrees that he will
not sell, assign, transfer or sublet this contract or any part thereof or interest therein, either by power of attorney or otherwise, without the prior written consent of the Company, and that any such sale, assignment, transfer or subletting,
without such consent of the Company shall be null and void. In the event of the authorized assignment to Consultant’s consulting company, the Consultant shall provide the Company prior written notice and shall remain obligated individually for
the obligations hereunder. Any subcontracts entered into by the Consultant shall be submitted to the Company for its prior approval and the Company shall have the right to reject any subcontractor whom it considers incompetent or unable to
satisfactorily perform the portion of the work involved. 
  
 10. ALTERATIONS AND AMENDMENTS. No alteration or amendment of this Consulting Agreement shall be valid unless the same is made in accordance with the provisions of this Consulting Agreement and by an instrument in writing
signed by the Company and by the Consultant; and in case of any such alteration or amendment, so much of this Consulting Agreement as is not necessarily thereby changed shall remain in force; and no act or conduct of either party shall be held to
operate as a waiver of any provision or provisions of this Consulting Agreement unless in the form of a writing signed by the party against which it is asserted. 
  
 11. WORK PRODUCT. All documents, information, data, analyses, or any other materials prepared by or used by the
Consultant arising out of the performance of the work under this Consulting Agreement, shall be owned by Company as and when produced, and the Consultant shall not be entitled to use such work product for any other purpose without the express
written consent of the Company. 
  
 12. AUDIT.
During the period of this Consulting Agreement, the Consultant shall maintain a set of accounts and records and any other evidence which shows and supports all direct reimbursable costs incurred or anticipated, and any applicable credit. The system
of accounts to be used by the Consultant shall be acceptable to and subject to approval of the Company and shall be in accordance with generally accepted accounting principles. The Consultant shall preserve these records for a period of three (3)
years after performance of the Consulting Agreement. The Consultant shall maintain all records of any type pertaining to this Consulting Agreement and each Company purchase order and attachments thereto for a period of five (5) years after final
acceptance of the work performed under this Consulting Agreement. 
  
 All books of accounts, records, documents, correspondence, and any other evidence pertaining to the direct charges of this Consulting Agreement shall be subject to inspection, copying and audit at all reasonable times by the Company or its
authorized representatives. 
  
 13. TERMINATION WITHOUT CAUSE.

  
 (a) Either party shall have the right to terminate this
Consulting Agreement without cause upon five (5) days prior written notice to the other party. 
  
 (b) In the event that this Consulting Agreement is terminated by the Company as aforesaid during the first six months of the Term, the Consultant shall be paid the value of any remaining unpaid monthly amounts due
during the first six months of this Agreement; 
  

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 (c) In the event this Consulting Agreement is terminated by the Company as aforesaid after the first six
months of the Term; 
  

	 	(i)	The Company shall have no obligation to make any further monthly payments; and 

  

	 	(ii)	The Consultant shall be paid for any hourly work done in excess of the maximum hours stated in Section 4(a)(ii) at the rate set forth in Section 4(a)(ii). 

 
 (d) In the event that this Consulting Agreement is terminated by the
Consultant as aforesaid, Consultant shall be paid for the work satisfactorily performed through the date of termination at the rate set forth in Section 4.(a) hereof. 
  
 14. TERMINATION WITH CAUSE. 
  

(a) The Company or Consultant shall have the right to terminate this Consulting Agreement for Cause upon five (5) days written notice to the other
party of its intent to terminate this Consulting Agreement. For the purposes of this Consulting Agreement, “Cause” shall include any breach of a material provision of this Consulting Agreement or the Agreement. 
  
 (b) In the event that the Company terminates the Consulting Agreement for
Cause, the Consultant shall be entitled to be paid for the work satisfactorily performed through the date of termination at the rate set forth in Section 4.(a) hereof. 
  
 15. JURISDICTION AND VENUE. This Consulting Agreement memorializing the total agreements of the parties hereto, and
all respective rights and obligations of the parties thereto, shall be governed by the laws of the State of Florida. Any litigation arising hereunder or related hereto shall be tried by the state courts of Hillsborough County, Florida. 

 
 16. CONSCIENCE OF AGREEMENT. This Consulting Agreement and the
Agreement represent the entire agreement and understanding between the parties and supersedes all prior representations or agreement whether written or oral, with respect to work hereunder. 
  
 17. ATTORNEY’S FEES. In the event that either party hereto is
required to institute litigation or some other form of alternative dispute resolution in order to enforce the terms of this Consulting Agreement, the prevailing party shall be entitled to recover its reasonable attorney’s fees and costs from
the other party. 
  
 18. SURVIVAL. Neither
completion of payments hereunder nor termination of this Consulting Agreement shall be deemed to relieve the Consultant of any rights or obligations hereunder which by their very nature survive this Consulting Agreement, including without
limitation, Sections 5., 6., 7., 8., 9., 11., 12., 13., 14., 15., 16., and 17. hereof. 
  
 19. EFFECTIVE DATE. This Consulting Agreement shall be effective as of December 1, 2003. 
  

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 IN WITNESS WHEREOF, TECO ENERGY, INC. and ROYSTON K. EUSTACE have caused this instrument to
be executed in Tampa, Florida as of the date first written above. 
  
 This Agreement supersedes and replaces the previous version of this agreement or any agreement between the parties concerning this work. 
  

					
	WITNESSES:	 	TECO ENERGY, INC.,
	 	 	A FLORIDA CORPORATION
			
	  

	 	 BY:
	 	  

	 	 	 	 	R.D. FAGAN
	
	 	 	 	 Chairman of the Board,

	 	 	 	 	 President & Chief Executive Officer

			
	  

	 	 BY:
	 	  

	 	 	 	 	ROYSTON K. EUSTACE
		
	  

	 	 DATE SIGNED:

  

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 EXHIBIT A 
  

PROJECTS: 
  

	 	1.	BGA 

  

	 	2.	Syn-Fuel 

  

	 	3.	Dell/McAdams 

  

	 	4.	Prior Energy 

  

	 	5.	BCH Mechanical 

  

	 	6.	TECO Propane Ventures 

  

	 	7.	TIE 

  

 -8-Agreement to Acquire and Charter

 Exhibit 10.34 
  

  
 AGREEMENT TO ACQUIRE AND CHARTER 
  
 Dated as of December
21, 2001 
  
 by and among 
  
 GTC CONNECTICUT STATUTORY TRUST, 
  
 Shipowner 
  
 FLEET CAPITAL CORPORATION, 
  
 Owner Participant 
  
 GULFCOAST TRANSIT COMPANY, 
  
 Seller and Charterer 
  
 and 
  
 TECO ENERGY, INC., 
  
 Guarantor 
  

  
  
 Lease Financing of the United States Flag 
 dry-bulk cargo vessels named 
 BARBARA KESSEL, Official No. 583310 
 GAYLE
EUSTACE, Official No. 587045 
 PEGGY PALMER, Official No. 641530 
 MARY TURNER, Official No. 646730 
  

 TABLE OF CONTENTS 
  

 

					
	 	 	 	  	Page

			
	 ARTICLE I
	 	 DEFINITIONS
	  	2
			
	 ARTICLE II
	 	 DEMISE CHARTER OF VESSEL; PAYMENT OF LESSOR'S COST
	  	2
			
	 ARTICLE III
	 	 CONDITIONS TO OBLIGATIONS OF OWNER PARTICIPANT AND SHIPOWNER
	  	3
			
	 ARTICLE IV
	 	 REPRESENTATIONS AND WARRANTIES
	  	8
			
	 ARTICLE V
	 	 COVENANTS
	  	13
			
	 ARTICLE VI
	 	 EXPENSES
	  	21
			
	 ARTICLE VII
	 	 TRANSFER OF TRUSTEE'S AND OWNER PARTICIPANT'S INTEREST
	  	21
			
	 ARTICLE VIII
	 	 MISCELLANEOUS
	  	23
			
	 SCHEDULE A
	 	 Definitions
	  	 
			
	 SCHEDULE 1
	 	 Seller's Payment Instructions
	  	 
			
	 SCHEDULE 2
	 	 Lessor's Cost
	  	 
			
	 EXHIBIT A-1
	 	 Form of Opinion of Sheila M. McDevitt, General Counsel to the Guarantor
	  	 
			
	 EXHIBIT A-2
	 	 Form of Opinion of Milbank, Tweed, Hadley & McCloy LLP, Special New York Counsel to the Obligors
	  	 
			
	 EXHIBIT A-3
	 	 Form of Opinion of Jones, Walker, Waechter, Poitevent, Carrere & Denegre, LLP, Maritime Counsel to the Charterer
	  	 
			
	 EXHIBIT A-4
	 	 Form of Opinion of Thompson Coburn LLP, Special Maritime Counsel to the Owner Participant
	  	 
			
	 EXHIBIT A-5
	 	 Form of Opinion of Bingham Dana LLP, Special Counsel to the Trust Company
	  	 
			
	 EXHIBIT B
	 	 Form of Certificate of Delivery and Acceptance
	  	 

 AGREEMENT TO ACQUIRE AND CHARTER 
  
 AGREEMENT TO ACQUIRE AND CHARTER, dated as of December 21, 2001, by and among STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, a national banking association, in its individual capacity only as expressly stated herein and otherwise solely as Trustee of the GTC CONNECTICUT STATUTORY TRUST (the “Shipowner”), FLEET CAPITAL
CORPORATION, a Rhode Island corporation (the “Owner Participant”), GULFCOAST TRANSIT COMPANY, a Florida corporation (as seller of the Vessels, the “Seller”; and as demise charterer of the Vessels, the
“Charterer”), and TECO ENERGY, INC., a Florida corporation, (the “Guarantor”; the Charterer and the Guarantor being hereinafter sometimes collectively referred to as the “Obligors”). 
  
 WHEREAS, capitalized terms used herein are defined as provided in Article I
below; 
  
 WHEREAS, Seller is the owner of the Vessels;

  
 WHEREAS, to provide for the acquisition and charter of the
Vessels by the Trust, as Shipowner, the Owner Participant and the Trust Company have entered into the Trust Agreement; 
  
 WHEREAS, Seller proposes to sell and deliver, and the Shipowner proposes to purchase and take delivery of, the Vessels, and concurrently with such
purchase and delivery the Shipowner and the Charterer have agreed to execute and deliver a Demise Charter of the Vessels and the Charterer has agreed to accept delivery of the Vessels under the Demise Charter, all subject to, and on the terms and
conditions herein and in the other Transaction Documents set forth; 
  
 WHEREAS, to induce the Owner Participant to cause the Shipowner to acquire the Vessels from the Seller and charter the Vessels to the Charterer, the Charterer will enter into the Tax Indemnity Agreement, the Charterer will enter into the
Assignments, and the Guarantor will enter into the Guarantee, all in favor of the Shipowner for the benefit of the Owner Participant, and the other Transaction Documents will be executed and delivered by the respective parties thereto; 

 NOW, THEREFORE, the parties hereto hereby agree as follows: 
  
 ARTICLE I 
  
 DEFINITIONS 
  
 SECTION 1.1. Definitions. Unless otherwise defined herein and unless the context shall otherwise require, capitalized terms used herein shall have
the respective meanings assigned thereto in Schedule A attached to this Agreement and made a part hereof for all purposes hereof (such definitions to be equally applicable to both the singular and the plural forms of the terms defined).

  
 ARTICLE II 
  
 DEMISE CHARTER OF VESSEL; 
 PAYMENT OF LESSOR’S COST 
  
 SECTION 2.1. Payment of Lessor’s Cost. Subject to the terms and conditions of this Agreement and in reliance on the representations and
warranties contained herein or made pursuant hereto, on the Closing Date the Owner Participant will advance funds to the Shipowner to enable the Shipowner to make payments in accordance with Section 2.3 for the Vessels accepted by the Charterer on
behalf of the Shipowner as provided in this Agreement in an aggregate amount equal to the sum of the Lessor’s Cost of each Vessel ; provided, however, that the aggregate amount paid by the Shipowner pursuant to this Section 2.1 shall not
exceed $45,000,000.00. 
  
 SECTION 2.2. Closings. All
documents and instruments required to be delivered on the Closing Date pursuant to this Agreement shall be delivered at the offices of Shipman & Goodwin LLP, One American Row, Hartford, CT 06103-2819, special counsel to the Owner Participant, or
at such other location as may be determined by counsel for the Owner Participant. 
  
