EXHIBIT 10.3
CROWN CRUISES OF PANAMA, INC.
- and -
XXXXXX BANK PLC
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FIRST NAVAL MORTGAGE
- on the -
m.v. "CROWN DYNASTY"
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Xxxxxxxx Xxxxx & Temperley
Xxxxx Xxxxx
0 Xxxxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Tel: 0000 000 0000
Fax: 0000 000 0000
Ref: GFS/242921
INDEX OF CONTENTS
CLAUSE HEADING PAGE NO.
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1. Definitions..............................................................2
2. Owner's Covenant to Pay..................................................5
3. Mortgage.................................................................6
4. Owner's Covenants as to Insurance........................................7
5. Owner's Covenants as to Operation & Maintenance.........................12
6. Expenses................................................................17
7. Protection and Maintenance of Security..................................18
8. Events of Default.......................................................19
9. Enforcement of Rights...................................................19
10. Application of Moneys...................................................22
11. No Waiver...............................................................22
12. Power of Delegation.....................................................22
13. Power of Attorney.......................................................23
14. Further Assurance.......................................................23
15. Benefit.................................................................23
16. Amount Secured by Mortgage..............................................23
17. Notices.................................................................24
18. Governing Law, Severability, Etc. ......................................24
19. Miscellaneous...........................................................25
20. Recording of This Mortgage..............................................25
THIS FIRST NAVAL MORTGAGE is made the day 28th of January, 2000 by CROWN CRUISES
OF PANAMA, INC. a company incorporated under the laws of Panama with its
registered office at x/x Xxxxxxx Xxxxx & Xxxxx, Xxxxxx Xxxxx Xx. 00, Xxxxxxx
Xxxxxxxx Xxxx & Calle Xx. 00, Xxxx 0, 00 & 00, Xxxxxx, Xxxxxxxx of Panama ("the
Owner") in favour of XXXXXX BANK PLC a company incorporated under the laws of
Finland acting through its London branch having its principal place of business
at 00 Xxxxxx Xxxx Xxxxxx, Xxxxxx X0X 0XX ("the Trustee" which expression shall
include its successors and permitted assigns) as trustee for the Beneficiaries.
WHEREAS:-
(A) The Owner is the sole owner of the whole of the motor vessel named
"CROWN DYNASTY" built in Valencia, Spain at Union Naval de Levante duly
documented in the name of the Owner under the laws and flag of the
Republic of Panama under Provisional Patente of Navigation Number
22465-PEXT-5 having radio call letters in the international Code of
Signals 3FJX3 with a gross capacity in tons of 19,089 net capacity
in tons of 8,103 length of 140.08 meters breadth of 22.50 meters and
depth of 7.20 meters number of masts number of bridges
number of main decks and number of funnels .
(B) By a loan agreement dated the 24th day of January 2000 made between (1)
the Lenders (as therein defined), (2) Xxxxxx Bank Plc ("the Agent") as
agent for the Lenders, (3) the Owner and (4) the Trustee (hereinafter
as the same may from time to time be amended, varied or supplemented
called "the Loan Agreement") the Lenders have agreed to make available
to the Owner a revolving credit facility of up to forty five million
United States Dollars (USD45,000,000) at any one time ("the Loan" which
expression shall also mean where the context so requires the amount
thereof from time to time outstanding) on the terms and conditions
therein set forth. The Owner is as at the date hereof justly indebted
to the Lenders in the amount of the Loan repayable with interest
thereon on the terms and conditions hereinafter set out. A copy of the
form of the Loan Agreement in the form executed is attached hereto and
forms an integral part hereof.
(C) Pursuant to the terms and conditions of the Loan Agreement, the Owner
has drawn the maximum amount of the Loan.
(D) The Lenders agreed to advance the Loan on condition that the Owner
should execute
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and deliver to the Trustee such a first priority mortgage of the Vessel
as hereinafter appears.
(E) In fulfilment of the said condition and in order to secure the payment
to the Trustee and the Beneficiaries of the Outstanding Indebtedness
(as hereinafter defined) and the performance and observance of and
compliance with all the covenants terms and conditions in this Mortgage
contained expressed or implied the Owner has duly authorised the
execution and delivery of this Mortgage and is duly permitted to give
as security for the payment of the Outstanding Indebtedness and the
performance and observance of and compliance with all the said
covenants terms and conditions a first preferred mortgage on the Vessel
under and pursuant to the laws of the Republic of Panama.
(F) By a deed of agency and trust dated January 28, 2000 made between (1)
the Agent, (2) the Trustee and (3) the Lenders it has been agreed that
the benefit of this Mortgage shall be held by the Trustee on trust for
itself, the Agent and the Lenders and its and their respective
successors, assignees and transferees (together "the Beneficiaries").
