4.6(a)_______________________________________________________________________
TRUST INDENTURE
Relating to United States Government Guaranteed
Shipyard Financing Obligations
Between
AVONDALE INDUSTRIES, INC.
Shipyard Owner
AND
CHEMICAL BANK
Indenture Trustee
Dated as of February 9, 1995
_______________________________________________________________________________
TRUST INDENTURE
between
AVONDALE INDUSTRIES, INC.
Shipyard Owner
And
CHEMICAL BANK
Indenture Trustee
Dated as of February 9, 1995
TABLE OF CONTENTS TO SPECIAL PROVISIONS OF THE INDENTURE [1]
Page
Parties.........................................................1
Recitals........................................................1
ARTICLE FIRST
Incorporation of General Provisions.............................2
ARTICLE SECOND
The Bonds.......................................................2
ARTICLE THIRD
Certain Redemptions.............................................3
(a) Mandatory Sinking Fund Redemptions.........................3
(b) Optional Sinking Fund Redemptions..........................4
(c) Optional Redemptions of Bonds at Premium...................4
ARTICLE FOURTH
Definitions.....................................................4
ARTICLE FIFTH
Additions, Deletions and Amendments to Exhibit 1................5
(a) Concerning Section 2.04....................................5
(b) Concerning Section 2.12....................................5
(c) Concerning Payment of the Bonds............................5
(d) Concerning Section 3.04....................................6
(e) Concerning Selection of Bonds to be Redeemed...............6
(f) Concerning References to 3.09(b)...........................6
(g) Concerning Home Office Payment.............................6
(h) Concerning Section 6.09....................................6
(i) Concerning Section 7.02....................................6
(j) Concerning Section 10.01...................................6
(k) Concerning Notices.........................................7
(l) Concerning the Special Provisions .........................7
(m) Concerning Applicable Law..................................7
(n) Execution of Counterparts..................................7
Signatures......................................................8
Acknowledgements.........................................9 and 10
EXHIBITS TO TRUST INDENTURE
SCHEDULE A Schedule of Definitions to Trust Indenture
EXHIBIT 1 General Provisions of the Indenture
Incorporated by Reference
EXHIBIT 2 Forms of Bond, Guarantee and Trustee's
Authentication Certificate
EXHIBIT 3 Authorization Agreement
EXHIBIT 4 Form of Secretary Supplemental Indenture
**FOOTNOTES**
[1]: This Table of Contents is not a part of the Indenture and
has no bearing upon the interpretation of any of its terms and
provisions.
TRUST INDENTURE
Special Provisions
THIS TRUST INDENTURE, dated as of February 9, 1995 (said
Trust Indenture, as the same may be amended, modified or
supplemented from time to time as permitted hereunder, herein
called the "Indenture"), between (i) AVONDALE INDUSTRIES, INC., a
Louisiana corporation (herein called the "Shipyard Owner"), and
(ii) Chemical Bank, a New York corporation (said Bank, and any
successor or assign hereunder, herein called the "Indenture
Trustee").
Recitals:
A. The Shipyard Owner is or will be the sole owner of the
shipyard advanced technology and modernization project identified
in Exhibit A to the Commitment To Guarantee Obligations (the
"Shipyard Project");
B. To aid in financing the construction of the Shipyard
Project, the Shipyard Owner will borrow an aggregate principal
amount approximately equal to, but in no event in excess of,
87.5% of the Actual Cost of the Shipyard Project as of the
Closing Date;
C. As one means of such financing of the construction of
the Shipyard Project, the Shipyard Owner has entered into a bond
purchase agreement (the "Bond Purchase Agreement") with the
purchasers named therein, providing for the sale and delivery, on
the Closing Date, of not in excess of $17,780,000 aggregate
principal amount of bonds designated, "United States Government
Guaranteed Shipyard Financing Bonds, 2010 Series" (the
"Obligations" or the "Bonds") having the maturity date and
interest rate set forth therein;
D. It is intended that pursuant to the terms of the
Authorization Agreement, Contract MA-12950, the Secretary, on
behalf of the United States, will authorize the Indenture
Trustee, under the terms of Title XI of the Act, to cause the
Guarantees, bearing the facsimile signature of the Secretary and
the facsimile seal of the United States Department of
Transportation, to be imprinted on the Obligations issued, and to
authenticate and deliver said Obligations on the Closing Date;
and
E. Pursuant to Section 1112(b) of the Act, the Secretary
has determined that the interest to be borne by the Obligations
(exclusive of charges for the guarantee fee and service charges,
if any) at the rate specified in the Obligations is reasonable.
NOW THEREFORE, in consideration of the premises, of the
mutual covenants herein contained, of the purchase of the
Obligations by the Holders thereof, and of other good and
valuable consideration, the receipt and adequacy of which the
parties hereby acknowledge, and for the equal and proportionate
benefit of all the present and future Holders of the Obligations,
the parties hereto agree as follows:
ARTICLE FIRST
Incorporation of General Provisions
This Indenture shall consist of two parts: the Special
Provisions and the General Provisions attached hereto as Exhibit
1, made a part of this Indenture and incorporated herein by
reference.
ARTICLE SECOND
The Bonds
(a) Pursuant to the terms hereof, on the date of this
Indenture, the Shipyard Owner shall issue those certain bonds,
which shall be designated "United States Government Guaranteed
Shipyard Financing Bonds, 2010 Series"; and the aggregate
principal amount of Bonds which may be issued under this
Indenture shall not exceed $17,780,000 except as provided in
Sections 2.09, 2.10, 2.12 and 3.10(b) of Exhibit 1 hereto.
(b) The Obligations, the Guarantees thereof, and the
Indenture Trustee's authentication certificate to be endorsed
thereon shall be substantially in the forms set forth in Exhibit
2 hereto.
(c) The Bonds shall be in the denominations of $250,000 or
any whole multiple of $1,000 in excess of $250,000; provided,
however, that in the event the principal amount of the Bonds of
any holder thereof is reduced below $250,000 as a result of a
redemption payment or repurchase by the Shipyard Owner, then
Bonds may be issued in such lesser amount.
(d) The Shipyard Owner shall at all times cause to be
maintained in Avondale, Louisiana an office or agency for the
purposes specified in Section 5.03 of Exhibit 1 to this
Indenture.
(e) The Indenture Trustee shall at all times have its
Corporate Trust Office in the City of New York, State of New
York.
BUS\21645.4
ARTICLE THIRD
Certain Redemptions
(a) Mandatory Sinking Fund Redemptions. The Bonds are
subject to redemption at a redemption price equal to 100% of the
principal amount thereof, together with interest accrued thereon
to the applicable sinking fund Redemption Date, through the
operation of a mandatory sinking fund providing for the semi-
annual redemption on March 31 and September 30 of each year,
commencing March 31, 1996, at 100% of the principal amount
thereof plus interest accrued thereon to the date of redemption,
of $593,000 principal amount of Bonds (or such lesser principal
amount of Bonds as shall then be outstanding), plus accrued
interest. Notwithstanding the foregoing provisions of this
subsection (a), if the principal amount of Outstanding Bonds
shall be reduced by reason of any redemption pursuant to Sections
3.04 or 3.05 of Exhibit 1 to this Indenture, the principal amount
of Bonds to be redeemed pursuant to this subsection (a) on each
subsequent mandatory sinking fund Redemption Date for such Bonds
shall be reduced by an amount equal to the principal amount of
such Bonds retired by reason of such redemption pursuant to
Sections 3.04 or 3.05 of Exhibit 1 hereto divided by the number
of mandatory sinking fund Redemption Dates (including the Stated
Maturity of such Bonds) scheduled thereafter (subject to such
increase as shall be necessary so that the total principal amount
of Bonds to be redeemed on any such sinking fund redemption date
shall be an integral multiple of $1,000); provided, however, that
the entire unpaid principal amount of the Outstanding Bonds shall
be paid not later than September 30, 2010. The Shipyard Owner
shall, in accordance with Section 3.02(d) of Exhibit 1 hereto,
promptly after each redemption pursuant to said Section 3.04,
furnish to the Secretary, the Indenture Trustee and each Holder
of an Obligation a revised table of sinking fund payments
reflecting the reductions made pursuant to this subsection (a) as
a result of such redemption.
