EXHIBIT 4.37
EXECUTION COPY
FIRST PREFERRED FLEET MORTGAGE
MADE BY
HOUSTON FLEET LLC
A DEBTOR AND A DEBTOR-IN-POSSESSION UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
IN FAVOR OF
JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT,
DOCUMENTATION AGENT AND COLLATERAL AGENT UNDER A
REVOLVING CREDIT AND GUARANTY AGREEMENT DATED AS
OF JANUARY 31, 2003 AMONG AMERICAN COMMERCIAL
LINES LLC, A DEBTOR AND A DEBTOR-IN-POSSESSION
UNDER CHAPTER 11 OF THE BANKRUPTCY CODE, AS
BORROWER, AMERICAN COMMERCIAL LINES HOLDINGS LLC
AND THE SUBSIDIARIES OF THE BORROWER NAMED
THEREIN, EACH A DEBTOR-IN-POSSESSION UNDER CHAPTER
11 OF THE BANKRUPTCY CODE, THE BANKS PARTY THERETO
AND JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT,
DOCUMENTATION AGENT AND COLLATERAL AGENT
_______________________________
DATED AND EFFECTIVE AS OF FEBRUARY 3, 2003
TABLE OF CONTENTS
PAGE
ARTICLE I GENERAL PROVISIONS........................................................................ 3
SECTION 1.1 Definitions...................................................................... 3
ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MORTGAGOR................................ 3
SECTION 2.1 Payment and Performance Obligations.............................................. 3
SECTION 2.2 Organization; Authority; Enforceability.......................................... 3
SECTION 2.3 Citizenship...................................................................... 3
SECTION 2.4 Ownership of Vessels; Warranty and Defense of Title.............................. 3
SECTION 2.5 Perfection....................................................................... 4
SECTION 2.6 Environmental Compliance......................................................... 4
SECTION 2.7 Liens............................................................................ 4
SECTION 2.8 Notice of Mortgage............................................................... 5
SECTION 2.9 Libel or Attachment.............................................................. 5
SECTION 2.10 Maintenance of Vessels........................................................... 5
SECTION 2.11 Documentation; Operation of Vessels.............................................. 6
SECTION 2.12 Inspection....................................................................... 7
SECTION 2.13 Taxes, Fees, etc................................................................. 7
SECTION 2.14 Sale, Assignment, Mortgage, Charter or Other Disposition of Vessel............... 7
SECTION 2.15 Requisition of Title or Use...................................................... 8
SECTION 2.16 Notice of Loss, Requisition or Damage............................................ 8
SECTION 2.17 Insurance........................................................................ 9
SECTION 2.18 Reimbursement of Mortgagee's Costs............................................... 14
ARTICLE III EVENTS OF DEFAULT AND REMEDIES............................................................ 14
SECTION 3.1 Event of Default and Remedies.................................................... 14
SECTION 3.2 Application of Proceeds.......................................................... 16
SECTION 3.3 Certain Rights of Mortgagor...................................................... 17
ARTICLE IV GENERAL POWERS OF MORTGAGEE............................................................... 17
SECTION 4.1 Arrest or Detention of Vessel.................................................... 17
SECTION 4.2 Suits............................................................................ 18
SECTION 4.3 Powers and Remedies Cumulative; No Waiver........................................ 18
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TABLE OF CONTENTS
(continued)
PAGE
ARTICLE V RELEASE OF VESSELS AND MORTGAGE OF ADDITIONAL VESSELS..................................... 19
SECTION 5.1 Definitions...................................................................... 19
SECTION 5.2 Release of Vessels............................................................... 19
SECTION 5.3 Mortgage of Additional Vessels................................................... 19
SECTION 5.4 Costs............................................................................ 20
ARTICLE VI SUNDRY PROVISIONS......................................................................... 20
SECTION 6.1 Amount of Fleet Mortgage......................................................... 20
SECTION 6.2 Counterparts..................................................................... 20
SECTION 6.3 Currency......................................................................... 20
SECTION 6.4 Assignment; Successors........................................................... 20
SECTION 6.5 Agents of Mortgagee.............................................................. 21
SECTION 6.6 Severability..................................................................... 21
SECTION 6.7 Amendments; Supplements.......................................................... 21
SECTION 6.8 Governing Law.................................................................... 21
SECTION 6.9 Recordation of Mortgage.......................................................... 21
SECTION 6.10 No Waiver of Preferred Status.................................................... 21
SECTION 6.11 Waiver........................................................................... 21
SECTION 6.12 Further Assurances............................................................... 21
SECTION 6.13 Notices.......................................................................... 22
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FIRST PREFERRED FLEET MORTGAGE
FIRST PREFERRED FLEET MORTGAGE, made effective this 3rd day of
February, 2003, by HOUSTON FLEET LLC, a Delaware limited liability company whose
address is 0000 X. Xxxxxx Xxxxxx, X.X. Xxx 000, Xxxxxxxxxxxxxx, Xxxxxxx
00000-0000, (the "Mortgagor"), a debtor and a debtor-in-possession in a case
pending under Chapter 11 of the Bankruptcy Code, to JPMORGAN CHASE BANK, a New
York banking corporation, whose address is 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, as administrative agent, documentation agent and collateral agent under
the Revolving Credit and Guaranty Agreement defined below (the "Mortgagee").
WHEREAS:
A. On January 31, 2003, American Commercial Lines LLC
and the Guarantors (as defined in the Revolving Credit and Guaranty Agreement
defined below), including the Mortgagor, filed voluntary petitions with the
Bankruptcy Court initiating the Cases (as defined in the Revolving Credit and
Guaranty Agreement defined below) and have continued in the possession of their
assets and in the management of their business pursuant to Sections 1107 and
1108 of the Bankruptcy Code.
B. The Mortgagor is the sole owner of the whole (100%)
of each of the vessels identified in Schedule I hereof and more fully described
in the Granting Clause hereof.
C. For purposes of 46 U.S.C. Section 31321(b)(3), the
amount of the direct or contingent obligations that are or may be secured by
this Fleet Mortgage (excluding interest, expenses and fees) is $75,000,000 plus
interest, expenses, fees, indemnities and costs of performance of the covenants
contained in this Fleet Mortgage, the Revolving Credit and Guaranty Agreement
defined below and in the other Loan Documents (as defined in the Revolving
Credit and Guaranty Agreement defined below).
D. The Mortgagor is executing and delivering this Fleet
Mortgage pursuant to a Revolving Credit and Guaranty Agreement dated as of
January 31, 2003 (as at any time amended, the "Revolving Credit and Guaranty
Agreement"), among the Mortgagor as borrower, American Commercial Lines Holdings
LLC ("Holdings"), and certain of the direct or indirect subsidiaries of the
Mortgagor signatory hereto (together with Holdings, each a "Guarantor" and
collectively, the "Guarantors"), JPMorgan Chase Bank, each of the other
financial institutions from time to time party thereto (together with JPMorgan
Chase Bank, the "Banks") and XX Xxxxxx Xxxxx Bank, as Administrative Agent,
Documentation Agent and Collateral Agent, pursuant to which (i) the Tranche A
Banks, severally, have agreed to make Tranche A Loans to the Mortgagor in an
aggregate principal amount of up to $25,000,000, from time to time during the
period commencing on the Closing Date and ending on the Termination Date and
(ii) the Tranche B Banks, severally, have agreed to make available Tranche B
Loans to the Mortgagor in an aggregate principal amount of up to $50,000,000 in
accordance with the Revolving Credit and Guaranty Agreement, a copy of which
Revolving Credit and Guaranty Agreement (without exhibits) is attached hereto as
Annex A and made a part hereof.
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E. In order to secure (a) the due and punctual payment
by the Mortgagor of (i) the principal of and premium, if any, and interest
(including interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Loans, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (ii) each payment required to be made by the Mortgagor under the
Revolving Credit and Guaranty Agreement in respect of any Letter of Credit, when
and as due, including payments in respect of reimbursement of disbursements,
interest thereon and obligations to provide cash collateral and (iii) all other
monetary obligations, including reasonable fees, costs, expenses and
indemnities, whether primary, secondary, direct, contingent, fixed or otherwise
(including monetary obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding), of the Mortgagor to the Banks and the
Mortgagee under the Revolving Credit and Guaranty Agreement, this Fleet Mortgage
and the other Loan Documents to which the Mortgagor is or is to be a party, (b)
the due and punctual performance of all covenants, agreements, obligations and
liabilities of the Mortgagor under or pursuant to the Revolving Credit and
Guaranty Agreement, this Fleet Mortgage and the other Loan Documents to which
the Mortgagor is or is to be a party, (c) the due and punctual performance of
all covenants, agreements, obligations and liabilities of each Guarantor under
or pursuant to the Loan Documents and (d) all other Obligations (as defined in
the Revolving Credit and Guaranty Agreement)(all the obligations referred to in
the preceding clauses (a) through (d) being referred to collectively, as the
"Secured Obligations"), the Mortgagor has duly authorized the execution and
delivery of this First Preferred Fleet Mortgage under and pursuant to Chapter
313 of Title 46 of the United States Code, as amended ("Chapter 313").
F. The Mortgagor is hereby granting to the Mortgagee
this Fleet Mortgage covering the whole of each of the vessels identified on
Schedule I hereof. By a supplement or supplements to this Fleet Mortgage, this
Fleet Mortgage may hereafter cover one or more additional vessels, as shall be
described in such supplement or supplements.
