FORM OF DEED OF SHIP MORTGAGE

FORM OF DEED OF SHIP MORTGAGE
First-Priority Statutory Ship Mortgage
Governed by the Laws of the Republic of Singapore
[Insert Document Reference Number]
FORM — Adaptable per Flag-State Requirements
Dated [●]
between
[Insert Full Legal Name of Mortgagor] (the "Mortgagor")
and
[Insert Full Legal Name of Security Agent] (the "Mortgagee" / "Security Agent")
Acting on behalf of and for the benefit of the Secured Parties (as defined herein)
ARTICLE 1 — DEFINITIONS AND INTERPRETATION
Section 1.1 — Definitions
In this Deed, unless the context otherwise requires, the following terms shall have the meanings set forth below. Where a term is defined in the Indenture or the Intercreditor Agreement and is used but not separately defined in this Deed, such term shall have the meaning given to it in the Indenture or the Intercreditor Agreement, as applicable. The following defined terms shall apply throughout this Deed and all Schedules, Appendices, and Exhibits hereto:
"Appraised Value" means, with respect to the Mortgaged Vessel or any other Collateral Vessel, the fair market value of such vessel as determined by the most recent valuation conducted by an Approved Appraiser, on a charter-free basis, without taking into account the benefit or burden of any existing charter, determined in accordance with the methodology specified in the Indenture (whether by desktop appraisal or, where required by the Indenture, by physical inspection), as updated at the frequency required under the Indenture (being not less frequently than semi-annually, and at such additional times as may be required upon the occurrence of a Collateral Coverage Ratio testing event or as otherwise directed by the Trustee or the Security Agent). [Insert any additional parameters or adjustments required under the Indenture, including adjustments for vessels under construction, vessels in lay-up, or vessels subject to damage or casualty.]
"Approved Appraiser" means [Insert name of the independent fleet appraiser or, alternatively, specify the criteria for qualification as an approved appraiser under the Indenture, which criteria shall include, at a minimum, that the appraiser is a member of a recognized international ship valuation organization, has no material relationship with the Mortgagor or any member of the Issuer Group, and is otherwise acceptable to the Trustee and the Security Agent acting reasonably].
"Collateral Coverage Ratio" means the ratio (expressed as a multiple) of (a) the aggregate Appraised Value of all Collateral Vessels (determined by reference to the most recent valuations delivered to the Trustee and the Security Agent pursuant to the Indenture) to (b) the aggregate outstanding principal amount of the Notes at the relevant testing date, as tested on a semi-annual basis pursuant to the terms of the Indenture. The Indenture requires that the Collateral Coverage Ratio shall at all times be not less than [●]x. [Insert the minimum ratio required to be maintained, and reference any grace period or cure mechanics applicable under the Indenture.]
"Collateral Vessels" means the vessels designated as collateral under the Indenture and the Security Documents, being [●] of the [●] total vessels in the fleet of the Issuer Group, as identified in Schedule 1 hereto, as such Schedule may be updated from time to time upon the addition or release of a Collateral Vessel in accordance with the provisions of the Indenture.
"Co-Issuers" means [Insert full legal name of the first co-issuer], a [Insert entity type] organized and existing under the laws of [Insert jurisdiction], and [Insert full legal name of the second co-issuer], a [Insert entity type] organized and existing under the laws of [Insert jurisdiction], in each case in their capacity as co-issuers of the Notes.
"Deed" means this Deed of Ship Mortgage, including all Schedules, Appendices, and Exhibits hereto, as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with the provisions hereof and of the Indenture.
"Earnings" means all moneys whatsoever from time to time due or payable to the Mortgagor or any other person arising out of the use, operation, or employment of the Mortgaged Vessel, including but not limited to all charter hire (whether time charter hire, voyage charter hire, bareboat charter hire, or otherwise), freight, deadfreight, demurrage, detention, damages for breach or early termination of any charterparty or contract of affreightment, defense and attack recoveries, salvage and towage remuneration, general average contributions and recoveries, and all other revenues, receipts, and compensations of whatsoever nature earned by or payable in respect of the Mortgaged Vessel. [Insert any additional components or carve-outs required under the Indenture or the Deed of Assignment of Earnings and Insurances.]
"Event of Default" has the meaning given to such term in the Indenture, and shall additionally include any event specified as an Event of Default in Section 5.1 of this Deed. [Insert cross-reference to the specific section and article of the Indenture in which Events of Default are defined.]
"Flag State" means the state whose flag the Mortgaged Vessel is entitled to fly and under whose laws the Mortgaged Vessel is registered, being, as of the date of this Deed, [Insert name of Flag State]. Any reference to the laws of the Flag State shall include all statutes, regulations, orders, and rules of such state applicable to the registration, mortgage, and operation of vessels.
"Guaranteed Obligations" has the meaning given to such term in the Indenture. [Insert cross-reference to the specific definition in the Indenture, which shall encompass all obligations guaranteed by the Guarantor Subsidiaries under their respective guarantees.]
"Guarantor Subsidiaries" means, collectively, the subsidiaries of the Co-Issuers (or either of them) that have provided upstream guarantees of the obligations of the Co-Issuers under the Notes and the Indenture, as listed in [Insert cross-reference to the schedule or section of the Indenture identifying the guarantor subsidiaries], as such list may be updated from time to time in accordance with the Indenture. The Mortgagor is [a Guarantor Subsidiary / the parent of a Guarantor Subsidiary / Insert as applicable].
"IMO Number" means the unique seven-digit identification number assigned to the Mortgaged Vessel by the International Maritime Organization in accordance with IMO Resolution A.1078(28) (as amended or replaced from time to time), which number remains unchanged upon change of flag, name, or ownership of the vessel.
"Indenture" means the [Insert full title, e.g., "Indenture governing the [●]% Senior Secured Notes due [●]"], dated as of [Insert date], among [Insert names of all parties thereto, including the Co-Issuers, the Guarantor Subsidiaries, the Trustee, and the Security Agent], as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"Insurances" means all policies and contracts of insurance (including hull and machinery insurance, protection and indemnity insurance, war risks insurance, loss of hire insurance, increased value insurance, freight interest insurance, mortgagee's interest insurance, and any other insurances) maintained or required to be maintained from time to time in respect of the Mortgaged Vessel pursuant to the Indenture and the other Security Documents, together with all claims, returns of premium, and other recoveries thereunder.
"Intercreditor Agreement" means the [Insert full title, e.g., "Intercreditor Agreement"], dated as of [Insert date], among [Insert names of all parties thereto, including the Co-Issuers, the Guarantor Subsidiaries, the Trustee, and the Security Agent], as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"Mortgaged Vessel" means the vessel more particularly described in Schedule 2 hereto, together with all her engines, machinery, equipment, boats, tackle, outfit, spare parts, fuel, consumable stores, and appurtenances, whether now owned or hereafter acquired, and all additions, improvements, renewals, and replacements thereto.
"Mortgagee" means [Insert full legal name of the Security Agent / Collateral Agent], a [Insert entity type, e.g., "company limited by shares"] organized and existing under the laws of [Insert jurisdiction of organization], having its registered office at [Insert full registered office address], and having unique entity number [Insert UEN or equivalent registration number], acting in its capacity as Security Agent for and on behalf of the Secured Parties, and its successors and assigns in such capacity.
"Mortgagor" means [Insert full legal name of the vessel-owning entity granting this mortgage], a [Insert entity type, e.g., "private company limited by shares"] organized and existing under the laws of [Insert jurisdiction of incorporation], having its registered office at [Insert full registered office address], and being the sole legal and beneficial owner of the Mortgaged Vessel as of the date hereof.
"Notes" means the [●]% Senior Secured Notes due [●] in an aggregate principal amount of US$[●], issued by the Co-Issuers pursuant to the Indenture, as the same may be amended, supplemented, or otherwise modified from time to time, and including any additional notes issued pursuant to the Indenture.
"Permitted Liens" has the meaning given to such term in the Indenture. [Insert cross-reference to the specific definition in the Indenture.]
"Secured Obligations" means all present and future obligations and liabilities (whether actual or contingent, whether owed jointly, severally, or in any other capacity whatsoever) of the Co-Issuers and the Guarantor Subsidiaries to the Secured Parties under or in connection with the Notes, the Indenture, the Intercreditor Agreement, and the Security Documents, including but not limited to: (a) all principal, interest (including default interest and post-petition interest to the extent permitted by applicable law), premium (if any), and Make-Whole Amount (if any) on the Notes; (b) all amounts payable under the Indenture, the Intercreditor Agreement, and the other Security Documents; (c) all fees, costs, expenses, and indemnification obligations owing to the Trustee, the Security Agent, and the Secured Parties in connection with any of the foregoing; and (d) all obligations of the Guarantor Subsidiaries under their respective upstream guarantees. [Insert any additional secured obligations specific to this transaction.]
"Secured Parties" means, collectively, (a) the Trustee, (b) the Security Agent, and (c) the holders of the Notes from time to time, and their respective successors and permitted assigns.
"Security Agent" means the Mortgagee, acting in its capacity as security agent and collateral agent appointed pursuant to the Intercreditor Agreement for and on behalf of the Secured Parties. References to the Security Agent shall be construed as references to the Mortgagee acting in such capacity. [Insert cross-reference to the appointment provisions in the Intercreditor Agreement.]
"Security Documents" means, collectively, this Deed and all other security documents granted by the Co-Issuers, the Guarantor Subsidiaries, or any member of the Issuer Group pursuant to the Indenture, including but not limited to: (a) the deeds of ship mortgage over each of the Collateral Vessels; (b) the deeds of assignment of earnings and insurances in respect of each of the Collateral Vessels; (c) the share pledge agreements over the shares of each vessel-owning subsidiary; (d) the assignments of intercompany loan receivables; and (e) such other security documents as may be required from time to time under the Indenture, in each case as amended, restated, supplemented, or otherwise modified from time to time.
"Trustee" means [Insert full legal name of the indenture trustee], a [Insert entity type] organized and existing under the laws of [Insert jurisdiction], having its registered office at [Insert full registered office address], and having unique entity number [Insert UEN or equivalent registration number], acting in its capacity as trustee under the Indenture, and its successors and assigns in such capacity.
Section 1.2 — Interpretation
For the purposes of this Deed, unless the context otherwise requires:
(a) references to "this Deed," "herein," "hereof," "hereto," and "hereunder" are references to this Deed of Ship Mortgage (including all Schedules, Appendices, and Exhibits hereto) as a whole and not to any particular provision hereof;
(b) words importing the singular shall include the plural and vice versa, and words importing any gender shall include all genders;
(c) references to a person include any individual, firm, body corporate, corporation, government, state or agency of a state, trust, partnership, joint venture, association, organization, or other entity, in each case whether or not having separate legal personality;
(d) references to any statute, law, regulation, or legislative provision shall be construed as a reference to such statute, law, regulation, or provision as amended, re-enacted, consolidated, or replaced from time to time, and shall include any subordinate legislation made thereunder;
(e) references to Schedules, Appendices, and Exhibits are references to the schedules, appendices, and exhibits of this Deed, and references to Articles, Sections, and sub-sections are references to the articles, sections, and sub-sections of this Deed;
(f) headings and sub-headings are inserted for convenience of reference only and shall not affect the construction or interpretation of this Deed;
(g) unless otherwise specified, all references to currency amounts and to "$" or "US$" are references to the lawful currency of the United States of America;
(h) references to any agreement, deed, instrument, or document (including the Indenture, the Intercreditor Agreement, and each of the Security Documents) shall be construed as a reference to such agreement, deed, instrument, or document as amended, restated, supplemented, novated, or otherwise modified from time to time;
(i) the word "including" and words of similar import shall mean "including without limitation," and the enumeration of specific examples shall not be construed as limiting the generality of the preceding words;
(j) where the provisions of this Deed require cross-reference to the interpretation provisions of the Indenture, such provisions of the Indenture are hereby incorporated by reference to the extent applicable and not inconsistent with this Deed;
(k) references to "Business Day" shall have the meaning given to such term in the Indenture [Insert cross-reference to the specific definition in the Indenture, which shall specify the relevant financial centers, e.g., New York, Singapore, and London]; and
(l) references to "writing" and "written" include any mode of reproducing words in a legible and non-transient form, including electronic mail (provided that confirmation of receipt is obtained or deemed obtained in accordance with Section 8.1 hereof).
Section 1.3 — Conflict with Indenture and Intercreditor Agreement
In the event of any conflict or inconsistency between the provisions of this Deed and the provisions of the Indenture or the Intercreditor Agreement, the following hierarchy shall apply:
(a) with respect to matters relating to the enforcement of security, the exercise of remedies, the application of proceeds, and the rights and obligations as between the Secured Parties inter se, the provisions of the Intercreditor Agreement shall prevail;
(b) with respect to matters relating to the covenants and undertakings of the Co-Issuers and the Guarantor Subsidiaries (including the Mortgagor), the Events of Default, and the rights of the holders of the Notes, the provisions of the Indenture shall prevail; and
(c) with respect to matters relating specifically to the creation, perfection, maintenance, and priority of the security interest in the Mortgaged Vessel and the vessel-specific covenants and representations of the Mortgagor, the provisions of this Deed shall govern, provided that the same are not inconsistent with the Indenture or the Intercreditor Agreement.
For the avoidance of doubt, the Mortgagor acknowledges that it has received and reviewed copies of the Indenture and the Intercreditor Agreement and is familiar with the provisions thereof that are relevant to its obligations under this Deed.
ARTICLE 2 — GRANT OF MORTGAGE
Section 2.1 — Mortgage and Charge
In consideration of the Secured Parties entering into the transactions contemplated by the Indenture and the other Security Documents, and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the Mortgagor hereby irrevocably and unconditionally mortgages and charges as a first-priority mortgage the Mortgaged Vessel (as more particularly described in Schedule 2 hereto), together with all property comprised therein and all additions, improvements, renewals, and replacements thereto, unto and in favor of the Mortgagee (acting as Security Agent for the benefit of the Secured Parties) as continuing security for the full and punctual payment, performance, and discharge of all the Secured Obligations.
This mortgage is granted as a first-priority / first-preferred mortgage over the Mortgaged Vessel, and is intended to create a first-priority lien over the Mortgaged Vessel ranking ahead of all other encumbrances, charges, liens, and interests of any nature whatsoever, except for Permitted Liens (as defined in the Indenture), which may rank in priority to this mortgage solely to the extent provided under applicable law or as expressly contemplated by the Indenture.
The Mortgagor acknowledges and agrees that this mortgage is granted for the benefit of all of the Secured Parties, and that the Mortgagee holds the benefit of this mortgage on trust for and on behalf of the Secured Parties in accordance with the terms of the Intercreditor Agreement.
Flag-State Adaptation Note: This clause shall be adapted as required by the laws of the Flag State in which the Mortgaged Vessel is registered. Where the Flag State requires a statutory form of mortgage (for example, under the Merchant Shipping Act (Cap. 179, Singapore), the Merchant Shipping Act (Chapter 234 of the Laws of Malta), the Maritime Act 1990 of the Republic of the marshall Islands, or equivalent legislation of any other Flag State), this Deed shall be supplemented by the execution and delivery of such statutory form of mortgage, and such statutory form shall be deemed to be incorporated herein by reference and to form part of this Deed. In the event of any conflict between the terms of such statutory form and the terms of this Deed, the terms of this Deed shall prevail as between the parties hereto, except to the extent that compliance with the terms of the statutory form is required by the laws of the Flag State for the valid creation, perfection, or recording of the mortgage.
Section 2.2 — Property Mortgaged
The mortgage and charge created by Section 2.1 extends to and encumbers the whole of the Mortgaged Vessel, including without limitation:
(a) the hull, superstructure, machinery, engines (including main engines and auxiliary engines), boilers, generators, propellers, rudders, anchors, chains, equipment, spare parts, fuel, lubricating oil, consumable stores, and all other appurtenances and accessories of whatsoever nature, whether now on board or hereafter placed on board the Mortgaged Vessel;
(b) all additions, improvements, renewals, and replacements of or to any of the foregoing, whether made before or after the date of this Deed, including any increases in tonnage or carrying capacity;
(c) all proceeds of any sale, loss, damage, or condemnation of the Mortgaged Vessel or any part thereof (subject to the provisions of the Deed of Assignment of Earnings and Insurances, to the extent that such proceeds are assigned thereunder);
(d) all requisition compensation, whether for hire or for title, payable by any governmental authority or other entity in respect of the Mortgaged Vessel; and
(e) all other property and assets of whatsoever nature from time to time forming part of or appurtenant to the Mortgaged Vessel.
The vessel particulars of the Mortgaged Vessel are set forth in Schedule 2 hereto.
Section 2.3 — Secured Obligations
The mortgage and charge created by this Deed secures the payment, performance, and discharge of all Secured Obligations, which shall include, without limitation:
(a) all principal, interest (including default interest and, to the extent permitted by applicable law, post-petition interest), premium (if any), and Make-Whole Amount (if any) due and payable on or in respect of the Notes;
(b) all amounts payable by the Co-Issuers, the Guarantor Subsidiaries (including the Mortgagor), or any member of the Issuer Group under or in connection with the Indenture, the Intercreditor Agreement, and the other Security Documents;
(c) all fees, costs, charges, expenses (including reasonable legal fees and disbursements), and indemnification obligations owing to the Trustee, the Security Agent, and the Secured Parties under or in connection with the Notes, the Indenture, the Intercreditor Agreement, and the Security Documents;
(d) all obligations of the Guarantor Subsidiaries under their respective upstream guarantees of the obligations of the Co-Issuers, as set forth in the Indenture; and
(e) all other obligations and liabilities (whether actual or contingent, whether present or future, and whether owed jointly, severally, or in any other capacity) of the Co-Issuers and the Guarantor Subsidiaries (including the Mortgagor) to the Secured Parties under or in connection with the Notes, the Indenture, the Intercreditor Agreement, and the Security Documents.
[Insert any additional secured obligations specific to this transaction.]
Section 2.4 — Continuing Security
This Deed constitutes and creates continuing security for the Secured Obligations. The mortgage and charge hereby created shall remain in full force and effect as a continuing security until all Secured Obligations have been unconditionally and irrevocably paid and discharged in full and no further Secured Obligations are capable of arising under or in connection with the Notes, the Indenture, the Intercreditor Agreement, or the Security Documents.
The security constituted by this Deed shall not be affected, impaired, or discharged by:
(a) any intermediate payment or discharge of the whole or any part of the Secured Obligations;
(b) any variation, extension, renewal, or replacement of any of the Secured Obligations or any document or instrument evidencing or creating any of the Secured Obligations;
(c) any change in the constitution, name, or corporate structure of the Mortgagor, any Co-Issuer, any Guarantor Subsidiary, or any other party to the Indenture or the Security Documents;
(d) any time, indulgence, waiver, consent, or concession granted by the Mortgagee, the Trustee, or any Secured Party to the Mortgagor or any other person;
(e) the taking, holding, release, variation, exchange, renewal, or non-perfection of any other security for the Secured Obligations; or
(f) any other act, event, or omission which, but for this provision, might operate to discharge, impair, or otherwise affect any of the obligations of the Mortgagor under this Deed or the security hereby created.
Section 2.5 — Collateral Coverage Ratio
The Mortgagor hereby acknowledges that the Indenture requires the maintenance of a minimum Collateral Coverage Ratio of [●]x, tested on a semi-annual basis in accordance with the provisions of the Indenture. As of the date of this Deed, the aggregate Appraised Value of all Collateral Vessels is US$[●] and the aggregate outstanding principal amount of the Notes is US$[●], resulting in a Collateral Coverage Ratio of [●]x.
The Mortgagor further acknowledges that, pursuant to the terms of the Indenture, in the event that the Collateral Coverage Ratio falls below the minimum required level, the Co-Issuers and the Guarantor Subsidiaries shall be required, within the time period specified in the Indenture, to take one or more of the following actions (as more fully set forth in [Insert cross-reference to the specific section of the Indenture]):
(a) provide additional Collateral Vessels, or grant additional security over other assets acceptable to the Trustee and the Security Agent, in each case sufficient to restore the Collateral Coverage Ratio to the minimum required level;
(b) prepay or redeem Notes in an aggregate principal amount sufficient to restore the Collateral Coverage Ratio to the minimum required level, together with accrued and unpaid interest and any applicable premium; or
(c) post cash collateral with the Security Agent in an amount sufficient to restore the Collateral Coverage Ratio to the minimum required level, such cash collateral to be held in a collateral account pledged to the Security Agent.
The Mortgagor agrees to cooperate with the Co-Issuers and the other Guarantor Subsidiaries in connection with any measures undertaken to restore the Collateral Coverage Ratio, and to execute such additional security documents as may be reasonably required by the Trustee or the Security Agent for such purpose.
ARTICLE 3 — REPRESENTATIONS AND WARRANTIES OF THE MORTGAGOR
The Mortgagor hereby represents and warrants to the Mortgagee (for itself and for the benefit of the Secured Parties) as of the date of this Deed and, unless otherwise specified, on a continuing basis, as follows:
Section 3.1 — Organization and Good Standing
The Mortgagor is a [Insert entity type] duly organized, validly existing, and in good standing under the laws of [Insert jurisdiction of incorporation]. The Mortgagor has full legal capacity and all requisite corporate power and authority to own, lease, and operate its assets and properties (including the Mortgaged Vessel) and to carry on its business as presently conducted and as proposed to be conducted. The Mortgagor is duly qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership of its assets requires such qualification, except where the failure to be so qualified or in good standing would not reasonably be expected to have a material adverse effect on the Mortgagor's ability to perform its obligations under this Deed.
Section 3.2 — Authorization
The execution, delivery, and performance of this Deed, and the consummation of the transactions contemplated hereby, have been duly authorized by all necessary corporate action on the part of the Mortgagor, including any required resolutions of the board of directors (or equivalent governing body) and, to the extent required, the shareholders of the Mortgagor. No further corporate approval, authorization, consent, or other action by, and no notice to or filing with, any governmental authority or any other person, is required for the due execution, delivery, and performance by the Mortgagor of this Deed or the granting of the security interest contemplated hereby, other than the recording of this mortgage with the ship registry of the Flag State (which the Mortgagor shall procure promptly following execution of this Deed) and such other filings as may be required under the laws of the Flag State or the jurisdiction of incorporation of the Mortgagor.
Section 3.3 — Title to the Mortgaged Vessel
The Mortgagor is the sole legal and beneficial owner of the Mortgaged Vessel, with good and marketable title thereto, free and clear of all liens, charges, mortgages, encumbrances, maritime liens, possessory liens, equitable interests, and claims of any nature whatsoever, other than Permitted Liens as defined in the Indenture. No person other than the Mortgagor has any ownership interest, right of possession, or other claim to or against the Mortgaged Vessel, and the Mortgagor has not granted any option, right of first refusal, or other preferential right to purchase the Mortgaged Vessel. The Mortgagor has full right, power, and authority to mortgage and charge the Mortgaged Vessel as provided in this Deed, and the mortgage and charge created hereby will constitute a valid and enforceable first-priority lien on the Mortgaged Vessel, subject only to Permitted Liens.
Section 3.4 — No Conflicts
The execution, delivery, and performance of this Deed, and the granting of the mortgage and charge contemplated hereby, do not and will not:
(a) conflict with or result in a breach or violation of the memorandum and articles of association (or equivalent constitutional documents) of the Mortgagor;
(b) conflict with or result in a breach or violation of, or constitute a default under, any law, statute, regulation, order, judgment, injunction, or decree applicable to the Mortgagor or the Mortgaged Vessel, or any rule or regulation of any governmental authority having jurisdiction over the Mortgagor or the Mortgaged Vessel;
(c) conflict with or result in a breach of, or constitute a default under, or result in the creation or imposition of any lien upon any of the properties or assets of the Mortgagor (including the Mortgaged Vessel) pursuant to, any agreement, indenture, mortgage, deed of trust, loan agreement, or other instrument to which the Mortgagor is a party or by which the Mortgagor or any of its properties or assets (including the Mortgaged Vessel) may be bound; or
(d) result in the acceleration of, or entitle any party to accelerate, whether after the giving of notice or lapse of time or both, any obligation under any such agreement, indenture, mortgage, deed of trust, loan agreement, or other instrument.
Section 3.5 — Registration and Flag State Compliance
The Mortgaged Vessel is duly registered in the name of the Mortgagor in the ship register maintained by the [Insert name of ship registry] of the Flag State under official number [Insert] and is entitled to fly the flag of the Flag State. All registration fees, tonnage taxes, and other charges imposed by the Flag State in connection with the registration of the Mortgaged Vessel have been duly paid and are current. This Deed is in proper form and, upon due execution and delivery, will be capable of being duly recorded as a first-priority mortgage over the Mortgaged Vessel in the ship registry of the Flag State. The Mortgagor has taken, or will promptly take, all steps necessary to ensure that this mortgage is duly recorded with the ship registry of the Flag State in accordance with applicable law.
Section 3.6 — Vessel Particulars
The particulars of the Mortgaged Vessel set forth in Schedule 2 hereto are true, complete, and accurate in all material respects as of the date of this Deed. No material particular relating to the Mortgaged Vessel has been omitted from Schedule 2 that would be required for the proper identification of the Mortgaged Vessel or the recording of this mortgage.
Section 3.7 — Classification and Condition
The Mortgaged Vessel is classed with [Insert name of Classification Society] with the highest classification available for a vessel of its type and age, and is assigned class notation [Insert class notation]. The Mortgaged Vessel is free of all overdue recommendations, conditions of class, memoranda, and notations, and there are no outstanding requirements of the classification society that have not been timely satisfied. The Mortgaged Vessel is in a good and seaworthy condition and state of repair, consistent with first-class ship management practice for vessels of similar type and age.
Section 3.8 — Insurances
The Mortgaged Vessel is insured in accordance with the requirements of the Indenture, including hull and machinery insurance, protection and indemnity insurance, war risks insurance, and loss of hire insurance, in such amounts, with such deductibles, with such insurers and underwriters, and upon such terms and conditions as are required by the Indenture. The Deed of Assignment of Earnings and Insurances in respect of the Mortgaged Vessel has been or will be duly executed and delivered, and all notices of assignment and loss payee endorsements required by the Indenture have been or will be duly given and obtained. All premiums and calls due in respect of such insurances have been paid and are current, and no event has occurred that would entitle any insurer to cancel, avoid, or reduce coverage under any such policy or contract.
Section 3.9 — ISM and ISPS Compliance
The Mortgagor and the Mortgaged Vessel are in full compliance with the requirements of the International Safety Management Code (as adopted by IMO Resolution A.741(18) and as amended from time to time) (the "ISM Code") and the International Ship and Port Facility Security Code (as adopted by the Conference of Contracting Governments to the International Convention for the Safety of Life at Sea, 1974, and as amended from time to time) (the "ISPS Code"). The Mortgagor (or the relevant ISM-compliant manager) holds a valid Document of Compliance ("DOC") issued by or on behalf of the Flag State administration, and the Mortgaged Vessel holds a valid Safety Management Certificate ("SMC") and a valid International Ship Security Certificate ("ISSC"), in each case issued by or on behalf of the Flag State administration and in full force and effect as of the date hereof.
Section 3.10 — Sanctions and Restricted Parties
Neither the Mortgagor nor any of its directors, officers, or, to the knowledge of the Mortgagor, its shareholders, is a person that is, or is owned or controlled by a person that is:
(a) the subject or target of any sanctions administered or enforced by the United Nations Security Council, the European Union, the United Kingdom (HM Treasury), the United States of America (including the Office of Foreign Assets Control of the U.S. Department of the Treasury ("OFAC"), the U.S. Department of State, and the U.S. Department of Commerce), the Republic of Singapore (including the Monetary Authority of Singapore), or any other applicable sanctions authority (collectively, "Sanctions"); or
(b) located, organized, or resident in a country or territory that is the subject or target of comprehensive, country-wide or territory-wide Sanctions (each, a "Sanctioned Country").
The Mortgaged Vessel has not been, during the three-year period preceding the date of this Deed, employed in any trade or voyage involving any Sanctioned Country or any person that is the subject or target of Sanctions, in each case in violation of applicable Sanctions laws and regulations. The Mortgagor has implemented and maintains policies and procedures designed to ensure compliance with all applicable Sanctions.
Section 3.11 — Environmental Compliance
The Mortgagor and the Mortgaged Vessel are in compliance in all material respects with all applicable environmental laws, regulations, and conventions, including but not limited to:
(a) the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978, and as further amended from time to time ("MARPOL"), including all annexes thereto;
(b) the International Convention on the Control of Harmful Anti-fouling Systems on Ships, 2001;
(c) the International Convention for the Control and Management of Ships' Ballast Water and Sediments, 2004;
(d) the International Convention on Civil Liability for Oil Pollution Damage, 1992 (as applicable to the type of the Mortgaged Vessel);
(e) any applicable emissions trading, carbon intensity, or greenhouse gas regulations, including the IMO regulations on the Energy Efficiency Existing Ship Index (EEXI) and the Carbon Intensity Indicator (CII) and any applicable regional emissions trading scheme (including the EU Emissions Trading System, to the extent applicable); and
(f) all other applicable laws, regulations, and conventions of the Flag State, port states, and any other relevant jurisdiction relating to the protection of the environment, pollution prevention, waste management, and hazardous substances.
No environmental incident involving the discharge or threatened discharge of pollutants, hazardous materials, or harmful substances from or in connection with the Mortgaged Vessel is pending or, to the knowledge of the Mortgagor, threatened, which would reasonably be expected to result in material liability to the Mortgagor or material damage to the Mortgaged Vessel.
Section 3.12 — No Litigation
There is no litigation, arbitration, administrative proceeding, investigation, or other legal or governmental proceeding pending or, to the knowledge of the Mortgagor, threatened against the Mortgagor or the Mortgaged Vessel before any court, tribunal, arbitral panel, governmental authority, or regulatory body, which:
(a) challenges or seeks to prevent, enjoin, or otherwise delay the transactions contemplated by this Deed;
(b) challenges the validity or enforceability of this Deed or the mortgage and charge created hereby; or
(c) would, if adversely determined, reasonably be expected to have a material adverse effect on (i) the business, assets, financial condition, or operations of the Mortgagor, (ii) the Mortgagor's ability to perform its obligations under this Deed, or (iii) the validity, enforceability, or priority of the mortgage and charge created by this Deed.
ARTICLE 4 — COVENANTS OF THE MORTGAGOR
The Mortgagor hereby covenants and agrees with the Mortgagee (for itself and for the benefit of the Secured Parties) as follows, in each case for so long as any Secured Obligation remains outstanding:
Section 4.1 — Maintenance of Vessel
The Mortgagor shall at all times maintain, or cause to be maintained, the Mortgaged Vessel in a good and seaworthy condition and state of repair, consistent with first-class ship management practice for vessels of similar type and age, and in compliance with all applicable laws, rules, regulations, and conventions. Without limiting the generality of the foregoing:
(a) Maintenance of Classification. The Mortgagor shall maintain, or cause to be maintained, the Mortgaged Vessel in class with the classification society specified in Schedule 2 hereto (or such other classification society as may be approved in writing by the Mortgagee), with the highest classification available for a vessel of its type and age, free of all overdue recommendations, conditions of class, memoranda, and notations. The Mortgagor shall not change the classification society of the Mortgaged Vessel without the prior written consent of the Mortgagee.
(b) Compliance with Classification Requirements. The Mortgagor shall promptly comply with all recommendations and conditions of class issued by the classification society in respect of the Mortgaged Vessel within the time periods specified by the classification society, and shall not defer, extend, or postpone compliance with any such recommendation or condition without the prior written consent of the Mortgagee.
(c) Dry-Docking. The Mortgagor shall cause the Mortgaged Vessel to be dry-docked for inspection, survey, and maintenance at the intervals required by the classification society and in accordance with good ship management practice, and in any event not less frequently than at intervals of [Insert, e.g., sixty (60)] months (or such shorter intervals as may be required by the classification society, the Flag State, or any applicable regulation).
(d) Structural Modifications. The Mortgagor shall not make, or permit to be made, any structural modification, alteration, or conversion to the Mortgaged Vessel that would materially affect its classification, tonnage, value, or seaworthiness without the prior written consent of the Mortgagee, such consent not to be unreasonably withheld or delayed, provided that the Mortgagor may make modifications required by applicable law, regulation, or the classification society without such consent, provided that the Mortgagor promptly notifies the Mortgagee of any such modification.
Section 4.2 — Insurances
The Mortgagor shall maintain, or cause to be maintained, all insurances required under the Indenture in respect of the Mortgaged Vessel, including but not limited to hull and machinery insurance, protection and indemnity insurance (including oil pollution coverage), war risks insurance (including piracy, terrorism, and crew risks), and loss of hire insurance, in such amounts, with such deductibles, with such insurers, underwriters, or protection and indemnity clubs, and upon such terms and conditions as are required by the Indenture. Without limiting the foregoing:
(a) the Mortgagor shall procure that the Mortgagee is named as co-assured, loss payee, and/or additional insured (as applicable) under all relevant policies and contracts of insurance maintained in respect of the Mortgaged Vessel, in each case in accordance with the requirements of the Indenture and the Deed of Assignment of Earnings and Insurances;
(b) the Mortgagor shall promptly notify the Mortgagee in writing of any material change in the terms or conditions of any insurance maintained in respect of the Mortgaged Vessel, including any material increase in deductibles, any reduction in coverage, or any change of insurer or protection and indemnity club;
(c) the Mortgagor shall promptly notify the Mortgagee in writing of any cancellation, non-renewal, or threatened cancellation or non-renewal of any insurance maintained in respect of the Mortgaged Vessel, and shall use its best endeavors to procure replacement coverage on terms no less favorable than the coverage being cancelled or not renewed;
(d) the Mortgagor shall comply with all terms and conditions of the insurance policies and contracts maintained in respect of the Mortgaged Vessel, and shall not do or permit to be done any act or thing that would render any such insurance void or voidable; and
(e) the Mortgagor shall deliver to the Mortgagee, promptly upon request, evidence of compliance with the insurance requirements of the Indenture, including copies of insurance certificates, cover notes, letters of undertaking from insurers and protection and indemnity clubs, and confirmations of loss payee and additional insured status.
The obligations of the Mortgagor under this Section 4.2 are in addition to, and not in substitution for, the obligations of the Mortgagor under the Deed of Assignment of Earnings and Insurances.
Section 4.3 — Registration and Flag
(a) The Mortgagor shall at all times maintain the registration of the Mortgaged Vessel under the flag of the Flag State and in the name of the Mortgagor in the ship register of the Flag State.
(b) The Mortgagor shall not change the flag, name, port of registry, or official number of the Mortgaged Vessel without the prior written consent of the Mortgagee.
(c) The Mortgagor shall at all times maintain this mortgage duly recorded as a first-priority mortgage in the ship registry of the Flag State, and shall promptly take all steps necessary to preserve the validity, enforceability, and priority of this mortgage, including the timely payment of all recording fees, renewal fees, and other charges imposed by the Flag State in connection therewith.
(d) The Mortgagor shall not apply for or consent to the parallel registration or bareboat charter registration of the Mortgaged Vessel under the flag of any other state without the prior written consent of the Mortgagee.
Section 4.4 — Negative Pledge
The Mortgagor shall not create, incur, assume, suffer, or permit to exist any lien, charge, mortgage, hypothecation, pledge, encumbrance, maritime lien, possessory lien, or other security interest of any nature whatsoever on, over, or with respect to the Mortgaged Vessel or any part thereof, or any interest therein (including the Earnings and the Insurances), other than Permitted Liens as defined in the Indenture. For the avoidance of doubt, the Mortgagor shall discharge or procure the discharge of any lien or encumbrance that is not a Permitted Lien promptly upon becoming aware of the same.
Section 4.5 — Restriction on Dispositions
The Mortgagor shall not sell, transfer, assign, convey, lease, charter on a bareboat or demise basis, or otherwise dispose of the Mortgaged Vessel or any interest therein, or agree to do any of the foregoing, without the prior written consent of the Mortgagee, except as expressly permitted under the Indenture. The Mortgagor acknowledges that the Indenture contains covenants governing asset sales, including provisions requiring that:
(a) any sale of a Collateral Vessel must be for fair market value and for consideration consisting of at least [●]% cash;
(b) the net proceeds of any such sale in excess of the threshold specified in the Indenture must be applied, within the period specified in the Indenture, either (i) to an offer to repurchase Notes at par (plus accrued and unpaid interest) or (ii) to reinvestment in replacement assets in accordance with the Indenture; and
(c) after giving effect to the release of the sold vessel from the Collateral, the minimum Collateral Coverage Ratio must continue to be maintained (or, if such ratio is not maintained, the consequences specified in Section 2.5 above shall apply).
Section 4.6 — Notification Obligations
The Mortgagor shall promptly notify the Mortgagee in writing (and in any event within [●] Business Days of becoming aware thereof) of:
(a) any casualty, damage, or loss affecting the Mortgaged Vessel where the cost of repair or the value of the loss exceeds US$[●] (or its equivalent in any other currency);
(b) any actual or threatened arrest, seizure, attachment, detention, confiscation, or forfeiture of the Mortgaged Vessel by any court, governmental authority, or other person, and the circumstances giving rise thereto;
(c) any requisition for hire or for title of the Mortgaged Vessel by any governmental authority, whether in time of war or otherwise;
(d) any environmental incident involving the Mortgaged Vessel, including any discharge, spill, or release of pollutants, hazardous materials, or harmful substances from the Mortgaged Vessel or the threat thereof;
(e) any breach or anticipated breach of the Collateral Coverage Ratio as specified in Section 2.5, or any event or circumstance that would reasonably be expected to result in such a breach;
(f) any change in the classification status of the Mortgaged Vessel, including any withdrawal, suspension, or downgrade of class, any overdue recommendation or condition of class, or any survey, inspection, or audit by the classification society that reveals material deficiencies;
(g) any change in the management, technical management, or commercial management of the Mortgaged Vessel;
(h) any claim, proceeding, or investigation by any governmental authority or other person relating to the Mortgaged Vessel that could reasonably be expected to have a material adverse effect; and
(i) any other event or circumstance that could reasonably be expected to materially and adversely affect the value of the Mortgaged Vessel or the security created by this Deed.
Section 4.7 — Compliance with Laws
The Mortgagor shall at all times comply, and shall cause the Mortgaged Vessel to comply, with all applicable laws, statutes, regulations, rules, orders, conventions, codes, and requirements of any governmental authority, Flag State, port state, or classification society, including without limitation all laws and regulations relating to maritime safety, navigation, pollution prevention, environmental protection, customs and immigration, sanctions, anti-money laundering, and anti-bribery and corruption.
Section 4.8 — Trading Restrictions
The Mortgagor shall not employ or permit the Mortgaged Vessel to be employed in any trade, voyage, or operation that:
(a) is unlawful under any applicable law or regulation;
(b) would render any insurance maintained in respect of the Mortgaged Vessel void or voidable, or would entitle any insurer to decline or reduce a claim under any such insurance;
(c) would expose the Mortgaged Vessel to being condemned, penalized, detained, seized, arrested, or forfeited by any court or governmental authority;
(d) would involve the carriage of contraband, arms, munitions, or other prohibited goods or materials in violation of applicable law; or
(e) would involve the Mortgaged Vessel calling at, trading with, or otherwise having any connection with any Sanctioned Country, or any person that is the subject or target of Sanctions, in each case without the prior written consent of the Mortgagee (which consent may be withheld in the Mortgagee's sole and absolute discretion).
Section 4.9 — ISM and ISPS Compliance
The Mortgagor shall at all times maintain, or cause to be maintained, in full force and effect:
(a) a valid Document of Compliance ("DOC") issued by or on behalf of the Flag State administration in respect of the Mortgagor (or the relevant ISM-compliant manager);
(b) a valid Safety Management Certificate ("SMC") issued by or on behalf of the Flag State administration in respect of the Mortgaged Vessel; and
(c) a valid International Ship Security Certificate ("ISSC") issued by or on behalf of the Flag State administration in respect of the Mortgaged Vessel,
in each case in compliance with the ISM Code and the ISPS Code (as defined in Section 3.9), and the Mortgagor shall promptly deliver copies of all such certificates (and any renewals, amendments, or replacements thereof) to the Mortgagee upon request.
Section 4.10 — Inspection Rights
The Mortgagee (and any person authorized by the Mortgagee, including surveyors, valuers, inspectors, and other agents) shall have the right to board, inspect, and survey the Mortgaged Vessel at any reasonable time and at any port or anchorage, upon [●] days' prior written notice to the Mortgagor (or, if an Event of Default has occurred and is continuing, without prior notice). The Mortgagor shall cooperate with and provide all reasonable assistance to the Mortgagee and its agents in connection with any such inspection or survey, including providing access to all certificates, documents, logs, records, and maintenance histories relating to the Mortgaged Vessel. All costs and expenses incurred by the Mortgagee in connection with any inspection or survey shall be for the account of the Mortgagee, provided that if an Event of Default has occurred and is continuing, all such costs and expenses shall be for the account of the Mortgagor and shall form part of the Secured Obligations.
Section 4.11 — Payment of Taxes and Registration Fees
The Mortgagor shall promptly pay and discharge all taxes, duties, fees, charges, assessments, and governmental impositions of any nature whatsoever imposed on or in respect of the Mortgaged Vessel by the Flag State or any other governmental authority having jurisdiction over the Mortgaged Vessel, including all tonnage taxes, port charges, light dues, and canal tolls. The Mortgagor shall maintain the registration of this mortgage in good standing with the ship registry of the Flag State and shall promptly pay all recording fees, renewal fees, and other charges required to maintain such registration.
Section 4.12 — Further Assurances
The Mortgagor shall, at its own cost and expense, promptly upon the reasonable request of the Mortgagee:
(a) execute and deliver such further deeds, instruments, documents, assignments, and agreements;
(b) provide such further information, certificates, opinions, and evidence;
(c) make such further filings, registrations, and recordings with any ship registry, governmental authority, or other office; and
(d) take such further action,
as the Mortgagee may reasonably request in order to create, perfect, protect, maintain, preserve, or enforce the mortgage and security interest created by this Deed, or to enable the Mortgagee to exercise and enforce its rights and remedies under this Deed. Where the Flag State requires additional filings, endorsements, notarizations, apostilles, consular legalizations, or other formalities for the valid creation, perfection, or recording of this mortgage, the Mortgagor shall procure the same promptly at its own expense.
ARTICLE 5 — EVENTS OF DEFAULT AND ENFORCEMENT
Section 5.1 — Events of Default
An Event of Default under the Indenture shall constitute an Event of Default under this Deed. In addition, each of the following events shall constitute an Event of Default under this Deed (to the extent not already constituting an Event of Default under the Indenture):
(a) Breach of Covenant. The Mortgagor fails to comply with any material covenant, obligation, or undertaking on its part to be performed or observed under this Deed, and such failure continues for a period of [●] days after written notice thereof has been given by the Mortgagee to the Mortgagor specifying the nature of the failure and requiring its remedy.
(b) Misrepresentation. Any representation or warranty made or deemed to be made by the Mortgagor in or pursuant to this Deed proves to have been materially incorrect, untrue, misleading, or incomplete when made or when deemed to have been repeated.
(c) Arrest, Seizure, or Forfeiture. The Mortgaged Vessel is arrested, seized, attached, detained, confiscated, or forfeited (or any process or proceeding for the arrest, seizure, attachment, detention, confiscation, or forfeiture of the Mortgaged Vessel is commenced), and such arrest, seizure, attachment, detention, confiscation, or forfeiture is not discharged, released, or stayed within [●] days after the occurrence thereof.
(d) Loss of Title. The Mortgagor ceases to be the sole legal and beneficial owner of the Mortgaged Vessel, or the Mortgaged Vessel is sold, transferred, or disposed of (otherwise than in accordance with the Indenture and with the prior written consent of the Mortgagee), or any person other than the Mortgagor acquires or claims any ownership interest, lien, charge, or encumbrance over the Mortgaged Vessel (other than Permitted Liens).
(e) Insolvency. The Mortgagor becomes insolvent, is unable to pay its debts as they fall due, makes a general assignment for the benefit of its creditors, files a voluntary petition in bankruptcy or for reorganization or arrangement under any insolvency law, or is the subject of an involuntary petition in bankruptcy or equivalent proceeding in any jurisdiction, or a receiver, administrator, liquidator, trustee, or similar officer is appointed over the Mortgagor or the Mortgaged Vessel, or the Mortgagor is dissolved, wound up, or ceases to carry on business.
For the avoidance of doubt, the Mortgagor acknowledges that the Events of Default under the Indenture include, inter alia, failure to pay principal or interest on the Notes, breach of financial covenants (including the Collateral Coverage Ratio), cross-default and cross-acceleration with respect to other indebtedness, failure to comply with covenants under the Indenture after any applicable grace period, and certain events of insolvency, judgment defaults, and invalidity of security.
Section 5.2 — Remedies Upon Event of Default
Upon the occurrence and during the continuance of an Event of Default, the Mortgagee (acting on the written instructions of the Trustee, or the requisite percentage of holders of the Notes as specified in the Indenture, and in each case subject to the terms and conditions of the Intercreditor Agreement, including any enforcement standstill and consultation provisions contained therein) shall be entitled, without further notice or demand (except to the extent required by applicable law), to exercise any or all of the following remedies:
(a) Possession. Take possession of the Mortgaged Vessel, wherever the same may be found, and for this purpose to enter upon any dock, harbor, port, anchorage, or other place where the Mortgaged Vessel may be situated. The master and crew of the Mortgaged Vessel are hereby instructed by the Mortgagor to surrender possession of the Mortgaged Vessel to the Mortgagee or its agents upon demand.
(b) Sale. Sell or procure the sale of the Mortgaged Vessel, either by public auction or by private treaty, in one lot or in separate lots, at such time and place and in such manner as the Mortgagee in its sole discretion considers appropriate, with power to buy in and resell without being answerable for any loss occasioned thereby. The Mortgagee shall be entitled to sell the Mortgaged Vessel free and clear of all liens, charges, and encumbrances, and to execute and deliver a bill of sale and such other instruments as may be necessary to transfer title to the purchaser. The Mortgagee shall have no obligation to obtain any particular price or to delay any sale.
(c) Operation and Management. Manage, operate, charter (on time charter, voyage charter, bareboat charter, or otherwise), repair, maintain, insure, lay up, or otherwise deal with the Mortgaged Vessel in such manner as the Mortgagee considers appropriate, and for this purpose to employ such managers, operators, agents, and crew as the Mortgagee sees fit, all at the cost and expense of the Mortgagor.
(d) Appointment of Receiver. Appoint a receiver or manager (including a receiver and manager) over the Mortgaged Vessel and its Earnings and Insurances, with such powers as the Mortgagee may determine, including the powers specified in paragraphs (a) through (c) above. Any receiver or manager so appointed shall be deemed to be the agent of the Mortgagor (and not the Mortgagee) and the Mortgagor shall be solely responsible for the acts, defaults, and remuneration of such receiver or manager.
(e) Set-Off. Exercise any rights of set-off or combination of accounts against any balances, credits, deposits, or moneys standing to the credit of the Mortgagor with the Mortgagee or any Secured Party.
(f) Other Remedies. Exercise any and all other rights, powers, and remedies available to the Mortgagee under applicable law, including under the Merchant Shipping Act (Cap. 179, Singapore) or the equivalent legislation of the Flag State, and under the Indenture, the Intercreditor Agreement, and the other Security Documents. The Mortgagee shall be entitled to arrest the Mortgaged Vessel in any jurisdiction for the purpose of enforcing the security created by this Deed.
The exercise of any remedy by the Mortgagee shall be subject to and in accordance with the enforcement consultation and standstill provisions of the Intercreditor Agreement. The Mortgagor acknowledges that the Intercreditor Agreement may require the Mortgagee to consult with the Trustee and the holders of the Notes (or their representatives) before taking enforcement action, and that certain waiting periods or notice requirements may apply.
Section 5.3 — Application of Proceeds
The proceeds of any enforcement action taken by the Mortgagee under this Deed (including the proceeds of any sale of the Mortgaged Vessel, any receipts from the operation or chartering of the Mortgaged Vessel, and any insurance or requisition compensation received in connection with the Mortgaged Vessel) shall be applied in the following order of priority (subject in all cases to the provisions of the Intercreditor Agreement and any mandatory requirements of applicable law):
(a) first, in payment of all costs, fees, expenses, and disbursements (including reasonable legal fees) incurred by the Mortgagee (and any receiver or manager appointed hereunder) in connection with the enforcement of the security created by this Deed, the taking of possession, the sale, the management, or the operation of the Mortgaged Vessel, and any other action taken by the Mortgagee in the exercise of its rights and remedies hereunder;
(b) second, in payment of all amounts owing to the Trustee under the Indenture, including the Trustee's fees, expenses, and indemnification obligations;
(c) third, in pay