[Draft--07/22/98]
[FORM OF LIBERIAN MORTGAGE]
FIRST PREFERRED SHIP MORTGAGE
ON THE
LIBERIAN FLAG VESSEL
M/V [NAME OF VESSEL]
GRANTED BY ___________________________, AS SHIPOWNER
IN FAVOR OF
THE FIRST NATIONAL BANK OF MARYLAND, AS
COLLATERAL AGENT, TRUSTEE AND MORTGAGEE
ON
______, 19__
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TABLE OF CONTENTS
Page
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WHEREAS................................................................. 1
ARTICLE I.
Covenants of the Shipowner
Section 1: Acknowledgment of Debt............................... 4
Section 2: Organization of Shipowner............................ 4
Section 3: No Existing Liens.................................... 4
Section 4: Preferred Mortgage under
Liberian Law....................................... 5
Section 5: No Unlawful Operation................................ 5
Section 6: Payment of Taxes, etc................................ 5
Section 7: No Power To Create Liens............................. 6
Section 8: Notice of Mortgage................................... 6
Section 9: Discharge of Liens,
Encumbrances, etc.................................. 6
Section 10: Libel................................................ 7
Section 11: Vessel Condition..................................... 7
Section 12: Provision of Information and
Documents.......................................... 8
Section 13: No Transfer of Flag; Sale;
Charter............................................ 9
Section 14: Insurance............................................ 9
Section 15: Reimbursement for Expenses........................... 14
Section 16: Performance of Charter............................... 14
Section 17: Event of Loss........................................ 14
Section 18: Financing Statements................................. 15
Section 19: Incorporation by Reference........................... 15
Section 20: Requisition of Title................................. 15
ARTICLE II.
Events of Default and Remedies
Section 1: Events of Default.................................... 16
Section 2: Sale Divests Title................................... 18
Section 3: Mortgagee's Power of
Attorney-Sales..................................... 18
Section 4: Mortgagee's Power of
Attorney-Collection................................ 18
Section 5: Mortgagee Power of
Attorney-Discharge of Liens........................ 19
Section 6: Delivery of Vessel................................... 19
Section 7: Indemnification...................................... 19
Section 8: Every Power Cumulative............................... 20
Section 9: Cure of Defaults..................................... 20
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Page
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Section 10: Restoration............................................ 21
Section 11: Distribution of Proceeds................................. 21
Section 12: Quiet Enjoyment.......................................... 21
Section 13: No Waiver of Preferred Status............................ 21
Section 14: Venue.................................................... 22
ARTICLE III.
Sundry Provisions
Section 1: Binding on Successors.................................... 23
Section 2: Exercise by Agents....................................... 23
Section 3: Notices.................................................. 23
Section 4: Titles and Section Headings.............................. 24
Section 5: Recording Clause......................................... 24
Exhibit A: Indenture
Exhibit B: Working Capital Facility Agreement
Exhibit C: Working Capital Guarantee
Exhibit D: Collateral Agency Agreement
FIRST PREFERRED SHIP MORTGAGE
M/V
FIRST PREFERRED MORTGAGE, made the _____ day of ____, 19___ by
________________, a corporation organized and existing under the laws of
_______________ (herein called the "Shipowner"), having its principal place of
business at ____________________ in favor of The First National Bank of
Maryland, a national banking association organized and existing under the laws
of the United States, as Collateral Agent and Trustee (herein called the
"Mortgagee") under a Collateral Agency and Intercreditor Agreement dated as of
July 15, 1998, (the "Collateral Agency Agreement") by and among the Mortgagee,
The First National Bank of Maryland, not in its individual capacity but as
trustee (the "Trustee") under the Indenture (as defined), The Bank of New York
(the "Working Capital Facility Provider"), the Shipowner, certain other
Subsidiary Guarantors (as defined in the Collateral Agency Agreement) and
Millenium Seacarriers, Inc. (the "Issuer");
WHEREAS:
A. The Shipowner is the sole owner of the whole of the motor
vessel ______________, more fully described in the Granting Clause below.
B. The Issuer has issued One Hundred Million United States
Dollars (U.S. $100,000,000) representing 100,000 units (the "Units"), each Unit
consisting of $1,000 principal amount at maturity of its 12% First Priority Ship
Mortgage Notes Due 2005 (the "Notes") and one warrant to purchase five shares of
common stock, par value $.01 per share of the Issuer, and whereas the Notes will
be issued in accordance with the terms of the Indenture dated as of July 15,
1998 among the Trustee, the Issuer, the Shipowner and certain other Subsidiary
Guarantors, and the Shipowner acknowledges that the Issuer is justly indebted up
to the principal amount of U.S. $100 Million to the Holders of the Notes on the
date hereof;
[C. A portion of the proceeds of the Notes have been lent by
the Issuer to the Shipowner and used to refinance the indebtedness of the
Shipowner respecting the Vessel;][INSERT IF APPLICABLE]
[X. Xxxxxxxx to the Escrow and Pledge Agreement dated as of
July 15, 1998 between the Issuer and The First National Bank of Maryland, as
Escrow Agent, the Issuer has deposited with the Escrow Agent a portion of the
net proceeds of the Offering of the Notes, to be used upon the satisfaction of
certain conditions including the delivery of this Mortgage to acquire additional
Mortgaged Vessels;]
D. In accordance with the Indenture, the Shipowner has
[executed and delivered a Supplemental Indenture pursuant to which it has]
guaranteed (the "Guarantee") the payment in full of the principal of, interest
on, and premium, if any, in respect of the Notes, made an assignment to the
Trustee as collateral security of certain of its rights in respect of the
Mortgaged Vessel and has agreed to execute and deliver this Mortgage in favor of
the Mortgagee as security for its obligations under its Guarantee;
E. The Issuer has entered into a Credit Agreement (the
"Working Capital Facility Agreement") dated as of July 20, 1998 among the
Working Capital Facility Provider and the Issuer pursuant to which the Working
Capital Facility Provider has
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agreed to make available to the Issuer a revolving line of credit, not to exceed
at any one time outstanding Seven Million United States Dollars (US $7,000,000),
all loans thereunder (the "Working Capital Loans") to bear interest at LIBOR,
plus 1 1/2%, and to be repayable on or before July 24, 1999;
F. The Shipowner [shall, concurrently with any capital draws
under the Working Capital Facility Agreement, execute and deliver] [has executed
and delivered] a Guaranty Agreement (a "Working Capital Guarantee") pursuant to
which it [shall guarantee] [has guaranteed] the payment in full of the principal
of, interest on, and premium, if any, in respect of the line of credit (the
"Working Capital Facility") made available pursuant to the Working Capital
Facility Agreement, [make] [made] an assignment to the Working Capital Facility
Provider as collateral security of certain of its rights with respect to the
Mortgaged Vessel and [shall agree] [has agreed] to execute and deliver the
Mortgage in favor of the Mortgagee as security for its obligations under its
Working Capital Guarantee; and
G. Except as otherwise defined herein, terms defined in the
Indenture are used herein as defined therein and terms not defined in the
Indenture and defined in the Collateral Agency Agreement are used herein as
defined in the Collateral Agency Agreement. A copy of each of: (i) the
Indenture, (ii) the Working Capital Facility Agreement, (iii) the Working
Capital Guarantee and (iv) the Collateral Agency Agreement is attached hereto as
Exhibit A, B, C and D, respectively, and made a part hereof;
NOW, THEREFORE, THIS MORTGAGE WITNESSETH:
That, in consideration of the premises and of the additional
covenants herein contained and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, and in order to secure
the payment of the principal of, interest on and premium, if any, respecting the
Notes, the Working Capital Loans, the Obligations, fees, expenses and all other
sums due or otherwise secured under the Indenture, under the Working Capital
Guarantee or hereunder (all such principal, interest, premium and other amounts
hereby collectively called the "Indebtedness hereby secured"), and to secure the
due performance and observance of all the agreements and covenants in the Notes,
the Indenture, the Working Capital Guarantee, the other Security Agreements, and
herein contained, the Shipowner has granted, conveyed, mortgaged, pledged,
confirmed, assigned, transferred and set over, and by these presents does hereby
grant, convey, mortgage, pledge, confirm, assign, transfer and set over, unto
the Mortgagee, the whole of the vessel, described as follows:
The whole of the motor vessel [NAME OF VESSEL], Official No.
