AMENDMENT NO. 6
TO
TITLE XI RESERVE FUND
AND FINANCIAL AGREEMENT
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▇▇▇▇▇▇▇▇▇ NO. 6
TO
TITLE XI
RESERVE FUND AND FINANCIAL AGREEMENT
This Amendment No. 6 to Title XI Reserve Fund and Financial
Agreement ("Amendment No. 6") dated as of August 22, 1996,
between Avondale Industries, Inc., a Louisiana corporation (the
"Company"), and the United States of America, represented by the
Secretary of Transportation, acting by and through the Maritime
Administrator (successor by operation of law to the Secretary of
Commerce, acting by and through the Assistant Secretary of
Commerce for Maritime Affairs) (the "Secretary"), pursuant to the
provisions of Title ▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇, as
amended.
RECITALS
A. The Company and the Secretary entered into the Title XI
Reserve Fund and Financial Agreement, dated October 21, 1975 (the
"Original Agreement"), in connection with the financing of the
vessel named AVONDALE DRYDOCK;
B. The Original Agreement was amended by Assumption
Agreement and Amendment No. 1 to Title XI Reserve Fund and
Financial Agreement on September 16, 1985 ("Amendment No. 1"), by
Amendment No. 2 to Title XI Reserve Fund and Financial Agreement
on March 27, 1987 ("Amendment No. 2"), by Master Assumption
Agreement, Supplemental Indenture No. 2 and Amendment to Title XI
Financing Agreements on March 13, 1991 ("Amendment No. 3"), by
Amendment to Title XI Reserve Fund and Financial Agreement dated
as of April __, 1993 ("Amendment No. 4"), and by Amendment No. 5
to Title XI Reserve Fund and Financial Agreement dated
February 9, 1995 ("Amendment No. 5"; and collectively, together
with the Original Agreement, Amendment ▇▇. ▇, ▇▇▇▇▇▇▇▇▇ ▇▇. ▇,
▇▇▇▇▇▇▇▇▇ ▇▇. ▇ and Amendment No. 4 herein called the
"Agreement"); and,
C. The Company and the Secretary desire further to amend
the Agreement to reflect modifications to certain covenants
contained in the Agreement.
NOW, THEREFORE, in consideration of the premises and other
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE FIRST
ADDITIONS, DELETIONS AND AMENDMENTS
1. Concerning Article Third of the Special Provisions of
the Agreement. Article Third of the Special Provisions to the
Agreement is hereby amended as follows:
(a) Concerning Section 13 of Exhibit 1:
(1) Concerning Subsection 13(b)(13). Subsection
13(b)(13) of Exhibit 1 hereto is amended by deleting
the word "and" before the number "(iii)" and
substituting a comma therefor, and, after the number
"(iii)" deleting the rest of the subsection and
inserting the following in lieu thereof:
"(A) mortgages, liens, security
interests, charges or encumbrances
(hereinafter a *Lien*) on any
property or other assets of the
Company of the type that are
subject to a Lien on the date
hereof (whether or not such Lien
may subsequently be released and
then regranted and whether or not
such property or assets now exists
or may hereafter arise) other than
the Security, the Increased
Security, the Premises and the
Shipyard Project, as each of the
foregoing capitalized terms are
defined in either that certain
Title XI Reserve Fund and Financial
Agreement dated February 9, 1995
between the Company and the United
States of America, ▇▇▇▇▇▇▇▇ ▇▇. ▇▇-
▇▇▇▇▇, or Schedule X to that
certain Security Agreement dated
February 9, 1995 between the
Company and the United States of
America, Contract No. MA-12951,
(hereinafter the Security, the
Increased Security, the Premises
and the Shipyard Project are
referred to collectively as the
*Secretary's Collateral*) and (B)
Liens on the proceeds and products
of any such property or assets
(other than the Secretary's
Collateral), any property or assets
acquired with the proceeds of or in
exchange for any such property or
assets (other than the Secretary's
Collateral), or the accounts
receivable generated from any such
property or assets (other than the
Secretary's Collateral), and (iv)
Liens to secure indebtedness or
obligations incurred to extend,
refinance, renew, replace or refund
(or successive extensions,
refinancings, renewals,
replacements or refundings of) any
indebtedness or obligations secured
by any Lien permitted by the
foregoing clause (iii) so long as
such Lien does not extend to any
other property (including, without
limitation, the Secretary's
Collateral.
Notwithstanding any other provision
of this subsection 13(b)(13), the
Company shall not consummate the
Disposition or Lien permitted
hereby if it would adversely affect
the priority of the Secretary's
security interests in the Vessel or
the Secretary's Collateral."