 SECTION 2.3. Application of Funds. On the Closing Date, payment of Lessor’s Cost for each Vessel shall be made by the Shipowner by wire transfer of immediately available funds to the account of the Seller
specified in Schedule 1. 
  
 SECTION 2.4. Agreement to
Charter. Subject to the terms and conditions set forth in this Section and in Section 3, the Shipowner agrees to acquire and demise to the Charterer, and the Charterer agrees to charter from the Shipowner, the Vessels, such deliveries and
acceptances to be evidenced by the Certificate of Delivery and Acceptance. 
  
 SECTION 2.5. Delivery; Inspection and Acceptance. The Shipowner hereby appoints the Charterer as the authorized agent of the Shipowner to inspect and accept delivery of the Vessels from Seller hereunder and
under the Demise Charter for all purposes thereof. The Charterer shall cause one or more authorized representatives of the Charterer to inspect each Vessel upon delivery thereof to the Charterer and, if such Vessel is found to be in good order, to
accept such Vessel as aforesaid; provided, however, that the Charterer shall 
  

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not be authorized to accept any Vessel on behalf of the Shipowner unless the conditions precedent set forth in Sections 3.1 and 3.2 shall have been satisfied
at or prior to such acceptance. Acceptance by the Charterer of the Vessels in accordance with this Agreement shall, without further act, constitute (a) delivery by the Shipowner to the Charterer of the Vessels under the Demise Charter, and (b)
irrevocable acceptance by the Charterer of the Vessels for charter to the Charterer under, and otherwise for all purposes of, the Demise Charter. If any Vessel is found by the Charterer not to be in good order, the Charterer shall not accept any of
the Vessels on behalf of the Shipowner under and in accordance with the terms hereof. 
  
 SECTION 2.6. Revocation of Authority. If any Event of Default shall have occurred and be continuing, the Shipowner may revoke the appointment and authorization of the Charterer to accept the Vessels by Notice
to the Charterer. 
  
 SECTION 2.7. Owner Participant
Direction. Owner Participant confirms that the making available of the Lessor’s Cost for each of the Vessels in accordance with Section 2.1 constitutes, without further act (unless otherwise instructed by the Owner Participant),
authorization and direction by the Owner Participant to the Shipowner to take the actions specified in Section 4.1 of the Trust Agreement. 
  
 ARTICLE III 
  
 CONDITIONS TO OBLIGATIONS OF 
 OWNER PARTICIPANT AND SHIPOWNER 
  
 SECTION 3.1. Conditions with Respect to Closing Date. It is a
condition precedent to the obligation of the Owner Participant to advance funds to enable the Shipowner to acquire the Vessels and to the occurrence of the Closing Date hereunder that all the following conditions shall have been fulfilled to the
Owner Participant’s satisfaction on or before the Closing Date: 
  
 (a) Due Authorization, etc. All the Transaction Documents to which each of the Obligors is or will be a party shall have been duly authorized by the relevant Obligor. This Agreement, the Demise Charter, the Tax
Indemnity Agreement, the Guarantee, the Assignments, and each of the other Transaction Documents shall have been duly executed and delivered by the parties thereto and shall be in full force and effect on the Closing Date, and an executed
counterpart of each shall have been delivered to the Shipowner. 
  
 (b) Certain Closing Documents. The Owner Participant shall have received the following, in each case in form and substance satisfactory to it: 
  
 (i) a copy of the resolutions of the Board of Directors of the Charterer authorizing the execution, delivery
and performance by the Charterer of the Transaction Documents to which it is a party, certified by an 
  

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appropriate officer of the Charterer on the Closing Date, together with an incumbency certificate as to the individual or individuals executing and
delivering such instruments or any other instruments delivered or to be delivered in connection with the transactions contemplated by such Transaction Documents on behalf of the Charterer; 
  
 (ii) a copy of the resolutions of the Board of Directors of
the Guarantor authorizing the execution, delivery and performance by the Guarantor of the Transaction Documents to which it is a party, certified by the Secretary or an Assistant Secretary of the Guarantor on the Closing Date, together with an
incumbency certificate as to the individual or individuals executing and delivering such instruments or any other instruments delivered or to be delivered in connection with the transactions contemplated by such Transaction Documents on behalf of
the Guarantor; 
  
 (iii) any and all
documentation required to be delivered to the Shipowner pursuant to Article 9 of the Demise Charter respecting insurance, including cover notes, certificates of insurance, amendments to policies or entries naming the Shipowner as an additional
insured, and, where appropriate, loss payee, evidence of innocent owner’s protection insurance in respect of all insurances required pursuant to said Article 9, and a written report of Charterer’s marine insurance broker with respect to
the insurance carried with respect to the Vessels and the operation thereof and stating in effect that such insurance complies in all respects with the requirements of said Article 9, and, if requested by the Owner Participant, as soon as possible
after the Closing Date, a copy of all policies evidencing the underlying coverage referred to in said cover notes or in said reports of the Charterer’s brokers; 
  
 (iv) certificates evidencing the good standing or legal existence, as applicable, of each Obligor;

  
 (v) certificates of the chief financial
officer, in the case of the Guarantor, and the Vice President-Controller, in the case of the Charterer, confirming as of the Closing Date the matters referred to in Section 4.1(c); 
  
 (vi) the financial statements referred to in Section 4.1(d) certified by the chief financial officer of the
Guarantor and confirming to be true the matters referred to in clause (ii) of Section 4.1(d); 
  
 (vii) the litigation letters referred to in Section 4.1(e), if required; 
  
 (viii) due evidence of the transfer of title of the Vessels from the Seller to the Shipowner, and of the
documentation of the Vessels in the name of the Shipowner for operation in the coastwise trade of the United States, together with a Certificate of Documentation and an Abstract of Title issued 
  

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 by the USCG for each Vessel showing Shipowner to be the registered owner thereof subject to no Liens of
record; provided, however, that the Abstracts of Title may be provided promptly after recording of the applicable conveyancing documents and the Certificates of Documentation with respect to the Vessels may be provided to the Owner
Participant after the Closing Date, but no later than January 18, 2002, if the letter from the USCG described in subsection (h)(iv) of this Section 3.1 is provided to the Owner Participant on the Closing Date; and 
  
 (ix) such other documents and evidence with respect to each
Obligor as the Owner Participant may reasonably request in connection with the consummation of the transactions contemplated by the Transaction Documents, and the taking of all corporate proceedings in connection therewith and compliance with the
conditions set forth in this Section 3.1. 
  
 (c)
Consents; Approvals, etc. All approvals and consents of any trustees or holders of any indebtedness or obligations of any Obligor that are required in connection with any transactions contemplated by this Agreement or the Transaction
Documents shall have been duly obtained, and copies thereof, in form and substance satisfactory to the Owner Participant, shall have been delivered to the Owner Participant. The execution and delivery of this Agreement and any Transaction Document,
the consummation by the Obligors of any of the transactions contemplated hereby and thereby and the compliance by the Obligors with any of the terms and provisions hereof and thereof shall not contravene any law, governmental rule or regulation of
the United States or any political subdivision thereof, and no consent or approval of, giving of notice to, registration with, recording or filing of any document with, or taking of any other action in respect of, any such governmental authority or
agency shall be required other than those that have been obtained and are in full force and effect on the Closing Date. 
  
 (d) Opinions of Counsel to Charterer and Guarantors. The Owner Participant and the Shipowner shall have received opinions from
Sheila M. McDevitt, General Counsel to the Guarantor, Milbank, Tweed, Hadley & McCloy LLP, special New York counsel to the Obligors, Jones, Walker, Waechter, Poitevent, Carrere & Denegre, LLP, maritime counsel to the Charterer, Thomspon
Coburn LLP, special maritime counsel to Owner Participant, and Bingham Dana LLP, special counsel to the Trust Company, substantially in the respective forms set forth in Exhibits A-1, A-2, A-3, A-4 and A-5 annexed hereto and made a part
hereof. 
  
 (e) Bill of Sale. There shall
have been delivered to the Shipowner in duplicate, in recordable form, a bill of sale for the Vessels signed by the Seller transferring to the Shipowner title to each of the Vessels and warranting to the Shipowner that the Seller had legal title
thereto and good and lawful right to sell the same and that as of the Closing Date (immediately prior to the transfer of title to the Shipowner) title thereto was free and clear of all Liens other than Permitted Liens. 
  

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 (f) Appraisal. The Owner Participant shall have received copies of an opinion of
an independent expert appraiser selected by the Owner Participant, satisfactory in form and substance to the Owner Participant, concluding that (i) the estimated economic useful life of each Vessel at the inception of the Demise Charter is equal to
at least one hundred twenty-five percent (125%) of the base Term thereof; (ii) the fair market value of each Vessel at the inception of the Demise Charter is not less than Lessor’s Cost of such Vessel; and (iii) at the end of the base Term of
the Demise Charter and without giving effect to inflation, each Vessel will have a fair market value of not less than twenty percent (20%) of the fair market value of such Vessel at the inception of the Demise Charter. 
  
 (g) Transaction Costs. If the transactions
contemplated by this Agreement are consummated, Transaction Costs incurred through the Closing Date and not exceeding in the aggregate 2% of Lessor’s Cost of the Vessels shall be funded by the Owner Participant to Shipowner and shall be paid by
Shipowner at the direction of the Owner Participant on the Closing Date (or as soon thereafter as is practicable). In the event the transactions contemplated by this Agreement are not consummated, the Seller shall pay all Transaction Costs, subject
to the limitations and qualifications expressly set forth in Section 6.1. 
  
 (h) Recordation. (i) The Shipowner shall have completed application for documentation of the Vessels on Form CG-1258 (and such other documents in support of such applications as the Coast Guard may require),
the Charterer shall have certified to the Secretary of Transportation as required by 46 U.S.C.A. § 12106(e)(1)(C) that each Vessel is under demise charter to it for a period of at least three (3) years and that it is a “citizen of the
United States” for engaging in the coastwise trade under Section 2 of the Shipping Act, (ii) such Demise Charter and any amendments to it shall have been filed as prescribed by 46 U.S.C.A. § 12106(e)(2), (iii) the applicable conveyancing
documents shall have been duly filed at the National Vessel Documentation Center of the United States Coast Guard in Falling Waters, West Virginia, and (iv) the Owner Participant shall have received a letter from the USCG to the effect that,
notwithstanding the fact that the USCG will be unable to deliver Certificates of Documentation with respect to the Vessels until its computer system is again operational after January 2, 2002, each of the Vessels is deemed documented in the name of
the Shipowner with coastwise endorsement as of the Closing Date. 
  
 SECTION 3.2. Additional Conditions with Respect to the Closing Date. On the Closing Date the Charterer shall not accept the Vessels on the Shipowner’s behalf or charter the same under the Demise Charter, and the Owner
Participant shall not be obligated to advance funds to enable the Shipowner to acquire the Vessels or make any payment with respect thereto, unless all the following conditions shall have been fulfilled on or prior to the Closing Date: 

 
 (a) Conveyance of Title, etc. Good and marketable
title to the Vessels shall be duly, effectively and validly conveyed and transferred to the Shipowner, free and clear of all Liens other than Permitted Liens. 
  

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 (b) Compliance with Documents. Each Obligor shall have complied with all the terms
of the Transaction Documents required to have been complied with by them on or prior to the Closing Date. 
  
 (c) No Change in Applicable Laws. Since the date of execution of this Agreement, no change shall have occurred in applicable laws
or in interpretations thereof by regulatory authorities that would make it illegal for the Owner Participant or the Shipowner to acquire or charter the Vessels in accordance with the Transaction Documents. 
  
 (d) Changes in Tax Assumptions. Since the date of
execution of this Agreement, no change shall have occurred, or shall have been proposed, in applicable tax laws, regulations or interpretations that, in the sole judgment of Owner Participant, would change in a manner adverse to Owner Participant
the availability of the tax benefits to Owner Participant assumed at the date of execution hereof. 
  
 (e) No Material Adverse Change. Except for matters disclosed publicly, to the Securities and Exchange Commission or to the Owner
Participant in writing prior to the execution hereof, nothing shall have occurred subsequent to September 30, 2001, that, either in any case or in the aggregate, has had, or would be reasonably expected to have, a Material Adverse Effect on either
of the Obligors. 
  