_____, of _____ gross and ____ net tons, or thereabouts, duly documented in the
name of the Shipowner under the laws of the Republic of Liberia, with her home
port at Monrovia, Liberia having been built in ________, ______, in 19___; such
vessel including, without being limited to, all of the boilers, engines,
machinery, masts, spars, boats, anchors, cables, chains, rigging, tackle,
capstans, outfit, tools, pumps and pumping equipment, apparel, furniture,
fittings, equipment, spare parts, and all other appurtenances thereunto
appertaining or belonging, whether now owned or hereafter acquired, and also any
and all additions, improvements, renewals and replacements hereafter made in or
to such vessel or any part thereof, including all items and appurtenances
aforesaid (such vessel, together with all of the foregoing, being herein called
the "Vessel").
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TO HAVE AND TO HOLD all and singular the above mortgaged and
described property unto the Mortgagee and its successors and assigns, to its and
to its successors' and assigns' own use, benefit and behoof forever upon the
terms set forth to secure the performance and observance of and compliance with
the covenants, terms and conditions of this Mortgage.
PROVIDED, and these presents are upon the condition, that, if
the Shipowner or its successors or assigns shall pay or cause to be paid the
Indebtedness hereby secured as and when the same shall become due and payable in
accordance with the terms of the Indenture, the Working Capital Guarantee and
this Mortgage, and all other such sums as may hereafter become secured by this
Mortgage in accordance with the terms hereof, and the Shipowner shall duly
perform, observe and comply with or cause to be performed, observed, or complied
with all the covenants, terms and conditions of the Indenture, the Working
Capital Guarantee, the other Security Agreements and this Mortgage, expressed or
implied, to be performed, then this Mortgage and the estate and rights hereunder
shall cease, determine and be void, otherwise to remain in full force and
effect.
The Shipowner for itself, its successors and assigns, hereby
covenants, declares and agrees with the Mortgagee and its successors and assigns
that the Vessel is to be held subject to the further covenants, conditions,
terms and uses hereinafter set forth.
ARTICLE I.
COVENANTS OF THE SHIPOWNER.
SECTION 1: ACKNOWLEDGMENT OF DEBT; GOVERNING LAW. (a) The
Shipowner hereby acknowledges that pursuant to its Guarantee, it is justly
indebted (i) pursuant to its Guarantee to the Holders of the Notes in the
principal amount of up to One Hundred Million United States Dollars (U.S.
$100,000,000) and (ii) pursuant to its Working Capital Guarantee to the Working
Capital Facility Provider in the principal amount of up to $7,000,000 and will
pay or cause to be paid the Indebtedness hereby secured. The Shipowner will
observe, perform and comply with the covenants, terms and conditions herein,
express or implied, on its part to be observed, performed or complied with.
(b) This Mortgage is intended to be a first preferred mortgage
under Liberian law and as such shall be governed by Liberian law. However, in
the event of any conflict between the substantive provisions of this Mortgage
and the Indenture, the terms of the Indenture shall prevail, provided they are
consistent with Liberian law.
SECTION 2: ORGANIZATION OF SHIPOWNER. (a) The Shipowner is a
corporation duly organized and existing under the laws of _____________________
and shall so remain during the life of this Mortgage and so long as each of the
Indenture and the Working Capital Guarantee shall remain in effect and any
Obligations or any Working Capital Loans remain outstanding.
(b) The Shipowner has full power and authority to own,
operate, charter and mortgage the Vessel; all action necessary and required by
law for the execution and delivery of this Mortgage has been duly and
effectively taken; and this
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Mortgage and the Indebtedness hereby secured is and will be the valid and
enforceable obligation of the Shipowner in accordance with its terms. All
consents or approvals required in respect of this Mortgage have been obtained
and are in full force and effect.
SECTION 3: NO EXISTING LIENS. The Shipowner lawfully owns and
is lawfully possessed of the Vessel free from any lien or encumbrance whatsoever
other than (a) liens for current crew's wages, (b) liens covered by valid
policies of insurance held by the Mortgagee and meeting the requirements of
Section 14 below of this Article I, (c) liens not covered by insurance incurred
in the ordinary course of business and not more than thirty days past due; and
(d) Permitted Liens, and will warrant and defend the title and possession
thereto and to every part thereof for the benefit of the Mortgagee against the
claims and demands of all persons whomsoever.
SECTION 4: PREFERRED MORTGAGE UNDER LIBERIAN LAW. The Vessel
is duly documented in the name of the Shipowner under the laws and flag of the
Republic of Liberia. The Shipowner will cause this Mortgage to be duly recorded
in accordance with the provisions of Chapter 3 of Title 22 of the Liberian Code
of Laws of 1956, as at any time amended (the "Liberian Maritime Law"), and will
otherwise comply with and satisfy all of the provisions of the Liberian Maritime
Law in order to establish and maintain this Mortgage, as at any time amended,
supplemented or assigned, as a first preferred mortgage lien thereunder upon the
Vessel and upon all renewals, replacements and improvements made in or to the
same or any part thereof for the amount of the Indebtedness hereby secured.