(2) Concerning Subsection 13(c)(7). The
provisions of Subsection 13(c)(7) of Exhibit 1 hereto
are hereby amended and restated in their entirety to
read as follows:
"Enter into any merger or consolidation or
convey, sell, lease, transfer or dispose of
(hereinafter a *Disposition*) or mortgage,
grant a security interest in, lien or
otherwise encumber (hereinafter, a *Lien*)
any substantial portion of its properties or
assets. The foregoing restriction, however,
shall not apply to (i) (A) Liens on any
property or other assets of the Company of
the type that are subject to a Lien on the
date hereof (whether or not such Lien may
subsequently be released and then regranted
and whether or not such property or assets
now exists or may hereafter arise) other than
the Security, the Increased Security, the
Premises and the Shipyard Project, as each of
the foregoing capitalized terms are defined
in either that certain Title XI Reserve Fund
and Financial Agreement dated February 9,
1995 between the Company and the United
States of America, Contract No. MA-12953, or
Schedule X to that certain Security Agreement
dated February 9, 1995 between the Company
and the United States of America, Contract
No. MA-12951, (hereinafter the Security, the
Increased Security, the Premises and the
Shipyard Project are referred to collectively
as the *Secretary's Collateral*) and (B)
Liens on the proceeds and products of any
such property or assets (other than the
Secretary's Collateral), any property or
assets acquired with the proceeds of or in
exchange for any such property or assets
(other than the Secretary's Collateral) or
the accounts receivable generated from any
such property or assets (other than the
Secretary's Collateral), and (ii) Liens to
secure indebtedness or obligations incurred
to extend, refinance, renew, replace or
refund (or successive extensions,
refinancings, renewals, replacements or
refundings of) any indebtedness or
obligations secured by any Lien permitted by
the foregoing clause (i) so long as such Lien
does not extend to any other property
(including, without limitation, the
Secretary's Collateral), and (iii) any
Disposition of or Lien on property or assets
of the Company (and, in the case of Liens,
any extension, refinancing, renewal,
replacement or refundings of the indebtedness
or other obligations secured by such Liens),
provided that (A) after giving effect to any
such Disposition or Lien the Net Book Value
(as defined below) of the aggregate of all of
the assets that have been the subject of any
Disposition or Lien (excluding assets subject
to Liens permitted by clauses (i) and (ii)
above) during the immediately prior 12 month
period does not exceed an amount equal to 10
percent of the sum of the total Net Book
Value of all of the Company's assets
(excluding the assets subject to the Liens
permitted by clauses (i) and (ii) above) as
indicated on the most recent audited annual
financial statement required to be submitted
pursuant to Section 14 hereof, (B) the
Company retains the proceeds of (x) the
Disposition or (y) the indebtedness or other
obligations secured by the Lien for use in
accordance with the Company's regular
business activities, including without
limitation, the repayment of indebtedness of
the Company and (C) the Disposition or Lien
is not otherwise prohibited by subsection
13(c)(3) above. *Net Book Value* is defined
as the original book value of an asset less
depreciation calculated on a straight line
basis over its useful life.
Notwithstanding clause (iii) of this
subsection 13(c)(7), the Company shall not
consummate the Disposition or Lien permitted
by such provision without the prior written
consent of the Secretary if the Company has
not, prior to the time of such Disposition or
Lien, submitted to the Secretary the
financial statement required by Section 14
hereof, and any attempt to so consummate such
Disposition or Lien absent such approval
shall be null and void ab initio.
Notwithstanding any other provision of this
subsection 13(c)(7), the Company shall not
consummate the Disposition or Lien permitted
hereby if it would adversely affect the
priority of the Secretary's security
interests in the Vessel or the Secretary's
Collateral."
ARTICLE SECOND
COUNTERPARTS
This Amendment No. 6 may be executed in any number of
counterparts. Each of said counterparts shall be deemed to be an
original, but together shall constitute but one and the same
instrument.
ARTICLE THIRD
AMENDMENT
The Agreement, as amended and supplemented by this Amendment
No. 6, is in all respects confirmed and shall remain in full
force and effect.
IN WITNESS WHEREOF, this Amendment No. 6 has been executed
by the parties hereto on the day and year first above written.
AVONDALE INDUSTRIES, INC., as Shipowner
By:/s/ ▇▇▇▇▇▇ ▇. KITCHEN
_________________________________________
▇▇▇▇▇▇ ▇. Kitchen, Vice President
(SEAL)
ATTEST:
/s/ ▇▇ ▇▇▇▇▇
_____________________________
Assistant Secretary
UNITED STATES OF AMERICA
DEPARTMENT OF TRANSPORTATION
BY: MARITIME ADMINISTRATOR
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_________________________________________
Secretary, Maritime Administration
ATTEST:
(SEAL)
ATTEST:
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
_____________________________
Assistant Secretary
Maritime Administration
