As filed with the Securities and Exchange Commission on November 9, 1994
Registration Statement No. 33--
===========================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORMS(*) S-3, S-1 AND F-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Chevron Corporation
(Exact name of Registrant as specified in its charter)
---------------
Delaware 94-0890210
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
225 Bush Street, M.J. McAuley
San Francisco, California 94104 225 Bush Street
(415) 894-7700 San Francisco, California 94104
(Address, including zip code, and (415) 894-7700
telephone number, including area (Name, address, including zip code,
code, or Registrant's principal and telephone number, including area
executive offices) code, of agent for service
Chevron Transport Corporation
(Exact name of Registrant as specified in its charter)
(Translation of Registrant's name into English)
---------------
Republic of Liberia 94-2280244
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
Chevron House M.J. McAuley
11 Church Street 225 Bush Street
Hamilton, Bermuda HM11 San Francisco, California 94104
(809) 295-1774 (415) 894-7700
(Address and telephone number of (Name, address, including zip code,
Registrant's principal executive and telephone number, including
offices) area code, of agent for service)
See Table of Additional Registrants
---------------
Copies to:
Blair W. White, Esq. Charles A. Dietzgen, Esq. James D. Phyfe, Esq.
Pillsbury Madison & Sutro Thacher Proffitt & Wood Davis Polk & Wardwell
P.O. Box 7880 2 World Trade Center 450 Lexington Avenue
San Francisco, California New York, N.Y. 10048 New York, N.Y. 10017
94102 (212) 912-7443 (212) 450-4598
(415) 983-1000
---------------
Approximate date of commencement of proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box: ( )
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box: ( )
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CALCULATION OF REGISTRATION FEE
Principal Proposed maximum
Title of each class of amount being Proposed maximum aggregate Amount of
securities being registered registered offering price (2) offering price(2) registration fee
- ------------------------------- ------------ ------------------ ------------------ ----------------
Serial First Preferred Mortgage
Notes (1) $168,500,000 100% $168,500,000 $58,103.86
(1) Maturing serially from 1995 to 2005.
(2) Estimated solely for purposes of calculating the registration fee.
---------------
The Registrants hereby amend this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrants shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
- --------
*This Registration Statement constitutes a filing on Form S-3 by Chevron
Corporation and Chevron Transport Corporation, a filing on Form S-1 by
California Petroleum Transport Corporation and a filing on Form F-1 by the
other Additional Registrants.
Additional Registrants
California Petroleum Transport Corporation
(Exact name of Registrant as specified in its charter)
---------------
Delaware 6159 04-3232976
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification Number)
c/o JH Management Corporation CT Corporation System
Room 6/9 1633 Broadway
One International Place New York, N.Y. 10019
Boston, M.A. 02110-2624 (212) 664-1666
(617) 951-7727
(Address, including zip (Name, address,
code, and telephone including zip code,
number, including area and telephone number,
code, of Registrant's including area code,
principal executive offices) of agent for service)
CalPetro Tankers The Bahamas Not Applicable 4412
(Bahamas I) Limited
CalPetro Tankers The Bahamas Not Applicable 4412
(Bahamas II) Limited
CalPetro Tankers The Bahamas Not Applicable 4412
(Bahamas III) Limited
(Exact name of registrant as (State or other jurisdiction (I.R.S. Employer (Primary Standard Industrial
specified in its charter) or incorporation or organization) Identification No.) Classification Code Number)
Mareva House CT Corporation System
4 George Street 1633 Broadway
Nassau, Bahamas New York, N.Y. 10019
(809) 322-4195 (212) 664-1666
(Address and telephone number of principal (Name, address, including zip code,
executive offices of CalPetro Tankers and telephone number, of agent for service)
(Bahamas I) Limited, CalPetro Tankers
(Bahamas II) Limited, and
CalPetro Tankers (Bahamas III) Limited)
CalPetro Tankers
(IOM) Limited Isle of Man Not Applicable 4412
(Exact name of registrant as (State or other jurisdiction (I.R.S. Employer (Primary Standard Industrial
specified in its charter) or incorporation or organization) Identification No.) Classification Code Number)
United House CT Corporation System
14-16 Nelson Street 1633 Broadway
Douglas, Isle of Man New York, N.Y. 10019
British Isles (212) 664-1666
011-44-624-623422
(Address and telephone number of (Name, address, including zip code,
principal executive of CalPetro Tankers and telephone number, of agent for
(IOM) Limited) service)
CROSS REFERENCE SHEET
(Pursuant to Item 501(b) of Regulation S-K)
Item No. and Caption Caption in Prospectus
-------------------- ---------------------
1. Forepart of Registration Statement and Outside
Front Cover Page of Prospectus..................Outside Front Cover Page
2. Inside Front and Outside Back Cover Pages of
Prospectus......................................Inside Front Cover Page of
Prospectus, Available
Information, Enforceability
of Civil Liabilities
3. Summary Information, Risk Factors and Ratio
of Earnings to Fixed Charges....................Prospectus Summary,
Investment Considerations,
Management's Discussion
and Analysis of Financial
Condition
4. Use of Proceeds.................................Use of Proceeds
5. Determination of Offering Price.................Outside Front Cover Page of
Prospectus, Underwriting
6. Dilution........................................ *
7. Selling Security Holders........................ *
8. Plan of Distribution............................Underwriting
9. Description of Securities to be Registered......Description of the Notes
10. Interests of Named Experts and Counsel......... *
11. Information with Respect to the Registrants
(a)(1) Description of Business................Prospectus Summary,
Investment Considerations,
California Petroleum and
the Owners, Management's
Discussion and Analysis
of Financial Condition
(2) Description of Property...................California Petroleum and
the Owners
(3) Legal Proceedings......................... *
(4) Control of Registrant.....................Prospectus Summary,
California Petroleum and
the Owners
(5) Nature of Trading Market.................. *
(6) Exchange Controls and Other Limitations
Affecting Security Holders................ *
(7) Taxation.................................. *
(8) Selected Financial Data...................Selected Financial Data,
Index to Financial
Statements
(9) Management's Discussion and Analysis of
Financial Condition and Results of
Operations................................Management's Discussion
and Analysis of Financial
Condition
(10) Directors and Officers of Registrants......Management
(11) Compensation of Directors and Officers.....Management
(12) Options to Purchase Securities from
Registrant or Subsidiaries................. *
(13) Interest of Management in Certain
Transactions...............................Certain Transactions with
Related Parties
(b) Financial Statements........................Index to Financial
Statements
12. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities................................... *
_______________
* Indicates that item is omitted from Prospectus because it is not applicable
or the answer is in the negative.
SUBJECT TO COMPLETION, DATED NOVEMBER 9, 1994
PROSPECTUS
_________, 1994*
$168,500,000
California Petroleum Transport Corporation
Serial First Preferred Mortgage Notes
Maturing Serially from 1995 to 2005
Payable from Charterhire Payments by
Chevron Transport Corporation
Whose Charter Obligations are Guaranteed by
Chevron Corporation
The Serial First Preferred Mortgage Notes designated below in the
aggregate principal amount of $168,500,000 (the "Serial Mortgage Notes") are
being issued as full recourse obligations of California Petroleum Transport
Corporation, a Delaware corporation ("California Petroleum"), by California
Petroleum as agent on behalf of the Owners named below. Interest on the
Serial Mortgage Notes will be payable semi-annually on ____________ and
___________ of each year, commencing on ______, 1995, at the rates per annum
set forth below. Principal will be payable on the Serial Mortgage Notes on
their respective maturity dates (each, a "Maturity Date"). Concurrent with
this offering, __% First Preferred Mortgage Notes Due 2014 in an aggregate
principal amount of $117,900,000 (the "Term Mortgage Notes" and, together with
the Serial Mortgage Notes, the "Notes"), are being offered pursuant to a
separate prospectus. The consummation of the sale of the Serial Mortgage
Notes is dependent on the consummation of the sale of the Term Mortgage Notes.
The proceeds from the sale of the Serial Mortgage Notes, together
with the proceeds from the sale of the Term Mortgage Notes, will be loaned by
California Petroleum to CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers
(Bahamas II) Limited, CalPetro Tankers (Bahamas III) Limited and CalPetro
Tankers (IOM) Limited (each, an "Owner") on a non-recourse basis, secured
jointly and severally by the collateral discussed below, to fund, after paying
certain fees and expenses, the acquisition by each Owner of a recently
constructed oil tanker (each, a "Vessel") from Chevron Transport Corporation
("Chevron Transport"). The Vessels consist of one double-hulled, 130,000
deadweight tonne oil tanker, two double-hulled, 150,000 deadweight tonne oil
tankers and one single-hulled, 150,000 deadweight tonne oil tanker, each of
which was constructed to the specifications of Chevron Transport. Initially,
each Owner will enter into a bareboat charter (each, an "Initial Charter")
with Chevron Transport with a term expiring on ___________, 2014, subject to
earlier termination at the option of Chevron Transport. The obligations of
Chevron Transport under each Initial Charter will be guaranteed by Chevron
Corporation ("Chevron"). Chevron Transport is an indirect, wholly-owned
subsidiary of Chevron. The Serial Mortgage Notes will not be obligations
of, or guaranteed by, Chevron Transport or Chevron, although California
Petroleum and the Owners expect that the amounts payable by Chevron
Transport, and guaranteed by Chevron, under the Initial Charters (whether
or not the termination options are exercised), together with an allocable
amount of anticipated earnings on the Permitted Investments (as defined
herein), will be sufficient to pay in full when due all principal of and
interest on the Serial Mortgage Notes. See "Investment Considerations--
Certain Risks Not Related to Chevron Transport or Chevron." The Serial
Mortgage Notes will be obligations of California Petroleum and will be
secured, equally and ratably with the Term Mortgage Notes, by an assignment
of a first preferred ship mortgage on each Vessel, an assignment of each
Initial Charter, as well as by certain other collateral. Upon payment in
full of the aggregate principal amount of Serial Mortgage Notes then
outstanding and allocable to a Vessel (the "Allocated Principal Amount"),
the collateral relating to such Vessel will be released from the Lien of
the Serial Indenture. California Petroleum has agreed not to incur any
indebtedness other than its obligations under the Notes and the related
Indentures and the Owners have agreed not to incur any indebtedness other
than Permitted Indebtedness so long as any Serial Mortgage Notes are
outstanding. See "Description of the Notes--Certain Covenants" and "The
Mortgages--Certain Covenants" for a discussion of Permitted Indebtedness.
The Serial Mortgage Notes will not be subject to optional redemption
prior to their respective maturity dates. If certain casualty or other events
occur with respect to a Vessel, the Serial Mortgage Notes will be subject to
mandatory redemption in part, equally and ratably with any Term Mortgage Notes
then outstanding, in an aggregate principal amount equal to the Allocated
Principal Amount of Serial Mortgage Notes then outstanding and allocable to
such Vessel. See "Description of the Notes-- Redemption." The Term Mortgage
Notes may be redeemed, in whole or in part, at the direction of California
Petroleum on any Payment Date on or after ______, 2005, the final Maturity
Date for any Serial Mortgage Notes.
The Serial Mortgage Notes will be debt obligations of California
Petroleum secured solely by the Collateral and will not be share capital,
debentures or general obligations of any Owner or the Owners and this
Prospectus does not constitute an offering of any such security of any Owner
or the Owners. Recourse under the Serial Indenture against the incorporators,
directors, officers and stockholders of California Petroleum and its
stockholders has been expressly waived by the Indenture Trustee, on behalf of
all Holders of the Serial Mortgage Notes and, accordingly, the incorporators,
directors, officers and stockholders of California Petroleum and its
stockholders will not be liable for any payments of debt service on the Serial
Mortgage Notes. California Petroleum's capitalization is nominal and it has
no source of income other than payments to it by the Owners and investment
proceeds thereon.
See "Investment Considerations" for a discussion of certain factors
which investors should consider in connection with an investment in the Serial
Mortgage Notes.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Underwriting Proceeds to
Price to Discounts and California
Interest Aggregate Public Commissions Petroleum
Rate Amount (1) (2) (1)(3)
-------- --------- -------- ------------- -----------
1995 Senior Mortgage
Notes % $ 18,160,000 100% % %
1996 Senior Mortgage
Notes 18,160,000 100
1997 Senior Mortgage
Notes 18,160,000 100
1998 Senior Mortgage
Notes 18,160,000 100
1999 Senior Mortgage
Notes 18,160,000 100
2000 Senior Mortgage
Notes 18,160,000 100
2001 Senior Mortgage
Notes 18,160,000 100
2002 Senior Mortgage
Notes 18,160,000 100
2003 Senior Mortgage
Notes 12,950,000 100
2004 Senior Mortgage
Notes 7,740,000 100
2005 Senior Mortgage
Notes 2,530,000 100
Total $168,500,000 $168,500,000 $___________ $_________
(1) Plus accrued interest, if any, from the date of issuance.
(2) See "Underwriting" for compensation and indemnity arrangements with
the Underwriter.
(3) Before deducting expenses payable from the proceeds of the offering
estimated at $_________.
The Serial Mortgage Notes are offered by the Underwriter, when, as
and if delivered to and accepted by the Underwriter, and subject to various
prior conditions, including its right to reject orders in whole or in part.
It is expected that delivery of the Serial Mortgage Notes will be made through
the facilities of The Depository Trust Company upon payment therefor in
immediately available funds in New York, New York on or about ___________,
1994.
Donaldson, Lufkin & Jenrette
Securities Corporation
* INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
Until _______, 1995 (90 days after the commencement of the
offering of the Serial Mortgage Notes), all dealers effecting transactions in
the Serial Mortgage Notes, whether or not participating in this distribution,
may be required to deliver a Prospectus. This delivery requirement is in
addition to the obligations of dealers to deliver a Prospectus when acting as
underwriters and with respect to their unsold allotments or subscriptions.
No action has been or will be taken in any jurisdiction by
California Petroleum, Chevron Transport, Chevron, any Owner or the Underwriter
that would permit a public offering of the Serial Mortgage Notes or possession
or distribution of this Prospectus in any jurisdiction where action for that
purpose is required, other than the United States of America.
All references in this Prospectus to "$" or "Dollars" shall be to
the currency of the United States of America.
No person has been authorized to give any information or to make
any representations other than those contained in this Prospectus, and if
given or made, such information or representations must not be relied upon as
having been authorized by California Petroleum, Chevron Transport, Chevron,
the Owners or the Underwriter. This Prospectus does not constitute an offer
to sell or a solicitation of an offer to buy any securities other than those to
which it relates or an offer to any person in any jurisdiction where such
offers would be unlawful. Neither the delivery of this Prospectus nor any
sale hereunder shall under any circumstances create any implication that the
information contained herein is correct as of any time subsequent to the date
hereof.
TABLE OF CONTENTS
Page Page
---- ----
Available Information........ 3 Chevron Transport and Chevron...... 26
Incorporation of Certain California Petroleum and the
Documents by Reference..... 4 Owners........................... 27
Enforceability of Civil Business........................... 29
Liabilities................ 5 Management......................... 31
Prospectus Summary........... 6 Certain Relationships
Investment Considerations.... 16 and Transactions................. 34
Use of Proceeds.............. 17 Description of the Notes........... 34
Capitalization of Chevron.... 17 The Mortgages...................... 59
Selected Financial Data of 17 The Initial Charters............... 68
Chevron.................... 18 Underwriting....................... 77
Summarized Financial Data of Legal Matters...................... 78
Chevron Transport.......... 19 Experts............................ 78
Capitalization of California Index to Financial Statements......F-1
Petroluem.................. 21 Appendix A Definitions of Shipping
Summarized Financial and Pro Terms..............................A-1
Forma Data of California Glossary...........................A-3
Petroleum and the Owners... 22
Management's Discussion and
Analysis of Financial
Condition of California
Petroleum and the Owners... 24
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT
OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
SERIAL MORTGAGE NOTES OFFERED HEREBY AND THE TERM MORTGAGE NOTES AT A LEVEL
ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR OTHERWISE.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
AVAILABLE INFORMATION
California Petroleum, Chevron Transport, Chevron and the Owners
have filed with the Securities and Exchange Commission (the "Commission") a
combined registration statement under the Securities Act of 1933, as amended
(the "Securities Act") with respect to the securities offered hereby (the
"Registration Statement"). This Prospectus, which constitutes a part of the
Registration Statement, does not contain all the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information with
respect to California Petroleum, Chevron Transport, Chevron and the Owners and
the securities offered hereby, reference is made to the Registration
Statement, including the exhibits thereto, and the financial statements and
notes filed as a part thereof. All of these documents may be inspected and
copied at prescribed rates at the public reference facilities maintained by
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Regional Offices of the Commission located at 7 World Trade Center, New York,
New York 10048, and Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661.
