Exhibit 4.47
Private & Confidential
Dated 15 March 2006
COMOROS SHIPPING LIMITED (1)
as Owner
PAGEON SHIPPING COMPANY LIMITED (2)
as Charterer
TOP TANKERS INC. (3)
as Charter Guarantor
and
FORTIS BANK (NEDERLAND) N.V. (4)
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QUADRIPARTITE DEED
relating to m.v. Vanguard
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▇▇▇▇▇▇ ▇▇▇▇
Contents
Clause Page
1 Definitions............................................................2
2 Representations and warranties.........................................8
3 Assignment............................................................11
4 Owner's Assignment....................................................12
5 Continuing security and other matters................................ 13
6 Charterer's undertakings..............................................16
7 Charter Guarantor's undertakings......................................17
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...............................29
11 Application of moneys.................................................30
12 Remedies cumulative and other provisions..............................31
13 Costs and indemnity...................................................32
14 Attorney..............................................................32
15 Further assurance.....................................................33
16 Consent, Termination of Charter and Quiet Enjoyment...................33
17 Continuation of Charter Period........................................35
18 Notices...............................................................35
19 Counterparts..........................................................36
20 Severability of provisions............................................36
21 Law and jurisdiction.................................................37
Schedule 1 Forms of Loss Payable Clauses......................................38
Schedule 2 Forms of Notices of Assignment of Insurances.......................39
THIS QUADRIPARTITE DEED is dated 15 March 2006
BETWEEN:
(1) COMOROS SHIPPING LIMITED a company incorporated in the Republic of Cyprus
whose registered office is at Themistokli Dervi 41, Hawai Nicosia Tower,
8th Floor, ▇▇▇▇/▇▇▇▇▇▇ ▇▇▇ -▇▇▇, ▇.▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ (the "Owner");
(2) PAGEON SHIPPING COMPANY LIMITED, a company incorporated in the Republic of
Cyprus whose registered office is at ▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ (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
▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇ Rotterdam, The Netherlands (the "Mortgagee").
WHEREAS:
(A) the Owner is the sole, absolute and unencumbered, legal and beneficial
owner of sixty-four sixty-fourth shares in the Ship described in clause
1.2;
(B) by a loan agreement (the "Loan Agreement") dated 14 March 2006 and made
between (1) the Owner, ▇▇▇▇▇▇ Navigation Co., Starcraft Marine Co. and ▇▇▇▇
Maritime S.A. (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) the Mortgagee as agent,
arranger, account bank, security agent and trustee and (4) Fortis Bank
(Nederland) N.V. as swap provider (the "Swap Provider' and together with
the Agent (as defined in the Loan Agreement) 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 14 March 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 14 March 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 (the "Charter") dated 14 March 2006
made between the Owner and the Charterer, 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 Loan, the Owner and the Charterer 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 entered or (as the
context may require) to be entered into by 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 Mortgagee (acting as 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;
"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;
"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;
"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 14 March 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 assignees 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 and permitted assignees 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 Owner pursuant to the Loan Agreement and/or the
Master Swap Agreement (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 vessel 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 Dy 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 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.
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
regulai ion 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 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
2.1.8 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 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
2.2.8 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) 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 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 Agent.
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 ;flat 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
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.
5.2.1 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:
5.6.1 exercise its rights of subrogation, reimbursement and indemnity
against the Owner, the other Borrowers or any other person liable;
5.6.2 demand or accept repayment in whole or in part of any indebtedness
now or hereafter due to the Charterer from the Owner, the other
Borrowers or from any other person liable or demand or accept any
Collateral Instrument in respect of the same or dispose of the
same;
5.6.3 take any step to enforce any right against the Owner, the other
Borrowers or any other person liable in respect of any Outstanding
Indebtedness (which expression, for the avoidance of doubt,
includes the Master Swap Agreement Liabilities); or
5.6.4 claim any set-off or counterclaim against the Owner, the other
Borrowers or any other person liable or claim or prove in
competition with the Mortgagee and/or the Secured Creditors or any
of them in the liquidation of the Owner, the other Borrowers or
any other person liable or have the benefit of, or share in, any
payment from or composition with, the Owner, the other Borrowers
or any other person liable or any other Collateral Instrument now
or hereafter held by the Mortgagee and/or the Secured Creditors or
any of them for the Outstanding Indebtedness (which expression,
for the avoidance of doubt, includes the Master Swap Agreement
Liabilities) or for the obligations or liabilities of any other
person liable but so that, if so directed by the Mortgagee, it
will prove for the whole or any part of its claim in the
liquidation of the Owner on terms that the benefit of such proof
and of all money received by it in respect thereof shall be paid
to the Mortgagee for application in or towards discharge of the
Outstanding Indebtedness (which expression, for the avoidance of
doubt, includes the Master Swap Agreement Liabilities) in such
manner as the Mortgagee shall deem appropriate.
