Exhibit 4.13
1. Shipbroker
2. Place and date
Seoul, 09/03/2006
3. Owners/Place of business (Cl. 1)
KOMARF HOPE 28 Shipping Company. Liberia
4. Bareboat Charterers/Place of business
Taygerus Shipping Company Limited. Liberia
5. Vessel's name, call sign and lag (Cl. 1 and 3)
M/T Timeless, ELNX9, Liberia.
6. Type of Vessel
Suez Max
7. GT/NT
79718/46569
8. When/Where built
1991 Hyundai Heavy Industries Co., Ltd., Ulsan, Korea.
9. Total DWT (abt.) In metric tons on summer freeboard
10. Classification society (C1. 3)
Det Norske Veritas
11. Date of last special survey by the Vessel's classification society
12. Further particulars of Vessel (also indicate minimum number of months'
validity of class certificates agreed acc. To Cl. 3)
13. Port or Place of delivery (Cl. 3)
14. Time for delivery (Cl. 4)
See Clause 4.
15. Cancelling date (Cl. 5)
April 30 2006
16. Port or Place of redelivery (Cl. 15)
Not applicable.
17. No. of months' validity, of trading and class certificates upon redelivery
(Cl. 15)
Six (6) months.
18. Running days' notice if other than stated in Cl. 4
See Clause 5.
19. Frequency of dry-docking (Cl. 10(g))
20. Trading limits (Cl. 6)
21. Charter period (Cl. 2)
Five (5) years (however, subject to Cl. 32)
22. Charter hire (Cl. 11)
US$ 750,000
23. New class and other safety requirements (state percentage of Vessel's
insurance value acc. To Box 29)(Cl. 10(a)(II))
24. Rate of interest payable acc. to Cl. 11(f) and, if applicable, acc. to PART
IV
25. Currency and method of payment (Cl. 11)
US Dollars, in same day funds
26. Place of payment; also state beneficiary and bank account (Cl. 11)
As to be notified by the Owners to the Charterers
27. Bank guarantee/bond (sum and place)((Cl. 24)(optional)
28. Mortgage(s), if any (state whether 12(a) or (b) applies; if 12(b) applies
state date of Financial Instrument and name of Mortgagee(s)/Place of
business)(Cl. 12)
12(b) applies.
1st priority mortgage, dated on or around the date herewith in favor of
Fortis Bank ("Agent") as trustee for the benefit of itself, the relevant
lenders ("Lenders") and swap providers.
2nd priority mortgage dated on or around the date herewith in favor of the
Charterers securing the Seller's Credit (as defined in Clause 32(a)).
3rd priority mortgage dated on or around the date herewith in favor of the
shareholder of the Owners securing the Shareholder's Funds (as defined in
the Loan Agreement defined in Clause 33).
Financial Instrument to also include, without limitation, the intercreditor
agreement and any other agreements in connection with financings related to
this Charter.
29. Insurance (hull and machinery and war risks)(state value acc. to Cl. 13(f)
or, if applicable, acc. To Cl. 14(k))(also state if Cl. 14 applies)
Each insurance to cover 130% of the Outstanding Project Cost; however, P&I
Club insurance to cover the maximum cover available on the market.
Clause 14 is not applicable.
30. Additional insurance cover, if any, for Owners' account limited to (CI,
13(b) or, if applicable, Cl. 14(g)
Not applicable.
31. Additional insurance cover, if any, for Charterers' account limited to (Cl.
13(b) or, if applicable, CI. 14(g))
Not applicable.
32. Latent defects (only to be filled in if period other than stated in CI. 3)
33. Brokerage commission and to whom payable (Cl. 14(g))
Not applicable
34. Grace period (state number of clear banking days)(Cl. 28)
35. Dispute Resolution (state 30(a), 30(b) or 30(c); if 30(c) agreed Place of
Arbitration must be stated (Cl. 30)
30(a)
36. War cancellation (indicate countries agreed)(Cl. 26(f))
37. Newbuilding Vessel (indicate with "yes" or "no": whether PART III
applies)(optional)
No
38. Name and place of Builders (only to be filled in if PART III applies)
39. Vessel's Yard Building No. (only to be filled in if PART III applies)
40. Date of Building Contract (only to be filled in if PART III applies)
41. Liquidated damages and costs shall accrue to (state party acc. to Cl. 1)
a)
b)
c)
42. Hire/Purchase agreement (indicate with "yes" or "no" whether PART IV
applies)(optional)
No
43. Bareboat Charter Registry (indicate "yes" or "no" whether PART V
applies)(optional)
No
44. Flag and Country of the Bareboat Charter Registry (only to be filled in if
PART V applies)
No
45. Country of the Underlying Registry (only to be filled in if PART V applies)
No
46. Number of additional clauses covering special provisions, if agreed)
32, 33, 34
PREAMBLE - It is mutually agreed that this Contract shall be performed subject
to the conditions contained in this Charter which shall include PART I and PART
II. In the event of a conflict of conditions, the provisions of PART I shall
prevail over those of PART II to the extent of such conflict but no further. It
is further mutually agreed that PART III and/or PART IV and/or PART V shall only
apply and only form part of this Charter if expressly agreed and stated in the
Boxes 37, 42 and 43. If PART III and/or PART IV and/or PART V apply, it is
further agreed that in the event of a conflict of conditions, the provisions of
PART I and PART II shall prevail over those of PART III and/or PART IV and/or
PART V to the extent of such conflict but no further.
Signature (Owners) Signature (Charterers)
- ------------------------------- -------------------------------
PART II
"BARECON 2001" Standard Bareboat Charter
1. Definitions
In this Charter, the following terms shall have the meanings hereby
assigned to them:
"The Owners" shall mean the party identified in Box 3;
"The Charterers" shall mean the party identified in Box 4;
"The Vessel" shall mean the vessel named in Box 5 and with particulars as
stated in Boxes 6 to 12.
"Financial Instrument" means the mortgage, deed of covenant or other such
financial security instrument in Box 28.
2. Charter Period
In consideration of the hire detailed in Box 22, the Owners have agreed to
let and the Charterers have agreed to hire the Vessel for the period stated
in Box 21 ("The Charter Period").
