EXHIBIT (10)(h)
CONSENT AND AGREEMENT
This Consent and Agreement dated as of September 28, 1995
is by and among New England Power Company, a Massachusetts
corporation ("Time Charterer"), Central Gulf Lines, Inc., a
Delaware corporation ("CGL"), Enterprise Ship Company, Inc., a
Delaware corporation ("Enterprise"), and The Bank of New York as
Collateral Trustee ("Collateral Trustee").
RECITAL
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WHEREAS, International Shipholding Corporation ("ISC") has
entered into a Memorandum of Agreement, dated October 27, 1994,
with Time Charterer and has, pursuant to such Memorandum of
Agreement, nominated Enterprise to act as purchaser of that
certain American Flag Vessel called "ENERGY INDEPENDENCE",
Official No. 657540 of 24,900.7 tons gross and 16,131 tons net
register (hereinafter called the "Vessel") an Addendum Number
One, an Addendum Number Two and a Modification to such Memorandum
of Agreement, dated September 22, 1995, September 22, 1995 and
September 20, 1995, respectively, with Time Charterer (as
amended, the "MOA") pursuant to which vessel shall be delivered
to Enterprise;
WHEREAS, by virtue of such purchase Enterprise is the owner
of the Vessel and Enterprise is willing to bareboat charter the
Vessel to CGL, and CGL is willing to charter the Vessel for a
period of fifteen (15) successive years commencing from the time
and date of delivery of the Vessel, on the terms and conditions
set forth in Bareboat Charter dated as of September 28, 1995 (the
"Bareboat Charter");
WHEREAS, in accepting ISC's nomination of Enterprise as
purchaser under the MOA, Time Charterer has agreed that
Enterprise will bareboat charter the Vessel to CGL pursuant to
the Bareboat Charter in connection herewith has agreed to accept
CGL as disponent owner under that certain Time Charter of the
Vessel dated October 27, 1994, between ISC and Time Charterer, as
amended by Addendum Number One dated September 22, 1995 and
Addendum Number Two dated September 22, 1995 (as amended, the
"Time Charter");
WHEREAS, Enterprise, ISC, as Guarantor, Citibank, N.A.,
Credit Lyonnais Cayman Island Branch and First National Bank of
Commerce, as Lenders, Citibank, N.A., as Agent and Citicorp
Securities Inc., as Arranger have entered into a Credit
Agreement, dated as of August 15, 1995 (as amended from time to
time in accordance with its terms, the "Credit Agreement")
providing for a loan to Enterprise in an aggregate principal
amount not to exceed $50,000,000. Pursuant to the Credit
Agreement, Enterprise has concurrently entered into a Collateral
Trust Agreement with The
Bank of New York as Collateral Trustee (the "Collateral
Trustee") pursuant to which the Collateral Trustee will hold
certain security for the benefit of the Lenders;
WHEREAS, CGL is executing an Assignment of Time Charter
(the "Assignment") pursuant to which it is assigning and
transferring to Enterprise all its right, title and interest in
and to the Time Charter with respect to the Vessel;
WHEREAS, Enterprise is executing a Re-Assignment of Time
Charter (the "Reassignment") pursuant to which it is assigning
and transferring to the Collateral Trustee all its right, title
and interest in and to the Time Charter with respect to the
Vessel;
WHEREAS, Enterprise is also executing an Assignment of
Bareboat Charter (the "Assignment of Bareboat Charter") pursuant
to which it is assigning and transferring to the Collateral
Trustee all its right, title and interest in and to the Bareboat
Charter with respect to the Vessel;
WHEREAS, the Time Charterer has been asked to consent to
such assignment and reassignment of the Time Charter and
assignment of the Bareboat Charter and to certain modifications
of the provisions of the Time Charter;
NOW, THEREFORE, in consideration of the mutual undertakings
of the parties hereto, as herein set forth, it is hereby agreed
as follows:
I. Time Charterer hereby acknowledges notice of and,
on and subject to the terms hereof, consents and agrees to the
Assignment of Time Charter (the "CGL Assignment") by CGL and to
the Reassignment of Time Charter by Enterprise (the
"Reassignment") and to the Bareboat Charter Assignment by
Enterprise referred to in the Reassignment, in each case as
collateral security for the obligations of Enterprise under the
Credit Agreement, the Loan Documents, the Notes and the
Collateral Trust Agreement and to all of the respective terms
thereof and hereby confirms and agrees:
(A) that the Time Charter is in full force and effect,
the Vessel has been accepted by the Time Charterer under the Time
Charter, and the First "Charter Year" has commenced as of the
date of this Consent and Agreement;
(B) that so long as the CGL Assignment and the
Reassignment are in effect, Time Charterer will make payment of
