EXHIBIT 10.8.1 TRUST INDENTURE Relating to United States Government Guaranteed Ship Financing Obligations

EXHIBIT 10.8.1

_________________________________________________________

TRUST INDENTURE

Relating to United States Government Guaranteed
Ship Financing Obligations

Between

TRAILER BRIDGE, INC.

Shipowner

AND

STATE STREET BANK AND TRUST COMPANY

Indenture Trustee

Dated as of June 23, 1997

_________________________________________________________

TRUST INDENTURE

Relating to United States Government Guaranteed
Ship Financing Obligations

Between

TRAILER BRIDGE, INC.

Shipowner

AND

STATE STREET BANK AND TRUST COMPANY

Indenture Trustee

Dated as of June 23, 1997

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) [Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(c) Optional Redemptions of Bonds at Premium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
------------------

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.

ARTICLE FOURTH

Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE FIFTH

Additions, Deletions and Amendments to Exhibit 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1
(a) Concerning Section 2.04 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(b) Concerning Section 2.12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(c) Concerning Payment of the Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(d) Concerning Selection of Bonds to be Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(e) Concerning References to 3.09(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(f) Concerning Home Office Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(g) Concerning Section 7.02 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(h) Concerning Section 10.01 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(i) Concerning Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(j) Concerning Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(k) Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 and 11

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

TRUST INDENTURE

SPECIAL PROVISIONS

THIS TRUST INDENTURE, dated as of June 23, 1997 (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)Trailer Bridge,
Inc., a Delaware corporation (herein called the "Shipowner"), and (ii) State
Street Bank and Trust Company, a Massachusetts trust company (said Bank, any
successor or assign hereunder, herein called the "Indenture Trustee").

RECITALS:

A. As provided in Article Fourth hereof, the terms defined in Schedule
A to this Indenture shall have the respective meanings stated in said Schedule;

B. The Shipowner has duly executed this Indenture, and duly authorized
the issuance hereunder of $10,515,000 aggregate principal amount of its bonds
pursuant to Section 2.03 of Exhibit 1 to this Indenture (herein together with
any bonds issued in respect thereof pursuant to Sections 2.09, 2.10, 2.12 and
3.10(b) of said Exhibit 1, called the "Bonds" or the "Obligations") designated
"United States Government Guaranteed Ship Financing Bonds, 1997 Series;" the
Obligations will bear interest at 7.07% per annum and mature on September 30,
2022;

C. The Obligations will be issued by the Shipowner to aid in the
financing of the cost of construction of two 408'9" x 100' container deck
barges;

D. Under the Authorization Agreement in the form set forth as Exhibit
3 hereto, the Secretary, on behalf of the United States, has agreed and will
agree to execute on each of the Obligations to be issued, a Guarantee of the
payment of the unpaid interest to the date of such payment on, and the unpaid
balance of the principal of, such Obligation under the provisions of Title XI
of the Act, and the Indenture Trustee is authorized to cause the Guarantees,
bearing the facsimile signature of the Secretary, and the facsimile seal of the
United States Department of Transportation, to be imprinted on the Obligations,
and to authenticate and deliver the Obligations and the Guarantees issued on
the Closing Date, such agreements and authorizations being subject to the
conditions set forth in the Authorization Agreement;

E. Pursuant to Section 1104(b)(5) of the Act, the Secretary has
determined that the

interest to be borne by the Obligations (exclusive of charges for the guarantee
fee and service charges, if any) at the rate specified in the form thereof set
forth in Exhibit 2 hereto is reasonable; and

F. All actions necessary have been taken in order (1) to make the
Obligations, when executed by the Shipowner, authenticated by the Indenture
Trustee and issued under the Indenture, the valid, binding and legal
obligations of the Shipowner in accordance with their terms, (2) to make the
Guarantees to be endorsed on the Obligations, when executed by the Secretary,
authenticated by the Indenture Trustee and delivered under this Indenture, the
valid, binding and legal obligations of the United States in accordance with
their terms, and (3) to make this Indenture the valid, binding and legal
agreement of the parties hereto in accordance with its terms.

NOW THEREFORE, in consideration of the premises, of the mutual
covenants herein contained, of the purchase of the Obligations by the Holders
thereof, and of other good and valuable consideration, the receipt and adequacy
of which the parties hereby acknowledge, and for the equal and proportionate
benefit of all the present and future Holders of the Obligations, the parties
hereto agree as follows:

ARTICLE FIRST

INCORPORATION OF GENERAL PROVISIONS

This Indenture shall consist of two parts: the Special Provisions and
the General Provisions attached hereto as Exhibit 1, made a part of this
Indenture and incorporated herein by reference.

ARTICLE SECOND

THE BONDS

(a) The Bonds issued hereunder shall be designated "United States
Government Guaranteed Ship Financing Bonds, 1997 Series," and shall be in the
form of Exhibit 2 to this Indenture; and, the aggregate principal amount of
Bonds which may be issued under this Indenture shall not exceed $10,515,000
except as provided in Sections 2.09, 2.10, 2.12 and 3.10(b) of Exhibit 1
hereto.

(b) The Bonds shall be in the denominations of $1,000 or any integral
multiple thereof.

office or agency for the purposes specified in Section 5.03 of Exhibit 1 to
this Indenture.

(d) The Indenture Trustee shall at the date of the Closing have its
Corporate Trust Office in the City of Boston, Commonwealth of Massachusetts.
(e) The Bonds shall mature on September 30, 2022.

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 30 and September 30 of each year,
commencing March 30, 1998, of $210,300 principal amount of Bonds (or such
lesser principal amount of Bonds as shall then be outstanding), which amount
represents two percent (2%) of the Original Principal Amount of Obligations,
plus interest accrued thereon to the Redemption Date. On September 30, 2022
there shall become due and payable, and the Shipowner shall pay, the balance of
the unpaid principal amount of Bonds then outstanding, together with all
interest accrued thereon to such date.

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 that, the entire unpaid principal amount of the Outstanding
Bonds shall be paid not later than September 30, 2022. The Shipowner 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 Shipowner may, at its option, with the prior written consent of the
Secretary, receive credit for Bonds not previously so credited or applied to
reduce the principal amount of Bonds Outstanding, (i) redeemed by the Shipowner
pursuant to the optional redemption provision provided for in subsection (c) of
this Article or purchased or acquired by the Shipowner (other 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 Shipowner 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 Shipowner and/or any other person restricting the Shipowner'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) [Reserved]

(c) Optional Redemptions of Bonds at Premium. At its option, the
Shipowner may redeem the Bonds, in whole at any time, at the redemption prices
as specified in the Bonds, together with interest accrued thereon to the date
fixed for redemption; provided that, no such redemption shall be made prior to
March 30, 2008, directly or indirectly with the proceeds of, or in anticipation
of, borrowing by or for the account of the Shipowner if such borrowing has an
effective interest cost (calculated in accordance with generally accepted
financial practice) of less than the rate of interest borne by the Bonds. If
the Shipowner shall elect to make any such optional redemption, the Shipowner
shall, at least 30 days but not more than 60 days prior to the date fixed for
redemption, deliver to the Indenture Trustee a Request stating that the
Shipowner intends to exercise its rights as above set forth to make such
optional redemption and specifying the Redemption Date, and the principal
amount of Bonds which the Shipowner intends to redeem on such date (which shall
not be less than all the Bonds outstanding). In the case of any redemption
pursuant to this subsection (c) prior to March 30, 2008, the Shipowner shall
deliver to the Indenture Trustee, at the time of delivery of said Request, an
Officer's Certificate stating that such redemption shall comply with the

proviso relating to such redemption prior to such 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 Shipowner and the Indenture Trustee
shall not enter into any Supplemental Indenture, and the Indenture Trustee
shall not enter into any supplement to the Authorization Agreement, pursuant to
Section 2.04 of Exhibit 1 to this Indenture, except to provide for the issuance
of additional Obligations of any series and Stated Maturity theretofore issued,
or of one or more additional series for the purpose of aiding in financing or
refinancing the construction, reconstruction or reconditioning of one or more
of the Vessels, 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 Shipowner,
and the Indenture Trustee, executed and delivered by an institutional Holder
having a combined capital and surplus of at least one hundred million dollars
($100,000,000) shall be considered sufficient indemnity to the

Secretary, the Shipowner, and the Indenture Trustee in connection with the
execution, authentication and delivery of any new Obligations or the making of
any payment as contemplated by said Section 2.12.

(c) Concerning Payment of the Obligations. Notwithstanding anything to
the contrary in Exhibit 1 hereto, the Obligations to be issued hereunder shall
be payable as to principal, premium (if any), and interest, at an office or
agency maintained by the Shipowner for such purpose at the Corporate Trust
Office of the Indenture Trustee, or at the option of the Shipowner, as to
payments of principal, premium (if any), or interest by check mailed by such
Corporate Trust Office to the addresses of the Obligees as such addresses shall
appear in the Obligation Register, subject in any event to the provisions
hereof concerning home office payment. The Indenture Trustee agrees that within
30 days from the date of any payment of principal or interest when the same
shall become due and payable by reason of maturity or redemption, a Responsible
Officer in the Corporate Trust Office of the Indenture Trustee shall ascertain
to his satisfaction that checks in payment of such amounts have been mailed by
such Corporate Trust Office to the addresses of the Obligees as provided above,
if payment is to be made by check, or if payment is to be made by wire
transfer, or by credit to an account maintained by the Obligee with the
Indenture Trustee, that such funds have been wired or credited, or if payment
is to be made at the Corporate Trust Office, that funds were held by the
Indenture Trustee for such payment on the date the payment was due. The
Indenture Trustee shall have no obligation to determine whether such checks or
payments were received by the Obligees.

(d) 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 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 I 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.

(e) Concerning Section 3.08(a). Section 3.08 (a) of Exhibit 1 is
amended by adding the following after the word "Register": "provided, however,
that the requirement in this Section 3.08(a) to include the Redemption Price in
such notice may be satisfied by stating (i)

the principal amount of Obligations being redeemed, (ii) that the Shipowner is
obligated to pay such amount, together with accrued interest at the interest
rate borne by the Obligations to the Redemption Date and the Redemption
Premium, and (iii) that the Shipowner shall calculate the Redemption Premium
and furnish such calculation, together with a reasonably detailed summary
thereof, to the Indenture Trustee and each Holder not later than the second
Business Day preceding the Redemption Date."

(f) 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.

(g) Concerning Home Office Payment. Notwithstanding any terms of this
Indenture or the Obligations to the contrary, the Shipowner may enter into an
agreement with any Holder of an Obligation providing for payment to such Holder
by certified or official bank check, or at the request of 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 Shipowner or of the Indenture Trustee without presentation of
such Obligation. The Shipowner will furnish to the Indenture Trustee a copy of
each such agreement. The Indenture Trustee hereby consents to such agreement
contained in Section 7 of the Bond Purchase Agreement dated as of the Closing
Date, between the Shipowner and the Purchasers named in Schedule 1 thereto, and
hereby acknowledges receipt of a copy thereof.

(h) 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 "$100,000,000."

(i) Concerning Section 10.01. Paragraph (2) of Section 10.01 of
Exhibit 1 to this Indenture is deleted, and the following substituted in lieu
thereof:

"(2) to evidence the succession pursuant to Article VIII of
another corporation or entity to the Shipowner or any
assumption of all or a part of the Obligations pursuant to
Article VIII;"

(j) Concerning Notices. Subject to the provisions of Section 13.01 of
Exhibit 1 to this Indenture, any notice, request, demand, direction, consent,
waiver, approval or other communication to be given to a party hereto or the
Secretary, shall be deemed to have been sufficiently given or made when
addressed to:

The Indenture Trustee as: State Street Bank and Trust Company
Corporate Trust Xxxxxxxxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000

The Shipowner as: Trailer Bridge, Inc.
0000 Xxxxxxx Xxxxxx Xxxxxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx XxXxxx

The Secretary as: SECRETARY OF TRANSPORTATION
c/o Maritime Administrator
Department of Transportation
000 Xxxxxxx Xxxxxx, XX
Xxxxxxxxxx, X.X. 00000

(k) 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 federal laws of the United States.