5.7 Suspense account
Any moneys received in connection with this Deed (whether before or after
any Incapacity of the Owner or the Charterer) which would (but for this
Deed) have been payable to the Charterer may, if an Event of Default has
happened, be placed to the credit of a suspense account with a view to
preserving the rights of the Mortgagee to prove for the whole of its and
the Secured Creditors' claims against the Owner, the other Borrowers or
any other person liable or may be applied in or towards satisfaction of
the Outstanding Indebtedness (which expression, for the avoidance of
doubt, includes the Master Swap Agreement Liabilities).
5.8 Settlements conditional
Any release, discharge or settlement between the Charterer and the
Mortgagee shall be conditional upon no security, disposition or payment
to the Mortgagee and/or the Secured Creditors or any of them by the
Owner, the other Borrowers or any other person liable being void, set
aside or ordered to be refunded pursuant to any enactment or law relating
to bankruptcy, liquidation, administration or insolvency or for any other
reason whatsoever and if such condition shall not be fulfilled the
Mortgagee shall be entitled to enforce this Deed subsequently as if such
release, discharge or settlement had not occurred and any such payment
had not been made.
5.9 Delivery of certain property
If, contrary to the provisions of this Deed, the Charterer takes or
receives the benefit of any security or receives or recovers any money or
other property, such security, money or other property shall be held on
trust for the Mortgagee (as security agent and trustee on behalf of the
Secured Creditors) and shall be delivered to the Mortgagee on demand.
5.10 Certificates conclusive
Any certificate submitted by the Mortgagee to the Charterer as to the
amount or any part thereof hereby secured shall, in the absence of
manifest error, be conclusive and binding on the Charterer.
5.11 Collateral Instruments
The Mortgagee shall not be obliged to make any claim or demand on the
Owner or to resort to any Collateral Instrument or other means of payment
now or hereafter held by or available to it before enforcing this Deed
and no action taken or omitted by the Mortgagee in connection with any
such Collateral Instrument or other means of payment shall discharge,
reduce, prejudice or affect the security created by the Charterer under
this Deed nor shall the Mortgagee be obliged to apply any money or other
property received or recovered in consequence of any enforcement or
realisation of any such Collateral Instrument or other means of payment
in reduction of the Outstanding Indebtedness.