NOW, THEREFORE, in consideration of the foregoing and other
good and valuable consideration, the receipt of which is hereby acknowledged,
and to secure the due and punctual payment and performance of the Secured
Obligations, the Mortgagor, for itself, its successors and assigns does by these
presents:
GRANT, CONVEY, MORTGAGE, PLEDGE AND CONFIRM UNTO THE
MORTGAGEE, its successors and assigns, the whole of each of the vessels
identified on Schedule I hereof, each of which is duly documented in the name of
the Mortgagor under the laws and flag of the United States of America,
including, without being limited to, all of the boilers, engines, machinery,
masts, spars, rigging, boats, pumps, anchors, cables, chains, tackle, apparel,
furniture, fittings, equipment and other appurtenances appertaining or belonging
thereto, whether now owned or hereafter acquired, and all additions,
improvements, and replacements hereafter made in or to any vessel, or any part
thereof whether on board or not, including all items and appurtenances aforesaid
and all rents, charters, charter parties, freights, sub-freights, cargoes,
operating profits, and proceeds of the foregoing (each such vessel and all items
thereof above enumerated being included in the term "Vessel" as used in this
Fleet Mortgage);
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TO HAVE AND TO HOLD the same unto and for the proper use and
benefit of the Mortgagee, its successors and assigns, forever, upon the terms
herein set forth;
PROVIDED, HOWEVER, and these presents are upon the condition
that, if the Mortgagor or its successors and assigns shall duly and punctually
pay in full and perform in full the Secured Obligations, then this Fleet
Mortgage and the rights hereunder shall cease, determine and be void, otherwise
to be and remain in full force and effect;
PROVIDED, FURTHER that any Vessel may be separately discharged
from this Fleet Mortgage by the Mortgagee in accordance with Section 5.2 hereof;
and
FURTHER COVENANT, DECLARE AND AGREE with the Mortgagee and its
successors and assigns, that the Vessels are to be held subject to the further
representations, warranties, covenants, terms and conditions hereinafter set
forth.
ARTICLE I
GENERAL PROVISIONS
SECTION 1.1 Definitions. Capitalized terms used but not defined herein
shall have the same meanings set forth with respect thereto in the Revolving
Credit and Guaranty Agreement.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MORTGAGOR
SECTION 2.1 Payment and Performance Obligations. The Mortgagor will
duly and punctually pay or cause to be paid and duly perform, observe and comply
with the Secured Obligations.
SECTION 2.2 Organization; Authority; Enforceability. The Mortgagor was
duly organized and is now validly existing and in good standing as a limited
liability company under the laws of the State of Delaware and shall so remain
during the life of this Fleet Mortgage and so long as any of the Secured
Obligations shall remain outstanding. The Mortgagor has all requisite authority,
power and legal right to own and operate the Vessels, to mortgage the Vessels to
the Mortgagee pursuant to this Fleet Mortgage, and to execute and deliver this
Fleet Mortgage. All action necessary and required by law for the execution and
delivery by the Mortgagor of this Fleet Mortgage has been duly and effectively
taken, and this Fleet Mortgage is and will continue to be the valid and binding
obligation of the Mortgagor enforceable in accordance with its terms. All
consents and approvals required in respect of this Fleet Mortgage have been
obtained and are in full force and effect.
SECTION 2.3 Citizenship. The Mortgagor warrants that the Mortgagor
meets, and shall continue for the term of this Fleet Mortgage and until all of
the Secured Obligations are paid and performed in full to meet, all citizenship
requirements necessary for each of the Vessels to be eligible for documentation
as a vessel of the United States, under the flag of the United States, pursuant
to Title 46, Section 12102 of the United States Code.
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SECTION 2.4 Ownership of Vessels; Warranty and Defense of Title. The
Mortgagor warrants that it is the true, lawful and sole owner of the whole of
each of the Vessels, and that its ownership of each Vessel is free and clear of
all Liens except such Liens which arose prior to the date of this Fleet Mortgage
that are incident to current operations or created by that certain First
Preferred Fleet Mortgage, dated and effective as of June 30, 1998 (the "Existing
Mortgage"), granted by the Mortgagor to The Chase Manhattan Bank, as collateral
agent and security trustee (the "Existing Mortgagee") pursuant to a Credit
Agreement dated as of June 30, 1998, as amended and restated as of April 11,
2002 and amended as of September 27, 2002, among the Mortgagor, the secured
lenders from time to time party thereto and the Existing Mortgagee (the
"Existing Agreement"); none of the Vessels are subject to a demise charter or to
a time or voyage charter other than demise charters or time charters entered in
the ordinary course of business and consistent with standard marine practice
that are listed on Schedule 2.14 to this Fleet Mortgage; and that the Mortgagor
will forever warrant and defend its title and possession of each Vessel for the
benefit of the Mortgagee against any and all claims and demands.
SECTION 2.5 Perfection. The Mortgagor shall comply with and satisfy all
applicable formalities and provisions of the laws and regulations of the United
States of America, including but not limited to the provisions of Chapter 313,
as amended, in order to perfect, establish, record and maintain this Fleet
Mortgage, and any supplement or amendment thereto, upon each of the Vessels and
upon all renewals, as a first preferred fleet mortgage thereunder and on all
additions, improvements and replacements made in or to each of the Vessels and
shall do such other acts and execute all such other instruments, deeds,
conveyances, mortgages and assurances as the Mortgagee may reasonably require in
order to subject each of the Vessels to the Lien of this Fleet Mortgage as
aforesaid.
SECTION 2.6 Environmental Compliance. The Mortgagor has complied with
the representations and warranties in Section 3.07 of the Revolving Credit and
Guaranty Agreement in respect to each of the Vessels and shall comply with
Section 4.01(l) of the Revolving Credit and Guaranty Agreement regarding
compliance with environmental laws and regulations in respect to each of the
Vessels.
SECTION 2.7 Liens. The Mortgagor represents and agrees that it has not
granted and will not grant any charterer, the master of any of the Vessels or
any other person, and none thereof has or shall have, any right, power or
authority to create, incur or permit to be placed or imposed upon the Vessels,
or any of them, any Liens, other than the Lien of this Fleet Mortgage, Liens for
crew's wages, wages for stevedores when employed directly by the Mortgagor or
the master of the applicable Vessel and general average and salvage (including
contract salvage), Liens created in the ordinary course of the Vessels' current
operations which are for "necessaries" within the meaning of 46 U.S.C. Section
31301(4) and the Lien of the Existing Mortgage provided that such Liens are
subordinate to the Lien of this Fleet Mortgage. The Mortgagor further agrees
that it will not permit to be continued any Lien upon the Vessels, or any of
them (other than this Fleet Mortgage and the Lien of the Existing Mortgage), for
a period in excess of forty-five (45) days after the same becomes due and
payable except for any Lien that is being contested by the Mortgagor in good
faith by appropriate proceedings diligently conducted which are effective to
stay the execution or other enforcement of such Lien and the Mortgagor shall
have set aside on its books adequate reserves in accordance with GAAP with
respect to such Lien.
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SECTION 2.8 Notice of Mortgage. The Mortgagor shall at all times keep a
properly certified copy of this Fleet Mortgage and any amendments and
supplements hereto and any assignments hereof (i) at its address set forth above
and (ii) in the case of a Vessel that is a self-propelled Vessel, with the
ship's papers on board such Vessel and such papers shall be exhibited, on
demand, to any person having business with such Vessel which might give rise to
a maritime Lien on such Vessel, or to any representative of the Mortgagee; and a
notice, reading as follows, printed in plain type of such size that the
paragraph of reading matter shall cover a space not less than six inches wide by
nine inches high, framed under glass, shall be placed and kept prominently
displayed in the chart room and in the master's cabin of each of the Vessels
that is a self-propelled Vessel:
"NOTICE OF MORTGAGE
This Vessel is owned by Houston Fleet LLC (the
"Mortgagor") and is subject to a First Preferred Fleet Mortgage, dated
February 3, 2003, as the same may be amended or supplemented, in favor
of JPMorgan Chase Bank, as administrative agent, documentation agent
and collateral agent, pursuant to the provisions of Chapter 313 of
Title 46 of the United States Code, as amended, and under the terms of
said Fleet Mortgage the Mortgagor hereby gives notice that it has not
granted any charterer, the master of this Vessel or any other person,
and none thereof has, the right, power or authority to create, incur or
permit to exist upon this Vessel any liens or encumbrances whatsoever,
other than the lien of said Fleet Mortgage, liens for crew's wages,
wages of stevedores when employed directly by the Mortgagor or the
master of this Vessel and general average or salvage (including
contract salvage). Any such right, power or authority is also
prohibited under the terms of said Fleet Mortgage."
SECTION 2.9 Libel or Attachment. If a libel or complaint shall be filed
against the Vessels, or any of them, or if the Vessels, or any of them, shall be
levied upon or taken into custody, or detained by any proceeding in any court or
tribunal or by any government or other authority, the Mortgagor, within ten (10)
days thereafter, will cause such Vessel or Vessels to be released and any Lien
thereon, other than the Lien of this Fleet Mortgage or of the Existing Mortgage,
to be discharged. In the event the Vessels, or any of them, are levied upon or
taken into custody or detained by any authority whatsoever, the Mortgagor agrees
forthwith to notify the Mortgagee thereof by telex, confirmed by letter. The
Mortgagor shall reimburse the Mortgagee for any amount paid by the Mortgagee,
whether in settlement of a claim or in satisfaction of a judgment, and such
amounts shall be Mortgagee's Costs, as defined in and in accordance with Section
2.18 hereof.
SECTION 2.10 Maintenance of Vessels. (a) The Mortgagor will at all
times, without cost or expense to the Mortgagee, maintain and preserve the
Vessels in all material respects, and cause the Vessels in all material respects
to be tight, staunch, strong and well and sufficiently tackled, appareled,
victualed, fitted, manned, furnished and equipped and to be maintained and
preserved, in good running order and repair so that the Vessels in all material
respects shall be well equipped and seaworthy, in good working order, repair and
operating condition, ordinary wear and tear excepted. At all times, at its own
cost and expense, the Mortgagor will exercise due diligence to maintain and
preserve the Vessels in all material respects in as good condition, working
order and repair as at the time of the execution of this Fleet Mortgage,
ordinary wear
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and tear and depreciation excepted, and will maintain the Vessels in all
material respects in accordance with good marine maintenance practice and
procedures and applicable legal or regulatory requirements for the service in
which they then are or will be engaged, and in such condition as will enable the
Vessels in all material respects to pass such inspection as may be required by
marine underwriters as a condition of their writing such insurance and in such
amounts as is required under this Fleet Mortgage. Furthermore, the Mortgagor
will cause each Vessel to be periodically inspected, drydocked and recoated
(hull paint), and its machinery overhauled in accordance with normal marine
practices or as may be required by the United States Coast Guard. At the request
of the Mortgagee, the Mortgagor shall cause a marine surveyor satisfactory to
the Mortgagee to perform a survey, inspection or other actions as may be
necessary on a representative sample of the Vessels (the number or location of
such Vessels included in such representative sample to be determined by the
Mortgagee in its discretion), to prove or establish that the Vessels in all
material respects have been maintained and preserved in accordance with the
provisions of this Section 2.10(a). In addition, the Mortgagor shall provide at
the end of each six-month period commencing six weeks following the date hereof
to the Mortgagee a certificate of the chief marine operations officer (currently
Xxxxx X. Xxxxxx, Senior Vice President Transportation Services) of the Mortgagor
stating that the Vessels have been maintained and preserved in accordance with
the requirements of this Section 2.10(a).