In lieu of making all or any part of any such mandatory
sinking fund redemption of Bonds, the Shipyard Owner may, at its
option, receive credit for Bonds not previously so credited or
applied to reduce the principal amount of Bonds Outstanding, (i)
redeemed by the Shipyard Owner pursuant to the optional
redemption provision provided for in subsection (b) of this
Article, (ii) redeemed by the Shipyard Owner pursuant to the
optional redemption provision provided for in subsection (c) of
this Article, or (iii) purchased or acquired by the Shipyard
Owner (otherwise than by redemption) and delivered to the
Indenture Trustee for cancellation pursuant to Section 2.13 of
Exhibit 1 hereto. The Bonds so credited or applied shall be
credited or applied, as the case may be, by the Indenture
Trustee, at 100% of the principal amount thereof. If the
Shipyard Owner shall elect to receive credit or application as
aforesaid in lieu of making all or part of any mandatory sinking
fund redemption, it shall deliver to the Indenture Trustee, at
least 40 days but not more than 60 days prior to the due date for
such mandatory sinking fund redemption, a Request (i) specifying
the principal amount of Bonds so optionally redeemed or otherwise
acquired and so to be credited or applied, as the case may be,
and (ii) stating that no such Bonds have theretofore been made
the basis of any such credit or application as aforesaid and that
none of such Obligations are subject to the terms of any
agreement or contract between the Secretary, the Shipyard Owner
and/or any other person restricting the Shipyard Owner's right to
apply any such Obligations as a credit pursuant to the terms of
this subsection (a), together with the Bonds (uncancelled) for
which such credit or application is so requested (unless such
Bonds shall theretofore have been delivered to the Indenture
Trustee).
(b) Optional Sinking Fund Redemptions. At its option, the
Shipyard Owner may redeem on any mandatory sinking fund
Redemption Date, at a redemption price equal to 100% of the
principal amount thereof, plus the Make-Whole Amount determined
for the mandatory sinking fund Redemption Date with respect to
the additional principal amount to be redeemed, together with
interest accrued thereon to such date, an additional principal
amount of Bonds up to the principal amount of Bonds required to
be redeemed under the first paragraph of subsection (a) of this
Article on such date and before any credit pursuant to the last
paragraph of subsection (a) of this Article. The right to make
any such optional sinking fund redemption shall not be
cumulative. If the Shipyard Owner shall elect to make any such
optional sinking fund redemption, the Shipyard Owner shall, at
least 40 days but not more than 60 days prior to such mandatory
sinking fund Redemption Date, deliver to the Indenture Trustee a
Request stating that the Shipyard Owner intends to exercise its
right as set forth in this subsection (b) to make such optional
sinking fund redemption and specifying the additional principal
amount of Bonds which the Shipyard Owner intends to redeem on
such mandatory sinking fund Redemption Date. The Request shall
be accompanied by an Officer's Certificate as to the estimated
Make-Whole Amount due in connection with such redemption
(calculated as if the date of such Request were the date of the
redemption), setting forth the details of such computation. The
Indenture Trustee shall deliver such Officer's Certificate to
each Holder along with the notice of redemption required by
Section 3.08 of the general provisions of the Indenture. Two
Business Days prior to such redemption, the Shipyard Owner shall
deliver to the Indenture Trustee and each Holder an Officer's
Certificate specifying the calculation of such Make-Whole Amount
as of the specified Redemption Date.
(c) Optional Redemptions of Bonds at Premium. At its
option, the Shipyard Owner may redeem the Bonds, in whole or in
part, at any time or from time to time, at a redemption price
equal to 100% of the principal amount thereof, plus the Make-
Whole Amount determined for the Redemption Date with respect to
the principal amount to be redeemed, together with interest
accrued thereon to the date fixed for redemption. If the Shipyard
Owner shall elect to make any such optional redemption, the
Shipyard Owner shall, at least 40 days but not more than 60 days
prior to the date fixed for redemption, deliver to the Indenture
Trustee a Request stating that the Shipyard Owner intends to
exercise its rights as above set forth to make such optional
redemption and specifying the Redemption Date, and the principal
amount of Bonds which the Shipyard Owner intends to redeem on
such date. The Request shall be accompanied by an Officer's
Certificate as to the estimated Make-Whole Amount due in
connection with such redemption (calculated as if the date of
such Request were the date of the redemption), setting forth the
details of such computation. The Indenture Trustee shall deliver
such Officer's Certificate to each Holder along with the notice
of redemption required by Section 3.08 of the general provisions
of the Indenture. Two Business Days prior to such redemption,
the Shipyard Owner shall deliver to the Indenture Trustee and
each Holder an Officer's Certificate specifying the calculation
of such Make-Whole Amount as of the specified Redemption Date.
ARTICLE FOURTH
Definitions
For all purposes of this Indenture, unless otherwise
expressly provided or unless the context otherwise requires:
(1) All references herein to Articles, Sections
or other subdivisions, unless otherwise specified,
refer to the corresponding Articles, Sections and other
subdivisions of this Indenture;
(2) The terms "hereof," "herein," "hereby,"
"hereto," "hereunder" and "herewith" refer to this
Indenture;
(3) The terms used herein and defined in Schedule
A to this Indenture shall have the respective meanings
stated in said Schedule.
ARTICLE FIFTH
Additions, Deletions and Amendments to Exhibit 1
The following additions, deletions and amendments are hereby
made to Exhibit 1 to this Indenture.
(a) Concerning Section 2.04. The Shipyard Owner and the
Indenture Trustee shall not enter into any Supplemental
Indenture, and the Indenture Trustee shall not enter into any
supplement to the Authorization Agreement, pursuant to Section
2.04 of Exhibit 1 to this Indenture, except to provide for the
issuance of additional Obligations of any series and Stated
Maturity theretofore issued or of one or more additional series
for the purpose of aiding in financing or refinancing of the
Shipyard Project or to refund Obligations issued for such
purpose.
(b) Concerning Section 2.12. With respect to clause (1) of
the proviso to Section 2.12 of Exhibit 1 to the Indenture, a
written agreement of indemnity which is satisfactory in form and
substance to the Secretary, the Shipyard Owner and the Indenture
Trustee executed and delivered by an institutional Holder having
a capital and surplus of at least $100,000,000 shall be
considered sufficient indemnity to the Secretary, the Shipyard
Owner and the Indenture Trustee in connection with the execution,
authentication and delivery of any new Obligation or the making
of any payment as contemplated by said Section 2.12.
(c) Concerning Payment of the Bonds. Notwithstanding
anything to the contrary in Exhibit 1 hereto, the Bonds to be
issued hereunder shall be payable (other than in the case of a
redemption in whole of any of the Bonds or upon the maturity of
any of the Bonds) as to principal, premium, if any, and interest
by check mailed by the Corporate Trust Office to the addresses of
the Obligees as such addresses shall appear in the Obligation
Register, subject in any event to the provisions hereof
concerning home office payment. Upon redemption in whole of any
of the Bonds or upon maturity of any of the Bonds, the principal,
premium, if any, and interest due thereon shall be paid by check
to the addresses of the Obligees as such addresses shall appear
in the Obligation Register, subject to the provisions hereof
concerning home office payment, only upon surrender of any such
Bond, by mail or other means, to the Indenture Trustee at the
office of the Indenture Trustee set forth herein. The Indenture
Trustee agrees that within 30 days from the date of any payment
of principal or interest when the same shall become due and
payable by reason of maturity or redemption, a Responsible
Officer in the Corporate Trust Office of the Indenture Trustee
shall ascertain to his satisfaction that checks in payment of
such amounts have been mailed by such Corporate Trust Office to
the addresses of the Obligees as provided above, if payment is to
be made by check or, if payment is to be made by wire transfer or
by credit to an account maintained by the Obligee with the
Indenture Trustee, that such funds have been wired or credited
or, if payment is to be made at the Corporate Trust Office, that
funds were held by the Indenture Trustee for such payment on the
date payment was due. The Indenture Trustee shall have no
obligation to determine whether such checks or payments were
received by the Obligees.