3. Delivery
(not applicable when Part III applies, as indicated in Box 37)
The Vessel to be delivered under this Charter by the Owners to the
Charterers shall be on an as is where is basis (and, at any rate, as
delivered under the MOA (as defined in Clause 4) by the Charterers as
sellers to the Owners as buyers) and without any warranty by the Owner.
4. Time for Delivery
(not applicable when Part III applies, as indicated in Box 37)
The delivery of the Vessel under this Charter shall be made simultaneously
with the delivery under the Memorandum of Agreement entered into on the
same date herewith by and between the Charterers as sellers and the Owners
as buyers ("MOA").
5. Cancelling
(not applicable when Part III applies, as indicated in Box 37)
(a) Should the Vessel not be delivered latest by the canceling date
indicated in Box 15 or the cancellation date as otherwise agreed by
and between the Owners and the Charterers hereunder, the Owners shall
propose a new date of cancellation that reasonably takes into account
the time needed for this Charter and the related financing
transactions to take into effect and the Owners shall accept such
proposal.
(b) Notwithstanding Clause 5(a) above, if it appears with reasonable
certainty the delivery of the Vessel under this Charter cannot be made
due to the failure in the related financing transactions or otherwise,
this Charter may be cancelled by a mutual agreement between the Owners
and the Charterers.
(c) Paragraph deleted.
6. Trading Restrictions
The Vessel shall be employed in lawful trades for the carriage of suitable
lawful merchandise within the trading limits indicated in Box 20.
The Charterers undertake not to employ the Vessel or suffer the Vessel to
be employed otherwise than in conformity with the terms of the contracts of
insurance (including any warranties expressed or implied therein) without
first obtaining the consent of the insurers to such employment and
complying with such requirements as to extra premium or otherwise as the
insurers may prescribe.
The Charterers also undertake not to employ the Vessel or suffer her
employment in any trade or business which is forbidden by the law of any
country to which the Vessel may sail or is otherwise illicit or in carrying
illicit or prohibited goods or in any manner whatsoever which may render
her liable to condemnation, destruction, seizure or confiscation.
Notwithstanding any other provisions contained in this Charter it is agreed
that nuclear fuels or radioactive products or waste are specifically
excluded from the "Cargo permitted to' be loaded or carried under this
Charter. This exclusion does not apply to radio-isotopes used or intended
to be used for any industrial, commercial, agricultural, medical or
scientific purposes provided the Owners' prior approval has been obtained
to loading thereof.
7. Surveys on Delivery and Redelivery
(not applicable when Part III applies, as indicated in Box 37)
The Owners and Charterers shall each appoint surveyors for the purpose of
determining and agreeing in writing the condition of the Vessel at the time
of delivery and redelivery hereunder. The Charterers shall bear all
expenses of the On-hire Survey including loss of time, if any, and the
Charterers shall also bear all expenses of the Off-hire Survey including
loss of time, if any, at the daily equivalent to the rate of hire or pro
rata thereof.
8. Inspection
The Owners shall have the right at any time after giving reasonable notice
to the Charterers to inspect or survey the Vessel or instruct a duly
authorized surveyor to carry out such survey on their behalf:-
(a) to ascertain the condition of the Vessel and satisfy themselves that
the Vessel is being properly repaired and maintained. The costs and
fees for such inspection or survey shall be paid by the Owners unless
the Vessel is found to require repairs or maintenance in order to
achieve the condition so provided;
(b) in dry-dock if the Charters have not dry-docked her in accordance with
Clause 10(g). The costs and fees for such inspection of survey shall
be paid by the Charters; and
(c) for any other commercial reason they consider necessary (provided it
does not unduly interfere with the commercial operation of the
Vessel). The costs and fees for such inspection and survey shall be
paid by the Owners.
All time used in respect of inspection, survey or repairs shall be for the
Charters' account and form part of the Charter Period.
The Charters shall also permit the Owners to inspect the Vessel's log book
whenever requested and shall whenever required by the Owners furnish them
with full information regarding and casualties or other accidents or damage
to the Vessel.
9. Inventories, Oil and Stores
A complete inventory of the Vessel's entire equipment, outfit including
spare part, appliances and of all consumable stores on board the Vessel
shall be made by the Charters in conjunction with the Owners redelivery of
the Vessel. The Charters and the Owners, respectively, shall at the time of
redelivery take over and pay for all bunkers, lubricating oil, unbroached
provisions, paints, ropes and other consumable stores (excluding spare
parts) in the said Vessel at the then current market prices at the ports of
delivery, respectively. The Charters shall ensure that all spare parts
listed in the inventory and used during the Charter Period are replaced at
their expense prior to redelivery Of the Vessel.
10. Maintenance and Operation
(a) (i) Maintenance and Repairs - During the Charter Period the Vessel
shall be in the full possession and at the absolute disposal for
all purposes of the Charters and under their complete control in
every respect. The Charters shall maintain the Vessel, her
machinery, boilers, appurtenances and spare parts in a good state
of repair, in efficient operating condition and in accordance
with good commercial maintenance practice and at their own
expense they shall at all times keep the Vessel's Class fully up
to date with the Classification Society indicated in Box 10 and
maintain all other necessary certificates in force at all times.
(ii) New Class and Other Safety Requirements - In the event of any
improvement, structural changes or new equipment becoming
necessary for the continued operation of the Vessel by reason of
new class requirements or by compulsory legislation costing
(excluding the Charters' loss of time) more than the percentage
stated in Box 23, or if Box 23 is left blank, 5 per cent of the
Vessel's insurance value as stated in Box 29, then the Charterers
at their own expense shall bear
(iii) Financial Security - The Charters shall maintain financial
security or responsibility in respect of third party liabilities
as required by any government, including federal, state of
municipal or other division or authority thereof, to enable the
Vessel, without penalty or charge, lawfully to enter, remain at
or leave any port, place territorial or contiguous waters of any
country, state or municipality in performance of this Charter
without any delay. This obligation shall apply whether or not
such requirements have been lawfully imposed by such government
or division or authority thereof.
