DATED [ ] 2003
(1) TORCH OFFSHORE INC.
AS OWNER
AND
(2) GLOBAL MARINE SYSTEMS LIMITED
AS MORTGAGEE
FIRST PREFERRED
VANUATU SHIP MORTGAGE
ON
M.V. "MIDNIGHT WRANGLER"
FORMERLY "WAVE ALERT"
HILL XXXXXX XXXXXXXXX
Xxxxxxxx Xxxxx
Xxxx'x Xxxxx
XXXXXX XX0X 0XX
Tel: 0000 0000000 Fax: 0000000
xxx.xxx-xxx.xxx
TABLE OF CONTENTS
CONTENTS Page
1. DEFINITIONS AND INTERPRETATION 1
2. CHARGE 5
3. REPAYMENT 5
4. CONTINUING SECURITY 5
5. REPRESENTATIONS AND WARRANTIES 6
6. UNDERTAKINGS 7
7. MAINTENANCE OF SECURITY 17
8. DEFAULT 18
9. APPLICATION OF MONEYS 21
10. NO WAIVER 22
11. RECEIVER 22
12. DELEGATION OF POWERS 23
13. INDEMNITY 23
14. POWER OF ATTORNEY 23
15. FURTHER ASSURANCE 24
16. NOTICE 24
17. LIMITATION ON AMOUNT OUTSTANDING 24
18. PAYMENT OF NON-BUSINESS DAY 25
19. CONFIRMATION REGARDING LAWS OF XXXXXXX 00
00. GROSSING-UP OF PAYMENTS 25
21. CURRENCY INDEMNITY 26
22. LAW AND JURISDICTION 26
SCHEDULE 1 28
SCHEDULE 2 29
THIS FIRST PREFERRED VANUATU SHIP MORTGAGE dated the [ ] 2003
BY:
(1)
TORCH OFFSHORE INC. a corporation duly incorporated under the laws of
the State of Delaware United States of America whose principal place of
business is situate at Xxxxx 000, 000 Xxxxxxx Xxxxxx, Xxxxxx 00000,
Xxxxxxxxx X.X.X. (hereinafter called the "Owner") and
(2) GLOBAL MARINE SYSTEMS LIMITED a company incorporated under the laws of
England and Wales whose registered office is at East Saxon House, 00
Xxxx Xxxxxx, Xxxxxxxxxx, XX0 0XX (hereinafter called the "Mortgagee")
WHEREAS
(A) The Owner is the sole Owner of the Vessel.
(B) The Mortgagee, by a Facility Agreement dated [ ] 2002 (a copy of
which is attached at Schedule 2 hereto) made between the Owner and the
Mortgagee as the same may be amended, supplemented or novated from time
to time (hereafter called the "Facility Agreement"), agreed to provide
a credit facility of up to US$ 9,731,417 (the "Facility") to the Owner
to assist the Owner in purchasing the Vessel.
(C) The Owner, in order to secure the repayment of the Facility and all
other sums of money from time to time owing to the Mortgagee under or
pursuant to the Facility Agreement and the performance and observance
and compliance with all of the covenants, terms and conditions in this
Mortgage and in the Facility Agreement contained, has duly authorised
the execution and delivery of this First Preferred Mortgage over the
Vessel under and pursuant to the Laws of Vanuatu.
NOW THIS MORTGAGE WITNESSETH AND IT IS HEREBY AGREED THAT in consideration of
the Mortgagee entering into the Facility Agreement and making available and
maintaining the Facility and for other good and valuable consideration which the
Owner hereby acknowledges having received, the Owner and the Mortgagee agree as
follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Mortgage unless otherwise defined in the recitals hereto or
below or otherwise herein or the context otherwise requires words and
expressions shall bear the meanings ascribed to them in the Facility
Agreement and:
"DOLLARS" and the sign "U.S.$" means lawful money of the United States
of America.
"EARNINGS" means all monies whatsoever due or to become due to the
Owner arising out of the use or operation of the Vessel present or
future, including all freight, hire and passage moneys compensation
payable to the Owner in event of requisition of the Vessel for hire,
remuneration for salvage and towage services, demurrage and detention
moneys and damages for breach (or payments for a variation or
termination) of any charterparty or any other contract of employment,
all sums recoverable under the Insurances in respect of loss of
Earnings and any other earnings whatsoever due or to become due to the
Owner at any time during the Security Period;
"ENVIRONMENTAL APPROVALS" means all approvals, licences, permits, or
other authorisations whatsoever required under applicable Environmental
Laws;
"ENVIRONMENTAL AFFILIATE" means any agent or employee of the Owner or
any person having a contractual relationship with the Owner in
connection with the Vessel or its operations or the carriage of cargo
and/or passengers on the Vessel and/or the provision of goods and/or
services on or from the Vessel;
"ENVIRONMENTAL CLAIM" means any claim for damages, clean up costs,
compliance, remedial action or otherwise made by any governmental or
regulatory authority (or by any other third party) alleging breach of
any Environmental Law or Environmental Approval or otherwise arising
out of or relating to an Environmental Incident;
"ENVIRONMENTAL INCIDENT" means any release of Environmentally Sensitive
Material from the Vessel or from a ship other than the Vessel where the
Vessel, the Owner or any Environmental Affiliate is actually or
allegedly at fault or otherwise liable (in whole or in part) or where
the Vessel is actually or potentially liable to be arrested;
"ENVIRONMENTAL LAWS" means all laws, regulations, conventions and
agreements whatsoever relating to pollution or protection of the
environment (including, but not limited to, the United States Oil
Pollution Act of 1990);
"ENVIRONMENTALLY SENSITIVE MATERIAL" means, oil, oil products any other
substance harmful to the environment, polluting, toxic or hazardous or
any substance the release of which into the environment is regulated by
any Environmental Law or Environmental Approval;
"INSURANCES" means all slips, certificates of entry, policies and
contracts of insurance (which expression includes all entries of the
Vessel in a protection and indemnity and a war risks association) which
are from time to time taken out or entered into by the Owner in respect
of the Vessel or her Earnings or otherwise howsoever in connection with
the Vessel [including for the
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avoidance of doubt any mortgagees interest insurance or additional
perils insurance] and all benefits of such policies and contracts
including all claims of whatsoever nature and any return of premiums;
"EVENT OF DEFAULT" means any of the events set out in Clause 8.
"OUTSTANDING INDEBTEDNESS" means:
(a) the aggregate of all sums of money (including interest) from
time to time owing by the Owner to the Mortgagee under this
Mortgage; and
(b) the aggregate of all sums of money (including interest) from
time to time owing by the Owner to the Mortgagee under or
pursuant to the Facility Agreement and the Security Documents.
"REQUISITION COMPENSATION" means all moneys or other compensation
payable during the Security Period by reason of requisition for title
or other compulsory acquisition of the Vessel otherwise than by
requisition for hire.
"SECURITY DOCUMENTS" means the Facility Agreement together with the
Security Documents as defined in the Facility Agreement.