all moneys due and to become due from it under the Time Charter
to the Retention Account maintained by the Collateral Trustee at
its office at 101 Barclay Street, New York, New York (or any
account
designated in writing by the Collateral Trustee as a successor or
replacement bank account), until receipt of written notice from
the Collateral Trustee that all obligations of Enterprise secured
by the Reassignment have been paid in full;
(C) pursuant to and subject to the provisions of
Section 11 of the Time Charter, payment of charter hire and other
sums required to be paid by Time Charterer is absolute and
unconditional and shall not be subject to any abatement,
reduction, right of set-off or defense by reason of counterclaim
or recoupment for any reason whatsoever which the Time Charterer
may have against CGL as the "Owner" under the Time Charterer;
moreover, none of the undersigned will seek to recover from the
collateral trustee for any reason whatsoever any moneys paid by
any of the undersigned to the Collateral Trustee by virtue of the
Assignment or Reassignment and this Consent and Agreement and any
such payment shall be final as to the Collateral Trustee;
(D) so long as the Reassignment is in effect, and
subject to the Time Charterer's rights to terminate the Time
Charter in accordance with its terms and as modified by this
Consent and Agreement, the undersigned will not amend or
supplement the Time Charter, or agree to any decrease in the
total number of days in any Charter Year, without first obtaining
the written
consent of the Collateral Trustee (which consent will not be
unreasonably
withheld); and
(E) that, subject to the rights of the Time Charterer
under the Time Charter and this Consent and Agreement, the Time
Charterer will fully cooperate with the collateral Trustee in its
exercise of the rights available to the Collateral Trustee under
the Reassignment, including, without limitation, the right to act
as "Owner" under the terms of the Time Charter or, subject to
Time Charterer's rights under Section 48A of the Time Charter,
provided the Time Charterer's consent will not be unreasonably
withheld, to nominate a third party to act as "Owner" under the
Time Charter.
II. The Time Charterer hereby agrees to deliver to the
Collateral Trustee a copy of any "Notice of Intention to Exercise
Purchase Option" given under the Time Charter and to give written
notice to the Collateral Trustee whether or not the Time
Charterer will purchase the Vessel subject to the Mortgage. In
the event the Time Charterer elects to purchase the Vessel free
and clear of the Mortgage, upon payment of the Purchase Value (as
defined in the Time Charter or in Article VII of this Consent and
Agreement as the case may be) the Collateral Trustee shall
execute (or cause to be executed) such instruments or documents,
at Enterprise's expense, so as to cause the lien of the Mortgage
and the Reassignment of the Time Charter to be released so that
the Vessel can be sold and transferred to the Time Charterer free
and clear of such liens and encumbrances.
III. Enterprise and the Collateral Trustee agree that
the rights of the Time Charterer to purchase the Vessel under the
express terms of the Time Charter, as modified by this Consent
and Agreement, shall continue in full force and effect regardless
of the exercise of any rights of the Collateral Trustee under the
Mortgage or the Reassignment of Time Charter or Assignment of
Bareboat Charter (including without limitation any termination of
the Bareboat Charter) and shall only be terminated in the event
of judicial sale in admiralty of the Vessel; provided, however,
that if any such judicial sale is not confirmed, the rights of
the Time Charterer shall continue in full force and effect as if
the sale of the Vessel had not occurred and provided further that
nothing herein shall be deemed a waiver by the Collateral Trustee
of the preferred status of the Mortgage in respect of third
parties.
IV. Notwithstanding the provisions of Section 48.A of
the Time Charter to the contrary, the Time Charterer agrees that
is shall not assign, transfer or otherwise dispose of any of its
right, title or interest in, to or under the Time Charter
without the prior written consent of the Collateral Trustee, and
that any
assignment, transfer or other disposition thereof without such
consent shall be void, provided, however, that the Time Charterer
may assign the Time Charter to a Related Company (as defined in
Section 25, of the Time Charter) so long as the Time Charterer
shall continue to perform its duties and obligations under the
Time Charter and shall remain responsible as the primary obligor
therefor, unless the Collateral Trustee otherwise consents.
