Exhibit 10.165
FIRST NAVAL MORTGAGE
The First Naval Mortgage (this Mortgage ), made as of
December 14, 1996, by TRB HOLDING CORPORATION, a Delaware corporation (the
Mortgagor ), whose address is 000 Xxxxxxxxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxx 00000, to NISSHO IWAI EUROPE PLC, an English corporation, whose address
is Bastion House, 000 Xxxxxx Xxxx, Xxxxxx, XX0X SJT, United Kingdom (the
Lender );
WHEREAS:
1. Mortgagor is the sole owner of the whole of that certain
vessel known as Seillean , Gross Register Tons (GRT): 50,928.00; Net Register
Tons: 15,278.00, Length: 236.47 meters, Width: 37 meters, Depth: 19.80 meters,
Permanent Navigation Patent No. 00000-00, Radio Call Letters: 3FPF6, and
Registration No. 25519-PEXT, and with the home port of Panama City, the
Republic of Panama (the Vessel ); and
2. Britoil PLC, a company organized under the laws of the
United Kingdom ( Britoil ), for itself and on behalf of the Donan
Participants, as defined therein, and BP Exploration Operating Company
Limited, an English limited liability company ( BP ), entered into that
Amended Agreement dated March 30, 1995, as amended, supplemented and novated
by the Novation Agreement dated July 10, 1996 among Britoil, BP and Britoil
(Beta) Limited, an English limited liability company ( Britoil (Beta) ) (the
Amended Agreement ); and
3. Reading & Xxxxx (U.K.) Limited, an English limited liability
company (the Charterer ), has assumed all of the rights, duties and
obligations of Britoil (Beta) to the Amended Agreement pursuant to the
Novation Agreement dated August 30, 1996 among Britoil, Britoil (Beta) and
Charterer (the Donan Charter Agreement ); and
4. Reading & Xxxxx Development Co. ( RBDC ) bareboat chartered
the Vessel to Charterer pursuant to the Bareboat Charter between Charterer and
RBDC, dated August 30, 1996 (the Bareboat Charter ), in order to permit
Charterer to operate the vessel and to fulfill its obligations under the Donan
Charter Agreement; and
5. Mortgagor, Charterer and Lender entered into the Loan
Agreement (the Loan Agreement ) dated as of December 14, 1996 whereby the
Lender agreed to lend the Mortgagor certain sums (the Loans ) to be secured
by the Vessel and all rights of the Mortgagor therein, a copy of which Loan
Agreement is attached hereto and made a part hereof, it has been also agreed
by the parties hereto that said Agreement will be deposited at the pertinent
protocol of the corresponding Notarial Instrument whereby this First Preferred
Ship Mortgage is protocoloized before the Notary Eleventh of the Circuit of
the City of Panama, Republic of Panama consequently, and in compliance of
contents of Article 1515 of the Code of Commerce of the Republic of Panama,
the principal amount secured by this mortgage is THIRTY-EIGHT MILLION AMERICAN
STATES DOLLARS (US$38,000,000.00). In addition, this Mortgage secures
interest on the principal amount and all obligations relating thereto as the
Mortgagor may be obligated to pay or perform under the covenants, terms, and
conditions in the Promissory Note, the Loan Agreement, this Mortgage and the
documents executed in connection therewith. The maturity date of the mortgage
which includes payment of principal and interest is January 15, 2002. The
corresponding interest rate is calculated in accordance with Exhibit A
attached hereto and made a part hereof. For all legal purposes, the text of
the Loan Agreement hereby referred to will constitute the final and definitive
guide for determining the exact amount of capital and interests secured by the
present mortgage; and
6. Pursuant to the Loan Agreement, the Mortgagor executed and
delivered to the Lender its Promissory Note (the Promissory Note ) dated
December 14, 1996, a copy of which is attached hereto and made a part hereof,
in the original principal amount of Thirty-Eight Million United States Dollars
(U.S. $38,000,000.00). Maturity dates on which capital and interest of the
mortgage must be paid as well as interest rate agreed to are those stipulated
in the referred Promissory Note; and
7. As a condition precedent to the Lender entering into the
Loan Agreement, the Lender has required that Mortgagor executes and delivers
this Mortgage in order to secure payment and performance of the principal
amount of the Promissory Note plus interest thereon and all obligations
relating thereto as the Mortgagor may be obligated to pay or perform under the
covenants, terms, and conditions in the Promissory Note, the Loan Agreement,
this Mortgage and the documents executed in connection therewith
(collectively, the Obligations ); and
8. Charterer will derive substantial benefit from the Mortgagor
obtaining the Loans and charterer s fulfillment of its obligations under the
Donan Charter Agreement.
NOW, THEREFORE, THIS MORTGAGE WITNESSETH:
That in consideration of the premises and of other good and
valuable considerations, the receipt of which is hereby acknowledged, to
secure and guarantee the payment on demand of the Obligations the Mortgagor
hereby executes and constitutes a first and absolute naval mortgage in
accordance with the provisions of Chapter V, Title IV of Book II of the Code
of Commerce, and the pertinent provisions of the Civil Code and other
legislation of the Republic of Panama, upon the Vessel, including all masts,
boilers, cables, engines, machinery, bowsprits, sails, rigging, boats,
anchors, chains, tackle, apparel, furniture, fittings, tools, pumps, equipment
and supplies, and all other appurtenances and accessories and additions,
improvements and replacements now or hereafter belonging thereto, whether or
not removed therefrom, property of the shipowner, of Panamanian flag and
registry;
TO HAVE AND TO HOLD all and singular the above described Vessel
unto the Lender, its successors and assigns, forever;
PROVIDED, HOWEVER, that if Mortgagor, its successors or assigns
shall perform, discharge and observe all and singular the terms, the
Obligations and the other covenants and agreements herein, then this Mortgage
shall cease, otherwise to remain in full force and affect.
The Mortgagor agrees to pay and to perform and observe the
Obligations in accordance with their terms and to hold the Vessel subject
thereto.
ARTICLE I.
Particular Covenants of the Mortgagor
The Mortgagor covenants and agrees as follows:
1. Mortgagor is and shall continue to be entitled to own the
Vessel out of the home port of Panama City, the Republic of Panama. All
action necessary for the execution, delivery and validity hereof and of the
Promissory Note and the Loan Agreement has been duly taken; and the Mortgagor
agrees to faithfully comply with the provisions hereof and thereof in all
material respects. Mortgagor is duly organized and is and shall continue in
good standing under the laws of the Delaware and authorized to do business and
in good standing.
2. Mortgagor lawfully owns and possesses the Vessel free from
all liens and encumbrances whatsoever (other than this Mortgage and the lien
of Donan Charter Agreement), except those of the Mortgagor and as otherwise
may hereinbelow be specified and shall warrant and defend title to and
possession of all and every part thereof for the benefit of the Lender against
all persons whomever. The Mortgagor shall not set up against the Lender or
any assignee of this Mortgage any claim of the Mortgagor against the Lender or
assignee under any past or future transaction.
3. INTENTIONALLY DELETED
4. Mortgagor shall comply with and not cause or permit the
Vessel to be operated contrary to any provisions of the laws, treaties,
conventions, rules, regulations and orders of the Republic of Panama, the
United States and any other jurisdiction wherein operated, except where the
failure to so comply might reasonably be expected to have a material adverse
effect on the Vessel (or the Mortgagor s financial condition, prospects, or
business). Mortgagor shall do everything necessary to establish and maintain
this Mortgage as a First Preferred Mortgage on the Vessel.
5. Neither the Mortgagor, Agent, Master nor any charterer of
the Vessel has or shall have any right, power or authority to create, incur or
permit to be placed or imposed on the Vessel or any part thereof any lien
whatsoever other than to the Lender or for crew s wages or salvage or other
Permitted Liens (as defined in the Loan Agreement).
6. A proper certified copy of this Mortgage and any supplement
thereto shall be carried with the Vessel s papers on board the Vessel and
shall be exhibited, on demand, to any person having business with the Vessel
or to any representative of the Lender, and a notice in plain writing of such
size that the paragraph of reading matter shall cover a space not less than
six inches high nor less than nine inches wide shall be placed and kept
prominently displayed in the pilot house, in the chart room, and in the
master s cabin of the Vessel. Such notice shall read substantially as
follows:
NOTICE OF MORTGAGE
This vessel is owned by TRB HOLDING CORPORATION and is subject to
a First Preferred Mortgage, dated December 14, 1996 in favor of NISSHO IWAI
EUROPE PLC. Under the term of the First Preferred Mortgage neither the owner,
any charterer, the master of the vessel, nor any other person shall have the
right, power or authority to create, incur, or permit to be placed or imposed
on the vessel any lien whatsoever, other than for crew s wages or salvage.
7. Mortgagor shall pay and discharge, or cause to be paid and
discharged, when due and payable, from time to time, all taxes, assessments,
government charges, fines and penalties lawfully imposed on the Vessel in
accordance with the Loan Agreement. If a libel shall be filed against the
Vessel, or if the Vessel shall be levied upon or taken into custody, or
detained by any proceeding in any court or tribunal, or by any government, of
any other authority, Mortgagor, within 15 days thereafter, shall cause the
Vessel to be released and any lien thereon, other than this Mortgage, to be
discharged. In the event the Vessel is levied upon, or taken into custody, or
detained by any authority whatsoever, Mortgagor agrees forthwith to notify
Lender, by telegram, confirmed by letter, at its office.
8. Lender shall have the right of any time, on reasonable
notice and without unreasonable disruption and subject to any required
governmental approvals or approvals of Britoil or other client for which the
Vessel is operating, to inspect or survey the Vessel to ascertain her
condition and to satisfy itself that the Vessel is being properly repaired and
maintained, and Mortgagor shall cause to be made all such repairs, without
expense to Lender, as such inspection or survey may show to be required.
Mortgagor shall also permit Lender to inspect the Vessel s logs and to examine
Mortgagor s accounts and records relating to the Vessel, whenever requested,
on reasonable notice, and shall furnish Lender with full information regarding
any casualty or other accident or damage to the Vessel involving an amount in
excess of U.S. $ 500,0000. Mortgagor shall certify quarterly and, if Lender
requests, monthly, that all wages and other claims whatsoever which might have
given rise to a lien upon the Vessel have been paid.
9. Mortgager shall not sell, transfer, mortgage or charter the
Vessel in any manner without the written consent of Lender first had and
obtained, and any such written consent to any such sale, mortgage, transfer or
charter, except as permitted under the Loan Agreement. Any sale, mortgage,
transfer or charter of the Vessel shall be subject to the provisions of this
Mortgage and the lien it creates. Mortgager covenants that it shall not merge
or consolidate with any other firm or corporation, or dissolve, except as
permitted under the Loan Agreement.
10. So long as this Mortgage is outstanding, the Vessel shall
remain documented under the laws of the Republic of Panama. In the event this
Mortgage or any provision thereof shall be deemed invalid, in whole or in
part, by reason of any present or future law or governmental regulation, or
any decision of any authoritative court, or, if the documents at any time held
by Lender be deemed by Lender, for any reason, insufficient to carry out the
true intent and spirit of this Mortgage, then, from time to time, Mortgagor
shall execute and deliver, on its own behalf such other and further
instruments, documents or assurances, as in the opinion of Lender may be
required, to more effectively subject the Vessel to the payment of the
principal sum of the mortgage debt, together with interest thereon, and the
performance of the terms and provisions of this Mortgage and to effectuate any
sale of the Vessel provided for in the event of default under this Mortgage as
more fully described below.
ARTICLE II
Default
1. In any one or more of the following events, herein termed
events of default :
The occurrence of an Event of Default under the Loan Agreement, or
in the due and punctual performance of any provision of Sections 4, 5, 6, 8
and 10 of Article I hereof, or an attempt to violate Sections 4 or 10 of
Article I hereof, or default continuing for thirty (30) days in the
performance of any other covenant herein, then during the continuation
thereof, Lender may:
(a) Declare all the then unpaid indebtedness hereby secured to
be due and payable immediately except that no declaration shall be necessary
in the event of either Mortgager being adjudicatedly bankrupt or the
substantial equivalent under whatever local proceedings may be applicable,
becoming insolvent, or admitting in writing its inability to pay its debts as
they fall due, having a receiver or trustee appointed of or in respect of its
property or business or any substantial part thereof or making an assignment
of creditors;
(b) Recover judgment for, and collect out of any property of
Mortgagor, any amount hereby or otherwise due hereunder; and collect all
earned charter hire and freight monies relating to services performed by the
Vessel, Mortgagor hereby assigning to Lender such earned charter hire and
freight monies then owing;
(c) Retake the Vessel without legal process at any time wherever
the same may be, and, without being responsible for loss or damage, hold and
in Lender s, Charterer s or Mortgagor s name lease, charter, operate or
otherwise use the Vessel for such time and on such terms as Lender may deem
advisable, being accountable for net profits, if any, and with the right to
dock the Vessel free of charge at Mortgagor s premises or elsewhere at
Mortgagor s expense; or sell the Vessel, free from any claim by Mortgagor of
any nature whatsoever, in the manner provided by law; to the extent permitted
by law, such sale may be public or private, without notice, without having the
Vessel present, and Lender may become the purchase;
(d) Exercise all of the rights and remedies in foreclosure and
otherwise given to the mortgagees by the provisions of the law of Panama or
any other jurisdiction where the Vessel may be found;
(e) Bring suit at law, in equity or in admiralty as may be
advised to recover the judgment for the indebtedness hereby secured and
collected the same out of any and all property of the Mortgagor whether
covered by this Mortgage or otherwise;
(f) Exercise any other right or remedy provided for in the Loan
Agreement, at law or in equity.
For such purpose Lender and its agents are hereby irrevocably
appointed the true and lawful attorneys of Mortgagor in the name and stead
either Mortgager to make all necessary transfers of the Vessel thus sold.
2. In the event that the Vessel shall be arrested or detained
by any officer of any court or by any other authority, Mortgagor hereby
authorize Lender, its officers, representatives and appointees, in the name of
Charterer, Mortgagor or Lender, to receive or to take possession thereof, and
to defend any action and discharge any lien.
3. Each and every power or remedy herein given to Lender shall
be cumulative, and in addition to all powers or remedies now or hereafter
existing in admiralty, in equity, at law or by statute, and may be exercised
as often as may be deemed expedient by Lender. No delay or omission by Lender
shall impair any right, power or remedy, and no waiver of any default shall
waive any other default. In any suit Lender shall be entitled to obtain
appointment of a receiver of the Vessel and the earnings thereof, who shall
have full rights and powers to use and operate the Vessel, and to obtain a
decree ordering and directing the sale and disposition thereof.
4. The net proceeds of any judicial or other sale, and any
lease, charter, management, operations or other use of the Vessel by Lender,
of any claim for damages, of any judgment, and any insurance received by
Lender (except to the extent paid to Mortgagor or applied in payment of
repairs or otherwise for Mortgagor s benefit) shall be applied as follows:
FIRST: To the payment of all reasonable attorneys fees, court
costs, and any other expenses, losses, charges, damages incurred or advances
made by Lender in the protection of its rights or caused by Mortgagor s
default hereunder or under the note secured hereby, with interest on all such
amounts at the Overdue Interest Rate (as defined in the Loan Agreement); and
to provide adequate indemnity against any liens for which priority over this
Mortgage is claimed;
SECOND: To the payment of all interest, to date of payment, on
the Promissory Note and any or all other sums secured hereby, and as to any
balance of such proceeds, to the payment next of any or all matured
installments of principal in the inverse order of their maturity.
Lender shall be entitled to collect any deficiency from Mortgagor.
Mortgagor shall be entitled to any surplus.
5. All advances and expenditures which Lender in its discretion
may make for repairs, insurance, payment of liens or other claims, defense of
suits, or for any other purpose whatsoever related hereto or to the note and
all damages sustained by Lender because of defaults, shall be repaid Mortgagor
on demand the Overdue Interest Rate and until so paid shall be a debt due from
Mortgagor to Lender secured by the lien hereof. Lender shall not be obligated
to make any such advances or expenditures, nor shall the making thereof
relieve Mortgagor of any obligation or default with respect thereto.
ARTICLE III
Possession Until Default
Until one or more of the events of default hereinbefore described,
Mortgagor shall be permitted to retain actual possession and use of the
Vessel.
ARTICLE IV
Sundry Provisions
1. All notices to the parties hereto shall be given at the
addresses and in the manner set forth in Section 9.02 of the Loan Agreement.
2. All covenants and agreements of Mortgagor herein contained
shall bind Mortgagor, its successors and assigns, and shall inure to the
benefit of Lender and its successors and assigns. Following any assignment
hereof, any reference herein to Lender shall be deemed to refer to the
assignee.
3. If any provision of this Mortgage be held to be invalid
under the provisions of any applicable law, such invalid provision shall be
deemed deleted from this Mortgage but the validity of the Mortgage shall not
otherwise be affected.
4. Mortgagor and Lender confer a Special Power of Attorney with
right of substitution upon Messrs. ICAZA, XXXXXXXX-XXXX & XXXXXX, a law firm
domiciled in the City of Panama, Republic of Panama to take all necessary
steps to record this instrument of mortgage in the Public Registry Office of
the Republic of Panama, and do whatsoever said law firm may consider
appropriate for the fulfillment of any and all laws and regulations governing
the ship mortgage in the Republic of Panama.
IN WITNESS WHEREOF, on the day and year first above written,
Mortgagor has caused this Mortgage to be duly executed in its name.
TRB HOLDING CORPORATION
By:
Name:
Title:
NOTARIAL CERTIFICATE
I, the undersigned, NOTARY PUBLIC, duly authorized, admitted and
sworn, residing and practicing in Houston, Xxxxxx County, Texas, U.S.A.,
DO HEREBY CERTIFY THAT:
1. ___________________________________, as _____________________ of
the above mentioned corporation did sign and deliver the above written
mortgage in my presence and that the signature appearing above is his
authentic signature.
2. Sufficient proof has been produced to me that the said
_________________________ has power to execute said mortgage on behalf of the
corporation. I further certify that the above signature of
____________________________ was set thereon in my presence and is, therefore,
authentic.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name and
affixed my seal of office this _________ day of __________ in the year of Our
Lord One thousand nine hundred ninety-seven.
Notary Public
ACCEPTANCE OF MORTGAGE
I, the undersigned, as ________________________ of NISSHO IWAI
EUROPE, PLC., referred to as the Lender in the above First Preferred Ship
Mortgage on the m.v. Seillean , hereby ACCEPTS for all legal purposes said
First Preferred Ship Mortgage on behalf of the Lender .
Date: NISSHO IWAI EUROPE PLC.
By:
Name:
Title:
NOTARIAL CERTIFICATE OF ACCEPTANCE OF MORTGAGE
I, the undersigned, NOTARY PUBLIC, duly authorized, admitted and
sworn, residing and practicing in Houston, Xxxxxx County, Texas, U.S.A.,
DO HEREBY CERTIFY THAT:
1. ___________________________________, as _____________________ of
the above mentioned corporation did sign and accept the above written mortgage
in my presence and that the signature appearing above is his authentic
signature.
2. Sufficient proof has been produced to me that the said
_________________________ has power to execute said mortgage on behalf of the
corporation. I further certify that the above signature of
____________________________ was set thereon in my presence and is, therefore,
authentic.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name and
affixed my seal of office this _________ day of __________ in the year of Our
Lord One thousand nine hundred ninety-seven.
Notary Public
Exhibit A
Payments; Calculation of Interest
Payments:
The Mortgagor shall repay the Loan on each Repayment Date.
Calculation of Interest:
(a) The Mortgagor shall pay to the Lender interest on the unpaid
principal amount of the Loan for the period commencing on the date the Loan is
made to but excluding the date the Loan shall be paid in full, at a rate per
annum equal to the lesser of (i) LIBOR plus the then Applicable Margin or (ii)
the Maximum Rate.
(b) Notwithstanding any of the foregoing, the Mortgagor will pay
to the Lender interest at a rate per annum equal to the lesser of (i) the
applicable Overdue Interest Rate or (ii) the Maximum Rate on any principal of,
or interest on, the Loan and on any other amount payable by the Mortgagor
under the Loan Agreement to or for the account of the Lender, which shall not
be paid in full when due (whether at stated maturity, by acceleration or
otherwise and whether the failure to make such payment constitutes a default
or event of default under the Loan Agreement, regardless of the giving or
receipt of notice or the lapse of any applicable cure period), for the period
commencing on the due date thereof until the same is paid in full.
(c) Interest shall be computed on the basis of a year of 360
days for actual days elapsed (including the first day but excluding the last
day) occurring in the period for which such amounts are payable, unless such
calculation would exceed the Maximum Rate, in which case interest shall be
calculated on the per annum basis of a year of 365 or 366 days, as the case
may be.
Applicable Margin means 2% per annum.
Interest Period means the period commencing on the date that an
advance of the Loan is (a) made or (b) continued, and ending on the fifteenth
(15th) calendar day in the next month thereafter, provided that the first
interest period shall end on February 15, 1997. If such fifteenth (15th) day
is not a business day, the Interest Period shall be extended to the next
succeeding business day.
LIBOR means, for each Interest Period, the arithmetic mean
(rounded upward, if necessary, to the nearest whole multiple of 1/16 of 1%) of
the one-month London Inter-Bank Offered Rates for deposits in United States
Dollars as quoted on Reuters monitor page LIBO at or about 11:00 a.m.,
London time on the date that is two (2) London business days prior to the
first day of such Interest Period. If only one such rate appears, LIBOR shall
be such rate. If no such rates appear, LIBOR shall be the rate (rounded
upwards if necessary to the nearest one sixteenth of one per cent) in respect
of any Interest Period determined by the Lender on the basis of the rates at
which deposits in Dollars are offered by the reference bank at or about 11:00
a.m., London time, on the day that is two (2) London business days prior to
the first day of such Interest Period or such other relevant period or at such
date, to prime banks in London interbank market for one (1) month period on
that Interest Payment Date and in amount equal to the outstanding Loan balance
(after giving effect to any advance) or such other relevant amount outstanding
as of the first day of such Interest Period or such other relevant period.
Maximum Rate means the maximum non-usurious rate of interest
permitted by applicable law.
Overdue Interest Rate means, in respect of any principal of, or
interest on, the Loan or any other amount payable by the Mortgagor under any
loan document which is not paid when due (whether at stated maturity, by
acceleration or otherwise), a rate per annum during the period commencing on
the due date until such amount is paid in full equal to the sum of LIBOR in
effect for such period plus 5% per annum.
Repayment Date means the last day of each Interest Period, until
an event of default occurs under the Loan Agreement.
