Filed by Bowne Pure Compliance





Exhibit 10.3




EXECUTION VERSION




DATED                            2008





GYPSUM TRANSPORTATION LIMITED




- and -




DVB BANK SE




 






DEED OF COVENANTS

m.v. “GYPSUM CENTENNIAL”




 






STEPHENSON HARWOOD

One St. Paul’s Churchyard

London EC4M 8SH

Tel: +44 (0)20-7329 4422

Fax: +44 (0)20-7329 7100

Ref: 819/1575/47-00986



 


 









 





CONTENTS




	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	1 Definitions and Interpretation
	 	 	2	 
	 
	 	 	 	 
	2 Representations and Warranties
	 	 	3	 
	 
	 	 	 	 
	3 Covenant to Pay and Perform
	 	 	4	 
	 
	 	 	 	 
	4 Mortgage and Amount Secured
	 	 	4	 
	 
	 	 	 	 
	5 Insurance
	 	 	5	 
	 
	 	 	 	 
	6 Operation and Maintenance
	 	 	10	 
	 
	 	 	 	 
	7 Mortgagee’s Powers
	 	 	16	 
	 
	 	 	 	 
	8 Ancillary Provisions
	 	 	18	 
	 
	 	 	 	 
	9 Receiver
	 	 	19	 
	 
	 	 	 	 
	10 Application of Moneys
	 	 	20	 
	 
	 	 	 	 
	11 Power of Attorney
	 	 	21	 
	 
	 	 	 	 
	12 Partial Invalidity
	 	 	21	 
	 
	 	 	 	 
	13 Further Assurance
	 	 	21	 
	 
	 	 	 	 
	14 Miscellaneous
	 	 	21	 
	 
	 	 	 	 
	15 Discharge of Security
	 	 	22	 
	 
	 	 	 	 
	16 Notices
	 	 	22	 
	 
	 	 	 	 
	17 Counterparts
	 	 	22	 
	 
	 	 	 	 
	18 Law and Jurisdiction
	 	 	23	 





 


 









 





DEED OF COVENANTS




Dated:
                   2008




BETWEEN:





	(1)	 	GYPSUM TRANSPORTATION LIMITED, a company incorporated according to the law of Bermuda whose
registered office is at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda (the
“Owner”).

	 
	(2)	 	DVB BANK SE with its registered office in Frankfurt and acting through its office at Parklaan
2, 3016BB Rotterdam, The Netherlands (the “Mortgagee”).






WHEREAS:





	(A)	 	Each of the banks listed in Schedule 1 to the Loan Agreement (as defined below) (collectively
the “Lenders”) has agreed to advance to the Owner its respective Commitment of an aggregate
amount not exceeding the total of (i) the lesser of forty million Dollars ($40,000,000) and
fifty per centum (50%) of the Market Value of Vessel A (in respect of Tranche A) and (ii) the
lesser of fifty million Dollars ($50,000,000) and fifty per centum (50%) of the Market Value
of Vessel B (in respect of Tranche B) (the “Loan”) on the terms and subject to the conditions
set out in a loan agreement dated  2008 made between the
Owner (as borrower), the Lenders (as lenders), the Mortgagee as agent for the Lenders (the
“Agent”) and the Mortgagee as security trustee for the Lenders (the “Security Trustee”) (the
“Loan Agreement”).

	 
	(B)	 	Pursuant to the Loan Agreement, and as a condition precedent to the several obligations of
the Lenders to make the Loan available to the Owner, the Owner has, amongst other things,
agreed to execute and deliver in favour of the Mortgagee as Security Trustee for the Finance
Parties a first priority statutory mortgage of all the shares in the Vessel, together with
this Deed, as security for the payment of the Indebtedness.

	 
	(C)	 	The Owner is the legal and beneficial owner of all the shares in the Vessel and has executed,
delivered and registered in favour of the Mortgagee a statutory mortgage with first priority
bearing the same date as this Deed over all the shares in the Vessel (the “Mortgage”).





 


 









 










THIS DEED WITNESSES as follows:




	1	 	Definitions and Interpretation







	 	1.1	 	In this Deed:

	 
	 	 	 	“Assigned Property” means the Insurances, the Earnings and the Requisition
Compensation.

	 
	 	 	 	“Indebtedness” means the aggregate from time to time of: the amount of the Loan
outstanding; all accrued and unpaid interest on the Loan; and all other sums of any
nature (together with all accrued and unpaid interest on any of those sums) payable
by the Owner to any of the Finance Parties under all or any of the Security
Documents.

	 
	 	 	 	“Mortgagees’ Insurances” means all policies and contracts of mortgagees’ interest
insurance, mortgagees’ additional perils (oil pollution) insurance and any other
insurance from time to time taken out by the Mortgagee in relation to the Vessel.

	 
	 	 	 	“Obligatory Insurances” means the insurances and entries referred to in Clause 5.1
and, where applicable, those referred to in Clauses 5.2, 5.5 and/or 6.16.

	 
	 	 	 	“Threshold Amount” means five hundred thousand Dollars ($500,000).

	 
	 	 	 	“Vessel” means the motor vessel “GYPSUM CENTENNIAL” registered in the ownership of
the Owner under the flag of Bermuda with Official Number 733699 together
with all her engines, machinery, boats, tackle, outfit, fuels, spares, consumable
and other stores, belongings and appurtenances, whether on board or ashore,
including any which may in the future be put on board or may in the future be
intended to be used for the Vessel if on shore.

	 
	 	1.2	 	Unless otherwise specified in this Deed, or unless the context otherwise
requires, all words and expressions defined in the Loan Agreement shall have the same
meaning when used in this Deed.