(l) Execution in 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.

TRAILER BRIDGE, INC.
Shipowner

[SEAL] By: Xxxx XxXxxx
-----------

STATE STREET BANK AND TRUST
COMPANY
Indenture Trustee

By: Xxxxxx X. Xxxxxxx
-----------------
Vice President
[SEAL]

XXXXX XX XXX XXXX )
) SS:
COUNTY OF NEW YORK )

On this 20 day of June, 1997 before me personally appeared Xxxx
XxXxxx, who being by me duly sworn, did depose and say that he resides at 00
Xxxxxxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000; that he is Chairman of TRAILER
BRIDGE, INC., that he knows the seal of said Corporation; 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 20 day
of June, 1997.

Xxxxxxx X. Xxxxxxx, Xx.
-----------------------
NOTARY PUBLIC
State of New York
02604837705
Comm. Expires 7/31/97

(Notarial Stamp and Seal)

COMMONWEALTH OF MASSACHUSETTS)
) SS:
COUNTY OF SUFFOLK )

Be it known this 17 day of June, 1997 personally appeared
before me Xxxxxx X. Xxxxxxx, who after being duly sworn, deposed and said that
he is a Vice President of STATE STREET BANK AND TRUST COMPANY, the
Massachusetts Trust Company which is described in and executed within the
instrument hereto annexed, that he/she knows the seal of said trust company,
that the seal affixed to said instrument is said trust company's seal, that it
was so affixed and that he/she signed the instrument hereto annexed by order of
the Board of Directors of the said STATE STREET BANK AND TRUST COMPANY, and
that he/she signed his/her name thereto by like authority, and acknowledged the
annexed instrument to be the free act and deed of the said STATE STREET BANK
AND TRUST COMPANY.

In testimony whereof, I have hereunto set my hand and seal this 17 day
of June, 1997.

Xxxxxxxx X. Xxxxx
-----------------
NOTARY PUBLIC

Xxxxxxxx X. Xxxxx
Notary Public
My Commission Expires June 20, 1997
(Notarial Stamp and Seal)

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

Page
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ARTICLE I. DEFINITIONS; OFFICER'S CERTIFICATE AND OPINIONS OF
COUNSEL. 1
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Officer's Certificate and Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE II. THE OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2.01. Designation of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2.02. Issue, Form, Principal Amount, Maturity,
Interest, Place of Payment, Denominations,
and Redemption of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2.03. Issuance of Obligations of
Initial Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.04. Additional Obligations;
Obligations of Additional Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.05. Legends on Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.06. Dates of Obligations; Interest Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.07. Execution of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.08. Authentication of Obligations and
Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.09. Temporary Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.10. Registration, Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.11. Who Treated as Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.12. Lost, Stolen, Destroyed or
Mutilated Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.13. Reacquired Obligations, Cancellation
and Disposition of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

ARTICLE III. REDEMPTION OF OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.01. Redemptions Suspended During Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

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

SECTION 3.02. Redemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(a) Redemptions with Premium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(b) Redemptions without Premium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(c) Sinking Fund Redemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(d) Adjustment of Redemption Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.03. Terminal Mandatory Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.04. Redemptions to Comply with Provisions of
1104(b)(2) of the Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.05. Redemption After Total Loss, Requisition
of Title, Seizure or Forfeiture of
Vessel or Termination of Certain
Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.06. Redemption After Assumption by the
Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.07. Determination of Obligations to be
Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.08. Notices of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.09. Deposit of Redemption Moneys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.10. Payment of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

ARTICLE IV. CASH HELD BY INDENTURE TRUSTEE OR PAYING AGENTSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 4.01. Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 4.02. Paying Agents Other Than Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.03. Unclaimed Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.04. Application of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13

ARTICLE V. REPRESENTATIONS AND AGREEMENTS OF SHIPOWNER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.01. Authorization, Execution and
Delivery of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.02. Payment and Procedure for Payment of
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.03. Offices or Agencies of Shipowner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

ARTICLE VI. INDENTURE DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 6.01. What Constitutes "Indenture Defaults" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 6.02. Demand for Payment of Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 6.03. Appointment of Indenture Trustee and
Holders of Outstanding Obligations as
Attorneys-in-Fact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 6.04. Termination and Payment of the Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 6.05. Rights of Indenture Trustee After
Indenture Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

SECTION 6.06. (a) Obligees' Right to Direct Indenture
Trustee After Indenture Default . . . . . . . . . . . . . . . . . . . . . . . . . 17
(b) Limitations on Obligees Right to Xxx . . . . . . . . . . . . . . . . . . . . . . . . 17
(c) Unconditional Right of Obligees to
Xxx for Principal (and Premium, if
any) and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 6.07. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 6.08. Recision of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 6.09. Assumption of Obligations of Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

ARTICLE VII. THE INDENTURE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 7.01. Acceptance of Trusts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 7.02. Eligibility of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 7.03. Rights and Duties of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 7.04. Compensation, Expenses and Indemnification of Indenture Trustee . . . . . . . . . . . . . . . . . . . 23
SECTION 7.05. Resignation and Removal of Indenture
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 7.06. Appointment of Successor Indenture
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 7.07. Effect of Appointment of Successor
Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 7.08. Merger, Consolidation and Sale
of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

ARTICLE VIII. CONSOLIDATION, MERGER AND SALE BY SHIPOWNER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 8.01. Consolidation, Merger or Sale
by Shipowner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 8.02. Sale of Vessel by the Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

ARTICLE IX. ACTS OF OBLIGEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
SECTION 9.01. Acts of Obligees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

ARTICLE X. SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 10.01. Permissible Without Action by Obligees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 10.02. Protection of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 10.03. Reference in Obligations
to Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 10.04. Waivers and Supplemental Indentures
with Consent of Obligees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 10.05. Consent of Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
SECTION 10.06. Continued Validity of the Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

ARTICLE XI. PERFORMANCE OF OBLIGATIONS TO SECRETARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
SECTION 11.01. Performance of Obligations to Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

ARTICLE XII. SATISFACTION AND DISCHARGE OF INDENTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..30
SECTION 12.01. Satisfaction and Discharge
of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

ARTICLE XIII. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..30
SECTION 13.01. Notices and Demands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
SECTION 13.02. Waivers of Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 13.03. Benefit of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 13.04. Execution of Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 13.05. Table of Contents; Titles and Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 13.06. Integration with Special Provisions of
the Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 13.07. Immunity of Incorporators, Stockholders,
Officers and Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 13.08 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

EXHIBIT 1

GENERAL PROVISIONS OF THE INDENTURE
INCORPORATED BY REFERENCE

ARTICLE I

DEFINITIONS; OFFICER'S CERTIFICATES
AND OPINIONS OF COUNSEL

SECTION 1.01. Definitions. For all purposes of this Indenture, the
terms used herein shall have the meanings specified in the Special Provisions
hereof, including without limitation Schedule A to this Indenture.

SECTION 1.02. Officer's Certificates and Opinions of Counsel. (a)
Each Officer's Certificate or Opinion of Counsel with respect to compliance
with a covenant or condition provided for herein (or waiver thereof) shall
include:

(1) A statement that the Person or Persons making such
certificate or rendering such opinion has or have read such covenant
or condition;

(2) A brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;

(3) A statement that, in the opinion of such Person or
Persons, he or they have made or caused to be made such examination or
investigation as is necessary to enable him or them to express an
informed opinion as to whether or not such covenant or condition has
been complied with (or compliance therewith has been waived); and

(4) A statement as to whether or not, in the opinion of
such Person or Persons, such condition or covenant has been complied
with (or such compliance has been waived).

(b) An Opinion of Counsel may be based (insofar as it relates to
factual matters, information with respect to which is in the possession of any
Person) upon a certificate or opinion of or representations in writing signed
by an officer or officers of such Person or by such Person, as the case may be,
and may be based upon an Opinion of Counsel signed by another counsel.

An Opinion of Counsel may state that said opinion is subject to the
execution and delivery of designated instruments if copies of such instruments
in form approved by such counsel are delivered to the Indenture Trustee prior
to or concurrently with the delivery of said opinion.

(c) A certificate or opinion of a Person or Persons other than counsel
may be based, insofar as it relates to legal matters, upon an Opinion of
Counsel, unless the Person or Persons signing such certificate or opinion
knew that such Opinion of Counsel was erroneous or, in the exercise of
reasonable care, should have known that the same was erroneous.

(d) If the Indenture requires or permits the execution of any document
by officers, counsel or other Persons, such document may be executed in
counterparts by different officers, counsel or other Persons, all of which
shall form one instrument.

(e) If the signer of any document is required to be approved by the
Indenture Trustee, the acceptance of such document by the Indenture Trustee
shall be sufficient and conclusive evidence of such approval.

(f) The fact that the delivery of any document is a condition
precedent to any action required or permitted hereby shall not preclude the
withdrawal, revocation, rescission, modification or amendment of such document
at any time prior to such action, and, in the event of any such withdrawal,
revocation or rescission, such document shall be disregarded for all purposes
of this Indenture.

ARTICLE II
THE OBLIGATIONS

SECTION 2.01. Designation of Obligations. The Obligations of each
series shall be designated as stated in the Special Provisions hereof or in the
Supplemental Indenture establishing such series.

SECTION 2.02. Issue, Form, Principal Amount, Maturity, Interest,
Place of Payment, Denominations and Redemption of Obligations. (a) Upon or
after the execution and delivery of this Indenture the aggregate principal
amount of Obligations of the series and Stated Maturity or Maturities permitted
by the Special Provisions hereof may be executed by the Shipowner,
authenticated by the Indenture Trustee, and delivered as provided herein.

(b) The Obligations of each series and Stated Maturity to be issued
hereunder, the Guarantees of the United States to be endorsed thereon and the
Indenture Trustee's authentication certificates to be endorsed thereon shall,
in the case of the initial series of Obligations, be in the form or forms set
forth in Exhibit 2 to the Special Provisions hereof or, in the case of
Obligations of any additional series, in the form or forms set forth in the

Supplemental Indenture establishing such series, and said Obligations shall:

(1) be limited to the respective principal amounts stated in
the Special Provisions hereof or in the Supplemental Indenture
establishing such series;

(2) bear interest from the date specified in Section 2.06 at
the rate or rates per annum stated in such Obligations;

(3) Mature in the amount or amounts and at the time or time
stated therein;

(4) be payable as to principal (and any premium thereon if
premium in case of redemption prior to Stated Maturity is provided for
therein), in any coin or currency of the United States which at the
time of payment is legal tender for public and private debts, at an
office or agency maintained from time to time by the Shipowner for
such purpose as provided in Section 5.03 at the place or places stated
in the Special Provisions hereof and payable as to interest as
aforesaid or, at the option of the Shipowner, by check mailed by such
office or agency to the addresses of the Obligees as such addresses
shall appear in the Obligation Register;

(5) be issued in the denominations provided in the Special
Provisions hereof or in the Supplemental Indenture establishing such
series; and

(6) be subject to redemption to the extent and as provided in
Article III.

(c) If the Maturity of any Obligation or an Interest Payment Date for
any Obligation shall be a day other than a Business Day, then such payment may
be made on the next succeeding Business Day, with the same force and effect as
if made on the nominal date for such payment, and no interest shall accrue
thereon for the period after said nominal date (whether or not such next
succeeding Business Day occurs in a succeeding month).