(b) The Mortgagor may make structural changes,
alterations or additions to the Vessels, or any of them, but only to the extent
that any such change, alteration or addition is made at the Mortgagor's expense
and risk and does not diminish the value, utility, capacity, operating condition
and seaworthiness of the applicable Vessel.
(c) The Mortgagor shall certify as often as required by
the Mortgagee that all wage and other claims which give rise to Liens have been
paid.
(d) The Mortgagor shall furnish the Mortgagee within
fifteen (15) days after receipt by the Mortgagor, copies of all Certificates of
Inspection delivered by the United States Coast Guard.
(e) At the request of the Mortgagee, the Mortgagor shall
at its expense deliver to the Mortgagee an appraisal of the current charter-free
fair market value (determined on the basis of a willing buyer and willing
seller) in Dollars of each Vessel by an independent valuer acceptable to the
Mortgagee.
SECTION 2.11 Documentation; Operation of Vessels. (a) The Mortgagor
will keep each vessel duly documented as a Vessel of the United States, under
the flag of the United States, and will not cause or permit any Vessel to be
operated in any manner prohibited by any law, regulation or contract applicable
to such Vessel, and shall have on board as and when required thereby valid
certificates showing compliance therewith. The Mortgagor will not cause or
permit the Vessels, or any of them, to engage in any unlawful trade or carry any
cargo that will expose the Vessels, or any of them, 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 or flag of the Vessels, or
any of them, under the laws and regulations of the United States.
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(b) The Mortgagor will (and will cause any charterer of
the Vessels, or any of them, to) comply with and satisfy all of the provisions
of any applicable law, regulation, proclamation or order concerning financial
responsibility for liabilities imposed on the Mortgagor or the Vessels, or any
of them, with respect to pollution by any state or nation or political
subdivision thereof, including but not limited to the United States Federal
Water Pollution Control Act and the United States Oil Pollution Act of 1990, as
any of the foregoing may at any time be amended, and will (and will cause any
charterer of the Vessels, or any of them, to) maintain all certificates or other
evidence of financial responsibility as may be required by any such law,
regulation, proclamation or order with respect to the trade in which the
Vessels, or any of them, is from time to time engaged and the cargo carried
thereby.
SECTION 2.12 Inspection. The Mortgagor will permit representatives of
the Mortgagee to inspect or survey the Vessels, at the Mortgagor's expense, to
ascertain the condition of such Vessel or Vessels and whether such Vessel or
Vessels are being properly repaired and maintained. Such inspection or survey
shall be made on reasonable notice and at reasonable times and places so as not
to interfere with the safe, efficient and normal operation of such Vessel or
Vessels. The Mortgagor will cause to be made all such repairs as shall be
required by this Fleet Mortgage, without expense to the Mortgagee, its
successors and assigns or any of its authorized representatives, as such
inspection or survey or an inspection or survey conducted pursuant to Section
2.10(a) may show to be required. The Mortgagor shall also permit the Mortgagee
to inspect the logs and papers of the Vessels, or any of them, and any and all
other contracts and other papers relating to the same, whether on board or not,
whenever requested, on reasonable notice.
SECTION 2.13 Taxes, Fees, etc. The Mortgagor will pay and discharge, or
cause to be paid and discharged, when due and payable from time to time, all
taxes, assessments, governmental charges, fines and penalties lawfully imposed
on the Vessels, or any of them; provided that the Mortgagor shall not be
required to pay any such tax, assessment or charge if the validity or amount
thereof is concurrently being contested in good faith by appropriate proceedings
and if the Mortgagor shall have set aside on its books reserves deemed by it
adequate with respect to such tax, assessment or charge. Notwithstanding the
foregoing, the Mortgagor 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 2.14 Sale, Assignment, Mortgage, Charter or Other Disposition
of Vessel. The Mortgagor will not in any manner change the flag of the Vessels,
or any of them, sell, transfer or mortgage the Vessels, or any of them, or enter
into any charter party other than (a) charters permitted by the Revolving Credit
and Guaranty Agreement, (b) the Existing Mortgage or the Existing Agreement, (c)
charters to Guarantors, (d) charters for a period of one year or less under
terms that are common and customary for a charter party used by prudent owners
and operators who charter vessels similar to the Vessels and engaged in trades
similar to the trades in which the Vessels are engaged, or with the prior
written consent of the Mortgagee, any charters in excess of one year, and (e)
charters for vessels listed on Schedule 2.14 to this Fleet Mortgage; provided
that no such charter allowed in this Section 2.14 will relieve the Mortgagor of
its obligations under this Fleet Mortgage, or change the flag of the Vessels, or
any of them. Any written consent given for any one of the foregoing transactions
shall not be construed to be a waiver of this provision in respect of any such
other transaction. Any such transaction with
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respect to the Vessels, or any of them, shall be subject to the provisions of
this Fleet Mortgage and the Lien it creates.
SECTION 2.15 Requisition of Title or Use. In the event that the title
to or ownership of the Vessels, or any of them, or the use of the Vessels, or
any of them (whether on a bareboat or time charter basis or any other basis),
shall be requisitioned, purchased or taken by, or the Vessels, or any of them,
shall be seized by or forfeited to any government of any country or any
department, agency or representative thereof pursuant to any present or future
law, proclamation, decree, order or otherwise, or to any other person or
persons, whether or not acting under color of governmental authority, and the
compensation, purchase price, reimbursement or award for such requisition,
purchase, seizure, forfeiture or other taking of such title, ownership or use
shall be an amount equal to or greater than (i) $750,000 (but only if the
Mortgagor fails within 270 days after the date of such event of requisition to
have or to have made commitments to have one or more Eligible Vessels (as
defined in 5.1 hereof), collectively with an aggregate fair market value at
least equal to the amount of such compensation (as evidenced by delivery to the
Mortgagee of an appraisal in form and substance satisfactory to the Mortgagee),
subjected to this Fleet Mortgage pursuant to the provisions of Section 5.3
hereof, or (ii) $25,000,000, then such event shall be deemed a "Condemnation"
and the compensation shall be deemed to be "Condemnation Proceeds" to be applied
by the Mortgagor to prepay outstanding Obligations in accordance with Section
2.26 of the Revolving Credit and Guaranty Agreement; provided however, if an
Event of Default shall have occurred and be continuing, any amount received in
the event of a requisition described above shall be applied by the Mortgagor to
prepay outstanding Obligations in accordance with Section 2.26 of the Revolving
Credit and Guaranty Agreement. To the extent that any Condemnation Proceeds are
payable to the Mortgagee, the Mortgagor hereby constitutes and appoints the
Mortgagee and its successors and assigns, its true and lawful attorney, for it
and in its name, place and stead, to collect, receipt for, acknowledge the
payment of, xxx for and execute any documentation or writing that may be
necessary or required in order to obtain payment of said compensation, purchase
price, reimbursement or award, giving and granting to said attorney full power
and authority to do and perform every act and thing whatsoever requisite or
necessary to be done as fully and to all intents and purposes as it, the
Mortgagor, might or could do if personally present at the doing thereof, with
full power of substitution, hereby ratifying and confirming all that its said
attorney or substitute shall do or cause to be done by virtue hereof, and the
Mortgagor shall promptly execute and deliver to the Mortgagee such documents and
shall promptly do and perform such acts 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.
SECTION 2.16 Notice of Loss, Requisition or Damage. In the event of (a)
actual loss of any Vessel, (b) any event referred to in Section 2.15 hereof with
respect to any Vessel or (c) any casualty, accident or damage to any Vessel
involving an amount in excess of $750,000, the Mortgagor shall forthwith give
written notice thereof (containing full particulars) to the Mortgagee.
Furthermore, the Mortgagor will provide to the Mortgagee, at the end of each
six-month period commencing six months following the date hereof, a written
report stating each casualty, accident or damage to any Vessel involving an
amount in excess of $50,000 that occurred in the prior six month period with
full particulars.
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SECTION 2.17 Insurance. (a) The Mortgagor shall at all times while this
Fleet Mortgage shall remain in effect maintain at its own expense the following
insurance:
(i) protection and indemnity insurance with
respect to each of the Vessels in such amounts, subject to such deductible or
retention amounts, against such risks and under such forms as are then common or
customary with respect to vessels similar to the Vessels and engaged in trades
similar to the trades in which the Vessels are engaged by other prudent owners
and operators of such vessels, provided that such protection and indemnity
insurance (including excess policies) shall in all events:
(w) provide limits of liability of not
less than $250,000,000 per occurrence (and contain no
annual limits on liability);
(x) provide for deductible or retained
amounts not exceeding $4,000,000 of annual aggregate
deductible with respect to all vessels owned or
chartered by the Mortgagor plus $50,000 per
occurrence;
(y) provide protection on an "occurrence"
basis (rather than on a "claims made" basis); and
(z) provide protection against liabilities
arising out of pollution or the spillage or leakage
of cargo with a $1,000,000 per occurrence deductible;
(ii) marine, hull and machinery and, if any
Vessel or Vessels are operated outside of the United States, war risks insurance
on each of the Vessels under the latest (at the time of issue of the policies in
question) forms of American or London Institute of Marine Underwriters, provided
that such marine, hull and machinery and war risks insurance shall in all
events:
(x) be in an amount with respect to each
Vessel that is not less than the full commercial
value thereof;
(y) with respect to an accident,
occurrence or event that does not result in an actual
or constructive total loss of a Vessel or Vessels or
an agreed or compromised total loss of a Vessel or
Vessels, provide for deductible or retained amounts
that do not exceed $4,000,000 of annual aggregate
deductible with respect to all vessels owned or
chartered by the Mortgagor plus $50,000 per
occurrence; and
(z) with respect to an accident,
occurrence or event that results in an actual or
constructive total loss of a Vessel or Vessels or an
agreed or compromised total loss of a Vessel or
Vessels, provide for deductible or retained
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amounts that do not exceed $4,000,000 of annual
aggregate deductible with respect to all vessels
owned or chartered by the Mortgagor with no per
occurrence deductible;
(iii) Insurance protecting against claims under
the Longshoremen's and Harbor Workers Compensation Act, Workmen's Compensation
and public liability;
(iv) Wreck removal and fire insurance with
underwriters and under policy forms and in amounts satisfactory to the
Mortgagee; and
(v) Such other insurances that become
customarily obtained by prudent operators of vessels similar to the Vessels and
engaged in trades similar to the trades in which the Vessels are engaged or as
may be reasonably required by the Mortgagee from time to time.
(b) At the Mortgagee's request, to obtain coverage
against Mortgagee's Additional Perils (Pollution) Insurance on each of the
Vessels, the Mortgagor shall reimburse the Mortgagee for all premiums and other
amounts paid by the Mortgagee in connection with such coverage. The Mortgagor
shall reimburse the Mortgagee for such costs as Mortgagee's Costs, as defined in
and in accordance with Section 2.18 hereof.
(c) All insurance policies required under paragraph (a)
of this Section 2.17 shall:
(i) name the Mortgagee, in its individual
capacity and as administrative agent, documentation agent and collateral agent,
as additional insured and as loss payee in accordance with the provisions of
paragraph (i) below;
(ii) provide that in respect of the interest of
the Mortgagee in such policies the insurance shall not be invalidated by any
action or inaction of the Mortgagor or any other person (other than the
Mortgagee) and shall insure the Mortgagee regardless of any breach or violation
of any warranty, declaration or condition contained in such policies by the
Mortgagor or any other person (other than the Mortgagee);
(iii) provide that if such insurance is canceled
by the insurers for any reason whatsoever, or such insurance is allowed to lapse
for non-payment of premium, or such insurance coverage is reduced or any other
material change is made with respect thereto, then such cancellation, lapse,
reduction or change shall not be effective as to the Mortgagor or the Mortgagee
for 30 days after receipt by the Mortgagor or the Mortgagee, respectively, of
written notice by such insurers of such cancellation, lapse, reduction or
material change; and
(iv) provide that there shall be no recourse
against the Mortgagee for the payment of premiums, commissions, club calls,
assessments or advances.
Each insurance policy with respect to protection and indemnity insurance shall:
(i) be primary without right of contribution
from any other insurance which is carried by the Mortgagee and
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(ii) expressly provide that all of the provisions
thereof, except the limits of liability, shall operate in the same manner as if
there were a separate policy covering each insured.
(d) The Mortgagor shall not permit the Vessels, or any of
them, to undertake any voyage or participate in any venture or transport any
cargo which is not permitted by the insurance then in effect or which would
limit such insurance or render it unavailable in whole or in part.
(e) All insurance required under this Fleet Mortgage
shall be placed and kept with such insurance companies or other insurance
underwriters as shall be reasonably acceptable to the Mortgagee and the
Mortgagor.
(f) The Mortgagor shall deliver to the Mortgagee copies
of all certificates and, if requested by the Mortgagee, copies of all binders
and policies with respect to insurance from time to time carried on the Vessels
pursuant to this Section 2.17. In addition, on the Closing Date and on or before
February 3rd in each year commencing February 3, 2004, the Mortgagor shall
furnish or cause to be furnished to the Mortgagee a signed 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 2.17 and stating that in the opinion of such brokers such insurance
complies in all material respects with the terms of this Section 2.17 and is
common and customary for types of insurances and coverage generally required by
mortgagee lenders from prudent owners and operators of vessels similar to the
Vessels and engaged in trades similar to the trades in which the Vessels are
engaged.
(g) The Mortgagor shall, at its own expense, have the
duty and responsibility to make all proofs of loss and take all other steps
necessary to collect from underwriters, insurance companies or funds any loss
under any insurance with respect to the Vessels, or any of them, obtained by the
Mortgagor as required by this Section 2.17.
(h) Nothing in this Section 2.17 shall prohibit the
Mortgagee from placing additional insurance on or with respect to the Vessels at
its expense, or any of them, or the operation thereof, unless such insurance
would conflict with insurance that is carried by the Mortgagor. In the event
that the Mortgagor shall fail to maintain any insurance which it is required to
maintain pursuant to this Section 2.17, the Mortgagee may, but shall not be
obligated to, arrange for such insurance and, in such event, the Mortgagor
shall, upon demand, reimburse the Mortgagee for the costs thereof as Mortgagee's
Costs, as defined in and in accordance with Section 2.18 hereof, without waiver
of any other additional rights the Mortgagee may have.
(i) Any sums payable as a result of a loss under
insurance on the Vessels, or any of them, with respect to protection and
indemnity risks, including liability arising out of pollution or the spillage or
leakage of cargo or collision or tower's liability, may be paid directly to the
person to whom any liability covered by such insurance has been incurred or, if
the liability insured against has been discharged, to the Mortgagee or the
Mortgagor to reimburse it or them for any loss, damage or expense incurred by it
or them and covered by such insurance. Each policy of insurance maintained under
clause (ii) of paragraph (a) of this Section 2.17 shall provide that any payment
that is to be made under such policy (other than with respect to any
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protection and indemnity risks covered thereby) shall be made solely to the
Mortgagee if such payment (i) is in respect of losses equal to or greater than
$750,000 (but only if the Mortgagor fails within 270 days after the date of such
loss (x) to have or to have made commitments to have any Vessel subject to a
loss fully repaired and restored or (y) in respect of an actual or constructive
total loss of a Vessel or an agreed or compromised total loss of a Vessel to
subject or to have made commitments to subject one or more Eligible Vessels (as
defined in Section 5.1 hereof), collectively with an aggregate fair market value
at least equal to the amount of such insurance proceeds (as evidenced by
delivery to the Mortgagee of an appraisal in form and substance satisfactory to
the Mortgagee), to this Fleet Mortgage pursuant to the provisions of Section 5.3
hereof), (ii) is in respect to losses equal to or greater than $25,000,000 or
(iii) without regard to the amount or character of the loss, is made after the
insurer has received notice from the Mortgagee that an Event of Default has
occurred and is continuing, and before such notice is rescinded. Any insurance
recoveries to which the Mortgagee shall be so entitled pursuant to the
proceeding sentence shall be applied as follows:
(1) In the event that insurance becomes payable
to the Mortgagee on account of an accident, occurrence or event
involving a Vessel or Vessels that does not result in an actual or
constructive total loss or an agreed or compromised total loss of such
Vessel or Vessels,
(A) If no Event of Default shall have occurred
and be continuing, the Mortgagee shall, upon the written
request of the Mortgagor, (i) apply the proceeds of insurance
to pay, or consent that the underwriters pay, directly for
repairs, liabilities, salvage claims or other charges and
expenses (including labor charges due or paid by the
Mortgagor) with respect to such Vessel or Vessels that are
covered by the policies, or (ii) to the extent that the
Mortgagor shall have repaired the damage to such Vessel or
Vessels and paid the cost thereof or discharged or paid such
liabilities, salvage claims or other charges and expenses with
respect to such Vessel or Vessels (such fact having been
certified to in a certificate of an authorized officer of the
Mortgagor ("Officer's Certificate") delivered to the
Mortgagee, accompanied by written confirmation by the
underwriter, a surveyor, an adjuster or a marine insurance
broker), apply the proceeds or insurance to reimburse, or
consent that the underwriters reimburse, the Mortgagor
therefor, and in either case, after all known damages with
respect to the particular loss shall have been repaired,
except to the extent the Mortgagor with the written consent of
the Mortgagee deems the said repair inadvisable, in which case
such event shall be deemed a Casualty and all insurance
proceeds shall be deemed Casualty Proceeds to be applied by
the Mortgagor to prepay outstanding Obligations in accordance
with Section 2.26 of the Revolving Credit and Guaranty
Agreement, and all known costs, liabilities, salvage claims,
charges and expenses with respect to such Vessel or Vessels
that are covered by the policies shall have been discharged or
paid, such fact having been certified to by
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an Officer's Certificate delivered to the Mortgagee,
accompanied by written confirmation by the underwriter, a
surveyor, an adjuster or a marine insurance broker, pay, or
consent that the underwriters pay, any balance of the proceeds
of insurance to the Mortgagor; or
(B) if an Event of Default shall have occurred
and be continuing such loss shall be deemed a Casualty and all
related insurance proceeds shall be deemed Casualty Proceeds
to be applied by the Mortgagor to prepay outstanding
Obligations in accordance with Section 2.26 of the Revolving
Credit and Guaranty Agreement or at the election of the
Mortgagee applied for the purposes stated in clause (A)(i) of
this subparagraph (1);
(2) In the event that insurance becomes payable
to the Mortgagee on account of an accident, occurrence or event
involving a Vessel or Vessels that results in an actual or constructive
total loss or an agreed or compromised total loss of such Vessel or
Vessels such loss shall be deemed a Casualty and all related insurance
proceeds shall be deemed Casualty Proceeds to be applied by the
Mortgagor to prepay outstanding Obligations in accordance with Section
2.26 of the Revolving Credit and Guaranty Agreement .
(j) During the continuance of a taking, requisition or
charter of the use of the Vessels, or any of them, by the United States of
America, the provisions of this Section 2.17 shall be deemed to have been
complied with in all respects as to such Vessel or Vessels if the United States
Government shall have agreed (i) to reimburse the Mortgagee and the Mortgagor
for loss or damage resulting from the risks indicated in paragraph (a) of this
Section 2.17, or (ii) that the Mortgagee and the Mortgagor shall be entitled to
just compensation therefor. In the event of any taking, requisition or charter
of the Vessels, or any of them, contemplated by this paragraph (j), the
Mortgagor shall promptly furnish to the Mortgagee an Officer's Certificate
stating that such taking, requisition or charter has occurred and that the
United States Government has agreed (i) to reimburse the Mortgagee and the
Mortgagor for loss or damage resulting from the risks indicated in paragraph (a)
of this Section 2.17 or (ii) that the Mortgagee and the Mortgagor are entitled
to just compensation therefor.
