Exhibit 4.10
Private & Confidential
Dated 15 March 2006
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KOMARF HOPE 27 SHIPPING COMPANY
as Owner (1)
KISAVOS SHIPPING CO. LTD.
as Charterer (2)
TOP TANKERS INC.
as Charter Guarantor (3)
and
FORTIS BANK (NEDERLAND) N.V. (4)
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QUADRIPARTITE DEED relating to m.v.
"Priceless"
-----------------------------------
▇▇▇▇▇▇ ▇▇▇▇
Contents
Clause Page
1 Definitions ..........................................................2
2 Representations and warranties........................................9
3 Assignment...........................................................12
4 Owner's Assignment...................................................13
5 Continuing security and other matters................................14
6 Charterer's undertakings.............................................16
7 General Undertakings.................................................18
8 Covenants concerning insurance and operational matters ..............18
9 Powers of Mortgagee to protect security and remedy defaults .........30
10 Powers of Mortgagee on Event of Default..............................30
11 Application of moneys................................................31
12 Remedies cumulative and other provisions.............................32
13 Costs and indemnity..................................................32
14 Attorney.............................................................33
15 Further assurance....................................................33
16 Sale of Ship.........................................................33
17 Continuation of Charter Period.......................................35
18 Notices..............................................................35
19 Counterparts.........................................................36
20 Severability of provisions...........................................36
21 Law and jurisdiction ................................................36
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) KOMARF HOPE 27 SHIPPING COMPANY a company incorporated under the laws of
the Republic of the ▇▇▇▇▇▇▇▇ Islands whose registered office is at Trust
Company Complex, Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇ Islands
MH96960 (the "Owner");
(2) KISAVOS SHIPPING CO. LTD., a company incorporated in the Republic of the
▇▇▇▇▇▇▇▇ Islands whose registered office is at Trust Company Complex,
Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇ Islands MH96960 (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 and guarantee facility agreement (the "Loan and Guarantee
Facility Agreement") dated 9 March 2006 and made between (1) the Owner
(therein referred to as the "Borrower"), (2) the banks and financial
institutions whose names are set out at Schedule 1 thereto as lenders (the
"Banks"), (3) the Mortgagee as agent, security agent and trustee (the
"Agent"), (4) Fortis Bank (Nederland) N.V. as guarantee bank (the
"Guarantee Bank "), (5) Fortis Bank (Nederland) N.V. as arranger (the
"Arranger") and (6) Fortis Bank (Nederland) N.V. as swap provider (the
"Swap Provider" and together with the Agent, the Arranger and the Account
Bank (as defined in the Loan and Guarantee Facility Agreement), the
Guarantee Bank and the Banks, the "Creditors"), the Banks agreed (inter
alia) to advance by way of loan to the Owner, upon the terms and conditions
therein, a maximum aggregate amount of up to thirty three million and six
hundred thousand Dollars ($33,600,000) and the Guarantee Bank agreed to
issue and/or maintain the Guarantee (as defined in the Loan and Guarantee
Facility Agreement (the "Guarantee") in favour of the Beneficiary (as
defined in the Loan and Guarantee Facility Agreement);
(C) by a 1992 ISDA Master Agreement dated 9 March 2006 (the "Master Swap
Agreement") made between (1) the Owner 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 Owner in respect of
the Loan (whether in whole or in part as the case may be from time to
time);
(D) pursuant to clause 16.1 of the Loan and Guarantee Facility Agreement, each
of the Creditors has appointed the Mortgagee as its agent, security agent
and trustee and pursuant to a deed of trust dated q 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 Creditors;
(E) pursuant to the Loan and Guarantee Facility 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
Creditors) a first preferred ship mortgage (the "Mortgage") on the Ship and
the Mortgage of even date herewith has been or will be registered under the
provisions of Chapter 3 of the Maritime ▇▇▇ ▇▇▇▇ of the Republic of the
▇▇▇▇▇▇▇▇ Islands as security for the payment by the Owner of the
Outstanding Indebtedness (as those expressions are defined in the
Mortgage);
(F) by a "Barecon 2001" bareboat charter (the "Charter") dated 9 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 and Guarantee Facility Agreement provided (inter alia) that as a
condition precedent to the advance of the Loan the Owner, the Charterer and
the Charter Guarantor should enter into a deed supplemental to the Mortgage
substantially in the form of this Deed, to secure (inter alia) all sums of
money from time to time owing to the Mortgagee and/or the Creditors under
the Loan and Guarantee Facility Agreement, the Master Swap Agreement and
the other Security Documents; and
(I) this Deed is supplemental to the Loan and Guarantee Facility Agreement and
the Mortgage and to the security thereby created and is the Quadripartite
Deed referred to in the Loan and Guarantee Facility 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);
"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 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;
"Charter Guarantee" means the guarantee executed or (as the context may
require) to be executed by the Charter Guarantor in favour of the Owner
pursuant to the Charterer;
"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 0240756I5017407192 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;
"Classification" means the classification +1 Al tanker for oil ESP EO
PP3 with the Classification Society or such other classification as the
Agent shall, at the request of the Owner, have agreed in writing shall
be treated as the Classification in relation to the Ship for the
purposes of the Security Documents;