SECTION 2.03. Issuance of Obligations of Initial Series. At any time
and from time to time after the execution and delivery of this Indenture, the
Shipowner may deliver to the Indenture Trustee Obligations of the initial
series issuable under this Indenture duly executed by the Shipowner as
hereinafter provided, accompanied by a Request of the Shipowner, and thereupon
the Indenture Trustee shall authenticate such Obligations, after endorsing
thereon and authenticating the Guarantees of the United States in accordance
with the Authorization Agreement, and shall deliver such Obligations and
Guarantees in accordance with such Request. Each such Request shall specify the
principal amounts, interest rates and Stated Maturities of the Obligations to
be authenticated and the names and addresses of the Persons in whose name the
Obligations are to be registered.

SECTION 2.04. Additional Obligations; Obligations of Additional
Series. At any time or from time to time, the Shipowner may, with the approval
of the Secretary, issue additional Obligations of any series and Stated
Maturity theretofore issued or of one or more

additional series, which shall (i) be in such principal amount, and (in the
case of Obligations of any additional series) mature on such dates, bear
interest at such rate or rates, be in such form or forms and have such other
terms and provisions, as shall be set forth in a Supplemental Indenture
providing for the issue thereof and (ii) be guaranteed by the United States
under Title XI of the Act pursuant to a supplement to the Authorization
Agreement.

SECTION 2.05. Legends on Obligations. Any Obligation may have
imprinted or stamped thereon any legend, consistent herewith, which is
prescribed by the Shipowner and approved by the Indenture Trustee, and, except
for endorsements permitted by the second paragraph of Section 2.10(c), by the
Secretary.

SECTION 2.06. Dates of Obligations; Interest Rights. Each Obligation
of any series shall be dated the date of its authentication and except as
otherwise provided in this Section, shall bear interest from the Interest
Payment Date for Obligations of such series next preceding the date of such
Obligation to which interest on the Obligations of such series has been paid,
unless (i) the date of such Obligation is the date to which interest on the
Obligations of such series has been paid, in which case from the date of such
Obligation, or (ii) no interest has been paid on the Obligations of such series
since the original issue date (as defined below) of such Obligation, in which
case from such original issue date. The term "original issue date" of an
Obligation shall mean (a) in the case of an Obligation issued on original
issue, the date of such Obligation, or (b) in the case of an Obligation not
issued on original issue, the date of the Obligation (or portion thereof)
issued on original issue for which such Obligation was issued (directly or
indirectly) on registration of transfer, exchange or substitution.

SECTION 2.07. Execution of Obligations. The Obligations shall from
time to time be executed on behalf of the Shipowner by a Responsible Officer
thereof (whose signature may be a facsimile), and its corporate seal (which may
be a facsimile) shall be affixed thereto or imprinted thereon and attested by
its secretary, an assistant secretary or an assistant trust officer (whose
signature may be a facsimile).

If any officer of the Shipowner whose signature (facsimile or
otherwise) appears on any Obligation shall cease to be such officer before such
Obligation shall have been authenticated by the Indenture Trustee or delivered,
such Obligation nevertheless may be authenticated, issued and delivered with
the same force and effect as though the person or persons whose signature or
signatures (facsimile or otherwise) appear on such Obligation had not ceased to
be such officer or officers of the Shipowner.

SECTION 2.08. Authentication of Obligations and Guarantees. No
Obligation or the Guarantee of the United States thereon shall be valid unless
such Obligation shall bear thereon an authentication certificate, manually
executed by the Indenture Trustee in accordance with the terms and conditions
of the Authorization Agreement, substantially in the form or forms referred to
in Section 2.02(b). Such authentication certificate, so

executed, on any Obligation shall be conclusive evidence, and the only
competent evidence, that such Obligation and such Guarantee have been duly
executed, authenticated and delivered hereunder.

SECTION 2.09. Temporary Obligations. There may be issued from time
to time in lieu of (or in exchange for) any definitive Obligation or
Obligations one or more temporary Obligations of like series and Stated
Maturity, with a Guarantee of the United States endorsed thereon and
authenticated by the Indenture Trustee, substantially of the same tenor as the
definitive Obligations in lieu of (or in exchange for) which they are issued,
with or without the specification of any Redemption Price or Prices. Such
temporary Obligation or Obligations may be in such authorized denomination or
denominations as shall be stated in a Request of the Shipowner delivered to the
Indenture Trustee prior to the authentication thereof, which Request shall
specify the aggregate principal amounts and the series and Stated Maturities of
such temporary Obligations.

If definitive Obligations are not ready for delivery, the Holder of
any temporary Obligation may, at the Corporate Trust Office, with the consent
of the Shipowner, exchange the same for a temporary Obligation or Obligations
of like series, tenor, interest accrual date and Stated Maturity of authorized
denominations for the same aggregate principal amount upon the surrender for
cancellation of such temporary Obligation or Obligations.

When definitive Obligations are ready for delivery, the Holder of any
temporary Obligation may, at the Corporate Trust Office, exchange the same
without charge for a definitive Obligation or Obligations of like series,
tenor, interest accrual date and Stated Maturity of authorized denominations
for the same aggregate principal amount.

SECTION 2.10. Registration, Transfer and Exchange. (a) The Shipowner
shall cause the Indenture Trustee to keep an Obligation Register for the
registration of ownership, transfers and exchanges of Obligations, at the
Corporate Trust Office.

(b) Any Obligation may be transferred at the Corporate Trust Office,
by surrender of such Obligation for cancellation, accompanied by an instrument
of transfer in form satisfactory to the Shipowner and the Indenture Trustee,
duly executed by the registered Obligee or his duly authorized attorney, and
thereupon the Shipowner shall execute, and the Indenture Trustee shall
authenticate and deliver in the name of the transferee or transferees, a new
Obligation or Obligations, and the Guarantee or Guarantees of the United States
thereon, in authorized denominations of like series, tenor, interest accrual
date and Stated Maturity and for the same aggregate principal amount.

(c) The Shipowner shall not be required to register transfers or make
exchanges of (1) Obligations for a period of 15 days immediately prior to (A)
an Interest Payment Date or (B) any selection of Obligations to be redeemed,
(2) Obligations after demand for payment of the Guarantees and prior to the
payment thereof or rescission of such demand pursuant to Section 6.02(a), or
(3) any Obligation which has been selected for redemption in whole or in part.

If any Obligation surrendered for transfer or exchange has been selected
for redemption in whole or in part, there may be endorsed on any Obligation or
Obligations issued therefor an appropriate notation of such fact.

(d) Any Obligation shall be exchangeable for a like principal amount of
Obligations of the same series, tenor, interest accrual date and Stated Maturity
but of different authorized denominations. Obligations to be exchanged shall be
surrendered at the Corporate Trust Office, and the Shipowner shall execute, and
the Indenture Trustee shall authenticate and deliver in exchange therefor, the
Obligation or Obligations, and the Guarantee or Guarantees of the United States
thereon, requested by the Obligee in accordance with this paragraph (d).

(e) As a condition precedent to any transfer or exchange of Obligations,
the Shipowner may (except upon an exchange of temporary for definitive
Obligations) require the payment of a sum sufficient to reimburse it for any
taxes or other governmental charges that may be imposed with respect thereto and
a sum not exceeding $2.00 for each Obligation delivered upon any such transfer
or exchange.

SECTION 2.11. Who Treated as Owners. The Shipowner, the Indenture
Trustee, the Secretary, and any office or agency for the payment of principal of
(and premium, if any) or interest on the Obligations may deem and treat the
Person in whose name any Obligation is registered in the Obligation Register as
the absolute owner of such Obligation for all purposes, and neither the
Shipowner, the Indenture Trustee, the Secretary, nor any such office or agency
shall be affected by any notice to the contrary, whether such Obligation shall
be past due or not. All payments of or on account of principal (and premium, if
any) or interest, or pursuant to the Guarantee endorsed on such Obligation, to
such registered Obligee shall be valid and effectual to satisfy and discharge
the liability of the Shipowner and the Secretary to the extent of the sum or
sums so paid, except as otherwise provided in Section 6.08.

SECTION 2.12. Lost, Stolen, Destroyed or Mutilated Obligations. Upon
receipt by the Shipowner and the Indenture Trustee of evidence satisfactory to
them of the loss, theft, destruction or mutilation of any Outstanding Obligation
and the ownership thereof, the Shipowner may execute, and upon request of the
Shipowner, the Indenture Trustee shall, but subject to all limitations imposed
by the Authorization Agreement and only to the extent authorized thereby,
authenticate and deliver, a new Obligation, and the Guarantee of the United
States thereon, of like series, tenor, interest accrual date, principal amount
and Stated Maturity (which may bear such notation as may be required by the
Indenture Trustee or by usage or by the rules of any stock exchange upon which
the Obligations are then listed and which shall bear a serial number different
from the serial number of the lost, stolen, destroyed or mutilated Obligation)
in lieu of such lost, stolen, destroyed or mutilated Obligation and, similarly,
upon receipt by the Shipowner and the Indenture Trustee of evidence satisfactory
to them of the loss, theft, destruction or mutilation of any Obligation which
has or is about to become due and payable, the Indenture Trustee may deem the

applicant with respect thereto to be the owner of said Obligation for the
purpose of receiving payment on account thereof of principal (and premium, if
any) upon maturity or interest or the payment of the Guarantee thereof;
provided that, as conditions precedent to the execution, authentication and
delivery of any new Obligation in place of said Obligation or to any payment
contemplated by this Section, (1) the Shipowner, the Indenture Trustee and the
Secretary shall receive indemnity satisfactory to the Shipowner, the Indenture
Trustee and the Secretary, (2) the Shipowner shall be reimbursed for all
reasonable expenses (including any fees or expenses of the Indenture Trustee)
incident thereto, and (3) said Obligation shall (unless the same shall have
been lost, stolen or destroyed) be surrendered.

Obligations issued pursuant to this Section and the Guarantees endorsed
thereon shall constitute original contractual obligations of the Shipowner and
the United States, respectively, whether or not the lost, stolen or destroyed
Obligations be at any time enforceable by anyone, and shall be equally and
proportionately entitled to the benefits of this Indenture with all other
Outstanding Obligations issued hereunder.

The provisions of this Section 2.12 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of lost, stolen, destroyed or mutilated Obligations.

SECTION 2.13. Reacquired Obligations; Cancellation and Disposition of
Obligations. In the event the Shipowner shall reacquire any Obligations (whether
by purchase or otherwise), such Obligations shall forthwith be delivered to the
Indenture Trustee for cancellation. Except as provided in Section 3.09(b), all
Obligations surrendered for the purpose of payment, redemption, transfer,
exchange, or substitution, or (if permitted in the Special Provisions hereof or
the Supplemental Indenture establishing any additional series of Obligations) in
discharge in whole or in part of any sinking fund payment shall, if surrendered
to the Shipowner or any Paying Agent, be delivered to the Indenture Trustee for
cancellation, or, if surrendered to the Indenture Trustee, shall be cancelled by
it. No Obligation shall be authenticated in lieu of or in exchange for any
Obligation cancelled as provided in this Section, except as may be expressly
permitted by this Indenture. Obligations cancelled by the Indenture Trustee
shall be delivered or disposed of as directed by a Request of the Shipowner.

ARTICLE III

REDEMPTION OF OBLIGATIONS

SECTION 3.01. Redemptions Suspended During Default. Notwithstanding the
following provisions of this Article III, neither the Shipowner nor the
Indenture Trustee shall redeem any Obligations, except pursuant to Section 3.04
or 3.06 during the continuance of any Indenture Default or event which with the
lapse of time could constitute a Payment Default, except that, where the mailing
of notice of redemption of any Obligations shall have

theretofore been made, the Indenture Trustee shall redeem or cause to be
redeemed such Obligations if it shall have received a sum sufficient for such
redemption. Except as aforesaid, any moneys received by the Indenture Trustee
for the redemption of Obligations which may not be applied to the redemption
thereof shall be held as security for the payment of all the Obligations, and,
(i) in case such Indenture Default or such event shall no longer be continuing,
such moneys shall thereafter be applied to the redemption of Obligations in
accordance with the applicable provisions of the Obligations and of this
Article III, (ii) in the event the Secretary shall have assumed the Obligations
pursuant to Section 6.09 or shall have been required to pay the Guarantees,
such moneys shall be paid over by the Indenture Trustee to the Secretary or
(iii) if no Obligation shall be Outstanding, other than by payment of the
Guarantees, such moneys shall be paid to the Shipowner.

SECTION 3.02. Redemptions. (a) Redemptions With Premium. If the
Obligations of any series and Stated Maturity or the Special Provisions hereof
or the Supplemental Indenture establishing such series shall so provide, such
Obligations shall be subject to redemption at a premium in the amounts, at the
price or prices, at the time or times and subject to the conditions specified
therein.

(b) Redemptions Without Premium. The Obligations of each series shall be
subject to redemption without premium in the amounts, at the time or times and
subject to the conditions specified in Sections 3.03, 3.04, 3.05 and 3.06. If
the Obligations of any series and Stated Maturity or the Special Provisions
hereof or the Supplemental Indenture establishing such series shall so provide,
such Obligations shall also be subject to redemption without premium in the
amounts, at the time or times and subject to the conditions specified therein or
as provided in subsection (c) of this Section 3.02.

(c) Sinking Fund Redemptions. If the Obligations of any series and Stated
Maturity or the Special Provisions hereof or the Supplemental Indenture
establishing such series shall so provide, such Obligations shall be subject to
(i) mandatory redemption through the operation of a sinking fund or similar
fund, in such amounts, at such times and subject to such credits (if any) as may
be specified therein, and (ii) redemption at the option of the Shipowner, in
connection with the operation of any such fund, in such additional amounts and
subject to such conditions as may be specified therein.

(d) Adjustments of Redemption Payments. If the Obligations of any series
and Stated Maturity or the Special Provisions hereof or of the Supplemental
Indenture establishing such series provide for an adjustment in mandatory
redemption payments as a result of any redemption or cancellation of
Obligations, the Shipowner shall recompute the remaining mandatory redemption
payments pursuant to such provisions and shall, at least 60 days prior to the
next Interest Payment Date which occurs at least 60 days following any such
redemption or cancellation of Obligations of such series requiring such
recomputation, submit to the Secretary for his review of such recomputation to
ascertain compliance with the provisions of such Obligations or the Special
Provisions hereof or such Supplemental

Indenture, a table of revised mandatory redemption payments on the Obligations
of such series reflecting the adjustments made pursuant to such provisions as a
result of such redemption or cancellation. Upon advice by the Secretary that he
finds such recomputation to comply with such provisions, the Shipowner shall
submit said table to the Indenture Trustee and the Indenture Trustee shall
promptly submit a copy thereof to each Holder of an Obligation of such series.

SECTION 3.03. Terminal Mandatory Redemption. The Shipowner shall redeem,
at the principal amount thereof and interest accrued thereon, all the
Obligations that shall be Outstanding on the date determined in accordance with
Section 1104(b)(3) of the Act and specified in the Special Provisions hereof so
that the final maturity of such Obligations shall not exceed the period
specified in said Section.

SECTION 3.04. Redemptions to Comply with Provisions of Section 1104(b)(2)
of the Act. Upon receipt by the Indenture Trustee of a written instruction
signed by the Secretary and a Responsible Officer of the Shipowner stating that
upon receipt of funds paid to the Indenture Trustee by the Shipowner or the
Secretary on behalf of the Shipowner such funds (i) shall be applied in the
manner specified in such instruction to redeem the principal amount of
Obligations specified in such instruction and (ii) are to be so applied in order
that the principal amount of Obligations that will be Outstanding after such
redemption will not exceed the principal amount thereof eligible for guarantee
by the United States under Section 1104(b)(2) of the Act, the Indenture Trustee
shall promptly give notice as provided in Section 3.08 of the redemption of such
Obligations on a date which is no more than 45 days from the date of receipt by
the Indenture Trustee of such instruction; and the Indenture Trustee shall, on
such date, redeem such Obligations at the principal amount thereof and interest
accrued thereon to such date. The Shipowner agrees to notify the Indenture
Trustee of the redemption at least 10 days prior to receipt by the Indenture
Trustee of such written instruction.

SECTION 3.05. Redemption after Total Loss, Requisition of Title, Seizure
or Forfeiture of a Vessel or Termination of Certain Contracts. Upon receipt by
the Indenture Trustee of written instructions from the Secretary and the
Shipowner stating that the principal amount of Obligations specified in such
instructions are required to be redeemed on the date specified therein (which
shall be not less than 40 nor more than 60 days from the receipt of such
instructions by the Indenture Trustee) by reason of (i) an actual, constructive,
agreed or compromised total loss of a Vessel, (ii) requisition of title to, or
seizure or forfeiture of a Vessel or (iii) termination of any contract for the
construction, reconstruction or reconditioning of a Vessel, the Indenture
Trustee shall promptly give notice as provided in Section 3.08 of the redemption
on such date of such principal amount of Obligations and the Indenture Trustee
shall, on such date, redeem such principal amount of Obligations together with
interest accrued thereon to such Redemption Date.

SECTION 3.06. Redemption After Assumption by the Secretary. Upon receipt
by the Indenture Trustee of written instructions from the Secretary stating that
the principal amount of Obligations specified in such instructions are required
to be redeemed on the date specified therein (which shall be not less than 40
nor more than 60 days from the receipt of such instructions by the Indenture
Trustee) at the option of the Secretary at any time after the Secretary's
assumption of the Obligations pursuant to Section 6.09, the Indenture Trustee
shall promptly give notice as provided in Section 3.08 of the redemption on the
Redemption Date of the principal amount of Obligations specified in such
instructions and the Indenture Trustee shall, on such Redemption Date, redeem
such Obligations together with interest accrued thereon to such Redemption Date;
provided that, the Secretary shall redeem at the principal amount thereof and
interest accrued thereon the Proportionate Part of the Outstanding Obligations
relating to such Vessel or Vessels which have been sold pursuant to Section 8.02
to a purchaser or purchasers who have not assumed such Obligations by notice to
the Indenture Trustee in accordance with this Section 3.06 within 40 days of the
nonassumption of the Obligations by such purchaser. The principal amount of the
Proportionate Part of the Outstanding Obligations shall be determined by the
Secretary.

SECTION 3.07. Determination of Obligations to be Redeemed. (a) If less
than all the Obligations are to be redeemed pursuant to Section 3.04 or 3.05,
the Indenture Trustee shall select Obligations of each series and Stated
Maturity for redemption in proportion to the respective principal amounts of
Obligations of such series and Stated Maturity then Outstanding, except as
otherwise provided in the Special Provisions or in the Supplemental Indenture
with respect to any series, making adjustment so that the principal amount of
any Obligation to be redeemed shall be $1,000 or an integral multiple thereof.

(b) If less than all the Obligations of any series or Stated Maturity are
to be redeemed under any of the provisions contained or referred to in this
Article III, the Indenture Trustee shall select, in such manner as it shall deem
appropriate and fair, the Obligations of such series or Stated Maturity to be
redeemed, and the Indenture Trustee shall, according to such method as it shall
in its reasonable discretion deem appropriate, make adjustments so that the
principal amount of any Obligation to be redeemed shall be $l,000 or an integral
multiple thereof.

SECTION 3.08. Notices of Redemption. (a) In case of any redemption of
Obligations, whether mandatory or optional, a notice of redemption (indicating
(1) the Redemption Date, (2) the Redemption Price, (3) if a part only of such
Obligations is to be redeemed, the numbers or other identification of the
Obligations and the principal amount thereof to be redeemed, in whole or in
part, (4) the place of payment upon redemption and (5) that interest shall cease
to accrue after the Redemption Date (but only if the Indenture Trustee or any
Paying Agent shall have received the required moneys) shall be given, by the
Shipowner or any authorized agent of the Shipowner (including the Indenture
Trustee), by mailing a copy of such notice, by first class mail, postage
prepaid, at least 30 days but not more than 60 days prior to the Redemption
Date, to each Holder of an Outstanding Obligation to be redeemed in whole or in
part at his last address appearing upon the

Obligation Register.

(b) Any notice of optional redemption of Obligations shall state that the
redemption is subject to the receipt of the redemption moneys by the Indenture
Trustee or any Paying Agent. Such notice shall be of no effect unless prior to
the opening of business on the Redemption Date the Indenture Trustee or such
Paying Agent shall receive an amount in cash sufficient for such redemption
(after taking into account any amounts then held by the Indenture Trustee or
such Paying Agent and available for such redemption).

SECTION 3.09. Deposit of Redemption Moneys. Prior to the opening of
business on any Redemption Date, the Shipowner shall, except as contemplated by
Section 3.08(b), deposit or cause to be deposited with the Indenture Trustee or
(except in the case of redemptions pursuant to Section 3.04, 3.05, or 3.06 )
with any Paying Agent an amount sufficient for such redemption (after taking
into account any amounts then held by the Indenture Trustee or such Paying Agent
and available for such redemption) with irrevocable directions to it to so apply
the same.

SECTION 3.10. Payment of Redemption Price. (a) If notice of redemption
shall have been given as provided above, the Obligations or portions thereof
specified in such notice shall, except as contemplated by Section 3.08(b),
become due and payable on the Redemption Date and at the place of payment and
the Redemption Price stated in such notice, and on and after said Redemption
Date (unless the Shipowner shall default in the payment of such Redemption
Price) interest on the Obligations or portions thereof so called for redemption
shall cease to accrue. Upon presentation and surrender of such Obligations in
accordance with such notice, such Obligations or the specified portions thereof
shall be paid and redeemed at the applicable Redemption Price.

(b) Upon presentation of any Obligation redeemed in part only, the
Shipowner shall execute and the Indenture Trustee shall authenticate and deliver
to or on the order of the Holder thereof, at the expense of the Shipowner, a new
Obligation or Obligations of like series and Stated Maturity, of authorized
denominations, having endorsed thereon a Guarantee or Guarantees executed by the
Secretary, in principal amount equal to the unredeemed portion of the Obligation
so presented, or, at the option of such Holder, there may be noted thereon by
the Indenture Trustee or, at its direction, by any Paying Agent the payment of
the portion of the principal amount of such Obligation so called for redemption.

ARTICLE IV

CASH HELD BY INDENTURE TRUSTEE OR PAYING AGENTS

SECTION 4.01. Generally. (a) All cash held by the Indenture Trustee or
any Paying Agent under this Indenture shall be held as a special deposit in
trust for the purposes for which it is held (subject to Section 4.03).

(b) Cash held by the Indenture Trustee or any Paying Agent (other than
the Shipowner) under this Indenture:

(1) need not be segregated;

(2) shall not be invested; and

(3) shall not bear interest except to the extent the Indenture
Trustee or such Paying Agent allows interest on similar deposits or
except as the Shipowner and the Indenture Trustee (or such Paying Agent)
may agree.

SECTION 4.02. Paying Agents Other Than Indenture Trustee. (a) The
Shipowner will cause any Paying Agent (other than the Indenture Trustee) which
it may appoint by a writing delivered to such Paying Agent, with copies to the
Indenture Trustee and the Secretary, to execute and deliver to the Indenture
Trustee an instrument in which such agent shall agree with the Indenture Trustee
that, subject to paragraph (b) of this Section and Section 4.03:

(1) it will hold in trust all sums held by it as such agent
for the payment of the principal of (and premium, if any) or interest on
Obligations for the benefit of the Holders of such Obligations, or for the
benefit of the Indenture Trustee;

(2) it will forthwith give the Indenture Trustee written
notice addressed to a Responsible Officer in the Corporate Trust Office of the
Indenture Trustee signed by a Responsible Officer of the Paying Agent of (A)
any payment by the Shipowner of the principal of (and premium, if any) or
interest on Obligations, specifying the amount paid, segregated as to principal
(premium, if any) and interest, and identifying each Obligation on which any
payment was made by number, date, series, Stated Maturity and the name of the
Obligee, and/or (B) any failure of the Shipowner to make any such payment when
the same shall be due and payable; and

(3) it will promptly, and in no event later than ten days
after any payment made by it hereunder, give the Indenture Trustee written
notice addressed to a Responsible Officer in the Corporate Trust Office of the
Indenture Trustee of all payments of Obligations made by it, including and
identifying all endorsements of payment made on Obligations by it, signed and
containing the specified information as provided in subparagraph (2) above, and
deliver to the Indenture Trustee all Obligations surrendered to it, for
cancellation by the Indenture Trustee.

(b) The Shipowner may at anytime cause to be paid to the Indenture
Trustee all sums held in trust by any Paying Agent pursuant to this Section,
such sums to be held by the Indenture Trustee upon the same trusts.

SECTION 4.03. Unclaimed Amounts. Any moneys received by the Indenture
Trustee or a Paying Agent, for the payment of Obligations or Guarantees and
remaining unclaimed by the Holders thereof for 6 years after the date of the
Maturity of said Obligations or the date of payment by the Secretary of the
Guarantees shall, upon delivery to the Indenture Trustee of a Request by the
Shipowner, be paid to the Shipowner; provided that, not less than 30 days prior
to such payment, the Shipowner shall publish notice thereof to the Obligees at
least once in the Authorized Newspapers, unless the Indenture Trustee, in its
discretion, waives the publication of such notice. In such event, such Holders
shall thereafter be entitled to look only to the Shipowner (and the settlor or
settlors of any trust for which the Shipowner is trustee, to the extent paid
over to it or them) for the payment thereof, and the Indenture Trustee or such
Paying Agent, as the case may be, shall thereupon be relieved from all
responsibility to such Holders therefor. No such Request, publication or payment
shall be construed to extend any statutory period of limitations which would
have been applicable in the absence of such Request, publication or payment.

SECTION 4.04. Application of Funds. If at any time the Indenture Trustee
shall hold funds (other than any amounts received by the Indenture Trustee
pursuant to Section 7.04), the application, distribution or payment of which is
not governed by a Request or written instruction of the Shipowner delivered
pursuant to any provision of the Indenture, the Indenture Trustee shall give
written notice thereof to the Shipowner, who shall promptly thereafter deliver
to the Indenture Trustee a Request or written instruction bearing the written
consent of the Secretary and directing the application, distribution or payment
to be made of such funds.

ARTICLE V

REPRESENTATIONS AND AGREEMENTS OF SHIPOWNER

The Shipowner hereby represents and agrees, so long as Obligations are
Outstanding, as follows:

SECTION 5.01. Authorization, Execution and Delivery of Indenture. The
Shipowner has duly authorized the execution and delivery of this Indenture.

SECTION 5.02. Payment and Procedure for Payment of Obligations. The
Shipowner will duly and punctually pay the principal of (and premium, if any)
and interest on the Obligations according to the terms thereof and of this
Indenture. The Shipowner will deposit with the Indenture Trustee or (subject to
Section 3.09) a Paying Agent prior to the opening of business on each date fixed
for each such payment an amount sufficient for such payment (after taking into
account any amounts then held by the Indenture Trustee or such Paying Agent and
available for such payment) with irrevocable directions to it to so apply the
same; provided that, payments of interest may be made as provided in Section
2.02(b)(4); and provided further, that except with the consent of the Secretary
the Shipowner shall not

deposit any such amount more than ten days prior to the date of the payment for
which such amount is deposited.

SECTION 5.03. Offices or Agencies of Shipowner. The Shipowner shall (1)
at all times cause one or more offices or agencies to be maintained within the
United States where Obligations may be presented for payment, registration of
transfer and exchange, and where demands to or upon the Shipowner with respect
thereto may be served, and (2) from time to time give written notice to the
Indenture Trustee and to the Secretary of the location of such offices or
agencies. The Corporate Trust Office shall be deemed to be such an office or
agency for such purposes until the Shipowner shall give the Indenture Trustee
and the Secretary written notice to the contrary.

Any such office or agency for payment of the Obligations (other than the
Corporate Trust Office) shall be a Paying Agent appointed in accordance with
Section 4.02.

ARTICLE VI

INDENTURE DEFAULTS AND REMEDIES

SECTION 6.01. What Constitutes "Indenture Defaults." Each of the
following events shall constitute an "Indenture Default":

(a) Default in the payment of the whole or any part of the
interest on any of the Outstanding Obligations when the same shall become due
and payable or default in the payment of the whole or any part of the principal
of any of the Outstanding Obligations when the same shall become due and
payable, whether by reason of Maturity, redemption, acceleration or otherwise,
or any default referred to in Section 6.08, and continuation of any such
default for a period of 30 days (herein called a "Payment Default"); and

(b) The giving of a Secretary's Notice to the Indenture
Trustee.

The Indenture Trustee shall give to the Obligees, the Secretary and the
Shipowner prompt notice in writing of any default in payment referred to in
clause (a) of this Section 6.01 (unless such default shall have been remedied
prior to the giving of such notice), and of the occurrence of any Indenture
Default which shall be continuing; provided that, the Indenture Trustee shall
have no duty to give any such notice unless and until a Responsible Officer of
the Indenture Trustee, who is a Responsible Officer in its Corporate Trust
Office, has actual knowledge of such default or Indenture Default. Any such
notice of an Indenture Default to the Obligees (i) shall specify the nature of
such Indenture Default, (ii) shall state that, by reason thereof, the Indenture
Trustee is entitled under the Indenture to demand payment by the Secretary of
the Guarantees, (iii) shall set forth the provisions of Section 6.04(b)(3) and
(5), and (iv) shall advise the Obligees of the provisions of Section 6.02.

SECTION 6.02. Demand for Payment of Guarantees. (a) If an Indenture
Default shall have occurred and be continuing, the Indenture Trustee shall not
later than 60 days from the date of such Indenture Default demand payment by the
Secretary of the unpaid interest to the date of such payment on, and the unpaid
balance of the principal of, all Outstanding Obligations, whereupon the entire
unpaid principal amount of the Outstanding Obligations and all unpaid interest
thereon shall become due and payable on the first to occur of the date which is
30 days from the date of such demand or the date on which the Secretary pays the
Guarantees; provided that, in the case of a demand made as a result of a Payment
Default, if, prior to the expiration of 30 days from the date of such demand and
prior to any payment of the Guarantees by the Secretary, the Secretary shall
find, and give written notice to the Shipowner and the Indenture Trustee to the
effect that, there was no Payment Default or that such Payment Default was
remedied prior to such demand, such demand and the consequences thereof shall be
rescinded and annulled and the Guarantees shall remain in full force and effect.
The Indenture Trustee shall give to each Obligee and to the Shipowner prompt
written notice of any demand made by the Indenture Trustee pursuant to this
paragraph (a), any such notice to Obligees to be given as provided in Section
6.04(c).

(b) If the Indenture Trustee shall not have made the demand referred to
in Section 6.02(a) on or before the 30th day following an Indenture Default
which shall have occurred and be continuing and if the Holders of all
Outstanding Obligations shall not have theretofore elected to terminate the
Guarantees as provided in Section 6.04(a)(2), any Holder of an Outstanding
Obligation, by an Act of Obligees delivered to the Secretary (with copies
thereof to the Indenture Trustee and the Shipowner), may, in place of the
Indenture Trustee and on behalf of all Holders of Outstanding Obligations, make
such demand, subject to all the provisions of, and with the effect provided in,
Section 6.02(a); provided that, the right of each Holder under this paragraph
(b) shall be without prejudice to the rights and duties of the Indenture Trustee
under Section 6.02(a) .

SECTION 6.03. Appointment of Indenture Trustee and Holders of Outstanding
Obligations as Attorneys-in-Fact. Each Holder of an Outstanding Obligation by
the purchase and acceptance of its Obligation, irrevocably appoints the
Indenture Trustee and each other Holder of an Outstanding Obligation its agent
and attorney-in-fact for the purpose of making the demand provided for in
Section 6.02 and (in the case of the Indenture Trustee) of receiving and
distributing any payment or payments by the Secretary made pursuant to any such
demand; provided that, no action or failure to act by the Indenture Trustee
shall affect the rights of any Holder of an Outstanding Obligation to take any
action whatsoever permitted by law and not in violation of the terms of the
Obligations or of the Indenture.

SECTION 6.04. Termination and Payment of the Guarantees. (a) Except as
otherwise provided in Section 6.08, the Guarantee with respect to any Obligation
shall terminate in case, and only in case, one or more of the following events
shall occur:

(1) Such Obligation shall have been Retired or Paid;

(2) The Holders of all Outstanding Obligations shall have
elected, by Act of Obligees delivered to the Secretary, to terminate
the Guarantees;

(3) Such Guarantee shall have been paid in full in cash by the
Secretary; or

(4) The Indenture Trustee and each Obligee shall have failed
to demand payment of such Guarantee as provided herein or in such
Guarantee or in the Act.

(b) Subject to the provisions of Section 6.08, when the Secretary
shall pay the Guarantees in full in cash to the Indenture Trustee:

(1) The Indenture Trustee shall hold the entire amount thereof
in trust for the sole purpose of providing for the payments specified
in subparagraph (5) below;

(2) No Obligation or Obligations shall thereafter be issued;

(3) The Obligations (A) shall represent only the right to
receive the payments from the Indenture Trustee specified in
subparagraph (5) below and, in the event the Indenture Trustee makes
payment to the Shipowner pursuant to Section 4.03, from the Shipowner,
(B) shall otherwise no longer constitute or represent an obligation of
the Shipowner, and (C) shall not be entitled to any other rights or
benefits under this Indenture;

(4) The Indenture Trustee shall forthwith give written notice
to the Shipowner and to each of the Obligees, stating that it has
received payment of the Guarantees in full in cash from the Secretary
and that the same is available for distribution to the Obligees in
the manner specified in subparagraph (5) below (and the Indenture
Trustee shall give like notice to the Holders of the Obligations at
least annually thereafter for a period of 6 years or until all
Obligations shall have been cancelled, whichever is earlier); and

(5) Upon the surrender for cancellation of any Obligation, the
Indenture Trustee shall forthwith pay to the Holder of such Obligation
in cash an amount (less the amount, if any, required to be withheld in
respect of transfer or other taxes on payment to such Holder) equal to
the unpaid principal amount of such Obligation and the unpaid interest
accrued thereon to the date on which the Secretary shall have paid the
Guarantees in full in cash to the Indenture Trustee; provided that,
for the purposes of this subparagraph (5), the Indenture Trustee (A)
may deem any Person as the owner of an Obligation in accordance with
Section 2.11 and (B) shall not be required to make any payment in
violation of applicable law.

(c) Each notice to Obligees required by this Section shall be given by
the Indenture Trustee by first class mail, postage prepaid, to the address of
each Obligee appearing upon the Obligation Register.