 (f) Compliance with Terms
of Agreements. The representations and warranties of each of the Obligors set forth in Article IV of this Agreement and in the other Transaction Documents shall be true and correct on and as of the Closing Date with the same effect as if made on
the Closing Date (except to the extent that they relate to a different time, in which case such representations and warranties shall have been true on and as of such time); and no Event of Default shall have occurred and be continuing or would occur
as a result of the acceptance or the charter of the Vessels on the Closing Date. 
  
 (g) Certificates of Citizenship. The Trust Company and the Charterer each shall have certified that it is a “citizen of the
United States” qualified to engage in the coastwise trade within the meaning of Section 2 of the Shipping Act, and the Owner Participant shall have certified that it is a Maritime Citizen pursuant to clause (ii) of the definition thereof.

  
 (h) Financing Statements. The
Charterer shall have delivered to the Shipowner such protective financing statements as shall have been requested by the Owner Participant with respect to the interests of the Shipowner in the Vessels and under the Assignments, duly executed and in
proper form for filing. 
  

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 SECTION 3.3. Closing Date. As of the Closing Date with respect to the Vessels accepted by the
Charterer on behalf of the Shipowner as provided in this Agreement, subject to the fulfillment to the satisfaction of Owner Participant of the conditions on the part of Obligors under this Agreement and the other Transaction Documents, the Shipowner
shall be unconditionally obligated to make payment of Lessor’s Cost for such Vessels as herein provided. 
  
 ARTICLE IV 
  
 REPRESENTATIONS AND WARRANTIES 
  
 SECTION 4.1.
Representations and Warranties of the Obligors. Each Obligor makes the following representations and warranties to the Owner Participant and the Shipowner, in each case to the extent any such representation or warranty is applicable to it:

  
 (a) Legal Existence; Corporate or Other
Legal Power. Each Obligor is duly incorporated, formed or organized, as the case may be, and existing in the jurisdiction of its incorporation, formation or organization and has duly qualified to do business in each jurisdiction in which such
qualification is necessary or where failure to be so qualified would have a material adverse effect on its business, financial condition, operations or properties and/or its ability to perform its obligations under the Transaction Documents. Each
Obligor has corporate or other legal power and authority to execute, deliver and perform this Agreement and the other Transaction Documents to which it is a party. 
  
 (b) Citizenship. Charterer is a “Citizen of the United States” eligible to engage in the
coastwise trade within the meaning of Section 2 of the Shipping Act. 
  
 (c) Authority; Binding Obligations. Each of the Transaction Documents has been duly authorized, executed and delivered by the respective Obligor or Obligors party thereto, and each constitutes the legal, valid
and binding obligation of each such Obligor enforceable in accordance with its terms, except as enforcement may be affected by the laws of bankruptcy and other laws affecting the rights of creditors generally and by equitable principles. The
execution, delivery and performance by each Obligor of this Agreement and the other Transaction Documents to which it is a party do not and will not violate any provision of applicable laws or any provision of the articles or certificate of
incorporation or organization, by-laws, operating agreement or other organizational documents of such Obligor, or result in the breach or violation of, or constitute a default or require any consent (other than consents that have heretofore been
given and consents with respect to the Demise Charter Assignment which the Charterer has agreed therein to use commercially reasonable efforts to obtain after the Closing Date), under, or result in the creation of any lien, charge or encumbrance
upon any property or asset of such Obligor pursuant to, any indenture, loan or credit agreement, mortgage or other agreement or 
  

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 instrument to which such Obligor is a party or by which such Obligor or any of their properties may be
bound or affected. Neither of the Obligors is in default under or in breach or violation of (and no event or condition exists which would, with the giving of notice or lapse of time or both, constitute such a default under or breach or violation of)
(i) any provision of this Agreement or the other Transaction Documents, or (ii) any indenture, lease, deed of trust, mortgage, bond or other evidence of indebtedness or other agreement or instrument by which the property of either of the Obligors is
bound or affected or any law, decree, order, rule or regulation where the continuation of such default, breach or violation would reasonably be expected to have a Material Adverse Effect (except for the matters disclosed in Guarantor’s Current
Report filed with the Securities and Exchange Commission on Form 8-K dated December 7, 2001, or to the Owner Participant in writing prior to the Closing Date). 
  

(d) Financial Condition. (i) The audited consolidated balance sheets of the Guarantor and its Subsidiaries as of December 31,
1999 and December 31, 2000, and the related statements of income and retained earnings and changes in financial position for the fiscal year then ended, and the unaudited consolidated balance sheet of the Guarantor and its Subsidiaries as of
September 30, 2001, and the related statements of income and retained earnings and changes in financial position for the nine-month period then ended, heretofore furnished to the Owner Participant, fairly present the financial condition of the
Guarantor and its consolidated Subsidiaries as of each such date and the results of operations of the Guarantor and its consolidated Subsidiaries for the period ended on each such date, all in accordance with GAAP throughout the periods involved;
and (ii) since September 30, 2001, there has been no change in the business, operations, properties or financial condition of the Guarantor or its Subsidiaries that has had, or would be reasonably expected to have, a Material Adverse Effect (except
for matters disclosed publicly, to the Securities and Exchange Commission or to the Owner Participant in writing prior to the execution hereof). 
  
 (e) Litigation; Other Proceedings. Except as set forth in letters of the Obligors delivered to the Owner Participant, or otherwise
disclosed in writing to the Owner Participant prior to the execution hereof, there are no actions, suits, proceedings or investigations pending or, to the knowledge of either of the Obligors, threatened against or affecting either of the Obligors or
of any of their respective Subsidiaries or any of their respective properties, at law or in equity, before or by any court or administrative or governmental body which relate to any action taken or to be taken by either of the Obligors under this
Agreement or the other Transaction Documents (or which otherwise relate to any Transaction Document), or which relate to any of the Vessels or the use or operation thereof, or which in the aggregate would reasonably be expected (after taking into
consideration insurance coverage) to have a Material Adverse Effect on either of the Obligors, and, to the knowledge of each Obligor, it is not in default with respect to any order of any court, governmental body or arbitrator relating to any of the
Vessels, or if not relating to the Vessels, applicable to it, which default would reasonably be expected to have a Material Adverse Effect on either of the Obligors. For the purposes of this Section, the term “governmental 
  

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 body” includes any Federal, state, municipal or other governmental or intergovernmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign; and the term “order” includes any judgment, order, writ, injunction, award, determination, direction, decree or demand. 
  
 (f) Encumbrances. The Guarantor and its Subsidiaries
have good title to their respective properties as are reflected in the most recent balance sheet referred to in Section 4.1(d) hereof (except (i) as sold or otherwise disposed of in the ordinary course of business, (ii) leased assets that are
capitalized on such balance sheet and (iii) assets not in the aggregate forming a material portion of the assets shown on such balance sheet). As of the Closing Date, except pursuant to or as contemplated by the Transaction Documents, there shall be
no assignment, pledge, security interest in, or other encumbrance of any of Charterer’s right, title or interest in, to or under, the Demise Charter, or of or with respect to any Vessel or any part of any thereof, to or in favor of any Person,
except for Permitted Liens. 
  
 (g)
Approvals. No authorization, consents, approvals, licenses, filings or registrations by or with any governmental authority or administrative body are required to be obtained by either of the Obligors for or in connection with the execution or
delivery of this Agreement or any other Transaction Document or for the performance thereof by the Obligors or the validity and enforceability of any of such agreements and instruments in accordance with their respective terms, except for such
authorizations, consents, approvals, licenses, filings or registrations that have been duly obtained, sent, registered, filed or taken, as the case may be. 
  
 (h) Investment Company Act. Each of the Obligors is not, and is not directly or indirectly controlled by or acting on behalf of any
person that is, an “investment company” within the meaning of the Investment Company Act of 1940. 
  
 (i) Title to the Vessels. On the Closing Date (i) all right, title and interest of Seller in and to the Vessels shall have been
transferred or assigned to the Shipowner pursuant to, and subject to the terms and conditions of, the Bills of Sale, (ii) the Shipowner will acquire good and marketable title to each Vessel free and clear of all Liens (other than Permitted Liens),
and (iii) no filing or recording of any document will then be necessary in order to establish, preserve, protect and perfect the Shipowner’s good and marketable title to the Vessels other than the due documentation of the Vessels in the name of
the Shipowner with the USCG. The foregoing representation and warranty as to the absence of Liens as of the Closing Date is qualified by reference to the Todd Shipyards Lien, which has been disclosed to Owner Participant and which shall constitute
an exception to such representation and warranty (and to any comparable representation and warranty herein, in the bill of sale with respect to the Vessels or in the Demise Charter relating to the absence of Liens) as such representations and
warranties relate to the MARY TURNER, Official No. 646730; provided, however, that (x) Charterer hereby represents and warrants that, after due investigation, Charterer reasonably believes that the Todd Shipyard Lien has, in fact, been
discharged and extinguished, whether by payment, operation of 
  

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 law or otherwise, notwithstanding the fact that it has not been release of record, (y) Charterer will use
commercially reasonable efforts in an effort to effect the release of the Todd Shipyards Lien of record by December 31, 2002, and (z) Charterer hereby agrees to indemnify and hold harmless each Indemnified Person from and against any claim, demand,
loss, liability or expense, including counsel fees and expenses, based on, arising from or relating to the Todd Shipyards Lien or the obligations purported to be secured thereby. 
  
 (j) Tax Returns, etc. Each of the Obligors has filed all material income tax returns and all other
material tax returns which are required to be filed by it and have paid or made provision for the payment of all material taxes which have become due and payable pursuant to such returns or pursuant to any assessment in respect thereof received by
such Obligor or its respective Subsidiaries, except such taxes, if any, as are being contested in good faith by appropriate proceedings conducted with due diligence, which proceedings do not involve any material risk of the sale, forfeiture or loss
(or loss of the use) of the Vessels or any interest therein or any payment of Charter Hire, and for the payment of which adequate reserves have been provided in accordance with GAAP. 
  
 (k) Use. The Vessels will not be used during the Charter Period outside of the trading range
established by Article 3 of the Demise Charter without the prior written consent of Shipowner, which consent shall not be unreasonably withheld. 
  
 (l) No Improvements. At the commencement of the Demise Charter and on the Closing Date, no improvements, modifications or additions
to the Vessels are required in order to render the Vessels complete for the intended use by the Charterer as an integrated blue-water dry-bulk tug-barge unit in the case of the BARBARA KESSEL and the GAYLE EUSTACE, and blue-water dry-bulk barges in
the case of the PEGGY PALMER and the MARY TURNER. 
  
 (m) Vessel Information. All written information supplied by the Seller to the Owner Participant or to any independent appraiser or surveyor furnishing any report or appraisal to the Owner Participant with respect to any Vessel or any
part thereof was accurate and complete at the time given in all material respects and, if the Seller later determined that any such information, at the time given, was inaccurate or incomplete in any material respect, the Seller has notified each
such party of such material change in any such information so supplied. 
  
 (n) Other Charters; Modifications. As of the Closing Date, except as disclosed in writing by Seller to Owner Participant, no Vessel is subject to (i) any Other Charter; (ii) any management agreement, operating
agreement or similar agreement relating to crewing or operation of such Vessel; or (iii) any claim for money due and unpaid with respect to any Modification to such Vessel which claim could form the basis for any Lien, other than Permitted Liens.

  

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 (o) Brokers. Except for Credit Suisse First Boston, no broker, placement agent,
arranger or other third party has been retained or engaged by the Obligors or otherwise has any claim through the Obligors for any broker’s, placement agent’s, arranger’s or similar fee with respect to the sale and leaseback of the
Vessels, and the Obligors agree to indemnify and defend the Owner Participant, the Shipowner and the Trust Company from and against any such claim. 
  
 (p) Ownership of Charterer. As of the Closing Date, the Charterer is a wholly-owned subsidiary of TECO Transport Corporation; TECO
Transport Corporation is a wholly-owned subsidiary of TECO Diversified, Inc.; and TECO Diversified, Inc. is a wholly-owned subsidiary of the Guarantor. Each of TECO Transport Corporation and TECO Diversified, Inc. is a corporation duly incorporated
and in good standing in the State of Florida. 
  