SECTION 5: NO UNLAWFUL OPERATION. The Shipowner will not cause
or permit the Vessel to be operated in any manner contrary to law, and the
Shipowner will not engage in any unlawful trade or violate any law or carry any
cargo that will expose the Vessel to penalty, forfeiture or capture, and will
not do, or suffer or permit to be done, anything which can or may injuriously
affect the registration or enrollment of the Vessel under the laws and
regulations of the Republic of Liberia and will at all times at its own expense
keep the Vessel duly documented thereunder, except in the case of any change of
registry permitted by the Indenture or hereby, in which case a mortgage will be
recorded against the Vessel under the laws of any such new registry state.
SECTION 6: PAYMENT OF TAXES, ETC. The Shipowner will pay and
discharge when due and payable, from time to time, all taxes, assessments,
governmental charges, fines and penalties lawfully imposed on the Vessel or any
income therefrom; PROVIDED that the Shipowner shall not be required to pay any
such tax, assessment or charge if the validity or amount thereof is concurrently
contested in good faith by appropriate proceedings, the Shipowner shall have set
aside on its books reserves in accordance with generally accepted accounting
principles in the United States consistently applied deemed by it adequate with
respect to such tax, assessment or charge and during the pendency of such
contest the Vessel will not be subject to sale or forfeiture; and PROVIDED
FURTHER, however, that the Shipowner will pay or cause to be paid all such
taxes, assessments or charges forthwith upon the commencement of proceedings to
foreclose any lien which is attached as security therefor.
SECTION 7: NO POWER TO CREATE LIENS. Neither the Shipowner,
any charterer, the Master of the Vessel nor any other person has or shall have
any right, power or authority to create, incur or permit to be placed or imposed
or continued upon the Vessel any lien or encumbrance whatsoever other than
Permitted Liens, liens for current crew's wages and salvage and the lien of this
Mortgage.
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SECTION 8: NOTICE OF MORTGAGE. The Shipowner will place, and
at all times and places will retain, a properly certified copy of this Mortgage
on board the Vessel with her papers and will cause each such certified copy and
the Vessel's marine document to be exhibited to any and all persons having
business therewith which might give rise to any lien thereon other than a
Permitted Lien or liens for current crew's wages or salvage, and to any
representative of the Mortgagee; and will place and keep prominently displayed
in the chart room and in the Master's cabin of the Vessel a framed printed
notice in plain type reading as follows:
"NOTICE OF MORTGAGE
This vessel is covered by a First Preferred Ship
Mortgage in favor of The First National Bank of Maryland, as
Trustee/Mortgagee, under authority of Title 22 of the Liberian
Code of Laws of 1956, as amended. Under the terms of said
First Preferred Mortgage, neither the Owner, any charterer,
the Master of this Vessel nor any other person has any right,
power or authority to create, incur or permit to be imposed
upon this Vessel any other lien whatsoever except liens for
current crew's wages and salvage."
SECTION 9: DISCHARGE OF LIENS, ENCUMBRANCES, ETC. Except for
the lien of this Mortgage, Permitted Liens or liens for loss, damage or expense,
which are fully covered by insurance or, in respect of which, a bond or other
security has been posted by the Shipowner with the appropriate court or other
tribunal to prevent the arrest or secure the release of the Vessel from arrest
on account of such claim or lien, the Shipowner will not suffer to be continued
any lien, encumbrance or charge on the Vessel, and in due course and in any
event, by the earlier of ninety (90) days after the same becomes due and payable
or twenty-one (21) days after being requested to do so by the Mortgagee, will
pay or cause to be discharged or make adequate provision for the satisfaction or
discharge of all claims or demands, or will cause the Vessel to be released or
discharged from any lien, encumbrance or charge therefor.
SECTION 10: LIBEL. If a libel, complaint or similar process be
filed against the Vessel or the Vessel be otherwise attached, levied upon or
taken into custody by virtue of any legal proceeding in any court, the Shipowner
will promptly notify the Mortgagee thereof by cable, facsimile or telex,
confirmed by letter, at its address, as specified in this Mortgage, and within
fifteen (15) days of such filing, attachment, levy or taking into custody will
cause the Vessel to be released and all liens thereon other than this Mortgage
and the liens securing the obligations under the Security Agreements and the
Working Capital Guarantee to be discharged and will promptly notify the
Mortgagee thereof in the manner aforesaid. In the event the Vessel is levied
upon or taken into custody or detained by any authority whatsoever, the
Shipowner agrees forthwith to notify the Mortgagee thereof by telex, confirmed
by letter. The Shipowner will notify the Mortgagee within forty-eight (48) hours
after it has become known to the Shipowner of any average or salvage incurred by
the Vessel.
SECTION 11: VESSEL CONDITION. (a) The Shipowner at all times
and without cost or expense to the Mortgagee, will maintain and preserve, or
cause to be maintained and preserved, the Vessel and all its equipment, outfit
and appurtenances, tight, staunch, strong, in good condition, working order and
repair and in all respects seaworthy and fit for its intended service, and will
keep the Vessel, or cause her to be kept and maintained, in such condition as
will entitle her to maintain her current
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classification and rating for vessels of the same age and type, free of notices,
recommendations or qualifications which negatively affect such classification in
[INSERT CURRENT CLASSIFICATION SOCIETY], or other classification society of like
standing approved by the Mortgagee. The Vessel shall, and the Shipowner
covenants that she will, at all times comply with all applicable laws, treaties
and conventions, and rules and regulations issued thereunder, and shall have on
board as and when required thereby valid certificates showing compliance
therewith, including all Safety Management Certificates required by the
International Safety Management Code (the "ISM Code"). The Shipowner will not
make, or permit to be made, any substantial change in the structure, type or
speed of the Vessel or with respect to any of the terms of the instruments of
insurance or diminish the value of the Vessel without first receiving written
approval thereof from the Mortgagee.
(b) The Shipowner agrees to give the Mortgagee at least ten
(10) days notice of the actual date and place of any survey or drydocking in
order that the Mortgagee may have representatives present if desired. The
Shipowner agrees that at the Mortgagee's request it will satisfy the Mortgagee
that the expense of such survey or drydocking or work to be done thereat is
within Shipowner's financial ability and will not result in a claim or lien
against the Vessel in violation of the provisions of this Mortgage.
(c) The Shipowner agrees to submit the Vessel regularly to
such periodical or other surveys as may be required for classification purposes
and will promptly supply to the Mortgagee copies of all reports issued in
respect thereof.
SECTION 12: PROVISION OF INFORMATION AND DOCUMENTS.
(a) The Shipowner will at all reasonable times afford the
Mortgagee or its authorized representatives full and complete access to the
Vessel for the purpose of inspecting the Vessel and her cargo and papers and, at
the request of the Mortgagee, the Shipowner will deliver for inspection, copies
of any and all contracts and documents relating to the Vessel, whether on board
or not.
(b) The Shipowner hereby agrees to promptly furnish to the
Mortgagee on demand, all charterparties or contracts of affreightment relating
to the Vessel and full details as to the parties, times of delivery and the like
pertaining thereto.