(d) If the Secretary shall not have paid the Guarantees in full in cash
to the Indenture Trustee within 30 days after any demand therefor pursuant to
Section 6.02 (whether or not because the Secretary makes either of the findings
referred to in the proviso of Section 6.02(a)), the Indenture Trustee shall give
prompt written notice of such nonpayment to each Obligee and the Shipowner. If
the Indenture Trustee shall have received notice of either of such findings,
such notice to each Obligee shall so state.

SECTION 6.05. Rights of Indenture Trustee after Indenture Default. During
the continuance of any Indenture Default, the Indenture Trustee shall have the
right to demand and to receive payment of the Guarantees and shall have, with
the consent of the Secretary as to matters other than the enforcement of the
Guarantees (unless all the Guarantees shall have terminated as provided herein):

(a) the right (in its name, as the trustee of an express
trust, or as agent and attorney-in-fact for each Holder of the Obligations as a
class) to take all action to enforce its rights and remedies (including the
institution and prosecution of all judicial and other proceedings and the
filings of proofs of claim and debt in connection therewith), and to enforce
all existing rights of the Holders of the Obligations as a class; and

(b) all other rights and remedies granted to the Indenture
Trustee by this Indenture, or the Authorization Agreement, or by law.

In addition, during the continuance of an Indenture Default and if all
the Guarantees shall have terminated as provided herein, the Indenture Trustee
shall have the right, by written notice to the Shipowner, to declare the entire
unpaid principal amount of the Outstanding Obligations and all unpaid interest
to be immediately due and payable.

SECTION 6.06. (a) Obligees' Right to Direct Indenture Trustee after
Indenture Default. During the continuance of any Indenture Default, the Holders
of a majority in principal amount of the Outstanding Obligations shall have the
right, by an Act of Obligees, to direct the Indenture Trustee:

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

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

provided that, subject to Section 7.03, the Indenture Trustee shall have the
right not to take

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

Anything in this Section 6.06(a) to the contrary notwithstanding, the
Indenture Trustee shall be obligated to demand payment of the Guarantees as
provided in Section 6.02(a) unless the Holders of all Outstanding Obligations
shall have elected to terminate the Guarantees as provided in Section
6.04(a)(2), in which case the Indenture Trustee shall be obligated to refrain
from making such demand.

(b) Limitations on Obligees' Right to Xxx. No Obligee shall have the
right to institute any judicial or other proceedings under this Indenture
unless:

(1) the Indenture Trustee shall have been directed to institute
such proceeding by the Holders of at least 25% in aggregate principal
amount of the Obligations then Outstanding;

(2) the Indenture Trustee shall have been offered adequate
security and indemnity against the costs, expenses and liabilities to be
incurred by compliance with such direction;

(3) the Indenture Trustee shall not have instituted such
proceeding within 60 days after the receipt of both such direction and
such offer of security and indemnity;

(4) no direction inconsistent with such request shall have been
given to the Indenture Trustee during such 60-day period by the Holders
of a majority in principal amount of the Outstanding Obligations; and

(5) the institution and prosecution of such proceeding would not
result in an impairment of the rights of any other Obligee, it being
understood and intended that no one or more Obligees shall have any right
in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other
Obligees or to obtain or to seek to obtain priority or preference over
any other Obligees or to enforce any right under this Indenture, except
in the manner herein provided and for the equal and ratable benefit of
all the Obligees.

(c) Unconditional Right of Obligees to Xxx for Principal (and Premium, if
any) and Interest. Nothing in paragraph (b) shall (i) affect the obligation of
the Shipowner to pay the principal of (and premium, if any) and interest on the
Obligations in accordance with their terms or affect the right of any Obligee to
institute any judicial or other proceeding to enforce the payment of his
Obligations or (ii) limit the right of any Obligee to demand payment of the
Guarantees pursuant to Section 6.02(b) or to institute any judicial or other
proceeding to enforce the payment of the Guarantee of any Obligation of which he
is the Holder.

SECTION 6.07. Undertaking for Costs. In any proceeding for the
enforcement of any right or remedy under this Indenture, or in any proceeding
against the Indenture Trustee for any action taken or omitted by it as Indenture
Trustee, the court may in its discretion require the filing by any party
litigant of an undertaking to pay the cost of such proceeding and may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant, having due regard to the merits and good faith of
the claims or defense made by such party litigant. The provisions of this
Section 6.07 shall not apply to any proceeding instituted by the Indenture
Trustee or any proceeding instituted by any Obligee for the payment of the
principal of (and premium, if any) and interest on his Obligations.

SECTION 6.08. Rescission of Payments. Notwithstanding any other provision
of this Indenture, or of the Obligations, in the event that any payment to or on
behalf of an Obligee of the principal of or interest due under any Obligation,
or any portion of any such payment, shall at any time be repaid by such Obligee
in compliance with an order (whether or not final) of a court of competent
jurisdiction pursuant to any provision of the Bankruptcy Code (Title 11 of the
United States Code) or any Federal Law replacing or superseding such Code, or
applicable state law, and regardless of whether there has been any previous
Indenture Default and any payment pursuant thereto, or whether such Obligation
shall theretofore have been acquired by the Shipowner or cancelled, or whether
an instrument satisfying and discharging this Indenture shall have been executed
and delivered, (1) such Obligation shall not be deemed to have been Retired or
Paid and shall be deemed to be Outstanding, (2) the return of such payment in
whole or in part (but not the mere possibility that any such payment or portion
thereof may be so required to be returned, nor any prior demand, suit or
proceeding for such return) in compliance with the order of such court shall
constitute a default in payment of such Obligation within the meaning of Section
6.01(a), which default shall be deemed to have occurred on the date of such
repayment and which default, if continued for 30 days, will constitute a Payment
Default, (3) the Guarantee of such Obligation and (to the extent necessary to
enforce such Obligation and Guarantee) this Indenture shall be in full force and
effect, and (4) the Person required to return such payment or portion thereof
shall be deemed for all purposes to be a Holder of such Obligation and entitled
to enforce such Obligation and Guarantee to the extent of such repayment and, if
there shall not be any Indenture Trustee hereunder then in office, such Person
shall also be entitled to exercise on his own behalf all the rights of the
Indenture Trustee hereunder necessary for such enforcement; provided that, in
the event the Guarantee of any Obligation shall have terminated for reasons set
forth in paragraphs (2) or (4) of Section 6.04(a) of this Indenture prior to the
aforesaid date of repayment the provisions of this Section shall not apply to
such Obligation.

SECTION 6.09. Assumption of Obligations by Secretary. Notwithstanding
anything contained herein, (i) in the event the Shipowner shall fail to make any
payment of principal or interest due on the Obligations on an Interest Payment
Date and such failure to pay shall continue for a period of 25 days or (ii) in
the event of any other default under the Mortgage or the Security Agreement, the
Secretary shall have the right to and may, in his sole

discretion, (a) by giving to the Indenture Trustee at any time pursuant to
clause (ii) above or, if pursuant to clause (i) above, on or after the 25th day
of said 25 day period of such default (but prior to the receipt by the
Secretary of any demand for payment of the Guarantees pursuant to Section 6.02)
a Secretary's Supplemental Indenture in the form of Exhibit 4 attached hereto,
which Exhibit is incorporated herein by reference, assume the rights and
obligations of the Shipowner under this Indenture and all Outstanding
Obligations as provided in said Secretary's Supplemental Indenture; and (b) if
applicable, make any payment of principal or interest which is due under the
Obligations. By the execution of this Indenture by the Indenture Trustee and
the Shipowner it is agreed hereunder that a Secretary's Supplemental Indenture
shall be effective and binding upon the Indenture Trustee and the Shipowner and
their respective successors or assigns without further act or deed of either as
of the date executed and given to the Indenture Trustee by the Secretary as
contemplated by this Section, and each of them for itself, its successors and
assigns hereby irrevocably appoints the Secretary its true and lawful
attorney-in-fact to execute and deliver said Secretary's Supplemental
Indenture. Upon any such assumption by the Secretary, the Secretary shall
succeed to and be substituted for and may exercise every right and power of the
Shipowner under this Indenture and the Obligations with the same force and
effect as if the Secretary has been named as the Shipowner herein and therein.
Upon any such assumption by the Secretary, the Indenture Trustee, upon request
of the Secretary, shall promptly notify the holders of the Outstanding
Obligations of such assumption. The Secretary may exercise its rights under
this Section 6.09 as often as it deems appropriate in its sole discretion.

ARTICLE VII

THE INDENTURE TRUSTEE

SECTION 7.01. Acceptance of Trusts. The Indenture Trustee hereby accepts
the trusts of this Indenture.

SECTION 7.02. Eligibility of Indenture Trustee. (a) The Indenture Trustee
shall at all times be a bank or trust company which (1) is organized as a
corporation and doing business under the laws of the United States or any state
thereof, (2) is authorized under such laws to exercise corporate trust powers,
(3) is subject to supervision or examination by federal or state authority, (4)
has a combined capital and surplus (as set forth in its most recent published
report of condition) of at least $3,000,000, and (5) shall not have become
incapable of acting or have been adjudged a bankrupt or an insolvent nor have
had a receiver appointed for itself or for any of its property, nor have had a
public officer take charge or control of it or its property or affairs for the
purpose of rehabilitation, conservation or liquidation.

(b) Should the Indenture Trustee at any time cease to be eligible,
pursuant to this

Section 7.02, to act as trustee, it shall promptly notify the Obligees, the
Shipowner and the Secretary of such fact; and should the Shipowner obtain
knowledge of such ineligibility, it shall promptly advise the Indenture
Trustee, the Secretary, and the Obligees of such fact. Any such notice (i)
shall set forth all the relevant facts known to the Indenture Trustee or the
Shipowner, as the case may be, (ii) if to the Secretary or the Shipowner, shall
be registered or certified mail, postage prepaid, and (iii) if to Obligees,
shall be sent to each Obligee in the manner provided in Section 6.04(c) at his
address as it appears on the Obligation Register, or at such other address as
such Obligee may have furnished to the Indenture Trustee for such purpose.

SECTION 7.03. Rights and Duties of Indenture Trustee. (a) The Indenture
Trustee shall not be responsible for the correctness of the Recitals in the
Special Provisions hereof or in the Obligations (except the Indenture Trustee's
authentication certificate thereon), all of which Recitals are statements made
solely by the Shipowner.

(b) The Indenture Trustee shall not be responsible for the validity,
execution by other parties thereto, or sufficiency of this Indenture, the
Authorization Agreement, the Obligations or the Guarantees.

(c) During the continuance of any Indenture Default (except for an
Indenture Default resulting from those defaults in payment or Payment Defaults
referred to in paragraph (r) of this Section, concerning which the Indenture
Trustee has not received the notice referred to in said paragraph (r) and the
information relating to items (1) through (5) of said paragraph (r)), the
Indenture Trustee shall exercise such of the rights and powers vested in it by
Article VI, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.

(d) Except during the continuance of any Indenture Default (other than an
Indenture Default referred to in the parenthetical expression set forth in
paragraph (c) of this Section), the Indenture Trustee undertakes to perform such
duties and only such duties as are specifically set forth in this Indenture, and
no implied covenants or obligations shall be read into this Indenture against
the Indenture Trustee.