"Classification Society" means Det Norske Veritas or such other
classification society which the Agent shall, at the request of the
Owner, have agreed in writing shall be treated as the Classification
Society in relation to the Ship for the purposes of the Security
Documents;
"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 Owner 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;
"Commercial Management Agreement" means the agreement made or (as the
context may require) to be made between the Charterer and the
Commercial Manager in a form previously approved in writing by the
Agent providing (inter alia) for the Commercial Manager to commercially
manage the Ship;
"Commercial Manager" means Top Tanker Management Inc. of Trust Company
Complex, Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ or any other person appointed by the Charterer with the prior
written consent of the Agent as commercial manager of the Ship and
includes its successors in title;
"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;
"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;
"DOC" means a document of compliance issued to an Operator in
accordance with rule 13 of the Code;
"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 and Guarantee Facility 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 and Guarantee Facility Agreement (as conclusively
certified by the Mortgagee);
"Flag State" means the ▇▇▇▇▇▇▇▇ Islands or such other state or
territory acceptable to the Agent designated in writing by the Agent
(acting on the instructions of the Majority Banks), at the request of
the Owner, as being the "Flag State" of the Ship for the purposes of
the Security Documents;
"Guarantee" means the guarantee described in recital (B) above;
"Guarantee Amount" means any amount owing by the Guarantee Bank to the
Beneficiary under or pursuant to the Guarantee, which amount is
indemnified by the Owner in accordance with the Loan and Guarantee
Facility Agreement;
"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);
"ISM 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;
"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 and Guarantee Facility Agreement at any
relevant time;
"Loan and Guarantee Facility 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 General Assignment) or in such
other forms as may from time to time be required or agreed in writing
by the Mortgagee;
"Management Agreements" means the Commercial Management Agreement and
the Technical Management Agreement and "Management Agreement" means
either of them;
"Managers" means the Commercial Manager and the Technical Manager and
"Manager means either of them;
"Master Swap Agreement" means the 1992 ISDA Master Agreement made
between the Swap Provider and the Owner dated9 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 preferred mortgage 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 General Assignment), or in such other form
as may from time to time be required or agreed in writing by the
Mortgagee;
"Operating Account" means the interest bearing Dollar account of the
Owner opened or (as the context may require) to be opened with the
Account Bank and includes any sub-accounts thereof and any other
account designated in writing by the Agent to be the Operating Account
for the purposes of this Agreement;
"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 out in rule 1.1.2 of the Code;
"Outstanding Indebtedness" means the aggregate of the Loan and the
Guarantee Amount the Master Swap Agreement Liabilities, and interest
accrued and accruing thereon, the Expenses and all other sums of money
from time to time owing by the Owner to the Mortgagee and/or any of the
other Creditors, whether actually or contingently, present or future,
under or pursuant to the Loan and Guarantee Facility 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 Jurisdiction" means any jurisdiction in which or where any
Security Party is incorporated, resident, domiciled, has a permanent
establishment, carries on, or has a place of business or is otherwise
effectively connected;
"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 and Guarantee Facility Agreement,
this Deed, the Mortgage, the General Assignment, the Master Swap
Agreement, the Share Pledge, the Charter Guarantee and any other such
document as is defined in the Loan and Guarantee Facility 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, the Guarantee
Amount, any interest thereon, and the moneys from time to time owing by
the Owner pursuant to the Loan and Guarantee Facility Agreement and/or
the Master Swap Agreement Liabilities (whether or not such documents,
also secure moneys from time to time owing pursuant to any other
document or agreement);
"Security Parties" means, collectively, the Owner, the Managers, the
Charterer, or any other person who may at any time be a party to any of
the Security Documents (other than the Creditors and the Charter
Guarantor) and "Security Party" means any one of them;
"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;
"Shareholder" means Dongbuka No.27 Ship Investment Company of ▇▇▇▇-▇▇▇▇
▇▇▇-▇▇, ▇▇▇▇▇▇-▇▇,▇▇▇▇▇ , ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇;
"Share Pledge" means the pledge made or (as the context may require) to
be made between the Shareholder and the Agent (as security agent and
trustee on behalf of the Creditors) in substantially the form set out
in Schedule 17, of its rights, title and interest in and to all the
shares in the Owner;
"Ship" means the vessel m.v. "Priceless" registered as a ▇▇▇▇▇▇▇▇
Islands ship under Official Number 1598 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; and
"SMC" means a safety management certificate issued in respect of a Ship
in accordance with rule 13 of the ISM Code;
"Subsidiary" of a person means any company or entity directly or
indirectly controlled by such person, and for this purpose "control"
means either the ownership of more than 50% of the voting share capital
(or equivalent rights of ownership) of such company or entity or the
power to direct its policies and management, whether by contract or
otherwise;
"Technical Manager's Undertaking" means an undertaking and assignment
in relation to the Ship executed or (as the context may require) to be