Chevron is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Commission. All of the reports, proxy statements and other documents
filed by Chevron with the Commission, including the documents incorporated by
reference herein, may be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the following Regional Offices of the Commission: 7 World
Trade Center, New York, New York 10048; and Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of all such
reports, proxy statements and other documents can also be obtained from the
Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. In addition, certain reports,
proxy statements and other information concerning Chevron may be inspected and
copied at the offices of the New York Stock Exchange, Inc., 20 Broad Street,
New York, New York 10015; the Chicago Stock Exchange, 440 South LaSalle
Street, Chicago, Illinois 60605; and The Pacific Stock Exchange, Inc., 301
Pine Street, San Francisco, California 94104 and 618 South Spring Street, Los
Angeles, California 90014. Chevron is not required to, and will not, provide
annual reports to Holders of the Serial Mortgage Notes unless specifically
requested to do so by such a Holder.
Chevron Transport is currently not subject to the informational
requirements of the Exchange Act. Chevron Transport will become subject to
such requirements upon effectiveness of the Registration Statement, although
it intends to seek and expects to receive an exemption therefrom.
Upon written or oral request, Chevron will provide, without
charge, to each person to whom a copy of this Prospectus has been delivered a
copy of any or all of the documents (without exhibits other than exhibits
specifically incorporated by reference into such documents) incorporated by
reference into this Prospectus. Requests for such copies should be directed
to: Chevron Corporation, 225 Bush Street, San Francisco, California 94104,
Attention: Office of the Comptroller (telephone: (415) 894-7700).
Neither California Petroleum nor any of the Owners is currently
subject to the informational requirements of the Exchange Act. California
Petroleum and each Owner will be subject to such requirements upon
effectiveness of the Registration Statement and will provide copies of reports
filed under the Exchange Act to the Holders of the Serial Mortgage Notes upon
request. During any time that California Petroleum or any Owner is not
subject to the reporting and informational requirements of the Exchange
Act, under the terms of the Serial Indenture and the Mortgages, California
Petroleum and the Owners have agreed that, so long as the Serial Mortgage
Notes remain outstanding, they will file with the Indenture Trustee and the
Commission and distribute to Holders of the Serial Mortgage Notes, upon
request, copies of the financial and other information that would have been
contained in such annual reports and periodic reports that California
Petroleum and the Owners would have been required to file with the
Commission pursuant to the Exchange Act.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by Chevron with the Commission are
incorporated by reference in this Prospectus:
(1) Chevron's Annual Report on Form 10-K for the year ended
December 31, 1993.
(2) Chevron's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1994.
(3) Chevron's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1994.
(4) Chevron's Current Report on Form 8-K, dated July 26, 1994.
(5) Chevron's Current Report on Form 8-K, dated August 1, 1994.
(6) Chevron's Current Report on Form 8-K/A, dated August 1, 1994.
(7) Chevron's Current Report on Form 8-K, dated August 3, 1994.
(8) Chevron's Current Report on Form 8-K, dated October 25, 1994.
(9) Chevron's Current Report on Form 8-K, dated October 28, 1994.
All documents filed by Chevron pursuant to Sections 13, 14 or
15(d) of the Exchange Act after the date hereof and prior to the termination
of the distribution of the Serial Mortgage Notes shall also be deemed to be
incorporated by reference herein and be a part hereof from the date of filing
of such documents. Any statement contained herein or in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein or in any subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
ENFORCEABILITY OF CIVIL LIABILITIES
Each of CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers
(Bahamas II) Limited and CalPetro Tankers (Bahamas III) Limited is a special
purpose company organized under the laws of the Commonwealth of the Bahamas
(the "Bahamas"). CalPetro Tankers (IOM) Limited is organized under the laws
of the Isle of Man. A substantial portion of the assets of each Owner is or
may be located outside the United States. As a result, it may be difficult
for investors to enforce outside the United States judgments against each such
Owner obtained in the United States in any actions, including actions
predicated on the civil liability provisions of the federal securities laws of
the United States. Certain directors of each such Owner are residents of
jurisdictions other than the United States, and all or a significant portion
of the assets of such persons are or may be located outside the United States.
As a result, it may be difficult for investors to effect service of process
within the United States upon such persons or to enforce against them in
United States courts judgments predicated upon the civil liability provisions
of the federal securities laws of the United States. There is currently no
treaty between the United States and the Bahamas or between the United States
and the Isle of Man providing for reciprocal recognition and enforcement of
judgments in civil and commercial matters and a final judgment for the payment
of money rendered by any federal or state court in the United States based on
civil liability, whether or not predicated solely upon the federal securities
laws, would, therefore, not be automatically enforceable in the Bahamas or in
the Isle of Man. Each Owner has irrevocably submitted to the jurisdiction of
the federal and state courts in The City of New York for the purpose of any
legal suit, action or proceeding against each such Owner in connection with
the offering and sale of the Serial Mortgage Notes.
The foregoing discussion is based on the advice of McKinney,
Bancroft & Hughes, counsel to CalPetro Tankers (Bahamas I) Limited, CalPetro
Tankers (Bahamas II) Limited, and CalPetro Tankers (Bahamas III) Limited with
respect to matters of Bahamian law, and Cains, counsel to CalPetro Tankers
(IOM) Limited with respect to matters of Isle of Man law.
Chevron Transport is organized under the laws of the Republic of
Liberia ("Liberia") and a substantial portion of its assets are or may be
located outside the United States. Certain directors of Chevron Transport are
residents of jurisdictions other than the United States, and all or a
significant portion of the assets of these directors of Chevron Transport may
be located outside the United States. As a result, it may not be possible for
investors to effect service of process within the United States upon such
persons or to enforce against them or against Chevron Transport in the United
States judgments predicated upon the civil liability provisions of the federal
securities laws of the United States. Chevron Transport has irrevocably
submitted to the jurisdiction of the federal and state courts in New York City
for the purpose of any legal suit, action or proceeding against Chevron
Transport in connection with the offering and sale of the Serial Mortgage
Notes.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more
detailed information and financial statements, including the notes thereto,
appearing elsewhere in this Prospectus. Definitions of certain shipping terms
and a glossary of certain other significant terms used in this Prospectus are
included as Appendix A hereto.
Chevron and Chevron Transport
Chevron Transport Corporation, a Liberian corporation ("Chevron
Transport"), is principally engaged in the marine transportation of oil and
refined petroleum products. As of September 30, 1994, Chevron Transport
operated 29 internationally flagged vessels which it owned or bareboat
chartered. In addition, at any given time, Chevron Transport typically has an
additional 35 to 45 ships on time or single-voyage charters. Chevron
Transport's primary transportation routes are from the Middle East, Indonesia,
Mexico, West Africa and the North Sea to ports in the United States, Europe,
the United Kingdom and Asia. Refined petroleum products are transported
worldwide. Chevron Transport expects to use each Vessel worldwide as
permitted under the Initial Charters.
Chevron Corporation, a Delaware corporation ("Chevron"), a major
international oil company, will guarantee the payment and performance
obligations of Chevron Transport under each Initial Charter. Chevron provides
administrative, financial and management support for, and manages its
investment in, domestic and foreign subsidiaries and affiliates, which engage
in fully integrated petroleum operations, chemical operations, real estate
development and other mineral and energy related activities in the United
States and approximately 100 other countries. Petroleum operations consist of
exploring for, developing and producing crude oil and natural gas;
transporting crude oil, natural gas and petroleum products by pipelines,
marine vessels and motor equipment; refining crude oil into finished petroleum
products; and marketing crude oil, natural gas and the many products derived
from petroleum. Chemical operations include the manufacture and marketing of
a wide range of chemicals primarily for industrial uses. Chevron Transport is
an indirect, wholly-owned subsidiary of Chevron.
Chevron's executive offices are located at 225 Bush Street, San
Francisco, California 94104. Chevron's telephone number is (415) 894-7700.
Chevron Transport's executive offices are located at Chevron House, 11 Church
Street, Hamilton, Bermuda HM11, and its telephone number is (809) 295-1774.
California Petroleum
California Petroleum Transport Corporation, a Delaware corporation
("California Petroleum"), is a special purpose corporation that has been
recently organized solely for the purpose of issuing, as agent on behalf of
the Owners, the Serial Mortgage Notes and the Term Mortgage Notes as full
recourse obligations of California Petroleum and loaning the proceeds of the
sale of the Notes to the Owners to facilitate the funding of the acquisition
of the four Vessels described below from Chevron Transport and the charter of
the Vessels. Recourse under the Serial Indenture against the
incorporators, directors, officers and stockholders of California Petroleum
and its stockholders has been expressly waived by the Indenture Trustee, on
behalf of all Holders of the Serial Mortgage Notes and, accordingly, the
incorporators, directors, officers and stockholders of California
Petroleum and its stockholders will not be liable for any payments of debt
service on the Serial Mortgage Notes. California Petroleum's
capitalization is nominal and it has no source of income other than
payments to it by the Owners and investment proceeds thereon. All the shares
of California Petroleum are held by CalPet Trust, a Massachusetts Charitable
Lead Trust formed by J.H. Holdings, a Massachusetts corporation, for the
benefit of certain charitable institutions in Massachusetts.
California Petroleum's executive offices are c/o JH Management
Corporation, Room 6/9, One International Place, Boston, Massachusetts
02110-2624, and its telephone number is (617) 951-7727.
The Owners
Each of CalPetro Tankers (Bahamas I) Limited ("CalPetro Bahamas
I"), CalPetro Tankers (Bahamas II) Limited ("CalPetro Bahamas II") and
CalPetro Tankers (Bahamas III) Limited ("CalPetro Bahamas III"), has been
recently organized as a special purpose company under the laws of the Bahamas
for the purpose of acquiring and chartering one of the Vessels. CalPetro
Tankers (IOM) Limited ("CalPetro IOM") has been recently organized as an Isle
of Man company. Each of the foregoing companies also is referred to in this
Prospectus as an "Owner." Each Owner, either pursuant to the terms of its
Memorandum of Association and/or pursuant to the terms of the related
Mortgage, will engage in no business other than the ownership and chartering
of its Vessel and activities resulting from or incidental to such ownership
and chartering. Each Owner is wholly-owned by California Tankers Investments
Limited, a company organized under the laws of the Bahamas, which is a
wholly-owned subsidiary of CalPetro Holdings Limited, an Isle of Man company.
None of the Owners is owned by or is an affiliate of California Petroleum and
none of California Petroleum or any Owner is owned by or is an affiliate of
Chevron Transport or Chevron.
Each of CalPetro Bahamas I, CalPetro Bahamas II and CalPetro
Bahamas III has executive offices located at Mareva House, 4 George Street,
Nassau, Bahamas, and each such Owner's telephone number is (809) 322-4195.
CalPetro IOM's executive offices are located at United House,
14-16 Nelson Street, Douglas, Isle of Man, British Isles and its telephone
number is 011-44-624-623422.
The Vessels
Each Vessel to be acquired by the respective Owner listed below is
a Suezmax oil tanker, which is currently owned and operated by Chevron
Transport. Suezmax-size tankers are medium-sized vessels ranging from
approximately 110,000 to 200,000 deadweight tonnes ("dwt"), and of maximum
length, breadth and draft capable of passing fully loaded through the Suez
Canal.
Approximate
Vessel Deadweight Vessel
Number Tonnes Owner Name Construction Status
- ------ ----------- ----- ------ ------------ ------
1 150,000 CalPetro Samuel Ginn Double Hull Delivered
Bahamas I ("S. Ginn") March 1993
2 130,000 CalPetro Condoleezza Rice Double Hull Delivered
Bahamas II ("C. Rice") August 1993
3 150,000 CalPetro Chevron Mariner Double Hull Delivered
IOM ("Chevron Mariner") October 1994
4 150,000 CalPetro William E. Crain Single Hull Delivered
Bahamas III ("W.E. Crain") February 1992
Each Vessel has been constructed under the supervision of Chevron
Transport and has been designed to Chevron Transport's specifications to
enhance safety and reduce operating and maintenance costs, including such
features as high performance rudders, extra steel (minimal use of high tensile
steels), additional fire safety equipment, redundant power generation
equipment, extra coating and electrolytic corrosion monitoring and protection
systems, additional crew quarters to facilitate added manning and, for three
of the Vessels, a double-hull design patented by one of Chevron's
subsidiaries. The builder of three of the Vessels, C. Rice, W.E. Crain and
Chevron Mariner, is Ishikawajima do Brasil Estaleiros S.A. ("Ishibras"), and
the builder of S. Ginn is Ishikawajima-Harima Heavy Industries Co., Ltd.
("IHI").
Vessel Technical Information
Vessel Builder Registration Length Beam Draft
- ------ ------- ------------ ------ ---- -----
(meters) (meters) (meters)
S. Ginn IHI Bahamas 274.50 50.00 17.205
C. Rice Ishibras Bahamas 258.90 48.30 16.79
Chevron Ishibras Bermuda 274.50 50.00 17.205
Mariner
W.E. Crain Ishibras Liberia 274.50 50.00 16.79
The Offering
Securities Offered..... $168,500,000 aggregate principal amount of Serial
First Preferred Mortgage Notes issued under an
indenture (the "Serial Indenture") in the principal
amounts and maturities stated below:
$18,160,000 principal amount of ___%
Serial First Preferred Mortgage Notes Due 1995
(the "1995 Serial Mortgage Notes").
$18,160,000 principal amount of ___%
Serial First Preferred Mortgage Notes Due 1996
(the "1996 Serial Mortgage Notes").
$18,160,000 principal amount of ___%
Serial First Preferred Mortgage Notes Due 1997
(the "1997 Serial Mortgage Notes").
$18,160,000 principal amount of ___%
Serial First Preferred Mortgage Notes Due 1998
(the "1998 Serial Mortgage Notes").
$18,160,000 principal amount of ___%
Serial First Preferred Mortgage Notes Due 1999
(the "1999 Serial Mortgage Notes").
$18,160,000 principal amount of ___%
Serial First Preferred Mortgage Notes Due 2000
(the "2000 Serial Mortgage Notes").
$18,160,000 principal amount of ___%
Serial First Preferred Mortgage Notes Due 2001
(the "2001 Serial Mortgage Notes").
$18,160,000 principal amount of ___%
Serial First Preferred Mortgage Notes Due 2002
(the "2002 Serial Mortgage Notes").
$12,950,000 principal amount of ___%
Serial First Preferred Mortgage Notes Due 2003
(the "2003 Serial Mortgage Notes").
$7,740,000 principal amount of ___%
Serial First Preferred Mortgage Notes Due 2004
(the "2004 Serial Mortgage Notes").
$2,530,000 principal amount of ___%
Serial First Preferred Mortgage Notes Due 2005
(the "2005 Serial Mortgage Notes").
The foregoing are collectively referred to in this Prospectus as the
"Serial Mortgage Notes."
Scheduled Principal
Payment Dates............For any Serial Mortgage Note, the principal amount
of such Serial Mortgage Note will be payable in
full on the maturity date for such Serial Mortgage
Note, which will be ______ of the respective year
of maturity (each, a "Maturity Date").
Interest Payment Dates.....___________ and ____________, commencing
_____________, 1995.
Denominations..............The Serial Mortgage Notes will be issued in minimum
denominations of $________and multiples of $1,000
in excess thereof.
Form.......................The Serial Mortgage Notes will be issued in the
form of one or more fully registered global notes
(each, a "Global Note") which will be issued to The
Depository Trust Company ("DTC") and registered in
the name of a nominee of DTC. The Indenture
Trustee will act as custodian of each Global Note
for DTC. Except as otherwise described herein, the
Serial Mortgage Notes will be available for
purchase in book-entry form only and each person
owning a beneficial interest in a Global Note must
rely on the procedures of the institutions having
accounts with DTC to exercise or be entitled to any
of the rights of a registered holder of any Serial
Mortgage Notes (a "Holder").
