Document:

Assumption Agreement and 2006 Supplement to Trust Indenture

 Exhibit 10.1 
 ASSUMPTION AGREEMENT 
 AND 
 2006 SUPPLEMENT TO TRUST INDENTURE 
 THIS ASSUMPTION AGREEMENT AND 2006
SUPPLEMENT TO TRUST INDENTURE (the “Assumption Agreement”), dated April 25, 2006, is made by and among AQ BOAT, LLC, a Delaware limited liability company (the “Assuming Shipowner”), THE BANK OF NEW YORK, as
indenture trustee (the “Trustee”), and THE UNITED STATES OF AMERICA (the “United States”), represented by the Secretary of Transportation, acting by and through the Maritime Administrator (the
“Secretary”, and together with the Assuming Shipowner and the indenture Trustee, the “Parties”). 
 RECITALS: 
 WHEREAS, Great AQ Steamboat, L.L.C., successor to Great AQ Steamboat Co. (the “Original
Shipowner”) entered into that certain Trust Indenture, dated August 24, 1995, as amended and supplemented (the “Original Indenture”), with the Trustee, pursuant to which it issued certain obligations in the principal
amounts and at the interest rates set forth therein, as amended (the “Obligations”), to finance, in part, the construction of a paddlewheel passenger vessel, the AMERICAN QUEEN, O.N. 1030765 (the “Vessel”);

 WHEREAS, payment of the principal of and interest on the Obligations is guaranteed by the United States under the terms of Title XI
of the Merchant Marine Act, 1936 (the “Guarantee”); 
 WHEREAS, as security for the due and timely payment of debt
service set forth in the Obligations, the Original Shipowner executed and delivered to the Secretary, inter alia, a promissory note in the amount of the Obligations (the “Secretary’s Note”), and in order to secure the
due and timely payment of the Secretary’s Note, the Original Shipowner executed and delivered to the Secretary a First Preferred Ship Mortgage relating to the Vessel, which named the Secretary as mortgagee (the “Mortgage”),
that certain Security Agreement (the “Original Shipowner Security Agreement”), that certain Title XI Reserve Fund and Financial Agreement (the “Original Shipowner Financial Agreement”) and that certain Depository
Agreement (the “Original Shipowner Depository Agreement”); 
 WHEREAS, the Original Shipowner filed for protection
under Chapter 11 of the Bankruptcy Code on October 22, 2001, and failed to make the debt service payment due and owing on February 24, 2002; 
 WHEREAS, an auction of certain vessels owned by the Original Shipowner, including the Vessel, was conducted with the consent of the Bankruptcy Court on May 3, 2002, and DNPS Delta Queen Steamboat Company,
Inc. (“DQSC”) was the successful bidder; 
 WHEREAS, DQSC designated its subsidiary, American Queen Steamboat, LLC
(the “Second Shipowner”), to hold all the right, title and interest in the Vessel, and the Second Shipowner agreed to assume the Original Indenture and the Obligations under terms satisfactory, in form and substance, to the
Secretary;  

 WHEREAS, in connection with the assumption of the Obligations, the Second Shipowner on
May 31, 2002 executed that certain Assumption Agreement and 2002 Supplement to Trust Indenture (the “Second Shipowner Trust Indenture Assumption”), that certain 2002 Endorsement to the Secretary’s Note, that certain
Assumption and 2002 Supplement to the Mortgage, that certain Security Agreement (the “Second Shipowner Security Agreement”), that certain Depository Agreement (the “Second Shipowner Depository Agreement”) and that
certain Title XI Reserve Fund and Financial Agreement (the “Second Shipowner Financial Agreement,” and collectively with the foregoing agreements and related documents the “Second Shipowner Transaction Documents”);

 WHEREAS, pursuant to that certain Asset Purchase Agreement dated as of April 6, 2006 (the “Asset Purchase
Agreement”) by and among DQSC, the Shipowner, Mississippi Queen Steamboat, LLC, Delta Queen Steamboat, LLC (collectively, the “DQ Companies”) and Ambassadors Cruise Group, LLC (“ACG”), the DQ Companies
agreed to sell certain assets, including the Vessel, to ACG; 
 WHEREAS, in connection with the Asset Purchase Agreement, the
Secretary and the Second Shipowner executed that certain Termination Agreement dated as of the date hereof pursuant to which the parties agreed to terminate the Second Shipowner Transaction Documents; 
 WHEREAS, Ambassadors has designated its subsidiary, AQ Boat LLC (the “Assuming Shipowner”), to hold all the right, title and
interest in the Vessel, and the Assuming Shipowner agreed to assume the Original Indenture and the Obligations under terms satisfactory, in form and substance, to the Secretary; 
 WHEREAS, on the date hereof the Assuming Shipowner has executed and delivered to the Secretary that certain 2006 Endorsement to the
Secretary’s Note, that certain 2006 Additional Endorsement to Promissory Note to the United States, that certain Assumption and 2006 Supplement to the Mortgage, Contract No. MA-14032 (the “Mortgage Assumption”), that certain
Depository Agreement, Contract No. MA-14034 (the “Depository Agreement”), that certain Title XI Reserve Fund and Financial Agreement, Contract No. MA-14033 (the “Financial Agreement”), that certain Amended and
Restated 2006 Security Agreement Contract No. MA-14031(the “Security Agreement”) and this Assumption Agreement; 
 WHEREAS, the Assuming Shipowner is not assuming, and shall have no obligations with respect, to (i) the Original Shipowner Security Agreement or the Second Shipowner Security Agreement, (ii) the Original Shipowner
Depository Agreement or the Second Shipowner Depository Agreement, and (iii) the Original Shipowner Financial Agreement or the Second Shipowner Financial Agreement, and such agreements are being replaced with the Security Agreement, the
Depository Agreement and the Financial Agreement; and 
 WHEREAS, the Assuming Shipowner, the Trustee and the Secretary wish to
further amend the Original Indenture as set forth herein. 
  

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 NOW THEREFORE, in consideration of the premises, the mutual covenants set forth herein, and for
other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows: 
 ARTICLE
I 
 ASSIGNMENT, ASSUMPTION AND CONSENT 
 Section 1.01. Assignment and Assumption. 
 (a) Pursuant to Section 8.02 of
Exhibit 1 to the Original Indenture, as modified by Article Sixth, subsection (t) of the Special Provisions thereof, the Assuming Shipowner hereby assumes all of the Original Shipowner’s right, title and interest in, and duties,
obligations and liabilities set forth in the Original Indenture; and hereby further assumes any other obligations of the Original Shipowner set forth in the Original Indenture; and hereby further expressly assumes the payment of the principal of and
interest (and premium, if any) on the Obligations in accordance with the terms thereof and of the Original Indenture, as amended through the date hereof. The parties expressly understand and agree that upon execution of this Assumption Agreement,
the Second Shipowner Trust Indenture Assumption shall terminate and the Assuming Shipowner shall not assume any of the Second Shipowner’s right, title and interest in, and duties, obligations and liabilities under the Second Shipowner Trust
Indenture Assumption. 
 (b) Interest on the Obligations shall be payable semi-annually on February 24 and August 24
of each year, effective February 25, 2006 (provided the payment due on February 25, 2006 was actually made on the date hereof by the Second Shipowner pursuant to an agreement with the holder of the Obligations and the Trustee), until the
principal sum has been paid. Effective the date hereof, the interest rate on the 2020 Bonds (as defined in Exhibit A attached hereto) has been reduced, and the 2020 Bonds shall bear interest at a fixed rate of 6.5% per year. 
 (c) The Assuming Shipowner shall have no obligations or liabilities with respect to the Floating Rate Note Due August 24, 2005.

 Section 1.02. Consent to Assumption. The Secretary hereby consents to the acquisition of the Vessel by the Assuming
Shipowner subject to the following conditions: 
 (a) the Assuming Shipowner shall execute and deliver, or cause to be
executed and delivered, to the Secretary at the closing of such acquisition (the “Closing Date”) the following documents, in form and substance satisfactory to the Secretary: 
 (i) 2006 Endorsement to the Secretary’s Note; 
 (ii) 2006 Endorsement to Promissory Note to the United States of America in the principal amount of $477,905.31 (the “Additional
Note”); 
 (iii) Assumption Agreement and 2006 Supplement to the First Preferred Ship Mortgage; 
  

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 (iv) Security Agreement; 
 (v) Title XI Reserve Fund and Financial Agreement (the “Financial Agreement”); 
 (vi) Depository Agreement; 
 (vii) Limited Guaranty of Ambassadors International, Inc.; 
 (viii) Opinion(s) of Counsel;
and 
 (ix) Such representations, warranties and certifications as the Secretary may require, but in no event shall such
representations, warranties, and certifications exceed those of the Original Shipowner. 
 (b) the Assuming Shipowner
expressly confirms and agrees to the Secretary’s continuing security interests as set forth in the Security Agreement and the Financial Agreement, and continuing liens on the Vessel as set forth in the Mortgage, and takes all actions necessary
to preserve the Secretary’s current priority status therein; and 
 (c) the Assuming Shipowner takes all actions
necessary to redocument the Vessel and record the Supplement to the Mortgage with the United States Coast Guard. 
 Section 1.03.
Agreements of the Secretary. 
 (a) The Secretary hereby agrees to execute all documents, if any, necessary to
redocument the Vessel and to record the Supplement to the Mortgage with the United States Coast Guard. 
 (b) On the Closing
Date, Secretary shall provide an opinion of counsel to the effect that the Guarantee shall remain in full force and effect. 
 (c) The Secretary represents, warrants and agrees that as of the Closing Date the outstanding amount of the Obligations is set forth on Exhibit A attached hereto. 
 Section 1.04. Covenants of the Assuming Shipowner. The Assuming Shipowner (a) hereby expressly confirms its obligation to reimburse
the Trustee for its fees and expenses incurred as of this date forward as set forth in Section 7.04 of Exhibit 1 to the Original Indenture, and the Trustee hereby acknowledges that the Assuming Shipowner has incurred no such fees or expenses,
or any liability to indemnify the Trustee for any fees or expenses incurred by the Original Shipowner or by the Secretary prior to the date hereof; and (b) hereby covenants that it has the limited liability company power and authority to
perform under this Assumption Agreement and the Original Indenture, and has taken all necessary limited liability company action to authorize the execution, delivery and performance of this Assumption Agreement. 
  

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 ARTICLE II 
 AMENDMENTS 
 Section 2.01. General Amendment. From and after the date hereof, all
references to the Original Shipowner, to Great AQ Steamboat Co., or to Great AQ Steamboat, L.L.C., in the Obligations or in the Original Indenture, as amended, shall be deemed to refer to and bind the Assuming Shipowner. 
 Section 2.02. Specific Amendment to Indenture. 
 (a) Concerning Section 6.09. Section 6.09 of Exhibit 1 to the Original Indenture, as modified by Article Sixth,
subsection (o) of the Special Provisions thereof, is hereby amended by waiving the requirement that the Trustee terminate the Letter of Representations with the Depository Trust Company upon receipt of an executed Secretary’s Supplemental
Indenture, pursuant to which it assumes the Original Indenture and the Obligations. 
 (b) Concerning Notices. Subject
to the provisions of Section 13.01 of Exhibit 1 to the Original Indenture, Article Sixth, subsection (u) of the Special Provisions is hereby amended by deleting reference to registered or certified mail, return receipt requested, and
inserting in its place,” nationally known courier, or by facsimile transmission, or by electronic mail”; and by deleting notice to the “Shipowner” and substituting therefor notice to the “Assuming Shipowner” addressed
to: AQ BOAT, LLC, c/o Ambassadors Cruise Group LLC, 1071 Camelback Street, Newport Beach, California 92660, Attn: Brian R. Schaefgen, Fax No. 949-759-5970, e-mail: brian.schaefgen@ambassadors.com. . 
 Section 2.03. Confirmation of Indenture and Obligations. 
 (a) The Obligations and the Trust Indenture are each in all respects confirmed by their respective parties thereto, and shall, as amended
and supplemented, remain in full force and effect. 
 (b) On behalf of the United States, the Secretary hereby confirms the
validity and enforceability of the Guarantees of the Obligations, each of which shall remain in full force and effect following the acquisition of the Vessel by the Assuming Shipowner, and shall inure to the benefit of the holders of the
Obligations. 
 ARTICLE III 
 MISCELLANEOUS 
 Section 3.01. Construction. This Assumption Agreement shall be construed in connection
with and as part of Schedule A to the Trust Indenture, and, where applicable, shall be governed by the laws of the State of New York, and, to the extent applicable, by the laws of the United States. 
 Section 3.02. Counterparts. This Assumption Agreement may be executed in any number of counterparts, each of which shall be deemed an
original, but all of which shall together constitute one and the same instrument. 
  

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 Section 3.03. Amendments and Assignments. 
 (a) This Assumption Agreement may be amended only in accordance with Article X of Exhibit 1 to the Original Indenture. 
 (b) This Assumption Agreement shall not be assigned without the Secretary’s prior written consent, and any attempt to so assign
otherwise shall be null and void ab initio. 
 Section 3.04. Definitions. Capitalized terms used but undefined
herein shall have the meanings ascribed to them in Schedule A to the Original Indenture. 
 Section 3.05. Discharge. The
Second Shipowner is hereby discharged from any and all obligations under the Original Indenture, as amended, the Obligations and the Second Shipowner Trust Indenture Assumption. 
 [Remainder of page intentionally left blank] 
  

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 IN WITNESS WHEREOF, by their signatures below, the Parties have executed and delivered this Assumption
Agreement as of the date and year first above written. 
  

									
	 Attest:
	 		 	 AQ BOAT, LLC

				
	/s/ Laura Tuthill	 		 	 By:
	 	 /s/ Brian R. Schaefgen

	 Name: Laura Tuthill
	 		 		 	 Brian R. Schaefgen

		 		 		 	 Chief Financial Officer

			
	 Attest:
	 		 	 THE BANK OF NEW YORK

				
	/s/ Robert A. Massimillo	 		 	 By:
	 	 /s/ Remo J. Reale

	 Name: Robert A. Massimillo
	 		 		 	 Name: Remo J. Reale

	             Vice President
	 		 		 	 Title:   Vice President

			
	 Attest:
	 		 	 THE UNITED STATES OF AMERICA

		 		 	 SECRETARY OF TRANSPORTATION

				
	/s/ Sarah J. Washington	 		 	 By:
	 	 /s/ Joel C. Richard

	 Name: Sarah J. Washington
	 		 		 	 Name: Joel C. Richard

		 		 		 	 Title:   Secretary

  

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 EXHIBIT A 
 TO ASSUMPTION AGREEMENT 
 AND 
 2006 SUPPLEMENT TO TRUST INDENTURE 
 United States Government Guaranteed Ship Financing

 Bond, American Queen Series, 7.68% Sinking Fund 
 Bond Due
June 2, 2020 (the “2020 Bonds”) 
  

			
	 Outstanding Principal, April 25, 2006
	  	$34,986,000
	 Interest (effective April 25, 2006)
	  	6.5%
	 Next Payment Date, Principal and Interest
	  	August 24, 2006

 TRUST INDENTURE 
 Relating to United States Government Guaranteed 
 Ship Financing Obligations, 
 American Queen Series 
 Between 
 GREAT AQ STEAMBOAT CO. 
 Shipowner 
 AND 

THE BANK OF NEW YORK 
 Indenture Trustee 
 Dated as of August 24, 1995 
  

 TRUST INDENTURE 
 Between 
 GREAT AQ STEAMBOAT CO. 
 Shipowner 
 AND 

THE BANK OF NEW YORK 
 Indenture Trustee 
 Dated as of August 24, 1995 
 TABLE OF CONTENTS TO SPECIAL PROVISIONS OF THE INDENTURE 1 
  

			
	  	  	Page
	 Parties
	  	1
	 Recitals
	  	1
		
	ARTICLE FIRST	  	
		
	 Incorporation of General Provisions
	  	2
		
	ARTICLE SECOND	  	
		
	 The Obligations
	  	2
		
	ARTICLE THIRD	  	
		
	 Interest Rate Calculations
	  	3
		
	ARTICLE FOURTH	  	
		
	 Certain Payments and Redemptions
	  	5
		
	 (a)    Mandatory Repayments and Sinking Fund Redemptions
	  	5
	 (b)    Credit Against Mandatory Repayments and Sinking Fund Redemptions
	  	6

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

			
	 (c)    Optional Prepayments or Redemptions Without Premium
	  	7
	 (d)    Optional Redemptions of Obligations at Premium
	  	7
		
	ARTICLE FIFTH	  	
		
	 Definitions
	  	8
		
	ARTICLE SIXTH	  	
		
	 Additions, Deletions and Amendments to Exhibit 1
	  	8
		
	 (a)    Concerning Section 2.04
	  	8
	 (b)    Concerning Section 2.07
	  	8
	 (c)    Concerning Section 2.10
	  	8
	 (d)    Concerning Section 2.12
	  	9
	 (e)    Concerning Payment of the Obligations
	  	9
	 (f)     Concerning Article III of Exhibit 1
	  	9
	 (g)    Concerning Section 3.03
	  	9
	 (h)    Concerning Section 3.05
	  	10
	 (i)     Concerning Section 3.06
	  	10
	 (j)     Concerning Section 3.07
	  	10
	 (k)    Concerning References to 3.09(b)
	  	11
	 (l)     Concerning Section 4.01
	  	11
	 (m)   Concerning Home Office Payment
	  	11
	 (n)    Concerning Section 6.06
	  	12
	 (o)    Concerning Section 6.09
	  	12
	 (p)    Concerning Section 7.02
	  	12
	 (q)    Concerning Section 7.03
	  	13
	 (r)     Concerning Section 7.04
	  	13
	 (s)    Concerning Section 8.01
	  	13
	 (t)     Concerning Section 8.02
	  	14
	 (u)    Concerning Notices
	  	14
	 (v)    Concerning Applicable Law
	  	15
	 (w)   Execution of Counterparts
	  	15
		
	 Signatures
	  	16
		
	 Acknowledgements
	  	17 and 18

 EXHIBITS TO TRUST INDENTURE 
  

			
	SCHEDULE A	  	Schedule of Definitions to Trust Indenture
		
	EXHIBIT 1	  	General Provisions of the Indenture Incorporated by Reference
		
	EXHIBIT 2(a)	  	Forms of 2005 Note, Guarantee and Trustee’s Authentication Certificate

  

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	EXHIBIT 2(b)	  	Forms of 2020 Bond, Guarantee and Trustee’s Authentication Certificate
		
	EXHIBIT 3	  	Authorization Agreement
		
	EXHIBIT 4	  	Form of Secretary Supplemental Indenture

  

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 TRUST INDENTURE 
 SPECIAL PROVISIONS 
 THIS TRUST INDENTURE, dated as of August 24, 1995 (said Trust Indenture, as the
same may be amended, modified or supplemented from time to time as permitted hereunder, herein called the “Indenture”), between (i) GREAT AQ STEAMBOAT CO., a Delaware corporation (herein called the “Shipowner”), and
(ii) THE BANK OF NEW YORK, a New York banking corporation (said Bank, any successor or assign hereunder, herein called the “Indenture Trustee”). 
 RECITALS: 
 A. As
provided in Article Fourth hereof, the terms defined in Schedule A to this Indenture shall have the respective meanings stated in said Schedule; 
 B. The Shipowner has duly executed this Indenture, and duly authorized the issuance hereunder of $60,589,000 aggregate principal amount of its obligations pursuant to Section 2.03 of Exhibit 1 to this Indenture (together with any notes
or bonds issued in respect thereof pursuant to Sections 2.09, 2.10, 2.12 and 3.10(b) of said Exhibit 1, herein called the “Obligations”) designated “United States Government Guaranteed Ship Financing Obligations, American Queen
Series”; the Obligations consist of $24,236,000 principal amount of Floating Rate Notes due August 24, 2005 and $36,353,000 principal amount of         % Sinking Fund Bonds due June 2, 2020;

 C. The Obligations will be issued by the Shipowner to aid in the financing of the cost of construction of the paddlewheel steamboat named
AMERICAN QUEEN (O.N. 1030765); 
 D. Under the Authorization Agreement in the form set forth as Exhibit 3 hereto, the Secretary, on behalf of
the United States, has agreed and will agree to execute on each of the Obligations to be issued, a Guarantee of the payment of the unpaid interest to the date of such payment on, and the unpaid balance of the principal of, such Obligation under the
provisions of Title XI of the Act, and the Indenture Trustee is authorized to cause the Guarantees, bearing the facsimile signature of the Secretary, and the facsimile seal of the United States Department of Transportation, to be imprinted on the
Obligations, and to authenticate and deliver the Obligations and the Guarantees issued on the Closing Date, such agreements and authorizations being subject to the conditions set forth in the Authorization Agreement; 
 E. Pursuant to Section 1104(b)(5) of the Act, the Secretary has determined that the interest to be borne by the Obligations (exclusive of charges
for the guarantee fee and 

 
service charges, if any) at the rates specified in the forms thereof set forth in Exhibit 2 hereto is reasonable; and 
 F. All actions necessary have been taken in order (1) to make the Obligations, when executed by the Shipowner, authenticated by the Indenture
Trustee and issued under the Indenture, the valid, binding and legal obligations of the Shipowner in accordance with their terms, (2) to make the Guarantees to be endorsed on the Obligations, when executed by the Secretary, authenticated by the
Indenture Trustee and delivered under this Indenture, the valid, binding and legal obligations of the United States in accordance with their terms, and (3) to make this Indenture the valid, binding and legal agreement of the parties hereto in
accordance with its terms. 
 NOW THEREFORE, in consideration of the premises, of the mutual covenants herein contained, of the purchase of
the Obligations by the Holders thereof, and of other good and valuable consideration, the receipt and adequacy of which the parties hereby acknowledge, and for the equal and proportionate benefit of all the present and future Holders of the
Obligations, the parties hereto agree as follows: 
 ARTICLE FIRST 
 INCORPORATION OF GENERAL PROVISIONS 
 This Indenture shall consist of two parts: the
Special Provisions and the General Provisions attached hereto as Exhibit 1, made a part of this Indenture and incorporated herein by reference. 
 ARTICLE SECOND 
 THE OBLIGATIONS 
 (a) The Obligations issued hereunder shall be designated “United States Government Guaranteed Ship Financing Obligations, American Queen Series” and shall consist of (1) the 2005 Notes which shall be in
the form of Exhibit 2(a) to this Indenture and (2) the 2020 Bonds which shall be in the form of Exhibit 2(b) to this Indenture. The aggregate principal amount of Obligations which may be issued under this Indenture shall not exceed $60,589,000
except as provided in Sections 2.09, 2.10, 2.12 and 3.10(b) of Exhibit 1 hereto. 
 (b) The Obligations shall be in the denominations of
$1,000 or any integral multiple thereof. 
 (c) The Shipowner shall at all times cause to be maintained in the City of New York, State of New
York an office or agency 

  

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for the purposes specified in Section 5.03 of Exhibit 1 to this Indenture. 
 (d) The Indenture Trustee shall at all times have its Corporate Trust Office in the City of New York, State of New York. 
 ARTICLE THIRD 
 INTEREST RATE CALCULATIONS

 For the purpose of appointing the Indenture Trustee to calculate the interest rate based on the London interbank offered rate
(“LIBOR”), on the 2005 Notes which bear interest at a rate calculated with reference to LIBOR, the Shipowner and the Indenture Trustee agree as follows: 
 (a) Upon the terms and subject to the conditions contained herein, the Shipowner hereby appoints the Indenture Trustee as its agent (in such capacity, the “Calculation Agent”) for the purpose of calculating
the interest rate on the 2005 Notes in the manner and at the times provided in the 2005 Notes. 
 (b) The Calculation Agent shall exercise
due care to determine the interest rate on the 2005 Notes and shall communicate the same to the Shipowner and any paying agent identified to it in writing as soon as practicable after each determination. The Calculation Agent will, upon the request
of the holder of any 2005 Note, provide the interest rate then in effect with respect to such 2005 Note and, if determined, the interest rate with respect to such 2005 Note which will become effective on the next Interest Reset Date, as such term is
defined in the 2005 Note. 
 (c) The Calculation Agent accepts its obligations set forth herein, upon the terms and subject to the conditions
hereof, including the following, to all of which the Shipowner agrees: 
 (i) The Calculation Agent shall be entitled to such
compensation as may be agreed upon with the Shipowner for all services rendered by the Calculation Agent, and the Shipowner promises to pay such compensation and to reimburse the Calculation Agent for the reasonable out-of-pocket expenses (including
attorney’s and other professional’s fees and expenses) incurred by it in connection with the services rendered by it hereunder upon receipt of such invoices as the Shipowner shall reasonably require. 
 (ii) In acting under the Indenture and in connection with the 2005 Notes, the Calculation Agent is acting solely as agent of the Shipowner
and does not assume any 

  

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obligations or relationship of agency or trust for or with any of the owners or holders of the 2005 Notes. 
 (iii) The Calculation Agent shall be protected and shall incur no liability for or in respect of any action taken or omitted to be taken
or anything suffered by it in reliance upon the terms of the 2005 Notes, any notice, direction, certificate, affidavit, statement or other paper, document or communication reasonably believed by it to be genuine and to have been approved or signed
by the proper party or parties. 
 (iv) Neither the Calculation Agent nor its officers, directors, employees, agents or
attorneys shall be liable to the Shipowner for any act or omission hereunder, or for any error of judgment made in good faith by it or them, except in the case of its or their gross negligence or willful misconduct. 
 (v) The Calculation Agent may consult with counsel and the written advice of such counsel or any opinion of counsel shall be full and
complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. 
 (vi) The Calculation Agent shall be obligated to perform such duties and only such duties as are herein specifically set forth, and no implied duties or obligations shall be read into the Indenture against the
Calculation Agent. 
 (vii) Unless herein otherwise specifically provided, any order, certificate, notice, request, direction
or other communication from the Shipowner made or given by it to the Calculation Agent under any provision of the Indenture shall be sufficient if signed by any officer of the Shipowner. 
 (viii) The Calculation Agent may, upon obtaining the prior written consent of the Shipowner, perform any duties hereunder either directly
or by or through agents or attorneys, and the Calculation Agent shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder. 
 (d) Any notice required to be given to the Shipowner or Calculation Agent pursuant to the provisions of this Article shall be delivered in person, sent
by letter or telecopy or communicated by telephone (subject, in the case of communication by telephone, to confirmation dispatched within twenty-four hours by letter or by telecopy), in the case of the Shipowner, Two N. Riverside Plaza, Suite 200,
Chicago, Illinois 60606, telephone: 

  

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(312) 466-6000, telecopy: (312) 466-6001, Attention: President, in the case of The Bank of New York, to Corporate Trust Trustee Administration, 101
Barclay Street, New York, New York 10286, telephone: (212) 815-5783, telecopy: (212) 815-5915, or to any other address of which either party shall have notified the others in writing as herein provided. Any notice hereunder given by
telephone, telecopy or letter shall be deemed to be received when in the ordinary course of transmission or post, as the case may be, it would be received. 
 ARTICLE FOURTH 
 CERTAIN PAYMENTS AND REDEMPTIONS 
 (a) Mandatory Repayments and Sinking Fund Redemptions. The Obligations of each maturity are subject to repayment or redemption, as applicable, at
a Redemption Price equal to 100% of the principal amount thereof, together with interest accrued thereon to the applicable repayment or sinking fund Redemption Date, through the operation of a mandatory repayment or sinking fund providing for the
semi-annual repayment or redemption (i) for the 2005 Notes, on February 24 and August 24 of each year, commencing February 24, 1996, of $1,212,000 principal amount of 2005 Notes (or such lesser principal amount of 2005 Notes as
shall then be outstanding) and (ii) for the 2020 Bonds, on February 24 and August 24 of each year, commencing February 24, 2006, of $1,212,000 principal amount of 2020 Bonds (or such lesser principal amount of 2020 Bonds as shall
be then outstanding), plus, in each case, interest accrued thereon to the Redemption Date. 
 Notwithstanding the foregoing provisions of
this subsection (a), if the principal amount of Outstanding Obligations shall be reduced by reason of any prepayment or redemption pursuant to Section 3.04 of Exhibit 1 to this Indenture, the principal amount of Obligations of each maturity to
be repaid or redeemed pursuant to this subsection (a) on each subsequent mandatory repayment or sinking fund Redemption Date for such maturity of Obligations shall be reduced by an amount equal to the principal amount of such maturity of
Obligations retired by reason of such prepayment or redemption pursuant to Section 3.04 of Exhibit 1 hereto divided by the number of mandatory repayment or sinking fund Redemption Dates (including the Stated Maturity of such maturity of
Obligations) scheduled to occur after the date of such prepayment or redemption pursuant to Section 3.04 of Exhibit 1 to this Indenture (subject to such increase as shall be necessary so that the total principal amount of each maturity of
Obligations to be prepaid or redeemed on any such repayment or sinking fund Redemption Date shall be an integral multiple of $1,000); provided that, the entire unpaid principal amount of the Outstanding Obligations of each maturity
shall be paid not later than the stated Maturity of such maturity. The Shipowner shall, 

  

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in accordance with Section 3.02(d) of Exhibit 1 hereto, promptly after each prepayment or redemption pursuant to said Section 3.04, furnish to the
Secretary, the Indenture Trustee and each Holder of an Obligation a revised table of repayments or sinking fund payments reflecting the reductions made pursuant to this subsection (a) as a result of such prepayment or redemption. 
 (b) Credit Against Mandatory Repayments or Sinking Fund Redemptions. In lieu of making all or any part of any mandatory repayment or sinking fund
redemption of Obligations of each maturity or of making any mandatory prepayment or redemption of Obligations pursuant to Section 3.04 of Exhibit 1 hereto, the Shipowner may, at its option, receive credit for Obligations of such maturity not
previously so credited or applied to reduce the principal amount of Obligations of such maturity Outstanding, (i) prepaid or redeemed by the Shipowner pursuant to the optional prepayment or redemption provisions provided for in subsection
(c) of this Article, (ii) redeemed by the Shipowner pursuant to the optional redemption provision provided for in subsection (d) of this Article, or (iii) purchased or acquired by the Shipowner (other than by prepayment or
redemption) and delivered to the Indenture Trustee for cancellation pursuant to Section 2.13 of Exhibit 1 hereto. The Obligations of such maturity so credited or applied shall be credited or applied, as the case may be, by the Indenture
Trustee, at 100% of the principal amount thereof. If the Shipowner shall elect to receive credit or application as aforesaid in lieu of making all or part of any mandatory repayment or sinking fund redemption or mandatory prepayment or mandatory
redemption, it shall deliver to the Indenture Trustee, at least 45 days but not more than 60 days prior to the Redemption Date for such mandatory repayment or sinking fund redemption or mandatory prepayment or redemption, a Request
(i) specifying the principal amount of Obligations of such maturity so optionally prepaid or redeemed or otherwise acquired, and so to be credited or applied, as the case may be, and (ii) stating that no such Obligations of such maturity
have theretofore been made the basis of any such credit or application as aforesaid, and that none of such Obligations are subject to the terms of any agreement or contract between the Secretary, the Shipowner and/or any other person restricting the
Shipowner’s right to apply any such Obligations of such maturity as a credit pursuant to the terms of this subsection (b), together with the Obligations of such maturity (uncancelled) for which such credit or application is so requested (unless
such Obligations of such maturity shall theretofore have been delivered to the Indenture Trustee). In the case of any crediting by the Shipowner in lieu of making all or part of a mandatory repayment or sinking fund redemption or mandatory
prepayment or redemption, the Indenture Trustee shall notify the Holders of the principal amount being so credited at least 30 and not more than 60 days prior to the repayment, prepayment or redemption date. 
  

 - 6 - 

 (c) Optional Prepayments or Redemptions Without Premium. (i) At its option, the Shipowner may
prepay or redeem on any mandatory repayment or sinking fund Redemption Date, at a prepayment or redemption price equal to 100% of the principal amount thereof, together with interest accrued thereon to such date, an additional principal amount of
Obligations of such maturity up to the principal amount of Obligations required to be repaid or redeemed under subsection (a) of this Article on such date, and before any credit pursuant to subsection (b) of this Article. The right to make
any such optional repayment or sinking fund redemption shall not be cumulative. If the Shipowner shall elect to make any such optional prepayment, the Shipowner shall, at least 45 days but not more than 60 days prior to such prepayment, deliver to
the Indenture Trustee a Request stating that the Shipowner intends to exercise its right to make such optional prepayment and specifying the additional principal amount of Obligations of such maturity which the Shipowner intends to prepay on such
Interest Payment Date. 
 (ii) Notwithstanding subparagraph (i) above, at its option, the Shipowner may prepay the 2005 Notes, in whole
or in part, on any Interest Payment Date, at the prepayment price of 100% of the principal amount thereof, together with interest accrued thereon to the date fixed for prepayment. If the Shipowner shall elect to make any such optional prepayment,
the Shipowner shall, at least 45 days but not more than 60 days prior to such prepayment, deliver to the Indenture Trustee a Request stating that the Shipowner intends to exercise its right to make such optional prepayment and specifying the
additional principal amount of 2005 Notes which the Shipowner intends to prepay on such Interest Payment Date. 
 (d) Optional Redemptions
of Obligations at Premium. At its option, the Shipowner may redeem the 2020 Bonds, in whole or in part, at any time or from time to time, at the redemption prices specified in the 2020 Bonds, together with interest accrued thereon to the date
fixed for redemption; provided that, no such redemption shall be made directly or indirectly with the proceeds of, or in anticipation of, borrowing by or for the account of the Shipowner guaranteed by the United States. If the
Shipowner shall elect to make any such optional redemption of 2020 Bonds, the Shipowner shall, at least 45 days but not more than 60 days prior to the date fixed for redemption, deliver to the Indenture Trustee a Request stating that the Shipowner
intends to exercise its rights as above set forth to make such optional redemption and specifying the Redemption Date, and the principal amount of 2020 Bonds which the Shipowner intends to redeem on such date. In the case of any redemption of the
2020 Bonds pursuant to this subsection (d) the Shipowner shall deliver to the Indenture Trustee, at the time of delivery of said Request, an Officer’s Certificate stating that such redemption shall comply with the proviso relating to such
redemption. 
  

 - 7 - 

 ARTICLE FIFTH 
 DEFINITIONS 
 For all purposes of this Indenture, unless otherwise expressly provided or unless the context
otherwise requires: 
 (1) All references herein to Articles, Sections or other subdivisions, unless otherwise specified,
refer to the corresponding Articles, Sections and other subdivisions of this Indenture; 
 (2) The terms “hereof”,
“herein”, “hereby”, “hereto”, “hereunder” and “herewith” refer to this Indenture; and 
 (3) The terms used herein and defined in Schedule A to this Indenture shall have the respective meanings stated in said Schedule. 
 ARTICLE SIXTH 
 ADDITIONS, DELETIONS AND AMENDMENTS TO EXHIBIT 1 
 The following additions, deletions and amendments are hereby made to Exhibit 1 to this Indenture. 
 (a) Concerning Section 2.04. The Shipowner and the Indenture Trustee shall not enter into any Supplemental Indenture, and the Indenture
Trustee shall not enter into any supplement to the Authorization Agreement, pursuant to Section 2.04 of Exhibit 1 to this Indenture, except to provide for the issuance of additional Obligations of any Stated Maturity theretofore issued, or of
one or more additional series for the purpose of aiding in financing or refinancing the construction, reconstruction or reconditioning of the Vessel, or to refund Obligations issued for such purpose. 
 (b) Concerning Section 2.07. Section 2.07 is hereby amended by inserting the word “or” after the word “secretary”
and by deleting the words “or an assistant trust officer” in the first paragraph thereof. 
 (c) Concerning
Section 2.10. (i) Section 2.10(b) is hereby amended by adding the word “endorsed” after the words “United States”. 
 (ii) Section 2.10(c) of Exhibit 1 hereto is hereby amended by inserting the following language before the period in the last line of the first paragraph thereof: “except as to the unredeemed portion of any
Obligation being redeemed in part”. 
  

