Exhibit 4.61
Private & Confidential
Dated 16 June 2006
ICON DOUBTLESS, LLC (1)
as Owner
FALAKRO SHIPPING COMPANY LIMITED (2)
as Charterer
TOP TANKERS INC. as Charter Guarantor (3)
and
FORTIS BANK (NEDERLAND) N.V. (4)
as Mortgagee
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QUADRIPARTITE DEED
relating to m.v. "Doubtless"
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▇▇▇▇▇▇ ▇▇▇▇
Contents
Clause Page
1 Definitions................................................................2
2 Representations and warranties.............................................8
3 Assignment................................................................12
4 Owner's Assignment........................................................12
5 Continuing security and other matters.....................................13
6 Charterer's undertakings..................................................16
7 Charter Guarantor's undertakings..........................................18
8 Covenants concerning insurance and operational matters....................22
9 Powers of Mortgagee to protect security and remedy defaults...............29
10 Powers of Mortgagee on Event of Default...................................30
11 Application of moneys.....................................................30
12 Remedies cumulative and other provisions..................................32
13 Costs and indemnity.......................................................32
14 Attorney..................................................................33
15 Further assurance.........................................................33
16 Consent, Termination of Charter and Quiet Enjoyment.......................34
17 Continuation of Charter Period............................................36
18 Notices...................................................................36
19 Counterparts..............................................................37
20 Severability of provisions................................................37
21 Law and jurisdiction......................................................37
Schedule 1 Forms of Loss Payable Clauses......................................39
Schedule 2 Forms of Notices of Assignment of Insurances.......................40
THIS QUADRIPARTITE DEED is dated 16 June 2006 BETWEEN:
(1) ICON DOUBTLESS, LLC, whose registered office is at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, New Castle County, Delaware 19808, United States
of America (the "Owner");
(2) FALAKRO SHIPPING COMPANY LIMITED, a company incorporated in the Republic
of Liberia whose registered office is at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ of Liberia (the "Charterer");
(3) TOP TANKERS INC., a company incorporated in The ▇▇▇▇▇▇▇▇ Islands whose
registered office is at Trust Company Complex, Ajeltake Road, Ajeltake
Island, Majuro, ▇▇▇▇▇▇▇▇ Islands MH96960 (the "Charter Guarantor"); and
(4) FORTIS BANK (NEDERLAND) N.V., a company incorporated under the laws of
The Netherlands acting for the purposes of this Deed through its office
at ▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ as security agent
and trustee for and on behalf of the Secured Creditors (the "Mortgagee").
WHEREAS:
(A) the Owner is the sole, absolute and unencumbered, legal and beneficial
owner of all of the shares in the Ship described in clause 1.1;
(B) by a loan agreement (the "Loan Agreement") dated 16 June 2006 and made
between (1) the Owner, ICON Faithful, LLC, ICON Spotless, LLC and Isomar
Marine Company Limited (therein and herein together referred to as the
"Borrowers"), (2) the banks and financial institutions whose names are
set out at schedule 1 thereto as lenders (the "Banks"), (3) Fortis Bank
NV/SA as arranger and account bank (in such capacity the "Account Bank"),
(4) the Mortgagee as agent (in such capacity the "Agent") and security
agent and (4) Fortis Bank (Nederland) N.V. as swap provider (in such
capacity the "Swap Provider and together with the Agent and the Banks,
the "Secured Creditors"), the Banks agreed (inter alia) to advance by way
of loan to the Borrowers, upon the terms and conditions therein, a
maximum aggregate amount of up to $80,000,000;
(C) by a 1992 ISDA Master Agreement dated 16 June 2006 (the "Master Swap
Agreement") made between (1) the Borrowers and (2) the Swap Provider, the
Swap Provider agreed the terms and conditions upon which it would enter
into (inter alia) interest rate swap transactions with the Borrowers in
respect of the Loan (whether in whole or in part as the case may be from
time to time);
(D) pursuant to clause 16.14 of the Loan Agreement, each of the Secured
Creditors has appointed the Mortgagee as its security agent and trustee
and pursuant to a deed of trust dated 16 June 2006 executed by the
Mortgagee (as trustee) in favour of the Creditors, the Mortgagee agreed
to hold, receive, administer and enforce this Deed for and on behalf of
itself and the Secured Creditors;
(E) pursuant to the Loan Agreement and the Master Swap Agreement there has
been or will be executed by the Owner in favour of the Mortgagee (as
security agent and trustee for and on behalf of the Secured Creditors) a
first preferred ship mortgage (the "Mortgage") on the Ship and the
Mortgage of even date herewith has been or will be registered under the
provisions of Chapter 3 of title 21 of the Liberian Code of Laws of 1956
as amended as security for the payment by the Borrowers of the
Outstanding Indebtedness (which expression, for the avoidance of doubt,
includes the Master Swap Agreement Liabilities) (as those expressions are
defined in the Mortgage);
(F) by a "Barecon 2001" bareboat charter dated 14 March 2006 made between
▇▇▇▇▇▇ Navigation Co. of Liberia (the "Original Owner) and the Charterer
as novated and amended in favour of the Owner and the Charterer by a
novation agreement dated 16 June 2006 made between the Original Owner,
the Charterer and the Owner (the "Charter"), the Owner has agreed to let,
and Charterer has agreed to take, the Ship on demise charter for a period
of sixty (60) months from the date of delivery of the Ship to the
Charterer thereunder upon the terms and conditions therein mentioned;
(G) as security for the obligations of the Charterer under the Charter, the
Charter Guarantor has or, as the case may be, will execute a guarantee in
favour of the Owner (the "Charter Guarantee");
(H) the Loan Agreement provided (inter alia) that, as a condition precedent
to the advance of the Doubtless Advance, the Owner, the Charterer and the
Charter Guarantor should enter into a deed supplemental to the Mortgage
substantially in the form of this Deed, to secure (inter alia) all sums
of money from time to time owing to the Mortgagee and/or the Secured
Creditors under the Loan Agreement, the Master Swap Agreement and the
other Security Documents; and
(I) this Deed is supplemental to the Loan Agreement and the Mortgage and to
the security thereby created and is the Doubtless Quadripartite Deed
referred to in the Loan Agreement but shall nonetheless continue in full
force and effect notwithstanding any discharge of the Mortgage.
NOW THIS DEED WITNESSES AND IT IS HEREBY AGREED as follows:
1 Definitions
1.1 Definitions
In this Deed, unless the context otherwise requires:
"Approved Brokers" means such firm of insurance brokers, appointed by the
Charterer during the Charter Period, as may from time to time be approved
in writing by the Mortgagee for the purposes of this Deed;
"Casualty Amount" means Five hundred thousand Dollars ($500,000) (or the
equivalent in any other currency);
"Charter" means the "Barecon 2001" demise charter between the Owner and
the Charterer referred to in recital (F);
"Charter Earnings" means all moneys whatsoever from time to time payable
by the Charterer to the Owner under or pursuant to the Charter and/or any
moneys payable to the Owner under or pursuant to the Charter Guarantee
and/or any guarantee, security or other assurance given to the Owner at
any time in respect of the Charterer's obligations under or, pursuant to
the Charter;
"Charterer includes the successors in title and permitted assignees of
the Charterer; "Charterer's Assigned Property" means all of the
Charterer's rights, title and interest in and to:
(a) the Insurances; and
(b) any Requisition Compensation;
"Charter Guarantee" means the guarantee executed or (as the context may
require) to be executed by the Charter Guarantor in favour of the Owner
as referred to in recital (G);
"Charter Guarantor includes the successors in title and permitted
assignees of the Charter Guarantor;
"Charter Guarantor's Account" means the interest bearing Dollar account
of the Charter Guarantor opened or (as the context may require) to be
opened with the Account Bank with account number 24.07.56.150 and
includes any sub-accounts thereof and any other account designated in
writing by the Mortgagee to be the Charter Guarantor's Account for the
purposes of this Deed;
"Charter Period" means such part of the period of the Charter as falls
within the Security Period or, in the event of expiration or
determination of the period of the Charter prior to the expiration of the
Security Period, the period down to the expiration or determination of
the period of the Charter;
"Charter Rights" means all of the rights of the Owner under or pursuant
to the Charter, the Charter Guarantee and any other guarantee, security
or other assurance given to the Owner at any time in respect of the
Charterer's obligations under or pursuant to the Charter including
(without limitation) the right to receive the Charter Earnings;
"Code" means the International Management Code for the Safe Operation of
Ships and for Pollution Prevention Constituted pursuant to Resolution A.
741 (18) of the International Maritime Organisation and incorporated into
the International Convention on Safety of Life at Sea 1974 (as amended)
and includes any amendment or extensions thereto and any regulation
issued pursuant thereto;
"Collateral Instruments" means notes, bills of exchange, certificates of
deposit and other negotiable and non-negotiable instruments, guarantees,
indemnities and other assurances against financial loss and any other
documents or instruments which contain or evidence an obligation (with or
without security) to pay, discharge or be responsible directly or
indirectly for, any indebtedness or liabilities of the Borrowers or any
of them or any other person liable and includes any documents or
instruments creating or evidencing a mortgage, charge (whether fixed or
floating), pledge, lien, hypothecation, assignment, trust arrangement or
security interest of any kind;
"Compulsory Acquisition" means requisition for title or other compulsory
acquisition, requisition, appropriation, expropriation, deprivation,
forfeiture or confiscation for any reason of the Ship by any Government
Entity or other competent authority, whether de jure or de facto, but
shall exclude requisition for use or hire not involving requisition of
title;
"DOC" means a document of compliance issued to an Operator in accordance
with rule 13 of the Code;
"Default" means any Event of Default or any event or circumstance which
with the giving of notice or lapse of time or the satisfaction of any
other condition (or any combination thereof) would constitute an Event of
Default;
"Delivery" means the delivery of the Ship by the Owner, and the
acceptance of the Ship by the Charterer, pursuant to the Charter;
"Delivery Date" means the date on which Delivery occurs;
"Encumbrance" means any mortgage, charge (whether fixed or floating),
pledge, lien, hypothecation, assignment, trust arrangement or security
interest or other encumbrance of any kind securing any obligation of any
person or any type of preferential arrangement (including without
limitation title transfer and/or retention arrangements having a similar
effect);
"Environmental Affiliate" means any agent or employee of the Charterer or
any other Relevant Party or any person having a contractual relationship
with the Charterer or any other Relevant Party in connection with any
Relevant Ship or its operation or the carriage of cargo and/or passengers
thereon and/or the provision of goods and/or services on or from the
Relevant Ship;
"Environmental Approval" means any consent, authorisation, licence or
approval of any governmental or public body or authorities or courts
applicable to any Relevant Ship or its operation or the carriage of cargo
and/or passengers thereon and/or the provision of goods and/or services
on or from such Relevant Ship required under any Environmental Law;
"Environmental Claim" means any and all enforcement, clean-up, removal or
other governmental or regulatory actions or orders instituted or
completed pursuant to any Environmental Law or any Environmental Approval
together with claims made by any third party relating to damage,
contribution, loss or injury, resulting from any actual or threatened
emission, spill, release or discharge of a Pollutant from any Relevant
Ship;
"Environmental Laws" means all national, international and state laws,
rules, regulations, treaties and conventions applicable to any Relevant
Ship pertaining to the pollution or protection of human health or the
environment including, without limitation, the carriage of Pollutants and
actual or threatened emissions, spills, releases or discharges of
Pollutants;
"Event of Default" means any of the events or circumstances described in
clause 10.1 of the Loan Agreement;
"Expenses" means the aggregate at any relevant time (to the extent that
the same have not been received or recovered by the Mortgagee) of:
(a) all losses, liabilities, costs, charges, expenses, damages and
outgoings of whatever nature (including, without limitation,
Taxes, registration fees and insurance premiums) suffered,
incurred or paid by the Mortgagee in connection with the exercise
of the powers referred to in or granted by this Deed or otherwise
payable by the Owner in accordance with clause 13; and
(b) interest on all such losses, liabilities, costs, charges,
expenses, damages and outgoings from the date on which the same
were suffered, incurred or paid by the Mortgagee until the date of
receipt or recovery thereof (whether before or after judgment) at
a rate per annum calculated in accordance with clause 3.4 of the
Loan Agreement (as conclusively certified by the Mortgagee);
"Government Entity" means and includes (whether having a distinct legal
personality or not) any national or local government authority, board,
commission, department, division, organ, instrumentality, court or agency
and any association, organisation or institution of which any of the
foregoing is a member or to whose jurisdiction any of the foregoing is
subject or in whose activities any of the foregoing is a participant;
"Incapacity" means, in relation to a person, the death, bankruptcy,
unsoundness of mind, insolvency, liquidation, dissolution, winding-up,
administration, receivership, amalgamation, reconstruction or other
incapacity of that person whatsoever (and, in the case of a partnership,
includes the termination or change in the composition of the
partnership);
"Insurances" means all policies and contracts of insurance (which
expression includes all entries of the Ship in a protection and indemnity
or war risks association) which are from time to time during the Security
Period in place or taken out or entered into by or for the benefit of,
among others, the Owner and/or the Charterer (whether in the sole name of
the Owner, or in the joint names of the Owner, the Charterer and the
Mortgagee or otherwise) in respect of the Ship (but not loss of earnings)
or otherwise howsoever in connection with the Ship and all benefits
thereof (including claims of whatsoever nature and return of premiums);
"ISPS Code" means the International Ship and Port Facility Security Code
constituted pursuant to resolution A.924(22) of the International
Maritime Organization now set out in Chapter XI-2 of the International
Convention for the Safety of Life at Sea 1974 (as amended) as adopted by
a Diplomatic Conference of the International Maritime Organisation on
Maritime Security in December 2002 and includes any amendments or
extensions thereto and any regulation issued pursuant thereto;
"ISSC" means an International Ship Security Certificate issued in respect
of the Ship pursuant to the ISPC Code;
"Loan" means the aggregate principal amount owing to the Banks or any of
them pursuant to the Loan Agreement at any relevant time;
"Loan Agreement" means the agreement referred to in recital (B) hereto as
the same may from time to time be supplemented and/or amended;