The Charters shall make and maintain all arrangement by bond or
otherwise as may be necessary to satisfy such requirements at the
Charters' sole expense and the Charters shall indemnify the Owners
against all consequences whatsoever (including loss of time) for any
failure or inability to do so.
(b) Operation for the Vessel - The Charters shall at their own expense and
by their own procurement man, victual, navigate, operate, supply, fuel
and, whenever required, repair the Vessel during the Charter Period
and they shall pay all charges and expenses of every kind and nature
whatsoever incidental to their use, and operation of the Vessel under
this Charter; provided, however, that, all tonnage taxes and other
ownership related expenses shall be paid by the Owners. The Master,
officers and crew of the Vessel shall be the servants of the
Charterers for all purposes whatsoever, even if for any reason
appointed by the Owners.
Charterers shall comply with the regulations regarding officers and
crew in force in the country of the Vessel's flag or any other
applicable law.
(c) The Charterers shall keep the Owners and the mortgagee(s) advised of
the intended employment, planned dry-docking and major repairs of the
Vessel, as reasonably required.
(d) Flag and Name of Vessel - During the Charter Period, the Charters
shall have the liberty to paint the Vessel in their own colours,
install and display their funnel insignia and fly their own house
flag. The Charters shall also have the liberty, with the Owners'
consent, which shall not be unreasonably withheld, to change the flag
and/or the name of the Vessel during the Charter Period. Painting and
re-painting, instalment and re-instalment, registration and
re-registration, if required by the Owners, shall be at the Charters'
expense and time.
(e) Changes to the Vessel - Subject to Clause l0(a)(ii), the Charters
shall make no structural changes in the Vessel or changes in the
machinery, boilers, appurtenances or spare parts thereof without in
each instance first securing the Owners' approval thereof. If the
Owners so agree, the Charters shall, if the Owners so require, restore
the Vessel to its former condition before the termination of this
Charter.
(f) Use of the Vessel's Outfit, Equipment and Appliances - The Charters
shall have the use of all outfit, equipment, and appliances on board
the Vessel at the time of delivery, provide the same or their
substantial equivalent shall be returned to the Owners on redelivery
in the same good order and condition as when received, ordinary wear
and tear excepted. The Charterers shall from time to time during the
Charter Period replace such items of equipment as shall be so damaged
or worn as to be unfit for use. The Charterers are to procure that all
repairs to or replacement of any damaged, worn or lost parts or
equipment be effected in such manner (both as regards workmanship and
quality of materials) as not to diminish the value of the Vessel. The
Charterers have the right to fit additional equipment at their expense
and risk but the Charterers shall remove such equipment at the end of
the period if requested by the Owners. Any equipment including radio
equipment on hire on the Vessel at time of delivery shall be kept and
maintained by the Charterers and the Charterers shall assume the
obligations and liabilities of the Owners under any lease contacts in
connection therewith and shall reimburse the Owners for all expenses
incurred in connection therewith, also for any new equipment required
in order to comply with radio regulations.
(g) Periodical Dry-Docking - The Charters shall dry-dock the Vessel and
clean and paint her underwater parts whenever the same may be
necessary, but not less than once during the period stated in Box 19
or, if Box 19 has been left blank, every sixty (60) calendar months
after delivery or such other period as may be required by the
Classification Society or flag State.
(h) Management Commercial, technical and/or operational management of the
Vessels to be executed by Top Tanker Management Inc. or any other
company acceptable to the Agent and KOMARF for the Charter Period.
(i) Compliance - The Charterers shall comply with any and all requirements
under the International Management Code for the Safe Operation of
Ships and for Pollution Prevention adopted by the International
Maritime Organisation and applicable law.
(k) Financial Statements - The Charterers shall submit to the Owners the
audited annual accounts within 180 days of the year end and
semi-annual management accounts within 90 days of the half- year end.
(l) Survey Reports - The Charterers shall supply the Owners the class
survey reports regularly including annual survey and the follow-up
reports showing the recommendation, if any, has been cleared at the
Charterer's expense. The Charterers shall put its best efforts to keep
the condition of the Vessels in compliance with all class certificates
during the Charter Period.
11. Hire
(a) The Charterers shall pay hire due to the Owners punctually in
accordance with the terms of this Charter in respect of which time
shall be of the essence.
(b) The Charterers shall on a monthly basis pay to the Owners for the hire
of the Vessel a lump sum in the amount indicated in Box 22 which shall
be payable not later than every thirty (30) running days in advance,
the first lump sum being payable on the date and hour of the Vessel's
delivery to the Charterers. Hire shall be paid continuously throughout
the Charter Period. Each hire shall be made free and clear of any
right of set-off, reduction or delay whatsoever.
(c) Payment of hire shall be made in cash without discount in the currency
and in the manner indicated in Box 25 and at the place mentioned in
Box 26.
(d) Final payment of hire, if for a period of less than thirty (30)
running days, shall be calculated proportionally according to the
number of days and hours remaining before redelivery and advance
payment to be effected accordingly.
(e) Notwithstanding whether the Vessel be lost or missing, the hire shall
be paid by the Charterers to the Owners as provided hereunder.
(f) Any delay in payment of hire shall entitle the Owners to interest at
the rate per annum as agreed in Box 24. If Box 24 has not been filled
in, the three months interbank offered rate in London (LIBOR or its
successor) for the currency stated in Box 25, as quoted by the British
Bankers' Association (BBA) on the date when the hire fell due,
increased by 2 per cent., shall apply.
(g) Payment of interest due under sub-clause 11(f) shall be made
immediately, whether or not the Owners have given invoice therefor to
the Charterers.
12. Mortgage
(only to apply if Box 28 has been appropriately filled in)
(a) Paragraph deleted.
(b) The Vessel chartered under this Charter is financed by a mortgage
according to the Financial Instrument. The Charterers undertake to
comply, and provide such information and documents to enable the
Owners to comply, with all such instructions or directions in regard
to the employment, insurances, operation, repairs and maintenance of
the Vessel as laid down in the Financial Instrument or as may be
directed from time to time during the currency of the Charter by the
mortgage(s) in conformity with the Financial Instrument. The
Charterers confirm that, for this purpose, they have acquainted
themselves with all relevant terms, conditions and provisions of the
Financial Instrument and agree to acknowledge this in writing in any
form that may be required by the motgagee(s). The Owners warrant that
they have not effected any mortgage(s) other than stated in Box 28 and
that they shall not agree to any amendment of the mortgage(s) referred
to in Box 28 or effect any other mortgage(s) without the prior consent
of the Charterers which shall not be unreasonably withheld.
(optional, Clauses 12(a) and 12(b) are alternatives; indicate alternative
agreed in Box 28).
13. Insurance and Repairs
(a) During the Charter Period the Vessel shall be kept insured by the
Charterers at their expense against hull and machinery, war and
Protection and Indemnity risks (and any risks against which it is
compulsory to insure for the operation of the Vessel, including
maintaining financial security in accordance with sub-clause
10(a)(iii)) in such form as the Owners shall in writing approve, which
approval shall not be un-reasonably withheld. Further, during the
Charter Period, the Charterers shall at their expense take our effect
MIL MAP and COFR insuring the Vessel and other insurances as the Agent
or the shareholder of the Owners may reasonably require. Insurance
policies for each insurance above shall name the Owners, the Lenders
and the Charterers as beneficiaries, and shall be assigned in favor of
them. Subject to the provisions of the Financial Instrument, if any,
and the approval of the Owners and the insurers, the Charterers shall
effect all insured repairs and shall undertake settlement and
reimbursement from the insurers of all costs in connection with such
repairs as well as insured charges, expenses and liabilities to the
extent of coverage under the insurances herein provided for. The
insurances shall not be subject to any deduction, franchise or any
other restrictions of similar effect.
The Charterers also to remain responsible for and to effect repairs
and settlement of costs and expenses incurred thereby in respect of
all other repairs not covered by the insurances and/or not exceeding
any possible franchise(s) or deductibles provided for in the
insurances. All time used for repairs under the provisions of
sub-clause 13(a) and for repairs of latent defects according to Clause
3(c) above, including any deviation, shall be for the Charterers'
account.
(b) Paragraph deleted.
(c) The Charterers shall upon the request of the Owners, provide
information and promptly execute such documents as may be required to
enable the Owners to comply with the insurance provisions of the
Financial Instrument.
(d) Subject to the provisions of the Financial Instrument, if any, should
the Vessel become and actual, constructive, compromised or agreed
total loss under the insurances required under sub-clause 13(a), all
insurance payments for such loss shall be paid to the Agent who shall
distribute the moneys in accordance with the Financial Instrument. The
Charterers undertake to notify the Owners and the mortgagee(s), if
any, of any occurrences in consequence of which the Vessel is likely
to become a total loss as defined in this Clause and all other
occurrence as required under the Financial Instrument.
(e) Subject to the Financial Instrument, the Owners shall upon the request
of the Charterers, promptly execute such documents as may be required
to enable the Charterers to abandon the Vessel to insurers and claim a
constructive total loss.
(f) For the purpose of insurance coverages of each insurance mentioned the
provisions of sub-clause 13(a), the insured amount shall be the sum
indicated in Box 29.
14. Paragraph deleted.
15. Redelivery
At the expiration of the Charter Period or, if earlier, on the date of sale
of the Vessel as provided for under Clause 32, the Vessel shall be
redelivered by the Charterers to the Owners at a safe and ice-free port in
such ready safe berth as the Owners may direct. The Charterers shall give
the Owners not less than thirty (30) running days' preliminary notice of
expected date, range of ports of redelivery or port or place of redelivery
(which shall include the port or place of delivery as directed by the
Owners) and not less than fourteen (14) running days' definite notice of
expected date and port or place of redelivery (which shall be the port or
place of delivery as directed by the Owners). Any changes thereafter in the
Vessel's position shall be notified immediately to the Owners.
The Charterers warrant that they will not permit the Vessel to commence a
voyage (including any preceding ballast voyage) which cannot reasonably be
expected to be completed in time to allow redelivery of the Vessel within
the Charter Period or on the date of sale of the Vessel as provided for
under Clause 32 at the place as directed by the Owners. Notwithstanding the
above, should the Charterers fail to redeliver the Vessel within the
Charter Period or on the date of sale of the Vessel as provided for under
Clause 32 at the place as directed by the Owners, the Charterers shall pay
the daily equivalent to the rate of hire stated in Box 22 plus 10 percent,
for the number of days by which the Charter Period or the date of sale is
exceeded. All other terms, conditions and provisions of this Charter shall
continue to apply.
Subject to the provisions of Clause 10, the Vessel shall be redelivered to
the Owners in the same or as good structure, state, condition and class as
that in which she was delivered free of class conditions/recommendations,
fair wear and tear not affecting class excepted. On re-delivery, The Vessel
shall have been drydocked as per class requirement.
The Vessel upon redelivery shall have her survey cycles up to date and the
trading and the national and international class certificates valid for at
least the number of months agreed in Box 17.
16. Non-Lien
The Charterers will not suffer, nor permit to be continued, any lien or
encumbrance incurred by them or their agents, which might have priority
over the title and interest of the Owners in the Vessel. The Charterers
further agree to fasten to the Vessel in a conspicuous place and to keep so
fasten during the Charter Period a notice reading to the effect of the
following:
"This Vessel is the property of (name of Owners). It is under charter to
(name of Charterers) and by the terms of the Charter Party neither the
Charterers nor the Master have any right, power or authority to create,
incur or permit to be imposed on the Vessel any lien whatever. Further, the
Vessel is subject to the first priority mortgage dated [ ] in favor of
Fortis Bank as trustee acting for itself and the mortgagees thereunder, the
second priority mortgage, dated [ ] in favor of [specify the Charterers
name], and the third priority mortgage dated [ ] in favor of [specify the
shareholder of the Owners name]"
17. Indemnity
(a) The Charterers shall indemnify the Owners, Korea Marine Fund
Corporation (a Korean corporation: "KOMARF"), the Owners, the Agent
and the Lenders and their respective successors, assigns, agents,
directors, shareholders and officers (co11ectively, "Indemnified
Parties") from and against any loss, damage, claim, cost and expense
incurred by them arising out of or in relation to the operation of the
Vessel by the Charterers (including, without limitation, costs of
Operating and maintaining the Vessels (whether by the time-charterers
or the subcharterers or by whomsoever leased, used or operated).
environmental claim or those based on environmental laws), and against
any lien of whatsoever nature arising out of an event occurring during
the Charter Period. If the Vessel be arrested or otherwise detained by
reason of claims or liens arising out of her operation hereunder by
the Charterers, the Charterers shall at their own expense take all
reasonable steps to secure that within a reasonable time the Vessel is
released, including the provision of bail.
Without prejudice to the generally of the foregoing, the Charterers
agree to indemnify the Indemnified Parties against all consequences or
liabilities arising from the Master, officers or agents signing Bills
of Lading or other documents.
(b) If the Vessel be arrested or otherwise detained by reason of a claim
or claims against the Owners, the Owners shall at their own expense
take all reasonable steps to secure that within a reasonable time the
Vessel is released, including the provision of bail.
In such circumstances the Owners shall indemnify the Charterers
against any loss, damage or expense incurred by the Charterers
(including hire paid under this Charter) as a direct consequence of
such arrest or detention.
18. Lien
The Owners to have a lien upon all cargoes, sub-hires and sub-freights
belonging or due to the Charterers or any sub-charterers and any Bill of
Lading freight for all claims under this Charter.
19. Salvage
All Salvage and towage performed by the Vessel shall be for the Charterers'
benefit and the cost of repairing damage occasioned thereby shall be borne
by the Charterers.
20. Wreck Removal
In the event of the Vessel becoming a wreck or obstruction to navigation
the Charterers shall indemnify the Indemnified Parties against any sums
whatsoever which the Indemnified Parties shall become liable to pay and
shall pay in consequence of the Vessel becoming a wreck or obstruction in
navigation.
21. General Average
The Owner shall not contribute to General Average.
22. Assignment, Sub-Charter and Sale
(a) The Charterers shall not assign this Charter nor sub-charter the
Vessel on a bareboat basis except in accordance with the Financial
Instrument.
(b) The Owners shall not sell the Vessel during the currency of this
Charter except as provided in Clause 32.
23. Contacts of Carriage
(a) The Charterers are to procure that all documents issued during the
Charter Period evidencing the terms and conditions agreed in respect
of carriage of goods shall contain a paramount clause incorporating
any legislation relating to carrier's liability for cargo compulsorily
applicable in the trade; if no such legislation exists, the documents
shall incorporate the Hague-Visby Rules, The documents shall also
contain the New Jason Clause and the Both-to-Blame Collision Clause.
(b) The Charterers are to procure that all passenger tickets issued during
the Charter Period for the carriage of passengers and their luggage
under this Charter shall contain a paramount clause incorporating any
legislation relating to carrier's liability for passengers and their
luggage compulsorily applicable in the trade; if no such legislation
exists, the passenger tickets shall incorporate the Athens Convention
Relating to the Carriage of Passengers and their Luggage by Sea, 1974,
and any protocol thereto. Delete as applicable
24. Paragraph deleted.
25. Requisition/Acquisition
(a) In the event of the Requisition for Hire for the Vessel by any
governmental or other competent authority (hereinafter referred to as
"Requisition for Hire") irrespective of the date during the Charter
Period when "Requisition for Hire" may occur and irrespective of the
length thereof and whether or not it be for an indefinite or a limited
period of time, and irrespective of whether it may or will remain in
force for the remainder of the Charter Period, this Charter shall not
be deemed thereby or thereupon to be frustrated or otherwise
terminated and the Charters shall continue to pay the stipulated hire
in the manner provided by this Charter until the time when the Charter
would have terminated pursuant to any of the provisions hereof.
(b) In the event of the Owners being deprived of their ownership in the
Vessel by any Compulsory Acquisition of the Vessel or requisition for
title by any governmental or other competent authority (hereinafter
referred to as "Compulsory Acquisition"), then, irrespective of the
date during the Charter Period when "Compulsory Acquisition" may
occur, this Charter shall not be deemed thereby or thereupon to be
frustrated or otherwise terminated and the Charters shall continue to
pay the stipulated hire in the manner provided by this Charter until
the time when the Charter would have terminated pursuant to any of the
provisions hereof.
25. War
(a) For the purpose of this Clause, the words "War Risks" shall include
any war (whether actual or threatened), act of war, civil war,
hostilities, revolution, rebellion, civil commotion, warlike
operations, the laying of mines (whether actual or reported). Acts of
piracy, acts of terrorists, acts of hostility of malicious damage,
blockades (whether imposed against vessels of certain flags or
ownership or against certain cargoes or crews or otherwise howsoever),
by any person, body, terrorist or political group, or the Government
of any state whatsoever, which may be dangerous or are likely to be or
to become dangerous to the Vessel, her cargo, crew or other persons on
board the Vessel.
(b) The Vessel, unless the written consent of the Owners be first
obtained, shall not continue to or go through any port, place, area or
zone (whether of land or sea), or any waterway or canal, where it
reasonably appears that the Vessel, her cargo, crew or other persons
on board the Vessel, in the reasonable judgment of the Owners, may be,
or are likely to be, exposed to War Risks. Should the Vessel, be
within any such place as aforesaid, which only becomes dangerous, or
is likely to be or to become dangerous, after her entry into it, the
Owners shall have the right to require the Vessel to leave such area.
(c) The Vessel shall not load contraband cargo, or to pass through any
blockade, whether such blockade be imposed on all vessels, or is
imposed selectively in any way whatsoever against vessels of certain
flags or ownership, or against certain cargoes or crews or otherwise
howsoever, or to proceed to an area where she shall be subject, or is
likely to be subject to a belligerent's right of search and/or
confiscation.
