Refunding Agreement
Between
Board of Commissioners of the Port of New Orleans
And
Avondale Industries, Inc.
Dated as of April 1, 1994
$36,250,000
Board of Commissioners of the Port of New Orleans
Industrial Revenue Refunding Bonds
(Avondale Industries, Inc. Project)
Series 1994
Refunding Agreement
This Refunding Agreement, dated as of the 1st day of April,
1994, is between the Board of Commissioners of the Port of New
Orleans, a political subdivision of the State of Louisiana (the
"Issuer"), and Avondale Industries, Inc., a Louisiana corporation
(the "Company").
W i t n e s s e t h :
WHEREAS, the Issuer is a political subdivision of the State of
Louisiana, created and existing pursuant to the Constitution and laws
of such State and is authorized and empowered by law, including
particularly the provisions of Chapter 14-A of Title 39 of the
Louisiana Revised Statutes of 1950, as amended (La. R.S. 39:1444-
1455) (the "Refunding Act"), to issue refunding bonds for the purpose
of refunding, readjusting, restructuring, refinancing, extending, or
unifying the whole or any part of outstanding securities of the
Issuer in an amount sufficient to provide funds necessary to
effectuate the purpose for which the refunding bonds are being issued
and to pay all costs associated therewith; and
WHEREAS, pursuant to the provisions of Sections 991 to 1001,
inclusive, of Title 39 of the Louisiana Revised Statutes of 1950, as
amended (the "Act"), and a Trust Indenture dated as of July 1, 1981,
as supplemented by a First Supplemental Trust Indenture dated as of
June 1, 1983, by and between the Issuer and First National Bank of
Commerce, New Orleans, Louisiana, as trustee (the "Original
Indenture"), the Issuer issued its Industrial Revenue Bonds (Avondale
Shipyards, Inc. Project) Series 1983 (the "Series 1983 Bonds") in the
aggregate principal amount of $36,250,000, all of which are
outstanding as of the date hereof, for the purpose of providing funds
to refund the outstanding Industrial Revenue Bonds (Avondale
Shipyards, Inc. Project) Series 1981 of the Issuer (the "Series 1981
Bonds"), which Series 1981 Bonds were issued for the purpose of
providing funds to finance the cost of the acquisition, construction
and installation of a floating drydock and land-based support
facilities for the repair and maintenance of various types of vessels
(the "Project"), which drydock is located between mile markers 106
and 107 on the right descending bank of the Mississippi River at the
downriver end of the main shipyard of the Company located at 5100
River Road, Avondale, Louisiana, in Jefferson Parish, within the
jurisdiction of the Issuer as a part of the public port of the
Issuer. The initial owner and operator of the Project was Avondale
Shipyards, Inc., a Louisiana corporation, and the current owner and
operator of the Project is the Company, successor to Avondale
Shipyards, Inc.; and
WHEREAS, pursuant to and in accordance with the provisions of
the Act and an Installment Sales Agreement dated as of July 1, 1981,
as supplemented by a First Supplemental Installment Sales Agreement
dated as of June 1, 1983 (the "Original Agreement"), by and between
the Issuer and Avondale Shipyards, Inc., predecessor to the Company,
the Issuer acquired the Project from the Company and reconveyed the
Project to the Company for purchase price payments in an amount
sufficient to pay the principal of, premium, if any, and interest on
the Series 1983 Bonds; and
WHEREAS, the Company has requested that the Issuer, pursuant to
and in accordance with the provisions of the Refunding Act, issue its
refunding bonds for the purpose of refunding the Series 1983 Bonds;
and
WHEREAS, in consideration of the issuance of said refunding
bonds by the Issuer, the Company will agree to make or cause to be
made payments in an amount sufficient to pay the principal of,
premium, if any, and interest on said refunding bonds pursuant to
this Refunding Agreement, said refunding bonds shall be paid solely
from the revenues derived by the Issuer from said payments by or on
behalf of the Company under this Refunding Agreement, and said
refunding bonds shall never constitute an indebtedness or pledge of
the general credit of the Issuer or the State of Louisiana, within
the meaning of any constitutional or statutory limitation of
indebtedness or otherwise; and
WHEREAS, said refunding bonds (the "Bonds") shall be designated
"Industrial Revenue Refunding Bonds (Avondale Industries, Inc.
Project) Series 1994"; and
WHEREAS, pursuant to an Escrow Agreement dated the date hereof
(the "Escrow Agreement") among the Issuer, the Company and First
National Bank of Commerce, the trustee under the Original Indenture
(the "Escrow Trustee"), the proceeds of the Bonds (other than the
proceeds which represent accrued interest), together with moneys from
the Company, are to be deposited with the Escrow Trustee in an escrow
fund (the "Escrow Fund") for the purpose of reimbursing Chemical
Bank, New York, New York (the "Series 1983 Letter of Credit Bank")
for its drawing in connection with the discharge of the Series 1983
Bonds; and
WHEREAS, the execution and delivery of the Indenture and this
Refunding Agreement, and the issuance and sale of the Bonds have been
and are in all respects duly and validly authorized by resolutions
duly adopted by the governing authority of the Issuer; and
NOW, THEREFORE, in consideration of the premises and of the
covenants and undertakings herein expressed, the parties hereto agree
as follows:
ARTICLE I
DEFINITIONS; REPRESENTATIONS AND WARRANTIES
SECTION 1.`.Definitions. The terms defined in the preamble
hereto, in this Article I or in Article I of the Indenture shall, for
all purposes of this Agreement, have the meanings herein or therein
specified, unless the context clearly otherwise requires:
"Administrative Expenses" means the direct, out-of-pocket
expenses reasonably incurred by the Issuer pursuant to this Agreement
or the Indenture and reasonable in amount, and the compensation
(agreed to by the Company) of the Trustee, the Paying Agent and the
Bond Registrar and the direct, out-of-pocket expenses of said parties
necessarily incurred under the Indenture and reasonable in amount.
"Affiliate" means as to any Person, (a) any Person which,
directly or indirectly, is in control of, is controlled by, or is
under common control with such Person or (b) any Person who is a
director or officer (i) of such Person or (ii) of any Person
described in clause (a) above. For purposes of this definition,
control of a Person shall mean the power, direct or indirect, to vote
10% or more of the securities having ordinary voting power for the
election of directors (or persons performing similar functions) of
such Person or direct or cause the direction of the management and
policies of such Person whether through ownership of voting
securities, by contract or otherwise.
"Agreement" or "Refunding Agreement" means this Agreement as
the same may from time to time be modified or amended as provided
herein.
"Agreement Term" means the term of this Agreement which shall
be the period from the date of delivery of the Bonds to the initial
purchasers thereof through the date on which payment of the principal
of, premium, if any, and interest on the Bonds (or provision
therefor) in accordance with the Indenture and performance of all the
Company's obligations under this Agreement shall have been made, upon
which payment and performance this Agreement shall terminate.
"Bonds" means the $36,250,000 aggregate principal amount of the
Issuer's Industrial Revenue Refunding Bonds (Avondale Industries,
Inc. Project) Series 1994 authorized to be issued under the
Indenture.
"Capitalized Lease" means any lease the obligations under which
have been, or in accordance with GAAP are required to be, recorded on
the books of a Person or any Subsidiary as a capital lease liability.
"Cash Equivalent Investments" means (i) securities issued,
guaranteed or insured by the United States or any of its agencies
with maturities of not more than one year from the date acquired;
(ii) certificates of deposit or other deposit arrangements with
maturities of not more than one year from the date acquired issued by
a U.S. federal or state chartered commercial bank of recognized
standing, which has capital and unimpaired surplus in excess of
$200,000,000 and which bank or its holding company has a short-term
commercial paper rating of at least A-1 or the equivalent by Standard
& Poor's Corporation and at least P-1 or the equivalent by Moody's
Investors Services, Inc.; (iii) reverse repurchase agreements with
terms of not more than seven days from the date acquired, for
securities of the type described in clause (i) above and entered into
only with commercial banks having the qualifications described in
clause (ii) above; (iv) commercial paper, master notes, or corporate
debt obligations other than those issued by the Company or any of its
Affiliates, issued by any Person incorporated under the laws of the
United States or any state thereof and rated at least A-1 or the
equivalent thereof by Standard & Poor's Corporation, at least P-1 or
the equivalent thereof by Moody's Investors Service, Inc., or at
least D-1 or the equivalent thereof by Duff & Phelps Credit Rating
Company, in each case with maturities of not more than one year from
the date acquired; and (v) investments in money market funds
registered under the Investment Company Act of 1940, as amended,
which have net assets of at least $200,000,000 and at least eighty-
five percent (85%) of whose assets consist of securities and other
obligations of the type described in clauses (i) through (iv) above.
"Company" means Avondale Industries, Inc., a corporation
organized and existing under the laws of the State, and its
successors and permitted assigns, including any surviving, resulting
or transferee corporation, as provided in Section 6.1 or 6.7 hereof.
"Consolidated Debt Service Coverage Ratio" means the ratio of
(a) Consolidated EBITDA to (b) the sum of (i) Consolidated Interest
Expense plus (ii) principal payments of Indebtedness of the Person
and its Subsidiaries (excluding any balloon principal payments,
principal payments on revolving credit agreements, other working
capital financings or Indebtedness incurred with regard to a contract
for the sale of one or more ships).
"Consolidated EBITDA" means with respect to any Person for any
period, (a) Consolidated Net Income for such period before deduction
for income taxes and net interest expense, as set forth in financial
statements determined in accordance with GAAP, plus (b) all Unusual
Losses during such period to the extent deducted from Consolidated
Net Income for such period, minus (c) all extraordinary gains during
such period to the extent included in Consolidated Net Income for
such period and plus (d) depreciation and amortization to the extent
deducted in computing Consolidated Net Income for such period.
"Consolidated Interest Expense" means with respect to any
Person for any period, the aggregate cash interest expense of such
Person and its Subsidiaries for such period, as determined in
accordance with GAAP, and shall include, in any event, the interest
component of all rent and of other amounts payable under all
Capitalized Leases of such Person and its Subsidiaries and in
addition, all commissions, discounts and other fees and charges owed
with respect to letters of credit and banker's acceptances allocable
to or amortized over such period.
"Consolidated Net Income" means with respect to any Person from
any period, the consolidated net income (or loss) of such Person and
its Subsidiaries for such period, determined in accordance with GAAP.
"Consolidated Net Worth" means with respect to any Person for
any period all amounts which, in accordance with GAAP, would be
included under stockholders' equity on a consolidated balance sheet
of the Person and its Subsidiaries at such time.
"Consolidated Senior Debt Service Coverage Ratio" means the
ratio of (a) Consolidated EBITDA to (b) the sum of (i) Consolidated
Interest Expense plus (ii) principal payments of Senior Indebtedness
of the Person and its Subsidiaries (excluding any balloon principal
payments, principal payments on revolving credit agreements, other
working capital financings or Indebtedness incurred with regard to a
contract for the sale of one or more ships).
"Consolidated Senior Indebtedness" means Indebtedness of the
Person and its Subsidiaries whether outstanding on the date of this
Agreement or thereafter created, incurred, assumed or guaranteed
(including, without limitation, interest that accrues on or after or
which would accrue but for the filing of a petition in bankruptcy or
for reorganization, whether or not a claim for post-petition interest
is allowed in such proceeding) except (a) any Indebtedness
outstanding after the date of this Agreement as to which, by the
express terms of the instrument creating or evidencing the same, it
is provided that such Indebtedness is subordinate or junior in right
of payment to any Senior Indebtedness, (b) any Indebtedness of the
Person or any Subsidiary to any Subsidiary or to any Affiliate of the
Person or any Subsidiary, (c) Indebtedness incurred in connection
with the purchase of goods, assets, materials or services in the
ordinary course of business or representing amounts recorded as
accounts payable, trade payables or other current liabilities of the
Person or any Subsidiary on the books of the Person or any Subsidiary
(other than the current portion of any Long Term Indebtedness of the
Company or any Subsidiary that but for this clause (c) would
constitute Senior Indebtedness), (d) any Indebtedness of or amount
owed by the Person or any Subsidiary to their respective employees
for services rendered to the Person or any Subsidiary, as the case
may be, and (e) any liability for federal, state, local or other
taxes owing or owed by the Person or any Subsidiary.
"Consolidated Senior Indebtedness Ratio" means with respect to
any Person and its Subsidiaries for any period the ratio of (a)
Consolidated Senior Indebtedness to (b) Total Capitalization.
"Consolidated Tangible Net Worth" means with respect to any
Person at a particular date, the total consolidated stockholders'
equity of such Person and its Subsidiaries less the amount of all
intangible assets of such Person and its Subsidiaries, all as
determined in accordance with GAAP.
"Costs of Issuance" means all fees, charges and expenses
incurred in connection with the authorization, preparation, sale,
issuance and delivery of the Bonds, including, without limitation,
financial, legal and accounting fees, expenses and disbursements,
rating agency fees, State Bond Commission fees, the Issuer's fees and
expenses attributable to the issuance of the Bonds, the cost of
printing, engraving and reproduction services and the fees and
expenses of the Trustee, the Paying Agent and the Bond Registrar.
"Event of Default" means an event of default specified and
defined in Section 7.1 hereof.
"First Preferred Vessel Mortgage" means the First Preferred
Vessel Mortgage on the 650 foot floating drydock constituting a
portion of the Project granted by the Company to the Trustee on
behalf of the Bondholders.
"GAAP" means generally accepted accounting principles in the
United States of America in effect from time to time.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any
Indebtedness or other obligation of any other Person and, without
limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or
pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for
the purpose of assuring in any other manner the obligee of such
Indebtedness or other obligation of the payment thereof or to protect
such obligee against loss in respect thereof (in whole or in part),
provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The term
"Guarantee" used as a verb has a corresponding meaning.
"Indebtedness" means for any Person (i) all indebtedness or
other obligations of such Person for borrowed money and all
indebtedness of such Person with respect to any other items
(including, without limitation, obligations evidenced by bonds,
debentures, notes or other similar instruments but excluding accounts
payable in the ordinary course of business, income taxes payable,
deferred taxes and deferred credits) which would, in accordance with
GAAP, be classified as a liability on the balance sheet of such
Person, (ii) all obligations of such Person to pay the deferred
purchase price of property or services (including indebtedness
created under or arising out of any conditional sale or other title
retention agreement), (iii) all obligations of such Person
(contingent or otherwise) under reimbursement or similar agreements
with respect to the issuance of letters of credit, (iv) all
indebtedness or other obligations of such Person under or with
respect to any swap or other financial hedging arrangement, including
any Interest Rate Protection Agreement, (v) all obligations of such
Person under Capitalized Leases, (vi) all indebtedness or other
obligations of any other Person of the type specified in clause (i),
(ii), (iii), (iv) or (v) above, the payment or collection of which
such Person has Guaranteed and (vi) all indebtedness or other
obligations of any other Person of the type specified in clause (i),
(ii), (iii), (iv), (v) or (vi) above secured by (or for which the
holder of such indebtedness has an existing right contingent or
otherwise, to be secured by) any Lien, upon or in property
(including, without limitation, accounts and contract rights) owned
by such Person, whether or not such Person has assumed or becomes
liable for the payment of such indebtedness or obligations.
"Indemnified Person" means the Issuer, including its members,
officers, agents and employees individually, and the Trustee.
"Indenture" means the Trust Indenture dated as of the date
hereof between the Issuer and the Trustee, as the same may be amended
or supplemented from time to time in accordance with its terms.
"Interest Rate Protection Agreement" means an interest rate
swap, cap or collar agreement or similar arrangement between any
Person and a financial institution providing for the transfer or
mitigation of interest risks either generally or under specific
contingencies.
"Issuer" means the Board of Commissioners of the Port of New
Orleans, a political subdivision of the State, organized and existing
under the laws of the State, or its successors and assigns.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, security interest, lien (statutory
or other) or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention
agreement, any Capitalized Lease having substantially the same
economic effect as any of the foregoing, and the filing of any
financing statement under the Uniform Commercial Code or comparable
law of any jurisdiction in respect of any of the foregoing).
"Long Term Indebtedness" means any Indebtedness which shall
have a maturity greater than one year and which is classified as non-
current in accordance with GAAP.
"Ogden Note" means the $8.0 million senior unsecured note of
the Company for the benefit of Ogden Corporation ("Ogden") delivered
pursuant to a Letter Agreement dated April 29, 1994 between the
Company and Ogden.
"Original Agreement" means an Installment Sales Agreement dated
as of July 1, 1981, as supplemented by a First Supplemental
Installment Sales Agreement dated as of June 1, 1983, by and between
the Issuer and Avondale Shipyards, Inc., a Louisiana corporation and
a predecessor of the Company.
"Original Indenture" means a Trust Indenture dated as of July
1, 1981, as supplemented by a First Supplemental Trust Indenture
dated as of June 1, 1983, by and between the Issuer and First
National Bank of Commerce, New Orleans, Louisiana, as trustee.
"Permitted Encumbrances" means (a) Liens permitted by the
Revolving Credit Agreement, by and among the Company, Continental
Bank N.A. and the Banks as defined therein dated as of May 10, 1994;
(b) Liens arising out of the refinancing, extension, renewal or
refunding of any Indebtedness of the Company secured by Liens
permitted in clause (a) provided that such Indebtedness (i) does not
exceed $50,000,000, (ii) is not secured by any different classes of
assets and (iii) is on terms and conditions substantially similar to
the terms and conditions of the existing Revolving Credit Agreement
referred to in clause (a) above; (c) Liens granted by the Company in
its ordinary course of business for the purpose of meeting bonding
requirements provided that such Liens do not secure such Indebtedness
in an aggregate principal amount exceeding $25,000,000; (d) customer
Liens on work in progress incurred in the ordinary course of
business; (e) Liens on the Company's 900-foot floating drydock/launch
platform; (f) Liens on certain property located in Harrison County,
Mississippi granted pursuant to a Guaranty Agreement between the
Company and said Harrison County; (g) Liens granted by the Company in
its ordinary course of business on property acquired after May 27,
1994; (h) Liens for taxes, assessments, charges or other governmental
levies not delinquent or which are being contested in good faith by
appropriate proceedings and for which adequate reserves have been
established by the Company or the respective Subsidiary, as the case
may be, to the extent required by GAAP; (i) mechanics', worker's,
materialmen's, operators', carriers', or other like Liens arising in
the ordinary and normal course of business with respect to
obligations which are not due or which are being contested in good
faith by appropriate proceedings; and (j) Liens not granted by the
Company or the respective Subsidiary, as the case may be, which are
promptly contested in good faith and by appropriate proceedings or
which are discharged or bonded within 30 days of notice thereof to
the Company or the respective Subsidiary, as the case may be.
"Person" or "person" means an individual, partnership,
corporation, business trust, joint stock company, trust,
unincorporated association, joint venture, governmental authority or
other entity of whatever nature.
"Project" means the floating drydock and support facilities,
more particularly described in Exhibit A hereto, constructed,
acquired or installed with proceeds from the sale of the Series
1981Bonds.
"Refunding Act" means Chapter 14-A of Title 39 of the
Louisiana Revised Statutes of 1950, as supplemented and amended.
"Refunding Date" means, with respect to the Series 1983 Bonds,
June 1, 1994, or such other date or dates as may be agreed to by the
Issuer and the Company; provided, however, that the Refunding Date
shall not be later than ninety (90) days following the date of
delivery of the Bonds to the initial purchasers thereof.
"Regulations" means all final and proposed United States Income
Tax Regulations.
"Repayments" means the principal, premium, if any, and interest
amounts specified in Section 3.1 hereof and payable by the Company
thereunder.
"Senior Indebtedness" means all Indebtedness except any
Indebtedness which by its terms is subordinate or junior in any
respect to any other Indebtedness.
"State" means the State of Louisiana.
"Subsidiary" means as to any Person a corporation or other
business entity of which shares of stock or other ownership interests
having ordinary voting power to elect a majority of the board of
directors or other managers of such corporation or business entity
are at the time owned, directly or indirectly through one or more
intermediaries, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" shall refer to
Subsidiary or Subsidiaries of the Company.
"Tax Regulatory Agreement" means the Tax Regulatory Agreement
among the Issuer, the Company and the Trustee dated of even date
herewith relating to the Bonds.
"Total Capitalization" means with respect to any Person for any
period the sum of (a) Consolidated Senior Indebtedness plus (b)
Consolidated Net Worth.
"Trustee" means First National Bank of Commerce, New Orleans,
Louisiana, as trustee under the Indenture, and its successors as
Trustee.
"Unusual Losses" means any loss considered extraordinary under
GAAP or such other loss resulting from the sale or write down of the
carrying value of any asset.
SECTION 2.`.Representations and Warranties of the Issuer. The
Issuer represents, warrants and finds that:
(a) The Issuer is a political subdivision of the State,
created by Act 70 of the Louisiana Legislature of 1896 and enjoying
powers pursuant to Article VI, Section 43 of the Louisiana
Constitution of 1974 and La. R.S. 34:1 through 34:47, inclusive, and
La. R.S. 9:1102.1, and is authorized by the provisions of the
Refunding Act, and other constitutional and statutory authority
supplemental thereto, to issue the Bonds.
(b) The Issuer has full power and authority to enter into this
Agreement and the Indenture and to carry out its obligations under
this Agreement and the Indenture and the transactions contemplated
hereby and thereby.
(c) The Issuer has duly authorized the execution and delivery
of this Agreement and the Indenture and the issuance and sale of the
Bonds.
(d) The Bonds are to be issued under and secured by the
Indenture pursuant to which the interest of the Issuer in this
Agreement and the amounts payable under this Agreement, (other than
indemnification and expense reimbursement rights) will be assigned to
the Trustee as security for the payment of the principal of, premium,
if any, and interest on the Bonds.
(e) Neither the execution and delivery of this Agreement or
the Indenture, nor the assignment of this Agreement to the Trustee,
nor the consummation of the transactions contemplated by this
Agreement or the Indenture, nor the fulfillment of or compliance with
the terms and conditions of this Agreement or the Indenture, results
or will result in the violation of any governmental order applicable
to the Issuer, or conflicts or will conflict with or results or will
result in a breach of any of the terms, conditions or provisions of
any agreement or instrument to which the Issuer is now a party or by
which it is bound, or constitutes or will constitute a default under
any of the foregoing.
SECTION 3.e.Representations, Covenants and Warranties of the
Company. The Company hereby makes the following representations,
covenants and warranties:
(a) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State, and is qualified to transact business in the State; has full
corporate power to own its properties and conduct its business; has
full legal right, power and authority to enter into this Agreement
and to carry out and consummate all transactions contemplated by this
Agreement; and by proper corporate action has duly authorized the
execution and delivery of this Agreement.
(b) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated will not
conflict with or constitute on the part of the Company a breach of or
default under the Articles of Incorporation of the Company, its By-
Laws, or any statute, indenture, mortgage, deed of trust, lease, note
agreement or other agreement or instrument to which the Company is a
party or by which it or its properties are bound, or any order, rule
or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its activities or properties.
(c) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes the legal, valid and binding
obligation of the Company enforceable in accordance with its terms,
subject to laws relating to bankruptcy, moratorium, insolvency or
reorganization and similar laws affecting creditors' rights
generally.
(d) No event has occurred and no condition exists with respect
to the Company that would constitute an Event of Default under this
Agreement or under the Original Agreement or which, with the lapse of
time or with the giving of notice or both, would become an "Event of
Default" hereunder or thereunder.
(e) The Company will (i) cause the Project to be operated as
dock and wharf facilities and storage facilities directly related
thereto, as defined in the Internal Revenue Code of 1954, as amended,
and the Regulations, and (ii) keep the Project within the
jurisdiction of the Issuer as a part of the public port at all times.
(f) Substantially all of the proceeds of the Series 1981 Bonds
have been used to provide dock or wharf or storage facilities
directly related thereto as those terms are defined in Section
103(b)(4)(D) of the Internal Revenue Code of 1954, as amended. All
of the proceeds of the Series 1981 Bonds have been expended to pay
the cost of acquisition, construction and installation of the Project
and the costs and expenses of issuance of the Series 1981 Bonds. All
of the proceeds of the Series 1983 Bonds have been expended to refund
and redeem the Series 1981 Bonds and to pay the costs and expenses of
issuance of the Series 1983 Bonds.
(g) The weighted average maturity of the Bonds does not exceed
120% of the remaining economic life of the Project financed with the
proceeds of the Series 1981 Bonds.
(h) The principal amount of the Bonds does not exceed the
outstanding principal amount of the Series 1983 Bonds.
(i) None of the proceeds of the Bonds will be used, and none
of the proceeds of the Series 1981 Bonds or the Series 1983 Bonds
were used, to provide any airplane, skybox or other private luxury
box, or health club facility; any facility primarily used for
gambling; or any store the principal business of which is the sale of
alcoholic beverages for consumption off premises.
(j) None of the proceeds of the Bonds will be used to finance
Costs of Issuance of the Bonds.
ARTICLE II
ISSUANCE OF THE BONDS AND
DEPOSIT OF BOND PROCEEDS
SECTION 1.j.Agreement to Issue Bonds; Disbursement of Bond
Proceeds. In order to provide funds for the refunding of all of the
outstanding Series 1983 Bonds or to reimburse the Series 1983 Letter
of Credit Bank in connection therewith, the Issuer, immediately after
the execution and delivery of this Agreement, will proceed to issue,
sell and deliver the Bonds to the initial purchasers thereof and will
cause the proceeds thereof (other than the proceeds which represent
accrued interest, if any) to be deposited as provided in Section 4.1
of the Indenture.
SECTION 2.j.No Warranty as to Sufficiency of Bond Proceeds.
The Issuer does not make any warranty, either express or implied,
that the proceeds of the Bonds will be sufficient to pay all amounts
then due and owing on the Series 1983 Bonds. The Company shall
provide such additional moneys as are required to reimburse the
Series 1983 Letter of Credit Bank for its drawing in connection with
the redemption of the Series 1983 Bonds on the Refunding Date. The
Company agrees that it will pay out of its own money and not out of
proceeds of the Bonds all Costs of Issuance with respect to the
Bonds. The Company agrees that if it should pay any portion of the
Series 1983 Bonds in excess of moneys available therefor, it shall
not be entitled to any reimbursement therefor from the Issuer, the
Trustee or any Bondholder, nor shall it be entitled to any abatement
or diminution of the amounts payable under this Agreement.
SECTION 3.j.Use of Moneys Held Under the Indenture. Any moneys
held in the Bond Fund shall be invested, reinvested and applied by
the Trustee in accordance with the Indenture. The Company hereby
agrees that upon the occurrence of an Event of Default under this
Agreement or under the Indenture, all amounts at any time deposited
in the Bond Fund, including all investments and reinvestments made
with such amounts and the proceeds thereof, and all of its rights to
and interests in such amounts, investments, reinvestments and
proceeds shall be held by the Trustee for the holders of the Bonds.
The Company hereby authorizes and directs the Trustee to hold such
amounts, investments, reinvestments and proceeds as custodian for the
Issuer, and to invest and disburse such amounts and proceeds in
accordance with the Indenture and this Agreement.
ARTICLE III
DEPOSIT OF BOND PROCEEDS AND REPAYMENTS
SECTION 1.j.Repayments. (a) In consideration of the issuance,
sale and delivery of the Bonds by the Issuer, the Company hereby
agrees to pay, during the Agreement Term, to the Trustee for the
account of the Issuer on each date on which the principal of,
premium, if any, or interest on the Bonds is due, whether at the
maturity thereof or upon acceleration, redemption or otherwise in
accordance with the provisions of the Indenture, Repayments in an
amount equal to the sum of (i) all interest which is due and payable
on the Bonds on such date, (ii) the principal amount of Bonds, if
any, which is due and payable on such date, and (iii) amounts, if
any, required to effect redemption of Bonds on such date pursuant to
the Indenture, including any applicable redemption premium. Pursuant
to the Indenture, the Issuer directs the Trustee to apply such
Repayments in the manner provided in the Indenture. Repayments shall
be paid to the Trustee in funds immediately available to the Trustee
on the payment date, and shall be immediately deposited by the
Trustee in accordance with the Indenture. In any event, the Company
agrees to make Repayments to the Trustee at such times and in such
amounts and manner so as to enable the Trustee to make payment of the
principal of, premium, if any, and accrued interest on the Bonds as
the same shall become due and payable whether by acceleration,
redemption or otherwise in accordance with the terms of the
Indenture.
(b) If the Company should fail to make any of the Repayments
required in Section 3.1.(a) above, the item or installment which the
Company has failed to make shall continue as an obligation of the
Company until the same shall have been fully paid, and the Company
agrees to pay the same with interest thereon (to the extent permitted
by law) at the rate per annum borne by the Bonds as provided in
Section 2.2 of the Indenture, until paid in full.
(c) In addition to the options of the Company under Article
VIII hereof to cause redemption, the Company shall have the right to
make from time to time partial prepayments of the amounts due
hereunder. The making of any prepayments by the Company shall not
require the Company to make any further prepayments. The Issuer
shall direct the Trustee to apply such prepayments in such manner,
consistent with the provisions of the Indenture, as may be directed
by the Company.
In the event that (i) such partial prepayments shall be applied
by the Trustee pursuant to the Indenture to the defeasance or
redemption of the Bonds or (ii) the Bonds are presented by the
Company or the Issuer to the Trustee for cancellation pursuant to the
Indenture, the Company shall be entitled to a credit for the Bonds so
defeased, redeemed or cancelled against payments required to be made
under the provisions of this Article.
(d) The obligation of the Company to make Repayments shall be
absolute and unconditional and shall not be subject to cancellation,
termination, abatement or diminution, or to any defense other than
payment or to any right of set-off, counterclaim, recoupment or
otherwise arising out of any breach under this Agreement, the
Indenture, or otherwise by the Issuer, the Trustee, or any other
party, or out of any obligation or liability at any time owing to the
Company by the Issuer, the Trustee, or any other party, and further,
the Repayments and the other payments due hereunder shall continue to
be payable at the times and in the amounts herein specified whether
or not the Project, or any portion thereof, shall have been destroyed
by fire or other casualty, or title thereto, or the use thereof,
shall have been taken by the exercise of the power of eminent domain.