(k) In the event that any claim or Lien is asserted
against the Vessels, or any of them, for loss, damage or expense which is
covered by insurance hereunder and it is necessary for the Mortgagor to obtain a
bond or supply other security to prevent the arrest of such Vessel or Vessels,
or to obtain the release of such Vessel or Vessels from arrest on account of
said claim or Lien, the Mortgagee, upon the written request of the Mortgagor,
may, but shall not be required to, assign all or any part of its right, title
and interest in and to said insurance covering such loss, damage or expense, to
any person executing a surety or guaranty bond or other agreement to save or
release such Vessel or Vessels from such arrest as collateral security to
indemnify against liability under said bond or other agreement.
SECTION 2.18 Reimbursement of Mortgagee's Costs. (a) The Mortgagor
shall promptly pay or reimburse to the Mortgagee all amounts the Mortgagee
determines constitute
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claims, liabilities, losses, taxes, duties, charges, costs, fees and expenses
("Mortgagee's Costs") incurred or made by the Mortgagee in exercising,
protecting or pursuing rights or remedies under this Fleet Mortgage, the
Revolving Credit and Guaranty Agreement or the other Loan Documents (including
but not limited to (i) amounts paid by the Mortgagee pursuant to Section 2.9,
(ii) costs incurred by the Mortgagee pursuant to Section 2.17(b) or (h), Section
5.4, Section 6.9 or Section 6.12 and (iii) expenses of any sale or taking of the
Vessels, or any of them, attorneys' fees and court costs) or resulting from the
release of the Vessels, or any of them, from the security created by this Fleet
Mortgage or resulting from supplementing this Fleet Mortgage to add additional
Vessels, with interest thereon at the rate provided in Section 2.09 of the
Revolving Credit and Guaranty Agreement.
(b) If the Mortgagor shall default in the observance or
performance of any of the covenants, conditions or agreements in this Fleet
Mortgage on its part to be performed or observed, the Mortgagee may in its
discretion do all acts and make all expenditures necessary to remedy such
default, including, but not limited to, the procurement of insurance on the
Vessels, or any of them, making repairs, discharge or purchase of Liens and
payment of taxes, dues, assessments, governmental charges, fines, penalties and
attorneys' fees; provided, however, that the Mortgagee shall be under no
obligation to the Mortgagor to do such acts or make any such expenditures nor
shall the doing or making thereof relieve the Mortgagor of any default in that
respect. All costs, fees and expenses of such acts and expenditures shall
constitute Mortgagee's Costs.
(c) All Mortgagee's Costs and interest thereon shall be
debts due from the Mortgagor to the Mortgagee payable on demand, and shall
constitute Secured Obligations and be secured by the Lien of this Fleet
Mortgage.
ARTICLE III
EVENTS OF DEFAULT AND REMEDIES
SECTION 3.1 Event of Default and Remedies. An Event of Default as
defined in the Revolving Credit and Guaranty Agreement shall be an Event of
Default hereunder.
Upon the occurrence and during the continuance of an Event of
Default, this Fleet Mortgage shall be in default, and the Mortgagee shall have
the right to exercise one or more of the following remedies:
(1) the Mortgagee may exercise all of the rights
and remedies in foreclosure and otherwise given to mortgagees by the provisions
of Chapter 313 or by any other applicable laws and exercise all of its rights
and remedies as attorney-in-fact or otherwise under this Fleet Mortgage;
(2) the Mortgagee may bring suit at law, in
equity or in admiralty in any court to foreclose, including foreclosure by
seizure, arrest and sale of the Vessels, or any of them, or to recover judgment
for the Secured Obligations, and collect the same out of any and all property of
the Mortgagor whether covered by this Fleet Mortgage or otherwise;
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(3) the Mortgagee may take the Vessels, or any
of them, wherever the same may be, without legal process and without being
responsible for loss or damage; and the Mortgagor or other person in possession
thereof shall forthwith upon demand of the Mortgagee surrender to the Mortgagee
possession of the Vessels, or any of them, and the Mortgagee may hold, lay up,
lease, charter, operate or otherwise use the Vessels, or any of them, for such
time and upon such terms as they may deem to be for their best advantage,
accounting only for the net profits, if any, arising from the use of such Vessel
or Vessels or from the sale thereof, by court proceedings or pursuant to clause
(4) below, net of all costs, expenses, charges, damages or losses by reason of
such use;
(4) the Mortgagee may sell the Vessels, or any
of them, free from any claim of or by the Mortgagor in admiralty, in equity, at
law or by statute and upon such terms and conditions as the Mortgagee
determines, at public or private sale, by sealed bids or otherwise, 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, and if the place
of sale should not be the City of New York, then also by publication of similar
notice in a daily newspaper, if any, published at the place of sale, and by
mailing notice of such sale, whether public or private, addressed to the
Mortgagor at its respective last known address fourteen (14) days prior to the
date fixed for entering into the contract of sale; in the event that the
Vessels, or any of them, 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 Vessels, or any of them, to the place
designated for such sale and in such manner as the Mortgagee may deem to be for
its advantage; or
(5) demand and receive all freights, hires,
charter hires, earnings, issues, revenues, income or profits of the Vessels, or
any of them, due or to become due from any person whomsoever.
Any sale of the Mortgagor's interest in the Vessels, or any of
them, made pursuant to this Fleet 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 Mortgagor therein and
thereto, and shall forever bar the Mortgagor, 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, or any other person, firm or
corporation to whom the Secured Obligations secured by this Fleet Mortgage are
otherwise due or owing, may bid for and purchase the Vessels, or any of them, or
other property of the Mortgagor and shall be entitled for the purpose of making
settlement or payment for the property so purchased, to use and apply the unpaid
balance of their portion of the Secured Obligations due and owing, or which may
become due or owing, as a credit against the purchase price of the Vessels, or
any of them, up to the amount represented by the ratable share of the net
proceeds of sale (after allowing for the costs and expenses of sale and other
charges) payable to such Mortgagee or such person.
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The Mortgagor hereby irrevocably appoints the Mortgagee and
its successors and assigns, with full power of substitution, the true and lawful
attorney or attorneys of the Mortgagor, in its name and stead, upon the
happening and during the continuance of an Event of Default, to make all
necessary transfers of the Vessels, or any of them, and for that purpose the
Mortgagee and its successors and assigns may execute all necessary instruments
of assignment and transfer, the Mortgagor hereby ratifying and confirming all
that its said attorney or attorneys shall do by virtue hereof. Nevertheless, the
Mortgagor shall, if so requested by the Mortgagee, ratify and confirm such sale
by executing and delivering to the purchaser of such Vessel or Vessels such
proper xxxx of sale, conveyance, instrument of transfer and release as may be
designated in such request.
The Mortgagor hereby irrevocably appoints the Mortgagee and
its successors and assigns, with full power of substitution, the true and lawful
attorney or attorneys of the Mortgagor, in its name and stead, upon the
happening and during the continuance of an Event of Default, to demand, collect,
receive, compromise and xxx for, so far as may be permitted by law, the
Mortgagor's interest in all freights, hire, earnings, issues, revenues, income
and profits of the Vessels, or any of them, and the Mortgagor's interest in all
amounts due from the underwriters under any insurance thereon as payments of
losses or as return premiums or otherwise, salvage awards and recoveries in
general average or otherwise, and the Mortgagor's interest in all other sums,
due or to become due at or after the time of the happening of any Event of
Default, in respect of the Vessels, or any of them, or in respect of any
insurance thereon from any person whomsoever, and to make, give and execute in
the name of the Mortgagor acquittances, receipts, releases or other discharges
for the same, whether under seal or otherwise, and to endorse and accept in the
name of the Mortgagor all checks, notes, drafts, warrants, agreements and all
other instruments in writing with respect to the foregoing.
The Mortgagor covenants and agrees that in addition to any and
all other rights, powers and remedies elsewhere in this Fleet Mortgage granted
to and conferred upon the Mortgagee, the Mortgagee in any suit to enforce any of
its rights, powers or remedies shall be entitled as a matter of right and not as
a matter of discretion (i) to the appointment of a receiver or receivers of the
Mortgagor's interest in the Vessels, or any of them, and the Mortgagor's
interest in the hire, earnings, issues, revenues, freights, incomes and profits
due or to become due and arising from the operation thereof, and (ii) to a
decree ordering and directing the sale and disposal of the Vessels, or any of
them.
SECTION 3.2 Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, the proceeds of the sale of the Vessels, or
any of them, the proceeds of any judgment collected by the Mortgagee for any
default hereunder, and the net earnings from any management, charter or other
use of the same by the Mortgagee under any of the powers specified in Section
3.1, and any and all other moneys held by or received by the Mortgagee pursuant
to or under the terms of this Fleet Mortgage, the application of which has not
elsewhere herein been specifically provided for, shall be applied by the
Mortgagee as follows:
FIRST: To the payment of all Mortgagee's Costs,
including the expenses of any sale or any taking of the Vessels, or any
of them, attorneys' fees and court costs,
16
together with interest as provided herein, and to provide adequate
indemnity to the Mortgagee against Liens claiming priority over or
equality with this Fleet Mortgage;
SECOND: To the payment of interest on, and then in
such order as the Mortgagee may determine, the principal of, the Loans
under the Revolving Credit and Guaranty Agreement;
THIRD: To the payment of the remaining Secured
Obligations due and owing and all other sums secured by or payable
hereunder whether due or not together with interest thereon as provided
herein, and of all damages, liquidated or otherwise, including without
limitation all other unpaid items, costs or expenses; and
FOURTH: To the payment of any surplus thereafter
remaining to the Mortgagor or to whomsoever may be entitled thereto.