(d) Concerning Section 3.04. In the ninth line of Section
3.04 of Exhibit 1 to this Indenture, delete the words "45 days"
and substitute in lieu thereof, the words "at least 30 but not
more than 60 days".
(e) Concerning Section 3.05. Paragraph (c) of Section 3.05
of Exhibit 1 to this Indenture is deleted and the following
substituted thereof:
(c) the Shipyard Project is not substantially complete
by March 31, 1996,
(f) Concerning Selection of Bonds to be Redeemed.
Notwithstanding the provisions of Section 3.07(b) of Exhibit 1 to
this Indenture, (i) if less than all the Bonds are to be
optionally redeemed under any of the provisions contained or
referred to in Article Third hereof or Article III of said
Exhibit 1, the Indenture Trustee shall select for redemption
Bonds of the Stated Maturity or Stated Maturities and (ii) if
less than all the Bonds of a particular Stated Maturity are to be
redeemed under any provisions contained or referred to in Article
Third hereof or Article III of Exhibit 1 to this Indenture, the
Indenture Trustee shall select the particular Bonds and/or
portions ($1,000 or any integral multiple thereof) of Bonds to be
redeemed on the Redemption Date by allocating the principal
amount to be redeemed among the Holders of Bonds of such Stated
Maturity in proportion to the respective principal amount of
Bonds of such Stated Maturity registered in their respective
names.
(g) Concerning References to Section 3.09(b). All cross-
references to Section 3.09(b) made in Exhibit 1 hereto shall be
deemed to refer to Section 3.10(b) of Exhibit 1 hereto.
(h) Concerning Home Office Payment. Notwithstanding any
terms of this Indenture or the Obligations to the contrary, the
Shipyard Owner may enter into an agreement with any Holder of an
Obligation providing for payment to such Holder by certified or
official bank check or at the request by such Holder, by credit
to an account maintained by the Holder with the Indenture Trustee
or by wire transfer of the principal of and the premium, if any,
and interest on such Obligation or any part thereof at a place
other than the place or places specified in such Obligation as
the place for such payment, and for the making of notation, if
any, of such payment on such Obligation by such Holder or by an
agent of the Shipyard Owner or of the Indenture Trustee without
presentation of such Obligation. The Shipyard Owner will furnish
to the Indenture Trustee a copy of each such agreement within 10
days prior to any payment date.
The Indenture Trustee hereby consents to such agreement
contained in Section 7.0 of the Bond Purchase Agreement dated as
of February 2, 1995, between the Shipyard Owner and the
Purchasers named in Schedule 1 thereto and hereby acknowledges
receipt of a copy thereof.
(i) Concerning Section 6.09. In the fifth line of Section
6.09 of Exhibit 1 to this Indenture, after the word "parties",
and before the comma, add the following phrase "(including the
expiration of all notice and cure periods provided for
thereunder)".
(j) Concerning Section 7.02. The amount "$3,000,000" in
Section 7.02 of Exhibit 1 hereto is hereby deleted and there is
substituted therefor the amount "$25,000,000."
(k) Concerning Section 10.01. Paragraph (b) of Section
10.01 of Exhibit 1 to this Indenture is deleted and the following
substituted in lieu thereof:
"(b) to evidence the succession pursuant to
Article VIII of another corporation or entity
to the Shipyard Owner or any assumption of
all or a part of the obligations the Shipyard
Owner hereunder;"
(l) Concerning Notices. (1) Subject to the provisions of
Section 13.01 of Exhibit 1 to this Indenture, any notice,
request, demand, direction, consent, waiver, approval or other
communication to be given to a party hereto or the Secretary
shall be deemed to have been sufficiently given or made when
addressed to:
The Indenture Trustee as: CHEMICAL BANK
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Corporate Trust Department
The Shipyard Owner as: [Mail]
AVONDALE INDUSTRIES, INC.
P. O. Box 50280
New Orleans, Louisiana 70150
Attention:Thomas M. Kitchen, Vice
President, Chief Financial
Officer and Secretary
[Courier]
AVONDALE INDUSTRIES, INC.
5100 River Road
Avondale, Louisiana 70094
Attention:Thomas M. Kitchen, Vice
President, Chief Financial
Officer and Secretary
The Secretary as: SECRETARY OF TRANSPORTATION
c/o Maritime Administrator
Department of Transportation
400 Seventh Street, SW
Washington, D.C. 20590
(2) The phrase "in the manner provided in Section
6.04(c)" is hereby deleted wherever such phrase appears in
Sections 7.02(b) and 10.04, and substituted in lieu thereof is
the phrase "by first class mail, postage prepaid".
(m) Concerning the Special Provisions. In the event of any
conflict in, or inconsistency between the Special Provisions of
this Trust Indenture and Exhibit 1 hereto, said Special
Provisions shall control.
(n) Concerning Applicable Law. This Indenture and each
Obligation shall be governed by the laws of the State of New York
and, to the extent applicable, the laws of the United States.
(o) Execution of Counterparts. This Indenture may be
executed in any number of counterparts. All such counterparts
shall be deemed to be originals and shall constitute but one and
the same instrument.
IN WITNESS WHEREOF, this Trust Indenture has been duly
executed by the parties hereto as of the day and year first above
written.
AVONDALE INDUSTRIES, INC.
Shipyard Owner
(SEAL)
BY /s/ Thomas M. Kitchen
---------------------
Thomas M. Kitchen, Vice
President, Chief Financial
Officer and Secretary
Attest:
/s/ Bruce L. Hicks
------------------
Bruce L. Hicks, Assistant Secretary
CHEMICAL BANK
Indenture Trustee
BY /s/Gregory McFarlane
--------------------
Gregory K. McFarlane,
Vice President
Attest:
(Signature Unreadable)
DISTRICT OF COLUMBIA
CITY OF WASHINGTON
On this 9th day of February, 1995, before me personally
appeared Thomas M. Kitchen, to me known, who being by me duly
sworn, did depose and say that he resides at 6627 Canal
Boulevard, Louisiana 70124; that he is Vice President, Chief
Financial Officer and Secretary of AVONDALE INDUSTRIES, INC.;
that he knows the seal affixed to said instrument is such
corporation's seal; that the seal affixed to said instrument is
such corporation's seal; that it was so affixed by authority of
the Board of Directors of said corporation, and that he signed
his name thereto by like authority.
In testimony whereof, I have hereunto set my hand and seal
this 9th day of February, 1995.
/s/ Linda E. Waltz
------------------
Linda E. Waltz
NOTARY PUBLIC
(Notarial Stamp and Seal) My Commission Expires April 30, 1999
STATE OF NEW YORK
COUNTY OF NEW YORK
Be it known, that on this 9th day of February,
1995, personally appeared before me Gregory K. McFarlane who
after being duly sworn, deposed and said that he is a Trust
Officer of Chemical Bank, the banking association which is
described in and executed the within instrument, and that he
signed the within instrument by order of the Board of Directors
of the said banking association and acknowledged the within
instrument to be the free act and deed of the said banking
association.