During the Agreement Term, the Company (i) shall not suspend or
discontinue its payment of Repayments, (ii) shall perform and observe
all of its other obligations contained herein and (iii) except as
explicitly permitted herein, shall not terminate this Agreement for
any cause including, without limiting the generality of the
foregoing, any acts or circumstances that may constitute failure of
consideration, commercial frustration of purpose, any change in tax
or other laws by the United States of America or the State or any
political subdivision of either, or any failure of the Issuer to
perform and observe any obligation or condition arising out of or
connected with this Agreement. This provision shall not be construed
to release the Issuer from the performance of any of its obligations
under this Agreement; and in the event the Issuer shall fail to
perform any such obligation, the Company may institute such action
against the Issuer as the Company may deem necessary to compel
performance; provided, however, that no such action shall claim or
attempt to establish or work a reduction of Repayments payable by the
Company hereunder. The Company may at its own cost and expense and
in its own name or in the name of the Issuer, prosecute or defend any
action or proceedings or take any other action involving third
persons which the Company deems reasonably necessary in order to
secure or protect its rights under this Agreement, and in such event
the Issuer shall cooperate fully with the Company.
SECTION 2.c.Additional Payments. The Company further agrees to
pay, during the Agreement Term, all amounts due to the Trustee or the
Issuer under this Agreement, the Indenture or any other agreements
entered into in connection with the issuance of the Bonds.
SECTION 3.3.Funding and Replenishment of Debt Service Reserve
Fund. In addition to Repayments required by Section 3.1, the Company
shall make deposits to the Debt Service Reserve Fund as follows: on
the date of delivery of the Bonds to the initial purchasers thereof,
the Company shall deposit $1,000,000 to the credit of the Debt
Service Reserve Fund and thereafter on each September 1, December 1,
March 1 and June 1, commencing September 1, 1994, the Company shall
deposit the sum of $300,000 to the Debt Service Reserve Fund until
the amount on deposit therein equals the Debt Service Reserve Fund
Requirement. In lieu of making such deposits in cash, the Company
may satisfy its obligation under this Section 3.3 by depositing with
the Trustee a Debt Service Reserve Fund Letter of Credit as defined
in Section 5.7 of the Indenture and hereby agrees to reinstate the
Debt Service Reserve Fund Letter of Credit or to deposit funds in the
Debt Service Reserve Fund as provided in Section 5.7 of the
Indenture.
If the amount on deposit in the Debt Service Reserve Fund on
any valuation date under Section 5.7 of the Indenture is less than
the Debt Service Reserve Fund Requirement because of a decrease in
the market value of the investments in the Debt Service Reserve Fund,
the Company shall make up such deficiency in six equal monthly
installments, commencing on the first Business Day of the month
following such valuation. If the amount on deposit in the Debt
Service Reserve Fund is less than the Debt Service Reserve
Requirement due to a withdrawal therefrom required by the Indenture
or a draw on the Debt Service Reserve Fund Letter of Credit, the
Company shall make up such deficiency in three equal monthly
installments commencing on the first Business Day of the month
following such withdrawal or draw.
ARTICLE IV
REFUNDING OF SERIES 1983 BONDS
SECTION 1.c.Escrow Fund - Application of Bond Proceeds. The
Issuer will cause to be deposited with the Escrow Trustee for credit
to the Escrow Fund the proceeds from the initial sale of the Bonds
(other than the proceeds which represent accrued interest, if any),
which proceeds shall be held therein and applied in accordance with
the Indenture and the Escrow Agreement. At the time such proceeds
are deposited, the Company will pay the balance of moneys required to
pay the redemption price for the Series 1983 Bonds to the Escrow
Trustee and will pay all Costs of Issuance. The proceeds of the
Bonds together with the additional funds provided by the Company on
deposit with the Escrow Trustee are to be used by the Escrow Trustee
to reimburse the Series 1983 Letter of Credit Bank in connection with
the redemption of the Series 1983 Bonds, all as provided in the
Indenture and the Escrow Agreement. The Company will take no action
which would reduce the principal amount of the Series 1983 Bonds
prior to their redemption.
SECTION 2.c.Compliance with Original Indenture. The Issuer and
the Company shall take all steps as may be necessary to effect the
redemption of the Series 1983 Bonds on the Refunding Date as provided
in the Original Indenture and as contemplated herein.
ARTICLE V
EFFECTIVE DATE
SECTION 1.c.Effective Date of Refunding Agreement. This
Agreement shall become effective on the date of delivery of the Bonds
to the initial purchasers thereof and shall continue in full force
and effect during the Agreement Term.
ARTICLE VI
SPECIAL COVENANTS
SECTION 1.c.Maintenance of Corporate Existence. The Company
covenants that during the Agreement Term, it will be qualified to do
business in the State, will maintain its corporate existence, will
not dissolve, sell or otherwise dispose of all or substantially all
of its assets to, and will not consolidate with or merge into,
another corporation or entity unless such corporation or entity shall
be incorporated and existing under the laws of one of the states of
the United States and qualifies to do business in the State, assumes
all of the obligations of the Company hereunder and, after such
transaction is not in default under any provisions hereof.
If a consolidation, merger, sale or other transfer is made as
provided in this Section, the provisions of this Section shall
continue in full force and effect and no further consolidation,
merger, sale or other transfer shall be made except in compliance
with the provisions of this Section. If the Company is not to be the
surviving, resulting or transferee corporation, written notice of
such consolidation or merger shall be given to the Issuer and the
Trustee ninety (90) days prior to such event.
SECTION 2.c.Limited Obligation Bonds. The Bonds shall be
limited obligations of the Issuer and shall be payable solely out of
the Dedicated Revenues of the Issuer as provided in the Indenture
(including all sums deposited in the Bond Fund from time to time
pursuant to this Agreement and the Indenture, and in certain events,
amounts attributable to Bond proceeds or amounts obtained through the
exercise of certain remedies provided in the Indenture). The Bonds
shall never constitute an indebtedness or general obligation of the
Issuer or the State within the meaning of any constitutional or
statutory provision or limitation of indebtedness and shall never
constitute or give rise to a pecuniary liability of the Issuer or the
State or a charge or pledge against the general credit or taxing
power of either.
SECTION 3.c.Tax Covenants.It is intended by the parties hereto
that this Agreement and all action taken hereunder be consistent with
and pursuant to the resolutions of the Issuer relating to the Bonds,
and that the interest on the Bonds be excluded from the gross income
of the recipients thereof, other than a person who is a "substantial
user" of the Project or a "related person" of a "substantial user"
within the meaning of the Code, for federal income tax purposes by
reason of the provisions of the Code. The Issuer and the Company
hereby covenant with each other that neither of them will, knowingly,
in the case of the Issuer, cause or permit the proceeds of the Bonds
or other moneys to be used in a manner, or take any action or fail to
take any action, which will cause the interest on the Bonds to be
includable in gross income of the recipients thereof other than a
person who is a "substantial user" of the Project or a "related
person" to such "substantial user" within the meaning of the Code for
federal income tax purposes. In addition, the Company covenants that
to the extent permitted by law, it shall take all actions necessary
to maintain such exclusion of the interest on the Bonds from gross
income for federal income tax purposes. In furtherance of the
foregoing, the Company also agrees on behalf of the Issuer to comply
with all rebate requirements and procedures as may become applicable
to the Bonds under the Code. The Company and the Issuer shall direct
the Trustee to make no use of the proceeds of the Bonds, or any funds
which may be deemed to be proceeds of the Bonds pursuant to Section
148 of the Code and the applicable Regulations thereunder, which
would cause the Bonds to be "arbitrage bonds" within the meaning of
such Section and such Regulations, and the Company shall comply with
and the Issuer shall take no action to violate the requirements of
such Section and such Regulations while any Bonds remain outstanding.
The Company will take no action which would cause any funds
constituting gross proceeds of the Bonds to be used in a manner as to
constitute a prohibited payment under the applicable regulations
pertaining to, or in any other fashion as would constitute failure of
compliance with, Section 148 of the Code.
The Company further agrees, throughout the Agreement Term, to
comply with or cause compliance with all representations or
requirements set forth in the Tax Regulatory Agreement. The Company
further agrees that in the event of a determination of taxability
pursuant to Section 7.1(b) of the Indenture, while the Company is not
required to complete the administrative proceeding or litigation
referred to within a specified period, it hereby covenants that it
will use its best efforts to obtain a prompt final determination,
decision or settlement of any administrative proceeding or
litigation.
SECTION 4.c.Maintenance of Project; Insurance; Taxes. The
Company will maintain, preserve and keep the Project or cause the
Project to be maintained, preserved and kept, with the appurtenances
and every part and parcel thereof, in good repair, working order and
condition and it will from time to time make or cause to be made all
necessary and proper repairs, replacements and renewals; provided,
however, that the Company will have no obligation to maintain,
repair, replace or renew any element or unit of the Project the
maintenance, repair, replacement or renewal of which becomes (i)
unlawful or (ii) uneconomical to the Company because of obsolescence
or change in government standards or regulations.
The Company agrees that the Project will be insured for fire
and extended coverage risks and personal and property liability
coverage (including property, comprehensive general liability and
umbrella insurance) in such amounts and covering such risks as are
customarily insured against by businesses of like size and type with
respect to facilities similar in nature to the Project and the
Trustee shall be named as an additional insured in such insurance.
The Company shall maintain workmen's compensation coverage or cause
the same to be maintained in accordance with Louisiana law. Any
provisions of this Agreement to the contrary notwithstanding, the
Company shall be entitled to the proceeds of any insurance or
condemnation award or portion thereof with respect to the Project and
such shall be paid directly to the Company and the Trustee, as loss
payee.
It is understood and agreed that the Repayments under Section
3.1 and other charges payable hereunder shall continue to be payable
at the times and in the amounts herein specified, whether or not the
Project shall have been wholly or partially destroyed by fire or
other casualty or shall have been taken in condemnation, and that
there shall be no abatement of any such payments and other charges by
reason thereof.
The Company further agrees that it will pay or cause to be
paid, as the same respectively become due, all taxes and governmental
charges of any kind whatsoever that may at any time be lawfully
assessed or levied against the Company or the Issuer with respect to
the Project, any portion thereof, including, without limiting the
generality of the foregoing, any taxes levied against the Company or
the Issuer upon or with respect to the income or profits of the
Issuer under this Agreement or any charge on the Repayments, and
including all ad valorem taxes lawfully assessed upon the Project,
all utility and other charges incurred in the operation, maintenance,
use, occupancy and upkeep of the Project, all assessments and charges
lawfully made by any governmental body for or on account of the
Project and in addition any excise tax levied against the Company or
the Issuer on the Repayments; provided, however, that nothing herein
shall require the payment of any such tax or charge or the making of
provision for the payment thereof so long as the validity thereof
shall be contested in good faith by appropriate legal proceedings,
unless thereby the lien of the Indenture on the Repayments will be
materially endangered or the Project or any material part thereof
shall be subject to loss or forfeiture, in which event such taxes,
assessments and charges shall be paid forthwith; and provided
further, that with respect to special assessments or other
governmental charges that may lawfully be paid in installments over a
period of years, the Company shall be obligated to pay or cause to be
paid only such installments as are required to be paid during the
Agreement Term.
SECTION 5.c.Permits. The Company shall, at its sole cost and
expense, procure or cause to be procured any and all necessary
building permits, other permits, licenses and other authorizations
required for the lawful and proper use, occupation, operation and
management of the Project. The Company also agrees to pay or cause
to be paid all lawful charges for gas, water, sewer, electricity,
light, heat, power, telephone and other utility services used,
rendered or supplied to, upon or in connection with the Project.
SECTION 6.c.Compliance with Law. The Company shall, throughout
the Agreement Term and at no expense to the Issuer, promptly comply
with or cause compliance with all laws, ordinances, orders, rules,
regulations and requirements of duly constituted public authorities
which may be applicable to the Project or to the repair and
alteration thereof, or to the use or manner of use of the Project.
Notwithstanding the foregoing, the Company shall have the right to
contest or cause to be contested the legality of any such law,
ordinance, order, rule, regulation or requirement as applied to the
Project provided that in the opinion of Counsel to the Company such
contest shall not in any way materially adversely affect or impair
the obligations of the Company under this Agreement or the ability of
the Company to discharge such obligations.
SECTION 7.c.First Preferred Vessel Mortgage and Prohibition
Against Sales. The Company will grant to the Trustee on behalf of
the Bondholders the First Preferred Vessel Mortgage. The Company
further covenants that it will not grant any lien, mortgage or
security interest in any other portion of the Project nor will it
sell, lease or otherwise dispose of its interest in the Project
except as provided in Section 6.1 hereof or in this Section. The
Company may from time to time sell or permit the sale of the
Company's interest in any machinery, fixtures, apparatus or
instruments constituting part of, or used in connection with, the
Project and remove or permit the removal thereof from the Project,
provided that such facilities are facilities which are not necessary
for the operation of the Project or for which a substitution is made
and provided further that such removal will not impair the exclusion
from gross income of interest on the Bonds for federal income tax
purposes. In addition, this Agreement may be assigned in whole or in
part and the Project may be sold or leased as a whole or in part (but
subject to this Agreement and the Issuer's rights hereunder) by the
Company without the necessity of obtaining the consent of the
Trustee, the Issuer or the holders of the Bonds, subject, however, to
the following conditions:
(a) No sale, assignment or leasing (other than pursuant
to Section 6.1 hereof) shall relieve the Company from primary
liability for any of its obligations hereunder, and in the
event of any such sale, assignment or leasing, the Company
shall remain primarily liable for the Repayments specified in
Section 3.1 hereof and for the performance and observance of
the other agreements on its part herein provided; and
(b) The purchaser, assignee or lessee from the Company
shall assume the obligations of the Company hereunder to the
extent of the interest sold, assigned or leased.
(c) The Company shall, within 30 days after the delivery
thereof, furnish or cause to be furnished to the Issuer and the
Trustee a true and complete copy of such assignment, sale, or
lease.
SECTION 8.c.Issuer Assignment of Rights and Interest in
Refunding Agreement. The Issuer shall, pursuant to the Indenture,
assign its rights under and interest in this Agreement (other than
rights with respect to expense reimbursement and indemnification) and
pledge and assign all payments, receipts and revenues receivable
under or pursuant to this Agreement (other than payments for
indemnification and expense reimbursement), as provided herein and in
the Indenture, to the Trustee pursuant to the Indenture as security
for payment of the principal of, premium, if any, and interest on the
Bonds; provided, however, that the Issuer reserves the right to
enforce in its own name and for its own benefit the obligations of
the Company to indemnify the Issuer and to reimburse the expenses of
the Issuer. The Company hereby acknowledges notice of and consents
to such assignment and pledge. It is hereby recognized that the
assignment shall entitle the Trustee to enforce any covenant made by
the Company for the benefit of the holders of the Bonds or the
Trustee and to enforce all of the rights, powers and interest of the
Issuer under this Agreement. Except as provided in this Section 6.8,
the Issuer will not sell, assign, transfer, convey or otherwise
dispose of its interest in this Agreement during the Agreement Term.
The Issuer hereby grants the Company full authority for the account
of the Issuer to perform any covenant or obligation alleged in any
notice of default under the Indenture, in the name and stead of the
Issuer, with full power to do any and all such things and acts to the
same extent that the Issuer could do to correct such default and
perform any such things and acts and with power of substitution to
correct such default.
SECTION 9.c.Payment of Administrative Expenses. The Company
will promptly pay or cause to be paid all Administrative Expenses as
the same become due and payable. The Company agrees to pay or cause
to be paid the Administrative Expenses of the Issuer directly to the
Issuer. The Company further agrees to pay or cause to be paid the
Administrative Expenses of the Trustee, the Paying Agent and the Bond
Registrar under the Indenture directly to said parties, who shall
receive and disburse such payments as provided in the Indenture. In
the event the Company shall fail to pay or cause to be paid any
Administrative Expenses, the payment so in default shall continue as
an obligation of the Company until the amount in default shall have
been fully paid, and the Company agrees to pay or cause to be paid
the same with interest thereon (to the extent legally enforceable) at
a rate which shall be the rate per annum borne by the then
outstanding Bonds or the maximum rate permitted by Louisiana law,
whichever is the lesser, until paid.
SECTION 10.c.Indemnification. The Company hereby agrees (i) to
protect, indemnify and hold harmless each Indemnified Person from
any and all financial responsibility or liability whatsoever with
respect to the financing or refinancing of the Project and the Bonds,
the Series 1981 Bonds or the Series 1983 Bonds issued with respect
thereto, provided that the Company will not be liable in any such
case to the extent that any such loss, claim, damage, liability and
expense arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in any
information furnished by the Issuer specifically for use in the
Limited Offering Memorandum for use under the caption "The Issuer";
(ii) to indemnify, defend and hold the Indemnified Person harmless
against any loss or damage to property or any injury or death of any
person or persons occurring in connection with the construction,
equipping or operation of the Project however caused; and (iii) to
indemnify, defend and hold the Indemnified Person harmless against
any claim, penalty, order, judgment, costs or reasonable Counsel fees
resulting from non-compliance of the Company or the Project with
federal, state or local health, safety or environmental laws,
ordinances or regulations with respect to the Project.
The Company also covenants and agrees, at its expense, to pay,
and to indemnify the Indemnified Person from and against, all costs,
expenses and charges lawfully incurred after an Event of Default in
enforcing any covenant or agreement of the Company contained in this
Agreement.
If any suit, action or proceeding is brought against any
Indemnified Person, that action or proceeding shall be defended by
Counsel to the Indemnified Person or the Company, as the Company
shall determine. The Indemnified Person shall notify the Company
promptly upon receiving notice of any such suit, action or
proceeding. If the defense is by Counsel to the Indemnified Person,
the Company shall indemnify the Indemnified Person for the reasonable
cost of that defense including reasonable Counsel fees. If the
Company determines that the Company shall defend the Indemnified
Person, the Company shall immediately assume the defense at its own
cost. The Company shall not be liable for any settlement of any
proceeding made without its written consent (which consent shall not
be unreasonably withheld).
The obligations of the Company under this Section shall survive
any assignment or termination of this Agreement.
SECTION 11.c.No Warranty. The Issuer makes no warranty, either
express or implied, as to the Project, including, without limitation,
title to the Project or the actual or designed capacity of the
Project, as to the suitability or operation of the Project for the
purposes specified in this Agreement, as to the condition of the
Project or as to the suitability thereof for the Company's purposes
or needs or as to compliance of the Project with applicable laws and
regulations or the ability of the Company to discharge the Bonds.
SECTION 12.c.Financial Statements of Company. The Company will
furnish the Trustee, at least one nationally recognized municipal
securities information repository, any beneficial owner of the Bonds
upon request to the Company and any rating agency that may maintain a
rating on the Bonds with its annual audited financial statements and
notice of certain material events affecting the security of the
Bonds, including principal and interest payment delinquencies,
nonpayment related defaults, events affecting the tax exempt status
of the Bonds, modifications to rights of bond holders, bond calls and
rating changes. In addition, the Company will deliver to the Trustee
and any Beneficial Owner of the Bonds known to the Company copies of
all financial statements available to the general public, including
the Company's Annual Reports on Form 10-K and Quarterly Reports on
Form 10-Q within five Business Days of such reports becoming
available to the general public. If at any time, the Company ceases
to be a reporting company within the meaning of the Securities
Exchange Act of 1934, as amended, the Company will provide
substantially the same material within 95 days of the end of any
fiscal year, and within 50 days of the end of any fiscal quarter.
SECTION 13.c.Consolidated Tangible Net Worth. The Company will
not permit the Consolidated Tangible Net Worth at the end of any
fiscal year to be less than $60,000,000. If the Consolidated
Tangible Net Worth at the end of any fiscal year is less than this
requirement the Company will either, at its option, (a) be
prohibited, until such time as the Company is again in compliance
with this requirement (determined at the end of each fiscal year),
from (i) paying cash dividends on common stock, (ii) repurchasing
shares of common stock, or (iii) incurring additional Indebtedness
other than for the refunding, refinancing or replacement of any
existing line of credit or revolving credit agreement and drawings
under such line or agreement; or (b) deliver to the Trustee (i) an
independent appraisal of all Project assets, (ii) perfected security
interests in all Project assets, and (iii) to the extent the
appraised value of the Project assets is less than the outstanding
par amount of the Bonds, perfected security interests on additional
Company assets, with an independent appraised value equal to the
difference. Any amount pledged as collateral pursuant to clause (b)
of this Section shall remain so pledged for as long as any Bonds
remain outstanding.
SECTION 14.c.Consolidated Senior Indebtedness Ratio. The
Company will not permit the Consolidated Senior Indebtedness Ratio at
the end of any fiscal year to be greater than 0.6 to 1. If the
Consolidated Senior Indebtedness Ratio at the end of any fiscal year
is greater than this requirement the Company will either, at its
option, (a) be prohibited, until such time as the Company is again in
compliance with this requirement (as determined at the end of each
fiscal year), from (i) paying cash dividends on common stock, (ii)
repurchasing shares of common stock, or (iii) incurring additional
Indebtedness, other than for the refunding, refinancing or
replacement of any existing line of credit or revolving credit
agreement and drawings under such line or agreement; or (b) deliver
to the Trustee (i) an independent appraisal of all Project assets,
(ii) perfected security interests in all Project assets, and (iii) to
the extent the appraised value of the Project assets is less than the
outstanding par amount of the Bonds, perfected security interests on
additional Company assets, with an independent appraised value equal
to the difference. Any amount pledged as collateral pursuant to
clause (b) of this Section shall remain so pledged for as long as any
Bonds remain outstanding.
SECTION 15.c.Consolidated Senior Debt Service Coverage Ratio.
Beginning with the fiscal year ending December 31, 1995, the Company
will not permit the Consolidated Senior Debt Service Coverage Ratio
(which will exclude repayment of the Ogden Note and its Subsidiaries
at the end of any fiscal year) to be less than 2.0 to 1; and the
Consolidated Debt Service Ratio (which will include all debt whether
senior or subordinate, except for the repayment of the Ogden Note)
and its Subsidiaries at the end of any fiscal year to be less than
1.1 to 1. If the Company shall fail to maintain either the
Consolidated Senior Debt Service Coverage Ratio or the Consolidated
Debt Service Coverage Ratio, then the Company will either, at its
option, (a) be prohibited, until such time as the Company is again in
compliance with this requirement (determined at the end of each
fiscal year), from (i) paying cash dividends on common stock, (ii)
repurchasing shares of common stock, or (iii) incurring additional
Indebtedness, other than for the refunding, refinancing or
replacement of any existing line of credit or revolving credit
agreement and drawings under such line or agreement; or (b) deliver
to the Trustee (i) an independent appraisal of all Project assets,
(ii) perfected security interests in all Project assets, and (iii) to
the extent the appraised value of the Project assets is less than the
outstanding par amount of the Bonds, perfected security interests on
additional Company assets, with an independent appraised value equal
to the difference. Any amount pledged as collateral pursuant to
clause (b) of this Section shall remain so pledged for as long as any
Bonds remain outstanding.
SECTION 16.c.Dividends of the Company. The Company will not
declare any dividend on, or make any payment on account of, or set
apart assets for a sinking or other analogous fund for the purchase,
redemption, defeasance, retirement or other acquisition of, any
shares of any class of stock of the Company or any Subsidiary, as the
case may be, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of the Company or any
Subsidiary, as the case may be, except that so long as no "Event of
Default" has occurred and is continuing or would result therefrom:
(a) the Company may declare and pay dividends payable solely in cash
on its shares of preferred stock, and (b) the Company may declare and
pay dividends payable solely in cash on its shares of common stock in
an amount not to exceed 75% of the difference between Consolidated
Net Income for the last four consecutive fiscal quarters ending with
the fiscal quarter immediately preceding the date the dividend is
declared and the amount of dividends paid on its shares of preferred
stock for the last four consecutive fiscal quarters ending with the
fiscal quarter immediately preceding the date the dividend is
declared. Notwithstanding the above, the Company will have the right
to pay a dividend on its common stock solely in the form of
additional shares of the Company's common stock.
SECTION 17.c.Liens of the Company. The Company will not
create, incur, assume or permit to exist any Lien upon any of its
revenues, property (including, but not limited to, fixed assets,
inventory, real property, receivables, intangible rights and stock)
or other assets, whether now owned or hereafter acquired, other than
Permitted Encumbrances unless (a) (i) the Revolving Credit Agreement
dated as of May 10, 1994, by and among the Company, Continental Bank
N.A. and the Banks as defined therein, including extensions according
to its terms, is continuing in effect or (ii) the Consolidated Senior
Debt Service Coverage Ratio is greater than 2.5 to 1.0 or (b) the
Company delivers to the Trustee (i) an independent appraisal of all
Project Assets, (ii) perfected security interests in all Project
assets, and (iii) to the extent the appraised value of the Project
assets is less than the outstanding par amount of the Bonds,
perfected security interests on additional Company assets, with an
independent appraised value equal to the difference. Any amount
pledged as collateral pursuant to clause (b) of this Section shall
remain so pledged for as long as any Bonds remain outstanding.
SECTION 18.c.Debt Service Reserve Fund. The Company agrees to
fund in accordance with the Indenture the Debt Service Reserve Fund
at the Debt Service Reserve Fund Requirement.
SECTION 19.c.Long Term Indebtedness. The Company will not
incur additional Long Term Indebtedness if either (i) the incurrence
of such Long Term Indebtedness would constitute a violation of this
Agreement; or (ii) the Company is unable to obtain a certificate from
the firm of Deloitte & Touche or other nationally recognized
accounting firm to the effect that on a pro-forma basis (including
the additional Long Term Indebtedness but excluding any Indebtedness
incurred for the refunding, refinancing or replacement of any
existing line of credit or revolving credit agreement and drawings
under such line or agreement) for any four consecutive fiscal
quarters of the last six, it has satisfied all covenants contained in
this Agreement.
SECTION 20.c.Liquidity Maintenance. The Company will maintain
at all times a line of credit, revolving credit or similar liquidity
facility with a bank or banks in an amount which, together with the
sum of all cash and Cash Equivalent Investments of the Company,
equals at least $35,000,000. If the sum of the cash and Cash
Equivalent Investments of the Company plus the amount of the line of
credit, revolving credit or similar liquidity facility referred to in
the foregoing sentence fails to equal at least $35,000,000, then the
Company will be prohibited from (i) paying cash dividends on common
stock, (ii) repurchasing shares of common stock or (iii) incurring
additional Indebtedness, other than for the refunding, refinancing or
replacement of any existing line of credit or revolving credit
agreement and drawings under such line or agreement until such time
as such condition is met.
SECTION 21.c.Confirmation of Compliance by Company. Continued
compliance with the covenants set forth herein will be confirmed
annually in writing by the Company to the Trustee as of each December
31st, for so long as any portion of the Bonds remain outstanding,
such confirmation to be received by the Trustee within 120 days of
the close of the fiscal year of the Company.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
SECTION 1.c.Events of Default. The following shall be "Events
of Default" under this Agreement, and the term "Event of Default"
shall mean, whenever used in this Agreement, any one or more of the
following:
(a) Failure by the Company to pay when due the Repayments
required to be paid under Section 3.1 hereof, which, after
giving effect to any draws against the Debt Service Reserve
Fund, causes a default in the payment of principal, interest or
redemption premium, if any, on any Bond.
(b) Failure by the Company to observe and perform any
covenant, condition or agreement on its part to be observed or
performed hereunder, other than as referred to in Section
7.1.(a) for a period of 60 days after written notice specifying
such failure and requesting that it be remedied is given to the
Company by the Issuer or, so long as any Bonds are outstanding,
by the Trustee, unless the Trustee, as the assignee of the
Issuer, shall agree in writing to an extension of such time
prior to its expiration; provided, however, if the failure
stated in the notice can, in the opinion of the Company, be
corrected, but not within the applicable period, such failure
shall not constitute an Event of Default or default if
corrective action is instituted by the Company within the
applicable period and the Company notifies the Issuer and the
Trustee of such corrective action and undertakes to diligently
pursue and does pursue the corrective action until the failure
is corrected.
(c) The dissolution or liquidation of the Company or the
filing by the Company of a voluntary petition in bankruptcy, or
failure by the Company expeditiously to discharge any
execution, garnishment or attachment of such consequence as
will impair its ability to carry out its obligations under this
Agreement, or the commission by the Company of any act of
bankruptcy, or adjudication of the Company as a bankrupt, or an
assignment by the Company for the benefit of its creditors, or
the entry by the Company into an agreement of composition with
its creditors, or the approval by a court of competent
jurisdiction of a petition applicable to the Company pursuant
to the provisions of the federal bankruptcy laws or any other
similar applicable law or statute of the United States of
America or any state thereof, or under any similar laws which
may hereafter be enacted, and such adjudication or approval
shall not be vacated or set aside or stayed within 60 days from
the date of entry thereof. The term "dissolution or
liquidation of the Company", as used in this subsection, shall
not be construed to include the cessation of the corporate
existence of the Company resulting either from a merger or
consolidation of the Company into or with another corporation
or a dissolution or liquidation of the Company following a
transfer of all or substantially all of its assets as an
entirety under the conditions permitting such actions contained
in this Agreement.
(d) Default with respect to other Indebtedness exceeding
10% of the Company's Consolidated Net Worth which results in
the acceleration of such Indebtedness.
(e) Any representation or warranty contained in the
Indenture or this Agreement is found to be false or misleading
when made and which has a material adverse impact on the Bonds.
(f) Any final judgment against the Company or its
Subsidiaries, not covered by insurance, which exceeds 10% of
the Company's Consolidated Net Worth.
(g) Failure to maintain the Debt Service Reserve Fund at
the Debt Service Reserve Fund Requirement according to the
terms of the Indenture and this Agreement.