 SECTION 4.2.
Representations and Warranties of Owner Participant. The Owner Participant represents, warrants and covenants that: 
  
 (a) it is a corporation duly organized, validly existing and in good standing under the laws of the State of Rhode Island; 
  
 (b) it is a Maritime Citizen pursuant to clause (ii) of the
definition thereof; 
  
 (c) it has the corporate
power and authority to enter into and perform its obligations under each of the Transaction Documents to which it is a party; and 
  
 (d) each of the Transaction Documents to which it is a party has been duly authorized by all necessary corporate action on the part of the
Owner Participant, has been duly executed and delivered by the Owner Participant and constitutes the legal, valid and binding obligation of the Owner Participant enforceable against the Owner Participant in accordance with its terms. 
  
 (e) the execution and delivery by it of the Transaction
Documents to which it is a party do not and will not result in any violation of, conflict with, or default under, any term of any charter instrument, by-law or other material agreement or instrument to which it is a party or by which it or its
properties may be bound, or any judgment or order binding upon or affecting it or its properties, or any federal or Rhode Island state law or regulation relating to its investment as Owner Participant; and 
  
 (f) neither the execution and delivery by it of the
Transaction Documents to which it is party nor the consummation of any of the transactions contemplated thereby requires the consent, authorization, approval or other action by, or notice to or filing, registration or qualification with, any federal
or Rhode Island governmental authority or regulatory body pursuant to any federal or Rhode Island law governing its investment as Owner Participant or any Person not already obtained, including any holders of any Indebtedness of Owner Participant.

  

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 SECTION 4.3 Representations and Warranties of the Trust Company. The Trust Company, in its
individual capacity, represents, warrants and covenants that: 
  
 (a) it is a national banking association duly organized, validly existing and in good standing under the laws of the United States, and has all requisite banking and trust power, authority and legal right to enter
into and perform its obligations under the Transaction Documents to which it is a party; 
  
 (b) it is a “citizen of the United States” qualified to engage in the coastwise trade within the meaning of Section 2 of the
Shipping Act; 
  
 (c) it has duly authorized by
all necessary corporate action, executed and delivered the Transaction Documents to which it is a party in its individual capacity or as Trustee, as and to the extent specified in such Transaction Documents; and each of the Transaction Documents to
which it is a party in its individual capacity constitutes the legal, valid and binding obligation of the Trust Company, enforceable against the Trust Company in accordance with the terms thereof; 
  
 (d) the execution and delivery by it, in its individual
capacity or as Trustee, as the case may be, of the Transaction Documents to which it is a party do not and will not result in any violation of, conflict with, or default under, any term of any charter instrument, by-law or other material agreement
or instrument to which it is a party or by which it or its properties may be bound, or any judgment or order binding upon or affecting it or its properties, or any federal or Connecticut state law or regulation relating to its banking and trust
powers; and 
  
 (e) other than the filing of a
certificate of trust with the Secretary of the State of the State of Connecticut, which filing has been duly effected, neither the execution and delivery by it, in its individual capacity or as Trustee, as the case may be, of the Transaction
Documents to which it is party nor the consummation of any of the transactions contemplated thereby requires the consent, authorization, approval or other action by, or notice to or filing, registration or qualification with, any federal,
Connecticut governmental authority or regulatory body pursuant to any federal or Connecticut law governing its banking or trust powers. 
  
 ARTICLE V 
  
 COVENANTS 
  
 SECTION 5.1. General. (a) Financing Statements. On or before the Closing Date, the Charterer, as lessee, shall execute protective Uniform Commercial Code financing statements covering the Charterer’s interests in the
Vessels and the property covered by the Assignments, and, on or before the Closing Date, the Charterer shall execute and deliver to counsel to the Owner Participant such financing statements in form for filing in the appropriate locations in the
State of Florida. 
  

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 (b) Further Assurances, etc. The Obligors will cause promptly and duly to be taken, executed,
acknowledged or delivered all such further acts, conveyances, documents and assurances as the Shipowner may from time to time request in order more effectively to carry out the intent and purposes of any of the Transaction Documents and the
transactions contemplated thereby. 
  
 (c) Certain Duties of
Charterer. The Charterer will take, or cause to be taken, such action with respect to the recording, filing, re-recording and refiling of any financing statements, continuation statements or other instruments as shall be necessary to maintain
the interest of the Shipowner in the Vessels and the property covered by the Assignments (subject to the terms thereof), or will furnish to the Shipowner timely notice of the necessity of such action, together with such instruments, in execution
form, and such other information as may be required to enable it to take such action. 
  
 (d) Obligors to Maintain Corporate or Other Legal Existence. Each Obligor shall at all times maintain its respective corporate or other legal existence except as permitted by subsection (e) below. Except for
actions permitted under subsection (e) below, each of the Obligors will do or cause to be done all things necessary to preserve and keep in full force and effect its full corporate or other legal power and authority to carry on its business as
presently conducted, to own and hold under lease and operate its properties and assets, and to perform its respective obligations under the Transaction Documents. 
  
 (e) Merger, Consolidation, Assignment, Transfer, Change of Control, Line of Business, etc. 
  
 (i) Neither Obligor may merge or consolidate with any Person or convey,
transfer or lease substantially all of its assets to any Person without the prior written consent of the Shipowner, except so long as no Event of Default has occurred and is continuing: 
  
 (A) the Guarantor may merge or consolidate with or into any of its wholly-owned subsidiaries;
provided in each instance that the Guarantor is the surviving entity; 
  
 (B) the Guarantor may merge or consolidate with or into another Person provided that (i) the surviving corporation or entity, if not Guarantor, shall have executed and delivered to each of the other parties
hereto an agreement in form and substance reasonably satisfactory to the Owner Participant containing an assumption by the surviving corporation of the due and punctual performance and observance of each covenant and condition of the Transaction
Documents to be performed and observed by the Guarantor, and (ii) the surviving corporation or entity has a Tangible Net Worth, after giving effect to such merger or consolidation, not less than the Tangible Net Worth of the Guarantor prior to such
merger or consolidation. 
  

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 (C) The Charterer may merge or consolidate with or into any other subsidiary that is
wholly-owned, either directly or indirectly, by the Guarantor. 
  
 (D) The Charterer may convey or transfer substantially all of its assets, including all of the Charterer’s rights and interests in the Vessels and under the Transaction Documents, to a Person which (i) is a
solvent corporation duly organized under the laws of a jurisdiction in the United States, (ii) has the corporate authority to enter into and carry out the transactions contemplated by the Transaction Documents to which the Charterer is a party, and
(iii) expressly assumes the obligations of the Charterer with respect to the Vessels and under the Transaction Documents pursuant to an agreement reasonably satisfactory to the Owner Participant. 
  
 (ii) Any Person formed by the consolidation of the Charterer, or into which
Charterer is merged, or which acquires substantially all of the assets of the Charterer, including the Charterer’s rights and interests in the Vessels and under the Transaction Documents, shall be “citizen of the United States”
eligible to engage in the coastwise trade within the meaning of Section 2 of the Shipping Act. 
  
 (iii) No such merger, consolidation or conveyance or transfer of assets by the Charterer shall release or otherwise limit or impair any obligation of the
Guarantor under the Guarantee. 
  
 (iv) Nothing contained herein
shall permit any charter, subcharter or other arrangement for the use, operation or possession of the Vessels except in compliance with the applicable provisions of the Demise Charter. 
  
 (v) Without the prior written consent of the Owner Participant, there shall be no sale, assignment or other transfer by
either Obligor, for purposes of security or otherwise, of any of the Transaction Documents or of any right, title and interest in, to or under any of the Transaction Documents, except pursuant to the express provisions of the Transaction Documents.

  
 SECTION 5.2. Certain Tax Assumptions; Inconsistent Actions;
Records. The Transaction Documents are being entered into on the assumption that the Demise Charter is a “true lease” and not a conditional sale or other agreement intended as security and that Shipowner and not the Charterer will be
treated as the owner of the Vessels for Federal income tax purposes. The Charterer agrees that neither it nor any Affiliate will at any time take any action for Federal income tax purposes or file any returns or other documents in connection
therewith inconsistent with the assumptions set forth in this Section 5.2. 
  

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 SECTION 5.3. Financial Statements. (a) As soon as available, and in any event within sixty (60)
days after the end of the first, second and third quarterly accounting periods in each fiscal year, the Guarantor shall furnish to the Owner Participant copies of its unaudited consolidated balance sheet and its consolidated Subsidiaries as of the
end of such accounting period and copies of the related statements of income and retained earnings and changes in financial position for the portion of its fiscal year ended with the last day of such quarterly accounting period and for such period,
all in reasonable detail, certified by its controller or other accounting officer and stating in comparative form the figures for the corresponding date and periods in the previous fiscal year. 
  
 (b) As soon as available after the end of each fiscal year, and in any event
within one hundred twenty (120) days thereafter, the Guarantor shall furnish to the Owner Participant copies of its audited financial statements and its consolidated Subsidiaries in comparative form certified as fairly presented by a nationally
recognized firm of independent certified public accountants, together with a certificate signed by its President, any Vice President, the Treasurer or other accounting officer, stating that he or she has reviewed the activities during such year and
that to the best of his or her knowledge each Obligor during such year has kept, observed, performed and fulfilled each and every covenant, obligation and condition contained in this Agreement or any other of the Transaction Documents, that no Event
of Default shall have existed during such year and that no Event of Default exists or if such a Default or Event of Default shall have so existed or shall exist specifying the nature and status thereof. 
  
 (c) If at any time the Charterer ceases to be a consolidated Subsidiary of
Guarantor for financial reporting purposes, Charterer shall thereafter provide to Owner Participant its quarterly and annual financial statements at the times and pursuant to the same reporting requirements as are set forth with respect to the
Guarantor in subsections (a) and (b) above. 
  
 (d) Each Obligor
shall furnish to the Owner Participant: 
  
 (i)
promptly after learning of the occurrence of any Event of Default, telex, telecopy, cable or other written notice thereof; 
  
 (ii) promptly after the sending or filing thereof, at any time when the stock of such Obligor shall be publicly traded, copies of all
reports which such Obligor sends to any of its security holders, and copies of all reports and registration statements which such Obligor files with the Securities and Exchange Commission or any national securities exchange; and 
  
 (iii) forthwith upon the request of the Owner Participant,
such other information respecting the financial condition and operations of such Obligor as the Owner Participant may from time to time reasonably request. 
  

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 (e) Notwithstanding the foregoing, financial statements, reports or registration statements required to
be furnished to Owner Participant pursuant to this Section 5.3 shall be deemed furnished when made available by Guarantor to Owner Participant by electronic notification and transmission over the internet or when posted electronically on a Web site
designated by the Guarantor to which Owner Participant has access, provided that the Guarantor or the Charterer, as the case may be, shall, upon specific written request of the Owner Participant, promptly provide to Owner Participant a
written copy of any such financial statement, report or registration statement. 
  
 SECTION 5.4. Inspection. The Charterer will permit any authorized representative designated by the Owner Participant upon reasonable prior notice to visit it and to discuss its financial affairs, finances and
accounts with its officers and its auditors, and to inspect its books and records and make copies of the same or any other documents relevant to the Vessels or the Transaction Documents, or to inspect any of the Vessels if they are then in port, all
at such reasonable times during normal business hours and as often as may be reasonably requested and all at the expense of the Person requesting the same but without interfering with the normal operation of the Vessels or disrupting the business
operations of the Charterer; provided, however, (i) that such inspection shall be at the expense of the Charterer to the extent that such inspection is undertaken as a result of an Event of Default and the costs and expenses thereof are
payable by the Charterer pursuant to Article 15 of the Demise Charter, (ii) that any such visit or inspection shall be limited to the Vessels and matters related to compliance with or performance of the terms and conditions of the Transaction
Documents and shall not extend to unrelated parts of the Charterer’s business, (iii) that any such visit or inspection shall be subject to applicable laws and regulations governing the operation of the Vessels, and (iv) the Charterer shall not
be liable to the Owner Participant or its employees, representatives and agents, and Owner Participant shall release Charterer from any and all liability to Owner Participant for any personal injury to any employee, representative or agent of Owner
Participant suffered in connection with any such visit or inspection. No party hereto shall have any duty to make any such examination or inspection or shall incur any liability by reason of not making the same. 
  
 SECTION 5.5. Shipowner’s Liens. The Trust Company, the Shipowner
and the Owner Participant, each severally and not jointly, agrees that it shall not, directly or indirectly, create, incur, assume or suffer to exist and, at its own cost and expense, shall promptly take such action as may be necessary duly to
discharge, any Shipowner’s Liens on or in respect of the Vessels in each case attributable to it; provided, however, that Trust Company, the Shipowner and the Owner Participant may contest any such Shipowner’s Lien in good faith by
appropriate proceedings diligently conducted where such proceedings do not involve a material risk of the sale, forfeiture or loss of any Vessel or which interfere with the use and possession of any Vessel by the Charterer, or, if such proceedings
do involve such material danger or such material interference, where such Shipowner’s Lien has been bonded to the reasonable satisfaction of the Charterer and, if such Lien is not a result of a Shipowner’s Lien attributable to the Owner
Participant, to the reasonable satisfaction of the Owner Participant. 
  

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 SECTION 5.6. Citizenship. (a) The Owner Participant covenants and agrees that if (i) it shall
cease to be a Maritime Citizen or it shall obtain knowledge of events or circumstances that would be likely to result in a cessation of its status as a Maritime Citizen, and (ii) the Vessels shall or would therefore become ineligible for
documentation in the name of the Shipowner under United States flag or ineligible for use by the Charterer in the United States coastwise trade, then the Owner Participant shall, forthwith upon obtaining knowledge of such cessation of its status as
a Maritime Citizen, or, in the event Owner Participant shall obtain knowledge of events or circumstances that would be likely to result in such cessation, at least forty-five (45) days before such cessation or as soon thereafter as Owner Participant
obtains knowledge of such events or circumstances if such knowledge is obtained later than forty-five (45) days before such cessation, notify Charterer thereof. In the event that Owner Participant ceases to be a Maritime Citizen (or notifies
Charterer that it has obtained knowledge of events or circumstances that would be likely to result in a cessation of its status as a Maritime Citizen), and Charterer does not exercise its option set forth in Article 10(h) of the Demise Charter by
the expiration of the sixty (60) day period referred to therein, or if prior to the end of such sixty (60) day period Charterer notifies Owner Participant in writing that it does not intend to exercise such option, and the Owner Participant is then
required to do so by law or by the USCG or other authority having jurisdiction, or if the Vessels would otherwise not be entitled to continue to be documented under the laws of the United States or eligible for the coastwise trade, then Owner
Participant shall forthwith transfer its beneficial interest in the Trust (or such portion thereof as may be necessary in the circumstances) to a purchaser or other transferee (which may be an Affiliate of Owner Participant) in accordance with
Section 7.2 and cause such purchaser or transferee to be substituted (fully or partially, as the case may be) for Owner Participant hereunder and under the Trust Agreement. For purposes of this Section 5.6, “knowledge” of the Owner
Participant shall mean actual knowledge of a Responsible Officer thereof. Other than the undertakings and obligations of the Owner Participant in this Section 5.6, neither Owner Participant nor Shipowner shall have any obligation under any
circumstances whatsoever to any of the Obligors or any other Person by reason of the cessation of the status of the Owner Participant as a Maritime Citizen, and no such cessation shall in any way diminish or adversely affect the obligations of any
Obligor under any provision of this Agreement or any of the other Transaction Documents. 
  
 (b) The Charterer covenants and agrees that if (i) it shall cease to be a “citizen of the United States” qualified to engage in the United States coastwise trade within the meaning of Section 2 of the
Shipping Act, and (ii) the Vessels shall or would therefore become ineligible for documentation in the name of the Shipowner under United States flag or ineligible for use by Charterer in the United States coastwise trade, then the Charterer shall
(at its own expense and without any reimbursement or indemnification from any Person) promptly take such action as may be necessary to prevent any loss of documentation or to maintain the United States documentation of the Vessels for use by the
Charterer in the United States coastwise trade, and the Charterer shall furnish to the Trustee and the Owner Participant an opinion of counsel addressed to and in form and substance satisfactory to such Persons, stating that all actions required to
be taken to prevent such loss of documentation or to maintain such documentation have been duly taken. Each party hereto agrees, upon the request and at the sole expense of the Charterer, to cooperate with the Charterer in complying with its
obligations under the provisions of this Section 5.6(b). 
  

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 (c) The Trust Company covenants and agrees that if (i) the Trust Company shall have reason to believe
that it shall cease to be, or shall cease to be, a Maritime Citizen, and (ii) the Vessels shall or would therefore become ineligible for documentation in the name of the Shipowner under United States flag or ineligible for use by Charterer in the
United States coastwise trade, then it shall (at its own expense and without any reimbursement or indemnification form any Person) promptly resign as Trustee under the Trust Agreement, effective upon the appointment of a successor trustee
thereunder, which shall be a Maritime Citizen. 
  
 SECTION 5.7.
Transaction Events of Default. The following shall constitute “Transaction Events of Default” for purposes of the Demise Charter: 
  
 (a) any material representation or warranty made by or on behalf of the Guarantor in any of the Transaction Documents shall prove to be
inaccurate in any material respect when made, and, if the same is susceptible to cure in a manner that is not prejudicial to any right or interest of Shipowner, Owner Participant or the Trust Company, the Guarantor fails to effect such cure within
thirty (30) days after it receives written notice thereof, or such longer period (not to exceed one hundred twenty (120) days from the date of such notice) during which the Guarantor is making diligent efforts to cure the same; or 
  
 (b) the Guarantor (i) shall fail to perform or observe any
covenant, condition or agreement to be performed or observed by it under any of the Transaction Documents and such failure continues for thirty (30) days after receipt by it of written notice thereof from Shipowner or Owner Participant, or such
longer period (not to exceed one hundred twenty (120) days from the date of such notice) during which the Guarantor is making diligent efforts to cure the same, or (ii) shall be in default pursuant to the terms of any of the Transaction Documents
after the giving of notice and the passage of any grace period, if any, provided therein with respect to such default; or 
  
 (c) the entry of a decree or order by a court having jurisdiction in the premises adjudging the Guarantor as bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Guarantor under the Federal Bankruptcy Code or any other applicable Federal, State or foreign law, or appointing a
receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Guarantor or of any substantial part of its property, or ordering the winding-up or liquidation of the affairs of the Guarantor, and the continuance of such
decree or order unstayed and in effect for a period of ninety (90) consecutive days; or an involuntary petition shall have been filed against the Guarantor seeking reorganization, arrangement, adjustment or composition of or in respect of the
Guarantor under the Federal Bankruptcy Code or any other applicable Federal, State or foreign law and such petition shall not have been withdrawn, dismissed or stayed within ninety (90) days of filing; or 
  

 - 19 - 

 (d) the institution by the Guarantor of proceedings to be adjudicated a bankrupt or
insolvent, or the consent by the Guarantor to the institution of bankruptcy or insolvency proceedings against it, or the filing by the Guarantor of a petition or answer or consent seeking reorganization or relief under the Federal Bankruptcy Code or
any other applicable Federal, State or foreign law, or the consent by the Guarantor to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Guarantor or of
any substantial part of its property, or the making by the Guarantor of an assignment for the benefit of creditors, or the admission by the Guarantor in writing of an inability to pay debts generally as they become due, or the taking of corporate
action by the Guarantor in furtherance of any such action; or 
  
 (e) the Guarantor, or any Affiliate of any thereof, shall default (after the expiration of any applicable period of grace with respect thereto) in the payment of any Indebtedness in excess of $10,000,000.00 or in the
payment of any Indebtedness due to the Owner Participant or any of its Affiliates or, to the extent not covered in any other subsection of this Section 5.7, shall default in the performance of any other material obligation to, or observance of any
material covenant for the benefit of, the Owner Participant or any of its Affiliates which results in the acceleration of the Indebtedness due under any loan, note, indenture, security agreement, lease, guarantee, title retention or conditional
sales agreement or other instrument or agreement evidencing such indebtedness or obligation. 
  
 SECTION 5.8. Liabilities of the Owner Participant, Shipowner and Trust Company. Neither the Owner Participant nor the Shipowner shall have any obligation or duty to the Obligors or to any other Person with
respect to the transactions contemplated hereby except those obligations or duties specifically set forth in the Transaction Documents. Without limitation of the generality of the foregoing, under no circumstances whatsoever shall the Owner
Participant as such be liable to the Obligors or any other Person for any action or inaction on the part of the Trust Company in connection with the Trust Agreement, this Agreement, or the administration of the Trust Estate or otherwise, whether or
not such action or inaction is caused by the willful misconduct or gross negligence of the Trust Company unless such action or inaction constituting such willful misconduct or gross negligence was at the direction of the Owner Participant. No
recourse shall be had against Trust Company (or any successor thereto) with respect to the duties and obligations specifically set forth in the Transaction Documents or for any amounts payable hereunder or under the Transaction Documents, or any
other document, agreement or instrument relating to the transactions contemplated by any of the aforementioned documents, or for any claim based hereon or thereon or otherwise in respect hereof or thereof; provided, however, that (i) nothing
herein shall prevent recourse to and the enforcement against Trust Company for performance of agreements made in its individual capacity and set forth in any Transaction Document to which it is a party or for its own gross negligence (or negligence
in the case of handling of money) or willful misconduct or for injuries resulting from the inaccuracy of any 
  

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 representation or warranty made by it in its individual capacity herein, and (ii) upon Charterer’s exercise of the
purchase option set forth in Article 10(a), Article 10(h) or Article 16(h) of the Demise Charter, the Owner Participant (or if there is then more than one Owner Participant, each Owner Participant) shall cause Shipowner to transfer title to the
Vessels to the Charterer including, without limitation, Shipowner’s execution and delivery to Charterer or Charterer’s Legally Eligible Designee of a bill of sale for each Vessel, in recordable form and, in connection with and at the time
of delivery of such bills of sale, Shipowner’s execution and delivery to Charterer or its Legally Eligible Designee of such appropriate instruments of assignment or reassignment (without recourse or warranty) of Shipowner’s rights, title
and interests under the Assignments as may be reasonably requested by Charterer. 
  
 ARTICLE VI 
  
 EXPENSES

  
 SECTION 6.1. Transaction Costs; Amendments; Waivers;
etc. The Charterer will pay on demand (a) all reasonable, out-of-pocket costs and expenses incurred in connection with the negotiations, preparation and entering into of the Transactions Documents, (b) the reasonable fees and expenses of the
Trust Company, (c) all placement, arrangement or similar fees due Credit Suisse First Boston with respect to the sale and leaseback financing of the Vessels as set forth in the engagement letter dated December 6, 2001, and (d) all reasonable,
out-of-pocket costs and expenses incurred in connection with the entering into or the giving or withholding of any future amendments, supplements, waivers or consents with respect to the Transaction Documents requested by the Charterer or the
Guarantor (herein together called “Transaction Costs”); subject, however, to the obligation of Owner Participant to fund certain initial Transaction Costs as part of Lessor’s Cost pursuant to Section 3.1(g) hereof. Transaction
Costs shall include the reasonable fees and disbursements of Shipman & Goodwin LLP, special counsel to the Owner Participant (not to exceed $50,000), Thompson Coburn LLP, special maritime counsel to the Owner Participant, and Bingham Dana LLP,
counsel to the Trust Company. 
  
 ARTICLE VII 
  
 TRANSFER OF TRUSTEE’S AND OWNER 
 PARTICIPANT’S INTEREST 
  
 SECTION 7.1. Transfer of Trustee’s Interest. The Trustee shall have the right to assign, convey, or otherwise transfer any of Trustee’s
right, title and interest in and to this Agreement, any other Transaction Document or the Vessels without the prior consent of either Obligor to any successor as Trustee under the Trust Agreement, provided only that no such assignment,
conveyance or transfer shall be made in violation of applicable law or adversely affect the right to operate the Vessels under U.S. flag in the coastwise trade of the United States and provided that any institution acting as successor trustee agrees
to assume all obligations, liabilities, warranties and representations and covenants made herein or in any of the other Transaction Documents by the Trust Company. 
  