Concurrent Offering........Concurrent with the offering of the Serial Mortgage
Notes, California Petroleum is offering for sale to
the public pursuant to a separate prospectus
$117,900,000 aggregate principal amount of ___%
First Preferred Mortgage Notes Due 2014 (the "Term
Mortgage Notes") issued under a separate indenture
(the "Term Indenture"). The consummation of the
sale of the Serial Mortgage Notes is dependent on
the consummation of the sale of the Term Mortgage
Notes.
Purchase of Vessels........The Vessels are currently operated by Chevron
Transport and the sale of the Vessels to the
respective Owners and the commencement of the
Initial Charters with respect to the Vessels will
occur on the closing date (the "Closing Date") for
the offering of the Notes.
The Initial Charters and
Chevron Guarantee........On the Closing Date, the Vessels will be purchased
by their respective Owner and will be chartered to
Chevron Transport. The bareboat charter for each
Vessel (each, an "Initial Charter") will have a
term expiring on _______, 2014, subject to Chevron
Transport's right to terminate each of the Initial
Charters on specified dates commencing on the date
that the Allocated Principal Amount of Serial
Mortgage Notes relating to such Vessel is scheduled
to have been paid in full. The obligations of
Chevron Transport under each Initial Charter will
be guaranteed by Chevron (each a "Chevron
Guarantee"). See "The Initial
Charters--Termination Options."
Security...................The obligations of California Petroleum under the
Serial Mortgage Notes will be secured, equally and
ratably with the Term Mortgage Notes, by the
assignment of a first preferred ship mortgage
(each, a "Mortgage") on each Vessel between the
respective Owner, as mortgagor, and California
Petroleum, as mortgagee, an assignment of each
Initial Charter, as well as certain other
collateral, including an assignment of the related
Chevron Guarantee, an assignment of the earnings
and insurance proceeds, an assignment of the
Management Agreements relating to the Vessels and
by a pledge of all of the outstanding stock of the
Owners (collectively, at any time, the
"Collateral"). Recourse under the Serial Indenture
against the incorporators, directors, officers and
stockholders of California Petroleum and its
stockholders has been expressly waived by the
Indenture Trustee, on behalf of all Holders of the
Serial Mortgage Notes and, accordingly, the
incorporators, directors, officers and stockholders
of California Petroleum and its stockholders will
not be liable for any payments of debt service on
the Serial Mortgage Notes. California Petroleum's
capitalization is nominal and it has no source
of income other than payments to it by the
Owners and investment proceeds thereon. The
Indenture Trustee, as indenture trustee under
the Term Indenture and the Serial Indenture,
California Petroleum and Chemical Trust Company
of California, as collateral trustee (the
"Collateral Trustee"), will enter into a
collateral trust agreement (the "Collateral
Agreement") pursuant to which the Collateral
Trustee will hold the Collateral for the benefit
of the holders of the Term Mortgage Notes and
the Holders of the Serial Mortgage Notes. In
accordance with the Collateral Agreement, the
Collateral Trustee will exercise remedies with
respect to the Collateral, including the sale or
other disposition of the Collateral, upon
receipt of notice of the occurrence of an event
of default (an "Enforcement Notice") under the
Term Indenture or the Serial Indenture, or both,
as the case may be. The right of the Collateral
Trustee to enforce the Mortgages, however, will
be subject to the rights of Chevron Transport
under each Initial Charter to the continued use
and operation of the related Vessel under such
Initial Charter, so long as no event of default
has occurred and is continuing under such
Initial Charter and so long as Chevron Transport
is performing its obligations thereunder. If
the Allocated Principal Amount of Serial
Mortgage Notes relating to a Vessel is paid in
full, the Collateral (including the related
Initial Charter, if it remains in effect)
relating to such Vessel will be released from
the Lien of the Serial Indenture. See
"Description of the Notes--Security."
Termination Options Under
the Initial Charters.....Under each Initial Charter, Chevron Transport may
elect to terminate such Initial Charter on any of
four, in the case of the double-hulled Vessels, or
three, in the case of the single-hulled Vessel,
termination dates and make a termination payment
(a "Termination Payment") in connection with
such termination. The earliest such optional
termination date for any Vessel is _____, 2002.
Chevron Transport is required to pay the
Termination Payment to the Collateral Trustee
(by virtue of the Collateral Trustee's receipt
of the assignment of the Initial Charters) on or
prior to the termination date. Whether or not
the termination options are exercised,
California Petroleum and the Owners expect that
the amounts payable by Chevron Transport (other
than the related Termination Payment, if any),
and guaranteed by Chevron, under the Initial
Charters, together with an allocable amount of
anticipated earnings on Permitted Investments
(as defined herein), will be sufficient to pay
in full when due all principal of and interest
on the Serial Mortgage Notes. See "Investment
Considerations--Certain Risks Not Related to
Chevron Transport or Chevron." The Termination
Payments, if any, will not secure the
obligations of California Petroleum under the
Serial Indenture.
Redemption.................If a casualty or certain other events occur with
respect to a Vessel as result of which the Vessel
is a Total Loss, then the Serial Mortgage Notes
will be subject to mandatory redemption in part,
equally and ratably with the Term Mortgage Notes,
in an aggregate principal amount equal to the
Allocated Principal Amount of Notes for such Vessel
together with accrued but unpaid interest thereon
and certain other amounts described herein. The
Serial Mortgage Notes are not subject to optional
redemption prior to their respective Maturity
Dates. See "Description of the Notes--Redemption."
Certain Covenants..........The Indentures will include certain covenants that,
among other things, prohibit California Petroleum
from (i) incurring any indebtedness other than the
Notes, (ii) making any investments, loans or
advances other than the loans to the Owners of the
proceeds from the sale of the Notes or (iii)
creating any Liens other than its obligations under
the Notes and the related Indentures. The
Mortgages will include certain covenants that,
among other things, limit the type and amount of
additional indebtedness that may be incurred by the
Owners and impose limitations on investments,
loans, advances, the payment of dividends and the
making of certain other payments, the creation of
liens, certain transactions with affiliates and
mergers.
Under each Mortgage, the related Owner is required
to keep its Vessel free and clear of all liens
other than liens for crew's wages accrued for not
more than three months, suppliers' or other similar
liens arising in the ordinary course of its
business and accrued for not more than three
months, liens for collision or salvage, or liens
for loss, damage or expense that are fully covered
by insurance or bonded. Notwithstanding the
preceding sentence, during the term of the related
Initial Charter, any lien permitted under the
Initial Charter will be permitted under the related
Mortgage. Under each Initial Charter, Chevron
Transport may not allow, or permit to be continued,
any lien incurred by it that might have priority
over the title and interest of the Owner in the
related Vessel. See "The Mortgages--Certain
Covenants" and "The Initial Charters-- Covenants."
Restricted Payments........None of the Owners may (i) declare or pay any
dividend or other distribution on any shares of its
capital stock, (ii) make any loans or advances to
any affiliate of such Owner or (iii) purchase,
redeem or otherwise acquire or retire for value any
shares of its capital stock (each, a "Restricted
Payment") unless, among other things, the Serial
Mortgage Notes shall have been repaid in full.
California Petroleum may not make any Restricted
Payments so long as any Notes are outstanding.
Funds will be released from the Collateral
Account to the Owners to permit them to make
Restricted Payments only after the date on which
each Vessel either (i) has been sold, (ii) is
subject to an Acceptable Replacement Charter or
(iii) is subject to an Initial Charter for which
the last optional termination date has occurred
and has not been exercised and only to the
extent excess funds (as defined) are available.
Certain Liabilities........Under each Initial Charter, Chevron Transport will
be liable for oil or other pollution damage
resulting from its operation of the related Vessel
under such Initial Charter and will be liable to
indemnify and hold harmless the related Owner
against any and all losses, damages and expenses
incurred by such Owner as a result of any oil or
other pollution damage resulting from Chevron
Transport's operation of such Vessel under such
Initial Charter (including, without limitation,
such Owner's liability under the United States Oil
Pollution Act of 1990, as amended ("OPA 90"), or
under the laws of any other jurisdiction relating
to oil spills).