(h) The invalidity or unenforceability of the Indenture,
this Agreement, the Bond Purchase Agreement or the First
Preferred Vessel Mortgage or of any material provisions of any
of such agreements.
(i) The occurrence and continuance of an "Event of
Default" under the Indenture.
The provisions of Section 7.1.(b) are subject to the following
limitations. If by reason of: acts of God; strikes, lockouts or
other industrial disturbances; acts of public enemies; orders of any
kind of the government of the United States or of the State or any of
their departments, agencies, political subdivisions or officials, or
any civil or military authority; insurrections; riots; epidemics;
landslides;lightning; earthquakes; fires; hurricanes; tornadoes;
storms; floods; washouts; droughts; arrests; restraining of
government and people; civil disturbances; explosions; breakage of or
accidents to machinery, transmission pipes or canals; partial or
entire failure of utilities; shortages of material, supplies or
transportation; or any other cause or event whether similar or
dissimilar to any of the foregoing not reasonably within the control
of the Company, the Company is unable in whole or in part to carry
out its agreements herein contained, other than the obligations on
the part of the Company contained in Sections 6.10 and 7.4 hereof,
the Company shall not be deemed in default during the continuance of
such inability.
SECTION 2.i.Remedies. Whenever any Event of Default referred
to in Section 7.1 hereof shall have happened and be continuing, any
one or more of the following remedial steps may be taken:
(a) The Issuer or the Trustee may at its option declare
immediately due and payable all outstanding unpaid Repayments
required to be paid under Section 3.1 hereof.
(b) The Issuer or the Trustee may take any action at law
or in equity to collect the payments hereunder then due and
thereafter to become due or to enforce performance and
observance of any obligation, agreement or covenant of the
Company under this Agreement.
Any amounts collected pursuant to action taken under this
Section shall be applied in accordance with the Indenture.
SECTION 3.b.No Remedy Exclusive. No remedy conferred upon or
reserved to the Issuer by this Agreement is intended to be exclusive
of any other available remedy or remedies, but each and every such
remedy shall be cumulative and shall be in addition to every other
remedy given under this Agreement or now or hereafter existing at law
or in equity or by statute. No delay or omission to exercise any
right or power accruing upon any Event of Default shall impair any
such right or power or shall be construed to be a waiver thereof, but
any such right and power may be exercised from time to time and as
often as may be deemed expedient. In order to entitle the Issuer or
the Trustee to exercise any remedy reserved to it in this Article, it
shall not be necessary to give any notice, other than such notice as
may be herein expressly required, or as may be required by applicable
law.
SECTION 4.b.Payment of Counsel Fees and Other Expenses. If the
Company shall be in default under any of the provisions of this
Agreement, and the Issuer or the Trustee shall employ Counsel or
incur other expenses for the collection of the Repayments or other
sums due and payable under this Agreement, or for the enforcement of
performance or observance of any obligation or agreement on the part
of the Company contained in this Agreement, the Company agrees that
it will on demand therefor reimburse the reasonable fees of such
Counsel and such other reasonable expenses so incurred.
SECTION 5.b.No Waiver. If any agreement contained in this
Agreement shall be breached by either party and such breach shall
thereafter be waived by the other party, such waiver shall be limited
to the particular breach so waived and shall not be deemed a waiver
of any other breach hereunder. In view of the assignment of the
Issuer's rights in and under this Agreement to the Trustee under the
Indenture, the Issuer shall have no power to waive any default or
Event of Default hereunder by the Company without the consent of the
Trustee to such waiver or, if the payment of the principal of and
accrued interest on the Bonds outstanding under the Indenture shall
have been accelerated at the request of the holders of the Bonds by
reason of such Event of Default and such Event of Default shall not
have been cured and such acceleration rescinded pursuant to the
Indenture, without the consent of the holders of a majority in
principal amount of the Bonds.
ARTICLE VIII
REDEMPTION; PREPAYMENT AND ABATEMENT
SECTION 1.b.Redemption of Bonds. The Issuer, at the request of
the Company and if the Bonds are then redeemable under the provisions
of the Indenture, shall forthwith take all steps that may be
necessary under the applicable redemption provisions of the Indenture
to effect redemption of all or part of the then outstanding Bonds as
may be specified by the Company, on such redemption date as may be
specified by the Company. Such request for redemption shall be in
writing and given by the Company not less than 45 days prior to the
date fixed for redemption by mailing a notice by first class mail,
postage prepaid to the Issuer and the Trustee. It is understood that
all expenses of such redemption shall be paid from money in the hands
of the Trustee or by the Company and not by the Issuer.
SECTION 2.b.Prepayment. There is expressly reserved to the
Company the right, and the Company is authorized and permitted, at
any time it may choose, to prepay all or any part of the amounts
payable under Section 3.1 hereof, and the Issuer agrees that the
Trustee will accept such prepayments when the same are tendered by
the Company. All amounts so prepaid shall be applied as provided in
the Indenture.
SECTION 3.b.Company Entitled to Certain Abatements if Bonds
Paid Prior to Maturity. If at any time the aggregate moneys held
under the Indenture shall be sufficient to retire in accordance with
the provisions of the Indenture all of the Bonds at the time
outstanding and to pay all fees, charges and expenses of the Trustee,
the Paying Agent, the Bond Registrar and the Issuer due or to become
due through the date on which the last of the Bonds is retired, the
Company shall be entitled to abate its Repayments pursuant to Section
3.1 hereof.
SECTION 4.b.References to Bonds Ineffective After Bonds Paid.
Upon payment in full of the Bonds (or provision for payment thereof
having been made in accordance with the provisions of the Indenture)
and all fees and charges of the Trustee, the Paying Agent, the Bond
Registrar and the Issuer, all references in this Agreement to the
Bonds shall be ineffective and neither the Trustee nor the holders of
any of the Bonds shall thereafter have any rights hereunder saving
and excepting those that shall have theretofore vested and be
unsatisfied.
ARTICLE IX
MISCELLANEOUS
SECTION 1.b.Termination of Refunding Agreement. Upon the
termination of this Agreement at the end of the Agreement Term, the
Issuer shall assign and transfer to the Company all money,
receivables, claims and other rights that are now or are to become
the property of the Company hereunder.
SECTION 2.b.Notices. Unless otherwise provided herein, all
notices, certificates, requests or other communications hereunder
shall be sufficiently given if given in accordance with Section 14.3
of the Indenture. The Company and the Issuer may, by notice given
hereunder, designate any further or different addresses to which
subsequent notices, certificates, requests or other communications
shall be delivered.
SECTION 3.b.Successors. This Agreement shall inure to the
benefit of the Issuer,the Company, the Trustee and the holders from
time to time of the Bonds, and shall be binding upon the Issuer, the
Company and their respective successors and assigns.
SECTION 4.b.Amendments to Refunding Agreement. Subsequent to
the initial issuance of the Bonds and prior to payment or provision
for the payment of the Bonds in full including interest and premium,
if any, thereon in accordance with the provisions of the Indenture,
and prior to payment or provision for the payment of expenses
pursuant to Section 6.9 hereof, this Agreement may not be effectively
amended, changed, modified, altered or terminated without the prior
written consent of the Trustee given in accordance with the
provisions of the Indenture and no amendment to this Agreement shall
be binding upon either party hereto until such amendment is reduced
to writing and executed by both parties thereto.
SECTION 5.b.Counterparts. This Agreement may be executed in
any number of counterparts, each of which, when so executed and
delivered, shall be an original; but such counterparts shall together
constitute but one and the same Agreement.
SECTION 6.b.Severability. If any clause, provision or section
of this Agreement shall be held illegal or invalid by any court, the
invalidity of such clause, provision or section shall not affect any
of the remaining clauses, provisions or sections hereof and this
Agreement shall be construed and enforced as if such illegal or
invalid clause, provision or section had not been contained herein.
In case any agreement or obligation contained in this Agreement shall
be held to be in violation of law, then such agreement or obligation
shall be deemed to be the agreement or obligation of the Issuer or
the Company, as the case may be, to the full extent permitted by law.
SECTION 7.b.Applicable Law. The laws of the State shall govern
the construction of this Agreement.
SECTION 8.b.Legal Holiday on Payment Dates. In any case where
the date of maturity of interest on or principal of the Bonds or the
date fixed for redemption of any Bonds shall be a day other than a
Business Day, the payments hereunder need not be made on such day of
maturity of interest on or principal of the Bonds or date fixed for
redemption but may be made on the next succeeding Business Day, with
the same force and effect as if made on the date required hereunder,
and no interest shall accrue for such period.
SECTION 9.b.Amounts Remaining in Bond Fund. Any amounts
remaining in the Bond Fund upon expiration or earlier termination of
this Agreement as herein provided, after payment in full of the Bonds
(or provision therefor) in accordance with the Indenture, and all
other costs and expenses to be paid by the Company hereunder, and all
amounts owing the Trustee, the Bond Registrar and the Issuer under
this Agreement and the Indenture, shall belong to and be paid to the
Company as an overpayment of the Repayments.
SECTION 10.b.Company Approval of Indenture. The Indenture has
been submitted to the Company for examination, and the Company, by
execution of this Agreement, acknowledges and agrees that it has
participated in the drafting of the Indenture and agrees that it has
approved the Indenture and agrees that it is bound by the terms and
conditions thereof and covenants and agrees to perform all
obligations required of the Company pursuant to the terms of the
Indenture.
SECTION 11.b.Binding Effect. This Agreement shall be binding
upon the parties hereto and upon their respective successors and
assigns, and the words "Issuer" and "Company" shall include the
parties hereto and their respective successors and assigns and
include any gender, singular and plural, and individuals,
partnerships or corporations.
SECTION 12.b.Captions and Headings. The captions or headings
in this Agreement are for convenience only and in no way define,
limit or describe the scope or intent of any provisions of this
Agreement.
SECTION 9.13.Exercise of Police Powers by Issuer. Neither the
terms of this Agreement nor the Indenture or the other instruments
contemplated hereby or thereby shall constitute a waiver by the
Issuer of the valid exercise of its police powers.
SECTION 13.b.Third Party Beneficiary. This Agreement shall
constitute a third party beneficiary contract for the benefit of the
Trustee, and the Trustee shall be entitled to enforce the performance
and observance by the Company of its agreements and covenants herein
contained as fully and completely as if the Trustee were a party
hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written in the presence of the undersigned competent witnesses.
BOARD OF COMMISSIONERS OF THE
PORT OF NEW ORLEANS
By:\s\ J. Ron Brinson
President and
Chief Executive Officer
ATTEST:
By: \s\ Signature Unreadable
Secretary
[SEAL]
WITNESSES:
\s\ Denise K. Pugh
\s\ Jane B. Pugh
AVONDALE INDUSTRIES, INC.
By:\s\ Albert L. Bossier, Jr.
Chairman, President and
Chief Executive Officer
ATTEST:
By: \s\ Thomas M. Kitchen
Vice President, Chief Financial
Officer and Secretary
[SEAL]
WITNESSES:
\s\ Denise K. Pugh
\s\ Jane B. Pugh
Table of Contents
ARTICLE I
DEFINITIONS; REPRESENTATIONS AND WARRANTIES
SECTION 1.1. Definitions.......................................... 3
SECTION 1.2. Representations and Warranties of the Issuer......... 8
SECTION 1.3. Representations, Covenants and Warranties of the
Company.............................................. 9
ARTICLE II
ISSUANCE OF THE BONDS AND
DEPOSIT OF BOND PROCEEDS
SECTION 2.1. Agreement to Issue Bonds; Disbursement of Bond
Proceeds.............................................11
SECTION 2.2. No Warranty as to Sufficiency of Bond Proceeds.......11
SECTION 2.3. Use of Moneys Held Under the Indenture...............11
ARTICLE III
DEPOSIT OF BOND PROCEEDS AND REPAYMENTS
SECTION 3.1. Repayments...........................................12
SECTION 3.2. Additional Payments..................................13
SECTION 3.3. Funding and Replenishment of Debt Service Reserve
Fund.................................................13
ARTICLE IV
REFUNDING OF SERIES 1983 BONDS
SECTION 4.1. Escrow Fund - Application of Bond Proceeds...........14
SECTION 4.2. Compliance with Original Indenture...................14
ARTICLE V
EFFECTIVE DATE
SECTION 5.1. Effective Date of Refunding Agreement................15
ARTICLE VI
SPECIAL COVENANTS
SECTION 6.1. Maintenance of Corporate Existence...................16
SECTION 6.2. Limited Obligation Bonds.............................16
SECTION 6.3. Tax Covenants........................................16
SECTION 6.4. Maintenance of Project; Insurance; Taxes.............17
SECTION 6.5. Permits..............................................18
SECTION 6.6. Compliance with Law..................................18
SECTION 6.7. First Preferred Vessel Mortgage and Prohibition
Against Sales........................................18
SECTION 6.8. Issuer Assignment of Rights and Interest in
Refunding Agreement..................................19
SECTION 6.9. Payment of Administrative Expenses...................19
SECTION 6.10. Indemnification......................................19
SECTION 6.11. No Warranty..........................................20
SECTION 6.12. Financial Statements of Company......................20
SECTION 6.13. Consolidated Tangible Net Worth......................20
SECTION 6.14. Consolidated Senior Indebtedness Ratio...............21
SECTION 6.15. Consolidated Senior Debt Service Coverage Ratio......21
SECTION 6.16. Dividends of the Company.............................21
SECTION 6.17. Liens of the Company.................................22
SECTION 6.18. Debt Service Reserve Fund............................22
SECTION 6.19. Long Term Indebtedness...............................22
SECTION 6.20. Liquidity Maintenance................................22
SECTION 6.21. Confirmation of Compliance by Company................22
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
SECTION 7.1. Events of Default....................................23
SECTION 7.2. Remedies.............................................24
SECTION 7.3. No Remedy Exclusive..................................24
SECTION 7.4. Payment of Counsel Fees and Other Expenses...........25
SECTION 7.5. No Waiver............................................25
ARTICLE VIII
REDEMPTION; PREPAYMENT AND ABATEMENT
SECTION 8.1. Redemption of Bonds..................................26
SECTION 8.2. Prepayment...........................................26
SECTION 8.3. Company Entitled to Certain Abatements if Bonds Paid
Prior to Maturity....................................26
SECTION 8.4. References to Bonds Ineffective After Bonds Paid.....26
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Termination of Refunding Agreement...................27
SECTION 9.2. Notices..............................................27
SECTION 9.3. Successors...........................................27
SECTION 9.4. Amendments to Refunding Agreement....................27
SECTION 9.5. Counterparts.........................................27
SECTION 9.6. Severability.........................................27
SECTION 9.7. Applicable Law.......................................27
SECTION 9.8. Legal Holiday on Payment Dates.......................27
SECTION 9.9. Amounts Remaining in Bond Fund.......................28
SECTION 9.10. Company Approval of Indenture........................28
SECTION 9.11. Binding Effect.......................................28
SECTION 9.12. Captions and Headings................................28
SECTION 9.13. Exercise of Police Powers by Issuer..................28
SECTION 9.13. Third Party Beneficiary..............................28
EXHIBIT A Project Description
EXHIBIT A
TO REFUNDING AGREEMENT
PROJECT DESCRIPTION
The project consists of a floating dry dock ("Floating Dry
Dock") constructed by M.A.N. Maschinenfabrik Augsburg - Nurnberg,
Aktiengesellschaft, Augsburg, West Germany, which Avondale Industries,
Inc., successor to Avondale Shipyards, Inc. ("Avondale"), has acquired
and moored at the down river end of its Main Plant and a 1700-foot wet
dock extension ("1700-Ft. Wet Dock") to Avondale's Wet Dock #3. The
project, including its various shoreside support facilities, is more
fully described below:
FLOATING DRY DOCK - GENERAL
The Floating Dry Dock consists of a continuous caisson,
forming the bearing body including two continuous, completely closed
sidewings which provide and insure stability and longitudinal strength.
The dimensions of the Dry Dock are as follows:
Overall length 215.00 m
Length over keel blocks 200.00 m
Width between inner side wing walls 36.20 m
Clear width between dock runways 35.00 m
Width between outer side wing walls 43.00 m
Moulded depth to upper deck 16.70 m
Height of caisson in dock centre 4.20 m
Water depth above top of keel blocks
when the dock is immersed 9.50 m
Height of keel blocks 1.50 m
Camber of pontoon deck 0.20 m
Freeboard of upper deck when the dock
is immersed 1.50 m
Freeboard of pontoon deck when the
dock is in service position 0.30 m
Frame spacing 0.625 m
The Floating Dry Dock includes the following principal items
of equipment:
161 Keel Blocks
12 pari Bilge Blocks
Rubbing Strakes and Protective Fenders
Platforms
Companionways, Access Pits, Hatchways, Steel Doors
Manholes
Skylights
Stairs, Ladders and Landings
Railings, Handrails
Connection Bridge
Draught Scales
FIRST PREFERRED VESSEL MORTGAGE
This FIRST PREFERRED VESSEL MORTGAGE dated as of May 31, 1994 by
AVONDALE INDUSTRIES, INC., 5100 River Road, Avondale, LA 70094 (the "Owner") to
FIRST NATIONAL BANK OF COMMERCE, not in its individual capacity but solely as
trustee for the holders of the Bonds (as defined below), 210 Baronne Street, 3rd
Floor, New Orleans, LA 70112 (the "Mortgagee").
WITNESSETH
WHEREAS, the Board of Commissioners of the Port of New Orleans (the
"Issuer") issued its Industrial Revenue Bonds (Avondale Shipyards, Inc. Project)
Series 1983 (the "Series 1983 Bonds") in the aggregate principal amount of
Thirty-Six Million Two Hundred and Fifty Thousand Dollars ($36,250,000), all of
which are outstanding as of the date hereof, for the purpose of providing funds
to refund the outstanding Industrial Revenue Bonds (Avondale Shipyards, Inc.
Project) Series 1981 of the Issuer (the "Series 1981 Bonds"), which Series 1981
Bonds were issued for the purpose of providing funds to finance the cost of the
acquisition, construction and installation of a floating drydock with the
official name JO ANN and official number 982958 (the "Vessel") and land-based
support facilities for the repair and maintenance of various types of vessels
(collectively, the "Project");
WHEREAS, pursuant to and in accordance with the provisions of Title 39
of the Louisiana Revised Statutes of 1950, as amended, and an Installment Sales
Agreement dated as of July 1, 1981, as supplemented by a First Supplemental
Installment Sales Agreement dated as of June 1, 1983, by and between the Issuer
and Avondale Shipyards, Inc., as predecessor to the Owner, the Issuer acquired
the Project from the Owner and reconveyed the Project to the Owner for a
purchase payment in an amount sufficient to pay the principal of, premium if
any, and interest on the Series 1983 Bonds;
WHEREAS, the Owner is the sole owner of the whole of the Vessel, duly
documented in the name of the Owner under the laws and the flag of the United
States of America with its home port at New Orleans, Louisiana;
WHEREAS, the Owner has requested that the Issuer, pursuant and in
accordance with the provisions of Chapter 14-A of Title 39 of the Louisiana
Revised Statutes of 1950, as amended (La.R.S. 39:1444-1455), issue its refunding
bonds designated "Industrial Revenue Refunding Bonds" (Avondale Industries, Inc.
Project) Series 1994 (the "Bonds") for the purpose of refunding the Series 1983
Bonds;
WHEREAS, in consideration of the issuance of the Bonds by the Issuer
pursuant to a Trust Indenture dated as of April 1, 1994
USCG Vessel Documentation Office New Orleans
Recorded in Book 9405, Inst. 475
PROFFIE COOK
Proffie Cook
Documentation Officer
between the Issuer and the Mortgagee (the "Indenture"), the Owner will agree to
make or cause to be made payments in an amount sufficient to pay the principal
of, premium, if any, and interest on any Bonds pursuant to the Refunding
Agreement of even date therewith (the "Refunding Agreement"), said Bonds shall
be paid solely from the revenues derived by the Issuer from said payments by or
on behalf of the Owner under the Refunding Agreement or from the Debt Service
Reserve Fund (as defined in the Indenture), and said Bonds shall never
constitute an indebtedness or pledge of general credit of the Issuer or the
State of Louisiana, within the meaning of any constitutional or statutory
limitation of indebtedness or otherwise;
WHEREAS, pursuant to the Indenture, the Issuer shall sell, assign,
transfer, set over and pledge to the Mortgagee, to the extent provided in the
Indenture, all of the right, title and interest of the Issuer in and to the
Refunding Agreement (except for the indemnification rights and expense
reimbursement rights contained in the Refunding Agreement);
WHEREAS, the Owner, in order to secure the payment of the principal
of, premium if any, and interest on the said Bonds pursuant to the Refunding
Agreement and the Indenture and to secure the performance and observance of and
compliance with all the agreements, covenants and conditions in this Mortgage,
and the performance and observance by the Owner of and compliance with all the
agreements, covenants and conditions in the Refunding Agreement, has therefore
duly authorized the execution and delivery of this First Preferred Vessel
Mortgage;
NOW, THEREFORE, THIS MORTGAGE WITNESSETH:
That in consideration of the premises and the sums as above recited
and of other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, and in order to secure the payment of the
Repayments (as defined in the Refunding Agreement) specified in Section 3.1 of
the Refunding Agreement, the payment of the principal, premium, if any, and
interest amounts on the Bonds according to the terms of the Indenture, and the
payment of all other amounts due by the Owner under the Refunding Agreement and
this Mortgage (all such principal, premium, if any, and interest and other sums
being hereinafter called the "Indebtedness hereby secured"), and to secure the
performance and observance of and compliance with the covenants, terms and
conditions herein and in the Refunding Agreement the Owner does by these
presents grant, convey, mortgage, pledge, set over and confirm unto the
Mortgagee, its successors and assigns, the whole of the Vessel, together with
all of the engines, machinery, masts, cable, rigging, tools, pumps, covers,
anchors, chains, tackle, apparel, furniture, fittings and equipment and all
other appurtenances thereto appertaining or belonging, whether now owned or
hereafter acquired, whether on board or not, and all additions, improvements and
replacements hereafter made in or to the Vessel;
TO HAVE AND TO HOLD the same unto the Mortgagee, its successors and
assigns, to their and their successors' and assigns' own use and behoof forever;
PROVIDED only, and the condition of these presents is such that if the
Owner, or its successors or assigns, shall pay or cause to be paid to the
Mortgagee the Indebtedness hereby secured as and when the same shall become due
and payable in accordance with the terms of this Mortgage, the Refunding
Agreement and the Indenture, and the Owner shall perform, observe and comply
with the covenants, terms and conditions in this Mortgage and the Refunding
Agreement contained, expressed or implied, to be performed, observed or complied
with, by and on the part of the Owner, then these presents and the rights
hereunder shall cease, terminate and be void; otherwise to be and remain in full
force and effect.
Nothing herein shall be deemed or construed to subject the lien hereof
on any property other than a vessel eligible for documentation as the term is
used in 46 U.S.C. section 12102, as amended.
IT IS HEREBY COVENANTED, DECLARED AND AGREED that the property above
described is to be held subject to the further covenants, conditions,
provisions, terms and uses hereinafter set forth.
ARTICLE I
COVENANTS OF THE OWNER
SECTION 1. The Owner shall pay or cause to be paid the Indebtedness
hereby secured in accordance with the terms of the Refunding Agreement, the
Indenture and this Mortgage and will observe, perform and comply with the
covenants, terms and conditions herein, expressed or implied, on its part to be
observed, performed or complied with.
SECTION 2. The Owner shall at all times be qualified to own and
operate the Vessel under the flag of the United States and engage in its lawful
trade under its certificate of documentation. The Mortgagee is, and at all times
shall remain, a citizen of the United States within the meaning of Section 2 of
the Shipping Act, 1916, as amended. The Indebtedness hereby secured is and will
be the valid and binding obligation of the Owner enforceable in accordance with
its terms.
SECTION 3. The Owner lawfully owns and is lawfully possessed of the
Vessel free from any security interest, lien, charge or encumbrance whatsoever
other than (a) this Mortgage and (b) liens for current crew's wages, tort,
general average and salvage. The Owner shall warrant and defend the title and
possession thereto and to every part thereof for the benefit of the Mortgagee
against the claims and demands of all persons whomsoever. Neither the Owner, any
charterer, the master of the Vessel nor any
other person has or shall have any right, power or authority to create, incur or
permit to be placed or imposed upon the Vessel any liens other than the liens
permitted under this Section 3.
SECTION 4. The Owner shall comply with and satisfy all the provisions
of Chapter 313 of Title 46 of the United States Code, as at any time amended, in
order to establish and maintain this Mortgage as a first preferred ship mortgage
upon the Vessel and upon all renewals of this Mortgage and improvements and
replacements made in or to the Vessel.
SECTION 5. The Owner shall not cause or permit the Vessel to be
operated in any manner contrary to law, shall not abandon the Vessel in a
foreign port, shall not engage in any unlawful trade or violate any law or carry
any cargo that will expose the Vessel to penalty, forfeiture or capture, and
shall not do, or suffer or permit to be done, anything which can or may
injuriously affect the documentation or trade endorsement of the Vessel or the
Owner's qualification to engage in the United States coastwise trade under the
laws and regulations of the United States of America and will at all times keep
the Vessel duly documented thereunder for such purpose. Without the prior
written consent of the Mortgagee, the Owner covenants and agrees that the Vessel
shall not be removed from the inland waterways of the United States and that the
flag or port of documentation of the Vessel shall not be changed.
SECTION 6. The Owner shall pay and discharge or cause to be paid and
discharged when due and payable, from time to time, all taxes, assessments,
governmental charges, fines and penalties lawfully imposed on the Vessel or any
income therefrom, however the Owner may contest said amounts in accordance with
Section 6.4 of the Refunding Agreement.
SECTION 7. The Owner shall, within four (4) days of the date hereof,
place, and at all times and places will retain, a properly certified copy of
this Mortgage with the master of the Vessel or with her papers and will cause
such certified copy and such Vessel's certificate of documentation to be
exhibited to any and all persons having business therewith which might give rise
to any lien thereon other than liens for crew's wages, tort, general average and
salvage, and to any representative of the Mortgagee; and shall place with the
master of the Vessel a framed printed notice in plain type reading as follows:
"NOTICE OF MORTGAGE
This Vessel is owned by AVONDALE INDUSTRIES, INC., and is covered
by a First Preferred Vessel Mortgage in favor of FIRST NATIONAL BANK
OF COMMERCE, as trustee, under authority of Chapter 313 of Title 46 of
the United States Code. Under the terms of said Mortgage, neither the
owner, any charterer, nor the master of this Vessel has any right,
power or authority to create, incur or permit to be imposed upon this
Vessel any lien whatsoever other than for current crew's wages, tort,
general average and salvage."
SECTION 8. The Owner shall at all times and without cost or expense to
the Mortgagee maintain and preserve, or cause to be maintained and preserved,
the Vessel and all its equipment, outfit and appurtenances, tight, staunch,
strong, in good condition, working order and repair and in all respects
seaworthy and fit for its intended service except ordinary wear and tear. The
Vessel shall, and the Owner covenants that it will, at all times comply with all
applicable laws, treaties and conventions to which the United States of America
is a party, and rules and regulations issued thereunder, and shall have on board
as and when required thereby valid certificates showing compliance therewith.
The Owner will not make, or permit to be made, any substantial change in the
structure, type or speed of the Vessel or change in her rig, without first
receiving the written approval thereof by the Mortgagee.
SECTION 9. The owner shall at all reasonable times afford the
Mortgagee or its authorized representative full and complete access to the
Vessel for the purpose of inspecting and valuing the Vessel and her cargo and
papers and, at the request of the Mortgagee, the Owner shall deliver for
inspection copies of any and all contracts and documents relating to the Vessel,
whether on board or not.
SECTION 10. The Owner shall not sell, mortgage, or transfer the Vessel
without the written consent of the Mortgagee first had and obtained. Any such
sale, mortgage or transfer of the Vessel which is not made in accordance with
the preceding sentence shall be subject to the provisions of this Mortgage and
the lien hereof.
SECTION 11.
(a) The Owner shall, not later than the day hereof, take out and
maintain insurance at the Owner's expense on and in respect of the Vessel and
shall, throughout the term of this Mortgage maintain the said insurance
effective with such insurer or insurers
as the Mortgagee may, in its discretion, approve in writing, as follows:
(1) Hull and Machinery in the name of the Owner and with the
Mortgagee as an additional assured, in at least the amount of the
$25,000,000.00, and further provide that all losses shall be
payable to the Mortgagee and Owner as their interest appear.
(2) Protection and Indemnity insurance, including pollution
liability, in the name of the Owner, naming the Mortgagee as an
additional insured, in the amount of $25,000,000.00.
(b) All insurance maintained by the Owner pursuant to this Section 11
shall:
(1) Provide that any notice of cancellation or adverse change shall
not be effective as to the Mortgagee until at least thirty (30)
days after receipt by the Mortgagee of written notice thereof.
(2) Provide that the insurers waive any right of subrogation against
the Mortgagee and waive any right of set off or for payment of
premium against Mortgagee.
(3) Provide that with respect to the interest of the Mortgagee such
policy shall not be invalidated by any action or inaction of the
Owner or any other person and shall insure the rights and
interest of the Mortgagee regardless of any claims for losses and
shall be payable notwithstanding:
(i) Any acts of negligence, including any breach of
conditional warrantee in any policy of insurance by the
Owner or any other person;
(ii) The use of the Vessel for purposes more hazardous than
permitted by the terms of the policy;
(iii) Any foreclosure or other proceeding or notice of sale
relating to the Vessel; or
(iv) Any change in the title or ownership of the Vessel.
(c) If at anytime the Owner shall fail to provide the insurance
required in Clause (b) above, the Mortgagee shall notify the Owner and the Owner
shall promptly act to provide reassurance to the Mortgagee that the insurance
obligations of this Section 11 have been and such are fully satisfied. If the
Owner fails to provide the insurance required by Clause (b) above, the Mortgagee
may effect, at the Owner's expense such additional insurance as is necessary to
comply with Clause (a) and the Owner shall, on demand, reimburse the Mortgagee
for all insurance premiums and other expenses so paid or incurred by the
Mortgagee. Nothing herein shall release the Owner of its obligations to take out
and keep in effect the insurance required by this Section 11.