(d) If the insurers of the war risks insurance, when Clause 14 is
applicable, should requires payment of premiums and /or calls because,
pursuant to the Charterers' orders, the Vessel is within, or is due to
enter and remain within, any area or areas which are specified by such
insurers as being subject to additional premiums because of War Risks,
then such premiums and/or calls shall be reimbursed by the Charterers
to the Owners at the same time as the next payment of hire is due.
(e) The Charterers shall have the liberty.
(i) to comply with all orders, directions, recommendations or advise
as to departures, arrival, routes, sailing in convoy, ports of
call, stoppages, destinations, discharge of cargo, delivery, or
in any other way whatsoever, which are given by the Government of
the Nation under whose flag the Vessel sails, or any other
Government, body or group whatsoever acting with the power to
compel compliance with their orders or directions;
(ii) to comply with the orders, directions or recommendations of any
war risks underwriters who have the authority to five the same
under the terms of the war risks insurance;
(iii) to comply with the terms of any resolution of the Security of
the European Community, the effective orders of any other
Supranational body which has the right to issue and give the
same, and with national laws aimed at enforcing the same to which
the Owners are subject, and to obey the orders and directions of
those who are charged with their enforcement.
(f) In any and all events of outbreak of war (whether there be a
declaration of war or not), the hire shall continue to be paid in
accordance with Clause 11.
27. Paragraph deleted.
28. Termination
(a) Charterers' Default
Subject to the Financial Instrument, the Owners shall be entitled to
withdraw the Vessel from the service of the Charterers and terminate
the Charter with immediate effect by written notice to the Charterers
if:
(i) the Charterers fail to pay hire in accordance with Clause 11.
However, where there is a failure to make punctual payment of
hire due to oversight, negligence, errors or omissions on the
part of the Charterers or their bankers, the Owners shall give
the Charterers written notice of the number of clear banking days
stated in Box 34 (as recognized at the agreed place of payment)
in which to rectify the failure, and when so rectified within
such number of days following the Owners' notice, the payment
shall stand as regular and punctual. Failure by the Charterers to
pay hire within the number of days stated in Box 34 of their
receiving the Owners' notice as provided herein, shall entitle
the Owners to withdraw the Vessel from the service of the
Charterers and terminate the Charter without further notice;
(ii) the Charters fail to comply with the requirements of:
(1) Clause 6 (Trading Restrictions)
(2) Clause 13(a) (Insurance and Repairs)
Provided that the Owners shall have the option, by written notice
to the Charterers, to give the Charters a specified number of
days grace within which to rectify the failure without prejudice
to the Owners' right to withdraw and terminate under this Clause
if the Charterers fail to comply with such notice;
(iii) The Charterers fail to rectify any failure to comply with the
requirements of sub-clause 10(a)(i) (Maintenance and Repairs) as
soon as practically possible after the Owners have requested them
in writing so to do and in any event so that the Vessel's
insurance cover is not prejudiced.
(b) Owners' Default
If the Owners shall by any act or omission be in breach of their
obligations under this Charter to the extent that the Charterers are
deprived of the use of the Vessel and such breach continues for a
period of fourteen (l4) running days after written notice thereof has
been given by the Charterers to the Owners, the Charterers shall be
entitled to terminate this Charter with immediate effect by written
notice to the Owners.
(c) Loss of Vessel covered by Insurance
Despite the Vessel becoming a total loss or is declared as a
constructive or compromised or arranged total loss, so long as it is
fully covered by insurance, the Charterers shall continue to pay the
hire at the time and in the manner as provided herein for a maximum
period of forty (40) days or until the insurance proceeds shall he
paid, whichever occurs first, and- any money paid by the Charterers to
the Owners as hire will be returned to the Charterers once the
insurance proceeds are paid. For the purpose of this sub-clause, the
Vessel shall not be deemed to be lost unless she has either become an
actual total loss or agreement has been reached with her underwriters
is not reached it is adjudged by a competent tribunal that a
constructive loss of the Vessel has occurred.
(d) Subject to the Agent's prior approval, either party shall be entitled
to terminate this Charter with immediate effect by written notice to
the other party in the event of an order being made or resolution
passed for the winding up, dissolution, liquidation or bankruptcy of
the other party (otherwise than for the purpose of reconstruction or
amalgamation) or if a receiver is appointed, or if it suspends
payment, ceases to carry on business or makes any special arrangement
or composition with its creditors.
(e) The termination of this Charter shall be without prejudice to all
rights accrued due between the parties prior to the date of
termination and to any claim that either party might have.
29. Repossesion
In the event of the termination of this Charter in accordance with the
applicable provisions of Clause 28, the Owners shall have the right to
repossess the Vessel from the Charterers at her current or next port of
call, or at a port or place convenient to them without hindrance or
interference by the Charterers, courts or local authorities. Pending
physical repossession of the Vessel in accordance with this Clause 29, the
Charterers shall hold the Vessel as gratuitous bailee only to the Owners.
The Owners shall arrange for an authorized representative to board the
Vessel as soon as reasonably practicable following the termination of the
Charter. The Vessel shall be deemed to be repossessed by the Owners from
the Charterers upon the boarding of the Vessel by the Owners'
representative. All arrangements and expenses relating to the settling of
wages, disembarkation and repatriation of the Charterers' Master, officers
and crew shall be the sole responsibility of the Charterers.
30. Dispute Resolution
(a) This Contract shall be governed by and construed in accordance with
English law and any dispute arising out of or in connection with this
Contract shall be referred to arbitration in London in accordance with
the Arbitration Act 1996 or any statutory modification or re-enactment
thereof save to the extent necessary to give effect to the provisions
of this Clause.
The arbitration shall be conducted in accordance with the London
Maritime Arbitrators Association (LMAA) Terms current at the time when
the arbitration proceedings are commenced.
The reference shall be to three arbitrators. A party wishing to refer
a dispute to arbitration shall appoint its arbitrator and send notice
of such appointment in writing to the other party requiring the other
party to appoint its own arbitrator within 14 calendar days of that
notice and stating that it will appoint its arbitrator as sole
arbitrator unless the other party appoints its own arbitrator and
gives notice that it has done so within the 14 days specified. If the
other party does not appoint its own arbitrator and give notice that
it has done so within the 14 days specified, the party referring a
dispute to arbitration may, without the requirement of any further
prior notice to the other party, appoint its arbitrator as sole
arbitrator and shall advise the other party accordingly. The award of
a sole arbitrator shall be binding on both parties as if he had been
appointed by agreement
Nothing herein shall prevent the parties agreeing in writing to vary
these provisions to provide for the appointment of a sole arbitrator.
In cases where neither the claim nor any counterclaim exceeds the sum
of US$50,000 (or such other sum as the parties may agree) the
arbitration shall be conducted in accordance with the LMAA Small
Claims Procedure current at the time when the arbitration proceedings
are commenced.
(b) Paragraph deleted.
(c) Paragraph deleted.
(d) Notwithstanding (a), (b) or (c) above, the parties may agree at any
time to refer to mediation any difference and/or dispute arising out
of or in connection with this Contract.
In the case of a dispute in respect of which arbitration has been
commenced under (a), (b) or (c) above, the following shall apply:
(i) Either party may at any time and from time to time elect to refer
the dispute or part of the dispute to mediation by service on the
other party of a written notice (the "Mediation Notice") calling
on the other party to agree to mediation.
(ii) The other party shall thereupon within 14 calendar days of
receipt of the Mediation Notice confirm that they agree to
mediation, in which case the parties shall thereafter agree a
mediator within a further 14 calendar days, failing which on the
application of either party a mediator will be appointed promptly
by the Arbitration Tribunal ("the Tribunal") or such person as
the Tribunal may designate for that purpose. The mediation shall
be conducted in such place and in accordance with such procedure
and on such terms as the parties may agree or, in the event of
disagreement, as may be set by the mediator.
(iii) If the other party does not agree to mediate, that fact may be
brought to the attention of the Tribunal and may be taken into
account by the Tribunal when allocating the costs of the
arbitration as between the parties.
(iv) The mediation shall not affect the right of either party to seek
such relief or take such steps as it considers necessary to
protect its interest.
(v) Either party may advise the Tribunal that they have agreed to
mediation. The arbitration procedure shall continue during the
conduct of the mediation but the Tribunal may take the mediation
timetable into account when setting the timetable for steps in
the arbitration.
(vi) Unless otherwise agreed or specified in the mediation terms, each
party shall bear its own costs incurred in the mediation and the
parties shall share equally the mediator's cost and expenses.
(vii) The mediation process shall be without prejudice and
confidential and no information or documents disclosed during it
shall be revealed to the Tribunal except to the extent that they
are disclosable under the law and procedure governing
arbitration.
(Note : The parties should be aware that the mediation process may not
necessarily interrupt time limits)
(e) If Box 35 in Part I is not appropriately filled in, sub-clause 30(a)
of this Clause shall apply. Sub-clause 30(d) shall apply in all cases.
*) Sub-clauses 30(a), 30(b) and 30(c) are alternatives; indicate
alternative agreed in Box 35.
31. Notices
(a) Any notice to be given by either party to the other party shall be in
writing and may be sent by fax, telex, registered or recorded mail or
by personal service.
(b) The address of the Parties for service of such communication shall be
as stated in Boxes 3 and 4 respectively.
32. Special Provisions
(a) Sellers' Credit: The sellers' credit (in the amount of 10% of the
Purchase Price under the MOA, "Sellers' Credit") shall be paid to the
Charterers in a lump sum payment upon the sale of the Vessels and
receipt of the full amount of sales proceeds, but not later than three
(3) months after the expiry of the Charter Period. For the avoidance
of doubt, no interest shall accrue on the Sellers' Credit.
In the event that the BBC is terminated before the scheduled expiry of
the Charter Period due to reasons attributable to the Charterer, the
Owner shall be entitled to forfeit amount of the Seller's Credit up to
a maximum of the aggregate remaining monthly payments under the BBC
after the termination without prejudice to its claims for damages and
other rights under applicable law or in equity.
The Sellers' Credit shall be secured by a second priority mortgage
over the Vessel ranking behind the first priority mortgages granted to
the Agent and the Swap Parties.
(b) Guarantee: Top Tankers Inc. shall unconditionally and irrevocably
guarantee the performance of the Charterers under this Charter as a
primary obligor and not merely as a surety.
Each of the Charterers and the charterers to KOMARF HOPE 27 Shipping
Company, KOMARF HOPE 29 Shipping Company and KOMARF HOPE 30 Shipping
Company (each a Liberian company; collectively, "Other Charterers")
shall also jointly and severally guarantee the performance of the
charters by the other Charterers.
(c) Sale of Vessel during the Six-Month Sales Period: The "Six-Months
Sales Period" shall mean the period from the date falling three months
prior to the expiry of the Charter Period to the date falling three
months after the expiry of the Charter Period.
The "Outstanding Project Cost" shall mean, collectively, (i) all sums
outstanding under the Main Financing Documentation, (ii) the principal
amount of the investment into the SIC by its investors, and (iii) the
Seller's Credit.
The following is applicable when the Vessel is sold during the
Six-Month Sales Period:
If the net sale proceeds of the Vessel ("Net Sales Proceeds") is lower
than the Outstanding Project Cost, such shortfall shall be first
covered by the Charterers up to the amount of USD two (2) million, and
the Owners will deduct such amount from the Sellers' Credit payable to
the Charterers in respect of that Vessel. If the Net Sales Proceeds
are higher than the Outstanding Project Cost, as to such surplus, the
first USD two (2) million shall belong to the Charterers and the
Owners will pay such amount to the Charterers in respect of that
Vessel upon sale of that Vessel, and any excess thereof shall belong
to the Owners.
(d) Sale of the Vessel after the Six Months Sales Period: The evaluation
value ("Evaluation Value") of the Vessel shall be the average of the
quote obtained from the Selected Evaluation Firms, with each quote
referring to the Vessel price as of the expiry date of the Charter
Period.
The Selected Evaluation Finns shall be two of the following firms
selected by a mutual agreement between the Charterers and the Owners:
One from Clarksons or Simpson Spence & Young and the other from Platou
or Fearnleys.