 


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	 	1.3	 	In this Deed:







	 	1.3.1	 	words denoting the plural number include the singular and vice versa;

	 
	 	1.3.2	 	words denoting persons include corporations, partnerships,
associations of persons (whether incorporated or not) or governmental or
quasi-governmental bodies or authorities and vice versa;

	 
	 	1.3.3	 	references to Clauses are references to clauses of this Deed;

	 
	 	1.3.4	 	references to this Deed include the recitals to this Deed;

	 
	 	1.3.5	 	the headings and contents page(s) are for the purpose of
reference only, have no legal or other significance, and shall be ignored in
the interpretation of this Deed;

	 
	 	1.3.6	 	references to any document (including, without limitation, to
any of the Security Documents) are, unless the context otherwise requires,
references to that document as amended, supplemented, novated or replaced from
time to time;

	 
	 	1.3.7	 	references to statutes or provisions of statutes are
references to those statutes, or those provisions, as from time to time
amended, replaced or re-enacted; and

	 
	 	1.3.8	 	references to any Finance Party include its successors,
transferees and assignees.







	 	1.4	 	In the Mortgage:







	 	1.4.1	 	references to “interest” means interest covenanted to be paid
in accordance with Clauses 3, 5.15 and 8.4;

	 
	 	1.4.2	 	references to “principal” means all other sums of money for
the time being comprised in the Indebtedness; and

	 
	 	1.4.3	 	the expression “the sums for the time being due on this
security” means the whole of the Indebtedness.





 


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	2	 	Representations and Warranties

	 
	 	 	The Owner represents and warrants to the Mortgagee that:







	 	2.1	 	it is not necessary to ensure the legality, validity, enforceability or
admissibility in evidence of the Mortgage or this Deed that either of them be filed,
recorded or enrolled with any governmental authority or agency or stamped with any
stamp or similar transaction tax, except for the registration of the Mortgage with the
Registrar of Ships (or equivalent official) at the Vessel’s port of registry; and

	 
	 	2.2	 	it is the sole legal and beneficial owner of all the shares in the Vessel and
(with the exception of the Mortgage, this Deed, crew’s wages and Permitted
Encumbrances) the Vessel is free from any Encumbrance and is not under arrest or in the
possession of any person (other than her master and crew) who may become entitled to
assert a maritime or possessory lien on her; and

	 
	 	2.3	 	the Vessel is insured and classed in accordance with the requirements of this
Deed.







	3	 	Covenant to Pay and Perform

	 
	 	 	The Owner agrees to pay to the Finance Parties all moneys comprised in the Indebtedness and
to perform all its other obligations arising out of the Security Documents as and when the
same shall be due for payment or performance.

	 
	4	 	Mortgage and Amount Secured







	 	4.1	 	In order to secure the payment of the Indebtedness and the performance by the
Owner of all its other obligations under or arising out of the Security Documents the
Owner, by the Mortgage and this Deed, mortgages and charges the Vessel to the Mortgagee
as security agent for the Finance Parties with full title guarantee.

	 
	 	4.2	 	The security constituted by the Mortgage and this Deed shall be continuing and
shall not be satisfied by any intermediate payment or satisfaction until the
Indebtedness shall have been paid in full and none of the Finance Parties shall be
under any further actual or contingent liability to any third party in relation to the
Vessel, the Assigned Property or any other matter referred to in the Security
Documents. The security constituted by the Mortgage and this Deed shall be in addition
to any other security now or in the future held by any of the Finance Parties for or in
respect of the Indebtedness, and shall not merge with or prejudice or be prejudiced by
any such security or any other contractual or legal rights of any of the Finance
Parties nor be affected by any irregularity, defect or informality or by any release,
exchange or variation of any such security. Section 93 of the Law
of Property Act 1925, or any provision which the Mortgagee considers analogous to
that provision under the law of any other relevant jurisdiction, shall not apply to
the security constituted by the Mortgage and/or this Deed.





 


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	5	 	Insurance







	 	5.1	 	The Owner covenants to ensure at its own expense throughout the Facility Period
that:







	 	5.1.1	 	the Vessel remains insured against marine risks and war risks
on an agreed value basis for an amount which is the greater from time to time
of (a) her full market value and (b) an amount which (when aggregated with the
amounts for which any other vessels providing first priority security for the
Indebtedness are insured for such risks) equals one hundred and twenty per cent
(120%) of the amount of the Loan outstanding; and

	 
	 	5.1.2	 	the Vessel remains entered in a protection and indemnity
association in both P&I and FD&D, or remains otherwise insured against
protection and indemnity risks and liabilities (including, without limitation,
protection and indemnity war risks); and

	 
	 	5.1.3	 	the Vessel remains insured against oil pollution caused by the
Vessel for not less than one billion Dollars ($1,000,000,000) unless that risk
is covered to the satisfaction of the Mortgagee by the Vessel’s protection and
indemnity entry or insurance.







	 	5.2	 	The Mortgagee agrees that, if and for so long as the Vessel may be laid up with
notification to the Mortgagee, the Owner may at its own expense take out port risk
insurance on the Vessel in place of hull and machinery insurance.

	 
	 	5.3	 	The Owner undertakes to place the Obligatory Insurances in such markets, in
such currency, on such terms and conditions, and with such brokers, underwriters and
associations as the Mortgagee shall have previously approved in writing. The Owner
shall not alter the terms of any of the Obligatory Insurances such that coverage is
reduced nor allow any person other than the Managers and any entity that is part of the
Group to be co-assured under any of the Obligatory Insurances without the prior written
consent of the Mortgagee which consent will not be unreasonably withheld, and will
supply the Mortgagee from time to time on request
with such information as the Mortgagee may in its reasonable discretion require with
regard to the Obligatory Insurances and the brokers, underwriters or associations
through or with which the Obligatory Insurances are placed.





 


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	 	5.4	 	The Owner undertakes duly and punctually to pay all premiums, calls and
contributions, and all other sums at any time payable in connection with the Obligatory
Insurances, and, at its own expense, to arrange and provide any guarantees from time to
time required by any protection and indemnity or war risks association. From time to
time at the Mortgagee’s request, the Owner will provide the Mortgagee with evidence
satisfactory to the Mortgagee that such premiums, calls, contributions and other sums
have been duly and punctually paid; that any such guarantees have been duly given; and
that all declarations and notices required by the terms of any of the Obligatory
Insurances to be made or given by or on behalf of the Owner to brokers, underwriters or
associations have been duly and punctually made or given.

	 
	 	5.5	 	The Owner will comply in all respects with all terms and conditions of the
Obligatory Insurances and will make all such declarations to brokers, underwriters and
associations as may be required to enable the Vessel to operate in accordance with the
terms and conditions of the Obligatory Insurances. The Owner will not do, nor permit
to be done, any act, nor make, nor permit to be made, any omission, as a result of
which any of the Obligatory Insurances may become liable to be suspended, cancelled or
avoided, or may become unenforceable, or as a result of which any sums payable under or
in connection with any of the Obligatory Insurances may be reduced or become liable to
be repaid or rescinded in whole or in part. In particular, but without limitation, the
Owner will not permit the Vessel to be employed other than in conformity with the
Obligatory Insurances without first taking out additional insurance cover in respect of
that employment, and the Owner will promptly notify the Mortgagee of any new
requirement imposed by any broker, underwriter or association in relation to any of the
Obligatory Insurances. This notification shall not include notices of cancellation to
amend War Risk Navigation Limits.

	 
	 	5.6	 	The Owner will, no later than fourteen days (or, in the case of war risks, no
later than seven days), before the expiry of any of the Obligatory Insurances renew
them
and shall promptly give the Mortgagee such details of those renewals as the
Mortgagee may require.





 


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	 	5.7	 	The Mortgagee shall be at liberty to take out Mortgagees’ Insurances in
relation to the Vessel for such amounts and on such terms and conditions as the
Mortgagee may from time to time decide, and the Owner shall from time to time on demand
reimburse the Mortgagee for all costs, premiums and expenses paid or incurred by the
Mortgagee in connection with any Mortgagees’ Insurances. All Mortgagees’ Insurances
shall be placed with brokers and clubs on terms reasonably acceptable to the Owner

	 
	 	5.8	 	The Owner shall deliver to the Mortgagee copies of all policies, certificates
of entry and other documents relating to the Insurances (including, without limitation,
receipts for premiums, calls or contributions) requested by the Mortgagee and shall
procure that letters of undertaking in such form as the Mortgagee may reasonably
approve shall be issued to the Mortgagee by the brokers through which the Insurances
are placed (or, in the case of protection and indemnity or war risks associations, by
their managers).

	 
	 	5.9	 	The Owner shall promptly provide the Mortgagee with full information regarding
any casualty or other accident or damage to the Vessel which in the reasonable opinion
of the Owner is in excess of the Threshold Amount.

	 
	 	5.10	 	The Owner agrees that, at any time after the occurrence and during the
continuation of an Event of Default, the Mortgagee shall be entitled to collect, sue
for, recover and give a good discharge for all claims in respect of any of the
Insurances; to pay collecting brokers the customary commission on all sums collected in
respect of those claims; to compromise all such claims or refer them to arbitration or
any other form of judicial or non-judicial determination; and otherwise to deal with
such claims in such manner as the Mortgagee shall in its discretion think fit.

	 
	 	5.11	 	Whether or not an Event of Default shall have occurred or be continuing, the
proceeds of any claim under any of the Insurances in respect of a Total Loss shall be
paid to the Mortgagee and applied by the Mortgagee in accordance with Clause 10.





 


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	 	5.12	 	In the event of any claim in respect of any of the Insurances (other than in
respect of a Total Loss or a claim less than the Threshold Amount), if the Owner shall
fail to reach agreement with any of the brokers, underwriters or associations for the
restoration of the Vessel, or for payment to third parties, within such time as the
Mortgagee may reasonably stipulate, the Mortgagee shall be entitled, if an Event of
Default has occurred and is continuing, to require payment to itself with respect to
hull and machinery claims, and with respect to protection and indemnity claims, to the
person entitled thereto or to other parties if and when designated by the Mortgagee.

	 
	 	 	 	In the event of any dispute arising between the Owner and any broker, underwriter or
association with respect to any obligation to make any payment in an amount greater
than the Threshold Amount to the Owner or to the Mortgagee under or in connection
with any of the Insurances, or with respect to the amount of any such payment
relating to a claim in excess of the Threshold Amount, the Mortgagee shall be
entitled, but after a reasonable time frame set by the Mortgagee and after which
still no agreement is achieved, to settle that dispute with participation of the
Owner with the broker, underwriter or association concerned. Any such settlement
shall be binding on the Owner.

	 
	 	5.13	 	The Mortgagee agrees that any amounts which may become due under any protection
and indemnity entry or insurance shall be paid to the Owner to reimburse the Owner for,
and in discharge of, the loss, damage or expense in respect of which they shall have
become due, unless, at the time the amount in question becomes due, an Event of Default
shall have occurred and be continuing, in which event the Mortgagee shall be entitled
to receive the amounts in question and to apply them either in reduction of the
Indebtedness or, at the option of the Mortgagee, to the discharge of the liability in
respect of which they were paid.

	 
	 	5.14	 	The Owner shall not settle, compromise or abandon any claim under or in
connection with any of the Insurances (other than a claim of less than the Threshold
Amount arising other than from a Total Loss) without the prior written consent of the
Mortgagee, which consent will not be unreasonably withheld or delayed.





 


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	 	5.15	 	If the Owner fails to effect or keep in force the Obligatory Insurances, the
Mortgagee may (but shall not be obliged to) effect and/or keep in force such insurances
on the Vessel and such entries in protection and indemnity or war risks
associations as the Mortgagee in its discretion considers desirable, and the
Mortgagee may (but shall not be obliged to) pay any unpaid premiums, calls or
contributions. The Owner will reimburse the Mortgagee from time to time on demand
for all such premiums, calls or contributions paid by the Mortgagee, together with
interest at the Default Rate from the date of payment by the Mortgagee until the
date of reimbursement.

	 
	 	5.16	 	The Owner shall comply strictly with the requirements of any legislation
relating to pollution or protection of the environment which may from time to time be
applicable to the Vessel in any jurisdiction in which the Vessel shall trade and in
particular (if the Vessel is to trade in the United States of America and Exclusive
Economic Zone (as defined in the Act)) the Owner shall comply strictly with the
requirements of the United States Oil Pollution Act 1990 (the “Act”). Before any such
trade is commenced and during the entire period during which such trade is carried on,
the Owner shall:







	 	5.16.1	 	pay any additional premiums required to maintain protection and indemnity
cover for oil pollution in amounts of up to one billion Dollars
($1,000,000,000); and

	 
	 	5.16.2	 	make all such quarterly or other voyage declarations as may from time to time
be required by the Vessel’s protection and indemnity association in order to
maintain such cover, and promptly deliver to the Mortgagee copies of such
declarations; and

	 
	 	5.16.3	 	submit the Vessel to such additional periodic, classification, structural or
other surveys which may be required by the Vessel’s protection and indemnity
insurers to maintain cover for such trade and promptly deliver to the Mortgagee
copies of reports made in respect of such surveys; and

	 
	 	5.16.4	 	implement any recommendations contained in the reports issued following the
surveys referred to in Clause 5.16.3 within the relevant time limits, and
provide evidence satisfactory to the Mortgagee that the protection and
indemnity insurers are satisfied that this has been done; and





 


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	 	5.16.5	 	in addition to the foregoing (if such trade is in the United States of
America and Exclusive Economic Zone):







	 	(aa)	 	obtain and retain a certificate of financial
responsibility under the Act in form and substance satisfactory to the
United States Coast Guard and provide the Mortgagee with a copy; and

	 
	 	(bb)	 	procure that the protection and indemnity
insurances do not contain a US Trading Exclusion Clause or any other
analogous provision and provide the Mortgagee with evidence that this
is so; and

	 
	 	(cc)	 	comply strictly with any operational or
structural regulations issued from time to time by any relevant
authorities under any act or convention relating to oil pollution so
that at all times the Vessel falls within the provisions which limit
strict liability under that act for oil pollution.







	 	5.17	 	The Mortgagee agrees and covenants that after an Event of Default has been
cured or remedied and provided that (i) no other Event of Default has occurred and is
continuing and/or (ii) the Finance Parties have not exercised their nights under clause
12.1 of the Loan Agreement, that it will promptly rescind any and all notices given to
any broker, underwriter or association to make all insurance payments to the Mortgagee.







	6	 	Operation and Maintenance

	 
	 	 	The Owner covenants with the Mortgagee:







	 	6.1	 	to keep the Vessel seaworthy and in a state of repair and in compliance with
the requirements from time to time of all applicable laws, conventions and regulations
and of her insurers; and

	 
	 	6.2	 	to maintain the registration of the Vessel under its current flag or a flag
approved by the Mortgagee; to effect and maintain registration of the Mortgage at the
Vessel’s ship registry; and not cause nor permit to be done any act or omission as a
result of which either of those registrations might be defeated or imperilled; and

	 
	 	6.3	 	to maintain the Vessel in a condition entitling the Vessel to the highest class
applicable to vessels of her type with a classification society as required by the Loan
Agreement and free of recommendations affecting class; and





 


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	 	6.4	 	to comply in all material respects with all laws, conventions and regulations
applicable to the Owner or to the Vessel and to carry on board the Vessel all
certificates and other documents which may from time to time be required to evidence
such compliance; and

	 
	 	6.5	 	not without the prior written consent of the Mortgagee, which consent will not
be unreasonably withheld or delayed, to make, nor permit nor cause to be made, any
material change in the structure, type or speed of the Vessel; and

	 
	 	6.6	 	to procure that all repairs to the Vessel or replacements of parts or equipment
of the Vessel are effected in such a way as not to materially diminish the value of the
Vessel and with replacement parts or equipment the property of the Owner and free of
all Encumbrances (other than Permitted Encumbrances, the Mortgage and this Deed); and

	 
	 	6.7	 	to permit the Mortgagee and all persons appointed by the Mortgagee to board the
Vessel from time to time during the Facility Period to inspect the Vessel’s state and
condition, upon reasonable advance notice and without interfering with the Vessel’s
operation and, if the Vessel shall not be in a state and condition which complies with
the requirements of this Deed, after giving to the Owner reasonably detailed notice of
the noncompliance and a reasonable opportunity to complete required repairs to effect
such repairs as shall in the opinion of the Mortgagee be desirable to ensure such
compliance, without prejudice to the Mortgagee’s other rights under or pursuant to the
Mortgage or this Deed; and

	 
	 	6.8	 	promptly to notify the Mortgagee of any arrest or detention of the Vessel, and
to cause the Vessel to be released from arrest or detention as quickly as possible, and
in any event within fourteen days from the date of arrest or detention, and promptly to
notify the Mortgagee in the same manner of the release of the Vessel; and

	 
	 	6.9	 	from time to time on request of the Mortgagee to produce to the Mortgagee
written evidence satisfactory to the Mortgagee confirming that the master and crew of
the Vessel have no claims for wages beyond the ordinary arrears and that the master has
no claim for disbursements other than those properly incurred by him in the ordinary
course of trading of the Vessel; and





 


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	 	6.10	 	not during the Facility Period to sell, agree to sell, or otherwise dispose of,
or agree to dispose of, any shares in the Vessel unless the Owner complies with clause
5.6 of the Loan Agreement; and

	 
	 	6.11	 	not during the Facility Period to change the name of the Vessel without notice
to the Mortgagee; and

	 
	 	6.12	 	in the event of any requisition or seizure of the Vessel, to take all lawful
and reasonable steps to recover possession of the Vessel as soon as it is entitled to
do so; and