Use of Proceeds............See "Use of Proceeds" for a discussion of the
application of the net proceeds of the offering of
the Serial Mortgage Notes to the cost of acquiring
the Vessels.
Ratings....................The Serial Mortgage Notes have been prospectively
rated ___ by Moody's Investors Service, Inc.
("Moody's"), ___ by Standard & Poor's Rating Group,
a division of McGraw-Hill, Inc. ("Standard &
Poor's") and ___ by Duff & Phelps Credit Rating Co.
("Duff & Phelps") at their initial issuance. A
security rating is not a recommendation to buy,
sell or hold securities and may be subject to
revision or withdrawal at any time.
Investment Considerations..Prospective purchasers of the Serial Mortgage Notes
should carefully consider the matters set forth in
this Prospectus under the caption "Investment
Considerations."
Sources and Uses of Funds
Sources of Funds:
Proceeds from Serial Mortgage Notes..........................$168,500,000
Proceeds from Term Mortgage Notes............................ 117,900,000
-----------
Total Sources..............................286,400,000
===========
Uses of Funds:
Owner's Purchase Price for S. Ginn.............................80,666,667
Owner's Purchase Price for C. Rice.............................80,666,667
Owner's Purchase Price for Chevron Mariner.....................80,666,667
Owner's Purchase Price for W.E. Crain..........................40,000,000
Underwriting Fees and Commissions...............................1,991,000 *
Legal, Printing, Rating and Other Fees............................509,000 *
Coordinator's Fees................................................950,000(1)
Broker's Fees................................................ 950,000(1)
-----------
Total Uses................................$286,400,000(2)
===========
__________
* Estimated
(1) The coordinator's fee is payable to Xenon Shipping AS and Merrimac
Shipping Ltd. and the brokers fee is payable to McQuilling Brokerage
Partners, Inc.
(2) Numbers do not equal total due to rounding.
INVESTMENT CONSIDERATIONS
Prospective purchasers of the Serial Mortgage Notes should
carefully consider the following investment considerations as well as the
other information set forth in this Prospectus.
Certain Risks Not Related to Chevron Transport or Chevron
The Indenture Events of Default specified in the Serial Indenture
include, in addition to a default by Chevron Transport under any Initial
Charter or the termination of Chevron's guaranty of any Initial Charter other
than pursuant to its terms, certain other events which do not depend on Chevron
Transport's compliance with the Initial Charters or the effectiveness of
Chevron's guaranty. Such Indenture Events of Default include (i) the
occurrence and continuance of a Mortgage Event of Default, (ii) a breach of
any representation, warranty or covenant of California Petroleum in the Serial
Indenture which continues uncured for a specified period, (iii) the occurrence
of specified events of bankruptcy with respect to California Petroleum and
(iv) the termination of any of the Security Documents other than pursuant to
their terms. See "Description of the Notes--Indenture Events of Default."
The activities of California Petroleum and the Owners have been limited as
described under "California Petroleum and the Owners," and California
Petroleum and each Owner will covenant to engage in no activities other than
those permitted. See "Description of the Notes--Certain Covenants" and "The
Mortgages--Certain Covenants" for a description of the applicable covenants.
Any of the Indenture Events of Default discussed above could occur
even if Chevron Transport is in full compliance with the terms of the Initial
Charters. For example, California Petroleum and the Owners will rely entirely
on Chevron Transport's charterhire payments under the Initial Charters and any
earnings on Permitted Investments to pay their expenses and make scheduled
payments of principal and interest on the Serial Mortgage Notes and interest
on the Term Mortgage Notes until the first termination date for each Initial
Charter. Such expenses will include Recurring Fees and Taxes (as defined
herein) and any other expenses for which Chevron Transport is not responsible
under the Initial Charters. Under each Initial Charter, Chevron Transport
will be responsible for, among other things, all costs and expenses of
operating and maintaining the related Vessel and under certain circumstances,
the costs and expenses of maintaining the documentation of the related Vessel
under the laws of the Registration Jurisdiction in excess of a specified
amount. See "The Initial Charters--Flag and Name of Vessel" and
"--Indemnity." While the Owners expect that such charterhire payments and
earnings will be sufficient to meet their requirements, substantial
unanticipated expenses or increases in expenses that are not payable by
Chevron Transport under the Initial Charters could result in the bankruptcy
of any Owner which would result in an Indenture Event of Default and a
corresponding event of default under the Term Indenture. See "Management's
Discussion and Analysis of Financial Condition--Capital Resources and
Liquidity." Upon the occurrence and continuance of such an Indenture Event
of Default and event of default under the Term Indenture, all principal and
accrued interest on the Serial Mortgage Notes, as well as the Term Mortgage
Notes, would become immediately due and payable. Thereafter, any amounts
received by the Collateral Trustee in the exercise of its remedies,
including for example charterhire payments from Chevron Transport or
proceeds from the sale of the Vessels, would be subject to the claims of
the holders of the Serial Mortgage Notes and the Term Mortgage Notes,
equally and ratably. There can be no assurance that amounts received by
the Collateral Trustee following an Indenture Event of Default would be
sufficient to pay the principal of and accrued interest on the outstanding
Serial Mortgage Notes.
Lack of Public Market for the Serial Mortgage Notes
There has not previously been any public market for the Serial
Mortgage Notes. California Petroleum does not intend to list the Serial
Mortgage Notes on any securities exchange or to seek approval for quotation
through any automated quotation system. There can be no assurance that an
active market for the Serial Mortgage Notes will develop. To the extent that
a market for the Serial Mortgage Notes does develop, the market value of the
Serial Mortgage Notes will depend on prevailing interest rates, the market for
similar securities and other factors, including the financial condition,
performance and prospects of the charterers of the Vessels and the value of
the Vessels. California Petroleum has been advised by the Underwriter that
the Underwriter presently intends to make a market in the Serial Mortgage
Notes, as permitted by applicable laws and regulations. The Underwriter is not
obligated, however, to make a market in the Serial Mortgage Notes, and any
such market-making may be discontinued at any time at the sole discretion of
the Underwriter. Accordingly, no assurance can be given as to the liquidity
of, or trading markets for, the Serial Mortgage Notes.
USE OF PROCEEDS
The proceeds from the sale of the Serial Mortgage Notes, together
with the proceeds from the Term Mortgage Notes, will be loaned to the Owners
to fund the acquisition of the Vessels from Chevron Transport and to pay the
underwriting commissions and certain fees and expenses as set forth on the
cover of this Prospectus. The Vessels are currently owned by Chevron
Transport and will be acquired by the related Owners and chartered by Chevron
Transport on the Closing Date. The net proceeds of the sale of the Notes to
be applied by the respective Owners to purchase the Vessels from Chevron
Transport will be approximately $80,666,667 for each double-hulled Vessel and
$40,000,000 for the single-hulled Vessel.
CAPITALIZATION OF CHEVRON
The unaudited capitalization of Chevron and its consolidated
subsidiaries as of September 30, 1994 is set forth in the following table.
This table should be read in conjunction with the consolidated financial
statements of Chevron and the related notes thereto incorporated by reference
herein.
September 30, 1994
---------------------
(in millions)
Short-term debt................................ $ 4,432
Long-term debt and capital lease
obligations:
Long-term debt............................ 3,945
Capital lease obligations................. 184
---------------------
Total debt.......................... $ 8,561
=====================
Stockholders' equity:
Preferred stock--$1.00 par value.......... -
Authorized--100,000,000 shares
Issued--None
Common stock--$1.50 par value............. $ 1,069
Authorized--1,000,000,000 shares
Issued--712,487,068 shares
Capital in excess of par value............ 1,857
Deferred compensation--Employee Stock
Ownership Plan.......................... (895)
Currency translation adjustment and other. 216
Retained earnings......................... 14,136
Treasury stock, at cost (60,816,635 shares) (2,066)
Total stockholders' equity.......... $ 14,317
=====================
Total debt and stockholders' equity. $ 22,878
=====================
SELECTED FINANCIAL DATA OF CHEVRON
The selected financial information presented in the table below
should be read in conjunction with the consolidated financial statements and
related notes contained in Chevron's Annual Report on Form 10-K for the year
ended December 31, 1993 referred to under "Incorporation of Certain Documents
by Reference." The selected financial information for each of the five years
in the period ended December 31, 1993 has been derived from audited financial
statements, while the amounts for the nine months ended September 30, 1994
have been derived from unaudited financial statements. In the opinion of
Chevron's management, the interim data includes all adjustments necessary for
a fair statement of the results for the interim period. These adjustments
were of a normal recurring nature except for the special items described in
the third quarter 1994 earnings press release which was filed with the
Commission as a part of Chevron's October 25, 1994 Current Report on Form 8-K.