"Loss Payable Clauses" means the provisions regulating the manner of
payment of sums receivable under the Insurances which are to be
incorporated in the relevant insurance documents, such Loss Payable
Clauses to be in the forms set out in schedule 1 during the Charter
Period (which shall, during the Charter Period, replace the forms of Loss
Payable Clauses specified in the Doubtless General Assignment (as such
term is defined in the Loan Agreement)) or in such other forms as may
from time to time be required or agreed in writing by the Mortgagee;
"Master Swap Agreement" means the 1992 ISDA Master Agreement made between
the Swap Provider and the Borrowers dated June 2006 mentioned in recital
(C) hereto, comprising a 1992 ISDA Master Agreement (and a Schedule
thereto), together with any Confirmations (as defined therein)
supplemental thereto;
"Master Swap Agreement Liabilities" means, at any relevant time, all
liabilities, actual or contingent, present or future, owing to the Swap
Provider under the Master Swap Agreement;
"Mortgage" means the first preferred mortgage mentioned in recital (E)
hereto;
"Mortgagee" includes the successors in title and replacements of the
Mortgagee;
"Notice of Assignment of Insurances" means a notice of assignment in the
form set out in schedule 2 during the Charter Period (which shall, during
the Charter Period, replace the form of Notice of Assignment of
Insurances specified in the Doubtless General Assignment), or in such
other form as may from time to time be required or agreed in writing by
the Mortgagee;
"Operator" means any person who is from time to time during the Security
Period concerned in the operation of the Ship and falls within the
definition of "Company" set in rule 1.1.2 of the Code;
"Other Ships" means together, Faithful, Spotless and Vanguard and "Other
Ship" means any of them;
"Outstanding Indebtedness" means the aggregate of the Loan and interest
accrued and accruing thereon, the Master Swap Agreement Liabilities, the
Expenses and all other sums of money from time to time owing by the
Borrowers to the Mortgagee and/or any of the Secured Creditors, whether
actually or contingently, present or future, under or pursuant to the
Loan Agreement, the Master Swap Agreement, the Security Documents or any
of them;
"Owner" includes the successors in title of the Owner; "Owner's Assigned
Property" means:
(a) the Charter;
(b) the Charter Guarantee;
(c) the Charter Earnings; and
(d) all other Charter Rights;
"Pollutant" means and includes pollutants, contaminants, toxic
substances, oil as defined in the United States Oil Pollution Act of 1990
and all hazardous substances as defined in the United States
Comprehensive Environmental Response, Compensation and Liability ▇▇▇
▇▇▇▇;
"Related Company" of a person means any Subsidiary of such person, any
company or other entity of which such person is a Subsidiary and any
Subsidiary of any such company or entity;
"Relevant Party" means the Owner, the Owners Related Companies, any other
Security Party and any other Security Party's Related Companies;
"Relevant Ship" means the Ship and any other vessel from time to time
(whether before or after the date of this Deed) owned, managed or crewed
by, or chartered to, any Relevant Party;
"Requisition Compensation" means all sums of money or other compensation
from time to time payable during the Security Period by reason of the
Compulsory Acquisition of the Ship;
"Security Documents" means the Loan Agreement, this Deed, the Mortgage
and any other such document as is defined in the Loan Agreement as a
Security Document or as may have been or may hereafter be executed to
guarantee and/or secure all or any part of the Loan, any interest
thereon, the Master Swap Agreement Liabilities and the moneys from time
to time owing by the Borrowers or any of them pursuant to the Loan
Agreement and/or the Master Swap Agreement or by any other Security Party
pursuant to any other Security Document (whether or not such documents,
also secure moneys from time to time owing pursuant to any other document
or agreement);
"Security Party" means any person who may at any time be a party to any
of the Security Documents (other than the Secured Creditors);
"Security Period" means the period commencing on the date hereof and
terminating upon discharge of the security created by the Security
Documents by payment of all moneys payable thereunder;
"Ship" means the m.v. "Doubtless" registered as a Liberian ship under
Official Number 9363 and includes any share or interest therein and her
engines, machinery, boats, tackle, outfit, equipment, spare gear, fuel,
consumable or other stores, belongings and appurtenances whether on board
or ashore and whether now owned or hereafter acquired and also any and
all additions, improvements and replacements hereafter made in or to such
vessel or any part thereof or in or to her equipment and appurtenances
aforesaid;
"SMC" means a safety management certificate issued in respect of a ship
in accordance with rule 13 of the Code;
"Subsidiary" of a person means any company or entity directly or
indirectly controlled by such person, and for this purpose "control"
means either the ownership of more than 50% of the voting share capital
(or equivalent rights of ownership) of such company or entity or the
power to direct its policies and management, whether by contract or
otherwise; and
"Total Loss" means:
(a) the actual, constructive, compromised or arranged total loss of
the Ship; or
(b) the Compulsory Acquisition of the Ship; or
(c) the hijacking, theft, condemnation, capture, seizure, arrest,
detention or confiscation of the Ship (other than where the same
amounts to the Compulsory Acquisition of the Ship) by any
Government Entity, or by persons acting or purporting to act on
behalf of any Government Entity, unless the Ship be released and
restored to the Owner or (during the Charter Period) the Charterer
(as the case may be) from such hijacking, theft, condemnation,
capture, seizure, arrest, detention or confiscation within thirty
(30) days after the occurrence thereof.
1.2 Insurance terms In clause 8.1.1:
1.2.1 "excess risks" means the proportion (if any) of claims for general
average, salvage and salvage charges and under the ordinary collision
clause not recoverable in consequence of the value at which the Ship is
assessed for the purpose of such claims exceeding her insured value;
1.2.2 "protection and indemnity risks" means the usual risks (including oil
pollution and freight, demurrage and defence cover) covered by a United
Kingdom protection and indemnity association or a protection and
indemnity association which is managed in London (including, without
limitation, the proportion (if any) of any sums payable to any other
person or persons in case of collision which are not recoverable under
the hull and machinery policies by reasons of the incorporation in such
policies of clause 8 of the Institute Time Clauses (Hulls) (1/11/95) or
the Institute Amended Running Down Clause (1/10/71) or any equivalent
provision); and
1.2.3 "war risks" includes those risks covered by the standard form of English
marine policy with Institute War and Strikes Clauses Hulls - Time
(1/11/95) attached or similar cover.
1.3 Headings
Clause headings and the table of contents are inserted for convenience of
reference only and shall be ignored in the interpretation of this Deed.
1.4 Construction of certain terms
In this Deed, unless the context otherwise requires:
1.4.1 references to clauses and Schedules are to be construed as references to
clauses of, and Schedules to, this Deed and references to this Deed
include its Schedules;
1.4.2 references to (or to any specified provision of) this Deed or any other
document shall be construed as references to this Deed, that provision or
that document as in force for the time being and as amended in accordance
with the terms thereof, or, as the case may be, with the agreement of the
relevant parties;
1.4.3 words importing the plural shall include the singular and vice versa;
1.4.4 references to a person shall be construed as references to an individual,
firm, company, corporation, unincorporated body of persons or any
Government Entity;
1.4.5 references to a "guarantee" shall include references to an indemnity or
other assurance against financial loss including, without limitation, an
obligation to purchase assets or services as a consequence of a default
by any other person to pay any Indebtedness and "guaranteed" shall be
construed accordingly; and
1.4.6 references to statutory provisions shall be construed as references to
those provisions as replaced or amended or re-enacted from time to time.
1.5 Conflict with Loan Agreement
As between the Owner and the Mortgagee, this Deed shall be read together
with the Loan Agreement but in case of any conflict between the two
instruments, the provisions of the Loan Agreement shall prevail.
1.6 Conflict with Charter
If and to the extent that any of the covenants and undertakings given by
the Charterer in this Deed may conflict with any of the provisions of the
Charter, such covenants and undertakings of this Deed shall (as between
the Mortgagee on the one hand and the Owner and the Charterer on the
other hand but not otherwise) prevail over such provisions of the
Charter.
2 Representations and warranties
2.1 Charterers continuing representations and warranties
The Charterer represents and warrants to the Mortgagee (as security agent
and trustee for and on behalf of the Secured Creditors) and the Owner
that:
2.1.1 Due incorporation
it is duly incorporated and validly existing in good standing under the
laws of the Republic of Liberia as a Liberian corporation and has power
to carry on its business as it is now being conducted and to own its
property and other assets;
2.1.2 Corporate power
it has power to execute, deliver and perform its obligations under the
Charter and such of the Security Documents to which it is, or is to be, a
party and all necessary corporate, shareholder and other action has been
taken to authorise the execution, delivery and performance of the same;
2.1.3 Binding obligations
the Charter and the Security Documents to which it is, or is to be, a
party constitute or will, when executed, constitute its valid and legally
binding obligations enforceable in accordance with their respective
terms;
2.1.4 No conflict with other obligations
the execution and delivery of, the performance of its obligations under,
and compliance with the provisions of the Charter and the Security
Documents to which it is, or is to be, a party by it will not (a)
contravene, any existing applicable law, statute, rule or regulation or
any judgment, decree or permit to which it is subject, or (b) contravene
or conflict with any provision of its constitutional documents;
2.1.5 No filings required
it is not necessary to ensure the legality, validity, enforceability or
admissibility in evidence of the Charter or any of the Security Documents
to which it is, or is to be, a party that they or any other instrument be
notarised, filed, recorded, registered or enrolled in any court, public
office or elsewhere in any Relevant Jurisdiction or that any stamp,
registration or similar tax or charge be paid in any Relevant
Jurisdiction on or in relation to the Charter or any of such Security
Documents and the Charter and each of such Security Documents are in
proper form for its enforcement in the courts of each Relevant
Jurisdiction;
2.1.6 Choice of law
the choice of English law to govern the Charter and the Security
Documents to which it is, or is to be, a party and the submission by the
Charterer to the non-exclusive jurisdiction of the English courts are
valid and binding;
2.1.7 No material adverse change
there has been no material adverse change in the financial position of
the Charterer from that disclosed by the Charterer to the Arranger and/or
the Agent in the negotiation of the Loan Agreement;
2.1.8 No immunity
neither it nor any of its assets is entitled to immunity on the grounds
of sovereignty or otherwise from any legal action or proceeding (which
shall include, without limitation, suit, attachment prior to judgment,
execution or other enforcement); and
2.1.9 Consents obtained
every consent, authorisation, licence or approval of, or registration
with or declaration to, governmental or public bodies or authorities or
courts required by it to authorise, or required by it in connection with,
the execution, delivery, validity, enforceability or admissibility in
evidence of the Charter and the Security Documents to which it is, or is
to be, a party or the performance by it of its obligations under the
Charter and such Security Documents have been obtained or made and are in
full force and effect and there has been no default in the observance of
any of the conditions or restrictions (if any) imposed in, or in
connection with, any of the same.
2.2 Charter Guarantor's continuing representations and warranties
The Charter Guarantor represents and warrants to the Mortgagee (as
security agent and trustee for and on behalf of the Secured Creditors)
and the Owner that:
2.2.1 Due incorporation
it is duly incorporated and validly existing in good standing under the
laws of the ▇▇▇▇▇▇▇▇ Islands as a ▇▇▇▇▇▇▇▇ Islands corporation and has
power to carry on its business as it is now being conducted and to own
its property and other assets;
2.2.2 Corporate power
it has power to execute, deliver and perform its obligations under the
Charter Guarantee and this Deed and has power to execute and deliver and
perform its obligations under the Charter Guarantee and this Deed, and
all necessary corporate, shareholder and other action has been taken to
authorise the execution, delivery and performance of the same and no
limitation on the powers of the Charter Guarantor to give guarantees or
security will be exceeded as a result of the execution, delivery and
performance of the Charter Guarantee or the Charter Guarantor's
obligations under this Deed;
2.2.3 Binding obligations
the Charter Guarantee and this Deed constitute or will, when executed,
constitute its valid and legally binding obligations enforceable in
accordance with their respective terms;
2.2.4 No conflict with other obligations
the execution and delivery of, the performance of its obligations under,
and compliance with the provisions of the Charter Guarantee and this Deed
by it will not (a) contravene, any existing applicable law, statute, rule
or regulation or any judgment, decree or permit to which it is subject or
(b) contravene or conflict with any provision of its constitutional
documents;
No filings required
it is not necessary to ensure the legality, validity, enforceability or
admissibility in evidence of the Charter Guarantee or this Deed that they
or any other instrument be notarised, filed, recorded, registered or
enrolled in any court, public office or elsewhere in any Relevant
Jurisdiction or that any stamp, registration or similar tax or charge be
paid in any Relevant Jurisdiction on or in relation to the Charter
Guarantee or this Deed and both the Charter Guarantee and this Deed are
in proper form for their enforcement in the courts of each Relevant
Jurisdiction;
2.2.6 Choice of law
the choice of English law to govern the Charter Guarantee and this Deed
and the submission by the Charter Guarantor to the non-exclusive
jurisdiction of the English courts are valid and binding;
2.2.7 No material adverse change
there has been no material adverse change in the financial position of
the Charter Guarantor from that disclosed by the Charter Guarantor to the
Arranger and/or the Agent in the negotiation of the Loan Agreement;
2.2.8 No immunity
neither it nor any of its assets is entitled to immunity on the grounds
of sovereignty or otherwise from any legal action or proceeding (which
shall include, without limitation, suit, attachment prior to judgement,
execution or other enforcement); and
2.2.9 Consents obtained
every consent, authorisation, licence or approval of, or registration
with or declaration to, governmental or public bodies or authorities or
courts required by the Charter Guarantor to authorise, or required by the
Charter Guarantor in connection with, the execution, delivery, validity,
enforceability or admissibility in evidence of the Charter Guarantee and
this Deed or the performance by the Charter Guarantor of its obligations
under the Charter Guarantee and this Deed has been obtained or made and
is in full force and effect and there has been no default in the
observance of any of the conditions or restrictions (if any) imposed in,
or in connection with, any of the same.