(e) No provision of this Indenture shall relieve the Indenture Trustee
from liability for its own negligent action, its own negligent failure to act,
or its own willful misconduct; provided that:

(1) Except during the continuance of an Indenture Default (other
than an Indenture Default referred to in the parenthetical expression set
forth in paragraph (c) of this Section), (A) the duties of the Indenture
Trustee shall be limited as provided in paragraph (d) of this Section,
and (B) in the absence of bad faith on the part of the Indenture Trustee,
the Indenture Trustee may conclusively rely upon certificates or opinions
conforming to the requirements of this Indenture as to the truth of the

statements and the correctness of the opinions expressed therein;

(2) The Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or Officers of the
Indenture Trustee unless it shall be proved that the Indenture Trustee
was negligent in ascertaining the pertinent facts; and

(3) The Indenture Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with an Act of Obligees relating to the time, method and place of
conducting any proceeding for any remedy available to the Indenture
Trustee, or exercising any trust or power conferred upon the Indenture
Trustee under this Indenture.

(f) Subject to paragraph (i) of this Section, the Indenture Trustee shall
be under a duty to examine certificates and opinions required by this Indenture
to be furnished to it to determine whether or not they conform to the
requirements hereof.

(g) Subject to paragraph (c) of this Section, the Indenture Trustee may
rely and shall be protected in acting upon any resolution, certificate, opinion,
notice, request, consent, order, appraisal, report, bond, or other paper or
document believed by it to be genuine, to have been signed by the proper party
or parties and to be in conformity with the provisions of this Indenture.

(h) In all cases where this Indenture does not make express provision as
to the evidence on which the Indenture Trustee may act or refrain from acting,
the Indenture Trustee shall be protected (subject to paragraph (c) of this
Section) in acting or refraining from acting hereunder in reliance upon an
Officer's Certificate as to the existence or nonexistence of any fact.

(i) The Indenture Trustee may consult with counsel satisfactory to the
Indenture Trustee (who may be counsel to the Shipowner), and an Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel.

(j) Subject to paragraph (c) of this Section, the Indenture Trustee shall
not be under any responsibility for the approval or selection of any expert for
any of the purposes expressed herein; provided that the Indenture Trustee shall
exercise reasonable care with respect to the approval or selection of
independent experts whom it approves or selects to furnish opinions or
certificates to the Indenture Trustee pursuant to this Indenture.

(k) Whenever it is provided that the Indenture Trustee shall take any
action, including the giving of any notice or the making of any demand, or
refrain from taking any action upon the happening or continuation of a specified
event (including an Indenture Default) or

upon the fulfillment of any condition or upon the Request of the Shipowner or
of Obligees or upon receipt of any notice, including a Secretary's Notice, the
Indenture Trustee (1) shall, subject to paragraph (c) of this Section, have no
liability for failure to take such action or for failure to refrain from taking
such action unless and until a Responsible Officer of the Indenture Trustee,
who is a Responsible Officer in the Corporate Trust Office, has actual
knowledge of such event or continuation thereof or the fulfillment of such
conditions or shall have received such Request, and (2) in taking or refraining
from taking such action, shall have full power to give any and all notices and
to do any and all acts and things incidental to such action.

(l) Subject to paragraph (c) of this Section, the Indenture Trustee shall
not be under any obligation to exercise any of the trusts or powers hereof at
the request, order or direction of any Obligees or the Secretary, unless such
Obligees or the Secretary shall have offered to the Indenture Trustee security
or indemnity satisfactory to it against the costs, expenses and liabilities to
be incurred thereby.

(m) The Indenture Trustee, in its individual or any other capacity, may
become the owner or pledgee of Obligations with the same rights it would have if
it were not Indenture Trustee.

(n) Notwithstanding any other provision of this Indenture, the Indenture
Trustee shall not take any action contrary to the terms of the Authorization
Agreement, and any such purported action or any attempt to take such action
shall be void and of no effect and, except as provided in Section 7.06(b), shall
not enter into any amendment to the Authorization Agreement except as expressly
authorized by a Supplemental Indenture entered into pursuant to Article X.

(o) No provision of this Indenture shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

(p) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Indenture Trustee shall be subject to the provisions of this
Section.

(q) Upon the execution and delivery of an instrument satisfying and
discharging this Indenture as provided in Section 12.01 hereof, all duties and
obligations of the Indenture Trustee hereunder (except with respect to the
application of funds for the payment of Obligations then held by the Indenture
Trustee) shall cease and shall not thereafter be revived, whether or not the
Indenture shall thereafter be in full force and effect as provided in Section
6.08.

(r) Notwithstanding any other provisions of this Indenture or the
Authorization Agreement, the Indenture Trustee shall have no duty or obligation
to exercise any of its rights or powers hereunder with respect to a default in
payment or Payment Default by reason of a repayment referred to in Section 6.08
unless and until it shall have received notice of such default and information
concerning (1) the date thereof, (2) the Obligation to which such repayment
relates, (3) the Person making such repayment and the Holder of such Obligation,
(4) the amounts of such repayment attributable to principal, premium and
interest on such Obligation, and (5) the Interest Payment Date or other date on
which the Obligee received the moneys to which the court order mentioned in
Section 6.08 relates.

SECTION 7.04. Compensation, Expenses and Indemnification of Indenture
Trustee. The Shipowner shall (1) pay reasonable compensation to the Indenture
Trustee and reimburse it for its reasonable expenses and disbursements
(including counsel fees and expenses) and (2) indemnify the Indenture Trustee
for, and hold it harmless against, any loss, liability or expense which it may
incur or suffer without negligence or bad faith in acting under this Indenture
or the Authorization Agreement. The compensation of the Indenture Trustee shall
not be limited to the compensation provided by law for a trustee acting under an
express trust.

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

(b) The Indenture Trustee may at any time be removed by:

(1) written notice to the Indenture Trustee and the Shipowner by
the Holders of a majority in principal amount of the Outstanding
Obligations; or

(2) written notice to the Indenture Trustee by the Shipowner or
the Secretary that the Indenture Trustee has ceased to be eligible under
Section 7.02(a).

(c) Any resignation or removal of the Indenture Trustee shall be
effective only upon appointment of a successor Indenture Trustee approved by the
Secretary and the acceptance of such appointment by such successor Indenture
Trustee.

SECTION 7.06. Appointment of Successor Indenture Trustee. (a) If the
Indenture Trustee or the Shipowner shall have given notice of ineligibility of
the Indenture Trustee pursuant to Section 7.02(b), or if any notice of
resignation or of removal shall have been given pursuant to Section 7.05, then a
successor Indenture Trustee may be appointed by the Shipowner; provided that, if
such successor Indenture Trustee is not so appointed (or has not

accepted such appointment) within 15 calendar days after the giving of any such
notice, such appointment may be made (i) by the Secretary or (ii) by a court of
competent jurisdiction upon the application of the Secretary, the Shipowner,
the retiring Indenture Trustee or any Person who then is, and has been, the
Holder of an Outstanding Obligation for at least 6 months.

(b) No successor Indenture Trustee shall be appointed without the prior
written consent of the Secretary and until such successor Indenture Trustee
shall enter into an amendment to the Authorization Agreement as set forth in the
first sentence of Section 4.04 thereof.

(c) If a successor Indenture Trustee is appointed, approved by the
Secretary and accepts such appointment, and the Shipowner shall have knowledge
thereof, the Shipowner shall give notice to the Obligees of such appointment in
the manner provided in Section 6.04(c). The failure of the Shipowner to give
such notice shall not affect the validity of any such appointment.

SECTION 7.07. Effect of Appointment of Successor Indenture Trustee. Upon
appointment and acceptance as Indenture Trustee, each successor Indenture
Trustee shall forthwith, without further act or deed, succeed to all the rights
and duties of its predecessor in trust under this Indenture and the
Authorization Agreement. Such predecessor shall promptly deliver to such
successor Indenture Trustee all sums held hereunder, together with all records
and other documents necessary or appropriate in connection with the performance
of the duties of the successor Indenture Trustee under this Indenture. Upon the
written request of the successor Indenture Trustee or the Shipowner and upon
payment of all amounts due to such predecessor under this Indenture, such
predecessor shall transfer, assign and confirm to the successor Indenture
Trustee all its rights under this Indenture by executing and delivering from
time to time to the successor Indenture Trustee such further instruments and by
taking such other action as may reasonably be deemed by such successor Indenture
Trustee or the Shipowner to be necessary or appropriate in connection therewith.

SECTION 7.08. Merger, Consolidation and Sale of Indenture Trustee. In the
event of any merger (including for the purposes of this Section, the conversion
of a state bank into a national banking association or vice versa) or
consolidation of the Indenture Trustee into any other Person or in the event of
the sale of all or substantially all the Indenture Trustee's corporate trust
business, the Person resulting from such merger (including any such conversion)
or consolidation, or the transferee in the case of any such sale, shall
forthwith notify the Shipowner and, subject to Section 7.02(a) and 7.06(b),
shall be the Indenture Trustee under this Indenture and the Authorization
Agreement without further act or deed.

Obligations and Guarantees authenticated after any such merger,
consolidation or sale may be authenticated by the successor Indenture Trustee
either in its own name or in the name of any predecessor which shall have been
the Indenture Trustee.

ARTICLE VIII

CONSOLIDATION, MERGER OR SALE BY SHIPOWNER

SECTION 8.01. Consolidation, Merger or Sale by Shipowner. Nothing in this
Indenture shall prevent any lawful consolidation or merger of the Shipowner with
or into any other Person, or any sale of a Vessel or Vessels to any other Person
lawfully entitled to acquire and operate such Vessel or Vessels or any sale by
the Shipowner of all or substantially all of its assets to any other Person;
provided that, except where the Shipowner shall be the Person surviving a merger
or consolidation, the Person formed by or surviving such consolidation or
merger, or to which the sale of such Vessel or Vessels shall be made, shall, by
Supplemental Indenture, expressly assume the payment of the principal of and
interest (and premium, if any) on the Proportionate Part of the Outstanding
Obligations relating to such Vessel or Vessels in accordance with the terms of
the Obligations and of the Indenture and shall expressly assume the performance
of the agreements of the Shipowner in the Indenture; provided further, that to
the extent said Proportionate Part of the Outstanding Obligations is not so
assumed, the Shipowner shall redeem or cause to be redeemed the principal amount
of the Proportionate Part of the Outstanding Obligations as is required by the
Secretary, such redemption to be in accordance with the terms of the Obligations
and of the Indenture. When a Person so assumes this Indenture and such
Proportionate Part of the Outstanding Obligations, the Supplemental Indenture
shall discharge and release the Shipowner from any and all obligations
thereunder relating to such Proportionate Part of the Outstanding Obligations.
In the event of such an assumption by a Person to whom a Vessel or Vessels have
been sold (a) such Person shall succeed to, and be substituted for, and may
exercise every right and power of the original Shipowner with the same effect as
if such successor Shipowner had been named as the Shipowner herein and (b) such
Proportionate Part of the Outstanding Obligations shall be surrendered to the
Indenture Trustee for appropriate notation or for the issuance of new
Obligations in exchange for such Proportionate Part of the Outstanding
Obligations in the name of the successor Shipowner, as required by the
Secretary. The principal amount of the Proportionate Part of the Outstanding
Obligations shall be determined by the Secretary.

