Document:

Exhibit 10.8

 

Form No.9A

 

	
  [LOGO]

  	
  [SEAL]  

  	
  /s/ Anthony J. Mangion

  
	
   

  	
   

  	
  ANTHONY J. MANGION

  
	
  Mortgage ‘B’ entered this 1 July 2004

  	
  MORTGAGE (Body Corporate)

  	
  Registrar of Ships

  
	
  at 1804 hours.

  	
   

  	
  Valletta, Malta

  
	
   

  	
  /s/ [ILLEGIBLE]

  	
   

  	
   

  
	
   

  	
  [SEAL]

  	
   

  	
   

  

 

	
  Official No.

  	
   

  	
  Name of
  Ship

  	
   

  	
  Home
  Port

  	
   

  	
  No.,
  Year and Port of Registry

  	
   

  	
  Whether
  a Sailing. Steam or Motor Ship

  	
   

  	
  Power of
  Engines, if any

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7452

  	
   

  	
  GENMAR
  TRADER

  	
   

  	
  VALLETTA

  	
   

  	
  56 IN
  2002, VALLETTA

  	
   

  	
  MOTOR
  SHIP

  	
   

  	
  11,220
  KW

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Metres

  	
   

  	
  Centimetres

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Length (Article 2
  (8))

  	
   

  	
  236

  	
   

  	
  72

  	
   

  	
  Gross Tonnage

  	
  57,082

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  and as described in more detail in the Certificate of
  the Surveyor and the Register.

  	
   

  
	
  Breadth (Reg 2
  (3))

  	
   

  	
  38

  	
   

  	
  00

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Moulded Depth
  Amidships to Upper Deck (Reg 2 (2))

  	
   

  	
  22

  	
   

  	
  30

  	
   

  	
  Net Tonnage

  	
  25,449

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

WHEREAS (a) there is an indebtedness of (1) GENMAR
TRADER LTD., a company registered in Malta whose registered office is situated
in 198 Old Bakery Street, Valletta, Malta (hereinafter sometimes referred to as
the “Mortgagor”) towards (2) NORDEA BANK FINLAND PLC, NEW YORK BRANCH, a
limited liability company organized under the laws of Finland with offices at
437 Madison Avenue, 21st Floor, New York, NY 10022, U.S.A. (hereinafter
sometimes called the “Mortgagee”, which expression shall include its successors
and assigns), as Security Trustee regulated by (A) a Credit Agreement dated as
of 1 st of July, 2004 (as amended, modified, restated and/or supplemented from
time to time, the “Credit Agreement”) made among (i) General Maritime Corporation,
a Marshall Islands corporation, as borrower (the “Borrower”), (ii) the banks
and financial institutions listed in Schedule 1 to the Credit Agreement, as
Lenders (the “Lenders”), and (iii) the Mortgagee, (B) the Subsidiaries
Guaranty, dated as of 1st of July, 2004 ( as amended, modified, restated and/or
supplemented from time to time, the “Guaranty”) executed by the Mortgagor in
favour of the Secured Creditors (as defined in the Credit Agreement) as
represented by the Mortgagee as Administrative Agent, respecting, inter alia,
certain obligations of the Borrower under the Credit Agreement, and (C) a Deed
of Covenants supplemental to this Mortgage dated the date hereof (as the same
may be amended, modified, restated and/or supplemented from time to time, the
“Deed of Covenants”) between the Mortgagor and the Mortgagee, and WHEREAS
pursuant to the Credit Agreement the Mortgagee was appointed as trustee for the
purpose, inter alia, of receiving, registering, assigning, discharging,
assigning and enforcing any security for the benefit of the Secured Creditors,
and WHEREAS the Mortgagee has entered into the Deed of Covenants and is
accepting this Mortgage in its capacity as Security Trustee and in the interest
and for the benefit of the Secured Creditors, and WHEREAS pursuant to the
Credit Agreement the Mortgagor has agreed to and does hereby execute this
Mortgage and supplemental Deed of Covenants in favour of the Mortgagee as
Security Trustee for the purpose of securing (aa) payment to the Mortgagee of all
sums for the time being owing to the Mortgagee on the said indebtedness,
including all sums due or to become due to the Mortgagee under the Credit
Agreement, the Subsidiaries Guaranty and the Deed of Covenants (whether
actually, contingently, presently and/or in the future) as well as all costs,
charges, expenses or other monies connected with or for the purpose of
creating, preserving, maintaining, administering, protecting, enforcing or
attempting to enforce this security, in the manner and at the times set forth
in the Credit Agreement, the Subsidiaries Guaranty and the Deed of Covenants
and (bb) the performance by the Mortgagor of all its obligations under Credit
Agreement, the Subsidiaries Guaranty and Deed of Covenants and whereas the
amount of principal and interest and any moneys due at any given time can be
ascertained by referenced to the Credit Agreement and the Deed of Covenants
and/or the books of account (or other accounting records) of the Mortgagee
and/or to a certificate issued by the Mortgagee, which amount shall, saving
manifest error, be the certain and liquidated amounts due by the Mortgagor to
the Mortgagee as aforesaid, and WHEREAS the Mortgagor is prohibited from
creating any further mortgages over or from transferring the vessel above
particularly described without consent of the Mortgagee;

 

Now we the (b) Genmar Trader Ltd.
in consideration of the premises for ourselves and our successors, covenant
with the said (c) Nordea Bank Finland plc,
New York Branch and (d) its assigns, to pay to him or them or it the
sums for the time being due on this security, whether by way of principal or
interest, at the times and manner aforesaid. And for the purpose of better
securing to the said (c) Nordea Bank Finland plc,
New York Branch the payment of such sums as last aforesaid, we
hereby mortgage to the said (c) Nordea Bank Finland plc,
New York Branch all the shares, of which we are the Owners in the
Ship above particularly described, and in her boats and appurtenances.

 

Lastly, we for ourselves and our successors,
covenant with the said (c) Nordea Bank Finland plc,
New York Branch and (d) its assigns that we have power to mortgage
in manner aforesaid the above mentioned shares, and that the same are free from
encumbrances (e).

 

Executed this 1st day of July Two Thousand and Four in
the presence of (g) Dr. Philip Bianchi

 

	
   

  	
  Signature of witness

  	
       /s/ [ILLEGIBLE]

  	
   

  	
  Signature/s (f) 

  	
  /s/ K.K. BORG CARDONA LL.M(LOND) LL.D

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  for and on behalf of (b) Genmar Trader Ltd.

  
	
   

  

 

(a) Here state by way of recital the details of the security, giving
the full name of Mortgagor or Mortgagee, the nature of the transaction and the
manner and time of payment. (b) Name of the Company. (c) Full name of
Mortgagee. (d) “his”, “their” or “its” (e) If any
prior encumbrance, add “save as appears by the Registry of the said Ship” (f)
Signature/s and description of duly authorised representative/s (g) Name and
description of witness.

NOTE - A Mortgage of a Maltese Ship shall have no effect unless and
until the Mortgage Deed is recorded at the Port of Registry of the Ship. Also,
a Mortgage takes its priority from the date of production for registry, not
from the date of the instrument.

NOTE - Registered Owners or Mortgagees are reminded of the importance
of keeping the Ship’s Registrar informed of any change of residence on their
part.

 

	
  M.S. (R) 13

  	
  PTO

  

 

 

DEED OF COVENANTS

TO ACCOMPANY A FIRST PRIORITY STATUTORY MORTGAGE

 

 

ON MALTA FLAG VESSEL

 

 

GENMAR TRADER

OFFICIAL NO. 7452

 

 

executed by

 

 

GENMAR TRADER LTD.,

as Shipowner

 

in favor of

 

NORDEA BANK FINLAND PLC, NEW YORK BRANCH,

as Trustee and as Mortgagee

 

 

July 1, 2004

 

 

TABLE
OF CONTENTS

 

	
  ARTICLE I

  	
   

  	
   

  
	
  Section 1.

  	
  Existence:
  Authorization

  	
   

  
	
  Section
  2.

  	
  Title to Vessel

  	
   

  
	
  Section
  3.

  	
  ISM
  and ISPS Compliance

  	
   

  
	
  ARTICLE II

  	
   

  	
   

  
	
  Section
  1.

  	
  Payment
  of Indebtedness

  	
   

  
	
  Section
  2.

  	
  Mortgage
  Recording

  	
   

  
	
  Section
  3.

  	
  Lawful
  Operation

  	
   

  
	
  Section
  4.

  	
  Payment of Taxes

  	
   

  
	
  Section
  5.

  	
  Prohibition
  of Liens

  	
   

  
	
  Section
  6.

  	
  Notice
  of Mortgage

  	
   

  
	
  Section
  7.

  	
  Removal of
  Liens

  	
   

  
	
  Section
  8.

  	
  Release
  from Arrest

  	
   

  
	
  Section 9.

  	
  Maintenance

  	
   

  
	
  Section
  10.

  	
  Inspection;
  Reports

  	
   

  
	
  Section
  11.

  	
  Flag; Home Port

  	
   

  
	
  Section 12.

  	
  No Sales, Transfers or
  Charters

  	
   

  
	
  Section 13.

  	
  Insurance

  	
   

  
	
  Section 14.

  	
  Reimbursement for Expenses

  	
   

  
	
  Section
  15.

  	
  Performance
  of Charters

  	
   

  
	
  Section
  16.

  	
  Change
  in Ownership

  	
   

  
	
  Section 17.

  	
  Prepayment if Event of Loss

  	
   

  
	
  ARTICLE III

  	
   

  	
   

  
	
  Section
  1.

  	
  Events of Default: Remedies

  	
   

  
	
  Section 2.

  	
  Power of Sale

  	
   

  
	
  Section
  3.

  	
  Power
  of Attorney-Sale

  	
   

  
	
  Section 4.

  	
  Power of
  Attorney-Collection

  	
   

  
	
  Section
  5.

  	
  Delivery
  of Vessel

  	
   

  
	
  Section 6.

  	
  Mortgagee to Discharge
  Liens

  	
   

  
	
  Section
  7.

  	
  Payment
  of Expenses

  	
   

  
	
  Section
  8.

  	
  Remedies
  Cumulative

  	
   

  
	
  Section
  9.

  	
  Cure of
  Defaults

  	
   

  
	
  Section 10.

  	
  Discontinuance of
  Proceedings

  	
   

  
	
  Section
  11.

  	
  Application
  of Proceeds

  	
   

  
	
  Section
  12.

  	
  Possession Until Default

  	
   

  
	
  Section 13.

  	
  Severability of
  Provisions. etc

  	
   

  
	
  ARTICLE IV

  	
   

  	
   

  
	
  Section
  1

  	
  Successors
  and Assigns

  	
   

  
	
  Section
  2.

  	
  Power
  of Substitution

  	
   

  
	
  Section
  3.

  	
  Counterparts

  	
   

  
	
  Section 4.

  	
  Notices

  	
   

  
	
  Section
  5.

  	
  Statutory
  Mortgage

  	
   

  
	
  Section
  6.

  	
  Further
  Assurances

  	
   

  
	
  Section
  7.

  	
  Governing Law

  	
   

  
	
  Section 8.

  	
  Additional Rights of
  the Mortgagee

  	
   

  

 

 

DEED OF COVENANTS

 

GENMAR TRADER

 

This
Deed of Covenants made July 1, 2004 (this “Deed”), between GENMAR TRADER LTD.,
a Malta company (the “Shipowner”), and NORDEA BANK FINLAND PLC, NEW YORK BRANCH
not in its individual capacity, but solely as Security Trustee (together with
its successors in trust and assigns, the “Mortgagee”), pursuant to the Credit
Agreement referred to below.

 

W I T N E S S E T
H

 

WHEREAS:

 

A.                                   The Shipowner is the sole owner of the whole
of the Malta flag vessel GENMAR TRADER, Official Number 7452 of 57,082 gross
tons and 25,449 net tons built in 1991 at Hyundai Heavy Industries Co., Ltd.,
Korea, with her home port at Valetta, Malta, which together with all interest
therein and all of the boilers, engines, machinery, masts, spars, boats,
anchors, cables, chains, rigging, tackle, capstans, outfit tools, pumps and
pumping equipment, apparel, furniture, drilling equipment, fittings, equipment,
spare parts, and all other appurtenances thereunto appertaining or belonging,
whether now owned or hereafter acquired, and also any and all additions,
improvements, renewals and replacements hereafter made in or to such vessel or
any part thereof, including all items and appurtenances aforesaid (such vessel,
together with all of the foregoing, being herein called the “Vessel”).

 

B.                                     General Maritime Corporation, a Marshall
Islands corporation (the “Borrower”), the Lenders party thereto from time to
time, and Nordea Bank Finland plc, New York Branch, as Administrative Agent and
as Collateral Agent, have entered into a Credit Agreement dated as of July 1,
2004 (as the same may be amended, supplemented or otherwise modified from time
to time, the “Credit Agreement”), providing for the making of loans to the
Borrower in the principal amount of up to Eight Hundred Twenty-Five Million
United States Dollars (U.S. $825,000,000) (the Lenders, the Administrative
Agent and Collateral Agent, collectively, the “Lender Creditors”).  A copy of the form of the Credit Agreement
(without attachments) is attached hereto as Exhibit A and made a part hereof.  Except as otherwise defined herein,
capitalized terms used herein and defined in the Credit Agreement shall be used
herein as so defined.

 

C.                                     The Borrower may at any time and from time to
time enter into, or guaranty the obligations of one or more Subsidiary
Guarantors or any of their respective Subsidiaries under, one or more Interest
Rate Protection Agreements or Other Hedging Agreements with respect to the
Loans (and/or the Commitments) with one or more Lenders or any Affiliate
thereof (each such Lender or Affiliate, even if the respective Lender
subsequently ceases to be a Lender under the Credit Agreement for any reason,
together with such Lender’s or Affiliate’s successors and assigns, if any, collectively,
the “Other Creditors” and, together with the Lender Creditors, the “Secured
Creditors”).  The estimated aggregate
notional amount of the liabilities of the Borrower under the Interest Rate Protection
Agreements or Other Hedging Agreements entered into with respect to the Loans
(and/or the Commitments) is Fifty Million United States Dollars (U.S.
$50,000,000).

 

D.                                    The Shipowner is a wholly owned subsidiary of
the Borrower.

 

 

E.                                      The Shipowner entered into the Subsidiaries
Guaranty in favor of the Secured Creditors pursuant to which the Shipowner has
guaranteed (i) to the Lender Creditors, all obligations of the Borrower under
the Credit Agreement and each other Credit Document to which the Borrower is a
party, and (ii) to each of the Other Creditors, all obligations of the Borrower
under each Interest Rate Protection Agreement and each Other Hedging Agreement entered
into with respect to the Loans (and/or the Commitments).  A copy of the form of the Subsidiaries
Guaranty is attached hereto as Exhibit B and made a part hereof.  The Lenders have advanced the Term Loans
pursuant to the Credit Agreement and have committed to make the Revolving Loans
subject to the terms and on the conditions set forth in the Credit Agreement;
the Shipowner acknowledges that it is justly indebted to the Secured Creditors
under the Subsidiaries Guaranty.

 

F.                                      Contemporaneously with the execution of this
Deed there has been executed and registered by the Shipowner in favor of the
Mortgagee a first priority statutory Maltese ship mortgage (the “Mortgage”) to
secure its obligation under the Subsidiaries Guaranty according to the terms thereof,
and the payment of all other such sums due or which may become due to the
Mortgagee pursuant to the Subsidiaries Guaranty, constituting a First Preferred
Mortgage over the said Vessel and the Shipowner has agreed to execute this Deed
collateral to the Mortgage and to the security thereby created.

 

G.                                     This Deed shall be read together with the
Subsidiaries Guaranty, but in the case of any inconsistency between this Deed
and the Subsidiaries Guaranty, the provisions of this Deed shall prevail, but
only to the extent required by Maltese law.

 

H.                                   Pursuant to the Credit Agreement, the
Mortgagee has agreed to act as Trustee for the Secured Creditors.

 

NOW,
THIS DEED WITNESSETH AS FOLLOWS:

 

1.                                       In consideration of the premises and other
good and valuable consideration, the Shipowner hereby covenants with the
Mortgagee to pay each and every sum of money that may be or become owing under
the terms of the Subsidiaries Guaranty and the Mortgage or either of them at
the time and in the manner specified therein, (all such obligations and other
sums hereinafter called the “Indebtedness hereby secured”).

 

2.                                       By way of security for payment of the
Indebtedness secured hereby, the Shipowner hereby MORTGAGE AND CHARGES to and
in favor of the Mortgagee all its interest, present and future, in the Vessel
and proceeds thereof (which the Shipowner hereby warrants to be free at the date
hereof from any other charges or encumbrances whatsoever).

 

3.                                       The Shipowner and the Mortgagee hereby
covenant with each other that the security created by this Deed, the
Subsidiaries Guaranty and any of the other Credit Documents to which the Shipowner
is a party shall be held by the Mortgagee as continuing security, and that the
security so created shall not be satisfied by any intermediate payment of any
part of the Indebtedness secured hereby.

 

4.                                       Upon the Mortgagee being satisfied that the
Indebtedness secured hereby has been unconditionally and irrevocably paid and
discharged in full, and following a written request therefor from the
Shipowner, the Mortgagee will, subject to being indemnified in scope and
substance to its

 

2

 

satisfaction
for the costs and expenses incurred by it in connection therewith, release the
security created by the Mortgage and this Deed.

 

5.                                      The Shipowner shall remain liable to fulfill
all obligations assumed by it in relation to the Vessel and the Mortgagee shall
be under no obligation of any kind whatsoever in respect thereof or be under
any liability whatsoever in event of any failure by the Shipowner to perform
its obligations in respect thereof.

 

It
is hereby covenanted, declared and agreed that the property above described is
to be held subject to the further covenants, conditions, terms and uses
hereinafter set forth.

 

The
Shipowner covenants and agrees with the Mortgagee as follows:

 

ARTICLE I

 

Representations and Warranties of the Shipowner

 

Section 1.                                            Existence;
Authorization.  The Shipowner is a company duly
organized and validly existing under the laws of the Republic of Malta licensed
as a shipping organization under the Maltese Merchant Shipping Act, and shall
so remain during the life of this Deed.  The
Shipowner has full power and authority to own and mortgage the Vessel; has full
right and entitlement to register the Vessel in its name under the flag of the
Republic of Malta and all action necessary and required by law for the
execution and delivery of this Deed and the Mortgage has been duly and
effectively taken; and each of the Indebtedness hereby secured and this Deed
and the Mortgage is and will be the legal, valid and binding obligation of the
Shipowner enforceable in accordance with its terms.

 

Section 2.                                            Title to Vessel.  The Shipowner lawfully owns and is lawfully
possessed of the Vessel free from any lien or encumbrance whatsoever other than
the Mortgage, liens for current crew’s wages and liens not yet required to be
removed under Section 7 of Article II hereof and will warrant and defend the
title and possession thereto and to every part thereof for the benefit of the
Mortgagee against the claims and demands of all persons whomsoever.

 

Section 3.                                            ISM and ISPS
Compliance.  The Shipowner has obtained all
necessary ISM Documentation in connection with the Vessel and is in full
compliance with the ISM Code and the ISPS Code (as such terms are defined in
Section 9 of Article II.

 

ARTICLE II

 

Covenants of the Shipowner

 

Section 1.                                            Payment of
Indebtedness.  The Shipowner will pay or cause
to be paid the Indebtedness hereby secured and will observe, perform and comply
with the covenants, terms and conditions herein and in the Subsidiaries
Guaranty, express or implied, on its part to be observed, performed or complied
with.  The obligation of the Indebtedness
hereby secured is an obligation in United States Dollars and the term “$” when
used herein shall mean such United States Dollars.  Notwithstanding fluctuations in the value or
rate of United States Dollars in terms of gold or any other currency, all
payments hereunder or otherwise in respect of the Indebtedness hereby secured
shall be payable in terms of United States Dollars when due, in United States
Dollars when paid, whether such payment is made before or after the due date.

 

3

 

Section 2.                                            Mortgage Recording.  The Shipowner will cause the Mortgage to be
duly recorded or filed in the Shipping Registry of the Malta Maritime
Authority, in accordance with the applicable provisions of the laws of the
Republic of Malta and will otherwise comply with and satisfy all of the
provisions of applicable laws of the Republic of Malta in order to establish
and maintain (a) the Mortgage as a first priority statutory mortgage thereunder
upon the Vessel and upon all renewals, replacements and improvements made in or
to the same and (b) this Deed as a first priority assignment of, charge over,
and security interest in the Vessel or other property assigned hereunder.

 

Sections 3.                                      Lawful Operation.  The Shipowner will not cause or permit the
Vessel to be operated in any manner contrary to law, and the Shipowner will not
engage in any unlawful trade or violate any law or carry any cargo that will
expose the Vessel to penalty, forfeiture or capture, and will not do, or suffer
or permit to be done, anything which can or may injuriously affect the
registration of the Vessel under the laws and regulations of the Republic of
Malta and will at all times keep the Vessel duly documented thereunder.

 

Section 4.                                            Payment of Taxes.  The Shipowner will pay and discharge when due
and payable, from time to time, all taxes, assessments, governmental charges,
fines and penalties lawfully imposed on the Vessel or any income therefrom.

 

Section 5.                                            Prohibition
of Liens.  Neither the Shipowner, any
charterer, the Master of the Vessel nor any other person has or shall have any
right, power or authority to create, incur or permit to be placed or imposed or
continued upon the Vessel, its freights, profits or hire any lien whatsoever
other than the Mortgage, this Deed, other liens in favor of the Mortgagee and
for crew’s wages and salvage.

 

Section 6.                                            Notice of Mortgage.  The Shipowner will place, and at all times and
places will retain a properly certified copy of the Mortgage and a true copy of
this Deed on board the Vessel with her papers and will cause such certified
copy and the Vessel’s marine document to be exhibited to any and all persons
having business therewith which might give rise to any lien thereon other than
liens for crew’s wages and salvage, and to any representative of the Mortgagee.

 

The Shipowner will place and keep prominently displayed in the chart
room and in the Master’s cabin on the Vessel a framed printed notice in plain
type reading as follows:

 

NOTICE
OF MORTGAGE

 

THIS VESSEL IS OWNED BY
GENMAR TRADER LTD., AND IS SUBJECT TO A FIRST PRIORITY STATUTORY MORTGAGE AND
DEED OF COVENANTS COLLATERAL THERETO IN FAVOR OF NORDEA BANK FINLAND PLC, NEW
YORK BRANCH, AS TRUSTEE/MORTGAGEE.  UNDER
THE TERMS OF SAID DEED, NEITHER THE SHIPOWNER, ANY CHARTERER, THE MASTER OF THE
VESSEL, NOR ANY OTHER PERSON HAS ANY RIGHT, POWER OR AUTHORITY TO CREATE, INCUR
OR PERMIT TO BE PLACED OR IMPOSED UPON THE VESSEL, ANY ENCUMBRANCES WHATSOEVER
OR ANY OTHER LIEN WHATSOEVER OTHER THAN FOR CREW’S WAGES AND SALVAGE.

 

4

 

Section 7.                                            Removal of Liens.  Except for the lien of this Deed and the
Mortgage, the Shipowner will not suffer to be continued any lien, encumbrance
or charge on the Vessel, and in due course and in any event within thirty (30)
days after the same becomes due and payable or within fourteen (14) days after
being requested to do so by the Mortgagee, the Shipowner will pay or cause to
be discharged or make adequate provision for the satisfaction or discharge of
all claims or demands, and will cause the Vessel to be released or discharged
from any lien, encumbrance or charge therefor.

 

Section 8.                                            Release
from Arrest.  If a
libel, complaint or similar process be filed against the Vessel or the Vessel
be otherwise attached, levied upon or taken into custody by virtue of any legal
proceeding in any court, the Shipowner will promptly notify the Mortgagee
thereof by telex, or telefax confirmed by letter, at the address, as specified
in this Deed, and within fourteen (14) days will cause the Vessel to be
released and all liens thereon other than the Mortgage and this Deed to be
discharged, will cause a certificate of discharge to be recorded in the case of
any recording of a notice of claim of lien, and will promptly notify the
Mortgagee thereof in the manner aforesaid.  The Shipowner will notify the Mortgagee within
forty-eight (48) hours of any average or salvage incurred by the Vessel.

 

Section 9.                                            Maintenance.  (a) The Shipowner will at all times and
without cost or expense to the Mortgagee maintain and preserve, or cause to be
maintained and preserved, the Vessel and all its equipment, outfit and
appurtenances, tight, staunch, strong, in good condition, working order and
repair and in all respects seaworthy and fit for its intended service, and will
keep the Vessel, or cause her to be kept, in such condition as will entitle her
to the highest classification and rating for vessels of the same age and type
in American Bureau of Shipping or other classification society listed on
Schedule X to the Credit Agreement.  The
Shipowner covenants to deliver annually to the Mortgagee a certificate from
such class society showing such classification to be maintained.  The Shipowner will without cost or expense to
the Mortgagee promptly, irrevocably and unconditionally instruct and authorize
the classification society of the Vessel, and shall request the classification
society to give an undertaking to the Mortgagee as follows:

 

1.                                       to send to the Mortgagee, following receipt
of a written request from the Mortgagee, certified true copies of all original
class records held by the classification society relating to the Vessel;

 

2.                                       to allow the Mortgagee (or its agents), at any
time and from time to time, to inspect the original class and related records
of the Shipowner and the Vessel at the offices of the classification society
and to take copies of them;

 

3.                                       following receipt of a written request from the
Mortgagee:

 

(a)                                  to advise of any facts or matters which may
result in or have resulted in a change, suspension, discontinuance, withdrawal
or expiry of the Vessel’s class under the rules or terms and conditions of the Shipowner’s
or the Vessel’s membership of the classification society; and

 

(b)                                 to confirm that the Shipowner is not in
default of any of its contractual obligations or liabilities to the
classification society and, without limiting the foregoing, that it has paid in
full all fees or other charges due and payable to the classification society;
and

 

5

 

(c)                                  if the Shipowner is in default of any of its
contractual obligations or liabilities to the classification society, to
specify to the Mortgagee in reasonable detail the facts and circumstances of
such default, the consequences thereof, and any remedy period agreed or allowed
by the classification society; and

 

(d)                                 to notify the Mortgagee immediately in writing
if the classification society receives notification from the Shipowner or any
other person that the Vessel’s classification society is to be changed.

 

Notwithstanding the above instructions and undertaking given for the
benefit of the Mortgagee, the Shipowner shall continue to be responsible to the
classification society for the performance and discharge of all its obligations
and liabilities relating to or arising out of or in connection with the
contract it has with the classification society, and nothing herein or therein
shall be construed as imposing any obligation or liability of the Mortgagee to
the classification society in respect thereof.

 

The Shipowner shall further notify the classification society that all
the foregoing instructions and authorizations shall remain in full force and
effect until revoked or modified by written notice to the classification
society received from the Mortgagee, and that the Shipowner shall reimburse the
classification society for all its costs and expenses incurred in complying
with the foregoing instructions.

 

(b)                                 The Vessel shall, and the Shipowner covenants
that she will, at all times comply with all applicable laws, treaties and conventions
to which the Republic of Malta is a party, and rules and regulations issued
thereunder, and shall have on board as and when required thereby valid
certificates showing compliance therewith.  The Shipowner will not make, or permit to be
made, any substantial change in the structure, type or speed of the Vessel or
change in her rig, without first receiving the written approval thereof by the
Mortgagee.

 

(c)                                  The Shipowner agrees to give the Mortgagee at
least ten (10) days notice of the actual date and place of any survey or dry
docking, in order that the Mortgagee may have representatives present if
desired.  The Shipowner agrees that at
the Mortgagee’s request it will satisfy the Mortgagee that the expense of such
survey or drydocking or work to be done thereat is within Shipowner’s financial
capability and will not result in a claim or lien against the Vessel in
violation of the provisions of this Deed, the Credit Agreement, the
Subsidiaries Guaranty or any other Credit Document.

 

(d)                                 The Shipowner shall promptly notify the
Mortgagee of and furnish the Mortgagee with full information, including copies
of reports and surveys, regarding any material accident or accident involving
repairs where the aggregate cost is likely to exceed Five Hundred Thousand Dollars
(U.S. $500,000) (or its equivalent in another currency), any major damage to
the Vessel, any event affecting the Vessel’s class, any occurrence in
consequence whereof the Vessel has become or is likely to suffer an Event of
Loss.

 

(e)                                  The Mortgagee shall have the right at any
time, on reasonable notice, to have its surveyor conduct inspections and
surveys of the Vessel to ascertain the condition of the Vessel and to satisfy
itself that the Vessel is being properly repaired and maintained.  Such inspections and surveys

 

6

 

shall be
conducted at such times and in such manner as will not interfere with the
Shipowner’s normal business operations and schedule.

 

(f)                                    The Shipowner will furnish to the Mortgagee
on demand true and complete copies of the DOC (the SMC referred to in the
definition of ISM Code Documentation below) and such other ISM Code
documentation as the Mortgagee may reasonably request in writing.

 

(g)                                 The Shipowner will comply or procure compliance
with the ISM Code and the ISPS Code (as such terms are defined below) and
notify the Mortgagee forthwith upon:

 

(i)                                     any claim for breach of the ISM Code or the
ISPS Code being made against the Shipowner, an ISM Responsible Person (as such
term is defined below) or the manager of the Vessel in connection with the
Vessel; or

 

(ii)                                  any other matter, event or incident, actual or
which will or could lead to the ISM Code or the ISPS Code not being complied
with;

 

and keep the Mortgagee advised in writing on a
regular basis and in such detail as the Mortgagee shall require, of the
Shipowner’s and Vessel manager’s response to the items referred to in
subclauses (i) and (ii) above.

 

For the purposes of this Mortgage:

 

“ISM
Code” means in relation to its application the Shipowner, the Vessel and its
operation:

 

(a)                                  ‘The International Management Code for the
Safe Operation of Ships and for Pollution Prevention’, currently known or
referred to as the ‘ISM Code’, adopted by the Assembly of the International
Maritime Organization by Resolution A.741(18) on 4
November 1993 and incorporated on 19 May 1994 into Chapter IX of the
International Convention for the Safety of Life at Sea 1974 (SOLAS 1974); and

 

(b)                                 all further resolutions, circulars, codes,
guidelines, regulations and recommendations which are now or in the future
issued by or on behalf of the International Maritime Organization or any other
entity with responsibility for implementing the ISM Code, including without
limitation, the ‘Guidelines on implementation or administering of the
International Safety Management (ISM) Code by Administrations’ produced by the
International Maritime Organization pursuant to Resolution A.788(19) adopted on
25 November 1995,

 

as the same may be amended, supplemented or replaced from time to time;

 

“ISM Code Documentation”
includes:

 

(a)                                  the document of compliance (DOC) and safety
management certificate (SMC) issued pursuant to the ISM Code in relation to the
Vessel within the periods specified by the ISM Code;

 

7

 

(b)                                 the interim safety management certificate (“Interim
SMC”) issued pursuant to the ISM Code in relation to the Vessel prior to or on
the delivery date thereof;

 

(c)                                  all other documents and data which are relevant
to the ISM SMS and its implementation and verification which the mortgage may
require by request; and

 

(d)                                 any other documents which are prepared or which
are otherwise relevant to establish and maintain the Vessel’s or the Shipowner’s
compliance with the ISM Code which the Mortgagee may require by request.

 

“ISM SMS” means the safety management system which is required to be
developed, implemented and maintained under the ISM Code.

 

“ISPS
Code” means the International Ship and Port Facility Security Code constituted
pursuant to resolution A.924(22) of the International
Maritime Organisation (“IMO”) adopted by a Diplomatic conference of the IMO on
Maritime Security on 13 December 2002 and now set out in Chapter XI-2 of the
Safety of Life at Sea Convention (SOLAS) 1974 (as amended) to take effect on
July 1, 2004.

 

Section 10.                                      Inspection; Reports.  (a) The Shipowner will at all reasonable times
afford the Mortgagee or its authorized representatives full and complete access
to the Vessel for the purpose of inspecting the Vessel and her cargo and
papers, including without limitation all records pertaining to the Vessel’s
maintenance and repair, and, at the request of the Mortgagee, the Shipowner
will deliver for inspection copies of any and all contracts and documents relating
to the Vessel, whether on board or not.

 

(b)                                 The Shipowner hereby agrees to furnish
promptly to the Mortgagee, on demand, any reports or information which the
Shipowner may submit to shareholders or regulatory agencies and any additional
information which the Mortgagee may request in respect of the financial
condition of the Shipowner.

 

Section 11.                                     Flag; Home Port.  (a)
The Shipowner will not change the flag or home port of the Vessel without the
written consent of the Mortgagee and any such written consent to anyone change
of flag or home port shall not be construed to be a waiver of this provision
with respect to any subsequent proposed change of flag or home port.

 

(b)                                 Notwithstanding the foregoing provisions of
this Section 11, upon not less than 30 days prior written notice to the
Mortgagee, provided no Default or Event of Default under the Credit Agreement
shall have occurred and be continuing, the Shipowner may change the flag or
home port of the Vessel to another flag or home port reasonably satisfactory to
the Mortgagee, provided that the Shipowner shall promptly take all actions
necessary or desirable to establish, preserve, protect and maintain the
security interest of the Mortgagee in the Vessel to the satisfaction of the
Mortgagee, and the Shipowner shall have provided to the Mortgagee and the
Lenders such opinions of counsel as may be reasonably requested by the
Mortgagee to assure itself that the conditions of this proviso have been
satisfied.

 

Section 12.                                      No
Sales, Transfers or Charters. The Shipowner will not sell, mortgage,
transfer, or change the management of, or demise charter the Vessel for any
period longer than

 

8

 

twelve (12) months (including any permitted
extensions or renewals) in each case, without the written consent of the
Mortgagee first had and obtained, and any such written consent to anyone sale,
mortgage, demise charter, transfer, or change of management shall not be
construed to be a waiver of this provision with respect to any subsequent
proposed sale, mortgage, demise charter, transfer, or change of management.  Any such sale, mortgage, demise charter,
transfer, or change of management of the Vessel shall be subject to the
provisions of this Deed, the Mortgage and the lien thereof.

 

Section 13.                                      Insurance.  (a)
The Shipowner, at its own expense, or with respect to part (a)(iii) of this
Section 13 the Mortgagee at the expense of the Shipowner, will keep the Vessel
insured with insurers and protection and indemnity clubs or associations of
internationally recognized responsibility, and placed in such markets, on such
terms and conditions, and through brokers, in each case reasonably satisfactory
to the Mortgagee and under forms of policies approved by the Mortgagee against
the risks indicated below and such other risks as the Mortgagee may specify
from time to time:

 

(i)                                     Marine and war risk, including London
Blocking and Trapping Addendum and Lost Vessel Clause, hull and machinery
insurance in an amount in U.S. dollars equal to, except as otherwise approved
or required in writing by the Mortgagee, the greater of (x) the then full
commercial value of the Vessel or (y) an amount which, when aggregated with
such insured value of the other Mortgaged Vessels (if the other Mortgaged Vessels
are then subject to a mortgage in favor of the Mortgagee under the Credit
Agreement, and have not suffered an Event of Loss), is equal to 120% of the
then outstanding aggregate principal amount of the Term Loans and the Total
Revolving Loan Commitment whether used or unused.

 

(ii)                                  Marine and war risk protection and indemnity
insurance or equivalent insurance (including coverage against liability for
passengers, fines and penalties arising out of the operation of the Vessel,
insurance against liability arising out of pollution, spillage or leakage, and
workmen’s compensation or longshoremen’s and harbor workers’ insurance as shall
be required by applicable law) in such amounts approved by the Mortgagee;
provided, however that insurance against liability under law or international
convention arising out of pollution, spillage or leakage shall be in an amount
not less than the greater of:

 

(y)                                 the maximum amount available, as that amount
may from time to time change, from the International Group of Protection and
Indemnity Associations or alternatively such sources of pollution, spillage or
leakage coverage as are commercially available in any absence of such coverage
by the International Group as shall be carried by prudent shipowners for
similar vessels engaged in similar trades plus amounts available from customary
excess insurers of such risks as excess amounts shall be carried by prudent
shipowners for similar vessels engaged in similar trades; and

 

(z)                                   the amounts required by the laws or
regulations of the United States of America or any applicable jurisdiction in
which the Vessel may be trading from time to time.

 

(iii)                               Mortgagee’s interest insurance (including
extended mortgagee interest-additional perils-pollution) coverage satisfactory
to the Mortgagee in an amount which, when aggregated with such insured value of
the other Mortgaged Vessels (if the other Mortgaged

 

9

 

Vessels are then subject to
a mortgage in favor of the Mortgagee under the Credit Agreement, and have not
suffered an Event of Loss), is equal to 120% of the then outstanding aggregate
principal amount of the Term Loans and the Total Revolving Loan Commitment
whether used or unused.  All such
mortgagee’s interest insurance cover shall in the Mortgagee’s discretion be
obtained directly by the Mortgagee and the Shipowner shall on demand pay all
costs of such cover.

 

(iv)                              While the Vessel is idle or laid up, at the option of the Shipowner and in
lieu of the above-mentioned marine and war risk hull insurance, port risk
insurance insuring the Vessel against the usual risks encountered by like
vessels under similar circumstances.

 

(b)                                 The marine and commercial war-risk insurance
required by this Section 13 shall have deductibles and franchises no higher
than the following: (i) Hull and Machinery - U.S. $115,000 for all hull claims
and U.S. $150,000 for all machinery claims each accident or occurrence and (ii)
Protection and Indemnity - U.S. $50,000 for cargo claims, U.S. $35,000 for crew
claims, U.S. $10,000 passenger claims and U.S. $15,000 all other claims, in
each case each accident or occurrence.

 

All insurance maintained
hereunder shall be primary insurance without right of contribution against any
other insurance maintained by the Mortgagee.  Each policy of marine and war risk hull and
machinery insurance with respect to the Vessel shall provide that the Mortgagee
shall be a named insured and a loss payee.  Each entry in a marine and war risk protection
indemnity club with respect to the Vessel shall note the interest of the
Mortgagee.  The Mortgagee and its
successors and assigns shall not be responsible for any premiums, club calls,
assessments or any other obligations or for the representations and warranties
made therein by the Shipowner or any other person.

 

(c)                                  The Shipowner will furnish the Mortgagee from
time to time on request, and in any event at least annually, a detailed report
signed by a firm of marine insurance brokers acceptable to the Mortgagee with
respect to P & I entry, the hull and machinery and war risk insurance
carried and maintained on the Vessel, together with their opinion as to the
adequacy thereof and its compliance with the provisions of this Deed.  At the Shipowner’s expense the Shipowner will
cause such insurance broker and the P & I club or association providing P
& I insurance referred to in part (a)(ii) of this Section 13, to agree to
advise the Mortgagee by telex or telecopier confirmed by letter of any expiration,
termination, alteration or cancellation of any policy, any default in the
payment of any premium and of any other act or omission on the part of the
Shipowner of which it has knowledge and which might invalidate or render
unenforceable, in whole or in part, any insurance on the Vessel, and to provide
an opportunity of paying any such unpaid premium or call, such right being exercisable
by the Mortgagee on a vessel by vessel and not on a fleet basis.  In addition, the Shipowner shall promptly
provide the Mortgagee with any information which the Mortgagee reasonably
requests for the purpose of obtaining or preparing any report from an
independent marine insurance consultant as to the adequacy of the insurances
effected or proposed to be effected in accordance with this Deed as of the date
hereof or in connection with any renewal thereof, and the Shipowner shall upon
demand indemnify the Mortgagee in respect of all reasonable fees and other expenses
incurred by or for the account of the Mortgagee in connection with any such
report; provided the Mortgagee shall be entitled to such indemnity only for one
such report during any period of twelve months.

 

The underwriters or brokers shall furnish the Mortgagee with a letter
or letters of undertaking to the effect that:

 

10

 

(i)                                     they will hold the instruments of insurance,
and the benefit of the insurances thereunder, to the order of the Mortgagee in
accordance with the terms of the loss payable clause referred to in the
relevant Assignment of Insurances for the Vessel; and

 

(ii)                                  they will have endorsed on each and every
policy as and when the same is issued the loss payable clause and the notice of
assignment referred to in the relevant Assignment of Insurances for the Vessel;
and

 

(iii)                               they will not set off against any sum recoverable
in respect of a claim against the Vessel under the said underwriters or brokers
or any other person in respect of any other vessel nor cancel the said
insurances by reason of non-payment of such premiums or other amounts.

 

All policies of insurance required hereby shall provide for not less
than 14 days prior written notice to be received by the Mortgagee of the
termination or cancellation of the insurance evidenced thereby.  All policies of insurance maintained pursuant
to this Section 13 for risks covered by insurance other than that provided by a
P & I Club shall contain provisions waiving underwriters’ rights of
subrogation thereunder against any assured named in such policy and any
assignee of said assured.  The Shipowner
has assigned to the Mortgagee its rights under any policies of insurance in
respect of the Vessel.  The Shipowner
agrees that, unless the insurances by their terms provide that they cannot
cease (by reason of nonrenewal or otherwise) without the Mortgagee being informed
and having the right to continue the insurance by paying any premiums not paid
by the Shipowner, receipts showing payment of premiums for required insurance
and also of demands from the Vessel’s P & I underwriters shall be in the
hands of the Mortgagee at least two (2) days before the risk in question
commences.

 

(d)                                 Unless the Mortgagee shall otherwise agree,
all amounts of whatsoever nature payable under any insurance must be payable to
the Mortgagee for distribution first to itself and thereafter to the Shipowner
or others as their interests may appear.  Nevertheless, until otherwise required by the
Mortgagee by notice to the underwriters upon the occurrence and continuance of
a Default or an event of default hereunder, (i) amounts payable under any insurance
on the Vessel with respect to protection and indemnity risks may be paid
directly to the Shipowner to reimburse it for any loss, damage or expense
incurred by it and covered by such insurance or to the person to whom any
liability covered by such insurance has been incurred provided that the
underwriter shall have first received evidence that the liability insured
against has been discharged, and (ii) amounts payable under any insurance with
respect to the Vessel involving any damage to the Vessel not constituting an
Event of Loss, may be paid by underwriters directly for the repair, salvage or
other charges involved or, if the Shipowner shall have first fully repaired the
damage or paid all of the salvage or other charges, may be paid to the Shipowner
as reimbursement therefor; provided, however, that if such amounts (including
any franchise or deductible) are in excess of U.S. $250,000, the underwriters
shall not make such payment without first obtaining the written consent thereto
of the Mortgagee.

 

(e)                                  All amounts paid to the Mortgagee in respect
of any insurance on the Vessel shall be disposed of as follows (after deduction
of the expenses of the Mortgagee in collecting such amounts):

 

11

 

(i)                                     any amount which might have been paid at the
time, in accordance with the provisions of paragraph (d) above, directly to the
Shipowner or others shall be paid by the Mortgagee to, or as directed by, the
Shipowner;

 

(ii)                                  all amounts paid to the Mortgagee in respect of
an Event of Loss (as defined in the Credit Agreement) of the Vessel shall be
applied by the Mortgagee to the payment of the Indebtedness hereby secured
pursuant to Section 4.02(c) of the Credit Agreement;

 

(iii)                               all other amounts paid to the Mortgagee in
respect of any insurance on the Vessel may, in the Mortgagee’s sole discretion,
be held and applied to the prepayment of the Indebtedness hereby secured or to
making of needed repairs or other work on the Vessel, or to the payment of
other claims incurred by the Shipowner relating to the Vessel, or may be paid
to the Shipowner or whosoever may be entitled thereto.

 

(f)                                    In the event that any claim or lien is
asserted against the Vessel for loss, damage or expense which is covered by
insurance required hereunder and it is necessary for the Shipowner to obtain a
bond or supply other security to prevent arrest of the Vessel or to release the
Vessel from arrest on account of such claim or lien, the Mortgagee, on request
of the Shipowner, may, in the sole discretion of the Mortgagee, assign to any
person, firm or corporation executing a surety or guarantee bond or other
agreement to save or release the Vessel from such arrest, all right, title and
interest of the Mortgagee in and to said insurance covering said loss, damage
or expense, as collateral security to indemnify against liability under said
bond or other agreement.

 

(g)                                 The Shipowner shall deliver to the Mortgagee
certified copies and, whenever so requested by the Mortgagee, the originals of
all certificates of entry, cover notes, binders, evidences of insurance and
policies and all endorsements and riders amendatory thereof in respect of
insurance maintained under this Deed for the purpose of inspection or
safekeeping, or, alternatively, satisfactory letters of undertaking from the
broker holding the same.  The Mortgagee
shall be under no duty or obligation to verify the adequacy or existence of any
such insurance or any such policies, endorsement or riders.

 

(h)                                 The Shipowner agrees that it will not execute
or permit or willingly allow to be done any act by which any insurance may be
suspended, impaired or cancelled, and that it will not permit or allow the
Vessel to undertake any voyage or run any risk or transport any cargo which may
not be permitted by the policies in force, without having previously notified
the Mortgagee in writing and insured the Vessel by additional coverage to
extend to such voyages, risks, passengers or cargoes.

 

(i)                                     In case any underwriter proposes to pay less
on any claim than the amount thereof, the Shipowner shall forthwith inform the
Mortgagee, and if a Default, an Event of Default or an Event of Loss has
occurred and is continuing, the Mortgagee shall have the exclusive right to
negotiate and agree to any compromise.

 

(j)                                     The Shipowner will comply with and satisfy
all of the provisions of any applicable law, convention, regulation,
proclamation or order concerning financial responsibility for liabilities
imposed on the Shipowner or the Vessel with respect to pollution by any state
or nation or political subdivision thereof and will maintain all certificates
or other evidence of financial responsibility as may be required by any such
law, convention, regulation, proclamation or order with respect to the trade in
which the Vessel is from time to time engaged and the cargo carried by it.

 

12

 

Section
14.                                     Reimbursement
for Expenses.  The Shipowner will reimburse
the Mortgagee promptly for any and all expenditures which the Mortgagee may
from time to time make, layout or expend in providing such protection in
respect of insurance, discharge or purchase of liens, taxes, dues, tolls,
assessments, governmental charges, fines and penalties lawfully imposed,
repairs, attorney’s fees, and other matters as the Shipowner is obligated
herein to provide, but fails to provide or which, in the sole judgment of the
Mortgagee are necessary or appropriate for the protection of the Vessel or the
security granted by this Deed.  Such
obligation of the Shipowner to reimburse the Mortgagee shall be an additional
indebtedness due from the Shipowner, shall bear interest at the interest rate
as set forth in Section 1.07(b) of the Credit Agreement from the date of
payment by the Mortgagee to and including the date of reimbursement by the
Shipowner, shall be secured by this Deed and the Mortgage, and shall be payable
by the Shipowner on demand.  The
Mortgagee, though privileged to do so, shall be under no obligation to the
Shipowner to make any such expenditure, nor shall the making thereof relieve
the Shipowner of any default in that respect.

 

Section 15.                                      Performance
of Charters. The Shipowner will fully perform any and all charter parties which may
be entered into with respect to the Vessel and will promptly notify the
Mortgagee of any material claim by any charterer of non-performance thereunder
by the Shipowner.

 

Section 16.                                      Change in
Ownership. The Shipowner further covenants and agrees
with the Mortgagee that, so long as any part of the Indebtedness hereby secured
remains unpaid, there shall be no change in the ownership of the Vessel or any
of the shares of the Shipowner without the prior written consent of the
Mortgagee.

 

Section 17.                                      Prepayment
if Event of Loss. In the event that the Vessel suffers an
Event of Loss, then and in each such case the Shipowner shall forthwith repay
the Indebtedness hereby secured at the time and in the amount set forth in
Section 4.02(c) of the Credit Agreement except to the extent such amounts have
otherwise been paid as therein provided.

 

ARTICLE III

 

Events of Default and Remedies

 

Section 1.                                            Events
of Default: Remedies. In case anyone or more of the following events, herein termed “events of default”, shall happen:

 

(a)                                  the Shipowner fails to pay within three (3)
Business Days of the date due any payment in respect of the Indebtedness hereby
secured as provided herein; or

 

(b)                                 the statements in Article I shall prove to have
been untrue when made in a material way; or

 

(c)                                  a default in the due and punctual observance
and performance of any of the provisions of Sections 2, 3, 7, 8, 9(b), 11, 12,
13(a), (b), (d), (h) and (j), 16 or 17 of Article II hereof shall have occurred
and be continuing; or

 

(d)                                 a breach or omission in the due and punctual
observance of any of the other covenants and conditions herein required to be
kept and performed by the Shipowner and such breach or omission shall continue
for 30 days after the day the Shipowner first knew or should have known of such
breach or omission; or

 

13

 

(e)                                  an Event of Default shall have occurred and be
continuing under the Credit Agreement; or

 

(f)                                    a payment default by the Borrower under any
Interest Rate Protection Agreement or Other Hedging Agreement shall have
occurred and be continuing; or

 

(g)                                 any notice shall have been issued by the
government or any bureau, department, officer, board or agency thereof of the
country of registry of the Vessel to the effect that the Vessel is subject to
cancellation from such registry or the certificate of registry of the Vessel is
subject to revocation or cancellation for any reason whatsoever, and such
notice shall not have been cancelled or annulled on or before seven (7)
Business Days prior to the date set forth in such notice for such cancellation
or revocation; or

 

(h)                                 the Vessel shall be cancelled from the country
of registry of the Vessel or the certificate of registry of the Vessel is
revoked or cancelled for any reason whatsoever;

 

then:

 

the security constituted by this Deed and the Mortgage shall become
immediately enforceable and that without limitation, the enforcement remedies
specified can be exercised irrespective of whether or not the Mortgagee has
exercised the right of acceleration under the Credit Agreement or any of the
other Credit Documents and the Mortgagee shall have the right to:

 

(i)                                     Declare all the then unpaid Indebtedness
hereby secured to be due and payable immediately, and upon such declaration,
the same shall become and be immediately due and payable provided, however,
that no declaration shall be required if an event of default shall have
occurred by reason of a default under Section 10.05 of the Credit Agreement,
then and in such case, the Indebtedness hereby secured shall become immediately
due and payable on the occurrence of such event of default without any notice
or demand;

 

(ii)                                  Exercise all of the rights and remedies in
foreclosure and otherwise given to a mortgagee by the provisions of the laws of
the country of registry of the Vessel or of any other jurisdiction where the
Vessel may be found;

 

(iii)                               Bring suit at law, in equity or in admiralty,
as it may be advised, to recover judgment for the Indebtedness hereby secured,
and collect the same out of any and all property of the Shipowner whether
covered by this Mortgage or otherwise;

 

(iv)                              Take and enter into possession of the Vessel,
at any time, wherever the same may be, without legal process and without being
responsible for loss or damage and the Shipowner or other person in possession
forthwith upon demand of the Mortgagee shall surrender to the Mortgagee
possession of the Vessel;

 

(v)                                 Without being responsible for loss or damage,
the Mortgagee may hold, lay up, lease, charter, operate or otherwise use such
Vessel for such time and upon such terms as it may deem to be for its best
advantage, and demand, collect and retain all hire, freights, earnings, issues,
revenues, income, profits, return premiums, salvage awards or recoveries,

 

14

 

recoveries in general average,
and all other sums due or to become due in respect of such Vessel or in respect
of any insurance thereon from any person whomsoever, accounting only for the
net profits, if any, arising from such use of the Vessel and charging upon all
receipts from the use of the Vessel or from the sale thereof by court
proceedings or pursuant to subsection (vi) next following, all costs, expenses,
charges, damages or losses by reason of such use; and if at any time the
Mortgagee shall avail itself of the right herein given them to take the Vessel,
the Mortgagee shall have the right to dock the Vessel, for a reasonable time at
any dock, pier or other premises of the Shipowner without charge, or to dock
her at any other place at the cost and expense of the Shipowner;

 

(vi)                              Without being responsible for loss or damage,
the Mortgagee may sell the Vessel upon such terms and conditions as to the
Mortgagee shall seem best, free from any claim of or by the Shipowner, at
public or private sale, by sealed bids or otherwise, by mailing, by air or
otherwise, notice of such sale, whether public or private, addressed to the
Shipowner at its last known address and to any other registered mortgagee,
twenty (20) calendar days prior to the date fixed for entering into the
contract of sale and by first publishing notice of any such public sale for ten
(10) consecutive days, in daily newspapers of general circulation published in
the City of New York, State of New York; in the event that the Vessel shall be
offered for sale by private sale, no newspaper publication of notice shall be
required, nor notice of adjournment of sale; sale may be held at such place and
at such time as the Mortgagee by notice may have specified, or may be adjourned
by the Mortgagee from time to time by announcement at the time and place
appointed for such sale or for such adjourned sale, and without further notice
or publication the Mortgagee may make any such sale at the time and place to
which the same shall be so adjourned; and any sale may be conducted without bringing
the Vessel to the place designated for such sale and in such manner as the
Mortgagee may deem to be for its best advantage, and the Mortgagee may become
the purchaser at any sale.  The Shipowner
agrees that any sale made in accordance with the terms of this paragraph shall
be deemed made in a commercially reasonable manner insofar as it is concerned;

 

(vii)                           Require that all policies, contracts,
certificates of entry and other records relating to the insurance with respect
to the Vessel, including, but not limited to, those described in Article II,
Section 13 hereof (the “Insurances”) (including details of and correspondence
concerning outstanding claims) be forthwith delivered to or to the order of the
Mortgagee;

 

(viii)                        Collect, recover, compromise and give a good
discharge for any and all monies and claims for monies then outstanding or
thereafter arising under the Insurances or in respect of the earnings or any
requisition compensation and to permit any brokers through whom collection or
recovery is effected to charge the usual brokerage therefor.

 

Section
2.                                          Power of Sale. Any sale of the
Vessel made in pursuance of this Deed, whether under the power of sale hereby
granted or any judicial proceedings, shall operate to divest all right, title
and interest of any nature whatsoever of the Shipowner therein and thereto, and
shall bar the Shipowner, its successors and assigns, and all persons claiming
by, through or under them.  No purchaser
shall be bound to inquire whether notice has been given, or whether any default
has occurred, or as to the propriety of the sale, or as to the application of
the proceeds thereof.  In case of any
such sale, the Mortgagee, if it is the purchaser, shall be entitled, for the
purpose of making settlement or payment for the property purchased, to use and
apply the Indebtedness hereby secured

 

15

 

in
order that there may be credited against the amount remaining due and unpaid
thereon the sums payable out of the net proceeds of such sale to the Mortgagee
after allowing for the costs and expense of sale and other charges; and
thereupon such purchaser shall be credited, on account of such purchase price,
with the net proceeds that shall have been so credited upon the Indebtedness hereby
secured.  At any such sale, the Mortgagee
may bid for and purchase such property and upon compliance with the terms of
sale may hold, retain and dispose of such property without further
accountability therefor.

 

Section 3.                                            Power of
Attorney-Sale. The Mortgagee is hereby irrevocably appointed attorney-in-fact of the
Shipowner to execute and deliver to any purchaser aforesaid, and is hereby
vested with full power and authority to make, in the name and on behalf of the
Shipowner, a good conveyance of the title to the Vessel so sold.  Any person dealing with the Mortgagee or
attorney-in-fact shall not be put on enquiry as to whether the power of
attorney contained herein has become exercisable.  In the event of any sale of the Vessel, under
any power herein contained, the Shipowner will, if and when required by the
Mortgagee, execute such form of conveyance of the Vessel as the Mortgagee may
direct or approve.

 

Section 4.                                            Power
of Attorney-Collection. The Mortgagee is hereby irrevocably appointed attorney-in-fact of the
Shipowner upon the happening of any event of default, in the name of the
Shipowner to demand, collect, receive, compromise and sue for, so far as may be
permitted by law, all freight, hire, earnings, issues, revenues, income and
profits of the Vessel and all amounts due from underwriters under any insurance
thereon as payment of losses or as return premiums or otherwise, salvage awards
and recoveries, recoveries in general average or otherwise, and all other sums
due or to become due at the time of the happening of any event of default as
defined in Section 1 of Article III hereof in respect of the Vessel, or in
respect of any insurance thereon, from any person whomsoever, and to make, give
and execute in the name of the Shipowner acquittances, receipts, releases or
other discharges for the same, whether under seal or otherwise, and to endorse
and accept in the name of the Shipowner all checks, notes, drafts, warrants,
agreements and other instruments in writing with respect to the foregoing.  Any person dealing with the Mortgagee or
attorney-in-fact shall not be put on enquiry as to whether the Power of
Attorney contained herein has become exercisable.

 

Section 5.                                            Delivery of Vessel. Upon the
security constituted by this Deed and the Mortgage becoming immediately
enforceable pursuant to Section 1 of Article III, the Mortgagee shall (in
addition to the powers described in Section 1 of Article III) become forthwith
entitled (but not bound) to appoint, by an instrument in writing under its seal
or under the hand of any director or officer or authorized signatory, a
receiver and/or manager of the Vessel upon such terms as to remuneration and
otherwise as the Mortgagee shall deem fit with power from time to time to
remove any receiver and appoint another in his stead and any receiver shall be
the agent of the Shipowner (who shall be solely responsible for his acts and
defaults and remuneration) and shall have all the powers conferred by law by
way of addition to, but without limiting, those powers any receiver shall have
all the powers and entitlements conferred on the Mortgagee by this Deed and
generally shall be entitled to the same protection and to exercise the same
powers and discretions as are granted to the Mortgagee under this Deed.

 

Section 6.                                            Mortgagee
to Discharge Liens. The Shipowner authorizes and empowers the Mortgagee or its appointees
or any of them to appear in the name of the Shipowner, its successors and
assigns, in any court of any country or nation of the world where a suit is
pending against the Vessel because of or on account of any alleged lien against
the Vessel from which the Vessel has not

 

16

 

been
released and to take such proceedings as to them or any of them may seem proper
towards the defense of such suit and the purchase or discharge of such lien,
and all expenditures made or incurred by them or any of them for the purpose of
such defense or purchase or discharge shall be a debt due from the Shipowner,
its successors and assigns, to the Mortgagee, and shall be secured by the lien
of this Deed and the Mortgage in like manner and extent as if the amount and
description thereof were written herein.

 

Section 7.                                            Payment of Expenses. The Shipowner
covenants that upon the happening of any one or more of the events of default,
then, upon written demand of the Mortgagee, the Shipowner will pay to the
Mortgagee the whole amount due and payable in respect of the Indebtedness
hereby secured; and in case the Shipowner shall fail to pay the same forthwith
upon such demand, the Mortgagee shall be entitled to recover judgment for the
whole amount so due and unpaid, together with such further amounts as shall be
sufficient to cover the reasonable compensation of the Mortgagee or its agents,
attorneys and counsel and any necessary advances, expenses and liabilities made
or incurred by it or them or the Mortgagee hereunder.  All moneys collected by the Mortgagee under
this Section 7 shall be applied by the Mortgagee in accordance with the
provisions of Section 11 of this Article III.

 

Section 8.                                            Remedies
Cumulative. Each and every power and remedy herein given to the Mortgagee shall be
cumulative and shall be in addition to every other power and remedy herein
given or now or hereafter existing at law, in equity, in admiralty or by
statute, and each and every power and remedy whether herein given or otherwise
existing may be exercised from time to time and as often and in such order as
may be deemed expedient by the Mortgagee, and the exercise or the beginning of
the exercise of any power or remedy shall not be construed to be a waiver of
the right to exercise at the same time or thereafter any other power or remedy.
 The Mortgagee shall not be required or
bound to enforce any of its rights under any of the other Credit Documents,
prior to enforcing its rights under this Deed and the Mortgage.  No delay or omission by the Mortgagee in the
exercise of any right or power or in the pursuance of any remedy accruing upon
any default as above defined shall impair any such right, power or remedy or be
construed to be a waiver of any such event of default or to be an acquiescence
therein; nor shall the acceptance by the Mortgagee of any security or of any
payment of or on account of the Indebtedness hereby secured maturing after any
event of default or of any payment on account of any past default be construed
to be a waiver of any right to exercise its remedies due to any future event of
default or of any past event of default not completely cured thereby.  No consent, waiver or approval of the
Mortgagee shall be deemed to be effective unless in writing and duly signed by
authorized signatories of the Mortgagee; any waiver by the Mortgagee of any of
the terms of this Deed or any consent given under this Deed shall only be
effective for the purpose and on the terms which it is given and shall be
without prejudice to the right to give or withhold consent in relation to
future matters (which are either the same or different).