In the event that the proceeds are insufficient to pay the amounts specified in
paragraphs "FIRST", "SECOND" and "THIRD" above, the Mortgagee shall be entitled
to collect the balance from the Mortgagor, or any other person liable therefor.
SECTION 3.3 Certain Rights of Mortgagor. In the absence of an Event of
Default, the Mortgagor shall (a) be permitted to retain actual possession and
use of the Vessels and (b) have the right, from time to time, in its discretion
and without application to the Mortgagee and without a release thereof by the
Mortgagee, to dispose of, free from the Lien hereof, its interest in any
boilers, engines, machinery, masts, spars, rigging, boats, anchors, cables,
chains, tackle, capstans, outfit, tools, pumps and pumping equipment, apparel,
furniture, fittings, equipment or any other appurtenances of the Vessels, or any
of them, that are no longer useful, necessary, profitable or advantageous in the
operation of such Vessel or Vessels, first or simultaneously replacing the same
by such new items of substantially equal value, which shall forthwith become
subject to the Lien of this Fleet Mortgage as a first preferred mortgage
thereon. Notwithstanding the foregoing, the Mortgagor shall not be required to
replace covers at the end of their useful lives for any Vessel or Vessels that
have been converted to a use that does not require a cover.
ARTICLE IV
GENERAL POWERS OF MORTGAGEE
SECTION 4.1 Arrest or Detention of Vessel. In the event that the
Vessels, or any of them, shall be arrested or detained by a marshal or other
officer of any court of law, equity or admiralty jurisdiction or by any
government or other authority and shall not be released from arrest or detention
within ten (10) days from the date of arrest or detention, the Mortgagor does
hereby authorize and empower the Mortgagee and its successors and assigns, in
the name of the Mortgagor, or its successors or assigns, and does hereby
irrevocably appoint the Mortgagee and its successors and assigns, with full
power of substitution, the true and lawful attorney or attorneys of the
Mortgagor, in its name and stead, to apply for and receive possession of and to
take possession of such Vessel or Vessels with all the rights and powers that
the Mortgagor, or its successors or assigns, might have, possess or exercise in
any such event.
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SECTION 4.2 Suits. The Mortgagor also hereby irrevocably appoints the
Mortgagee and its successors and assigns, with full power of substitution, the
true and lawful attorney of the Mortgagor, in its name and stead, to appear in
the name of the Mortgagor, its successors or assigns, in any court where a suit
is pending against the Vessels, or any of them, because of or on account of any
alleged Lien against such Vessel or Vessels from which such Vessel or Vessels
have not been released and to take such proceedings as the Mortgagee reasonably
may deem proper towards the defense of such suit and the purchase or discharge
of such Lien, and all expenditures made or incurred by the Mortgagee for the
purpose of such defense or discharge shall constitute Mortgagee's Costs.
The Mortgagor hereby expressly and irrevocably consents to the
jurisdiction of any court in any jurisdiction whatsoever wherein any Vessel may
at any time be located outside of the continental United States for the sole
purposes of the foreclosure of this Fleet Mortgage, the sale of the Mortgagor's
interest in such Vessel or the enforcement of any other remedy or right
hereunder, and hereby expressly and irrevocably submits the person of the
Mortgagor and its interest in such Vessel to the jurisdiction of any such court
in any such action or proceeding.
SECTION 4.3 Powers and Remedies Cumulative; No Waiver. Each and every
power and remedy herein specifically given to the Mortgagee or otherwise
available pursuant to this Fleet Mortgage shall be cumulative and shall be in
addition to every other power and remedy herein specifically given or now or
hereafter existing at law, in equity, in admiralty or by statute, and each and
every power and remedy whether specifically herein given or otherwise existing
may be exercised from time to time and as often and in such order as may be
determined 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 notice to
or demand on the Mortgagor in any instance shall entitle the Mortgagor to any
other or further notice or demand in similar or other circumstances. No delay or
omission by the Mortgagee in the exercise of any right or power or in pursuance
of any remedy occurring upon an Event of Default shall impair any such right,
power or remedy or be construed to be a waiver of any default on the part of the
Mortgagor 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 any advances
after any past Event of Default or of any payment on account of any past Event
of 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.
ARTICLE V
RELEASE OF VESSELS AND MORTGAGE
OF ADDITIONAL VESSELS
SECTION 5.1 Definitions. For purposes of this Article V, the following
terms shall have the respective meanings set forth below:
"Eligible Vessel" shall mean any inland river barge or towboat
which is duly documented pursuant to the laws of the United States as a vessel
of the United States under the United States flag, the whole of which vessel is
lawfully owned and lawfully possessed by the Mortgagor, free from any Lien other
than the Liens permitted by Section 2.7 hereof.
18
"Release" shall mean a release, substantially in the form of
Annex B (with such changes as shall be required in order to enable such release
to be filed and recorded in accordance with the provisions of Chapter 313), of
one or more Vessels from the Lien of this Fleet Mortgage executed by the
Mortgagee and delivered to the Mortgagor.
"Release Request" shall mean a request delivered by the
Mortgagor to the Mortgagee pursuant to and in accordance with the requirements
of Section 5.2 hereof.
"Supplement" shall mean a supplement to this Fleet Mortgage,
substantially in the form of Annex C hereto (with such changes as shall be
required in order to enable such supplement to be filed and recorded in
accordance with the provisions of Chapter 313) that subjects one or more
Eligible Vessels to the Lien of this Fleet Mortgage, executed by the Mortgagor
and delivered to the Mortgagee pursuant to and in accordance with the
requirements of Section 5.3 hereof.
SECTION 5.2 Release of Vessels. (a) The Mortgagor may deliver a Release
Request to the Mortgagee at any time prior to any sale or disposition of a
Vessel or Vessels by the Mortgagor permitted by Section 6.11 of the Revolving
Credit and Guaranty Agreement (a "Permitted Sale"). Any Release Request shall be
in writing, be signed on behalf of the Mortgagor, certify that such Permitted
Sale will be in accordance with the Revolving Credit and Guaranty Agreement,
identify the Vessel or Vessels to be released and be accompanied by a form of
Release respecting such Vessel or Vessels for execution by the Mortgagee.
(b) After receiving a Release Request that satisfies the
requirements of the preceding paragraph (a) and provided no Event of Default has
occurred and is continuing, the Mortgagee shall deliver to the Mortgagor a
Release covering the Vessel or Vessels designated in such Release Request. Upon
recordation, the Mortgagor shall deliver to the Mortgagee evidence thereof.
SECTION 5.3 Mortgage of Additional Vessels. (a) If the Mortgagor
acquires any Eligible Vessel or Eligible Vessels during any calendar month, on
or before the thirtieth (30th) day following the close of such calendar month,
the Mortgagor shall prepare, execute and deliver to the Mortgagee a Supplement
with respect to such Eligible Vessel or Eligible Vessels. Upon execution of the
Supplement by the Mortgagee, the Mortgagor shall cause such Supplement to be
recorded and shall otherwise take all steps necessary in order to subject the
Eligible Vessel or Eligible Vessels named therein to the Lien of this Fleet
Mortgage, subject to all of the terms and provisions hereof. At the time of the
execution and recordation of such Supplement, (i) the Mortgagor shall deliver to
the Mortgagee a copy of the Supplement, together with evidence of recordation,
(ii) the Mortgagor shall deliver to the Mortgagee certificates of insurance or
other evidence reasonably satisfactory to the Mortgagee that the Mortgagor has
insured the Vessel or Vessels covered by such Supplement in accordance with the
requirements set forth in Section 2.17 of this Fleet Mortgage, (iii) the
Mortgagor shall deliver to the Mortgagee an opinion of counsel reasonably
satisfactory to the Mortgagee, substantially in the form of Annex D hereto and
(iv) the Mortgagor shall deliver to the Mortgagee such other documents and take
such other steps as may be reasonably requested by the Mortgagee.
19
(b) If any Subsidiary of the Mortgagor acquires any
Eligible Vessel or Eligible Vessels during a calendar month, on or before the
thirtieth (30th) day following the close of such calendar month, the Mortgagor
shall cause such Subsidiary to subject such Eligible Vessel or Eligible Vessels
to a first preferred mortgage, substantially in the form of this Fleet Mortgage,
in favor of the Mortgagee, or if applicable, a mortgage supplement in the same
manner as described in this Section 5.3.
SECTION 5.4 Costs. The Mortgagor shall, promptly upon receiving
invoices therefor, pay all costs and expenses incurred by the Mortgagor and the
Mortgagee in connection with the matters contemplated by this Article V
(including, without limitation, the costs of negotiating, preparing, duplicating
and delivering documents, all filing and recording fees and similar charges and
the fees and disbursements of counsel) and reimburse the Mortgagee for any such
costs and expenses paid by them, which amounts shall constitute Mortgagee's
Costs.
ARTICLE VI
SUNDRY PROVISIONS
SECTION 6.1 Amount of Fleet Mortgage. For purposes of 46 U.S.C. Section
31321(b)(3), the amount of the direct or contingent obligations that are or may
be secured by this Fleet Mortgage (excluding interest, expenses and fees) is
$75,000,000 plus interest, expenses, fees, indemnities and costs of performance
of the covenants contained in this Fleet Mortgage, the Revolving Credit and
Guaranty Agreement and in the other Loan Documents.
SECTION 6.2 Counterparts. This Fleet Mortgage and any amendment hereof
may be executed in any number of counterparts and all such counterparts executed
and delivered each as an original shall constitute but one and the same
instrument.
SECTION 6.3 Currency. The terms "Dollars" and "$" as used herein shall
mean any coin or currency of the United States of America which at the time of
payment shall be legal tender for public and private debts.
SECTION 6.4 Assignment; Successors. All the covenants, promises,
stipulations and agreements of the Mortgagor in this Fleet Mortgage contained
shall bind the Mortgagor and its successors and assigns and shall inure to the
benefit of the Mortgagee and its successors and assigns. The Mortgagor
acknowledges that the Mortgagee may assign its interest, in whole or in part, in
this Fleet Mortgage, to any third party and, for such purpose, the Mortgagor
waives all right to notice or consent. The Mortgagor may not assign any of its
rights or obligations hereunder without the prior written consent of the
Mortgagee.