SECTION 8.02. Sale of the Vessel or Vessels by the Secretary. Nothing
contained in this Indenture shall prevent the sale of a Vessel or Vessels to any
other Person or Persons by the Secretary, by a court of law or by the Shipowner
following, in connection with or in lieu of a foreclosure or similar action.
Following any such sale (1) the Person to whom such Vessel or Vessels have been
sold may by Supplemental Indenture expressly assume the payment of and interest
(and premium, if any) on the Proportionate Part of the Outstanding Obligations
relating to such Vessel or Vessels in accordance with the terms of the
Obligations and the Indenture and shall expressly assume the performance of the
Shipowner in the Indenture; and (2) in the event such Person does not so assume,
the Secretary shall redeem the Proportionate Part of the Outstanding Obligations
relating to such Vessel or Vessels without premium pursuant to Section 3.06
hereof; provided that, the Secretary shall

allow or permit the sale of a Vessel or Vessels to the original Shipowner or to
any affiliate of the of the Shipowner only if (i) the Secretary has not
redeemed such Obligations prior to such sale, and (ii) such purchaser assumes
such Proportionate Part of the Outstanding Obligations as contemplated by the
preceding clause (1). When a Person so assumes this Indenture and such
Proportionate Part of the Outstanding Obligations, the Supplemental Indenture
shall discharge and release the Secretary from any and all obligations
thereunder in the Secretary's capacity as Shipowner relating to such
Proportionate Part of the Outstanding Obligations. In the event of such an
assumption by a Person to whom a Vessel or Vessels have been sold (a) such
Person shall succeed to, and be substituted for, and may exercise every right
and power of the original Shipowner with the same effect as if such successor
Shipowner had been named as the Shipowner herein and (b) such Proportionate
Part of the Outstanding Obligations shall be surrendered to the Indenture
Trustee for appropriate notation or for the issuance of new Obligations in
exchange for such Proportionate Part of the Outstanding Obligations in the name
of the successor Shipowner, as required by the Secretary. Any such sale or the
execution of a Supplemental Indenture by any successor Shipowner shall not
discharge or in any manner affect the obligation of the United States to pay
the Guarantees pursuant to the terms thereof. The principal amount of the
Proportionate Part of the Outstanding Obligations shall be determined by the
Secretary.

ARTICLE IX

ACTS OF OBLIGEES

SECTION 9.01. Acts of Obligees. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action required or
permitted by this Indenture to be given or taken by Obligees may be embodied in
and evidenced by one or more instruments of substantially similar tenor signed
by such Obligees in person or by an agent or attorney duly appointed in
writing. Except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Indenture Trustee and, where it is hereby expressly required, to the Shipowner
and the Secretary. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act of
Obligees." Proof of execution of any such instrument or of a writing
appointing any such agent or attorney shall be sufficient for any purpose of
this Indenture and (subject to Section 7.03) conclusive in favor of the
Indenture Trustee and the Shipowner, if made in the manner provided in
paragraph (b) of this Section.

(b) The fact and date of the execution by any Person of any instrument
or writing referred to in paragraph (a) of this Section may be proved by the
affidavit of a witness of such execution or by the certificate or acknow-
ledgment of any notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such
instrument or writing acknowledged to him the execution thereof. Where such
execution is by an officer of a corporation or a

member of a partnership, on behalf of such corporation or partnership, such
affidavit or certificate shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Indenture Trustee (or, if such instrument or
writing is addressed to the Secretary, the Secretary) deems sufficient.

(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Obligation shall bind every future
Holder of the same Obligation and the Holder of every Obligation issued upon
the transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or suffered to be done by the Indenture Trustee, any Paying Agent
or the Shipowner in reliance thereon, whether or not notation of such action is
made upon such Obligation.

ARTICLE X

SUPPLEMENTAL INDENTURES

SECTION 10.01. Permissible without Action by Obligees. The
Shipowner, the Indenture Trustee, or, where applicable, the Secretary, from
time to time and at any time, may, without the consent of or notice to any of
the Obligees, subject to Sections 10.02 and 10.05, enter into an indenture or
other instrument supplemental hereto and which thereafter shall form a part
hereof, for any one or more of the following purposes:

(1) to add to the covenants of the Shipowner, whether
applicable to one or more series of Obligations;

(2) to evidence the succession pursuant to Article VIII of
another corporation or entity to the Shipowner and the assumption by
such successor of the obligations of the Shipowner hereunder;

(3) to eliminate any right reserved to or conferred upon the
Shipowner;

(4) to make such provisions for the purpose of curing any
ambiguity or correcting or supplementing any provisions in this
Indenture as the Shipowner or the Secretary may deem necessary or
desirable, provided such provisions are not inconsistent with this
Indenture and shall not adversely affect the interests of the
Obligees;

(5) to provide for the issuance of additional Obligations of
any series and Stated Maturity theretofore issued under this Indenture
or to set forth the terms and

provisions of any one or more additional series of Obligations in
accordance with Section 2.04; or

(6) to evidence the assumption pursuant to Section 6.09 by the
Secretary of the Shipowner's obligations under this Indenture
and the Outstanding Obligations.

SECTION 10.02. Protection of Indenture Trustee. Upon receipt of a
Request of the Shipowner that the Indenture Trustee execute any Supplemental
Indenture and upon receipt of any Act of Obligees required pursuant to Section
10.04 and the consent of the Secretary required pursuant to Section 10.05, the
Indenture Trustee shall enter into such Supplemental Indenture; provided that,
the Indenture Trustee shall not be obligated to enter into any Supplemental
Indenture which the Indenture Trustee believes adversely affects the Indenture
Trustee's own rights, duties or immunities under this Indenture.

SECTION 10.03. Reference in Obligations to Supplemental Indentures.
Obligations authenticated and delivered after the execution and delivery of any
Supplemental Indenture may, with the consent and approval of the Shipowner and
the Indenture Trustee, contain a text modified to conform to such Supplemental
Indenture or have imprinted or stamped thereon a legend with respect to such
Supplemental Indenture, but no such modification or legend shall be necessary
to make such Supplemental Indenture effective.

SECTION 10.04. Waivers and Supplemental Indentures with Consent of
Obligees. With the consent of the Holders of not less than 60% in principal
amount of the Outstanding Obligations of each series affected thereby, by Act
of Obligees delivered to the Shipowner and the Indenture Trustee, (x)
compliance by the Shipowner with any of the terms of the Indenture may be
waived or (y) the Shipowner and the Indenture Trustee may enter into any
Supplemental Indenture for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of the Obligations issued
under this Indenture; provided that, no such waiver or Supplemental Indenture
shall:

(a) Without the consent of all Obligees affected thereby (1)
change the Stated Maturity or reduce the principal of any Obligation, (2)
extend the time of payment of, or reduce the rate of, interest thereon, (3)
change the due date of or reduce the amount of any mandatory sinking fund
payment, (4) reduce any premium payable upon the redemption of any Obligation,
or (5) change the coin or currency in which any Obligation or the interest
thereon is payable; or

(b) Without the consent of all Obligees (l) terminate or
modify any of the Guarantees or the obligations of the Secretary thereunder,
(2) reduce the amount of any of the Guarantees, (3) eliminate, modify or
condition the duties of the Indenture Trustee to demand payment of the
Guarantees or otherwise to comply with the provisions of Sections 6.02 and
6.04, (4) eliminate or reduce any of the eligibility requirements for the
Indenture

Trustee stated in Section 7.02, or (5) reduce the percentage in principal
amount of the Outstanding Obligations of any series, the consent of whose
Holders is required for any such Supplemental Indenture, or required for any
waiver provided herein or to modify any of the provisions of this Section
except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent
of all Obligees affected thereby.

It shall not be necessary for any Act of Obligees under this Section
to approve the particular form of any proposed Supplemental Indenture, but it
shall be sufficient if such Act shall approve the substance thereof. Promptly
after the execution of any Supplemental Indenture pursuant to this Section, the
Shipowner shall give notice thereof to the Obligees in the manner provided in
Section 6.04(c). Any failure of the Shipowner to give such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such Supplemental Indenture.

SECTION 10.05. Consent of Secretary. Subject to the provisions of
Section 11.01, no waiver pursuant to Section 10.04 shall be effective, and
neither the Shipowner nor the Indenture Trustee shall enter into any
Supplemental Indenture, without the prior written consent of the Secretary
thereto, and any purported action or attempt to take such action forbidden to
be taken by this Section shall be void and of no effect.

SECTION 10.06. Continued Validity of the Guarantees. Notwithstanding
anything herein to the contrary, this Indenture, the Guarantees and the
Authorization Agreement shall each remain in full force and effect
notwithstanding the assumption by the Secretary of the Obligations pursuant to
the Secretary's Supplemental Indenture entered into pursuant to Section 6.09,
and pursuant to Section 1103(e) of the Act, the validity of the Guarantee of
any Obligation shall be unaffected, and such Guarantee and all
responsibilities, requirements and consents relating to the Secretary under the
terms and provisions of this Indenture shall remain in full force and effect
notwithstanding any such assumption by the Secretary as aforesaid.

ARTICLE XI

PERFORMANCE OF OBLIGATIONS TO SECRETARY

SECTION 11.01. Performance of Obligations to Secretary.
Notwithstanding any other provisions of this Indenture to the contrary, each of
the provisions hereof which requires or permits action by the Secretary, the
consent, approval or authorization of the Secretary, the furnishing of any
document, paper or information to the Secretary, or the performance of any
other obligation to the Secretary, shall not be effective and the Sections
containing such provisions shall be read as though there were no such
requirements or permissions, after termination of the Guarantees pursuant to
Section 6.04(a).

ARTICLE XII

SATISFACTION AND DISCHARGE OF INDENTURE

SECTION 12.01. Satisfaction and Discharge of Indenture. Whenever all
Outstanding Obligations authenticated and delivered hereunder shall have been
Retired or Paid the Indenture Trustee shall forthwith deliver to the Shipowner
and the Secretary a duly executed instrument, in form submitted to it by the
Shipowner and reasonably satisfactory to the Indenture Trustee, satisfying and
discharging this Indenture and, at the time such form of instrument is
submitted to the Indenture Trustee the Shipowner shall deliver to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel each stating that
all conditions precedent herein provided relating to the satisfaction and
discharge of this Indenture have been complied with. Notwithstanding the
satisfaction and discharge of this Indenture, the Obligations of the Shipowner
to the Indenture Trustee under Section 7.04 shall survive.

ARTICLE XIII

MISCELLANEOUS

SECTION 13.01. Notices and Demands. Except as otherwise specifically
provided herein or in the Act, any notice, request, demand or direction upon,
or other communication to, the Indenture Trustee, the Shipowner or the
Secretary shall be deemed to have been sufficiently given or made by being
mailed, registered or certified mail, postage prepaid, addressed to the
Indenture Trustee, the Shipowner or the Secretary at their respective addresses
appearing in the Special Provisions of this Indenture or at such other address
as any of them may advise the others in writing from time to time. Except as
otherwise specifically provided herein or in the Act, any notice, request,
demand or direction upon, or other communication to, the Obligees shall be
deemed to have been sufficiently given or made by being mailed, registered or
certified mail, postage prepaid, to the address of each Obligee last appearing
on the Obligation Register.

SECTION 13.02. Waivers of Notice. In any case where notice by mail
or otherwise is provided herein, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be deemed the equivalent of such notice. Waivers of notice
shall be filed with the Indenture Trustee, but such filing shall not be a
condition precedent to the validity of any action taken thereon in reliance
upon any such waiver.

SECTION 13.03. Benefit of Indenture. This Indenture is for the sole
benefit of the Shipowner, the Indenture Trustee, the Holders from time to time
of the Outstanding Obligations and (until the obligations to the Secretary
shall have terminated as provided in Article XI) the Secretary.

SECTION 13.04. Execution of Counterparts. This Indenture may be
executed in any number of counterparts. All such counterparts shall be deemed
to be original and shall together constitute but one and the same instrument.

SECTION 13.05. Table of Contents; Titles and Headings. Any table of
contents, the titles of the Articles and the headings of the Sections are not a
part of this Indenture and shall not be deemed to affect the meaning or
construction of any of its provisions.

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

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

SECTION 13.08. Applicable Law. This Indenture and each Obligation
shall be governed by the laws referred to in the Special Provisions hereof,
except to the extent Federal law applies hereto.

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EXHIBIT 10.8.1 TRUST INDENTURE Relating to United States Government Guaranteed Ship Financing Obligations

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