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 SECTION 7.2. Transfer of Owner Participant’s Interest. Unless an Event of Default shall have
occurred and be continuing (in which case no transfer restrictions shall apply), no Owner Participant shall transfer all or any portion of its right, title or interest in and to the Trust, the Trust Estate or the Transaction Documents during the
Charter Period unless: (a) the transferee shall be (i) a Person having a Tangible Net Worth, calculated in accordance with GAAP, in excess of $75,000,000 and (ii) any other Person if the obligations of such Person under the Transaction Documents are
guaranteed by a Person that has a tangible net worth, calculated in accordance with GAAP, in excess of $75,000,000; (b) the transferee enters into a transfer agreement, copies of which are provided to the Trustee, the Charterer, the Guarantors and
any Owner Participant, which shall state the conditions that (i) the transferee has the requisite legal power and authority to enter into and carry out the transactions contemplated by the Transaction Documents, (ii) the transferee makes
representations and warranties comparable to those set forth in Section 4.2, and (iii) the Charterer and Guarantor shall have received an opinion of transferee’s counsel with respect to the foregoing matters in a form reasonably satisfactory to
Charterer and Guarantor; (c) the transferee is a Maritime Citizen; (d) such transfer complies in all respects with, and does not violate any, applicable law; (e) the transferring or transferee Owner Participant shall pay all reasonable documented
fees, expenses and charges of the Owner Participant, the Charterer and the Trustee (including, without limitation, reasonable documented legal fees and expenses of special counsel); and (f) such transferee is a bank, bank affiliate, finance or
leasing company or other financial institution not engaged in the operation of a business in direct competition with Charterer (except that such restriction shall not apply to any proposed transferee simply because such transferee, as part of its
normal financing or investment activities, makes loans or provides lease financing to, or invests in, companies that may compete with Charterer). No such transfer of Owner Participant’s interest shall result in their being more than three (3)
Owner Participants at any one time and after given effect to any such transfer each Owner Participant shall hold an interest equal to its pro rata share of Lessor’s Cost of each Vessel. 
  

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 ARTICLE VIII 
  
 MISCELLANEOUS 
  
 SECTION 8.1. (a) Notices. Except as otherwise provided herein, any notices or other communications required or permitted under the terms and
provisions hereof shall be in writing and shall become effective when delivered by hand or received by telex or telecopier or registered first-class mail, postage prepaid, addressed as follows: 
  
 To Shipowner: 
  
 GTC CONNECTICUT STATUTORY TRUST 
 c/o State Street Bank and Trust Company of Connecticut, 
 National Association, as Trustee 
 Goodwin Square 
 225 Asylum Street 
 Hartford, Connecticut 06103 
  
 Attention: Corporate Trust Department 
 Telecopy: (860) 244-1889 
  
 with
a copy to: 
  
 FLEET CAPITAL CORPORATION

 Fleet Capital Leasing 
 One Financial Plaza 
 2nd Floor 
 Providence, Rhode Island 02903 
  
 Attention: Senior Credit Officer 
 Telecopy: (401) 278-8022 
  
 To Charterer: 
  
 GULFCOAST TRANSIT COMPANY 
 702 North Franklin Street 
 Tampa, Florida 33602 
  
 Attention: Secretary 
 Telecopy: (813) 228-1328 
  
 with a copy to: 

 
 TECO ENERGY, INC. 
 702 North Franklin Street 
 Tampa, Florida 33602 
  
 Attention: General Counsel 
 Telecopy: (813) 228-4811 
  

 - 23 - 

 To the Guarantor: 
  
 TECO ENERGY, INC. 
 702 North Franklin Street 
 Tampa, Florida 33602 
  
 Attention: Corporate Secretary 
 Telecopy: (813) 228-1328 
  
 with a copy to: 
  
 Attention: General Counsel 
 Telecopy: (813) 228-4811 
  
 or such other address as any of the foregoing Persons shall from time to time designate in writing to the other parties hereto. 
  
 (b) Governing Law. This Agreement shall in all respects be governed
by, and construed in accordance with, the internal laws of the State of New York, except where federal maritime law otherwise governs. 
  
 (c) Amendment. The terms of this Agreement shall not be altered, modified, amended, supplemented or terminated in any manner whatsoever except by
written instrument signed by the party against which such alteration, modification, amendment, supplement or termination is sought. 
  
 (d) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors and assigns.

  
 (e) Headings. Section headings and the Table of
Contents are for convenience only and shall not be construed as part of this Agreement. 
  
 (f) Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original for all purposes, but all such counterparts
shall together constitute but one and the same instrument. 
  
 (g)
Severability. If any term or provision hereof or the application thereof to any circumstances shall, in any jurisdiction and to any extent, be invalid or unenforceable, such term or such provision shall be ineffective as to such jurisdiction
to the extent such invalidity or unenforceability without invalidating or rendering unenforceable such term or provisions hereof or the application of such term or provision to circumstances other than those as to which it is held invalid or
unenforceable. To the extent permitted by applicable laws, the parties hereto hereby waive any provision of law that renders any term or provision hereof invalid or unenforceable in any respect. 
  

 - 24 - 

 (h) Survival of Representations and Warranties. All representations, warranties, covenants and
agreements of any Person made herein and in certificates delivered pursuant hereto shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement regardless of any
investigation or inspection made by or on behalf of the Shipowner and the acceptance hereunder of the Vessels on behalf of the Shipowner, and shall continue in full force and effect until all the obligations of the Charterer under the Demise Charter
shall be fully performed in accordance with the terms thereof. 
  
 (i) Non-Recourse to the Trust Company. It is understood and agreed that the Trust Company is entering into this Agreement solely in its capacity as Trustee under the Trust Agreement and that all of the representations, warranties,
undertakings and agreements by and for the purpose of binding the Shipowner are not the responsibility of the Trust Company individually but are intended solely for the purpose of binding the Trust and that the Trust Company shall not be liable or
accountable in its individual capacity in any circumstances whatsoever except as otherwise expressly provided in this Agreement or in the Trust Agreement. It is further agreed that all Persons having any claims against the Shipowner as a result of
transactions contemplated by any Transaction Document shall look solely to the Trust Estate for satisfaction thereof, except as provided in the first sentence of this subparagraph. It is also understood and agreed that, absent written instructions
from the Owner Participant pursuant to the Trust Agreement, the Shipowner shall not be under any obligation to exercise any of the permissive rights or powers granted to it under this Agreement or any of the other Transaction Documents. 

 
 [The signature page follows] 
  

 - 25 - 

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

			
	STATE STREET BANK AND TRUST COMPANY, in its individual capacity only as expressly stated herein and otherwise solely as Trustee of the GTC CONNECTICUT STATUTORY TRUST,
Shipowner
		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	FLEET CAPITAL CORPORATION, Owner Participant
		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	GULFCOAST TRANSIT COMPANY, Charterer
		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	 TECO ENERGY, INC., Guarantor

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

 SCHEDULE A 
  
 Definitions 
  
 “ABS” shall mean the American Bureau of Shipping or any successor organization. 
  
 “Adjustment Factor” shall mean the percentage adjustment
calculated, upward or downward, by multiplying the Adjustment Factor Percentage for each one basis point (.01%) corresponding change in the Relevant Treasury Rate from the Reference Rate. 
  
 “Adjustment Factor Percentage” shall mean the number 0.003272 expressed as a percentage. 
  
 “Affiliate” shall mean any Person directly or indirectly
controlling, controlled by or under direct or indirect common control with another Person. For the purpose of this definition, “control” when used with respect to any specified Person means 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. 
  
 “Agreement” shall mean that certain Agreement to Acquire and
Charter dated as of December 21, 2001 by and among Shipowner, Owner Participant, the Seller, Charterer and the Guarantor, providing, among other things, for the agreement of Shipowner to purchase the Vessels from the Seller and of Charterer
concurrently therewith to enter into the Demise Charter and to accept delivery of the Vessels from Shipowner under the Demise Charter. 
  
 “Appraisal Procedure” means the procedure specified in the succeeding sentences for determining an amount or value hereunder. The parties
shall consult for the purpose of determining such amount or value by mutual agreement. In the absence of such agreement after thirty (30) days, either party may give written notice to the other requesting determination of such amount or value by
appraisal and in such event the parties shall consult for the purpose of appointing a mutually acceptable qualified independent appraiser (which shall include the Appraiser). If the parties are unable to agree on an appraiser within twenty (20) days
of the giving of such notice, such amount or value shall be determined by each of two independent appraisers, one of whom shall be selected by Charterer and the other of whom shall be selected by Shipowner, on or before the twenty-first
(21st) day following the giving of such notice. If the determination made by the appraiser reaching the greater
value does not exceed the lower value by more than ten percent of the lower value, the two values shall be averaged and such determination shall constitute the determination of the appraisers. If such excess shall be greater than ten percent of the
lower value, a third appraiser shall be selected by the two appraisers or by the Society of Maritime Arbitrators, Inc., if the other two are unable to agree upon a third appraiser within ten days. The third appraiser shall make his determination
within fifteen (15) days of his appointment. Of the three appraisals, the determination of the appraiser which differs most from the other two appraisers shall be excluded, the remaining two determinations shall be averaged and such average shall
constitute the determination of the appraisers. 

 “Appraiser” shall mean ABS Consulting Ltd. 
  
 “Assignments” shall mean the Demise Charter Assignment and
the Insurances Assignment. 
  
 “Base Rental
Factor” shall mean the percentage set forth in the column entitled “Total Base Rental Factor” in Schedule C to the Demise Charter for the relevant Basic Hire Payment Date. 
  
 “Basic Hire” with respect to any Vessel shall mean payments
of charter hire under the Demise Charter payable on each Basic Hire Payment Date, each in an amount equal to Lessor’s Cost of such Vessel multiplied by the Base Rental Factor applicable to such Basic Hire Payment Date; provided, however,
that (i) if Charterer does not exercise the early termination option with respect to the Vessels pursuant to Article 10(a) of the Demise Charter, Basic Hire shall then be reset as provided in Article 10(b) of the Demise Charter to an amount equal to
Lessor’s Cost multiplied by the Remaining Rental Factor, and (ii) if Charterer exercises its option to renew in Article 16 of the Demise Charter, Basic Hire for such renewal term shall be determined in accordance with Article 16. 
  
 “Basic Hire Payment Date” shall mean each Basic Hire Payment
Date set forth in Schedule C to the Demise Charter; provided, however, that if a Basic Hire Payment Date is not a Business Day, the Basic Hire payable by Charterer on such Basic Hire Payment Date shall be made at the opening of
business on the next following Business Day. 
  
 “Business
Day” shall mean a day which is not a Saturday, Sunday, or other day on which banking institutions doing business in Providence, Rhode Island, New York, New York or Tampa, Florida, are authorized or obligated by law or required by executive
order to remain closed. 
  
 “Certificate of Delivery And
Acceptance” shall mean that certain Certificate substantially in the form of Exhibit B to the Agreement whereby (i) Charterer accepts delivery of the Vessels from Seller on behalf of Shipowner under the Agreement, and (ii) Charterer
irrevocably and unconditionally accepts delivery of the Vessels under the Demise Charter. 
  
 “Charter Hire” shall mean Basic Hire and Supplemental Hire. 
  
 “Charter Period” shall mean the Term plus a period of time, if any, reasonably required to effect Redelivery (including the time
necessary to remove any Severable Modifications to which Charterer has title pursuant to Article 6(c)(i)); provided, however, that the Charter Period shall not exceed the Term by more than fifteen (15) days, absent force majeure.

  

 SA-2 

 “Charterer” shall mean Gulfcoast Transit Company, a Florida corporation, together with
its permitted successors and assigns under the Demise Charter. 
  
 “Classification Society” shall mean the recognized classification society which at any time is designated for purposes of surveying the Vessels and is acceptable to Shipowner, and may include ABS and DNV, provided such
classification society is at the time a member of the International Association of Classification Societies and approved by the USCG. 
  
 “Closing Date” shall mean the date and time on which concurrently (i) Seller delivered the Vessels to Shipowner under the Agreement at
the direction of Charterer, and (ii) Shipowner shall have delivered and Charterer shall have accepted the Vessels pursuant to Article 2 of the Demise Charter, which in no event shall occur later than 5:00 p.m. EST on December 31, 2001. 

 
 “Code” shall mean the Internal Revenue Code of 1986, as
amended. 
  
 “Consolidated or consolidated” shall
mean with reference to any term defined herein, shall mean that term as applied to the accounts of any Person and its Subsidiaries, consolidated in accordance with GAAP. 
  
 “Crew’s Wages” shall mean crew’s wages, including the wages of the master, to the extent provided
by Public Law 90-293, approved April 25, 1968. 
  
 “Default Interest Rate” shall mean a variable interest rate equal to the Prime Rate plus two percent (2%) per annum. 
  