6 Charterer's undertakings
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;
(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 Managers or terminate or amend the terms of either of the
Management Agreements;
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; and
6.1S 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;
(c) at the time of the delivery of the annual audited financial
statements, a statement from the Charter Guarantor's
auditors stating the respective amounts of the Net Asset
Value, Book Equity, the Total Debt and the Total Market
Value Adjusted Assets, in respect of or, as the case may
be, as at the end of the financial year to which such
financial statements relate indicating the manner in which
the same have been calculated and whether or not the limits
imposed by clauses 7.2.1, 7.2.4 and 7.2.5 have or have not
been exceeded at such time and so that each such statement
shall (in the absence of manifest error or in the absence
of the Mortgagee reaching a different determination
pursuant to clause 7.2.8) be conclusive evidence of such
amounts or facts for the purposes of this Deed; and
7.1.2 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 31 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 reievant 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;
(k) 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;
(l) sums outstanding under acceptances by the Charter Guarantor
or any of its Subsidiaries or by any bank or acceptance
house under acceptance credits opened al behalf of the
Charter Guarantor or any Subsidiary;
(m) 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;
(n) rental payments under Finance Leases;
(o) receivables sold or discounted with a right of recourse to
the Charter Guarantor or any of its Subsidiaries;
(p) 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;
(q) preference share capital redeemable prior to the last day
of the period of the Charter;
(r) 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;
(s) indebtedness incurred in respect of swaps, forward exchange
contracts, futures or other derivatives;
(t) any other liability arising from a transaction having the
commercial effect of a borrowing or the raising of money;
(u) 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
(v) 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
determined by the Mortgagee 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 Loan and 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 (including 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 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 8.1.10);
(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 one
registration of 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 Classification as the class of the Ship and to
comply with and ensure that the Ship at all times complies with
the provisions of the 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
Flag State 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 Classification Society 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 tie 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 will procure that any Operator of the Ship will:
(a) maintain at all times a valid and current ISSC;
(b) in respect of such Ship;
(c) immediately notify the Mortgagee in writing of any actual
or threatened withdrawal, suspension, cancellation or
modification of the ISSC in respect of the Ship;
(d) 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, he 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, the Mortgagee (as security
agent and trustee for and on behalf of the Secured Creditors) shall
become forthwith entitled by notice given to the Owner 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 the Mortgagee
may require 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, 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)00 above,
and the surplus (if any) shall be paid to the Owner, the Charterer or
such other person as may for the time being be entitled thereto.
11.2 Shortfalls
In the event that the balance referred to in clause 11.1 is insufficient
to pay in full the whole of the Outstanding Indebtedness, the Mortgagee
shall be entitled to collect the shortfall from the Owner or any other
person liable for the time being therefore.
11.3 Application of Insurances received by Mortgagee
Any moneys received by the Mortgagee in respect of the Insurances (other
than in respect of recovery under any loss of earnings insurance or in
respect of a Total Loss) pursuant to the Mortgage and/or the assignments
by the Charterer contained in clause 3.1 shall:
11.3.1 if received by the Mortgagee, or in the hands of the Mortgagee
after the occurrence of a Default but prior to the occurrence of
an Event of Default, be retained by the Mortgagee and shall be
paid over by the Mortgagee to the Charterer (during the Charter
Period) at such times, in such amounts and for such purposes
and/or shall be applied by the Mortgagee in or towards
satisfaction of any sums from time to time accruing due and
payable by the Owner or the other Borrowers under the Security
Documents or any of them or by virtue of payment demanded
thereunder, in each case the Mortgagee may in its absolute
discretion determine; and
11.3.2 if received by the Mortgagee, or in the hands of the Mortgagee,
after the occurrence of an Event of Default, be applied by the
Mortgagee in the manner specified in clause 11.1 and/or clause
11.3, as the Mortgagee may in its absolute discretion determine.
12 Remedies cumulative and other provisions
12.1 No implied waivers; remedies cumulative
No failure or delay on the part of the Mortgagee and/or the Secured
Creditors or any of them to exercise any right, power or remedy vested in
it under any of the Security Documents shall operate as a waiver thereof,
nor shall any single or partial exercise by the Mortgagee and/or the
Secured Creditors or any of them of any right, power or remedy nor the
discontinuance, abandonment or adverse determination of any proceedings
taken by the Mortgagee and/or the Secured Creditors or any of them to
enforce any right, power or remedy preclude any other or further exercise
thereof or proceedings to enforce the same or the exercise of any other
right, power or remedy nor shall the giving by the Mortgagee of any
consent to any act which by the terms of this Deed requires such consent
prejudice the right of the Mortgagee to withhold or give consent to the
doing of any other similar act. The remedies provided in the Security
Documents are cumulative and are not exclusive of any remedies provided
by law.
12.2 Delegation
The Mortgagee shall be entitled, at any time and as often as may be
expedient, to delegate all or any of the powers and discretions vested in
it by the Mortgage and this Deed (including the power vested in it by
virtue of clause 14) or any of the other Security Documents in such
manner, upon such terms, and to such persons as the Mortgagee in its
absolute discretion may think fit.