(c) On the date hereof and on an annual basis, the Shipowner
shall obtain and provide the Mortgagee with a Certificate of Confirmation of
Class.
(d) The Shipowner agrees to assign to the Mortgagee
contemporaneously with the execution of this Mortgage any charters or earnings
of the Vessel pursuant to the Indenture or the Supplemental Indenture.
(e) The Shipowner hereby appoints the Mortgagee
attorney-in-fact of the Shipowner, whether or not an event of default shall have
occurred or is continuing, to appear before governmental bodies, classification
societies and insurers and to demand and receive to the same extent that the
Shipowner itself might, all information and certificates respecting (i) the
organizational status of the Shipowner under the laws of its jurisdiction of
organization or any other jurisdiction in which it may have qualified to do
business, (ii) the status of the Vessel under the laws and regulations of its
country of registration, and its compliance with the requirements thereof, and
(iii) the state of the records of the Vessel or of the Shipowner in respect of
the Vessel in any classification society with which the Vessel may be classed or
of any company, association or club by
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whom the Vessel or the Shipowner in respect of the Vessel may be insured; and
the Shipowner hereby agrees that the Mortgagee may execute its powers as
attorney-in-fact as aforesaid through its agents, representatives and attorneys.
This power of attorney is coupled with an interest and shall be irrevocable as
long as any Indebtedness hereby secured remains outstanding.
SECTION 13: NO TRANSFER OF FLAG; SALE; CHARTER. (a) The
Shipowner will not transfer or change the flag or port of documentation of the
Vessel (except to Cyprus, the Bahamas, Panama, the Cayman Islands, Isle of Man,
the Hellenic Republic or any other jurisdiction which at the time is generally
deemed acceptable by institutional lenders to the shipping industry, as
determined in good faith by the Board of Directors, as permitted by the terms of
the Indenture, PROVIDED, HOWEVER, that there shall at all times exist an
effective Mortgage on the Vessel, notwithstanding such transfer or change of
flag or port) without the prior written consent of the Mortgagee (which consent
shall contain such terms and conditions as the Mortgagee shall reasonably
conclude are necessary, including Opinions of Counsel, filings and
documentation, to ensure the continuing first priority perfected Lien of the
Mortgagee for the benefit of the Holders and the Working Capital Facility
Provider in respect of the Vessel and the other Collateral). Any such written
consent to any one transfer or change of flag or port of documentation shall not
be construed to be a waiver of this provision with respect to any subsequent
proposed transfer or change of flag or port of documentation.
(b) Without the prior written consent of the Mortgagee, the
Shipowner will not in any manner (i) sell, transfer or mortgage the Vessel other
than in accordance with Section 4.07 of the Indenture or (ii) enter into any
charterparty, contract of affreightment, bill of lading or other engagement of
affreightment or for the carriage or transportation of cargo or other operation
of any kind of the Vessel other than the charterparty existing on the date
hereof.
SECTION 14: INSURANCES. (a) The Shipowner will cause to be
carried and maintained on or in respect of the Vessel without expense to the
Mortgagee insurances, payable in U.S. Dollars, in amounts, against risks
(including marine hull and machinery insurance, marine protection and indemnity
insurance, war risks insurance and liability arising out of pollution and the
spillage or leakage of cargo and cargo liability insurance) and in a form which
is substantially equivalent to the coverage carried by other responsible and
experienced companies engaged in the operation of vessels similar to the Vessel
and for similar purposes and with insurance companies, underwriters, funds,
mutual insurance associations or clubs of recognized standing. Hull and
Machinery and war risk insurance shall be carried in an amount which is not less
than the greater of the full commercial value of the Vessel or 120% of the
Vessel Percentage of the Indebtedness hereby secured outstanding from time to
time. Protection and indemnity insurance (as well as required insurance against
liability for pollution or spillage or leakage of cargo which shall have
limitations of liability of not less than $500 million, shall be in the highest
amount from time to time available for vessels of the same type, size, age and
flag as the Vessel. The Shipowner will reimburse the Mortgagee for all premiums
and other amounts paid by the Mortgagee in connection with mortgagee's interest
insurance and additional peril pollution or equivalent cover in favor of the
Mortgagee which shall insure the interest of the Mortgagee regardless of any
breach or violation by the Shipowner or of any other person of any
representation, warranty, covenant, condition, declaration or promise contained
in any relevant policy and which shall be obtained through an insurance broker
reasonably acceptable to the Mortgagee that is different from the insurance
brokers utilized for all other insurances and reinsurances provided for
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hereunder. None of the aforementioned insurance shall provide for a deductible
amount in excess of One Million United States Dollars (U.S. $1,000,000) per
occurrence (or equivalent in any other currency or currency unit).
In the case of all marine, navigating and war risk hull and
machinery policies, the Shipowner will cause the Mortgagee to be named as an
additional insured and will use all reasonable efforts (and cause its insurance
broker to use all reasonable efforts) to cause the insurers under such policies
to waive any liability of the Mortgagee for premiums, calls payable, assessments
or advances under such policies and for the representations and warranties made
therein by the Shipowner or any other person.
The Shipowner will also, without expense to the Mortgagee,
have the Vessel fully entered in a protection and indemnity association or club
in good standing and acceptable to the Mortgagee. The Shipowner will cause such
association or club to issue to the Mortgagee a Letter of Undertaking in a form
satisfactory to the Mortgagee.
In the case of all protection and indemnity insurance
(including insurance against liability arising out of pollution), the Shipowner
will cause the Mortgagee to be named as an additional insured and will take such
actions as shall be necessary so that the Mortgagee shall not be liable under
such policies for payment of any premium, club call, assessment or advance or
for the representations and warranties made therein by the Shipowner or any
other person. Unless the Mortgagee shall have otherwise directed, any loss
involving damage to the Vessel which is not in excess of One Million United
States Dollars (U.S. $1,000,000) may be paid directly for repair or salvage or
to reimburse the Shipowner for the same. The Shipowner will cause its brokers to
agree to advise the Mortgagee promptly of any default in the payment of any
premium and of any other act or omission on the part of the Shipowner of which
they have knowledge and which might invalidate or render unenforceable, in whole
or in part, any insurance on the Vessel.
The Shipowner will also cause such brokers to agree to mark
their records and to advise the Mortgagee by cable, telex or facsimile
transmission, at least seven (7) business days' prior to the expiration date of
any insurance carried pursuant to this Mortgage, whether such insurance has been
renewed or replaced with new insurance which complies with the provisions of
this Section 14 and the other provisions of this Mortgage.
(b) The Shipowner will assign to the Mortgagee
contemporaneously with the execution of the Mortgage any policies of insurance
in respect of the Vessel pursuant to an Insurance Assignment.