2.3 Charterer's initial representations and warranties
The Charterer represents and warrants to the Mortgagee (as security agent
and trustee for and on behalf of the Secured Creditors) and the Owner
that:
2.3.1 No withholding Taxes
no Taxes are imposed by withholding or otherwise on any payment to be
made by it under the Charter or the Security Documents to which it is, or
is to be, a party or are imposed on or by virtue of its execution or
delivery of the Charter or any of such Security Documents or any other
document or instrument to be executed or delivered under the Charter or
any of such Security Documents;
2.3.2 Ship's employment
(save for the Charter and the Doubtless Time Charter) the Ship is not and
will not on the Delivery Date be subject to any charter or contract or to
any agreement to enter into any charter or contract entered into by the
Charterer which, if entered into by it after the date of this Deed, would
have required the consent of the Mortgagee;
2.3.3 Freedom from Encumbrances
the Charterer is the sole, legal and beneficial owner of the whole of the
Charterer's Assigned Property and neither the Charterer's Assigned
Property nor any part thereof are or will be on the Delivery Date subject
to any Encumbrance created by it or arising due to its act or omission or
its use or operation of the Ship and it has not (save as disclosed in
writing to the Mortgagee) received notice of any Encumbrance (other than
pursuant to this Deed) in respect thereof created by any other person;
2.3.4 Commissions etc.
there are no commissions, rebates, premiums or other payments in
connection with the Charter other than as disclosed to the Mortgagee in
writing prior to the date hereof;
2.3.5 Compliance with Environmental Laws and Approvals
except as may already have been disclosed by it in writing to, and
acknowledged in writing by, the Mortgagee:
(a) the Charterer and to the best of its knowledge and belief (having made
due enquiry) its Environmental Affiliates have complied with the
provisions of all Environmental Laws;
(b) the Charterer and to the best of its knowledge and belief (having made
due enquiry) its Environmental Affiliates have obtained all Environmental
Approvals and are in compliance with all such Environmental Approvals;
and
(c) neither the Charterer nor to the best of its knowledge and belief (having
made due enquiry) any of its Environmental Affiliates has received notice
of any Environmental Claim that the Charterer or any such Environmental
Affiliate is not in compliance with any Environmental Law or any
Environmental Approval;
2.3.6 No Environmental Claims
except as may already have been disclosed by it in writing to, and
acknowledged in writing by, the Mortgagee, there is no Environmental
Claim pending or, to the best of its knowledge and belief (having made
due enquiry), threatened against the Charterer or the Ship or any other
ship owned, managed or crewed by, or chartered to, the Charterer or, to
the best of its knowledge and belief (having made due enquiry) any of its
Environmental Affiliates; and
2.3.7 No potential Environmental Claims
except as may already have been disclosed by it in writing to, and
acknowledged in writing by, the Mortgagee, there has been no emission,
spill, release or discharge of a Pollutant from the Ship or any other
ship owned by, managed or crewed by, or chartered to, the Charterer nor
to the best of its knowledge and belief (having made due enquiry) from
any other ship owned by, managed or crewed by, or chartered to, the
Charterer which could give rise to an Environmental Claim.
2.4 Charter Guarantor's Initial representations and warranties
The Charter Guarantor represents and warrants to the Mortgagee (as
security agent and trustee for and on behalf of the Secured Creditors)
and the Owner that no Taxes are imposed by withholding or otherwise on
any payment to be made by it under the Charter Guarantee or are imposed
on or by virtue of its execution or delivery of the Charter Guarantee or
this Deed or any other document or instrument to be executed or delivered
under the Charter Guarantee or this Deed.
2.5 Repetition of representations and warranties
On and as of the Delivery Date and (except in relation to the
representations and warranties in clauses 2.3, 2.4 and 5) each Interest
Payment Date during the Charter Period, the Charterer and the Charter
Guarantor shall be deemed to repeat the representations and warranties in
clauses 2.1, 2.2, 2.3 and 2.4 as if made with reference to the facts and
circumstances existing on such day.
3 Assignment
3.1 Charterer's Assignment
By way of security for the Outstanding Indebtedness (which expression,
for the avoidance of doubt, includes the Master Swap Agreement
Liabilities) the Charterer with full title guarantee hereby assigns and
agrees to assign to the Mortgagee absolutely all its rights, title and
interest in and to the Charterer's Assigned Property and all its benefits
and interests present and future therein. Provided however that unless
and until a Default shall occur (whereupon all insurance recoveries shall
be receivable by the Mortgagee and applied in accordance with clause 11.1
or clause 11.3 (as the case may be)):
3.1.1 any moneys payable under the Insurances, shall be payable in accordance
with the terms of the relevant Loss Payable Clause and the Mortgagee will
not in the meantime give any notification to the contrary to the insurers
as contemplated by the Loss Payable Clauses; and
3.1.2 any insurance moneys received by the Mortgagee in respect of any major
casualty (as specified in the relevant Loss Payable Clause) shall, unless
prior to receipt or whilst such moneys are in the hands of the Mortgagee
there shall have occurred a Default (whereupon such insurance monies
shall be applied in accordance with clause 11.1 or clause 11.3 (as the
case may be)), be paid over to the Charterer upon the Charterer
furnishing evidence satisfactory to the Mortgagee that all loss and
damage resulting from such casualty has been properly made good and
repaired, and that all repair accounts and other liabilities whatsoever
in connection with the casualty have been fully paid and discharged by
the Charterer, provided however that the insurers with whom the fire and
usual marine risks insurances are effected may, in the case of a major
casualty, and with the previous consent in writing of the Mortgagee, make
payment on account of repairs in the course of being effected.
3.2 Use of Charterer's name
The Charterer covenants and undertakes with the Mortgagee to do or permit
to be done each and every act or thing which the Mortgagee may from time
to time require to be done for the purpose of enforcing the Mortgagee's
rights under this Deed and to allow its name to be used as and when
required by the Mortgagee for that purpose.
3.3 Reassignment
Upon payment and discharge in full to the satisfaction of the Mortgagee
of the Outstanding Indebtedness, the Mortgagee shall, at the request and
cost of the Charterer, re-assign the Charterer's Assigned Property to the
Charterer or as it may direct.
3.4 Liability of Charterer
The Charterer shall remain liable to perform all the obligations assumed
by it in relation to the Assigned Property and the Mortgagee shall be
under no obligation of any kind whatsoever in respect thereof or be under
any liability whatsoever in the event of any failure by the Charterer to
perform its obligations in respect thereof.
4 Owner's Assignment
4.1 Assignment
By way of security for payment of the Outstanding Indebtedness (which
expression, for the avoidance of doubt, includes the Master Swap
Agreement Liabilities) the Owner with full title guarantee hereby assigns
and agrees to assign to the Mortgagee (as security agent and trustee on
behalf of the(.) Secured Creditors) absolutely all its rights, title and
interest in and to the Owner's Assigned Property and all benefits
accruing to the Owner thereunder Provided however that the Charter
Earnings shall be payable to the Doubtless Operating Account (as such
term is defined in the Loan Agreement) until such time as a Default shall
occur and the Mortgagee shall direct to the contrary whereupon the Owner
shall forthwith, and the Mortgagee may at any time thereafter, instruct
the persons from whom the Charter Earnings are then payable to pay the
same to the Mortgagee (as security agent and trustee on behalf of the
Secured Creditors) or as it may direct and any Charter Earnings then in
the hands of the Owner's brokers or other agents shall be deemed to have
been received by them for the use and on behalf of the Mortgagee.
4.2 Use of Owner's name
The Owner covenants and undertakes with the Mortgagee to do or permit to
be done each and every act or thing which the Mortgagee may from time to
time require to be done for the purpose of enforcing the Mortgagee's
rights under this Deed and to allow its name to be used as and when
required by the Mortgagee for that purpose.
4.3 Reassignment
Upon payment and discharge in full to the satisfaction of the Mortgagee
of the Outstanding Indebtedness, the Mortgagee shall, at the request and
cost of the Owner, re-assign the Owner's Assigned Property to the Owner
or as it may direct.
4.4 Liability of Owner
The Owner shall remain liable to perform all the obligations assumed by
it in relation to the Mortgaged Property and the Mortgagee shall be under
no obligation of any kind whatsoever in respect thereof or be under any
liability whatsoever in the event of any failure by the Owner to perform
its obligations in respect thereof.
4.5 Acknowledgement by Charterer
By its execution of this Deed, each of the Charterer and the Charter
Guarantor has received written notice of, and consents to, the assignment
to the Mortgagee of the Charter, the Charter Earnings, the other Charter
Rights and the Charter Guarantee.
5 Continuing security and other matters
5.1 Continuing security
The security created by this Deed shall:
5.1.1 be held by the Mortgagee (as security agent and trustee for and on behalf
of the Secured Creditors) as a continuing security for the payment of the
Outstanding Indebtedness (which expression, for the avoidance of doubt,
includes the Master Swap Agreement Liabilities) and the performance and
observance of and compliance with all of the covenants, terms and
conditions contained in the Security Documents, express or implied, and
that the security so created shall not be satisfied by any intermediate
payment or satisfaction of any part of the amount hereby and thereby
secured (or by any settlement of accounts between the Owner or any other
person who may be liable to the Mortgagee and/or the Secured Creditors in
respect of the Outstanding Indebtedness (which expression, for the
avoidance of doubt, includes the Master Swap Agreement Liabilities) or
any part thereof and the Mortgagee and/or the Secured Creditors) and
shall remain in full force and effect until the Outstanding Indebtedness
(which expression, for the avoidance of doubt, includes the Master Swap
Agreement Liabilities) has been discharged in full (which expression
shall not embrace payment or a dividend in liquidation or bankruptcy of
less than 100%);
5.1.2 be in addition to, and shall not in any way prejudice or affect, and
maybe enforced by the Mortgagee without prior recourse to, the security
created by any other of the Security Documents or by any present or
future Collateral Instruments, right or remedy held by or available to
the Mortgagee and/or the Secured Creditors or any of them any right or
remedy of the Mortgagee and/or the Secured Creditors or any of them or
any right or remedy of the Mortgagee thereunder;
5.1.3 not be in any way prejudiced or affected by the existence of any of the
other Security Documents or any such Collateral Instrument, rights or
remedies or by the same becoming wholly or in part void, voidable or
unenforceable on any ground whatsoever or by the Mortgagee and/or the
Secured Creditors or any of them dealing with, exchanging, varying or
failing to perfect or enforce any of the same, or giving time for payment
or performance or indulgence or compounding with any other person liable;
and
5.1.4 not in any way be prejudiced or affected by any change in the
constitution of, or any amalgamation or reconstruction of the Owner, the
Mortgagee or any other person or by any legal limitation, disability,
incapacity or other circumstances relating to the Owner or any other
person, whether or not known to the Mortgagee and/or the Secured
Creditors, by any invalidity in or irregularity or unenforceability of
the obligations of the Owner or any other person under the Loan Agreement
or any of the other Security Documents or otherwise and so that in the
event that any obligation or purported obligation of the Owner or any
other person which, if enforceable or valid or continuing, would be
secured by this Deed is or becomes wholly or in part unenforceable or
invalid or terminated for any reason whatsoever, the Owner will keep the
Mortgagee and the Secured Creditors fully indemnified against any loss
suffered by the Mortgagee and/or the Secured Creditors as a result of any
failure by the Owner or such other party to perform any such obligation
or purported obligation.
5.2 Rights additional and no enquiry
5.2.1 Rights additional
All the rights, remedies and powers vested in the Mortgagee (as security
agent and trustee on behalf of the Secured Creditors) hereunder shall be
in addition to and not a limitation of any and every other right, power
or remedy vested in the Mortgagee and/or the Secured Creditors or any of
them under the Loan Agreement, this Deed, the Master Swap Agreement, the
other Security Documents or any such Collateral Instrument or at law and
that all the powers so vested in the Mortgagee and/or the Secured
Creditors or any of them may be exercised from time to time and as often
as the Mortgagee and/or the Secured Creditors or any of them may deem
expedient.
5.2.2 No enquiry
The Mortgagee shall not be obliged to make any enquiry as to the nature
or sufficiency of any payment received by it under this Deed or to make
any claim or take any action to collect any moneys hereby assigned or to
enforce any rights or benefits hereby assigned to the Mortgagee or to
which the Mortgagee (as security agent and trustee on behalf of the
Creditors) may at any time be entitled under this Deed.
5.3 Obligations of Owner, Charterer and Mortgagee
The Owner and the Charterer shall each remain liable to perform all the
obligations assumed by it in relation to the Owners Assigned Property and
the Charterers Assigned Property and the Mortgagee shall be under no
obligation of any kind whatsoever in respect thereof or be under any
liability whatsoever in the event of any failure by the Owner or the
Charterer to perform its obligations in respect thereof.
5.4 Discharge of Mortgage
This Deed shall continue in full force and effect after any discharge of
the Mortgage.