In testimony whereof, I have hereunto set my hand and seal
this 9th day of February, 1995.
/s/ Annabelle DeLuca
----------------
Annabelle DeLuca
NOTARY PUBLIC
(Notarial Stamp and Seal) Commission Expires July 15, 1995
4.6(b)
_______________________________________________________________________________
Contract No. MA-12953
TITLE XI RESERVE FUND AND
FINANCIAL AGREEMENT
Between
AVONDALE INDUSTRIES, INC.
and
THE UNITED STATES OF AMERICA
Dated as of February 9, 1995
_______________________________________________________________________________
TITLE XI RESERVE FUND
AND FINANCIAL AGREEMENT
TABLE OF CONTENTS TO
SPECIAL PROVISIONS
Page
Recitals........................................................1
Granting Clause.................................................2
ARTICLE FIRST
Definitions.....................................................2
ARTICLE SECOND
Incorporation of General Provisions.............................3
ARTICLE THIRD
Additions, Deletions and Amendments to Exhibit..................3
(a) Concerning Section 1 of Exhibit 1.....................3
(b) Concerning Section 2 of Exhibit 1.....................3
(c) Concerning Section 8 of Exhibit 1.....................3
(d) Concerning Section 13 of Exhibit 1....................4
ARTICLE FOURTH
Shipyard Project Application....................................7
ARTICLE FIFTH
Counterparts....................................................8
ARTICLE SIXTH
Conflict........................................................8
ARTICLE SEVENTH
Concerning Regulations..........................................8
Signatures......................................................9
Exhibit 1 General Provisions Incorporated into the
Title XI Reserve Fund and Financial
Agreement by Reference.
Attachment AAttachment A to Exhibit 1 to Title XI
Reserve Fund and Financial Agreement.
Contract No.
MA-12953
TITLE XI RESERVE FUND
AND FINANCIAL AGREEMENT
THIS TITLE XI RESERVE FUND AND FINANCIAL AGREEMENT dated as
of February 9, 1995 between AVONDALE INDUSTRIES, INC., a
Louisiana corporation (the "Company") and THE UNITED STATES OF
AMERICA (the "United States"), represented by the Secretary of
Transportation, acting by and through the Maritime Administrator
(the "Secretary"), pursuant to the provisions of Title XI of the
Merchant Marine Act, 1936, as amended.
R E C I T A L S:
A. The Company has authorized the issuance of and on this
date intends to issue bonds designated "United States Government
Guaranteed Shipyard Financing Bonds, 2010 Series" in an aggregate
principal amount not to exceed $17,780,000 (individually, an
"Obligation", and collectively, the "Obligations") to finance the
cost of the acquisition, installation and development of advanced
and modern shipyard technology (the "Shipyard Project").
B. Under the provisions of an Authorization Agreement (the
"Authorization Agreement"), Contract No. MA-12950, to be entered
into as of the date hereof between the Secretary and the
Indenture Trustee, the Secretary intends to authorize a guarantee
to be endorsed upon each of the Obligations, pursuant to which
the Secretary has guaranteed the payment in full of all of the
unpaid interest to the date of payment on, and all of the unpaid
principal balance of each Obligation (individually, a "Guarantee"
and collectively, the "Guarantees").
C. As part of the Guarantee transaction, and as security
to the United States for the payment to the United States of the
principal of and the interest due or to become due on the
promissory note, dated the date hereof, to be executed and
delivered by the Company to the Secretary with respect to the
Obligations (the "Secretary's Note"), in accordance with the
terms thereof, the Company has agreed to make and enter into a
Security Agreement, dated as of the date hereof, between the
Company and the Secretary (the "Security Agreement"), and the
Title XI Reserve Fund and Financial Agreement.
D. As of the date hereof, the Company has executed and
delivered a mortgage (the "Mortgage") on the Shipyard Project in
favor of the Secretary.
E. The Company, the Secretary and Chemical Bank, a
national banking association ("Depository-Bailee" or the
"Depository") are entering into the Depository Agreement,
Contract No. MA-12954, dated as of the date hereof, providing,
among other things, for the creation of the Title XI Reserve
Fund.
NOW, THEREFORE, in consideration of the premises and
mutual covenants herein contained, and of other good and valuable
consideration, the receipt of which is hereby acknowledged, the
parties hereby agree as follows:
GRANTING CLAUSE
The Company hereby sells, grants, conveys, mortgages,
assigns, transfers, pledges, confirms and sets over unto the
Secretary a continuing security interest in all of its right,
title and interest in and to (a) the Title XI Reserve Fund, and
(b) all sums, instruments, money, negotiable documents, chattel
paper and proceeds thereof currently on deposit, or hereafter
deposited in the Title XI Reserve Fund, all of which foregoing
collateral shall be held by the Depository-Bailee as bailee in
accounts in the name of "Avondale Industries, Inc., entirely as
collateral for the United States of America, as represented by
the Secretary of Transportation, acting by and through the
Maritime Administrator (the "Secretary") and held by the
Depository-Bailee solely and exclusively as bailee for the
Secretary."
ARTICLE FIRST
DEFINITIONS
For all purposes of this Title XI Reserve Fund and Financial
Agreement, unless otherwise expressly provided or unless the
context otherwise requires:
(1) All references to Sections or other subdivisions,
unless otherwise specified, refer to the corresponding Sections
and other subdivisions of the Title XI Reserve Fund and Financial
Agreement;
(2) The terms "hereof," "herein," "hereto," "hereunder" and
"herewith" refer to this Title XI Reserve Fund and Financial
Agreement;
(3) The capitalized terms used herein but not otherwise
defined herein shall have the respective meanings ascribed to
them in Schedule X to the Security Agreement; and
(4) Capitalized terms used herein which are defined in the
General Provisions attached hereto as Exhibit 1 shall have the
respective meanings stated in said General Provisions unless
otherwise defined pursuant to subparagraph 3 of this Article
First.
ARTICLE SECOND
INCORPORATION OF GENERAL PROVISIONS
This Title XI Reserve Fund and Financial Agreement shall
consist of two parts: the Special Provisions and the General
Provisions attached hereto as Exhibit 1, made a part of the Title
XI Reserve Fund and Financial Agreement and incorporated herein
by reference. Where a provision of the General Provisions has
been modified or superseded by a provision of the Special
Provisions, all references in the General Provisions to the
modified or superseded sections shall be deemed to refer to such
sections as so modified or superseded.
ARTICLE THIRD
ADDITIONS, DELETIONS AND AMENDMENTS TO EXHIBIT 1
The following additions, deletions and amendments are hereby
made to Exhibit 1 hereto:
(a) Concerning Section 1 of Exhibit 1:
(1) Concerning Subsection 1(d). Subsection 1(d) of
Exhibit 1 hereto is amended by adding after the word
"entity," the phrase, "except for guarantees of the
obligations of American Heavy Lift Shipping Company,".
(b) Concerning Section 2 of Exhibit 1:
(1) Concerning Subsection 2(a). Subsection 2(a) of
Exhibit 1 hereto is amended by adding the following
sentence at the end of thereof:
"Wherever reference is made in this
Exhibit 1 to Title XI Reserve Fund and
Financial Agreement to the Title XI
Reserve Fund special joint depository
account, such reference shall be changed
to a separate depository account held by
the Title XI Reserve Fund Depository-
Bailee, as bailee, in the name of
"Avondale Industries, Inc., entirely as
collateral for the United States of
America, represented by the Secretary of
Transportation acting by and through the
Maritime Administrator (the "Secretary")
and held by the Depository-Bailee solely
and exclusively for the Secretary."