executed by the Technical Manager in favour of the Agent (as security
agent and trustee on behalf of the Creditors);
"Technical Manager" means V. Ships Management Limited of Eaglehurst,
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇, ▇▇▇ ▇▇▇ or any other person
appointed by the Commercial Manager with the prior written consent of
the Agent as technical manager of the Ship and includes its successors
in title and assignees;
"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 and Guarantee Facility Agreement
As between the Owner and the Mortgagee, this Deed shall be read
together with the Loan and Guarantee Facility Agreement but in case of
any conflict between the two instruments, the provisions of the Loan
and Guarantee Facility 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 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 the ▇▇▇▇▇▇▇▇ Islands as a corporation and has
power to carry on its business as it is now being conducted and to own
its property and other assets;
2.1.2 Corporate power
it has power to execute, deliver and perform its obligations under the
Charter and such of the Security Documents to which it is, or is to be,
a party and has power to execute and deliver and perform its
obligations under the Charter Guarantee and the Security Documents, and
all necessary corporate, shareholder and other action has been taken to
authorise the execution, delivery and performance of the same;
2.1.3 Binding obligations
the Charter and the Security Documents to which it is, or is to be, a
party constitute or will, when executed, constitute its valid and
legally binding obligations enforceable in accordance with their
respective terms;
2.1.4 No conflict with other obligations
the execution and delivery of, the performance of its obligations
under, and compliance with the provisions of the Charter and the
Security Documents to which it is, or is to be, a party by it will not
(a) contravene, any existing applicable law, statute, rule or
regulation or any judgment, decree or permit to which it is subject, or
(b) contravene or conflict with any provision of its articles of
incorporation, by-laws, statutes or other 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 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 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 Charterers 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
articles of incorporation, by-laws, statutes or other constitutional
documents;
2.2.5 No filings required
it is not necessary to ensure the legality, validity, enforceability or
admissibility in evidence of 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 each of the Charter Guarantee and this Deed
are in proper form for its enforcement in the courts of each Relevant
Jurisdiction;
2.2.6 Choice of law
the choice of English law to govern 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 it to authorise, or required by it in connection
with, the execution, delivery, validity, enforceability or
admissibility in evidence of the Charter Guarantee and this Deed or the
performance by it 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 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 Creditors) and the
Owner that:
2.5 No withholding Taxes
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;
2.6 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, 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, the
Owner with full title guarantee hereby assigns and agrees to assign to
the Mortgagee (as security agent and trustee on behalf of the
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 Operating Account 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
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 and
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 Creditors) as a continuing security for the payment of
the Outstanding Indebtedness and the performance and observance of and
compliance with all of the covenants, terms and conditions contained in
the Security Documents, express or implied, and that the security so
created shall not be satisfied by any intermediate payment or
satisfaction of any part of the amount hereby and thereby secured (or
by any settlement of accounts between the Owner or any other person who
may be liable to the Mortgagee and/or the other Creditors in respect of
the Outstanding Indebtedness or any part thereof and the Mortgagee
and/or the other Creditors) and shall remain in full force and effect
until the Outstanding Indebtedness 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 other Creditors or any of them
any right or remedy of the Mortgagee and/or the other 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
other 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
other Creditors, by any invalidity in or irregularity or
unenforceability of the obligations of the Owner or any other person
under the Loan and Guarantee Facility 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 other Creditors fully indemnified against any loss suffered by
the Mortgagee and the other 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 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 other Creditors or
any of them under the Loan and Guarantee Facility 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 other Creditors or any of them may be
exercised from time to time and as often as the Mortgagee and/or the
other 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 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 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 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 or any other
person liable in respect of any Outstanding Indebtedness and/or the
Master Swap Agreement Liability; or
5.6.4 claim any set-off or counterclaim against the Owner or any other person
liable or claim or prove in competition with the Mortgagee and/or the
other Creditors or any of them in the liquidation of the Owner or any
other person liable or have the benefit of, or share in, any payment
from or composition with, the Owner or any other person liable or any
other Collateral Instrument now or hereafter held by the Mortgagee
and/or the other Creditors or any of them for the Outstanding
Indebtedness 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 in such manner as the
Mortgagee shall deem appropriate.