"SECURITY PERIOD" means the period from the date hereof terminating
upon discharge of Outstanding Indebtedness.
"TOTAL LOSS" means:
(a) actual constructive or compromised or agreed or arranged total
loss of the Vessel; or
(b) requisition for title or other compulsory acquisition of the
Vessel otherwise than by requisition for hire; or
(c) capture, seizure, arrest or detention or confiscation of the
Vessel by any government or by persons acting or purporting to
act on behalf of any government, unless the Vessel be released
from such capture, seizure, arrest or detention within twenty
(20) Business Days after the occurrence thereof.
"VESSEL" means the vessel described in Schedule 1 hereto and includes
any share or interest therein and her engines, machinery, masts, spars,
rigging, boats, anchors, chains, tackle, apparel, furniture, fittings
and equipment, outfit, spare gear, fuel, consumable or other stores
belonging and appurtenances whether on board or ashore and all
replacements, renewals or additions to any of the foregoing, or any
improvements made to the Vessel from time to time during the
continuance of the Security Period.
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1.2 In Clause 6(A) hereof:-
(a) "EXCESS RISKS" means the proportion of claims for general
average and salvage charges and under the ordinary
running-down clause not recoverable in consequence of the
value at which a vessel is assessed for the purpose of such
claims exceeding her insured value;
(b) "PROTECTION AND INDEMNITY RISKS" means the usual risks covered
by an English protection and indemnity association including
the proportion not recoverable in case of collision under the
ordinary running-down clause;
(c) "WAR RISKS" includes the risk of mines and all risks excluded
from the standard form of English marine policy by the free of
capture and seizure clause.
1.3 INTERPRETATION
In this Mortgage, unless the context otherwise requires:
(a) words importing the singular include the plural and vice versa
and words importing a gender include every gender;
(b) references to any document (including this Mortgage) are
references to that document as amended, consolidated,
supplemented, novated or replaced from time to time;
(c) references to clauses, paragraphs and Schedules are references
to clauses and paragraphs of, and Schedules to, this Mortgage;
(d) headings are for convenience only and shall be ignored in
construing this Mortgage;
(e) references to law include references to any constitutional
provision, treaty, decree, convention, statute, act,
regulation, rule, ordinance, subordinate legislation, rule of
common law and of equity and judgment;
(f) references to any law are references to that law as amended,
consolidated, supplemented or replaced from time to time;
(g) references to any person include references to any individual,
company, body corporate, association, partnership, firm, joint
venture, trust and Governmental Entity.
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2. CHARGE
2.1 IN CONSIDERATION of the premises and in order to secure the payment of
the Outstanding Indebtedness and to secure the performance and
observance of and compliance with the covenants, terms and conditions
of this Mortgage and in the Security Documents contained the Owner has
granted, conveyed, hypothecated, mortgaged, pledged, assigned,
transferred, set over and confirmed and does by these presents grant,
convey, mortgage, hypothecate, pledge, assign, transfer, set over and
confirm unto the Mortgagee the whole of the Vessel to have and to hold
the same unto the Mortgagee, its successors and assigns the terms
hereinafter set forth PROVIDED ONLY and the condition of these presents
is such that if the Owner, its successors and assigns shall pay or
cause to be paid to the Mortgagee, its successors or assigns all the
Outstanding Indebtedness as and when the same shall become due and
payable in accordance with the terms of the Security Documents and this
Mortgage and shall observe and comply with the covenants, terms and
conditions contained in the Security Documents and this Mortgage,
expressed or implied to be performed, observed or complied with by and
on the part of the Owner during the Security Period then upon such full
fulfilment the Mortgagee shall, upon the request of and at the cost of
the Owner execute and deliver to the Owner such release of this
security as the Owners shall reasonably require.
3. REPAYMENT
3.1 For the consideration aforesaid the Owner hereby covenants as follows:-
(a) that it will pay to the Mortgagee the Outstanding Indebtedness
in accordance with the terms, conditions and provisions in the
Security Documents and in this Mortgage and that it will
perform, observe and comply with the covenants, terms and
conditions on its part to be performed, observed and complied
with in the Security Documents and in this Mortgage;
(b) the Owner will pay interest at the Default Rate on any moneys
which are by this Mortgage expressed to be payable on demand
and which are not paid upon demand being made as from the date
of demand until payment (both before and after any judgment),
4. CONTINUING SECURITY
4.1 It is DECLARED and AGREED that the security created by this Mortgage
and the other Security Documents shall be held by the Mortgagee as a
continuing security for the payment of all moneys which may at any time
and from time to time be owing or become due and payable to the
Mortgagee under the Security Documents or this Mortgage and the
performance and observance of and compliance with all of the covenants,
terms and conditions therein and herein contained and that the security
so created shall not be satisfied by any intermediate payment or
satisfaction of any part of the amount
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hereby and thereby secured and that the security so created shall be in
addition to and shall not in any way be prejudiced or affected by any
collateral or other security now or hereafter held by the Mortgagee for
all or any part of the moneys hereby and thereby secured and that every
power and remedy given to the Mortgagee hereunder shall be in addition
to and not a limitation of any and every other power or remedy vested
in the Mortgagee under any of the Security Documents or this Mortgage
or at law and that all the powers so vested in the Mortgagee may be
exercised from time to time and as often as the Mortgagee may deem
expedient.
5. REPRESENTATIONS AND WARRANTIES
5.1 The Owner REPRESENTS AND WARRANTS TO AND COVENANTS with the Mortgagee
that:
(A) it was duly organised and incorporated and is now validly
existing as a corporation under the laws of Delaware and is in
good standing thereunder and will remain so during the life of
this Mortgage;
(B) it has the power to execute, deliver and carry out the terms,
conditions and covenants contained in this Mortgage and has
taken all necessary action to authorise the execution,
delivery and carrying out of the terms of this Mortgage and to
ensure that the obligations of the Owner enforceable in
accordance with their terms;
(C) any and all consents or permissions necessary to enable it to
execute and deliver this Mortgage and to enable the Mortgagee
(as and when it deems necessary in accordance with the terms
hereof) to enforce this Mortgage have been obtained and that
the execution, delivery and performance by the Owner of this
Mortgage will in no way contravene any restriction or
limitation imposed on the Owner by its constitutional
documents or by agreement or otherwise howsoever;
(D) it lawfully owns the whole of the property in the Vessel free
from any security interest, lien, charge or encumbrance
whatsoever other than the encumbrance of this Mortgage and the
Seller's Lien;
(E) there are no actions, suits or proceedings pending, or to its
knowledge, threatened against or affecting it at law, in
equity or in admiralty, or before any court or commission,
domestic or foreign, or of any governmental agency, domestic
or foreign;
(F) it is, by this Mortgage and the registration thereof,
constituting in favour of the Mortgagee amongst other things
all the rights of a First Preferred Vanuatu Ship Mortgage on
the Vessel to secure the Outstanding Indebtedness and the
performance and observance of and
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compliance with the covenants, terms and conditions in this
Mortgage and the Security Documents contained; and
(G) it has not assigned, charged, pledged or encumbered the Vessel
(including by any charter or employment contract) except under
this Mortgage.
(H) it is not necessary to register this Mortgage other than with
the relevant Vanuatu Authorities.
6. UNDERTAKINGS
6.1 The Owner COVENANTS and undertakes with the Mortgagee that throughout
the Security Period:
(A) Insurances
(i) To maintain adequate and sufficient Insurances on and
over the Vessel in respect of (a) hull, machinery and
equipment, marine and war risks (including excess
risks and/or port risks) (b) protection and indemnity
risks (including pollution risks to the highest value
possible under the rules of the relevant protection
and indemnity association for ships of the same type,
size, age and flag as the Vessel) and (c) otherwise
in accordance with the provisions of the Security
Documents;
(ii) To effect the Insurances aforesaid in the name of the
Owner or, if so required by the Mortgagee in the
joint names of the Owner and the Mortgagee (wherever
possible without liability on the part of the
Mortgagee for the premiums or calls) (a) in such
amounts (but on a 100% order basis) and upon such
terms (including deductibles) as shall from time to
time be approved in writing by the Mortgagee but in
any event on a valid policy basis in Dollars in an
amount of not less than whichever is the greater of:-
o the market value of the Vessel for the time
being with the benefit of any charters being
or to be performed by the Vessel; or
o such amount as is necessary so that it
equals or exceeds one hundred and
twenty-five per cent (125%) of the amount of
Outstanding Indebtedness from time to time;
and (b) through such brokers (hereinafter called the
"approved brokers") and with such insurance companies
underwriters war risks and protection and indemnity
associations as shall from
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time to time be approved in writing by the Mortgagee
and not to exclude any risks or agree to the
alteration of any deductible without the prior
consent in writing of the Mortgagee;
(iii) To renew all such Insurances at least seven Business
Days before the relevant policies or contracts expire
and to procure that the approved brokers shall
promptly confirm in writing to the Mortgagee as and
when each such renewal is effected;
(iv) Punctually to pay all premiums calls contributions or
other sums payable in respect of all such Insurances
and to produce all relevant receipts when so required
by the Mortgagee;
(v) To arrange for the execution of such guarantees as
may from time to time be required by any protection
and indemnity or war risks association;
(vi) To procure that there is duly endorsed upon all slips
cover notes policies certificates of entry or other
instruments of insurance issued or to be issued in
connection with the Insurances aforesaid the interest
of the Mortgagee by means of a Notice of Assignment
(signed by the Owner) and/or a Loss Payable Clause
providing (a) in the case of fire and usual marine
risks insurances and war risks insurances that unless
and until an Event of Default shall happen and the
Mortgagee shall give notice thereof to the insurers
(whereupon all insurance recoveries shall be
receivable by the Mortgagee in accordance with Clause
9.1 hereof) there shall be paid to the Mortgagee any
and every sum receivable in respect of a Total Loss
and any and every sum receivable in respect of a
major casualty (that is to say a casualty in respect
whereof the claim or the aggregate of the claims
exceeds Two Million United States Dollars
(U.S$2,000,000) inclusive of any deductible) and all
other sums receivable in respect of such Insurances
shall be paid to the Owner and (b) in the case of the
protection and indemnity risks insurances that unless
and until an Event of Default shall happen and the
Mortgagee shall give notice thereof to the insurers
(whereupon all insurance recoveries shall be
receivable by the Mortgagee in accordance with Clause
9.1 hereof) all sums receivable in respect of such
Insurances shall be paid to the Owner;
PROVIDED HOWEVER that unless and until an Event of
Default shall happen (whereupon all insurance
recoveries shall be applied in accordance with Clause
9.1 hereof) the insurance moneys received by the
Mortgagee in respect of any major casualty shall be
paid over to the Owner upon the Owner
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furnishing evidence that all loss and damage
resulting from the casualty has been properly made
good and repaired and that all repair accounts and
other liabilities whatsoever in connection with the
casualty have been fully paid and discharged by the
Owner and PROVIDED FURTHER that the insurers through
whom the fire and usual marine risks insurances are
effected may in the case of a major casualty and with
the previous consent in writing of the Mortgagee make
payment on account of repairs in the course of being
effected;
(vii) To procure that all such instruments of insurance as
are referred to in sub-clause (vi) above shall be
deposited with the approved brokers and that such
brokers shall furnish the Mortgagee with pro forma
copies thereof and a letter or letters of undertaking
in such form as may be required by the Mortgagee and
that such letters of undertaking are renewed annually
during the Security Period;
(viii) To procure that the protection and indemnity and/or
war risks associations wherein the Vessel is entered
shall (if so required by the Mortgagee) furnish the
Mortgagee with a letter or letters of undertaking in
such form as may be required by the Mortgagee and
that such letters of undertaking are renewed annually
during the Security Period;
(ix) Not to employ the Vessel or suffer the Vessel to be
employed otherwise than in conformity with the terms
of the instruments of insurance aforesaid (including
any warranties express or implied therein) without
first obtaining the consent to such employment of the
insurers and complying with such requirements as to
extra premium or otherwise as the insurers may
prescribe;
(x) To apply all such sums receivable in respect of the
Insurances as are paid to the Owner in accordance
with Clause 6.1(A)(vi) hereof for the purpose of
making good the loss and fully repairing all damage
in respect whereof the insurance moneys shall have
been received so as not to diminish the value of the
Vessel.
(xi) That if any of the insurances referred to in Clause
6.1(A)(i) form part of a fleet cover it will procure
that the approved brokers shall undertake to the
Mortgagee that they shall neither set off against any
claims in respect of the Vessel any premiums due in
respect of other vessels under such fleet cover or
any premium due for other insurances nor cancel the
insurances for reason of non-payment of premiums for
other
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vessels under such fleet cover or of premiums for
such other insurances.
(xii) The Mortgagee shall be entitled to effect or require
there to be effected in its name and for its benefit
a mortgagee's interest policy and mortgagees
interest, additional perils cover in respect of the
Mortgagee's interest in the Vessel for an amount of
one hundred and twenty-five per cent (125%) of the
Outstanding Indebtedness and upon such other terms as
the Mortgagee considers appropriate and the Owner
shall pay to the Mortgagee on demand for the cost of
effecting and maintaining these insurances.
(B) Repair
at its own expense the Owner will keep the Vessel or procure
that the Vessel is kept in a good and efficient state of
repair so as to maintain her present class as set out in
Schedule 1 or at the equivalent class with such other
classification society of equivalent status as the Mortgagee
shall approve in writing and so as to comply with the
provisions of Vanuatu law and all other regulations and
requirements (statutory or otherwise) from time to time
applicable to the Vessel and so as to ensure that the Vessel
shall at all times be capable of operating efficiently as the
type of ship referred to herein and shall procure that all
repairs to or replacements of any damaged, worn or lost parts
or equipment be effected in such manner (both as regards
workmanship and quality of materials) as not to diminish the
value or class of the Vessel;
(C) Modification
the Owner will not without the prior written consent of the
Mortgagee (such consent not to be unreasonably withheld) make
any modifications or alterations to the Vessels speed,
structure, machinery or equipment;
(D) Survey
at its own expense will submit the Vessel or procure that the
Vessel is submitted to continuous survey and such other
surveys as may be required for classification purposes and
shall, if so requested in writing, supply to the Mortgagee
copies of all survey reports issued in respect thereof;
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(E) Inspection
the Owner will permit surveyors or other persons appointed by
the Mortgagee (or such other person as it shall appoint on its
behalf) to board the Vessel at all reasonable times for the
purpose of inspecting her condition or for the purpose of
satisfying themselves in regard to proposed or executed
repairs and to afford all proper facilities for such
inspection. The cost of such surveyors or other persons
attending the Vessel if the Mortgagor is not in default shall
be borne by the Mortgagee, but if the Mortgagor is in default,
the Mortgagor shall bear the costs;
(F) Prevention of and release from arrest
(except in the case of any Seller's Lien for which the
Mortgagee shall be responsible) the Owner will promptly pay
and discharge or procure the prompt payment and discharge by
such other party as may be liable therefore of all debts,
damages and liabilities whatsoever which have given or may
give rise to maritime liens or possessory liens or statutory
liens on or claims enforceable against the Vessel under the
laws of Vanuatu and of all other countries to whose
jurisdiction the Vessel may from time to time become subject
and in the event of arrest of the Vessel pursuant to legal
process or in the event of her detention in exercise or
purported exercise of any such lien or claim as aforesaid
shall procure the release of the Vessel from such arrest or
detention within 14 days of receiving notice thereof by
providing or procuring the provision of bail or other security
as the circumstances may require.
(G) Employment
not knowingly employ the Vessel or suffer her employment in
any trade or business which is forbidden by International law
or is otherwise illicit or in carrying illicit or prohibited
goods or in any manner whatsoever which may render her liable
to condemnation in a Prize Court or to destruction, seizure or
confiscation and in the event of hostilities in any part of
the world (whether war be declared or not) not knowingly
employ the Vessel or suffer her employment in carrying any
contraband goods or enter or trade or continue to trade in any
zone after it has been declared a war zone by any government
or by the Vessel's war risks insurers unless the Mortgagee
shall have first given their consent thereto in writing and
there shall have been effected by the Owner and at its expense
such special insurance cover as the Mortgagee may require;
(H) Information and performance
the Owner will promptly furnish to the Mortgagee all such
information as the Mortgagee may from time to time require
regarding the Vessel,
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her employment position and engagements, particulars of all to
wages and salvages and copies of all charters and other
contracts for her employment or otherwise howsoever concerning
her and shall in all respects perform and observe all
obligations and conditions on the part of the Owner to be
performed and observed contained in any charter, contract of
affreightment, xxxx of lading or other contract for the
Vessel's employment and shall promptly and diligently
institute and maintain all such proceedings as may be
necessary or expedient to protect the interests of the Owner
or the Mortgagee in any such charter, contract of
affreightment, xxxx of lading or other contract for the
Vessel's employment;
(I) Notification of certain events
the Owner will notify the Mortgagee forthwith by facsimile
transmission:
(i) of any accident to the Vessel involving repairs the
cost whereof will or is likely to exceed One Million
Dollars (U.S.$1,000,000) (or the equivalent in any
other currency) or if the Vessel is put in the hands
of any person for work costing or likely to cost such
amount to be carried out on her;
(ii) of any occurrence in consequence whereof the Vessel
has become or is likely to become a Total Loss;
(iii) of any requirement or recommendation made by any
insurer or classification society or by any competent
authority which is not complied with in accordance
with its terms;
(iv) of any writ served on or any arrest of the Vessel or
the exercise or purported exercise of any lien on the
Vessel or her Earnings or her Insurances;
(v) of any petition or notice of meeting to consider any
resolution to wind up the Owner, or for the
appointment of a receiver, administrator, trustee,
conservator or liquidator of the Owner or of all or a
substantial part of its undertaking or assets (or any
event or occasion analogous thereto under the laws of
the place of its incorporation, including for the
avoidance of doubt Chapter 11 proceedings);
(vi) if it becomes impossible or unlawful for the Owner to
fulfil any of the obligations on its part to be
performed under the Security Documents or this
Mortgage or forthwith upon becoming aware of the same
if anything is done or suffered or omitted to be done
in respect of the Vessel by the Owner, any charterer
or the
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Master of the Vessel or any other person acting on
behalf of any of them which imperils or is likely to
imperil the security created by this Mortgage;
(vii) forthwith upon becoming aware of the same if the
Vessel ceases to be registered as a Vanuatu Ship in
the name of the Owner or anything is done or suffered
to be done whereby such registration may be forfeited
or imperiled;
(viii) of any Environmental Claim being made in connection
with the Vessel or any Environmental Incident
occurring and to keep the Mortgagees advised of the
progress or outcome of the same;
(ix) of the occurrence or likely or threatened occurrence
of any Event of Default referred to in Clause 8
hereof;
(J) Payment of outgoings and evidence of payment
the Owner will promptly pay all tolls, dues and other
outgoings whatsoever in respect of the Vessel and shall keep
proper books of account in respect of the Vessel and her
Earnings as and when the Mortgagee may so require shall make
such books available for inspection on behalf of the Mortgagee
and furnish satisfactory evidence that the wages and
allotments and the insurance and pension contributions of the
Master and crew are being regularly paid and that all
deductions from crew's wages in respect of any tax liability
are being properly accounted for and that the Master has no
claim for disbursements other than those incurred by him in
the ordinary course of trading on the voyage then in progress;
(K) Encumbrances
the Owner will not without the prior written consent of the
Mortgagee (and then only subject to such terms as the
Mortgagee may impose which shall include the agreement, in a
form approved by the Mortgagee, of any subsequent mortgagee or
chargee of the Vessel that all moneys secured or to be secured
pursuant to the terms and conditions in this Mortgage
contained shall rank in priority to all moneys to be secured
by the mortgage or charge to be created in favour of such
mortgagee or chargee) mortgage, charge or otherwise assign or
encumber the Vessel nor her Insurances, or Requisition
Compensation or to suffer the creation of any such mortgage,
charge or assignment as aforesaid to or in favour of any
person other than the Mortgagee under the terms of the
Security Documents or in the case of any other Permitted
Encumbrances;
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(L) Sale or disposal
the Owner will not without the prior written consent of the
Mortgagee (and then only subject to such terms as the
Mortgagee may impose) or save as expressly permitted under the
Facility Agreement sell, assign or otherwise transfer or
dispose of the Vessel or any share or interest therein or part
thereof or agree to do any of the aforesaid, or permit the
bareboat registration of the Vessel elsewhere;
(M) Letting
the Owner will not without the prior written consent of the
Mortgagee (and then only subject to such terms as the
Mortgagee may impose) let the Vessel:
(i) on demise or bareboat charter for any period;
(ii) by any contract of employment of the Vessel for a
term which exceeds or which by virtue of the exercise
of any optional extensions therein contained may
exceed 12 months' duration;
(iii) on terms whereby more than 2 months' hire (or the
equivalent) is payable in advance;
(iv) below the market rate prevailing at the time when the
charter or contract for the Vessel is fixed; or
(v) on terms where the Mortgagee's priority is not
clearly recognised by the parties thereto,
PROVIDED THAT the terms of any charter entered into after the
giving of the written consent of the Mortgagee pursuant to the
foregoing provisions shall be subject in all respects to the
terms and conditions of this Mortgage and to the rights of the
Mortgagee hereunder and that a clause to such effect shall be
incorporated in the terms of any such charter and (in the case
of any demise or bareboat charter) the charterer shall enter
into such tripartite deed concerning the insurance, operation
and maintenance of the Vessel and the rights of the Mortgagee
as the Mortgagee may require;
(N) Repairer's lien
the Owner will not without the prior written consent of the
Mortgagee (such consent not to be unreasonably withheld) put
the Vessel into the possession of any person for the purpose
of work being done upon her in an amount exceeding or likely
to exceed One Million Dollars (U.S.$1,000,000) (or the
equivalent in any other currency) unless such person shall
first have given to the Mortgagee in terms satisfactory to it
14
a written undertaking not to exercise any lien on the Vessel
or her Earnings for the cost of such work or otherwise;
(O) Legal Registration and Expenses
the Owner will pay on demand to the Mortgagee (or as it may
direct) the amount of all investigation and legal and other
expenses of any kind whatsoever, stamp duties (if any),
registration fees and any other charges reasonably incurred by
the Mortgagee in connection with the preparation, completion
and registration of this Mortgage, and all costs and expenses
of whatsoever nature reasonably incurred by the Mortgagee in
connection with or incidental to the protection, preservation
or enforcement of the security under the Security Documents
and/or this Mortgage and the recovery from the Owner of the
Outstanding Indebtedness whether under the security of this
Mortgage or otherwise or in or about the exercise by the
Mortgagee of any of the powers vested in them under the
Security Documents or hereunder together in each case with
interest at the Default Rate from the date on which such
costs, expenses and charges were incurred up to the date of
payment by the Owner to the Mortgagee (after as well as before
judgment) and the amount of such costs, expenses and charges
together with interest thereon shall be secured by this
Mortgage until paid by the Owner to the Mortgagee;
(P) Registration
the Owner will keep the Vessel registered as a Vanuatu Ship
and do or suffer to be done nothing whereby such registration
may be forfeited or imperiled;
(Q) Manager
the Owner will not without the prior written consent of the
Mortgagee (such consent not to be unreasonably withheld, but
subject to such terms as the Mortgagee may impose) appoint or
permit the appointment of any manager of or for the Vessel;
(R) Mortgage
the Owner will cause this Mortgage to be duly recorded and
endorsed as prescribed by Vanuatu law and otherwise comply
with and satisfy all the requirements and formalities
established by Vanuatu law to perfect this Mortgage as a valid
and enforceable first preferred lien upon the Vessel and
furnish to the Mortgagee from time to time such proofs as the
Mortgagee may reasonably request for their satisfaction with
respect to the Owner's compliance with the provisions of this
Clause 6(R). Further the Owner will place and at all times
retain a
15
properly certified copy of this Mortgage on board the Vessel
with her papers and cause such certified copy of this Mortgage
to be exhibited to any and all persons having business with
the Vessel which might give rise to any lien thereon (other
than a lien for crew's wages and salvage) and to any
representative of the Mortgagee and place and keep prominently
displayed in the chartroom and in the Master's cabin of the
Vessel a framed printed notice in plain type in which the area
of print shall not be less than 6 inches by 9 inches reading
as follows
"NOTICE OF MORTGAGE
This Vessel is covered by a First Preferred Mortgage in favour
of Global Marine Systems Limited under the laws of Vanuatu.
Under the terms of the said Mortgage neither the Owner nor any
charterer nor the Master of this Vessel nor any other person
has any right, power or authority to create, incur or permit
to be imposed upon this Vessel any lien or encumbrance
whatsoever other than liens for crew's wages and salvage.";
(S) Environmental Laws
To comply with all Environmental Laws including, without
limitation, requirements relating to xxxxxxx and the
establishment of financial responsibility and to obtain and
comply with all Environmental Approvals and, without prejudice
to the generality of the foregoing, to comply with and
maintain in place all certificates and authorisations required
by any government or other authority in any country with which
the Vessel is to trade.
(T) Anti-Drug Abuse
Without prejudice to any of its other obligations herein to
take all necessary and proper action to prevent any
infringements of the Anti-Drug Abuse Act of 1986 of the United
States of America or any similar legislation applicable to the
Vessel in any jurisdiction in or to which the Vessel shall be
employed or located or trade or which may otherwise be
applicable to the Vessel and/or the Owner.
(U) ISM Code
To ensure that the persons responsible for the operation of
the Vessel obtain certification for themselves and the Vessel
as and when required by the ISM Code and maintain such
certification so that they are not withdrawn or cancelled.
16
(V) Consequence of Default
Where the Vessel is (or is to be) sold in exercise of any
power contained in this Deed or otherwise conferred on the
Mortgagee to execute forthwith upon request by the Mortgagee
such form of conveyance of the Vessel as the Mortgagee may
require.
(W) Further Assurance
the Owner will do and permit to be done each and every act or
thing whatsoever which the Mortgagee may reasonably require to
be done for the purpose of enforcing or preserving or securing
the Mortgagee's rights hereunder and allow the Mortgagee to
use the Owner's name as may be required for that purpose;
7. MAINTENANCE OF SECURITY
7.1 The Mortgagee shall without prejudice to its rights and powers
hereunder or under any of the other Security Documents be entitled (but
not bound) at any time and as often as may be necessary to take any
such action as it may in its discretion think fit for the purpose of
protecting and maintaining the security created by this Mortgage and
any other Security Documents (including without prejudice to the
foregoing generality the exercise of any of the rights set out in this
Clause 7 and its rights as Mortgagee of the Vessel and each and every
cost, expense or liability so incurred by the Mortgagee in or about the
protection of the security constituted thereby and hereby shall be
repayable to the Mortgagee by the Owner on demand together with
interest thereon at the Default Rate from the date whereon such cost,
expense or liability was incurred by the Mortgagee until the date of
actual receipt (as well after as before any judgment) and any such
cost, expense or liability so incurred together with interest thereon
shall be secured by this Mortgage until paid by the Owner to the
Mortgagee.
7.2 Without prejudice to the generality of the foregoing and subject to the
aforesaid:
(A) in the event that the provisions of Clause 6(A) hereof or any
of them shall not be complied with the Mortgagee shall be at
liberty to effect and thereafter to maintain all such
insurances upon the Vessel as in their discretion they may
think fit;
(B) in the event that the provisions of Clause 6(B) and/or 6(D) or
any of them shall not be complied with the Mortgagee shall be
at liberty to arrange for the carrying out of such repairs
and/or surveys at the cost of the Owner as the Mortgagee may
deem expedient or necessary;
(C) in the event that the provisions of Clause 6(F) hereof or any
of them shall not be complied with the Mortgagee shall be at
liberty to pay and discharge all such debts, damages and
liabilities as are therein
17
mentioned and/or to take any such measures as the Mortgagee
may deem expedient or necessary for the purpose of securing
the release of the Vessel and the Owner shall repay and
indemnify the Mortgagee against any payments, costs or
expenses so incurred by it together with interest at the
Default Rate from the date of payment to the date of recovery
in full (both before and after any judgment) by the Mortgagee.
8. DEFAULT
8.1 Upon the happening of any of the following events (herein called
"EVENTS OF DEFAULT") the Outstanding Indebtedness shall immediately
become payable to the Mortgagee on demand and the security created by
this Mortgage shall be immediately enforceable:-
(A) If the Owner does not pay any sum of money payable under the
Facility Agreement or the Security Documents on its due date
(which for this purpose means a Payment Date, or in respect of
moneys payable on demand means unless otherwise specifically
provided within five (5) Business Days from such demand) or
defaults in the due payment of any sum which has become due
and payable hereunder or under the Security Documents.
(B) If the Owner defaults in the due performance and observance of
any of the terms, covenants and conditions on its part
contained in this Mortgage (other than relating to payments of
monies which shall be governed by sub-clause (A) above or the
covenants contained in Xxxxxx 0 (X), (X), (X), (X), (X), (X)
and (U) which result in an immediate default) and such default
continues unremedied for a period of twenty eight (28) days
after the Lender has given to the Owner a written notice of
such default.
(C) If any representation or warranty made by the Owner, in this
Mortgage or the Security Documents or any notice, certificate
or statement delivered or made pursuant hereto or thereto
proves to have been incorrect, inaccurate or misleading in any
material respect and which has or is likely to have material
consequences.
(D) if the Vessel becomes a Total Loss provided that it shall not
be an Event of Default if:
(a) the Vessel is insured in accordance with Clause 6 and
the Security Documents; and
(b) no insurer has refused to meet or has disputed the
claim for Total Loss; and
18
(c) payment of insurance proceeds in respect of the Total
Loss in an amount not less than the Outstanding
Indebtedness is made in full to the Lender within
ninety days of the occurrence of the casualty giving
rise to the Total Loss in question (or such longer
period as the Mortgagee may agree), or if earlier,
the recovery by Mortgagee of the total loss insurance
proceeds; or
(E) if it shall become impossible or unlawful for the Owner to
fulfil or perform any of its covenants and obligations
contained in any of the Security Documents or for the
Mortgagee to exercise the rights of any of them vested in it
under any of the same;
(F) if the Vessel ceases, without the consent of the Mortgagee,
such consent not to be unreasonably withheld, to be registered
as a Vanuatu Ship or anything is done or suffered to be done
or omitted to be done whereby such registration may be
forfeited or imperiled;
(G) if the Vessel ceases to be classified with [Det Norske Veritas
+ 1A1 PSV DynPos AUTR, EO, HELDK];
(H) if any of the events of default specified in any subsequent
mortgage registered on the Vessel consented to by the
Mortgagee shall occur or the mortgagee of such subsequent
mortgage shall enforce or attempt to enforce such subsequent
mortgage;
(I) if any of the events specified and defined as an Event of
Default in the Facility Agreement shall occur;
(J) if any security given for moneys due and to become due to the
Mortgagee hereunder shall for any reason whatsoever cease to
be effective or become unenforceable unless the events giving
rise to the enforceability or the failure or effectiveness of
the security are within the control of the Owner or the
Mortgagee;
(K) if the Owner or the Vessel fails to comply with any
Environmental Law or Environmental Approval or the Vessel is
involved in or may potentially be involved in any
Environmental Claim and, in the opinion of the Mortgagee, such
non-compliance or such claim or potential claim could be
expected to have a material adverse affect on the business,
assets, operations of the Owner affecting the security created
by this Mortgage.
8.2 Upon the Outstanding Indebtedness being repayable on demand, whether or
not such demand shall have been made under Clause 8.1 hereof, the
Mortgagee shall be forthwith entitled as and when it may seem fit to
put into force and exercise all rights and powers possessed by it as
Mortgagee and in particular:-
19
(i) to exercise all the rights and remedies in foreclosure and
otherwise given to mortgagees by the provisions of the laws of
Vanuatu and exercise all of the rights and remedies in
foreclosure and otherwise given to mortgagees by the laws of
any other jurisdiction where the Vessel may be found;
(ii) to take possession of, operate and manage the Vessel;
(iii) to require that all policies, contracts and other records
relating to the Insurances (including details of and
correspondence concerning outstanding claims) be forthwith
delivered to such adjusters and/or other insurers as the
Mortgagee may nominate;
(iv) to collect, recover, compromise and give a good discharge for
all claims then outstanding or thereafter arising under the
Insurances or any of them and to take over or institute (if
necessary using the name of the Owner) all such proceedings in
connection therewith as the Mortgagee in its absolute
discretion thinks fit and to permit any brokers or others
through whom collection or recovery is effected to charge the
usual brokerage therefore;
(v) to discharge, compound, release or compromise claims in
respect of the Vessel which have given or may give rise to any
charge or lien on the Vessel or which are or may be
enforceable by proceedings against the Vessel under the laws
of Vanuatu and of all other countries to whose jurisdiction
the Vessel may from time to time become subject;
(vi) to sell the Vessel upon such terms and conditions as to the
Mortgagee seems best with or without the benefit of any
charterparty and free from any claim of or by the Owner in
admiralty, in equity, at law or by statute, at public or
private sale, by sealed bids or otherwise and to execute any
documents under the power given to it under Clause 14 in
connection with such sale on behalf of the Owner; in case of a
public sale notice of sale shall be published for 5
consecutive Business Days in a newspaper published daily at
the place of sale; in case of public or private sale notice of
such sale shall be mailed, addressed to the Owner at its last
known address, 7 Business Days prior to the date fixed for
entering into the contract of sale; sale may be held at such
place and at such time as the Mortgagee by notice may have
specified, and may be adjourned by the Mortgagee from time to
time by announcement at the time and place appointed for such
sale or from 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 PROVIDED
20
ALWAYS that upon any sale of the Vessel or any share or
interest therein by the Mortgagee's power of sale has arisen
in the manner herein provided and the sale shall be deemed to
be within the power of the Mortgagee and the receipt of the
Mortgagee for the purchase money shall effectively discharge
the purchaser who shall not be concerned with the manner of
application of the proceeds of sale or be in any way
answerable therefore;
(vii) to remove the Vessel or to require the Vessel to be removed
from any place where she may be or be lying to any port,
harbour, dock or other location for the purposes of the
Vessel's docking, laying-up, repair, management, employment,
maintenance, sale or to preserve or maintain the Mortgagee's
security in the Vessel in such manner as the Mortgagee may in
its complete discretion deem necessary;
(viii) to manage or appoint managers, insure, maintain and repair the
Vessel and to employ or lay up the Vessel in such manner and
for such period as the Mortgagee in its absolute discretion
deems expedient and for the purposes aforesaid the Mortgagee
shall be entitled to do all acts and things incidental or
conductive thereto and in particular to enter into such
arrangements respecting the Vessel, her insurance, management,
maintenance, repair, classification and employment in all
respects as if the Mortgagee was the owner of the Vessel and
without being responsible for any loss thereby incurred;
(ix) to recover from the Owner on demand all expenses, payments,
disbursements, costs, losses and damages as may be incurred by
the Mortgagee whether the Mortgagee be in possession of the
Vessel or not in or about or incidental to or in connection
with the exercise by the Mortgagee of any of the powers herein
contained together with interest thereon at the Default Rate
from the date on which such expenses, payments, disbursements,
costs, losses or damages were incurred by the Mortgagee up to
the date of payment by the Owner to the Mortgagee (after as
well as before judgment) and such expenses, payments,
disbursements, costs, losses and damages together with the
said interest thereon shall, until paid by the Owner to the
Mortgagee, be secured on the Vessel by this Mortgage in
priority to all sums of money secured by any mortgage or
charge on the Vessel created or registered after the date
hereof;
9. APPLICATION OF MONEYS
9.1 All moneys received by the Mortgagee in respect of the sale by it of
the Vessel or any share therein or recovery under the Insurances or
otherwise pursuant to the provisions of this Mortgage or the Security
Documents shall be held by the Mortgagee upon trust in the first place
to pay or retain all such payments, disbursements, expenses, costs,
losses and damages whatsoever (together with
21
interest thereon as hereinbefore provided for) as may have been
incurred by the Mortgagee in or about or incidental to the exercise by
the Mortgagee of the powers specified or otherwise referred to in
Clause 8 hereof or any of them and the balance shall be applied against
the Outstanding Indebtedness PROVIDED ALWAYS that in the event that
such balance is insufficient to pay in full the whole of the
Outstanding Indebtedness the Mortgagee shall be entitled to collect the
shortfall from the Owner or any other person liable therefore.
10. NO WAIVER
10.1 No delay or omission of the Mortgagee to exercise any right or power
vested in it under the Security Documents or this Mortgage shall impair
such right or power or be construed as a waiver of or an acquiescence
in any default by the Owner and in the event of the Mortgagee at any
time agreeing to waive any such right or power such waiver shall be
recoverable by the Mortgagee at any time and the right or power shall
thenceforth be again exercisable as though there has been no such
waiver.
11. RECEIVER
11.1 At any time after the occurrence of an Event of Default the Mortgagee
may appoint by writing any person to be a Receiver ("RECEIVER") of the
Vessel and of all or part of any other property assigned or charged to
the Mortgagee by any Security Documents and may from time to time by
writing remove any Receiver so appointed and appoint another in his
place. A copy of any such appointment or renewal shall be sent to the
Owner by the Mortgagee.
11.2 A Receiver so appointed shall be the agent of the Owner (who shall
indemnify and hold harmless the Mortgagee against all costs, claims and
liabilities arising from such appointment and from the acts and
defaults of the Receiver) and shall have power to exercise all or any
of the powers conferred on the Mortgagee by law and by each Security
Document.
11.3 The Owner irrevocably appoints any Receiver appointed as aforesaid its
Attorney for and in its name and on its behalf and as its act and deed
to execute, seal and deliver and otherwise perfect any assurance,
agreement, instrument or act which may be required or may be deemed
proper for any of the purposes hereof.
11.4 The net proceeds of sale and all other moneys received by the Receiver
shall be applied by him (subject to the claims of all secured and
unsecured creditors (if any) ranking in priority to the security
created by the relevant Security Document):
(A) FIRST, in payment of all reasonable costs, charges and
expenses of and incidental to the appointment of the Receiver
and the exercise of
22
all or any of the powers aforesaid and of all outgoings
properly paid by him;
(B) SECONDLY, in payment of remuneration of the Receiver at such
rate as may be specified in the instrument or appointment or
otherwise reasonably agreed between him and the Mortgagee;
(C) THIRDLY, in payment to the Mortgagee of any balance remaining
in the hands of the Receiver to be applied against the
Outstanding Indebtedness.
12. DELEGATION OF POWERS
12.1 The Mortgagee shall be entitled at any time and as often as may be
expedient to delegate all or any of the powers and discretions vested
in it by the Security Documents or any of them (including the power
vested in it by virtue of Clause 14 hereof) in such manner upon such
terms and to such persons as the Mortgagee in its absolute discretion
may think fit.
13. INDEMNITY
13.1 The Owner HEREBY AGREES AND UNDERTAKES to indemnify the Mortgagee
against all obligations and liabilities whatsoever and whensoever
arising which the Mortgagee may incur in good faith in respect of, in
relation to or in connection with the Vessel, or otherwise howsoever in
relation to or in connection with any of the matters dealt with in the
Security Documents or this Mortgage.
14. POWER OF ATTORNEY
14.1 The Owner HEREBY IRREVOCABLY APPOINTS the Mortgagee as its Attorney for
the duration of the Security Period for the purpose of doing in its
name all acts which the Owner itself could do in relation to the
Vessel; PROVIDED HOWEVER that such power shall not be exercisable by or
on behalf of the Mortgagee until the happening of an Event of Default.
14.2 The exercise of such power by or on behalf of the Mortgagee shall not
put any person dealing with the Mortgagee upon any enquiry as to
whether sums due under the Security Documents or any of them have
become payable on demand nor shall such person be in any way affected
by notice that the sums so due have not become payable and the exercise
by the Mortgagee of such power shall be conclusive evidence to such
person of the Mortgagee's right to exercise the same.
14.3 The Owner hereby irrevocably appoints the Mortgagee and any Receiver
jointly and also severally to be its attorney in its name and on its
behalf and as its act and deed or otherwise of it, to agree the form of
and to execute and do
23
all deeds, instruments, acts and things in order to file, record,
register or enrol this Deed in any court, public office or elsewhere
which the Mortgagee may in its discretion consider necessary or
advisable, now or in the future, to ensure the legality, validity,
enforceability or admissibility in evidence thereof and any other
assurance, document, act or thing required to be executed by the Owner
pursuant to Clause 15.
15. FURTHER ASSURANCE
15.1 The Owner HEREBY FURTHER UNDERTAKES at its own expense to execute,
sign, perfect, do and (if required) register every such further
assurance, document, act or thing as in the opinion of the Mortgagee
may be necessary or desirable for the purpose of more effectually
mortgaging and charging the Vessel, or perfecting the security
constituted by this Mortgage or the Security Documents and the Owner
HEREBY IRREVOCABLY APPOINTS the Mortgagee as its Attorney for the
purpose of executing, signing, perfecting, doing and registering every
such further assurance, documents act or thing as aforesaid.
16. NOTICE
16.1 All notices and other communications required by this Mortgage to be in
writing shall be sent to the recipient in the manner set out in the
Facility Agreement.
17. LIMITATION ON AMOUNT OUTSTANDING
17.1 For the purpose of recording of this First Preferred Ship Mortgage as
required by the laws of Vanuatu the maximum principal amount that may
be outstanding at any one time under this Mortgage is [ ]
United States Dollars (US$ ) or an equivalent amount in
Euros, Swiss Francs, Pounds Sterling or Yen, consisting of;
(a) principal indebtedness in the amount of Nine Million Seven
Hundred and Thirty Xxx Xxxxxxxx Xxxx Xxxxxxx xxx Xxxxxxxxx
Xxxxxx Xxxxxx Dollars (U.S.$9,731,417) or an equivalent amount
in Euros, Swiss Francs, Pounds Sterling or Yen; and
(b) [Three Million United Stated Dollars (U.S.$ 3,000,000)] in
respect of default interest and performance of mortgage
covenants. The date of maturity as to US$ 9,731,417 is
[ ] 200[8] and the date of maturity as to U.S.$
[3,000,000] is on demand and the discharge amount is the same
as the total amount."
24
18. PAYMENT ON NON-BUSINESS DAY
18.1 If any payment hereunder shall become due on a day which is not a
Business Day then such payment shall be made on the immediately
preceding Business Day.
19. CONFIRMATION REGARDING LAWS OF VANUATU
19.1 Anything to the contrary herein notwithstanding:
(A) this Mortgage does not and shall not be deemed to include any
property other than a vessel within the meaning of the laws of
Vanuatu; and
(B) neither the preferred status of this Mortgage nor any of the
benefits, privileges or provisions of the laws of Vanuatu are
waived by the Mortgagee.
It is the intention of the parties that the foregoing provisions of
this Clause 19 shall govern the interpretation and construction of the
other provisions of this Mortgage, and such other provisions are
entered into by the parties only upon the understanding that they shall
be governed by the provisions of this Clause 19. Therefore, no
provision of this Mortgage shall be construed in any way inconsistent
with the provision of this Clause 19, and in the event that a court of
competent jurisdiction holds that any such provision cannot be
construed to be consistent with the provisions of this Clause 19, this
Clause 19 shall prevail over and supersede such other provision which
shall to the extent of such inconsistency be of no force or effect.
20. GROSSING-UP OF PAYMENTS
20.1 All payments made by the Owner under this Mortgage and the Security
Documents shall be made free and clear of and without set-off or
counterclaim and without deduction or withholding for or on account of
any present or future income, stamp and other taxes, levies, imposts,
duties, fees, charges, deductions, withholdings, restrictions or
conditions of any nature now or hereafter imposed, levied, collected,
withheld or assessed by the taxing authorities in or the Government of
the Republic of Vanuatu or by any other taxing or governmental
authority whatsoever. In the event that any such taxes as aforesaid
shall be imposed, levied, collected, withheld, deducted or assessed
thereon, all such taxes shall be borne by the Owner or, if under the
provisions of any applicable law this stipulation cannot be applied,
then the Owner shall increase the payments to the Mortgagee so that the
net amounts paid to the Mortgagee be equivalent to the amounts which
the Mortgagee is entitled to be paid by the Owner. Income or
corporation taxes levied on the profits of the Mortgagee in its place
of incorporation or any place in which it carries on business shall be
for the account of the Mortgagee.
25
21. CURRENCY INDEMNITY
21.1 Any payment or payments made to or for the account of the Mortgagee in
a currency (the currency in which the relevant payment is made being
hereinafter referred to as the "Relevant Currency") other than Dollars
pursuant to a judgment or order of a court or tribunal of any
jurisdiction shall only constitute a discharge to the Owner to the
extent of the Dollar amount which the Mortgagee is able, on the date or
dates of receipt by the Mortgagee of such payment or payments in the
Relevant Currency (or, in the case of any such date which is not a
Business Day), to purchase in London with the amount or amounts so
received by the Mortgagee on such date or dates. If the amount of
Dollars which the Mortgagee is so able to purchase falls short of the
Dollar amount originally due to the Mortgagee under this Mortgage the
Owner shall indemnify and hold the Mortgagee harmless against any loss
or damage arising as a result. For the purposes of this Clause,
"BUSINESS DAY" means a day on which the relevant office of the
Mortgagee is open for business and on which the foreign exchange market
in London is open for dealings between the Relevant Currency and
Dollars. This indemnity shall constitute a separate and independent
obligation from the other obligations contained in this Mortgage, and
shall give rise to a separate and independent cause of action and shall
apply irrespective of any indulgence granted by the Mortgagee from time
to time and shall continue in full force and effect notwithstanding any
judgment or order for a liquidated sum or sums in respect of amounts
due under this Mortgage or any such judgment or order.
21.2 Any provision hereof prohibited by or unlawful or unenforceable under
any applicable law shall, to the extent required by such law, be
ineffective without modifying the remaining provisions hereof but where
the provisions of any such applicable law may be waived they are hereby
waived by the Owner and the Mortgagee to the full extent permitted by
such law to the end that this Mortgage shall be valid and binding and
enforceable in accordance with its terms.
22. LAW AND JURISDICTION
This Mortgage shall be governed by and construed according to Vanuatu
law and the Owner agrees that any legal proceedings brought by the
Mortgagee or on behalf of the Mortgagee hereunder may be brought in the
courts of
England and by the execution and delivery of this Mortgage
the Owner submits to such jurisdiction and hereby irrevocably
designates and appoints Xxxxx & Co at Xxxxxxxx Xxxxx, Xxxxxxxx Xxxxxx,
Xxxxxxxxx XX0 0XX (Attention D Bennet) or such other person as the
Mortgagee may approve in writing to receive for and on behalf of the
Owner service of process in
England in any such legal action or
proceeding. The foregoing shall not however limit or impair the rights
of the Mortgagee to bring any legal action or proceeding in any other
appropriate jurisdiction.
26
IN WITNESS whereof the Owner has executed this Mortgage by its duly authorised
Attorney-in-Fact the day and year first above written.
EXECUTED as a Deed )
by )
........................................ )
the duly appointed Attorney-in-Fact of )
TORCH OFFSHORE INC. )
in the presence of: )
EXECUTED as a Deed )
by )
........................................ )
for and on behalf of )
GLOBAL MARINE SYSTEMS )
LIMITED )
in the presence of: )
27
SCHEDULE 1
1. The Vessel referred to in Clause 1.1
of this Deed is:
NAME PARTICULARS
m.v. MIDNIGHT WRANGLER Registered under the laws and flag
of the Republic of Vanuatu,
Official Number [ ] of [4416]
gross tons, [1324].
2. Classification referred to in Clause 6(b) of this Mortgage is: Det Norske
Veritas.
3. Type of Ship: Offshore Support Vessel.
28
SCHEDULE 2
FACILITY AGREEMENT
29
