Exhibit 10.19
FORM OF
DEED OF COVENANTS
TO ACCOMPANY A FIRST PREFERRED STATUTORY MORTGAGE
ON MALTA FLAG VESSEL
[VESSEL]
OFFICIAL NO. [OFFICIAL NUMBER]
executed by
[SHIPOWNER],
as Shipowner
in favor of
CHRISTIANIA BANK OG KREDITKASSE ASA, NEW YORK BRANCH,
as Trustee and as Mortgagee
[CLOSING DATE]
DEED OF COVENANTS
[VESSEL NAME]
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TABLE OF CONTENTS
PAGE
RECITALS...................................................................... 1
ARTICLE I REPRESENTATIONS AND WARRANTIES OF THE SHIPOWNER.....................5
SECTION 1. EXISTENCE; AUTHORIZATION............................5
SECTION 2. TITLE TO VESSEL.....................................5
ARTICLE II COVENANTS OF THE SHIPOWNER.........................................5
SECTION 1. PAYMENT OF INDEBTEDNESS.............................5
SECTION 2. MORTGAGE RECORDING..................................6
SECTION 3. LAWFUL OPERATION....................................6
SECTION 4. PAYMENT OF TAXES....................................6
SECTION 5. PROHIBITION OF LIENS................................6
SECTION 6. NOTICE OF MORTGAGE..................................6
SECTION 7. REMOVAL OF LIENS....................................7
SECTION 8. RELEASE FROM ARREST.................................7
SECTION 9. MAINTENANCE.........................................7
SECTION 10. INSPECTION; REPORTS.................................9
SECTION 11. FLAG; HOME PORT....................................10
SECTION 12. NO SALES, TRANSFERS OR CHARTERS....................10
SECTION 13. INSURANCE..........................................10
SECTION 14. REIMBURSEMENT FOR EXPENSES.........................15
SECTION 15. PERFORMANCE OF CHARTERS............................15
SECTION 16. CHANGE IN OWNERSHIP................................15
SECTION 17. PREPAYMENT IF EVENT OF LOSS........................15
ARTICLE III EVENTS OF DEFAULT AND REMEDIES...................................15
SECTION 1. EVENTS OF DEFAULT; REMEDIES........................15
SECTION 2. POWER OF SALE......................................18
SECTION 3. POWER OF ATTORNEY - SALE...........................18
SECTION 4. POWER OF ATTORNEY - COLLECTION.....................19
SECTION 5. DELIVERY OF VESSEL.................................19
SECTION 6. MORTGAGEE TO DISCHARGE LIENS.......................19
SECTION 7. PAYMENT OF EXPENSES................................20
SECTION 8. REMEDIES CUMULATIVE................................20
SECTION 9. CURE OF DEFAULTS...................................20
SECTION 10. DISCONTINUANCE OF PROCEEDINGS......................21
SECTION 11. APPLICATION OF PROCEEDS............................21
SECTION 12. POSSESSION UNTIL DEFAULT...........................21
i DEED OF COVENANTS
[VESSEL NAME]
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SECTION 13. SEVERABILITY OF PROVISIONS, ETC....................22
ARTICLE IV SUNDRY PROVISIONS.................................................23
SECTION 1. SUCCESSORS AND ASSIGNS.............................23
SECTION 2. POWER OF SUBSTITUTION..............................23
SECTION 3. COUNTERPARTS.......................................23
SECTION 4. NOTICES............................................23
SECTION 6. FURTHER ASSURANCES.................................24
SECTION 7. GOVERNING LAW......................................25
SECTION 8. ADDITIONAL RIGHTS OF THE MORTGAGEE.................25
SIGNATURE.......................................................................
EXHIBIT A Form of Credit Agreement
with Schedules II and X and Exhibits A, B, C, H-1,
H-2 and L
EXHIBIT B Form of Subsidiaries Guaranty
EXHIBIT C Form of Pledge and Security Agreement
ii DEED OF COVENANTS
[VESSEL NAME]
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DEED OF COVENANTS
[VESSEL]
This Deed of Covenants made [CLOSING DATE] (this "Deed"), between
[SHIPOWNER], a [CITIZENSHIP] corporation (the "Shipowner"), and CHRISTIANIA BANK
OG KREDITKASSE ASA, New York Branch ("CBK") not in its individual capacity, but
solely as Trustee (together with its successors in trust and assigns, the
"Mortgagee"), pursuant to that certain Master Vessel and Collateral Trust
Agreement dated as of [Closing Date] (as the same may be amended, supplemented
or otherwise modified from time to time, the "Master Vessel Trust Agreement")
between CBK, as Collateral Agent to the Secured Creditors party to the Credit
Agreement defined below, and CBK, as Trustee.
W I T N E S S E T H That
WHEREAS:
A. The Shipowner is the sole owner of the whole of the Malta flag
vessel [VESSEL], Official Number [OFFICIAL NUMBER] of [GROSS TONS] gross tons
and [NET TONS] net tons built in [YEAR BUILT] at [YARD AND LOCATION BUILT], with
her home port at Valetta, Malta, which together with all interest therein and
all of the boilers, engines, machinery, masts, spars, boats, anchors, cables,
chains, rigging, tackle, capstans, outfit, tools, pumps and pumping equipment,
apparel, furniture, drilling equipment, fittings, equipment, spare parts, and
all other appurtenances thereunto appertaining or belonging, whether now owned
or hereafter acquired, and also any and all additions, improvements, renewals
and replacements hereafter made in or to such vessel or any part thereof,
including all items and appurtenances aforesaid (such vessel, together with all
of the foregoing, being herein called the "Vessel").
B. GENERAL MARITIME CORPORATION, a Marshall Islands corporation (the
"Borrower"), the Lenders party thereto from time to time (the "Lenders") and
CBK, as Administrative Agent, Syndication Agent and Lead Arranger for the
Lenders, have entered into a Credit Agreement dated as of [CREDIT AGREEMENT
DATE] among the Borrower, the lenders party thereto from time to time (the
"Lenders") and CBK, as administrative agent, syndication agent and lead arranger
(as the same may be amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), providing for loans to the Borrower in the
aggregate principal amount of up to ONE HUNDRED SIXTY-FIVE MILLION UNITED STATES
DOLLARS (US$165,000,000) (as defined in the Credit Agreement, the "Loan"), a
copy of the form of which (together with its attachments, but excluding
Schedules I, III through IX and XI, and Exhibits D through G and I through K) is
attached hereto as EXHIBIT A and made a part hereof.
DEED OF COVENANTS
[VESSEL NAME]
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C. The Borrower may at any time and from time to time on and after
the date hereof enter into, or guaranty the obligations of the Shipowner or one
or more other Pledgors (as defined in the Pledge Agreement defined below) or any
of their respective subsidiaries under, one or more Interest Rate Protection
Agreements or Other Hedging Agreements with respect to the Borrower's
obligations under the Credit Agreement, with one or more Lenders or any
affiliate thereof (each such Lender or affiliate, even if the respective Lender
subsequently ceases to be a Lender under the Credit Agreement for any reason,
together with such Lender's or affiliate's successors and assigns, if any,
collectively, the "Other Creditors" and, together with the Lenders, herein
called the "Secured Creditors"; each such Interest Rate Protection Agreement, as
amended, modified, restated and/or supplemented from time to time, herein called
an "Interest Rate Protection Agreement," and each such Other Hedging Agreement,
as amended, modified, restated and/or supplemented from time to time, herein
called an "Other Hedging Agreement"). The estimated aggregate notional amount of
the liabilities of the Borrower, the Shipowner, the other Pledgors and their
respective subsidiaries under the Interest Rate Protection Agreements or Other
Hedging Agreements is TEN MILLION UNITED STATES DOLLARS (US $10,000,000).
D. The Shipowner is an indirectly wholly owned subsidiary of the
Borrower.
E. The Shipowner and each other Subsidiary Guarantor (as defined in
the Credit Agreement) have duly executed and delivered the Subsidiaries Guaranty
(as defined in the Credit Agreement), a copy of the form of which (without
attachments) is attached hereto as EXHIBIT B and made a part hereof, pursuant to
which the Shipowner and each other shipowning subsidiary of the Borrower have
guaranteed (i) all obligations of the Borrower under the Credit Agreement and
the other Credit Documents (as defined in the Credit Agreement) to induce the
Lenders to make the Loan, and (ii) all obligations of the Borrower, the
Shipowner, the other Pledgors and their respective subsidiaries under each
Interest Rate Protection Agreement and each Other Hedging Agreement. The Lenders
have advanced a portion of the Loan pursuant to the Credit Agreement and have
committed to make future advances subject to the terms and on the conditions set
forth in the Credit Agreement; the Shipowner acknowledges that it is justly
indebted to the Lenders and the other Secured Creditors under the Subsidiaries
Guaranty.
F. Contemporaneously with the execution of this Deed there has been
executed and registered by the Shipowner in favor of the Mortgagee a First
Preferred Statutory Maltese Ship Mortgage (the "Mortgage") to secure its
obligation under the Subsidiaries Guaranty, the other Credit Documents to which
it is a party (in each case, according to the terms thereof) and the payment of
all other such sums due or which may become due to the Mortgagee pursuant to the
Subsidiaries Guaranty, the "Pledge Agreement"), a copy of the form of which
(without attachments) is attached hereto as EXHIBIT C and made a part hereof,
made by the
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[VESSEL NAME]
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Shipowner and each other Subsidiary Guarantor to the Collateral Agent, for the
benefit of the Secured Creditors, and the other Credit Documents, constituting a
First Preferred Mortgage over the said Vessel and the Shipowner has agreed to
execute this Deed collateral to the Mortgage and to the security thereby
created.
G. This Deed shall be read together with the Subsidiaries Guarantee
and the Pledge Agreement, but in the case of any conflict between the two
instruments, the provisions of the Subsidiaries Guaranty shall govern and
prevail. Terms used herein and not otherwise defined herein are used as defined
in the Subsidiaries Guaranty.
H. Pursuant to the Master Vessel Trust Agreement, the Mortgagee has
agreed to act as Trustee for the Secured Creditors and hold such preferred
mortgages as set forth in the Master Vessel Trust Agreement.
NOW, THIS DEED WITNESSETH AS FOLLOWS:
1. In consideration of the premises and other good and valuable
consideration, the Shipowner hereby covenants with the Mortgagee to pay each and
every sum of money that may be or become owing under the terms of the
Subsidiaries Guaranty, the Pledge Agreement, the Mortgage and the other Credit
Documents to which it is a party or any of them at the time and in the manner
specified therein, including without limitation:
(i) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations, liabilities
and indebtedness (including, without limitation, principal, premium,
interest, fees and indemnities (including, without limitation, all
interest that accrues after the commencement of any case, proceeding or
other action relating to the bankruptcy, insolvency, reorganization or
similar proceeding of the Shipowner at the rate provided for in the
respective documentation, whether or not a claim for post-petition
interest is allowed in any such proceeding)) of the Shipowner to the
Lender Creditors (as defined in the Pledge Agreement), whether now
existing or hereafter incurred under, arising out of, or in connection
with, the Credit Agreement and the other Credit Documents to which the
Shipowner is a party and the due performance and compliance by the
Shipowner with all of the terms, conditions and agreements contained in
the Credit Agreement and in such other Credit Documents (all such
obligations, liabilities and indebtedness under this clause (i), except to
the extent consisting of obligations, liabilities or indebtedness with
respect to Interest Rate Protection Agreements or Other Hedging Agreements
being herein collectively called the "Credit Document Obligations");
(ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations, liabilities
and
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[VESSEL NAME]
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indebtedness (including, without limitation, all interest that accrues
after the commencement of any case, proceeding or other action relating to
the bankruptcy, insolvency, reorganization or similar proceeding of the
Shipowner at the rate provided for in the respective documentation,
whether or not a claim for post-petition interest is allowed in any such
proceeding) owing by the Shipowner to the Other Creditors (as defined in
the Pledge Agreement) under, or with respect to any Interest Rate
Protection Agreement or Other Hedging Agreement, whether such Interest
Rate Protection Agreement or Other Hedging Agreement is now in existence
or hereafter arising, and the due performance and compliance by the
Shipowner with all of the terms, conditions and agreements contained
therein (all such obligations, liabilities and indebtedness described in
this clause (ii) being herein collectively called the "Other
Obligations");
(iii) any and all sums advanced by the Mortgagee in order to
preserve the Vessel (as defined below) or preserve its security interest
in the Vessel;
(iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations or liabilities of the
Shipowner referred to in clauses (i) and (ii) above, after an Event of
Default (as defined in the Credit Agreement) shall have occurred and be
continuing, the reasonable expenses of retaking, holding, preparing for
sale or lease, selling or otherwise disposing of or realizing on the
Vessel, or of any exercise by the Mortgagee of its rights hereunder,
together with reasonable attorneys' fees and court costs; and
(v) all amounts paid by the Mortgagee as to which the Mortgagee has
the right to reimbursement under Section 14 of Article II and Section 7 of
Article III;
all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) hereof being herein collectively called the "Obligations," it being
acknowledged and agreed that the "Obligations" shall include extensions of
credit of the types described above, whether outstanding on the date hereof or
extended from time to time after the date hereof,
(all such Obligations, principal, interest, and all other sums hereinafter
called the "Indebtedness hereby secured").
2. By way of security for payment of the Indebtedness secured
hereby, the Shipowner hereby MORTGAGE AND CHARGES to and in favor of the
Mortgagee all its interest, present and future, in the Vessel and proceeds
thereof (which the Shipowner hereby warrants to be free at the date hereof from
any other charges or encumbrances whatsoever).
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[VESSEL NAME]
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3. The Shipowner and the Mortgagee hereby covenant with each other
that the security created by this Deed, the Subsidiaries Guaranty, the Pledge
Agreement and any of the other Credit Documents to which it is a party shall be
held by the Mortgagee as continuing security, and that the security so created
shall not be satisfied by any intermediate payment of any part of the
Indebtedness secured hereby.
4. Upon the Mortgagee being satisfied that the Indebtedness secured
hereby has been unconditionally and irrevocably paid and discharged in full, and
following a written request therefor from the Shipowner, the Mortgagee will,
subject to being indemnified in scope and substance to its satisfaction for the
costs and expenses incurred by it in connection therewith, release the security
created by the Mortgage and this Deed.
5. The Shipowner shall remain liable to fulfill all obligations
assumed by it in relation to the Vessel and the Mortgagee shall be under no
obligation of any kind whatsoever in respect thereof or be under any liability
whatsoever in event of any failure by the Shipowner to perform its obligations
in respect thereof.
It is hereby covenanted, declared and agreed that the property above
described is to be held subject to the further covenants, conditions, terms and
uses hereinafter set forth.
The Shipowner covenants and agrees with the Mortgagee as follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES OF THE SHIPOWNER
Section 1. EXISTENCE; AUTHORIZATION. The Shipowner is a company duly
organized and validly existing under the laws of [PLACE OF SHIPOWNER
INCORPORATION] and shall so remain during the life of this Deed. The Shipowner
has full power and authority to own and mortgage the Vessel; has full right and
entitlement to register the Vessel in its name under the flag of the Republic of
Malta and all action necessary and required by law for the execution and
delivery of this Deed and the Mortgage has been duly and effectively taken; and
each of the Indebtedness hereby secured and this Deed and the Mortgage is and
will be the legal, valid and binding obligation of the Shipowner enforceable in
accordance with its terms.
Section 2. TITLE TO VESSEL. The Shipowner lawfully owns and is
lawfully possessed of the Vessel free from any lien or encumbrance whatsoever
other than the Mortgage, liens for current crew's wages and liens not yet
required to be removed under Section 7 of Article II hereof and will warrant and
defend the title
5 DEED OF COVENANTS
[VESSEL NAME]
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and possession thereto and to every part thereof for the benefit of the
Mortgagee against the claims and demands of all persons whomsoever.
ARTICLE II
COVENANTS OF THE SHIPOWNER
Section 1. PAYMENT OF INDEBTEDNESS. The Shipowner will pay or cause
to be paid the Indebtedness hereby secured and will observe, perform and comply
with the covenants, terms and conditions herein and in the Subsidiaries
Guaranty, the Pledge Agreement and the other Credit Documents to which it is a
party, express or implied, on its part to be observed, performed or complied
with.
The obligation of the Indebtedness hereby secured is an obligation
in United States Dollars and the term "$" when used herein shall mean such
United States Dollars. Notwithstanding fluctuations in the value or rate of
United States Dollars in terms of gold or any other currency, all payments
hereunder or otherwise in respect of the Indebtedness hereby secured shall be
payable in terms of United States Dollars when due, in United States Dollars
when paid, whether such payment is made before or after the due date.
Section 2. MORTGAGE RECORDING. The Shipowner will cause the Mortgage
to be duly recorded or filed in the Office of
[_________________________________________] of the Republic of Malta, in
accordance with the applicable provisions of the laws of the Republic of Malta
and will otherwise comply with and satisfy all of the provisions of applicable
laws of the Republic of Malta in order to establish and maintain (a) the
Mortgage as a first preferred statutory mortgage thereunder upon the Vessel and
upon all renewals, replacements and improvements made in or to the same and (b)
this Deed, the Securities Guaranty and any other Security Documents as a first
priority assignment of, charge over, and security interest in the Vessel or
other property assigned thereunder.
Section 3. LAWFUL OPERATION. The Shipowner will not cause or permit
the Vessel to be operated in any manner contrary to law, and the Shipowner will
not engage in any unlawful trade or violate any law or carry any cargo that will
expose the Vessel to penalty, forfeiture or capture, and will not do, or suffer
or permit to be done, anything which can or may injuriously affect the
registration of the Vessel under the laws and regulations of the Republic of
Malta and will at all times keep the Vessel duly documented thereunder.
Section 4. PAYMENT OF TAXES. The Shipowner will pay and discharge
when due and payable, from time to time, all taxes, assessments, governmental
charges, fines and penalties lawfully imposed on the Vessel or any income
therefrom.
6 DEED OF COVENANTS
[VESSEL NAME]
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Section 5. PROHIBITION OF LIENS. Neither the Shipowner, any
charterer, the Master of the Vessel nor any other person has or shall have any
right, power or authority to create, incur or permit to be placed or imposed or
continued upon the Vessel, its freights, profits or hire any lien whatsoever
other than the Mortgage, this Deed, other liens in favor of the Mortgagee and
for crew's wages and salvage.
Section 6. NOTICE OF MORTGAGE. The Shipowner will place, and at all
times and places will retain a properly certified copy of the Mortgage and a
true copy of this Deed on board the Vessel with her papers and will cause such
certified copy and the Vessel's marine document to be exhibited to any and all
persons having business therewith which might give rise to any lien thereon
other than liens for crew's wages and salvage, and to any representative of the
Mortgagee.
The Shipowner will place and keep prominently displayed in the chart
room and in the Master's cabin on the Vessel a framed printed notice in plain
type reading as follows:
NOTICE OF MORTGAGE
THIS VESSEL IS OWNED BY [SHIPOWNER], AND IS SUBJECT TO A FIRST PREFERRED
STATUTORY MORTGAGE AND DEED OF COVENANTS COLLATERAL THERETO IN FAVOR OF
CHRISTIANIA BANK OG KREDITKASSE ASA, NEW YORK BRANCH, AS TRUSTEE/MORTGAGEE
UNDER THE TERMS OF SAID DEED, NEITHER THE SHIPOWNER, ANY CHARTERER, THE
MASTER OF THE VESSEL, NOR ANY OTHER PERSON HAS ANY RIGHT, POWER OR
AUTHORITY TO CREATE, INCUR OR PERMIT TO BE PLACED OR IMPOSED UPON THE
VESSEL, ANY ENCUMBRANCES WHATSOEVER OR ANY OTHER LIEN WHATSOEVER OTHER
THAN FOR CREW'S WAGES AND SALVAGE.
Section 7. REMOVAL OF LIENS. Except for the lien of this Deed and
the Mortgage, the Shipowner will not suffer to be continued any lien,
encumbrance or charge on the Vessel, and in due course and in any event within
thirty (30) days after the same becomes due and payable or within fourteen (14)
days after being requested to do so by the Mortgagee, the Shipowner will pay or
cause to be discharged or make adequate provision for the satisfaction or
discharge of all claims or demands, and will cause the Vessel to be released or
discharged from any lien, encumbrance or charge therefor.
Section 8. RELEASE FROM ARREST. If a libel, complaint or similar
process be filed against the Vessel or the Vessel be otherwise attached, levied
upon or taken into custody by virtue of any legal proceeding in any court, the
7 DEED OF COVENANTS
[VESSEL NAME]
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Shipowner will promptly notify the Mortgagee thereof by telex, or telefax
confirmed by letter, at the address, as specified in this Deed, and within
fourteen (14) days will cause the Vessel to be released and all liens thereon
other than the Mortgage and this Deed to be discharged, will cause a certificate
of discharge to be recorded in the case of any recording of a notice of claim of
lien, and will promptly notify the Mortgagee thereof in the manner aforesaid.
The Shipowner will notify the Mortgagee within forty-eight (48) hours of any
average or salvage incurred by the Vessel.
Section 9. MAINTENANCE. (a)The Shipowner will at all times and
without cost or expense to the Mortgagee maintain and preserve, or cause to be
maintained and preserved, the Vessel and all its equipment, outfit and
appurtenances, tight, staunch, strong, in good condition, working order and
repair and in all respects seaworthy and fit for its intended service, and will
keep the Vessel, or cause her to be kept, in such condition as will entitle her
to the highest classification and rating for vessels of the same age and type in
[_____________________________] or other classification society of like standing
approved by the Mortgagee. The Shipowner covenants to deliver annually to the
Mortgagee a certificate from such class society showing such classification to
be maintained. The Shipowner will without cost or expense to the Mortgagee
promptly, irrevocably and unconditionally instruct and authorize the
classification society of the Vessel, and shall request the classification
society to give an undertaking to the Mortgagee as follows:
1. to send to the Mortgagee, following receipt of a written request
from the Mortgagee, certified true copies of all original class
records held by the classification society relating to the Vessel;
2. to allow the Mortgagee (or its agents), at any time and from time to
time, to inspect the original class and related records of the
Shipowner and the Vessel at the offices of the classification
society and to take copies of them;
3. following receipt of a written request from the Mortgagee:
(a) to advise of any facts or matters which may result in or have
resulted in a change, suspension, discontinuance, withdrawal
or expiry of the Vessel's class under the rules or terms and
conditions of the Shipowner's or the Vessel's membership of
the classification society; and
(b) to confirm that the Shipowner is not in default of any of its
contractual obligations or liabilities to the classification
society and, without limiting the foregoing, that it has paid
in full all fees or other charges due and payable to the
classification society; and
8 DEED OF COVENANTS
[VESSEL NAME]
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(c) if the Shipowner is in default of any of its contractual
obligations or liabilities to the classification society, to
specify to the Mortgagee in reasonable detail the facts and
circumstances of such default, the consequences thereof, and
any remedy period agreed or allowed by the classification
society; and
(d) to notify the Mortgagee immediately in writing if the
classification society receives notification from the
Shipowner or any other person that the Vessel's classification
society is to be changed.
Notwithstanding the above instructions and undertaking given for the benefit of
the Mortgagee, the Shipowner shall continue to be responsible to the
classification society for the performance and discharge of all its obligations
and liabilities relating to or arising out of or in connection with the contract
it has with the classification society, and nothing herein or therein shall be
construed as imposing any obligation or liability of the Mortgagee to the
classification society in respect thereof.
The Shipowner shall further notify the classification society that
all the foregoing instructions and authorizations shall remain in full force and
effect until revoked or modified by written notice to the classification society
received from the Mortgagee, and that the Shipowner shall reimburse the
classification society for all its costs and expenses incurred in complying with
the foregoing instructions.
(b) The Vessel shall, and the Shipowner covenants that she will, at
all times comply with all applicable laws, treaties and conventions to which the
Republic of Malta is a party, and rules and regulations issued thereunder, and
shall have on board as and when required thereby valid certificates showing
compliance therewith. The Shipowner will not make, or permit to be made, any
substantial change in the structure, type or speed of the Vessel or change in
her rig, without first receiving the written approval thereof by the Mortgagee.
(c) The Shipowner agrees to give the Mortgagee at least ten (10)
days notice of the actual date and place of any survey or drydocking, in order
that the Mortgagee may have representatives present if desired. The Shipowner
agrees that at the Mortgagee's request it will satisfy the Mortgagee that the
expense of such survey or drydocking or work to be done thereat is within
Shipowner's financial capability and will not result in a claim or lien against
the Vessel in violation of the provisions of this Deed, the Credit Agreement or
the Subsidiaries Guaranty, the Pledge Agreement or any other Credit Document.
(d) The Shipowner shall promptly notify the Mortgagee of and furnish
the Mortgagee with full information, including copies of reports and
9 DEED OF COVENANTS
[VESSEL NAME]
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surveys, regarding any material accident or accident involving repairs where the
aggregate cost is likely to exceed Five Hundred Thousand Dollars (U.S. $500,000)
(or its equivalent in another currency), any major damage to the Vessel, any
event affecting the Vessel's class, any occurrence in consequence whereof the
Vessel has become or is likely to suffer an Event of Loss as defined in the
Credit Agreement.
(e) The Mortgagee shall have the right at any time, on reasonable
notice, to have its surveyor conduct inspections and surveys of the Vessel to
ascertain the condition of the Vessel and to satisfy itself that the Vessel is
being properly repaired and maintained. Such inspections and surveys shall be
conducted at such times and in such manner as will not interfere with the
Shipowner's normal business operations and schedule.
Section 10. INSPECTION; REPORTS. (a) The Shipowner will at all
reasonable times afford the Mortgagee or its authorized representatives full and
complete access to the Vessel for the purpose of inspecting the Vessel and her
cargo and papers, including without limitation all records pertaining to the
Vessel's maintenance and repair, and, at the request of the Mortgagee, the
Shipowner will deliver for inspection copies of any and all contracts and
documents relating to the Vessel, whether on board or not.
(b) The Shipowner hereby agrees to furnish promptly to the
Mortgagee, on demand, any reports or information which the Shipowner may submit
to shareholders or regulatory agencies and any additional information which the
Mortgagee may request in respect of the financial condition of the Shipowner.
Section 11. FLAG; HOME PORT. (a) The Shipowner will not change the
flag or home port of the Vessel without the written consent of the Mortgagee and
any such written consent to any one change of flag or home port shall not be
construed to be a waiver of this provision with respect to any subsequent
proposed change of flag or home port.
(b) Notwithstanding the foregoing provisions of this Section 11,
upon not less than 30 days prior written notice to the Mortgagee, provided no
Default or Event of Default under the Credit Agreement shall have occurred and
be continuing, the Shipowner may change the flag or home port of the Vessel to
another flag or home port reasonably satisfactory to the Mortgagee, PROVIDED
that the Shipowner shall promptly take all actions necessary or desirable to
establish, preserve, protect and maintain the security interest of the Mortgagee
in the Vessel to the satisfaction of the Mortgagee, and the Shipowner shall have
provided to the Mortgagee and the Lenders such opinions of counsel as may be
reasonably requested by the Mortgagee to assure itself that the conditions of
this proviso have been satisfied.
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[VESSEL NAME]
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Section 12. NO SALES, TRANSFERS OR CHARTERS. The Shipowner will not
sell, mortgage, transfer, or change the management of, or demise charter the
Vessel for any period longer than twelve (12) months (including any permitted
extensions or renewals) in each case, without the written consent of the
Mortgagee first had and obtained, and any such written consent to any one sale,
mortgage, demise charter, transfer, or change of management shall not be
construed to be a waiver of this provision with respect to any subsequent
proposed sale, mortgage, demise charter, transfer, or change of management. Any
such sale, mortgage, demise charter, transfer, or change of management of the
Vessel shall be subject to the provisions of this Deed, the Mortgage and the
lien thereof.
Section 13. INSURANCE. (a) The Shipowner, at its own expense, or
with respect to part (a)(iii) of this Section 13 the Mortgagee at the expense of
the Shipowner, will keep the Vessel insured with insurers and protection and
indemnity clubs or associations of internationally recognized responsibility,
and placed in such markets, on such terms and conditions, and through brokers,
in each case reasonably satisfactory to the Mortgagee and under forms of
policies approved by the Mortgagee against the risks indicated below and such
other risks as the Mortgagee may specify from time to time:
(i) Marine and war risk, including London Blocking and Trapping
Addendum and Lost Vessel Clause, hull and machinery insurance in an amount
in U.S. dollars equal to, except as otherwise approved or required in
writing by the Mortgagee, the greater of (x) the then full commercial
value of the Vessel or (y) an amount which, when aggregated with such
insured value of the other Vessels referred to in the Credit Agreement (if
the other Vessels are then subject to a mortgage in favor of the Mortgagee
under the Credit Agreement, and have not suffered an Event of Loss as
defined in the Credit Agreement), is equal to 120% of the then outstanding
aggregate principal amount of the outstanding Term Loans (as defined in
the Credit Agreement) plus the Total Revolving Loan Commitment (as defined
in the Credit Agreement) whether used or unused.
(ii) Marine and war risk protection and indemnity insurance or
equivalent insurance (including coverage against liability for passengers,
fines and penalties arising out of the operation of the Vessel, insurance
against liability arising out of pollution, spillage or leakage, and
workmen's compensation or longshoremen's and harbor workers' insurance as
shall be required by applicable law) in such amounts approved by the
Mortgagee; provided, however that insurance against liability under law or
international convention arising out of pollution, spillage or leakage
shall be in an amount not less than the greater of:
(y) the maximum amount available, as that amount may from time to
time change, from the International Group of Protection and
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Indemnity Associations or alternatively such sources of
pollution, spillage or leakage coverage as are commercially
available in any absence of such coverage by the International
Group as shall be carried by prudent shipowners for similar
vessels engaged in similar trades plus amounts available from
customary excess insurers of such risks as excess amounts
shall be carried by prudent shipowners for similar vessels
engaged in similar trades; and
(z) the amounts required by the laws or regulations of the United
States of America or any applicable jurisdiction in which the
Vessel may be trading from time to time.
(iii) Mortgagee's interest insurance (including extended mortgagee
interest-additional perils-pollution) coverage satisfactory to the
Mortgagee in an amount equal to 120% of the then outstanding aggregate
principal amounts of the outstanding Term Loans plus the Total Revolving
Loan Commitment (as defined in the Credit Agreement) whether used or
unused; all such mortgagee's interest insurance cover shal in the
Mortgagee's discretion be obtained directly by the Mortgagee and the
Shipowner shall on demand pay all costs of such cover.
(iv) While the Vessel is idle or laid up, at the option of the
Shipowner and in lieu of the above-mentioned marine and war risk hull
insurance, port risk insurance insuring the Vessel against the usual risks
encountered by like vessels under similar circumstances.
(b) The marine and commercial war-risk insurance required by this
Section 13 shall have deductibles and franchises no higher than the following:
(i) Hull and Machinery - US$115,000 for all hull claims and US$150,000 for all
machinery claims each accident or occurrence and (ii) Protection and Indemnity -
US$50,000 for cargo claims, US$35,000 for crew claims, US$10,000 passenger
claims and US$15,000 all other claims, in each case each accident or occurrence.
All insurance maintained hereunder shall be primary insurance
without right of contribution against any other insurance maintained by the
Mortgagee. Each policy of marine and war risk hull and machinery insurance with
respect to the Vessel shall provide that the Mortgagee shall be a named insured
and a loss payee. Each entry in a marine and war risk protection indemnity club
with respect to the Vessel shall note the interest of the Mortgagee. The
Mortgagee and its successors and assigns shall not be responsible for any
premiums, club calls, assessments or any other obligations or for the
representations and warranties made therein by the Shipowner or any other
person.
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(c) The Shipowner will furnish the Mortgagee from time to time on
request, and in any event at least annually, a detailed report signed by a firm
of marine insurance brokers acceptable to the Mortgagee with respect to P & I
entry, the hull and machinery and war risk insurance carried and maintained on
the Vessel, together with their opinion as to the adequacy thereof and its
compliance with the provisions of this Mortgage. At the Shipowner's expense the
Shipowner will cause such insurance broker and the P & I club or association
providing P & I insurance referred to in part (a)(ii) of this Section 13, to
agree to advise the Mortgagee by telex or telecopier confirmed by letter of any
expiration, termination, alteration or cancellation of any policy, any default
in the payment of any premium and of any other act or omission on the part of
the Shipowner of which it has knowledge and which might invalidate or render
unenforceable, in whole or in part, any insurance on the Vessel, and to provide
an opportunity of paying any such unpaid premium or call, such right being
exercisable by the Mortgagee on a Mortgaged Vessel (as defined in the Credit
Agreement) by Mortgaged Vessel and not on a fleet basis.
The underwriters or brokers shall furnish the Mortgagee with a
letter or letters of undertaking to the effect that:
(i) they will hold the instruments of insurance, and the
benefit of the insurances thereunder, to the order of the Mortgagee in
accordance with the terms of the loss payable clause referred to in the
Assignment of Insurances (attached to the Credit Agreement as Exhibit
H-2); and
(ii) they will have endorsed on each and every policy as and
when the same is issued the loss payable clause and the notice of
assignment referred to in the Assignment of Insurances; and
(iii) they will not set off against any sum recoverable in
respect of a claim against the Vessel under the said underwriters or
brokers or any other person in respect of any other vessel nor cancel
the said insurances by reason of non-payment o such premiums or other
amounts.
All policies of insurance required hereby shall provide for not less
than 14 days prior written notice to be received by the Mortgagee of the
termination or cancellation of the insurance evidenced thereby. All policies of
insurance maintained pursuant to this Section 13 for risks covered by insurance
other than that provided by a P & I Club shall contain provisions waiving
underwriters' rights of subrogation thereunder against any assured named in such
policy and any assignee of said assured. The Shipowner has assigned to the
Mortgagee its rights under any policies of insurance in respect of the Vessel.
The Shipowner agrees that, unless the insurances by their terms provide that
they cannot cease (by reason of nonrenewal or otherwise) without the Mortgagee
being informed and having the right to continue the insurance by paying any
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premiums not paid by the Shipowner, receipts showing payment of premiums for
required insurance and also of demands from the Vessel's P & I underwriters
shall be in the hands of the Mortgagee at least two (2) days before the risk in
question commences.
(d) Unless the Mortgagee shall otherwise agree, all amounts of
whatsoever nature payable under any insurance must be payable to the Mortgagee
for distribution first to itself and thereafter to the Shipowner or others as
their interests may appear. Nevertheless, until otherwise required by the
Mortgagee by notice to the underwriters upon the occurrence and continuance of a
Default (as defined in the Credit Agreement) or an event of default hereunder,
(i) amounts payable under any insurance on the Vessel with respect to protection
and indemnity risks may be paid directly to the Shipowner to reimburse it for
any loss, damage or expense incurred by it and covered by such insurance or to
the person to whom any liability covered by such insurance has been incurred
provided that the underwriter shall have first received evidence that the
liability insured against has been discharged, and (ii) amounts payable under
any insurance with respect to the Vessel involving any damage to the Vessel not
constituting an Event of Loss (as defined in the Credit Agreement), may be paid
by underwriters directly for the repair, salvage or other charges involved or,
if the Shipowner shall have first fully repaired the damage or paid all of the
salvage or other charges, may be paid to the Shipowner as reimbursement
therefor; PROVIDED, HOWEVER, that if such amounts (including any franchise or
deductible) are in excess of U.S.$250,000, the underwriters shall not make such
payment without first obtaining the written consent thereto of the Mortgagee.
(e) All amounts paid to the Mortgagee in respect of any insurance on
the Vessel shall be disposed of as follows (after deduction of the expenses of
the Mortgagee in collecting such amounts):
(i) any amount which might have been paid at the time, in accordance
with the provisions of paragraph (d) above, directly to the Shipowner or
others shall be paid by the Mortgagee to, or as directed by, the
Shipowner;
(ii) all amounts paid to the Mortgagee in respect of an Event of
Loss (as defined in the Credit Agreement) of the Vessel shall be applied
by the Mortgagee to the payment of the Indebtedness hereby secured
pursuant to Section 4.02(c) of the Credit Agreement;
(iii) all other amounts paid to the Mortgagee in respect of any
insurance on the Vessel may, in the Mortgagee's sole discretion, be held
and applied to the prepayment of the Indebtedness hereby secured or to
making of needed repairs or other work on the Vessel, or to the payment of
other claims incurred by the Shipowner relating to the Vessel, or may be
paid to the Shipowner or whosoever may be entitled thereto.
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(f) In the event that any claim or lien is asserted against the
Vessel for loss, damage or expense which is covered by insurance required
hereunder and it is necessary for the Shipowner to obtain a bond or supply other
security to prevent arrest of the Vessel or to release the Vessel from arrest on
account of such claim or lien, the Mortgagee, on request of the Shipowner, may,
in the sole discretion of the Mortgagee, assign to any person, firm or
corporation executing a surety or guarantee bond or other agreement to save or
release the Vessel from such arrest, all right, title and interest of the
Mortgagee in and to said insurance covering said loss, damage or expense, as
collateral security to indemnify against liability under said bond or other
agreement.
(g) The Shipowner shall deliver to the Mortgagee certified copies
and, whenever so requested by the Mortgagee, the originals of all certificates
of entry, cover notes, binders, evidences of insurance and policies and all
endorsements and riders amendatory thereof in respect of insurance maintained
under this Deed for the purpose of inspection or safekeeping, or, alternatively,
satisfactory letters of undertaking from the broker holding the same. The
Mortgagee shall be under no duty or obligation to verify the adequacy or
existence of any such insurance or any such policies, endorsement or riders.
(h) The Shipowner agrees that it will not execute or permit or
willingly allow to be done any act by which any insurance may be suspended,
impaired or cancelled, and that it will not permit or allow the Vessel to
undertake any voyage or run any risk or transport any cargo which may not be
permitted by the policies in force, without having previously notified the
Mortgagee in writing and insured the Vessel by additional coverage to extend to
such voyages, risks, passengers or cargoes.
(i) In case any underwriter proposes to pay less on any claim than
the amount thereof, the Shipowner shall forthwith inform the Mortgagee, and if a
Default, an Event of Default or an Event of Loss (as such terms are defined in
the Credit Agreement) has occurred and is continuing the Mortgagee shall have
the exclusive right to negotiate and agree to any compromise.
(j) The Shipowner will comply with and satisfy all of the provisions
of any applicable law, convention, regulation, proclamation or order concerning
financial responsibility for liabilities imposed on the Shipowner or the Vessel
with respect to pollution by any state or nation or political subdivision
thereof and will maintain all certificates or other evidence of financial
responsibility as may be required by any such law, convention, regulation,
proclamation or order with respect to the trade in which the Vessel is from time
to time engaged and the cargo carried by it.
Section 14. REIMBURSEMENT FOR EXPENSES. The Shipowner will reimburse
the Mortgagee promptly for any and all expenditures which the
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Mortgagee may from time to time make, lay out or expend in providing such
protection in respect of insurance, discharge or purchase of liens, taxes, dues,
tolls, assessments, governmental charges, fines and penalties lawfully imposed,
repairs, attorney's fees, and other matters as the Shipowner is obligated herein
to provide, but fails to provide or which, in the sole judgment of the Mortgagee
are necessary or appropriate for the protection of the Vessel or the security
granted by this Deed. Such obligation of the Shipowner to reimburse the
Mortgagee shall be an additional indebtedness due from the Shipowner, shall bear
interest at the interest rate as set forth in Section 1.07(b) of the Credit
Agreement from the date of payment by the Mortgagee to and including the date of
reimbursement by the Shipowner, shall be secured by this Deed and the Mortgage,
and shall be payable by the Shipowner on demand. The Mortgagee, though
privileged to do so, shall be under no obligation to the Shipowner to make any
such expenditure, nor shall the making thereof relieve the Shipowner of any
default in that respect.
Section 15. PERFORMANCE OF CHARTERS. The Shipowner will fully
perform any and all charter parties which may be entered into with respect to
the Vessel and will promptly notify the Mortgagee of any material claim by any
charterer of non-performance thereunder by the Shipowner.
Section 16. CHANGE IN OWNERSHIP. The Shipowner further covenants and
agrees with the Mortgagee that, so long as any part of the Indebtedness hereby
secured remains unpaid, there shall be no change in the ownership of the Vessel
or any of the shares of the Shipowner without the prior written consent of the
Mortgagee.
Section 17. PREPAYMENT IF EVENT OF LOSS. In the event that the
Vessel suffers an Event of Loss, as such term is defined in the Credit
Agreement, then and in each such case the Shipowner shall forthwith repay the
Indebtedness hereby secured at the time and in the amount set forth in Section
4.02(c) of the Credit Agreement except to the extent such amounts have otherwise
been paid as therein provided.
ARTICLE III
EVENTS OF DEFAULT AND REMEDIES
Section 1. EVENTS OF DEFAULT; REMEDIES. In case any one or more of
the following events, herein termed "events of default", shall happen:
(a) the Shipowner fails to pay within three (3) Business Days of the
date due any payment in respect of the Indebtedness hereby secured as
provided herein; or
(b) the statements in Article I shall prove to have been untrue when
made in a material way; or
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(c) a default in the due and punctual observance and performance of
any of the provisions of Sections 2, 3, 7, 8, 9(b), 11, 12, 13(a), (b),
(d), (h) and (j), 16 or 17 of Article II hereof shall have occurred and be
continuing; or
(d) a breach or omission in the due and punctual observance of any
of the other covenants and conditions herein required to be kept and
performed by the Shipowner and such breach or omission shall continue for
30 days after the day the Shipowner first knew or should have known of
such breach or omission; or
(e) an Event of Default shall have occurred and be continuing under
the Credit Agreement; or
(f) a payment default by the Borrower or any of its subsidiaries
under any Interest Rate Protection Agreement or Other Hedging Agreement
shall have occurred and be continuing; or
(g) any notice shall have been issued by the government or any
bureau, department, officer, board or agency thereof of the country of
registry of the Vessel to the effect that the Vessel is subject to
cancellation from such registry or the certificate of registry of the
Vessel is subject to revocation or cancellation for any reason whatsoever,
and such notice shall not have been cancelled or annulled on or before
seven (7) Business Days (as defined in the Credit Agreement) prior to the
date set forth in such notice for such cancellation or revocation; or
(h) the Vessel shall be cancelled from the country of registry of
the Vessel or the certificate of registry of the Vessel is revoked or
cancelled for any reason whatsoever;
then:
the security constituted by this Deed and the Mortgage shall become
immediately enforceable and that without limitation, the enforcement remedies
specified can be exercised irrespective of whether or not the Mortgagee has
exercised the right of acceleration under the Credit Agreement or any of the
other Credit Documents and the Mortgagee shall have the right to:
(i) Declare all the then unpaid Indebtedness hereby secured to be
due and payable immediately, and upon such declaration, the same shall
become and be immediately due and payable provided, however, that no
declaration shall be required if an event of default shall have occurred
by reason of a default under Section 10.05 of the Credit Agreement, then
and in such case, the Indebtedness hereby secured shall become immediately
due and payable on the occurrence of such event of default without any
notice or demand;
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(ii) Exercise all of the rights and remedies in foreclosure and
otherwise given to a mortgagee by the provisions of the laws of the
country of registry of the Vessel or of any other jurisdiction where the
Vessel may be found;
(iii) Bring suit at law, in equity or in admiralty, as it may be
advised, to recover judgment for the Indebtedness hereby secured, and
collect the same out of any and all property of the Shipowner whether
covered by this Mortgage or otherwise;
(iv) Take and enter into possession of the Vessel, at any time,
wherever the same may be, without legal process and without being
responsible for loss or damage and the Shipowner or other person in
possession forthwith upon demand of the Mortgagee shall surrender to the
Mortgagee possession of the Vessel;
(v) Without being responsible for loss or damage, the Mortgagee may
hold, lay up, lease, charter, operate or otherwise use such Vessel for
such time and upon such terms as it may deem to be for its best advantage,
and demand, collect and retain all hire, freights, earnings, issues,
revenues, income, profits, return premiums, salvage awards or recoveries,
recoveries in general average, and all other sums due or to become due in
respect of such Vessel or in respect of any insurance thereon from any
person whomsoever, accounting only for the net profits, if any, arising
from such use of the Vessel and charging upon all receipts from the use of
the Vessel or from the sale thereof by court proceedings or pursuant to
subsection (vi) next following, all costs, expenses, charges, damages or
losses by reason of such use; and if at any time the Mortgagee shall avail
itself of the right herein given them to take the Vessel, the Mortgagee
shall have the right to dock the Vessel, for a reasonable time at any
dock, pier or other premises of the Shipowner without charge, or to dock
her at any other place at the cost and expense of the Shipowner;
(vi) Without being responsible for loss or damage, the Mortgagee may
sell the Vessel upon such terms and conditions as to the Mortgagee shall
seem best, free from any claim of or by the Shipowner, at public or
private sale, by sealed bids or otherwise, by mailing, by air or
otherwise, notice of such sale, whether public or private, addressed to
the Shipowner at its last known address and to any other registered
mortgagee, twenty (20) calendar days prior to the date fixed for entering
into the contract of sale and by first publishing notice of any such
public sale for ten (10) consecutive days, in daily newspapers of general
circulation published in the City of New York, State of New York; in the
event that the Vessel shall be offered for sale by private sale, no
newspaper publication of notice shall be required, nor notice of
adjournment of sale; sale may be held at such place and at such time as
the
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Mortgagee by notice may have specified, or may be adjourned by the
Mortgagee from time to time by announcement at the time and place
appointed for such sale or for such adjourned sale, and without further
notice or publication the Mortgagee may make any such sale at the time and
place to which the same shall be so adjourned; and any sale may be
conducted without bringing the Vessel to the place designated for such
sale and in such manner as the Mortgagee may deem to be for its best
advantage, and the Mortgagee may become the purchaser at any sale. The
Shipowner agrees that any sale made in accordance with the terms of this
paragraph shall be deemed made in a commercially reasonable manner insofar
as it is concerned;
(vii) Require that all policies, contracts, certificates of entry
and other records relating to the insurance with respect to the Vessel,
including, but not limited to, those described in Article II, Section 13
hereof (the "Insurances") (including details of and correspondence
concerning outstanding claims) be forthwith delivered to or to the order
of the Mortgagee;
(viii) Collect, recover, compromise and give a good discharge for
any and all monies and claims for monies then outstanding or thereafter
arising under the Insurances or in respect of the earnings or any
requisition compensation and to permit any brokers through whom collection
or recovery is effected to charge the usual brokerage therefore.
Section 2. POWER OF SALE. Any sale of the Vessel made in pursuance
of this Deed, whether under the power of sale hereby granted or any judicial
proceedings, shall operate to divest all right, title and interest of any nature
whatsoever of the Shipowner therein and thereto, and shall bar the Shipowner,
its successors and assigns, and all persons claiming by, through or under them.
No purchaser shall be bound to inquire whether notice has been given, or whether
any default has occurred, or as to the propriety of the sale, or as to the
application of the proceeds thereof. In case of any such sale, the Mortgagee, if
it is the purchaser, shall be entitled, for the purpose of making settlement or
payment for the property purchased, to use and apply the Indebtedness hereby
secured in order that there may be credited against the amount remaining due and
unpaid thereon the sums payable out of the net proceeds of such sale to the
Mortgagee after allowing for the costs and expense of sale and other charges;
and thereupon such purchaser shall be credited, on account of such purchase
price, with the net proceeds that shall have been so credited upon the
Indebtedness hereby secured. At any such sale, the Mortgagee may bid for and
purchase such property and upon compliance with the terms of sale may hold,
retain and dispose of such property without further accountability therefor.
Section 3. POWER OF ATTORNEY - SALE. The Mortgagee is hereby
irrevocably appointed attorney-in-fact of the Shipowner to execute and deliver
to
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any purchaser aforesaid, and is hereby vested with full power and authority to
make, in the name and on behalf of the Shipowner, a good conveyance of the title
to the Vessel so sold. Any person dealing with the Mortgagee or attorney-in-fact
shall not be put on enquiry as to whether the power of attorney contained herein
has become exercisable. In the event of any sale of the Vessel, under any power
herein contained, the Shipowner will, if and when required by the Mortgagee,
execute such form of conveyance of the Vessel as the Mortgagee may direct or
approve.
Section 4. POWER OF ATTORNEY - COLLECTION. The Mortgagee is hereby
irrevocably appointed attorney-in-fact of the Shipowner upon the happening of
any event of default, in the name of the Shipowner to demand, collect, receive,
compromise and sue for, so far as may be permitted by law, all freight, hire,
earnings, issues, revenues, income and profits of the Vessel and all amounts due
from underwriters under any insurance thereon as payment of losses or as return
premiums or otherwise, salvage awards and recoveries, recoveries in general
average or otherwise, and all other sums due or to become due at the time of the
happening of any event of default as defined in Section 1 of Article III hereof
in respect of the Vessel, or in respect of any insurance thereon, from any
person whomsoever, and to make, give and execute in the name of the Shipowner
acquittances, receipts, releases or other discharges for the same, whether under
seal or otherwise, and to endorse and accept in the name of the Shipowner all
checks, notes, drafts, warrants, agreements and other instruments in writing
with respect to the foregoing. Any person dealing with the Mortgagee or
attorney-in-fact shall not be put on enquiry as to whether the Power of Attorney
contained herein has become exercisable.
Section 5. DELIVERY OF VESSEL. Upon the security constituted by this
Deed and the Mortgage becoming immediately enforceable pursuant to Section 1 of
Article III, the Mortgagee shall (in addition to the powers described in Section
1 of Article III) become forthwith entitled (but not bound) to appoint, by an
instrument in writing under its seal or under the hand of any director or
officer or authorized signatory, a receiver and/or manager of the Vessel upon
such terms as to remuneration and otherwise as the Mortgagee shall deem fit with
power from time to time to remove any receiver and appoint another in his stead
and any receiver shall be the agent of the Shipowner (who shall be solely
responsible for his acts and defaults and remuneration) and shall have all the
powers conferred by law by way of addition to, but without limiting, those
powers any receiver shall have all the powers and entitlements conferred on the
Mortgagee by this Deed and generally shall be entitled to the same protection
and to exercise the same powers and discretions as are granted to the Mortgagee
under this Deed.
Section 6. MORTGAGEE TO DISCHARGE LIENS. The Shipowner authorizes
and empowers the Mortgagee or its appointees or any of them to appear in the
name of the Shipowner, its successors and assigns, in any court of any country
or nation of the world where a suit is pending against the Vessel because of or
on
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account of any alleged lien against the Vessel from which the Vessel has not
been released and to take such proceedings as to them or any of them may seem
proper towards the defense of such suit and the purchase or discharge of such
lien, and all expenditures made or incurred by them or any of them for the
purpose of such defense or purchase or discharge shall be a debt due from the
Shipowner, its successors and assigns, to the Mortgagee, and shall be secured by
the lien of this Deed and the Mortgage in like manner and extent as if the
amount and description thereof were written herein.
Section 7. PAYMENT OF EXPENSES. The Shipowner covenants that upon
the happening of any one or more of the events of default, then, upon written
demand of the Mortgagee, the Shipowner will pay to the Mortgagee the whole
amount due and payable in respect of the Indebtedness hereby secured; and in
case the Shipowner shall fail to pay the same forthwith upon such demand, the
Mortgagee shall be entitled to recover judgment for the whole amount so due and
unpaid, together with such further amounts as shall be sufficient to cover the
reasonable compensation of the Mortgagee or its agents, attorneys and counsel
and any necessary advances, expenses and liabilities made or incurred by it or
them or the Mortgagee hereunder. All moneys collected by the Mortgagee under
this Section 7 shall be applied by the Mortgagee in accordance with the
provisions of Section 11 of this Article III.
Section 8. REMEDIES CUMULATIVE. Each and every power and remedy
herein given to the Mortgagee shall be cumulative and shall be in addition to
every other power and remedy herein given or now or hereafter existing at law,
in equity, in admiralty or by statute, and each and every power and remedy
whether herein given or otherwise existing may be exercised from time to time
and as often and in such order as may be deemed expedient by the Mortgagee, and
the exercise or the beginning of the exercise of any power or remedy shall not
be construed to be a waiver of the right to exercise at the same time or
thereafter any other power or remedy. The Mortgagee shall not be required or
bound to enforce any of its rights under any of the other Credit Documents,
prior to enforcing its rights under this Deed and the Mortgage. No delay or
omission by the Mortgagee in the exercise of any right or power or in the
pursuance of any remedy accruing upon any default as above defined shall impair
any such right, power or remedy or be construed to be a waiver of any such event
of default or to be an acquiescence therein; nor shall the acceptance by the
Mortgagee of any security or of any payment of or on account of the Indebtedness
hereby secured maturing after any event of default or of any payment on account
of any past default be construed to be a waiver of any right to exercise its
remedies due to any future event of default or of any past event of default not
completely cured thereby. No consent, waiver or approval of the Mortgagee shall
be deemed to be effective unless in writing and duly signed by authorized
signatories of the Mortgagee; any waiver by the Mortgagee of any of the terms of
this Deed or any consent given under this Deed shall only be effective for the
purpose and on the terms which it is given and shall be without prejudice to the
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right to give or withhold consent in relation to future matters (which are
either the same or different).
Section 9. CURE OF DEFAULTS. If at any time after an event of
default and prior to the actual sale of the Vessel by the Mortgagee or prior to
any enforcement or foreclosure proceedings the Shipowner offers completely to
cure all events of default and to pay all expenses, advances and damages to the
Mortgagee consequent on such events of default, with interest at the interest
rate set forth in Section 1.07(b) of the Credit Agreement, then the Mortgagee
may, but shall not be obligated to, accept such offer and payment and restore
the Shipowner to its former position, but such action, if taken, shall not
affect any subsequent event of default or impair any rights consequent thereon.
Section 10. DISCONTINUANCE OF PROCEEDINGS. In case the Mortgagee
shall have proceeded to enforce any right, power or remedy under this Deed and
the Mortgage by foreclosure, entry or otherwise, and such proceedings shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to the Mortgagee, then and in every such case the Shipowner and the
Mortgagee shall be restored to its former position and right hereunder with
respect to the property subject or intended to be subject to this Deed and the
Mortgage, and all rights, remedies and powers of the Mortgagee shall continue as
if no such proceedings had been taken.
Section 11. APPLICATION OF PROCEEDS. After an event of default
hereunder shall have occurred and be continuing, the proceeds of any sale of the
Vessel and any and all other moneys received by the Mortgagee pursuant to or
under the terms of this Deed or in any proceedings hereunder, the application of
which has not elsewhere herein been specifically provided for, shall be applied
as follows:
FIRST: To the payment of all costs and expenses (together with
interest thereon as set forth in Section 14 of Article II) of the
Mortgagee, including the reasonable compensation of its agents and
attorneys, by reason of any sale, retaking, management or operation of the
Vessel and all other sums payable to the Mortgagee hereunder by reason of
any expenses or liabilities incurred or advances made by it for the
protection, maintenance and enforcement of the security or of any of its
rights hereunder, under the Credit Agreement, the Subsidiaries Guaranty
and under the other Credit Documents or in the pursuit of any remedy
hereby or thereby conferred; and at the option of the Mortgagee to the
payment of any taxes, assessments or liens claiming priority over the lien
of the Mortgage; and
SECOND: To the Pledgee (as defined in the Pledge Agreement) for its
distribution in accordance with the provisions of Section 9 of the Pledge
Agreement.
22 DEED OF COVENANTS
[VESSEL NAME]
<Page>
Section 12. POSSESSION UNTIL DEFAULT. Until one or more of the
events of default hereinafter described shall happen, the Shipowner (a) shall be
suffered and permitted to retain actual possession and use of the Vessel and (b)
shall have the right, from time to time, in its discretion, and without
application to the Mortgagee, and without obtaining a release thereof by the
Mortgagee, to dispose of, free from the lien hereof, any boilers, engines,
machinery, masts, spars, sails, rigging, boats, anchors, chains, tackle,
apparel, furniture, fittings or equipment or any other appurtenances of the
Vessel that are no longer useful, necessary, profitable or advantageous in the
operation of the Vessel, first or simultaneously replacing the same by new
boilers, engines, machinery, masts, spars, sails, rigging, boats, anchors,
chains, tackle, apparel, furniture, fittings, equipment, or other appurtenances
of substantially equal value to the Shipowner, which shall forthwith become
subject to the lien of this Mortgage as a first priority mortgage thereon.
Section 13. SEVERABILITY OF PROVISIONS, ETC. (a) If any provision of
this Deed should be deemed invalid or shall be deemed to affect adversely the
preferred status of this Deed of the Mortgage under any applicable law, such
provision shall be void and of no effect and shall cease to be a part of this
Deed without affecting the remaining provisions, which shall remain in full
force and effect.
(b) In the event that the Subsidiaries Guaranty, this Deed, the
Mortgage, any of the other Credit Documents or any of the documents or
instruments which may from time to time be delivered thereunder or hereunder or
any provision thereof or hereof shall be deemed invalidated by present or future
law of any nation or by decision of any court, this shall not affect the
validity and/or enforceability of all or any other parts of the Subsidiaries
Guaranty, the Pledge Agreement, this Deed, the Mortgage, any of the other Credit
Documents or such documents or instruments and, in any such case, the Shipowner
covenants and agrees that, on demand, it will execute and deliver such other and
further agreements and/or documents and/or instruments and do such things as the
Mortgagee in its sole discretion may reasonably deem to be necessary to carry
out the true intent of this Deed, the Mortgage, Subsidiaries Guaranty, the
Pledge Agreement and the other Credit Documents.
(c) In the event that the title, or ownership of the Vessel shall be
requisitioned, purchased or taken by any government of any country or any
department, agency or representative thereof, pursuant to any present or future
law, proclamation, decree order or otherwise, the lien of this Deed and the
Mortgage shall be deemed to attach to the claim for compensation therefor, and
the compensation, purchase or other taking of such title or ownership is hereby
agreed to be payable to the Mortgagee who shall be entitled to receive the same
and shall pay it to the Mortgagee who shall apply it as provided in Section 11
of this Article III. In the event of any such requisition, purchase or taking,
and the failure of the Mortgagee to receive proceeds as herein provided, the
Shipowner shall promptly execute and deliver to the Mortgagee such documents, if
any, as in the
23 DEED OF COVENANTS
[VESSEL NAME]
<Page>
opinion of the Mortgagee may be necessary or useful to facilitate or expedite
the collection by the Mortgagee of such part of the compensation, purchase
price, reimbursement or award as is payable to it hereunder.
(d) Anything herein to the contrary notwithstanding, it is intended
that nothing herein shall waive the priority status of this Deed and the
Mortgage, and if any provision of this Deed or portion thereof shall be
construed to waive the priority status of this Deed or the Mortgage, then such
provision to such extent shall be void and of no effect.
ARTICLE IV
SUNDRY PROVISIONS
Section 1. SUCCESSORS AND ASSIGNS. All of the covenants, promises,
stipulations and agreements of the Shipowner in this Deed contained shall bind
the Shipowner and its successors and shall inure to the benefit of the Mortgagee
and its successors and assigns. In the event of any assignment or transfer of
this Deed, the term "Mortgagee", as used in this Deed, shall be deemed to mean
any such assignee or transferee.
Section 2. POWER OF SUBSTITUTION. Wherever and whenever herein any
right, power or authority is granted or given to the Mortgagee, such right,
power or authority may be exercised in all cases by the Mortgagee or such agent
or agents as it may appoint, and the act or acts of such agent or agents when
taken shall constitute the act of the Mortgagee hereunder.
Section 3. COUNTERPARTS. This Deed may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.
Section 4. NOTICES. Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including telexed, telegraphic, telex, telecopier or cable communication) and
mailed, telexed, telecopied, cabled or delivered, if to the Shipowner or to the
Mortgagee, at its address as specified below, or at such other address as shall
be designated by such party in a written notice to the other party:
If to the Shipowner, addressed to it in care of:
General Maritime Corporation
35 West 56th Street
New York, NY 10019
Telephone: (212) 763-5600
Facsimile: (212) 763-5603
24 DEED OF COVENANTS
[VESSEL NAME]
<Page>
If to the Mortgagee, addressed to it:
Christiania Bank og Kreditkasse, ASA, New York Branch
11 West 42nd Street, 7th Floor
New York, NY 10036
Attn: Hans Chr. Kjelsrud
Telephone: (212) 827-4814
Facsimile: (212) 827-4888
with a copy to:
Holland & Knight LLP
195 Broadway
New York, NY 10007
Attn: Jovi Tenev
Telephone: (212) 513 3218
Facsimile: (212) 385 9010
All such notices and communications shall, (i) when mailed, be
effective three Business Days (as defined in the Credit Agreement) after being
deposited in the mails, prepaid and properly addressed for delivery, (ii) when
sent by overnight courier, be effective one Business Day after delivery to the
overnight courier prepaid and properly addressed for delivery on such next
Business Day, or (iii) when sent by telex or telecopier, be effective when sent
by telex or telecopier, except that notices and communications to the Mortgagee
shall not be effective until received by the Mortgagee.
Section 5. STATUTORY MORTGAGE. This Deed accompanies and is to be
read with and forms part of the Mortgage dated the date hereof and shall be
effective from the date hereof.
Section 6. FURTHER ASSURANCES. The Shipowner shall execute and do
all such assurances, acts and things as the Mortgagee, or any receiver in its
absolute discretion may require for:
(a) perfecting or protecting the security created (or intended to be
created) by this Deed and the Mortgage; or
(b) preserving or protecting any of the rights of the Mortgagee
under this Deed and the Mortgage (or any of them); or
(c) ensuring that the security constituted by this Deed and the
Mortgage and the covenants and obligations of the Shipowner under this
Deed shall enure to the benefit of assignees of the Mortgagee (or any of
them); or
25 DEED OF COVENANTS
[VESSEL NAME]
<Page>
(d) facilitating the appropriation or realization of the Vessel or
any part thereof and enforcing the security constituted by this Deed and
the Mortgage on or at any time after the same shall have become
enforceable; or
(e) the exercise of any power, authority or discretion vested in the
Mortgagee under this Deed and the Mortgage (or any of them),
in any such case, forthwith upon demand by the Mortgagee and at the expense of
the Shipowner. Without limitation of the foregoing, in connection with any
Interest Rate Protection Agreements or Other Hedging Agreements entered into
from time to time, the Shipowner shall, at its expense, enter into, deliver and
cause to be recorded such amendments and supplements to this Deed and the
Mortgage, and such other instruments and legal opinions, as the Mortgagee may
reasonably request.
Section 7. GOVERNING LAW. The provisions of this Deed shall, with
respect to its validity, effect, recordation and enforcement, be governed by and
construed in accordance with the applicable laws of the Republic of Malta.
Section 8. ADDITIONAL RIGHTS OF THE MORTGAGEE. In the event the
Mortgagee shall be entitled to exercise any of its remedies under Article III
hereof, the Mortgagee shall have the right to arrest and take action against the
Vessel at whatever place the Vessel shall be found lying and for the purpose of
any action which the Mortgagee may bring before the Courts of such jurisdiction
or other judicial authority and for the purpose of any action which the
Mortgagee may bring against the Vessel, any writ, notice, judgment or other
legal process or documents may (without prejudice to any other method of service
under applicable law) be served upon the Master of the Vessel (or upon anyone
acting as the Master) and such service shall be deemed good service on the
Shipowner for all purposes.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
26 DEED OF COVENANTS
[VESSEL NAME]
<Page>
IN WITNESS WHEREOF, the Shipowner has caused this Deed of
Covenants to be duly executed by its authorized representative the day and year
first above written.
[NAME OF SHIPOWNER]
By:
-----------------------------------------
Name:
Title:
CHRISTIANIA BANK OG
KREDITKASSE ASA,
NEW YORK BRANCH
as Trustee,
By:
-----------------------------------------
Name:
Title:
By:
-----------------------------------------
Name:
Title:
DEED OF COVENANTS
[VESSEL NAME]