5.7 Suspense account
Any money 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 other Creditors' claims against the Owner or any
other person liable or may be applied in or towards satisfaction of the
Outstanding Indebtedness.
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 other Creditors or any of them by the Owner
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 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 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 Sub-chartering
it will not without the prior written consent of the Mortgagee sub-let
the Ship on demise charter for any period;
6.1.5 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 12.1 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;
6.1.6 Sister ship arrest
it will, in the event of the Ship at any time being arrested, seized,
detained or subjected to distress or levied upon by reason of any
process, claim or Encumbrance of whatsoever nature arising out of the
use or operation of the Ship by the Charterer or any of its agents,
employees or sub-charterers or any other vessel owned or operated or
managed by or chartered to the Charterer or any of its affiliates or
its or their agents, employees or charterers or sub-charterers, at its
own expense take prompt action to secure the release of the Ship and be
responsible for discharging each and every liability in connection with
any such process, claim or Encumbrance;
6.1.7 Sister ship indemnity
it will indemnify the Owner and the Mortgagee and the other Creditors
and hold each of them harmless against all liabilities of whatsoever
nature (including penalties claims demands orders or judgments) which
the Owner or the Mortgagee and/or the other Creditors or any of them
may suffer or incur in respect of the Ship and which arise out of the
use or operation of the Ship or of any other vessel owned or operated
or managed by or chartered to the Charterer or any of its affiliates or
its or their agents, employees or charterers or sub-charterers;
6.1.8 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;
6.1.9 Ship's name and registration (a) it will not change the name of the
Ship; (b) it will not do or suffer to be done anything, or omit to do
anything, the doing or omission of which could or might result in the
Ship not being eligible for registration under the laws and flag of the
Flag State on and after Delivery or result in such registration being
forfeited or imperilled or which could or might result in the Ship
being required to be registered otherwise than under the laws and flag
of the Flag State;
6.1.10 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;
6.1.11 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;
6.1.12 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
6.1.13 Notification of certain events
it will notify the Mortgagee forthwith by telex 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 General Undertakings
7.1 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, 7.2.2, 7.2.6
and 7.2.7 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 1.2.10) 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, for the first nine (9) months after the Drawdown Date, a
minimum amount of twenty million Dollars ($20,000,000) shall be
standing to the credit of the Charter Guarantor's Account and that for
the period commencing nine months after the Drawdown Date and ending on
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 at any time there
are no Encumbrances whatsoever existing over or in relation to such
minimum amounts;
7.2.2 ensure that an aggregate minimum amount of fifty million Dollars shall
at all times during the Security Period be standing to the credit of
accounts of the Charter Guarantor (including the Charter Guarantor's
Account) and the Charter Guarantor shall evidence compliance with the
terms of this clause at no later than three (3) monthly intervals
throughout the Security Period or otherwise promptly upon the
Mortgagee's first written request;
7.2.3 endeavour that any Excess Cash Flow in relation to the Ship will be
paid into the Charter Guarantor's Account;
7.2.4 provide details to the Agent at three (3) monthly intervals evidencing
the operating expenses and the Earnings of the Ship;
7.2.5 ensure that on the Drawdown Date, the minimum average length of time
that Fleet Vessels are employed on time charter for is eighteen months;
7.2.6 ensure that its Net Asset Value at all times exceeds $125,000,000; and
7.2.7 ensure that its Book Equity shall at all times exceed $75,000,000.
7.2.8 For the purpose of this clause 7.2 and clause 7.3, 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 not
being, in any such case, a revaluation of all the Group's fixed
assets in accordance with a valuation report from independent
valuers approved by the Mortgagee so long as any such revaluation
is carried out not more frequently than once every five years.