13 Costs and indemnity
13.1 Costs
The Owner shall pay to the Mortgagee (as security agent and trustee for
and on behalf of the Secured Creditors) and/or any of the Secured
Creditors on demand on a full indemnity basis all expenses or liabilities
of whatsoever nature (including legal fees, fees of insurance advisers,
printing, out-of-pocket expenses, stamp duties, registration fees and
other duties or charges) together with any value added tax or similar tax
payable in respect thereof, incurred by the Mortgagee and/or any of the
Secured Creditors in connection with the enforcement of, or preservation
of any rights under, this Deed or otherwise in respect of the Outstanding
Indebtedness (which expression, for the avoidance of doubt, includes the
Master Swap Agreement Liabilities) and the security therefor or in
connection with the preparation, completion, execution or registration of
this Deed.
13.2 Mortgagee's indemnity
The Owner hereby agrees and undertakes to indemnify the Mortgagee and
each of the Secured Creditors against all losses, actions, claims,
expenses, demands, obligations and liabilities whatever and whenever
arising which may now or hereafter be incurred by the Mortgagee and/or
any of the Secured Creditors, or by any manager, agent, officer or
employee for whose liability, act or omission it or he may be answerable,
in respect of, in relation to, or in connection with anything done or
omitted in the exercise or purported exercise of the powers contained
this Deed or otherwise in connection therewith and herewith or with any
part of the Owner and the Owner's Assigned Property or the Charterer's
Assigned Property or otherwise howsoever in relation to, or in connection
with, any of the matters dealt with in this Deed.
14 Attorney
14.1 Power
By way of security, the Owner and the Charterer each hereby irrevocably
appoints the Mortgagee (as security agent and trustee for and on behalf
of the Secured Creditors) to be its attorney generally for and in its
name and on its behalf and as its act and deed or otherwise to execute,
seal and deliver and otherwise perfect and do all such deeds, assurances,
agreements, instruments, acts and things which may be required for the
full exercise of all or any of the rights, powers or remedies conferred
by this Deed or which may be deemed proper in or in connection with all
or any of the purposes aforesaid. The power hereby conferred shall be a
general power of attorney under the Powers of ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, and the
Owner and the Charterer ratifies and confirms, and agrees to ratify and
confirm, any deed, assurance, agreement, instrument, act or thing which
the Mortgagee may execute or do pursuant thereto. Provided always that
such power shall not be exercisable by or on behalf of the Mortgagee
until the happening of an Event of Default.
14.2 Exercise of power
The exercise of such power by or on behalf of the Mortgagee shall not put
any person dealing with the Mortgagee upon any enquiry as to whether any
Event of Default has happened, nor shall such person be in any way
affected by notice that no such Event of Default has happened, and the
exercise by the Mortgagee of such power shall be conclusive evidence of
the Mortgagee's right to exercise the same.
14.3 Filings
The Owner and the Charterer each hereby irrevocably appoints the
Mortgagee (as security agent and trustee for and on behalf of the Secured
Creditors) to be its attorney in its name and on its behalf and as its
act and deed or otherwise of it, to agree the form of and to execute and
do all deeds, instruments, acts and things in order to file, record,
register or enrol the Mortgage and/or this Deed in any court, public
office or elsewhere which the Mortgagee may in its discretion consider
necessary or advisable, now or in the future, to ensure the legality,
validity, enforceability or admissibility in evidence thereof and any
other assurance, document, act or thing required to be executed by the
Owner and the Charterer pursuant to clause 15.
15 Further assurance
The Charterer hereby further undertakes at its own expense from time to
time to execute, sign, perfect, do and (if required) register every such
further assurance, document, act or thing as in the opinion of the
Mortgagee may be necessary or desirable for the purpose of more
effectually mortgaging and charging the Charterer's Assigned Property or
perfecting the security constituted or intended to be constituted by this
Deed.
16 Consent, Termination of Charter and Quiet Enjoyment
16.1 Consent
In consideration of the Charterer executing this Deed, the Mortgagee
consents to the entry by the Owner into the Charter and the performance
of its obligations thereunder.