	 
	 	6.13	 	to give to the Mortgagee from time to time during the Facility Period on
request such information as the Mortgagee may reasonably require with regard to the
Vessel’s employment, position and state of repair and, on the Mortgagee’s reasonable
request, to supply the Mortgagee with copies of all charterparties and other contracts
of employment relating to the Vessel; and

	 
	 	6.14	 	to comply with all requirements from time to time of the Vessel’s
classification society and to give to the Mortgagee from time to time during the
Facility Period on request copies of all classification certificates of the Vessel and
reports of surveys required by the Vessel’s classification society (the Owner by its
execution of this Deed irrevocably authorising the Mortgagee to obtain such information
and documents from the Vessel’s classification society as the Mortgagee may from time
to time require), and to notify the Mortgagee promptly of any requirement or
recommendation imposed by the Vessel’s classification society; and

	 
	 	6.15	 	not during hostilities (whether or not a state of war shall formally have been
declared and including, without limitation, any civil war) to permit the Vessel to be
employed in carrying any goods which may be declared to be contraband of war or which
may render the Vessel liable to confiscation, seizure, detention or destruction, nor to
permit the Vessel to enter any area which is declared a war zone by any governmental
authority or by the Vessel’s insurers unless the Mortgagee shall have consented to that
employment or voyage in writing, which consent (if given) shall be conditional on the
Owner effecting at its own expense such additional insurances as the Mortgagee shall
consider necessary or desirable and, if required by the Mortgagee, specifically
assigning those insurances to the Mortgagee by such documents as the Mortgagee may
require; and





 


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	 	6.16	 	not without the prior written consent of the Mortgagee to let the Vessel on any
demise charter or on any time charter, consecutive voyage charter or other contract of
employment which (inclusive of any extension option) is capable of exceeding twelve
months nor to employ the Vessel in any way which might impair the security created by
the Security Documents; and

	 
	 	6.17	 	not without the prior written consent of the Mortgagee to enter into any
agreement or arrangement for sharing the Earnings; and

	 
	 	6.18	 	duly to perform (unless prevented by force majeure), and to take all necessary
steps to enforce the performance by charterers and shippers of all material provisions
of charterparties and other contracts of employment and all bills of lading and other
contracts relating to the Vessel; and

	 
	 	6.19	 	not following the occurrence and during the continuation of an Event of Default
to let the Vessel on charter or renew or extend any charter or other contract of
employment of the Vessel, nor agree to do so, without the prior written consent of the
Mortgagee; and

	 
	 	6.20	 	to pay and discharge when due from time to time all taxes, levies, duties,
fines and penalties imposed on the Vessel or the Earnings, or on the Owner, its income,
profits, capital gains or any of its property, except those amounts that are being
contested in good faith by appropriate proceedings and where the Owner has set aside
sufficient reserves therefor, and where the failure to pay such amounts would not
reasonably be expected to result in a Material Adverse Effect; and

	 
	 	6.21	 	not at any time during the Facility Period without the prior written consent of
the Mortgagee (and then subject to such conditions as the Mortgagee may reasonably
impose) to create nor grant nor permit to exist any Encumbrance over the Vessel or any
share in the Vessel or any of the Assigned Property other than any Permitted
Encumbrances existing from time to time; and

	 
	 	6.22	 	to notify the Mortgagee promptly after the Owner becomes aware of any legal
proceedings or arbitration involving the Vessel or the Owner where the amount claimed
by any party (ignoring any counterclaim or defence of set-off) exceeds or may
reasonably be expected to exceed the Threshold Amount; and





 


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	 	6.23	 	not without the prior written consent of the Mortgagee to put the Vessel into
the possession of any person for the purpose of work or repairs estimated to cost more
than the Threshold Amount (except for repairs the cost of which is recoverable under
the Insurances, except for applicable deductibles, and in respect of which the insurers
have agreed to make payment in accordance with any applicable loss payable clause); and

	 
	 	6.24	 	to keep proper books of account in respect of the Vessel and the Earnings and
as and when reasonably required by the Mortgagee to make such books available for
inspection on behalf of the Mortgagee provided there shall be no disruption or
interference to the Owner’s business or operations; and

	 
	 	6.25	 	not without the prior written consent of the Mortgagee, which consent will not
be unreasonably withheld or delayed, to appoint anyone as commercial or technical
managers of the Vessel, nor to terminate nor materially vary the arrangements for the
commercial or technical management of the Vessel, nor to permit the commercial or
technical management of the Vessel to be sub-contracted or delegated to any third
party; and

	 
	 	6.26	 	to take all reasonable precautions to prevent any infringements by the Owner of
any anti drug legislation in any jurisdiction in which the Vessel shall trade and in
particular (if the Vessel is to trade in the United States of America) to take all
reasonable precautions to prevent any infringements of the Anti-Drug Abuse Act of 1986
of the United States of America and for this purpose, if required, to enter into a
“Carrier Initiative Agreement” with the United States’ Customs Service and, if
required, to procure that the same or a similar agreement is maintained in full force
and effect and that the Owner’s obligations under that agreement are performed in all
material respects in respect of the Vessel; and





 


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	 	6.27	 	to comply, or procure that the operator of the Vessel will comply in all
material respects, with the International Management Code for the Safe Management of
Ships and for Pollution Prevention adopted by the International Maritime Organisation
(as the same may be amended from time to time) (the “ISM Code”) or any replacement of
the ISM Code and in particular, without limitation, to:







	 	6.27.1	 	procure that the Vessel remains for the duration of the Facility Period
subject to a safety management system developed and implemented in accordance
with the ISM Code;

	 
	 	6.27.2	 	maintain for the Vessel throughout the Facility Period a valid and current
safety management certificate issued under paragraph 13.7 of the ISM Code
(“SMC”) and provide a copy to the Mortgagee;

	 
	 	6.27.3	 	procure that the company responsible for the Vessel’s compliance with the ISM
Code under paragraph 1.1.2 of the ISM Code (“ISM Company”) maintains throughout
the Facility Period a valid and current Document of Compliance issued for the
ISM Company under paragraph 13.2 of the ISM Code (“DOC”) and provide a copy to
the Mortgagee; and