The following is applicable when the Vessel is not sold prior to the
expiry of Six-Month Sales Period:
If in respect of any Vessel the Evaluation Value for that Vessel is
lower than the Outstanding Project Cost relating to that Vessel as of
the end of the Charter Period, the Owner will deduct such amount up to
USD 2 million from the Sellers' Credit payable to the Charterers in
respect of that Vessel. If in respect of any Vessel the Evaluation
Value for that Vessel is higher than the Outstanding Project Cost
relating to that Vessel, the Owners will pay such amount up to USD 2
million to the Charterers in respect of that Vessel on the date of
expiration of the Six-Month Sales Period.
The foregoing mechanism shall not be affected even where the actual
sales price of the Vessel is different from the Evaluation Value.
(f) Sale of the Vessel before the Six Months Sales Period: The Owners may
sell the Vessels at any time after three (3) years from the
commencement of the Charter Period, subject, however, to an approval
thereof by the relevant subcharterer(s), if any.
If the Net Sales Proceeds is lower than the Outstanding Project Cost,
the Sellers' Credit will be payable to the Charterers in respect of
that Vessel in full. If the Net Sales Proceeds are higher than the
Outstanding Project Cost, the Owners will pay the Charterers the
Seller's Credit in respect of that Vessel in full, and an additional
amount to:
o USD 4 million if the sale is concluded during the 4th year of the
Charter.
o USD 3 million if the sale is concluded during, the 5th year of
the Charter (however, excluding the Six-Month Sales Period).
Any excess thereof shall belong to the Owners.
All of the above amounts shall be payable immediately upon the
delivery of the Vessels to the new owners, and, simultaneously
therewith, this Charter will be terminated.
Further, at any time after three (3) Years from the commencement of
the Charter Period, the Vessel, subject to the Charterers' approval
(which shall not be unreasonably withheld), may be sold by the Owners
with this Charter maintained by the new owners. In such cases of sale,
the following paragraph shall be applicable:
If the Net Sales Proceeds is lower than the Outstanding Project Cost,
the Sellers' Credit will be payable to the Charterers in respect of
that Vessel in full. If the Net Sales Proceeds are higher than the
Outstanding Project Cost, the Owners will pay the Charterers the
Sellers' Credit in respect of that Vessel in full, and, as to any
surplus, the first USD two (2) million shall belong to Top Tankers
Inc. (each of such Sellers' Credit and such first USD two (2) million
to be payable at the time of the sale of the Vessel), and any excess
thereof shall belong to the Owner.
(g) Sales Mechanism: Whether the Vessel is sold during, after or before
the Six-Month Sales Period, as to the Vessel, the Owners will give the
Charterers the right of first refusal.
Subject to the Charterers' right of first refusal specified above
(i.e., such right of first refusal shall be deemed waived when a
waiver by the Charterers is obtained or when the Charterers fail to
exercise such right after a prior notice of one (l) week by the
Owners), the Owners shall have no obligation to give the Charterers an
opportunity to bid when it plans to sell the Vessels. The Owners shall
have an absolute and free discretion in selecting the buyer of the
Vessel and in determining the mechanisms for the sale of the Vessel.
The Vessel and the other vessels owned by the Other Charterers
(collectively, "Vessels") may be sold at one time or at different
times through separate sales transactions and varying mechanisms.
(h) Extension of Charter Period: For the effective sale of the Vessels
after the Charter Period, the Charter Period may be extended by a
period of not longer than three (3) months at the option of the
Owners, in which case the hire shall be USD 5,000 per day during such
extended three (3) month Charter Period.
Further, the Owners shall have the right to require the Charterers to
manage the Vessel for a period of up to one (1) year after expiration
of the Charter Period pursuant to the ship management agreement
between the Owner and the Charterer (or any other company nominated by
the Charterer), providing that (i) as to the costs incurred for the
technical management of the Vessel shall be borne by the Owners on an
net cost amount basis; and (ii) as to the income from commercial
operation of the Vessel shall be distributed between the Charterers
and the Owners on a 40% to 60% basis.
The Charterers shall make their best efforts to assist the Owners in
the sale of the Vessels.
(i) Time Charter Assignment: As to the time-charter or sub-charter by the
Charterers of the Vessel during the Charter Period, such time-charter
or sub-charter shall be assigned to the Owners and the Agent and other
relevant parties under the main financing and investment documentation
for security.
(j) Compliance with the Financial Instrument: The Charterers shall comply
with the Financial. Instrument as required by the Agent (including,
without limitation, its requirement to maintain a minimum consolidated
cash balance of USD 50 million at all times with the Agent).
33. Compliance with the Owners' requests
The Charterers shall, throughout the Charter Period, comply with the
Owners' requests which may be made from time to time for the Owners'
compliance with the provisions of the loan and guarantee facility agreement
entered into on, or to be entered into around, the even date herewith by
and among, inter alios, the Buyers as borrower, Fortis Bank (Nederland)
N.V. as agent and arranger and the lenders specified therein (the "Loan
Agreement").
34. Hell & High Water Clause
This Charter is a "hell and high water" bareboat charter and.
notwithstanding anything in this Charter to the contrary (however,
excluding clause 28(c) of this Charter), the Charterer's obligation for
payments hereunder shall be absolute and unconditional under any and all
circumstances and shall not be affected by any circumstances of any
character (including, for the avoidance of doubt, any loss of the Vessel as
provided in clause 28(c) of this Charter or any other termination of this
Charter pursuant to clause 28(b) of this Charter or for any other reason
whatsoever (other than clause 28(a) and (d) of this Charter) whether
provided for in this Charter or available to the Charterer by operation of
law or otherwise). If for any reason whatsoever this Charter shall be
terminated in whole or in part for any of the reasons specifically provided
herein or by operation of law or otherwise, the Charterer nonetheless
agrees to pay to the Owner or to the person entitled thereto an amount
equal to each payment of hire at the time such payment would have become
clue and payable in accordance with the terms hereof had this Charter not
been terminated in whole or in part; Each payment of hire made by the
Charterer shall be final, and the Charterer will not seek to recover all or
any part of such payment from the Owner for any reason whatsoever, except
for manifest error.