Chevron adopted Statements of Financial Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions," and
No. 109, "Accounting for Income Taxes," effective January 1, 1992.
Year Ended December 31,
Nine Months Ended -------------------------------------------------
Dollars in millions September 39, 1994 1993 1992 1991 1990 1989
- -------------------------------------------------------- ------------------- ------ ------- ------- ------- -------
Sales and other operating revenues...................... $26,203 $36,191 $38,212 $38,118 $41,540 $31,916
Equity in net income of affiliates
and other income.................................... 394 891 1,465 825 1,026 869
Total costs............................................. 24,725 34,656 36,214 36,691 38,353 31,479
------- ------- ------- ------- ------- -------
Income before income tax expense and
cumulative effect of changes in
accounting principles............................... $1,872 $2,426 $3,463 $2,252 $4,213 $1,306
Income tax expense...................................... 802 1,161 1,253 959 2,056 1,055
------- ------- ------- ------- ------- -------
Income before cumulative effect of changes
in accounting principles............................ $1,070 $1,265 $ 2,210 $ 1,293 $ 2,157 $ 251
Cumulative effect of changes in accounting
principles.......................................... -- -- (641) -- -- --
------- ------- ------- ------- ------- -------
Net income.............................................. $1,070 $1,265 $ 1,569 $ 1,293 $ 2,157 $ 251
======= ======= ======= ======= ======= =======
Per share of common stock(1)
Income before cumulative effect of changes
in accounting principles. . . . . . . . . . . $ 1.64 $ 1.94 $ 3.26 $ 1.85 $ 3.05 $ .37
Cumulative effect of changes in accounting
principles. . . . . . . . . . . . . . . . . . . - - (.95) - - -
Net income per share of common stock . . . $ 1.64 $ 1.94 $ 2.31 $ 1.85 $ 3.05 $ .37
Ratio of earnings to fixed charges of
Chevron on a total enterprise basis................ 5.06 5.23 6.35 4.34 6.07 2.75
- -------------
(1) All per share amounts reflect a two-for-one stock split in May, 1994.
The ratios of earnings to fixed charges set forth in the table above are
computed using amounts for Chevron as a whole, including its majority owned
subsidiaries and its proportionate share of 50 percent owned entities
(primarily the Caltex Group of Companies). For the purpose of determining
earnings in the calculation of the ratios, equity in net income of less than
50 percent owned affiliates is adjusted to the amounts of distributions
received (but not undistributed amounts). In addition, consolidated income
before cumulative effect of changes in accounting principles is increased by
income taxes, previously capitalized interest charged to earnings during the
period, the minority interest's share of net income, and fixed charges,
excluding capitalized interest. Fixed charges consist of interest on debt
(including capitalized interest and amortization of debt discount and expense)
and a portion of rentals determined to be representative of interest.
SUMMARIZED FINANCIAL DATA
OF CHEVRON TRANSPORT
Chevron Transport, an indirect, wholly-owned subsidiary of
Chevron, is the principal operator of Chevron's international tanker fleet.
Chevron Transport derives most of its shipping revenues by providing
transportation services to Chevron affiliates. The following table sets forth
certain summary financial data for Chevron Transport and its subsidiaries
(Chevron Tanker Bermuda Limited, Chevron Manning Services Limited and Chevron
Product Carriers Corporation). The data has been derived from audited
financial statements prepared by Chevron Transport and its subsidiaries on a
stand alone basis in conformity with generally accepted accounting principles.
The financial information at and for the nine months ended September 30, 1994
has been derived from unaudited financial statements which in the opinion of
Chevron Transport management reflect all adjustments (consisting only of
normal recurring adjustments) necessary for the fair presentation of Chevron
Transport's financial position and results of operations for such periods.
Year Ended December 31,
Nine Months Ended -------------------------------------------------
Dollars in millions September 30, 1994 1993(1) 1992 1991
- -------------------------------------------- --------------------------- --------------- ------------- -------------
Sales and other operating revenues.......... $340 $542 $519 $621
Total costs and other deductions............ 394 553 514 552
(Loss) income before cumulative effect of
changes in accounting principles............ (41) (3) 6 59
Cumulative effect of changes in accounting
principles................................ -- (15) -- --
Net (loss) income .......................... (41) (18) 6 59
At December 31,
At September 30, 1994 1993 1992 1991
--------------------------------------------------------------------------------
Current assets.............................. $ 34 $108 $164 $ 79
Other assets................................ 878 796 791 689
Current liabilities......................... 367 376 360 95
Other liabilities........................... 214 185 207 291
Net equity.................................. 331 343 388 382
- ----------
(1) Effective January 1, 1993, Chevron Transport adopted Statement of
Financial Accounting Standards No. 109 (SFAS 109), "Accounting for Income
Taxes." In prior periods, Chevron Transport accounted for income taxes in
accordance with SFAS 96, "Accounting for Income Taxes."
CAPITALIZATION OF CALIFORNIA PETROLEUM
The following unaudited table sets forth the capitalization of
California Petroleum at September 30, 1994, and as adjusted to give effect to
the sale of the Notes and the application of the estimated net proceeds
therefrom. This table should be read in conjunction with the financial
statements of California Petroleum and the related notes thereto set forth
elsewhere in this Prospectus. See also "Use of Proceeds" and "Management's
Discussion and Analysis of Financial Condition."
September 30, 1994
------------------------------------
Actual As Adjusted
---------------- ----------------
(in thousands)
Cash............................. $1 $ 1
Long-term debt:
Serial Mortgage Notes....... - $168,500
Term Mortgage Notes......... - 117,900
----------------
Total Long-term debt.. - $286,400
Stockholder's Equity:
Capital Stock............... $1 $ 1
Additional Paid-in Capital.. 0 0
Retained Earnings........... 0 0
---------------- ----------------
Total Stockholder's Equity $1 $ 1
---------------- ----------------
Total Capitalization.. $1 $286,401
SUMMARIZED FINANCIAL AND PRO FORMA DATA OF
CALIFORNIA PETROLEUM AND THE OWNERS
Neither California Petroleum nor any of the Owners has an
operating history. Financial data for comparable accounting periods is not
available for any of them. The financial statements set forth in this
Prospectus for California Petroleum and each of the Owners include their
beginning balance sheets. See "Index to Financial Statements."
The following unaudited pro forma balance sheet of California
Petroleum at September 30, 1994 was prepared as if the sale of the Notes
and the application of the estimated net proceeds therefrom had occurred on
such date. The following unaudited pro forma income statement of
California Petroleum for the nine months ended September 30, 1994 gives
effect to the sale of the Notes and the application of the estimated net
proceeds therefrom as if it had occurred on January 1, 1994, the beginning
of California Petroleum's fiscal year. The unaudited pro forma income
statement does not purport to represent what California Petroleum's results
of operations actually would have been if the transaction had occurred as
of the dates indicated or what such results will be for any future periods.
The unaudited pro forma financial data are based upon assumptions set forth
in the accompanying notes which California Petroleum believes are
reasonable and should be read in conjunction with the financial statements,
including the Owners' pro forma condensed combined financial data, and
accompanying notes thereto included elsewhere in this Prospectus.
At
Pro Forma September 30, 1994
Unaudited Pro Forma Balance Sheet Historical Adjustments Pro Forma
------------- -------------------- --------------------
Assets
Current assets...................................
