Exhibit 4.65
Private & Confidential
Dated 16- June 2006
ISOMAR MARINE COMPANY LIMITED
as Owner
PAGEON SHIPPING COMPANY LIMITED
as Charterer
TOP TANKERS INC.
as Charter Guarantor
and
FORTIS BANK (NEDERLAND) N.V.
as Mortgagee
QUADRIPARTITE DEED
relating to m.v. "Vanguard"
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) ISOMAR MARINE COMPANY LIMITED, whose registered office is at ▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ (the
"Owner");
(2) PAGEON SHIPPING COMPANY LIMITED, a company incorporated in the Republic
of Cyprus whose registered office is at 284 Arch. Makarios III Avenue,
Limassol, Cyprus (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 Doubtless, LLC, ICON Faithful, LLC and ICON
Spotless, LLC (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 t6 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 to 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 priority statutory ship mortgage and a deed of covenant collateral
thereto (together the "Mortgage") on the Ship and the Mortgage of even
date herewith has been or will be registered under the provisions of the
laws of Cyprus 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
Comoros Shipping Limited of Cyprus (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 the 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 Vanguard 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 Vanguard 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 Vanguard 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 priority statutory mortgage and deed of
covenant collateral thereto 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 Vanguard 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, Doubtless, Faithful and Spotless 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 Owner's 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. "Vanguard' registered as a Cyprus ship under IMO
Number 8913605 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 Charterer's 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 Cyprus as a limited liability
company 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;
2.2.5 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 Vanguard 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 Vanguard 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 may be 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 Owner's Assigned Property
and the Charterer's 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 Charterer's 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:
5.6A 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 Charterer's 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 72.1, 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" 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 debt securities issued by the Charter
Guarantor or any of its Subsidiaries not for the time being
beneficially owned by the Charter Guarantor or any of its
Subsidiaries; (c) sums outstanding under acceptances by the
Charter Guarantor or any of its Subsidiaries or by any bank or
acceptance house under acceptance credits opened 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 Cyprus 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 Cyprus
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 the Cyprus Merchant Shipping Acts and all 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 Cyprus 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 Vanguard 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 Master's
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
Charterer's 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 Charterer's 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
Owner's Assigned Property and/or the Charterer's 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 Owner's Assigned Property and/or the Charterer's
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 Owner's 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 111 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
Charterer's 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, ISOMAR MARINE COMPANY LIMITED of
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
(the "Owner") and by a Quadripartite Deed dated [o] 2006 and PAGEON
SHIPPING COMPANY LIMITED of 284 Arch. Makarios III Avenue, Limassol,
Cyprus (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
Owner's 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. "Vanguard' 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 ISOMAR MARINE COMPANY LIMITED of ▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
(the "Owner") or PAGEON SHIPPING COMPANY LIMITED of 284 Arch. Makarios
Ill Avenue, Limassol, Cyprus (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)
ISOMAR MARINE COMPANY LIMITED (the "Owner") of ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and PAGEON SHIPPING COMPANY LIMITED
(the "Charterer") of ▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, the owners
and demise charterers respectively of the motor vessel "Vanguard' HEREBY GIVE
NOTICE that by a General Assignment dated [o] 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 [o] 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
ISOMAR MARINE COMPANY LIMITED
Dated [o] 2006
--------------------------------
Signed
For and on behalf of
PAGEON SHIPPING COMPANY LIMITED
Dated [o] 2006
SIGNED, SEALED and DELIVERED
by ▇▇▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇
for and on behalf of -----------------------------
ISOMAR MARINE COMPANY LIMITED Attorney-in-fact
as Owner
/s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
In the presence of:
Witness ▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇
Address: Piraeus
Occupation:
SIGNED, SEALED and DELIVERED
by Eirini Alexandropolou /s/ Eirini Alexandropolou
for and on behalf of -----------------------------
PAGEON SHIPPING COMPANY LIMITED Attorney-in-fact
as Charterer
/s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
in the presence of:
Witness ▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇
Address: Piraeus
Occupation:
EXECUTED as a DEED
by Eirini Alexandropolou
for and on behalf of /s/ E. Alexandropolou
TOP TANKERS INC. as -----------------------------
Charter Guarantor Attorney-in-fact
/s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
in the presence of
Witness ▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇
Address: Piraeus
Occupation:
EXECUTED as a DEED
by ▇. ▇▇▇▇▇▇▇▇▇▇
for and on behalf of /s/ ▇. ▇▇▇▇▇▇▇▇▇▇
FORTIS BANK (NEDERLAND) N.V. -----------------------------
as Mortgage Attorney-in-fact
/s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
In the presence of:
Witness ▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇
Address: Piraeus
Occupation: