THIS SECOND PREFERRED MORTGAGE is made and given this 15th day of March,
2000 by STAVANGER SUN LTD., a company organized and existing under the laws of
the Cayman Islands, and qualified as a foreign maritime entity under the laws of
the Republic of the Xxxxxxxx Islands (the "Owner"), as mortgagor, in favor of
CHRISTIANIA BANK OG KREDITKASSE ASA, a banking corporation organized and
existing under the laws of the Kingdom of Norway, in its capacity as security
trustee (the "Mortgagee"), as mortgagee.
W H E R E A S : -
A. The Owner is the sole owner of the whole of the vessel GENMAR SUN (ex
STAVANGER SUN) (the "Vessel"), Official No. 1439, of 50,272 gross registered
tons and 23,376 net registered tons and registered and documented in the name of
the Owner under the laws and flag of the Republic of the Xxxxxxxx Islands at the
Port of Majuro.
B. The Owner has heretofore granted to the Mortgagee, as
trustee/mortgagee, a first preferred mortgage (the "First Mortgage"), dated the
date hereof, covering the Vessel, the First Mortgage having been recorded in the
Office of the Maritime Administrator of the Republic of the Xxxxxxxx Islands at
the Port of New York, New York on the date hereof at a.m. E.S.T., in Book
PM 11 at Page .
C. Pursuant to a junior facility agreement, dated October 30, 1997, made
by and among, the Owner and Boss Ltd., a company organized and existing under
the laws of the Cayman Islands ("Boss") (the Owner and Boss being herein
collectively called the "Borrowers"), as borrowers, Christiania Bank og
Kreditkasse ASA (the "Initial Bank"), as Lenders, and Christiania Bank og
Kreditkasse ASA, as agent (in its capacity as agent, the "Agent") and security
trustee (in its capacity as security trustee, the "Security Trustee") for the
Lenders and its transferees and assigns, as amended by four amendment
agreements, dated May 8, 1998, December 27, 1999, February 17, 2000 and the date
hereof, respectively, the Initial Bank having transferred a portion of its
interest in said facility agreement to Fokus Bank ASA (the Initial Bank and
Fokus Bank ASA being herein collectively called the "Lenders") pursuant to a
transfer certificate, dated January 30, 1998 (said facility agreement, as so
amended, assigned and transferred being herein called the "Facility Agreement"),
a copy of which is attached hereto as Exhibit A, the Lenders, in accordance with
the terms of the
Facility Agreement, have heretofore loaned to the Borrowers, on a joint and
several basis, the original principal amount of U.S. $5,000,000 (the "Loan"),
which remains outstanding in full on the date hereof, the principal amount of
the Loan to be repaid in full on October 27, 2002.
D. Pursuant to the terms of the Facility Agreement the Loan shall bear
interest at the rate per annum equal to the aggregate of (i) LIBOR (as defined
in the Facility Agreement) and (ii) the Margin (as defined in the Facility
Agreement) (the "Interest Rate"), payable as provided therein; default interest
thereon shall be payable by the Borrowers at the rate per annum of one percent
(1%) above the Interest Rate (the "Default Rate").
E. Pursuant to an ISDA master agreement dated October 22, 1997 (the
"ISDA Master Agreement") and Confirmation thereto (the ISDA Master Agreement and
said Confirmation being herein called the "Swap Agreement"), the forms of which
are attached hereto as Exhibit B, between the Borrowers, on the one part, and
Christiania Bank og Kreditkasse ASA (in such capacity, the "Swap Counterparty"),
as swap counterparty, on the other part, the Swap Counterparty agreed to make
available to the Borrower an interest rate swap facility in relation to the
Loan.
F. The Owner has agreed to mortgage the Vessel to the Mortgagee to
secure not only the Loan, but also the repayment of the Owner's obligations
under the ISDA Master Agreement and the payment of interest thereon and of all
other sums of money from time to time owing to the Swap Counterparty under the
ISDA Master Agreement up to the amount of U.S. $300,000 (the "Contingent Sum").
G. Pursuant to a trust deed dated October 30, 1997 (the "Trust Deed")
made by and among, INTER ALIOS, the Borrowers, the Lenders, the Agent and the
Security Trustee, the Security Trustee agreed, INTER ALIA, to receive, hold,
administer and enforce this Mortgage on behalf of the Lenders and the Swap
Counterparty.
H. The Owner, in order to secure the repayment of the Outstanding
Indebtedness (as that term is defined in sub-clause 1.1 hereof) and to secure
the performance and observance of and compliance with all the covenants, terms
and conditions in the Facility Agreement, the Swap Agreement and this Mortgage
contained, expressed or implied, to be performed, observed and complied with by
and on the part of the Owner, has duly
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authorized the execution and delivery of this Second Preferred Mortgag under and
pursuant to Chapter III of the Maritime Xxx 0000 of the Republic of the Xxxxxxxx
Islands, as amended.
NOW, THEREFORE, THIS MORTGAGE WITNESSETH:
1. DEFINITIONS
In this Mortgage, unless the context otherwise requires:
1.1 "Outstanding Indebtedness" means the Loan, the Contingent Sum,
interest thereon and all other sums of money owing to the
Lenders and/or the Swap Counterparty by the Owner from time to
time under or in connection with the Facility Agreement, the
Swap Agreement and this Mortgage;
1.2 "the Vessel" means the whole of the vessel described in Recital
(A) hereof and includes all her engines, machinery, boats,
boilers, masts, rigging, anchors, chains, cables, apparel,
tackle, outfit, spare gear, fuel, consumable or other stores,
belongings, freights and appurtenances, whether on board or
ashore, whether now owned or hereafter acquired, and all
additions, improvements and replacements hereafter made in or to
the said Vessel, or any part thereof, except suc equipment or
stores which, when placed aboard the Vessel, do not become the
property of the Owner and except that it is not intended that
this Mortgage shall include property other than the Vessel and
it shall not include property other than the Vessel as the term
"vessel" is used in Section 71(2) of Chapter 3 of the Maritime
Xxx 0000 of the Republic of the Xxxxxxxx Islands, as amended;
and
2. SECURITY
In consideration of the premises and of other good and valuable
consideration, the receipt and adequacy whereof are hereby acknowledged,
and in order to secure the payment of the Outstanding Indebtedness in
the specific manner set forth in this Mortgage, the Swap Agreement and
the Facility Agreement, the Owner has granted, conveyed and mortgaged
and does by these presents grant, convey and mortgage to and in favor of
the Mortgagee, its successors and assigns, the whole of the Vessel;
PROVIDED, HOWEVER, that
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notwithstanding any provisions to the contrary contained in this
Mortgage and irrespective of whether it is expressly mentioned in each
provision, this Mortgage be, and it hereby is, subject and subordinate
to the First Mortgage, TO HAVE AND TO HOLD the same unto the Mortgagee,
its successors and assigns, forever, upon the terms set forth in this
Mortgage for the enforcement of the payment of the Outstanding
Indebtedness and to secure the performance and observance of and
compliance with the covenants, terms and conditions in this Mortgage,
the Swap Agreement and the Facility Agreement contained, PROVIDED,
HOWEVER, and the terms of this Mortgage are such that, this Mortgage
shall be discharged, canceled and have no further effect when there
shall be no further amounts payable to the Lenders and/or the Swap
Counterparty in respect of the Outstanding Indebtedness and the Owner
shall have complied with all of the covenants, terms and conditions in
this Mortgage, the Swap Agreement and the Facility Agreement contained.
3. DECLARATION OF INDEBTEDNESS
The Owner hereby covenants and agrees to pay the Outstanding
Indebtedness to the Mortgagee, the Lenders and/or the Swap Counterparty
or their successors and assigns.
4. CONTINUING SECURITY
It is declared and agreed that the security created by this
Mortgage shall be held by the Mortgagee as a continuing security for the
payment of the Outstanding Indebtedness and that the security so created
shall not be satisfied by any intermediate payment or satisfaction of
any part of the amount hereby secured.
5. INSURANCE AND MAINTENANCE OF THE VESSEL
The Owner covenants and agrees, unless the Mortgagee has given its prior
written consent to the contrary:
(i) to insure and keep the Vessel insured or procure that the Vessel
is kept insured at no expense to the Mortgagee, the Lenders or
Swap Counterparty at all times and for as long as the Vessel is
subject to this Mortgage, against such risks, including, but not
limited to, Hull and Machinery, Hull Interest, Loss of Hire,
Freight Interest, Protection & Indemnity (including
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satisfactory (in the sole opinion of the Mortgagee) cover for
pollution liability) and War Risk insurances, in such amounts,
on such terms and with such insurers as the Mortgagee may
reasonably require, and to register and maintain the
registration of the Mortgagee's interest in all insurance
policies with such insurers;
(ii) to ensure that the insurance value of the Vessel covers the
actual risks to which the Vessel is from time to time exposed,
but, except with respect to P&I and Loss of Hire insurance, such
insurance shall at all times be in an amount at least equal to
the higher of the Fair Market Value of the Vessel and one
hundred twenty percent (120%) of the then aggregate outstanding
amount of the Outstanding Indebtedness and the indebtedness
secured by the First Mortgage and upon such terms and with such
deductibles as shall from time to time be approved by the
Mortgagee;
(iii) to deliver an annual certificate to the Mortgagee from the
insurance broker(s) through whom the insurances relevant to the
Vessel have been placed evidencing that the insurances referred
to in sub-clause (i) above have been taken out in respect of the
Vessel and that such insurances are in full force and effect;
(iv) at the request of the Mortgagee, to obtain (at the Owner's
expense) Mortgagee Interest Insurance and, if so requested by
the Mortgagee, Extended Mortgagee Interest - Additional Perils
(Pollution Cover) Insurance relevant to the Vessel in the form
and substance satisfactory to the Mortgagee;
(v) to reimburse the Mortgagee, from time to time, for all costs and
expenses incurred by the Mortgagee in its procurement of a
Mortgagee's Interest Policy in respect of its interest in the
Vessel (including Additional Perils (Pollution) coverage);
(vi) to keep and to cause to be kept the Vessel in a good and
efficient state of repair so that the Vessel is classed and
maintained in the highest class with American Bureau of Shipping
or another
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classification society acceptable to the Mortgagee, and to
comply with the provisions of all laws, regulations and
requirements (statutory or otherwise) from time to time
applicable to vessels registered under the flag of the Republic
of the Xxxxxxxx Islands, and at all times to maintain the
approval of the Vessel by all oil company majors, and to procure
that all repairs to or replacements of any damaged, worn or lost
parts or equipment be effected in such manner (both as regards
workmanship and quality of materials) as not to diminish the
value of the Vessel and to permit the Mortgagee, at the cost of
the Mortgagee, by surveyors or other persons appointed by it in
its behalf to board the Vessel at all reasonable times for the
purpose of inspecting her condition or for the purpose of
satisfying itself in regard to proposed or executed repairs and
to afford all proper facilities for such inspections, provided
that such inspections will cause no undue delay to the Vessel;
(vii) not to employ the Vessel or suffer her employment in any trade
or business which is forbidden by the laws of the Republic of
the Xxxxxxxx Islands or is otherwise illicit or in carrying
illicit or prohibited goods or in any manner whatsoever which
may render her liable to condemnation in a Prize Court or to
destruction, seizure or confiscation of the Vessel and, in the
event of hostilities in any part of the world (whether war be
declared or not), not to employ the Vesse or suffer her
employment in carrying any contraband goods or to enter or trade
to any zone which is declared a war zone by any government or by
the Vessel's War Risks insurers, unless necessary extra War
Risks insurance cover has been obtained for the Vessel;
(viii) not to change the registration of the Vessel from the laws and
flag of the Republic of the Xxxxxxxx Islands without the prior
written consent of the Mortgagee;
(ix) to maintain its qualification in good standing as a foreign
maritime entity in the Republic of the Xxxxxxxx Islands;
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(x) not to sell, agree to sell, abandon or otherwise dispose of the
Vessel or any interest therein or to suffer the disposition of
any thereof;
(xi) to pay to the Mortgagee, the Lenders and/or the Swap
Counterparty, as the case may be, on demand, all moneys
(including reasonable fees of counsel) whatsoever which the
Mortgagee, the Lenders and/or the Swap Counterparty shall or may
expend, be put to or become liable for, in or about the
protection, maintenance or enforcement of the security created
by this Mortgage or in or about the exercise by the Mortgagee,
the Lenders and/or the Swap Counterparty of any of the powers
vested in it hereunder, under the Facility Agreement or under
the Swap Agreement and to pay interest thereon at the applicable
Default Rate from the date such demand for payment is made;
(xii) to immediately notify the Mortgagee of:
(a) any accident to the Vessel involving repairs the cost
whereof will or is likely to exceed the sum of U.S.
$500,000 (or the equivalent in any other currency);
(b) any occurrence in consequence whereof the Vessel has
become or is likely to become a total loss;
(c) any arrest of the Vessel or the exercise or purported
exercise of any lien on the Vessel or the earnings of
the Vessel;
(d) any requisition for title or other compulsory
acquisition of the Vessel otherwise than by requisition
for hire;
(e) any capture, seizure, arrest, detention or confiscation
of the Vessel by any government or by persons acting or
purporting to act on behalf of any government; and
(f) any material interruption in the operation of the
Vessel, including, but not limited to an Off-Hire period
of five days or more, and the financial implications of
such interruption;
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(xiii) not bring the Vessel in any yard for repairs (other than for the
purpose of ordinary drydockings at regular intervals), the costs
of which might exceed U.S. $500,000 (or the equivalent thereof
in any other currency), in addition to normal drydocking
expenses, or permit any major change or structural alteration to
be made to the Vessel;
(xiv) not to create, incur or permit to be placed or imposed or
continued upon the Vessel any lien whatsoever other than for
Master's and crew's wages, salvage compensation and
disbursements arising by operation of law and the liens of the
First Mortgage and this Mortgage;
(xv) to comply with all declaration and reporting requirements
imposed by the Protection and Indemnity club or insurers
including, without limitation, the quarterly declarations
required by the U.S. Oil Pollution Clause 20/2/91, and to insure
payment of all premiums required to maintain in force the
maximum U.S. Oil Pollution Cover;
(xvi) not in any material way change, amend, negotiate, cancel or
terminate the Initial or Subsequent Management Agreement (as
such terms are defined in the Facility Agreement) covering the
Vessel without the prior written consent of the Mortgagee; and
(xvii) to place or to cause to be placed and at all times and places to
retain or to cause to be retained a properly certified copy of
this Mortgage on board the Vessel with her papers and cause this
Mortgage to be exhibited to any and all persons having business
with the Vessel which might give rise to any lien thereon, other
than liens permitted under the preceding Clause 5(xiv) hereof,
and to any representative of the Mortgagee on demand; and to
place and keep or to cause t be placed and kept prominently
displayed in the chart room and in the Master's cabin of the
Vessel a framed printed notice in plain type in English of such
size that the paragraph of reading matter shall cover a space
not less than
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six (6) inches wide by nine (9) inches high, reading as follows:
"NOTICE OF MORTGAGE
This Vessel is covered by a Second Preferred Mortgage to Christiania
Bank og Kreditkasse ASA, as security trustee, under the authority of
Chapter III of the Maritime Xxx 0000 of the Republic of the Xxxxxxxx
Islands, as amended. Under the terms of the said Second Preferred
Mortgage, neither the Owner nor any charterer nor the Master nor any
officer or agent of this Vessel nor any other person has any right,
power or authority to create, incur or permit to be imposed upo this
Vessel any lien whatsoever other than for crew's wages or salvage."
6. AUTHORITY OF THE MORTGAGEE
Without prejudice to any other rights of the Mortgagee hereunder:
(i) in the event that the provisions of Clause 5(i) hereof or any of
them shall not be complied with, the Mortgagee shall be at
liberty to effect and thereafter to replace, maintain and renew
all such insurances relating to the Vessel as in its sole
discretion it may think fit;
(ii) in the event that the provisions of Clause 5(vi) hereof shall
not be complied with, the Mortgagee shall be at liberty to
arrange for the carrying out of such repairs and/or surveys as
it deems expedient or necessary; and
(iii) any and all expenses incurred by the Mortgagee (including
reasonable fees of counsel) in respect of its performance under
the foregoing sub-clauses (i) and (ii) shall be paid by the
Owner on demand, with interest thereon at the Default Rate from
the date when such expenses were paid by the Mortgagee.