	 
	 	6.27.4	 	notify the Mortgagee promptly in writing of any actual or threatened
withdrawal, suspension, cancellation or modification of the SMC of the Vessel
or of the DOC of the ISM Company; and







	 	6.28	 	to comply in relation to the Vessel with the International Ship and Port
Facility Security Code adopted by the International Maritime Organisation (as the same
may be amended from time to time) (the “ISPS Code”) or any replacement of the ISPS Code
and in particular, without limitation, to:







	 	6.28.1	 	procure that the Vessel and the company responsible for the Vessel’s
compliance with the ISPS Code comply with the ISPS Code;

	 
	 	6.28.2	 	maintain for the Vessel throughout the Facility Period a valid and current
International Ship Security Certificate issued under the ISPS Code (“ISSC”) and
provide a copy to the Mortgagee;

	 
	 	6.28.3	 	notify the Mortgagee immediately in writing of any actual or threatened
withdrawal, suspension, cancellation or modification of the ISSC; and





 


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	 	6.29	 	to comply in relation to the Vessel with Annex VI (Regulations for the
Prevention of Air Pollution from Ships) to the International Convention for the
Prevention of Pollution from Ships 1973 (as modified in 1978 and 1997) (as the same may
be amended from time to time) (“Annex VI”) or any replacement of Annex VI and in
particular, without limitation, to:







	 	6.29.1	 	procure that the Vessel’s master and crew are familiar with, and that the
Vessel complies with, Annex VI; and

	 
	 	6.29.2	 	maintain for the Vessel throughout the Facility Period a valid and current
International Air Pollution Prevention Certificate issued under Annex VI
(“IAPPC”) and provide a copy to the Mortgagee; and

	 
	 	6.29.3	 	notify the Mortgagee promptly in writing of any actual or threatened
withdrawal, suspension, cancellation or modification of the IAPPC.







	7	 	Mortgagee’s Powers







	 	7.1	 	If an Event of Default shall occur and be continuing, and the Agent shall
demand payment of all or any part of the Indebtedness, the security constituted by the
Mortgage and this Deed shall become immediately enforceable and the Mortgagee shall be
entitled to exercise all or any of the rights, powers, discretions and remedies vested
in the Mortgagee by this Clause without any requirement for any court order or
declaration that an Event of Default has occurred. The Mortgagee’s right to exercise
those rights, powers, discretions and remedies shall be in addition to and without
prejudice to all other rights, powers, discretions and remedies to which it may be
entitled, whether by statute or otherwise. The Mortgagee shall be entitled to exercise
its rights, powers, discretions and remedies, and whether or not any previous default
shall have been waived, and in particular without the limitations contained in Section
103 of the Law of Property Act 1925 or any statutory provision which the Mortgagee
considers analogous to that section under the law of any other relevant jurisdiction.

	 
	 	7.2	 	In the circumstances described in Clause 7.1, the Mortgagee shall be entitled
(but not obliged) to:







	 	7.2.1	 	take possession of the Vessel wherever she may be; and/or

	 
	 	7.2.2	 	discharge the master and crew of the Vessel and employ a new
master and crew; and/or

	 
	 	7.2.3	 	navigate the Vessel to such places as the Mortgagee may decide
or detain or lay up the Vessel; and/or





 


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	 	7.2.4	 	in the name of the Mortgagee or the name of the Owner, demand,
sue for, receive and give a good receipt for all sums due to the Owner in
connection with the Vessel and, in the name of the Mortgagee or the name of the
Owner or the name of the Vessel, commence such legal proceedings as it may
consider appropriate, or conduct the defence of any legal proceedings commenced
against the Vessel or the Owner in its capacity as owner of the Vessel; and/or

	 
	 	7.2.5	 	sell or dispose of all or any shares in the Vessel either by
private treaty or auction, on such terms as the Mortgagee shall think fit
(including deferred payment terms and with or without the benefit of any
charterparty or other contract of employment), with the power to make a loan on
such terms as the Mortgagee may decide to any prospective purchaser to assist
in the purchase of the Vessel, and the power to postpone any sale, without
being liable for any loss caused by any such sale or the postponement of any
such sale; and/or

	 
	 	7.2.6	 	replace or repair any part of the Vessel or alter her to suit
the Mortgagee’s requirements and put her through all appropriate surveys;
and/or

	 
	 	7.2.7	 	employ agents, servants and others on such terms as the
Mortgagee may in its discretion determine; and/or

	 
	 	7.2.8	 	charter or load the Vessel on such terms and for the carriage
of such cargoes as the Mortgagee may in its discretion determine.







	 	7.3	 	For the avoidance of doubt, if the Mortgagee takes any action or enters into or
completes any transaction pursuant to Clause 7.2 after an Event of Default has been
remedied, that action or transaction shall not be affected by the remedying of the
Event of Default.






 


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	8	 	Ancillary Provisions







	 	8.1	 	In connection with the exercise of its rights, powers, discretions and remedies
under Clause 7 or otherwise as mortgagee of the Vessel, the Mortgagee shall have power
to buy in, rescind or vary any contract for sale of the Vessel and generally to do all
things in connection with the sale of the Vessel as it shall think fit.






	 	8.2	 	On any sale of the Vessel by the Mortgagee, the purchaser shall not be bound to
enquire whether the Mortgagee’s power of sale has become exercisable or whether its
exercise has become expedient, and the purchaser shall not be affected by any notice
that the sale was or may have been irregular in any way. The receipt of the Mortgagee
for any amounts paid to it shall be a complete discharge to the purchaser who shall not
be concerned with the application of the payment or be answerable for any
misapplication. As regards any purchaser, any such sale shall be deemed to be within
the power of sale conferred on the Mortgagee by this Deed and at law and any remedy of
the Owner in respect of any irregularity or impropriety shall be in damages only.

	 
	 	8.3	 	If the Mortgagee takes possession of the Vessel and until sale the Mortgagee
shall be entitled to deal with the Vessel in all respects as if it were the owner of
the Vessel.

	 
	 	8.4	 	The Mortgagee shall be entitled to recover from the Owner on demand all losses,
expenses, payments and disbursements incurred by the Mortgagee in or about or
incidental to the exercise by it of any of its rights, powers, discretions and remedies
under Clause 7 or otherwise as mortgagee of the Vessel together with interest at the
Default Rate.

	 
	 	8.5	 	No failure to exercise, nor any delay in exercising, on the part of the
Mortgagee, any right or remedy under Clause 7 or otherwise as mortgagee of the Vessel
shall operate as a waiver, nor shall any single or partial exercise of any right or
remedy prevent any further or other exercise or the exercise of any other right or
remedy. The rights and remedies provided in this Deed are cumulative and not exclusive
of any rights or remedies provided by law.

	 
	 	8.6	 	The Mortgagee may at any time and from time to time delegate to any person all
or any of its rights, powers, discretions and remedies pursuant to the Security
Documents on such terms as the Mortgagee may consider appropriate (including the power
to sub-delegate).





 


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	 	8.7	 	Every right, power, discretion and remedy conferred on the Mortgagee under or
pursuant to the Security Documents shall be cumulative and in addition to every other
right, power, discretion or remedy to which the Mortgagee may at any time be
entitled by law or in equity. The Mortgagee may exercise each of its rights,
powers, discretions and remedies as often and in such order as it deems appropriate.

	 
	 	8.8	 	Neither the Mortgagee nor any agent or employee of the Mortgagee shall be
liable for any losses which may be incurred in or about the exercise of any of the
rights, powers, discretions or remedies of the Mortgagee under or pursuant to the
Mortgage or this Deed, nor liable as mortgagee in possession for any loss on
realisation or for any neglect or default of any nature for which a mortgagee in
possession might otherwise be liable other than any loss resulting from the wilful
misconduct or gross negligence of the Mortgagee.







	9	 	Receiver







	 	9.1	 	At any time after the occurrence and during the continuation of an Event of
Default the Mortgagee may (but shall not be obliged to) appoint any person to be
receiver and/or manager of the Vessel and/or any of the Assigned Property.

	 
	 	9.2	 	The appointment of a receiver and/or manager by the Mortgagee may be made in
writing under the hand of any authorised signatory of the Mortgagee.

	 
	 	9.3	 	The Mortgagee shall have the power to authorise any joint receiver and/or
manager to exercise any or all of his powers independently of any other joint receiver
and/or manager.

	 
	 	9.4	 	The Mortgagee may at any time and from time to time remove any receiver and/or
manager from office and appoint a replacement.

	 
	 	9.5	 	The Mortgagee shall have the power from time to time to fix the remuneration of
any receiver and/or manager on the basis of charging from time to time adopted by him
or his firm and any receiver and/or manager shall not be limited to any maximum amount
or rate specified by law.





 


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	 	9.6	 	Any receiver and/or manager appointed pursuant to this Clause shall be the
agent of the Owner and the Owner shall be solely responsible for his acts and defaults
and for the payment of his remuneration.

	 
	 	9.7	 	Any receiver and/or manager appointed pursuant to this Clause shall have all
the powers provided for in Schedule 1 of the Insolvency Act 1986 without restriction,
and in particular without the restrictions contained in Section 103 of the Law of
Property Act 1925 or any other statutory or other restriction which the Mortgagee
may consider analogous under the laws of any other jurisdiction.

	 
	 	9.8	 	Without limitation, any receiver and/or manager shall have power on behalf of
the Owner (and at the Owner’s expense) to do or omit to do anything which the Owner
could do or omit to do in relation to the Vessel or any of the Assigned Property and
may exercise all or any of the rights, powers, discretions and remedies conferred on
the Mortgagee by the Security Documents or at law.

	 
	 	9.9	 	No receiver and/or manager shall be liable as mortgagee in possession to
account or be liable for any loss on realisation of, or any default of any nature in
connection with, the Vessel or any of the Assigned Property or the exercise of any of
the rights, powers, discretions and remedies vested in the receiver and/or manager by
virtue of the Security Documents or at law.







	10	 	Application of Moneys

	 
	 	 	All amounts received by the Mortgagee arising from the exercise by the Mortgagee of its
rights, powers, discretions and remedies under or pursuant to the Mortgage and this Deed
(including, without limitation, all amounts received by the Mortgagee in connection with the
taking possession and/or sale of the Vessel, any chartering or other use of the Vessel by
the Mortgagee, and any claims for damages or claims on any insurance received by the
Mortgagee while in possession of or while chartering or using the Vessel) shall, unless
otherwise agreed by the Mortgagee or otherwise expressly provided in the Loan Agreement, be
applied by the Mortgagee in or towards satisfaction, or by way of retention on account, of
the Indebtedness, in accordance with clause 12.3 of the Loan Agreement.






 


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	11	 	Power of Attorney







	 	11.1	 	The Owner by way of security irrevocably appoints the Mortgagee and any
receiver and/or manager appointed by the Mortgagee severally to be its attorney (with
unlimited power of substitution and delegation) with power (in the name of the Owner or
otherwise) to do all acts which the Owner could do in connection with the Vessel or the
Assigned Property including, without limitation, to execute and deliver a bill of sale
transferring title in the Vessel to a third party and to give a good receipt for any
purchase price.






	 	11.2	 	The Mortgagee agrees that it will not, nor permit any receiver and/or manager
appointed by it to, exercise any of its powers as attorney of the Owner unless an Event
of Default shall have occurred and be continuing, but the exercise of any such powers
by the Mortgagee shall not put any person dealing with the Mortgagee on enquiry as to
whether an Event of Default has occurred.

	 
	 	11.3	 	The exercise by the Mortgagee or by any receiver and/or manager of any of their
powers as attorney of the Owner shall be conclusive evidence (as between the Mortgagee
and any third party) of their right to do so.