(c) Unless the Mortgagee shall otherwise agree, all insurance
must name the Mortgagee as an assured, but without liability for premiums, calls
or assessments, and all amounts of whatsoever nature payable under any insurance
must be payable to the Mortgagee for distribution first to itself and thereafter
to the Shipowner or others as their interests may appear. Nevertheless, until
otherwise required by the Mortgagee by notice to the underwriters, (i) amounts
payable under any insurance on the Vessel with respect to protection and
indemnity risks may be paid directly to the Shipowner to reimburse it for any
loss, damage or expense incurred by it and covered by such insurance or to the
person to whom any liability covered by such insurance has been incurred;
PROVIDED, HOWEVER, that if the Mortgagee shall give notice that the Shipowner is
in default hereunder, all such payments shall be made to the Mortgagee until the
Indebtedness hereby secured has been fully discharged, and (ii) concerning
amounts
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payable under any insurance with respect to the Vessel involving any damage to
the Vessel not constituting an actual or constructive or an agreed or
compromised total loss, the underwriters may pay direct for the repair, salvage
or other charges involved or, if the Shipowner shall have first fully repaired
the damage or paid all of the salvage or other charges, may pay the Shipowner as
reimbursement therefor; PROVIDED, HOWEVER, that if such amounts (including any
franchise or deductible) are in excess of One Million United States Dollars
($1,000,000), the underwriters shall make such payment to the Mortgagee. All
payments of insurance shall be made to the Mortgagee if an Event of Default
shall have occurred or any event which with the giving of notice or the lapse of
time, or both, would constitute an Event of Default.
(d) All amounts paid to the Mortgagee in respect of any
insurances on the Vessel shall be disposed of as follows:
(i) any amount which might have been paid at the time, in
accordance with the provisions of paragraph (c) above, directly to the
Shipowner or others as their interest may appear shall be paid by the
Mortgagee to, or as directed by, the Shipowner;
(ii) all amounts paid to the Mortgagee in respect of an Event
of Loss shall be paid in accordance with Section 3.3(d) of the
Collateral Agency Agreement;
(iii) so long as no Event of Default shall have occurred and
be continuing, all other amounts paid to the Mortgagee in respect of
any insurance on the Vessel shall be applied to the making of needed
repairs or other work on the Vessel, or to the payment of other claims
incurred by the Shipowner relating to the Vessel, or may be paid to the
Shipowner or whomsoever may be entitled thereto;
(iv) all remaining amounts paid to the Mortgagee in respect of
any insurance on the Vessel may, in the Mortgagee's sole discretion, be
held and applied to in accordance with the Collateral Agency Agreement;
(v) if an Event of Default shall have occurred and be
continuing, any amounts shall be applied in accordance with Section 3.7
of the Collateral Agency Agreement.
(e) In the event that any claim or lien is asserted against
the Vessel for loss, damage or expense which is covered by insurance required
hereunder and it is necessary for the Shipowner to obtain a bond or supply other
security to prevent arrest of the Vessel or to release the Vessel from arrest on
account of such claim or lien, the Mortgagee, on request of the Shipowner, may,
in the sole discretion of the Mortgagee, assign to any person, firm or
corporation executing a surety or guarantee bond or other Agreement to save or
release the Vessel from such arrest, all right, title and interest of the
Mortgagee in and to said insurance covering said loss, damage or expense, as
collateral security to indemnify against liability under said bond or other
agreement.
(f) The Shipowner shall deliver to the Mortgagee certified
copies or originals on the date hereof and annually at the times the Officers'
Certificates are required to be delivered under the Indenture, of all
certificates of entry, cover notes, binders and evidences of insurance and
policies for the purpose of inspection or safekeeping. In addition, the
Shipowner will furnish the Mortgagee concurrently with the
10
execution hereof and thereafter at intervals of not more than twelve (12)
calendar months, a detailed report by independent marine insurance brokers,
selected by the Mortgagor and acceptable to the Mortgagee, describing in
reasonable detail the insurance pursuant to this Section 14 and stating that in
the opinion of such brokers such insurance complies in all material respects
with the terms of this Section 14 and is common and customary for types of
insurances and coverage generally required by mortgagees from prudent owners and
operators of vessels similar to the Vessel and engaged in trades similar to the
trades in which the Vessel is engaged.
(g) The Shipowner agrees that it will not execute or permit or
willingly allow to be done any act by which any insurance may be suspended,
impaired or canceled, and that it will not permit or allow the Vessel to
undertake any voyage or run any risk or transport any cargo which may not be
permitted by the policies in force, without having previously insured the Vessel
by additional coverage to extend to such voyages, risks or cargoes with
insurance satisfactory to the Mortgagee and the Shipowner agrees (without
limiting the foregoing) that it will not permit the Vessel to enter or trade to
any zone which is declared a war zone by any government or by the War Risk
Insurers for the Vessel unless the Mortgagee shall have first given its consent
thereto in writing which Mortgagee shall have full power to withhold) and there
shall have been effected by the Shipowner and at its expense such special
insurance as the Mortgagee may require.
(h) In case any underwriter proposes to pay less on any claim
than the amount thereof, the Shipowner shall forthwith inform the Mortgagee and
the Mortgagee shall have the right to negotiate and agree to any compromise.
(i) The Shipowner will comply with and satisfy all of the
provisions of any applicable law, convention, regulation, proclamation or order
concerning financial responsibility for liabilities imposed on the Shipowner or
the Vessel with respect to pollution by any state or nation or political
subdivision thereof and will maintain all certificates or other evidence of
financial responsibility as may be required by any such law, convention,
regulation, proclamation or order with respect to the trade which the Vessel is
from time to time engaged in and the cargo carried by it.
(j) All insurance required under this Mortgage shall be placed
and kept with such insurance companies or other insurance underwriters as shall
be reasonably acceptable to the Mortgagee.
SECTION 15: REIMBURSEMENT FOR EXPENSES. (a) The Shipowner will
reimburse the Mortgagee promptly, with interest at the interest rate applicable
to the Notes per calendar month set forth in the Indenture for any and all
expenditures which the Mortgagee may from time to time make, lay out or expend
in providing such protection in respect of insurance, discharge or purchase of
liens, taxes, dues, assessments, governmental charges, fines and penalties
lawfully imposed, repairs, attorneys' fees, necessary translation fees for
documents made in a language other than English and other matters as the
Shipowner is obligated herein to provide, but fails to provide. Such obligation
of the Shipowner to reimburse the Mortgagee shall be an additional indebtedness
due from the Shipowner, secured by this Mortgage, and shall be payable by the
Shipowner on demand. The Mortgagee, though privileged to do so, shall be under
no obligation to the Shipowner to make any such expenditures, nor shall the
making thereof relieve the Shipowner of any default in that respect.
11
SECTION 16: PERFORMANCE OF CHARTER. The Shipowner will fully
perform, or cause to be performed, any and all charterparties and contracts of
affreightment which are, or may be, entered into with respect to the Vessel.