 - 8 - 

 (iii) Section 2.10(d) is hereby amended by adding the word “endorsed” after the words
“United States”. 
 (d) Concerning Section 2.12. (i) Section 2.12 is hereby amended by adding the word
“endorsed” after the words “United States”. 
 (ii) With respect to clause (1) of the proviso to Section 2.12
of Exhibit 1 to the Indenture, a written agreement of indemnity which is satisfactory in form and substance to the Secretary, the Shipowner, and the Indenture Trustee, executed and delivered by an institutional Holder having a capital and surplus of
at least $100,000,000 shall be considered sufficient indemnity to the Secretary, the Shipowner, and the Indenture Trustee in connection with the execution, authentication and delivery of any new Obligations or the making of any payment as
contemplated by said Section 2.12. 
 (e) Concerning Payment of the Obligations. Notwithstanding anything to the contrary in
Exhibit 1 hereto, the Obligations to be issued hereunder shall be payable as to principal, premium (if any), and interest, at an office or agency maintained by the Shipowner for such purpose at the Corporate Trust Office of the Indenture Trustee, or
at the option of the Shipowner, as to payments of principal, premium (if any), or interest by check mailed by such Corporate Trust Office to the addresses of the Obligees as such addresses shall appear in the Obligation Register, subject in any
event to the provisions hereof concerning home office payment. The Indenture Trustee agrees that within 30 days from the date of any payment of principal or interest when the same shall become due and payable by reason of maturity or redemption, a
Responsible Officer in the Corporate Trust Office of the Indenture Trustee shall ascertain to his satisfaction that checks in payment of such amounts have been mailed by such Corporate Trust Office to the addresses of the Obligees as provided above,
if payment is to be made by check, or if payment is to be made by wire transfer, or by credit to an account maintained by the Obligee with the Indenture Trustee, that such funds have been wired or credited, or if payment is to be made at the
Corporate Trust Office, that funds were held by the Indenture Trustee for such payment on the date the payment was due. The Indenture Trustee shall have no obligation to determine whether such checks or payments were received by the Obligees.

 (f) Concerning Article III of Exhibit 1. All references in Article III of Exhibit 1 hereto to redemptions of Obligations shall be
read to include repayments and prepayments of Obligations, as applicable. 
 (g) Concerning Section 3.03. The date required by
Section 3.03 of Exhibit 1 hereto is June 2, 2020. 
  

 - 9 - 

 (h) Concerning Section 3.05. Section 3.05 of Exhibit 1 hereto is hereby amended by
changing the phrase “a Vessel” to “the Vessel” each time it appears. 
 (i) Concerning Section 3.06.
Section 3.06 of Exhibit 1 hereto is hereby amended in its entirety to read as follows: 
 “SECTION 3.06.
Prepayment or Redemption After Assumption by the Secretary. Upon receipt by the Indenture Trustee of written instructions from the Secretary stating that the total principal amount of Obligations are required to be prepaid or redeemed on the
date specified therein (which shall be not less than 37 nor more than 60 days from the receipt of such instructions by the Indenture Trustee) at the option of the Secretary at any time after the Secretary’s assumption of the Obligations
pursuant to Section 6.09, the Indenture Trustee shall promptly give notice as provided in Section 3.08 of the prepayment or redemption on the Redemption Date of all the Outstanding Obligations and the Indenture Trustee shall, on such
Redemption Date, if and only to the extent that the Secretary makes funds available to the Indenture Trustee for such purpose, prepay or redeem all of such Obligations together with interest accrued thereon to such Redemption Date; provided
that, the Secretary shall prepay or redeem at the principal amount thereof and interest accrued thereon all of the Outstanding Obligations by notice to the Indenture Trustee in accordance with this Section 3.06 within 30 days of the
non-assumption of the Obligations by a purchaser of the Vessel pursuant to Section 8.02.” 
 (j) Concerning
Section 3.07. (i) Section 3.07(a) is hereby amended by deleting the phase “or 3.05” in the first sentence thereof. 
 (ii) Notwithstanding the provisions of Section 3.07(b) of Exhibit 1 to this Indenture, if less than all of the Obligations are to be repaid, prepaid or redeemed under any of the provisions contained or referred to in Article Third
hereof or Article III of said Exhibit 1, the Indenture Trustee shall select such Obligations to be repaid, prepaid or redeemed on the Redemption Date by allocating the principal amount to be repaid, prepaid or redeemed first between each maturity of
Obligations in proportion to the Outstanding Obligations and second among the holders of each maturity of Obligations in proportion to the aggregate principal amount of such maturity of Obligations registered in their respective names; provided
that, the Indenture Trustee may select for repayment, prepayment or redemption portions of the principal amount of the Obligations of a denomination larger than $1,000; but the portions of the principal amount of the Obligations so selected shall be
equal to $1,000 or an integral multiple thereof. 
  

 - 10 - 

 (k) Concerning References to Section 3.09(b). All cross-references to Section 3.09(b)
made in Exhibit 1 hereto shall be deemed to refer to Section 3.10(b) of Exhibit 1 hereto. 
 (l) Concerning Section 4.01.
Section 4.01(b) of Exhibit 1 hereto is hereby amended in its entirety to read as follows: 
 “(b) Cash held by the
Indenture Trustee or any Paying Agent (other than the Shipowner) under this Indenture- 
 (i) need not be segregated;

 (ii) shall not be invested except as permitted by clause (iv) of this Section 4.01(b); 
 (iii) shall not bear interest except to the extent the Indenture Trustee or such Paying Agent allows interest on similar deposits or
except as the Shipowner and the Indenture Trustee (or such Paying Agent) may agree; and 
 (iv) if the Shipowner shall have
deposited or caused to be deposited with the Indenture Trustee funds sufficient for the payment of the Obligations at their Maturity, including interest to the date of Maturity, and the date of Maturity is more than 3 Business Days after the deposit
of such funds, the Indenture Trustee upon the Request of the Shipowner shall invest such funds, as directed by the Shipowner, in direct obligations of the United States Government maturing at or prior to the date of Maturity of such Obligations and
having a principal amount equal to not less than the amount of the funds so invested. Such investments shall be held in trust for the purpose for which the funds so invested were held. After the Obligations in respect of which the funds were
deposited have been paid in full (except as to unclaimed amounts as referred to in Section 4.03) any of such funds (including interest received in respect of such investments and gain on matured investments purchased at a discount) held by the
Indenture Trustee in excess of amounts to which Holders of such Obligations are entitled shall upon the Request of the Shipowner be paid by the Indenture Trustee to the Shipowner.” 
 (m) Concerning Home Office Payment. Notwithstanding any terms of this Indenture or the Obligations to the contrary, the Shipowner may enter into
an agreement with any Holder of an Obligation providing for payment to such Holder by check, or at the request of such Holder, by wire transfer of the principal of and the premium (if any), and interest on such Obligation or any 

  

 - 11 - 

 
part thereof at a place other than the place or places specified in such Obligation as the place for such payment, and for the making of notation (if any),
of such payment on such Obligation by such Holder, or by an agent of the Shipowner or of the Indenture Trustee without presentation of such Obligation. The Shipowner will furnish to the Indenture Trustee a copy of each such agreement. The Indenture
Trustee hereby consents to such agreement contained in Section 7 of the Purchase Agreement dated August 24, 1995, between the Shipowner and the purchasers named therein, and hereby acknowledges receipt of a copy thereof. 
 (n) Concerning Section 6.06. Section 6.06(b)(2) is hereby amended by adding after the word “expenses” the words
“(including the fees and expenses of its legal counsel)”. 
 (o) Concerning Section 6.09. Section 6.09 is hereby
amended by adding at the end thereof a new paragraph reading as follows: 
 “In the event that the Obligations are
registered in the name of The Depository Trust Company (“DTC”), Cede & Co. (“Cede”) or another nominee of DTC or Cede pursuant to a Letter of Representations (“LOR”) which is executed among the Shipowner, the
Indenture Trustee and DTC, and (i) if the Secretary assumes the Obligations pursuant to Section 6.09(a) hereof, or (ii) if the Secretary instructs the Shipowner and the Indenture Trustee to terminate the LOR, the Shipowner and the
Indenture Trustee, immediately upon receipt of notice of such assumption or upon receipt of notice of such termination, shall terminate or cause the termination of the LOR in accordance with Section 11 thereof. The Indenture Trustee shall
within 30 days from receipt of either such notice from the Secretary also instruct DTC to notify its direct and indirect participants of the need to re-register the Obligations in the names of the beneficial owners. Upon surrender by DTC of the
Obligations issued in its name, the name of Cede or another nominee, the Shipowner shall issue at its sole expense, and the Indenture Trustee shall authenticate Obligations in the names provided to the Indenture Trustee by DTC.” 
 (p) Concerning Section 7.02. The amount “$3,000,000” in Section 7.02 of Exhibit 1 hereto is hereby deleted, and there is
substituted therefor the amount “$75,000,000”, except that in determining the qualification of any Paying Agent such number shall remain $3,000,000. 
  

 - 12 - 

 (q) Concerning Section 7.03. The provisions of Section 7.03 shall be equally applicable to
the Indenture Trustee in its capacity of Calculation Agent. 
 (r) Concerning Section 7.04. (i) Section 7.04 is hereby
amended by adding after the words “Indenture Trustee” the words “as they may agree upon in writing from time to time”. 
 (ii) In addition the following sentence is added at the end thereof: “The obligations of the Shipowner under this Section 7.04 shall survive the resignation or removal of the Indenture Trustee.” 
 (iii) The provisions of Section 7.04 shall be equally applicable to the Indenture Trustee in its capacity as Calculation Agent. 
 (s) Concerning Section 8.01. Section 8.01 of Exhibit 1 hereto is hereby amended in its entirety to read as follows: 
 “SECTION 8.01. Consolidation, Merger or Sale by Shipowner. Nothing in this Indenture shall prevent any lawful consolidation or
merger of the Shipowner with or into any other Person, or any sale of the Vessel to any other Person lawfully entitled to acquire and operate the Vessel or any sale by the Shipowner of all or substantially all of its assets to any other Person;
provided that, except where the Shipowner shall be the Person surviving a merger or consolidation, the Person formed by or surviving such consolidation or merger, or to which the sale of the Vessel shall be made, shall, by Supplemental
Indenture, expressly assume the payment of the principal of and interest (and premium, if any) on the Outstanding Obligations relating to the Vessel in accordance with the terms of the Obligations and of the Indenture and shall expressly assume the
performance of the agreements of the Shipowner in the Indenture; provided further, that to the extent the Outstanding Obligations are not so assumed, the Shipowner shall prepay or redeem or cause to be prepaid or redeemed the Outstanding
Obligations, such prepayment or redemption to be in accordance with the terms of the Obligations and of the Indenture. When a Person so assumes this Indenture and the Outstanding Obligations, the Supplemental Indenture shall discharge and release
the Shipowner from any and all obligations thereunder relating to the Outstanding Obligations. In the event of such an assumption by a Person to whom the Vessel has been sold (a) such Person shall succeed to, and be substituted for, and may
exercise every right and power of the original Shipowner with the same effect as if such successor Shipowner had been named as the Shipowner herein and (b) the Outstanding Obligations shall be surrendered to the Indenture Trustee for
appropriate 

  

 - 13 - 

 
notation or for the issuance of new Obligations in exchange for the Outstanding Obligations in the name of the successor Shipowner, as required by the
Secretary.” 
 (t) Concerning Section 8.02. Section 8.02 of Exhibit 1 hereto is hereby amended in its entirety to read
as follows: 
 “SECTION 8.02. Sale of the Vessel by the Secretary. Nothing contained in this Indenture shall
prevent the sale of the Vessel to any other Person by the Secretary, by a court of law or by the Shipowner following, in connection with or in lieu of a foreclosure or similar action. Following any such sale (1) the Person to whom the Vessel
has been sold may by Supplemental Indenture expressly assume the payment of and interest (and premium, if any) on all of the Outstanding Obligations in accordance with the terms of the Obligations and the Indenture and shall expressly assume the
performance of the agreements of the Shipowner in the Indenture; and (2) in the event such Person does not so assume, the Secretary shall prepay or redeem all of the Outstanding Obligations without premium pursuant to Section 3.06 hereof;
provided that, the Secretary shall allow or permit the sale of the Vessel to the original Shipowner or to any affiliate of the original Shipowner only if (i) the Secretary has not prepaid or redeemed such Obligations prior to such sale,
and (ii) such purchaser assumes all of the Outstanding Obligations as contemplated by the preceding clause (1). When a Person so assumes this Indenture and all of the Outstanding Obligations, the Supplemental Indenture shall discharge and
release the Secretary from any and all obligations thereunder in the Secretary’s capacity as Shipowner relating to the Outstanding Obligations. In the event of such an assumption by a Person to whom the Vessel has been sold (a) such Person
shall succeed to, and be substituted for, and may exercise every right and power of the original Shipowner with the same effect as if such successor Shipowner had been named as the Shipowner herein and (b) the Outstanding Obligations shall be
surrendered to the Indenture Trustee for appropriate notation or for the issuance of new Obligations in exchange for the Outstanding Obligations in the name of the successor Shipowner, as required by the Secretary. Any such sale or the execution of
a Supplemental Indenture by any successor Shipowner shall not discharge or in any manner affect the obligation of the United States to pay the Guarantees pursuant to the terms thereof.” 
 (u) Concerning Notices. Subject to the provisions of Section 13.01 of Exhibit 1 to this Indenture, any notice, request, demand, direction,
consent, waiver, approval or other communication to be given to a party hereto or the 

  

 - 14 - 

 
Secretary, shall be deemed to have been sufficiently given or made when addressed to: 
  

	The Indenture Trustee as:	The Bank of New York 

	    	101 Barclay Street 

	    	Floor 21 West 

	    	New York, New York 10286 

	    	Attn: Corporate Trust Administration 

  

	The Shipowner as:	GREAT AQ STEAMBOAT CO. 

	    	Two N. Riverside Plaza 

	    	Suite 200 

	    	Chicago, Illinois 60606 

	    	Attn: President 

  

	                    with a copy to:	GREAT AQ STEAMBOAT CO. 

	    	30 Robin Street Wharf 

	    	New Orleans, Louisiana 70130-1890 

  

	The Secretary as:	SECRETARY OF TRANSPORTATION 

	    	c/o Maritime Administrator 

	    	Department of Transportation 

	    	400 Seventh Street, SW 

	    	Washington, D.C. 20590 

 (v) Concerning Applicable
Law. This Indenture and each Obligation shall be governed by the laws of the State of New York, and to the extent applicable, the laws of the United States. 
 (w) Execution of Counterparts. This Indenture may be executed in any number of counterparts. All such counterparts shall be deemed to be originals, and shall constitute but one and the same instrument.

  

 - 15 - 

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

									
		 		 	GREAT AQ STEAMBOAT CO.
	(SEAL)	 		 	Shipowner
				
	ATTEST:	 		 	 By:  
	 	/s/ Illegible
				
	/s/ Illegible	 		 		 	

  

									
		 		 	THE BANK OF NEW YORK
		 		 	Indenture Trustee
				
	(SEAL)	 		 	By:	 	/s/ Mary La Gumina
	ATTEST:	 		 		 	 MARY LA GUMINA
 ASSISTANT VICE PRESIDENT

				
	/s/ Paul J. Schmalzel	 		 		 	
	 PAUL J. SCHMALZEL
 Assistant Treasurer
	 		 	

  

 - 16 - 

	DISTRICT OF COLUMBIA	)     ss. 

 Be it known this 24th day
of August, 1995, personally appeared before me Steve Isaacson, who after being duly sworn, deposed and said that he is a Vice President of Great AQ Steamboat Co., the corporation which is described in and executed within the instrument hereto
annexed, and that he signed the instrument hereto annexed by order of the Board of Directors of the said corporation, and acknowledged the annexed instrument to be the free act and deed of the said corporation. 
 In testimony whereof, I have hereunto set my hand an seal this 24th day of August, 1995. 
  

	
	
	 /s/ Vicki L. Hux

	NOTARY PUBLIC
	Vicki L. Hux
	Notary Public District of Columbia
	My Commission Expires: 6-14-2000

 [SEAL] 
 (Notarial Stamp and Seal) 
  

 - 17 - 

	STATE OF NEW YORK	) 

	    	)     SS: 

	COUNTY OF NEW YORK	) 

 Be it known this 24th day of August, 1995, personally appeared before me Mary Lagumina, who after being duly sworn, deposed and said that he/she is a Asst. Vice President
of The Bank of New York, the Indenture Trustee which is described in and executed within the instrument hereto annexed, and that he/she signed the instrument hereto annexed by order of the Board of Directors of the said The Bank of New York, and
acknowledged the annexed instrument to be the free act and deed of the said Asst. Vice - President 
 In testimony whereof, I have hereunto
set my hand and seal this 24th day of August, 1995. 
  

	
	
	 /s/ William J. Cassels

	NOTARY PUBLIC
	 WILLIAM J. CASSELS

	 Notary Public, State of New York
 No. ____________________
 ___________________________________
 ___________________________________

Commission Expires May 16, 1996

 (Notarial Stamp and Seal) 
  

 - 18 - 

 Document 4 
 SCHEDULE OF DEFINITIONS 
 SCHEDULE A to 
 Trust Indenture 

 Schedule A to Trust Indenture 
 Dated as of August 24, 1995 
 “Act” means the Merchant Marine
Act, 1936, as amended, and in effect on the Closing Date. 
 “Act of Obligees” means any request, demand, authorization, direction,
notice, consent, waiver or other action to be given or taken by the Obligees and embodied in one or more documents of the type, and executed in the manner, required by the Indenture. 
 “Actual Cost” means the actual cost of the Vessel as determined and re-determined by the Secretary pursuant to Sections 1101(f) and 1104(b)(2)
of the Act. 
 “Actual Knowledge” means actual knowledge of a Responsible Officer of a Person. 
 “Affiliate” or “Affiliated” means any Person directly or indirectly controlling, controlled by, or under common control with, another
Person. 
 “Authorization Agreement” means the Authorization Agreement, Contract No. MA-13047, dated as of August 24, 1995,
between the Secretary and the Indenture Trustee, whereby the Secretary authorizes the Guarantee of the United States to be endorsed on each of the Obligations, as the same is originally executed, or as modified, amended or supplemented in accordance
with the applicable provisions thereof. 
 “Authorized Newspapers” means The Wall Street Journal (all editions) and The
Journal of Commerce. Whenever successive weekly publications in the Authorized Newspapers are required under any agreement or other document, such publications may be made (unless otherwise expressly provided under any agreement or other
document) on the same or different days of the week and in the same or in different Authorized Newspapers. If it is impossible or impractical to publish any notice required under any agreement or other document in the manner therein provided, then
such publication in lieu thereof as shall be made with the approval of the Secretary (in the case of notice under the Authorization Agreement), or approval of the Indenture Trustee (in the case of notice under the Indenture), shall constitute a
sufficient publication of such notice. 
 “Business Day” means a day which is not a Saturday, Sunday or a bank holiday under the
laws of the United States of America, the States of Illinois or New York, or London, England. 
 “Closing Date” means the date on
which the Secretary’s Note is executed. 

 “Corporate Trust Office” means the office of the Indenture Trustee at which, at any time, its
corporate trust business shall be principally administered, which office at the date of execution of the Indenture is located at 101 Barclay Street, Floor 21 West, New York, New York 10286. 
 “Delivery Date” means June 2, 1995 which is the date on which the Vessel was delivered to and accepted by the Shipowner. 
 “Depreciated Actual Cost” means the depreciated actual cost of the Vessel as determined and re-determined by the Secretary pursuant to Sections
1101(g) and 1104(b)(2) of the Act. 
 “Guarantee” means each, and “Guarantees” means every, guarantee of an Obligation by
the United States pursuant to Title XI of the Act, as provided in the Authorization Agreement. 
 “Holder” means each, and
“Holders” means every, registered holder of an Obligation. 
 “Indenture” means the Trust Indenture dated as of
August 24, 1995, between the Shipowner and the Indenture Trustee, as the same is originally executed, or as modified, amended or supplemented in accordance with the applicable provisions thereof. 
 “Indenture Default” has the meaning specified in Article VI of Exhibit 1 to the Indenture. 
 “Indenture Trustee” means The Bank of New York, a New York banking corporation, and any successor trustee permitted under the Indenture.

 “Interest Payment Date” means, with respect to any Obligation, the date when any installment of interest on such Obligation is
due and payable. 
 “Maturity”, when used with respect to any Obligation, means the date on which the principal of such Obligation
becomes due and payable as therein provided, whether at the Stated Maturity or by redemption or declaration of acceleration or otherwise. 
 “Obligation” means each, and “Obligations” means every, obligation of the Shipowner bearing a Guarantee and authenticated and delivered pursuant to the Indenture and the Authorization Agreement. 
 “Obligation Register” has the meaning specified in Section 2.10 of Exhibit 1 to the Indenture. 
 “Obligee” means each, and “Obligees” means every, Holder of an Obligation. 
  

 - 2 - 

 “Officer’s Certificate” means a certificate conforming to Section 1.02 of Exhibit 1
to the Indenture and signed by a Responsible Officer of the Person giving such certificate. 
 “Opinion of Counsel” means an
opinion of counsel conforming to Section 1.02 of Exhibit 1 to the Indenture. 
 “Outstanding”, when used with reference to the
Obligations, shall mean all Obligations theretofore issued under the Indenture, except: 
  

	 	(1)	Obligations Retired or Paid; and 

  

	 	(2)	Obligations in lieu of which other Obligations have been issued under the Indenture. 

 For the purposes of Articles VI and X of Exhibit 1 to the Indenture, and also in determining whether the Holders of a stated percentage of the principal amount of Outstanding Obligations have taken any Act of Obligees
required or permitted by the Indenture, Obligations owned by the Shipowner or by any Affiliate of the Shipowner (excluding (a) Obligations held by an Affiliate of the Shipowner when such Affiliate is acting in a fiduciary capacity if it is
established to the satisfaction of the Indenture Trustee that neither the Shipowner nor another Affiliate has a beneficial interest therein and (b) Obligations pledged in good faith by the Shipowner or by any Affiliate of the Shipowner, if the
pledgee (i) is not an Affiliate of the pledgor and (ii) establishes to the satisfaction of the Indenture Trustee that it has the right to vote such Obligations) shall be disregarded and deemed not to be Outstanding; provided that,
for the purpose of determining whether the Indenture Trustee shall be protected in relying on any such Act of Obligees, only Obligations which the Indenture Trustee has actual knowledge are so owned shall be so disregarded and deemed not to be
Outstanding. Obligations which are not Outstanding shall not be entitled to any rights or benefits provided in the Indenture. 
 “Paying
Agent” means any bank or trust company having the qualifications set forth in clauses (1), (3), (4) and (5) of Section 7.02 (a) of Exhibit 1 to the Indenture, which shall be appointed by the Shipowner in accordance with
Section 4.02 of Exhibit 1 to the Indenture to pay the principal of (and premium, if any) or interest on the Obligations on behalf of the Shipowner. 
 “Payment Default” has the meaning specified in Section 6.01(a) of Exhibit 1 to the Indenture. 
 “Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, 

  

 - 3 - 

 
unincorporated organization, government or any agency or political subdivision thereof. 
 “Place of Payment” means the place at which an Obligation is to be redeemed, repaid or prepaid pursuant to Article III of Exhibit 1 to the
Indenture. 
 “Principal Office,” when used with respect to the Shipowner, means the office of the Shipowner at which, at any
particular time, its corporate business is principally administered. 
 “Purchase Agreement” means that certain agreement for the
purchase of the Obligations to be executed by the Shipowner and the purchasers named therein, as originally executed or as modified or supplemented in accordance with the applicable provisions thereof. 
 “Redemption Date” means, with respect to any Obligation, a date fixed for the redemption, repayment or prepayment of such Obligation by or
pursuant to Article Third of the Special Provisions of the Indenture or Article III of Exhibit 1 to the Indenture. 
 “Redemption
Price” means, with respect to any Obligation, the price at which an Obligation is to be repaid, prepaid or redeemed pursuant to Article Third of the Special Provisions of the Indenture or Article III of Exhibit 1 to the Indenture. 

“Request” means a written request to a Person for the action therein specified, signed by a Responsible Officer or the Person making such
request. 
 “Responsible Officer” means (i) in the case of any business corporation, the chairman of the board of directors,
the president or any vice-president, the secretary or any assistant secretary, or the treasurer or any assistant treasurer, (ii) in the case of any commercial bank, the chairman or vice-chairman of the executive committee of the board of
directors or trustees, the president, any vice president, the secretary, the treasurer, any trust officer, any executive or senior or second or assistant vice president, or any officer or assistant officer customarily performing functions similar to
those performed by the persons who at the time shall be such officers or to whom any corporate trust matter is referred because of his/her knowledge of and familiarity with the particular subject, and (iii) with respect to the signing or
authentication of Obligations and Guarantees by the Indenture Trustee, any person specifically authorized by the Indenture Trustee to sign or authenticate Obligations. 
 “Retired or Paid,” as applied to Obligations and the indebtedness evidenced thereby, means that such Obligations shall 

  

 - 4 - 

 
be deemed to have been retired or paid and shall no longer be entitled to any rights or benefits provided in the Indenture if: 
  

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

  

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

  

	 	(3)	such Obligations shall have become due and payable at Maturity and funds sufficient for the payment of such Obligations (including interest to the date of Maturity, or in the case
of a payment after Maturity, to the date of payment, together with any premium thereon) and available for such payment (whether as a result of payment pursuant to the Guarantees or otherwise) shall be held by the Indenture Trustee or any Paying
Agent pursuant to Section 4.02 of Exhibit 1 to the Indenture (or shall have been so held and shall thereafter have been paid to the Shipowner pursuant to Section 4.03 of Exhibit 1 to the Indenture) in trust for the purpose or with
irrevocable directions, to apply the same; 

 provided that, the foregoing definition is subject to the provisions of Section 6.08
of Exhibit 1 to the Indenture. 
 “Secretary” means the Secretary of Transportation or any official or official body from time to
time duly authorized to perform the duties and functions of the Secretary of Transportation under Title XI of the Act (including the Maritime Administrator, the Acting Maritime Administrator, and to the extent so authorized, the Deputy Maritime
Administrator and other officials of the Maritime Administration). 
 “Secretary’s Note” means the promissory note of the
Shipowner in favor of the Secretary executed and delivered on the date of the Indenture. 
 “Secretary’s Notice” means a
notice from the Secretary to the Indenture Trustee to the effect that (a) a default, within the meaning of Section 1105(b) of the Act, has occurred under a mortgage, loan agreement, or other security agreement that has been entered into
between the Secretary, the Shipowner and any other parties in order to protect the interests of the United States in connection with the Guarantees, (b) such notice is given for the purposes of Section 6.01(b) of Exhibit 1 to the Indenture
in order to protect the security interests of the United States of America under such mortgage, loan agreement or other security agreement, and (c) the Guarantees will terminate upon the expiration of 60 days from the date of such notice if

  

 - 5 - 

 
the Indenture Trustee and each Obligee shall have failed to demand payment of the Guarantees as provided in the Indenture, the Guarantees or the Act. Such
notice shall be given (i) in writing, by registered mail, return receipt requested, deposited in the United States mails on the date of such notice and addressed to a Responsible Officer in the Corporate Trust Office of the Indenture Trustee in
accordance with the Special Provisions of the Indenture, (ii) by collect telegram or telex, telecopy or similar means of transmission dispatched on such date and addressed to the Responsible Officer in the Corporate Trust Office of the
Indenture Trustee, as aforesaid, and (iii) by collect telephone call made on such date to a Responsible Officer in the Corporate Trust Office of the Indenture Trustee. A Secretary’s Notice shall not be deemed to have been given unless it
shall have been given in accordance with all the provisions of this definition, and the date of any Secretary’s Notice shall be deemed to be the date on which it is so given. 
 “Secretary’s Supplemental Indenture” means a Supplemental Indenture evidencing the succession, pursuant to Section 6.09 of Exhibit 1
to the Indenture, of the Secretary to the Shipowner, and the assumption by the Secretary of the obligations of the Shipowner under the Indenture. 
 “Section 1104” means Section 1104A of the Act, and when used with reference to subsections of Section 1104, means subsections of Section 1104A. 
 “Shipowner” means Great AQ Steamboat Co., a Delaware corporation, and subject to the provisions of Sections 6.09, 8.01 and 8.02 of Exhibit 1 to
the Indenture, shall also include its successors and assigns. 
 “Stated Maturity,” when used with respect to any Obligation, means
the date determinable as set forth in such Obligation as the final date on which the principal of such Obligation is due and payable. 
 “Supplemental Indenture” shall mean any indenture supplement to the Indenture entered into pursuant to Article X thereof. 
 “Title XI” means Title XI of the Act. 
 “2005 Notes” shall mean the notes designated as the variable rate notes
in Article Second (a)(1) of the Special Provisions of the Indenture. 
 “2020 Bonds” shall mean the bonds designated as sinking
fund bonds in Article Second (a)(2) of the Special Provisions of the Indenture. 
 “United States” means the United States of
America. 
 “Vessel” means the paddlewheel steamboat named AMERICAN QUEEN, Official Number 1030765. 
  