	12	 	Partial Invalidity

	 
	 	 	If, at any time, any provision of the Mortgage or this Deed is or becomes illegal, invalid
or unenforceable in any respect under any law of any jurisdiction, neither the legality,
validity or enforceability of the remaining provisions nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction will in any way be
affected or impaired.

	 
	13	 	Further Assurance

	 
	 	 	The Owner agrees that from time to time on the written request of the Mortgagee it will
promptly execute and deliver to the Mortgagee all further documents which the Mortgagee may
require for the purpose of perfecting or protecting the security intended to be created by
the Mortgage and this Deed.

	 
	14	 	Miscellaneous







	 	14.1	 	In the event of there being any conflict between this Deed and the Loan
Agreement, the Loan Agreement shall prevail.

	 
	 	14.2	 	All the covenants and agreements of the Owner in this Deed shall bind the Owner
and its successors and permitted assignees and shall inure to the benefit of the
Finance Parties and their respective successors, transferees and assignees.

	 
	 	14.3	 	The representations and warranties on the part of the Owner contained in this
Deed shall survive the execution of the Mortgage and this Deed and the registration of
the Mortgage.





 


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	 	14.4	 	The rights of the Mortgagee under the Mortgage and this Deed shall not be
affected by any change in the constitution of the Owner or by the liquidation,
bankruptcy or insolvency of the Owner.

	 
	 	14.5	 	No variation or amendment of this Deed shall be valid unless in writing and
signed on behalf of the Owner and the Mortgagee.

	 
	 	14.6	 	Other than the Finance Parties, a person who is not a party to this Deed has no
right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the
benefit of any term of this Deed.







	15	 	Discharge of Security







	 	15.1	 	Following the expiry of the Facility Period the Mortgagee will, at the cost of
and on the request of the Owner, promptly execute and deliver to the Owner a discharge,
release or reassignment of the Mortgage.

	 
	 	15.2	 	Any discharge, release or reassignment by the Mortgagee of any of the security
constituted by, or any of the obligations of the Owner contained in, any of the
Security Documents shall be (and be deemed always to have been) void if any act
(including, without limitation, any payment) as a result of which such discharge,
release or reassignment was given or made is subsequently wholly or partially rescinded
or avoided by operation of any law.







	16	 	Notices

	 
	 	 	The provisions of clause 16 of the Loan Agreement shall apply (mutatis mutandis) to this
Deed as if it were set out in full with references to this Deed substituted for references
to the Loan Agreement.







	17	 	Counterparts

	 
	 	 	This Deed may be executed in any number of counterparts, and this has the same effect as if
the signatures on the counterparts were on a single copy of this Deed.





 


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	18	 	Law and Jurisdiction







	 	18.1	 	This Deed shall in all respects be governed by and interpreted in accordance
with English law.

	 
	 	18.2	 	For the exclusive benefit of the Mortgagee, the Owner irrevocably agrees that
the courts of England are to have jurisdiction to settle any disputes which may arise
out of or in connection with this Deed and that any proceedings may be brought in those
courts.

	 
	 	18.3	 	Nothing contained in this Clause shall limit the right of the Mortgagee to
commence any proceedings against the Owner in any other court of competent jurisdiction
nor shall the commencement of any proceedings against the Owner in one or more
jurisdictions preclude the commencement of any proceedings in any other jurisdiction,
whether concurrently or not.

	 
	 	18.4	 	The Mortgagee shall in addition have the right to arrest and take action
against the Vessel and/or any other vessel for the time being belonging to the Owner
wherever it or they may be, for which purpose the Owner irrevocably agrees that any
claim form, notice, judgment or other legal process may be served on the Owner in the
manner set out in Clause 18.6 or on the Vessel or on the master (or anyone acting as
the master) of the Vessel or of the vessel against which the action is taken, which
shall be deemed good service on the Owner, the Vessel or such other vessel for all
purposes.

	 
	 	18.5	 	The Owner irrevocably waives any objection which it may now or in the future
have to the laying of the venue of any proceedings in any court referred to in this
Clause and any claim that those proceedings have been brought in an inconvenient or
inappropriate forum, and irrevocably agrees that a judgment in any proceedings
commenced in any such court shall be conclusive and binding on it and may be enforced
in the courts of any other jurisdiction.

	 
	 	18.6	 	Without prejudice to any other mode of service allowed under any relevant law,
the Owner:







	 	18.6.1	 	irrevocably appoints USG (U.K.) Ltd, 1 Swan Road, South West Industrial
Estate, Peterlee, County Durham, SR8 2HS, Attention: Secretary, as its agent
for service of process in relation to any proceedings before the English
courts; and

	 
	 	18.6.2	 	agrees that failure by a process agent to notify the Owner of the process
will not invalidate the proceedings concerned.





 


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IN WITNESS of which this Deed has been duly executed and delivered the day and year first before
written.



	 	 	 	 	 	 	 	 	 
	SIGNED SEALED and DELIVERED
	 	 	)	 	 	 	 	 
	as a DEED
	 	 	)	 	 	 	 	 
	by GYPSUM TRANSPORTATION
	 	 	)	 	 	 	 	 
	LIMITED
	 	 	)	 	 	 	 	 
	acting by
	 	 	)	 	 	 	 	 
	 
	 	 	)	 	 	 	 	 
	its duly authorised
	 	 	)	 	 	 	 	 
	 
	 	 	)	 	 	 	 	 
	in the presence of:
	 	 	)	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SIGNED and DELIVERED
	 	 	)	 	 	 	 	 
	as a DEED
	 	 	)	 	 	 	 	 
	by DVB BANK SE
	 	 	)	 	 	 	 	 
	acting by
	 	 	)	 	 	 	 	 
	 
	 	 	)	 	 	 	 	 
	its duly authorised
	 	 	)	 	 	 	 	 
	 
	 	 	)	 	 	 	 	 
	in the presence of:
	 	 	)	 	 	 	 	 







 


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