(d) On request, the Owner shall provide the Mortgagee with
certificates of all insurance affected or maintained pursuant to this Section
11. The Owner also shall cause an independent insurance broker to provide a
certificate as of May 31, 1994, and annually thereafter certifying that the
insurance required by this Section 11 is in full force and effect.
(e) The Owner shall comply and satisfy all the provisions of
applicable law, conventions, regulations, proclamation, order, or otherwise
concerning financial responsibilities or liabilities imposed on the Vessel, or
the Owner or the Mortgagee, relating to the Vessel, with respect to pollution by
any state, nation or any political subdivision thereof, and will maintain all
evidence of financial responsibilities which may be required.
(f) The Owner shall, at its expense, renew all insurances required by
this Section 11 at least fourteen (14) days before the relevant policies,
contracts or certificates of entry expire, and the Owner shall cause the insurer
or P & I club promptly to confirm in writing to the Mortgagee that the renewal
has been in effect.
SECTION 12. The Owner shall fully perform any and all charter parties
or other contracts which it may enter into with respect to the Vessel.
SECTION 13. In the event that this Mortgage or any provision hereof
shall be deemed invalidated in whole or in part by reason of any present or
future law or any decision of any authoritative court, or if the documents at
any time held by the Mortgagee shall be deemed by the Mortgagee for any reason
insufficient to carry out the true intent and spirit of this Mortgage, then from
time to time, the Owner shall execute within ten (10) days after delivery of
such documents to the Owner, on its own behalf, such other and further
assurances and documents as in the reasonable opinion of the Mortgagee may be
required more effectively to subject the Vessel to the payment of the
Indebtedness hereby secured, as in this Mortgage provided, and the performance
of the terms and provisions of this Mortgage and the Refunding Agreement.
ARTICLE II
EVENTS OF DEFAULT AND REMEDIES
SECTION 1. Each of the following events, shall constitute an "Event of
Default" under this Mortgage:
(a) an Event of Default under the Refunding Agreement or the
Indenture; or
(b) any other payment in respect of the Mortgage has not been
received by the Mortgagee when due: or
(c) a default by the Owner in the observance or performance of any
other agreement under this Mortgage shall have occurred and shall remain
unremedied for sixty (60) days:
then, and in each and every such case, the Mortgagee shall have the right to:
(1) Declare all the then unpaid Indebtedness hereby secured to be due
and payable immediately as set forth in the Refunding Agreement, and upon such
declaration the same, including premium, if any, or interest to date of
declaration, shall become and be immediately due and payable: and
(2) Exercise all of the rights and remedies available to the Mortgagee
under the Refunding Agreement or the Indenture and exercise the following rights
and remedies:
(A) exercise all rights and remedies in foreclosure and otherwise
given to mortgagees by the provisions of Chapter 313 of Title 46 of
the United States Code, or other applicable law including the law of
any other jurisdiction where the Vessel may be found;
(B) bring suit at law, in equity or in admiralty, in any court of any
nation in the world, as it may be advised, to recover judgment for the
Indebtedness hereby secured and collect the same out of any and all
property of the Owner whether covered by this Mortgage or otherwise;
(C) Take and enter into possession of the Vessel, at any time,
wherever the same may be, without legal process and without being
responsible for loss or damage, and the Owner or other person in
possession forthwith upon demand of the Mortgagee shall surrender to
the Mortgagee possession of the Vessel, and the Mortgagee may, without
being responsible for loss or damage, hold, lay up, lease, charter,
operate or otherwise use the Vessel for such time and upon such terms
as it may deem to be for its best advantage, and demand, collect and
retain all hire, freights, earnings, issues, revenues, income,
profits, return premiums, salvage awards or recoveries,
recoveries in general average, and all other sums due or to become due
in respect of the Vessel or in respect of any insurance thereon from
any person whomsoever, accounting only for the net profits, if any,
arising from such use of the Vessel and charging upon all receipts
from the use of the Vessel or from the sale thereof by court
proceedings or pursuant to Subsection (D) next following, all costs,
expenses, charges, damages, or losses by reason of such use; and if at
any time the Mortgagee shall avail itself of the right herein given it
to take the Vessel, the Mortgagee shall have the right to dock the
Vessel, for a reasonable time at any dock, pier or other premises of
the Owner without charge, or to dock her at any other place at the
cost and expense of the Owner; and
(D) Take and enter into possession of the Vessel, at any time,
wherever the same may be, without legal process, and if it seems
desirable to the Mortgagee and without being responsible for loss or
damage, sell the Vessel at any place and at such time as the Mortgagee
may specify and in such manner and upon such terms and conditions as
the Mortgagee may deem advisable, free from any claim by the Owner in
admiralty, in equity, at law or by statute, at public or private sale,
by sealed bids or otherwise, by mailing, by air or otherwise, notice
of such sale, whether public or private, addressed to the Owner at its
last known address, ten days prior to the date fixed for entering into
the contract of sale. In case of a public sale the Mortgagee shall
first publish notice of any such public sale for ten consecutive days,
in some newspaper published in New Orleans, Louisiana and, if the
place of sale should not be New Orleans, Louisiana, similar notice
shall also be published in some newspaper published in New Orleans,
Louisiana and in a daily newspaper, if any, published at the place of
sale. In the event that the Vessel shall be offered for sale by
private sale, no newspaper publication of notice shall be required,
nor notice of adjournment of sale. Any sale may be held at such place
and at such time as the Mortgagee by notice to the Owner may have
specified, or may be adjourned by the Mortgagee from time to time by
announcement at the time and place appointed for such sale or for such
adjourned sale, and without further notice or publication the
Mortgagee may make any such sale at the time and place to which the
same shall be so adjourned; and any sale may be conducted without
bringing the Vessel to the place designated for such sale and in such
manner as the Mortgagee may deem to be for its best advantage, and the
Mortgagee may become the purchaser at any sale.
SECTION 2. Any sale of the Vessel made in pursuance of this Mortgage,
whether under the power of sale hereby granted or any judicial proceedings,
shall operate to divest all right, title
and interest of any nature whatsoever of the Owner therein and thereto, and
shall bar the Owner, its successors and assigns, and all persons claiming by,
through or under them. No purchaser shall be bound to inquire whether notice has
been given, or whether any default has occurred, or as to the propriety of the
sale, or as to the application of the proceeds thereof. In case of any such
sale, if the Mortgagee is the purchaser, the Mortgagee shall be entitled, for
the purpose of making settlement or payment for the property purchased, to use
and apply the Indebtedness hereby secured in order that there may be credited
against the amount remaining due and unpaid on the Indebtedness hereby secured
the sums payable out of the net proceeds of such sale to the Mortgagee after
allowing for the costs and expense of sale and other charges; and thereupon the
Mortgagee shall be credited, on account of such purchase price, with the net
proceeds that shall have been so credited against the amount of Indebtedness
hereby secured. At any such sale, the Mortgagee may bid for and purchase such
property and upon compliance with the terms of sale may hold, retain and dispose
of such property without further accountability therefor.
SECTION 3. The Mortgagee is hereby appointed attorney-in-fact of the
Owner to execute and deliver to any purchaser aforesaid, said attorney-in-fact
being hereby vested with full power and authority to make, in the name and on
behalf of the Owner, a good conveyance of the title to the Vessel so sold. In
the event of any sale of the Vessel under any power herein contained, the Owner
will, if and when required by the Mortgagee, execute such form of conveyance of
the Vessel as the Mortgagee may direct or approve.
SECTION 4. The Mortgagee is hereby appointed attorney-in-fact of the
Owner upon the happening of an Event of Default, in the name of the Owner to
demand, collect, receive, compromise and sue for, so far as may be permitted by
law, all freight, hire, earnings, issues, revenues, income and profits of the
Vessel and all amounts due from underwriters under any insurance thereon as
payment of losses or as return of premiums or otherwise, salvage awards and
recoveries, recoveries in general average or otherwise, and all other sums due
or to become due at the time of the happening of an Event of Default in respect
of the Vessel, or in respect of any insurance thereon, from any person
whomsoever, and to make, give and execute in the name of the Owner acquittances,
receipts, releases or other discharges for the same, whether under seal or
otherwise, and to endorse and accept in the name of the Owner all checks, note,
drafts, warrants, agreements and other instruments in writing with respect to
the foregoing.
SECTION 5. Whenever any right to enter and take possession of the
Vessel accrues to the Mortgagee, it may require the Owner to deliver, and the
Owner shall on demand, at its own cost and expense, deliver to the Mortgagee the
Vessel as demanded. If any legal proceedings shall be taken to enforce any right
under this Mortgage, the Mortgagee shall be entitled as a matter of right to the
appointment of a receiver of the Vessel and of the freights,
hire, earnings, issues, revenues, income and profits due or to become due and
arising from the operation thereof.
SECTION 6. The Owner authorizes and empowers the Mortgagee, or its
appointees or any of them on behalf of the Mortgagee, to appear in the name of
the Owner, its successors and assigns, in any court of any country or nation of
the world where a suit is pending against the Vessel because of or on account of
any alleged lien against the Vessel from which the Vessel has not been released
and to take such proceedings as to them or any of them may seem proper towards
the defense of such suit and the purchase or discharge of such lien, and all
expenditures made or incurred by them or any of them for the purpose of such
defense or purchase or discharge shall be a debt due from the Owner, its
successors and assigns, to the Mortgagee, and shall be secured by the lien of
this Mortgage in like manner and extent as if the amount and description thereof
were written herein. The authority and power hereby conferred upon the Mortgagee
or its appointees does not preclude the right and power of the Owner to sue in
its own name or to enter into agreements with third parties with respect to the
Vessel, subject always to the restrictions imposed by this Mortgage.
SECTION 7. Each and every power and remedy herein given to the
Mortgagee shall be cumulative and shall be in addition to every other power and
remedy herein given or now or hereafter existing at law, in equity, in admiralty
or by statute, and each and every power and remedy whether herein given or
otherwise existing may be exercised from time to time and as often and in such
order as may be deemed expedient by the Mortgagee, and the exercise or the
beginning of the exercise of any power or remedy shall not be construed to be a
waiver of the right to exercise at the same time or thereafter any other power
or remedy. No delay or omission by the Mortgagee in the exercise of any right or
power or in the pursuance of any remedy accruing upon an Event of Default shall
impair any such right, power or remedy or be construed to be a waiver of such
Event of Default or to be an acquiescence therein; nor shall the acceptance by
the Mortgagee of any security or of any payment of or on account of the
Indebtedness hereby secured maturing after an Event of Default or of any payment
on account of any past default be construed to be a waiver of any right to take
advantage of any future Event of Default or of any past Event of Default not
completely cured thereby. No consent, waiver or approval of the Mortgagee shall
be deemed to be effective unless in writing and duly signed by an authorized
signatory of the Mortgagee.
SECTION 8. In case the Mortgagee shall have proceeded to enforce any
right, power or remedy under this Mortgage by fore-closure, entry or otherwise,
and such proceedings shall have been discontinued or abandoned for any reason or
shall have been determined adversely to the Mortgagee, then and in every such
case the Owner and the Mortgagee shall be restored to their former positions and
rights hereunder with respect to the property subject
or intended to be subject to this Mortgage, and all rights, remedies and powers
of the Mortgagee shall continue as if no such proceedings had been taken.
SECTION 9. The proceeds of any sale of the Vessel received by the
Mortgagee, and the net earnings of any charter operation or other use of the
Vessel after acceleration of the Indebtedness hereby secured, or insurance,
received by the Mortgagee on behalf of the holders of the Bonds under any of the
rights, powers or remedies herein specified or any and all other moneys received
by the Mortgagee on behalf of the holders of the Bonds pursuant to or under the
terms of this Mortgage or in any proceedings hereunder, the application of which
has not elsewhere herein been specifically provided for, shall be deposited in
the Bond Fund (as defined in the Indenture) and applied as provided in the
Indenture.
SECTION 10. Until an Event of Default shall happen, the Owner (a)
shall be suffered and permitted to retain actual possession and use of the
Vessel and (b) shall have the right, from time to time, in its discretion, and
without application to the Mortgagee, and without obtaining a release thereof by
the Mortgagee, to dispose of, free from the lien hereof, any boilers, machinery,
rigging, anchors, chains, tackle, apparel, furniture, fittings, covers,
equipment or any other appurtenances of the Vessel that are no longer useful,
necessary, profitable or advantageous in the operation of the Vessel, first or
simultaneously replacing the same by new machinery, rigging, anchors, chains,
tackle, apparel, furniture, fittings, covers, equipment, or other appurtenances
of substantially equal value to the Owner, which shall forthwith become subject
to the lien of this Mortgage as a first preferred ship mortgage thereon.
SECTION 11.
(a) If any provision of the Refunding Agreement, the Indenture or this
Mortgage should be deemed invalid or shall be deemed to affect adversely the
preferred status of this Mortgage under any applicable law, such provision shall
cease to be a part of this Mortgage without affecting the remaining provisions,
which shall remain in full force and effect.
(b) Anything herein to the contrary notwithstanding, it is intended
that nothing herein shall waive the preferred status of this Mortgage and that,
if any provision in this Mortgage or portion thereof shall be construed to waive
the preferred status of this Mortgage, then such provision to such extent shall
be void and of no effect.
SECTION 12. The Owner hereby acknowledges and agrees that the
Mortgagee shall not be required to have the Vessel marshalled (upon any sale of
the Vessel pursuant to this Mortgage or otherwise) or be required to realize on
any other collateral prior to its realization on the Vessel.
ARTICLE III
SUNDRY PROVISIONS
SECTION 1. All of the covenants, promises, stipulations and agreements
of the Owner in this Mortgage contained shall bind the Owner and its successors
and assigns and shall inure to the benefit of the Mortgagee and its successors
and assigns. In the event of any assignment or transfer of this Mortgage, the
term "Mortgagee", as used in this Mortgage, shall be deemed to mean and include
any such assignee or transferee. This Mortgage may not be amended or
supplemented orally but may be amended or supplemented from time to time by an
instrument in writing executed by the Owner and the Mortgagee.
SECTION 2. Wherever and whenever herein any right, power or authority
is granted or given to the Mortgagee, such right, power or authority may be
exercised in all cases by the Mortgagee or such agent or agents as it may
appoint, and the act or acts of such agent or agents when taken shall constitute
the act of the Mortgagee hereunder.
SECTION 3. This Mortgage may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.
SECTION 4. All notices and other communications hereunder shall be in
writing and shall be delivered and deemed received in accordance with Section
9.2 of the Refunding Agreement and Section 14.3 of the Indenture. This Mortgage
shall be governed by, and construed and enforced in accordance with, the
maritime laws of the United States of America, when applicable, and otherwise
shall be governed by, and construed and enforced in accordance with, the laws of
the State of Louisiana.
SECTION 5. For purposes of this Mortgage and for purposes of recording
this Mortgage as required by Chapter 313 of Title 46 of the United States Code,
the total amount of this Mortgage is THIRTY-SIX MILLION TWO HUNDRED FIFTY
THOUSAND DOLLARS ($36,250,000), premium, if any, and interest and performance of
mortgage covenants; there is no separate discharge amount.
IN WITNESS WHEREOF, the Owner has caused this First Preferred
Vessel Mortgage covering the Vessel to be duly executed and delivered the day
and year first above written.
AVONDALE INDUSTRIES, INC.
By: ALBERT BOSSIER, JR.
Name: Albert Bossier, Jr.
Title: President
STATE OF LOUISIANA )
) SS.:
PARISH OF ORLEANS )
On the 31 day of May, 1994, before me personally came Albert Bossier, Jr.,
to me known, who, being by me duly sworn, did depose and say that he is the
President of Avondale Industries, Inc., the party described in and which
executed the foregoing Mortgage, and that he was duly authorized to sign his
name thereto on behalf thereof.
THOMAS Y. ROBERSON
Notary Public
[Notarial Seal]
My commission expires at death.
THOMAS Y. ROBERSON, JR.
NOTARY PUBLIC
Parish of Orleans, State of Louisiana
My Commission is issued for Life.
In witness whereof, The Mortgagee has
accepted this First Preferred Vessel
Mortgage as of the day and year
written
FIRST NATIONAL BANK OF COMMERCE,
not in its individual capacity but
solely as Trustee
By: DENNIS MILLINER
Name: Dennis Milliner
Title: Vice President and
Trust Officer
STATE OF LOUISIANA )
) SS.:
PARISH OF ORLEANS )
On the 31st day of May, 1994, before me personally came Denis L. Milliner,
to me known, who, being by me duly sworn, did depose and say that he is a Vice
President and Trust Officer of First National Bank of Commerce, the party
described in and which executed the foregoing Mortgage, and that he was duly
authorized to sign his name thereto on behalf thereof.
JOHN J. BRODERS
John J. Broders
Notary Public
[Notarial Seal]
My commission expires with life.
JOHN A. BRODERS
NOTARY PUBLIC
Orleans Parish
Louisiana
My Commission is for Life
CERTIFICATE OF OWNERSHIP OF VESSEL
DEPARTMENT OF TRANSPORTATION OMB APPROVED
U.S. COAST GUARD CG-1330 (REV. 5-82) 2115-0110
1. VESSEL
A. NAME OF VESSEL B. OFFICIAL NUMBER C. HOME PORT
JO ANN 982958 NEW ORLEANS, LA.
2. OWNERSHIP CERTIFICATION
I HEREBY CERTIFY THAT THE ABOVE-NAMED VESSEL BEARING THE OFFICIAL NUMBER
INDICATED, IS OWNED AS FOLLOWS:
AVONDALE INDUSTRIES, INC., OF MGR PLANT ENGR & MAINT, 5100 RIVE ROAD,
AVONDALE, LA. 70094 - SOLE OWNER
3. ENCUMBRANCES
AND THAT THE FOLLOWING MORTGAGES, LIENS, OR OTHER ENCUMBRANCES ARE ON RECORD AT
THIS OFFICE:
A. KIND OF ENCUMBRANCE:
PREFERRED MORTGAGE
(1) GRANTOR (2) GRANTEE (3) DATE OF INSTRUMENT
31 MAY 1994
(4) AMOUNT
AVONDALE INDUSTRIES, INC. FIRST NATIONAL BANK OF $36,250,000.00
COMMERCE, TRUSTEE
(5) MATURITY DATE
------------------
6. (a) DATE (b) TIME (c) BOOK (d) PAGE
RECORDATION DATA 31 MAY 1994 N/A 9405 475
7. FILE TIME (a) DATE (b) TIME (c) PORT
DATA 31 MAY 1994 8:56A.M. NEW ORLEANS, LA.
8. KIND OF ENCUMBRANCE:
NONE
1. GRANTOR (2) GRANTEE (3) DATE OF INSTRUMENT
(4) AMOUNT
(5) MATURITY DATE
6. RECORDATION DATA (a) DATE (b) TIME (c) BOOK (d) PAGE
7. ENDORSEMENT DATA (a) DATE (b) TIME (c) PORT
C. KIND OF ENCUMBRANCE:
(1) GRANTOR (2) GRANTEE (3) DATE OF INSTRUMENT
(4) AMOUNT
(5) MATURITY DATE
6. RECORDATION DATA (a) DATE (b) TIME (c) BOOK (D) PAGE
7. ENDORSEMENT DATA (a) DATE (b) TIME (c) PORT
ISSUED: DATE TIME
31 MAY 1994 9:30 A.M.
SEAL ------------------------------------------
PROFFIE COOK
DOCUMENTATION OFFICER
TRUST INDENTURE
This Trust Indenture, dated as of the 1st day of April,
1994, is between the Board of Commissioners of the Port of New
Orleans, a political subdivision of the State of Louisiana (the
"Issuer"), and First National Bank of Commerce, a national banking
association duly organized and existing under the laws of the
United States, as trustee (the "Trustee").
W i t n e s s e t h :
WHEREAS, the Issuer is a political subdivision of the State
of Louisiana, created and existing pursuant to the Constitution
and laws of such State and is authorized and empowered by law,
including particularly the provisions of Chapter 14-A of Title 39
of the Louisiana Revised Statutes of 1950, as amended (La. R.S.
39:1444-1455) (the "Refunding Act"), to issue refunding bonds for
the purpose of refunding, readjusting, restructuring, refinancing,
extending, or unifying the whole or any part of outstanding
securities of the Issuer in an amount sufficient to provide funds
necessary to effectuate the purpose for which the refunding bonds
are being issued and to pay all costs associated therewith; and
WHEREAS, pursuant to the provisions of Sections 991 to 1001,
inclusive, of Title 39 of the Louisiana Revised Statutes of 1950,
as amended (the "Act"), and a Trust Indenture dated as of July 1,
1981, as supplemented by a First Supplemental Trust Indenture
dated as of June 1, 1983, by and between the Issuer and First
National Bank of Commerce, New Orleans, Louisiana, as trustee (the
"Original Indenture"), the Issuer issued its Industrial Revenue
Bonds (Avondale Shipyards, Inc. Project) Series 1983 (the "Series
1983 Bonds") in the aggregate principal amount of $36,250,000, all
of which are outstanding as of the date hereof, for the purpose of
providing funds to refund the outstanding Industrial Revenue Bonds
(Avondale Shipyards, Inc. Project) Series 1981 of the Issuer (the
"Series 1981 Bonds"), which Series 1981 Bonds were issued for the
purpose of providing funds to finance the cost of the acquisition,
construction and installation of a floating drydock and land-based
support facilities for the repair and maintenance of various types
of vessels (the "Project"), which drydock is located between mile
markers 106 and 107 on the right descending bank of the
Mississippi River at the downriver end of the main shipyard of
Avondale Industries, Inc., a Louisiana corporation (the
"Company"), located at 5100 River Road, Avondale, Louisiana, in
Jefferson Parish, within the jurisdiction of the Issuer as a part
of the public port of the Issuer. The initial owner and operator
of the Project was Avondale Shipyards, Inc., a Louisiana
corporation, and the current owner and operator of the Project is
the Company, successor to Avondale Shipyards, Inc.; and
WHEREAS, pursuant to and in accordance with the provisions
of the Act and an Installment Sales Agreement dated as of July 1,
1981, as supplemented by a First Supplemental Installment Sales
Agreement dated as of June 1, 1983 (the "Original Agreement"), by
and between the Issuer and Avondale Shipyards, Inc., a predecessor
to the Company, the Issuer acquired the Project from the Company
and reconveyed the Project to the Company for purchase price
payments in an amount sufficient to pay the principal of, premium,
if any, and interest on the Series 1983 Bonds; and
WHEREAS, the Company has requested that the Issuer, pursuant
to and in accordance with the provisions of the Refunding Act,
issue its refunding bonds to be designated "Industrial Revenue
Refunding Bonds (Avondale Industries, Inc. Project) Series 1994"
(the "Bonds") for the purpose of refunding the Series 1983 Bonds;
and
WHEREAS, in consideration of the issuance of the Bonds by
the Issuer, the Company will agree to make or cause to be made
payments in an amount sufficient to pay the principal of, premium,
if any, and interest on the Bonds pursuant to the Refunding
Agreement of even date herewith (the "Refunding Agreement"), such
Bonds shall be paid solely from the revenues derived by the Issuer
from said payments by or on behalf of the Company under the
Refunding Agreement, and the Bonds shall never constitute an
indebtedness or pledge of the general credit of the Issuer or the
State of Louisiana, within the meaning of any constitutional or
statutory limitation of indebtedness or otherwise; and
WHEREAS, the Bonds and the certificate of authentication are
to be in substantially the form attached hereto as Exhibit A, with
necessary or appropriate variations, omissions and insertions as
may be permitted or required by this Indenture (including without
limitation an opinion of bond counsel designated by the Issuer);
and
WHEREAS, pursuant to an Escrow Agreement dated the date
hereof (the "Escrow Agreement") among the Issuer, the Company and
First National Bank of Commerce, the trustee under the Original
Indenture (the "Escrow Trustee"), the proceeds of the Bonds (other
than the proceeds which represent accrued interest), together with
moneys from the Company, will be deposited with the Escrow Trustee
in an escrow fund (the "Escrow Fund") for the purpose of
reimbursing Chemical Bank, New York, New York (the "Series 1983
Letter of Credit Bank") for its drawing in connection with the
discharge of the Series 1983 Bonds; and
WHEREAS, the execution and delivery of this Indenture and
the Refunding Agreement, and the issuance and sale of the Bonds
have been and are in all respects duly and validly authorized by
resolutions duly adopted by the governing authority of the Issuer;
and
WHEREAS, all other things necessary to make the Bonds, when
issued, executed and delivered by the Issuer and authenticated
pursuant to this Indenture, the valid, legal and binding obliga-
tions of the Issuer, and to constitute this Indenture a valid
pledge of the Dedicated Revenues of the Issuer (as hereinafter
defined) and other amounts pledged hereunder as security for the
payment of the principal of, premium, if any, and interest on the
Bonds authenticated and delivered under this Indenture, have been
performed, and the creation, execution and delivery of this
Indenture and the creation, execution and issuance of the Bonds,
subject to the terms hereof, have in all respects been duly
authorized;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That the Issuer, in consideration of the premises, of the
acceptance by the Trustee of the trusts hereby created, of the
mutual covenants herein contained and of the purchase and
acceptance of the Bonds by the holders thereof, and for other
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and in order to secure the payment of the
principal of, interest and premium, if any, on the Bonds according
to their tenor and effect, and the performance and observance by
the Issuer of all the covenants and conditions herein and therein
contained, (a) has executed and delivered this Indenture and (b)
has agreed to sell, assign, transfer, set over and pledge, and by
these presents does hereby sell, assign, transfer, set over and
pledge unto the Trustee, and to its successors in trust and its
assigns forever, to the extent provided in this Indenture, all of
the right, title and interest of the Issuer in and to the
Refunding Agreement (except for the indemnification rights and
expense reimbursement rights contained in the Refunding
Agreement), all Dedicated Revenues of the Issuer (hereinafter
defined) and all amounts on deposit in the Bond Fund (hereinafter
defined) and the Debt Service Reserve Fund (hereinafter defined);
provided, however, that nothing in the Bonds or in this Indenture
shall be construed as pledging the general credit or taxing power
of the Issuer or the State of Louisiana, nor shall this Indenture
or the Bonds appertaining thereto give rise to a pecuniary
liability of the Issuer.
TO HAVE AND TO HOLD the same unto the Trustee and its
successors in trust forever:
IN TRUST, NEVERTHELESS, upon the terms and trusts herein set
forth for the benefit and security of those who shall hold or own
the Bonds issued hereunder, or any of them, without preference of
any of said Bonds over any others thereof by reason of priority in
the time of the issue or negotiation thereof or by reason of the
date or maturity thereof, for any other reason whatsoever, except
as otherwise provided herein.
IT IS HEREBY COVENANTED, declared and agreed by and between
the parties hereto, that all such Bonds are to be issued,
authenticated and delivered and that all property subject or to
become subject hereto, is to be held and applied upon and subject
to the further covenants, conditions, uses and trusts hereinafter
set forth; and the Issuer, for itself and its successors, does
hereby covenant and agree to and with the Trustee and its
successors in the trust, for the benefit of those who shall hold
all of said Bonds, or any of them, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.`.Definitions. All words and phrases defined in
Article I of the Refunding Agreement shall have the same meaning
in this Indenture. In addition the following terms defined in
this Article I shall, for all purposes of this Indenture, have the
meanings herein specified, unless the context clearly otherwise
requires:
"Authorized Company Representative" shall mean the person or
persons at the time designated to act on behalf of the Company,
such designation in each case to be evidenced by a certificate
furnished to the Issuer and the Trustee containing the specimen
signature of such person or persons and signed on behalf of the
Company by its Chairman, President and Chief Executive Officer, or
Vice President, Chief Financial Officer and Secretary authorized
to act on behalf of the Company.
"Beneficial Owner" means, so long as a book-entry system of
registration is in effect pursuant to Section 2.12 hereof, the
actual purchaser of the Bonds.
"Bond Fund" means the fund created under Section 5.2 of this
Indenture.
"Bondholder" or "holder of the Bonds" or "holder" means the
registered owner of any Bond. Any reference to a majority or a
particular percentage or proportion of the Bondholders shall mean
the holders at the particular time of a majority or of the
specified percentage or proportion in aggregate principal amount
of all Bonds then outstanding under this Indenture, exclusive of
any such Bonds held by the Company or the Issuer or any affiliate
of either; provided, however, that for the purpose of determining
whether the Trustee shall be protected in relying upon any
direction or consent given or action taken by Bondholders, only
the Bonds which such Trustee knows are so held shall be so
excluded.
"Bond Purchase Agreement" means the Bond Purchase Agreement
dated May 27, 1994, among the Issuer, the Company and Chemical
Securities Inc., as purchaser.
"Bond Register" means the books for the registration of the
Bonds required pursuant to Section 2.3 of this Indenture.
"Bond Registrar" means the registrar appointed by the Issuer
hereunder, initially the Trustee, to keep the books and make the
registrations required pursuant to Article II hereof.
"Bond Year" means the period commencing June 1, and
terminating on May 31 of each calendar year during the term of the
Bonds, except that the first Bond Year shall commence on the Date
of Issuance and end on May 31, 1995 (unless a different period is
required by the Code as hereinafter defined).
"Bonds" means the $36,250,000 principal amount of Industrial
Revenue Refunding Bonds (Avondale Industries, Inc. Project) Series
1994, authenticated and delivered under Section 2.2 of this
Indenture.
"Business Day" means any day other than (i) a Saturday or
Sunday or legal holiday or a day on which banking institutions in
the City of New York, New York or in the city or cities in which
the principal office of the Trustee or the Company are located are
authorized or required by law to close or (ii) a day on which the
New York Stock Exchange is closed.
"Certified Resolution" means a copy of a resolution or
resolutions certified by the Secretary of the Issuer under its
seal to have been duly adopted by the Issuer and to be in full
force and effect on the date of such certification.