For the purposes of this paragraph (c) any increase in the book
value of any fixed asset resulting from its transfer by one
member of the Group to another member of the Group shall be
deemed to result from a writing up of its book value by way of
revaluation;
(d) excluding amounts set aside for taxation as at the date of such
balance sheet and making such adjustments as may be appropriate
in respect of any significant additional taxation expected to
result from transactions carried out by any member of the Group
after such date and not reflected in that balance sheet;
(e) deducting all amounts attributable to minority interests in
Subsidiaries;
(f) making such adjustments as may be appropriate in respect of any
variation in the amount of such paid up share capital or any such
reserves after the date of the relevant balance sheet (but so
that no such adjustment shall be made in respect of any variation
in profit and loss account except to the extent of any profit or
loss, calculated on a cumulative basis, recorded in the
consolidated profit and loss account of the Group delivered to
the Mortgagee before the date of this Deed, or under clause 7.1.1
in respect of any subsequent period);
(g) making such adjustments as may be appropriate in respect of any
distribution declared, recommended or made by any member of the
Group (otherwise than attributable directly or indirectly to the
Charter Guarantor) out of profits earned up to and including the
date of the latest audited balance sheet of that member of the
Group to the extent that such distribution is not provided for in
that balance sheet;
(h) making such adjustments as may be appropriate in respect of any
variation in the interests of the Charter Guarantor in its
Subsidiaries since the date of the latest published audited
consolidated balance sheet of the Group;
(i) if the calculation is required for the purpose of or in
connection with a transaction under or in connection with which
any company is to become or cease to be a Subsidiary of the
Charter Guarantor, making all such adjustments as would be
appropriate if that transaction had been carried into effect; and
(j) making such adjustments as may be appropriate in the opinion of
the Mortgagee in order that the above amounts are calculated in
accordance with the Original Accounting Principles;
"Earnings" means all earnings of the Ship payable under or pursuant to
any Time Charters entered into in relation to the ship, or else any
other 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 the aggregate
of the Charter Earnings and the operating expenses in relation to the
Ship;
"Finance Lease" means a lease treated as a finance lease pursuant to
the Applicable Accounting Principles.
"Fleet Vessels" means any vessels owned, or chartered on long-term
demise charter to any member of the Group;
"Group" means, together, the Charter Guarantor and its Subsidiaries and
"member of the Group" means any of them;
"Net Asset Value" means, at any relevant time, the amount in Dollars
resulting after deducting the Total Debt from the Total Market Value
Adjusted Assets, in either case at such time;
"Original Accounting Principles" means those accounting principles,
standards and practices which were used in the preparation of the
consolidated audited financial statements of the Group as at 31
December 2005, and for the year then ended and, to the extent that they
do not conflict with those principles, standards and practices, such
other accounting principles, standards and practices as were generally
acceptable in the United States of America on 31 December 2005;
"Total Debt" means the aggregate principal amount (including any fixed
or minimum premium payable on final repayment) of:
(a) moneys borrowed or raised by the Charter Guarantor and its
Subsidiaries;
(b) bonds, notes, loan stock, debentures, commercial paper or other
debt securities issued by the Charter Guarantor or any of its
Subsidiaries not for the time being beneficially owned by the
Charter Guarantor or any of its Subsidiaries;
(c) sums outstanding under acceptances by the Charter Guarantor or
any of its Subsidiaries or by any bank or acceptance house under
acceptance credits opened on behalf of the Charter Guarantor or
any Subsidiary;
(d) deferred indebtedness of the Charter Guarantor or any of its
Subsidiaries for payment of the acquisition or construction price
for assets or services acquired or constructed;
(e) rental payments under Finance Leases;
(f) receivables sold or discounted with a right of recourse to the
Charter Guarantor or any of its Subsidiaries;
(g) the nominal amount of any issued and paid up share capital (other
than equity share capital) of any Subsidiary not beneficially
owned by the Charter Guarantor or another Subsidiary;
(h) preference share capital redeemable prior to the last day of the
period of the Charter;
(i) indebtedness secured by any Encumbrance over all or any part of
the undertaking, property, assets, rights or revenues of the
Charter Guarantor or any of its Subsidiaries irrespective of
whether or not such indebtedness is supported by a personal
covenant on the part of the Charter Guarantor or any of its
Subsidiaries;
(j) indebtedness incurred in respect of swaps, forward exchange
contracts, futures or other derivatives;
(k) any other liability arising from a transaction having the
commercial effect of a borrowing or the raising of money;
(l) obligations under guarantees in respect of the obligations of any
other person which, if such person were the Charter Guarantor or
a Subsidiary, would fall within paragraphs (a) to (k) above,
PROVIDED THAT
(i) moneys owing by the Charter Guarantor to a Subsidiary or by
a Subsidiary to the Charter Guarantor or to another
Subsidiary shall not be taken into account;
(ii) the principal amount of Total Debt deemed to be outstanding
in relation to Finance Leases or hire purchase agreements
shall be the present value of the minimum lease or hire
payments discounted at the interest rate implicit in the
relevant lease or hire purchase agreement; and
"Total Market Value Adjusted Assets" means the aggregate of:
(a) the value (less depreciation computed in accordance with
generally accepted international accounting principles
consistently applied) on a consolidated basis of all tangible
fixed assets of the Group, as stated in the relevant consolidated
financial statements of the Group, but excluding any ships at the
relevant time owned by members of the Group which, for the
purposes of such consolidated financial statements, are included
in the consolidated tangible fixed assets of the Group (for the
purposes of clauses 7.2 and 7.3, the "Relevant Ships"); and
(b) the aggregate of the market value of the Relevant Ships, as such
market value shall have been most recently determined (as of the
date of the relevant calculation) pursuant to the provisions of
clause 7.3 of this Deed by means of valuations obtained by the
Mortgagee in accordance with the provisions of clause 7.3 of this
Deed (and not the value of the Relevant Ships as stated in the
relevant consolidated financial statements of the Group).