 “Delivery” shall mean the delivery of the Vessels by Shipowner to Charterer under the Demise Charter on the Closing Date, which shall be
concurrent as to time and place with delivery of the Vessels from Seller to Shipowner under the Agreement. 
  
 “Demise Charter” shall mean the Demise Charter between Shipowner and Charterer, providing for the demise charter by Charterer from
Shipowner of the Vessels, as originally executed or as modified, amended or supplemented in accordance with the applicable provisions thereof. 
  
 “Demise Charter Assignment” means the General Assignment of Freights, Charters and Hires from Charterer to Shipowner. 
  
 “Designated Taxes” shall have the meaning set forth in
Article 2 of the Guarantee. 
  
 “DNV” shall mean
Det Norske Veritas or any successor organization. 
  
 “Documentation Citizen” shall mean a corporation established under the laws of the United States or of a State thereof, whose president or other chief executive officer, by whatever title, and chairman of its board of
directors are citizens of the United States, as well as any officers authorized to act in their absence or disability, and no more of its directors are non-citizens than a minority of the number necessary to constitute a quorum. 
  

 SA-3 

 “Dollars” shall mean any coin or currency which at the time of payment is legal tender
for the payment of public and private debts in the United States, and shall be represented by the sign “$”. 
  
 “Early Purchase Amount” shall mean 83.61988618% of Lessor’s Cost. 
  
 “Early Termination Date” means January 2, 2007. 
  
 “Environmental Claim” means any administrative, regulatory
or judicial suit, proceeding, action, judgment, notice of violation, claim, demand, abatement order, direction, investigation, litigation or any other proceeding by any governmental authority or any other Person, based on any Environmental Law or
any violation thereof, for personal injury (including sickness, disease or death), tangible or intangible property damage, damage to environmental or natural resources, reimbursement of environmental cleanup costs, nuisance, pollution,
contamination, fines, penalties, restrictions, attorneys’ fees, health effects, monitoring or any other adverse effects on the environment. 
  
 “Environmental Law” means any applicable foreign, federal, state or local statute, law (including common law), ordinance, rule,
regulation, order (whether voluntary or not) relating to the environment, natural resources, or human health and safety, including the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9601 et seq.), the
Oil Pollution Act of 1990 (33 U.S.C. § 2701 et seq.), the Hazardous Material Transportation Act (49 U.S.C. § 1801 et seq.), the Resource Conservation and Recovery Act, also known as the Solid Waste Disposal Act (42 U.S.C.
§ 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. § 1251 et seq.), the Clean Air Act (U.S.C. § 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), the
Occupational Safety and Health Act (29 U.S.C. § 651 et seq.) and any analogous state or local law, as such laws have been or will be amended or supplemented now or in the future, and expressly including any additional law (including
common law), ordinance, rule, or regulation relating to the environment, natural resources, or human health and safety which may be enacted, pronounced or promulgated in the future. 
  
 “Environmental Lien” shall have the meaning set forth in Article 18(a) of the Demise Charter. 

 
 “Event of Default” shall mean any of the Events of
Defaults specified in Article 15(a) of the Demise Charter. 
  
 “Event of Loss” shall mean any of the following events occurring during the Charter Period: (i) the actual or constructive total loss of any Vessel, which shall include damages to an extent determined in good faith by
Charterer, and accepted by such Vessel’s underwriter, to make repairs uneconomical or to render such Vessel unfit for normal use or the compromised or agreed total loss (as determined in accordance with such Vessel’s Policies of

  

 SA-4 

 Insurance) of such Vessel during the Charter Period (even though Charterer shall have been deprived of, or limited in,
the use of such Vessel in any respect at the time of such loss by reason of any act or omission of Shipowner), (ii) the requisition of the title to or other compulsory acquisition of any of the Vessels otherwise than by a requisition for use of the
Vessels as described in Article 12 of the Demise Charter, or the capture, seizure, arrest (other than by reason of a claim, the failure of Charterer to discharge which, would constitute an Event of Default under the Demise Charter), detention by the
operation of political or executive act or confiscation of any Vessel by any government or Persons acting or purporting to act on behalf of any government unless such Vessel be released and restored to Shipowner or Charterer, as the case may be,
from such requisition, capture, seizure, arrest, detention or confiscation within ninety (90) days after the occurrence thereof, or (iii) the imposition, by governmental action, change in applicable law or change in the applicable requirements of
the USCG or the Classification Society, of the obligation to make Modifications to a Vessel that (A) cost more than $1,000,000, and (B) in the reasonable good faith judgment of Charterer would be uneconomical solely as a consequence of the age and
type of the Vessel; provided that Charterer as a result of such determination of economic obsolescence ceases operation of such Vessel and sells such Vessel for scrap or otherwise (in an arm’s length transaction to a non-Affiliate of
Charterer). An Event of Loss shall be deemed to have occurred (w) in the event of an actual total loss of any of the Vessels, on the date of such loss; (x) in the event of a constructive total loss; (y) in the case of a compromised or agreed total
loss, on the date agreed upon by underwriter; or on such ninetieth (90th) day in the case of such a requisition, capture, seizure, arrest, detention or confiscation; or (z) upon the date of sale in the case of economic obsolescence under clause
(iii) above. 
  
 “Excluded Cargoes” with respect
to any Vessel shall mean cargoes that are (i) Hazardous Materials, and (ii) either (A) are excluded from or would invalidate applicable insurance carried, or required by the Demise Charter to be carried, with respect to such Vessel and its
operations, (B) are not permitted by such Vessel’s certificate of inspection, or (C) are liquid cargoes (including, but not limited to, petroleum, petroleum products and chemicals). 
  
 “Fair Market Bareboat Charter Value” and “Fair
Market Sales Value” shall mean, respectively, the fair market value which would be realized by the owner of the Vessels for a bareboat charter or upon a sale of the Vessels, determined by the Appraisal Procedure. For purposes of this Demise
Charter, fair market value shall be determined on the basis of, and shall be equal in amount to, the value which would be obtained in an arm’s length transaction between an informed and willing charterer or buyer, as the case may be, of the
Vessels for use as U.S. flag vessels eligible to engage in the coastwise trade of the United States (other than a charterer or buyer currently in possession) and an informed and willing lessor or seller under no compulsion to charter or sell and, in
such determination, any costs of removal from the location(s) of current use shall not be a deduction from fair market value, provided, however, that the determinations of Fair Market Bareboat Charter Value and Fair Market Sales Value for
purposes of Articles 15 and 16 of the Charter shall be based upon the actual condition of the Vessels at the time of such determination and shall take into account any legal impediments to the prompt sale or chartering of such Vessels. 

 

 SA-5 

 “Federal Bankruptcy Code” shall mean the United States Bankruptcy Code, Title 11 United
States Code, as amended. 
  
 “Fees, Taxes and/or Other
Charges” shall mean any and all fees (including, without limitation, documentation, license and registration fees) and any and all taxes (including, without limitation, income, gross receipts, franchise, sales, use, personal property
(tangible or intangible), stamp and interest equalization taxes), levies, imposts, duties, charges or withholdings of any nature whatsoever, together with any and all penalties, fines or interest thereon. 
  
 “GAAP” shall mean generally accepted accounting principles
as in effect in the United States, consistently applied. 
  
 “Guarantee” shall mean that certain Guarantee Agreement entered into between Guarantor and Shipowner dated the Closing Date. 
  
 “Guaranteed Agreement” and “Guaranteed Agreements” shall have the meanings set forth in the second recital of the
Guarantee. 
  
 “Guaranteed Obligation” and
“Guaranteed Obligations” shall have the meanings set forth in Section 1.1 of the Guarantee. 
  
 “Guaranteed Party” and “Guaranteed Parties” shall have the meaning set forth in the third recital of the Guarantee.

  
 “Guarantor” shall mean TECO Energy, Inc., a
Florida corporation. 
  
 “Hazardous Material”
shall mean any material or substance that, whether by its nature or use, is at any time subject to regulation, or for which liability is imposed, under any Environmental Law or other applicable legal requirements, including without limitation crude
petroleum, any petroleum products (whether or not refined or otherwise processed), asbestos, flammables, volatile hydrocarbons, industrial solvents, explosive or radioactive materials, hazardous wastes, toxic substances or related materials.

  
 “Indebtedness” shall mean with respect to any
Person, without duplication, (a) every obligation of such Person for money borrowed, (b) every obligation of such Person evidenced by bonds, debentures, notes or other similar instruments, including obligations incurred in connection with the
acquisition of property, assets or businesses, (c) every reimbursement obligation of such Person with respect to letters of credit, bankers, acceptances or similar facilities issued for the account of such Person, (d) every obligation of such Person
issued or assumed as the deferred purchase price of property or services (but excluding (i) trade accounts payable or accrued liabilities arising in the ordinary course of business which are not overdue by sixty (60) days or more or are being
contested in good faith and (ii) obligations arising under construction contracts for the construction of qualified vessels substituted pursuant to the terms of the Indenture), (e) interest accrued after the 
  

 SA-6 

 commencement of any bankruptcy, insolvency, receivership or similar proceedings and other interest that would have
accrued but for the commencement of such proceedings, (f) the maximum fixed redemption or repurchase price of preferred stock of such Person at the time of determination, (g) every obligation of the type referred to in clauses (a) through (h) of
another Person and all dividends of another Person the payment of which, in either case, such Person has guaranteed or is responsible or liable, directly or indirectly, as obligor, guarantor or otherwise. Any reference in this definition to
indebtedness shall be deemed to include any renewals, extensions, refundings, amendments and modifications to any such indebtedness or any indebtedness issued in exchange for such indebtedness. 
  
 “Indemnified Persons” shall mean the Trust Company, in its
individual capacity and as Trustee, the Trust, Owner Participant, and their respective Affiliates, officers, directors, agents, servants, employees, and their successors and assigns. 
  
 “Institute Warranties and Clauses” shall mean the trading warranty clauses in general use and promulgated
by the American Institute of Marine Underwriters or the Institute of London Underwriters or other underwriters approved in accordance with the provisions of Article 9 of the Demise Charter, whichever is applicable with respect to the United States
placed or foreign placed hull insurance. 
  
 “Insurances
Assignment” shall mean that certain Assignment of Insurances whereby Charterer assigns to Shipowner all of its right, title and interest in, to, and under, all Policies of Insurance. 
  
 “Legally Eligible Designee” shall mean a Person which at the
time in question is permitted by applicable United States laws and regulations to purchase and take title to the Vessels. 
  
 “Lessor’s Cost” shall mean with respect to each Vessel the fair market value of such Vessel as determined by the Appraiser, as set
forth on Schedule 2 to the Agreement. 
  
 “Liens”
shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any
kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any capitalized lease having substantially the same economic effect as any of the foregoing), or rights of others. 
  
 “Maritime Citizen” shall mean any Person who either (i) is a
citizen of the United States within the meaning of Section 2 of the Shipping Act, 1916, as amended, 46 App. U.S.C. 802, for the purpose of engaging in coastwise trade, or (ii) is a Documentation Citizen which is, or whose parent entity is, or whose
parent entity has a subsidiary which is, primarily engaged in leasing or financing transactions within the meaning of 46 U.S.C. 12106(e)(1)(B). 
  

 SA-7 

 “Material Adverse Effect” means any event or circumstance which (a) constitutes or would
result in an Event of Default, or (b) materially and adversely effects (i) the assets, liabilities, financial condition or operations of an Obligor, or, if applicable, an Obligor and its Subsidiaries taken as a whole, (ii) the ability of an Obligor
to perform its obligations under the Transaction Documents to which it is a party, or (iii) the condition, value, utility or operation of, or title to, any Vessel. 
  
 “Modification” means any improvement, modification, alteration or addition to any Vessel. 
  
 “Non-Severable Modification” means, with respect to any
Vessel, any Modification that is not a Severable Modification. 
  
 “Notice” shall mean any written notice given by one Person to any other Person or Persons in the manner set forth in one or the other of the manners set forth in the Notice provisions of any applicable Transaction Document.

  
 “Obligations” shall mean the joint and/or
several obligations of the Obligors under, pursuant or relating to, the Transaction Documents. 
  
 “Obligors” shall mean Charterer and the Guarantor. 
  
 “Officer’s Certificate” shall mean, when used with respect to any corporation, a certificate signed by the chairman of the board,
the managing director, any director, the president, any vice president, the secretary, or the treasurer of such corporation. 
  