"Code" means the United States Internal Revenue Code of
1986, as amended. References to the Code and to sections of the
Code shall include relevant final, temporary or proposed
regulations thereunder as in effect from time to time and as
applicable to obligations issued on the date of issuance of the
Bonds.
"Company" means Avondale Industries, Inc., a corporation
duly organized and existing under the laws of the State, and its
successors and permitted assigns, including any surviving,
resulting or transferee corporation as provided in Section 6.1 or
6.7 of the Refunding Agreement.
"Conversion" means the conversion of the interest rate on
the Bonds from the Variable Rate to the Fixed Rate on the Fixed
Rate Conversion Date.
"Counsel" means an attorney at law (who may be counsel to
the Issuer or the Company) satisfactory to the Trustee.
"Date of Issuance" means the date on which the Issuer
initially issues the Bonds.
"Debt Service Reserve Fund" means the fund created under
Section 5.6 of this Indenture.
"Debt Service Reserve Fund Requirement" means an amount
equal to the lesser of (i) the maximum principal and interest on
the Bonds in any Bond Year or (ii) 1.25 times the average annual
debt service on the Bonds or (iii) 10% of the proceeds of the
Bonds.
"Dedicated Revenues of the Issuer" means the properties,
rights and interests specified in Section 5.3 hereof which stand
as security for payment of the Bonds.
"DTC" means The Depository Trust Company, New York, New
York.
"Escrow Agreement" means the Escrow Agreement dated the date
of this Indenture among the Issuer, the Company and the Escrow
Trustee.
"Escrow Fund" means the account established pursuant to the
Escrow Agreement.
"Escrow Trustee" means First National Bank of Commerce, New
Orleans, Louisiana.
"Event of Default" shall have the meaning set forth in
Section 9.1 hereof.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100th of 1%)
equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the
Wall Street Journal on the Business Day next succeeding such day,
provided that if such day is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding
Business Day.
"Fixed Rate" means the interest rate on each maturity of the
Bonds established in accordance with this Indenture.
"Fixed Rate Conversion" means the conversion of the interest
rate on the Bonds from the Variable Rate to the Fixed Rate.
"Fixed Rate Conversion Date" means the date on which the
Bonds shall commence to bear interest at the Fixed Rate as
provided in Section 2.2 of this Indenture.
"Fixed Rate Period" shall mean that period during which the
Bonds shall bear interest at the Fixed Rate.
"Government Obligations" means (a) direct general
obligations of the United States of America or (b) obligations,
the payment of the principal of, premium, if any, and interest on
which is fully and unconditionally guaranteed by the United States
of America.
"Indenture" means this Trust Indenture and any indenture
supplemental hereto and amendatory hereof to the extent permitted
hereby.
"Issuer" means the Board of Commissioners of the Port of New
Orleans, a political subdivision of the State of Louisiana,
organized and existing under the laws of the State of Louisiana,
or its successors and assigns.
"Notice Parties" means the Issuer, the Trustee, the Company
and Chemical Securities Inc.
"Officer's Certificate" means a certificate signed by the
Chairman or Vice Chairman of the Issuer.
"Paying Agent" or "paying agent" means the Trustee and any
paying agent for the Bonds appointed pursuant to this Indenture or
any Supplemental Indenture, or any successors therein named
pursuant to the provisions of this Indenture.
"Permitted Investments" means, to the extent permitted by
the laws of the State, the following obligations or securities:
(i) direct obligations of, or obligations guaranteed by, the
United States of America, and any bonds or other obligations of
the Federal National Mortgage Association (including Participation
Certificates), Government National Mortgage Association, Federal
Farm Credit Banks, Federal Intermediate Credit Banks, Federal
Banks for Cooperatives, Federal Land Banks, Federal Home Loan
Mortgage Corporation and Federal Home Loan Banks, (ii)
interest-bearing certificates of deposit (secured by the
obligations described in the foregoing subparagraph (i)) in a
national or state bank or a trust company (which may be the
Trustee) which has a combined capital and surplus aggregating not
less than $25,000,000, (iii) any obligation secured by a pooling
of one or more of the foregoing, (iv) bankers' acceptances,
Eurodollar deposits or certificates of deposit of banks or trust
companies, including the Trustee, organized under the laws of the
United States or Canada or any state or province thereof, or
domestic branches of foreign banks, having capital and surplus of
$25,000,000 or more, (v) other unsubordinated securities issued or
guaranteed (including a guarantee in the form of a bank standby
letter of credit) by any domestic corporation (including a bank or
trust company) which has outstanding, at the time of investment,
debt securities rated in one of the two highest rating categories
(without regard to rating subcategories) by any nationally
recognized statistical rating agency, (vi) obligations of any
domestic corporation which are fully and continually secured by
any of the securities or obligations referred to in (i) through
(v), (vii) investments in a money market type fund which limits
its investments to the types of obligations described in (i)
through (v), and (viii) as otherwise permitted by State law for
the funds so invested.
"Principal Office" or "principal office" means the principal
corporate trust office of the Trustee, presently located in New
Orleans, Louisiana.
"Prior Bonds" means collectively the Series 1981 Bonds and
the Series 1983 Bonds.
"Project" means the facilities described in Exhibit A to the
Refunding Agreement financed with the proceeds of the Series 1981
Bonds, including any modifications thereof, substitutions therefor
and additions thereto and excluding deletions therefrom.
"Refunding Act" means Chapter 14-A of Title 39 of the
Louisiana Revised Statutes of 1950, as supplemented and amended.
"Refunding Agreement" means the Refunding Agreement between
the Issuer and the Company dated of even date herewith relating to
the Bonds, as the same may be amended in accordance with its terms
and this Indenture.
"Refunding Date" means, with respect to the Series 1983
Bonds, June 1, 1994, or such other date or dates as may be agreed
to by the Issuer and the Company; provided, however, that the
Refunding Date shall not be later than ninety (90) days following
the date of delivery of the Bonds to the initial purchasers
thereof.
"Registered Owner" or "Owner" or "owner" or "registered
owner" means the person or persons in whose name or names the
particular registered Bond shall be registered as to principal and
interest on the books of the Issuer kept for that purpose in
accordance with the terms of this Indenture.
"Repayments" means the principal, premium, if any, and
interest amounts specified in Section 3.1 of the Refunding
Agreement and payable by the Company thereunder.
"Series 1981 Bonds" means the Issuer's $36,250,000 aggregate
principal amount of Industrial Revenue Bonds (Avondale Shipyards,
Inc. Project) Series 1981 dated July 1, 1981.
"Series 1983 Bonds" means the Issuer's $36,250,000 aggregate
principal amount of Industrial Revenue Bonds (Avondale Shipyards,
Inc. Project) Series 1983 dated May 1, 1983.
"Series 1983 Letter of Credit Bank" means Chemical Bank, New
York, New York.
"State" means the State of Louisiana.
"Supplemental Indenture" or "indenture supplemental hereto"
means any supplemental indenture now or hereafter duly authorized
and entered into in accordance with the provisions of this
Indenture.
"Trustee" means First National Bank of Commerce, New
Orleans, Louisiana, and its successor or successors as Trustee
hereunder.
"Variable Rate" means the lesser of (i) the Federal Funds
Rate plus 275 basis points; or (ii) 9.0% , as determined in
accordance with Section 2.2 of this Indenture, from and including
the Date of Issuance to but not including the Fixed Rate
Conversion Date.
"Variable Rate Period" means that period during which the
Bonds shall bear interest at the Variable Rate.
ARTICLE II
DESCRIPTION, AUTHORIZATION,
MANNER OF EXECUTION, AUTHENTICATION,
REGISTRATION AND TRANSFER OF BONDS
SECTION 1.`.Bonds as Limited Obligations of Issuer. The
Bonds and the interest thereon shall be limited obligations of the
Issuer payable solely from the Dedicated Revenues of the Issuer
and all amounts on deposit in the Bond Fund, all of which are
pledged for the payment thereof under this Indenture. The Bonds
shall never constitute an indebtedness or general obligation of
the Issuer or the State within the meaning of any constitutional
or statutory provision or limitation of indebtedness and shall
never constitute or give rise to a pecuniary liability of the
Issuer or the State or a charge or pledge against the general
credit or taxing power of either. All the Bonds issued and to be
issued hereunder shall be equally and ratably secured, to the
extent provided in this Indenture, by the pledge of all the
Dedicated Revenues of the Issuer.
SECTION 2.`.Issuance and Payment Terms of Bonds. There is
hereby created for issuance under this Indenture a series of Bonds
designated "Industrial Revenue Refunding Bonds (Avondale
Industries, Inc. Project) Series 1994" in the aggregate principal
amount of Thirty-Six Million Two Hundred Fifty Thousand Dollars
($36,250,000). The Bonds delivered to the original purchasers
thereof shall be dated May 31, 1994. The Bonds shall be issued as
fully registered bonds in the denomination of $100,000 or an
integral multiple of $5,000 in excess thereof numbered from R-1
upwards; no Beneficial Owner may own an interest of less than
$100,000 in the Bonds. The Bonds shall bear interest from the
date thereof, payable semiannually on June 1 and December 1 of
each year, commencing December 1, 1994 and on the Fixed Rate
Conversion Date (each an "Interest Payment Date"), at the Variable
Rate to, but excluding, the Fixed Rate Conversion Date and from
the Fixed Rate Conversion Date at the Fixed Rate. The Bonds shall
mature on June 1 of the years and in the principal amounts as
follows:
Year Amount
2004 $ 6,000,000
2014 30,250,000
Bonds issued prior to the first Interest Payment Date
thereon shall be dated May 31, 1994 and Bonds issued on or
subsequent to the first Interest Payment Date thereon shall be
dated as of the Interest Payment Date immediately preceding the
date of authentication and delivery thereof, unless such date of
authentication and delivery shall be an Interest Payment Date, in
which case they shall be dated as of the date of authentication
and delivery; provided, however, that, notwithstanding the
foregoing, if, as shown by the records of the Trustee, interest on
the Bonds shall be in default, registered Bonds issued in exchange
for Bonds surrendered for transfer or exchange shall be dated as
of the date to which interest has been paid in full on the Bonds
surrendered or, if no interest has been paid on any of the Bonds,
as of the date of initial issuance of the Bonds. Interest on the
Bonds shall be computed upon the basis of (i) during the Variable
Rate Period, the actual number of days in such period divided by
365 and (ii) during the Fixed Rate Period a 360-day year,
consisting of twelve (12) thirty (30) day months.
The principal of, premium, if any, and interest on all of
the Bonds shall be paid in any coin or currency of the United
States of America which, at the time of payment, is legal tender
for the payment of public and private debts at the principal
corporate trust office of the Trustee, all upon presentation and
surrender of such Bonds as they respectively become due; provided,
however, that the interest on each Bond shall be paid by check or
draft mailed to the person who is listed as the Registered Owner
thereof as of the close of business on the fifteenth (15th) day of
the calendar month preceding each Interest Payment Date (the
"Regular Record Date") at his or her address as it appears on the
Bond Register; and provided further, that a Bondholder of
$1,000,000 or more in aggregate principal amount of the Bonds may
request in writing payment of interest on such Bonds in
immediately available funds by wire transfer to the bank account
number of such owner furnished to the Trustee not less than seven
(7) days prior to such Interest Payment Date.
The interest rate on the Bonds shall be converted from the
Variable Rate to the Fixed Rate in the following manner:
(i) Upon the earlier of August 1, 1994 or upon an
election pursuant to clause (ii) below, the interest rate
borne by the Bonds shall be converted from the Variable Rate
to the Fixed Rate on the Fixed Rate Conversion Date, and the
Bonds shall thereafter bear interest at the Fixed Rate from
the Fixed Rate Conversion Date until the final maturity date
of the Bonds upon the conditions set forth in this Section.
(ii) On August 1, 1994, or on such earlier date
specified by a Bondholder, the rate of interest payable on
all or any portion of the Bonds shall be converted in
denominations of $100,000 or an integral multiple of $5,000
in excess thereof from the Variable Rate to the Fixed Rate.
In order to exercise this option a Bondholder shall deliver
one (1) day prior written notice, which notice shall be
irrevocable, to the Notice Parties directing such Fixed Rate
Conversion. The notice shall specify (1) the effective date
upon which the Fixed Rate Conversion is to occur (the "Fixed
Rate Conversion Date"), which shall be the next Business Day
following the receipt of the Conversion notice by such
Notice Parties and (2) the date on which Chemical Securities
Inc. is to establish the Fixed Rate, which date shall be the
Fixed Rate Conversion Date. Upon the earlier of August 1,
1994 or the date stated in the notice for the determination
of the Fixed Rate, Chemical Securities Inc. shall determine
the Fixed Rate at the lowest rate of interest that would, in
its opinion, based on then prevailing market conditions and
the yields at which comparable securities are then being
sold, be necessary to sell the Bonds in the secondary market
at par, plus accrued interest. In no event will the Fixed
Rate exceed 9.0% per annum.
(iii)The determination by Chemical Securities Inc. in
accordance with this Section of the Fixed Rate to be borne
by the Bonds shall be conclusive and binding on the holders
of the Bonds and the other Notice Parties.
(iv) On the Fixed Rate Conversion Date, Chemical
Securities Inc. will calculate the interest on such Bonds
being converted which has accrued while the Bonds were
Variable Rate Bonds. Chemical Securities Inc. shall advise
the Trustee and the Company of the interest accrued.
(v) On each Fixed Rate Conversion Date, holders of
such Bonds directing such Conversion to a Fixed Rate shall
deliver any Bonds so converted to the Trustee for notation
of the date of the Fixed Rate Conversion and the Fixed Rate
on the face of the Bonds. In the event that all Bonds are
converted to the Fixed Rate, the holders of the Bonds shall
surrender the Bonds to the Trustee for submission to DTC for
registration in book-entry only form.
SECTION 3.`.Bond Register. The Issuer shall keep or cause
to be kept the Bond Register at the principal office of the
Trustee for the registration of Bonds as herein provided and
hereby appoints the Trustee as Bond Registrar to keep such books
and make such registrations under such reasonable regulations as
the Trustee may prescribe. The Company, from time to time, shall
be entitled to review such Bond Register at the principal office
of the Trustee.
The Trustee shall maintain a register of the Beneficial
Owners of the Bonds upon receipt of written certification from
such Beneficial Owner as to its beneficial ownership accompanied
by evidence thereof reasonably satisfactory to the Trustee and
setting forth its address. Upon the transfer of a Bond, the new
Registered Owner shall become the Beneficial Owner until another
Beneficial Owner is designated. A copy of any notice sent
hereunder to Registered Owners of Bonds shall also be sent to such
Beneficial Owners registered with the Trustee as herein provided,
and any consent, request, direction, approval, objection or other
instrument or action required or permitted by this Indenture to be
executed or taken by the Registered Owner of any Bond (other than
the transfer of a Bond) shall be fully effective if executed or
taken by the Beneficial Owner thereof provided that, in the event
of conflicting instruments executed by the Registered Owner and
the Beneficial Owner, the action by the Registered Owner shall
govern. The Trustee shall not be responsible for, nor have any
liability for, or with respect to, the accuracy of the register of
Beneficial Owners of the Bonds or for the failure to provide any
Beneficial Owner of any notice sent to Registered Owners.
SECTION 4.`.Recital. All Bonds shall contain a recital that
they are issued pursuant to the Refunding Act and may have printed
thereon such legend or legends as may be required to comply with
any law, rule or regulation or to conform to general usage or
practice as determined to be advisable by the Company, the Issuer
and the Trustee. By accepting a Bond, each Bondholder irrevocably
appoints the Trustee under this Indenture as the special
attorney-in-fact for the holder vested with full power on behalf
of the holder to effect and enforce the provisions of this
Indenture for the benefit of the holder.
SECTION 5.`.Transfer of Bonds. All Bonds shall be
transferable only on the Bond Register upon surrender of such
Bonds at the principal office of the Trustee with a written
instrument of transfer satisfactory to the Trustee duly executed
by the Registered Owner or his duly authorized attorney or legal
representative.
Bonds, upon surrender thereof at the principal office of the
Trustee with a written instrument of transfer satisfactory to the
Trustee duly executed by the Registered Owner or his duly
authorized attorney or legal representative in writing may at the
option of the holder thereof be exchanged for an equal aggregate
principal amount of Bonds of the same maturity and interest rate
in any of the authorized denominations and registered in such name
or names as may be requested.
Registrations, transfers and exchanges of Bonds shall be
without charge to the holder of the Bonds but, for every
registration, exchange or transfer of Bonds, the Issuer or the
Trustee may make a charge sufficient to reimburse it for any tax,
fee or other governmental charge required to be paid with respect
to such registration, exchange or transfer, which sum or sums
shall be paid by the person requesting such registration, exchange
or transfer as a condition precedent to the exercise of the
privilege of making such registration, exchange or transfer.
Each Bond delivered pursuant to any provision of this
Indenture in exchange or substitution for, or upon the transfer of
the whole or any part of one or more other Bonds, shall carry all
of the rights to interest accrued and unpaid and to accrue which
were carried by the whole or such part, as the case may be, of
such one or more other Bonds, and notwithstanding anything
contained in this Indenture, such Bonds shall be so dated or bear
such notation that neither gain in nor loss in interest shall
result from any such exchange, substitution or transfer.
Every transfer of Bonds under the foregoing provisions shall
be effected in such manner as may be prescribed by the Trustee.
The Trustee shall not be required to exchange, register or
transfer Bonds after the mailing of notice of redemption, during
the period of 15 days next preceding the mailing of such notice of
redemption, nor during the period of 15 days next preceding an
Interest Payment Date.
SECTION 6.`.Registered Owners. The Issuer and the Trustee
may treat the person in whose name any Bond is registered as the
absolute owner of such Bond for the purpose of receiving payment
of principal of and interest on such Bond and for all other
purposes whether or not such Bond is overdue, and neither the
Issuer nor the Trustee shall be affected by notice to the
contrary.
SECTION 7.`.Temporary Bonds. Until Bonds in definitive form
are ready for delivery, the Issuer may execute, and upon its
request in writing, the Trustee shall authenticate and deliver in
lieu of any thereof and subject to the same provisions,
limitations and conditions, one or more printed, lithographed or
typewritten Bonds in temporary form, substantially of the tenor of
the Bonds hereinbefore described, with appropriate omissions,
variations and insertions. Such Bond or Bonds in temporary form
may be for the principal amount of $100,000 or an integral
multiple of $5,000 in excess thereof, as the Issuer may determine.
Until exchanged for Bonds in definitive form such Bonds in
temporary form shall be entitled to the lien and benefit of this
Indenture. The Issuer shall, without unreasonable delay, prepare,
execute and deliver to the Trustee, and thereupon, upon the
presentation and surrender of the Bond or Bonds in temporary form,
the Trustee shall authenticate and deliver, in exchange therefor,
a Bond or Bonds in definitive form in authorized denominations of
the same maturity for the same aggregate principal amount as the
Bond or Bonds in temporary form surrendered. Such exchange shall
be made by the Issuer and without making any charge therefor
except that the Issuer may require payment by the Company of a sum
sufficient to cover any tax or other governmental charge that may
be imposed in relation thereto. When and as interest is paid upon
Bonds in temporary form, the fact of such payment shall be noted
thereon upon presentation to the Trustee.
SECTION 8.`.Facsimile Signatures. All the Bonds shall, from
time to time, be executed on behalf of the Issuer by the manual or
facsimile signature of the President and Chief Executive Officer
of the Issuer and its seal (which may be in facsimile) shall be
thereunto affixed (or printed or engraved or otherwise reproduced
thereon if in facsimile) and attested by the manual or facsimile
signature of the Secretary of the Issuer.
If any of the officers whose manual or facsimile signatures
shall be upon the Bonds shall cease to be such officers of the
Issuer before such Bonds shall have been actually authenticated by
the Trustee or delivered by the Issuer, such Bonds nevertheless
may be authenticated, issued and delivered with the same force and
effect as though the person or persons whose signature shall be
upon such Bonds had not ceased to be such officer or officers of
the Issuer; and also any such Bonds may be signed and sealed on
behalf of the Issuer by those persons who, at the actual date of
the execution of such Bond, shall be the proper officers of the
Issuer, although at the nominal date of such Bonds any such person
shall not have been such officer of the Issuer.
SECTION 9.`.Mutilated, Lost, Destroyed or Stolen Bonds. A
mutilated Bond may be surrendered to the Trustee and the Trustee
shall validate the same or, upon the request of the person
surrendering such Bond, the Issuer shall execute and the Trustee
shall authenticate and deliver in exchange therefor a new Bond of
like maturity, designation, interest rate, and principal amount.
All mutilated Bonds surrendered in any such exchange shall
forthwith be canceled.
If there be delivered to the Issuer and to the Trustee, (a)
an affidavit or any other form of evidence satisfactory to them to
establish proof of ownership and the circumstances of the
destruction, loss or theft of any Bond, and (b) such security or
indemnity as may be required by them to save each of them
harmless, then, in the absence of notice to the Issuer or the
Trustee that such Bond has been acquired by a bona fide purchaser,
the Issuer shall execute and upon its request the Trustee shall
authenticate and deliver in lieu of any such destroyed, lost or
stolen Bond, a new Bond of like maturity, denomination, interest
rate and principal amount.
In case any such mutilated, destroyed, lost or stolen Bond
has become or is about to become due and payable, the Issuer in
its discretion may, instead of issuing a new Bond, cause the
Trustee to pay such Bond out of money held by the Trustee and
available for such purpose.
SECTION 10.`.Authentication of Bonds by Trustee. No Bonds
shall be secured hereby or entitled to the benefit hereof or shall
be or become valid or obligatory for any purpose unless there
shall be endorsed on such Bond a certificate of authentication,
substantially in the form prescribed in this Indenture, executed
by the Trustee; and such certificate on any Bond issued by the
Issuer shall be conclusive evidence and the only competent
evidence that it has been duly authenticated and delivered
hereunder.
SECTION 11.`.Destruction of Bonds. Upon the surrender to
the Trustee of any temporary or mutilated Bonds, or Bonds acquired
or redeemed or paid at maturity by the Issuer, or Bonds acquired
by market purchase, the same shall be canceled and, in due course,
may be incinerated or otherwise destroyed by the Trustee, and if
so incinerated or destroyed the Trustee shall deliver its
certificate of such incineration or other destruction to the
Issuer and the Company.
SECTION 12.`.Book-Entry Registration of Bonds. Upon the
Conversion of all of the Bonds to a Fixed Rate, the Bonds shall be
issued in the name of Cede & Co., as nominee for DTC, as
registered owner of the Bonds, and held in the custody of DTC.
The Issuer and the Trustee acknowledge that they shall execute and
deliver a Letter of Representation with DTC and that the terms and
provisions of said Letter of Representation shall govern in the
event of any inconsistency between the provisions of this
Indenture and said Letter of Representation. A single certificate
will be issued and delivered to DTC for each maturity of the
Bonds. The Beneficial Owners will not receive physical delivery
of Bond certificates except as provided herein. Beneficial Owners
are expected to receive a written confirmation of their purchase
providing details of each Bond acquired. For so long as DTC shall
continue to serve as securities depository for the Bonds as
provided herein, all transfers of beneficial ownership interest
will be made by book-entry only, and no investor or other party
purchasing, selling or otherwise transferring beneficial ownership
of Bonds is to receive, hold or deliver any Bond certificate.
For every transfer and exchange of the Bonds, the Beneficial
Owner may be charged a sum sufficient to cover such Beneficial
Owner's allocable share of any tax, fee or other governmental
charge that may be imposed in relation thereto.
Bond certificates are required to be delivered to and
registered in the name of the Beneficial Owner under the following
circumstances:
(a) DTC determines to discontinue providing its
service with respect to the Bonds. Such a determination may
be made at any time by giving 30 days' notice to the Issuer
or the Trustee and discharging its responsibilities with
respect thereto under applicable law.
(b) The Issuer determines that continuation of the
system of book-entry transfer through DTC (or a successor
securities depository) is not in the best interests of the
Beneficial Owners.
The Issuer, the Company and the Trustee will recognize DTC
or its nominee as the Bondholder for all purposes, including
notices and voting.
Neither the Issuer, the Trustee nor the Company are
responsible for the performance by DTC of any of its obligations,
including, without limitation, the payment of moneys received by
DTC, the forwarding of notices received by DTC or the giving of
any consent or proxy in lieu of consent.
Whenever during the term of the Bonds the beneficial
ownership thereof is determined by a book entry at DTC, the
requirements of this Indenture of holding, delivering or
transferring Bonds shall be deemed modified to require the
appropriate person to meet the requirements of DTC as to
registering or transferring the book entry to produce the same
effect.
If at any time DTC ceases to hold the Bonds, all references
herein to DTC shall be of no further force or effect.
ARTICLE III
AUTHENTICATION AND DELIVERY OF BONDS
SECTION 1.b.All Bonds Equally and Ratably Secured. This
Indenture creates and shall be and constitute a continuing,
irrevocable and exclusive pledge and assignment of the Dedicated
Revenues of the Issuer to the extent provided in this Indenture,
to secure the full and final payment of the principal of, and
interest (and redemption premium, if any) on, all Bonds
authenticated and delivered hereunder. All Bonds issued hereunder
are, to the extent provided in this Indenture, equally and ratably
secured by this Indenture without preference, priority or
distinction on account of the actual time or times of the
authentication or delivery or maturity of the Bonds or any of
them, so that, subject to aforesaid, all Bonds at any time
outstanding hereunder shall have the same right, lien and
preference under and by virtue of this Indenture and shall be
equally and ratably secured hereby with like effect as if they had
all been executed, authenticated and delivered simultaneously on
the date hereof whether the same, or any of them, shall be
disposed of at some future date, or whether they, or any of them,
shall be authorized to be authenticated and delivered after the
date hereof pursuant to Section 2.5 of this Indenture.
SECTION 2.b.Conditions of Authentication. The Bonds in the
aggregate principal amount of $36,250,000 shall be executed by the
Issuer and delivered to the Trustee for authentication, together
with a statement as to the amount and disposition of the proceeds
of the principal amount of said Bonds and any accrued interest
thereon; thereupon the Bonds shall be authenticated by the Trustee
and shall be delivered to or upon the order of the purchasers
thereof, but only upon the receipt by (i) the Escrow Trustee of
the aforesaid proceeds of the principal amount of the Bonds, which
shall be deposited with the Escrow Trustee for credit to the
Escrow Fund as provided in Article IV hereof, and (ii) the Trustee
of an amount equal to the accrued interest, if any, on said Bonds
to the date of their delivery, which shall be deposited into the
Bond Fund. Prior to authentication of the Bonds the Trustee shall
also have received the following:
(1) A Certified Resolution authorizing the issuance of
the Bonds and the execution and delivery of the Refunding
Agreement and Indenture.
(2) An original executed counterpart of the Refunding
Agreement.
(3) An original executed counterpart of this
Indenture.
(4) An original executed counterpart of the Escrow
Agreement.
(5) A request and authorization to the Trustee on
behalf of the Issuer and signed by the Chairman or Vice
Chairman or President and Chief Executive Officer and the
Secretary of the Issuer to (i) authenticate and deliver the
Bonds to the purchaser or purchasers therein identified upon
payment to the Escrow Trustee of the proceeds of the Bonds
(other than accrued interest, which shall be deposited with
the Trustee for credit to the Bond Fund) as hereinafter
provided under Article IV hereof, and (ii) execute and
deliver any document to which the Trustee is a party.
(6) An original executed counterpart of the Tax
Regulatory Agreement dated as of April 1, 1994, by and among
the Issuer, the Trustee and the Company.
(7) The unqualified approving opinion and a
supplementary opinion of bond counsel of nationally
recognized standing dated the day the Bonds are issued.
ARTICLE IV
PROCEEDS OF BONDS
SECTION 1.a. Proceeds of Bonds. The proceeds from the
initial sale of the Bonds (other than the proceeds which represent
accrued interest) shall be deposited with the Escrow Trustee for
credit to the Escrow Fund and held therein and applied in
accordance with the Escrow Agreement. At the time such proceeds
are deposited, the Company will pay the balance of moneys required
to pay the redemption price for the Series 1983 Bonds to the
Escrow Trustee and will pay all Costs of Issuance. The proceeds
of the Bonds, together with the additional funds provided by the
Company on deposit with the Escrow Trustee, will be used by the
Escrow Trustee to reimburse the Series 1983 Letter of Credit Bank
in connection with the redemption of the Series 1983 Bonds, all as
provided in the Escrow Agreement.
ARTICLE V
PLEDGE AND ASSIGNMENT; BOND FUND;
DEBT SERVICE RESERVE FUND
SECTION 1.a. Pledge of Dedicated Revenues. All Dedicated
Revenues of the Issuer are hereby pledged and assigned unto the
Trustee for the payment of the principal of, premium, if any, and
interest on the Bonds and the performance of the other obligations
of the Issuer contained in this Indenture. The Issuer hereby
assigns, sets over to and grants its right, title and interest in
and to the Refunding Agreement (other than its expense
reimbursement and indemnification rights) and all amounts on
deposit in the Bond Fund and the Debt Service Reserve Fund to the
Trustee for the benefit of the Bondholders.
SECTION 2.a. Bond Fund. There is hereby created "Board of
Commissioners of the Port of New Orleans Industrial Revenue
Refunding Bond Fund - Avondale Industries Project" (the "Bond
Fund"), which shall be held in trust by the Trustee for the
benefit of the holders of the Bonds and shall be subject to a lien
and charge in favor of the holders of all of the Bonds issued and
outstanding under this Indenture. The Issuer hereby directs
payment to the Trustee of all Dedicated Revenues of the Issuer.
Upon receipt of such payments and of such other money as may be
paid to the Trustee by the Issuer or otherwise for deposit in the
Bond Fund, the Trustee shall deposit the same in the Bond Fund.