NOW THIS MORTGAGE WITNESSETH AND IT IS HEREBY AGREED as follows:-
1. DEFINITIONS
1.1 In this Mortgage unless the context otherwise requires any term defined
in the preamble or recitals hereto has the meaning ascribed to it
therein and:-
"DEFAULT RATE"
means interest at the rate calculated in accordance with clause 4.3 of
the Loan Agreement;
"EVENT OF DEFAULT"
means any of the events set out in clause 8 hereof;
"INSURANCES"
means all policies and contracts of insurance (which expression
includes all entries of
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the Vessel in a protection and indemnity or war risks association)
which are from time to time taken out or entered into in respect of the
Vessel and her earnings or otherwise howsoever in connection with the
Vessel with the exception of mortgagees interest insurances;
"OUTSTANDING INDEBTEDNESS"
means the aggregate of all sums of money whatsoever now or in the
future actually or contingently due or owing to the Trustee and the
Beneficiaries under the Security Documents or any of them;
"PERSON"
includes any body of persons;
"REQUISITION COMPENSATION"
means all moneys or other compensation whatsoever payable by reason of
the requisition for title or other compulsory acquisition of the Vessel
(otherwise than by requisition for hire) or the capture, seizure,
arrest, detention or confiscation of the Vessel by any government or by
persons acting or purporting to act on behalf of any government;
"SECURITY DOCUMENTS"
means the Loan Agreement, this Mortgage and any other document as may
have been or may hereafter be executed to secure the Loan;
"SECURITY PERIOD"
means the period commencing on the date hereof and terminating upon
discharge of the security created by the Security Documents by
irrevocable payment in full of the Outstanding Indebtedness;
"TOTAL LOSS"
means:-
(i) actual or constructive or compromised or agreed or arranged
total loss of the Vessel; or
(ii) requisition for title or other compulsory acquisition of the
Vessel otherwise than by requisition for hire; or
(iii) capture, seizure, arrest, detention or confiscation of the
Vessel by any
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government or by persons acting or purporting to act on behalf
of any government unless the Vessel is released and restored
to the Owner from such capture, seizure, arrest or detention
within thirty (30) days after the occurrence thereof; and
"VESSEL"
means the vessel described in Recital (A) hereto and includes her
engines, machinery, boats, tackle, outfit, spare gear, fuel, consumable
or other stores, belongings and appurtenances whether on board or
ashore and whether now owned or hereafter acquired.
1.2 In clause 4.1(A) hereof:-
"EXCESS RISKS"
means the proportion of claims for general average and salvage charges
and under the ordinary running down clause not recoverable in
consequence of the value at which a vessel is assessed for the purpose
of such claims exceeding her insured value;
"PROTECTION AND INDEMNITY RISKS"
means the usual risks covered by associations that are members of the
International Group of P. & I. Associations including without
limitation pollution risks (whether relating to oil or otherwise
howsoever) and the proportion not recoverable in case of collision
under the ordinary running down clause; and
"WAR RISKS"
includes the risks of mines and all risks excluded from the standard
form of English marine policy by the free of capture and seizure
clause.
1.3 This Mortgage shall be read together with the Loan Agreement.
1.4 Clause headings are inserted for convenience of reference only and
shall be ignored in the interpretation of this Mortgage.
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2. OWNER'S COVENANT TO PAY
2.1 In consideration of the premises the Owner covenants with the Trustee
as follows:-
(A) to repay each Drawing at the time and in the manner specified
in clause 5 of the Loan Agreement;
(B) to pay interest on the Loan at the rate at the times and in
the manner specified in clause 4 of the Loan Agreement;
(C) to pay interest at the Default Rate (both before and after any
judgment) on any sum or sums payable under the Security
Documents which is not paid on the due date;
(D) to pay each and every other sum of money that may be or become
owing to the Beneficiaries or any of them under the terms of
the Security Documents or any of them at the times and in the
manner specified therein;
(E) to pay to and/or indemnify the Beneficiaries or any of them
for such additional amounts as may be necessary in order that
all payments under this Mortgage after deduction or
withholding for or on account of all present or future taxes
(other than corporate taxes on the overall net income of the
Beneficiaries or any of them) imposed by any competent
authority in any jurisdiction relative to the Owner shall be
no less than such payments would have been had there been no
such taxes; and
(F) to perform observe and comply with the obligations, covenants,
terms and conditions set out in this Mortgage.
2.2 Notwithstanding anything to the contrary contained in this clause 2 the
Outstanding Indebtedness shall become immediately payable on demand
upon the happening of any Event of Default.
3. MORTGAGE
3.1 In consideration of the premises and in order to secure by this
Mortgage the repayment of each Drawing plus interest at the rate set
forth in the Loan Agreement
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and the payment of all such other sums as may hereafter from time to
time and at any other time form part of the Outstanding Indebtedness
and to secure the performance and observance of and compliance with the
covenants terms and conditions herein contained, the Owner in
accordance with the provisions of Chapter V Title IV of Book Second of
the Code of Commerce of the Republic of Panama and of the pertinent
provisions of the Civil Code and other legislation of the Republic of
Panama hereby executes and constitutes a First Preferred Naval Mortgage
on the whole of the Vessel in favour of the Trustee (as trustee for the
Beneficiaries) to have and to hold the same unto the Trustee its
successors and assigns forever upon the terms herein set forth,
Provided Only and the condition of these presents is such that if the
Owner its successors and assigns shall pay or cause to be paid to the
Beneficiaries the Outstanding Indebtedness as and when the same shall
become due and payable in accordance with the terms of the Loan
Agreement and this Mortgage and shall observe and comply with the
covenants, terms and conditions in the Loan Agreement and this Mortgage
contained expressed or implied to be performed, observed or complied
with by and on the part of the Owner then these presents and the rights
hereunder shall cease determine and be void and the Trustee will, at
the request and cost of the Owner, execute a release in such form as
the Owner may reasonably require, of the security created by this
Mortgage.
3.2 It is declared and agreed that the security created by this Mortgage
shall be held by the Trustee 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 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 and that the security so created
shall be in addition to and shall not in any way be prejudiced or
affected by any collateral or other security now or hereafter held by
the Trustee for all or any part of the moneys hereby and thereby
secured and that every power and remedy given to the Trustee hereunder
shall be an addition to and not a limitation of any and every other
power or remedy vested in the Trustee under any of the other Security
Documents or at law and that all the powers so vested in the Trustee
may be exercised from time to time and as often as the Trustee may deem
expedient.
4. OWNER'S COVENANTS AS TO INSURANCE
4.1 The Owner covenants with the Trustee and undertakes throughout the
Security Period:-
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(A) at the Owner's expense to insure and keep the Vessel insured
in United States Dollars (or such other currency as the
Trustee may approve in writing) against (a) fire and usual
marine risks (including excess risks), (b) war risks, (c)
protection and indemnity risks, (d) oil pollution liability
risks in excess of the limit of cover for oil pollution
liability included within the protection and indemnity risks,
(e) loss of hire and (f) any other risks which the Trustee may
from time to time require;
(B) to effect the Insurances (a) generally in such amounts and
upon such terms as shall from time to time be approved in
writing by the Trustee, through such brokers (hereinafter
called "the approved brokers") and with such insurance
companies underwriters war risks and protection and indemnity
associations as shall from time to time be approved in writing
by the Trustee, and (b) in particular 01. (in respect of all
risks within the protection and indemnity insurances other
than oil pollution risks) in an unlimited amount, or (if
unlimited cover ceases to be available) in the maximum amount
available to the Owner for the Vessel in the market from time
to time; 02. (in respect of oil pollution liability risks
included within the protection and indemnity insurances) in
the maximum amount available to the Owner for the Vessel in
the market from time to time; and 03. (in respect of oil
pollution liability risks in excess of the limit of cover
included in the protection and indemnity insurances) in such
amount and upon such terms as the Trustee may from time to
time require;
(C) to renew the Insurances at least fourteen (l4) days before the
relevant policies or contracts expire and to procure that the
approved brokers shall promptly confirm in writing to the
Trustee as and when each such renewal is effected;
(D) punctually to pay premiums calls contributions or other sums
payable in respect of all the Insurances and to produce all
relevant receipts when so required by the Trustee;
(E) to arrange for the execution of such guarantees as may from
time to time be required by a protection and indemnity or war
risks association;
(F) to procure that the interests of the Trustee and the
Beneficiaries shall be duly endorsed upon all slips cover
notes policies certificates of entry or other
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instruments of insurance issued or to be issued in connection
with the Insurances and in particular, but without limitation,
if so required by the Trustee, (but without liability as
between the Owner and the Trustee for premiums or calls) to
procure that the Trustee be named as co-assured;
(G) to procure that all such instruments of insurance as are
referred to in sub-clause (F) above shall be deposited with
the Trustee (or with such other person as the Trustee may from
time to time direct) and that the approved brokers furnish the
Trustee with a letter or letters of undertaking in such form
as may be required by the Trustee;
(H) to procure that the protection and indemnity and/or war risks
associations wherein the Vessel is entered shall (if so
required by the Trustee) furnish the Trustee with a letter or
letters of undertaking in such form as may be required by the
Trustee;
(I) to operate and manage the Vessel or procure that the Vessel is
operated and managed strictly in conformity with the terms of
the instruments of insurance referred to in sub-clause (F)
above (including any warranties express or implied therein)
and in particular:
(i) to ensure that the Vessel's classification,
structure, operation and management are maintained
strictly in conformity with any warranty as to class,
structure, operation or management or any other
provision as to class, structure, operation or
management contained in the Insurances and to this
end to submit the Vessel or cause the Vessel to be
submitted to such periodical or other surveys as may
be required by the Vessel's classification society,
salvage association or otherwise howsoever not less
than fourteen (14) days before the date upon which
such surveys fall due;
(ii) promptly and fully to implement any and all
requirements or recommendations contained in any
report issued upon or following any of the surveys
referred to in sub-clause (i) above and promptly
after such surveys have been carried out to provide
evidence satisfactory to
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the Trustee that this has been done together with
confirmation from the relevant approved brokers that
the Vessel complies with such of the Insurances to
which such surveys are relevant;
(iii) (without prejudice to clauses 4.1(G) and (H) hereof)
to procure that the approved brokers furnish the
Trustee with a letter of undertaking in terms
satisfactory to the Trustee in which the approved