V.(A) In connection with exercise of the Collateral
Trustee's remedies under the Collateral Trust Agreement, the
Credit Agreement or the Loan Documents, CGL, Enterprise, the Time
Charterer and the Collateral Trustee agree that any reassignment,
transfer or other disposition by the Collateral Trustee of all of
CGL's, Enterprise's, or any successor party's right, title and
interest in, to and under the Bareboat Charter and/or the Time
Charter as Owner to any person and any further reassignment,
transfer or disposition thereof and to the sale, whether public
or private or pursuant to judicial foreclosure, of the Vessel to
any person in connection with the exercise of remedies by the
Collateral Trustee or the Lenders pursuant to the Collateral
Trust Agreement, the Credit Agreement and the Loan Documents,
shall be subject to the Time Charterer's consent as provided in
Section 48.A of the Time Charter, as modified by this Consent and
Agreement, which consents shall not be unreasonably withheld,
provided that
in all events any such reassignment, transfer or disposition
shall not cause the Vessel to cease to qualify for operation in
the United States' coastwise trade.
(B)(1) In the event that the Collateral Trustee proposes
to make a disposition of all of Enterprise's or CGL's right,
title and interest in, to and under the Time Charter as Owner
whether or not in connection with the sale of the Vessel in a
private or judicially-ordered sale, pursuant to the exercise of
remedies under the Collateral Trust Agreement, the Credit
Agreement and the Loan Documents, it shall notify the Time
Charterer in writing of such intention and offer the Time
Charterer the opportunity to exercise its right to purchase the
Vessel in accordance with APPENDIX 4 of the Time Charter, as
modified by the Consent and Agreement.
(2) Subject to the Time Charterer's purchase option,
in the exercise of remedies under the Collateral Trust Agreement,
the Credit Agreement and the Loan Documents, the Collateral
Trustee may assign the Time Charter Either to a Qualified
Operator pre-approved by the Time Charterer pursuant to Article
V(B)(3) or to a Qualified Operator approved the Time Charterer
pursuant to Article V(B)(4), and in either case, no other
approval or consent of the Time Charterer shall be required. To
be qualified an operator (i) must have a minimum Net Worth of $10
million and minimum Total Assets of
$25 million and (ii) be qualified to operate vessels in the U.S.
coastwise trade (a "Qualified Operator).
(3) Within 20 days of the date hereof the Time
Charterer shall furnish, and Enterprise shall cause the Time
Charterer to furnish, to Enterprise and the Collateral Trustee a
written list of four Qualified Operators to whom the Owner's role
under the Time Charter may be assigned pursuant to this Article
V(B). On the basis of such list Time Charterer, Enterprise and
the Collateral Trustee shall, within 30 days of the date hereof
arrive at and Approved List (the "Approved List") of Qualified
Operators; profiled that if the Time Charterer fails to deliver
such a list, or the parties fail to arrive at an Approved List,
then the Collateral Trustee shall provide to the Time Charterer
the names of four Qualified Operators and the Time Charterer
shall select on of the operators in accordance with the last two
sentences of Article V(B)(4). The Time Charterer agrees that
annually it will either confirm that such Qualified Operators are
still acceptable, or it will designate a replacement Qualified
Operator for any operator acceptable to Time Charterer and the
Approved List, as so modified, shall be effective for the
forthcoming year. The Time Charterer's failure to confirm such
Qualified Operators or to designate a replacement as aforesaid
shall be deemed to be the Time Charterer's continued acceptance
of the Approved List of Qualified Operators as
then constituted.
(4) The Collateral Trustee may elect not to exercise
its rights under Article V(B)(2) above in which case it shall so
advise the Time Charterer, and the Time Charterer shall select an
operator from the Approved List, which operator must be able to
operate the Vessel for a sum which equal to or less than the
Maximum Operating Expense Amount as defined by the Credit
Agreement (the "Expense Requirement"). The only grounds for the
Time Charterer not selecting one of the operators from the
Approved List shall be the inability of any of the listed
operators to meet the Expense Requirement. If for such reason no
operator can be selected from the Approved List, the Time
Charterer shall so inform the Collateral Trustee. The Collateral
Trustee then may either (i) approve selection of one of the
operators by waiving the Expense Requirement or (ii) within ten
(10) days provide to the Time Charterer the names of four
Qualified Operators. Subject to the Times Charterer's right of
consent under Section 48A of the Time Charter (which will not be
unreasonably withheld), the Time Charterer shall select one of
the operators so designated by the Collateral Trustee, subject to
the same Expense Requirement. Once an operator is selected
pursuant to this Article V(B)(4), such operator shall continue to
serve until a successor is appointed in accordance with the same
procedure.