SECTION 17: EVENT OF LOSS. (a) So long as no Event of Default
shall have occurred and be continuing, in the event of an actual, constructive,
agreed or compromised total loss of the Vessel, any adjustment or compromise of
such loss by the Shipowner will be at the highest amount reasonably obtainable,
and insurance or other payments for such loss shall be applied in accordance
with Section 3.3(d) of the Collateral Agency Agreement.
(b) This Mortgage shall extend to and constitute a lien upon,
and the Shipowner hereby grants the Mortgagee a security interest in, all
proceeds resulting from any of the events mentioned in subsection (a) above as
security for the Indebtedness hereby secured.
SECTION 18: FINANCING STATEMENTS. The Shipowner hereby
irrevocably authorizes the Mortgagee to file and record financing statements in
any jurisdiction where the same may be in force and to make any filings or
recordings under any legislation having similar effect for the purpose of
perfecting or continuing the perfection of the security interests granted by the
Shipowner to the Mortgagee herein without obtaining the signature of the
Shipowner thereto. The Shipowner hereby irrevocably authorizes the Mortgagee to
execute any such financing statement or similar document in the name of the
Shipowner.
SECTION 19: INCORPORATION BY REFERENCE. All of the covenants,
representations and agreements on the part of the Issuer as guaranteed by the
Shipowner and of the Shipowner, which are set forth in, and all of the rights,
powers and remedies of the Mortgagee which are provided for in, the Indenture,
the Working Capital Facility Agreement, the Collateral Agency Agreement, the
other Security Agreements and the Notes, together with all other provisions of
the Indenture, the Working Capital Facility Agreement, the Collateral Agency
Agreement and the Notes, are incorporated herein by reference with the same
force and effect as though set forth at length in this Mortgage.
SECTION 20: REQUISITION OF TITLE. In the event that the title
or ownership of the Vessel shall be requisitioned, purchased or taken by any
government of any country or any department, agency or representative thereof,
or any authority acting or purporting to act under color of government, pursuant
to any present or future law, proclamation, decree, order or otherwise, the lien
of this Mortgage shall be deemed to attach to the claim for compensation of the
Shipowner for its interest in the Vessel from such government or department,
agency or representative, or from any other source, and the compensation,
purchase price, reimbursement or award for such requisition, purchase or other
taking of such title or ownership due the shipowner from such government,
department, agency or representative or other source, is hereby declared payable
to the Mortgagee, who shall be entitled to receive the same, and shall apply the
same as provided in Section 3.3(d) of the Collateral Agency Agreement; and in
the event of any such requisition, purchase or taking, the Shipowner shall
promptly execute and deliver to the Mortgagee such documents, if any, and shall
promptly do and perform such acts, if any, as in the opinion of the Mortgagee
may be necessary or useful to facilitate or expedite the collection by the
Mortgagee of such compensation, purchase price, reimbursement or award.
12
ARTICLE II.
Events of Default and Remedies.
SECTION 1: EVENTS OF DEFAULT. In case any one or more of the
following events, herein termed "Events of Default", shall have occurred and be
continuing:
(a) the statements in Sections 2 and 3 of Article I shall
prove to be untrue;
(b) a default shall have occurred in the due and punctual
observance and performance of any of the provisions of Sections 4, 5,
9, 10, 13, 14(a), 14(b), 14(c), 14(g), 14(i), 16, 17 and 20 of Article
I hereof;
(c) a default by the Shipowner in the observance or
performance of any agreement under this Mortgage shall have occurred
and shall remain unremedied for twenty-one (21) days after written
notice thereof shall have been given to the Shipowner by the Mortgagee;
or
(d) an Event of Default under the Indenture, the Notes or the
Working Capital Facility Agreement; then, and in each and every such
case, the Mortgagee shall have the right to:
(1) Declare all the then unpaid Indebtedness hereby secured to
be due and payable immediately, and upon such declaration the same,
including interest to date of declaration, shall become and be
immediately due and payable;
(2) Exercise all of the rights and remedies in foreclosure and
otherwise given to mortgagees by the provisions of the law of the
Republic of Liberia or of any other jurisdiction where the Vessel may
be found and exercise all of its rights and remedies as
attorney-in-fact or otherwise under this Mortgage;
(3) Bring suit at law, in equity or in admiralty, as it may be
advised, to recover judgment for the Indebtedness hereby secured, and
collect the same out of any and all property of the Shipowner whether
covered by this Mortgage or otherwise;
(4) Take and enter into possession of the Vessel, at any time,
wherever the same may be, without legal process and without being
responsible for loss or damage, and the Shipowner or other person in
possession forthwith upon demand of the Mortgagee shall surrender to
the Mortgagee possession of the Vessel and the Mortgagee may, without
being responsible for loss or damage, hold, lay-up, lease, charter,
operate or otherwise use such Vessel for such time and upon such terms
as it may deem to be for its best advantage, and demand, collect and
retain all hire, freights, earnings, issues, revenues, income, profits,
return premiums, salvage awards or recoveries, recoveries in general
average, and all other sums due or to become due in respect of such
Vessel or in respect of any insurance thereon from any person
whomsoever, accounting only for the net profits, if any, arising from
such use of the Vessel and charging upon all receipts from the use of
the Vessel or from the sale thereof by court proceedings or pursuant to
Subsection (5) next following, 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
13
herein given it to take the Vessel, the Mortgagee shall have the right
to dock the Vessel at any dock, pier or other premises of the Shipowner
without charge, or to dock her at any other place at the cost and
expense of the Shipowner;
(5) Take and enter into possession of the Vessel, at any time,
wherever the same may be, without legal process, and if it seems
desirable to the Mortgagee and without being responsible for loss or
damage, sell such Vessel, at any place and at such time as the
Mortgagee may specify and in such manner as the Mortgagee may deem
advisable, free from any claim by the Shipowner in admiralty, in
equity, at law or by statute, at public or private sale, by sealed bids
or otherwise, by mailing, by air or otherwise, notice of such sale,
whether public or private, addressed to the Shipowner at its last known
address, fourteen (14) days prior to the date fixed for entering into
the contract of sale and by first publishing notice of any such public
sale for ten (10) consecutive days, in a newspaper published in the
City of New York, State of New York or if the place of sale should not
be in New York City then by publication of a similar notice at or near
the place of sale; in the event that the Vessel shall be offered for
sale by private sale, no newspaper publication of notice shall be
required, nor notice of adjournment of sale; sale may be held at such
place and at such time as the Mortgagee by notice may have specified,
or may be adjourned by the Mortgagee from time to time by announcement
at the time and place appointed for such sale or for such adjourned
sale, and without further notice or publication the Mortgagee may make
any such sale at the time and place to which the same shall be so
adjourned; and any sale may be conducted without bringing the Vessel to
the place designated for such sale and in such manner as the Mortgagee
may deem to be for its best advantage, and the Mortgagee may become the
purchaser at any judicial sale.