SECTION 3.a. Deposits into Bond Fund. There shall be
deposited into the Bond Fund from the proceeds of the Bonds,
immediately upon the receipt thereof by the Trustee, an amount
equal to the accrued interest, if any, on said Bonds to the date
of their delivery. In addition, there shall be deposited into the
Bond Fund as Dedicated Revenues of the Issuer when received: (a)
all Repayments specified in Section 3.1 of the Refunding Agreement
and all prepayments under Article VIII of the Refunding Agreement
(other than payments for expense reimbursement and
indemnification);, (b) all moneys required to be deposited therein
pursuant to Sections 5.6 and 5.7 of this Indenture, and (c) all
other money received by the Trustee and required under or pursuant
to any of the provisions of the Refunding Agreement or this
Indenture or any refunding agreement, note or indenture
supplemental thereto, respectively, to be paid into the Bond Fund.
The Issuer hereby covenants and agrees that so long as any of the
Bonds issued hereunder are outstanding, it will deposit or cause
to be deposited in the Bond Fund sums (but only from Dedicated
Revenues of the Issuer) sufficient to meet and pay promptly the
principal of, premium, if any, and interest on the Bonds as the
same shall become due and payable.
SECTION 4.a. Use of Moneys in Bond Fund. Moneys in the Bond
Fund shall be used solely for the payment of the principal of and
interest on the Bonds, for the payment or redemption of the Bonds
at or prior to their maturity and for the payment of redemption
premium, if any, on redemption of the Bonds. The Trustee, without
further authorization than is in this Section 5.4 contained, shall
pay from the moneys in the Bond Fund (i) the interest on the Bonds
as and when the same shall become due, and (ii) the principal of
and premium, if any, on the Bonds as and when the same shall come
due, provided that such payment of principal and premium shall be
made only upon presentation and surrender of such Bonds as they
come due.
SECTION 5.a. Bond Fund and Debt Service Reserve Fund
Sufficient to Pay All Bonds. If at any time the amount in the
Bond Fund and the Debt Service Reserve Fund shall be sufficient to
pay when due the principal of, premium, if any, and interest on
the Bonds remaining outstanding, the Trustee shall notify the
Issuer and the Company that no additional or further payments need
be made under this Indenture, and the Trustee shall apply the
money then in said Bond Fund and Debt Service Reserve Fund to the
payment of the principal of, premium, if any, and interest on the
Bonds when due.
SECTION 6.a. Creation of the Debt Service Reserve Fund;
Payments Into the Debt Service Reserve Fund. There is hereby
created "Board of Commissioners of the Port of New Orleans
Industrial Revenue Refunding Bond Debt Service Reserve Fund -
Avondale Industries Project" (the "Debt Service Reserve Fund"),
which shall be held in trust by the Trustee for the benefit of the
holders of the Bonds and shall be subject to a lien and charge in
favor of the holders of all of the Bonds issued and outstanding
under this Indenture. There shall be deposited into the Debt
Service Reserve Fund all payments by the Company pursuant to
Section 3.3 of the Refunding Agreement until the amount on deposit
in said Fund shall equal the Debt Service Reserve Fund
Requirement. All earnings on the Debt Service Reserve Fund shall
remain therein until there is an amount in the Debt Service
Reserve Fund equal to the Debt Service Reserve Requirement;
provided, however, in no event shall moneys on deposit in the Debt
Service Reserve Fund exceed the Debt Service Reserve Fund
Requirement and in such event such excess moneys shall be
transferred to the Bond Fund.
SECTION 7.a. Use of Moneys in the Debt Service Reserve
Fund; Investment of Debt Service Reserve Fund Moneys. Moneys in
the Debt Service Reserve Fund shall be used solely for the payment
of the principal of, premium, if any, and interest on the Bonds in
the event moneys in the Bond Fund are insufficient to make such
payments when due, whether on an Interest Payment Date, redemption
date, sinking fund redemption date, maturity date or otherwise.
The Trustee shall, on such payment date for principal of or
interest on the Bonds, determine if sufficient funds are available
in the Bond Fund to make such payments when due and, if sufficient
funds are not available in such Fund, shall make the required
transfer, if any, to the Bond Fund to cure such deficiency. In
addition, upon the occurrence of an Event of Default hereunder,
any moneys in the Debt Service Reserve Fund shall be transferred
by the Trustee to the Bond Fund. On the final maturity date of
the Bonds any moneys in the Debt Service Reserve Fund shall be
used to pay the principal of and interest on the Bonds on such
final maturity date. In the event of the redemption of the Bonds
in whole, any moneys in the Debt Service Reserve Fund shall be
transferred to the Bond Fund and applied to the payment of the
principal of and premium, if any, and interest on the Bonds.
Whenever the total amount on deposit in the Bond Fund and
the Debt Service Reserve Fund is sufficient to pay in full all
outstanding Bonds in accordance with their respective terms
(including principal and interest thereon), the funds on deposit
in the Debt Service Reserve Fund shall be transferred to the Bond
Fund and applied to pay the principal of, premium, if any, and
interest on the Bonds.
All moneys in the Debt Service Reserve Fund shall be
invested in accordance with the directions of an Authorized
Company Representative in Government Obligations having a maturity
of not exceeding five (5) years, provided that not more than 50%
of the Government Obligations (valued as provided herein) shall
have a maturity not exceeding three (3) years. The value of
Government Obligations on deposit in the Debt Service Reserve Fund
shall be determined by the Trustee annually, on each June 1. If
any such valuation reveals that the value of the investments in
the Debt Service Reserve Fund is less than the Debt Service
Reserve Fund Requirement with respect to the Bonds then
outstanding, the Trustee shall immediately notify the Company and
the Issuer of the amount of the difference between the amount
derived by such valuation and the Debt Service Reserve Fund
Requirement, which difference shall be deposited by the Company in
the Debt Service Reserve Fund in the manner and at the time
required by Section 3.3 of the Refunding Agreement.
Notwithstanding the foregoing provisions, in lieu of the
required deposits into the Debt Service Reserve Fund, the Company
may cause to be deposited into the Debt Service Reserve Fund a
Debt Service Reserve Fund Letter of Credit for the benefit of the
Bondholders in an amount equal to the difference between the Debt
Service Reserve Fund Requirement and the sums then on deposit in
the Debt Service Reserve Fund, if any, which Debt Service Reserve
Fund Letter of Credit shall be available to be drawn upon (upon
the giving of notice as required thereunder) on any date, on which
payments are required to be made from the Bond Fund wherein a
deficiency exists which cannot be cured by funds in any other Fund
held pursuant to the Indenture and available for such purpose. If
a disbursement is made under the Debt Service Reserve Fund Letter
of Credit, the Company shall be obligated to reinstate the amount
disbursed by either depositing a replacement Debt Service Reserve
Fund Letter of Credit in the amount of the disbursement or to
deposit into the Debt Service Reserve Fund funds in the amount of
the disbursement made under such Debt Service Reserve Fund Letter
of Credit, or a combination of such alternatives as shall equal
the Debt Service Reserve Fund Requirement in six equal monthly
installments as provided in Section 3.3 of the Refunding
Agreement. As used herein, Debt Service Reserve Fund Letter of
Credit means the irrevocable letter of credit, if any, issued in
favor of the Trustee and deposited in the Debt Service Reserve
Fund in lieu of or in partial substitution for cash or securities
on deposit therein. The issuer providing such letter of credit
shall be a banking institution, bank or trust company or branch
thereof which has a senior debt rating of "A" or better from
either Moody's Investors Service, Inc. or Standard & Poor's
Corporation.
ARTICLE VI
SECURITY FOR AND INVESTMENT OF MONEY
SECTION 1.a. Moneys Held in Trust. All money from time to
time received by the Trustee and held in any fund created under
this Indenture, or otherwise, shall be held in trust by the
Trustee for the benefit of the holders from time to time of the
Bonds entitled to be paid therefrom.
SECTION 2.a. Bond Fund Investments. Money on deposit to the
credit of the Bond Fund shall be invested by the Trustee in
accordance with the direction of an Authorized Company
Representative in Permitted Investments maturing or marketable
prior to the maturities thereof at such time or times as to enable
disbursements to be made from the Bond Fund in accordance with the
terms hereof. Neither the Issuer nor the Trustee shall be liable
or responsible for any loss resulting from any investments made in
accordance with such directions.
All such investments shall be held by or under the control
of the Trustee and shall be deemed at all times a part of the Bond
Fund and the interest and any gain received thereon or any profit
realized therefrom and any loss resulting therefrom, respectively,
shall be credited to and held in or charged to the Bond Fund. If
at any time it shall become necessary that some or all of the
securities purchased with the money in such fund be redeemed or
sold in order to raise money necessary to comply with the
provisions of this Indenture, the Trustee shall, without further
authorization than is hereby contained, effect such redemption or
sale, employing, in the case of a sale, any commercially
reasonable method of effecting the same.
SECTION 3.a. Arbitrage Bond Covenant. With respect to the
authority to invest funds granted in this Indenture, the Issuer
directs the Trustee and the Trustee hereby covenants with the
holders of the Bonds that it will make no use of the proceeds of
the Bonds, or any other funds which may be deemed to be proceeds
of the Bonds pursuant to Section 148 of the Code, which would
cause the Bonds to be "arbitrage bonds" within the meaning of such
Section.
The Company has agreed in the Refunding Agreement to comply
with rebate requirements of Section 148(f) of the Code. The
Trustee shall provide such information as the Company may request
to enable the Company to calculate the amount of gross earnings on
the Bond Fund and Refunding Fund.
SECTION 4.a. Balance in the Bond Fund and Debt Service
Reserve Fund After Payment of the Bonds. Any balance in the Bond
Fund and Debt Service Reserve Fund created under this Indenture or
otherwise held by the Trustee after all the Bonds issued hereunder
and secured hereby have been paid in full, or provision for
payment in full thereof have been made, and all amounts due to the
Trustee and the Issuer have been paid, shall be paid over to the
Company. Should the holders of any Bonds fail or neglect to
present their Bonds for payment within one year from the date such
Bonds become due and payable, whether by redemption or at
maturity, the Trustee shall, at the end of such period, remit to
the Company in trust for the holders of the Bonds the money then
held for such Bonds; and the holders of such Bonds shall
thereafter have recourse only to the Company for payment thereof.
ARTICLE VII
REDEMPTION OF BONDS
SECTION 1.a.Redemption of the Bonds. Except as otherwise
provided herein, any redemption of all or any part of the Bonds
issued under the provisions of this Indenture which are subject to
redemption shall be made in the manner provided in this Article
VII. The Bonds may be redeemed prior to their respective
maturities, as follows:
(a) The Bonds maturing on June 1, 2014 are subject to
optional redemption prior to their maturity by the Issuer
beginning on June 1, 2004, in whole at any time and in part
on any Interest Payment Date at the following redemption
prices (stated as a percentage of principal amount) plus
accrued interest to the redemption date:
Redemption Period
(Both Inclusive) Redemption Price
June 1, 2004 through May 31, 2005 103%
June 1, 2005 through May 31, 2006 102%
June 1, 2006 through May 31, 2007 101%
June 1, 2007 and thereafter 100%
(b) The Bonds are subject to special mandatory
redemption prior to their maturity at any time, as a whole
or in part if such partial redemption will preserve the
exclusion from gross income for federal income tax purposes
of interest on the remaining Bonds outstanding (and if in
part, by lot or other customary means) at a redemption price
equal to 108% of the principal amount thereof, plus interest
accrued to the redemption date in the event that it is
finally determined by the Internal Revenue Service (or its
successor) or by a court of competent jurisdiction in a
proceeding in which the Company participates to the degree
it deems sufficient, that, as a result of the failure by the
Company to observe a covenant, agreement or representation
in the Refunding Agreement, the interest payable on the
Bonds has become includable for federal income tax purposes
in the gross income of any owner of a Bond, other than an
owner who is a "substantial user" of the Project or a
"related person" to such "substantial user" as provided in
the Code and applicable regulations thereunder. Any such
determination will not be considered final for this purpose
unless the Company has been given written notice and, if it
so desires, has been afforded the opportunity, at its
expense, to contest the same, either directly or in the name
of any owner of the Bonds, and until the conclusion of any
appellate review, if sought. The Company is not required to
complete the administrative proceeding or litigation
referred to above within a specified period, but it
covenants in the Refunding Agreement that it will use its
best efforts to obtain a prompt final determination,
decision or settlement of any administrative proceeding or
litigation. The Trustee shall receive and coordinate
notices from holders of the Bonds and give notices to the
Company and the Issuer in connection with such events in
such manner as the Trustee in its discretion deems
reasonable.
(c) The Bonds are subject to redemption prior to their
maturity by the Issuer at the direction of the Company, in
whole, at any time, but not in part, at a redemption price
equal to 100% of the principal amount of the outstanding
Bonds, plus accrued interest thereon to the date of
redemption, without premium, upon prepayment of the payments
relating to the Bonds under the Refunding Agreement upon the
occurrence of any of the following events:
(i) if all or any substantial portion of the
Project is destroyed to such extent that, in the
opinion of the Board of Directors of the Company
expressed in a resolution filed with the Issuer and the
Trustee, it is uneconomical to rebuild, repair or
restore the Project to approximately its condition
prior to such destruction;
(ii) if all or any substantial portion of the
Project is taken by eminent domain which, in the
opinion of the Board of Directors of the Company
expressed in a resolution filed with the Issuer and the
Trustee, will, or is likely to result in the Company
being prevented from carrying on its normal operations
at the Project for a period of six (6) months; or
(iii) a determination by an independent consultant
that technological or regulatory changes make the
continued operation of the Project uneconomical.
The exercise of any such option shall be at the direction of
the Company which shall give written notice to the Issuer and the
Trustee within one hundred twenty (120) days of the occurrence of
an event described in Section 7.1.(c)(i), 7.1.(c)(ii) or
7.1.(c)(iii) above, which notice shall specify that, as determined
by the Company, one or more of such events has occurred or one or
more of such conditions is continuing and also shall specify a
date for redemption not less than 45 nor more than 120 days from
the date such notice is given.
(d) The Bonds shall be subject to mandatory sinking
fund redemption on June 1 of the years and in the principal
amounts at a redemption price of 100% of the principal
amount of the Bonds to be redeemed, plus interest accrued to
the redemption date as follows:
Bonds maturing on June 1, 2004
Year Amount
1997 $550,000
1998 600,000
1999 650,000
2000 705,000
2001 770,000
2002 830,000
2003 910,000
2004 * 985,000
Bonds maturing on June 1, 2014
Year Amount
1997 $ 340,000
1998 370,000
1999 405,000
2000 440,000
2001 475,000
2002 525,000
2003 565,000
2004 620,000
2005 1,745,000
2006 1,900,000
2007 2,075,000
2008 2,260,000
2009 2,465,000
2010 2,685,000
2011 2,925,000
2012 3,190,000
2013 3,475,000
2014 * 3,790,000
*Final Maturity
SECTION 2.d.Partial Redemption. If less than all of the
Bonds shall be called for redemption, the particular Bonds or
portions of Bonds (in multiples of $100,000 or an integral
multiple of $5,000 in excess thereof) to be redeemed shall be
selected by lot or other customary means by the Trustee in such
manner as the Trustee in its discretion may deem proper in order
to assure to each holder of Bonds a fair opportunity to have his
Bond or Bonds or portions thereof drawn; provided, however, that
the portion of any Bond of a denomination more than $100,000 shall
be $100,000 or an integral multiple of $5,000 in excess thereof.
Bonds registered in the name of the Company as of the 35th
day preceding the date set for redemption shall be selected first
and if canceled before redemption shall be deemed redeemed for
purposes of redemption of the required principal amount of Bonds.
If there shall be drawn for redemption less than the principal
amount of a Bond, the Issuer shall execute and the Trustee shall
authenticate and shall deliver, upon surrender of such Bond,
accompanied by instruments of transfer, where appropriate, without
charge to the owner thereof, fully registered Bonds of like
maturity and interest rate in any of the authorized denominations,
which shall correspond to the unredeemed balance of the
surrendered Bond.
SECTION 3.d.Notice of Redemption. Notice of a call for
redemption shall be given by the Trustee not less than 30 days
prior to the date fixed for redemption by mailing a notice by
first class mail, postage prepaid to the registered owners of the
Bonds to be redeemed at the registered addresses shown on the Bond
Register of the Trustee as of the 45th day preceding the
redemption date, but failure to mail any such notice and any
defect in any such notice or the mailing thereof, as it affects
any particular Bond, shall not affect the validity of the
proceedings for the redemption of any other Bond. Such notice
(other than a notice of redemption pursuant to Section 7.1(d)
above) may state that redemption is conditional upon the deposit
of the funds necessary to effectuate the redemption, and that the
notice will be of no effect if such deposit is not made. So long
as Cede & Co. is the registered owner of the Bonds, as nominee of
DTC, notice of any redemption will be given by the Trustee to Cede
& Co., not the Beneficial Owners of the Bonds. If funds are
deposited (as more fully described herein) with the Trustee
sufficient to pay the redemption price of any Bonds, either at
maturity or by call for redemption or otherwise, together with
interest accrued to the redemption date, as provided in and
limited by the terms of this Indenture, interest on such Bonds
will cease to accrue on the redemption date, and thereafter
payment to the registered owners will be restricted to the funds
so deposited.
SECTION 4.d.Effect of Redemption. On the date fixed for
redemption, proper notice having been given for the payment of the
principal of, redemption premium, if any, and any accrued interest
to the redemption date and such amounts being held in trust for
the registered owners of the Bonds or portions thereof to be
redeemed, the Bonds or portions of the Bonds so called for
redemption shall become and be due and payable at the redemption
price provided for redemption of such Bonds or portions of Bonds
so called for redemption. The interest on such Bonds or portions
of Bonds shall cease to accrue, and such Bonds shall cease to be
entitled to any benefit or security under the Indenture. The
registered owners of such Bonds or such portions of Bonds shall
have no rights in respect thereof except to receive payment of the
redemption price thereof and to receive Bonds for any unredeemed
portions of Bonds. If less than all of the Bonds of any one
maturity have been called for redemption, the particular Bonds or
portions of Bonds to be redeemed shall be selected by lot by the
Trustee in such manner as the Trustee shall determine.
The Bonds and portions of Bonds which are subject to
redemption prior to maturity and which have been duly called for
redemption, or with respect to which irrevocable instructions to
call for redemption at a stated redemption date have been given to
the Trustee, and for which moneys sufficient (or Government
Obligations the principal of and the interest on which will
provide moneys sufficient) to pay the principal of, redemption
premium, if any, and interest on such Bonds to the applicable
redemption or payment dates, shall be held in a separate account
for the registered owners of the Bonds or portions thereof to be
redeemed or paid, all as provided herein, shall not thereafter be
deemed to be outstanding hereunder, and shall cease to be entitled
to any security or benefit under this Indenture, other than the
right to receive payment from such moneys or Government
Obligations.
ARTICLE VIII
PARTICULAR COVENANTS
SECTION 1.d. Payment of Principal, Premium and Interest. The
Issuer covenants that it will promptly pay the principal of,
premium, if any, and interest on every Bond issued under this
Indenture but only from the Dedicated Revenues of the Issuer as
provided herein at the place, on the dates, from the funds and in
the manner provided herein and in said Bonds according to the true
intent and meaning thereof.
SECTION 2.d. Trustee Authorized to Require Company to Make
Payments. So long as any of the Bonds are outstanding, the
Trustee as assignee of the rights of the Issuer under this
Indenture is authorized to require the Company to pay all of the
payments and other costs and charges payable by the Company under
the Refunding Agreement.
SECTION 3.d. Take Further Action. The Issuer covenants that
it shall from time to time execute and deliver such further
instruments and take such further action as may be reasonable and
as may be required to carry out the purpose of this Indenture;
provided, however, that no such instruments or actions shall
pledge the credit or taxing power of the Issuer.
SECTION 4.d. No Disposition of Revenues. Except as otherwise
permitted in this Indenture or the Refunding Agreement the Issuer
shall not sell, lease or otherwise dispose of the Refunding
Agreement or any of the revenues derived therefrom. Anything in
this Section to the contrary notwithstanding, the Issuer shall not
be precluded from taking such actions with respect to the Project
as shall be necessary in order for it to perform its governmental
functions.
SECTION 5.d. No Extensions. In order to prevent any claims
for interest after maturity, the Issuer will not directly or
indirectly extend or assent to the extension of the time of
payment of claims for interest on any of the Bonds and will not
directly or indirectly be a party to or approve any such
arrangement by funding claims for interest or in any other manner.
In case any such claim for interest shall be extended or funded in
violation hereof, such claim for interest shall not be entitled,
in case of any default hereunder, to the benefit or security of
this Indenture except subject to the prior payment in full of the
principal of and premium, if any, on all Bonds issued and
outstanding hereunder, and of all claims for interest which shall
not have been so extended or funded.
SECTION 6.d. Faithful Performance. The Issuer covenants that
it will faithfully perform at all times any and all covenants,
undertakings, stipulations and provisions required to be performed
by it and contained in this Indenture, in any and every Bond
executed, and delivered hereunder and in all of its proceedings
pertaining hereto. The Issuer covenants that it is duly
authorized under the laws of the State, including particularly and
without limitation the Act, to issue the Bonds authorized hereby
and to execute this Indenture, to assign the Refunding Agreement
and amounts payable under the Refunding Agreement, and to assign
the payments and amounts hereby assigned in the manner and to the
extent herein set forth; that all action on its part for the
issuance of the Bonds and the execution and delivery of this
Indenture has been duly and effectively taken.
ARTICLE IX
DEFAULT PROVISIONS AND REMEDIES
OF TRUSTEE AND BONDHOLDERS
SECTION 1.d. Events of Default. If any of the following
events occur it is hereby defined as and declared to be and to
constitute an "Event of Default":
(a) Failure in the payment when due of the interest on
any Bond or failure in the payment when due of the principal
or premium, if any, on any Bond, whether at the stated
maturity thereof, or upon proceedings for redemption thereof,
or upon the maturity thereof, by declaration or otherwise;
(b) Default in the performance or observance of any
other of the covenants, agreements or conditions on the part
of the Issuer contained in this Indenture or in the Bonds,
and the continuance thereof for a period of 60 days after
written notice given by the Trustee or by the holders of not
less than 25% in aggregate principal amount of Bonds then
outstanding as provided in Section 9.12 hereof; or
(c) The occurrence or existence of any event, omission
or circumstance which is an "Event of Default" under the
Refunding Agreement.
The term "default" shall mean the events specified in
Sections 9.1.(a), 9.1.(b) and 9.1.(c) above, exclusive of any
period of grace and irrespective of the giving of any written
notice pursuant to this Indenture or the Refunding Agreement.
SECTION 2.c. Acceleration. Upon the occurrence and
continuance of an Event of Default the Trustee may, and upon the
written request of the holders of not less than a majority in
aggregate principal amount of Bonds then outstanding shall, by
notice in writing delivered to the Issuer and the Company, declare
the principal of all Bonds then outstanding and the accrued
interest thereon to the date of declaration immediately due and
payable; provided, however, that the holders of Bonds then
outstanding may waive any such Event of Default and rescind such
declaration and its consequences as provided in Section 9.11
hereof. Upon any declaration of acceleration hereunder the Issuer
and the Trustee shall immediately declare all payments under the
Refunding Agreement to be immediately due and payable in
accordance with Section 7.2 of the Refunding Agreement.
SECTION 3.c. Trustee May Institute Suits; Proof of Claim.
Upon the occurrence and continuance of any Event of Default, the
Trustee shall have the power to, but unless requested in writing
by the holders of a majority in aggregate principal amount of the
Bonds then outstanding and furnished with satisfactory security
and indemnity as provided in Section 10.1.(i) hereof shall be
under no obligation to, institute and maintain such suits and
proceedings to prevent any impairment of the security under this
Indenture and such suits and proceedings as the Trustee may be
advised by Counsel shall be necessary or expedient to preserve or
protect its interests and the interests of the Bondholders.
The Trustee is authorized and directed, on behalf of the
Bondholders and without any further action by the Bondholders, to
file a proof or proofs of claim in any bankruptcy, receivership or
other insolvency proceeding involving the Company.
SECTION 4.c. Remedies on Events of Default. Upon the
occurrence and continuance of an Event of Default the Trustee may
proceed to pursue any available remedy to enforce the First
Preferred Vessel Mortgage and the payment of the principal of,
premium, if any, and interest on the Bonds then outstanding,
including, without limitation, mandamus.
If an Event of Default shall have occurred, and if requested
to do so by the holders of not less than a majority in aggregate
principal amount of the Bonds then outstanding and indemnified as
provided hereinafter in Section 10.1.(i) hereof, the Trustee shall
be obligated to exercise such one or more of the rights and powers
conferred by this Section and by Section 9.3 as the Trustee, being
advised by Counsel, shall deem most expedient in the interest of
the Bondholders.
No remedy by the terms of this Indenture conferred upon or
reserved to the Trustee (or to the Bondholders) is intended to be
exclusive of any other remedy, but each and every remedy shall be
cumulative and shall be in addition to any other remedy given to
the Trustee or to the Bondholders hereunder or now or hereafter
existing by law.
No delay or omission to exercise any right or power accruing
upon any default or Event of Default shall impair any such right
or power or shall be construed to be a waiver of any such default
or Event of Default or acquiescence therein; and every such right
and power may be exercised from time to time and as often as may
be deemed expedient.
No waiver of any default or Event of Default hereunder,
whether by the Trustee or by the Bondholders, shall extend to or
shall affect any subsequent default or Event of Default or shall
impair any rights or remedies consequent thereon.
SECTION 5.c. Bondholders to Direct Trustee. Anything in this
Indenture to the contrary notwithstanding, the holders of a
majority in aggregate principal amount of Bonds then outstanding
shall have the right, at any time, by an instrument or instruments
in writing executed and delivered to the Trustee, to direct the
method and place of conducting all proceedings to be taken in
connection with the enforcement of the terms and conditions of
this Indenture or any other proceedings hereunder; provided,
however, that such direction shall not be otherwise than in
accordance with the provisions of law or of this Indenture and
shall not, in the opinion of the Trustee, unduly prejudice the
rights of Bondholders who are not in such majority. Without
limitation of the foregoing, any such remedial proceeding may
include, to the extent in accordance with law and as directed by
Bondholders in accordance with the provisions of this Indenture,
including providing reasonable indemnity for all costs or
liabilities arising therefrom, forbearance or non-action on the
part of the Trustee, the acceptance by the Trustee, as mortgagee
under the First Preferred Vessel Mortgage, of a deed in lieu of
foreclosure, the sale of the property covered by the First
Preferred Vessel Mortgage free of the lien thereof for an amount
less than the amounts due with respect to the Bonds and the waiver
of claims or the granting of a covenant not to sue.
SECTION 6.c.Enforcement of Bond Documents. Notwithstanding
Section 9.5 above, or any other provision of this Indenture, the
holders of at least 75% in aggregate principal amount of the then
outstanding Bonds shall have the right to take any and all actions
in their own name for the benefit of the holders of all
outstanding Bonds to enforce this Indenture in accordance with the
provisions of this Article IX, and to enforce the Refunding
Agreement and the First Preferred Vessel Mortgage, provided that
with respect to any such action such Bondholders shall act in
concert and not individually. In addition, upon providing
reasonable indemnity for costs or liabilities arising therefrom,
such Bondholders shall have the right to act in the name of the
Trustee. In the event that such Owners elect to take such action,
they shall notify the Trustee in writing of their election and any
costs incurred in connection with the taking of such action shall
be treated as costs of the Trustee and shall be subject to the
same repayment, lien and security rights.
SECTION 7.c. Application of Moneys. All money received by
the Trustee pursuant to any right given or action taken under the
provisions of this Article shall be applied first to the payment
of the costs and expenses of the proceedings resulting in the
collection of such money and of the Administrative Expenses,
liabilities and advances incurred or made by the Trustee hereunder
except as a result of its gross negligence or bad faith. The
balance of such money, after providing for the foregoing, shall be
deposited by the Trustee in the Bond Fund and all money in the
Bond Fund shall be applied as follows:
(a) Unless the principal of all the Bonds shall have
become or shall have been declared due and payable, all such
money shall be applied:
First - To the payment to the persons entitled
thereto of all installments of interest then due on the
Bonds, in the order of maturity of the installments of
such interest and, if the amount available shall not be
sufficient to pay in full any particular installment,
then to the payment ratably, according to the amounts
due on such installment, to the persons entitled
thereto, without any discrimination or privilege; and
Second - To the payment to the persons entitled
thereto of the unpaid principal of and premium, if any,
on any of the Bonds which shall have become due (other
than Bonds called for redemption for the payment of
which money is held pursuant to the provisions of this
Indenture), in the order of their due dates, with
interest on such Bonds at the rate provided in Section
9.11 hereof from the respective dates upon which they
become due and, if the amount available shall not be
sufficient to pay in full Bonds due on any particular
date, together with such interest, then to the payment,
ratably, according to the amount of principal, and
premium, if any, due on such date, to the persons
entitled thereto without any discrimination or
privilege.
(b) If the principal of all the Bonds shall have
become due or shall have been declared due and payable, all
such money shall be applied to the payment of the principal,
premium, if any, and interest then due and unpaid upon the
Bonds, without preference or priority of principal over
interest or of interest over principal, or of any installment
of interest over any other installment of interest, or of any
Bond over any other Bond, ratably, according to the amounts
due respectively for principal, premium, if any, and interest
to the persons entitled thereto without any discrimination or
privilege.
(c) If the principal of all the Bonds shall have been
declared due and payable, and if such declaration shall
thereafter have been rescinded and annulled under the
provisions of Section 9.11 hereof, then subject to the
provisions of paragraph (b) of this Section in the event that
the principal of all the Bonds shall later become due or be
declared due and payable, the money shall be applied in
accordance with the provisions of paragraph (a) of this
Section.
