Exhibit 4.17
1. Shipbroker
2. Place and date
Seoul, 09/03/2006
3. Owners/Place of business (Cl. 1)
KOMARF HOPE 29 Shipping Company, Liberia
4. Bareboat Charterers/Place of business
Pylio Shipping Company Limited, Liberia
5. Vessel's name, call sign and lag (Cl. 1 and 3)
M/T Flawless, ELNX4, 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
Det Norske Veritus
10. Classification society (C1. 3)
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 slate beneficiary and bank account (Cl. 11)
As to be notified by the owners to the Charters.
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 (Cl.
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, Cl. 14(g))
Not applicable
32. Latent defects (only to be filled in if period other than stated in Cl.
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)
/s/ K. H. Kwan /s/ Stamatis Tsantanis
- ---------------------------- -------------------------
Attorney-in-fact
PART II
"BARCON 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 stated 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)
(a) through (c) Paragraphs deleted
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").
(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 lake 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 on
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 the cost of compliance.
(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, 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 10(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.
(j) 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
for 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 MU, 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. Paragraphs 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 dry docked 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 [o]
in favor of Fortis Bank as trustee acting for itself and the mortgagees
thereunder, the second priority mortgage dated [o] in favor of [specify
the Charterers name], and the third priority mortgage dated [o] 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
(collectively, "Indemnified Parties") from and against any
loss, damage, claim, cost and et---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 Charcters 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 he deemed thereby or thereupon to be
frustrated or otherwise terminated and the Charcters 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 provisions hereof.
26. 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
Charterers 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 (14) 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 be 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. Repossession
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) Nothwithstanding (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. an
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 28 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. 1.1 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 he
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 he 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 up 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. hi such cases of sale, the
following paragraph shall he 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 (I ) 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 he distributed between the
Charterers and the Owners on a 40% to 60o 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 he 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). .1f 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 due 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.
PART III - PART V
Paragraphs deleted