5.5 Liability unconditional
The rights, remedies and powers vested in the Mortgagee under this Deed
shall not be affected nor shall this Deed be discharged or reduced by
reason of:
5.5.1 the Incapacity or any change in the name, style or constitution of the
Owner or any other person liable;
5.5.2 the Mortgagee granting any time, indulgence or concession to, or
compounding with, discharging, releasing or varying the liability of the
Owner or any other person liable or renewing, determining, varying or
increasing any accommodation, facility or transaction or otherwise
dealing with the same in any manner whatsoever or concurring in,
accepting or varying any compromise, arrangement or settlement or
omitting to claim or enforce payment from the Owner or any other person
liable; or
5.5.3 any act or omission which would not have discharged or affected the
security constituted by the Charterer under this Deed had it been a
principal debtor instead of a guarantor or by anything done or omitted
which but for this provision might operate to exonerate such security.
5.6 Waiver of Charterers rights
Until the Outstanding Indebtedness (which expression, for the avoidance
of doubt, includes the Master Swap Agreement Liabilities) has been paid,
discharged or satisfied in full (and notwithstanding payment of a
dividend in any liquidation or under any compromise or arrangement) and
notwithstanding that the security created by this Deed and the other
Security Documents may have been realised, the Charterer agrees that,
without the prior written consent of the Mortgagee, it will not:
5.6.1 exercise its rights of subrogation, reimbursement and indemnity against
the Owner, the other Borrowers or any other person liable;
5.6.2 demand or accept repayment in whole or in part of any indebtedness now or
hereafter due to the Charterer from the Owner, the other Borrowers or
from any other person liable or demand or accept any Collateral
Instrument in respect of the same or dispose of the same;
5.6.3 take any step to enforce any right against the Owner, the other Borrowers
or any other person liable in respect of any Outstanding Indebtedness
(which expression, for the avoidance of doubt, includes the Master Swap
Agreement Liabilities); or
5.6.4 claim any set-off or counterclaim against the Owner, the other Borrowers
or any other person liable or claim or prove in competition with the
Mortgagee and/or the Secured Creditors or any of them in the liquidation
of the Owner, the other Borrowers or any other person liable or have the
benefit of, or share in, any payment from or composition with, the Owner,
the other Borrowers or any other person liable or any other Collateral
Instrument now or hereafter held by the Mortgagee and/or the Secured
Creditors or any of them for the Outstanding Indebtedness (which
expression, for the avoidance of doubt, includes the Master Swap
Agreement Liabilities) or for the obligations or liabilities of any other
person liable but so that, if so directed by the Mortgagee, it will prove
for the whole or any part of its claim in the liquidation of the Owner on
terms that the benefit of such proof and of all money received by it in
respect thereof shall be paid to the Mortgagee for application in or
towards discharge of the Outstanding Indebtedness (which expression, for
the avoidance of doubt, includes the Master Swap Agreement Liabilities)
in such manner as the Mortgagee shall deem appropriate.
5.7 Suspense account
Any moneys received in connection with this Deed (whether before or after
any Incapacity of the Owner or the Charterer) which would (but for this
Deed) have been payable to the Charterer may, if an Event of Default has
happened, be placed to the credit of a suspense account with a view to
preserving the rights of the Mortgagee to prove for the whole of its and
the Secured Creditors' claims against the Owner, the other Borrowers or
any other person liable or may be applied in or towards satisfaction of
the Outstanding Indebtedness (which expression, for the avoidance of
doubt, includes the Master Swap Agreement Liabilities).
5.8 Settlements conditional
Any release, discharge or settlement between the Charterer and the
Mortgagee shall be conditional upon no security, disposition or payment
to the Mortgagee and/or the Secured Creditors or any of them by the
Owner, the other Borrowers or any other person liable being void, set
aside or ordered to be refunded pursuant to any enactment or law relating
to bankruptcy, liquidation, administration or insolvency or for any other
reason whatsoever and if such condition shall not be fulfilled the
Mortgagee shall be entitled to enforce this Deed subsequently as if such
release, discharge or settlement had not occurred and any such payment
had not been made.
5.9 Delivery of certain property
If, contrary to the provisions of this Deed, the Charterer takes or
receives the benefit of any security or receives or recovers any money or
other property, such security, money or other property shall be held on
trust for the Mortgagee (as security agent and trustee on behalf of the
Secured Creditors) and shall be delivered to the Mortgagee on demand.
5.10 Certificates conclusive
Any certificate submitted by the Mortgagee to the Charterer as to the
amount or any part thereof hereby secured shall, in the absence of
manifest error, be conclusive and binding on the Charterer.
5.11 Collateral Instruments
The Mortgagee shall not be obliged to make any claim or demand on the
Owner or to resort to any Collateral Instrument or other means of payment
now or hereafter held by or available to it before enforcing this Deed
and no action taken or omitted by the Mortgagee in connection with any
such Collateral Instrument or other means of payment shall discharge,
reduce, prejudice or affect the security created by the Charterer under
this Deed nor shall the Mortgagee be obliged to apply any money or other
property received or recovered in consequence of any enforcement or
realisation of any such Collateral Instrument or other means of payment
in reduction of the Outstanding Indebtedness.
6 Charterer's undertakings
6.1 The Charterer hereby covenants with the Mortgagee (as security agent and
trustee for and on behalf of the Secured Creditors) and undertakes that
throughout the Charter Period:
6.1.1 Notice
it will from time to time upon the request of the Mortgagee give written
notice (in such form and to such persons as the Mortgagee may reasonably
require) of the assignment contained in clause 3.1 to any person from
whom any part of the Charterer's Assigned Property is or may be due and
will procure that the interest of the Mortgagee in the Insurances shall
be endorsed on the instruments of insurance from time to time issued in
connection with the Insurances as are placed with the Approved Brokers by
reason of a Notice of Assignment of Insurances (signed by the Charterer,
the Owner and by any other assured who shall have assigned its interest
in the Insurances to the Mortgagee);
6.1.2 Negative undertakings relating to Charter
it will not without the prior written consent of the Mortgagee:
(a) Assignments
assign or otherwise dispose of the Charterers rights and
obligations under the Charter; and
(b) Variations agree to any variation of the Charter;
6.1.3 Performance of Charter obligations
it will perform its obligations under the Charter;
6.1.4 Total Loss recovery
it will, in the event that, upon a Total Loss of the Ship, the Mortgagee
is disabled from recovering under the Insurances or any of them or the
amount of the recovery thereunder is diminished and such disablement or
diminution results from any breach by the Charterer of any of its
obligations under this Deed and/or the Charter, pay to the Mortgagee on
demand a sum (which shall be applied in accordance with clause 11.1 as if
the same had been a recovery under the Insurances in respect of such
Total Loss) equal to the amount which would but for such disablement have
been recoverable under the Insurances or (as the case may be) a sum equal
to the amount hereby the insurance recovery has been diminished;
6.1.5 Compliance with Environmental Laws
it will comply with, and procure that all its Environmental Affiliates
comply with, all Environmental Laws including, without limitation,
requirements relating to ▇▇▇▇▇▇▇ and establishment of financial
responsibility and will obtain and comply with, and procure that all its
Environmental Affiliates obtain and comply with, all Environmental
Approvals;
6.1.6 Abandonment
it will not without the prior written consent of the Mortgagee (and then
only subject to any conditions the Mortgagee may impose) abandon the
Ship;
6.1.7 Charterer's Manager
it will not without the prior written consent of the Mortgagee (and then
only on and subject to such terms as the Mortgagee may agree) appoint a
commercial or technical manager of the Ship other than the relevant
Managers or terminate or amend the terms of the relevant Management
Agreements to which it is a party;
6.1.8 Encumbrances
it will not without the prior written consent of the Mortgagee (and then
only subject to such conditions as the Mortgagee may impose) create or
purport or agree to create or permit to arise or subsist any Encumbrance
over or in respect of any part of the Charterer's Assigned Property
otherwise than to or in favour of the Mortgagee;
6.1.9 Provision of further information
provide the Mortgagee with such financial or other information concerning
the Charterer and its affairs as the Mortgagee may from time to time
require; and
6.1.10 Notification of certain events
it will notify the Mortgagee forthwith by facsimile confirmed by letter
of:
(a) any petition or notice of meeting to consider any resolution to
wind up the Charterer (or any event analogous thereto under the
laws of the place of its incorporation);
(b) the occurrence of any Default of which it is aware; or
(c) the occurrence of any Environmental Claim against the Charterer,
the Ship, any other Relevant Party or any other Relevant Ship or
any incident, event or circumstances which may give rise to any
such Environmental Claim.
7 Charter Guarantor's undertakings
7.1 General Undertakings
The Charter Guarantor hereby agrees and undertakes to the Mortgagee (as
security agent and trustee for and on behalf of the Secured Creditors)
that it will at all times throughout the Security Period:
7.1.1 deliver to the Mortgagee sufficient copies of each of the following
documents:
(a) not later than one hundred and eighty (180) days after the end of
each financial year, the audited balance sheet and profit and loss
account of the Charter Guarantor and the audited consolidated
balance sheet and the consolidated profit and loss account of the
Group for such financial year and a cash flow statement for the
Group for such financial year together with the report of the
auditors thereon, the notes thereto and the directors' report
thereon, if any;
(b) at the time of issue thereof every report, circular, notice or
like document issued by the Charter Guarantor to its shareholders
or creditors generally; and
(c) at the time of the delivery of the annual audited financial
statements, a statement from the Charter Guarantor's auditors
stating the respective amounts of the Net Asset Value, Book
Equity, the Total Debt and the Total Market Value Adjusted Assets,
in respect of or, as the case may be, as at the end of the
financial year to which such financial statements relate
indicating the manner in which the same have been calculated and
whether or not the limits imposed by clauses 7.2.1, 7.2.4 and
7.2.5 have or have not been exceeded at such time and so that each
such statement shall (in the absence of manifest error or in the
absence of the Mortgagee reaching a different determination
pursuant to clause 7.2.8) be conclusive evidence of such amounts
or facts for the purposes of this Deed;
7.1.2 Provision of further information
provide the Mortgagee with such financial or other information concerning
the Charter Guarantor and its affairs as the Mortgagee may from time to
time require; and
7.1.3 comply with its obligations under the Charter Guarantee.
7.2 Financial Undertakings
The Charter Guarantor hereby agrees and undertakes to the Mortgagee (as
security agent and trustee for and on behalf of the Secured Creditors)
that it will at all times throughout the Security Period:
7.2.1 ensure that:
(a) a minimum amount of Twenty million Dollars ($20,000,000) shall be
standing to the credit of the Charter Guarantor's Account for the
period commencing on the first Drawdown Date and ending on 15
December 2006 and thereafter and until the final date of the
Security Period a minimum amount of Twenty Five million Dollars
($25,000,000) shall be standing to the credit of the Charter
Guarantor's Account and further ensure that there are no
Encumbrances whatsoever existing over or in relation to such
minimum amount; and
(b) it maintains cash balances of at least Fifty million Dollars
($50,000,000) in bank accounts in its name or in the name of a
member of the Group and agreed by the Mortgagee in writing from
time to time and for the purposes of this clause 7.2.1(b) the
expression "bank accounts(degree) shall exclude any bank accounts
which are subject to an Encumbrance;
7.2.2 endeavour that any Excess Cash Flow in relation to the Ship will be paid
into the Charter Guarantor's Account;
7.2.3 provide details to the Mortgagee at three (3) monthly intervals starting
from the date of this Deed-evidencing the operating expenses and the
Earnings of the Ship;
7.2.4 ensure that its Net Asset Value at all times exceeds One hundred and
twenty five million Dollars ($125,000,000); and
7.2.5 ensure that its Book Equity shall at all times exceed Seventy five
million Dollars ($75,000,000).
7.2.6 For the purpose of this clause 7, the following expressions shall have
the following meanings:
"Applicable Accounting Principles" means accounting principles, concepts,
bases and policies generally adopted and accepted in the United States of
America consistently applied;
"Book Equity" means the aggregate of the amounts paid-up or credited as
paid-up on the Charter Guarantor's issued share capital and the amount of
the consolidated capital and revenue reserves of the Group (including any
share premium account, capital redemption reserve fund and any credit
balance on the consolidated profit and loss account of the Group) all as
shown by the latest audited consolidated balance sheet and profit and
loss account of the Group delivered under this Deed but after:
(a) deducting any debit balance on such consolidated profit and loss
account;
(b) deducting any amount shown in such consolidated balance sheet in
respect of goodwill (including goodwill arising on consolidation)
and other intangible assets;
(c) deducting (so far as not otherwise excluded as attributable to
minority interests) a sum equal to the aggregate of the amount by
which the book value of any fixed assets of any member of the
Group has been written up after 31 December 2005 (or, in the case
of a company becoming a subsidiary after that date, the date on
which that company became a subsidiary) by way of revaluation. For
the purposes of this paragraph (c) any increase in the book value
of any fixed asset resulting from its transfer by one member of
the Group to another member of the Group shall be deemed to result
from a writing up of its book value by way of revaluation;
(d) excluding amounts set aside for taxation as at the date of such
balance sheet and making such adjustments as may be appropriate in
respect of any significant additional taxation expected to result
from transactions carried out by any member of the Group after
such date and not reflected in that balance sheet;
(e) deducting all amounts attributable to minority interests in
Subsidiaries;
(f) making such adjustments as may be appropriate in respect of any
variation in the amount of such paid up share capital or any such
reserves after the date of the relevant balance sheet (but so that
no such adjustment shall be made in respect of any variation in
profit and loss account except to the extent of any profit or
loss, calculated on a cumulative basis, recorded in the
consolidated profit and loss account of the Group delivered to the
Mortgagee before the date of this Deed, or under clause 7.1.1 in
respect of any subsequent period);
(g) making such adjustments as may be appropriate in respect of any
distribution declared, recommended or made by any member of the
Group (otherwise than attributable directly or indirectly to the
Charter Guarantor) out of profits earned up to and including the
date of the latest audited balance sheet of that member of the
Group to the extent that such distribution is not provided for in
that balance sheet;
(h) making such adjustments as may be appropriate in respect of any
variation in the interests of the Charter Guarantor in its
Subsidiaries since the date of the latest published audited
consolidated balance sheet of the Group;
(i) if the calculation is required for the purpose of or in connection
with a transaction under or in connection with which any company
is to become or cease to be a Subsidiary of the Charter Guarantor,
making all such adjustments as would be appropriate if that
transaction had been carried into effect; and
(j) making such adjustments as may be appropriate in the opinion of
the Mortgagee in order that the above amounts are calculated in
accordance with the Original Accounting Principles;
"Earnings" means all earnings of the Ship payable under or pursuant to
any charters entered into by the Charterer in respect of the employment
of the Ship;
"Encumbrance" means any mortgage, charge (whether fixed or floating),
pledge, lien, hypothecation, assignment, trust arrangement or security
interest or other encumbrance of any kind securing any obligation of any
person or any type of preferential arrangement (including without
limitation title transfer and/or retention arrangements having a similar
effect);
"Excess Cash Flow" means any Earnings of the Ship minus (a) the aggregate
of the Charter Earnings and (b) the operating expenses in relation to the
Ship;
"Finance Lease" means a lease treated as a finance lease pursuant to the
Applicable Accounting Principles.
"Group" means, together, the Charter Guarantor and its Subsidiaries and
"member of the Group" means any of them;
"Net Asset Value" means, at any relevant time, the amount in Dollars
resulting after deducting the Total Debt from the Total Market Value
Adjusted Assets, in either case at such time;
"Original Accounting Principles" means those accounting principles,
standards and practices which were used in the preparation of the
consolidated audited financial statements of the Group as at 31 December
2005, and for the year then ended and, to the extent that they do not
conflict with those principles, standards and practices, such other
accounting principles, standards and practices as were generally
acceptable in the United States of America on 31 December 2005;
"Total Debt" means the aggregate principal amount (including any fixed or
minimum premium payable on final repayment) of:
(a) moneys borrowed or raised by the Charter Guarantor and its
Subsidiaries;
(b) bonds, notes, loan stock, debentures, commercial paper or other
issued by the Charter Guarantor or any of its Subsidiaries not for
beneficially owned by the Charter Guarantor or any of its
Subsidiaries;
(c) sums outstanding under acceptances by the Charter Guarantor
Subsidiaries or by any bank or acceptance house under acceptance
on behalf of the Charter Guarantor or any Subsidiary;
(d) deferred indebtedness of the Charter Guarantor or any of its
Subsidiaries for payment of the acquisition or construction price
for assets or services acquired or constructed;
(e) rental payments under Finance Leases;
(f) receivables sold or discounted with a right of recourse to the
Charter Guarantor or any of its Subsidiaries;
(g) the nominal amount of any issued and paid up share capital (other
than equity share capital) of any Subsidiary not beneficially
owned by the Charter Guarantor or another Subsidiary;
(h) preference share capital redeemable prior to the last day of the
period of the Charter;
(i) indebtedness secured by any Encumbrance over all or any part of
the undertaking, property, assets, rights or revenues of the
Charter Guarantor or any of its Subsidiaries irrespective of
whether or not such indebtedness is supported by a personal
covenant on the part of the Charter Guarantor or any of its
Subsidiaries;
(j) indebtedness incurred in respect of swaps, forward exchange
contracts, futures or other derivatives;
(k) any other liability arising from a transaction having the
commercial effect of a borrowing or the raising of money; and
(l) obligations under guarantees in respect of the obligations of any
other person which, if such person were the Charter Guarantor or a
Subsidiary, would fall within paragraphs (a) to (k) above,
PROVIDED THAT:
(i) moneys owing by the Charter Guarantor to a Subsidiary or by
a Subsidiary to the Charter Guarantor or to another
Subsidiary shall not be taken into account;
(ii) the principal amount of Total Debt deemed to be outstanding
in relation to Finance Leases or hire purchase agreements
shall be the present value of the minimum lease or hire
payments discounted at the interest rate implicit in the
relevant lease or hire purchase agreement; and
"Total Market Value Adjusted Assets" means the aggregate of:
(a) the value (less depreciation computed in accordance with generally
accepted international accounting principles consistently applied)
on a consolidated basis of all tangible fixed assets of the Group,
as stated in the relevant consolidated financial statements of the
Group, but excluding any ships at the relevant time owned by
members of the Group which, for the purposes of such consolidated
financial statements, are included in the consolidated tangible
fixed assets of the Group (for the purposes of clauses 7.2 and
7.3, the "Relevant Ships"); and
(b) the aggregate of the market value of the Relevant Ships, as such
market value shall have been most recently determined (as of the
date of the relevant calculation) pursuant to the provisions of
clause 7.3 of this Deed by means of valuations obtained by the
Mortgagee in accordance with the provisions of clause 7.3 of this
Deed (and not the value of the Relevant Ships as stated in the
relevant consolidated financial statements of the Group).
7.2.7 All the terms defined in this clause 7.2 and used in this Deed are to be
determined on a consolidated basis in respect of the Group and (except as
items are expressly included or excluded in the relevant definition or
clause) are used and shall be construed in accordance with Applicable
Accounting Principles and as determined from the latest consolidated
financial statements of the Group delivered to the Mortgagee pursuant to
clause 7.1.1.
7.2.8 The compliance of the Charter Guarantor with the covenants set out in
clauses 7.2.1, 7.2.4 and 7.2.5 shall be determined on the basis of
calculations made by the Mortgagee at any time by reference to then
latest consolidated financial statements of the Group delivered to the
Mortgagee pursuant to clause 7.1.1. For the avoidance of doubt, it is
hereby agreed that the Mortgagee shall be entitled to make such
determinations and/or calculations at any time when, and in relation to
any period in relation to which, the Charter Guarantor shall be obliged
to comply with each of the covenants out in clauses 7.2.1, 7.2.4 and
7.2.5 without regard to when any such financial statements are due to be
delivered or have been actually delivered to the Mortgagee pursuant to
clause 7.1.
7.2.9 For the purposes of this clause 7.2:
(a) no item shall be deducted or credited more than once in any
calculation; and
(b) any amount expressed in a currency other than Dollars shall be
converted into Dollars in accordance with Applicable Accounting
Principles.
7.3 Valuation of Relevant Ships
7.3.1 Valuations
Each of the Relevant Ships shall, for the purposes of this clause 7, be
valued in Dollars as and when the Mortgagee shall require. Each such
valuation of a Relevant Ship shall be made by an independent firm of
shipbrokers appointed by the Mortgagee. Such valuation shall be made
without, unless required by the Mortgagee, physical inspection, and on
the basis of a sale for prompt delivery for cash at arm's length, on
normal commercial terms as between a willing buyer and a willing seller
and without taking into account the benefit of any charterparty or other
employment of such Relevant Ship. The value of each of the Relevant Ships
determined in accordance with the provisions of this clause 7.3 shall be
binding upon the parties hereto for the purposes of calculating the Total
Market Value Adjusted Assets until such time as any further such
valuations shall be obtained.
7.3.2 Information
The Charter Guarantor undertakes to the Mortgagee to supply to the
Mortgagee and to any such shipbroker such information concerning any
Relevant Ship and its condition as such shipbrokers may reasonably
require for the purpose of making any such valuation.
7.3.3 Costs
All costs in connection with the Mortgagee obtaining any valuation of
each of the Relevant Ships referred to in clause 7.3.1 shall be borne by
the Owner.
8 Covenants concerning insurance and operational matters
8.1 Covenants
The Charterer hereby covenants with the Mortgagee (as security agent and
trustee for and on behalf of the Secured Creditors) and undertakes
throughout the Charter Period:
8.1.1 Insurance
(a) Insured risks, amounts and terms
to insure and keep the Ship insured free of cost and expense to
the Mortgagee and in the joint names only of the Owner and the
Charterer or, if so required by the Mortgagee, in the joint names
of the Owner, the Mortgagee and the Charterer (but without
liability on the part of the Mortgagee for premiums or calls):
(i) against fire and usual marine risks (including excess
risks) and war risks, on an agreed value basis, in such
amounts and upon such terms as shall from time to time be
acceptable to the Mortgagee. For the avoidance of doubt,
the Charterer hereby covenants with the Mortgagee and
undertakes throughout the Security Period to ensure that
the Ship will be insured for not less than the greater of:
(A) the value of the Ship for the time being (as most
recently determined by the Agent pursuant to clause
8.2.2 of the Loan Agreement); and
(B) such amount as will, when aggregated with the
amounts of the equivalent insurance of the Other
Ships, be at least equal to one hundred and thirty
per cent (130%) of the aggregate of the (aa) Loan
and (bb) the Swap Exposure (as such expression is
defined in the Loan Agreement);
(ii) and upon such terms as should from time to time be approved
in writing by the Mortgagee;
(iii) against protection and indemnity risks (including pollution
risks for the highest amount in respect of which cover is
or may become available for ships of the same type, size,
age and flag as the Ship and a freight, demurrage and
defence cover) for the full value and tonnage of the Ship
(as approved in writing by the Mortgagee) and upon such
terms as shall from time to time be approved in writing by
the Mortgagee; and
(iv) in respect of such other matters of whatsoever nature and
howsoever arising in respect of which insurance would be
maintained by a prudent owner of the Ship.
and to pay to the Mortgagee the cost (as conclusively certified by
the Mortgagee) of (A) any mortgagee's interest insurance
(including, if the Mortgagee shall so require, mortgagee's
additional perils (all P&I risks) coverage) which the Mortgagee
may from time to time effect in respect of the Ship upon such
terms in such amounts as it shall deem desirable and (B) any other
insurance cover which the Mortgagee may from time to time effect
in respect of the Ship and/or in respect of its interest or
potential third party liability as mortgagee of the Ship as the
Mortgagee shall deem desirable having regard to any limitations in
respect of amount or extent of cover which may from time to time
be applicable to any of the other insurances referred to in this
clause 8.1.1(a);
(b) Approved brokers, insurers and associations
to effect the insurances aforesaid in such currency as the
Mortgagee may approve and through the Approved Brokers (other than
the said mortgagee's interest insurance which shall be effected
through brokers nominated by the Mortgagee) and with such
insurance companies and/or underwriters as shall from time to time
be approved in writing by the Mortgagee; provided however that the
insurances against war risks and protection and indemnity risks
may be effected by the entry of the Ship with such war risks and
protection and indemnity associations as shall from time to time
be approved in writing by the Mortgagee;
(c) Fleet liens, set-off and cancellation
if any of the insurances referred to in clause 8.1.1(a) form part
of a fleet cover, to procure that the Approved Brokers shall
undertake to the Mortgagee that they shall neither set off against
any claims in respect of the Ship any premiums due in respect of
other vessels under such fleet cover or any premiums due for other
insurances, nor cancel the insurance for reason of non-payment of
premiums for other vessels under such fleet cover or of premiums
for such other insurances, and shall undertake to issue a separate
policy in respect of the Ship if and when so requested by the
Mortgagee;
(d) Payment of premiums and calls
punctually to pay all premiums, calls, contributions or other sums
payable in respect of all such insurances and to produce all
relevant receipts or other evidence of payment when so required by
the Mortgagee;
(e) Renewal
at least 14 days before the relevant policies, contracts or
entries expire, to notify the Mortgagee of the names of the
brokers and/or the war risks and protection and indemnity
associations proposed to be employed by the Charterer or any other
party for the purposes of the renewal of such insurances and of
the amounts in which such insurances are proposed to be renewed
and the risks to be covered and, subject to compliance with any
requirements of the Mortgagee pursuant to this clause 8.1.1, to
procure that appropriate instructions for the renewal of such
insurances on the terms so specified are given to the Approved
Brokers and/or to the approved war risks and protection and
indemnity associations at least 10 days before the relevant
policies, contracts or entries expire, and that the Approved
Brokers and/or the approved war risks and protection and indemnity
associations will at least 7 days before such expiry (or within
such shorter period as the Mortgagee may from time to time agree)
confirm in writing to the Mortgagee as and when such renewals have
been effected in accordance with the instructions so given;
(f) Guarantees
to arrange for the execution and delivery of such guarantees or
indemnities as may from time to time be required by any protection
and indemnity or war risks association;
(g) Hull policy documents, notices, loss payable clauses and brokers'
undertakings
to deposit with the Approved Brokers (or procure the deposit of)
all slips, cover notes, policies, certificates of entry or other
instruments of insurance from time to time issued in connection
with such of the insurances referred to in clause 8.1.1(a) as are
effected through the Approved Brokers and procure that the
interest of the Mortgagee shall be endorsed thereon by
incorporation of the relevant Loss Payable Clause and, where the
Insurances have been assigned to the Mortgagee, by means of a
Notice of Assignment of Insurances (signed by the Owner and the
Charterer and by any other assured who shall have assigned its
interest in the Insurances to the Mortgagee) and that the
Mortgagee shall be furnished with pro forma copies thereof and a
letter or letters of undertaking from the Approved Brokers in such
form as shall from time to time be required by the Mortgagee;
(h) Associations' loss payable clauses, undertakings and certificates
to procure that any protection and indemnity and/or war risks
associations in which the Ship is for the time being entered shall
endorse the relevant Loss Payable Clause on the relevant
certificate of entry or policy and shall furnish the Mortgagee
with a copy of such certificate of entry or policy and a letter or
letters of undertaking in such form as shall from time to time be
required by the Mortgagee;
(i) Extent of cover and exclusions
to take all necessary action and comply with all requirements
which may from time to time be applicable to the Insurances
(including, without limitation, the making of all requisite
declarations within any prescribed time limits and the payment of
any additional premiums or calls) so as to ensure that the
Insurances are not made subject to any exclusions or
qualifications to which the Mortgagee has not given its prior
written consent and are otherwise maintained on terms and
conditions from time to time approved in writing by the Mortgagee;
(j) Correspondence with brokers and associations
to provide to the Mortgagee, at the time of each such
communication, copies of all written communications between the
Charterer and the Approved Brokers and approved war risks and
protection and indemnity associations which relate to compliance
with requirements from time to time applicable to the Insurances
including, without limitation, all requisite declarations and
payments of additional premiums or calls referred to in clause
8.1.1(i);
(k) Collection of claims
to do all things necessary and provide all documents, evidence and
information to enable the Mortgagee to collect or recover any