(c) Concerning Section 8 of Exhibit 1. Section 8 of
Exhibit 1 is hereby amended by adding the following paragraph
thereto:
"All amounts held by the Title XI
Reserve Fund Depository, at whatever
time, pursuant to the provisions of the
Depository Agreement, whether money,
instruments, negotiable documents,
chattel paper, proceeds thereof, or
otherwise, shall constitute and be held
by said Depository-Bailee (as bailee)
solely and exclusively as bailee for the
Secretary as security for the payment
and performance of any and all of the
Company's Secretary's Notes."
(d) Concerning Section 13 of Exhibit 1:
(1) Concerning Subsection 13(a). Pursuant to
Subsection 13(a), the Company hereby certifies that it meets
the conditions to make the election contemplated by Section
2(b)(2)(B) of Exhibit 1 hereto and elects to be governed by
Subsections 13(b) and (c) of Exhibit 1 hereto, as amended
herein, and the Secretary consents hereby to such election.
From the date hereof, the covenants set forth in Section 12
of Exhibit 1 hereto shall not apply to the Company and shall
have no applicability to the Company under any circumstances
whatsoever.
(2) Concerning Subsection 13(b). The covenants in
Subsection 13(b) will not apply if the transaction or event
contemplated by the covenant occurs within the Company's
consolidated group.
(3) Concerning Subsection 13(b)(8). The provisions of
Subsection 13(b)(8) are hereby amended so as to add the
phrase, "except for leases with respect to equipment leased
or rented in the normal course of business," after the
parenthetical phrase "(having a term of six months or more)"
and provide that the aggregate annual payments of charter
hire and rent for which the Company may become liable
(directly or indirectly) under charters and leases (having a
term of six months or more), except for leases with respect
to equipment leased or rented in the normal course of
business, shall not exceed $4,000,000.
(4) Concerning Subsection 13 (b)(11). Subsection
13(b)(11) of Exhibit 1 hereto is amended by deleting the
words "or have" appearing at the beginning thereof.
(5) Concerning Subsection 13(b)(12). Subsection
13(b)(12) of Exhibit 1 hereto is amended by deleting the
word "and" before the number "(ii)" and substituting a comma
therefor, and, after the last word thereof, namely,
"exists", adding a comma and the phrase "and (iii) loans,
mortgages, liens, charges, security interests, encumbrances
and indebtedness approved, consented to or permitted by the
Secretary, and the refinancing or renewal thereof on terms
and conditions substantially similar to those approved,
consented to or permitted by the Secretary (with ten (10)
days written notice to the Secretary prior to the closing of
such refinancing or renewal), whether (xx) prior to, as of
the date of, or after the applicability of this Subsection
13(b) to the Company or (yy) permitted under Subsection
13(c) hereof prior to the applicability of this Subsection
13(b) to the Company."
(6) Concerning Subsection 13(c)(1). Subsection
13(c)(1) of Exhibit 1 hereto is deleted in its entirety and
the following is substituted therefor:
"(1) Make any distribution of earnings,
except as may be permitted by (A), (B)
or (C) below:
(A) From retained earnings in an
amount specified in subparagraph (C)
below provided that in the fiscal year
in which the distribution of earnings is
made there is no operating loss to the
date of such payment of such
distribution of earnings and (i) there
was no operating loss in the immediately
preceding three fiscal years, or (ii)
there was a one-year operating loss
during the immediately preceding three
fiscal years, but (x) such loss was not
in the immediately preceding fiscal
year, and (y) there was positive net
income for the three year period;
(B) If distributions of earnings
may not be made under (A) above, a
distribution can be made in an amount
equal to the total operating net income
for the immediately preceding three
fiscal year period, provided that (i)
there were no two successive years of
operating losses, (ii) in the fiscal
year in which such distribution is made
there is no operating loss to the date
of such distribution, and (iii) the
distribution or earnings made would not
exceed an amount specified in
subparagraph (C) below;
(C) Distributions of earnings may
be made from earnings of prior years in
an aggregate amount equal to (i) 40
percent of the Company's total net
income after tax for each of the prior
years, less any distributions that were
made in such years; or (ii) the
aggregate of the Company's total net
income after tax for such prior years
provided that after making such
distribution, the Company's Long Term
Debt does not exceed its Net Worth. In
computing net income for purposes of
this subparagraph (C), extraordinary
gains, such as gains from the sale of
assets, shall be excluded;"
(7) Concerning Subsection 13(c)(2). The provisions of
Subsection 13(c)(2) of Exhibit 1 hereto are hereby amended
and restated in their entirety to read as follows:
(i) Sell, mortgage, transfer or
lease the Shipyard Project or any
assets (except for any assets in
inventory and/or the proceeds
thereof) to any non-Affiliate
except as permitted in Subsection
13(c)(6) below; or (ii) sell,
mortgage, transfer or lease the
Shipyard Project or any assets
(except for any assets in inventory
and/or the proceeds thereof) to an
Affiliate unless such transaction
is (a) at a fair market value as
determined by an independent
appraiser acceptable to the
Secretary, and, (b) a total cash
transaction or, in the case of a
lease, the lease payments are cash
payments; and (iii) for the
purposes of this section, the term
"Affiliate" shall also include any
officer, director or shareholder of
the Company."
(8) Concerning Subsection 13(c)(4). In Subsection
13(c)(4), insert "(i)" after the word "except" the last time
such word appears; substitute a comma for the semicolon at
the end of the clause; and add "(ii) for guarantees of the
obligations of American Heavy Lift Shipping Company, (iii)
for any wholly owned subsidiary in the Company's
consolidated group, or (iv) as to work or the performance of
work by the Company's subcontractors, suppliers or vendors
with respect to the sale of products or services by the
Company to third parties."
(9) Concerning Subsection 13(c)(5). At the end of
Subsection 13(c)(5), add the phrase, "except if the primary
business activity of the Company remains shipping and/or
shipbuilding."
(10) Concerning Subsection 13(c)(6). The provisions of
Subsection 13(c)(6) of Exhibit 1 hereto are hereby amended
and restated in their entirety to read as follows:
"Enter into any merger or consolidation
or convey, sell, lease, mortgage, grant
a security interest in or otherwise
transfer or dispose of any substantial
portion of its properties or assets,
except for any assets in inventory
and/or the proceeds thereof, provided,
however, the Company shall not be deemed
to have conveyed, sold, leased,
mortgaged, granted a security interest
in or otherwise transferred or disposed
of a substantial portion of its
properties or assets if (i) the Net Book
Value (defined as the original book
value of an asset less depreciation
calculated on a straight line basis over
its useful life) of the aggregate of all
of the assets (except for any assets in
inventory and/or the proceeds thereof)
in which a security interest has been
granted, or which have been conveyed,
sold, leased, mortgaged or otherwise
transferred or disposed of (and with
respect to assets subject to the
restrictions of this Subsection, which
assets are leased, mortgaged, or a
security interest granted therein,
excluding assets leased, mortgaged or so
encumbered in a prior 12 consecutive
calendar month period or undertaken in
connection with a refinancing or renewal
of the indebtedness secured thereby on
terms and conditions substantially
similar to those terms and conditions of
such prior financing, with ten (10) days
written notice to the Secretary prior to
the closing of such refinancing or
renewal) by the Company during any
period of 12 consecutive calendar months
does not exceed 10 percent of the total
Net Book Value of all of the Company's
assets (except for any assets in
inventory and/or the proceeds thereof,
and, further, the assets which are the
basis for the calculation of the 10
percent of the Net Book Value are those
assets, except for any assets in
inventory and/or the proceeds thereof,
indicated on the most recent audited
annual financial statement required to
be submitted pursuant to Section 14
hereof prior to the date of the sale);
(ii) the Company retains the proceeds of
(x) the conveyance, sale, lease, or
other transfer or disposition of assets
(other than inventory and/or the
proceeds thereof) or (y) any
indebtedness or obligations secured by
the mortgage, granting of a security
interest in or other similar transfer or
disposition of assets (other than
inventory and/or the proceeds thereof)
for use in accordance with the Company's
regular business activities, including
without limitation, the repayment of
indebtedness of the Company, and (iii)
the sale is not otherwise prohibited by
subsection 13(c)(2) above.