 - 6 - 

 Document ___ 
 GENERAL PROVISIONS INCORPORATED INTO 
 THE TRUST INDENTURE BY REFERENCE 
 Exhibit 1 
 to 
 Trust Indenture 

 EXHIBIT I 
 GENERAL PROVISIONS OF THE INDENTURE 
 INCORPORATED BY REFERENCE 
 TABLE OF CONTENTS 
 TO 
 EXHIBIT 1* 
  
  

							
	  	 	  	  	 	  	Page
	ARTICLE I.	 	DEFINITIONS; OFFICER’S CERTIFICATE AND OPINIONS OF COUNSEL	  	1
		 	SECTION 1.01.	  	 Definitions
	  	1
		 	SECTION 1.02.	  	 Officer’s Certificate and Opinions of Counsel
	  	1
			
	ARTICLE II.	 	THE OBLIGATIONS	  	2
		 	SECTION 2.01.	  	 Designation of Obligations
	  	2
		 	SECTION 2.02.	  	 Issue, Form, Principal Amount, Maturity, Interest, Place of Payment, Denominations, and Redemption of Obligations
	  	2
		 	SECTION 2.03.	  	 Issuance of Obligations of Initial Series
	  	3
		 	SECTION 2.04.	  	 Additional Obligations; Obligations of Additional Series
	  	3
		 	SECTION 2.05.	  	 Legends on Obligations
	  	3
		 	SECTION 2.06.	  	 Dates of Obligations; Interest Rights
	  	3
		 	SECTION 2.07.	  	 Execution of Obligations
	  	3
		 	SECTION 2.08.	  	 Authentication of Obligations and Guarantees
	  	4
		 	SECTION 2.09.	  	 Temporary Obligations
	  	4
		 	SECTION 2.10.	  	 Registration, Transfer and Exchange
	  	4
		 	SECTION 2.11.	  	 Who Treated as Owners
	  	5
		 	SECTION 2.12.	  	 Lost, Stolen, Destroyed or Mutilated Obligations
	  	5
		 	SECTION 2.13.	  	 Reacquired Obligations, Cancellation and Disposition of Obligations
	  	6
			
	ARTICLE III.	 	REDEMPTION OF OBLIGATIONS	  	6
		 	SECTION 3.01.	  	 Redemptions Suspended During Default
	  	6
		 	SECTION 3.02.	  	 Redemptions
	  	6
		 		  	 (a) Redemptions with Premium
	  	6
		 		  	 (b) Redemptions without Premium
	  	6
		 		  	 (c) Sinking Fund Redemptions
	  	7
		 		  	 (d) Adjustment of Redemption Payments
	  	7
		 	SECTION 3.03.	  	 Terminal Mandatory Redemption
	  	7
		 	SECTION 3.04.	  	 Redemptions to Comply with Provisions of SECTION 1104(b)(2) of the Act
	  	7
		 	SECTION 3.05.	  	 Redemption After Total Loss, Requisition of Title, Seizure or Forfeiture of Vessel or Termination of Certain Contracts
	  	7
		 	SECTION 3.06.	  	 Redemption After Assumption by the Secretary
	  	8
		 	SECTION 3.07.	  	 Determination of Obligations to be Redeemed
	  	8
		 	SECTION 3.08.	  	 Notices of Redemption
	  	8
		 	SECTION 3.09.	  	 Deposit of Redemption Moneys
	  	9
		 	SECTION 3.10.	  	 Payment of Redemption Price
	  	9
			
	ARTICLE IV.	 	CASH HELD BY INDENTURE TRUSTEE OR PAYING AGENTS	  	9
		 	SECTION 4.01.	  	 Generally
	  	9

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

							
		 	SECTION 4.02.	  	 Paying Agents Other Than Indenture Trustee
	  	9
		 	SECTION 4.03.	  	 Unclaimed Amounts
	  	10
		 	SECTION 4.04.	  	 Application of Funds
	  	10
			
	ARTICLE V.	 	 REPRESENTATIONS AND AGREEMENTS OF SHIPOWNER
	  	11
		 	SECTION 5.01.	  	 Authorization, Execution and Delivery of Indenture
	  	11
		 	SECTION 5.02.	  	 Payment and Procedure for Payment of Obligations
	  	11
		 	SECTION 5.03.	  	 Offices or Agencies of Shipowner
	  	11
			
	ARTICLE VI.	 	 INDENTURE DEFAULTS AND REMEDIES
	  	11
		 	SECTION 6.01.	  	 What Constitutes “Indenture Defaults”
	  	11
		 	SECTION 6.02.	  	 Demand for Payment of Guarantees
	  	12
		 	SECTION 6.03.	  	 Appointment of Indenture Trustee and Holders of Outstanding Obligations as Attorneys-in-Fact
	  	12
		 	SECTION 6.04.	  	 Termination and Payment of the Guarantees
	  	12
		 	SECTION 6.05.	  	 Rights of Indenture Trustee After Indenture Default
	  	14
		 	SECTION 6.06.	  	 (a)  Obligees’ Right to Direct Indenture Trustee After Indenture Default
	  	14
		 		  	 (b)  Limitations on Obligees Right to Sue
	  	14
		 		  	 (c)  Unconditional Right of Obligees to Sue for Principal (and Premium, if any) and Interest
	  	15
		 	SECTION 6.07.	  	 Undertaking for Costs
	  	15
		 	SECTION 6.08.	  	 Recision of Payments
	  	15
		 	SECTION 6.09.	  	 Assumption of Obligations of Secretary
	  	16
			
	ARTICLE VII.	 	 THE INDENTURE TRUSTEE
	  	16
		 	SECTION 7.01.	  	 Acceptance of Trusts
	  	16
		 	SECTION 7.02.	  	 Eligibility of Indenture Trustee
	  	16
		 	SECTION 7.03.	  	 Rights and Duties of Indenture Trustee
	  	17
		 	SECTION 7.04.	  	 Compensation, Expenses and Indemnification of Indenture Trustee
	  	19
		 	SECTION 7.05.	  	 Resignation and Removal of Indenture Trustee
	  	19
		 	SECTION 7.06.	  	 Appointment of Successor Indenture Trustee
	  	20
		 	SECTION 7.07.	  	 Effect of Appointment of Successor Indenture Trustee
	  	20
		 	SECTION 7.08.	  	 Merger, Consolidation and Sale of Indenture Trustee
	  	20
			
	ARTICLE VIII.	 	 CONSOLIDATION, MERGER AND SALE BY SHIPOWNER
	  	21
		 	SECTION 8.01.	  	 Consolidation, Merger or Sale by Shipowner
	  	21
		 	SECTION 8.02.	  	 Sale of Vessel by the Secretary
	  	21
			
	ARTICLE IX.	 	 ACTS OF OBLIGEES
	  	22
		 	SECTION 9.01.	  	 Acts of Obligees
	  	22
			
	ARTICLE X.	 	 SUPPLEMENTAL INDENTURES
	  	23
		 	SECTION 10.01.	  	 Permissible Without Action by Obligees
	  	23
		 	SECTION 10.02.	  	 Protection of Indenture Trustee
	  	23
		 	SECTION 10.03.	  	 Reference in Obligations to Supplemental Indentures
	  	23
		 	SECTION 10.04.	  	 Waivers and Supplemental Indentures with Consent of Obligees
	  	23
		 	SECTION 10.05.	  	 Consent of Secretary
	  	24
		 	SECTION 10.06.	  	 Continued Validity of the Guarantees
	  	24

  

 ii 

							
			
	ARTICLE XI.	 	 PERFORMANCE OF OBLIGATIONS TO SECRETARY
	  	24
		 	SECTION 11.01.	  	 Performance of Obligations to Secretary
	  	24
			
	ARTICLE XII.	 	 SATISFACTION AND DISCHARGE OF INDENTURE
	  	25
		 	SECTION 12.01.	  	 Satisfaction and Discharge of Indenture
	  	25
			
	ARTICLE XIII.	 	 MISCELLANEOUS
	  	25
		 	SECTION 13.01.	  	 Notices and Demands
	  	25
		 	SECTION 13.02.	  	 Waivers of Notice
	  	25
		 	SECTION 13.03.	  	 Benefit of Indenture
	  	25
		 	SECTION 13.04.	  	 Execution of Counterparts
	  	25
		 	SECTION 13.05.	  	 Table of Contents; Titles and Headings
	  	25
		 	SECTION 13.06.	  	 Integration with Special Provisions of the Indenture
	  	26
		 	SECTION 13.07.	  	 Immunity of Incorporators, Stockholders, Officers and Directors
	  	26
		 	SECTION 13.08.	  	 Applicable Law
	  	26

  

 iii 

 EXHIBIT I 
 GENERAL PROVISIONS OF THE INDENTURE 
 INCORPORATED BY REFERENCE 
 ARTICLE I 
 DEFINITIONS; OFFICER’S
CERTIFICATES 
 AND OPINIONS OF COUNSEL 
 SECTION 1.01. Definitions. For all purposes of this Indenture, the terms used herein shall have the meanings specified in the Special Provisions hereof, including without limitation Schedule A to this Indenture. 
 SECTION 1.02. Officer’s Certificates and Opinions of Counsel. (a) Each Officer’s Certificate or Opinion of Counsel with respect to
compliance with a covenant or condition provided for herein (or waiver thereof) shall include: 
 (1) A statement that the
Person or Persons making such certificate or rendering such opinion has or have read such covenant or condition; 
 (2) A
brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; 
 (3) A statement that, in the opinion of such Person or Persons, he or they have made or caused to be made such examination or
investigation as is necessary to enable him or them to express an informed opinion as to whether or not such covenant or condition has been complied with (or compliance therewith has been waived); and 
 (4) A statement as to whether or not, in the opinion of such Person or Persons, such condition or covenant has been complied with (or such
compliance has been waived). 
 (b) An Opinion of Counsel may be based (insofar as it relates to factual matters, information with respect to
which is in the possession of any Person) upon a certificate or opinion of or representations in writing signed by an officer or officers of such Person or by such Person, as the case may be, and may be based upon an Opinion of Counsel signed by
another counsel. 
 An Opinion of Counsel may state that said opinion is subject to the execution and delivery of designated instruments if
copies of such instruments in form approved by such counsel are delivered to the Indenture Trustee prior to or concurrently with the delivery of said opinion. 
 (c) A certificate or opinion of a Person or Persons other than counsel may be based, insofar as it relates to legal matters, upon an Opinion of Counsel, unless the Person or Persons signing such certificate or opinion
knew that such Opinion of Counsel was erroneous or, in the exercise of reasonable care, should have known that the same was erroneous. 
 (d)
If the Indenture requires or permits the execution of any document by officers, counsel or other Persons, such document may be executed in counterparts by different officers, counsel or other Persons, all of which shall form one instrument.

 (e) If the signer of any document is required to be approved by the Indenture Trustee, the acceptance of such document by the Indenture
Trustee shall be sufficient and conclusive evidence of such approval. 
 (f) The fact that the delivery of any document is a condition
precedent to any action required or permitted hereby shall not preclude the withdrawal revocation, rescission, modification or amendment of such document at any time 

 
prior to such action, and, in the event of any such withdrawal, revocation or rescission, such document shall be disregarded for all purposes of this
Indenture. 
 ARTICLE II 
 THE
OBLIGATIONS 
 SECTION 2.01. Designation of Obligations. The Obligations of each series shall be designated as stated in the Special
Provisions hereof or in the Supplemental Indenture establishing such series. 
 SECTION 2.02. Issue, Form, Principal Amount, Maturity,
Interest, Place of Payment, Denominations and Redemption of Obligations. (a) Upon or after the execution and delivery of this Indenture the aggregate principal amount of Obligations of the series and Stated Maturity or Maturities permitted
by the Special Provisions hereof may be executed by the Shipowner, authenticated by the Indenture Trustee, and delivered as provided herein. 
 (b) The Obligations of each series and Stated Maturity to be issued hereunder, the Guarantees of the United States to be endorsed thereon and the Indenture Trustee’s authentication certificates to be endorsed thereon shall, in the case
of the initial series of Obligations, be in the form or forms set forth in Exhibit 2 to the Special Provisions hereof or, in the case of Obligations of any additional series, in the form or forms set forth in the Supplemental Indenture establishing
such series, and said Obligations shall: 
 (1) be limited to the respective principal amounts stated in the Special
Provisions hereof or in the Supplemental Indenture establishing such series; 
 (2) bear interest from the date specified in
Section 2.06 at the rate or rates per annum stated in such Obligations; 
 (3) Mature in the amount or amounts and at the
time or time stated therein; 
 (4) be payable as to principal (and any premium thereon if premium in case of redemption prior
to Stated Maturity is provided for therein), in any coin or currency of the United States which at the time of payment is legal tender for public and private debts, at an office or agency maintained from time to time by the Shipowner for such
purpose as provided in Section 5.03 at the place or places stated in the Special Provisions hereof and payable as to interest as aforesaid or, at the option of the Shipowner, by check mailed by such office or agency to the addresses of the
Obligees as such addresses shall appear in the Obligation Register; 
 (5) be issued in the denominations provided in the
Special Provisions hereof or in the Supplemental Indenture establishing such series; and 
 (6) be subject to redemption to
the extent and as provided in Article III. 
 (c) If the Maturity of any Obligation or an Interest Payment Date for any Obligation shall be a
day other than a Business Day, then such payment may be made on the next succeeding Business Day, with the same force and effect as if made on the nominal date for such payment, and no interest shall accrue thereon for the period after said nominal
date (whether or not such next succeeding Business Day occurs in a succeeding month). 
  

 2 

 SECTION 2.03. Issuance of Obligations of Initial Series. At any time and from time to time after
the execution and delivery of this Indenture, the Shipowner may deliver to the Indenture Trustee Obligations of the initial series issuable under this Indenture duly executed by the Shipowner as hereinafter provided, accompanied by a Request of the
Shipowner, and thereupon the Indenture Trustee shall authenticate such Obligations, after endorsing thereon and authenticating the Guarantees of the United States in accordance with the Authorization Agreement, and shall deliver such Obligations and
Guarantees in accordance with such Request. Each such Request shall specify the principal amounts, interest rates and Stated Maturities of the Obligations to be authenticated and the names and addresses of the Persons in whose name the Obligations
are to be registered. 
 SECTION 2.04. Additional Obligations; Obligations of Additional Series. At any time or from time to time, the
Shipowner may, with the approval of the Secretary, issue additional Obligations of any series and Stated Maturity theretofore issued or of one or more additional series, which shall (i) be in such principal amount, and (in the case of
Obligations of any additional series) mature on such dates, bear interest at such rate or rates, be in such form or forms and have such other terms and provisions, as shall be set forth in a Supplemental Indenture providing for the issue thereof and
(ii) be guaranteed by the United States under Title XI of the Act pursuant to a supplement to the Authorization Agreement. 
 SECTION
2.05. Legends on Obligations. Any Obligation may have imprinted or stamped thereon any legend, consistent herewith, which is prescribed by the Shipowner and approved by the Indenture Trustee, and, except for endorsements permitted by the
second paragraph of Section 2.10(c), by the Secretary. 
 SECTION 2.06. Dates of Obligations; Interest Rights. Each Obligation of
any series shall be dated the date of its authentication and except as otherwise provided in this Section, shall bear interest from the Interest Payment Date for Obligations of such series next preceding the date of such Obligation to which interest
on the Obligations of such series has been paid, unless (i) the date of such Obligation is the date to which interest on the Obligations of such series has been paid, in which case from the date of such Obligation, or (ii) no interest has
been paid on the Obligations of such series since the original issue date (as defined below) of such Obligation, in which case from such original issue date. The term “original issue date” of an Obligation shall mean (a) in the case
of an Obligation issued on original issue, the date of such Obligation, or (b) in the case of an Obligation not issued on original issue, the date of the Obligation (or portion thereof) issued on original issue for which such Obligation was
issued (directly or indirectly) on registration of transfer, exchange or substitution. 
 SECTION 2.07. Execution of Obligations. The
Obligations shall from time to time be executed on behalf of the Shipowner by a Responsible Officer thereof (whose signature may be a facsimile), and its corporate seal (which may be a facsimile) shall be affixed thereto or imprinted thereon and
attested by its secretary, an assistant secretary or an assistant trust officer (whose signature may be a facsimile). 
 If any officer of
the Shipowner whose signature (facsimile or otherwise) appears on any Obligation shall cease to be such officer before such Obligation shall have been authenticated by the Indenture Trustee or delivered, such Obligation nevertheless may be
authenticated, issued and delivered with the same force and effect as though the person or persons whose signature or signatures (facsimile or otherwise) appear on such Obligation had not ceased to be such officer or officers of the Shipowner.

  

 3 

 SECTION 2.08. Authentication of Obligations and Guarantees. No Obligation or the Guarantee of the
United States thereon shall be valid unless such Obligation shall bear thereon an authentication certificate, manually executed by the Indenture Trustee in accordance with the terms and conditions of the Authorization Agreement, substantially in the
form or forms referred to in Section 2.02(b). Such authentication certificate, so executed, on any Obligation shall be conclusive evidence, and the only competent evidence, that such Obligation and such Guarantee have been duly executed,
authenticated and delivered hereunder. 
 SECTION 2.09. Temporary Obligations. There may be issued from time to time in lieu of (or in
exchange for) any definitive Obligation or Obligations one or more temporary Obligations of like series and Stated Maturity, with a Guarantee of the United States endorsed thereon and authenticated by the Indenture Trustee, substantially of the same
tenor as the definitive Obligations in lieu of (or in exchange for) which they are issued, with or without the specification of any Redemption Price or Prices. Such temporary Obligation or Obligations may be in such authorized denomination or
denominations as shall be stated in a Request of the Shipowner delivered to the Indenture Trustee prior to the authentication thereof, which Request shall specify the aggregate principal amounts and the series and Stated Maturities of such temporary
Obligations. 
 If definitive Obligations are not ready for delivery, the Holder of any temporary Obligation may, at the Corporate Trust
Office, with the consent of the Shipowner, exchange the same for a temporary Obligation or Obligations of like series, tenor, interest accrual date and Stated Maturity of authorized denominations for the same aggregate principal amount upon the
surrender for cancellation of such temporary Obligation or Obligations. 
 When definitive Obligations are ready for delivery, the Holder of
any temporary Obligation may, at the Corporate Trust Office, exchange the same without charge for a definitive Obligation or Obligations of like series, tenor, interest accrual date and Stated Maturity of authorized denominations for the same
aggregate principal amount. 
 SECTION 2.10. Registration, Transfer and Exchange. (a) The Shipowner shall cause the Indenture
Trustee to keep an Obligation Register for the registration of ownership, transfers and exchanges of Obligations, at the Corporate Trust Office. 
 (b) Any Obligation may be transferred at the Corporate Trust Office, by surrender of such Obligation for cancellation, accompanied by an instrument of transfer in form satisfactory to the Shipowner and the Indenture Trustee, duly executed
by the registered Obligee or his duly authorized attorney, and thereupon the Shipowner shall execute, and the Indenture Trustee shall authenticate and deliver in the name of the transferee or transferees, a new Obligation or Obligations, and the
Guarantee or Guarantees of the United States thereon, in authorized denominations of like series, tenor, interest accrual date and Stated Maturity and for the same aggregate principal amount. 
 (c) The Shipowner shall not be required to register transfers or make exchanges of (1) Obligations for a period of 15 days immediately prior to
(A) an Interest Payment Date or (B) any selection of Obligations to be redeemed, (2) Obligations after demand for payment of the Guarantees and prior to the payment thereof or rescission of such demand pursuant to Section 6.02(a), or
(3) any Obligation which has been selected for redemption in whole or in part. 
 If any Obligation surrendered for transfer or exchange has
been selected for redemption in whole or in part, there may be endorsed on any Obligation or Obligations issued therefor an appropriate notation of such fact. 
  

 4 

 (d) Any Obligation shall be exchangeable for a like principal amount of Obligations of the same series,
tenor, interest accrual date and Stated Maturity but of different authorized denominations. Obligations to be exchanged shall be surrendered at the Corporate Trust Office, and the Shipowner shall execute, and the Indenture Trustee shall authenticate
and deliver in exchange therefor, the Obligation or Obligations, and the Guarantee or Guarantees of the United States thereon, requested by the Obligee in accordance with this paragraph (d) . 
 (e) As a condition precedent to any transfer or exchange of Obligations, the Shipowner may (except upon an exchange of temporary for definitive
Obligations) require the payment of a sum sufficient to reimburse it for any taxes or other governmental charges that may be imposed with respect thereto and a sum not exceeding $2.00 for each Obligation delivered upon any such transfer or exchange.

 SECTION 2.11. Who Treated as Owners. The Shipowner, the Indenture Trustee, the Secretary, and any office or agency for the payment
of principal of (and premium, if any) or interest on the Obligations may deem and treat the Person in whose name any Obligation is registered in the Obligation Register as the absolute owner of such Obligation for all purposes, and neither the
Shipowner, the Indenture Trustee, the Secretary, nor any such office or agency shall be affected by any notice to the contrary, whether such Obligation shall be past due or not. All payments of or on account of principal (and premium, if any) or
interest, or pursuant to the Guarantee endorsed on such Obligation, to such registered Obligee shall be valid and effectual to satisfy and discharge the liability of the Shipowner and the Secretary to the extent of the sum or sums so paid, except as
otherwise provided in Section 6.08. 
 SECTION 2.12. Lost, Stolen, Destroyed or Mutilated Obligations. Upon receipt by the
Shipowner and the Indenture Trustee of evidence satisfactory to them of the laws, theft, destruction or mutilation of any Outstanding Obligation and the ownership thereof, the Shipowner may execute, and upon request of the Shipowner, the Indenture
Trustee shall, but subject to all limitations imposed by the Authorization Agreement and only to the extent authorized thereby, authenticate and deliver, a new Obligation, and the Guarantee of the United States thereon, of like series, tenor,
interest accrual date, principal amount and Stated Maturity (which may bear such notation as may be required by the Indenture Trustee or by usage or by the rules of any stock exchange upon which the Obligations are then listed and which shall bear a
serial number different from the serial number of the lost, stolen, destroyed or mutilated Obligation) in lieu of such lost, stolen, destroyed or mutilated Obligation and, similarly, upon receipt by the Shipowner and the Indenture Trustee of
evidence satisfactory to them of the loss, theft, destruction or mutilation of any Obligation which has or is about to become due and payable, the Indenture Trustee may deem the applicant with respect thereto to be the owner of said Obligation for
the purpose of receiving payment on account thereof of principal (and premium, if any) upon maturity or interest or the payment of the Guarantee thereof; provided that, as conditions precedent to the execution, authentication and delivery of
any new Obligation in place of said Obligation or to any payment contemplated by this Section, (1) the Shipowner, the Indenture Trustee and the Secretary shall receive indemnity satisfactory to the Shipowner, the Indenture Trustee and the
Secretary, (2) the Shipowner shall be reimbursed for all reasonable expenses (including any fees or expenses of the Indenture Trustee) incident thereto, and (3) said Obligation shall (unless the same shall have been lost, stolen or
destroyed) be surrendered. 
 Obligations issued pursuant to this Section and the Guarantees endorsed thereon shall constitute original
contractual obligations of the Shipowner and the United States, respectively, whether or not the lost, stolen or destroyed Obligations be at any time enforceable by anyone, and shall be equally and 

  

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proportionately entitled to the benefits of this Indenture with all other Outstanding Obligations issued hereunder. 
 The provisions of this Section 2.12 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the
replacement or payment of lost, stolen, destroyed or mutilated Obligations. 
 SECTION 2.13. Reacquired Obligations; Cancellation and
Disposition of Obligations. In the event the Shipowner shall reacquire any Obligations (whether by purchase or otherwise), such Obligations shall forthwith be delivered to the Indenture Trustee for cancellation. Except as provided in
Section 3.09(b), all Obligations surrendered for the purpose of payment, redemption, transfer, exchange, or substitution, or (if permitted in the Special Provisions hereof or the Supplemental Indenture establishing any additional series of
Obligations) in discharge in whole or in part of any sinking fund payment shall, if surrendered to the Shipowner or any Paying Agent, be delivered to the Indenture Trustee for cancellation, or, if surrendered to the Indenture Trustee, shall be
cancelled by it. No Obligation shall be authenticated in lieu of or in exchange for any Obligation cancelled as provided in this Section, except as may be expressly permitted by this Indenture. Obligations cancelled by the Indenture Trustee shall be
delivered or disposed of as directed by a Request of the Shipowner. 
 ARTICLE III 
 REDEMPTION OF OBLIGATIONS 
 SECTION 3.01. Redemptions Suspended During Default.
Notwithstanding the following provisions of this Article III, neither the Shipowner nor the Indenture Trustee shall redeem any Obligations, except pursuant to Section 3.04 or 3.06 during the continuance of any Indenture Default or event which
with the lapse of time could constitute a Payment Default, except that, where the mailing of notice of redemption of any Obligations shall have theretofore been made, the Indenture Trustee shall redeem or cause to be redeemed such Obligations if it
shall have received a sum sufficient for such redemption. Except as aforesaid, any moneys received by the Indenture Trustee for the redemption of Obligations which may not be applied to the redemption thereof shall be held as security for the
payment of all the Obligations, and, (i) in case such Indenture Default or such event shall no longer be continuing, such moneys shall thereafter be applied to the redemption of Obligations in accordance with the applicable provisions of the
Obligations and of this Article III, (ii) in the event the Secretary shall have assumed the Obligations pursuant to Section 6.09 or shall have been required to pay the Guarantees, such moneys shall be paid over by the Indenture Trustee to the
Secretary or (iii) if no Obligation shall be Outstanding, other than by payment of the Guarantees, such moneys shall be paid to the Shipowner. 
 SECTION 3.02. Redemptions. (a) Redemptions With Premium. If the Obligations of any series and Stated Maturity or the Special Provisions hereof or the Supplemental Indenture establishing such series shall so provide, such
Obligations shall be subject to redemption at a premium in the amounts, at the price or prices, at the time or times and subject to the conditions specified therein. 
 (b) Redemptions Without Premium. The Obligations of each series shall be subject to redemption without premium in the amounts, at the time or times and subject to the conditions specified in Sections 3.03,
3.04, 3.05 and 3.06. If the Obligations of any series and Stated Maturity or the Special Provisions hereof or the Supplemental Indenture establishing such series shall so provide, such Obligations shall also be subject to redemption without premium
in the amounts, at the time or times and subject to the conditions specified therein or as provided in subsection (c) of this Section 3.02. 
  

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 (c) Sinking Fund Redemptions. If the Obligations of any series and Stated Maturity or the Special
Provisions hereof or the Supplemental Indenture establishing such series shall so provide, such Obligations shall be subject to (i) mandatory redemption through the operation of a sinking fund or similar fund, in such amounts, at such times and
subject to such credits (if any) as may be specified therein, and (ii) redemption at the option of the Shipowner, in connection with the operation of any such fund, in such additional amounts and subject to such conditions as may be specified
therein. 
 (d) Adjustments of Redemption Payments. If the Obligations of any series and Stated Maturity or the Special Provisions
hereof or of the Supplemental Indenture establishing such series provide for an adjustment in mandatory redemption payments as a result of any redemption or cancellation of Obligations, the Shipowner shall recompute the remaining mandatory
redemption payments pursuant to such provisions and shall, at least 60 days prior to the next Interest Payment Date which occurs at least 60 days following any such redemption or cancellation of Obligations of such series requiring such
recomputation, submit to the Secretary for his review of such recomputation to ascertain compliance with the provisions of such Obligations or the Special Provisions hereof or such Supplemental Indenture, a table of revised mandatory redemption
payments on the Obligations of such series reflecting the adjustments made pursuant to such provisions as a result of such redemption or cancellation. Upon advice by the Secretary that he finds such recomputation to comply with such provisions, the
Shipowner shall submit said table to the Indenture Trustee and the Indenture Trustee shall promptly submit a copy thereof to each Holder of an Obligation of such series. 
 SECTION 3.03. Terminal Mandatory Redemption. The Shipowner shall redeem, at the principal amount thereof and interest accrued thereon, all the Obligations that shall be Outstanding on the date determined in
accordance with Section 1104(b)(3) of the Act and specified in the Special Provisions hereof so that the final maturity of such Obligations shall not exceed the period specified in said Section. 
 SECTION 3.04. Redemptions to Comply with Provisions of Section 1104(b)(2) of the Act. Upon receipt by the Indenture Trustee of a written
instruction signed by the Secretary and a Responsible Officer of the Shipowner stating that upon receipt of funds paid to the Indenture Trustee by the Shipowner or the Secretary on behalf of the Shipowner such funds (i) shall be applied in the
manner specified in such instruction to redeem the principal amount of Obligations specified in such instruction and (ii) are to be so applied in order that the principal amount of Obligations that will be Outstanding after such redemption will
not exceed the principal amount thereof eligible for guarantee by the United States under Section 1104(b)(2) of the Act, the Indenture Trustee shall promptly give notice as provided in Section 3.08 of the redemption of such Obligations on
a date which is 45 days from the date of receipt by the Indenture Trustee of such instruction; and the Indenture Trustee shall, on such date, redeem such Obligations at the principal amount thereof and interest accrued thereon to such date. The
Shipowner agrees to notify the Indenture Trustee of the redemption at least 10 days prior to receipt by the Indenture Trustee of such written instruction. 
 SECTION 3.05. Redemption after Total Loss, Requisition of Title, Seizure or Forfeiture of a Vessel or Termination of Certain Contracts. Upon receipt by the Indenture Trustee of written instructions from the
Secretary and the Shipowner stating that the principal amount of Obligations specified in such instructions are required to be redeemed on the date specified therein (which shall be not less than 40 nor more than 60 days from the receipt of such
instructions by the Indenture Trustee) by reason of (i) an actual, constructive, agreed or compromised total loss of a Vessel, (ii) requisition of title to, or seizure or forfeiture of a Vessel or (iii) termination of any contract for
the construction, reconstruction or reconditioning of a Vessel, 

  

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the Indenture Trustee shall promptly give notice as provided in Section 3.08 of the redemption on such date of such principal amount of Obligations and
the Indenture Trustee shall, on such date, redeem such principal amount of Obligations together with interest accrued thereon to such Redemption Date. 
 SECTION 3.06. Redemption after assumption by the Secretary. Upon receipt by the Indenture Trustee of written instructions from the Secretary stating that the principal amount of Obligations specified in such
instructions are required to be redeemed on the date specified therein (which shall be not less than 30 nor more than 60 days from the receipt of such instructions by the Indenture Trustee) at the option of the Secretary at any time after the
Secretary’s assumption of the Obligations pursuant to Section 6.09, the Indenture Trustee shall promptly give notice as provided in Section 3.08 of the redemption on the Redemption Date of the principal amount of Obligations specified
in such instructions and the Indenture Trustee shall, on such Redemption Date, redeem such Obligations together with interest accrued thereon to such Redemption Date; provided that, the Secretary shall redeem at the principal amount thereof
and interest accrued thereon the Proportionate Part of the Outstanding Obligations relating to such Vessel or Vessels which have been sold pursuant to Section 8.02 to a purchaser or purchasers who have not assumed such Obligations by notice to
the Indenture Trustee in accordance with this Section 3.06 within 30 days of the nonassumption of the Obligations by such purchaser. The principal amount of the Proportionate Part of the Outstanding Obligations shall be determined by the
Secretary. 
 SECTION 3.07. Determination of Obligations to be Redeemed. (a) If less than all the Obligations are to be redeemed
pursuant to Section 3.04 or 3.05, the Indenture Trustee shall select Obligations of each series and Stated Maturity for redemption in proportion to the respective principal amounts of Obligations of such series and Stated Maturity then
Outstanding, except as otherwise provided in the Special Provisions or in the Supplemental Indenture with respect to any series, making adjustment so that the principal amount of any Obligation to be redeemed shall be $1,000 or an integral multiple
thereof. 
 (b) If less than all the Obligations of any series or Stated Maturity are to be redeemed under any of the provisions contained or
referred to in this Article III, the Indenture Trustee shall select, in such manner as it shall deem appropriate any fair, the Obligations of such series or Stated Maturity to be redeemed, and the Indenture Trustee shall, according to such method as
it shall in its reasonable discretion deem appropriate, make adjustments so that the principal amount of any Obligation to be redeemed shall be $1,000 or an integral multiple thereof. 
 SECTION 3.08. Notices of Redemption. (a) In case of any redemption of Obligations, whether mandatory or optional, a notice of redemption
(indicating (1) the Redemption Date, (2) the Redemption Price, (3) if a part only of such Obligations is to be redeemed, the numbers or other identification of the Obligations and the principal amount thereof to be redeemed, in whole
or in part, (4) the place of payment upon redemption and (5) that interest shall cease to accrue after the Redemption Date (but only if the Indenture Trustee or any Paying Agent shall have received the required moneys) shall be given, by
or on behalf of the Shipowner, by mailing a copy of such notice, by first class mail, postage prepaid, at least 30 days but not more than 60 days prior to the Redemption Date, to each Holder of an Outstanding Obligation to be redeemed in whole or in
part at his last address appearing upon the Obligation Register. 
 (b) Any notice of optional redemption of Obligations shall state that the
redemption is subject to the receipt of the redemption moneys by the Indenture Trustee or any Paying Agent. Such notice shall be of no effect unless prior to the opening of business on the Redemption Date the Indenture Trustee or such Paying Agent
shall receive an amount in cash sufficient for 

  

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such redemption (after taking into account any amounts then held by the Indenture Trustee or such Paying Agent and available for such redemption).

 SECTION 3.09. Deposit of Redemption Moneys. Prior to the opening of business on any Redemption Date, the Shipowner shall, except as
contemplated by Section 3.08(b), deposit or cause to be deposited with the Indenture Trustee or (except in the case of redemptions pursuant to Section 3.04, 3.05, or 3.06) with any Paying Agent an amount sufficient for such redemption
(after taking into account any amounts then held by the Indenture Trustee or such Paying Agent and available for such redemption) with irrevocable directions to it to so apply the same. 
 SECTION 3.10. Payment of Redemption Price. (a) If notice of redemption shall have been given as provided above, the Obligations or portions
thereof specified in such notice shall, except as contemplated by Section 3.08(b), become due and payable on the Redemption Date and at the place of payment and the Redemption Price stated in such notice, and on and after said Redemption Date
(unless the Shipowner shall default in the payment of such Redemption Price) interest on the Obligations or portions thereof so called for redemption shall cease to accrue. Upon presentation and surrender of such Obligations in accordance with such
notice, such Obligations or the specified portions thereof shall be paid and redeemed at the applicable Redemption Price. 
 (b) Upon
presentation of any Obligation redeemed in part only, the Shipowner shall execute and the Indenture Trustee shall authenticate and deliver to or on the order of the Holder thereof, at the expense of the Shipowner, a new Obligation or Obligations of
like series and Stated Maturity, of authorized denominations, having endorsed thereon a Guarantee or Guarantees executed by the Secretary, in principal amount equal to the unredeemed portion of the Obligation so presented, or, at the option of such
Holder, there may be noted thereon by the Indenture Trustee or, at its direction, by any Paying Agent the payment of the portion of the principal amount of such Obligation so called for redemption. 
 ARTICLE IV 
 CASH HELD BY INDENTURE TRUSTEE OR
PAYING AGENTS 
 SECTION 4.01. Generally. (a) All cash held by the Indenture Trustee or any Paying Agent under this Indenture
shall be held as a special deposit in trust for the purposes for which held (subject to Section 4.03). 
 (b) Cash held by the Indenture
Trustee or any Paying Agent (other than the Shipowner) under this Indenture: 
 (1) need not be segregated; 
 (2) shall not be invested; and 
 (3) shall not bear interest except to the extent the Indenture Trustee or such Paying Agent allows interest on similar deposits or except as the Shipowner and the Indenture Trustee (or such Paying Agent) may agree.

 SECTION 4.02. Paying Agents Other Than Indenture Trustee. (a) The Shipowner will cause any Paying Agent (other than the
Indenture Trustee) which it may appoint by a writing delivered to such Paying Agent, with copies to the Indenture Trustee and the Secretary, to execute and deliver to the Indenture Trustee an instrument in which such agent shall agree with the
Indenture Trustee that, subject to paragraph (b) of this Section and Section 4.03: 
 (1) it will hold in trust all
sums held by it as such agent for the payment of the principal of (and premium, if any) or interest on Obligations for the benefit of the Holders of such Obligations, or for the benefit of the Indenture Trustee; 
  

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 (2) it will forthwith give the Indenture Trustee written notice addressed to a
Responsible Officer in the Corporate Trust Office of the Indenture Trustee signed by a Responsible Officer of the Paying Agent of (A) any payment by the Shipowner of the principal of (and premium, if any) or interest on Obligations, specifying
the amount paid, segregated as to principal (premium, if any) and interest, and identifying each Obligation on which any payment was made by number, date, series, Stated Maturity and the name of the Obligee, and/or (B) any failure of the
Shipowner to make any such payment when the same shall be due and payable; and 
 (3) it will promptly, and in no event later
than ten days after any payment made by it hereunder, give the Indenture Trustee written notice addressed to a Responsible Officer in the Corporate Trust Office of the Indenture Trustee of all payments of Obligations made by it, including and
identifying all endorsements of payment made on Obligations by it, signed and containing the specified information as provided in subparagraph (2) above, and deliver to the Indenture Trustee all Obligations surrendered to it, for cancellation
by the Indenture Trustee. 
 (b) The Shipowner may at anytime cause to be paid to the Indenture Trustee all sums held in trust by any Paying
Agent pursuant to this Section, such sums to be held by the Indenture Trustee upon the same trusts. 
 SECTION 4.03. Unclaimed
Amounts. Any moneys received by the Indenture Trustee or a Paying Agent, for the payment of Obligations or Guarantees and remaining unclaimed by the Holders thereof for 6 years after the date of the Maturity of said Obligations or the date of
payment by the Secretary of the Guarantees shall, upon delivery to the Indenture Trustee of a Request by the Shipowner, be paid to the Shipowner; provided that, not less than 30 days prior to such payment, the Shipowner shall publish notice
thereof to the Obligees at least once in the Authorized Newspapers, unless the Indenture Trustee, in its discretion, waives the publication of such notice. In such event, such Holders shall thereafter be entitled to look only to the Shipowner (and
the settlor or settlors of any trust for which the Shipowner is trustee, to the extent paid over to it or them) for the payment thereof, and the Indenture Trustee or such Paying Agent, as the case may be, shall thereupon be relieved from all
responsibility to such Holders therefor. No such Request, publication or payment shall be construed to extend any statutory period of limitations which would have been applicable in the absence of such Request, publication or payment. 
 SECTION 4.04. Application of Funds. If at any time the Indenture Trustee shall hold funds (other than any amounts received by the Indenture
Trustee pursuant to Section 7.04), the application, distribution or payment of which is not governed by Request or written instruction of the Shipowner delivered pursuant to any provision of the Indenture, the Indenture Trustee shall give
written notice thereof to the Shipowner, who shall promptly thereafter deliver to the Indenture Trustee a Request or written instruction bearing the written consent of the Secretary and directing the application, distribution or payment to be made
of such funds. 
  

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 ARTICLE V 
 REPRESENTATIONS AND AGREEMENTS OF SHIPOWNER 
 The Shipowner hereby represents and agrees, so long as
Obligations are Outstanding, as follows: 
 SECTION 5.01. Authorization, Execution and Delivery of Indenture. The Shipowner has duly
authorized the execution and delivery of this Indenture. 
 SECTION 5.02. Payment and Procedure for Payment of Obligations. The
Shipowner will duly and punctually pay the principal of (and premium, if any) and interest on the Obligations according to the terms thereof and of this Indenture. The Shipowner will deposit with the Indenture Trustee or (subject to
Section 3.09) a Paying Agent prior to the opening of business on each date fixed for each such payment an amount sufficient for such payment (after taking into account any amounts then held by the Indenture Trustee or such Paying Agent and
available for such payment) with irrevocable directions to it to so apply the same; provided that, payments of interest may be made as provided in Section 2.02(b)(4); and provided further, that except with the consent of the
Secretary the Shipowner shall not deposit any such amount more than ten days prior to the date of the payment for which such amount is deposited. 
 SECTION 5.03. Offices or Agencies of Shipowner. The Shipowner shall (1) at all times cause one or more offices or agencies to be maintained within the United States where Obligations may be presented for payment, registration of
transfer and exchange, and where demands to or upon the Shipowner with respect thereto may be served, and (2) from time to time give written notice to the Indenture Trustee and to the Secretary of the location of such offices or agencies. The
Corporate Trust Office shall be deemed to be such an office or agency for such purposes until the Shipowner shall give the Indenture Trustee and the Secretary written notice to the contrary. 
 Any such office or agency for payment of the Obligations (other than the Corporate Trust Office) shall be a Paying Agent appointed in accordance with
Section 4.02. 
 ARTICLE VI 
 INDENTURE DEFAULTS AND REMEDIES 
 SECTION 6.01. What Constitutes “Indenture Defaults.” Each of the following
events shall constitute an “Indenture Default”: 
 (a) Default in the payment of the whole or any part of the
interest on any of the Outstanding Obligations when the same shall become due and payable or default in the payment of the whole or any part of the principal of any of the Outstanding Obligations when the same shall become due and payable, whether
by reason of Maturity, redemption, acceleration or otherwise, or any default referred to in Section 6.08, and continuation of any such default for a period of 30 days (herein called a “Payment Default”); and 
 (b) The giving of a Secretary’s Notice to the Indenture Trustee. 
 The Indenture Trustee shall give to the Obligees, the Secretary and the Shipowner prompt notice in writing of any default in payment referred to in
clause (a) of this Section 6.01 (unless such default shall have been remedied prior to the giving of such notice), and of the occurrence of any Indenture Default which shall be continuing; provided that, the Indenture Trustee shall
have no duty to give any such notice unless and until a Responsible Officer of the Indenture Trustee, who is a Responsible Officer in its Corporate Trust 

  

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Office, has actual knowledge of such default or Indenture Default. Any such notice of an Indenture Default to the Obligees (i) shall specify the nature
of such Indenture Default, (ii) shall state that, by reason thereof, the Indenture Trustee is entitled under the Indenture to demand payment by the Secretary of the Guarantees, (iii) shall set forth the provisions of
Section 6.04(b)(3) and (5), and (iv) shall advise the Obligees of the provisions of Section 6.02. 
 SECTION 6.02. Demand
for Payment of Guarantees. (a) If an Indenture Default shall have occurred and be continuing, the Indenture Trustee shall not later than 60 days from the date of such Indenture Default demand payment by the Secretary of the unpaid interest
to the date of such payment on, and the unpaid balance of the principal of, all Outstanding Obligations, whereupon the entire unpaid principal amount of the Outstanding Obligations and all unpaid interest thereon shall become due and payable on the
first to occur of the date which is 30 days from the date of such demand or the date on which the Secretary pays the Guarantees; provided that, in the case of a demand made as a result of a Payment Default, if, prior to the expiration of 30
days from the date of such demand and prior to any payment of the Guarantees by the Secretary, the Secretary shall find, and give written notice to the Shipowner and the Indenture Trustee to the effect that, there was no Payment Default or that such
Payment Default was remedied prior to such demand, such demand and the consequences thereof shall be rescinded and annulled and the Guarantees shall remain in full force and effect. The Indenture Trustee shall give to each Obligee and to the
Shipowner prompt written notice of any demand made by the Indenture Trustee pursuant to this paragraph (a), any such notice to Obligees to be given as provided in Section 6.04(c). 
 (b) If the Indenture Trustee shall not have made the demand referred to in Section 6.02(a) on or before the 30th day following an Indenture Default
which shall have occurred and be continuing and if the Holders of all Outstanding Obligations shall not have theretofore elected to terminate the Guarantees as provided in Section 6.04(a)(2), any Holder of an Outstanding Obligation, by an Act
of Obligees delivered to the Secretary (with copies thereof to the Indenture Trustee and the Shipowner), may, in place of the Indenture Trustee and on behalf of all Holders of Outstanding Obligations, make such demand, subject to all the provisions
of, and with the effect provided in, Section 6.02(a); provided that, the right of each Holder under this paragraph (b) shall be without prejudice to the rights and duties of the Indenture Trustee under Section 6.02(a).

 SECTION 6.03. Appointment of Indenture Trustee and Holders of Outstanding Obligations as Attorneys-in-Fact. Each Holder of an
Outstanding Obligation by the purchaser and acceptance of its Obligation, irrevocably appoints the Indenture Trustee and each other Holder of an Outstanding Obligation its agent and attorney-in-fact for the purpose of making the demand provided for
in Section 6.02 and (in the case of the Indenture Trustee) of receiving and distributing any payment or payments by the Secretary made pursuant to any such demand; provided that, no action or failure to act by the Indenture Trustee shall
affect the rights of any Holder of an Outstanding Obligation to take my action whatsoever permitted by law and not in violation of the terms of the Obligations or of the Indenture. 
 SECTION 6.04. Termination and Payment of the Guarantees. (a) Except as otherwise provided in Section 6.08, the Guarantee with respect to
any Obligation shall terminate in case, and only in case, one or more of the following events shall occur: 
 (1) Such
Obligation shall have been Retired or Paid; 
  

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 (2) The Holders of all Outstanding Obligations shall have elected, by Act of Obligees
delivered to the Secretary, to terminate the Guarantees; 
 (3) Such Guarantee shall have been paid in full in cash by the
Secretary; or 
 (4) The Indenture Trustee and each Obligee shall have failed to demand payment of such Guarantee as provided
herein or in such Guarantee or in the Act. 
 (b) Subject to the provisions of Section 6.08, when the Secretary shall pay the Guarantees
in full in cash to the Indenture Trustee: 
 (1) The Indenture Trustee shall hold the entire amount thereof in trust for the
sole purpose of providing for the payments specified in subparagraph (5) below; 
 (2) No Obligation or Obligations shall
thereafter be issued; 
 (3) The Obligations (A) shall represent only the right to receive the payments from the
Indenture Trustee specified in subparagraph (5) below and, in the event the Indenture Trustee makes payment to the Shipowner pursuant to Section 4.03, from the Shipowner, (B) shall otherwise no longer constitute or represent an
obligation of the Shipowner, and (C) shall not be entitled to any other rights or benefits under this Indenture; 
 (4)
The Indenture Trustee shall forthwith give written notice to the Shipowner and to each of the Obligees, stating that it has received payment of the Guarantees in full in cash from the Secretary and that the same is available for distribution to the
Obligees in the manner specified in subparagraph (5) below (and the Indenture Trustee shall give like notice to the Holders of the Obligations at least annually thereafter for a period of 6 years or until all Obligations shall have been
cancelled, whichever is earlier); and 
 (5) Upon the surrender for cancellation of any Obligation, the Indenture Trustee
shall forthwith pay to the Holder of such Obligation in cash an amount (less the amount, if any, required to be withheld in respect of transfer or other taxes on payment to such Holder) equal to the unpaid principal amount of such Obligation and the
unpaid interest accrued thereon to the date on which the Secretary shall have paid the Guarantees in full in cash to the Indenture Trustee; provided that, for the purposes of this subparagraph (5), the Indenture Trustee (A) may deem any
Person as the owner of an Obligation in accordance with Section 2.11 and (B) shall not be required to make any payment in violation of applicable law. 
 (c) Each notice to Obligees required by this Section shall be given by the Indenture Trustee by first class mail, postage prepaid, to the address of each Obligee appearing upon the Obligation Register. 
 (d) If the Secretary shall not have paid the Guarantees in full in cash to the Indenture Trustee within 30 days after any demand therefor pursuant to
Section 6.02 (whether or not because the Secretary makes either of the findings referred to in the proviso of Section 6.02(a)), the Indenture Trustee shall give prompt written notice of such nonpayment to each Obligee and the Shipowner. If
the Indenture Trustee shall have received notice of either of such findings, such notice to each Obligee shall so state. 
  

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 SECTION 6.05. Rights of Indenture Trustee after Indenture Default. During the continuance of any
Indenture Default, the Indenture Trustee shall have the right to demand and to receive payment of the Guarantees and shall have, with the consent of the Secretary as to matters other than the enforcement of the Guarantees (unless all the Guarantees
shall have terminated as provided herein): 
 (a) the right (in its name, as the trustee of an express trust, or as agent and
attorney-in-fact for each Holder of the Obligations as a class) to take all action to enforce its rights and remedies (including the institution and prosecution of all judicial and other proceedings and the filings of proofs of claim and debt in
connection therewith), and to enforce all existing rights of the Holders of the Obligations as a class; and 
 (b) all other
rights and remedies granted to the Indenture Trustee by this Indenture, or the Authorization Agreement, or by law. 
 In addition, during the
continuance of an Indenture Default and if all the Guarantees shall have terminated as provided herein, the Indenture Trustee shall have the right, by written notice to the Shipowner, to declare the entire unpaid principal amount of the Outstanding
Obligations and all unpaid interest to be immediately due and payable. 
 SECTION 6.06. (a) Obligees’ Right to Direct Indenture
Trustee after Indenture Default. During the continuance of any Indenture Default, the Holders of a majority in principal amount of the Outstanding Obligations shall have the right, by an Act of Obligees, to direct the Indenture Trustee:

 (1) to exercise or to refrain from exercising any right or to enforce any remedy granted to it by this Indenture; and

 (2) to direct the time, method and place of the exercise of any such right or the enforcement of any such remedy:

 provided that, subject to Section 7.03, the Indenture Trustee shall have the right not to take any such action if it shall determine in good
faith that the action would involve it in personal liability, would subject it to expenses against which it had not been offered adequate security and indemnity, or would be unjustly prejudicial to the Obligees not parties to such direction.

 Anything in this Section 6.06(a) to the contrary notwithstanding, the Indenture Trustee shall be obligated to demand payment of the
Guarantees as provided in Section 6.02(a) unless the Holders of all Outstanding Obligations shall have elected to terminate the Guarantees as provided in Section 6.04(a)(2), in which case the Indenture Trustee shall be obligated to refrain
from making such demand. 
 (b) Limitations on Obligees’ Right to Sue. No Obligee shall have the right to institute any judicial
or other proceedings under this Indenture unless: 
 (1) the Indenture Trustee shall have been directed to institute such
proceeding by the Holders of at least 25% in aggregate principal amount of the Obligations then Outstanding; 
 (2) the
Indenture Trustee shall have been offered adequate security and indemnity against the costs, expenses and liabilities to be incurred by compliance with such direction; 
 (3) the Indenture Trustee shall not have instituted such proceeding within 60 days after the receipt of both such direction and such offer
of security and indemnity; 
  

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 (4) no direction inconsistent with such request shall have been given to the Indenture
Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Obligations; and 
 (5)
the institution and prosecution of such proceeding would not result in an impairment of the rights of any other Obligee, it being understood and intended that no one or more Obligees shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Obligees or to obtain or to seek to obtain priority or preference over any other Obligees or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all the Obligees. 
 (c) Unconditional Right of Obligees to Sue for
Principal (and Premium, if any) and Interest. Nothing in paragraph (b) shall (i) affect the obligation of the Shipowner to pay the principal of (and premium, if any) and interest on the Obligations in accordance with their terms or affect
the right of any Obligee to institute any judicial or other proceeding to enforce the payment of his Obligations or (ii) limit the right of any Obligee to demand payment of the Guarantees pursuant to Section 6.02(b) or to institute any
judicial or other proceeding to enforce the payment of the Guarantee of any Obligation of which he is the Holder. 
 SECTION 6.07.
Undertaking for Costs. In any proceeding for the enforcement of any right or remedy under this Indenture, or in any proceeding against the Indenture Trustee for any action taken or omitted by it as Indenture Trustee, the court may in its
discretion require the filing by any party litigant of an undertaking to pay the cost of such proceeding and may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant, having due regard to
the merits and good faith of the claims or defense made by such party litigant. The provisions of this Section 6.07 shall not apply to any proceeding instituted by the Indenture Trustee or any proceeding instituted by any Obligee for the
payment of the principal of (and premium, if any) and interest on his Obligations. 
 SECTION 6.08. Rescission of Payments.
Notwithstanding any other provision of this Indenture, or of the Obligations, in the event that any payment to or on behalf of an Obligee of the principal of or interest due under any Obligation, or any portion of any such payment, shall at any time
be repaid by such Obligee in compliance with an order (whether or not final) of a court of competent jurisdiction pursuant to any provision of the Bankruptcy Code (Title 11 of the United States Code) or any Federal Law replacing or superseding such
Code, or applicable state law, and regardless of whether there has been any previous Indenture Default and any payment pursuant thereto, or whether such Obligation shall theretofore have been acquired by the Shipowner or cancelled, or whether an
instrument satisfying and discharging this Indenture shall have been executed and delivered, (1) such Obligation shall not be deemed to have been Retired or Paid and shall be deemed to be Outstanding, (2) the return of such payment in
whole or in part (but not the mere possibility that any such payment or portion thereof may be so required to be returned, nor any prior demand, suit or proceeding for such return) in compliance with the order of such court shall constitute a
default in payment of such Obligation within the meaning of Section 6.01(a), which default shall be deemed to have occurred on the date of such repayment and which default, if continued for 30 days, will constitute a Payment Default,
(3) the Guarantee of such Obligation and (to the extent necessary to enforce such Obligation and Guarantee) this Indenture shall be in full force and effect, and (4) the Person required to return such payment or portion thereof shall be
deemed for all purposes to be a Holder of such Obligation and entitled to enforce such Obligation and Guarantee to the extent of such repayment and, if there shall not be any Indenture Trustee hereunder then in 

  

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office, such Person shall also be entitled to exercise on his own behalf all the rights of the Indenture Trustee hereunder necessary for such enforcement;
provided that, in the event the Guarantee of any Obligation shall have terminated for reasons set forth in paragraphs (2) or (4) of Section 6.04(a) of this Indenture prior to the aforesaid date of repayment the provisions of
this Section shall not apply to such Obligation. 
 SECTION 6.09. Assumption of Obligations by Secretary. Notwithstanding anything
contained herein, (i) in the event the Shipowner shall fail to make any payment of principal or interest due on the Obligations on an Interest Payment Date and such failure to pay shall continue for a period of 25 days or (ii) in the event
of a default under a mortgage, loan agreement, or other security agreement between the Secretary, the Shipowner and any other parties, the Secretary shall have the right to and may, in his sole discretion, (a) by giving to the Indenture Trustee
at any time pursuant to clause (ii) above or, if pursuant to clause (i) above, on or after the 25th day of said 25 day period of such default (but prior to the receipt by the Secretary of any demand for payment of the Guarantees pursuant
to Section 6.02) a Secretary’s Supplemental Indenture in the form of Exhibit 4 attached hereto, which Exhibit is incorporated herein by reference, assume the rights and obligations of the Shipowner under this Indenture and all Outstanding
Obligations as provided in said Secretary’s Supplemental Indenture; and (b) if applicable, make any payment of principal or interest which is due under the Obligations. By the execution of this Indenture by the Indenture Trustee and the
Shipowner it is agreed hereunder that a Secretary’s Supplemental Indenture shall be effective and binding upon the Indenture Trustee and the Shipowner and their respective successors or assigns without further act or deed of either as of the
date executed and given to the Indenture Trustee by the Secretary as contemplated by this Section, and each of them for itself, its successors and assigns hereby irrevocably appoints the Secretary its true and lawful attorney-in-fact to execute and
deliver said Secretary’s Supplemental Indenture. Upon any such assumption by the Secretary, the Secretary shall succeed to and be substituted for and may exercise every right and power of the Shipowner under this Indenture and the Obligations
with the same force and effect as if the Secretary has been named as the Shipowner herein and therein. Upon any such assumption by the Secretary, the Indenture Trustee, upon request of the Secretary, shall promptly notify the holders of the
Outstanding Obligations of such assumption. The Secretary may exercise its rights under this Section 6.09 as often as it deems appropriate in its sole discretion. 
 ARTICLE VII 
 THE INDENTURE TRUSTEE 
 SECTION 7.01. Acceptance of Trusts. The Indenture Trustee hereby accepts the trusts of this Indenture. 
 SECTION 7.02. Eligibility of Indenture Trustee. (a) The Indenture Trustee shall at all times be a bank or trust company which (1) is
organized as a corporation and doing business under the laws of the United States or any state thereof, (2) is authorized under such laws to exercise corporate trust powers, (3) is subject to supervision or examination by federal or state
authority, (4) has a combined capital and surplus (as set forth in its most recent published report of condition) of at least $3,000,000, and (5) shall not have become incapable of acting or have been adjudged a bankrupt or an insolvent
nor have had a receiver appointed for itself or for any of its property, nor have had a public officer take charge or control of it or its property or affairs for the purpose of rehabilitation, conservation or liquidation. 
  

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 (b) Should the Indenture Trustee at any time cease to be eligible, pursuant to this Section 7.02, to
act as trustee, it shall promptly notify the Obligees, the Shipowner and the Secretary of such fact; and should the Shipowner obtain knowledge of such ineligibility, it shall promptly advise the Indenture Trustee, the Secretary, and the Obligees of
such fact. Any such notice (i) shall set forth all the relevant facts known to the Indenture Trustee or the Shipowner, as the case may be, (ii) if to the Secretary or the Shipowner, shall be registered or certified mail, postage prepaid,
and (iii) if to Obligees, shall be sent to each Obligee in the manner provided in Section 6.04(c) at his address as it appears on the Obligation Register, or at such other address as such Obligee may have furnished to the Indenture Trustee
for such purpose. 
 SECTION 7.03. Rights and Duties of Indenture Trustee. (a) The Indenture Trustee shall not be responsible for
the correctness of the Recitals in the Special Provisions hereof or in the Obligations (except the Indenture Trustee’s authentication certificate thereon), all of which Recitals are statements made solely by the Shipowner. 
 (b) The Indenture Trustee shall not be responsible for the validity, execution by other parties thereto, or sufficiency of this Indenture, the
Authorization Agreement, the Obligations or the Guarantees. 
 (c) During the continuance of any Indenture Default (except for an Indenture
Default resulting from those defaults in payment or Payment Defaults referred to in paragraph (r) of this Section, concerning which the Indenture Trustee has not received the notice referred to in said paragraph (r) and the information
relating to items (1) through (5) of said paragraph (r)), the Indenture Trustee shall exercise such of the rights and powers vested in it by Article VI, and use the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs. 
 (d) Except during the continuance of any Indenture Default
(other than an Indenture Default referred to in the parenthetical expression set forth in paragraph (c) of this Section), the Indenture Trustee undertakes to perform such duties and only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into this Indenture against the Indenture Trustee. 
 (e) No provision of
this Indenture shall relieve the Indenture Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct; provided that: 
 (1) Except during the continuance of an Indenture Default (other than an Indenture Default referred to in the parenthetical expression set
forth in paragraph (c) of this Section), (A) the duties of the Indenture Trustee shall be limited as provided in paragraph (d) of this Section, and (B) in the absence of bad faith on the part of the Indenture Trustee, the
Indenture Trustee may conclusively rely upon certificates or opinions conforming to the requirements of this Indenture as to the truth of the statements and the correctness of the opinions expressed therein; 
 (2) The Indenture Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Officers of the
Indenture Trustee unless it shall be proved that the Indenture Trustee was negligent in ascertaining the pertinent facts; and 
 (3) The Indenture Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with an Act of Obligees relating to the time, method and place of conducting any proceeding for any
remedy available to the Indenture 

  

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Trustee, or exercising any trust or power conferred upon the Indenture Trustee under this Indenture. 
 (f) Subject to paragraph (i) of this Section, the Indenture Trustee shall be under a duty to examine certificates and opinions required by this
Indenture to be furnished to it to determine whether or not they conform to the requirements hereof. 
 (g) Subject to paragraph (c) of
this Section, the Indenture Trustee may rely and shall be protected in acting upon any resolution, certificate, opinion, notice, request, consent, order, appraisal, report, bond, or other paper or document believed by it to be genuine, to have been
signed by the proper party or parties and to be in conformity with the provisions of this Indenture. 
 (h) In all cases where this Indenture
does not make express provision as to the evidence on which the Indenture Trustee may act or refrain from acting, the Indenture Trustee shall be protected (subject to paragraph (c) of this Section) in acting or refraining from acting hereunder
in reliance upon an Officer’s Certificate as to the existence or nonexistence of any fact. 
 (i) The Indenture Trustee may consult with
counsel satisfactory to the Indenture Trustee (who may be counsel to the Shipowner), and an Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith
and in accordance with such Opinion of Counsel. 
 (j) Subject to paragraph (c) of this Section, the Indenture Trustee shall not be
under any responsibility for the approval or selection of any expert for any of the purposes expressed herein; provided that the Indenture Trustee shall exercise reasonable care with respect to the approval or selection of independent experts
whom it approves or selects to furnish opinions or certificates to the Indenture Trustee pursuant to this Indenture. 
 (k) Whenever it is
provided that the Indenture Trustee shall take any action, including the giving of any notice or the making of any demand, or refrain from taking any action upon the happening or continuation of a specified event (including an Indenture Default) or
upon the fulfillment of any condition or upon the Request of the Shipowner or of Obligees or upon receipt of any notice, including a Secretary’s Notice, the Indenture Trustee (1) shall, subject to paragraph (c) of this Section, have
no liability for failure to take such action or for failure to refrain from taking such action unless and until a Responsible Officer of the Indenture Trustee, who is a Responsible Officer in the Corporate Trust Office, has actual knowledge of such
event or continuation thereof or the fulfillment of such conditions or shall have received such Request, and (2) in taking or refraining from taking such action, shall have full power to give any and all notices and to do any and all acts and
things incidental to such action. 
 (l) Subject to paragraph (c) of this Section, the Indenture Trustee shall not be under any
obligation to exercise any of the trusts or powers hereof at the request, order or direction of any Obligees or the Secretary, unless such Obligees or the Secretary shall have offered to the Indenture Trustee security or indemnity satisfactory to it
against the costs, expenses and liabilities to be incurred thereby. 
 (m) The Indenture Trustee, in its individual or any other capacity,
may become the owner or pledgee of Obligations with the same rights it would have if it were not Indenture Trustee. 
 (n) Notwithstanding
any other provision of this Indenture, the Indenture Trustee shall not take any action contrary to the terms of the Authorization 

  

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Agreement, and any such purported action or any attempt to take such action shall be void and of no effect and, except as provided in Section 7.06(b),
shall not enter into any amendment to the Authorization Agreement except as expressly authorized by a Supplemental Indenture entered into pursuant to Article X. 
 (o) No provision of this Indenture shall require the Indenture Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. 
 (p) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording
protection to the Indenture Trustee shall be subject to the provisions of this Section. 
 (q) Upon the execution and delivery of an
instrument satisfying and discharging this Indenture as provided in Section 12.01 hereof, all duties and obligations of the Indenture Trustee hereunder (except with respect to the application of funds for the payment of Obligations then held by
the Indenture Trustee) shall cease and shall not thereafter be revived, whether or not the Indenture shall thereafter be in full force and effect as provided in Section 6.08. 
 (r) Notwithstanding any other provisions of this Indenture or the Authorization Agreement, the Indenture Trustee shall have no duty or obligation to
exercise any of its rights or powers hereunder with respect to a default in payment or Payment Default by reason of a repayment referred to in Section 6.08 unless and until it shall have received notice of such default and information
concerning (1) the date thereof, (2) the Obligation to which such repayment relates, (3) the Person making such repayment and the Holder of such Obligation, (4) the amounts of such repayment attributable to principal, premium and
interest on such Obligation, and (5) the Interest Payment Date or other date on which the Obligee received the moneys to which the court order mentioned in Section 6.08 relates. 
 SECTION 7.04. Compensation, Expenses and Indemnification of Indenture Trustee. The Shipowner shall (1) pay reasonable compensation to the
Indenture Trustee and reimburse it for its reasonable expenses and disbursements (including counsel fees and expenses) and (2) indemnify the Indenture Trustee for, and hold it harmless against, any loss, liability or expense which it may incur
or suffer without negligence or bad faith in acting under this Indenture or the Authorization Agreement. The compensation of the Indenture Trustee shall not be limited to the compensation provided by law for a trustee acting under an express trust.

 SECTION 7.05. Resignation and Removal of Indenture Trustee. (a) The Indenture Trustee may resign at any time by giving written
notice to the Shipowner. Within 10 days thereafter, the resigning Indenture Trustee shall give notice of such resignation to the Obligees in the manner provided in Section 6.04(c). If the resigning Indenture Trustee fails to do so within such
10-day period, within the next succeeding 10 days the Shipowner shall give such notice in the same manner. 
 (b) The Indenture Trustee may
at any time be removed by: 
 (1) written notice to the Indenture Trustee and the Shipowner by the Holders of a majority in
principal amount of the Outstanding Obligations; or 
  

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 (2) written notice to the Indenture Trustee by the Shipowner or the Secretary that the
Indenture Trustee has ceased to be eligible under Section 7.02(a). 
 (c) Any resignation or removal of the Indenture Trustee shall be
effective only upon appointment of a successor Indenture Trustee approved by the Secretary and the acceptance of such appointment by such successor Indenture Trustee. 
 SECTION 7.06. Appointment of Successor Indenture Trustee. (a) If the Indenture Trustee or the Shipowner shall have given notice of ineligibility of the Indenture Trustee pursuant to Section 7.02(b),
or if any notice of resignation or of removal shall have been given pursuant to Section 7.05, then a successor Indenture Trustee may be appointed by the Shipowner; provided that, if such successor Indenture Trustee is not so appointed
(or has not accepted such appointment) within 15 calendar days after the giving of any such notice, such appointment may be made (i) by the Secretary or (ii) by a court of competent jurisdiction upon the application of the Secretary, the
Shipowner, the retiring Indenture Trustee or any Person who then is, and has been, the Holder of an Outstanding Obligation for at least 6 months. 
 (b) No successor Indenture Trustee shall be appointed without the prior written consent of the Secretary and until such successor Indenture Trustee shall enter into an amendment to the Authorization Agreement as set forth in the first
sentence of Section 4.04 thereof. 
 (c) If a successor Indenture Trustee is appointed, approved by the Secretary and accepts such
appointment, and the Shipowner shall have knowledge thereof, the Shipowner shall give notice to the Obligees of such appointment in the manner provided in Section 6.04(c). The failure of the Shipowner to give such notice shall not affect the
validity of any such appointment. 
 SECTION 7.07. Effect of Appointment of Successor Indenture Trustee. Upon appointment and
acceptance as Indenture Trustee, each successor Indenture Trustee shall forthwith, without further act or deed, succeed to all the rights and duties of its predecessor in trust under this Indenture and the Authorization Agreement. Such predecessor
shall promptly deliver to such successor Indenture Trustee all sums held hereunder, together with all records and other documents necessary or appropriate in connection with the performance of the duties of the successor Indenture Trustee under this
Indenture. Upon the written request of the successor Indenture Trustee or the Shipowner and upon payment of all amounts due to such predecessor under this Indenture, such predecessor shall transfer, assign and confirm to the successor Indenture
Trustee all its rights under this Indenture by executing and delivering from time to time to the successor Indenture Trustee such further instruments and by taking such other action as may reasonably be deemed by such successor Indenture Trustee or
the Shipowner to be necessary or appropriate in connection therewith. 
 SECTION 7.08. Merger, Consolidation and Sale of Indenture
Trustee. In the event of any merger (including for the purposes of this Section, the conversion of a state bank into a national banking association or vice versa) or consolidation of the Indenture Trustee into any other Person or in the event of
the sale of all or substantially all the Indenture Trustee’s corporate trust business, the Person resulting from such merger (including any such conversion) or consolidation, or the transferee in the case of any such sale, shall forthwith
notify the Shipowner and, subject to Section 7.02(a) and 7.06(b), shall be the Indenture Trustee under this Indenture and the Authorization Agreement without further act or deed. 
 Obligations and Guarantees authenticated after any such merger, consolidation or sale may be authenticated by the successor Indenture Trustee 

  

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either in its own name or in the name of any predecessor which shall have been the Indenture Trustee. 
 ARTICLE VIII 
 CONSOLIDATION, MERGER OR SALE
BY SHIPOWNER 
 SECTION 8.01. Consolidation, Merger or Sale by Shipowner. Nothing in this Indenture shall prevent any lawful
consolidation or merger of the Shipowner with or into any other Person, or any sale of a Vessel or Vessels to any other Person lawfully entitled to acquire and operate such Vessel or Vessels or any sale by the Shipowner of all or substantially all
of its assets to any other Person; provided that, except where the Shipowner shall be the Person surviving a merger or consolidation, the Person formed by or surviving such consolidation or merger, or to which the sale of such Vessel or
Vessels shall be made, shall, by Supplemental Indenture, expressly assume the payment of the principal of and interest (and premium, if any) on the Proportionate Part of the Outstanding Obligations relating to such Vessel, or Vessels in accordance
with the terms of the Obligations and of the Indenture and shall expressly assume the performance of the agreements of the Shipowner in the Indenture; provided further, that to the extent said Proportionate Part of the Outstanding Obligations
is not so assumed, the Shipowner shall redeem or cause to be redeemed the principal amount of the Proportionate Part of Outstanding Obligations as is required by the Secretary, such redemption to be in accordance with the terms of the Obligations
and of the Indenture. When a Person so assumes this Indenture and such Proportionate Part of the Outstanding Obligations, the Supplemental Indenture shall discharge and release the Shipowner from any and all obligations thereunder relating to such
Proportionate Part of the Outstanding Obligations. In the event of such an assumption by a Person to whom a Vessel or Vessels have been sold (a) such Person shall succeed to, and be substituted for, and may exercise every right and power of the
original Shipowner with the same effect as if such successor Shipowner had been named as the Shipowner herein and (b) such Proportionate Part of the Outstanding Obligations shall be surrendered to the Indenture Trustee for appropriate notation
or for the issuance of new Obligations in exchange for such Proportionate Part of the Outstanding Obligations in the name of the successor Shipowner, as required by the Secretary. The principal amount of the Proportionate Part of the Outstanding
Obligations shall be determined by the Secretary. 
 SECTION 8.02. Sale of the Vessel or Vessels by the Secretary. Nothing contained
in this Indenture shall prevent the sale of a Vessel or Vessels to any other Person or Persons by the Secretary, by a court of law or by the Shipowner following, in connection with or in lieu of a foreclosure or similar action. Following any such
sale (1) the Person to whom such Vessel or Vessels have been sold may by Supplemental Indenture expressly assume the payment of and interest (and premium, if any) on the Proportionate Part of the Outstanding Obligations relating to such Vessel
or Vessels in accordance with the terms of the Obligations and the Indenture and shall expressly assume the performance of the Shipowner in the Indenture; and (2) in the event such Person does not so assume, the Secretary shall redeem the
Proportionate Part of the Outstanding Obligations relating to such Vessel or Vessels without premium pursuant to Section 3.06 hereof; provided that, the Secretary shall allow or permit the sale of a Vessel or Vessels to the original
Shipowner or to any affiliate of the Shipowner only if (i) the Secretary has not redeemed such Obligations prior to such sale, and (ii) such purchaser assumes such Proportionate Part of the Outstanding Obligations as contemplated by the
preceding clause (1). When a Person so assumes this Indenture and such Proportionate Part of the Outstanding Obligations, the Supplemental Indenture shall discharge and release the Secretary from any and all obligations thereunder in the
Secretary’s capacity as Shipowner relating to such Proportionate Part of the Outstanding Obligations. In the event of such an 

  

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assumption by a Person to whom a Vessel or Vessels have been sold (a) such Person shall succeed to, and be substituted for, and may exercise every right
and power of the original Shipowner with the same effect as if such successor Shipowner had been named as the Shipowner herein and (b) such Proportionate Part of the Outstanding Obligations shall be surrendered to the Indenture Trustee for
appropriate notation or for the issuance of new Obligations in exchange for such Proportionate Part of the Outstanding Obligations in the name of the successor Shipowner, as required by the Secretary. Any such sale or the execution of a Supplemental
Indenture by any successor Shipowner shall not discharge or in any manner affect the obligation of the United States to pay the Guarantees pursuant to the terms thereof. The principal amount of the Proportionate Part of the Outstanding Obligations
shall be determined by the Secretary. 
 ARTICLE IX 
 ACTS OF OBLIGEES 
 SECTION 9.01. Acts of Obligees. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action required or permitted by this Indenture to be given or taken by Obligees may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Obligees in person
or by an agent or attorney duly appointed in writing. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Indenture Trustee and, where it is hereby expressly
required, to the Shipowner and the Secretary. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act of Obligees” signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent or attorney shall be sufficient for any purpose of this Indenture and (subject to Section 7.03) conclusive in favor of the Indenture Trustee and the Shipowner, if made
in the manner provided in paragraph (b) of this Section. 
 (b) The fact and date of the execution by any Person of any instrument or
writing referred to in paragraph (a) of this Section may be proved by the affidavit of a witness of such execution or by the certificate or acknowledgment of any notary public or other officer authorized by law to take acknowledgments of deeds,
certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by an officer of a corporation or a member of a partnership, on behalf of such corporation or partnership, such
affidavit or certificate shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which
the Indenture Trustee (or, if such instrument or writing is addressed to the Secretary, the Secretary) deems sufficient. 
 (c) The ownership
of Obligations shall be proved by the Obligation Register. 
 (d) Any request, demand, authorization, direction, notice, consent, waiver or
other action by the Holder of any Obligation shall bind every future Holder of the same Obligation and the Holder of every Obligation issued upon the transfer thereof or in exchange therefor or in lieu thereof in respect of anything done or suffered
to be done by the Indenture Trustee, any Paying Agent or the Shipowner in reliance thereon, whether or not notation of such action is made upon such Obligation. 
  