SECTION 6.5 Agents of Mortgagee. Wherever and whenever herein any
right, power or authority is granted or given to the Mortgagee, such right,
power and authority may be exercised in all cases by the Mortgagee through such
agent or agents or official or officials as it or they may appoint or authorize,
and the act or acts of such agent or agents or official or officials when taken
shall constitute the act of the Mortgagee.
SECTION 6.6 Severability. If any word, phrase, sentence, paragraph,
provision or section of this Fleet Mortgage shall be held, declared, or
pronounced void, voidable, invalid,
20
unenforceable or inoperative for any reason by any court of competent
jurisdiction, such holding, declaration or pronouncement shall not adversely
affect any other word, phrase, sentence, paragraph, provision or section of this
Fleet Mortgage which will otherwise remain in full force and effect and be
enforced in accordance with its terms, and the effect of such holding,
declaration or pronouncement shall be limited to the territory or the
jurisdiction in which made.
SECTION 6.7 Amendments; Supplements. This Fleet Mortgage may not be
amended or supplemented except in writing by the Mortgagor and the Mortgagee.
The provisions of this Fleet Mortgage may not be waived except in writing by the
Mortgagee.
SECTION 6.8 Governing Law. To the extent not governed by the laws of
the United States, this Fleet Mortgage shall be governed by the laws of the
State of New York.
SECTION 6.9 Recordation of Mortgage. The cost and expense of recording
this Fleet Mortgage, and the cost and expense of obtaining certified copies of
this Fleet Mortgage, shall be paid by the Mortgagor, and the Mortgagor agrees to
pay the same or reimburse the Mortgagee, as the case may be, within 10 days
after demand. If such sums are not so paid, and if they are borne or paid by the
Mortgagee, such sums shall be Mortgagee's Costs.
SECTION 6.10 No Waiver of Preferred Status. Nothing contained herein
shall be construed as a waiver by the Mortgagee of the preferred status of this
Fleet Mortgage, and any provision which would otherwise constitute such a waiver
shall to such extent be of no force or effect.
SECTION 6.11 Waiver. The Mortgagor agrees that it will not at any time
or in any manner whatever claim or take any benefit of any stay, extension or
moratorium law which may affect the terms of this Fleet Mortgage; nor claim or
take any benefit of any law providing for the valuation or appraisal of the
Vessels, or any of them, prior to any sale thereof; and the Mortgagor hereby
expressly waives all benefit or advantage of any such law, and covenants not to
hinder, delay, or impede the execution of any power or remedy herein granted or
available at law or in equity to the Mortgagee, but to suffer and permit the
execution of every power and remedy as though no such law existed.
SECTION 6.12 Further Assurances. At the request of the Mortgagee, from
time to time the Mortgagor will execute, on its own behalf, such other and
further instruments and documents as in the opinion of the Mortgagee or special
counsel to the Mortgagee may be required, useful or desirable to subject each
Vessel more effectually to the Lien of this Fleet Mortgage or to obtain or
maintain the full benefits of this Fleet Mortgage. Upon the failure of the
Mortgagor so to do, the Mortgagee may execute any and all such other and further
assurances and documents for and in the name of the Mortgagor, and the Mortgagor
hereby irrevocably appoints the Mortgagee the agent and attorney-in-fact of the
Mortgagor so to do, and any expense of the Mortgagee in connection therewith
shall constitute Mortgagee's Costs.
SECTION 6.13 Notices. Notices and other communications provided for
herein shall be given as provided in the Revolving Credit and Guaranty
Agreement.
21
IN WITNESS WHEREOF, the Mortgagor has executed this Fleet
Mortgage effective the day and year first above written.
HOUSTON FLEET LLC
By
------------------------------
Name:
Title:
22
STATE OF INDIANA )
: ss.:
COUNTY OF XXXXX )
On this __ day of February, 2003, before me personally
appeared _______________ to me known, who, being by me duly sworn, did depose
and say that she/he resides at __________________________; that she/he is the
______________ of HOUSTON FLEET LLC, the limited liability company described in
and which executed the foregoing instrument; that she/he signed his name thereto
pursuant to authority granted to her/him by the Board of Managers of said
limited liability company.
-----------------------
Notary Public
1
SCHEDULE I
LIST OF VESSELS
NAME OFFICIAL NUMBER
---- ---------------
1
SCHEDULE 2.14
EXISTING CHARTERS
1
ANNEX A
FORM OF REVOLVING CREDIT AND GUARANTY AGREEMENT
1
ANNEX B
FORM OF PARTIAL RELEASE OF FIRST PREFERRED FLEET MORTGAGE
JPMORGAN CHASE BANK, a New York banking corporation, as administrative
agent, documentation agent and collateral agent pursuant to the Revolving Credit
and Guaranty Agreement, located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(the "Mortgagee"), does hereby certify that the [vessel/vessels] listed on
Attachment A attached hereto and made a part hereof that were mortgaged to the
Mortgagee under that First Preferred Fleet Mortgage, dated February __, 2003 (as
previously supplemented, the "Fleet Mortgage") [any amendments or supplements],
made and executed by Houston Fleet LLC, a Delaware limited liability company,
with its address at [__________________________], to secure payment to the
Mortgagee of the total principal amount of US$75,000,000, plus interest,
expenses, fees, indemnities and the costs of performance of mortgage and other
covenants, which mortgage was filed at the United States Coast Guard, National
Vessel Documentation Center on February __, 2003, at [time] and recorded in Book
[____], Instrument [____] [recording information of amendments or supplements]
on the whole of the vessels listed on Schedule I therein, [is/are] hereby
released from the lien of the Fleet Mortgage. All other vessels listed on
Schedule I to the Fleet Mortgage but not listed on Attachment A remain subject
to the lien of the Fleet Mortgage.
IN WITNESS WHEREOF, the Mortgagee has caused this Partial Release of
First Preferred Fleet Mortgage to be executed this _____ day of ____________,
[year].
JPMORGAN CHASE BANK, a New York
banking corporation, as
administrative agent, documentation
agent and collateral agent
By:
-------------------------------
Name:
Title:
1
STATE OF _________________ )
) ss:
COUNTY OF ________________ )
On this ___ day of _____________, 200_, before me personally
appeared _______________ to me known, who, being by me duly sworn, did depose
and say that she/he resides at __________________________; that she/he is the
____________ of JPMORGAN CHASE BANK, the banking corporation described in and
which executed the foregoing instrument; that she/he signed his name thereto
pursuant to authority granted to her/him by the Board of Directors of said
corporation.
-----------------------
Notary Public
1
ANNEX C
SUPPLEMENT NO. ____
to
FIRST PREFERRED FLEET MORTGAGE
THIS SUPPLEMENT NO. ___, dated and effective as of the _____
day of ____________________, (this "Supplement") to that First Preferred Fleet
Mortgage dated and effective as of February __, 2003, is entered into between
HOUSTON FLEET LLC, a Delaware limited liability company (the "Mortgagor"), and
JPMORGAN CHASE BANK, as administrative agent, documentation agent and collateral
agent (the "Mortgagee") under a Revolving Credit and Guaranty Agreement dated as
of February __, 2003 (the "Revolving Credit and Guaranty Agreement") among the
Mortgagor, American Commercial Lines Holdings LLC, the Banks party thereto (the
"Banks"), and JPMorgan Chase Bank, as administrative agent, documentation agent
and collateral agent.
W I T N E S S E T H:
RECITALS
A. This Supplement supplements that certain First
Preferred Fleet Mortgage dated February __, 2003 made and given by the Mortgagor
to the Mortgagee, and filed in the Office of the United States Coast Guard
National Vessel Documentation Center at [TIME] on [DATE] and recorded in Book
No. ____, Instrument No. ____ (said First Preferred Fleet Mortgage, as the same
has heretofore been and may hereafter be amended, supplemented and restated, is
herein called the "Fleet Mortgage") on the Vessels identified on Schedule I
attached hereto.
B. This is a supplement that covers the whole of the
[vessel/vessels] listed on Schedule II attached hereto as more fully described
in the Granting Clause hereof. [Such vessel/each of such vessels] has been duly
documented in the name of the Mortgagor or for which an application for such
[vessel/vessels] to be duly documented in the name of the Mortgagor has been
filed at the United States Coast Guard National Vessel Documentation Center that
is in substantial compliance with the requirements of chapter 121 of Title 46 of
the United States Code, as amended, and the regulations prescribed under that
chapter under the laws and flag of the United States. The Mortgagor is the true,
lawful and sole owner of the whole of each of the [vessel/vessels] identified on
Schedule II.
C. The full name and address of the Mortgagor is:
Houston Fleet LLC
0000 X. Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxxxxxx, Xxxxxxx 00000-0000
1
Attention: General Counsel
D. The full name and address of the Mortgagee is:
JPMorgan Chase Bank, as administrative agent,
documentation agent and collateral agent under the
Revolving Credit and Guaranty Agreement,
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx (telecopy: 646-534-1755)
E. For purposes of 46 U.S.C. Section 31321(b)(3), the
amount of the direct or contingent obligations that are or may be secured by
this Supplement (excluding interest, expenses and fees) is $75,000,000 plus
interest, expenses, fees, indemnities and costs of performance of the covenants
contained in this Supplement, the Fleet Mortgage, the Revolving Credit and
Guaranty Agreement and in the other Loan Documents.
F. The Mortgage was granted by the Mortgagor to secure
the payment of the Secured Obligations.
G. Pursuant to the provisions of Section 5.3 of the
Fleet Mortgage, the Mortgagor is now required to subject [an] additional
[vessel/vessels] to the Lien of the Fleet Mortgage by executing and delivering
to the Mortgagee this Supplement.