Notwithstanding any other provision of
this subsection 13(c)(6), the Company
shall not consummate such sale without
the prior written consent of the
Secretary if the Company has not, prior
to the time of such sale, submitted to
the Secretary the financial statement
referred to in (i) of this subsection,
and any attempt to so consummate such
sale absent such approval shall be null
and void ab initio."
ARTICLE FOURTH
SHIPYARD PROJECT APPLICATION
This Title XI Reserve Fund and Financial Agreement shall
apply to the Shipyard Project described in Attachment A to
Exhibit 1 attached hereto. Any allocable financial requirements
or other specific requirements relating to the Shipyard Project
shall be so indicated in Attachment A. It is the intention of
this Title XI Reserve Fund and Financial Agreement that it remain
in effect so long as the Company owns the Shipyard Project with
Title XI guaranteed obligations outstanding relating to such
Shipyard Project.
ARTICLE FIFTH
COUNTERPARTS
This Title XI Reserve Fund and Financial Agreement may be
executed in any number of counterparts. All such counterparts
shall be deemed to be originals and shall together constitute but
one and the same instrument.
ARTICLE SIXTH
CONFLICT
In the event of any conflict in or inconsistency between the
Special Provisions of this Title XI Reserve Fund and Financial
Agreement and Exhibit 1 hereto, said Special Provisions shall
control.
ARTICLE SEVENTH
CONCERNING REGULATIONS
Pursuant to 46 C.F.R S298.43 in effect on the date hereof,
the regulations set forth in 46 C.F.R. S298.1, et seq. (the
"Regulations") in effect on the date hereof are fully applicable
herein; provided, however, that to the extent the Secretary has
authority to waive such Regulations, or any of them, and has
waived them herein, they are hereby waived; and provided,
further, that any amendment to said Regulations or any regulation
or regulations hereafter promulgated or issued shall not be
applicable herein. The Secretary has not used any of his
authority under 46 C.F.R. S298.39 to exempt the Company from any
requirement of the Regulations.
IN WITNESS WHEREOF, this Title XI Reserve Fund and Financial
Agreement has been executed by the parties hereto as of the day
and year first above written.
AVONDALE INDUSTRIES, INC.
(SEAL)
BY: /s/ Thomas M. Kitchen
---------------------
Thomas M. Kitchen, Vice
President, Chief Financial
Officer and Secretary
Attest:
/s/ Bruce L. Hicks
------------------
Bruce L. Hicks, Assistant Secretary
UNITED STATES OF AMERICA
By: SECRETARY OF TRANSPORTATION
By: MARITIME ADMINISTRATOR
By: /s/ Joel C. Richard
-------------------
Joel C. Richard
Attest:
/s/ Sarah J. Johnson
--------------------
Sarah J. Johnson
Assistant Secretary
Maritime Administration
4.6(c)
EXHIBIT "B"
S P E C I M E N B O N D
$_______________ No. ____
UNITED STATES GOVERNMENT GUARANTEED
SHIPYARD FINANCING BOND, 2010 SERIES
8.16% Sinking Fund Bond Due September 30, 2010
Issued by
AVONDALE INDUSTRIES, INC.
Principal and interest guaranteed under Title XI of the
Merchant Marine Act, 1936, as amended.
AVONDALE INDUSTRIES, INC., a Louisiana corporation (herein
called the "Shipyard Owner"), FOR VALUE RECEIVED, promises to pay
to ________________________ __________________ or registered
assigns, the principal sum of ______________________
_________________________ AND NO/100 DOLLARS ($_____________.00)
on September 30, 2010, and to pay interest, semiannually on March
31 and September 30 of each year, commencing March 31, 1995, on
the unpaid principal amount of this Bond at the rate of 8.16% per
annum (calculated on the basis of a 360-day year of twelve 30-day
months) from the interest payment date referred to above next
preceding the date of this Bond to which interest on the Bonds
has been paid (unless the date hereof is the date to which
interest on the Bonds has been paid, in which case from the date
of this Bond), or, if no interest has been paid on the Bonds
since the original issue date (as defined in the Indenture
hereinafter mentioned) of this Bond, from such original issue
date, until payment of said principal sum has been made or duly
provided for, and at the same rate per annum on any overdue
principal.
The principal of and the interest on this Bond, as well as
any premium hereon in case of certain redemptions hereof prior to
maturity, are payable to the registered owner hereof at the
Corporate Trust Office of the Indenture Trustee hereinafter
referred to, Chemical Bank, 450 West 33rd Street, New York, New
York 10001, or at the offices or agencies which may be maintained
from time to time by the Shipyard Owner for such purpose 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 therein; provided, that principal, premium, if any,
or interest may be paid at the option of the Shipyard Owner
(other than in the case of a redemption in whole of this Bond or
upon the maturity of this Bond) by check mailed to the address of
the registered owner hereof as such address shall appear in the
Obligation Register of said Indenture Trustee, and provided
further, that the Shipyard Owner and the registered owner hereof
may enter into other arrangements as to payment in accordance
with the Special Provisions of the Indenture. Prior to any sale,
assignment or transfer of this Bond by the registered owner
hereof in respect of which a principal payment has been made, the
registered owner hereof shall either: (i) cause a proper
notation of all such principal payments to be made hereon, or
(ii) present this Bond to the Indenture Trustee so that it may
make such notation. Upon redemption in whole of this Bond or
upon maturity of this Bond, the principal, premium, if any, and
interest due thereon shall be paid by check to the address of the
registered owner hereof as such address shall appear in the
Obligation Register, subject to the provisions of the Special
Provisions of the Indenture concerning home office payment, only
upon surrender of this Bond, by mail or other means, to the
Indenture Trustee at the office of the Indenture Trustee set
forth in the Special Provisions of the Indenture.
This Bond is one of an issue of bonds of the Shipyard Owner
of $17,780,000 aggregate principal amount of sinking fund bonds,
designated as its "United States Government Guaranteed Shipyard
Financing Bonds, 2010 Series", all issued under a Trust Indenture
dated as of February 9, 1995 (said Trust Indenture, as the same
may be amended, modified or supplemented from time to time as
permitted thereunder, herein called the "Indenture"), between the
Shipyard Owner and Chemical Bank, a New York corporation, as
Indenture Trustee (said Indenture Trustee, and its successor as
defined in the Indenture, herein called the "Indenture Trustee")
to aid in financing the cost of the construction by the Shipyard
Owner of the Shipyard Project (as defined in the Indenture).
Reference is hereby made to the Indenture for a definition of
certain terms used herein and a description of the rights,
limitations of rights, obligations, duties and immunities
thereunder of the Shipyard Owner and the Indenture Trustee and
the rights and limitations of rights of the Holders of the Bonds.
In accordance with the terms of an Authorization Agreement
dated as of February 9, 1995 (herein the "Authorization
Agreement"), between the United States of America, represented by
the Secretary of Transportation, acting by and through the
Maritime Administrator (herein called the "Secretary") and the
Indenture Trustee and by endorsement of the guarantee of the
United States of America (herein collectively called the
"Guarantees") on each of the Bonds and the authentication and
delivery of the Guarantees by the Indenture Trustee, all pursuant
to Title XI of the Merchant Marine Act, 1936, as amended and in
effect on February 9, 1995 (herein called the "Act"), the Bonds
are guaranteed by the United States of America as provided in the
Authorization Agreement and in the Guarantees endorsed thereon.
Reference is hereby made to the Authorization Agreement for a
description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Secretary and the
Indenture Trustee and the rights and limitations of rights of the
Holders of the Bonds.