brokers undertake (inter alia) to give the Trustee
notice of any failure by the Owner to comply with any
warranty as to the Vessel's class or structure;
(iv) to comply strictly with the requirements of any
legislation relating to pollution or protection of
the environment which may from time to time be
applicable to the Vessel in any jurisdiction in which
the Vessel shall trade and in particular (if the
Vessel is to trade in the United States of America
and Exclusive Economic Zone (as defined in the Act))
to comply strictly with the requirements of the
United States Oil Pollution Act 1990 ("the Act") and
before any such trade is commenced and during the
entire period during which such trade is carried on:-
(a) to pay any additional premiums required to
maintain protection and indemnity cover for
oil pollution up to the limit available to
the Owner for the Vessel in the market;
(b) to make all such quarterly or other voyage
declarations as may from time to time be
required by the Vessel's protection and
indemnity association in order to maintain
such cover, and promptly to deliver to the
Trustee copies of such declarations;
(c) to submit the Vessel to such additional
periodic, classification, structural or
other surveys which may be required by the
Vessel's protection and indemnity insurers
to maintain cover for such trade and
promptly to deliver to the Trustee copies of
reports made in respect of such surveys;
(d) to implement any recommendations contained
in the reports issued following the surveys
referred to in sub-clause (c) above
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within the time limit specified therein, and
provide evidence satisfactory to the Trustee
that the protection and indemnity insurers
are satisfied that this has been done; and
(e) in addition to the foregoing (if such trade
is in the United States of America and
Exclusive Economic Zone):
(01) to obtain and retain a certificate
of financial responsibility under
the Act in form and substance
satisfactory to the United States
Coast Guard and to provide the
Trustee with a copy thereof;
(02) to procure that the protection and
indemnity insurances do not contain
a US Trading Exclusion Clause or any
other provision analogous thereto
and to provide the Trustee with
evidence that this is so; and
(03) strictly to comply with any
operational or structural
regulations issued from time to time
by any relevant authorities under
the Act so that at all times the
Vessel falls within the provisions
which limit strict liability under
the Act for oil pollution;
(v) before allowing the Vessel to enter or trade to any
zone which is declared a war zone or which is
rendered dangerous by reason of hostility in any part
of the world (whether war be declared or not) to
effect such special insurance cover as the Trustee
may require; and
(vi) to notify the Trustee forthwith by letter or in case
of urgency by telex of any requirement or
recommendation made by any insurer or classification
society which has not been complied with prior to
fourteen (14) days before the date by which it is
required to be complied with;
(J) to apply all sums receivable in respect of the Insurances as
are paid to the
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Owner for the purpose of making good the loss and fully
repairing all damage in respect whereof the insurance moneys
shall have been received;
(K) not to make any alteration which would or could reasonably be
expected to have a material adverse effect on the rights or
interest of the Trustee and/or the Beneficiaries to any of the
terms in any of the instruments of insurance referred to in
sub-clause (F) above which have been approved by the Trustee
and not to make, do, consent or agree to any act or omission
which would or might render any such instrument of insurance
invalid, void, voidable or unenforceable or render any sum
payable thereunder repayable in whole or in part;
(L) not without the prior approval of the Trustee to settle,
compromise or abandon any claim under the Insurances for Total
Loss or for a major casualty; and
(M) to indemnify the Trustee and the Beneficiaries fully forthwith
upon demand for any and all costs and expenses incurred by the
Trustee and/or the Beneficiaries from time to time:
(i) in effecting for the benefit of the Trustee and/or
the Beneficiaries in such amount, upon such terms,
through such insurance brokers and with such
insurance company or underwriter as the Trustee shall
in its sole discretion elect (i) a mortgagee's
interest insurance policy on the Vessel and (ii) an
insurance policy against the possible consequences of
pollution involving the Vessel, including without
limitation, the risk of expropriation or
sequestration of the Vessel, the imposition of a lien
or encumbrance of any kind having priority over this
Mortgage or a claim against the Vessel exceeding the
amount receivable in respect of pollution under the
Vessel's protection and indemnity insurances; and
(ii) in obtaining from time to time a report or reports on
the adequacy of the Insurances from an insurance
adviser appointed by the Trustee.
4.2 The Trustee shall be entitled from time to time to review the terms of
clause 4.1 hereof in order to provide for changes occurring after the
date of this Mortgage in
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legislation or circumstances affecting the Owner, the Vessel, the
Insurances, the laws of any jurisdiction or any other matters which the
Trustee deems relevant, and to modify its requirements in respect of
the Insurances in the light of such changes. Any such modification,
once notified in writing by the Trustee to the Owner shall be binding
on the Owner and take effect as an amendment to clause 4.1 hereof.
5. OWNER'S COVENANTS AS TO OPERATION & MAINTENANCE
5.1 The Owner covenants with the Trustee and undertakes throughout the
Security Period:-
(A) to keep the Vessel registered as a Panamanian ship and not to
do or suffer to be done anything whereby such registration may
be forfeited or imperilled;
(B) not (without the previous consent in writing of the Trustee)
to make any modification to the Vessel which would result in
any substantial change in the structure type or speed of the
Vessel;
(C) at all times to maintain and preserve the Vessel in good
working order and repair so as to maintain the highest class
available to vessels of her type and so that the Vessel is in
every respect seaworthy and in good operating condition and to
maintain and preserve the Vessel in such good working order
and condition as to comply with the requirements of the
Vessel's insurers and of the laws, regulations and
requirements (statutory or otherwise) from time to time
applicable to vessels registered under the laws and flag of
the Republic of Panama and if so required with the
requirements of the laws and government of any State colony
country province or dependency where the Vessel may trade and
to renew and replace all parts and appurtenances thereof when
and as they shall be worn out damaged lost or destroyed by
others of a similar nature and of at least equal quality;
(D) to permit the Trustee or to procure that the Trustee be
permitted by surveyors or other persons appointed by it in
that behalf to board the Vessel at all reasonable times for
the purpose of inspecting her condition and her class or other
records or for the purpose of satisfying themselves in regard
to proposed or executed repairs and to afford all proper
facilities for such inspections;
(E) to pay and discharge or to cause to be paid and discharged all
debts damages
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and liabilities whatsoever which have given or may give rise
to maritime or possessory liens on or claims enforceable
against the Vessel and in event of arrest of the Vessel
pursuant to legal process or in event of her detention in
exercise or purported exercise of any such lien as aforesaid
to procure the release of the Vessel from such arrest or
detention forthwith upon receiving notice thereof by providing
bail or otherwise as the circumstances may require;
(F) not to employ the Vessel or suffer her employment in any trade
or business which is forbidden by international law or is
otherwise illicit or in carrying illicit or prohibited goods
or in any manner whatsoever which renders her liable to
condemnation in a Prize Court or to destruction seizure or
confiscation and in event of hostilities in any part of the
world (whether war be declared or not) not to employ the
Vessel or suffer her employment in carrying goods which are or
may be declared contraband or to enter or trade to any zone
which is declared a war zone or which is rendered dangerous by
reason of such hostilities unless the Trustee shall have first
given its consent in writing;
(G) to take all reasonable precautions to prevent any
infringements of any anti drug legislation in any jurisdiction
in which the Vessel shall trade and in particular (if the
Vessel is to trade in the United States of America) to take
all reasonable precautions to prevent any infringements of the
Anti-Drug Abuse Act of 1986 of the United States of America
(as the same may be amended and/or re-enacted from time to
time hereafter) and for this purpose to enter into a "Carrier
Initiative Agreement" with the United States' Customs Service
and to procure that the same or a similar agreement is
maintained in full force and effect and that the Owner's
obligations thereunder are performed in respect of the Vessel;
(H) to comply with all laws, regulations, conventions and
agreements whatsoever applicable to the Vessel in any
jurisdiction in which the Vessel shall trade relating to
pollution or protection of the environment howsoever;
(I) promptly to furnish to the Trustee all such information as it
may from time to time reasonably require regarding the Vessel
her employment position and
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engagements particulars of all towages and salvages and copies
of all charters and other contracts for her employment or
otherwise howsoever concerning her;
(J) to notify the Trustee forthwith by letter or in case of
urgency by telex of:-
(i) any accident to the Vessel involving repairs the cost
whereof will or is likely to exceed one million five
hundred thousand United States Dollars (USD1,500,000)
(or the equivalent in any other currency);
(ii) any occurrence in consequence whereof the Vessel has
become or is likely to become a Total Loss;
(iii) any requirement or recommendation made by any
competent authority which has not been complied with
prior to fourteen (14) days before the date by which
it is required to be complied with; and
(iv) any arrest of the Vessel or the exercise or purported
exercise of any lien on the Vessel or her earnings;
(K) promptly to pay all tolls dues and other outgoings whatsoever
in respect of the Vessel and as and when the Trustee may so
require to furnish satisfactory evidence that the wages and
allotments and insurance and pension contributions of the
Master and crew are being regularly paid and that all
deductions from crew's wages in respect of any 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;
(L) not without the previous consent of the Trustee in writing
(which the Trustee shall have full liberty to withhold) to let
the Vessel:-
(i) on demise charter for any period;
(ii) by any time or consecutive voyage charter for a term
which exceeds or which by virtue of any optional
extensions therein contained is likely to exceed
Thirteen (l3) months' duration;
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(iii) on terms whereby more than Two (2) months' hire (or
the equivalent) is payable in advance; or
(iv) below the market rate prevailing at the time when the
Vessel is fixed;
(M) not without the previous consent in writing of the Trustee
(and then only subject to such terms as the Trustee may
impose) to mortgage charge or otherwise assign the Vessel or
any share therein or to suffer the creation of any such
mortgage charge or assignment to or in favour of any person
other than the Trustee;
(N) not without the previous consent in writing of the Trustee to
sell or agree to sell or otherwise dispose of the Vessel or
any share therein or change the flag of the Vessel;
(O) not to put the Vessel into the possession of any person for
the purpose of work being done upon her in an amount exceeding
or likely to exceed one million five hundred thousand United
States Dollars (USD1,500,000) (or the equivalent in any other
currency) unless:-
(i) in the case of damage repairs to the Vessel, the
Trustee is satisfied that the cost of such repairs
(other than any deductible) is covered by the
Insurances; or
(ii) in the case of a scheduled drydocking the Trustee is
satisfied that adequate financial provision has been
made for payment in respect thereof; or
(iii) the Trustee is satisfied that the person into whose
possession the Vessel is to be delivered has agreed
to waive any repairer's or similar possessory lien
for work carried out to the Vessel by such person;
(P) to keep proper books of account in respect of the Vessel and
her earnings and as and when required by the Trustee to make
such books available for inspection on behalf of the Trustee;
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(Q) to comply with all the requirements and formalities under any
applicable legislation of the Republic of Panama necessary to
perfect this Mortgage as a valid and enforceable first
preferred mortgage upon the Vessel and to furnish to the
Trustee from time to time such evidence as the Trustee may
reasonably request to satisfy itself with respect to the
Owner's compliance with the provisions of this sub-clause;
(R) to place and retain a copy of this Mortgage certified by the
appropriate Panamanian authorities with the Vessel's papers on
board the Vessel and any other certificates or other documents
required by law and to cause each such certified copy and such
papers to be brought to the attention of the master for the
time being of the Vessel and to be exhibited on demand to any
persons having business with the Vessel or to any
representative of the Trustee;
(S) to comply, or procure that the operator of the Vessel will
comply, with the International Management Code for the Safe
Operation of Ships and for Pollution Prevention adopted by the
International Maritime Organisation (as the same may be
amended from time to time) ("the ISM Code") or any replacement
of the ISM Code and in particular, without prejudice to the
generality of the foregoing, as and when required to do so by
the ISM Code and at all times thereafter, (i) to hold, or
procure that the operator of the Vessel holds, a valid
Document of Compliance (being a document issued to a vessel
operator as evidence of its compliance with the requirements
of the ISM Code) duly issued to the Owner or the operator (as
the case may be) pursuant to the ISM Code and a valid Safety
Management Certificate (being a document issued to a vessel as
evidence that the vessel operator and its shipboard management
operate in accordance with an approved structured and
documented system enabling the personnel of that vessel
operator to implement effectively the safety and environmental
protection policy of that vessel operator) duly issued to the
Vessel pursuant to the ISM Code, (ii) to provide the Trustee
with copies of any such Document of Compliance and Safety
Management Certificate as soon as the same are issued and
(iii) to keep, or procure that there be kept, on board the
Vessel a copy of any such Document of Compliance and the
original of any such Safety Management Certificate; and
(T) to procure that the Vessel (including, without limitation, all
computer systems,
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all systems and equipment containing embedded microchips
(including leased systems and equipment) and any other
systems, equipment or parts of the Vessel whatsoever whose
proper functioning or operation is capable of being affected
by the incorrect processing, storing, calculation or
recognition of dates, together with all software and data in
connection with any of the foregoing) shall at all times
comply with the requirements of Year 2000 Conformity as
defined in "A DEFINITION OF YEAR 2000 CONFORMITY REQUIREMENTS"
issued by the British Standards Institution (BSI DISC
PD2000-1:1998) or such later reviewed, revised or amended
version thereof as may be published by the British Standards
Institution from time to time (in which case the later version
shall be the relevant one for the purposes of this clause).
6. EXPENSES
6.1 The Owner undertakes to pay to the Trustee on demand all moneys
whatsoever which the Trustee and/or the Beneficiaries shall or may
expend be put to or become liable for in or about the protection
maintenance or enforcement of the security created by this Deed and the
other Security Documents or in or about the exercise by the Trustee
and/or the Beneficiaries of any of the powers vested in it or them
under this Deed or under any of the other Security Documents and to pay
interest thereon at the Default Rate from the date of demand until the
date of actual receipt (whether before or after any relevant judgment).
6.2 The Owner undertakes to pay on demand to the Trustee (or as it may
direct) the amount of all investigation and legal expenses of any kind
whatsoever stamp duties (if any) registration fees and any other
charges incurred by the Trustee and/or the Beneficiaries in connection
with the preparation completion and registration of the Security
Documents or otherwise in connection with the Outstanding Indebtedness
and the security therefor.
7. PROTECTION AND MAINTENANCE OF SECURITY
7.1 The Trustee shall without prejudice to its other rights and powers
hereunder be entitled (but not bound) at any time and as often as may
be necessary to take any such
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action as it may in its absolute discretion think fit for the purpose
of protecting the security created by this Deed and the other Security
Documents and each and every expense or liability so incurred by the
Trustee and/or the Beneficiaries in or about the protection of the
security shall be repayable to the Trustee by the Owner on demand
together with interest thereon at the Default Rate from the date of
demand until the date of actual receipt whether before or after any
relevant judgment.
7.2 Without prejudice to the generality of the foregoing:-
(A) if the provisions of clause 4.1 hereof or any of them are not
complied with the Trustee shall be at liberty to effect and
thereafter to maintain all such insurances upon the Vessel as
in its discretion it may think fit;
(B) if the provisions of clause 5.1(C) and 5.1(D) hereof or any of
them are not complied with the Trustee shall be at liberty to
arrange for the carrying out of such repairs and/or surveys as
it deems expedient or necessary; and
(C) if the provisions of clause 5.1(E) hereof or any of them are
not complied with the Trustee shall be at liberty to pay and
discharge all such debts, damages and
liabilities as are therein mentioned and/or to take any such
measures as it deems expedient or necessary for the purpose of
securing the release of the Vessel,
and each and every expense or liability so incurred by the Trustee
and/or the Beneficiaries shall be recoverable from the Owner as
provided in clause 7.1 hereof together with interest thereon at the
Default Rate.
8. EVENTS OF DEFAULT
8.1 Upon the happening of any of the following events the Lenders shall
cease to be under any further obligation to make the Loan available and
the Outstanding Indebtedness shall immediately become payable on
demand:-
(A) the happening of any of the events of default specified in
clause 11.1 of the Loan Agreement; or
(B) anything is done or suffered or omitted to be done by the
Owner which in the reasonable opinion of the Trustee has
imperilled or is likely to imperil the
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security created by the Security Documents.
9. ENFORCEMENT OF RIGHTS
9.1 Upon demand being made for payment of the Outstanding Indebtedness
under clause 8 hereof interest shall accrue thereon at the Default Rate
from the date of demand until the date of payment (as well after as
before judgment) and the security created by this Mortgage shall be
enforceable so that the Trustee shall be entitled as and when it may
see fit to put into force and exercise all the powers possessed by it
as mortgagee of the Vessel and in particular:-
(A) to exercise all rights and remedies in foreclosure and
otherwise given to mortgagees by the provisions of Article
1527 of the Code of Commerce and any other legislation or code
affecting the same;
(B) to bring suit at law in equity or in admiralty as it may be
advised to recover judgment for any and all amounts due
hereunder and collect the same out of any and all property of
the Owner whether covered by this Mortgage or otherwise;
(C) to take and enter into possession of the Vessel wherever the
same may be without legal process and (if it has acted in good
faith) without being responsible for loss or damage and the
Owner or other person in possession forthwith upon demand of
the Trustee shall surrender to the Trustee possession of the
Vessel and the Trustee, without being responsible for loss or
damage where it has acted in good faith may hold lay up lease
charter operate or otherwise use the Vessel for such time and
upon such terms as it may deem to be for its best advantage
and for that purpose may employ such agents managers masters
officers crews surveyors and servants as it shall think fit
and may repair and reclass the Vessel accounting only for the
net profits if any arising from such use and charging upon all
receipts from such use or from the sale of the Vessel by court
proceeds or pursuant to sub-clause (G) below all costs
expenses charges damages or losses by reason of such use and
if at any time the Trustee shall avail itself of the right
herein given it to take the Vessel and shall take her the
Trustee shall have the right to dock the Vessel for a
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reasonable time at any place at the cost and expense of the
Owner;
(D) to require that all policies contracts and other records
relating to the Insurances (including details of and
correspondence concerning outstanding claims) be forthwith
delivered to such adjusters and/or brokers and/or other
insurers as the Trustee may nominate;
(E) to collect recover compromise and give a good discharge for
all claims then outstanding or thereafter arising under the
Insurances or any of them and to take over or institute (if
necessary using the name of the Owner) all such proceedings in
connection therewith as the Trustee in its absolute discretion
thinks fit and to permit any brokers through whom collection
or recovery is effected to charge the usual brokerage
therefor;
(F) to discharge compound release or compromise liens and/or
claims in respect of the Vessel which have given or may give
rise to any charge or lien on the Vessel or which are or may
be enforceable by proceedings against the Vessel;
(G) without being responsible for loss or damage (if it has acted
in good faith) sell the Vessel at any place and at such time
as the Trustee may specify and in such manner and on such
terms and conditions as the Trustee may deem advisable free
from any claim by the Owner in admiralty in equity at law or
by statute except that notice of sale will be given by
publication in a newspaper of general circulation in the city
of Panama, Republic of Panama, not less than twenty (20)
calendar days in advance of the sale to satisfy the
requirement of notice of sale to the Owner and the other
registered mortgagees, if any, contained in Article 1527 of
the Panama Code of Commerce. Such notice shall be necessary
only in respect of the initial date of sale and should an
adjournment of the sale be deemed necessary, a new date, time
and place for the sale may be set by the Trustee at the time
of the adjournment without need for any further notice. In the
event that the Vessel is sold under any power contained herein
the Owner will if and when required by the Trustee execute
such form of conveyance of the Vessel as the Trustee may
direct or approve; and
(H) to manage insure maintain and repair the Vessel and to employ
sail or lay up the Vessel in such manner and for such period
as the Trustee in its discretion deems expedient and for the
purposes aforesaid the Trustee shall be entitled to
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do all acts and things incidental or conducive thereto and
in particular to enter into such arrangements respecting the
Vessel her insurance management maintenance repair
classification and employment in all respects as if the
Trustee were the owner of the Vessel and without being
responsible for any loss thereby incurred in the absence of
gross negligence or wilful default on the part of the Trustee,
Provided always that upon any sale of the Vessel or any share therein
by the Trustee pursuant to sub-clause (G) above the purchaser shall not
be bound to see or enquire whether the Trustee's power of sale has
arisen in the manner herein provided and the sale shall be deemed to be
within the power of the Trustee and the receipt of the Trustee for the
purchase money shall effectively discharge the purchaser who shall not
be concerned with the manner of application of the proceeds of sale or
be answerable therefor in any way.
10. APPLICATION OF MONEYS
10.1 All moneys received by the Trustee in respect of a sale of the Vessel
or any share therein or otherwise pursuant to the provisions of this
Mortgage and all moneys received and retained by the Trustee in respect
of the Insurances and Requisition Compensation pursuant to this
Mortgage shall be applied by the Trustee in accordance with the
relevant provisions of clause 10 of the Loan Agreement.
11. NO WAIVER
11.1 No delay or omission of the Trustee or the Beneficiaries to exercise
any right or power vested in it or them under the Security Documents or
any of them shall impair such right or power or be construed as a
waiver of or an acquiescence in any default by the Owner and no express
waiver given by the Trustee and/or the Beneficiaries in relation to any
default by the Owner or breach by the Owner of any of its obligations
under this Mortgage shall prejudice the right of the Trustee under this
Mortgage arising from any subsequent default or breach (whether or not
such subsequent default or breach is of a nature different from the
previous default or breach) nor shall the giving by the Trustee and/or
the Beneficiaries of any consent to the doing of any act which by the
terms of this Mortgage requires the consent of the Trustee prejudice
the
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right of the Trustee to give or withhold as it sees fit is consent to
the doing of any other similar act.
12. POWER OF DELEGATION
12.1 The Trustee 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 Security Documents or any of them (including the power
vested in it by virtue of clause 13 hereof) in such manner upon such
terms and to such persons as the Trustee in its absolute discretion may
think fit.