moneys which shall at any time become due in respect of the
Insurances;
(l) Employment of Ship
not to employ the Ship or suffer the Ship to be employed otherwise
than in conformity with the terms of the Insurances (including any
warranties express or implied therein) without first obtaining the
consent of the insurers to such employment and complying with such
requirements as to extra premium or otherwise as the insurers may
prescribe; and
(m) Application of recoveries
to apply all sums receivable under the Insurances which are paid
to it in accordance with the Loss Payable Clauses in repairing all
damage and/or in discharging the liability in respect of which
such sums shall have been received;
8.1.2 Ship's registration
not to do or suffer to be done anything, or omit to do anything the doing
or omission of which could or might result in the registration of the
Ship as a Liberian ship being forfeited or imperilled or which could or
might result in the Ship being required to be registered under any other
flag than the Liberian flag and not to register the Ship or permit its
registration under any other flag without the prior written consent of
the Mortgagee;
8.1.3 Repair
to keep the Ship in a good and efficient state of repair and procure that
all repairs to or replacement of any damaged, worn or lost parts or
equipment are effected in such manner (both as regards workmanship and
quality of materials) as not to diminish the value of the Ship;
8.1.4 Modification; removal of parts; equipment owned by third parties
not without the prior written consent of the Mortgagee to, or suffer any
other person to:
(a) make any modification to the Ship in consequence of which her
structure, type or performance characteristics could or might be
materially altered or her value materially reduced; or
(b) remove any material part of the Ship or any equipment the value of
which is such that its removal from the Ship would materially
reduce the value of the Ship without replacing the same with
equivalent parts or equipment which are owned by the Owner free
from Encumbrances; or
(c) install on the Ship any equipment owned by a third party which
cannot be removed without causing damage to the structure or
fabric of the Ship;
8.1.5 Maintenance of class; compliance with regulations
to maintain the relevant Classification (as defined in the Loan
Agreement) as the class of the Ship and to comply with and ensure that
the Ship at all times complies with the provisions of all laws,
regulations and requirements (statutory or otherwise) from time to time
applicable to vessels registered under the laws and flag of the relevant
Flag State (as defined in the Loan Agreement) or otherwise applicable to
the Ship;
8.1.6 Surveys
to submit the Ship to continuous surveys and such periodical or other
surveys as may be required for classification purposes and to supply to
the Mortgagee copies of all survey reports issued in respect thereof;
8.1.7 Inspection
to ensure that the Mortgagee, by surveyors or other persons appointed by
it for such purpose, may board the Ship at all reasonable times for the
purpose of inspecting her and to afford all proper facilities for such
inspections and for this purpose to give the Mortgagee reasonable advance
notice of any intended drydocking of the Ship (whether for the purpose of
classification, survey or otherwise);
8.1.8 Prevention of and release from arrest
promptly to pay and discharge all debts, damages, liabilities and
outgoings whatsoever which have given or may give rise to maritime,
statutory or possessory liens on, or claims enforceable against, the
Ship, her Insurances or any part thereof and, in the event of a writ or
libel being filed against the Ship, her Insurances or any part thereof,
or of any of the same being arrested, attached or levied upon pursuant to
legal process or purported legal process or in the event of detention of
the Ship in exercise or purported exercise of any such lien or claim as
aforesaid, to procure the release of the Ship, her Insurances from such
arrest, detention attachment or levy or, as the case may be, the
discharge of the writ or libel forthwith upon receiving notice thereof by
providing bail or procuring the provision of security or otherwise as the
circumstances may require;
8.1.9 Employment
not to employ the Ship or permit her employment in any manner, trade or
business which is forbidden by Liberian law, or which is unlawful or
illicit under the law of any relevant jurisdiction, or in carrying
illicit or prohibited goods, or in any manner whatsoever which may render
her liable to condemnation in a prize court, or to destruction, seizure,
confiscation, penalty or sanctions and, in the event of hostilities in
any part of the world (whether war be declared or not), not to employ the
Ship or permit her employment in carrying any contraband goods, or enter
or trade to or to continue to trade in any zone which has been declared a
war zone by any Government Entity or by the Ship's war risks insurers
unless the prior written consent of the Mortgagee is obtained and such
special insurance cover as the Mortgagee may require shall have been
effected by the Charterer and at the expense of the Charterer;
8.1.10 Information
promptly to furnish the Mortgagee with all such information as it may
from time to time require regarding the Ship, her employment, position
and engagements, particulars of all towages and salvages, and copies of
all charters and other contracts for her employment, or otherwise
howsoever concerning it;
8.1.11 Notification of certain events
to notify the Mortgagee forthwith by facsimile thereafter confirmed by
letter of:
(a) any damage to the Ship requiring repairs the cost of which will or
might exceed the Casualty Amount;
(b) any occurrence in consequence of which the Ship has or may become
a Total Loss;
(c) any requisition of the Ship for hire;
(d) any requirement or recommendation made by any insurer or the
relevant Classification Society (as defined in the Loan Agreement)
or by any competent authority which is not, or cannot be, complied
with in accordance with its terms; or
(e) any arrest or detention of the Ship or any exercise or purported
exercise of a lien or other claim on the Ship or the Insurances or
any part thereof;
(f) any petition or notice of meeting to consider any resolution to
wind-up the Charterer (or any event analogous thereto under the
laws of the place of its incorporation); or
(g) the occurrence of any Default;
8.1.12 Payment of outgoings and evidence of payments
promptly to pay all tolls, dues and other outgoings whatsoever in respect
of the Ship and the Ship's Insurances and to keep proper books of account
in respect of the Ship and, as and when the Mortgagee may so require, to
make such books available for inspection on behalf of the Mortgagee, and
to furnish satisfactory evidence that the wages and allotments and the
insurance and pension contributions of the Master and crew are being
promptly and regularly paid and that all deductions from crew's wages in
respect of any applicable tax liability are being properly accounted for
and that the Master has no claim for disbursements other than those
incurred by him in the ordinary course of trading on the voyage then in
progress;
8.1.13 Repairers' liens
not without the prior written consent of the Mortgagee to put the Ship
into the possession of any person for the purpose of work being done upon
her in an amount exceeding or likely to exceed the Casualty Amount unless
such person shall first have given to the Mortgagee in terms satisfactory
to it, a written undertaking not to exercise any lien on the Ship for the
cost of such work or otherwise;
8.1.14 Chartering
save for any charter disclosed by the Charterer to the Mortgagee in
writing and agreed by the Mortgagee in writing, in either case prior to
the date of this Deed, not without the prior written consent of the
Mortgagee (which the Mortgagee shall have full liberty to withhold) and,
if such consent is given, only subject to such conditions as the
Mortgagee may impose, to let the Ship:
(a) on demise charter for any period;
(b) by any time or consecutive voyage charter for a term which exceeds
or which by virtue of any optional extensions therein contained
might exceed twelve (12) months' duration;
(c) on terms whereby more than two (2) months' hire (or the
equivalent) is payable in advance; or
(d) below the market rate prevailing at the time when the Ship is
fixed or other than on arms' length terms;
8.1.15 Sharing of Earnings
not without the prior written consent of the Mortgagee (and then only
subject to such conditions as the Mortgagee may impose) to enter into any
agreement or arrangement whereby the Earnings may be shared with any
other person;
8.1.16 Manager
not without the prior written consent of the Mortgagee to appoint a
manager of the Ship other than the Commercial Manager (as such term is
defined in the Loan Agreement), or terminate or amend the terms of the
Doubtless Commercial Management Agreement (as such term is defined in the
Loan Agreement);
8.1.17 Notice of Mortgage
to place and at all times and places to retain a properly certified copy
of the Mortgage (which shall form part of the Ship's documents) on board
the Ship with her papers and cause such certified copy of the Mortgage to
be exhibited to any and all persons having business with the Ship which
might create or imply any commitment or encumbrance whatsoever on or in
respect of the Ship (other than a lien for crew's wages and salvage) and
to any representative of the Mortgagee and to place and keep prominently
displayed in the navigation room and in the Masters cabin of the Ship a
framed printed notice in plain type reading as follows:
"NOTICE OF MORTGAGE"
This Ship is subject to a first priority mortgage in favour of FORTIS
BANK (NEDERLAND) N.V. of ▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇. Under the said mortgage, neither the Owner nor any charterer
nor the Master of this Ship has any right, power or authority to create,
incur or permit to be imposed upon this Ship any commitments or
encumbrances whatsoever other than for crew's wages and salvage"
and in terms of the said notice it is hereby agreed that save and subject
as otherwise herein provided, neither the Owner nor the Charterer nor any
other charterer nor the Master of the Ship nor any other person has any
right, power or authority to create, incur or permit to be imposed upon
the Ship any lien whatsoever other than for crew's wages and salvage;
8.1.18 Anti-drug abuse
without prejudice to clause 8.1.9, to take all necessary and proper
precautions to prevent any infringements of the Anti-Drug Abuse Act of
1986 of the United States of America or any similar legislation
applicable to the Ship in any jurisdiction in or to which the Ship shall
be employed or located or trade or which may otherwise be applicable to
the Ship and/or the Owner and/or the Charterer and, if the Mortgagee
shall so require, to enter into a "Carrier Initiative Agreement" with the
United States Customs and Border Protection and to procure that the same
agreement (or any similar agreement hereafter introduced by any
Government Entity of the United States of America) is maintained in full
force and effect and performed by the Charterer;
8.1.19 Compliance with environmental laws
to comply with, and procure that all Environmental Affiliates of the
Charterer comply with, all Environmental Laws including, without
limitation, requirements relating to ▇▇▇▇▇▇▇ submission of oil response
plans, designations of qualified individuals and establishment of
financial responsibility and to obtain and comply with, and procure that
all Environmental Affiliates of the Charterer obtain and comply with, all
Environmental Approvals;
8.1.20 Compliance with Code
comply and will procure that any Operator will comply with and ensure
that the Ship and any Operator will comply with the requirements of the
Code, including (but not limited to) the maintenance and renewal of valid
certificates pursuant thereto throughout the Security Period;
8.1.21 Withdrawal of DOC and SMC
procure that any Operator will, immediately inform the Mortgagee if there
is any threatened or actual withdrawal of its DOC or the SMC in respect
of the Ship;
8.1.22 Issuance of DOC and SMC
procure that any Operator will, promptly inform the Mortgagee upon the
issue to the Owner or any Operator of a DOC and to the Ship of an SMC or
the receipt by the Owner or any Operator of notification that its
application for the same has been refused; and
8.1.23 ISPS Code compliance
and procure that any Operator of the Ship will:
(a) maintain at all times a valid and current ISSC in respect of the
Ship;
(b) immediately notify the Mortgagee in writing of any actual or
threatened withdrawal, suspension, cancellation or modification of
the ISSC in respect of the Ship; and
(c) procure that the Ship will comply at all times with the ISPS Code.
8.2 Substitute performance of Mortgage
To the extent that, pursuant to the Charter or this Deed, the Charterer
duly performs and discharges (or procures the performance and discharge
of) the duties and liabilities undertaking by the Owner in the Mortgage,
then such performance and discharge of the said duties and liabilities by
the Charterer shall, to that extent, be deemed to be proper and due
performance and discharge of the Owner's duties and liabilities under the
Mortgage.
9 Powers of Mortgagee to protect security and remedy defaults
9.1 Protective action
The Mortgagee (as security agent and trustee on behalf of the Secured
Creditors) shall, without prejudice to its other rights, powers and
remedies under any of the Security Documents, be entitled (but not bound)
at any time, and as often as may be necessary, to take any such action as
it may in its discretion think fit for the purpose of protecting or
maintaining the security created by this Deed and the other Security
Documents, and all Expenses attributable thereto shall be payable by the
Owner on demand.
9.2 Remedy of defaults
Without prejudice to the generality of the provisions of clause 9.1:
9.2.1 if the Charterer fails to comply with any of the provisions of clause
8.1.1 the Mortgagee shall be entitled (but not bound) to effect and
thereafter to maintain all such insurances upon the Ship as in its
discretion it may think fit in order to procure the compliance with such
provisions or alternatively, to require the Ship (at the Charterer's
risk) to remain in, or to proceed to and remain in a port designated by
the Mortgagee until such provisions are fully complied with;
9.2.2 if the Charterer fails to comply with any of the provisions of clauses
8.1.3, 8.1.5 or 8.1.6, the Mortgagee shall be entitled (but not bound) to
arrange for the carrying out of such repairs, changes or surveys as it
may deem expedient or necessary in order to procure the compliance with
such provisions; and
9.2.3 if the Charterer fails to comply with any of the provisions of clause
8.1.8, the Mortgagee shall be entitled (but not bound) to pay and
discharge all such debts, damages, liabilities and outgoings as are
therein mentioned and/or to take any such measures as it may deem
expedient or necessary for the purpose of securing the release of the
Ship in order to procure the compliance with such provisions,
and the Expenses attributable to the exercise by the Mortgagee of any
such powers shall be payable by the Owner to the Mortgagee on demand.