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7. EVENTS OF DEFAULT
(B) Each of the following events shall constitute an Event of
Default:
(i) an Event of Default (as defined in the Facility
Agreement) shall occur and be continuing;
(ii) an Event of Default (as defined in the First
Mortgage) shall occur and be continuing;
(iii) failure to pay when due the Outstanding Indebtedness or
any portion thereof; and
(iv) a default by the Owner in the due and punctual
observance of any of the covenants in this Mortgage and
such default if capable of remedy is not remedied within
ten (10) business days after notice from the Mortgagee
to the Owner requesting action to remedy such default.
The remedy period of ten (10) business days shall not
apply to the Owner's obligations according to Clauses
5(i), (ii), (iv) and (xv) hereof.
(B) If any Event of Default shall happen, the Mortgagee, shall be
entitled:
(i) to demand payment by written notice to the Owner of the
Outstanding Indebtedness, whereupon such payment by the
Owner to the Mortgagee, the Lenders and/or the Swap
Counterparty shall be immediately due and payable,
anything contained in the Facility Agreement, the Swap
Agreement or this Mortgage to the contrary
notwithstanding and without prejudice to any other
rights and remedies of the Mortgagee, the Lenders or the
Swap Counterparty under the Facility Agreement, the Swap
Agreement or this Mortgage;
(ii) to exercise all the rights and remedies in foreclosure
and otherwise given to mortgagees by any applicable law,
including those under the provisions of Chapter III of
the Maritime Xxx 0000 of the Republic of the Xxxxxxxx
Islands, as amended;
(iii) to take possession of the Vessel, wherever the same may
be, without prior demand and without
10
legal process (when permissible under applicable law);
(iv) to require that all policies, contracts, and other
records in respect of the insurances relating to the
Vessel (including details of and correspondence
concerning outstanding claims) be forthwith delivered to
such adjusters, brokers or other insurers as the
Mortgagee may nominate;
(v) to collect, recover, compromise and give a good
discharge for all claims then outstanding or thereafter
arising under the insurances relating to the Vessel or
any of them and to take over or institute (if necessary
using the name of the Owner) all such proceedings in
connection therewith as the Mortgagee in its absolute
discretion thinks fit and to permit the brokers through
whom collection or recovery is effected to charge the
usual brokerage therefor;
(vi) to discharge, compound, release or compromise claims
against the Owner in respect of the Vessel which have
given or may give rise to any charge or lien on the
Vessel or which are or may be enforceable by proceedings
against the Vessel;
(vii) to take appropriate judicial proceedings for the
foreclosure of this Mortgage and/or for the enforcement
of the Mortgagee's, the Lenders' and the Swap
Counterparty's rights under the Facility Agreement, the
Swap Agreement, this Mortgage or otherwise; and to
recover judgment for any amount due by the Owner under
this Mortgage; and
(viii) to sell the Vessel or any interest therein with or
without the benefit of any charterparty by public
auction at home or abroad, or by private sale upon at
least ten (10) business days prior written notice to the
Owner and upon such terms as the Mortgagee in its
absolute discretion may determine, with power to
postpone any such sale and in the absence of negligence
or willful neglect without being answerable for any loss
occasioned by such sale or resulting from postponement
thereof.
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8. APPLICATION OF PROCEEDS
Subject to the provisions of the First Mortgage, the proceeds of
any sale made either under the power of sale hereby granted to the Mortgagee or
under a judgment or decree in any judicial proceedings for the foreclosure of
this Mortgage or for the enforcement of any remedy granted to the Mortgagee
hereunder, or any net earnings arising from the management, charter or other use
of the Vessel by the Mortgagee under any of the powers herein contained or by
law provided, or the proceeds of any and all insurances relating to the Vessel
and any claims for damages on account of the Vessel or the Owner of any nature
whatsoever or any requisition compensation, shall be applied as follows:
FIRST: To the payment of all costs and expenses (together with
interest thereon at the Default Rate) of the Mortgagee, the Lenders and the Swap
Counterparty, including the reasonable compensation of their agents and
attorneys, by reason of any sale, retaking, management or operation of the
Vessel and all other sums payable to the Mortgagee, the Lenders and the Swap
Counterparty hereunder by reason of any expenses or liabilities incurred or
advances made by them for the protection, maintenance and enforcement of the
security or of any of their rights hereunder or in the pursuit of any remedy
hereby conferred; and at the option of the Mortgagee, the Lenders and/or the
Swap Counterparty to the payment of all taxes, assessments or liens claiming
priority over the lien of this Mortgage;
SECOND: To the payment in full of the Outstanding Indebtedness
if then due and payable; and
THIRD: Any surplus thereafter remaining, to the Owner or the
Owner's successors in interest and assigns or to whomsoever may be entitled
thereto.