Section 1103(d) of Title XI of the Act provides that:
"The full faith and credit of the United
States is pledged to the payment of all
guarantees made under this title with respect
to both principal and interest, including
interest, as may be provided for in the
guarantee, accruing between the date of
default under a guaranteed obligation and the
payment in full of the guarantee."
If an Indenture Default (defined in Section 6.01 of Exhibit
1 to the Indenture as a Payment Default or the giving of a
Secretary's Notice) shall have occurred and be continuing, the
Indenture Trustee, as provided in the Indenture, shall, not later
than 60 days from the date of such Indenture Default, demand
payment by the Secretary of the Guarantees, whereupon the entire
unpaid principal amount of the Outstanding Bonds and all unpaid
interest thereon shall become due and payable on the first to
occur of the date which is 30 days from the date of such demand
or the date on which the Secretary pays the Guarantees. If no
demand for payment of the Guarantees shall have been made by the
Indenture Trustee on or before the 30th day following an
Indenture Default, the Holder of any Outstanding Bond may, in the
manner provided in the Indenture, make such demand in place of
the Indenture Trustee. In the event of an Indenture Default of
which the Secretary has actual knowledge, the Secretary, as
provided in the Authorization Agreement, will publish notice in
the authorized newspapers, which shall include "The Wall Street
Journal" (all editions) and "The Journal of Commerce" , of the
occurrence of such Indenture Default within 30 days from the date
of such Indenture Default unless demand for payment under the
Guarantees shall previously have been made by the Indenture
Trustee, but any failure to publish such notice or any defect
therein shall not affect in any way any rights of the Indenture
Trustee or any Holder of a Bond in respect of such Indenture
Default.
Within 30 days from the date of any demand for payment of
the Guarantees, the Secretary shall pay to the Indenture Trustee,
as agent and attorney-in-fact for the Holders of the Outstanding
Bonds (including this Bond), all the unpaid interest to the date
of such payment on, and the unpaid balance of the principal of
such Bonds in full, in cash; provided that, in the case of a
demand made as a result of a Payment Default, the Secretary shall
not be required to make any such payment if within such 30-day
period (and prior to any payment of the Guarantees by the
Secretary) the Secretary finds either that there was no Payment
Default or that such Payment Default was remedied prior to the
demand for payment of the Guarantees, in which event the
Guarantees shall continue in full force and effect.
The Holder of this Bond, by the purchase and acceptance
hereof, hereby irrevocably appoints the Indenture Trustee and
each other Holder of any Outstanding Bond as agent and attorney-
in-fact for the purpose of making any demand for payment of the
Guarantees and (in the case of the Indenture Trustee) of
receiving and distributing such payment; provided that no action
or failure to act by the Indenture Trustee shall affect the right
of the Holder of this Bond to take any action whatsoever
permitted by law and not in violation of the terms of this Bond
or of the Indenture.
In the event of (a) a default, continued for 25 days, in the
payment of the principal of or interest on the Bonds (including
this Bond) when due or (b) any default under a mortgage, loan
agreement or other security agreement between the Secretary, the
Shipyard Owner and any other parties (including the expiration of
all notice and cure periods provided for thereunder), the
Secretary shall have the right to and may, in its discretion by
written notice given to the Indenture Trustee on or after said
25-day period or after such default but prior to receipt by the
Secretary of a demand in accordance with the Indenture for
payment under the Guarantees, assume all of the rights and
obligations of the Shipyard Owner under the Indenture and the
Bonds and, if such default relates to the payment of the
principal of and interest on the Bonds, make all payments then in
default under the Bonds.
Any amount payable by the Secretary under the Guarantees
shall not be subject to any claim or defense of the United States
of America, the Secretary, or others, whether by way of
counterclaim, set-off, reduction or otherwise. Further, the
Holder of this Bond shall have no right, title or interest in any
collateral or security given by the Shipyard Owner to the
Secretary.
After payment of the Guarantees by the Secretary to the
Indenture Trustee, this Bond (1) if it has not then been
surrendered for cancellation or cancelled, shall represent only
the right to receive payment in cash of an amount (less the
amount, if any, required to be withheld in respect of transfer or
other taxes on payments to the Holder of this Bond) equal to the
unpaid principal amount hereof and the unpaid interest accrued
hereon to the date on which the Secretary shall have paid the
Guarantees in full in cash to the Indenture Trustee, (2) shall
otherwise no longer constitute or represent an obligation of the
Shipyard Owner, and (3) shall not be entitled to any other rights
or benefits provided in the Indenture, subject to Section 6.08 of
the Indenture.
The Bonds (including this Bond) may be redeemed upon the
terms and conditions provided in the Indenture, in whole or in
part, at the option of the Shipyard Owner, at any time or from
time to time upon at least 30 and not more than 60 days' prior
notice to the registered holders thereof given as provided in the
Indenture, at a redemption price equal to 100% of the principal
amount hereof, plus the Make-Whole Amount (as defined in the
Indenture) determined for the Redemption Date with respect to the
principal amount to be redeemed, together with the interest
accrued thereon to the date fixed for redemption.
The Bonds (including this Bond) are also subject to
redemption, upon the terms and conditions provided in the
Indenture and upon like notice, through the operation of a
mandatory sinking fund providing for the redemption on March 31,
1996, and on each September 30 and March 31 thereafter to and
including March 31, 2010, at 100% of the principal amount thereof
plus interest accrued thereon to such date, of a principal amount
of such Bonds equal to $593,000 and on September 30, 2010, the
entire unpaid principal amount of the Outstanding Bonds shall be
paid in full, together with all interest accrued thereon to such
date, provided, however, that notwithstanding the foregoing
provisions of this paragraph, that in case the principal amount
of Outstanding Bonds shall be reduced by reason of any redemption
described in the next succeeding paragraph, the principal amount
of Bonds to be redeemed through the operation of the mandatory
sinking fund on each subsequent mandatory sinking fund redemption
date shall be subject to reduction as provided in the Indenture.
In lieu of making all or any part of any such mandatory sinking
fund redemption, the Shipyard Owner may, at its option, receive
credit for Bonds (not previously credited against a mandatory
sinking fund payment or which the Shipyard Owner has advised the
Indenture Trustee have been credited with respect to a
determination by the Secretary as to whether or not the principal
amount of Outstanding Obligations exceeds 87.5% of the
depreciated actual cost or actual cost, as the case may be, of
the Shipyard Project, as determined by the Secretary under
Section [1112(b)] of the Act) (i) redeemed pursuant to the
optional sinking fund redemption provided for in the last
sentence of this paragraph, (ii) redeemed by the Shipyard Owner
pursuant to the optional redemption at a premium referred to
above, or (iii) purchased or acquired by the Shipyard Owner
otherwise than by redemption. Bonds so credited shall be
credited by the Indenture Trustee at 100% of the principal amount
thereof. In addition to any such mandatory sinking fund
redemption, the Shipyard Owner may, at its option, redeem on the
due date of any such mandatory sinking fund redemption, at 100%
of the principal amount thereof, plus the Make-Whole Amount
determined for the mandatory sinking fund Redemption Date with
respect to the additional principal amount to be redeemed,
together with interest accrued thereon to such date, an
additional principal amount of Bonds up to the principal amount
of Bonds required to be redeemed pursuant to such mandatory
sinking fund requirement on such date and before any credit
pursuant to the preceding sentence; provided that the right to
make any such optional sinking fund redemption shall not be
cumulative.