10 Powers of Mortgagee on Event of Default
10.1 Powers
Upon the happening of any Event of Default which has not been remedied or
expressly waived in writing by the Creditors, the Mortgagee (as security
agent and trustee for and on behalf of the Secured Creditors) shall
become forthwith entitled by notice given to the Borrowers in accordance
with the provisions of clause 10.2 of the Loan Agreement or, as regards
the Master Swap Agreement, in accordance with the relevant terms of the
Master Swap Agreement, to declare the Outstanding Indebtedness (which
expression, for the avoidance of doubt, includes the Master Swap
Agreement Liabilities) to be due and payable immediately or in accordance
with such notice, whereupon the Outstanding Indebtedness (which
expression, for the avoidance of doubt, includes the Master Swap
Agreement Liabilities) shall become so due and payable and (whether or
not the Mortgagee shall have given any such notice) the Mortgagee shall
become forthwith entitled, as and when it may see fit, to put into force
and exercise in relation to the Owner's Assigned Property and/or the
Charterers Assigned Property or any part thereof all or any of the
rights, powers and remedies possessed by it as mortgagee and/or assignee
of the Owner's Assigned Property and/or the Charterers Assigned Property
(whether at law, by virtue of the Mortgage and this Deed or otherwise)
and in particular (without limiting the generality of the foregoing):
10.1.1 to require that all policies, contracts, certificates of entry and other
records relating to the Insurances (including details of and
correspondence concerning outstanding claims) be delivered forthwith to
such adjusters and/or brokers and/or other insurers as the Mortgagee may
nominate;
10.1.2 to collect, recover, compromise and give a good discharge for, all claims
then outstanding or thereafter arising under the Insurances or any of
them or in respect of any other part of the Owners Assigned Property
and/or the Charterers Assigned Property, and to take over or institute
(if necessary using the name of the Owner or, as the case may be, the
Charterer) all such proceedings in connection therewith as the Mortgagee
in its absolute discretion thinks fit, and, in the case of the
Insurances, to permit the brokers through whom collection or recovery is
effected to charge the usual brokerage therefore;
10.1.3 to discharge, compound, release or compromise claims in respect of the
Ship or any other part of the Owner's Assigned Property and/or the
Charterer's Assigned Property which have given or may give rise to any
charge or lien or other claim on the Ship or any other part of the
Owner's Assigned Property and/or the Charterer's Assigned Property or
which are or may be enforceable by proceedings against the Ship or any
other part of the Owner's Assigned Property and/or the Charterer's
Assigned Property; and
10.1.4 to recover from the Owner on demand all Expenses incurred or paid by the
Mortgagee in connection with the exercise of the powers (or any of them)
referred to in this clause 10.1.
10.2 Liability of Mortgagee
The Mortgagee shall not be liable as mortgagee in possession in respect
of all or any of the Owners Assigned Property and/or the Charterers
Assigned Property to account or be liable for any loss upon realisation
or for any neglect or default of any nature whatsoever in connection
therewith for which a mortgagee in possession may be liable as such.
11 Application of moneys
11.1 Application
All moneys received by the Mortgagee (as security agent and trustee for
and on behalf of the Secured Creditors) in respect of:
11.1.1 recovery under the Insurances (other than under any loss of earnings
insurance and any such sum or sums as may have been received by the
Mortgagee (as security agent and trustee for and on behalf of the Secured
Creditors) in accordance with the relevant Loss Payable Clause in respect
of a major casualty as therein defined and paid over to the Charterer as
provided in clause 3.1.2 or which fall to be otherwise applied under
clause 11.3);
11.1.2 Requisition Compensation; and
11.1.3 the Owners Assigned Property,
shall be held by it upon trust in the first place to pay or make good the
Expenses and the balance shall:
(a) in the case of moneys received in respect of sale of the Ship or
recovery under the Insurances in relation to a Total Loss of the
Ship or her Requisition Compensation:
(i) if no Default has occurred and is continuing, be applied in
making such prepayment as is required in accordance with
clause 4.3 of the Loan Agreement and in or towards any
payments required pursuant to clause 4.4 of the Loan
Agreement and the balance, if any, shall be paid to the
Owner; or
(ii) if a Default has occurred and is continuing but no Event of
Default has occurred, be retained by the Mortgagee on a
suspense account until such time as such Default is
remedied and no other Default has occurred and is
continuing (whereupon such moneys shall be applied in
accordance with clause 4.3 of the Loan Agreement and in or
towards any payments required pursuant to clause 4.4 of the
Loan Agreement) and the balance, if any, shall be paid to
the Owner provided that, until applied in accordance with
clause 4.3 of the Loan Agreement and in or towards any
payments required pursuant to clause 4.4 of the Loan
Agreement or paragraph (b) below, moneys so retained shall
be applied by the Mortgagee in or towards satisfaction of
any sums from time to time accruing due and payable by the
Owner under the Security Documents or any of them by virtue
of payment demanded thereunder in each case as the
Mortgagee may in its absolute discretion determine; and
(b) in any case, if an Event of Default has occurred and which has not
been remedied or expressly waived in writing by the Creditors, be
applied by the Mortgagee in the manner specified in clause 13.1 of
the Loan Agreement and/or (at the absolute discretion of the
Mortgagee) in accordance with sub-clause (a)(ii) above,
and the surplus (if any) shall be paid to the Owner, the Charterer or
such other person as may for the time being be entitled thereto.
11.2 Shortfalls
In the event that the balance referred to in clause 11.1 is insufficient
to pay in full the whole of the Outstanding Indebtedness, the Mortgagee
shall be entitled to collect the shortfall from the Owner or any other
person liable for the time being therefore.
11.3 Application of Insurances received by Mortgagee
Any moneys received by the Mortgagee in respect of the Insurances (other
than in respect of recovery under any loss of earnings insurance or in
respect of a Total Loss) pursuant to the Mortgage and/or the assignments
by the Charterer contained in clause 3.1 shall:
11.3.1 if received by the Mortgagee, or in the hands of the Mortgagee after the
occurrence of a Default but prior to the occurrence of an Event of
Default, be retained by the Mortgagee and shall be paid over by the
Mortgagee to the Charterer (during the Charter Period) at such times, in
such amounts and for such purposes and/or shall be applied by the
Mortgagee in or towards satisfaction of any sums from time to time
accruing due and payable by the Owner or the other Borrowers under the
Security Documents or any of them or by virtue of payment demanded
thereunder, in each case the Mortgagee may in its absolute discretion
determine; and
11.3.2 if received by the Mortgagee, or in the hands of the Mortgagee, after the
occurrence of an Event of Default, be applied by the Mortgagee in the
manner specified in clause 11.1 and/or clause 11.3, as the Mortgagee may
in its absolute discretion determine.
12 Remedies cumulative and other provisions
12.1 No implied waivers; remedies cumulative
No failure or delay on the part of the Mortgagee and/or the Secured
Creditors or any of them to exercise any right, power or remedy vested in
it under any of the Security Documents shall operate as a waiver thereof,
nor shall any single or partial exercise by the Mortgagee and/or the
Secured Creditors or any of them of any right, power or remedy nor the
discontinuance, abandonment or adverse determination of any proceedings
taken by the Mortgagee and/or the Secured Creditors or any of them to
enforce any right, power or remedy preclude any other or further exercise
thereof or proceedings to enforce the same or the exercise of any other
right, power or remedy nor shall the giving by the Mortgagee of any
consent to any act which by the terms of this Deed requires such consent
prejudice the right of the Mortgagee to withhold or give consent to the
doing of any other similar act. The remedies provided in the Security
Documents are cumulative and are not exclusive of any remedies provided
by law.
12.2 Delegation
The Mortgagee shall be entitled, at any time and as often as may be
expedient, to delegate all or any of the powers and discretions vested in
it by the Mortgage and this Deed (including the power vested in it by
virtue of clause 14) or any of the other Security Documents in such
manner, upon such terms, and to such persons as the Mortgagee in its
absolute discretion may think fit.
13 Costs and indemnity
13.1 Costs
The Owner shall pay to the Mortgagee (as security agent and trustee for
and on behalf of the Secured Creditors) and/or any of the Secured
Creditors on demand on a full indemnity basis all expenses or liabilities
of whatsoever nature (including legal fees, fees of insurance advisers,
printing, out-of-pocket expenses, stamp duties, registration fees and
other duties or charges) together with any value added tax or similar tax
payable in respect thereof, incurred by the Mortgagee and/or any of the
Secured Creditors in connection with the enforcement of, or preservation
of any rights under, this Deed or otherwise in respect of the Outstanding
Indebtedness (which expression, for the avoidance of doubt, includes the
Master Swap Agreement Liabilities) and the security therefor or in
connection with the preparation, completion, execution or registration of
this Deed.
13.2 Mortgagee's indemnity
The Owner hereby agrees and undertakes to indemnify the Mortgagee and
each of the Secured Creditors against all losses, actions, claims,
expenses, demands, obligations and liabilities whatever and whenever
arising which may now or hereafter be incurred by the Mortgagee and/or
any of the Secured Creditors, or by any manager, agent, officer or
employee for whose liability, act or omission it or he may be answerable,
in respect of, in relation to, or in connection with anything done or
omitted in the exercise or purported exercise of the powers contained
this Deed or otherwise in connection therewith and herewith or with any
part of the Owner and the Owner's Assigned Property or the Charterer's
Assigned Property or otherwise howsoever in relation to, or in connection
with, any of the matters dealt with in this Deed.
14 Attorney
14.1 Power
By way of security, the Owner and the Charterer each hereby irrevocably
appoints the Mortgagee (as security agent and trustee for and on behalf
of the Secured Creditors) to be its attorney generally for and in its
name and on its behalf and as its act and deed or otherwise to execute,
seal and deliver and otherwise perfect and do all such deeds, assurances,
agreements, instruments, acts and things which may be required for the
full exercise of all or any of the rights, powers or remedies conferred
by this Deed or which may be deemed proper in or in connection with all
or any of the purposes aforesaid. The power hereby conferred shall be a
general power of attorney under the Powers of ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, and the
Owner and the Charterer ratifies and confirms, and agrees to ratify and
confirm, any deed, assurance, agreement, instrument, act or thing which
the Mortgagee may execute or do pursuant thereto. Provided always that
such power shall not be exercisable by or on behalf of the Mortgagee
until the happening of an Event of Default.
14.2 Exercise of power
The exercise of such power by or on behalf of the Mortgagee shall not put
any person dealing with the Mortgagee upon any enquiry as to whether any
Event of Default has happened, nor shall such person be in any way
affected by notice that no such Event of Default has happened, and the
exercise by the Mortgagee of such power shall be conclusive evidence of
the Mortgagee's right to exercise the same.
14.3 Filings
The Owner and the Charterer each hereby irrevocably appoints the
Mortgagee (as security agent and trustee for and on behalf of the Secured
Creditors) to be its attorney in its name and on its behalf and as its
act and deed or otherwise of it, to agree the form of and to execute and
do all deeds, instruments, acts and things in order to file, record,
register or enrol the Mortgage and/or this Deed in any court, public
office or elsewhere which the Mortgagee may in its discretion consider
necessary or advisable, now or in the future, to ensure the legality,
validity, enforceability or admissibility in evidence thereof and any
other assurance, document, act or thing required to be executed by the
Owner and the Charterer pursuant to clause 15.
15 Further assurance
The Charterer hereby further undertakes at its own expense from time to
time to execute, sign, perfect, do and (if required) register every such
further assurance, document, act or thing as in the opinion of the
Mortgagee may be necessary or desirable for the purpose of more
effectually mortgaging and charging the Charterer's Assigned Property or
perfecting the security constituted or intended to be constituted by this
Deed.
16 Consent, Termination of Charter and Quiet Enjoyment
16.1 Consent
In consideration of the Charterer executing this Deed, the Mortgagee
consents to the entry by the Owner into the Charter and the performance
of its obligations thereunder.
16.2 Quiet Enjoyment and termination
In consideration of the undertakings of the Charterer contained in
clauses 6 and 8 and of the Charter Guarantor contained in clause 7,
provided (a) the Charterer has not committed a breach of the Charter
which would entitle the Owner to terminate the Charter (including, but
not limited to, a failure to pay charterhire in accordance with the
Charter) or (b) the Charterer has not committed a breach of this Deed or
(c) the Charterer has not committed a breach of any of the terms of the
co-ordination deed dated June 2006 made between, inter alios, the
Charterer and the Mortgagee (the "Co-ordination Deed") or (d) the Charter
Guarantor has not committed a breach of this Deed, the Mortgagee agrees
that it will not take any action as mortgagee against the Ship under (i)
the Loan Agreement and (ii) any of the other Security Documents, which
action would have the effect of interfering with the Charterers quiet
enjoyment of the Ship PROVIDED ALWAYS THAT:
16.2.1 nothing in this clause 16 shall prevent the Mortgagee and/or the other
Creditors (as defined in the Loan Agreement) from exercising any of their
respective rights under the Loan Agreement and/or the Security Documents
(including without limitation, rights thereunder to foreclose, take
possession of and sell the Ship) if those rights are exercised in such a
way as to enable the Ship to be available to the Charterer during the
Charter Period; and
16.2.2 nothing in this clause 16 shall prevent the Mortgagee and/or the other
Creditors (as defined in the Loan Agreement) from joining or intervening
in or otherwise supporting any proceedings arising from or relating to
the arrest or detention of the Ship by any other person with a view to
substantiating, preserving or protecting the Mortgagee and/or the other
Creditors' (as defined in the Loan Agreement) interest in the Ship as
mortgagee or otherwise.