(5) If a suitable successor operator is not selected
in accordance with the procedures provided in Article V(B)(4),
the parties shall enter into good faith negotiations to revise
their economic assumptions in order to arrive at a basis on which
to accept any of the candidates which previously had been
dismissed for failure to meet the Expense Requirement test. If
agreement on such terms cannot be negotiated, the Time Charterer
shall have 15 days within which to exercise its purchase option,
after which time the Collateral Trustee may either (i) notify the
Time Charterer that it will forego (but without any waiver
thereof) for the time being exercise of its remedies and have CGL
continue to operate the Vessel or (ii) propose a purchaser who
will take the Vessel over subject to the Time Charter or (iii)
advise the Time Charterer that it intends to proceed with its
remedies under the Credit Agreement and the Loan Documents,
including its right to foreclose on the Vessel. The Time
Charterer shall be free to terminate the Time Charter in the
event that it does not agree with the Purchaser proposed by the
Collateral Trustee.
(C) CGL, Enterprise and the Collateral Trustee agree
that in connection with any assignment, transfer or other
disposition of the Bareboat Charter and/or the Time Charter or
any such sale of the Vessel, the Time Charterer shall have the
right to terminate the Time Charter under Section 48.B of the
Time Charter
(1) if the Time Charter shall have been assigned to a substitute
operator either not currently pre-approved pursuant to Article
V(B)(3) or who shall not have been approved pursuant to Article
V(B)(4) or (2) if the Time Charterer elects to purchase the
Vessel (whether before or after the seventh anniversary of the
date of delivery of the Vessel) under the terms of the Time
Charter, as modified by this Consent and Agreement.
(D) CGL, Enterprise and the Collateral Trustee agree
that any permitted reassignment, transfer or other disposition of
the Time Charter by the Collateral Trustee pursuant to Article
V(B) or otherwise with the consent of the Time Charterer shall
provide that the assignee or transferee shall have assumed all of
the obligations of the Owner under the Time Charter arising after
the date of such assumption, and CGL, Enterprise and ISC as the
guarantor of their performance shall remain liable to the Time
Charterer for any and all obligations of the Owner under the Time
Charter arising prior to or which relate to the period prior to
the date of such assumption, and after the date of such
assignment and assumption.
VI. Enterprise and the Collateral Trustee agree that
so long as the obligations to the Lenders shall be outstanding,
in addition to the rights to terminate the Time Charter according
to
its terms operator shall have been appointed with Time
Charterer's consent pursuant to Article V(B), the Time Charter
may be terminated by the Time Charterer at any time (whether
before or after the seventh anniversary of the date of delivery
of the Vessel under the terms of the Time Charter) in the event
that the Collateral Trustee proposes to sell the Vessel in a
private or judicially-ordered sale pursuant to the exercise of
remedies under the Collateral Trust Agreement, the Credit
Agreement or the Loan Documents or upon the occurrence of any
reorganization, arrangement, insolvency, readjustment,
bankruptcy, dissolution, liquidation or similar proceeding
involving Enterprise or ISC. In the event that the Collateral
Trustee proposes to sell the Vessel in a private or
judicially-ordered sale pursuant to the exercise of remedies
under the Credit Agreement, it shall notify the Time Charterer in
writing of such intention, specifying the anticipated date of
sale which shall not be less than 20 days nor more than 60 days
from the time of such notification. The Time Charterer shall
have 15 days from the date of such notice from the Collateral
Trustee to purchase the Vessel by giving its irrevocable Notice
of Intention to Exercise Purchase Option to the Owner and the
Collateral Trustee. Such purchase shall be in accordance with
the procedures and provisions set forth in Appendix 4 to the Time
Charter, except that (i) the 180 day notice of purchase shall not
be required, (ii) if such purchase occurs before the seventh
anniversary of the Time Charter, Schedule A attached hereto,
(iii) if such purchase occurs on a date other than a semi- annual
anniversary as set forth in the appropriate schedule the exact
purchase price shall be determined by (x) multiplying (A) a
number equal to the difference between the next applicable
semi-annual purchase price and the last applicable semi-annual
purchase price by (B) a fraction, the numerator of which is the
number of days since the last semi-annual anniversary and the
denominator of which is 180 and (y) subtracting the product of
such calculation from the purchase figure applicable to the
amount designated for the last applicable semi-annual period.