Whenever money is to be applied pursuant to the provisions of
this Section, such moneys shall be applied at such times, and from
time to time, as the Trustee shall determine, having due regard to
the amount of such money available for application and the
likelihood of additional money becoming available for such
application in the future. Whenever the Trustee shall apply such
funds, it shall fix the date (which shall be an Interest Payment
Date unless it shall deem another date more suitable) upon which
such application is to be made and upon such date interest on the
amounts of principal to be paid on such date shall cease to
accrue. The Trustee shall give such notice as it may deem
appropriate of the deposit with it of any such money and of the
fixing of any such date, and shall not be required to make payment
to the holder of any Bond until such Bond shall be presented to
the Trustee for appropriate endorsement or for cancellation if
fully paid.
Whenever all the Bonds and interest thereon have been paid
under the provisions of this Section 9.7 and all expenses and
charges of the Trustee and the Issuer have been paid, any balance
remaining in the Bond Fund shall be paid as provided in Section
6.4 hereof.
SECTION 8.c. Trustee as Representative of the Bondholders.
All rights of action (including the right to file proofs of claim
under this Indenture or under any of the Bonds) may be enforced by
the Trustee without the possession of any of the Bonds or the
production thereof in any trial or other proceedings relating
thereto and any such suit or proceedings instituted by the Trustee
shall be brought in its name as Trustee without the necessity of
joining as plaintiffs or defendants any holders of the Bonds, and
any recovery of judgment shall be for the equal and ratable
benefit of the holders of the outstanding Bonds.
SECTION 9.c. Enforcement by Bondholders. Except as provided
in Section 9.6 above, no holder of any Bond shall have any right
to institute any suit, action, or proceeding for the enforcement
of any covenant or provision of this Indenture or for the
appointment of a receiver or any other remedy hereunder, unless
(i) a default has occurred of which the Trustee has been notified
as provided in Section 10.1.(g), or of which by said subsection it
is deemed to have notice; (ii) such default shall have become an
Event of Default and such Event of Default is then continuing;
(iii) the holders of not less than a majority in aggregate
principal amount of Bonds then outstanding shall have made written
request to the Trustee and shall have offered reasonable
opportunity either to proceed to exercise the powers hereinbefore
granted or to institute such action, suit or proceeding in the
Trustee's name and shall have offered to the Trustee security or
indemnity as provided in Section 10.1.(i); and (iv) the Trustee
shall thereafter fail or refuse to exercise the powers
hereinbefore granted or to institute such action, suit or
proceeding in its own name. Such notification, request and offer
of security or indemnity are hereby declared in every case at the
option of the Trustee to be conditions precedent to the execution
of the powers and trusts of this Indenture, and to any action or
cause of action for the enforcement of this Indenture, or for the
appointment of a receiver or for any other remedy hereunder, it
being understood and intended that no one or more holders of the
Bonds shall have any right in any manner whatsoever to enforce any
right hereunder except in the manner herein provided, and that all
proceedings shall be instituted, and maintained in the manner
herein provided and for the equal and ratable benefit of the
holders of all Bonds then outstanding.
Nothing in this Indenture contained shall, however, affect or
impair any right to enforcement conferred on any Bondholder by law
or right of any Bondholder to enforce the payment of the principal
of, premium, if any, and interest on any Bond at and after the
maturity thereof, or the obligation of Issuer to pay the principal
of, premium, if any, and interest on each of the Bonds issued
hereunder to the respective holders thereof at the time, place,
from the source and in the manner in said Bonds and this Indenture
expressed.
SECTION 10.c. Rights to Continue. In case the Trustee shall
have proceeded to enforce any right under this Indenture by the
appointment of a receiver or otherwise, and such proceedings shall
have been discontinued or abandoned for any reason, or shall have
been determined adversely, then and in every such case the Issuer,
the Trustee and the Bondholders shall be restored to their former
positions and rights hereunder and all rights, remedies and powers
of the Trustee shall continue as if no such proceedings had been
taken.
SECTION 11.c. Waivers of Default. To the extent not
precluded by law the Trustee may in its discretion waive any
default or Event of Default hereunder and its consequences and
rescind any declaration of maturity of principal, and shall do so
upon the written request of the holders of not less than a
majority in aggregate principal amount of all the Bonds then
outstanding; provided, however, that there shall not be waived (a)
any Event of Default in the payment of the principal or premium,
if any, of any outstanding Bonds at the date of maturity specified
therein or the date fixed for redemption thereof or (b) any Event
of Default in the payment when due of interest on any such Bonds,
unless prior to such waiver or rescission, all arrears of
interest, or all arrears of payment of principal then due, as the
case may be, together with interest (to the extent permitted by
law), at the rate per annum borne by any of the Bonds, on overdue
principal and interest, and all Administrative Expenses of the
Trustee in connection with such default shall have been paid or
provided for, and in case of any such waiver or rescission, or in
case any proceeding taken by the Trustee on account of any such
default shall have been discontinued or abandoned or determined
adversely, then and in every such case the Issuer, the Trustee and
the Bondholders shall be restored to their former positions and
rights hereunder, respectively, but no such waiver or rescission
shall extend to any subsequent or other default, or impair any
right consequent thereon.
SECTION 12.c. Right to Cure Defaults. No default specified
in Section 9.1.(b) shall constitute an Event of Default until
notice of the default by registered or certified mail shall be
given by the Trustee, or by the holders of not less than a
majority of the aggregate principal amount of Bonds then
outstanding, to the Issuer and the Company and the Issuer and the
Company shall have had 60 days after receipt of such notice to
correct said default or cause the default to be corrected, and
shall not have corrected the default or caused the default to be
corrected within such period; provided, however, if the default be
such that it can, in the opinion of the Issuer and the Company, be
corrected but not within such period, it shall not constitute an
Event of Default if corrective action is instituted by the Issuer
or the Company within such period, and the Issuer and the Company
notifies the Trustee of such corrective action and undertakes to
diligently pursue and does diligently pursue such corrective
action until the default is corrected.
With regard to any alleged default concerning which notice is
given to the Issuer and the Company under the provisions of this
Section 9.12, the Issuer has in the Refunding Agreement granted to
the Company full authority for the account of the Issuer to
perform any covenant or obligation alleged in said notice to
constitute a default, in the name and stead of the Issuer, with
full power to do any and all such things and acts to the same
extent that the Issuer could do to correct such default and
perform any such things and acts and with power of substitution to
correct such default and the Trustee hereby agrees to accept such
performance.
ARTICLE X
THE TRUSTEE AND PAYING AGENT
SECTION 1.c.Acceptance of Trust and Conditions Thereof. The
Trustee hereby accepts the trusts imposed upon it by this
Indenture, and agrees to perform said trusts, but only upon and
subject to the following express terms and conditions:
(a) The Trustee may execute any of the trusts or
powers hereof and perform any of its duties by or through
Counsel, agents, receivers or employees but shall be
answerable for the conduct of the same in accordance with the
standard specified herein, and shall be entitled to advice of
Counsel concerning all matters of trust hereof and the duties
hereunder, and may in all cases pay such reasonable
compensation to all such Counsel, agents, receivers and
employees as may reasonably be employed in connection with
the trusts hereof. The Trustee may act upon the opinion or
advice of Counsel in the exercise of its reasonable judgment.
The Trustee shall not be responsible for any loss or damage
resulting from any action or nonaction in good faith in
reliance upon such opinion or advice.
(b) The Trustee shall not be responsible for, nor have
any liability with respect to, any recital herein or in the
Bonds (except in respect of the certificate of the Trustee
endorsed on the Bonds), insuring the Project or collecting
any insurance proceeds, the maintenance, validity or
sufficiency of the security for the Bonds issued hereunder or
intended to be secured hereby, the value or title of the
Project or otherwise as to the maintenance of the security
hereof, but the Trustee may require of the Issuer or the
Company full information and advice as to the performance of
the covenants, conditions and agreements aforesaid as to the
condition of the Project.
(c) The Trustee shall not be accountable for, or have
any liability with respect to, the use of any Bonds
authenticated or delivered hereunder after such Bonds shall
have been delivered in accordance with instructions of the
Issuer. The Trustee may become the owner of Bonds secured
hereby with the same rights which it would have if it were
not the Trustee.
(d) The Trustee shall be fully protected in acting
upon any notice, request, consent, certificate, order,
affidavit, letter, telegram or other paper or document
believed to be genuine and correct and to have been signed or
sent by the proper person or persons. Any action taken by the
Trustee pursuant to this Indenture upon the request or
authority or consent of any person who at the time of making
such request or giving such authority or consent is the owner
of any Bond, shall be conclusive and binding upon all future
owners of the same Bond or portions thereof and upon Bonds
issued in exchange therefor or for portions thereof or in
place thereof.
(e) As to the existence or non-existence of any fact
or as to the sufficiency or validity of any instrument, paper
or proceeding, the Trustee shall be entitled to rely upon a
certificate of the Issuer signed by (i) the Chairman or the
Secretary of the Issuer, or (ii) any other duly authorized
person (such authority to be conclusively evidenced by an
appropriate Certified Resolution of the Issuer) or any
certificate signed by an Authorized Company Representative as
sufficient evidence of the facts therein contained, and prior
to the occurrence of a default of which the Trustee has been
notified as provided in Section 10.1.(g), or of which by said
subsection it is deemed to have notice, the Trustee shall
also be at liberty to accept a similar certificate to the
effect that any particular dealing, transaction or action is
necessary or expedient, but may at its discretion secure such
further evidence deemed necessary or advisable, but shall in
no case be bound to secure the same. The Trustee may accept
a certificate of the Secretary of the Issuer under its seal
to the effect that a resolution or ordinance in the form
therein set forth has been adopted by the Issuer as
conclusive evidence that such resolution or ordinance has
been duly adopted, and is in full force and effect.
(f) The permissive right of the Trustee to do things
enumerated in this Indenture shall not be construed as a duty
and the Trustee shall not be answerable for other than its
gross negligence, bad faith or willful misconduct.
(g) Except for (i) a default under Section 9.1(a)
hereof, or (ii) a default specified in Section 7.1(a) of the
Refunding Agreement, or (iii) the failure of the Company to
file any financial statements, documents or certificates
specifically required to be filed with the Trustee or the
Issuer pursuant to the provisions of this Indenture, the
Refunding Agreement or the First Preferred Vessel Mortgage,
or (iv) any other event of which a "responsible trust
officer" has "actual knowledge" and which event, with the
giving of notice or lapse of time or both, would constitute
an Event of Default under this Indenture or the Refunding
Agreement, the Trustee shall not be deemed to have notice of
any default or event unless specifically notified in writing
of such event by the Company, the Issuer or the holders of
not less than a majority in aggregate principal amount of the
Bonds then outstanding. The Trustee pursuant to Section 10.3
hereof, shall give notice to the Registered Owners of the
Bonds of the occurrence of any default or event of which it
has, or is deemed to have, notice pursuant to the foregoing
provisions. As used above, the term "responsible trust
officer" means the trust officer of the Trustee assigned to
supervise this Indenture, and "actual knowledge" means the
actual fact or statement of knowing, without any duty to make
any investigation with regard thereto.
(h) The Trustee shall not be required to give any bond
or surety in respect of the execution of the said trusts and
powers or otherwise in respect of the premises.
(i) Before taking any action hereunder the Trustee may
require satisfactory security or indemnity for the
reimbursement of all expenses to which it may be put and to
protect it against all liability, except liability which is
adjudicated to have resulted from gross negligence, bad faith
or willful misconduct by reason of any action so taken.
Notwithstanding the foregoing, wherever in this Indenture
provision is made for indemnity by the Owners of the Bonds,
if the Owner providing such indemnity has an aggregate net
worth or net asset value of at least $50,000,000, as set
forth in its most recent audited financial statements or as
otherwise satisfactorily demonstrated to the Trustee, at its
sole option and discretion, the Trustee may not require any
indemnity bond or other security for such indemnity. In any
case, where more than one Owner is providing indemnity, such
indemnity shall be several and not joint and, as to each such
Owner, such indemnity obligation shall not exceed its
percentage interest of outstanding Bonds of Owners providing
such indemnity. If provided indemnity, the Trustee shall
utilize counsel or other advisors designated by a majority in
interest of the indemnifying Owners to whom the Trustee has
no reasonable objection and in the event the Trustee requires
independent counsel, the costs and expenses thereof shall be
for its own account and the Trustee shall not have any right
for reimbursement against the Trust Estate or the Owners.
(j) All money received by the Trustee or any paying
agent shall, until used or applied or invested as herein
provided, be held in trust for the purposes for which it was
received but need not be segregated from other funds except
to the extent required by this Indenture or by law.
(k) The Trustee shall not be bound to make an
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture or other paper or document believed by it to be
genuine and to have been signed or presented by the proper
party or parties, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it
shall be entitled to examine during normal business hours the
books, records and premises of the Issuer, personally or by
agent or by Counsel.
(l) The Trustee, prior to the occurrence of an Event
of Default and after the curing of all Events of Default
which may have occurred, undertakes to perform such duties
and only such duties as are specifically set forth in this
Indenture and the Refunding Agreement. In case an Event of
Default has occurred (which has not been cured or waived)
Trustee shall exercise such of the rights and powers vested
in it by this Indenture and the Refunding Agreement, 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.
SECTION 2.l.Reimbursement of Administrative Expenses. The
Trustee shall be entitled to payment and/or reimbursement for
Administrative Expenses, including reasonable fees for its
services rendered hereunder and all advances, Counsel fees and
other expenses reasonably and necessarily made or incurred by the
Trustee in connection with such services under this Indenture.
The Trustee and any paying agent shall be entitled to payment and
reimbursement for their reasonable fees and charges as paying
agents for the Bonds hereinabove provided. Upon the occurrence of
an Event of Default, but only upon an Event of Default, the
Trustee and any paying agent shall have a first lien with right of
prior payment on account of interest or principal of any Bond for
the foregoing advances, fees, costs and expenses incurred by them
respectively.
The Trustee shall be entitled to be indemnified for, and be
held harmless against, any loss, liability or expense incurred
without gross negligence or bad faith on the part of the Trustee,
arising out of or in connection with the acceptance or
administration of the trusts hereunder, including the costs and
expenses of defending itself against any claim or liability in the
premises. All fees, charges and other compensation to which the
Trustee and any paying agent may be entitled under the provisions
of this Indenture are required to be paid by the Company under the
terms of the Refunding Agreement and accordingly, the Issuer shall
not be liable to indemnify the Trustee or any paying agent for
fees, charges and other compensation to which the Trustee and any
paying agent may be entitled, and by acceptance of the trusts
hereunder, the Trustee and any paying agent shall be deemed to
have agreed to the foregoing. The Company may, without creating a
default hereunder, contest in good faith the necessity for any
services and expenses of the Trustee and the reasonableness of any
of the fees, charges or expenses referred to in this Section 10.2.
SECTION 3.l.Notice to Bondholders of Event of Default. If a
default or Event of Default occurs of which the Trustee is by
reason of Section 10.1.(g) hereof required to take notice or if
notice of default is given as provided in said Section 10.1.(g),
then the Trustee shall give notice thereof within 60 days after
the occurrence thereof (unless such default shall have been cured
or waived) by mailing written notice thereof to all registered
holders of Bonds, as the names and addresses of such holders
appear in the Bond Register.
SECTION 4.l.Trustee's Right to Intervene. In any judicial
proceeding to which the Issuer is a party and which in the opinion
of the Trustee and its Counsel has a substantial bearing on the
interests of holders of the Bonds, the Trustee may intervene on
behalf of Bondholders and shall do so if requested in writing by
the holders of not less than a majority of the aggregate principal
amount of Bonds then outstanding. The rights and obligations of
the Trustee under this Section are subject to the approval of a
court of competent jurisdiction.
SECTION 5.l.Successor Trustee Upon Merger, Etc. Any
corporation or association into which the Trustee may be merged,
or with which it may be consolidated, or to which it may sell or
transfer its trust business and assets as a whole or substantially
as a whole, or any corporation or association resulting from any
such sale, merger, consolidation or transfer to which it is a
party, ipso facto, shall be and become successor Trustee hereunder
and vested with all the trusts, powers, discretions, immunities,
privileges and all other matters as was its predecessor, without
the execution or filing of any instrument or any further acts,
deed or conveyance on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
SECTION 6.l.Resignation of Trustee. A Trustee and any
successor Trustee may resign by giving 60 days' written notice to
the Issuer and the Company and by first class mail to each
registered owner of Bonds then outstanding as shown on the records
of the Trustee. Such resignation shall take effect only upon the
appointment of a successor Trustee by the Bondholders or by the
Issuer as hereinafter provided. Such notice to the Issuer and the
Company may be served personally or sent by registered mail or
telegram.
SECTION 7.l.Removal of Trustee. The Trustee may be removed
at any time by an instrument or concurrent instruments in writing
delivered to the Trustee, the Issuer and the Company by the owners
of a majority in aggregate principal amount of Bonds then
outstanding.
SECTION 8.l.Appointment of Successor Trustee. In case the
Trustee hereunder shall resign or be removed, or be dissolved, or
shall be in the course of dissolution or liquidation, or otherwise
become incapable of acting hereunder, or in the case it shall be
taken under control of any public officer or officers, or of a
receiver appointed by a court, a successor may be appointed by the
owners of a majority in aggregate principal amount of Bonds then
outstanding, by an instrument or concurrent instruments in writing
signed by such owners, or by their attorneys-in-fact, duly
authorized; provided, however, that in case of such vacancy the
Issuer, at the direction of the Company by an instrument executed
and signed by the Chairman of the Issuer and under its seal
attested by its Secretary, shall forthwith appoint a temporary
Trustee to fill such vacancy until a successor Trustee shall be
appointed by the Bondholders in the manner above provided (subject
to the approval of the Company provided that the Company is not in
default under the Refunding Agreement), and any such temporary
Trustee as appointed by the Issuer shall immediately and without
further act be superseded by the successor Trustee so appointed by
such Bondholders. Every such Trustee and temporary Trustee
appointed pursuant to the provisions of this Section shall be a
corporation organized and doing business under the laws of the
United States of America or of any state, authorized under such
laws to exercise corporate trust powers having a reported capital
and surplus of not less than $50,000,000, subject to supervision
or examination by federal or state authority, if there be such an
institution willing, qualified and able to accept the trust upon
reasonable or customary terms.
SECTION 9.l.Acceptance by Successor Trustee. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver
to its predecessor and also to the Issuer and the Company an
instrument in writing accepting such appointment hereunder, and
thereupon such successor, without any further act, deed or
conveyance, shall become fully vested with all the estates,
properties, rights, powers, trusts, duties and obligations of its
predecessors; but such predecessor Trustee shall, nevertheless, on
the written request of the Issuer, or of its successor, execute
and deliver an instrument transferring to such successor Trustee
all the estates, properties, rights, powers and trusts, duties and
obligations of such predecessor hereunder, and every predecessor
Trustee shall deliver all securities and money held by it as
Trustee hereunder to its successor. Should any instrument in
writing from the Issuer be required by a successor Trustee for
more fully and certainly vesting in such successor the estate,
rights, powers and duties hereby vested or intended to be vested
in the predecessor, any and all such instruments in writing shall,
on request, be executed, acknowledged and delivered by the Issuer.
SECTION 10.l.Reliance Upon Instruments. The ordinances,
resolutions, opinions, certificates and other instruments provided
for in this Indenture may, in the absence of actual knowledge to
the contrary, be accepted by the Trustee as conclusive evidence of
the facts and conclusions stated therein and shall be full
warrant, protection and authority to the Trustee for the
withdrawal of cash hereunder, and the taking or omitting to take
of any other action under this Indenture.
SECTION 11.l.Former Trustee No Longer Custodian or Paying
Agent. Any Trustee which has resigned or been removed shall cease
to be custodian of the funds, Bond Registrar and paying agent for
principal, premium, if any, and interest on the Bonds and the
successor Trustee shall become such custodian, Bond Registrar and
paying agent.
SECTION 12.l.Directions from Company; Company May Perform.
Whenever after a reasonable request by the Company the Issuer
shall fail, refuse or neglect to give any direction to the Trustee
or to require the Trustee to take any other action which the
Issuer is required to have the Trustee take pursuant to the
provisions of the Refunding Agreement or this Indenture, the
Company instead of the Issuer may give any such direction to the
Trustee or require the Trustee to take any such action, and the
Trustee is hereby irrevocably empowered and directed to accept
such direction from the Company as sufficient for all purposes of
this Indenture. The Company shall have the right to cause the
Trustee to comply with any of the Trustee's obligations under this
Indenture to the same extent that the Issuer is empowered so to
do.
The Issuer and the Trustee acknowledge that certain actions
or failures to act by the Issuer under this Indenture may create
or result in a default hereunder and the Issuer hereby agrees that
the Company may perform any and all acts or take such action as
may be necessary for and on behalf of the Issuer to prevent or
correct said default and the Trustee agrees that it shall take or
accept such performance by the Company as performance by the
Issuer in such event.
ARTICLE XI
SUPPLEMENTAL INDENTURES
SECTION 1.l.Supplemental Indentures Not Requiring Consent of
Bondholders. The Issuer and the Trustee may without the consent
of, or notice to, any of the Bondholders, enter into an indenture
or indentures supplemental to this Indenture as shall not be
inconsistent with the terms and provisions hereof for any one or
more of the following purposes:
(a) To add to the covenants and agreements of the
Issuer contained in this Indenture other covenants and
agreements thereafter to be observed, and to surrender any
right or power herein reserved to or conferred upon the
Issuer.
(b) To modify any of the provisions of this Indenture
or relieve the Issuer from any of the obligations,
conditions, or restrictions herein contained; provided, that
no such modification or release shall be or become operative
or effective which shall in any manner impair any of the
rights of the Bondholders or the Trustee; and provided
further, that the Trustee may in its sole discretion decline
to enter into any such supplemental indenture which in its
opinion may not afford adequate protection to the Trustee
when the same shall become operative.
(c) To cure any ambiguity or to cure, correct, or
supplement any defect or inconsistent provision contained in
this Indenture or in any supplemental indenture in a manner
which, in the opinion of bond counsel of nationally
recognized standing, is not adverse to the interests of the
Bondholders.
(d) To make such provision in regard to matters or
questions arising under this Indenture as may be necessary or
desirable and not inconsistent with this Indenture and not,
in the opinion of bond counsel of nationally recognized
standing, adverse to the interests of the Bondholders.
(e) To make any other change which, in the opinion of
bond counsel of nationally recognized standing, does not
materially adversely affect the rights of the Issuer or any
Bondholder.
SECTION 2.e.Supplemental Indentures Requiring Consent of
Bondholders. Exclusive of Supplemental Indentures covered by
Section 11.1 hereof and subject to the terms and provisions
contained in this Section 11.2, and not otherwise, the holders of
not less than a majority in aggregate principal amount of the
Bonds then outstanding shall have the right, from time to time,
anything contained in this Indenture to the contrary
notwithstanding, to consent to and approve the execution by the
Issuer and the Trustee of such other indenture or indentures
supplemental hereto as shall be deemed necessary or desirable by
the Issuer for the purpose of modifying, altering, amending,
adding to or rescinding, in any particular, any of the terms or
provisions contained in this Indenture or in any Supplemental
Indenture; provided, however, that nothing in this Indenture
contained shall permit, or be construed as permitting without the
consent of the holders of all Bonds then outstanding and affected
thereby (a) an extension of the maturity of the principal of, or
the interest on, or redemption date of any Bond issued hereunder,
(b) a reduction in the principal amount of any Bond or the rate of
interest or redemption premium thereon, (c) a privilege or
priority of any Bond or Bonds over any other Bond or Bonds, (d) a
reduction in the aggregate principal amount of the Bonds required
for consent to such modification, amendment or Supplemental
Indenture, or (e) impairment of the exclusion from gross income
for federal income tax purposes of interest on any of the
outstanding Bonds.
If at any time the Issuer shall request the Trustee to enter
into such Supplemental Indenture for any of the purposes of this
Section 11.2, the Trustee shall, upon being satisfactorily
indemnified with respect to expenses, cause notice of proposed
execution of such Supplemental Indenture to be given by mailing a
notice by first class mail, postage prepaid to the registered
owners of the Bonds at the registered addresses shown on the Bond
Register of the Trustee. Such notice shall briefly set forth the
nature of the proposed Supplemental Indenture and shall state that
copies thereof are on file at the principal office of the Trustee
for inspection by all Bondholders. If, within 60 days or such
longer period as shall be prescribed by the Issuer following the
giving of such notice, the holders of not less than a majority in
aggregate principal amount of the Bonds outstanding shall have
consented and approved the execution thereof as herein provided,
no holder of any Bond shall have any right to object to any of the
terms and provisions contained therein, or the operation thereof,
or in any manner to question the propriety of the adoption
thereof, or to enjoin or restrain the Trustee or the Issuer from
taking any action pursuant to the provisions thereof. Upon the
execution of any such Supplemental Indenture as in this Section
11.2 permitted and provided, this Indenture shall be and be deemed
to be modified and amended in accordance therewith.
SECTION 3.e.Consent of the Company and the Trustee. Anything
herein to the contrary notwithstanding, a Supplemental Indenture
under this Article XI shall not become effective unless and until
the Company shall have consented to execution of such Supplemental
Indenture, provided that the Company is not in default under the
terms of the Refunding Agreement. The Company shall be deemed to
have consented to the execution of any such Supplemental Indenture
if the Issuer does not receive a letter of protest or objection
thereto signed by or on behalf of the Company on or before 3:30
p.m. local time in the City of New York, New York, of the 30th day
after the delivery of a notice and a copy of the proposed
Supplemental Indenture to Company by registered or certified mail.
If the Company is so deemed to have consented to execution of any
such Supplemental Indenture, the Issuer shall furnish to the
Trustee a certificate that the Issuer has not received the
necessary letter of protest or objection within the required time
period, and in relying upon such certificate, the Trustee shall be
fully protected from liability.
Anything herein to the contrary notwithstanding, a
Supplemental Indenture under this Article XI which affects any
rights of the Trustee shall not become effective unless and until
the Trustee shall have consented in writing to the execution of
such Supplemental Indenture.
ARTICLE XII
AMENDMENT OF REFUNDING AGREEMENT
SECTION 1.e.Amendment to Refunding Agreement Not Requiring
Consent of Bondholders. The Issuer and the Trustee may without
the consent of or notice to the Bondholders consent to any
modification or amendment of the Refunding Agreement as may be
required (i) by the provisions of the Refunding Agreement or this
Indenture, (ii) for the purpose of curing any ambiguity or formal
defect or omission in a manner not adverse to the interest of the
Bondholders, or (iii) in connection with any other change therein
which, in the judgment of the Trustee, is not adverse to the
interests of the Trustee or the Bondholders.
SECTION 2.e.Amendment to Refunding Agreement Requiring
Consent of Bondholders. Except for the modifications or
amendments as provided in Section 12.1 hereof, neither the Issuer
nor the Trustee shall consent to any other modification or
amendment of the Refunding Agreement without the giving of notice
and the written approval or consent of the holders of not less
than a majority in aggregate principal amount of the Bonds then
outstanding given and procured as in Section 11.2 provided. If at
any time the Issuer and the Company shall request the consent of
the Trustee to any such proposed modification or amendment of the
Refunding Agreement, the Trustee shall, upon being satisfactorily
indemnified with respect to expenses, cause notice of such
proposed modification or amendment to be given in the same manner
as provided by Section 11.2 hereof with respect to Supplemental
Indentures. Such notice shall briefly set forth the nature of
such proposed modification or amendment and shall state that
copies of the instrument embodying the same are on file at the
principal office of the Trustee for inspection by all Bondholders.
If within 60 days or such longer period as shall be prescribed by
the Issuer following the mailing of such notice, the holders of
not less than a majority in aggregate principal amount of the
Bonds outstanding at the time of the execution of any such
modification or amendment of the Refunding Agreement shall have
consented to and approved the execution thereof as herein
provided, no holder shall be entitled to object to the terms and
provisions contained therein, or the operation thereof, or to
question the propriety of the execution thereof, or to enjoin or
restrain the Company or the Issuer from executing the same or from
taking any action pursuant to the provisions thereof. Upon the
execution of any such modification or amendment of the Refunding
Agreement in this Section 12.2 permitted and provided, the
Refunding Agreement shall be deemed to be modified and amended in
accordance therewith. Nothing in this Section contained shall
permit, or be construed as permitting, any reduction in or
postponement or extension of the Repayments required to be paid
pursuant to Section 3.1 of the Refunding Agreement or any
reduction in the percentage of holders of outstanding Bonds whose
consent is required for any such change, modification or
alteration without the consent of the holders of all Bonds then
outstanding.
Anything herein to the contrary notwithstanding, any
modification or amendment of the Refunding Agreement under this
Article XII which affects any rights of the Trustee shall not
become effective unless and until the Trustee shall have consented
in writing to the execution of any such modification or amendment
of the Refunding Agreement.
ARTICLE XIII
DEFEASANCE
SECTION 1.e.Discharge of Bonds; Release of Security. If the
Issuer shall pay or cause to be paid to the holders of all
outstanding Bonds the principal, premium, if any, and interest due
or to become due thereon at the times and in the manner stipulated
therein and herein, and if the Issuer shall have kept, performed
and observed all and singular the covenants and promises in the
Bonds and in this Indenture expressed as to be kept, performed and
observed by it or on its part, then the pledge of any of the
Dedicated Revenues of the Issuer under this Indenture and all
covenants, agreements and other obligations of the Issuer to the
holders shall cease, terminate and be void. In such event the
Trustee shall execute and deliver to the Issuer such instruments
in writing as shall be requisite to evidence the discharge and
satisfaction of the Issuer's obligations under this Indenture, and
assign and deliver to the Issuer any property at the time which
may then be in its possession, except amounts required to be paid
to the Company under Section 6.4 hereof, which shall be assigned
and delivered to the Company, and except cash or securities held
by the Trustee for the payment of principal (and premium, if any)
and of interest on the Bonds.