(6) Take and receive all insurance proceeds to which it shall
become entitled by reason of the existence of an Event of Default and
any acceleration of the Notes or of any amounts owed under the Working
Capital Guarantee.
SECTION 2: SALE DIVESTS TITLE. Any sale of the Vessel made in
pursuance of this Mortgage, whether under the power of sale hereby granted or
any judicial proceedings, shall operate to divest all right, title and interest
of any nature whatsoever of the Shipowner therein and thereto, and shall bar the
Shipowner, its successors and assigns, and all persons claiming by, through or
under them. No purchaser shall be bound to inquire whether notice has been
given, or whether any default has occurred, or as to the propriety of the sale,
or as to the application of the proceeds thereof. In case of any such sale, the
Mortgagee, if it is the purchaser, shall be entitled for the purpose of making
settlement or payment for the property purchased to use and apply the
Indebtedness hereby secured in order that there may be credited against the
amount remaining due and unpaid thereon the sums payable out of the net proceeds
of such sale to the Mortgagee after allowing for the costs and expense of sale
and other charges; and thereupon such purchaser shall be credited, on account of
such purchase price, with the net proceeds that shall have been so credited upon
the Indebtedness hereby secured. At any such judicial sale, the Mortgagee may
bid for and purchase such property, may credit against payment of the purchase
price thereof all sums due under the Notes or the Working Capital Guarantee and
upon compliance with the terms of sale may hold, retain and dispose of such
property without further accountability therefor.
14
SECTION 3: MORTGAGEE'S POWER OF ATTORNEY-SALES. The Mortgagee
is hereby appointed attorney-in-fact of the Shipowner, upon the happening of any
Event of Default, to execute and deliver to any purchaser aforesaid, and is
hereby vested with full power and authority to make, in the name and on behalf
of the Shipowner, a good conveyance of the title to the Vessel so sold. In the
event of any sale of the Vessel, under any power herein contained, the Shipowner
will, if and when required by the Mortgagee, execute such form of conveyance of
the Vessel as the Mortgagee may direct or approve.
SECTION 4: MORTGAGEE'S POWER OF ATTORNEY-COLLECTION. The
Mortgagee is hereby appointed attorney-in-fact of the Shipowner upon the
happening of any Event of Default, in the name and on behalf of the Shipowner to
demand, collect, receive, compromise and sue for, so far as may be permitted by
law, all freights, hire, earnings, issues, revenues, income and profits of the
Vessel and all amounts due from underwriters under any insurances thereon as
payment of losses or as return premiums or otherwise, salvage awards and
recoveries, recoveries in general average or otherwise, and all other sums due
or to become due at the time of the happening of any Event of Default in respect
of the Vessel, or in respect of any insurances thereon, from any person
whomsoever, and to make, give and execute in the name of the Shipowner
acquittances, receipts, releases or other discharges for the same, whether under
seal or otherwise, and to endorse and accept in the name of the Shipowner all
checks, notes, drafts, warrants, agreements and other instruments in writing
with respect to the foregoing.
SECTION 5: MORTGAGEE POWER OF ATTORNEY-DISCHARGE OF LIENS. The
Shipowner authorizes and empowers the Mortgagee or its appointees or any of them
to appear in the name of the Shipowner, its successors and assigns, in any court
of any country or nation of the world where a suit is pending against the Vessel
because of or on account of any alleged lien against the Vessel from which the
Vessel has not been released and to take such proceedings as to them or any of
them as may seem proper towards the defense of such suit and the purchase or
discharge of such lien, and all expenditures made or incurred by them or any of
them for the purpose of such defense or purchase or discharge shall be a debt
due from the Shipowner, its successors and assigns, to the Mortgagee, shall be
payable on demand and shall be secured by the lien of this Mortgage in like
manner and extent as if the amount and description thereof were written herein.
SECTION 6: DELIVERY OF VESSEL. Whenever any right to enter and
take possession of the Vessel accrues to the Mortgagee, it may require the
Shipowner to deliver, and the Shipowner shall on demand, at its own cost and
expense, deliver to the Mortgagee the Vessel as demanded. If the Mortgagee shall
be entitled to take any legal proceedings to enforce any right under this
Mortgage, the Mortgagee shall be entitled as a matter of right to the
appointment of a receiver of the Vessel and of the freights, hire, earnings,
issues, revenues, income and profits due or to become due and arising from the
operation thereof.
SECTION 7: INDEMNIFICATION. The Shipowner covenants that upon
the happening of any one or more of the Events of Default, then, upon written
demand of the Mortgagee, the Shipowner will pay to the Mortgagee the whole
amount due and payable in respect of the Indebtedness hereby secured; and in
case the Shipowner shall fail to pay the same forthwith upon such demand, the
Mortgagee shall be entitled to recover judgment for the whole amount so due and
unpaid, together with such further amounts as shall be sufficient to cover the
reasonable compensation to the Mortgagee's agents, attorneys and counsel and any
necessary advances, expenses and liabilities made or
15
incurred by it hereunder. All moneys collected by the Mortgagee under this
Section 7 shall be applied by the Mortgagee in accordance with the provisions of
Section 3.7 of the Collateral Agency Agreement.
SECTION 8: EVERY POWER CUMULATIVE. 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, in 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
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. No delay or omission by the
Mortgagee in the exercise of any right or power or in the pursuance of any
remedy accruing upon any default as above defined shall impair any such right,
power or remedy or be construed to be a waiver of any such Event of Default or
to be an acquiescence therein; nor shall the acceptance by the Mortgagee of any
security or of any payment of or on account of the Indebtedness hereby secured
maturing after any Event of Default or of any payment on account of any past
default be construed to be a waiver of any right to take advantage of any future
Event of Default or of any past Event of Default not completely cured thereby.
No consent, waiver or approval of the Mortgagee shall be deemed to be effective
unless in writing and duly signed by authorized signatories of the Mortgagee.
SECTION 9: CURE OF DEFAULTS. Subject to the terms of the
Indenture, if at any time after an Event of Default and prior to the actual sale
of the Vessel by the Mortgagee or prior to any enforcement or foreclosure
proceedings, the Shipowner offers completely to cure all Events of Default and
to pay all expenses, advances and damages to the Mortgagee consequent on such
Events of Default, with interest with respect to the Shipowner's obligations as
provided herein or in the Indenture or the Working Capital Facility Agreement as
set forth therein, then the Mortgagee may, but shall not be required to, accept
such offer and payment and restore the Shipowner to its former position, but
such action, if taken, shall not affect any subsequent Event of Default or
impair any rights consequent thereon.
SECTION 10: RESTORATION. In case the Mortgagee shall have
proceeded to enforce any right, power or remedy under this Mortgage by
foreclosure, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to the Mortgagee, then and in every such case the Shipowner and the Mortgagee
shall be restored to their former positions and rights hereunder with respect to
the property subject or intended to be subject to this Mortgage, and all rights,
remedies and powers of the Mortgagee shall continue as if no such proceedings
had been taken.