 

Section 9.                                            Cure of Defaults. If at any time
after an event of default and prior to the actual sale of the Vessel by the
Mortgagee or prior to any enforcement or foreclosure proceedings the Shipowner
offers completely to cure all events of default and to pay all expenses,
advances and damages to the Mortgagee consequent on such events of default,
with interest at the interest rate set forth in Section 1.07(b) of the Credit
Agreement, then the Mortgagee may, but shall not be obligated to, accept such
offer and payment and restore the Shipowner to its former position, but such
action, if taken, shall not affect any subsequent event of default or impair
any rights consequent thereon.

 

Section 10.                                      Discontinuance of Proceedings. In case the Mortgagee shall have proceeded
to enforce any right, power or remedy under this Deed and the Mortgage by
foreclosure, entry or

 

17

 

otherwise,
and such proceedings shall have been discontinued or abandoned for any reason
or shall have been determined adversely to the Mortgagee, then and in every
such case the Shipowner and the Mortgagee shall be restored to its former
position and right hereunder with respect to the property subject or intended
to be subject to this Deed and the Mortgage, and all rights, remedies and powers
of the Mortgagee shall continue as if no such proceedings had been taken.

 

Section 11.                                      Application
of Proceeds. After an event of default hereunder shall have occurred and be
continuing, the proceeds of any sale of the Vessel and any and all other moneys
received by the Mortgagee pursuant to or under the terms of this Deed or in any
proceedings hereunder, the application of which has not elsewhere herein been
specifically provided for, shall be applied as follows:

 

First: To the
payment of all costs and expenses (together with interest thereon as set forth
in Section 14 of Article II) of the Mortgagee, including the reasonable
compensation of its agents and attorneys, by reason of any sale, retaking,
management or operation of the Vessel and all other sums payable to the
Mortgagee hereunder by reason of any expenses or liabilities incurred or
advances made by it for the protection, maintenance and enforcement of the
security or of any of its rights hereunder, under the Credit Agreement, the
Subsidiaries Guaranty and under the other Credit Documents or in the pursuit of
any remedy hereby or thereby conferred; and at the option of the Mortgagee to
the payment of any taxes, assessments or liens claiming priority over the lien
of the Mortgage; and

 

Second:                             To the Pledgee (as defined in the Pledge
Agreement) for its distribution in accordance with the provisions of Section 9
of the Pledge Agreement; and

 

Third:                                        To the Shipowner or as may be directed by a
court of competent jurisdiction.

 

Section 12.                                      Possession
Until Default. Until one or more of the events of default
hereinafter described shall happen, the Shipowner (a) shall be suffered and
permitted to retain actual possession and use of the Vessel and (b) shall have
the right, from time to time, in its discretion, and without application to the
Mortgagee, and without obtaining a release thereof by the Mortgagee, to dispose
of, free from the lien hereof, any boilers, engines, machinery, masts, spars,
sails, rigging, boats, anchors, chains, tackle, apparel, furniture, fittings or
equipment or any other appurtenances of the Vessel that are no longer useful,
necessary, profitable or advantageous in the operation of the Vessel, first or
simultaneously replacing the same by new boilers, engines, machinery, masts,
spars, sails, rigging, boats, anchors, chains, tackle, apparel, furniture,
fittings, equipment, or other appurtenances of substantially equal value to the
Shipowner, which shall forthwith become subject to the lien of this Deed and
the Mortgage.

 

Section 13.                                     Severability
of Provisions, etc. (a) If any provision of this Deed should be
deemed invalid or shall be deemed to affect adversely the preferred status of
this Deed or the Mortgage under any applicable law, such provision shall be
void and of no effect and shall cease to be a part of this Deed without
affecting the remaining provisions, which shall remain in full force and
effect.

 

(b)                                 In the event that the Subsidiaries Guaranty,
this Deed, the Mortgage, any of the other Credit Documents or any of the
documents or instruments which may from time to time be delivered thereunder or
hereunder or any provision thereof or hereof shall be deemed invalidated by
present or

 

18

 

future
law of any nation or by decision of any court, this shall not affect the
validity and/or enforceability of all or any other parts of the Subsidiaries
Guaranty, this Deed, the Mortgage, any of the other Credit Documents or such
documents or instruments and, in any such case, the Shipowner covenants and
agrees that, on demand, it will execute and deliver such other and further
agreements and/or documents and/or instruments and do such things as the
Mortgagee in its sole discretion may reasonably deem to be necessary to carry
out the true intent of this Deed, the Mortgage, the Subsidiaries Guaranty and
the other Credit Documents.

 

(c)                                  In the event that the title, or ownership of
the Vessel shall be requisitioned, purchased or taken by any government of any
country or any department, agency or representative thereof, pursuant to any
present or future law, proclamation, decree order or otherwise, the lien of
this Deed and the Mortgage shall be deemed to attach to the claim for
compensation therefor, and the compensation, purchase or other taking of such
title or ownership is hereby agreed to be payable to the Mortgagee who shall be
entitled to receive the same and shall pay it to the Mortgagee who shall apply
it as provided in Section 11 of this Article III.  In the event of any such requisition, purchase
or taking, and the failure of the Mortgagee to receive proceeds as herein
provided, the Shipowner shall promptly execute and deliver to the Mortgagee
such documents, if any, as in the opinion of the Mortgagee may be necessary or
useful to facilitate or expedite the collection by the Mortgagee of such part
of the compensation, purchase price, reimbursement or award as is payable to it
hereunder.

 

(d)                                 Anything herein to the contrary
notwithstanding, it is intended that nothing herein shall waive the priority
status of this Deed and the Mortgage, and if any provision of this Deed or portion
thereof shall be construed to waive the priority status of this Deed or the
Mortgage, then such provision to such extent shall be void and of no effect.

 

ARTICLE IV

 

Sundry Provisions

 

Section 1                                               Successors and Assigns.   All
of the covenants, promises, stipulations and agreements of the Shipowner in
this Deed contained shall bind the Shipowner and its successors and shall inure
to the benefit of the Mortgagee and its successors and assigns.  In the event of any assignment or transfer of
this Deed, the term “Mortgagee”, as used in this Deed, shall be deemed to mean
any such assignee or transferee.

 

Section 2.                                          Power of
Substitution. Wherever and whenever herein any right, power or authority is granted
or given to the Mortgagee, such right, power or authority may be exercised in
all cases by the Mortgagee or such agent or agents as it may appoint, and the
act or acts of such agent or agents when taken shall constitute the act of the
Mortgagee hereunder.

 

Section 3.                                          Counterparts. This Deed may
be executed in any number of counterparts, each of which shall be an original,
but such counterparts shall together constitute but one and the same
instrument.

 

Section 4.                                          Notices. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telexed, telegraphic, telex, telecopier or cable
communication) and mailed, telexed, telecopied, cabled or delivered, if to the
Shipowner or to the Mortgagee, at its address as specified below, or at such
other address as shall be designated by such party in a written notice to the
other party:

 

19

 

If to the Shipowner, addressed to it in care of:

 

General Maritime Corporation

35 West 56th Street

New York, NY 10019

Telephone: (212) 763-5600

Facsimile: (212) 763-5603

 

If to the Mortgagee, addressed to it:

 

Nordea Bank Finland PLC, New
York Branch

437 Madison Avenue, 21st
Floor

New York, NY 10022

Attention: Mr. Hans Chr.
Kjelsrud

Facsimile: (212) 421 4420

 

All such notices and communications shall,
(i) when mailed, be effective three Business Days after being deposited in the
mails, prepaid and properly addressed for delivery, (ii) when sent by overnight
courier, be effective one Business Day after delivery to the overnight courier
prepaid and properly addressed for delivery on such next Business Day, or (iii)
when sent by telex or telecopier, be effective when sent by telex or telecopier,
except that notices and communications to the Mortgagee shall not be effective
until received by the Mortgagee.

 

Section 5.                                            Statutory Mortgage. This Deed
accompanies and is to be read with and forms part of the Mortgage dated the
date hereof and shall be effective from the date hereof.

 

Section 6.                                           Further Assurances. The Shipowner
shall execute and do all such assurances, acts and things as the Mortgagee, or
any receiver in its absolute discretion may require for:

 

(a)                                  perfecting or protecting the security created (or
intended to be created) by this Deed and the Mortgage; or

 

(b)                                 preserving or protecting any of the rights of the
Mortgagee under this Deed and the Mortgage (or any of them); or

 

(c)                                  ensuring that the security constituted by this Deed
and the Mortgage and the covenants and obligations of the Shipowner under this
Deed shall enure to the benefit of assignees of the Mortgagee (or any of them);
or

 

(d)                                 facilitating the appropriation or realization
of the Vessel or any part thereof and enforcing the security constituted by
this Deed and the Mortgage on or at any time after the same shall have become
enforceable; or

 

(e)                                  the exercise of any power, authority or
discretion vested in the Mortgagee under this Deed and the Mortgage (or any of
them),

 

in any
such case, forthwith upon demand by the Mortgagee and at the expense of the
Shipowner.

 

20

 

Section 7.                                            Governing Law. The provisions
of this Deed shall, with respect to its validity, effect, recordation and
enforcement, be governed by and construed in accordance with the applicable
laws of the Republic of Malta.

 

Section 8.                                            Additional Rights of the Mortgagee. In the event the Mortgagee shall be entitled to exercise any of its
remedies under Article III hereof, the Mortgagee shall have the right to arrest
and take action against the Vessel at whatever place the Vessel shall be found
lying and for the purpose of any action which the Mortgagee may bring before
the Courts of such jurisdiction or other judicial authority and for the purpose
of any action which the Mortgagee may bring against the Vessel, any writ,
notice, judgment or other legal process or documents may (without prejudice to
any other method of service under applicable law) be served upon the Master of
the Vessel (or upon anyone acting as the Master) and such service shall be
deemed good service on the Shipowner for all purposes.

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

21

 

IN
WITNESS WHEREOF, the Shipowner has caused this Deed of Covenants to be duly
executed by its authorized representative the day and year first above written.