The Bonds (including this Bond) are also subject to
redemption, upon the terms and conditions provided in the
Indenture, in whole or in part, at 100% of the principal amount
thereof plus interest accrued thereon to the date of redemption,
upon at least 30 and not more than 60 days prior notice to the
registered holders thereof (a) in the event that Bonds must be
redeemed so that the principal amount of all Obligations
Outstanding after such redemption will not exceed 87.5% of the
depreciated actual cost or actual cost, as the case may be, of
the Shipyard Project, as determined by the Secretary, (b) in the
event of an actual, constructive, agreed or compromised total
loss of, requisition of title to, or seizure or forfeiture of,
the Shipyard Project, or condemnation thereof, (c) in the event
the Shipyard Project is not substantially completed by March 31,
1996, or (d) in the event that, after an assumption by the
Secretary of the Bonds, a purchaser of the Shipyard Project from
the Secretary does not assume all the rights and obligations of
the Shipyard Owner under the Indenture relating to the Shipyard
Project.
The Bonds (including this Bond) may also be redeemed upon
the terms and conditions provided in the Indenture, in whole or
in part, at the option of the Secretary, at any time following an
assumption of the Bonds and the Indenture by the Secretary and
prior to any sale of the Shipyard Project to a purchaser which
assumes the Shipyard Owner's rights and obligations under the
Bonds and the Indenture, upon at least 30 and not more than 60
days' prior notice to the registered holders thereof given as
provided in the Indenture, at a Redemption Price equal to 100% of
the principal amount to be redeemed plus interest accrued to the
date fixed for redemption.
Any optional redemption shall be subject to the receipt of
the redemption moneys by the Indenture Trustee or any Paying
Agent. Bonds called for redemption shall (unless the Shipyard
Owner shall default in the payment of such Bonds at the
applicable redemption price plus accrued interest) cease to bear
interest on and after the date fixed for redemption.
As provided in and subject to Section 10.04 of the Indenture
and to the extent permitted thereby, compliance by the Shipyard
Owner with any of the terms of the Indenture may be waived, and
the Indenture and the rights and obligations of the Shipyard
Owner and the rights of the Holders of the Bonds (including this
Bond) thereunder may be modified, at any time with the prior
consent of the Secretary and, except as otherwise expressly
provided in the Indenture, the consent of the Holders of at least
60% in principal amount of the Outstanding Bonds affected thereby
in the manner and subject to the limitations set forth in the
Indenture; provided that no such waiver or modification shall (1)
without the consent of the Holder of each Bond affected thereby:
(a) change the Stated Maturity or reduce the principal amount of
any Bond, (b) extend the time of payment of, or reduce the rate
of, interest thereon, (c) change the due date of or reduce the
amount of any sinking fund payment, (d) reduce any premium
payable upon the redemption thereof, or (e) change the coin or
currency in which any Bond or the interest thereon is payable; or
(2) without the consent of all Holders of Bonds: (v) terminate or
modify any of the Guarantees or the obligations of the United
States of America thereunder, (w) reduce the amount of any of the
Guarantees, (x) eliminate, modify or condition the duties of the
Indenture Trustee to demand payment of the Guarantees, (y)
eliminate or reduce the eligibility requirements of the Indenture
Trustee, or (z) reduce the percentage of principal amount of
Bonds the consent of whose Holders is required for any such
modification or waiver.
The Indenture provides that the Bonds (including this Bond)
shall no longer be entitled to any benefit provided therein if
the Bonds shall have become due and payable at Maturity (whether
by redemption or otherwise) and funds sufficient for the payment
thereof (including interest to the date fixed for such payment,
together with any premium thereon) and available for such payment
(1) shall be held by the Indenture Trustee or any Paying Agent,
or (2) shall have been so held and shall thereafter have been
paid to the Shipyard Owner after having been unclaimed for 6
years after the date of maturity thereof (whether by redemption
or otherwise) or the date of payment of the Guarantees, except
for the right, if any, of the Holder to receive payment from the
Shipyard Owner of any amounts paid to the Shipyard Owner as
provided in (2) above with respect to this Bond, all subject,
however, to the provisions of Section 6.08 of Exhibit 1 to the
Indenture.
This Bond is transferable by the registered Holder or by his
duly authorized attorney, at the Corporate Trust Office of the
Indenture Trustee, upon surrender or cancellation of this Bond,
accompanied by an instrument of transfer in form satisfactory to
the Shipyard Owner and the Indenture Trustee, duly executed by
the registered Holder hereof or his attorney duly authorized in
writing, and thereupon a new, fully registered Bond or Bonds of
like series and maturity for the same aggregate principal amount
will be issued to the transferee in exchange therefor, each in
the principal amount of $250,000 or any whole multiple of $1000
in excess of $250,000 subject to the provisions of the Indenture.
The Indenture provides that the Shipyard Owner shall not be
required to make transfers or exchanges of (1) Bonds for a period
of 15 days immediately prior to an interest payment date or (2)
Bonds after demand for payment of the Guarantees and prior to
payment thereof or rescission of such demand as provided in
Section 6.02(a) of Exhibit 1 to the Indenture or (3) any Bond
which has been selected for redemption in whole or in part.
The Shipyard Owner, the Secretary, the Indenture Trustee and
any office or agency for the payment of Bonds may deem and treat
the person in whose name this Bond is registered as the absolute
owner thereof for all purposes, and neither the Shipyard Owner,
the Secretary, the Indenture Trustee, nor any such office or
agency shall be affected by any notice to the contrary, whether
this Bond shall be past due or not.
No recourse shall be had for the payment of principal of, or
the interest or premium (if any) on, this Bond, or for any claim
based hereon or on the Indenture, against any incorporator or any
past, present or future subscriber to the capital stock,
stockholder, officer or director of the Shipyard Owner or of any
successor corporation, as such, either directly or through the
Shipyard Owner or any such successor corporation, under any
constitution, statute or rule of law or by the enforcement of any
assessment, or otherwise, all such liability being expressly
waived and released by the acceptance of this Bond and by the
terms of the Indenture.
Neither this Bond nor the Guarantee endorsed hereon shall be
valid or become obligatory for any purpose until the Indenture
Trustee shall have fully signed the authentication certificate
endorsed hereon.
IN WITNESS WHEREOF, the Shipyard Owner has caused this Bond
to be duly executed by the manual or facsimile signatures of its
duly authorized officers under its corporate seal or facsimile
thereof.
Dated as of February 9, 1995 AVONDALE INDUSTRIES, INC.
BY:
----------------------
Thomas M. Kitchen, Vice
President, Chief Financial
Officer and Secretary
(SEAL)
Attest:
___________________________________
Bruce L. Hicks, Assistant Secretary
GUARANTEE OF THE UNITED STATES OF AMERICA
The United States of America, represented by the Secretary
of Transportation, acting by and through the Maritime
Administrator, pursuant to Title XI of the Merchant Marine Act,
1936, as amended, hereby guarantees to the holder of the within
Bond, upon demand of the holder or his agent, payment of the
unpaid interest on, and the unpaid balance of the principal of,
such Bond, including interest accruing between the date of
default under such Bond and the payment in full of this
Guarantee. The full faith and credit of the United States of
America is pledged to the payment of this Guarantee. The
validity of this Guarantee is incontestable in the hands of any
holder of such Bond. Payment of this Guarantee will be made in
accordance with the provisions of such Bond.
UNITED STATES OF AMERICA
SECRETARY OF TRANSPORTATION
(SEAL OF THE DEPARTMENT
OF TRANSPORTATION)
BY:
-------------------
Maritime Administrator
TRUSTEE'S AUTHENTICATION CERTIFICATE
This is one of the Bonds described in the Indenture and the
foregoing Guarantee is one of the Guarantees described in the
Authorization Agreement.
CHEMICAL BANK
Indenture Trustee
BY:_______________________________
Authorized Officer
PAYMENTS ON ACCOUNT OF PRINCIPAL
Amount of Balance of Authorized
Payment Date Principal Paid Principal Unpaid Signature
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