In the event that the proceeds are insufficient to pay the
amounts specified in paragraphs "First" and "Second" above, the Mortgagee, the
Lenders and/or the Swap Counterparty shall be entitled to collect the balance
from the Owner or any other person liable therefor.
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9. DELEGATION
The Mortgagee, the Lenders and the Swap Counterparty shall be
entitled at any time and as often as may be expedient to delegate all or any of
the powers and discretions vested in them by this Mortgage (including the power
vested in the Mortgagee by virtue of Clause 10 hereof) in such manner and upon
such terms and to such persons as the Mortgagee, the Lenders and/or the Swap
Counterparty in their absolute discretion may think fit.
10. POWER OF ATTORNEY
The Owner hereby irrevocably appoints the Mortgagee as its
attorney-in-fact to do in its name or in the name of the Owner all acts which
the Owner, or its successors or assigns, could do in relation to the Vessel,
including without limitation, to execute and deliver charters and a xxxx of sale
with respect to the Vessel,
PROVIDED, HOWEVER, that such power shall not be exercisable by
or on behalf of the Mortgagee unless and until any Event of Default stipulated
in Clause 7(A) hereof shall occur.
11. RECORDATION
For the purpose of recording this Second Preferred Mortgage as
required under Section 302 the Maritime Xxx 0000 of the Republic of the Xxxxxxxx
Islands, as amended, the total amount is U.S. $5,300,000 (of which U.S.
$5,000,000 represents the Loan and U.S. $300,000 represents the Contingent Sum),
and interest and performance of mortgage covenants. The date of maturity with
respect to the debt secured by this Mortgate is October 27, 2002. The discharge
amount is the same as the total amount. For property other than the Vessel if
any should be determined to be covered by this Mortgage, the discharge amount is
0.01% of the total amount.
12. NOTICES
Notices and other communications required or permitted by this
Mortgage shall, until further notice in writing of a change therein, be in
writing delivered personally or mailed (airmailed, if international) by
registered or certified mail, with proof of delivery requested, telexed or
telefaxed as follows:
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If to the Owner: Stavanger Sun Ltd.
c/o General Maritime III Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, X.X. 00000
Attn.: Xxxxx X. Xxxxxxxxxxxxx, Director
Telefax No.: x(000) 000-0000
If to the Mortgagee: Christiania Bank of Kreditkasse ASA
X.X. Xxx 0000 Xxxxxxx
0000 Xxxx 0,
Xxxxxx
Attn: Shipping/Energy/Transportation
Telefax No.: x000-00-00-00-00-00
Every notice or demand shall, except so far as otherwise expressly provided by
this Mortgage, be deemed to have been received, in the case of letter, on the
date of delivery to the recipient thereof, and in the case of a telefax
transmission, on the date and at the time of dispatch thereof (provided that if
14
the date of dispatch is not a business day in the locality of the party to whom
such notice or demand is sent it shall be deemed to have been received on the
next following business day in such locality).
IN WITNESS WHEREOF, the Owner has executed this Mortgage by its
duly authorized representative on the day and year first above written.
Signed, sealed and delivered
as a Deed by STAVANGER SUN LTD.
By:
------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxxxxxxxx
Title: Attorney-in-Fact
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ACKNOWLEDGMENT OF MORTGAGE
STATE OF NEW YORK )
: ss.
COUNTY OF NEW YORK)
On the 15th day of March, in the year 2000, before me, the
undersigned, a Notary Public in and for said State, personally appeared
Xxxxxxxxxxx X. Xxxxxxxxxxxxx, personally known to me or proved to me on the
basis of satisfactory evidence to be the individual whose name is subscribed to
the within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person upon behalf of which the individual acted, executed the instrument.
Notary Public
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