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 ARTICLE X 
 SUPPLEMENTAL INDENTURES 
 SECTION 10.01. Permissible without Action by Obligees. The Shipowner, the
Indenture Trustee, or, where applicable, the Secretary, from time to time and at any time, may, without the consent of or notice to any of the Obligees, subject to Sections 10.02 and 10.05, enter into an indenture or other instrument supplemental
hereto and which thereafter shall form a part hereof, for any one or more of the following purposes: 
 (1) to add to the
covenants of the Shipowner, whether applicable to one or more series of Obligations; 
 (2) to evidence the succession
pursuant to Article VIII of another corporation or entity to the Shipowner and the assumption by such successor of the obligations of the Shipowner hereunder; 
 (3) to eliminate any right reserved to or conferred upon the Shipowner; 
 (4) to make such provisions for the purpose of curing any ambiguity or correcting or supplementing any provisions in this Indenture as the
Shipowner or the Secretary may deem necessary or desirable, provided such provisions are not inconsistent with this Indenture and shall not adversely affect the interests of the Obligees; 
 (5) to provide for the issuance of additional Obligations of any series and Stated Maturity theretofore issued under this Indenture or to
set forth the terms and provisions of any one or more additional series of Obligations in accordance with Section 2.04; or 
 (6) to evidence the assumption pursuant to Section 6.09 by the Secretary of the Shipowner’s obligations under this Indenture and the Outstanding Obligations. 
 SECTION 10.02. Protection of Indenture Trustee. Upon receipt of a Request of the Shipowner that the Indenture Trustee execute any Supplemental
Indenture and upon receipt of any Act of Obligees required pursuant to Section 10.04 and the consent of the Secretary required pursuant to Section 10.05, the Indenture Trustee shall enter into such Supplemental Indenture; provided
that, the Indenture Trustee shall not be obligated to enter into any Supplemental Indenture which the Indenture Trustee believes adversely affects the Indenture Trustee’s own rights, duties or immunities under this Indenture. 
 SECTION 10.03. Reference in Obligations to Supplemental Indentures. Obligations authenticated and delivered after the execution and delivery of
any Supplemental Indenture may, with the consent and approval of the Shipowner and the Indenture Trustee, contain a text modified to conform to such Supplemental Indenture or have imprinted or stamped thereon a legend with respect to such
Supplemental Indenture, but no such modification or legend shall be necessary to make such Supplemental Indenture effective. 
 SECTION
10.04. Waivers and Supplemental Indentures with Consent of Obligees. With the consent of the Holders of not less than 60% in principal amount of the Outstanding Obligations of each series affected thereby, by Act of Obligees delivered to the
Shipowner and the Indenture Trustee, (x) compliance by the Shipowner with any of the terms of the Indenture may be waived or (y) the Shipowner and the Indenture Trustee may enter into any Supplemental Indenture for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of the Obligations issued 

  

 23 

 
under this Indenture; provided that, no such waiver or Supplemental Indenture shall: 
 (a) Without the consent of all Obligees affected thereby (1) change the Stated Maturity or reduce the principal of any Obligation,
(2) extend the time of payment of, or reduce the rate of, interest thereon, (3) change the due date of or reduce the amount of any mandatory sinking fund payment, (4) reduce any premium payable upon the redemption of any Obligation,
or (5) change the coin or currency in which any Obligation or the interest thereon is payable; or 
 (b) Without the
consent of all Obligees (1) terminate or modify any of the Guarantees or the obligations of the Secretary thereunder, (2) reduce the amount of any of the Guarantees, (3) eliminate, modify or condition the duties of the Indenture
Trustee to demand payment of the Guarantees or otherwise to comply with the provisions of Sections 6.02 and 6.04, (4) eliminate or reduce any of the eligibility requirements for the Indenture Trustee stated in Section 7.02, or
(5) reduce the percentage in principal amount of the Outstanding Obligations of any series, the consent of whose Holders is required for any such Supplemental Indenture, or required for any waiver provided herein or to modify any of the
provisions of this Section except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of all Obligees affected thereby. 
 It shall not be necessary for any Act of Obligees under this Section to approve the particular form of any proposed Supplemental Indenture, but it shall
be sufficient if such Act shall approve the substance thereof. Promptly after the execution of any Supplemental Indenture pursuant to this Section, the Shipowner shall give notice thereof to the Obligees in the manner provided in
Section 6.04(c). Any failure of the Shipowner to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such Supplemental Indenture. 
 SECTION 10.05. Consent of Secretary. Subject to the provisions of Section 11.01, no waiver pursuant to Section 10.04 shall be effective,
and neither the Shipowner nor the Indenture Trustee shall enter into any Supplemental Indenture, without the prior written consent of the Secretary thereto, and any purported action or attempt to take such action forbidden to be taken by this
Section shall be void and of no effect. 
 SECTION 10.06. Continued Validity of the Guarantees. Notwithstanding anything herein to the
contrary, this Indenture, the Guarantees and the Authorization Agreement shall each remain in full force and effect notwithstanding the assumption by the Secretary of the Obligations pursuant to the Secretary’s Supplemental Indenture entered
into pursuant to Section 6.09, and pursuant to Section 1103(e) of the Act, the validity of the Guarantee of any Obligation shall be unaffected, and such Guarantee and all responsibilities, requirements and consents relating to the
Secretary under the terms and provisions of this Indenture shall remain in full force and effect notwithstanding any such assumption by the Secretary as aforesaid. 
 ARTICLE XI 
 PERFORMANCE OF OBLIGATIONS TO SECRETARY 
 SECTION 11.01. Performance of Obligations to Secretary. Notwithstanding any other provisions of this Indenture to the contrary, each of the
provisions hereof which requires or permits action by the Secretary, the consent, approval or authorization of the Secretary, the furnishing of any document, paper or information to the Secretary, or the 

  

 24 

 
performance of any other obligation to the Secretary, shall not be effective and the Sections containing such provisions shall be read as though there were
no such requirements or permissions, after termination of the Guarantees pursuant to Section 6.04(a). 
 ARTICLE XII 
 SATISFACTION AND DISCHARGE OF INDENTURE 
 SECTION 12.01. Satisfaction and Discharge of Indenture. Whenever all Outstanding Obligations authenticated and delivered hereunder shall have been Retired or Paid the Indenture Trustee shall forthwith deliver to the Shipowner and the
Secretary a duly executed instrument, in form submitted to it by the Shipowner and reasonably satisfactory to the Indenture Trustee, satisfying and discharging this Indenture and, at the time such form of instrument is submitted to the Indenture
Trustee the Shipowner shall deliver to the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel each stating that all conditions precedent herein provided relating to the satisfaction and discharge of this Indenture have been
complied with. Notwithstanding the satisfaction and discharge of this Indenture, the Obligations of this Shipowner to the Indenture Trustee under Section 7.04 shall survive. 
 ARTICLE XIII 
 MISCELLANEOUS 
 SECTION 13.01. Notices and Demands. Except as otherwise specifically provided herein or in the Act, any notice, request, demand or direction upon,
or other communication to, the Indenture Trustee, the Shipowner or the Secretary shall be deemed to have been sufficiently given or made by being mailed, registered or certified mail, postage prepaid, addressed to the Indenture Trustee, the
Shipowner or the Secretary at their respective addresses appearing in the Special Provisions of this Indenture or at such other address as any of them may advise the others in writing from time to time. Except as otherwise specifically provided
herein or in the Act, any notice, request, demand or direction upon, or other communication to, the Obligees shall be deemed to have been sufficiently given or made by being mailed, registered or certified mail, postage prepaid, to the address of
each Obligee last appearing on the Obligation Register. 
 SECTION 13.02. Waivers of Notice. In any case where notice by mail or
otherwise is provided herein, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be deemed the equivalent of such notice. Waivers of notice shall be filed with
the Indenture Trustee, but such filing shall not be a condition precedent to the validity of any action taken thereon in reliance upon any such waiver. 
 SECTION 13.03. Benefit of Indenture. This Indenture is for the sole benefit of the Shipowner, the Indenture Trustee, the Holders from time to time of the Outstanding Obligations and (until the obligations to
the Secretary shall have terminated as provided in Article XI) the Secretary. 
 SECTION 13.04. Execution of Counterparts. This
Indenture may be executed in any number of counterparts. All such counterparts shall be deemed to be original and shall together constitute but one and the same instrument. 
 SECTION 13.05. Table of Contents; Titles and Headings. Any table of contents, the titles of the Articles and the headings of the Sections are not
a part of this Indenture and shall not be deemed to affect the meaning or construction of any of its provisions. 
  

 25 

 SECTION 13.06. Integration with Special Provisions of the Indenture. In the event of any conflict
between the provisions of the Special Provisions of the Indenture and of this Exhibit 1 thereto, the provisions of the Special Provisions shall govern and the provisions of this Exhibit 1 to the Indenture shall be deemed to be amended accordingly.

 SECTION 13.07. Immunity of Incorporators, Stockholders, Officers and Directors. No recourse shall be had for the payment of the
principal of, or the premium, if any, or interest on any Obligation, or for any claim based thereon or otherwise in respect thereof or of the indebtedness represented thereby, or upon any obligation, covenant or agreement of this Indenture, against
any incorporator, stockholder, officer or director, as such, past, present or future, of the Shipowner or of any successor corporation, either directly or through the Shipowner or any successor corporation, whether by virtue of any constitutional
provision, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly agreed and understood that this Indenture and the Obligations are solely corporate obligations, and that no personal liability
whatsoever shall attach to, or be incurred by, any incorporator, stockholder, officer or director, as such, past, present or future, of the Shipowner or of any successor corporation, either directly or through the Shipowner or any successor
corporation, because of the incurring of the indebtedness hereby authorized or under, or by reason of, any of the obligations, covenants, promises or agreements contained in this Indenture or in any of the Obligations or to be implied herefrom or
therefrom, and that all liability, if any, of that character against every such incorporator, stockholder, officer and director is, by the acceptance of the Obligations and as a condition of, and as part of the consideration for, the execution of
this Indenture and the issue of the Obligations, expressly waived and released. 
 SECTION 13.08. Applicable Law. This Indenture and
each Obligation shall be governed by the laws referred to in the Special Provisions hereof, except to the extent Federal law applies hereto. 
  

 26 

 FIRST PREFERRED SHIP MORTGAGE 
 $60,589,000 
 GREAT AQ STEAMBOAT CO. 
 Shipowner and Mortgagor 
 30 Robin Street Wharf

 New Orleans, Louisiana 70130-1890 
 to 
 THE UNITED STATES OF AMERICA 
 Mortgagee 
 represented by the Secretary 
 acting by and through the 
 Maritime Administrator 
 Maritime Administration of the U.S. 
 400
Seventh Street, S.W. 
 Washington, D.C. 20590 
 Dated as of August 24, 1995 
  

 Covering the whole of the Vessel 
 AMERICAN QUEEN 
 O.N. 1030765 

 FIRST PREFERRED SHIP MORTGAGE 
 THIS FIRST PREFERRED SHIP MORTGAGE, effective as of August 24, 1995, by GREAT AQ STEAMBOAT CO., a Delaware corporation (the
“Shipowner” and “Mortgagor”) located at 30 Robin Street Wharf, New Orleans, Louisiana 70130-1890, to the UNITED STATES OF AMERICA (the “United States”), represented by the Secretary of Transportation, acting by and
through the Maritime Administrator (the “Secretary” and “Mortgagee”) located at the U.S. Department of Transportation, 400 Seventh Street, S.W., Washington, D.C. 20590. 
 WHEREAS, the Shipowner is the sole owner of the whole of the AMERICAN QUEEN more fully described in the Granting Clause below; 
 WHEREAS, the Shipowner has, in consideration of the issuance of certain Guarantees (the “Guarantees”) by the Secretary, pursuant to Title XI of
the Merchant Marine Act, 1936, as amended (“Title XI”), of the payment of the unpaid interest on, and the unpaid balance of the principal of, the United States Government Guaranteed ship Financing Bonds, American Queen Series issued by the
Shipowner in the aggregate principal amount of $60,589,000 (the “Obligations”), and pursuant to the terms and provisions of the Security Agreement, dated the date hereof, between the shipowner and the Secretary (herein as it may be amended
or supplemented, called the “Security Agreement”), issued and delivered to the Secretary its promissory note dated the date hereof payable to the Secretary in the principal amount of $60,589,000 (said promissory note in the form attached
to the Security Agreement as Exhibit 2 being herein called the “Secretary’s Note”); and the Shipowner has agreed to execute and deliver this First Preferred Ship Mortgage to the Secretary (hereinafter referred to in this Mortgage as
the “Mortgagee”) for the purpose of securing the shipowner’s obligations to the Secretary with respect to the Guarantees and the payment of the principal of and interest on the Secretary’s Note in accordance with its terms, and
the terms of the Security Agreement and this Mortgage (the Mortgage, as the same may hereafter be amended or supplemented in accordance with the terms hereof, herein called the “Mortgage”); 
 NOW, THEREFORE, THIS MORTGAGE WITNESSETH: 
 That, in consideration of the premises and of the additional covenants herein contained and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and as security for the Guarantees and in order to
secure the payment of the above-mentioned interest on and principal of the Secretary’s Note and all other sums that may be secured by the Mortgage and the Security Agreement, and to secure the due performance and observance of all the
agreements and covenants in the Secretary’s Note and herein contained, the Shipowner has 

  

 2 

 
granted, conveyed, mortgaged, pledged, confirmed, assigned, transferred and set over, and by these presents does grant, convey, mortgage, pledge, confirm,
assign, transfer and set over unto the Mortgagee, the whole of the Vessel described as follows: 
  

							
	 Name of Vessel
	  	Type	  	Official Number	  	Year Built
	 AMERICAN QUEEN
	  	Paddlewheel
Passenger Vessel	  	1030765	  	1995

 which Vessel has its home port at the port of New Orleans, Louisiana, and is more fully described in its
certificate of documentation, together with all of its boilers, engines, machinery, masts, spares, rigging, boats, anchors, cables, chains, tackle, tools, pumps and pumping equipment, apparel, furniture, fittings and equipment, spare parts and all
other appurtenances to said Vessel appertaining or belonging, whether now owned or hereafter acquired whether on board or not and all additions, improvements, renewals and replacements hereafter made in or to said Vessel or said appurtenances.

 TO HAVE AND TO HOLD, all and singular, the above mortgaged and described property unto the Mortgagee, to its own use, benefit and behoof
forever; 
 PROVIDED, HOWEVER, and these presents are upon the condition that, if the above-mentioned principal of and interest on the
Secretary’s Note are paid or satisfied in accordance with the terms thereof, the Security Agreement and this Mortgage, and all other obligations and liabilities that may be secured by the Security Agreement and this Mortgage are paid in
accordance with their terms, then this Mortgage and the estate and rights hereunder shall cease, determine and be void, otherwise to remain in full force and effect. 
 The Shipowner hereby agrees with the Mortgagee that the Vessel now or at any time subject to the lien of this mortgage is to be held by the Mortgagee subject to the further agreements and conditions hereinafter set
forth. 
 ARTICLE FIRST 
 Section 1. The execution and delivery of this Mortgage and the execution and delivery of the Secretary’s Note have each been duly authorized by the Shipowner and are not in contravention of any indenture or undertaking to which
the Shipowner is a party or by which it is bound. 
 Section 2. All of the covenants and agreements on the part of the Shipowner
including, without limitation, those relating to: maintenance of United States citizenship; organization and 

  

 3 

 
existence of the Shipowner; title to and possession of the Vessel; sale, transfer or charter of the Vessel; taxes; liens; documentation of the Vessel;
material changes in the Vessel; compliance with applicable laws; maintenance of marine insurance; requisition of title; and compliance with Chapter 313 of Title 46 of the United States Code, which are set forth in, and all of the rights, immunities,
powers and remedies of the Secretary which are provided for in the Security Agreement (including the Special Provisions thereof and the General Provisions of Exhibit 1 thereto), except for the Granting Clause thereof, together with all other
provisions of the Security Agreement, are incorporated herein by reference with the same force and effect as though set forth at length in this Mortgage, and true copies of the form of the Special Provisions of and Exhibit 1 to the Security
Agreement and the Secretary’s Note are annexed hereto. 
 Section 3. A Default pursuant to the provisions of the Security Agreement
shall constitute a default hereunder, and shall give the Mortgagee the rights and remedies established by Chapter 313 of Title 46 of the United States Code, and as provided in the Security Agreement. 
 Section 4. This instrument is executed as and shall constitute an instrument supplemental to the Security Agreement, and shall be construed in
connection with, and as part of, the Security Agreement. 
 ARTICLE SECOND 
 Section 1. This Mortgage may be executed in any number of counterparts and all such counterparts executed and delivered each as an original shall
constitute but one and the same instrument. 
 Section 2. All the covenants, promises, stipulations and agreements of the Shipowner in
this Mortgage shall bind the Shipowner and its successors and assigns, and shall inure to the benefit of the Mortgagee and its successors and assigns, and all the covenants, promises, stipulations and agreements of the Mortgagee in this Mortgage
contained herein, shall bind the Mortgagee and its successors and assigns, and shall inure to the benefit of the Shipowner and its successors and assigns, whether so expressed or not. 
 Section 3. Any term used herein which is defined in the Security Agreement and which is not specifically defined herein shall have the meaning
specified in the Security Agreement, unless the context otherwise requires. 
 Section 4. No provision of this Mortgage or of the
Security Agreement shall be deemed to constitute a waiver by the Mortgagee 

  

 4 

 
of the preferred status of the Mortgage given by 46 U.S.C. $31305, and any provision of this Mortgage or of the Security Agreement which would otherwise
constitute such a waiver, shall to such extent be of no force and effect. 
 Section 5. If the Secretary’s Note shall have been
satisfied and discharged, and if the Shipowner shall pay or cause to be paid all other sums that may have become secured under the Security Agreement and this Mortgage, then this Mortgage and the estate and rights hereunder shall cease, determine,
and become null and void; and the Secretary, on request of the Shipowner and at the Shipowner’s cost and expense, shall forthwith cause satisfaction and discharge of this Mortgage to be entered upon its and other appropriate records, and shall
execute and deliver to the Shipowner such instruments as may be necessary, duly acknowledging the satisfaction and discharge of this Mortgage. 
 ARTICLE THIRD 
 The total principal amount of the obligations that is secured by this First Preferred Ship Mortgage is SIXTY
MILLION FIVE HUNDRED EIGHT-NINE THOUSAND DOLLARS ($60,589,000) excluding interest, expenses, and fees (such as custodial costs and attorneys’ fees). The date of maturity is June 2, 2020, and the discharge amount is the same as the total
amount. 

  

 5 

 IN WITNESS WHEREOF, this instrument has been executed on the date below indicated, and effective as of
the day and year first above written. 
  

			
	 GREAT AQ STEAMBOAT CO.
 as
Shipowner

		
	 BY:
	 	

		 	 Vice President and
 Chief Financial Officer

		
	 Date Signed:
	 	 August 24, 1995

  

	
	 Attest:

	
	

	 Vice President and
 Assistant Secretary

 CONSENTED TO: 
  

			
	 UNITED STATES OF AMERICA
 SECRETARY OF TRANSPORTATION
 acting by and through the
 MARITIME ADMINISTRATOR

		
	 By:
	 	

		 	 Secretary
 Maritime Administration

  

 6 

 ACKNOWLEDGEMENT 
  

			
	 DISTRICT OF COLUMBIA
	  	 )

		  	 )  ss:

	 CITY OF WASHINGTON
	  	 )

 On this 24th day of August 1995, before me, Vicki L. Hux, a Notary Public in and for the District of Columbia, personally appeared Steven M. Isaacson, duly known to me to be Vice President and Chief Financial
Officer of GREAT AQ STEAMBOAT CO., a Delaware corporation, the corporation described in and that executed the instrument hereto annexed and that he signed his name thereto by like authority. 
  

									
		 		 	
					
		 		 		 		 	

		 		 		 		 	 NOTARY PUBLIC

					
		 		 		 		 	 My Commission Expires:

		 		 		 		 	 Vicki L. Hux

		 		 		 		 	 Notary Public District of Columbia

	 (NOTARIAL SEAL)
	 		 		 	 My Commission Expires 6-14-2000

  

 7 

 ACKNOWLEDGEMENT 
  

			
	 DISTRICT OF COLUMBIA
	  	 )

		  	 )  ss:

	 CITY OF WASHINGTON
	  	 )

 I, the undersigned, a Notary Public in and for the District of Columbia, do hereby certify that
John C. Richard, Secretary of the Maritime Administration, personally appeared before me in said District, the aforesaid officer being personally well known to me as the person who executed the Mortgage hereto annexed, and acknowledged the same to
be his/her act and deed as said officer. 
 Given under my hand and seal this 24th day of August, 1995. 
  

									
		 		 	
					
		 		 		 		 	

		 		 		 		 	 NOTARY PUBLIC

					
		 		 		 		 	 My Commission Expires: 1/31/99

		 		 		 		 	 Illegible

		 		 		 		 	 Notary Public for the District of Columbia

	(NOTARIAL STAMP AND SEAL)	 		 		 	 My Commission Expires January 31, 1999

  

 8 

 Contract No. MA-13049 
 ASSUMPTION AND SUPPLEMENT NO. 1 
 TO FIRST PREFERRED SHIP MORTGAGE 
 BY AND AMONG 
 GREAT AQ STEAMBOAT,
L.L.C. 
 as Assuming Shipowner 
 Robin Street Wharf 
 1380 Port of New Orleans Place 
 New Orleans, Louisiana 70130-1890 
 Interest Assumed 100% 
 GREAT AQ STEAMBOAT CO., 
 Robin
Street Wharf 
 1380 Port of New Orleans Place 
 New Orleans, Louisiana 70130-1890 
 Interest Conveyed 100% 
 AND 
 THE UNITED STATES OF AMERICA

 represented by the Secretary of Transportation, acting by 
 and through the Maritime Administrator 
 400 Seventh Street, S.W.

 Washington, D.C. 20590 
 $58,165,000.00 
 Effective as of December 31, 1996 
 AMERICAN QUEEN 
 O.N. 1030765 
  

 9 

 ASSUMPTION AND SUPPLEMENT NO. 1 
 TO 
 FIRST PREFERRED SHIP MORTGAGE 
 This Assumption and Supplement No. 1 to First Preferred Ship Mortgage (“Supplement No. 1”), relating to the AMERICAN QUEEN, Official
No. 1030765 (the “Vessel”), effective as of December 31, 1996, is made by and among Great AQ Steamboat, L.L.C., a Delaware limited liability company, located at Robin Street Wharf, 1380 Port of New Orleans Place, New Orleans,
Louisiana 70130-1890 (the “Shipowner”), Great AQ Steamboat Co., Robin Street Wharf, 1380 Port of New Orleans Place, New Orleans, Louisiana 70130-1890 (the “Assignor”), to the United States of America, represented by the Secretary
Transportation, acting by and through the Maritime Administrator, 400 Seventh Street, S.W., Washington, D.C. 20590 (the “Secretary” or “Mortgagee”). 
 WITNESSETH: 
 WHEREAS, on August 24, 1995, the Assignor, executed and delivered a First
Preferred Ship Mortgage to the Mortgagee (the “Mortgage”), pursuant to which the Original Shipowner mortgaged to the Mortgagee the Vessel listed in said Mortgage as security for, among other things, payment of the principal of and interest
on the United States Government Guaranteed Ship Financing Obligations, consisting of 2005 Notes and 2020 Bonds (the “Obligations”) issued by the Assignor under the Indenture and to secure the payment of the principal of and interest on the
promissory note issued by the Assignor and delivered to the Secretary originally on August 24, 1995 (the “Secretary’s Note”), pursuant to the terms and provisions of the Security Agreement dated August 24, 1995, Contract No.
MA-13048 (the “Security Agreement”); said Mortgage having been recorded on August 24, 1995 in the Office of the United States Coast Guard National Vessel Documentation Center, Falling Waters, West Virginia in Book NVDC 95-1, Page 179
at 3:05 p.m.; and 
 WHEREAS simultaneously with the delivery hereof, as a result of the merger of the Assignor into the Shipowner and
pursuant to operation of law, the Assignor is transferring its assets, including its interest in the Vessel to the Shipowner subject to the Mortgage, and the Shipowner is assuming all of the covenants, promises, stipulations and agreements of the
Assignor as stated in the Mortgage; and 
 WHEREAS, the Shipowner and the Mortgagee have executed and delivered the Modification and
Assumption Agreement (the “Agreement”), the form of which is 

  

 10 

 
attached hereto as Exhibit A, which, among other things, constitutes an assumption of the Security Agreement; and 
 WHEREAS, pursuant to Endorsement No. 1 to the Secretary’s Note, the form of which is attached hereto as Exhibit B, the Shipowner has assumed the
Secretary’s Note and obligations set forth therein, and has modified the method for calculation of interest on the 2005 Notes; and 
 WHEREAS, the calculation of interest set forth in the Secretary’s Note, an exhibit to and a part of the Mortgage, has changed, and the Secretary has required the Mortgage to be Supplemented in order to attach an Addendum to the
Secretary’s Note (the “Addendum”) which reflects the revised method of calculating interest, a form of which is attached hereto as Exhibit C; 
 NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged and as security for the Guarantees and in order to secure the
payment of the above-mentioned interest on and principal of the Secretary’s Note and all other sums that may be secured by the Mortgage and the Security Agreement, and to secure the due performance and observance of all agreements and covenants
in the Mortgage and Secretary’s Note and herein contained, the Shipowner hereby acknowledges and confirms that it has assumed and shall be fully liable on a joint and several or solidary basis for all obligations of the Assignor under the
Mortgage and the Shipowner has granted, conveyed, mortgaged, pledged, confirmed, assigned, transferred and set over, and by these presents does grant, convey, mortgage, pledge, confirm, assign, transfer and set over, unto the Mortgagee, the whole of
the Vessel listed in the Recitals of this Mortgage duly documented in the name of the Shipowner under the laws of the United States, having its home port at the port of New Orleans, Louisiana, together with all its engines, boilers, machinery,
masts, boats, anchors, cables, chains, rigging, tackle, apparel, furniture, capstans, outfit, tools, pumps, pumping and other equipment and all other appurtenances thereto now or at any time hereafter appertaining or belonging to and whether on
board or not on board and also any and all additions, improvements and replacements hereafter made in or to the Vessel or in and to their equipment and appurtenances as aforesaid, and the parties hereto further agree as follows: 
 SECTION 1. The Mortgagee hereby consents to the transfer of the Vessel and all appurtenances thereto by the Assignor to the Shipowner, subject, however,
to the maintenance thereon of the lien of the Mortgage with first priority and upon the due performance of the terms and conditions of this Assumption. 
 SECTION 2. For all purposes, including U.S. Coast Guard record keeping, the Shipowner shall be the owner of record of the Vessel and the Shipowner agrees the Vessel shall be redocumented in its name as owner thereof
on the date hereof with her home port at New Orleans, Louisiana. 
 SECTION 3. The Shipowner hereby covenants promises and agrees (i) to
pay the unpaid principal of and interest on the Secretary’s Note when the same may be due and 
  

 11 

 
payable in accordance with and subject to the teams of the Security Agreement, the Mortgage, and the Secretary’s Note, and all other sums which may be
secured by the Mortgage, as assumed by this Supplement No. 1 and the Security Agreement, and (ii) to observe each and every covenant, agreement and condition of the Mortgage which by the terms thereof are to be performed or observed by the
Shipowner thereunder. 
 SECTION 4. The Mortgagee releases and discharges the Assignor from each and every obligation to be performed by the
Mortgagor under the Mortgage. 
 SECTION 5. Assignor agrees that at any time and from time to time, upon written request of the Shipowner,
Assignor will promptly and duly execute any and all such further action as the Shipowner may reasonably request in order to obtain the full benefits of this Assignment and of the rights and powers herein granted. 
 SECTION 6. The provisions of the Addendum, annexed hereto as Exhibit C are incorporated herein by reference and a true copy of the from of the Addendum
is annexed hereto. 
 SECTION 7. For the purposes of 46 U.S.C. 31321(b)(3), the amount of the direct or contingent obligations that are or
may be secured by the Mortgage, excluding interest, expenses and fees is the total amount of Fifty Eight Million One Hundred and Sixty Five Thousand Dollars ($58,165,000.00) and the total amount of the Secretary’s Note on the date hereof is
Fifty Eight Million One Hundred and Sixty Five Thousand Dollars ($58,165,000.00) and, therefore, the total amount of the Mortgage as assumed by this Supplement No. 1 is $58,165,000.00 and interest (and premium, if any) and performance of
mortgage covenants. The date of maturity, June 2, 2020, remains unchanged and the discharge amount is the same as the reduced total amount The interest of the Shipowner in the Vessel is 100%. The interest mortgaged with respect to the Vessel is
100%. Nothing herein shall constitute a novation, release, termination or reissuance of the Mortgage, or a novation of the indebtedness evidenced by the Secretary’s Note. 
 SECTION 8. All of the covenants and agreements on the part of the Shipowner which are set forth in, and all the rights, privileges, powers and immunities
of the Mortgagee which are provided for in, the Mortgage and the Security Agreement attached hereto are incorporated herein and shall apply to the Shipowner with the same force and effect as though set forth at length in this Supplement No. 1.
Terms used herein and not otherwise defined herein are used as defined in Schedule X attached to the Security Agreement 
 SECTION 9. The
execution and delivery of this instrument have been duly authorized and all conditions and requirements necessary to make this instrument a valid and binding agreement and to effect the assumption of the Mortgage provided herein and to continue the
Mortgage, as assumed by this instrument, as a valid, binding and legal first preferred ship mortgage for the security of the Secretary’s Note, have been duly performed and complied with; 
  

 12 

 SECTION 10. The Mortgage is in all respects ratified and confirmed, and all of the terms, provisions and
conditions thereof shall be and remain in full force and effect except as specifically amended hereby. 
 IN WITNESS WHEREOF, this
instrument has been executed on the date below indicated and is effective as of the day and year first above written. 
  

			
	 ASSIGNOR:

	
	GREAT AQ STEAMBOAT CO., a Delaware corporation
		
	By:	 	 Great AQ Steamboat, L.L.C., a Delaware
 limited liability
company, successor by
 merger to Great AQ Steamboat Co.

  

			
		
	By:	 	 The Delta Queen. Steamboat Co., a
 Delaware corporation,
a Managing
 Member

  

			
		
	By:	 	

		 	Name: Jordan B. Allen
		 	Title: Senior Vice President

  

			
		
	By:	 	DQSB II, Inc., a Delaware
	corporation, a Managing Member
		 	

  

			
		
	By:	 	

		 	Name: Jordan B. Allen
		 	Title: Senior Vice President

  

			
	Date: March 25, 1997

  

 13 

			
	 SHIPOWNER:

	
	GREAT AQ STEAMBOAT, L.L.C., a Delaware limited liability company
		
	By:	 	 The Delta Queen Steamboat Co., a
 Delaware corporation, a
Managing
 Member

  

			
		
	By:	 	

		 	Name: Jordan B. Allen
		 	Title: Senior Vice President
		
	Date:	 	March 25, 1997

  

			
		
	By:	 	DQSB II, Inc., a Delaware corporation,
a Managing Member

  

			
		
	By:	 	

		 	Name: Jordan B. Allen
		 	Title: Senior Vice President
		
	Date:	 	March 25, 1997

  

			
	
	 UNITED STATES OF AMERICA
 SECRETARY
OF TRANSPORTATION

		
	By:	 	Maritime Administrator, as Mortgagee

  

			
		
	By:	 	

		 	 Secretary

		 	 Maritime Administration

  

			
	Date: March 26, 1997

  

	
	ATTEST
	
	

	Assistant Secretary
	Maritime Administration

  

 14 

 ACKNOWLEDGMENTS 
  

			
	 STATE OF ILLINOIS
	  	 )

		  	 )              SS.:

	 COUNTY OF COOK
	  	 )

 On this 25th day of March, 1997, before me personally appeared Jordan B. Allen, known to me to be
the person whose name is subscribed to the foregoing instrument and who, being by me duly sworn, did depose and say that he is Senior Vice President of The Delta Queen Steamboat Co. and DQSB II, Inc., the Managing Members of GREAT AQ STEAMBOAT,
L.L.C., a Delaware limited liability company, successor by merger and operation of law to Great AQ Steamboat Co., a Delaware corporation, and acknowledged to me that he executed the same on behalf of said companies for the purposes and consideration
therein expressed and as the free and voluntary act and deed of himself and said companies. 
  

	
	
	

	 Notary Public

 My commission expires: 4-28-00 
  

			
	 STATE OF ILLINOIS
	  	 )

		  	 )              SS.:

	 COUNTY OF COOK
	  	 )

 On this 25th day of March, 1997, before me personally appeared Jordan B. Allen, known to me to be
the person whose name is subscribed to the foregoing instrument and who, being by me duly sworn, did depose and say that he is Senior Vice President of The Delta Queen Steamboat Co. and DQSB II, Inc., the Managing Members of GREAT AQ STEAMBOAT,
L.L.C., a Delaware limited liability company, and acknowledged to me that he executed the same on behalf of said companies for the purposes and consideration therein expressed and as the free and voluntary act and deed of himself and said companies.

  

	
	
	

	 Notary Public

 My commission expires: 4-28-00 
  

 15 

			
	 DISTRICT OF COLUMBIA
	  	 )

		  	 )  SS.:

	 CITY OF WASHINGTON
	  	 )

 I, the undersigned, a Notary Public in and for the District of Columbia, do hereby certify that
Joel C. Richard, Maritime Administration, the United States of America, personally appeared before me in said District, the aforesaid officer being personally well known to me as the person who executed the Assumption and Supplement No. 1 to
First Preferred Ship Mortgage hereto annexed and acknowledged the same to be his free act and deed as said officer on behalf of the United States of America. 
 GIVEN under my hand and seal this 26 day of March, 1997. 
  

	
	
	

	Notary Public

 (Notorial Stamp and Seal) 
 My Commission Expires: 
 Melinda M. Allen 
 Notary Public, District of Columbia 
 My Commission Expires June 14, 2001 
  

 16Amended and Restated 2006 Security Agreement

 Exhibit 10.2 
 Contract No. MA-14031 
 AMENDED AND RESTATED 
 2006 SECURITY AGREEMENT 
 SPECIAL
PROVISIONS 
 THIS SECURITY AGREEMENT (the “Security Agreement”), dated April 25, 2005, by and between AQ
BOAT, LLC, a Delaware limited liability company (the “Assuming Shipowner”), and THE UNITED STATES OF AMERICA, represented by the Secretary of Transportation, acting by and through the Maritime Administrator (the
“Secretary,” and with the Assuming Shipowner, the “Parties”). 
 RECITALS: 
 WHEREAS, Great AQ Steamboat, L.L.C., successor to Great AQ Steamboat Co. (the “Original Shipowner”) entered into that certain
Trust Indenture, dated August 24, 1995, as amended and supplemented (the “Original Indenture”), with The Bank of New York (the “Original Trustee”), pursuant to which it issued certain obligations in the
principal amounts and at the interest rates set forth therein (the “Obligations”), to finance, in part, the construction of a paddlewheel passenger vessel, AMERICAN QUEEN, O.N. 1030765 (the “Vessel”); 
 WHEREAS, payment of the principal of and interest on the Obligations is guaranteed by the United States under the terms of Title XI of the
Merchant Marine Act, 1936 (the “Guarantee”); 
 WHEREAS, as security for the due and timely payment of debt service
set forth in the Obligations, the Original Shipowner executed and delivered to the Secretary, inter alia, a promissory note in the amount of the Obligations (the “Secretary’s Note”), and in order to secure the due and
timely payment of the Secretary’s Note, the Original Shipowner executed and delivered to the Secretary a First Preferred Ship Mortgage relating to the Vessel, which named the Secretary as mortgagee (the “Mortgage”), that
certain Security Agreement (the “Original Shipowner Security Agreement”), that certain Title XI Reserve Fund and Financial Agreement (the “Original Shipowner Financial Agreement”) and that certain Depository
Agreement (the “Original Shipowner Depository Agreement”); 
 WHEREAS, the Original Shipowner filed for protection
under Chapter 11 of the Bankruptcy Code on October 22, 2001, and failed to make the debt service payment due and owing on February 24, 2002; 
 WHEREAS, an auction of certain vessels owned by the Original Shipowner, including the Vessel, was conducted with the consent of the Bankruptcy Court on May 3, 2002, and DNPS Delta Queen Steamboat Company,
Inc. (“DQSC”) was the successful bidder; 

 WHEREAS, DQSC designated its subsidiary, American Queen Steamboat, LLC (the “Second
Shipowner”), to hold all the right, title and interest in the Vessel, and the Second Shipowner agreed to assume the Original Indenture and the Obligations;  
 WHEREAS, in connection with the assumption of the Obligations, the Second Shipowner on May 31, 2002 executed that certain Assumption
Agreement and 2002 Supplement to Trust Indenture (the “Second Shipowner Trust Indenture Assumption”), that certain 2002 Endorsement to the Secretary’s Note, that certain Assumption and 2002 Supplement to the Mortgage, that
certain Security Agreement (the “Second Shipowner Security Agreement”), that certain Depository Agreement (the “Second Shipowner Depository Agreement”) and that certain Title XI Reserve Fund and Financial Agreement
(the “Second Shipowner Financial Agreement,” and collectively with the foregoing agreements and related documents the “Second Shipowner Transaction Documents”); 
 WHEREAS, pursuant to that certain Asset Purchase Agreement dated as of April 6, 2006 (the “Asset Purchase Agreement”) by and
among DQSC, the Second Shipowner, Mississippi Queen Steamboat, LLC, Delta Queen Steamboat, LLC (collectively, the “DQ Companies”) and Ambassadors Cruise Group, LLC (“ACG”), the DQ Companies agreed to sell certain
assets, including the Vessel, to ACG; 
 WHEREAS, in connection with the Asset Purchase Agreement, the Secretary and the Second
Shipowner executed that certain Termination Agreement dated as of the date hereof pursuant to which the parties agreed to terminate the Second Shipowner Transaction Documents; 
 WHEREAS, Ambassadors has designated its subsidiary, AQ Boat LLC (the “Assuming Shipowner”), to hold all the right, title and
interest in the Vessel, and the Assuming Shipowner agreed to assume the Original Indenture and the Obligations under terms satisfactory, in form and substance, to the Secretary; 
 WHEREAS, on the date hereof the Assuming Shipowner has executed and delivered to the Secretary that certain Assumption Agreement and 2006
Supplement to Trustee Indenture (the “Assumption Agreement”), pursuant to which it has assumed the Obligations and the Original Indenture, that certain 2006 Endorsement to the Secretary’s Note, that certain 2006 Additional
Endorsement to Promissory Note to The United States, that certain Assumption and 2006 Supplement to the Mortgage, Contract No. MA-14032 (the “Mortgage Assumption”), that certain Depository Agreement, Contract No. MA-14034 (the
“Depository Agreement”), that certain Title XI Reserve Fund and Financial Agreement, Contract No. MA-14033 (the “Financial Agreement”), and this Security Agreement; 
 WHEREAS, the Assuming Shipowner is not assuming, and shall have no obligations with respect, to (i) the Original Shipowner Financial
Agreement or the Second Shipowner Financial Agreement, (ii) the Original Shipowner Depository Agreement or the Second Shipowner Depository Agreement, or (iii) the Original Shipowner Security Agreement or the Second Shipowner Security
Agreement, and such agreements are being replaced with the Financial Agreement, the Depository Agreement and this Security Agreement; and 
  

 2 

 WHEREAS, the Assuming Shipowner wishes to comply with its undertakings set forth in the Assumption
Agreement by executing this Security Agreement. 
 NOW THEREFORE, in consideration of the premises, the mutual covenants set forth
herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows: 
 ARTICLE I 
 CONCERNING THESE SPECIAL AND GENERAL PROVISIONS 
 This Security Agreement shall consist of two parts: the Special Provisions and the General Provisions attached hereto as Exhibit 1 of the Security
Agreement and incorporated herein by reference. In the event of any conflict, or inconsistency between the Special Provisions of this Security Agreement and Exhibit 1, the Special Provisions shall control. 
 ARTICLE II 
 ADDITION, DELETIONS AND
AMENDMENTS TO EXHIBIT 1 
 The following additions, deletions and amendments are hereby made to Exhibit 1 of the Security Agreement:

 1. General. Wherever it appears in Exhibit 1 of the Security Agreement, the term “Shipowner” shall mean the
“Assuming Shipowner.” 
 2. Concerning Subsection 1.03(a). Subsection 1.03(a) is hereby amended by deleting it in its
entirety and substituting the following provision in its place: 
 “Granting Clause. (a) In order to create a
present security interest in the Secretary, the Assuming Shipowner does hereby grant, sell, convey, assign, transfer, mortgage, pledge, set over and confirm unto the Secretary continuing security interests in all of the right, title and interest of
the Assuming Shipowner in and to all of the following, whether now owned or existing or hereafter arising or acquired: 
 (1)
All goods, whether equipment or inventory appertaining to or relating to the Vessel, whether or not on board or ashore and not covered by the Mortgage, and any charter and charter hire relating to such Vessel; 
 (2) The Title XI Reserve Fund, all monies, instruments, negotiable documents, chattel paper, and proceeds thereof currently on deposit or
hereafter deposited in, or credited to, the Title XI Reserve Fund; 
 (3) All monies, instruments, negotiable documents,
chattel paper and proceeds thereof held by the Depository under the Depository Agreement; 
  

 3 

 (4) Proceeds of Policies of Insurance relating to the Vessel and, whether or not insured,
any general average claims or loss of hire claims the Assuming Shipowner may have with respect to the Vessel; 
 (5) The
indemnification of the Assuming Shipowner by Delaware North Park Services, Inc. pursuant to the Asset Purchase Agreement relating to the Assuming Shipowner’s receipt of clear title to the Vessel; and 
 (6) All proceeds of the collateral described in paragraphs (1) through (5) of this section. 
 The Secretary shall have, as further security, certain right, title and interest in and to the following: 
 (7) The Mortgage, executed and delivered by the Original Shipowner in favor of the Secretary, as mortgagee, as assumed by the Assuming
Shipowner pursuant to the Mortgage Assumption. 
 3. Concerning Section 1.03(c). Section l.03(c)(1) is hereby amended by deleting
“each Construction Contract and” and “other” wherever they appear. Section 1.03(c)(2) is hereby deleted in its entirety. 
 4. Concerning Article II. The provisions of Article II, insofar as such provisions are applicable to the Vessel, are hereby amended by deleting the words “Delivery Date” wherever they appear in any section thereof and by
substituting therefor the words “Closing Date.” 
 5. Concerning Section 2.01. Section 2.01(a)(2) is hereby
amended by deleting the following: “Guarantee Commitment, the Construction Contract, Bond Purchase Agreement.” 
 6. Concerning
Section 2.02. Section 2.02(d)(1) is hereby deleted in its entirety. 
 7. Concerning Section 2.03.
Section 2.03 is hereby deleted in its entirety. 
 8. Concerning Section 2.04. Section 2.04 is hereby deleted in its
entirety. 
 9. Concerning Section 2.05(a). Section 2.05(a) is hereby deleted in its entirety. 
 10. Concerning Section 2.05(b). 
 (A) Section 2.05(b) is hereby amended by deleting all references to “Proportionate Part of the” or “Proportionate Part of.” 
 (B) In connection with Section 2.05(b)(3) and the last paragraph of Section 2.05(e) the maximum amount of self-insurance
permitted to the Shipowner under the last paragraph thereof shall be $750,000 per occurrence. 
  

 4 

 11. Concerning Section 2.05(c). 
 (A) In connection with clause (ii) of the initial paragraph of Section 2.05(c), the Secretary shall permit payment of losses up
to the amount of $250,000 to be made, directly to the Assuming Shipowner under the circumstances specified therein. 
 (B)
Section 2.05(c)(2) is hereby deleted in its entirety. 
 (C) Section 2.05(c)(3) is hereby amended by deleting
“Proportionate Part of’ and “a Proportionate Part of” in the proviso. 
 12. Concerning Section 2.05(g).
Section 2.05(g) is hereby amended by deleting “the Proportionate Part of” in the proviso. 
 13. Concerning
Section 2.07. Section 2.07(c) is hereby amended by deleting “termination of the Construction Contract relating to such Vessel,” in the first paragraph thereof, and by deleting all references to “Proportionate Part
of,” “a Proportionate Part of” and “the Proportionate Part of.” 
 14. Concerning Section 2.08.

 (A) The first sentence of Section 2.08(a) is hereby amended by inserting immediately after the words
“Vessel’s documents” and before the word “and” the following: “; provided that, if at any time, it is provided by law that a mortgage may be carried or kept at any place other than aboard such Vessel, then the certified
copy of the Mortgage, any supplement to the Mortgage and any assignment of the Mortgage shall be carried or kept with such Vessel’s documents;” and 
 (B) The notice referred to in Section 2.08(b) and (c) shall read as follows: 
 “NOTICE OF SHIP MORTGAGE 
 This Vessel is
owned by AQ Boat, LLC, a Delaware limited liability company (“Shipowner”), and is covered by a First Preferred Ship Mortgage in favor of the United States of America, under authority of Chapter 313, Title 46 of the United States Code.
Under the terms of said Mortgage neither the Shipowner, any charterer, the master or agent of this Vessel nor any other person has any right, power or authority to create, incur or permit to be placed or imposed upon this Vessel any lien other than
statutory liens incident to current operations that are subordinate to the Mortgage.” 
 The provisions of this Section shall not apply
until a reasonable time after the recordation of the Mortgage. 
 15. Concerning Section 2.14. Section 2.14 is hereby
deleted in its entirety. 
 16. Concerning Article IV. Article IV is hereby deleted in its entirety. 
 17. Concerning Article V. Article V is hereby deleted in its entirety. 
  

 5 

 18. Concerning Section 6.01. 
 (A) In connection with Section 6.01(b), add the following Security Defaults: 
 “(10) Failure of the Assuming Shipowner to cooperate with the Secretary in any sale of the Vessel in accordance with the restriction
set forth in the transfer of title filed with the U.S. Coast Guard; 
 (11) Failure of the Assuming Shipowner to pay, when due
and payable, the debt service on the Promissory Note to the United States of America in the amount of $2,788,509.40, with interest capitalized from the date hereof to August 23, 2003, as amended by the 2006 Endorsement to Promissory Note dated
April 24, 2006; 
 (B) 6.01(b)(5) is hereby amended by deleting “or the Construction Contract.” 
 (C) Section 6.01(b)(6) is hereby amended by deleting “the Guarantee Commitment.” 
 19. Concerning Section 8.01. Section 8.01 is hereby amended by deleting all references to “Proportionate Part of the.”

 20. Concerning Schedule X. Schedule A is hereby amended bas follows: 
 (A) By adding the defined term “Treasury,” which shall mean the Treasury of the United States, located in the
District of Columbia. 
 (B) By adding the defined term “Deposit Fund,” which shall mean the account
held in the name of the Secretary at the Treasury of the United States pursuant to Section 1109 of the Act and in accordance with the terms of the Depository Agreement. 
 21. Concerning Notices. 
 (A) Section 9.01 is hereby amended by deleting the words “registered or certified mail, postage prepaid,” and replacing it with the words “facsimile transmission or by electronic mail.” 
 (B) Subject to Section 9.01 of the Security Agreement, any notice, request, demand, direction, consent, waiver, approval or other
communication, when given to a party hereto, shall be addressed to: 
  

	 	The Secretary as:	SECRETARY OF TRANSPORTATION 

	 	    	c/o Maritime Administrator 

	 	    	Maritime Administration 

	 	    	400 Seventh Street, S.W. 

	 	    	Washington, D.C. 20590 

	 	    	Attention: Michael Bouril 

	 	    	Fax: 202-366-7901 

	 	    	E-mail: michael.bouril@dot.gov 

  

 6 

	 	The Assuming Shipowner as:	AQ BOAT, LLC 

	 	    	c/o Ambassadors Cruise Group LLC 

	 	    	1071 Camelback Street 

	 	    	Newport Beach, California 92660 

	 	    	Attn: Brian R. Schaefgen 

	 	    	Fax: 949-759-5970 

	 	    	E-mail: brian.schaefgen@ambassadors.com 

  

	 	                            with copy to:	Blank Rome LLP 

	 	    	600 New Hampshire Avenue, NW #1200 

	 	    	Washington, DC 20037 

	 	    	Attn: James B. Ellis II 

	 	    	Fax: 202-944-3068 

	 	    	E-mail: ellis-j@blankrome.com 

 22. Governing Law.
This Security Agreement and the rights and obligations of the parties hereto shall be governed by and construed in accordance with U.S. maritime laws, to the extent applicable, and otherwise in accordance with the laws of the State of New York.

 23. Acknowledgement. The Assuming Shipowner is not assuming, and shall have no obligations with respect to, the Original
Shipowner’s Security Agreement and the Second Shipowner’s Security Agreement, both of which shall be of no further force and effect. 
 [Remainder of page intentionally left blank] 
  

 7 

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

			
	AQ BOAT, LLC
		
	By:	 	/s/ Brian R. Schaefgen
		 	Brian R. Schaefgen
		 	Chief Financial Officer

  

			
	Attest:
		
	By:	 	/s/ Laura Tuthill
		 	Name:

  

			
	UNITED STATES OF AMERICA
SECRETARY OF TRANSPORTATION
	
	MARITIME ADMINISTRATOR
		
	By:	 	/s/ Joel C. Richard
		 	Joel C. Richard
		 	Secretary
		 	Maritime Administration

  

	
	Attest:
	
	/s/ Sarah J. Washington
	Assistant Secretary
	Maritime Administration

  

 8 

			
	Exhibit 1 to Security Agreement	  	 Document 10
 GENERAL PROVISIONS

 TABLE OF CONTENTS 
  

					
	ARTICLE I
	DEFINITIONS; OFFICER’S CERTIFICATES; GRANTING CLAUSE
			
	SECTION 1.01.	  	Definitions	  	1
	SECTION 1.02.	  	Officers Certificates	  	1
	SECTION 1.03.	  	Granting Clause	  	1
	
	ARTICLE II
	SHIPOWNERS REPRESENTATIONS AND AGREEMENTS
			
	SECTION 2.01.	  	Shipowner’s Representations, Agreements, Organization and Existence	  	2
	SECTION 2.02.	  	Covenants Concerning the Vessels	  	3
		  	 (a)    Title to and Possession of the Vessels
	  	3
		  	 (b)    Sale, Mortgage, Transfer or Charter of the Vessels
	  	4
		  	 (c)    Taxes and Governmental Charges
	  	4
		  	 (d)    Liens
	  	4
		  	 (e)    Compliance with Applicable Laws
	  	4
		  	 (f)     Vessels Operation
	  	5
		  	 (g)    Vessels Condition and Maintenance
	  	5
		  	 (h)    Material Changes in the Vessels
	  	6
		  	 (i)     Documentation of the Vessels
	  	6
	SECTION 2.03.	  	Maintenance of Construction Contract	  	6
	SECTION 2.04.	  	Delivery Requirements	  	6
	SECTION 2.05.	  	Insurance	  	7
	SECTION 2.06.	  	Inspection of the Vessels; Examination of Shipowner’s Records	  	13
	SECTION 2.07.	  	Requisition of Title, Termination of Construction Contact or Total Loss of a Vessel	  	13
	SECTION 2.08.	  	Notice of Mortgage	  	14
	SECTION 2.09.	  	Compliance with 46 U.S.C. Chapter 313	  	14
	SECTION 2.10.	  	Performance of Shipowners Agreements by the Secretary	  	14
	SECTION 2.11.	  	Uniform Commercial Code Filings; Further Assurances	  	14
	SECTION 2.12.	  	Modification of Formation Agreements	  	15
	SECTION 2.13.	  	Members of Limited Liability Companies	  	15
	SECTION 2.14.	  	Concerning the Performance and Payment Bonds	  	15
	
	ARTICLE III
	THE SECRETARY’S NOTE
			
	SECTION 3.01.	  	Secretary’s Note	  	16
	SECTION 3.02.	  	Termination of the Guarantees	  	16
	SECTION 3.03.	  	Execution of Additional Secretary’s Note	  	16

  

 i 

					
	ARTICLE IV
	CONSTRUCTION FUND; MONEYS DUE WITH RESPECT TO CONSTRUCTION OF THE VESSELS
			
	SECTION 4.01.	  	Construction Fund	  	17
	SECTION 4.02.	  	Moneys Due with Respect to Construction of the Vessels	  	17
	
	ARTICLE V
	ACTUAL COST; THE ESCROW FUND
			
	SECTION 5.01.	  	Actual Cost Determinations	  	17
	SECTION 5.02.	  	Escrow Fund Deposits	  	18
	SECTION 5.03.	  	Escrow Fund Withdrawals	  	18
	SECTION 5.04.	  	Investment and Liquidation of the Escrow Fund	  	20
	SECTION 5.05.	  	Income on the Escrow Fund	  	20
	SECTION 5.06.	  	Termination Date of the Escrow Fund	  	20
	
	ARTICLE VI
	DEFAULTS AND REMEDIES
			
	SECTION 6.01.	  	What Constitutes “Defaults;” Continuance of Defaults	  	21
	SECTION 6.02.	  	Acceleration of Maturity of the Secretary’s Note	  	22
	SECTION 6.03.	  	Waivers of Default	  	22
	SECTION 6.04.	  	Remedies After Default	  	23
	SECTION 6.05.	  	Application of Proceeds	  	25
	SECTION 6.06.	  	General Powers of the Secretary	  	25
	
	ARTICLE VII
	AMENDMENTS AND SUPPLEMENTS TO THE SECURITY AGREEMENT, MORTGAGE AND INDENTURE
			
	SECTION 7.01.	  	Amendments and Supplements to the Security Agreement and the Mortgage	  	26
	SECTION 7.02.	  	Amendments and Supplements to the Indenture	  	26
	
	ARTICLE VIII
	CONSOLIDATION, MERGER OR SALE
			
	SECTION 8.01.	  	Consolidation, Merger or Sale	  	26
	SECTION 8.02.	  	Transfer of a General Partners or a Joint Venturer’s Interest	  	27
	
	ARTICLE IX
	NOTICES
			
	SECTION 9.01.	  	Notices	  	27
	SECTION 9.02.	  	Waivers of Notice	  	27
	SECTION 9.03.	  	Shipowner’s Name or Address Change	  	28

  

 ii 

					
	ARTICLE X
	DISCHARGE OF SECURITY AGREEMENT AND THE MORTGAGE
			
	SECTION 10.01.	  	Discharge of Security Agreement and the Mortgage	  	28
	
	ARTICLE XI
	MISCELLANEOUS
			
	SECTION 11.01.	  	Successors and Assigns	  	28
	SECTION 11.02.	  	Execution in Counterparts	  	28
	SECTION 11.03.	  	Shipowner’s Rights in Absence of Default	  	28
	SECTION 11.04.	  	Surrender of Vessels’ Documents	  	29
	SECTION 11.05.	  	Applicable Regulations	  	29
	SECTION 11.06.	  	Table of Contents, Titles and Heading	  	29

  

 iii 

 ARTICLE I 
 DEFINITIONS; OFFICER’S CERTIFICATES; GRANTING CLAUSE 
 SECTION 1.01. Definitions.
All capitalized terms used but, not defined herein, shall have the meaning ascribed in Schedule X. 
 SECTION 1.02. Officers
Certificates. To satisfy a covenant or condition provided for in this Security Agreement, the Responsible Officer of the Person making such Officers Certificate shall certify that the officer (a) has read such covenant or condition;
(b) has made or caused to be made such examination or investigation as is necessary to enable the Officer to express an informed opinion with respect to such covenant or condition; and (c) believes to the best of the Officers knowledge
that such condition or covenant has been met. An Officers Certificate shall set forth the pertinent supporting information and shall be subject to the Secretary’s review of its adequacy and accuracy. 
 SECTION 1.03. Granting Clause. (a) In order to create a present security interest in the Secretary, the Shipowner’s does hereby
grant, sell, convey, assign, transfer, mortgage, pledge, set over and confirm unto the Secretary continuing security interests in all of the right, title and interest of the Shipowner’s in and to all of the following, whether now owned or
existing or hereafter arising or acquired: 
 (1) Each Construction Contract (insofar as it relates to the interest in and to
the Construction Contacts, and the other contracts conveyed to the Secretary by this subsection are hereinafter referred to collectively as the “Rights Under the Construction and Related Contracts.” 
 (2) The Shipowner’s rights to receive all moneys which from time to time may become due to the Shipowner’s with respect to the
Construction of each Vessel regardless of the legal theory by which moneys are recovered. Said right, title and interest in and to the moneys, cash, bonds, claims, and securities conveyed by this subsection are herein referred to collectively as the
“Moneys Due with Respect to the Construction of the Vessels.” The Secretary acknowledges and agrees that the Moneys Due with Respect to the Construction of the Vessels will be paid directly to the Depository for application in accordance
with this Security Agreement and the Indenture. 
 (3) All goods, whether equipment or inventory appertaining to or relating
to each Vessel, whether or not on board or ashore and not covered by the Mortgage, and any charter hire relating to each Vessel. 
 (4) The Title XI Reserve Fund and all moneys, instruments, negotiable documents, chattel paper, and proceeds thereof currently on deposit or hereafter deposited in the Title XI Reserve Fund. 
 (5) The Construction Fund and all moneys, instruments, negotiable documents, chattel paper and proceeds thereof currently on deposit or
hereafter deposited in said Fund. 

 (6) All moneys, instruments, negotiable documents, chattel paper and proceeds thereof
held by the Depository under the Depository Agreement. 
 (7) Proceeds of Policies of Insurance relating to each Vessel and,
whether or not insured, any general average claims or loss of hire claims Shipowner’s may have with respect to each Vessel. 
 (8) All proceeds of the collateral described in paragraphs (1) through (7) of this Section. 
 The Secretary shall have,
upon execution and delivery thereof, as further security, certain right, title and interest in and to the following: 
 (9)
The Mortgage, to be executed and delivered by the Shipowner’s to the Secretary, as mortgagee, on the date hereof, covering each Vessel. 
 (b) The right, title and interest of the Secretary pursuant to Section 1.03(a) is herein, collectively, called the “Security.” The Secretary shall hold the Security as collateral security for all of the obligations and
liabilities of the Shipowner’s under the Secretary’s Note and as collateral security for and with respect to the Guarantees whether now made or hereafter entered into. 
 (c) Notwithstanding paragraphs (a) and (b) of this Section, (1) the Shipowner’s shall remain liable to perform its obligations under
each Construction Contract and the above-mentioned other contracts; (2) the Secretary shall not, by virtue of this Security Agreement, have any obligations under any of the documents referred to in clause (1) or be required to make any
payment owing by the Shipowner’s thereunder; and (3) if there is no existing Default, the Shipowner’s shall (subject to the rights of the Secretary hereunder) be entitled to exercise all of its rights under each of the documents
referred to in this Section and shall be entitled to receive all of the benefits accruing to it thereunder as if paragraphs (a) and (b) of this Section were not applicable. 
 (d) The Shipowner’s hereby agrees with the Secretary that the Security is to be held by the Secretary subject to the further agreements and
conditions set forth herein. 
 ARTICLE II 
 SHIPOWNERS REPRESENTATIONS AND AGREEMENTS 
 The Shipowner’s hereby represents and agrees, so
long as this Security Agreement shall not have been discharged, as follows: 
 SECTION 2.01. Shipowner’s Representations,
Agreements, Organization and Existence. 
 (a) General Representations. The Shipowner’s hereby represents and warrants that
the following are true statements as of the date hereof and further warrants that they shall remain true thereafter: 
 (1)
the Shipowner’s is duly organized, validly existing and in good standing under the laws of the jurisdiction designated in the initial paragraph of the Special Provisions hereof and shall maintain such existence. The Shipowner’s has not
failed to qualify to do business in any jurisdiction in the United States in which its business or properties require such qualification, and had and has full legal right, power and authority to own its own properties and assets and conduct its
business as it is presently conducted; 
  

 2 

 (2) the Shipowner’s had and has legal power and authority to enter into and carry
out the terms of the Guarantee Commitment, the Construction Contract, Bond Purchase Agreement, Obligations, Indenture, Security Agreement, Secretary’s Note, Mortgage, Financial Agreement, and Depository Agreement (the “Documents”);

 (3) each of the Documents has been duly authorized, executed and delivered by the Shipowner’s and constitutes, in
accordance with its respective terms, legal, valid and binding instruments enforceable against the Shipowner’s, except to the extent limited by applicable bankruptcy, reorganization, insolvency, moratorium or similar laws of general application
relating to or affecting the enforcement of creditors rights as from time to time in effect; 
 (4) the consummation of the
transactions contemplated by and compliance by the Shipowner’s of all the terms and provisions of the Documents will not violate any provisions of the formation documents of the Shipowner’s and will not result in a breach of the terms and
provisions of, or constitute a default under any other agreement or undertaking by the Shipowner or by which the Shipowner’s is bound or any order of any court or administrative agency entered into in any proceedings to which the
Shipowner’s is or has been a party; and 
 (5) there is no litigation, proceeding or investigation pending or, to the
best of the Shipowner’s knowledge, threatened, involving the Shipowner’s or any of its property which could prevent or jeopardize the performance by the Shipowner’s of its obligations under the Documents; 
 (b) Shipowner’s United States Citizenship. The Shipowner’s is a citizen of the United States within the meaning of Section 2 of the
Shipping Act, 1916, as amended, and shall remain such a citizen for operation in the trades in which the Shipowner’s proposes to operate the Vessels and in the event the Shipowner’s shall cease to be such a citizen, the Shipowner’s
shall notify the Secretary immediately of such fact. 
 (c) Taxes. The Shipowner’s has paid or caused to be paid all taxes
assessed against it, unless the same are being contested in good faith or an authorized extension of time has been granted. 
 SECTION
2.02. Covenants Concerning the Vessels. 
 (a) Title to and Possession of the Vessels. On the date of this Security
Agreement, the Shipowner’s represents and warrants that it lawfully owns each Vessel free from any liens, encumbrances, security interests, charges, or rights in rem (subject only to (1) the equity of the Shipyard under the
Construction Contract, if any, (2) liens on any undelivered Vessel which the Shipyard is obligated to discharge under the Construction Contract, (3) any security interest 

  

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subordinated to the Secretary’s security interest permitted under the Special Provisions hereof, (4) the Secretary’s rights hereunder and
(5) the liens permitted by paragraph (d)(3) of this Section). The Shipowner’s shall, for the Secretary’s benefit, warrant and defend the title to, and possession of, each Vessel and every part thereof against the claims and demands of
all Persons whomsoever. 
 (b) Sale, Mortgage, Transfer or Charter of the Vessels. 
 (1) The Shipowner’s shall not, without the Secretary’s prior written consent, sell, mortgage, demise charter or transfer any
Vessel to any Person (or charter the Vessel to a Related Party under any form of charter). 
 (2) The Shipowner’s hereby
covenants that: (A) it will not enter into any time charter of the Vessels in excess of six months unless the time charter contains the following provision, “This time charter is subject to each of the rights and remedies of the Secretary
of Transportation and has been assigned to the Secretary under a Security Agreement and Mortgage, each executed by the Shipowner’s in favor of the Secretary with respect to the Vessels being chartered.” and (B) it shall, within 10
calendar days of entering into any time charter in excess of six months, transmit a copy of the time charter to the Secretary. 
 (c)
Taxes and Governmental Charges. The Shipowner’s shall pay and discharge, or cause to be paid and discharged, on or before the same shall become delinquent, all taxes, assessments, government charges, tines and penalties lawfully imposed
upon each Vessel, unless the same are being contested in good faith. 
 (d) Liens. 
 (3) As a condition precedent to each payment by the Shipowner’s under the Construction Contract, the Shipowner’s shall require
an Officer’s Certificate from the Shipyard stating that once the Shipyard receives said payment, there will be no liens or rights in rem against the respective Vessel. At the Delivery Date of each Vessel, the Shipowner’s and the
Shipyard shall provide an Officers Certificate stating that there are no liens or rights in rem against the respective Vessel except for the Mortgage. 
 (4) After the Delivery Date of each Vessel, the Shipowner’s shall satisfy, or cause to be satisfied, within 30 days of its knowledge
thereof, any lien or encumbrance or right in rem which shall be filed against such Vessel unless the same is being contested in good faith; and 
 (5) Neither the Shipowner’s, any charterer, the master of any Vessel, nor any other Person has or shall have any right, power or authority, without the Secretary’s prior written consent, to create, incur or
permit to be placed or imposed on any Vessel any lien, encumbrance, security interest, charge, or rights in rem, and statutory liens incident to current operations unless such statutory liens are subordinate to the Mortgage. 
 (e) Compliance with Applicable Laws. The Shipowner’s shall at all times be in compliance with all applicable U.S. laws. In addition, each
Vessel (1) shall be designed to meet, and on the Delivery Date thereof and at all times thereafter shall meet all requirements of 

  

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applicable laws, treaties and conventions, and of applicable rules and regulations thereunder, and (2) shall have on board valid certificates showing
compliance therewith; provided that the foregoing shall not apply if (A) the Vessel is in Government Use; (B) there has been an actual or constructive total loss or an agreed or compromised total loss of such Vessel; or
(C) there has been any other loss with respect to such Vessel and the Shipowner shall not have had a reasonable time to repair the same. 
 (f) Vessels Operation. Except when the Vessel is in Government Use, the Shipowner shall not (1) cause or permit the Vessels to be operated in any manner contrary to law or to any lawful rules or regulations of the Maritime
Administration, (2) remove or attempt to remove the Vessels beyond the limits of the United States without the Secretary’s prior written consent except on voyages with the intention of returning to the United States, or (3) abandon
such Vessels in any foreign port unless there has been an actual or constructive total loss or an agreed or compromised total loss of any of the Vessels. 
 (g) Vessels Condition and Maintenance. 
 (1) Each Vessel shall be constructed,
maintained and operated so as to meet, at all times, the highest classification, certification, rating and inspection standards for Vessels of the same age and type as may be imposed by the Classification Society; provide that, the foregoing
shall not apply if the Vessel has been (i) under Government Use, (ii) an actual or constructive total loss or an agreed or compromised total loss of such Vessel, or (iii) any other loss with respect to such Vessel and the
Shipowner’s shall not have had a reasonable time to repair the same; 
 (2) On the Delivery Date of each Vessel, the
Shipowner’s shall furnish to the Secretary an interim Class Certificate issued for each such Vessel by the Classification Society and promptly after the Delivery Date of each Vessel, furnish to the Secretary a Certificate of Class with respect
to such Vessel issued by the Classification Society. Subsequently, the Shipowner’s shall animally (A) furnish to the Secretary a Certificate of Confirmation of Class issued by the Classification Society showing that the above mentioned
classification and rating have been retained for each Vessel and (B) furnish to the Secretary copies of all Classification Society reports, including periodic and damage surveys for each Vessel; provide that, the foregoing shall not
apply if the Vessel is in Government Use and the governmental body does not permit classification and rating of the Vessel. 
 (3) Notwithstanding Section 2.02(g)(2), if the Vessel is a barge which is not classed, then the Shipowner’s shall, at all times, at its own cost and expense maintain and preserve each Vessel, so far as may be practicable, in at
least as good order and condition, ordinary wear and tear excepted, as at the Delivery Date of such Vessel, and shall perform or cause to be performed at least once every five years and at any other time reasonably required by the Secretary, a
survey and inspection of the Vessels by an independent marine surveyor approved by the Secretary; and provided that, no such surveys will be required within the last three years prior to the final Stated Maturity of the Obligations.

 The Shipowner’s shall furnish two copies of the report of such independent marine surveyor to the Secretary within 15 days of such survey and
inspection. The Shipowner’s shall deliver to the 

  

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Secretary annually an Officer’s Certificate stating the condition and maintenance of each Vessel; provide further, that none of this Section
shall apply when the Vessel is in Government Use. 
 (h) Material Changes in the Vessels. After the Delivery Date of any undelivered
Vessel or the Closing Date of any already delivered Vessel, the Shipowner’s shall not make, or permit to be made, any material change in the structure, means of propulsion, type or speed of such Vessel or in its rig, without the
Secretary’s prior written consent. 
 (i) Documentation of the Vessels. Upon the Delivery Date and thereafter, each Vessel shall
be and shall remain documented under the laws of the United States of America. 
 SECTION 2.03. Maintenance of Construction
Contract. 
 (a) The Construction Contract shall be maintained in full force and effect insofar as it relates to the due performance by
the Shipowner’s and the Shipyard of all theft respective obligations thereunder and the Shipowner’s shall not, without the Secretary’s prior written consent, amend, modify, assign or terminate the Construction Contract or consent to
any change in the Construction Contract which releases the Shipyard from its obligations to comply with the provisions of the Construction Contract or any applicable laws, treaties, conventions, rules and regulations; provide that, the
Secretary’s prior written consent shall not be necessary; but prompt written notice to the Secretary shall be given for (1) any mandatory or regulatory change to the Construction Contract as a result of any requirements of any governmental
agency, or (2) any non-mandatory changes that Shipyard and Shipowner’s desire to make which do not exceed, with respect to any item of the Vessel’s construction, one (1%) percent of the Vessels Contract Price and which do not, in
the aggregate, cause the Vessels Contract Price to be increased more than five (5%) percent or the delivery and completion date of the Vessel to be extended more than ten (10) days. Notwithstanding the foregoing, no change shall be made in
the general dimensions and/or characteristics of the Vessels which changes the capacity of the Vessels to perform as originally intended by the Construction Contract without the Secretary’s prior written consent. The Secretary will nonetheless
retain its authority to review work done under a change order to ascertain whether the work should be included in Actual Cost and whether the price charged is fair and reasonable. No withdrawals may be made from the Escrow Fund for work that is not
determined to be includable in Actual Cost. 
 (b) Notwithstanding anything to the contrary contained in the Construction Contract or herein,
no changes to the payment milestones and disbursement schedules shall be made without the Secretary’s prior written consent, except to the extent reasonably required to reflect the change orders under paragraph (a) of this Section.

 SECTION 2.04. Delivery Requirements. At or prior to the Delivery Date, the Shipowner’s shall have: 
 (a) documented the Vessel under the laws of the United States with the United States Coast Guard; 
 (b) executed and delivered to the Secretary the Mortgage (or mortgage supplement) substantially in the form of Exhibit 3 annexed hereto; 
  

 6 

 (c) recorded the Mortgage (or, if appropriate, a mortgage supplement) in the National Vessel
Documentation Center of the United States Coast Guard, or its successor; 
 (d) delivered to the Secretary an Officer’s Certificate
(1) from the Shipowner and the Shipyard certifying that the Vessel is free of any claim, lien, charge, mortgage, or other encumbrance of any character except as permitted under Section 2.02(d); (2) certifying that there has not
occurred and is not then continuing any event which constitutes (or after any period of time or any notice, or both, would constitute) a default under the Security Agreement; (3) that the marine insurance as required under Section 2.05
will be in full force and effect at the time of Vessel delivery; (4) certifying that the Vessel was constructed substantially in accordance with the plans and specifications of the Construction Contract; (5) certifying that there have been
no unusual occurrences (or a full description of such occurrences, if any) which would adversely affect the condition of the delivered Vessel. 
 (e) delivered to the Secretary (1) an opinion of counsel substantially in the form of Exhibit A to the form of Mortgage; and (2) a certificate of delivery and acceptance from the Shipowner’s and the Shipyard to the Secretary
with respect to the delivered Vessel; 
 SECTION 2.05. Insurance. 
 (a) Prior to the Delivery Date of each Vessel, the Shipowner’s shall, without cost to the Secretary or, with respect to war risk builders risk
insurance mentioned below, without cost to the Shipyard, cause each Vessel to be insured as provided in the Construction Contract and as contemplated by the Consent of Shipyard; provided that, the insurance required by this Section shall be
approved by the Secretary. 
 (b) Upon the Delivery Date of each Vessel and at all times thereafter, the Shipowner’s shall, without cost
to the Secretary, keep such Vessel insured as indicated below and with such additional insurance as may be specified by the Secretary in an amount in U.S. dollars equal to 110% of the unpaid principal amount of the Proportionate Part of the
Secretary’s Note, or such greater sum, up to and including the full commercial value of such Vessel as may be required by the Secretary. The Shipowner shall provide 30 days prior written notice to the Secretary of all insurance renewals.

 (1) Marine and war risk hull insurance under the latest (at the time of issue of the policies in question) forms of
American Institute of Marine Underwriters’ policies approved by the Secretary and/or policies issued by or for the Maritime Administration (or under such other firms of policies as the Secretary may approve in writing) insuring such Vessel
against the usual risks covered by such forms (including, at the Shipowner’s option, such amounts of increased value and other forms of “total loss only” insurance as are permitted by said hull insurance policies); and 
 (2) While any Vessel is laid up, at the Shipowner’s option and in lieu of the above-mentioned marine and war risk hull insurance or
marine and war risk hull and increased value insurance, port risk insurance under the latest (at the time of issue of the policies in question) forms of American Institute of Marine Underwriters’ policies approved by the Secretary and/or
policies issued by or for the Maritime Administration (or under such other 

  

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forms of policies as the Secretary may approve in writing) insuring such Vessel against the usual risks covered by such forms. 
 (3) Notwithstanding the foregoing, the Shipowner’s, with the Secretary’s prior written consent, shall have the right to
self-insure up to the amount specified in the Special Provisions hereof for any loss resulting from any one accident or occurrence (other than an actual or constructive total loss of any Vessel). 
 (c) All policies of insurance under this Section shall provide, so long as this Security Agreement has not been discharged, that payment of all losses
shall be made payable to the Secretary for distribution by him to himself, the Shipowner’s and (in the case of the insurance required by paragraph (a) of this Section) the Shipyard, except that (i) as provided in paragraph (e) of
this Section and (ii) under the policies required by paragraph (b) of this Section, payment of all losses up to the amount specified in the Special Provisions hereof by all insurance underwriters with respect to any one accident,
occurrence or event may be made directly to the Shipowner’s unless there is an existing Default, or if the Secretary shall have assumed the Shipowner’s rights and duties under the Indenture and the Obligations and made any payments in
default under the terms of Section 6.09 of the Indenture, in which event payment of all losses shall be made payable to the Secretary as aforesaid. 
 Any such insurance recoveries to which the Secretary shall be so entitled shall be applied as follows: 
 (1) In the event that insurance becomes payable under said policies on account of an accident, occurrence or event not resulting in an actual or constructive total loss or an agreed or compromised total loss of any
Vessel, the Secretary shall (A) if there is no existing Default and if none of the events described in Section 2.07 has occurred, in accordance with a Shipowner’s Request, pay, or consent that the underwriters pay, direct for repairs,
liabilities, salvage claims or other charges and expenses (including sue and labor charges due or paid by the Shipowner’s) covered by the policies, or (to the extent that, as stated in an Officers Certificate delivered to the Secretary,
accompanied by written confirmation by the underwriter or a surveyor or adjuster, the damage shall have been repaired and the cost thereof paid of such liabilities, salvage claims, or other charges and expenses discharged or paid, reimburse, or
consent that the underwriters reimburse, the Shipowner’s therefor and (after all known damage with respect to the particular loss shall have been repaired, except to the extent the Shipowner’s, with the Secretary’s written consent,
deems the said repair inadvisable, and all known costs, liabilities, salvage claims, charges and expenses, covered by the policies, with respect to such loss shall have been discharged or paid, as stated in an Officers Certificate delivered to the
Secretary, accompanied by written confirmation by the underwriters or a surveyor or adjuster) pay, or consent that the underwriters pay, any balance to the Shipowner’s; or (B) if there is an existing Default, in accordance with a Request
of Shipowner’s, pay, or consent that the underwriters pay, direct for the Shipowner’s proportion of such repairs, liabilities, salvage claims or other charges and expenses (including sue and labor charges due or paid by the
Shipowner’s) covered by the policies and hold any balance until the same may be paid or applied under clauses (A), (C) or (D) of this subsection, whichever is applicable; or (C) if the Guarantees shall have terminated pursuant to
Section 3.02(c) or if the Secretary shall have assumed the Shipowners rights and duties under the Indenture and the Obligations and made any payments in default under the terms 

  

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of Section 6.09 of the Indenture and none of the events described in Section 2.07 has occurred, apply the insurance as provided in
Section 6.05; or (D) if the Guarantees shall have terminated pursuant to Section 3.02(b) or (d), pay the insurance to the Shipowner’s; 
 (2) In the event of an accident, occurrence or event resulting in an actual or constructive total loss of any Vessel prior to the Delivery Date of such Vessel, the Shipowner’s shall forthwith deposit with the
Secretary any insurance moneys which the Shipowner’s receives on account thereof under policies of insurance required by paragraph (a) of this Section, and any such insurance moneys shall be held by the Secretary for 10 days (or such
lesser or further time as the Shipowner’s and the Secretary may agree upon). Upon the expiration of said period of time, (A) if there is no existing Default and if the Shipowner’s, the Shipyard and the Secretary shall have elected not
to construct such Vessel under the Construction Contract, then said insurance moneys shall be applied, to the extent necessary and required pursuant to Section 2.07; or (B) if there is no existing Default and if the Shipowner’s, the
Shipyard and the Secretary shall not have made the election contemplated by clause (A) of this subsection, then said insurance moneys (together with the Shipowner’s funds to the extent, if any, required by the Secretary for deposit on
account of interest under clause (ii) below) shall be deposited in the Escrow Fund, in such amount and to the extent available, so that the moneys in the Escrow Fund after such deposit shall be equal to (i) the principal amount of the
Proportionate Part of the Outstanding Obligations relating to such Vessel at the time of such deposit and (ii) such interest on said deposit, if any, as may be required by the Secretary (said moneys to be subject to withdrawal in the same
manner as moneys originally deposited in said Escrow Fund); and the balance, if any, of such insurance moneys held by the Secretary shall be paid to the Shipowner’s; and 
 (3) In the event of an accident, occurrence or event resulting in an actual or constructive total loss or an agreed or compromised total
loss of any Vessel, whether prior to or after the Delivery Date of such Vessel, and the insurance moneys have not been applied as provided in paragraph (c)(2) of this Section, the Shipowner’s shall forthwith deposit with the Secretary any
insurance moneys which the Shipowner’s receives on account thereof under policies of insurance required by this Section, and any such insurance moneys received by the Secretary, whether from the Shipowner’s or otherwise, or held by the
Secretary pursuant to paragraph (c)(2) of this Section, shall (A) if there is no existing Default, be applied, to the extent necessary, pursuant to Section 2.07; (B) if there is an existing Security Default, be held until the same may
be applied under clauses (A), (C), or (D) of this subsection, whichever is applicable; (C) if the guarantees shall have terminated pursuant to Section 3.02(c) or if the Secretary shall have assumed the Shipowners rights and duties
under the Indenture and the Obligations and made any payments in default under the terms of Section 6.09 of the Indenture, be applied as provided in Section 6.05; provide that, notwithstanding the foregoing clauses (A), (B) and
(C) of this subsection, the Shipowner’s shall not be required to so deposit with the Secretary insurance moneys in an amount which, together with funds otherwise available for the redemption of Obligations is in excess of that required for
the redemption of the Proportionate Part of the Outstanding Obligations pursuant to Section 3.05 of the Indenture and for the payment to the Secretary of a Proportionate Part of all other sums that may be secured by this Security Agreement and
the Mortgage; or (D) if the Guarantees shall have terminated pursuant to Section 3.02(b) or 3.02(d), be paid to the Shipowner’s. 
  

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 (d) In the event of an accident, occurrence or event resulting in a constructive total loss of any
Vessel, the Secretary shall have the right (with the prior written consent of the Shipowner’s, unless there is an existing Default, and at any time prior to the Delivery Date of such Vessel also with the prior written consent of the Shipyard)
to claim for a constructive total loss of such Vessel. If (1) such claim is accepted by all underwriters under all policies then in force as to such Vessel under which payment is due for total loss and (2) payment in full is made in cash
under such policies to the Secretary, then the Secretary shall have the right to abandon such Vessel to the underwriters of such policies, free from lien of this Security Agreement and the Mortgage. 
 (e) Commencing on the Delivery Date of each Vessel, the Shipowner’s shall, without cost to the Secretary, keep each such Vessel insured against
marine and war risk protection and indemnity risks and liabilities by policies of insurance approved by the Secretary as to form and amount; provided that, (1) the Shipowner’s shall, as soon as possible before such Delivery Date,
present any such policy to the Secretary (who shall promptly approve or disapprove the same), (2) any approval of a policy under this subsection shall be effective until the end of the policy period or until 60 days after the Secretary shall
notify the Shipowner’s of a desired change in the form and/or amount thereof, whichever shall first occur, and (3) war protection and indemnity insurance shall be required unless the Secretary gives written notice to the Shipowner’s
stating that such insurance is not required. 
 Such policies may provide that (1) if the Shipowner’s shall not have incurred the
loss, damage, or expense in question, any loss under such insurance may be paid directly to the Person to whom any liability covered by such policies has been incurred (whether or not a Default then exists), and (2) if the Shipowner’s
shall have incurred the loss, damage or expense in question, any such loss shall be paid to the Shipowner’s in reimbursement if there is no existing Default of which the underwriter has written notice from the Shipowner’s or the Secretary,
or, if there is such an existing Default, to the Secretary to be held and applied as follows: (A) applied as provided in Section 6.05 in the event the Guarantees shall have terminated pursuant to Section 3.02(c) or if the Secretary
shall have assumed the Shipowner’s rights and duties under the Indenture and the Obligations and made any payments in default under the terms of Section 6.09 of the Indenture, or (B) to the extent not theretofore applied pursuant to
Section 6.05, paid forthwith to the Shipowner’s upon its Request in the event there is no existing Default or the Guarantees shall have terminated pursuant to Section 3.02(b) or (d) at the date of delivery of such Request;
provided that, irrespective of the foregoing, with the Secretary’s prior written consent, the Shipowner’s shall have the right to self-insure in an amount up to the limit specified in the Special Provisions hereof with respect to
each accident, occurrence or event, except that, with respect to cargo or property carried, the Shipowner’s, with the Secretary’s prior written consent, shall have the right to self-insure in an amount up to the limit specified in the
Special Provisions hereof with respect to each cargo or property carried. 
 (f) All insurance required under this Section shall be placed
and kept with the United States Government or with American and/or British (and/or other foreign, if permitted by the Secretary in writing) insurance companies, underwriters’ association or underwriting finds approved by the Secretary. All
insurance required under this subsection shall be arranged through marine insurance brokers and/or underwriting agents as chosen by the Shipowner’s and approved by the Secretary. 
  

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 (g) The Secretary shall not have the right to enter into an agreement or compromise providing for an
agreed or compromised total loss of any Vessel without prior written consent of (i) the Shipyard (prior to the Delivery Date of such Vessel) and (ii) (unless there is an existing Default) the Shipowner’s. If (1) the
Shipowner’s shall have given prior consent thereto or (2) there is an existing Default, the Secretary shall have the right in his discretion, and with the prior written consent of the Shipyard prior to the Delivery Date of such Vessel, to
enter into an agreement or compromise providing for an agreed or compromised total loss of such Vessel; provided that, if the aggregate amount payable to the Shipowner’s and/or the Secretary under such agreement or compromise, together
with funds held by the Secretary and available for the redemption of Obligations, is not sufficient to redeem or pay the Proportionate Part of the Outstanding Obligations pursuant to Section 2.07, the Secretary shall not enter into such
agreement or compromise without the Shipowner’s prior written consent. 
 (h) During the continuance of (1) a taking or requisition
of the use of any Vessel by any government or governmental body, or (2) a charter, with the Secretary’s prior written consent, of the use of any Vessel by the United States Government or by any governmental body of the United States, or by
any other government or governmental body, the provisions of this Section shall be deemed to have been complied with in all respects if such government or governmental body shall have agreed to reimburse, in a manner approved by the Secretary in
writing, the Shipowner’s for loss or damage covered by the insurance required hereunder or resulting from the risks under paragraphs (a), (b),and (e) of this Section or if the Shipowner shall be entitled to just compensation therefor. In
addition, the provisions of this Section shall be deemed to have been complied with in all respects during any period after (A) title to any Vessel shall have been taken or requisitioned by any government or governmental body or (B) there
shall have been an actual or constructive total loss or an agreed or compromised total loss of any Vessel. In the event of any taking, requisition, charter or loss contemplated by this paragraph, the Shipowner shall promptly furnish to the Secretary
an Officers Certificate stating that such taking, requisition, charter or loss has occurred and, if there shall have been a taking, requisition or charter of the use of any Vessel, that the government or governmental body in question has agreed to
reimburse the Shipowner, in a manner approved by the Secretary, for loss or damage resulting from the risks under paragraphs (a), (b), and (e) of this Section or that the Shipowner is entitled to just compensation therefor. 
 (i) All insurance required (A) under paragraph (a) of this Section shall be taken out in the names of the Shipowner, the United States and the
Shipyard as assureds, and (B) under paragraphs (b) and (c) of this Section shall be taken out in the names of the Shipowner and the United States as assureds. All policies for such insurance so taken out shall, unless otherwise
consented to by the Secretary, provide that (1) there shall be no recourse against the United States for the payment of premiums or commissions, (2) if such policies provide for the payment of club calls, assessments or advances,
there shall be no recourse against the United States for the payment thereof, and (3) at least 10 days’ prior written notice of any cancellation for the nonpayment of premiums, commissions, club calls, assessments or advances shall be
given to the Secretary by the insurance underwriters. 
 (j) The Shipowner shall not, without the Secretary’s prior written consent,
(1) do any act, nor voluntarily suffer or permit any act to be done, whereby any insurance required by this Section shall or may be suspended, impaired or defeated or (2) suffer or permit any Vessel to 

  

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engage in any voyage or to carry any cargo not permitted under the policies of insurance then in effect without first covering such Vessel with insurance
satisfactory in all respects for such voyage or the carriage of such cargo; provide that, this paragraph shall be subject to the requirements of any military authority of the United States and shall not apply in the case of such Vessel if and
so long as the title or use of such Vessel shall have been taken, requisitioned or chartered by any government or governmental body as contemplated by Section 2.07. 
 (k) In the event that any claim or lien is asserted against any Vessel for loss, damage or expense which is covered by insurance hereunder and it is necessary for the Shipowner to obtain a bond or supply other
security to prevent arrest of such Vessel or to release such Vessel from arrest on account of said claim or lien, the Secretary, on the Shipowner’s Request, may, at the Secretary’s sole option, assign to any Person executing a surety or
guaranty bond or other agreement to save or release such Vessel from such arrest, all right, title and interest of the Secretary in and to said insurance covering such loss, damage or expense as collateral security to indemnify against liability
under said bond or other agreement. 
 (l) Except as the Secretary shall otherwise direct by notice in writing to the Shipowner, the
Shipowner shall deliver to the Secretary the original policies evidencing insurance maintained under this Section; provided that, if any such original policy shall have been delivered previously to the Secretary or to a mortgagee by the
Shipowner under another ship mortgage of the Shipowner, the Shipowner shall deliver a duplicate or pro forma copy of such policy to the Secretary. The Secretary or any agent thereof (who may also be an agent of the issuer) shall at all times hold
the policies delivered as aforesaid; provide that, if one or more of said policies are held by an agent of the Secretary, the Shipowner shall, upon the Secretary’s request, deliver a duplicate or pro forma copy thereof to the Secretary,
and provided further, that if the Shipowner shall deliver to the Secretary a Request (1) stating that delivery of such policy to the insurer is necessary in connection with the collection, enforcement or settlement of any claim thereunder
(including claims for return premiums and any other amounts payable by the insurer) and (2) setting forth the name and address of the Person to whom such policy is to be delivered or mailed for such purpose, and if the Secretary approves such
Request, the Secretary shall, at the Shipowner’s expense, deliver or mail (by registered or certified mail, postage prepaid) such policy in accordance with such Request, accompanied by a written direction to the recipient to redeliver such
policy directly to the Secretary or an agent thereof when it has served the purpose for which so delivered. The Shipowner agrees that, in case it shall at any time so cause the delivery or mailing of any policy to any Person as aforesaid, the
Shipowner will cause such policy to be promptly redelivered to the Secretary or an agent thereof as aforesaid. The Secretary shall have no duty to see to the redelivery of such policy, but shall have the duty to request the redelivery thereof at
intervals of 60 days thereafter. 
 (m) Nothing in this Section shall limit the insurance coverage which the Secretary may require under any
contract or agreement to which the Secretary and the Shipowner are parties. 
 The requirements of this Section are expressly subject to the
Special Provisions of this Security Agreement. 
  

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 SECTION 2.06. Inspection of the Vessels; Examination of Shipowner’s Records. The
Shipowner will: (a) afford the Secretary, upon reasonable notice, access to the Vessels, their cargoes and papers for the purpose of inspecting the same; (b) maintain records of all amounts paid or obligated to be paid by or for the
account of the Shipowner for each Vessel’s Construction; and (c) at reasonable times permit the Secretary, upon request, to make reasonable, material and pertinent examination and audit of books, records and accounts maintained by the
Shipowner, and to take information therefrom and make transcripts or copies thereof. 
 SECTION 2.07. Requisition of Title,
Termination of Construction Contact or Total Loss of a Vessel. In the event of requisition of title to or seizure or forfeiture of such Vessel, termination of the Construction Contract relating to such Vessel, or the occurrence of the
circumstances referred to in Section 2.05(c)(3), then all of the following shall apply: 
 (a) The Shipowner shall promptly give written
notice thereof to the Secretary. 
 (b) The Shipowner shall promptly pay all amounts it receives by reason of such requisition, seizure,
forfeiture, termination or total loss (“Loss Event’) to the Secretary. 
 (c) After the Secretary has received sufficient funds to
retire a Proportionate Part of the Outstanding Obligations affected by the Loss Event: 
 (1) if there is no existing Default,
(A) the Secretary and the Shipowner shall give notice to the Indenture Trustee of a redemption of Proportionate Part of the Outstanding Obligations pursuant to Section 3.05 of the Indenture, (B) such amount, if any, held by the
Secretary, shall be paid by the Secretary to the Indenture Trustee not earlier than 10 days prior to, nor later than the opening of business on, the Redemption Date required by Section 3.05 of the Indenture, (C) the remainder shall next be
applied by the Secretary for the payment of a Proportionate Part of all other sums that may be secured hereby, and (D) the balance shall be paid to the Shipowner including any interest earned on the proceeds which are in excess of the amount
required to redeem the Obligations; 
 (2) if there is an existing Default and the Guarantees shall not have terminated
pursuant to Section 3.02, such amounts shall be held until the same may be applied or paid under paragraphs (1), (3), or (4) of this subsection, whichever is applicable; 
 (3) if the Guarantees shall have terminated pursuant to Section 3.02(c) or if the Secretary shall have assumed the Shipowner’s
rights and duties under the Indenture and the Obligations and made any payments in default under the terms of Section 6.09 of the Indenture, such amounts shall be applied as provided in Section 6.05; or 
 (4) if the Guarantees shall have terminated pursuant to Section 3.02(b) or 3.02(d) such amounts shall be paid by the Secretary to the
Shipowner. 
 Provided that, notwithstanding the foregoing, the Shipowner shall not be required to pay the Secretary any amount which the Secretary
agrees is in excess of the amount needed for redemption of the Proportionate Part of the Outstanding Obligations affected by the Loss Event. 
  

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 SECTION 2.08. Notice of Mortgage. 
 (a) A properly certified copy of the Mortgage shall be carried on board each self-propelled Vessel with that Vessel’s documents and shall be
exhibited on demand to any Person having business with such Vessel or to any Secretary’s representative. 
 (b) A notice printed in
plain type of such size that the paragraph of reading matter shall cover a space not less than six inches wide by nine inches high, and framed, shall be placed and kept prominently exhibited in the chart room and in the masters cabin of a
self-propelled Vessel. 
 (c) The notice referred to in paragraph (b) of this Section shall read as follows: 
 “NOTICE OF FLEET MORTGAGE 
 This
Vessel is owned by (Insert name of Shipowner), a (Insert jurisdiction) corporation (“Shipowner”), and is covered by a First Preferred Ship Mortgage in favor of the United States of America, under authority of Chapter 313,
Title 46 of the United States Code. Under the terms of said Mortgage neither the Shipowner, any charterer, the master or agent of this Vessel nor any other person has any right, power or authority to create, incur or permit to be placed or imposed
upon this Vessel any lien other than statutory liens incident to current operations that are subordinate to the Mortgage.” 
 SECTION
2.09. Compliance with 46 U.S.C. Chapter 313. The Shipowner shall comply with and satisfy all of the provisions of Chapter 313, in order to establish and thereafter to maintain the Mortgage as a preferred mortgage upon each Vessel.

 SECTION 2.10. Performance of Shipowners Agreements by the Secretary. If the Shipowner shall fail to perform any of its
agreements hereunder or under the Mortgage, the Secretary may, in its discretion, at any time during the continuance of an event which by itself, with the passage of time, or the giving of notice, would constitute a Default, perform all acts and
make all necessary expenditures to remedy such failure. Notwithstanding the foregoing, the Secretary shall not be obligated to (and shall not be liable for the failure to) perform such acts and make such expenditures. All funds advanced and expenses
and damages incurred by the Secretary relating to such compliance shall constitute a debt due from the Shipowner to the Secretary and shall be secured hereunder and under the Mortgage prior to the Secretary’s Note and shall be repaid by the
Shipowner upon demand, together with interest at the rate that would have been paid by the Department of Treasury on the expended funds plus 1%. 
 SECTION 2.11. Uniform Commercial Code Filings; Further Assurances. The Shipowner shall (a) furnish evidence satisfactory to the Secretary that financing statements under the UCC shall have been filed against the Shipowner
and/or the Shipyard in all offices in which it may be necessary or advisable in the opinion of the Secretary to perfect the Secretary’s security interests, and (b) from time to time execute and deliver such further instruments and take
such action as may reasonably be required to more effectively subject the Security to the lien of 

  

 14 

 
this Security Agreement and the Mortgage as contemplated thereby, including but not limited to, legal opinions from an independent counsel for the Shipowner
to the effect that all UCC Financing Statements have been filed to perfect the Secretary’s interests in the Security as valid and enforceable first priority perfected security interests. 
 SECTION 2.12. Modification of Formation Agreements. 
 (a) If the Shipowner is organized as a general partnership, limited partnership, limited liability company or joint venture, then for so long as there is Outstanding any indebtedness to the United States of America
pursuant to the Act, the partnership agreement, operating agreement, limited liability agreement, joint venture agreement (or any agreement constituting such an entity) shall not be amended, modified or voluntarily terminated without the
Secretary’s prior written consent. 
 (b) In the event where any action by the Shipowner, any member of the Shipowner or the management
of the Shipowner results or would result in dissolution of the Shipowner pursuant to its limited liability company agreement or governing law, each member of the Shipowner shall forthwith take all steps necessary to reform and reestablish the
Shipowner. 
 SECTION 2.13. Members of Limited Liability Companies. All existing and future members of a Shipowner which is a
limited liability company (each being a “Member”), upon becoming a Member, shall forthwith enter into an agreement with the Secretary, in form and substance satisfactory to the Secretary, whereby each Member agrees: (1) that any
amounts owed by the Shipowner to a Member with respect to its interest (as that or the equivalent term is used in the Shipowner’s limited liability company agreement) (the “Distributions”) shall be subordinated to the Shipowner’s
payment of the Secretary’s Note and debts under the Security Agreement, provided that such Distributions may be paid to the extent the Shipowner is permitted to pay dividends under the Financial Agreement; (2) that in the event of
default by the Shipowner under the Security Agreement, the Member shall be subordinated in its rights to receive any Distribution or to be paid any sums whatsoever by the Shipowner until the Secretary has made a full recovery of any and all amounts
owed under the Secretary’s Note and the Security Agreement. 
 SECTION 2.14. Concerning the Performance and Payment Bonds.
During the Construction, the Shipowner shall cause to be maintained Performance Bonds and Payment Bonds naming the Shipowner and the Secretary as co-obligees (the “Surety Bonds”) in form and substance satisfactory to the Secretary, to be
obtained by the Shipyard in the amount of the Construction Contract, issued by such surety company or companies as shall be satisfactory to the Secretary (the “Surety”). In the event that the price for the work to be performed under the
Construction Contract is increased, then the Surety Bonds shall be increased simultaneously in a corresponding amount. The Shipowner hereby agrees that the Secretary shall be the sole loss payee under the Surety Bonds and the Surety shall pay such
amounts directly to the Secretary fur distribution to the co-obligees as their interests may appear. The Shipowner hereby agrees that its interest as a co-obligee under each of the Surety Bonds is and shall be, upon the occurrence of a Default under
the Security Agreement, fully subject and subordinate to the rights and interests of the Secretary therein. In the event of a default under the Security Agreement, which default results in a payment under any of the Surety Bonds, then the Surety
Bonds proceeds shall be 

  

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distributed by the Secretary in accordance with the provisions of Section 6.05 hereof. The Shipowner hereby irrevocably appoints the Secretary, the true
and lawful attorney of the Shipowner, in its name and stead, to execute all consents, approvals, settlements and agreements on behalf of the Shipowner with respect to any rights related to the Surety Bonds. 
 ARTICLE III 
 THE SECRETARY’S
NOTE 
 SECTION 3.01. Secretary’s Note. On this date, the Shipowner has duly executed and delivered and the Secretary
has accepted the Secretary’s Note payable in an amount equal to the principal amount of the Obligations. 
 SECTION 3.02.
Termination of the Guarantees. Except as provided in Section 6.08 of the Indenture, the Guarantee with respect to a particular Obligation, shall terminate only when, one or more of the following events shall occur: 
 (a) Such Obligation shall have been Retired or Paid; 
 (b) The Obligees of all the Obligations then Outstanding shall have elected to terminate the Guarantees, and the Secretary has been so notified by the Indenture Trustee or all Obligees in writing; provided
that, such termination shall not prejudice any rights accruing hereunder prior to such termination; 
 (c) Such Guarantee shall have been
paid in full in cash by the Secretary; or 
 (d) The Indenture Trustee and each Obligee shall have failed to demand payment of such Guarantee
as provided in the Indenture, Guarantee, or the Act. 
 SECTION 3.03. Execution of Additional Secretary’s Note.

 (a) In the event and when each new issue of Obligations is executed, authenticated and delivered on a date or dates subsequent to the date
hereof, as contemplated by, and pursuant to the Indenture, the Shipowner shall, at the time of the issuance of such Obligations, execute and deliver to the Secretary an additional Secretary’s Note or, at the Secretary’s discretion, an
endorsement to the Secretary’s Note in an amount equal to the principal amount of, and at the interest rate borne by, such issue of Obligations, on the terms stated in the Secretary’s Note. 
 (b) Each Secretary’s Note or endorsement executed and delivered in accordance with Section 3.03 shall together with the Secretary’s Note
be secured by this Security Agreement and the Mortgage. 
  

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 ARTICLE IV 
 CONSTRUCTION FUND; MONEYS DUE WITH RESPECT TO CONSTRUCTION OF THE VESSELS 
 SECTION 4.01.
Construction Fund. 
 (a) The Shipowner has deposited in the Construction Fund with the Depository the amount, if any, indicated in
the Depository Agreement from the proceeds of the Obligation to be held by the Depository in a Securities Account in accordance with the terms of the Depository Agreement. This Securities Account together with any future deposits and the proceeds
from the investment of the amounts on deposit shall be called the “Construction Fund.” 
 (b) The Shipowner may withdraw money from
the Construction Fund under the same procedures and conditions as the Shipowner may withdraw money from the Escrow Fund under Section 5.03, except that the Shipowner’s Request for withdrawal will not be subject to
Section 5.03(a)(2)(A) or 5.03(h). The administration of the Construction Fund shall also be subject to the terms and conditions of Sections 5.04 and 5.05. 
 SECTION 4.02. Moneys Due with Respect to Construction of the Vessels. 
 (a) In the event that
the Shipowner shall receive any moneys from any Person in connection with the Construction of any Vessel, the Shipowner shall give written notice thereof to the Secretary and shall promptly pay the same over to the Depository to be held in the Title
XI Reserve Fund. 
 (b) Upon and after a final determination of Actual Cost in accordance with Section 5.01, in the absence of a
Default, any moneys held by the Depository which are not to be applied for the redemption of Obligations under Section 3.04 of the Indenture shall be paid to the Shipowner. 
 (c) In the event there is an existing Default, the money shall be held by the Depository in accordance with the provisions of the Depository Agreement.

 (d) In the event the Secretary assumes the Shipowner’s rights and duties under Section 6.09 of the Indenture or pays the
Guarantees, the Depository shall promptly pay all moneys including all Moneys Due with Respect to Construction of the Vessels to the Secretary, who will apply it in accordance with Section 6.05. 
 ARTICLE V 
 ACTUAL COST; THE ESCROW
FUND 
 SECTION 5.01. Actual Cost Determinations. 
 (a) The Actual Cost of each Vessel (and the aggregate Actual Cost of all of the Vessels), determined as of the date of this Security Agreement, is as set
forth in Table A hereof. 
 (b) The Secretary agrees to: (1) make a final determination of the Actual Cost of each Vessel, limited to
amounts paid by or for the account of the Shipowner on account of the items 

  

 17 

 
set forth in Table A hereof and, to the extent approved by the Secretary, any other items or any increase in the amounts of such items, such determination to
be made as of the time of payment by or for the account of the Shipowner of the hill amount of said Actual Cost of such Vessel, excluding any amounts which are not to become due and payable, and (2) promptly give written notice to the
Shipowner, of the results of said final determination; provided that, the Shipowner shall have requested such determination not less than 60 days in advance and shall have furnished to the Secretary not less than 30 days in advance of such
determination along with a Shipowner’s Officer’s Certificate and a statement by an independent certified (or, with the Secretary’s prior written consent, an independent) public accountant or firm of accountants of the total amounts
paid or obligated to be paid by or for the account of the Shipowner for the Construction of such Vessel, together with a breakdown of such totals according to the items for which paid or obligated to be paid. 
 SECTION 5.02. Escrow Fund Deposits. At the time of the sale of the Obligations, the Shipowner shall deposit with the Secretary in the
Escrow Fund all of the proceeds of that sale unless the Shipowner is entitled to withdraw funds under Section 5.03. If the Obligations are issued before the delivery of all of the Vessels, then the Shipowner shall also deposit into the Escrow
Fund on the Closing Date an amount equal to six months interest at the rate borne by the Obligations. 
 SECTION 5.03. Escrow Fund
Withdrawals. 
 (a) The Secretary shall within a reasonable time after written Request from the Shipowner, disburse from the Escrow Fund
directly to the Indenture Trustee, any Paying Agent for such Obligations, the Shipyard, or any other Person entitled thereto, any amount which the Shipowner is obligated to pay, or to the Shipowner for any amounts it has paid, on account of the
items and amounts or any other items set forth in Table A annexed hereto or subsequently approved by the Secretary, provided that, the Secretary is satisfied with the accuracy and completeness of the information contained in the following
submissions: 
 (1) A Responsible Officer of the Shipowner shall deliver an Officer’s Certificate, in form and substance
satisfactory to the Secretary, stating that (A) there is neither a Default under the Construction Contract nor the Security Agreement; (B) there have been no occurrences which have or would adversely and materially affect the condition of
the Vessel, its hull or any of its component parts; (C) the amounts of the Request are in accordance with the Construction Contract including the approved disbursement schedule and each item in these amounts is properly included in the
Secretary’s approved estimate of Actual Cost; (D) with respect to the Request, once the Contractor is paid there will be no liens or encumbrances on the applicable Vessel, its hull or component parts for which the withdrawal is being
requested except for those already approved by the Secretary; and (E) if the Vessel has already been delivered, it is in class and is being maintained in the highest and best condition. The Shipowner shall also attach an Officer’s
Certificate of the Shipyard, in form and substance satisfactory to the Secretary, stating that there are no liens or encumbrances as provided in clause (D) of this subsection and attaching the invoices and receipts supporting each proposed
withdrawal to the satisfaction of the Secretary. 
  

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 (2) No payment or reimbursement under this Section shall be made (A) to any Person
until the Construction Fund, if any, has been exhausted, (B) to any Person until the total amount paid by or for the account of the Shipowner from sources other than the proceeds of such Obligations equals at least 12-1/2% of the Actual Cost of
the related Vessel is made; (C) to the Shipowner which would have the effect of reducing the total amounts paid by the Shipowner pursuant to clause (B) of this subsection; or (D) to any Person on account of items, amounts or increases
representing changes and extras or owner furnished equipment, if any, set forth in Table A annexed hereto, unless such items, amounts and increases shall have been previously approved by the Secretary; provide d, however, that when the amount
guaranteed by the Secretary equals 75% or less of the Actual Cost, then after the initial 12 1/2% of Actual Cost has been paid by or on behalf of the Shipowner for such Vessel and up to 37 1/2% of Actual Cost has been withdrawn from the Escrow Fund
for such Vessel, the Shipowner shall pay the remaining Shipowner’s equity of at least 12 1/2% (as determined by the Secretary) before additional monies can be withdrawn from the Escrow Fund relating to such Vessel. 
 (b) The excess, as determined by the Secretary, of any amount on deposit in the Escrow Fund which represents interest on the principal amount deposited,
over and above the amount of interest due on the next Interest Payment Date on the principal amount, as determined by the Secretary, remaining on deposit on such Interest Payment Date, may, unless there is an existing Default, be disbursed by the
Secretary upon the Shipowner’s Request made not more than 10 Business Days prior to such Interest Payment Date or made within at least 60 days after such Interest Payment Date. 
 (c) The Secretary shall not be required to make any disbursement pursuant to this Section except out of the cash available in the Escrow Fund, If
sufficient cash is not available to make the requested disbursement, additional cash shall be provided by the maturity or sale of securities in accordance with instructions pursuant to Section 5.04. If any sale or payment on maturity shall
result in a loss in the principal amount of the Escrow Fund invested in securities so sold or matured, the requested disbursement from the Escrow Fund shall be reduced by an amount equal to such loss, and the Shipowner shall, no later than the time
for such disbursement, pay to the Indenture Trustee, any Paying Agent, the Shipyard, or any other Person entitled thereto, the balance of the requested disbursement from the Shipowner’s funds other than the proceeds of such Obligations.

 (d) If the Secretary assumes the Shipowner’s rights and duties under the Indenture and the Obligations, and makes any payments in
default under the Indenture, or the Secretary pays the Guarantees, all amounts in the Escrow Fund (including realized income which has not yet been paid to the Shipowner), shall be paid to the Secretary and be credited against any amounts due or to
become due to the Secretary under the Security Agreement and the Secretary’s Note. To the extent payment of the Escrow Fund to the Secretary is not required, said amounts or any balance thereof, shall be paid to the Shipowner. 
 (e) At any time the Secretary shall have determined that there has been, for any reason, a disbursement from the Escrow Fund contrary to this Section,
the Secretary shall give written notice to the Shipowner of the amount improperly disbursed, the amount to be deposited or redeposited into the Escrow Fund on account thereof, and the reasons for such determination. 

  

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The Shipowner shall thereafter promptly deposit or redeposit, as appropriate, such amount (with interest, if any) required by the Secretary into the Escrow
Fund. 
 (f) Notwithstanding any other provision of this Section, the Shipowner shall not seek or receive reimbursement for any amount paid
to the Shipyard or any Person by the Secretary. 
 (g) In the event that one of the events described in Section 2.07 has occurred with
respect to one or more of the Vessels or the Secretary shall have paid the Guarantees or shall have assumed the Shipowner’s rights and duties under Section 6.09 of the Indenture, the Secretary may direct that moneys remaining on deposit in
the Escrow Fund may be withdrawn in whole or in part for one of the following purposes: (1) application as provided in Section 3.05 of the Indenture (but in no event shall any such disbursement for such purpose be in an amount greater than
the related Proportionate Part of the Outstanding Obligations); (2) payment to the Shipowner, or its order, in the event all Outstanding Obligations are Retired or Paid, other than by payment of the Guarantees; or (3) application as
provided in Section 6.05, if the Secretary shall have paid the Guarantees or shall have assumed the Shipowner’s rights and duties under the Indenture and the Obligations. 
 (h) Any amounts remaining in the Escrow Fund on the Termination Date of the Escrow Fund which are in excess of 87 1/2% or 75% of Actual Cost, as the case
may be, shall be applied pursuant to Section 3.04 of the Indenture to retire a Proportionate Part of the Outstanding Obligations. 
 SECTION 5.04. Investment and Liquidation of the Escrow Fund. The Secretary may invest the Escrow Fund in obligations of the United States with such maturities that the Escrow Fund will be available as required for the purposes
hereof. The Secretary shall deposit the Escrow Fund into an account with the Treasury Department and upon agreement with the Shipowner, shall deliver to the Treasury Department instructions for the investment, reinvestment and liquidation of the
Escrow Fund. The Secretary shall have no liability to the Shipowner for acting in accordance with such instructions. 
 SECTION 5.05.
Income on the Escrow Fund. Except as provided in Section 5.03, any income realized on the Escrow Fund shall, unless there is an existing Default, be paid to the Shipowner upon receipt by the Secretary of such income. For the purpose of
this Section, the term “income realized on the Escrow Rind,” shall mean with respect to the Escrow Fund (1) the excess of the cash received from the sale of securities over their cost (less any losses from sale not already paid
pursuant to Section 5.03(c)) and (2) cash received from the payment of principal and interest on securities. 
 SECTION
5.06. Termination Date of the Escrow Fund. The Escrow Fund will terminate 90 days after the Delivery Date of the last Vessel covered by this Security Agreement (herein called the “Termination Date of the Escrow Fund”). In the
event that on such date the payment by or for the account of the Shipowner of the full amount of the aggregate Actual Cost of all of the Vessels set forth in Table A hereof has not been made or the amounts with respect to such Actual Cost are not
then due and payable, then the Shipowner and the Secretary by written agreement shall extend the Termination Date of the Escrow Fund for such period as shall be determined by the Shipowner and the Secretary as sufficient to allow for such
contingencies. If 

  

 20 

 
the Secretary shall have earlier made a final determination of the aggregate Actual Cost of all of the Vessels in accordance with Section 5.01, the
Termination Date of the Escrow Fund shall be deemed to be the date of such final determination; provided that, if as a result of such final determination, a redemption of Obligations is required pursuant to Section 3.04 of the Indenture,
the Termination Date shall be the date specified as the Redemption Date in the notice of redemption given pursuant to Section 3.08 of the Indenture. 
 ARTICLE VI 
 DEFAULTS AND REMEDIES 
 SECTION 6.01. What Constitutes “Defaults;” Continuance of Defaults. Each of the following events shall constitute a
“Default” within the meaning of Section 6.01: 
 (a) A default in the payment of the whole or any part of the interest on any
of the Outstanding Obligations when the same shall become due and payable; or default in the payment of the whole or any part of the principal of any of the Outstanding Obligations when the same shall become due and payable, whether by reason of
Maturity, redemption, acceleration, or otherwise, or any default referred to in Section 6.08 of the Indenture; and continuation of such default for a period of 30 days shall constitute and is herein called a “Payment Default,” Any
corresponding default with respect to the interest on, or the principal of, the Secretary’s Note is also deemed to be a Payment Default; 
 (b) The following shall constitute and each is herein called a “Security Default:” 
 (1) Default by the
Shipowner in the due and punctual observance and performance of any provision in Sections 2.01(b), 2.02(b) and (i), 2.03, 2.04, 2.09, 2.11, 2.12, 2.14, 8.01 and 8.02; 
 (2) Default by the Shipowner continued after written notice specifying such failure by certified or registered mail to the Shipowner from
the Secretary in the due and punctual observance and performance of any provision in Sections 2,02(a), (d), (e), (f) and (g), 2.05 (except (g) and (k) thereof), 2.07, and 2.13. 
 (3) Default by the Shipowner continued for 30 days after written notice by certified or registered mail to the Shipowner from the
Secretary in the due and punctual observance of any other agreement in this Security Agreement or in the Mortgage; 
 (4) The
Shipowner shall become insolvent or bankrupt or shall cease paying or providing for the payment of its debts generally, or the Shipowner shall be dissolved or shall, by a court of competent jurisdiction, be adjudged a bankrupt, or shall make a
general assignment for the benefit of its creditors, or shall lose its charter by forfeiture or otherwise; or a petition for reorganization of the Shipowner under the Bankruptcy Code shall be filed by the Shipowner, or such petition be filed by
creditors and the same shall be approved by such a court of competent jurisdiction; or a reorganization of the Shipowner under said Code shall be approved by a court, whether proposed by a creditor, a stockholder or any other Person whomsoever; or a
receiver or receivers of any kind whatsoever, whether appointed in admiralty, bankruptcy, common law or equity proceedings, shall be appointed, by a decree of a court of competent jurisdiction, with 

  

 21 

 
respect to any Vessel, or all or substantially all of the Shipowner’s property, and such decree shall have continued unstayed, on appeal or otherwise,
and in effect for a period of 60 days; 
 (5) Any default in the due and punctual observance and performance of any provision
in the Financial Agreement or the Construction Contract; 
 (6) Any representation or warranty made relating to the execution
and delivery of this Security Agreement, the Mortgage, the Guarantee Commitment or the Financial Agreement, or in any certificate required to be furnished pursuant thereto, shall prove to be incorrect in any material respect; 
 (7) Any event constituting a Default under any security agreement or preferred mortgage under Chapter 313, relating to any other vessel or
vessels owned by the Shipowner and financed under the Act; 
 (8) Any additional Security Default prescribed in the Special
Provisions hereof; and 
 (9) Any event constituting a default under any bareboat or time charter or contract of affreightment
of the Vessel. 
 At any time following the occurrence of a Security Default, the Secretary may give the Indenture Trustee a Secretary’s
Notice with respect to such Security Default, after which the Indenture Trustee and the Obligees shall have the right to make demand for payment of the Guarantees in accordance with the Indenture and the Authorization Agreement, unless the Secretary
shall have assumed the Shipowner’s rights and duties under the Indenture and the Obligations, and made any payments in default under Section 6.09 of the Indenture. 
 SECTION 6.02. Acceleration of Maturity of the Secretary’s Note. The Secretary may, by giving written notice to the Shipowner, declare
the principal of the Secretary’s Note and interest accrued thereon to be immediately due and payable, at any time after (a) the Secretary shall have been obligated to pay the Guarantees pursuant to the terms of the Indenture and the
Authorization Agreement, or (b) the Secretary shall have assumed the Shipowner’s rights and duties under the Indenture and the Obligations, and made any payments in default under the terms of Section 6.09 of the Indenture. Thereupon,
the principal of and interest on the Secretary’s Note shall become immediately due and payable, together with interest at the same rates specified in the Secretary’s Note. 
 SECTION 6.03. Waivers of Default. 
 (a) If the Secretary shall not have assumed the Shipowner’s rights and duties under the Indenture and the Obligations, and made any payments in default under the terms of Section 6.09 of the Indenture, and if the Secretary
determines that an event which, with the passage of time, would become a Payment Default, has been remedied within 30 days after the occurrence of such event, upon a Request by the Shipowner, the Secretary shall waive the consequences of such event.

  

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 (b) If the Secretary shall not have assumed the Shipowners rights and duties under the Indenture and the
Obligations, and made any payments in default under the terms of Section 6.09 of the Indenture, and if the Secretary shall have determined prior to payment of the Guarantees that a Payment Default has been remedied after the expiration of the
aforesaid 30-day period, but prior to the date of demand by the Indenture Trustee or an Obligee for payment under the Guarantees, upon a Request by the Shipowner, the Secretary shall waive such Default. 
 (c) If the Secretary shall have determined prior to the expiration of the period required for payment of the Guarantees that a Payment Default had not
occurred or has been subsequently remedied by the Shipowner (and if the Secretary shall not have assumed the Shipowners rights and duties under the Indenture and the Obligations, and made any payments in default under the terms of Section 6.09
of the Indenture and prior to any payment of Guarantees), the Secretary shall notify the Indenture Trustee and the Shipowner of such determination, and, the Secretary shall waive such Default. 
 (d) The Secretary, in its sole discretion, may waive any Security Default or any event which by itself, or with the passage of time or the giving of
notice, or both, would give rise to a Security Default; provided that, such Default is waived prior to the Secretary giving to the Indenture Trustee the Secretary’s Notice. 
 (e) The Secretary shall notify the Shipowner and the Indenture Trustee in writing of any determinations made under paragraphs (a), (b), and (c) of
this Section, and the Secretary shall waive the consequences of any such Default, and annul any declaration under Section 6.02, and the consequences thereof. 
 (f) No waiver under this Section shall extend to or affect any subsequent or other Default, nor impair any rights or remedies consequent thereon. 
 (g) No waiver under this Section shall be deemed to have occurred because the Secretary shall have assumed the Shipowners rights and duties under the
Indenture and the Obligations, and made any payments in default under the terms of Section 6.09 of the Indenture. 
 SECTION
6.04. Remedies After Default. 
 (a) In the event of a Default, and before and after the payment of the Guarantees or the
assumption by the Secretary of the Shipowners rights and duties under the Indenture and the Obligations, and the making of any payments in default under the terms of Section 6.09 of the Indenture, the Secretary shall have the right to take the
Vessels without legal process wherever the same may be (and the Shipowner or other Person in possession shall forthwith surrender possession of the Vessels to the Secretary upon demand) and hold, lay up, lease, charter, operate, or otherwise use the
Vessels for such time and upon such terms as the Secretary may reasonably deem to be in the Secretary’s best interest, accounting only for the net profits, if any, arising from the use of the Vessels, and charging against all receipts from the
use of the Vessels, all reasonable charges and expenses relating to such Vessel’s use. 
 (b) Upon either (i) payment of the
Guarantees or (ii) the Secretary’s assumption of the Shipowner’s rights and duties under the Indenture and the Obligations, and the making of any payments in default under Section 6.09 of the Indenture, the Secretary shall have
the right to: 
 (1) Exercise all the rights and remedies in foreclosure and otherwise given to mortgagees by Chapter 313;

  

 23 

 (2) Bring suit at law, in equity or in admiralty to recover judgment for any and all
amounts due under the Secretary’s Note, this Security Agreement and the Mortgage, collect the same out of any and all of Shipowner’s property, whether or not the same is subject to the lien of the Mortgage, and in connection therewith,
obtain a decree ordering the sale of any Vessel in accordance with paragraph (b)(4) of this Section; 
 (3) Have a receiver of
the Vessels appointed as a matter of right in any suit under this Section (and any such receiver may have the rights of the Secretary under paragraph (b)(4) of this Section); 
 (4) Sell any Vessel, free from any claim of the Shipowner, by a public extrajudicial sale, held at such time and place and in such manner
as the Secretary may reasonably deem advisable, after twice publishing notice of the time and place of such sale prior to the proposed sale in the Authorized Newspaper to the Shipowner. Such publication and mailing is to be made at least 10 Business
Days prior to the date fixed for such sale; provided that, such sale may be adjourned from time to time without further publication or notice (other than announcement at the time and place appointed to such sale or adjourned sale). It shall
not be necessary to bring any such Vessel to the place appointed for such sale or adjourned sale; 
 (5) Accept a conveyance
of title to, and to take without legal process (and the Shipowner or other Person in possession shall forthwith surrender possession to the Secretary), the whole or any part of any Vessel and the Security wherever the same may be, and to take
possession of and to hold the same; 
 (6) In the Secretary’s discretion, take any and all action authorized by Sections
1105(c), 1105(e) and 1108(b) of the Act and any and all action provided for, or authorized, or permitted by, or with respect to the Increased Security; 
 (7) Receive, in the event of an actual or constructive total loss, or an agreed or compromised total loss, or a requisition of title to or use of any Vessel, all insurance or other payments therefor to which the
Shipowner would otherwise be entitled, such insurance moneys to be applied by the Secretary in accordance with Section 6.05; and 
 (8) Pursue to final collection of all the claims arising under this Security Agreement and to collect such claims from, the Increased Security. 
 (c) The Shipowner hereby irrevocably appoints the Secretary the true and lawful attorney of the Shipowner, in its name and stead, to make all necessary
transfers of the whole or any part of the Increased Security in connection with a sale, use or other disposition pursuant to Section 6.04(a) or 6.04(b), and for that purpose to execute all necessary instruments of assignment and transfer.
Nevertheless, the Shipowner shall, if so requested by the Secretary in writing, ratify and confirm such sale by executing and delivering to any purchaser of the whole or any part of the Increased Security, such proper bill of sale, conveyance,
instrument of transfer, or release as may be designated in such request. 
  

 24 

 (d) No remedy shall be exclusive of any other remedy, and each and every remedy shall be cumulative and
in addition to any other remedy. 
 (e) No delay or omission to exercise any right or remedy shall impair any such right or remedy or shall
be deemed to be a waiver of any Default. 
 (f) The exercise of any right or remedy shall not constitute an election of remedies by the
Secretary. 
 (g) If the Secretary discontinues any proceeding, the rights and remedies of the Secretary and of the Shipowner shall be as
though no such proceeding had been taken. 
 SECTION 6.05. Application of Proceeds. 
 (a) The proceeds (from sale or otherwise) of the whole or any part of the Increased Security and use thereof by the Secretary under any of the foregoing
powers, (b) the proceeds of any judgment collected by the Secretary for any default hereunder, (c) the proceeds of any insurance and of any claim for damages to the whole or any part of the Increased Security received by the Secretary
while exercising any such power, and (d) all other amounts received by the Secretary, including amounts which are required by Sections 2.05 and 2.07 shall be applied by the Secretary as follows: 
 (1) to the payment of all advances and all reasonable charges by the Secretary pursuant to this Security Agreement; 
 (2) to the payment of the whole amount of the interest then due and unpaid upon the Secretary’s Note; 
 (3) to the payment of the whole amount of the principal then due and unpaid upon the Secretary’s Note; 
 (4) to the Secretary for application to any other debt of the Shipowner due to the Secretary under any other financing insured or
guaranteed by the Secretary under to the Act; 
 (5) to the Indenture Trustee for its reasonable fees and expenses; and

 (6) any balance thereof remaining shall be paid to the Shipowner. 
 SECTION 6.06. General Powers of the Secretary.  
 (a) In the event any Vessel shall be arrested or detained by a marshal or other officer of any court of law, equity or admiralty jurisdiction in any country or nation of the world or by any government or other
authority, and shall not be released from arrest or detention within 15 days from the date of arrest or detention, the Shipowner hereby authorizes the Secretary, in the name of the Shipowner, to apply for and receive possession of and to take
possession of such Vessel with all the rights and powers that the Shipowner might have, possess and exercise in any such event. This authorization is irrevocable. 
  

 25 

 (b) The Shipowner irrevocably authorizes the Secretary or its appointee (with full power of substitution)
to appear in the name of the Shipowner in any court of any country or nation of the world where a suit is pending against the whole or any part of the Increased Security because of or on account of any alleged lien or claim against the whole or any
part of the Increased Security, from which the whole or said part of the Increased Security has not been released. 
 (c) The following shall
constitute a debt due from the Shipowner to the Secretary, and shall be repaid by the Shipowner upon demand: all reasonable expenses incurred pursuant to paragraphs (a) or (b) of this Section and all reasonable expenses incurred incident
to the exercise by the Secretary of any remedies pursuant to Section 6.04(b) or the assumption by the Secretary of the rights and duties of the Shipowner under the Indenture and the Obligations, and the making of any payments in default under
the terms of Section 6.09 of the Indenture (including, but not limited to, fees paid to the Indenture Trustee for expenses incident to said assumption of the Indenture by the Secretary), together with interest at the rate that would have been
paid by the Department of Treasury on the expended funds plus 1%. The Secretary shall not be obligated to (nor be liable for the failure to) take any action provided for in paragraphs (a) and (b) of this Section. 
 ARTICLE VII 
 AMENDMENTS AND
SUPPLEMENTS TO THE SECURITY AGREEMENT, MORTGAGE AND INDENTURE 
 SECTION 7.01. Amendments and Supplements to the Security
Agreement and the Mortgage. This Security Agreement and the Mortgage may not be amended or supplemented orally, but may be amended or supplemented from time to time only by an instrument in writing executed by the Shipowner and the Secretary.

 SECTION 7.02. Amendments and Supplements to the Indenture. Notwithstanding any provisions in the Indenture, the Shipowner
agrees that no amendments or supplements will be made to the Indenture without the Secretary’s prior written consent, and any purported action contrary to this Section shall be null and void ab initio and of no force and effect. 
 ARTICLE VIII 
 CONSOLIDATION, MERGER
OR SALE 
 SECTION 8.01. Consolidation, Merger or Sale. 
 (a) Nothing in this Security Agreement or the Mortgage shall prevent any lawful consolidation or merger of the Shipowner with or into any other Person,
or any sale of a Vessel or Vessels to any other Person lawfully entitled to acquire and operate such Vessel or Vessels, or any sale by the Shipowner of all or substantially all of its assets to any other Person; provide that, the Secretary
shall have given its prior written consent to such succession, merger, consolidation or sale. 
 (b) Any Successor shall (by indenture
supplemental to the Indenture, and by instrument amending or supplementing this Security Agreement, and the Mortgage, as may be necessary), expressly assume the payment of the principal of (and premium, if any) and interest 

  

 26 

 
on the Outstanding Obligations in accordance with the terms of the Obligations, shall execute and deliver to the Secretary, an endorsement to the
Secretary’s Note in form satisfactory to the Secretary, shall expressly assume the payment of the principal of and interest on the Secretary’s Note, and shall expressly assume the performance of the agreements of the Shipowner in the
Indenture, this Security Agreement, the Mortgage and any related document. 
 (c) Upon the assumption of the documents listed in paragraph
(b) of this Section, the Secretary shall consent to the surrender of each Vessel’s documents pursuant to 46 U.S.C. 12111(c)(3), as amended; provide that, concurrently with such surrender, such Vessel shall be redocumented under the
laws of the United States. 
 (d) In the event of any sale of less than all the Vessels, the Secretary shall determine if there will remain
adequate security for the Guarantees after discharge of any such Vessel or Vessels from the Security Agreement and Mortgage, and (1) the Shipowner shall redeem, together with any premium and/or accrued interest thereof, the Proportionate Part
of the Outstanding Obligations relating to such Vessel or Vessels in accordance with the provisions of Article Third of the Indenture, or (2) the Person to which such sale shall have been made (the “Transferee”), shall assume the
documents listed in paragraph (b) of this Section. Upon any such assumption, the Transferee shall succeed to and be substituted for the Shipowner with the same force and effect as if it had been named in the Indenture, the Obligations, this
Security Agreement and the Mortgage (and such other documents) to the extent the same relate to such Proportionate Part of the Outstanding Obligations and to such Vessel or Vessels. 
 SECTION 8.02. Transfer of a General Partners or a Joint Venturer’s Interest. 
 (a) If the Shipowner is organized as a partnership or a joint venture, a general partner or a joint venturer may lawfully transfer its respective
interests under the terms of the partnership or joint venture agreement to any Person and may be released from all of theft obligations thereunder and under this Security Agreement or the Mortgage; provided that, (i) the Secretary shall
have given its prior written consent to the proposed transaction and (ii) the transferee shall assume in full all of the existing obligations which the transferring general partner or joint venturer has under the applicable partnership or joint
venture agreement, this Security Agreement, the Mortgage and any related document. 
 ARTICLE IX 
 NOTICES 
 SECTION 9.01.
Notices. Except as otherwise provided in this Security Agreement or by the Act, all notices, requests, demands, directions, consents, waivers, approvals or other communications may be made or delivered in person or by registered or certified
mail, postage prepaid, addressed to the party at the address of such party specified in the Special Provisions hereof, or at such other address as such party shall advise each other party by written notice, and shall be effective upon receipt by the
addressee thereof. 
 SECTION 9.02. Waivers of Notice. In any case where notice by publication, mail or otherwise is provided
for by this Security Agreement, such notice may be waived in writing by 

  

 27 

 
the Person entitled to receive such notice, either before or after the event, and such waiver shall be deemed the equivalent of such notice. 
 SECTION 9.03. Shipowner’s Name or Address Change. The Shipowner shall not change its name or its address without first providing
written notice to the Secretary of the new name and/or the change in address. 
 ARTICLE X 
 DISCHARGE OF SECURITY AGREEMENT AND THE MORTGAGE 
 SECTION 10.01. Discharge of Security Agreement and the Mortgage. 
 (a) If the Obligations and
the related Secretary’s Note shall have been satisfied and discharged, and if the Shipowner shall pay or cause to be paid all other sums that may have become secured under this Security Agreement and the Mortgage, then this Security Agreement,
the Mortgage and the liens, estate and rights and interests hereby and thereby granted, shall cease, determine, and become null and void, and the Secretary, on the Shipowner’s Request and at the Shipowner’s cost and expense, shall
forthwith cause satisfaction and discharge and duly acknowledge such satisfaction and discharge of this Security Agreement and the Mortgage to be entered upon its and other appropriate records, and shall execute and deliver to the Shipowner such
instruments as may be necessary, and forthwith the estate, right, title and interest of the Secretary in and to the Security, the Increased Security, and any other securities, cash, and any other property held by it under this Security Agreement and
the Mortgage, shall thereupon cease, determine and become null and void, and the Secretary shall transfer, deliver and pay the same to the Shipowner. 
 (b) If all of the Guarantees on the Outstanding Obligations shall have been terminated pursuant to Sections 3.02(b) or 3.02(d), the Secretary shall assign to the Shipowner this Security Agreement, the Mortgage and the
liens, estate, rights and interests hereby and thereby granted. 
 ARTICLE XI 
 MISCELLANEOUS 
 SECTION 11.01. Successors and Assigns. All the
covenants, promises, stipulations and agreements of the Secretary and Shipowner in this Security Agreement shall bind the Secretary and Shipowner and its respective successors and assigns. This Security Agreement is for the sole benefit of the
Shipowner, the Secretary, and their respective successors and assigns, and no other Person shall have any right hereunder. 
 SECTION
11.02. Execution in Counterparts. This Security Agreement may be executed in any number of counterparts. All such counterparts shall be deemed to be originals and shall together constitute but one and the same instrument. 
 SECTION 11.03. Shipowner’s Rights in Absence of Default. Except during the existence of a Default, the Shipowner (1) shall be
permitted to retain actual possession and use of the Vessel, and (2) shall have the right, from time to time, in its discretion and without the consent of or release by the Secretary, to dispose of, free from the lien hereof and of the
Mortgage, any and all engines, machinery, masts, boats, anchors, cables, chains, rigging, tackle, 

  

 28 

 
apparel, furniture, capstans, outfit, tools, pumps, pumping and other equipment, and all other appurtenances to the Vessels, and also any and all additions,
improvements and replacements in or to the Vessels or said appurtenances, after first or simultaneously replacing the same with items of at least substantially equal value. 
 SECTION 11.04. Surrender of Vessels’ Documents. The Secretary shall consent to the surrender of each Vessel’s documents in
connection with any redocumentation of such Vessel required on account of alterations to such Vessel which are not prohibited by this Security Agreement and by the Mortgage. 
 SECTION 11.05. Applicable Regulations. Only the provisions of the regulations issued under Title XI of the Act as in effect on the date
hereof (46 C.F.R. 298) shall control the Security Agreement provisions. 
 SECTION 11.06. Table of Contents, Titles and
Heading. The table of contents, and titles of the Articles and the headings of the Sections are not a part of this Security Agreement and shall not be deemed to affect the meaning or construction of any of its provisions. 
  

 29 

			
	Schedule X to the Security Agreement	  	Document 11

 Schedule of Definitions 
 “Act” means the Merchant Marine Act, 1936, as amended and in effect on the Closing Date. 
 “Actual
Cost” means the actual cost of a Vessel, as set forth in Table A of the Security Agreement or as subsequently predetermined by the Secretary pursuant to the Security Agreement and the Act. 
 “Audited Financial Statements” mean the annual audit of the Shipowner’s accounts in accordance with generally accepted auditing standards by
independent certified public accountants or independent licensed public accountants, certified or licensed by a regulatory authority of a state or other political subdivision of the United States, who may be the Shipowner’s regular auditors.

 “Authorization Agreement” means the Authorization Agreement, Contract No, MA-13047, between the Secretary and the Indenture Trustee,
whereby the Secretary authorizes the Guarantee of the United States to be endorsed on the Obligations, as the same is originally executed, or as modified, amended or supplemented therein. 
 “Authorized Newspaper” means The Wall Street Journal or if it ceases to exist, then in such other newspaper as the Secretary may designate.

 [Intentionally Omitted] 
 “Business Day”
means a day which is not a Saturday, Sunday or a bank holiday under the laws of the United States or the State of New York. 
 “Chapter 313”
means the provisions of 46 United States Code Chapter 313, as amended. 
 “Classification Society” means the American Bureau of Shipping or
as specified in the Special Provisions of the Security Agreement, either a member of the International Association of Classification Societies (“IACS”) that has been ISO 9000 series registered or an IACS member that meets the requirements
of the International Maritime Organization, is qualified under a Quality Systems Certificate Scheme and recognized by the United States Coast Guard and the Secretary as meeting acceptable standards. 
 “Closing Date” or “Closing” means the date when the Security Agreement is executed and delivered by the Shipowner. 
 “Commitment to Guarantee Obligations” has the same meaning as the term Guarantee Commitment. 
 “Construction” means construction of the Vessels, including designing, inspecting, outfitting and equipping thereof. 

 “Construction Contract” means each, and “Construction Contracts” means every, contract
relating to the Construction of the Vessels between the Shipowner and the Shipyard, as originally executed or as modified or supplemented pursuant to the applicable provisions thereof. 
 “Default” when used in the Security Agreement has the meaning attributed to it in Article VI thereof. 
 “Delivery Date” means the date on which a Vessel is delivered to and accepted by the Shipowner. 
 “Depository”
shall mean the Secretary, acting on behalf of the United States of America. 
 “Depository Agreement” shall mean the Depository Agreement,
Contract No. MA-13789 among the Shipowner and the Secretary, as originally executed or as modified or supplemented in accordance with the applicable provisions thereof. 
 [Intentionally Omitted] 
 “Eligible Investment” has the meaning given by Section 5 of the Financial
Agreement. 
 [Intentionally Omitted] 
 “Financial
Agreement” means the Title XI Reserve Fund and Financial Agreement, Contract No. MA-13788, executed by the Shipowner and the Secretary, as originally executed or as modified, amended or supplemented. 
 “Financial Asset” has the meaning given by Article 8-102(a)(9) of the UCC. 
 “Government Use” means the use of a Vessel or requisition of its title required by a government or governmental body of the United States of America. 
 “Guarantee” means each, and the “Guarantees” means every, guarantee of an Obligation by the United States pursuant to Title XI of the
Act, as provided in the Authorization Agreement. 
 [Intentionally Omitted] 
 “Increased Security” means the Secretary’s Note, the Security Agreement, the Vessels, the Security, the Title XI Reserve Fund, and any other security agreement between the Secretary and the
Shipowner relating to any vessels financed under the Act, and the Policies of Insurance, and the proceeds of the foregoing. 
 “Indenture”
means the Trust Indenture dated as of the Closing Date between the Shipowner and the Indenture Trustee, as originally executed, or as modified, amended or supplemented. 
 “Indenture Default” has the meaning specified in Article VI of the Indenture. 
 “Indenture
Trustee” means The Bank of New York and any successor trustee under the Indenture. 

 “Interest Payment Date” means with respect to any Obligation, the date when any installment of interest
on such Obligation is due and payable. 
 “Long Term Debt” means, as of any date, the total notes, bonds, debentures, equipment obligations
and other evidence of indebtedness that would be included in long term debt in accordance with generally accepted accounting principles. There shall also be included any guarantee or other liability for the debt of any other Person, not otherwise
included on the balance sheet. For purposes of clarification, Long Term Debt shall specifically exclude the current portion thereof, all in accordance with generally accepted accounting principles. 
 “Maturity” when used with respect to any Obligation, means the date on which the principal of such Obligation becomes due and payable as therein
provided, whether at the Stated Maturity or by redemption, declaration of acceleration or otherwise. 
 [Intentionally Omitted] 
 “Mortgage” means the first preferred fleet mortgage on the Vessels (or first preferred ship mortgage on the Vessel, as the case may be), Contract No.
MA-13049, by the Shipowner to the Secretary, as originally executed, modified, amended or supplemented. 
 “Mortgagee” means the Secretary,
as mortgagee under the Mortgage. 
 “Mortgagor” means the Shipowner, as mortgagor under the Mortgage. 
 “Net Worth” means, as of any date, the total of paid-in capital stock, paid-in surplus, earned surplus and appropriated surplus, and all other amounts
that would be included in net worth in accordance with generally accepted accounting principles, but exclusive of (1) any receivables from any stockholder, director, Officer or employee of the Company (other than current receivables arising out
of the ordinary course of business and not outstanding for more than 60 days) and (2) any increment resulting from the reappraisal of assets. 
 “Obligation” means each, and Obligations “means every, obligation of the Shipowner bearing a Guarantee that is authenticated and delivered under the Authorization Agreement and Indenture. 
 “Obligee” means each, and “Obligees” means every, holder of an Obligation. 
 “Offering Circular” means the offering circular relating to the issuance and sale of each Obligation. 
 “Officer’s Certificate” means a certificate conforming to Section 1.02 of the Security Agreement or the Indenture as the context may require.

 “Outstanding” when used with reference to the Obligations, shall mean all Obligations theretofore issued under the Indenture, except:
(1) Obligations Retired or Paid; and (2) Obligations in lieu of which other Obligations have been issued under the Indenture. 

 “Paying Agent” means any bank or trust company meeting the qualifications in Section 7.02(a) of the
Indenture and appointed by the Shipowner under Section 4.02 of the Indenture to pay the principal of (and premium, if any) or interest on the Obligations on behalf of the Shipowner. 
 “Payment Default” has the meaning specified in Section 6.01 of the Security Agreement. 
 “Person” or “Persons” means any individual, corporation, partnership, joint venture, association, limited liability company, joint-stock company, trust, unincorporated organization, government, or any
agency or political subdivision thereof. 
 “Policies of Insurance” and “policies” means all cover notes, binders, policies
of insurance and certificates of entry in a protection and indemnity association, club or syndicate with respect to the Vessel, (including all endorsements and riders thereto), including but not limited to all insurance required under
Section 2.05 of the Security Agreement. 
 [Intentionally Omitted] 
 “Redemption Date” means a date fixed for the redemption of an Obligation by the Indenture. 
 “Related Party”
means one that can exercise control or significant influence over the management and/or operating policies of another Person, to the extent that one of the Persons may be prevented from fully pursuing its own separate interests. Related parties
consist of all affiliates of an enterprise, including (1) its management and their immediate families, (2) its principal owners and their immediate families, (3) its investments accounted for by the equity method, (4) beneficial
employee trusts that are managed by the management of the enterprise, and (5) any Person that may, or does, deal with the enterprise and has ownership of, control over, or can significantly influence the management or operating policies of
another Person to the extent that an arms-length transaction may not be achieved. 
 “Request” means a written request to a Person for the
action therein specified, signed by a Responsible Officer of the Person making such request. 
 “Responsible Officer” means (1) in the
case of any business entity, the chairman of the board of directors, the president, any executive or senior vice president, the secretary, the treasurer, member or partner, (2) in the case of any commercial bank, the chairman or vice-chairman
of the executive committee of the board of directors or trustees, the president, any executive or senior vice president, the secretary, the treasurer, any trust officer, and (3) with respect to the signing or authentication of Obligations and
Guarantees by the Indenture Trustee, any person specifically authorized by the Indenture Trustee to sign or authenticate Obligations. 
 “Retired or
Paid,” as applied to Obligations and the indebtedness evidenced thereby, means that such Obligations shall be deemed to have been so retired or paid and shall no longer be entitled to any rights or benefits provided in the Indenture if.
(1) such Obligations shall have been paid in full; (2) such Obligations shall have been canceled by the Indenture Trustee; or (3) such Obligations shall have become due and payable at Maturity and funds sufficient for the payment of
such Obligations (including interest to the date of Maturity, or in the case of a payment after Maturity, to the date of payment, together with any premium thereon) and available for such payment and are held by the Indenture Trustee or any Paying
Agent with irrevocable directions, 

 
to pay such Obligations; provided that, the foregoing definition is subject to Section 6.08 of the Indenture. 
 “Secretary” means the Secretary of Transportation or any officials duly authorized to perform the functions of the Secretary of Transportation under
Title XI of the Act. 
 “Secretary’s Notice” means a notice from the Secretary to the Indenture Trustee that a Default, within the
meaning of Section 6.01(b) of the Security Agreement has occurred. 
 “Securities Account” has the meaning given by Article 8-501 of
the UCC. 
 “Securities Intermediary” has the meaning given by Article 8-102(a)(14) of the UCC and also means the Depository. 
 “Security” has the meaning specified in Section 1.03 of the Security Agreement. 
 “Security Agreement” means the security agreement, Contract No. MA-13787, dated as of the Closing Date, consisting of the special provisions, the general provisions and this schedule X, executed by
the Shipowner as security for the Secretary, as originally executed or as modified, amended or supplemented. 
 “Security Default” has the
meaning specified in Section 6.01 of the Security Agreement. 
 “Shipowner” means American Queen Steamboat, LLC, a Delaware limited
liability company. 
 “Shipyard” means each, and “Shipyards” means every, Shipyard identified in Recital A to the Guarantee
Commitment. 
 “Stated Maturity” means the date determinable as set forth in any Obligation as the final date on which the principal of such
Obligation is due and payable. 
 “Successor” means a Person formed by or surviving a consolidation or merger with the Shipowner or to which
the Vessels have been sold. 
 “Title XI” means Title XI of the Act. 
 “Title XI Reserve Fund” has the meaning specified in the Financial Agreement. 
 “Title XI Reserve
Fund and Financial Agreement” means the Financial Agreement. 
 “UCC” means the Uniform Commercial Code as enacted in the State of
Delaware. 
 “Vessel” means the AMERICAN QUEEN, Official Number 1030765, financed with the Obligations. 
 [Intentionally Omitted]

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