GRANTING CLAUSE
NOW, THEREFORE, in consideration of the premises and of other
valuable consideration, the receipt and sufficiency of which the Mortgagor
hereby acknowledges, and in order to secure the timely payment in full and the
full performance of all Secured Obligations, the Mortgagor has granted,
conveyed, mortgaged, pledged, assigned, transferred, set over and confirmed and
subjected to the Lien of the Fleet Mortgage, and by these presents the Mortgagor
does grant, convey, mortgage, pledge, assign, transfer, set over and confirm and
subject to the Lien of the Fleet Mortgage, unto the Mortgagee and its successors
and assigns, the whole of the [vessel/vessels] identified in Recital B above,
[each of] which is duly documented in the name of the Mortgagor or for which an
application for such [vessel/vessels] to be duly documented in the name of the
Mortgagor has been filed at the United States Coast Guard National Vessel
Documentation Center that is in substantial compliance with the requirements of
chapter 121 of Title 46 of the United States Code, as amended, and the
regulations prescribed under that chapter, under the laws and flag of the United
States of America, including, without being limited to, all of the boilers,
engines, machinery, masts, spars, rigging, boats, pumps, anchors, cables,
chains, tackle, apparel, furniture, fittings, equipment and other appurtenances
appertaining or belonging thereto, whether now owned or hereafter acquired, and
all additions, improvements and replacements hereafter made in or to any vessel,
or any part thereof whether on board or not, including all items and
appurtenances aforesaid and all rents, charters, charter parties, freights,
sub-freights, cargoes, operating profits, and proceeds of the foregoing ([each]
2
such vessel and all items thereof above enumerated being included in the term
"Vessel" as used in this Fleet Mortgage);
TO HAVE AND TO HOLD the same unto and for the proper use and
benefit of the Mortgagee, its successors and assigns, forever, upon the terms of
the Fleet Mortgage. [The/each] Vessel identified herein shall be subjected to
the Lien of the Fleet Mortgage by this Supplement.
ARTICLE I
GENERAL PROVISIONS
SECTION 1.1 Definitions. Capitalized terms used but not
defined herein shall have the same meanings set forth with respect thereto in
the Fleet Mortgage.
SECTION 1.2 Schedule I. Schedule I to the Fleet Mortgage is
hereby supplemented by the inclusion thereon of the Vessels listed in Schedule
II hereto with the effect that such Vessels shall hereafter be included as
"Vessels" for all purposes of the Fleet Mortgage.
ARTICLE II
REPRESENTATIONS OR WARRANTIES OF THE MORTGAGOR
SECTION 2.1 Restatement and Incorporation of Representations
or Warranties. The Mortgagor hereby confirms the accuracy of each of the
representations and warranties of the Fleet Mortgage as of the date hereof with
respect to each Vessel identified herein.
ARTICLE III
RELATIONSHIP TO MORTGAGE
SECTION 3.1 Part of the Mortgage. This Supplement supplements
the Fleet Mortgage and shall, from and after the date hereof, constitute a part
of the Fleet Mortgage for all purposes.
SECTION 3.2 Ratification of the Mortgage. The Fleet Mortgage
remains in full force and effect and, except as expressly supplemented by this
Supplement, the Fleet Mortgage and each of its provisions is hereby in all
respects ratified and confirmed.
ARTICLE IV
SUNDRY PROVISIONS
SECTION 4.1 Counterparts. This Supplement may be executed in
any number of counterparts, each of which shall for all purposes be deemed to be
an original and such counterparts taken together shall be deemed to constitute
one and the same instrument.
SECTION 4.2 Governing Law. To the extent not governed by the
laws of the United States, this Supplement shall be governed by the laws of the
State of New York.
3
SECTION 4.3 Recordation of Supplement. The cost and expense of
recording this Supplement, and the cost and expense of obtaining certified
copies of this Supplement, shall be paid by the Mortgagor, and the Mortgagor
agrees to pay the same or reimburse the Mortgagee, as the case may be, within 10
days after demand, If such sums are not so paid, and if they are borne or paid
by the Mortgagee, such sums shall be Mortgagee's Costs.
SECTION 4.4 Further Assurances. At the request of the
Mortgagee, from time to time the Mortgagor will execute, on its own behalf, such
other and further instruments and documents as in the opinion of the Mortgagee
or special counsel to the Mortgagee may be required, useful or desirable to
subject each Vessel more effectually to the Lien of the Fleet Mortgage or to
obtain or maintain the full benefits of the Fleet Mortgage. Upon the failure of
the Mortgagor so to do, the Mortgagee may execute any and all such other and
further assurances and documents for and in the name of the Mortgagor, and the
Mortgagor hereby irrevocably appoints the Mortgagee the agent and
attorney-in-fact of the Mortgagor so to do, and any expense of the Mortgagee in
connection therewith shall constitute Mortgagee's Costs.
4
IN WITNESS WHEREOF, the Mortgagor and the Mortgagee have
caused this Supplement No. ___ to First Preferred Fleet Mortgage to be duly
executed and delivered as of the day and year first above written.
HOUSTON FLEET LLC
By:
---------------------------------
Title:
JPMORGAN CHASE BANK, as
administrative agent, documentation
agent and collateral agent
By:
---------------------------------
Title:
5
STATE OF [ ] )
: ss.:
COUNTY OF [ ] )
On this ___ day of _____________, 200_, before me personally
appeared _______________ to me known, who, being by me duly sworn, did depose
and say that she/he resides at __________________________; that she/he is the
____________ of HOUSTON FLEET LLC, the limited liability company described in
and which executed the foregoing instrument; that she/he signed his name thereto
pursuant to authority granted to her/him by the Board of Managers of said
limited liability company.
-----------------------
Notary Public
6
STATE OF [ ] )
: ss.:
COUNTY OF [ ] )
On this ___ day of _____________, 200_, before me personally
appeared _______________ to me known, who, being by me duly sworn, did depose
and say that she/he resides at __________________________; that she/he is the
____________ of JPMORGAN CHASE BANK, the New York banking corporation described
in and which executed the foregoing instrument; that she/he signed his name
thereto pursuant to authority granted to her/him by the Board of Directors of
said corporation.
-----------------------
Notary Public
1
SCHEDULE I TO SUPPLEMENT NO. __
LIST OF VESSELS FROM FLEET MORTGAGE
Name Official Number
---- ---------------
1
SCHEDULE II TO SUPPLEMENT NO. __
LIST OF VESSELS ADDED BY SUPPLEMENT
Name Official Number
---- ---------------
2
ANNEX D
Form of Legal Opinion
[date]
JPMorgan Chase Bank,
as administrative agent, documentation agent and collateral agent
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
We have acted as special maritime counsel to Houston Fleet LLC, a
Delaware limited liability company (the "Mortgagor"), in connection with that
Supplement No. __ dated _________, ____ (the "Mortgage Supplement") to that
First Preferred Ship Mortgage dated _____________, ____, (the "Fleet Mortgage")
given by the Mortgagor, as mortgagor, to JPMorgan Chase Bank, as administrative
agent, documentation agent and collateral agent, as Mortgagee (the "Mortgagee").
In connection with this opinion, we have examined (a) an executed copy,
certified or otherwise identified to our satisfaction, of the Mortgage
Supplement, (b) such other agreements, documents, certificates and corporate
records of the Mortgagor and official records, affidavits and other instruments
and (c) such laws and regulations, as we deemed appropriate for the purposes of
this opinion. As to factual matters, we have, in certain instances, examined and
relied upon certificates of corporate officers of the Mortgagor, copies of which
are delivered to you simultaneously herewith and have assumed the genuineness of
all signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals and the conformity with the originals of
all documents submitted to us as copies. For purposes of this opinion, we have
assumed that the Mortgage Supplement has been duly and validly authorized,
executed and delivered and constitutes the legal, valid and binding obligation
of the Mortgagor, enforceable in accordance with its terms under the laws of the
State of New York.
Based upon the foregoing and subject to the further limitations,
assumptions and qualifications set forth herein, we are of the opinion that:
1. The Mortgagor is the sole owner of the whole of [the
vessel/each of the vessels] identified on Schedule 1 to the Mortgage Supplement
(the "[New Vessel/Vessels]"). [The/each] New Vessel is free and clear of any
claim, lien, mortgage or other encumbrance of any character of record except for
the Fleet Mortgage and the Existing Mortgage, as defined in the Fleet Mortgage,
and except as set forth on Exhibit A attached hereto. To the extent that this
opinion relates to ownership and freedom and clearance of claims, liens,
mortgages or other encumbrances on the [New Vessel/Vessels], we have relied upon
the certificates as to such matters, dated the date above, of the Mortgagor and
records of the United States Coast Guard National Vessel Documentation Center.
3
2. [The New Vessel/each of the New Vessels] is eligible for
documentation and is duly documented under the laws of the United States under
46 U.S.C. Chapter 121.
3. The Mortgage Supplement has been duly filed and recorded at
the National Vessel Documentation Center (the only office in which such filing
and recording are necessary), and constitutes a fully perfected "preferred"
mortgage on each of the New Vessels in favor of the Mortgagee having the effect
and with the priority provided by 46 U.S.C. Section 31301 et seq., and subject
to no other lien or encumbrance of record.
The foregoing opinion is subject to the following qualifications:
(a) Enforcement of the Mortgage Supplement may be (i) limited by
applicable bankruptcy, insolvency, moratorium, reorganization
or similar laws affecting the enforcement of creditors' rights
generally, (ii) subject to general principles of equity
(regardless of whether such enforcement is considered in a
proceeding in equity or at law) and (iii) subject to the fact
that some of the provisions of the Mortgage Supplement may be
rendered void or unenforceable in whole or in part by the laws
of certain jurisdictions in which enforcement may be sought,
but that fact will not materially interfere with the practical
realization of the benefits of the security provided by the
Mortgage Supplement, and the inclusion of such provisions does
not affect the validity of the Mortgage Supplement and without
which provisions the Mortgage Supplement contains adequate
provisions for enforcing payment of the Secured Obligations
(as such term is defined in each Fleet Mortgage) and realizing
upon the security provided by the Mortgage Supplement;
(b) No opinion is expressed as to the specific remedy, if any,
that any court, other governmental authority or arbitrator may
grant, impose or render; and
(c) We do not purport to be expert on, and express no opinion with
respect to, the law of any jurisdiction other than the federal
laws of the United States of America.
This opinion is given as of the date hereof and is intended solely for
your benefit and is not to be made available to or relied upon by other persons
or entities without the undersigned's prior written consent.
Very truly yours,
4