VII. CGL and Enterprise each warrant that it is now and
for the period of the Time Charter shall remain a citizen of the
United States as defined by Section 2 of the Shipping Act of
1916, as amended. Enterprise and Collateral Trustee acknowledge
and agree that the term "Owner" as used in the Time Charter,
including without limit in Clause 3.A. thereof , shall include
Enterprise, in addition to CGL, and that upon any event of
default under the Bareboat Charter pursuant to which either
Enterprise or the Collateral Trust elect to pursue any remedy
available under the terms of the Bareboat Charter, the Credit
Agreement, the Collateral Trust Agreement or the Loan Documents,
then in such event Enterprise shall assume and perform the
obligations of Owner under the Time Charter unless and until a
substitute operator is
appointed pursuant to Article V(B). In all events, CGL,
Enterprise and the Collateral Trustee agree with Time Charterer
that the Time Charter shall survive any termination of the
Bareboat Charter unless Time Charterer shall elect to terminate
the Time Charter. CGL, Enterprise and the Collateral Trustee
also agree with Time Charterer that transfer of beneficial
ownership, or a controlling interest, in the equity of either CGL
or Enterprise shall be deemed a transfer of the Time Charter
requiring the Time Charterer's consent.
VIII. Notwithstanding the provisions of Section 3.B. of
the Time Charter to the contrary, or Article VI of this Consent
and Agreement, the Time Charterer consents to a direct or
indirect interest in the Vessel by a financial institution so
long as such financial institution either is a citizen of the
United States for purposes of operating a vessel in the United
States coastwise trade as defined in Section 2 of the Shipping
Act, 1916, as amended, or holds such interest in the Vessel
through an "approved" trustee within the meaning of Section 31328
of Title 46, United States Code and is otherwise legally
qualified to hold a mortgage on a coastwise qualified vessel
under the then applicable law and regulations. So long as such
financial institution satisfies the requirements of this Article
IX, the Time Charterer shall not have the right to terminate the
Time Charter pursuant to Section 3.B. of
the Time Charter on account of such financial institution not
being a citizen of the United States.
IX. Terms not defined in this Consent and Agreement or
the Credit Agreement shall be defined in the Time Charter.
X. This Consent and Agreement and the consents
referred to herein or provided pursuant hereto may be relied on
by Enterprise, CGL and the Collateral Trustee and shall be deemed
to satisfy any requirement for the Time Charterer's consent under
the Time Charter with respect to the transactions contemplated
hereby. In the event of any inconsistency or contradiction
between the provisions of the Bareboat Charter and Time Charter
as regards to the rights of the parties hereto, the provisions of
the Time Charter shall prevail.
IN WITNESS WHEREOF, the parties, intending to be legally
bound, has caused this Consent and Agreement to be duly executed
by their duly authorized officers on the day and year first above
written.
NEW ENGLAND POWER COMPANY
By: __________________________
Name: John G. Cochrane
Title: Assistant Treasurer
Accepted and agreed to:
THE BANK OF NEW YORK,
as Collateral Trustee
By: __________________________
Name:
Title:
ENTERPRISE SHIP COMPANY, INC.
By: __________________________
Name: Niels W. Johnsen
Title: Chairman
CENTRAL GULF LINES, INC.
By: __________________________
Name: Niels M. Johnsen
Title: Vice President
SCHEDULE A
Purchase Value
Beginning of Effective at
Semiannual Beginning of Each
Period* Semi-annual Period
_____________ __________________
1 $59,707,395
2 59,373,814
3 59,040,234
4 58,706,653
5 58,373,073
6 58,039,492
7 57,705,912
8 57,372,331
9 57,038,751
10 56,705,170
11 56,371,590
12 56,038,009
13 55,704,428
14 55,370,848
__________________
* Periods 1 through 14 as defined in Time Charter.