16.3 Termination by Mortgagee
On the occurrence of any of the following:
16.3.1 an Event of Default; and
16.3.2 if any event or circumstance shall have occurred which would, under the
terms of the Charter, entitle the Owner to terminate the Charter; or
16.3.3 if the Charterer shall be in default of any of its obligations under this
Deed; or
16.3.4 if the Charterer is in breach of any of the terms of the Co-ordination
Deed; or
16.3.5 if the Charter Guarantor shall be in default of its obligations under
this Deed,
the Mortgagee shall be entitled to terminate the Charter by notice to the
Owner and the Charterer, which notice shall operate to terminate the
Charter forthwith if the Ship is then in port and free of cargo or
otherwise upon completion of the voyage (including discharge of cargo, if
any) upon which the Ship was engaged at the time when the notice to
determine was given and upon any termination of the Charter pursuant to
this clause 16.3:
(a) all obligations whatsoever of the Owner thereunder shall be
absolutely discharged and extinguished;
(b) if the Charterer shall, at any time prior to such termination,
have been in repudiatory breach of the terms of the Charter, such
termination by the Mortgagee shall, as between the Owner and the
Charterer, operate as an acceptance by the Owner of the
Charterer's repudiation of the Charter and the Owner's right to
recover damages in respect of such repudiation (as such right has
been assigned to the Mortgagee by the Charter Assignment) shall be
fully preserved; and
(c) the Charterer shall cease to be in possession of the Ship with the
consent of the Owner (or with the consent of the Mortgagee as the
Owner's assignee) and shall forthwith vacate possession of the
Ship in an orderly fashion, Provided that such vacating of
possession of the Ship by the Charterer shall not of itself
constitute the Mortgagee a mortgagee-in-possession of the Ship.
16.4 Preservation of Owner's rights
If the circumstances in which the Mortgagee becomes entitled under
clauses 16.2 or 16.3 to determine the Charter shall constitute or include
grounds on which the Owner was entitled to determine the same, any
determination by the Mortgagee shall (as between the Owner and the
Charterer) operate as an acceptance by the Owner of the Charterer's
repudiation of the Charter and the Owner's right to recover damages in
respect of such repudiation shall be fully preserved.
16.5 Remedy of Owner's breach
Notwithstanding anything herein contained, the Owner shall remain liable
to perform all the obligations assumed by it under the Charter and the
Mortgagee shall have no obligations whatsoever thereunder or be under any
liability whatsoever to the Charterer in event of any failure by the
Owner to perform its obligations thereunder or hereunder provided however
that:
16.5.1 a notice in writing (which shall set out full particulars of the matters
complained of and which is hereinafter called the "notice of complaint")
shall be immediately given by the Charterer to the Mortgagee in event of
any breach or alleged breach of the Charter by the Owner by reason
whatsoever the Charterer claims to be entitled to determine the Charter;
16.5.2 within fifteen (15) days after receipt by the Mortgagee of any notice of
complaint by the Mortgagee shall be entitled (but not bound) to notify
the Charterer in writing of its intention to remedy the matters
complained of by such notice of complaint and any remedial measures
thereafter taken by the Mortgagee shall be without prejudice to the
Charterer's right to claim against the Owner in respect of any loss and
damage suffered by the Charterer by reason of such breach but in no
circumstances shall the Mortgagee be under any liability therefore or for
any loss or damage suffered by the Charterer arising from delay or
otherwise in effecting such remedial measures as the Mortgagee (whose
decision shall be final) deems appropriate; and
16.5.3 all expenses whatsoever incurred by the Mortgagee in or about such
remedial measures as may be undertaken on its behalf pursuant to clause
16.5.2 shall be recoverable by the Mortgagee from the Owner on demand but
payment by the Owner to the Mortgagee pursuant to such demand shall not
as between the Owner and the Charterer operate as an admission by the
Owner of liability for the matters complained of in the relevant notice
of complaint.
16.6 Sale free of or subject to Charter
Notwithstanding anything herein contained, in the event of a sale of the
Ship during the Charter Period pursuant to the power in that behalf
vested in the Mortgagee by virtue of the Security Documents, such sale
shall be free of or subject to the Charter at the option of the
Mortgagee.
16.7 Sale subject to Charter
If the Ship is sold subject to the Charter (which expression means that
the purchaser of the Ship or any other person chartering the Ship from
the purchaser shall as from the date on which the Ship is registered in
the name of the purchaser assume all future obligations and acquire all
future rights and benefits under the Charter), the Owner and/or the
Charterer shall enter into such form of agreement with the purchaser as
the Mortgagee may require to the intent that such purchaser or other
person shall be substituted in place of the Owner as owner or disponent
owner of the Ship for the purposes of the Charter.
16.8 Sale free of Charter
Without prejudice to clauses 16.2 and 16.3, if the Ship is sold free of
the Charter, the Owner and the Charterer shall enter into such form of
agreement or agreements as the Mortgagee may require for determination of
the Charter by mutual consent.
17 Continuation of Charter Period
The Charterer shall continue to pay charterhire under the Charter on the
days and in the amounts required under the Charter notwithstanding that
the Ship shall become a Total Loss or that the Charterer shall be
permanently deprived of her use for any other reason prior to the end of
the Charter Period, provided that no further instalments of charterhire
shall become due and payable after the Borrowers have prepaid the Advance
relevant to such Ship or any other part of the Loan As may be required in
clause 4.3 of the Loan Agreement.
18 Notices
18.1 Every notice, request, demand or other communication under this Deed
shall:
18.1.1 be in writing delivered personally or by first-class prepaid letter
(airmail if available) or facsimile transmission or other means of
telecommunication in permanent written form;
18.1.2 be deemed to have been received in the case of a letter, when delivered
personally or three (3) days after it has been put in to the post and, in
the case of a facsimile transmission or other means of telecommunication
in permanent written form, at the time of despatch (provided that if the
date of despatch is not a business day in the country of the addressee or
if the time of despatch is after the close of business in the country of
the addressee it shall be deemed to have been received at the opening of
business on the next such business day); and
18.1.3 be sent:
(a) if to the Owner at:
c/o ICON Capital Corp. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇
Fax no: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: General Counsel
(b) if to the Charterer at:
c/o Top Tanker Management Inc.
109-111 ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
Fax no: ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇
Attention: Legal Department
(c) if to the Mortgagee at:
Fortis Bank (Nederland) N.V.
▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Fax no: ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇. ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
or to such other address and/or numbers as is notified by one party to
the other parties under this Deed.
19 Counterparts
This Deed may be entered into in the form of two or more counterparts,
each executed by one or more of the parties, and, provided all the
parties shall so execute this Deed, each of the executed counterparts,
when duly exchanged or delivered, shall be deemed to be an original but,
taken together, they shall constitute one instrument.
20 Severability of provisions
Each of the provisions in this Deed are severable and distinct from the
others, and if at any time one or more such provisions is or becomes
invalid, illegal or enforceable, the validity, legality and
enforceability of the remaining provisions of this Deed shall not in any
way be affected or impaired thereby.
21 Law and jurisdiction
21.1 Law
This Deed is governed by, and shall be construed in accordance with,
English law.
21.2 Submission to Jurisdiction
For the benefit of the Mortgagee, the parties hereto irrevocably agree
that any legal action or proceedings in connection with this Deed may be
brought in the English courts, or in the courts of any other country
chosen by the Mortgagee, each of which shall have jurisdiction to settle
any disputes arising out of or in connection with this Deed. Each of the
Owner, the Charter Guarantor and the Charterer irrevocably and
unconditionally submits to the jurisdiction of the English courts, and
the courts of any country chosen by the Mortgagee and the Owner, the
Charter Guarantor and the Charterer irrevocably designate, appoint and
empower Law Debenture Corporate Services Limited at present of ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ (▇▇ the case of the
Owner) and Top Tankers (UK) Limited at present of ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (in the case of the Charterer and the Charter
Guarantor) to receive, for it and on its behalf, service of process
issued out of the English courts in any legal action or proceedings
arising out of or in connection with this Deed. The submission to such
jurisdiction shall not (and shall not be construed so as to) limit the
right of the Mortgagee to take proceedings against the Owner and/or the
Charterer and/or the Charter Guarantor in any other court of competent
jurisdiction nor shall the taking of proceedings in any one or more
jurisdictions preclude the taking of proceedings in any other
jurisdiction, whether concurrently or not. The parties further agree that
only the courts of England and not those of any other State shall have
jurisdiction to determine any claim which the Owner or the Charterer
and/or the Charter Guarantor may have against the Mortgagee arising out
of or in connection with this Deed.
21.3 Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇
Save for clauses 5.6, 5.7 and 5.8 (which can be enforced by the Secured
Creditors although they are not a party to this Deed), no term of this
Deed shall be enforceable pursuant to the Contracts (Rights of Third
Parties) ▇▇▇ ▇▇▇▇ by a person who is not a party to this Deed.
IN WITNESS whereof this Deed has been duly executed as a deed the day and year
first above written
Schedule 1
Forms of Loss Payable Clauses
(1) Hull and machinery (marine and war risks)
By a General Assignment dated [o] 2006, ICON DOUBTLESS, LLC of ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, Delaware
19808, United States of America (the "Owner") and by a Quadripartite Deed
dated [o] 2006 and FALAKRO SHIPPING COMPANY LIMITED of ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ of Liberia (the "Charterer') have each assigned to
FORTIS BANK (NEDERLAND) N.V. of ▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇ Rotterdam, The
Netherlands (the "Mortgagee") (as security agent and trustee for and on
behalf of the Secured Creditors as therein defined (the "Secured
Creditors")) all the Owners and the Charterer's rights, title and
interest in and to all policies and contracts of insurance from time to
time taken out or entered into by or for the benefit of the Owner and/or
the Charterer in respect of m.v. "Doubtless" and accordingly:
(a) all claims hereunder in respect of an actual or constructive or
compromised or arranged total loss, and all claims in respect of a
major casualty (that is to say any casualty the claim in respect
of which exceeds Five hundred thousand Dollars ($500,000) (or the
equivalent in any other currency) inclusive of any deductible
shall be paid in full to the Mortgagee (as security agent and
trustee for and on behalf of the Secured Creditors) or to its
order; and
(b) all other claims hereunder shall be paid in full to the Charterer
or to its order, unless and until the Mortgagee shall have
notified insurers hereunder to the contrary, whereupon all such
claims shall be paid to the Mortgagee (as security agent and
trustee for and on behalf of the Secured Creditors) or to its
order.
(2) Protection and indemnity
Payment of any recovery which ICON DOUBTLESS, LLC of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, Delaware 19808, United
States of America (the "Owner) or FALAKRO SHIPPING COMPANY LIMITED of ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ of Liberia (the "Charterer") is entitled
to make out of the funds of the Association in respect of any liability,
costs or expenses incurred by the Owner or the Charterer, shall be made
to the Owner or the Charterer or to its order, unless and until the
Association receives notice to the contrary from FORTIS BANK (NEDERLAND)
N.V. of ▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ (the
"Mortgagee") in which event all recoveries shall thereafter be paid to
the Mortgagee or their order; provided that no liability whatsoever shall
attach to the Association, its Managers or their agents for failure to
comply with the latter obligation until the expiry of two clear business
days from the receipt of such notice.
Schedule 2
Forms of Notices of Assignment of Insurances
Notice of Assignment
(For attachment by way of endorsement to the Policy)
ICON DOUBTLESS, LLC (the "Owner") of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, Delaware 19808, United States of America and
FALAKRO SHIPPING COMPANY LIMITED (the "Charterer") of ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ of Liberia, the owners and demise charterers respectively of the motor
vessel "Doubtless" HEREBY GIVE NOTICE that by a General Assignment dated [ ]
2006 and entered into by the Owner with FORTIS BANK (NEDERLAND) N.V. (the
"Mortgagee") (as security agent and trustee for and on behalf of the Secured
Creditors as therein defined (the "Secured Creditors")) and by a Quadripartite
Deed dated [ ] 2006 and entered into by, inter alios, the Charterer and the
Owner with the Mortgagee (as security agent and trustee for and on behalf of the
Secured Creditors), there has been assigned by us to the Mortgagee (as security
agent and trustee for and on behalf of the Secured Creditors) as mortgagees of
the said vessel all insurances in respect thereof, including the insurances
constituted by the policy whereon this notice is endorsed.
/s/ ▇▇▇▇ ▇▇▇▇▇
----------------------------------
Signed
For and on behalf of
ICON DOUBTLESS, LLC
Dated [__] 2006
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Signed
For and on behalf of
FALAKRO SHIPPING COMPANY LIMITED
Dated [__] 2006
EXECUTED as a DEED )
by ▇▇▇▇ ▇▇▇▇▇ ) /s/ ▇▇▇▇ ▇▇▇▇▇
for and on behalf of ) -----------------------------
ICON DOUBTLESS, LLC ) Attorney-in-fact
/s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
in the presence of:
Witness Name: ▇▇▇▇▇ ▇▇▇▇▇
Address: ▇▇▇▇▇▇ ▇▇▇▇
Occupation: Piraeus
EXECUTED as a DEED )
by Eirini Alexandropolou ) /s/ Eirini Alexandropolou
for and on behalf of ) -----------------------------
FALAKRO SHIPPING COMPANY LIMITED ) Attorney-in-fact
/s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
in the presence of:
Witness Name: ▇▇▇▇▇ ▇▇▇▇▇
Address: ▇▇▇▇▇▇ ▇▇▇▇
Occupation: Piraeus
EXECUTED as a DEED )
by Eirini Alexandropolou ) /s/ Eirini Alexandropolou
for and on behalf of ) -----------------------------
TOP TANKERS ) Attorney-in-fact
/s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
in the presence of:
Witness Name: ▇▇▇▇▇ ▇▇▇▇▇
Address: ▇▇▇▇▇▇ ▇▇▇▇
Occupation: Piraeus
EXECUTED as a DEED )
by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ) /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
for and on behalf of ) -----------------------------
FORTIS BANK (NEDERLAND) N.V. ) Attorney-in-fact
/s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
in the presence of:
Witness Name:
Address:
Occupation: