EXHIBIT 10.9
CROWN CRUISES OF PANAMA, INC.
- and -
EFF-SHIPPING LIMITED
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THIRD 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/243417
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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.................................................................18
7. PROTECTION AND MAINTENANCE OF SECURITY...................................18
8. EVENTS OF DEFAULT........................................................19
9. ENFORCEMENT OF RIGHTS....................................................20
10. APPLICATION OF MONEYS....................................................22
11. NO WAIVER................................................................22
12. POWER OF DELEGATION......................................................23
13. POWER OF ATTORNEY........................................................23
14. FURTHER ASSURANCE........................................................23
15. AMOUNT SECURED BY MORTGAGE...............................................24
16. NOTICES..................................................................24
17. GOVERNING LAW, SEVERABILITY, ETC. .......................................24
18. MISCELLANEOUS............................................................25
19. RECORDING OF THIS MORTGAGE...............................................25
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THIS THIRD NAVAL MORTGAGE is made the 28th day 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 EFF-SHIPPING LIMITED. a company incorporated under the laws
of the Cayman Islands with its registered office at the offices of Huntlaw
Corporate Services Ltd., The Huntlaw Building, PO Box 1350, Xxxxxx Town, Grand
Cayman, Cayman Islands ("the Mortgagee" which expression shall include its
successors and permitted assigns).
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 Mortgagee and (2) the Owner (hereinafter as the same may from time
to time be amended, varied or supplemented called the "Loan Agreement")
the Mortgagee has agreed to make available to the Owner a loan of
twenty four million four hundred and eighty thousand United States
Dollars (USD24,480,000) (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 Mortgagee 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 whole of the Loan in a single amount.
(D) The Mortgagee agreed to advance the Loan on condition that the Owner
should
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execute and deliver to the Mortgagee such a third priority mortgage of
the Vessel as hereinafter appears.
(E) In fulfilment of the said condition and in order to secure the payment
to the Mortgagee 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 third
preferred mortgage on the Vessel under and pursuant to the laws of the
Republic of Panama.
(F) By first and second preferred mortgages of even date herewith ("the
Prior Mortgages") the Owner has mortgaged the Vessel in favour of
Xxxxxx Bank Plc ("the Prior Mortgagee") as trustee for itself and
others.
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 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
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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 Mortgagee 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 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
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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.
2. OWNER'S COVENANT TO PAY
2.1 In consideration of the premises the Owner covenants with the Mortgagee
as follows:-
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(A) to repay the Loan to the Mortgagee by the instalments at the
times and in the manner specified in clause 5 of the Loan
Agreement;
(B) to pay interest on the Loan to the Mortgagee 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 to the Mortgagee (both
before and after any judgment) on any sum or sums payable
under the Security Documents which is not paid to the
Mortgagee on the due date;
(D) to pay each and every other sum of money that may be or become
owing to the Mortgagee 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 Mortgagee 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 Mortgagee) 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
Owner shall be entitled to prepay the Loan in whole or in part in
accordance with the provisions of clause 6.3 of the Loan Agreement.
2.3 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
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repayment to the Mortgagee of the Loan plus interest at the rate set
forth in the Loan Agreement 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
Third Preferred Naval Mortgage on the whole of the Vessel in favour of
the Mortgagee subject to the rights of the Prior Mortgagee under the
Prior Mortgages to have and to hold the same unto the Mortgagee 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
Mortgagee its successors or assigns 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
Mortgagee 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 Mortgagee 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 Mortgagee for all or any part of the moneys hereby and thereby
secured and that every power and remedy given to the Mortgagee
hereunder shall be an addition to and not a limitation of any and every
other power or remedy vested in the Mortgagee under any of the other
Security Documents or at law and that all the powers so vested in the
Mortgagee may be exercised from time to time and as often as the
Mortgagee may deem expedient.
4. OWNER'S COVENANTS AS TO INSURANCE
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4.1 The Owner covenants with the Mortgagee and undertakes throughout the
Security Period:-
(A) at the Owner's expense to insure and keep the Vessel insured
in United States Dollars (or such other currency as the
Mortgagee 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 Mortgagee
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 Mortgagee, 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 Mortgagee, 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 Mortgagee 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
Mortgagee 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 Mortgagee;
(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;
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(F) to procure that the interests of the Mortgagee shall be duly
endorsed upon all slips cover notes policies certificates of
entry or other instruments of insurance issued or to be issued
in connection with the Insurances and in particular, but
without limitation, if so required by the Mortgagee, (but
without liability as between the Owner and the Mortgagee for
premiums or calls) to procure that the Mortgagee be named as
co-assured;
(G) subject to the rights of the Prior Mortgagee under the Prior
Mortgages to procure that all such instruments of insurance as
are referred to in sub-clause (F) above shall be deposited
with the Mortgagee (or with such other person as the Mortgagee
may from time to time direct) and that the approved brokers
furnish the Mortgagee with a letter or letters of undertaking
in such form as may be required by the Mortgagee;
(H) subject to the rights of the Prior Mortgagee under the Prior
Mortgages to procure that the protection and indemnity and/or
war risks associations wherein the Vessel is entered shall (if
so required by the Mortgagee) furnish the Mortgagee with a
letter or letters of undertaking in such form as may be
required by the Mortgagee;
(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;
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(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 the Mortgagee 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)
subject to the rights of the Prior Mortgagee under
the Prior Mortgages to procure that the approved
brokers furnish the Mortgagee with a letter of
undertaking in terms satisfactory to the Mortgagee in
which the approved brokers undertake (inter alia) to
give the Mortgagee 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
Mortgagee copies of such declarations;
(c) to submit the Vessel to such additional
periodic, classification,
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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
Mortgagee 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 within
the time limit specified therein, and
provide evidence satisfactory to the
Mortgagee 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
Mortgagee 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 Mortgagee 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 Mortgagee
may require; and
(vi) to notify the Mortgagee 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
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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 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 Mortgagee 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 Mortgagee 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 Mortgagee to settle,
compromise or abandon any claim under the Insurances for Total
Loss or for a major casualty; and
(M) to indemnify the Mortgagee fully forthwith upon demand for any
and all costs and expenses incurred by the Mortgagee from time
to time:
(i) in effecting for the benefit of the Mortgagee in such
amount, upon such terms, through such insurance
brokers and with such insurance company or
underwriter as the Mortgagee 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 Mortgagee.
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4.2 The Mortgagee 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 legislation or circumstances affecting the
Owner, the Vessel, the Insurances, the laws of any jurisdiction or any
other matters which the Mortgagee 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 Mortgagee 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 Mortgagee 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 Mortgagee)
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 Mortgagee or to procure that the Mortgagee 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
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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 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 Mortgagee 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
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relating to pollution or protection of the environment
howsoever;
(I) promptly to furnish to the Mortgagee all such information as
it may from time to time reasonably require regarding the
Vessel 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
her;
(J) to notify the Mortgagee 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 Mortgagee 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 Mortgagee in writing
(which the Mortgagee 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
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which by virtue of any optional extensions therein
contained is likely to exceed Thirteen (l3) months'
duration;
(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 Mortgagee
(and then only subject to such terms as the Mortgagee 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 Mortgagee;
(N) not without the previous consent in writing of the Mortgagee
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
Mortgagee 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 Mortgagee
is satisfied that adequate financial provision has
been made for payment in respect thereof; or
(iii) the Mortgagee 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;
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(P) to keep proper books of account in respect of the Vessel and
her earnings and as and when required by the Mortgagee to make
such books available for inspection on behalf of the
Mortgagee;
(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 third
preferred mortgage upon the Vessel and to furnish to the
Mortgagee from time to time such evidence as the Mortgagee 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 Mortgagee;
(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 Mortgagee
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
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Certificate; and
(T) to procure that the Vessel (including, without limitation, all
computer systems, 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 Mortgagee on demand all moneys
whatsoever which the Mortgagee 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 Mortgagee of any of the powers vested in it
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 Mortgagee (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 Mortgagee 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 Mortgagee shall without prejudice to its other rights and powers
hereunder be
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entitled (but not bound) at any time and as often as may be necessary
to take any such 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 Mortgagee in or about the protection of the security
shall be repayable to it 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 Mortgagee 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 Mortgagee 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 Mortgagee 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 Mortgagee
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 Mortgagee shall
cease to be under any further obligation to make the Loan available and
the Outstanding Indebtedness shall immediately become payable to the
Mortgagee 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
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reasonable opinion of the Mortgagee has imperilled or is
likely to imperil the security created by the Security
Documents.
9. ENFORCEMENT OF RIGHTS
9.1 Upon the Mortgagee's demanding 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 Mortgagee, subject to the rights of the Prior
Mortgagee under the Prior Mortgages, 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 Mortgagee shall surrender to the Mortgagee possession of
the Vessel and the Mortgagee, 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 Mortgagee shall avail
itself of the right herein given it to take
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the Vessel and shall take her the Mortgagee shall have the
right to dock the Vessel for a 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 Mortgagee 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 Mortgagee 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 Mortgagee may specify and in such manner and on such
terms and conditions as the Mortgagee 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 Mortgagee 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 Mortgagee execute
such form of conveyance of the Vessel as the Mortgagee may
direct or approve; and
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(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 Mortgagee in its discretion deems expedient and for the
purposes aforesaid the Mortgagee shall be entitled to 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
Mortgagee 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
Mortgagee,
Provided Always that upon any sale of the Vessel or any share therein
by the Mortgagee pursuant to sub-clause (G) above the purchaser shall
not be bound to see or enquire whether the Mortgagee's power of sale
has arisen in the manner herein provided and the sale shall be deemed
to be within the power of the Mortgagee and the receipt of the
Mortgagee 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 Mortgagee 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 Mortgagee in
respect of the Insurances and Requisition Compensation pursuant to this
Mortgage shall be applied by the Mortgagee in accordance with the
relevant provisions of clause 10 of the Loan Agreement.
11. NO WAIVER
11.1 No delay or omission of the Mortgagee to exercise any right or power
vested in it 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
Mortgagee 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 Mortgagee 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 Mortgagee of any consent to the doing of any act
which by the terms of this Mortgage requires the consent of the
Mortgagee prejudice the right of the Mortgagee to give or withhold as
it sees fit is
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consent to the doing of any other similar act.
12. POWER OF DELEGATION
12.1 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 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 Mortgagee in its absolute discretion
may think fit.
13. POWER OF ATTORNEY
13.1 The Owner irrevocably appoints the Mortgagee 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 Mortgagee unless the security created by this Mortgage
has become enforceable pursuant to clause 9 hereof and shall in any
event be subject to the rights of the Prior Mortgagee under the Prior
Mortgages.
13.2 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 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 Mortgagee 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 Mortgagee 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. AMOUNT SECURED BY MORTGAGE
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15.1 A certificate submitted by the Mortgagee 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 to the Mortgagee under this
Mortgage shall in the absence of manifest error be conclusive and
binding on the Owner for all purposes.
16. NOTICES
16.1 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.
17. GOVERNING LAW, SEVERABILITY, ETC.
17.1 This Mortgage shall be construed and enforceable in accordance with the
laws of the Republic of Panama.
17.2 The Owner agrees that the Mortgagee 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 Mortgagee.
17.3 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 with their respective
terms.
17.4 Each and every power and remedy herein given to the Mortgagee 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
- 26 -
time and as often and in such order as may be deemed expedient by the
Mortgagee 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.
18. MISCELLANEOUS
18.1 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.
18.2 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.
19. RECORDING OF THIS MORTGAGE
19.1 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 EFF-SHIPPING LIMITED a corporation organised and
subsisting under the laws of the Cayman Islands 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 EFF-SHIPPING LIMITED )
acting by )
/s/ Per Xxxxx Skult )
---------------------------------------
its duly appointed )
Attorney )
in the presence of:- )