13. POWER OF ATTORNEY
13.1 The Owner irrevocably appoints the Trustee as its attorney for the
duration of the Security Period for the purpose of doing in its name
all acts which the Owner itself could do in relation to the Vessel,
Provided However that such power shall not be exercisable by or on
behalf of the Trustee unless the security created by this Mortgage has
become enforceable pursuant to clause 9 hereof.
13.2 The exercise of such power by or on behalf of the Trustee shall not put
any person dealing with the Trustee upon any enquiry as to whether the
security created by this Mortgage has become enforceable pursuant to
clause 9 hereof nor shall such person be in any way affected by notice
that the security has not become enforceable and the exercise by the
Trustee of such power shall be conclusive evidence of its right to
exercise the same.
14. FURTHER ASSURANCE
14.1 The Owner further undertakes at its own expense to execute sign perfect
do and (if required) register every such further assurance document act
or thing as in the opinion of the Trustee may be necessary or desirable
for the purpose of more effectually mortgaging and charging the Vessel
or perfecting the security constituted by this Mortgage or contemplated
by the other Security Documents.
15. BENEFIT
15.1 The Owner hereby acknowledges and agrees that the benefit of this
Mortgage shall be held by the Trustee on trust for the Beneficiaries
and the Owner hereby covenants that
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this Mortgage shall remain in full force and effect and shall fully
secure all the Beneficiaries.
16. AMOUNT SECURED BY MORTGAGE
16.1 A certificate submitted by the Trustee to the Public Registry Office in
Panama or to any court of law or public authority as to the amount due
or to become due from the Owner under this Mortgage shall in the
absence of manifest error be conclusive and binding on the Owner for
all purposes.
17. NOTICES
17.1 The provisions of clause 18 of the Loan Agreement shall apply mutatis
mutandis in respect of any certificate, notice or demand given or made
under this Mortgage.
18. GOVERNING LAW, SEVERABILITY, ETC.
18.1 This Mortgage shall be construed and enforceable in accordance with the
laws of the Republic of Panama.
18.2 The Owner agrees that the Trustee shall have liberty but shall not be
obliged to take any proceedings in the courts of any country to protect
or enforce the security hereby constituted or to enforce any provisions
of the Security Documents or to recover payment of the Outstanding
Indebtedness and for the purpose of any proceeding for the enforcement
of the security created by this Mortgage and/or the other Security
Documents the Owner hereby submits to the jurisdiction of the courts of
any country of the choice of the Trustee.
18.3 If any provision in this Mortgage or any other of the Security
Documents is or becomes invalid or unenforceable under any applicable
law the provisions thereof shall in all other respects remain in full
force and effect and the provision in question shall be ineffective to
the extent (but only to the extent) of its nonconformity with the
requirement of the applicable law and if it is competent to the parties
to waive any requirements which would otherwise operate as aforesaid
those requirements are hereby waived to the extent permitted by such
law to the end that the Mortgage and the other Security Documents shall
be valid binding and enforceable in accordance
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with their respective terms.
18.4 Each and every power and remedy herein given to the Trustee shall be
cumulative and shall be in addition to every other power and remedy
herein given or now or hereafter existing at law in equity admiralty or
by statute and each and every power and remedy whether herein given or
otherwise existing may be exercised from time to time and as
often and in such order as may be deemed expedient by the Trustee and
the exercise or the beginning of the exercise of any power or remedy
shall not be construed to be a waiver of the right to exercise at the
same time or thereafter any other power or remedy.
19. MISCELLANEOUS
19.1 This Mortgage may be executed in any number of counterparts each of
which shall be an original but such counterparts shall together
constitute but one and the same instrument.
19.2 The English text of this Mortgage is the authentic text and in the
event of any differences arising on translation recourse shall be had
to the English text.
20. RECORDING OF THIS MORTGAGE
20.1 The parties hereby confer a special power of attorney on the firm of
lawyers named Xxxxxxx & Associates of the City of Panama in the
Republic of Panama empowering such firm of lawyers to take all
necessary steps to record this instrument of mortgage and the
prohibitions contained in clauses 5.1(M) and (N) hereof and a
certificate pursuant to clause 15 hereof in the appropriate registries
in the City of Panama in accordance with the laws of the Republic of
Panama with full power of substitution in respect of the special power
of attorney herein granted.
IN WITNESS whereof this Mortgage has been executed the day and year first above
written.
SIGNED SEALED and DELIVERED )
as a DEED )
by CROWN CRUISES OF PANAMA, INC. )
acting by )
/s/ Xxxxxxx X. Xxxxxx )
---------------------------------------
its duly appointed )
)
in the presence of:- )
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ACCEPTANCE OF MORTGAGE
The Undersigned mortgagee XXXXXX BANK PLC a corporation organised and subsisting
under the laws of Finland Does Hereby Accept the foregoing Mortgage executed in
its favour by CROWN CRUISES OF PANAMA, INC. a corporation incorporated according
to the laws of Panama on the 29th day of October, 1999 covering the Panamanian
flag Vessel m.v. "CROWN DYNASTY" and does hereby accept the said Mortgage in all
respects and agrees to all terms and conditions of the said Mortgage
Dated the 28th day of January Two thousand.
SIGNED SEALED and DELIVERED )
as a DEED )
by XXXXXX BANK PLC )
acting by )
/s/ Xxxxxxx Xxxxxx Xxxxxx )
---------------------------------------
its duly appointed )
Attorney )
in the presence of:- )