The principal of, premium, if any, and interest on the Bonds
shall, prior to the maturity or redemption date thereof, be deemed
to have been paid within the meaning and with the effect expressed
in this Article if (a) there shall have been deposited with the
Trustee either (i) money in an amount which shall be sufficient or
(ii) non-callable Government Obligations the principal of and
interest on which, when due, and without further reinvestment,
will provide money, which together with the money (if any)
deposited with the Trustee at the same time, shall be sufficient,
to pay when due the principal of, premium, if any, and interest
due and to become due on said Bonds on and prior to the redemption
date or maturity date thereof, as the case may be, and (b) in the
case of such redemption, notice of such redemption shall have been
duly given or, in the event Bonds are not by their terms subject
to redemption within the next succeeding 60 days, the Issuer shall
have given the Trustee in form satisfactory to it irrevocable
instructions to give a notice to the Bondholders that the deposit
required by (a) above has been made with the Trustee and that said
Bonds are deemed to have been paid in accordance with this Article
and stating such maturity or redemption date upon which money is
available for payment of the principal of, premium, if any, and
interest on said Bonds. Said notice shall be given in the manner
set forth in Section 7.3 hereof. Neither non-callable Government
Obligations nor money deposited with the Trustee pursuant hereto
shall be used for any purpose other than, and shall be held in
trust for, the payment of the principal of, premium, if any, and
interest on said Bonds; provided, however, that any cash received
from such principal or interest payments on such non-callable
Government Obligations deposited with the Trustee, not then needed
for such purpose, may, to the extent practicable, be reinvested in
Government Obligations and interest earned from such reinvestment
shall be paid over to the Company, after all such Bonds have been
fully paid as to principal, interest and redemption premium, if
any.
ARTICLE XIV
MISCELLANEOUS
SECTION 1.e.Beneficiaries. With the exception of rights
herein expressly conferred, nothing expressed or mentioned in or
to be implied from this Indenture or the Bonds is intended to or
shall be construed to give any person other than the Issuer, the
Trustee, the Company and the holders of the Bonds, any legal or
equitable right, remedy or claim under or in respect to this
Indenture, or any covenants, conditions and provisions herein
contained; this Indenture and all of the covenants, conditions and
provisions hereof being intended to be and being for the sole and
exclusive benefit of such persons.
SECTION 2.e.Severability. If any of the provisions of this
Indenture shall be held or deemed to be or shall, in fact, be
inoperative or unenforceable as applied in any particular case in
any jurisdiction or jurisdictions or in all jurisdictions, or in
all cases, because it conflicts with any other provision or
provisions hereof or any constitution or statute or rule or public
policy, or for any other reason, such circumstances shall not have
the effect of rendering the provision in question inoperative or
unenforceable in any other case or circumstance, or of rendering
any other provision or provisions herein contained invalid,
inoperative, or unenforceable to any extent whatever.
The invalidity of any one or more phrases, sentences, clauses
or Sections in this Indenture shall not affect the remaining
portions thereof.
SECTION 3.e.Notices. All notices, certificates, requests,
complaints, demands, or other communications hereunder shall be
deemed sufficiently given when delivered in writing as follows:
If to the Issuer:Board of Commissioners of the
Port of New Orleans
P. O. Box 60046
New Orleans, LA 70160
Attention: President and Chief Executive
Officer
If to the Company:Avondale Industries, Inc.
5100 River Road
Avondale, LA 70094
Attention: Chief Financial Officer
If to the Trustee:First National Bank of Commerce
210 Baronne Street
New Orleans, LA 70112
Attention: Corporate Trust Department
The Issuer, the Company and the Trustee may by notice given
hereunder designate any further or different addresses to which
subsequent notices, certificates, requests, complaints, demands or
other communications hereunder shall be sent.
SECTION 4.e.Legal Holiday on Payment Dates. In any case
where the date of maturity of interest on or principal of the
Bonds or the date fixed for redemption of any Bonds shall not be a
Business Day, the payment of interest or principal, and premium,
if any, need not be made on such day but may be made on the next
succeeding Business Day, with the same force and effect as if made
on the date of maturity or the date fixed for redemption, and no
interest shall accrue for the period after such date.
SECTION 5.e.No Recourse Against Issuer. No recourse under or
upon any obligations, covenants or agreements of this Indenture,
or of any Bond, or in any way based thereon or otherwise in
respect thereof, shall be had against any past, present or future
member or officer, as such, of the Issuer or any successor body
politic, either directly or through the Issuer, whether by virtue
of any constitution, statute or rule of law, or by the enforcement
of any assessment or penalty or otherwise, all such liability
being hereby expressly waived and released as a condition of and
as consideration for, the execution of this Indenture and the
issue of the Bonds.
SECTION 6.e.Counterparts. This Indenture may be executed in
any number of counterparts, each of which shall be an original,
but such counterparts shall together constitute but one and the
same instrument.
SECTION 7.e.Applicable Law. This Indenture and each Bond
shall be deemed to be a contract made under the laws of the State
and for all purposes shall be construed in accordance with the
laws of the State.
[BALANCE OF PAGE LEFT BLANK INTENTIONALLY]
IN WITNESS WHEREOF, the Issuer has caused this Indenture to
be executed by its President and Chief Executive Officer
thereunto duly authorized and its seal to be hereunto affixed and
attested by its Secretary, and the Trustee has caused this
Indenture to be executed by a Trust Officer thereunto duly
authorized and its corporate seal to be hereunto affixed and
attested by a Vice President and Trust Officer, all as of the day
and year first above written in the presence of the undersigned
competent witnesses.
BOARD OF COMMISSIONERS OF
PORT OF NEW ORLEANS
By: \s\ J. Ron Brinson
ATTEST: President & Chief Executive Officer
By: \s\Signature Unreadable
[SEAL]
Secretary
WITNESSES:
\s\ Denise K. Pugh
\s\ Jane B. Pugh
FIRST NATIONAL BANK OF
COMMERCE, as Trustee
ATTEST: By:\s\ Timothy C. Brennan
Trust Officer
By: \s\ Dennis Milliner
Vice President and
Trust Officer
[SEAL]
WITNESSES:
\s\ Denise K. Pugh
\s\ Jane B. Pugh
Trust Indenture
Table of Contents
PREAMBLE............................................................ 1
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions.......................................... 4
ARTICLE II
DESCRIPTION, AUTHORIZATION,
MANNER OF EXECUTION, AUTHENTICATION,
REGISTRATION AND TRANSFER OF BONDS
SECTION 2.1. Bonds as Limited Obligations of Issuer............... 9
SECTION 2.2. Issuance and Payment Terms of Bonds.................. 9
SECTION 2.3. Bond Register........................................11
SECTION 2.4. Recital..............................................11
SECTION 2.5. Transfer of Bonds....................................11
SECTION 2.6. Registered Owners....................................12
SECTION 2.7. Temporary Bonds......................................12
SECTION 2.8. Facsimile Signatures.................................12
SECTION 2.9. Mutilated, Lost, Destroyed or Stolen Bonds...........13
SECTION 2.10. Authentication of Bonds by Trustee...................13
SECTION 2.11. Destruction of Bonds.................................13
SECTION 2.12. Book-Entry Registration of Bonds.....................13
ARTICLE III
AUTHENTICATION AND DELIVERY OF BONDS
SECTION 3.1. All Bonds Equally and Ratably Secured................15
SECTION 3.2. Conditions of Authentication.........................15
ARTICLE IV
PROCEEDS OF BONDS
SECTION 4.1. Proceeds of Bonds...................................17
ARTICLE V
PLEDGE AND ASSIGNMENT; BOND FUND;
DEBT SERVICE RESERVE FUND
SECTION 5.1. Pledge of Dedicated Revenues........................18
SECTION 5.2. Bond Fund...........................................18
SECTION 5.3. Deposits into Bond Fund.............................18
SECTION 5.4. Use of Moneys in Bond Fund..........................18
SECTION 5.5. Bond Fund and Debt Service Reserve Fund Sufficient to
Pay All Bonds.......................................18
SECTION 5.6. Creation of the Debt Service Reserve Fund; Payments
Into the Debt Service Reserve Fund..................19
SECTION 5.7. Use of Moneys in the Debt Service Reserve Fund;
Investment of Debt Service Reserve Fund Moneys......19
ARTICLE VI
SECURITY FOR AND INVESTMENT OF MONEY
SECTION 6.1. Moneys Held in Trust................................21
SECTION 6.2. Bond Fund Investments...............................21
SECTION 6.3. Arbitrage Bond Covenant.............................21
SECTION 6.4. Balance in the Bond Fund and Debt Service Reserve Fund
After Payment of the Bonds......................21
ARTICLE VII
REDEMPTION OF BONDS
SECTION 7.1. Redemption of the Bonds..............................22
SECTION 7.2. Partial Redemption...................................24
SECTION 7.3. Notice of Redemption.................................24
SECTION 7.4. Effect of Redemption.................................25
ARTICLE VIII
PARTICULAR COVENANTS
SECTION 8.1. Payment of Principal, Premium and Interest..........26
SECTION 8.2. Trustee Authorized to Require Company to Make
Payments............................................26
SECTION 8.3. Take Further Action.................................26
SECTION 8.4. No Disposition of Revenues..........................26
SECTION 8.5. No Extensions.......................................26
SECTION 8.6. Faithful Performance................................26
ARTICLE IX
DEFAULT PROVISIONS AND REMEDIES
OF TRUSTEE AND BONDHOLDERS
SECTION 9.1. Events of Default...................................27
SECTION 9.2. Acceleration........................................27
SECTION 9.3. Trustee May Institute Suits; Proof of Claim.........27
SECTION 9.4. Remedies on Events of Default.......................28
SECTION 9.5. Bondholders to Direct Trustee.......................28
SECTION 9.6. Enforcement of Bond Documents.......................28
SECTION 9.7. Application of Moneys...............................29
SECTION 9.8. Trustee as Representative of the Bondholders........30
SECTION 9.9. Enforcement by Bondholders..........................30
SECTION 9.10. Rights to Continue..................................30
SECTION 9.11. Waivers of Default..................................31
SECTION 9.12. Right to Cure Defaults..............................31
ARTICLE X
THE TRUSTEE AND PAYING AGENT
SECTION 10.1. Acceptance of Trust and Conditions Thereof...........32
SECTION 10.2. Reimbursement of Administrative Expenses.............34
SECTION 10.3. Notice to Bondholders of Event of Default............34
SECTION 10.4. Trustee's Right to Intervene.........................35
SECTION 10.5. Successor Trustee Upon Merger, Etc...................35
SECTION 10.6. Resignation of Trustee...............................35
SECTION 10.7. Removal of Trustee...................................35
SECTION 10.8. Appointment of Successor Trustee.....................35
SECTION 10.9. Acceptance by Successor Trustee......................36
SECTION 10.10. Reliance Upon Instruments............................36
SECTION 10.11. Former Trustee No Longer Custodian or Paying Agent...36
SECTION 10.12. Directions from Company; Company May Perform.........36
ARTICLE XI
SUPPLEMENTAL INDENTURES
SECTION 11.1. Supplemental Indentures Not Requiring Consent of
Bondholders..........................................37
SECTION 11.2. Supplemental Indentures Requiring Consent of
Bondholders..........................................37
SECTION 11.3. Consent of the Company and the Trustee...............38
ARTICLE XII
AMENDMENT OF REFUNDING AGREEMENT
SECTION 12.1. Amendment to Refunding Agreement Not Requiring Consent
of Bondholders.......................................39
SECTION 12.2. Amendment to Refunding Agreement Requiring Consent of
Bondholders..........................................39
ARTICLE XIII
DEFEASANCE
SECTION 13.1. Discharge of Bonds; Release of Security..............40
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1. Beneficiaries........................................41
SECTION 14.2. Severability.........................................41
SECTION 14.3. Notices..............................................41
SECTION 14.4. Legal Holiday on Payment Dates.......................42
SECTION 14.5. No Recourse Against Issuer...........................42
SECTION 14.6. Counterparts.........................................42
SECTION 14.7. Applicable Law.......................................42
EXHIBIT A Bond Form
EXHIBIT B Letter of Representations of The Depository Trust
Company
EXHIBIT A
TO TRUST INDENTURE
[FORM OF FACE OF BOND]
No. R-__ CUSIP ____________
[Unless this Bond is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer
or its agent for registration of transfer, exchange, or payment, and
any Bond issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and
any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the Registered Owner hereof, Cede & Co., has an
interest herein.]
United States of America
State of Louisiana
Board of Commissioners of the Port of New Orleans
Industrial Revenue Refunding Bond
(Avondale Industries, Inc. Project)
Series 1994
Maturity Date: Date of Conversion to Fixed Rate:
Registered Owner:
Date of this Bond: Fixed Rate:
Principal Amount:
The Board of Commissioners of the Port of New Orleans, a political
subdivision of the State of Louisiana (the "Issuer"), and its
successors and assigns, acknowledges itself indebted for value received
and hereby promises to pay, solely from the sources specified herein
and not otherwise, to the Registered Owner, or registered assigns, on
the Maturity Date stated above, unless paid earlier as provided below,
the Principal Amount shown above, unless redeemed prior thereto as
hereinafter provided, upon presentation and surrender hereof at the
principal corporate trust office of First National Bank of Commerce, of
New Orleans, Louisiana, as trustee (the "Trustee"), and to pay interest
on such Principal Amount from the date hereof, payable semiannually on
June 1 and December 1 (each an "Interest Payment Date"), commencing
December 1, 1994, until the date on which this Bond becomes due,
whether at maturity, by acceleration or redemption. Interest on this
Bond due on each Interest Payment Date is payable by check or draft
mailed to the person who is listed as the Registered Owner hereof as of
the close of business on the fifteenth (15th) day of the calendar month
preceding each Interest Payment Date (the "Regular Record Date") at his
or her address as it appears on the Bond Register; and provided
further, that a Bondholder of $1,000,000 or more in aggregate principal
amount of the Bonds may request in writing payment of interest on such
Bonds in immediately available funds by wire transfer to the bank
account number of such owner furnished to the Trustee not less than
seven (7) days prior to such Interest Payment Date. The principal of,
redemption premium, if any, and interest on this Bond are payable in
any coin or currency of the United States of America which, at the time
of payment, is legal tender for the payment of public and private
debts.
The Bonds shall bear interest at a Variable Rate as defined in the
Indenture dated as of April 1, 1994, between the Issuer and the Trustee
(the "Indenture"), to but excluding the Fixed Rate Conversion Date (as
defined in the Indenture), and from the Fixed Rate Conversion Date at
the Fixed Rate (as defined in the Indenture) but in no event shall
either the Variable Rate or the Fixed Rate exceed 9% per annum. The
Trustee shall note on the face of the Bond the date of the Fixed Rate
Conversion Rate and the Fixed Rate.
This Bond shall not be valid or become obligatory for any other
purpose or be entitled to any security or benefit under the Indenture
until the Certificate of Authentication inscribed hereon shall have
been signed by the Trustee.
[FOR SO LONG AS THIS BOND IS HELD IN BOOK-ENTRY FORM REGISTERED IN
THE NAME OF CEDE & CO. ON THE REGISTRATION BOOKS OF THE ISSUER KEPT BY
THE TRUSTEE, AS BOND REGISTRAR, THIS BOND, IF CALLED FOR PARTIAL
REDEMPTION IN ACCORDANCE WITH THE INDENTURE, SHALL BECOME DUE AND
PAYABLE ON THE REDEMPTION DATE DESIGNATED IN THE NOTICE OF REDEMPTION
GIVEN IN ACCORDANCE WITH THE INDENTURE AT, AND ONLY TO THE EXTENT OF,
THE REDEMPTION PRICE, PLUS ACCRUED INTEREST TO THE SPECIFIED REDEMPTION
DATE; AND THIS BOND SHALL BE PAID, TO THE EXTENT SO REDEEMED, (i) UPON
PRESENTATION AND SURRENDER THEREOF AT THE OFFICE SPECIFIED IN SUCH
NOTICE OR (ii) AT THE WRITTEN REQUEST OF CEDE & CO., BY CHECK OR DRAFT
MAILED TO CEDE & CO. BY THE TRUSTEE OR BY WIRE TRANSFER TO CEDE & CO.
BY THE TRUSTEE IF CEDE & CO. AS BONDOWNER SO ELECTS. IF, ON THE
REDEMPTION DATE, MONEYS FOR THE REDEMPTION OF BONDS OF SUCH MATURITY TO
BE REDEEMED, TOGETHER WITH INTEREST TO THE REDEMPTION DATE, SHALL BE
HELD BY THE TRUSTEE SO AS TO BE AVAILABLE THEREFOR ON SUCH DATE, AND
AFTER NOTICE OF REDEMPTION SHALL HAVE BEEN GIVEN IN ACCORDANCE WITH THE
INDENTURE, THEN, FROM AND AFTER THE REDEMPTION DATE, THE AGGREGATE
PRINCIPAL AMOUNT OF THIS BOND SHALL BE IMMEDIATELY REDUCED BY AN AMOUNT
EQUAL TO THE AGGREGATE PRINCIPAL AMOUNT THEREOF SO REDEEMED,
NOTWITHSTANDING WHETHER THIS BOND HAS BEEN SURRENDERED TO THE TRUSTEE
FOR CANCELLATION.]
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH
ON THE REVERSE SIDE HEREOF WHICH SHALL FOR ALL PURPOSES HAVE THE SAME
EFFECT AS THOUGH FULLY SET FORTH HEREIN.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and
things required by the Constitution and statutes of the State of
Louisiana and the Indenture to exist, to have happened and to have been
performed precedent to and in the issuance of this Bond do exist, have
happened and have been performed in due form, time and manner as
required by law.
IN WITNESS WHEREOF, the BOARD OF COMMISSIONERS OF THE PORT OF NEW
ORLEANS has caused this Bond to be executed in its name and on its
behalf by the facsimile signature of its President and Chief Executive
Officer, and a facsimile of its official seal to be imprinted hereon,
attested by the facsimile signature of its Secretary.
BOARD OF COMMISSIONERS OF THE
PORT OF NEW ORLEANS
By:
____________________________________
ATTEST: President and Chief Executive
Officer
By: ___________________________________ [SEAL]
Secretary
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the within mentioned
Indenture.
FIRST NATIONAL BANK OF COMMERCE,
as Trustee
By:
____________________________________
Authorized Officer
DATE OF AUTHENTICATION:
__________________________
[FORM OF REVERSE OF BOND]
This Bond is one of an authorized issue of bonds of the Issuer in
the aggregate principal amount of $36,250,000, designated as
"Industrial Revenue Refunding Bonds (Avondale Industries, Inc. Project)
Series 1994" (the "Bonds"), authorized by a resolution adopted by the
Issuer on March 31, 1994 and issued under and secured by the Indenture
in full conformity with the Constitution and laws of the State of
Louisiana, including particularly the provisions of Chapter 14-A of
Title 39 of the Louisiana Revised Statutes of 1950, as amended. The
Bonds are issued for the purpose of refunding the Issuer's Industrial
Revenue Bonds (Avondale Shipyards, Inc. Project) Series 1983 (the
"Series 1983 Bonds") in the aggregate principal amount of $36,250,000,
all of which are outstanding as of the date hereof. The Series 1983
Bonds were issued for the purpose of providing funds to refund the
Issuer's outstanding Industrial Revenue Bonds (Avondale Shipyards, Inc.
Project) Series 1981 (the "Series 1981 Bonds"), which Series 1981 Bonds
were issued for the purpose of providing funds to finance the cost of
the acquisition, construction and installation of a floating drydock
and land-based support facilities for the repair and maintenance of
various types of vessels (the "Project"), which drydock is located
between mile markers 106 and 107 on the right descending bank of the
Mississippi River at the downriver end of the main shipyard of Avondale
Industries, Inc., a Louisiana corporation (the "Company"), located at
5100 River Road, Avondale, Louisiana, in Jefferson Parish, within the
jurisdiction of the Issuer as a part of the public port of the Issuer.
The initial owner and operator of the Project was Avondale Shipyards,
Inc., a Louisiana corporation, and the current owner and operator of
the Project is the Company, successor to Avondale Shipyards, Inc..
This Bond and the series of which it forms a part are limited
obligations of the Issuer and are payable solely from payments to be
made by the Company to the Trustee for the benefit of the Issuer
(except payments with respect to the indemnification or reimbursement
of certain expenses of the Issuer) under a Refunding Agreement dated as
of April 1, 1994, between the Issuer and the Company (the "Refunding
Agreement"), and including all money on deposit in the Debt Service
Reserve Fund (as defined in the Indenture) and all money received under
the Refunding Agreement to be paid into the Bond Fund (as defined in
the Indenture), including the income thereon and investment thereof, if
any, and, in certain events, amounts attributable to Bond proceeds or
amounts obtained through the exercise of certain remedies provided for
in the Indenture. The Bonds are further secured by a First Preferred
Vessel Mortgage on the 650 foot floating drydock constituting a portion
of the Project, granted by the Company to the Trustee. The Bonds shall
never constitute an indebtedness or general obligation of the Issuer or
the State of Louisiana within the meaning of any constitutional or
statutory provision or limitation of indebtedness and shall never
constitute or give rise to a pecuniary liability of the Issuer or the
State of Louisiana or a charge or pledge against the general credit or
taxing power of either. The holder of this Bond shall have no right to
enforce the provisions of the Indenture or to institute action to
enforce the covenants therein, or to take any action with respect to
any event of default under the Indenture, or to institute, appear in or
defend any suit or proceedings with respect thereto, except as provided
in the Indenture.
Reference is hereby made to the Indenture and to all indentures
supplemental thereto or amendatory thereof for a full and complete
statement of the provisions with respect to the custody and application
of the proceeds of the Bonds, the collection and disposition of the
Dedicated Revenues of the Issuer pledged as security for the payment of
the Bonds and the rights of the holders of the Bonds, the terms and
conditions on which, and the purposes for which, the Bonds are issued
and the rights, duties and obligations of the Issuer and the Trustee
thereunder, to all of which the holder hereof, by acceptance of this
Bond, assents. By acceptance of this Bond, the holder hereof
irrevocably appoints the Trustee under the Indenture as the special
attorney-in-fact for such holder vested with full power on behalf of
the holder hereof to effect and enforce the provisions of the Indenture
for the benefit of the holder hereof.
To the extent permitted by and as provided in the Indenture,
modifications or alterations of the Indenture, or of any indenture
supplemental thereto, and of the rights and obligations of the Issuer
and of the holders of the Bonds in any particular may be made with the
consent of the holders of not less than a majority in aggregate
principal amount of the Bonds then outstanding under the Indenture;
provided, however, that no such modification or alteration shall be
made without the consent of the holders of all Bonds then outstanding
and affected thereby which will permit (a) an extension of the maturity
of the principal of, or the interest on, or redemption date of any Bond
issued under the Indenture, (b) a reduction in the principal amount of
any Bond or the rate of interest or redemption premium thereon, (c) a
privilege or priority of any Bond or Bonds over any other Bond or
Bonds, (d) a reduction in the aggregate principal amount of the Bonds
required for consent to such modification, amendment, or supplemental
indenture, or (e) impairment of the exclusion from gross income for
federal income tax purposes of interest on any of the outstanding
Bonds. Any such consent by the holder of this Bond shall be conclusive
and binding upon such holder and all future holders and owners of this
Bond whether or not any notation of such consent is made upon this
Bond.
In the manner and with the effect provided in the Indenture, the
Bonds may be redeemed prior to the maturity thereof, pursuant to
certain provisions of the Indenture, as provided hereinbelow.
The Bonds maturing on June 1, 2014 are subject to optional re-
demption prior to their maturity by the Issuer beginning on June 1,
2004, in whole at any time and in part on any Interest Payment Date at
the following redemption prices (stated as a percentage of principal
amount) plus accrued interest to the redemption date::
Redemption Period
(Both Inclusive) Redemption Price
June 1, 2004 through May 31, 2005 103%
June 1, 2005 through May 31, 2006 102%
June 1, 2006 through May 31, 2007 101%
June 1, 2007 and thereafter 100%
The Bonds are subject to special mandatory redemption prior to
their maturity at any time, as a whole or in part if such partial
redemption will preserve the exclusion from gross income for federal
income tax purposes of interest on the remaining Bonds outstanding (and
if in part, by lot or other customary means) at a redemption price
equal to 108% of the principal amount thereof, plus interest accrued to
the redemption date in the event that it is finally determined by the
Internal Revenue Service (or its successor) or by a court of competent
jurisdiction in a proceeding in which the Company participates to the
degree it deems sufficient, that, as a result of the failure by the
Company to observe a covenant, agreement or representation in the
Refunding Agreement, the interest payable on the Bonds has become
includable for federal income tax purposes in the gross income of any
owner of a Bond, other than an owner who is a "substantial user" of the
Project or a "related person" to such "substantial user" as provided in
the Internal Revenue Code of 1986, as amended, and applicable
regulations thereunder. Any such determination will not be considered
final for this purpose unless the Company has been given written notice
and, if it so desires, has been afforded the opportunity, at its
expense, to contest the same, either directly or in the name of any
owner of the Bonds, and until the conclusion of any appellate review,
if sought. The Company is not required to complete the administrative
proceeding or litigation referred to above within a specified period,
but it covenants in the Refunding Agreement that it will use its best
efforts to obtain a prompt final determination, decision or settlement
of any administrative proceeding or litigation.
The Bonds are subject to redemption prior to their maturity by
the Issuer at the direction of the Company, in whole, at any time, but
not in part, at a redemption price equal to 100% of the principal
amount of the outstanding Bonds, plus accrued interest thereon to the
date of redemption, without premium, upon prepayment of the payments
relating to the Bonds under the Refunding Agreement upon the occurrence
of any of the following events:
(i) if all or any substantial portion of the Project is
destroyed to such extent that, in the opinion of the Board of
Directors of the Company expressed in a resolution filed with the
Issuer and the Trustee, it is uneconomical to rebuild, repair or
restore the Project to approximately its condition prior to such
destruction;
(ii) if all or any substantial portion of the Project is
taken by eminent domain which, in the opinion of the Board of
Directors of the Company expressed in a resolution filed with the
Issuer and the Trustee, will, or is likely to result in the
Company being prevented from carrying on its normal operations at
the Project for a period of six (6) months; or
(iii) a determination by an independent consultant that
technological or regulatory changes make the continued operation
of the Project uneconomical.
The exercise of any such option shall be at the direction of the
Company which shall give written notice to the Issuer and the Trustee
within one hundred twenty (120) days of the occurrence of an event
described in clause (i), (ii) or (iii) above, which notice shall
specify that, as determined by the Company, one or more of such events
has occurred or one or more of such conditions is continuing and also
shall specify a date for redemption not less than 45 nor more than 120
days from the date such notice is given.
The Bonds are subject to mandatory sinking fund redemption on
June 1 of the years and in the principal amounts at a redemption price
of 100% of the principal amount of the Bonds to be redeemed, plus
interest accrued to the redemption date as follows:
Bonds maturing on June 1, 2004
Year Amount
1997 $550,000
1998 600,000
1999 650,000
2000 705,000
2001 770,000
2002 830,000
2003 910,000
2004 * 985,000
Bonds maturing on June 1, 2014
Year Amount
1997 $ 340,000
1998 370,000
1999 405,000
2000 440,000
2001 475,000
2002 525,000
2003 565,000
2004 620,000
2005 1,745,000
2006 1,900,000
2007 2,075,000
2008 2,260,000
2009 2,465,000
2010 2,685,000
2011 2,925,000
2012 3,190,000
2013 3,475,000
2014 * 3,790,000
*Final Maturity
Any such redemption, either in whole or in part, shall be made
upon at least 30 days' prior notice in the manner and upon the terms
and conditions provided in the Indenture. If this Bond shall have been
duly called for redemption and payment of the redemption price,
together with unpaid interest accrued to the date fixed for redemption,
shall have been made or provided for, all as more fully set forth in
the Indenture, interest on this Bond shall cease to accrue from the
date fixed for redemption and, from and after such date, this Bond
shall no longer be entitled to any lien, benefit or security under the
Indenture and the holder hereof shall have no rights in respect of this
Bond except to receive payment of such redemption price and unpaid
interest accrued to the date fixed for redemption.
The Bonds are issuable in the form of fully registered bonds in
the denomination of $100,000 or an integral multiple of $5,000 in
excess thereof; no Beneficial Owner (as defined in the Indenture) may
own an interest of less than $100,000 in the Bonds.
This Bond shall be transferable only on the Bond Register upon
surrender hereof at the principal office of the Trustee with a written
instrument of transfer satisfactory to the Trustee duly executed by the
Registered Owner or his duly authorized attorney. Such transfer shall
be without charge to the owner of this Bond except that any tax, fee or
other governmental charge required to be paid with respect to such
transfer shall be paid by the Registered Owner hereof as a condition
precedent to the exercise of such privilege. The Issuer and the
Trustee may deem and treat the registered holder hereof as the absolute
owner hereof for the purpose of receiving payment of principal hereof
and interest hereon and for all other purposes whether or not this Bond
is overdue, and neither the Issuer nor the Trustee shall be affected by
any notice to the contrary.
* * * * *
[FORM OF ASSIGNMENT]
For value received the undersigned hereby sells, assigns and
transfers unto ________________ _______________________________ the
within-mentioned Bond and all rights thereunder, and hereby irrevocably
constitutes and appoints _____________________________________ to
transfer the within Bond on the books kept for registration thereof,
with full power of substitution in the premises.
Dated:
NOTICE: The signature to this assignment
must correspond with the name as it appears
upon the face of the within Bond in every
particular, without alteration or enlarge-
ment or any change whatever.
-------------------------
Please Insert Social
Security
or other Identifying
Number of Assignee
-------------------------
-------------------------
[FORM OF LEGAL OPINION CERTIFICATE]
I, the undersigned Secretary of the Board of Commissioners of the
Port of New Orleans, do hereby certify that the following is a true
copy of the complete legal opinion of Foley & Judell, the original of
which was manually executed, dated and issued as of the date of payment
for and delivery of this Bond and was delivered to Chemical Securities
Inc., the purchaser of the Bonds:
(LEGAL OPINION)
I further certify that an executed copy of the above legal opinion
is on file in my office and that an executed copy thereof has been
furnished to the Trustee for this Bond.
_________________________________________
Secretary