 

	
   

  	
  GENMAR TRADER LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  John C. Georgiopoulos

  
	
   

  	
   

  	
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NORDEA BANK FINLAND PLC, NEW
  YORK

  BRANCH, as Security Trustee,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
					

 

22Exhibit
10.67

 

 

FORM OF

AFFYMETRIX,
INC.

NON-QUALIFIED
STOCK OPTION AGREEMENT

 

	
  Name

  	
   

  	
  Option
  Number:

  	
   

  	
  XXXXXX

  
	
  Address1

  	
   

  	
  ID:

  	
   

  	
  XXXXXX

  
	
  City, State, Zip Code

  	
   

  	
  Plan:

  	
   

  	
  Amended & Restated 1996
  Non-Employee Directors Stock Option Plan

  

 

This Non-Qualified Stock Option Agreement (the “Agreement”), is made
and entered into between AFFYMETRIX, INC., a Delaware corporation (the “Company”)
and _______________ (“Optionee”) residing at the above address.

 

THE PARTIES AGREE AS FOLLOWS:

 

                1. Grant of
Option.  The Company hereby grants to
the Optionee a Non-Qualified Stock Option (the “Option”) to purchase common
stock of the Company as specified below, subject to (i) the Terms and
Conditions of Grant attached as Exhibit A, and (ii) the Affymetrix, Inc.
Amended & Restated 1996 Non-Employee Directors Stock Option Plan (the “Plan”)
incorporated herein by reference.

 

                2. Definitions.  As used in this Agreement, including the
Terms and Conditions of Grant, the following terms shall have the meanings set
forth in this section 2.

 

	
  2.1

  	
   

  	
  Grant Date:

  	
   

  	
  XXXXXX

  
	
  2.2

  	
   

  	
  Number of shares covered:

  	
   

  	
  XXX

  
	
  2.3

  	
   

  	
  Option Termination Date:

  	
   

  	
  XXXXXX

  
	
  2.4

  	
   

  	
  Exercise Price:

  	
   

  	
  XXXXXX

  
	
  2.5

  	
   

  	
  Vesting Schedule:

  	
   

  	
  As follows:

  

 

	
  Shares

  	
   

  	
  Vest Type

  	
   

  	
  Full Vest

  
	
  XXX

  	
   

  	
  On Vest Date

  	
   

  	
  XXXXXX

  

 

	
  AFFYMETRIX, INC.

  	
   

  	
  OPTIONEE

  
	
   

  	
   

  	
   

  
	
  Company Representative

  	
   

  	
  Name of Optionee

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
  Date

  

 

 

Exhibit A

AMENDED AND RESTATED 1996

NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN OF

AFFYMETRIX, INC. (THE “PLAN”)

TERMS AND CONDITIONS OF GRANT

	
  Tax Treatment

  	
   

  	
  This
  option is intended to be a nonstatutory option, as provided in the Stock
  Option Grant Agreement and the Plan.

  
	
  Vesting

  	
   

  	
  This
  option becomes vested, as shown in the vesting schedule set forth in the
  Stock Option Grant Agreement.

  
	
   

  	
   

  	
  No
  additional shares become exercisable after your service as a director of the
  Company (or a subsidiary of the Company) has terminated for any reason.

  
	
  Term

  	
   

  	
  Each
  Option granted hereunder shall expire 10 years and two days after the date of
  the grant.

  
	
  Regular Termination

  	
   

  	
  If
  your service as a director of the Company or a subsidiary of the Company
  terminates for any reason except death or disability, then this option will
  expire at the close of business at Company headquarters on the date 3 months
  after your termination date. The Company determines when your service
  terminates for this purpose.

  
	
  Death

  	
   

  	
  If
  you die as a director of the Company or a subsidiary of the Company, then
  this option will expire at the close of business at Company headquarters on
  the date 18 months after the date of death.

  
	
  Disability

  	
   

  	
  If
  your service as a director of the Company or a subsidiary of the Company
  terminates because of your disability, then this option will expire at the
  close of business at Company headquarters on the date 18 months after your
  termination date. 

  
	
   

  	
   

  	
  For
  all purposes under this Agreement, “disability” is determined pursuant to the
  Plan.

  
	
  Option
  Exercise

  	
   

  	
  Each
  option granted pursuant to the Plan shall be exercisable in full six months
  after the date of grant and shall be subject to the Company’s right of repurchase
  as set forth herein and in the Plan.

  
	
  Restrictions
  on Exercise

  	
   

  	
  The
  Company will not permit you to exercise this option if the issuance of shares
  at that time would violate any law or regulation.

  
	
  Corporate
  Transactions

  	
   

  	
  In connection with an acquisition of the Company
  affected by a merger, consolidation, or any like occurrence in which the
  Company is involved, the Company’s right of repurchase as set forth in the
  Plan shall expire with respect to twice the number of Options otherwise
  determined pursuant to the Plan. The Administrator shall have the authority,
  in its sole discretion to determine the time prior to consummation of such
  acquisition when such increased expiration of the right to repurchase shall
  become effective.

  
	
  Time of
  Option Exercise; Repurchase Right

  	
   

  	
  The Company shall have
  a right of repurchase at the Option exercise price with respect to Shares
  purchased upon exercise of Options granted under the Plan. The Company’s
  repurchase right with respect to the shares purchased upon exercise of
  options covered under the Stock Option Grant Agreement shall expire with
  respect to 100% of the number of such shares on the first anniversary of the
  date of grant. The Company may exercise its repurchase right by written
  notice to the Director within 120 days after the date such Director Ceases to
  act as a Director of the Company.

  

 

	
  Notice
  of Exercise

  	
   

  	
  When
  you wish to exercise this option, you must notify the Company by filing the
  proper “Notice of Exercise” form at the address given on the form. Your
  notice must specify how many shares you wish to purchase. Your notice must
  also specify method of receipt of shares (physical certificate or transferred
  electronically to your broker). The notice will be effective when it is
  received along with the full payment of the exercise price and any applicable
  taxes by the Company. 

  
	
   

  	
   

  	
  If
  someone else wants to exercise this option after your death, that person must
  prove to the Company’s satisfaction that he or she is entitled to do so.

  
	
  Form of
  Payment

  	
   

  	
  When
  you submit your notice of exercise, you must include payment of the option
  exercise price for the shares you are purchasing along with any applicable
  withholding taxes. Payment may be made in one (or a combination of two or
  more) of the following forms as approved by the Administrator:

  
	
   

  	
   

  	
  •       Your
  personal check, a cashier’s check or a money order.

  
	
   

  	
   

  	
  •       Delivery by the optionee of Common
  Stock already owned by the optionee for all or part of the option price,
  provided the Fair Market Value of such Common Stock is equal on the date of
  exercise to the Option price; provided, however, that if an Optionee has
  exercised any portion of any Option granted by the Company by delivery of
  Common Stock, the Optionee may not, within six months following such
  exercise, exercise any Option granted under this Plan by delivery of Common
  Stock.

  
	
   

  	
   

  	
  •       Acceptance
  of the Optionee’s full recourse promissory note for all or part of the Option
  price payable on such terms and bearing such interest rate which may be
  either secured or unsecured as determined by the administrator.

  
	
   

  	
   

  	
  •       Any other
  consideration and method of payment to the extent permitted under the
  applicable laws & regulations.

  
	
  Withholding
  Taxes and Stock Withholding

  	
   

  	
  You
  will not be allowed to exercise this option unless you make arrangements
  acceptable to the Company to pay any withholding taxes that may be due as a
  result of the option exercise. These arrangements may include (subject to
  Administrator approval) withholding shares of Company stock that otherwise
  would be issued to you when you exercise this option or to tender to the
  Company other shares of Common Stock or other securities of the Company owned
  by the Optionee.
  The value of these shares, determined as of the effective date of the option
  exercise (the Tax Date), will be applied to the withholding taxes.

  
	
  Restrictions
  on Resale

  	
   

  	
  By
  signing this Agreement, you agree not to sell any option shares at a time
  when applicable laws, Company policies (including the Insider Trading Policy)
  or an agreement between the Company and its underwriters prohibit a sale.
  This restriction will apply as long as you are a director of the Company or a
  subsidiary of the Company.

  
	
  Transfer
  of Option

  	
   

  	
  Prior
  to your death, only you may exercise this option. No Option granted under
  this Plan shall be assignable or otherwise transferable by the Optionee,
  except by will or the laws of descent and distribution, or pursuant to a
  qualified domestic relations order as defined by the Code.

  
	
  Retention
  Rights

  	
   

  	
  Your
  option or this Agreement does not give you the right to be retained by the
  Company or a subsidiary of the Company with respect to the continuation of
  the Optionee’s membership on the Board.

  

 

	
  Stockholder
  Rights

  	
   

  	
  You,
  or your estate or heirs, have no rights as a stockholder of the Company until
  you have exercised this option by giving the required notice to the Company
  and paying the exercise price. No adjustments are made for dividends or other
  rights if the applicable record date occurs before you exercise this option,
  except as described in the Plan.

  
	
  Adjustments

  	
   

  	
  In
  the event of a stock split, a stock dividend or a similar change in Company
  stock, the number of shares covered by this option and the exercise price per
  share may be adjusted pursuant to the Plan.

  
	
  Final
  and Binding

  	
   

  	
  All
  questions of interpretation, implementation and application of this Plan
  shall be determined by the Administrator. Such determination shall be final
  and binding on all persons.

  
	
  Applicable
  Law

  	
   

  	
  This
  Agreement will be interpreted and enforced under the laws of the State of
  Delaware (without regard to their choice-of-law provisions).

  
	
  The
  Plan and Other Agreements

  	
   

  	
  The
  text of the Plan is incorporated in this Agreement by reference.

  
	
   

  	
   

  	
  This
  Agreement and the Plan constitute the entire understanding between you and
  the Company regarding this option. Any prior agreements, commitments or
  negotiations concerning this option are superseded. This Agreement may be
  amended only by another written agreement, signed by both parties. 

  
	
   

  	
   

  	
  In the event that this document conflicts with
  the Plan, the Plan will control.

  

BY SIGNING THE COVER SHEET OF
THIS AGREEMENT, YOU AGREE TO ALL OF THE TERMS AND 

CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.

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