16.2 Quiet Enjoyment and termination
In consideration of the undertakings of the Charterer contained in
clauses 6 and 8 and of the Charter Guarantor contained in clause 7,
provided (a) the Charterer has not committed breach of the Charter which
would entitle the Owner to terminate the, Charter (including, but nit
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 March 2006 made between, inter alios, the
Charterer and the Mortgagee (the "Co-ordination Deed") or (d) the
Charterer has not failed to pay any charterhire in accordance with the
terms of a notice (the "Notice") received by the Owner under the Charter
Assignment or (e) 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 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 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' interest in the Ship as mortgagee or otherwise.
16.3 Termination by Mortgagee On the occurrence of:
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;
16.3.4 if the Charterer is in breach of any of the terms of the
Co-ordination Deed;
16.3.5 if the Charterer shall be in breach of the terms of the Notice; or
16.3.6 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 Charterers repudiation of
the Charter and the Owner's right to recover damages in
respect of such repudiation (as such right has been
assigned tr. 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 on any date after the earlier of the expiry
of the period for the prepayment of the Loan specified in clause 4.3 of
the Loan Agreement or the date upon which the Loan is prepaid in full in
accordance with clauses 4.3 and 4.5 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) to the Owner at:
do V&P Law Firm
▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇
Fax no: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: Ms Aleka Tatagia
(b) to the Charterer at:
do Top Tanker Management Inc.
109-111 ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
Fax no: + ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇
Attention: Legal Department
(c) 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 Atlas Maritime Services Ltd. 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) Act 'i999
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 M 2006, COMOROS SHIPPING LIMITED of
Themistokli Dervi 41, Hawai Nicosia Tower, 8th Floor, ▇▇▇▇/▇▇▇▇▇▇ ▇▇▇ -
▇▇▇, ▇.▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ (the "Owner") and by a Quadripartite
Deed dated Eo] 2006, PAGEON SHIPPING COMPANY LIMITED of 284 Arch.
Makarios Ill 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 COMOROS SHIPPING LIMITED, of Themistokli
Dervi 41, Hawai Nicosia Tower, 8th Floor, ▇▇▇▇/▇▇▇▇▇▇ ▇▇▇ - ▇▇▇, ▇.▇.
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ (the "Owner") or PAGEON SHIPPING COMPANY LIMITED
of 284 Arch. Makarios III 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)
COMOROS SHIPPING LIMITED (the "Owner") of Themistokli Dervi 41, Hawai
Nicosia Tower, 8th Floor, ▇▇▇▇/▇▇▇▇▇▇ ▇▇▇ - ▇▇▇, ▇.▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ 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 H2006 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.
--------------------------
Signed
For and on behalf of
COMOROS SHIPPING LIMITED
Dated [_] 2006
--------------------------
Signed
For and on behalf of
PAGEON SHIPPING COMPANY LIMITED
Dated [_] 2006
SIGNED, SEALED and DELIVERED ) /s/ Dimitri Glomelakis
by Dimitri Glomelakis ) -------------------------
by ) Attorney-in-fact
for and on behalf of )
COMOROS SHIPPING LIMITED )
in the presence of: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Witness
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Address: Trainee Solicitor
Occupation: ▇▇▇▇▇▇ ▇▇▇▇
SIGNED, SEALED and DELIVERED ) /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
as a DEED ) -------------------------
by ▇▇▇▇▇▇▇ ▇▇▇▇▇ ) Attorney-in-fact
for and on behalf of )
PAGEON SHIPPING COMPANY LIMITED )
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
in the presence of:
Witness
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Address: Trainee Solicitor
Occupation: ▇▇▇▇▇▇ ▇▇▇▇
EXECUTED as a DEED ) /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
by ▇▇▇▇▇▇▇ ▇▇▇▇▇ ) -------------------------
for and on behalf of ) Attorney-in-fact
TOP TANKERS INC. )
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
in the presence of
Witness
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Address: Trainee Solicitor
Occupation: ▇▇▇▇▇▇ ▇▇▇▇
EXECUTED as a DEED ) /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
by ▇▇▇▇▇ ▇▇▇▇▇▇ ) -------------------------
for and on behalf of ) Attorney-in-fact
FORTIS BANK (NEDERLAND) N.V. )
/s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
in the presence of
Witness
Name: ▇▇▇▇▇ ▇▇▇▇▇
Address: ▇▇▇▇▇▇ ▇▇▇▇
Occupation: Piraeus