 “Opinion of Counsel” shall mean the opinion of counsel to Charterer and the Guarantor addressing the matters described in Exhibit A to
the Agreement. 
  
 “Option Closing Date” shall
have the meaning set forth in Article 10(h) of this Demise Charter. 
  
 “Other Charter” shall mean any bareboat charter or bareboat subcharter, entered into with respect to any Vessel, other than the Demise Charter. 
  
 “Other Interested Persons” shall mean, for purposes of any policies of insurance required to be maintained
on or with respect to the Vessel, (1) Owner Participant, (2) Trust Company, and (3) any other permitted charterer (individually, an “Other Interested Person”). 
  
 “Owner Participant” shall mean Fleet Capital Corporation, a Rhode Island corporation. 
  
 “Parts” means appliances, parts, instruments, appurtenances,
accessories and equipment of whatever nature, whether or not constituting Modifications. 
  

 SA-8 

 “Per Diem Rate” means a per diem rate calculated on the basis of the average of
Basic Hire for the last seven (7) years of the Term. 
  
 “Permitted Liens” shall mean (1) liens for Crew’s Wages and salvage (including contract salvage), general average and damages arising out of maritime torts which are either unclaimed or covered by insurance, (2) liens
incident to current operations and not more than thirty (30) days past due unless same is being contested in good faith by Charterer and Charterer has set aside adequate reserves in accordance with GAAP with respect to same, (3) liens for wages of
stevedores when employed directly by the Vessels, Charterer, or the master(s) of the Vessels, (4) liens covered by insurance and any deductible applicable thereto, (5) the Charters Assignment and the Insurances Assignment, (6) liens for repairs or
for changes made in the Vessels to comply with law, the requirements of the Vessels’ classification society in order to maintain their class as required by Article 4 of the Demise Charter, or in accordance with Article 6 of the Demise Charter,
provided that any liens permitted by this clause (6) shall be discharged in the ordinary course of business of Charterer and in any event shall secure claims not more than thirty (30) days past due unless same is being contested in good faith
by Charterer and Charterer has set aside adequate reserves in accordance with GAAP with respect to same, and (7) the encumbrances, if any, constituted by the Demise Charter. 
  
 “Person” means any individual, corporation, partnership, limited partnership, limited liability
partnership, joint venture, association, joint-stock company, company, limited liability company, trust, unincorporated organization or government or any agency or political subdivision thereof. 
  
 “Plans and Specifications” shall mean the plans and
specifications for the Vessels furnished by Seller to Owner Participant. 
  
 “Policies of Insurance” and “Policies” shall mean all cover notes, binders, policies of insurance and certificates of entry in protection and indemnity associations, clubs or
syndicates with respect to the Vessels including all endorsements and riders to any thereof. 
  
 “Prime Rate” shall mean the interest rate announced from time to time by Fleet National Bank as its prime rate, notwithstanding the fact that such bank may regularly make loans at rates of interest
less than such prime rate. 
  
 “Redelivery” shall
mean redelivery of the Vessels by Charterer to Shipowner upon the termination of the Charter Period free and clear of all liens, encumbrances and rights of others for which Charterer is responsible under the terms of the Demise Charter and in all
respects in the condition required by the Demise Charter, and the term “Redelivered” shall have a meaning correlative to the foregoing. The term “Redelivery” shall include retaking of the Vessels in accordance with Article
15(b)(i) of the Demise Charter. 
  
 “Reference
Rate” shall mean 3.12%. 
  

 SA-9 

 “Relevant Treasury Rate” shall mean the Treasury Constant Maturity rate for a 2-year
period, as published in the Selected Interest Rates table of Federal Reserve statistical release H.15(519) (or similar successor publication) in effect thirty (30) days prior to the Early Termination Date. 
  
 “Remaining Rental Factor” shall mean the Base Rental Factor,
adjusted (upward or downward) by the Adjustment Factor. 
  
 “Request” shall mean a written request to a Person for the action therein specified, signed when made by any Person by the chairman of the board, the president, any vice president, the secretary, or the treasurer of such
Person. 
  
 “Responsible Officer” shall mean with
respect to any Person the chairman of the board, the president, any vice president, the secretary, or treasurer of such Person, and with respect to the Trust Company or the Trustee, means any officer in its corporate trust administration department.

  
 “Sales Value” means with respect to any
Vessel 45.34125% of Lessor’s Cost of such Vessel. 
  
 “Seller” means Gulfcoast Transit Company, a Florida corporation, as owner (prior to the Closing Date) and seller of the Vessels. 
  
 “Severable Modification” shall mean any Modification (i) the cost of which was not included in Lessor’s Cost, and (ii) that can be
readily removed from any of the Vessels (or any part thereof) without causing damage to or diminishment of the value, utility or remaining useful life of such Vessel. 
  
 “Shipowner” shall mean the Trust, acting by and through the Trust Company, not in its individual capacity
but solely as Trustee under the Trust Agreement, together with its permitted successors and assigns. 
  
 “Shipowner’s Liens” shall mean Liens arising solely as the result of Owner Participant’s or Shipowner’s acts or omissions
(other than acts or omissions for which Shipowner or Owner Participant is indemnified pursuant to the terms of the Transaction Documents) or of claims or demands against Owner Participant or Shipowner unrelated to (i) Shipowner’s ownership of
the Vessels, (ii) the administration of the Trust Estate, or (iii) the transactions contemplated by the Transaction Documents. 
  
 “Shipping Act” shall mean the Shipping Act, 1916, as at any time amended, Title 46, United States Code, §801 et seq., or any
successor statute thereto. 
  
 “Stipulated Loss
Value” with respect to any Vessel shall mean at any date during the Term, if such date is a Basic Hire Payment Date, the amount determined by multiplying Lessor’s Cost for such Vessel times the percentage set forth opposite such date
under the heading “Stipulated Loss Value” on Schedule B and if such date is not a Basic Hire Payment 
  

 SA-10 

 Date the percentage set forth opposite the date next preceding such date under the heading “Stipulated Loss
Value” on Schedule B, plus interest at the Default Rate on such amount from such date to the date of payment of Stipulated Loss Value (and each reference in the Demise Charter to Stipulated Loss Value calculated as of a particular date
shall be deemed to include such interest factor to the date of payment). 
  
 “Subsidiary” shall mean any corporation, association, trust, or other business entity of which the designated parent shall at any time own directly or indirectly through a Subsidiary or Subsidiaries
at least a majority (by number of votes) of the outstanding voting stock or shall otherwise have a majority interest therein. 
  
 “Supplemental Hire” shall mean all amounts at any time payable to Shipowner under or pursuant to the terms of the Demise Charter other
than Basic Hire, including, without limitation, interest on late payments, payments on accounts of indemnities, legal fees, expenses of investigation, out-of-pocket expenses, the fees and expenses of the Trust Company, and all other amounts of
whatsoever kind and nature payable under, pursuant to, or by reason of the Demise Charter or any provision thereof, but excluding Basic Hire. 
  
 “Tangible Net Worth” for any Person, shall mean the shareholder’s equity of such Person and its Subsidiaries determined on a
consolidated basis in accordance with GAAP. 
  
 “Tax
Indemnity Agreement” shall mean the Tax Indemnity Agreement dated as of December 21, 2001 between Charterer and Owner Participant. 
  
 “Taxes” shall have the meaning set forth in Article 17 of the Demise Charter. 
  
 “Term” shall mean a period commencing with the Closing Date,
and ending on the twelfth (12th) anniversary of the Closing Date, or, if Charterer has exercised its option to renew
in Article 16, on the last day of such renewal term, provided, however, that the Term shall end prior to said day in the event of a termination thereof in accordance with Articles 10, 11 or 15 of the Demise Charter. 
  
 “Todd Shipyards Lien” shall mean a maritime lien on the MARY
TURNER, Official No. 646730, filed on October 9, 1985 in favor of Todd Shipyards Corporation in the amount of $160,000. 
  
 “Transaction Costs” shall have the meaning set forth in Section 6.1 of the Agreement. 
  
 “Transaction Documents” shall mean the Agreement, the Demise
Charter, the Guarantee, the Tax Indemnity Agreement, the Assignments, the Certificate of Delivery and Acceptance, the Bills of Sale, including any and all schedules and exhibits thereto, and all other certificates, affidavits, applications,
agreements, writings and documents in any way pertaining to any of the transactions referred to in the foregoing enumerated documents, and “Transaction Document” shall mean any of the foregoing. 
  

 SA-11 

 “Transaction Event of Default” shall mean any of the “Transaction Events of
Default” specified in Section 5.7 of the Agreement 
  
 “Trust” shall mean the GTC CONNECTICUT STATUTORY TRUST, a Connecticut statutory trust created by and existing pursuant to the Trust Agreement. 
  
 “Trust Agreement” shall mean the Amended and Restated Trust Agreement dated as of December 21, 2001,
between Owner Participant and the Trust Company. 
  
 “Trust Company” shall mean State Street Bank and Trust Company of Connecticut, National Association, in its individual capacity. 
  
 “Trust Estate” shall have the meaning assigned to that term in the Trust Agreement. 
  
 “Trustee” shall mean the Trust Company, not in its
individual capacity but solely as trustee of the Trust. 
  
 “USC” shall mean the United States Code. 
  
 “USCG” shall mean the United States Coast Guard, Department of Transportation, or any successor agency thereto. 
  
 “Vessels” or “Vessel” shall mean the following United States flag dry-bulk cargo marine transportation vessels:

  

	 	(i)	the BARBARA KESSEL, a 7,200 horsepower integrated blue-water tug-barge unit, built in 1977, Official No. 583310; 

  

	 	(ii)	the GAYLE EUSTACE, a 36,686 short-ton cargo capacity integrated blue-water barge, built in 1977, Official No. 587045; 

  

	 	(iii)	the PEGGY PALMER, a 37,700 short-ton cargo capacity blue-water barge, built in 1981, Official No. 641530; 

  

	 	(iv)	the MARY TURNER, a 42,800 short-ton cargo capacity blue-water barge, built in 1982, Official No. 646730; 

  
 or each or any such vessel as the context may require, and in each case shall include, subject to Sections 5(c), 6(b) and 6(c) of the Demise
Charter, all of their engines, boilers, machinery, masts, boats, anchors, cables, chains, rigging, tackle, apparel, furniture, capstans, outfit, tools, pumps, pumping and other equipment, gear, furnishings, appliances, fittings and spare and
replacement parts and all other appurtenances to said vessels appertaining or belonging, whether now owned or hereafter acquired, whether on board or not on board, and also any and all additions, improvements and replacements hereafter made in or to
said vessels or any part thereof, including all items and appurtenances as aforesaid. If the Demise Charter terminates with respect to any such vessel upon the occurrence of an Event of Loss and 
  

 SA-12 

 payment to Shipowner of all amounts due with respect to such vessel as a result of such Event of Loss pursuant to Article
11(a) of the Demise Charter, such vessel shall thereafter be excluded from the definition of “Vessels” or “Vessel”, as the case may be. 
  
 SCHEDULE 1 
  
 Seller’s Payment Instructions 
  

 SA-13 

 SCHEDULE 2 
  
 Lessor’s Cost 
  

				
	 BARBARA KESSEL
	  	$	5,050,031.84
	 GAYLE EUSTACE
	  	$	10,104,387.34
	 PEGGY PALMER
	  	$	12,893,146.37
	 MARY TURNER
	  	$	15,189,008.45
	 	  	
	

	 Total Lessor’s Cost
	  	$	43,236,574.00
	 	  	
	

 EXHIBIT A-1 
  
 Form of Opinion of Sheila M. McDevitt, 
 General Counsel to the Guarantor 

 EXHIBIT A-2 
  
 Form of Opinion of Milbank, Tweed, Hadley & McCloy LLP, 
 Special New York Counsel to the Obligors 

 EXHIBIT A-3 
  
 Form of Opinion of Jones, Walker, Waechter, Poitevent, Carrere & Denegre, LLP, 
 Maritime Counsel to the Charterer 

 EXHIBIT A-4 
  
 Form of Opinion of Thompson Coburn LLP, 
 Special Maritime Counsel to the Owner Participant 

 EXHIBIT A-5 
  
 Form of Opinion of Bingham Dana LLP, 
 Special Counsel to the Trust Company 

 EXHIBIT B 
  

Form of Certificate of Delivery and Acceptance

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