7.2.9 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.
7.2.10 The compliance of the Charter Guarantor with the covenants set out in
clauses 7.2.1, 7.2.2, 7.2.6 and 7.2.7 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, 7.2.2 and
7.2.7 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.
7.2.11 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 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 and 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
and Guarantee Facility Agreement); and
(B) such amount as will be at least equal to one hundred
and thirty per cent (130%) of the aggregate of the Loan
and the Guarantee Amount;
(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;
(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 5.1.1(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 (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 (g) 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 (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
(i);
(k) Collection of claims
to do all things necessary and provide all documents, evidence
and information to enable the Mortgagee to collect or recover any
moneys which shall at any time become due in respect of the
Insurances;
(l) Employment of Ship
not to employ the Ship or suffer the Ship to be employed
otherwise than in conformity with the terms of the Insurances
(including any warranties express or implied therein) without
first obtaining the consent of the insurers to such employment
and complying with such requirements as to extra premium or
otherwise as the insurers may prescribe;
(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 ▇▇▇▇▇▇▇▇ Islands 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 ▇▇▇▇▇▇▇▇ Islands 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 ▇▇▇▇▇▇▇▇ Islands 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 telex 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 Time Charter, not without the prior written consent of the
Mortgagee (which the Mortgagee shall have full liberty to withhold)
and, if such consent is given, only subject to such conditions as the
Mortgagee may impose, to let the Ship:
(a) on demise charter for any period;
(b) by any time or consecutive voyage charter for a term which
exceeds or which by virtue of any optional extensions therein
contained might exceed twelve (12) months' duration;
(c) on terms whereby more than two (2) months' hire (or the
equivalent) is payable in advance; or
(d) below the market rate prevailing at the time when the Ship is
fixed or other than on arms' length terms;
8.1.15 Sharing of Earnings
not without the prior written consent of the Mortgagee (and then only
subject to such conditions as the Mortgagee may impose) to enter into
any agreement or arrangement whereby the Earnings may be shared with
any other person;
8.1.16 Manager
not without the prior written consent of the Mortgagee to appoint a
manager of the Ship other than the Commercial Manager or the Technical
Manager, or terminate or amend the terms of the Management Agreements;
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 preferred mortgage in favour of [here
insert name of Mortgagee] of [here insert address of Mortgagee]. 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 Service 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, ail 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; and
8.1.20 Compliance with ISM 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
ISM 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;
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 in respect of such
Ship;
(b) immediately notify the Mortgagee in writing of any actual or
threatened withdrawal, suspension, cancellation or modification
of the ISSC in respect of the Ship;
(c) procure that the Ship will comply at all times with the ISPS
Code; and
8.1.24 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
Creditors) shall, without prejudice to its other rights, powers and
remedies under any of the Security Documents, be entitled (but not
bound) at any time, and as often as may be necessary, to take any such
action as it may in its discretion think fit for the purpose of
protecting or maintaining the security created by this Deed and the
other Security Documents, and all Expenses attributable thereto shall
be payable by the Owner on demand.
9.2 Remedy of defaults
Without prejudice to the generality of the provisions of clause 9.1:
9.2.1 if the Charterer fails to comply with any of the provisions of clause
8.1.1 the Mortgagee shall be entitled (but not bound) to effect and
thereafter to maintain all such insurances upon the Ship as in its
discretion it may think fit in order to procure the compliance with
such provisions or alternatively, to require the Ship (at the
Charterer's risk) to remain in, or to proceed to and remain in a port
designated by the Mortgagee until such provisions are fully complied
with;
9.2.2 if the Charterer fails to comply with any of the provisions of clauses
8.1.3, 8.1.5 or 8.1.6, the Mortgagee shall be entitled (but not bound)
to arrange for the carrying out of such repairs, changes or surveys as
it may deem expedient or necessary in order to procure the compliance
with such provisions; and
9.2.3 if the Charterer fails to comply with any of the provisions of clause
8.1.8 the Mortgagee shall be entitled (but not bound) to pay and
discharge all such debts, damages, liabilities and outgoings as are
therein mentioned and/or to take any such measures as it may deem
expedient or necessary for the purpose of securing the release of the
Ship in order to procure the compliance with such provisions,
and the Expenses attributable to the exercise by the Mortgagee of any
such powers shall be payable by the Owner to the Mortgagee on demand.