SECTION 11: DISTRIBUTION OF PROCEEDS. The proceeds of any sale
of the Vessel and the net earnings of any charter operation or other use of the
Vessel and any and all other moneys received by the Mortgagee pursuant to or
under the terms of this Mortgage or in any proceedings hereunder, the
application of which has not elsewhere herein been specifically provided for,
shall be applied in accordance with Section 6.10 of the Indenture and Section
3.3(d) of the Collateral Agency Agreement.
SECTION 12: QUIET ENJOYMENT. Until one or more of the Events
of Default hereinabove described shall happen, the Shipowner (a) shall be
suffered and permitted to
16
retain actual possession and use of the Vessel and (b) shall have the right,
from time to time, in its discretion, and without application to the Mortgagee
subject to the terms of the Indenture, and without obtaining a release thereof
by the Mortgagee, to dispose of, free from the lien hereof, any boilers,
engines, machinery, masts, spars, sails, rigging, boats, anchors, chains,
tackle, apparel, drills, furniture, fittings or equipment or any other
appurtenances of the Vessel that are no longer useful, necessary, profitable or
advantageous in the operation of the Vessel, first or simultaneously replacing
the same by new boilers, engines, machinery, masts, spars, sails, rigging,
boats, anchors, chains, tackle, drills, apparel, furniture, fittings, equipment,
or other appurtenances of substantially equal value to the Shipowner, which
shall forthwith become subject to the lien of this Mortgage as a preferred
mortgage thereon.
SECTION 13: NO WAIVER OF PREFERRED STATUS. (a) If any
provision of this Mortgage should be deemed invalid or shall be deemed to affect
adversely the preferred status of this Mortgage under any applicable law, such
provision shall cease to be a part of this Mortgage without affecting the
remaining provisions, which shall remain in full force and effect.
(b) In the event that the Indenture, the Guarantee, the
Working Capital Facility Agreement, the Working Capital Guarantee, the
Collateral Agency Agreement, or this Mortgage or any of the documents or
instruments which may from time to time be delivered hereunder or thereunder or
any provision hereof or thereof shall be deemed invalidated by present or future
law of any nation or by decision of any court, or if any third party shall fail
or refuse to recognize any of the powers granted to the Mortgagee hereunder when
it is sought to exercise them, this shall not affect the validity and/or
enforceability of all or any other parts of the Indenture, the Guarantee, the
Working Capital Facility Agreement, the Working Capital Guarantee, the
Collateral Agency Agreement or the Mortgage or such documents or instruments
and, in any such case, the Shipowner covenants and agrees that, on demand, it
will execute and deliver such other and further agreements and/or documents
and/or instruments and do such things as the Mortgagee in its sole discretion
may deem to be necessary to carry out the true intent of this Mortgage and of
the obligations secured hereby.
(c) Anything herein to the contrary notwithstanding, it is
intended that nothing herein shall waive the preferred status of this Mortgage
and that, if any provision or portion thereof herein shall be construed to waive
the preferred status of this Mortgage, then such provision to such extent shall
be void and of no effect.
SECTION 14: VENUE. In the event of any legal proceedings,
Section 7.12 of the Collateral Agency Agreement shall apply. Notwithstanding
Section 7.12 of the Collateral Agency Agreement, the Mortgagee is free to
initiate proceedings before any other court worldwide where the Vessel may be
found, and the Shipowner hereby expressly and irrevocably consents to the
jurisdiction of any court in any jurisdiction whatsoever where the Vessel may at
any time be located for the purpose of the foreclosure of this Mortgage, the
sale of the Shipowner's interest in the Vessel or the enforcement of any other
remedy or right hereunder, and hereby expressly and irrevocably submits the
person of the Shipowner and its interests in the Vessel to the jurisdiction of
any such court in any such action or proceeding.
17
ARTICLE III.
Sundry Provisions.
SECTION 1: BINDING ON SUCCESSORS. All of the covenants,
promises, stipulations and agreements of the Shipowner in this Mortgage
contained shall bind the Shipowner and its successors and assigns and shall
inure to the benefit of the Mortgagee and its respective successors and assigns.
In the event of any assignment or transfer of this Mortgage to the extent
permitted by the Indenture, the term "Mortgagee", as used in this Mortgage,
shall be deemed to mean any such assignee or transferee.
SECTION 2: EXERCISE BY AGENTS. Wherever and whenever herein
any right, power or authority is granted or given to the Mortgagee, such right,
power or authority may be exercised in all cases by the Mortgagee or such agent
or agents as it may appoint, and the act or acts of such agent or agents when
taken shall constitute the act of the Mortgagee hereunder.
SECTION 3: NOTICES. Any notice or other communication to be
given pursuant hereto shall be in the manner provided in the Indenture and
addressed as follows:
If to the Mortgagee, to
The First National Bank of Maryland, as
Collateral Agent, Trustee and Mortgagee
Corporate Trust Department
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Telephone: 000-000-0000
Telefax: 000-000-0000
Telex:
If to the Shipowner, to
__________________________
__________________________
__________________________
__________________________
Telephone:
Telefax:
Telex:
or at such other address as either party may notify to the other in writing.
SECTION 4: TITLES AND SECTION HEADINGS. The titles and section
headings in this Mortgage are for convenience only and shall not affect the
construction hereof.
SECTION 5: RECORDING CLAUSE. The maximum principal amount that
may be outstanding under this Mortgage is One Hundred and Seven Million United
States Dollars (U.S. $107,000,000) and for the purpose of recording this
18
Mortgage, the total amount of this First Preferred Mortgage is One Hundred and
Seven Million United States Dollars (U.S. $107,000,000) and interest, prepayment
fees, and performance of mortgage covenants. The maturity date with respect to
One Hundred Million United States Dollars (U.S. $100,000,000) of the principal
amount secured by this Mortgage is July 15, 2005 and the maturity date with
respect to Seven Million United States Dollars (US $7,000,000) of the principal
amount secured by this Mortgage is July 24, 1999. The discharge amount is the
same as the total amount.
IN WITNESS WHEREOF, the Shipowner has caused this First
Preferred Mortgage on the MV [NAME OF VESSEL] to be duly executed the day and
year first above written.
[NAME OF SHIPOWNER]
By:
----------------------------
Name:
Title:
19
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of ______, _____, before me personally
appeared _______________, to me known, who, being by me duly sworn, did depose
and say that he/she resides at __________________, ______________,
_________________; that he/she is the Attorney-in-Fact of
_______________________ a corporation, the company described in and which
executed the foregoing instrument; that he/she signed his/her name thereto
pursuant to a power of attorney granted by the Board of Directors of said
corporation and that the foregoing instrument is the act and deed of said
corporation.
-------------------------
NOTARY PUBLIC
For use in
the Republic of Liberia