10 Powers of Mortgagee on Event of Default
10.1 Powers
Upon the happening of any Event of Default, the Mortgagee (as security
agent and trustee for and on behalf of the Creditors) shall become
forthwith entitled by notice given to the Owner in accordance with the
provisions of clause 10.2 of the Loan and Guarantee Facility Agreement,
or, as regards the Master Swap Agreement, in accordance with the
relevant terms of the Master Swap Agreement, to declare the Outstanding
Indebtedness to be due and payable immediately or in accordance with
such notice, whereupon the Outstanding Indebtedness 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 Creditors) in respect of:
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
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 be applied in the manner specified
in clause 13.1 of the Loan and Guarantee Facility Agreement 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 and 5.2 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 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 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
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 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 and/or any of the other Creditors
(as security agent and trustee for and on behalf of the Creditors) on
demand on a full indemnity basis all reasonable 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 other Creditors in connection with the enforcement of, or
preservation of any rights under, this Deed or otherwise in respect of
the Outstanding Indebtedness 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 other 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 other 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 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
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 Sale of Ship
16.1 Termination of Charter
Notwithstanding anything contained in the Charter, if and when the
Mortgagee becomes entitled to put into force and exercise all the
powers possessed by it as mortgagee of the Ship or otherwise pursuant
to the Mortgage or at any time thereafter, the Mortgagee shall be
entitled (but not bound) to determine the Charter at any time by notice
in writing to the Owner and the Charterer which notice shall operate to
determine 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
said notice to determine was given. Upon determination of the Charter
pursuant to this clause 16.1 hereof all liabilities whatsoever of the
Owner thereunder shall be absolutely discharged and extinguished.
16.2 Preservation of Owner's rights
If the circumstances in which the Mortgagee becomes entitled under
clause 16.1 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.
16.3 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:
16.3.1 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;
16.3.2 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
16.3.3 all expenses whatsoever incurred by the Mortgagee in or about such
remedial measures as may be undertaken on its behalf pursuant to clause
16.3.2 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.
16.4 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.
16.5 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.
16.6 Sale free of Charter
Without prejudice to clause 16.1, 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 and Guarantee Facility Agreement or the date
upon which the Loan is prepaid in full in accordance with clauses 4.3
and 4.5 of the Loan and Guarantee Facility 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 telex 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 telex or 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:
c/o Korea Marine Fund Corporation
▇▇▇, ▇▇▇▇▇ ▇▇▇▇., ▇, ▇▇▇▇▇▇ ▇-▇▇
▇▇▇▇▇▇-▇▇, ▇▇▇▇▇, ▇▇▇▇▇
Fax No. : ▇(▇▇▇) ▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇-▇▇▇▇ ▇▇▇
(b) to the Charterer at:
c/o Top Tanker Management Inc.
109-111 ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇ ▇▇▇▇▇▇
Fax no: + ▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇-▇
Attention Stamatis Tsantanis
(c) to the Mortgagee at:
Fortis Bank (Nederland) N.V.
▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Fax no: ▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇
Attention: Gees Kamphof
(d) to the Charter Guarantor at:
c/o Top Tanker Management Inc.
109-111 ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇ ▇▇▇▇▇▇
Fax no: + ▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇-▇
Attention: Stamatis Tsantanis
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 Charterer and the Charter Guarantor 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 Charterer and the Charter Guarantor irrevocably designate, appoint
and empower DLA ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ UK LLP at present of ▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (in 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 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) ▇▇▇ ▇▇▇▇
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 2006, KOMARF HOPE 27 Shipping
Company Limited (the "Owner") and by a Quadripartite Deed dated
▇▇▇▇, ▇▇▇▇▇▇▇ SHIPPING CO. LTD. of Trust Company
Complex, Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇ Islands
MH96960 (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
Creditors as herein defined (the "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.
"Priceless" 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 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 Creditors) or to its order.
(2) Protection and indemnity
Payment of any recovery which KOMARF HOPE 27 Shipping Company Limited
of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro,
▇▇▇▇▇▇▇▇ Islands MH96960 (the "Owner") or KISAVOS SHIPPING CO. LTD.
(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)
KOMARF HOPE 27 SHIPPING of Trust Company Complex, Ajeltake Road, Ajeltake
Island, Majuro, ▇▇▇▇▇▇▇▇ Islands MH96960 (the "Owner") and KISAVOS SHIPPING CO.
LTD (the "Charterer") of Trust Company Complex, Ajeltake Road, Ajeltake Island,
Majuro, ▇▇▇▇▇▇▇▇ Islands MH96960 the owners and demise charterers respectively
of the m.v. "Priceless" HEREBY GIVE NOTICE that by a General Assignment dated
2006 and entered into by the Owner with FORTIS BANK
(NEDERLAND) N.V. (the "Mortgagee") (as security agent and trustee for and on
behalf of the Creditors as herein defined (the "Creditors")) and by a
Quadripartite Deed dated 2006 and entered into by the Charterer and the Owner
with the Mortgagee (as security agent and trustee for and on behalf of the
Creditors), there has been assigned by us to the Mortgagee (as security agent
and trustee for and on behalf of the 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
KOMARF HOPE 27 Shipping Company Limited
Dated 2006
Signed
For and on behalf of
KISAVOS SHIPPING CO. LTD
Dated 2006
SIGNED, SEALED and DELIVERED as a )
DEED by Jun Hyung ▇▇▇ )
for and on behalf of ) /s/ Jun Hyung ▇▇▇
KOMARF HOPE 27 SHIPPING COMPANY ) ----------------------
pursuant to a Unanimous Written ) Authorized Signatory
Consent of Board of Directors and )
Sole Shareholder dated 9 March 2006 )
in the presence of:
Witness: /s/ ▇▇▇▇▇ ▇▇▇▇▇ Yu
Name: ▇▇▇▇▇ ▇▇▇▇▇ Yu
Address: ▇▇▇, ▇▇▇▇▇ ▇▇▇▇., ▇, ▇▇▇▇▇▇ ▇-▇▇,
▇▇▇▇▇▇-▇▇, ▇▇▇▇▇, 110-714
Occupation: Deputy General Manager, KOMARF
SIGNED, SEALED and DELIVERED as a )
DEED by )
for and on behalf of )
KISAVOS SHIPPING CO. LTD. ) ----------------------
pursuant to a power of attorney ) Attorney-in-Fact
dated 2006 )
in the presence of:
Witness:
Name:
Address:
Occupation:
SIGNED, SEALED and DELIVERED as a )
DEED by )
for and on behalf of )
KOMARF HOPE 27 SHIPPING COMPANY ) ----------------------
pursuant to a power of attorney ) Attorney-in-Fact
dated 2006 )
in the presence of:
Witness:
Name:
Address:
Occupation:
SIGNED, SEALED and DELIVERED as a )
DEED by Stamatis Tsantanis )
for and on behalf of ) /s/ C. Kamphof
KISAVOS SHIPPING CO. LTD ) ----------------------
pursuant to a power of attorney ) Attorney-in-Fact
dated 8 March 2006 )
in the presence of:
Witness: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Address: Top Tanker Management Inc.
109-111 Messogion ▇▇, ▇▇▇ ▇▇. ▇▇▇▇▇▇
Occupation: Advocate
SIGNED, SEALED and DELIVERED as a )
DEED by Stamatis Tsantanis )
for and on behalf of ) /s/ C. Kamphof
TOP TANKERS INC. ) ----------------------
pursuant to a power of attorney ) Attorney-in-Fact
dated 8 March 2006 )
in the presence of:
Witness: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Address: Top Tanker Management Inc.
109-111 Messogion ▇▇, ▇▇▇ ▇▇. ▇▇▇▇▇▇
Occupation: Advocate
SIGNED, SEALED and DELIVERED as a )
DEED by )
for and on behalf of )
FORTIS BANK (NEDERLAND) N.V. ) ----------------------
pursuant to a power of attorney ) Attorney-in-Fact
dated 2006 )
in the presence of:
Witness:
Name:
Address:
Occupation:
SIGNED, SEALED and DELIVERED as a )
DEED by Stamatis Tsantanis )
for and on behalf of )
TOP TANKERS INC. ) ----------------------
pursuant to a power of attorney ) Attorney-in-Fact
dated 8 March 2006 )
in the presence of:
Witness:
Name:
Address:
Occupation:
SIGNED, SEALED and DELIVERED as a )
DEED by Cees Kamphof )
for and on behalf of ) /s/ C. Kamphof
FORTIS BANK (NEDERLAND) N.V. ) ----------------------
pursuant to a power of attorney ) Attorney-in-Fact
dated 8 March 2006 )
in the presence of:
Witness: /s/ ▇.▇. Meyee
Name: ▇.▇. Meyee
Address: Cooloungelgs
3012 AE Rottendam
The Netherlands
Occupation: Secretary