Cash........................................... $ 1,000 $ $ 1,000
------------- -------------------- --------------------
Total current assets....................... 1,000 1,000
--------------------
Term loans receivable............................ 116,088,687(c) 116,088,687
Serial loans receivable.......................... - 165,911,313(c) 165,911,313
Other assets..................................... - 4,400,000(b) 4,400,000
------------- -------------------- --------------------
Total assets............................... $ 1,000 $ 286,400,000 $ 286,401,000
------------- ==================== ====================
Liabilities and Stockholders' Equity
Current liabilities
Current portion of serial notes................ $ - $ 18,160,000(a) $ 18,160,000
------------- -------------------- --------------------
Total current liabilities.................. - 18,160,000 18,160,000
Term note debt................................... - 117,900,000(a) 117,900,000
Serial note debt less current portion - 150,340,000(a) 150,340,000
------------- -------------------- --------------------
Total liabilities - 286,400,000 286,400,000
Stockholders' equity
Common stock issued............................ 1,000 - 1,000
------------- -------------------- --------------------
Total stockholders' equity................. 1,000 - 1,000
------------- -------------------- --------------------
Total liabilities and stockholders' equity $ 1,000 $ 286,400,000 $ 286,401,000
============= ==================== ====================
For the Nine
Months Ended
Unaudited Pro Forma Income September 30, 1994
Statement Historical Pro Forma Adjustments Pro Forma
------------ ------------------------- --------------------
Interest income..................... $ - $ 17,368,721(c) $ 17,368,721
Other income........................ - 45,000(d) $ 45,000
------------ ------------------------ --------------------
Total income.................. - 17,413,721 17,413,721
Interest expense.................... - 17,154,902(a) 17,154,902
General and
administrative
expenses.......................... - 45,000(d) 45,000
Amortization of debt
issue costs....................... - 213,819(b) 213,819
------------ ------------------------ --------------------
Net income $ $ 0 $ 0
============ ======================== ====================
__________
Pro forma adjustments are made to reflect:
(a) The issuance of $117,900,000 in Term Mortgage Notes and $168,500,000 in
Serial Mortgage Notes. The Term Mortgage Notes are assumed to bear
interest at 8.62% per annum. The Serial Mortgage Notes are assumed to
bear interest at rates ranging from 6.25% to 8.28% through maturity.
Principal will be payable on the Term Mortgage Notes in accordance with
a sinking fund schedule commencing in 2003 and continuing through 2014,
the maturity date. Serial Mortgage Notes will mature beginning in 1995
and continuing through 2005. Interest is assumed to be payable
semi-annually on July 1 and January 1 of each year.
(b) Capitalization of assumed debt issue costs. The costs represent
estimated underwriting fees and commissions, coordinator's and broker's
fees and other costs relating to the issuance of the Term Mortgage Notes
and the Serial Mortgage Notes described in (a) above. At the time of
issuance, $4,400,000 of proceeds relating to the issued Term Mortgage
Notes and Serial Mortgage Notes discussed in (a) above were assumed to
be used to pay these costs. These costs will be amortized over the term
of the Notes to which they relate.
(c) Lending of the proceeds from the issuance of the Term Mortgage Notes and
Serial Mortgage Notes described in (a) above. The Term Loans earn
interest at an assumed rate of 8.62% per annum and principal is to be
repaid during the years 2003 through 2014 in accordance with the Term
Loan Agreements between California Petroleum and the Owners. The
Serial Loans earn interest at assumed rates ranging from 6.25% to
8.28% and mature during the years 1995 through 2005 in accordance
with the Serial Loan Agreements between California Petroleum and the
Owners. The Term Loans and Serial Loans are reported net of the
related debt discounts which are estimated to total $1,811,313 and
$2,588,687, respectively. The discounts will be amortized over the
term of such loans to which they relate. Interest is assumed to be
due semi-annually on July 1 and January 1 of each year.
(d) General and administrative expenses comprising trustee fees, legal
fees, agency fees and other costs estimated by management of
California Petroleum to be incurred by California Petroleum during
the nine months ended September 30, 1994. These costs will be billed
to the Owners.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION OF CALIFORNIA PETROLEUM
AND THE OWNERS
As of the date of this Prospectus, neither California Petroleum
nor the Owners had any operating history. On the Closing Date, California
Petroleum will loan the proceeds from the sale of the Notes to the Owners to
fund the acquisition of the Vessels and to pay the underwriting commissions and
certain fees and expenses as discussed under "Use of Proceeds."
Capital Resources and Liquidity.
California Petroleum expects that all of its expenses will consist
of interest payments due on the Notes issued by it and audit, legal, trustee
and other administrative expenses. So long as all of the Vessels remain
subject to the Initial Charters, the Collateral to be pledged to the
Collateral Trustee in connection with the issuance of the Notes, assuming that
the anticipated rate of return on the Permitted Investments discussed below is
realized, has been structured to provide California Petroleum with sufficient
funds to make timely payments of all such anticipated expenses, plus amounts
necessary to pay principal of and interest on the Notes when due.
The foregoing determination assumes that amounts remaining in the
Trust Accounts on each Payment Date will be invested in Permitted Investments
that will provide a 5.0% annual rate of return. The Owners believe that on
the Closing Date, guaranteed investment contracts rated at least "AA" or "Aa"
by Standard & Poor's or Moody's, respectively, will be available with at least
the assumed annual rate of return for such amounts until the first optional
termination date under any Initial Charter. The annual rate of return on
Permitted Investments of amounts remaining in any Trust Account on or after
such first optional termination date is not predictable.
Charterhire payments under each Initial Charter have been
structured so that approximately $100,000 annually will be available to pay
anticipated expenses with respect to the related Vessel which are not directly
payable by Chevron Transport under such Initial Charter. For each Vessel such
expenses, including Recurring Fees and Taxes, the related Management Fee and
Technical Advisor's Fee, an allocable amount of the fees and expenses of the
Indenture Trustee and Collateral Trustee and a provision for miscellaneous or
unexpected expenses, are estimated to equal approximately $72,500 annually for
the first three years. Under each Management Agreement, the Management Fee and
Technical Advisor's Fee are subject to a negotiated adjustment after the first
three years. See "Business--Operations" and "Certain Relationships and
Transactions--The Management Agreements." The Recurring Fees and Taxes also
are subject to change as a result of governmental action, inflation or
unanticipated expenses incurred by the related Owner or California Petroleum
which are not directly payable by Chevron Transport under the related Initial
Charter. If the costs and expenses of maintaining the documentation of a
Vessel under the laws of the Registration Jurisdiction exceed a specified
amount, however, Chevron Transport will either pay such excess amount or
cooperate with the related Owner to change the registry or port of
documentation of such Vessel. See "The Initial Charters--Flag and Name of
Vessel." Neither the Owners nor California Petroleum have, nor will they have
in the future, any source of capital for the payment of expenses which are not
directly payable by Chevron Transport under the Initial Charters other than
the charterhire payments, and any income from the reinvestment thereof. See
"Description of the Notes -- Trust Accounts."
California Petroleum's only sources of funds with respect to the
Notes will be payments of interest and principal on the related loans
("Acquisition Loans") from California Petroleum to each Owner of a portion of
the proceeds from the sale of the Notes, and earnings on the Permitted
Investments. California Petroleum does not have, nor will it have in the
future, any source of capital for payment of the Notes other than the
Acquisition Loans to the Owners and income from the reinvestment thereof.
The Owners expect that substantially all of their expenses will
consist of payments due on their Acquisition Loans, fees and tonnage taxes for
the Vessels, Management Fees, Technical Advisor's Fees and audit, legal and
other administrative expenses and insurance not covered by the charterer
(mortgagee additional perils insurance). The Owners' sources of funds with
respect to their Acquisition Loans will be charterhire payments for the
Vessels, any Termination Payments or the proceeds from the sale of any Vessel.
The Owners do not have, nor will they have in the future, any other source of
capital for payment of the Acquisition Loans.
Under each Initial Charter, Chevron Transport has the right to
terminate such Initial Charter on specified termination dates. The first
optional termination date with respect to each Initial Charter occurs on the
payment date on which the Allocated Principal Amount of Serial Mortgage Notes
with respect to the related Vessel is scheduled to be paid in full.
Results of Operations.
California Petroleum's results of operations will depend on the
amount of interest paid by the Owners on the Acquisition Loans, the rate
at which payments of principal are made on such Acquisition Loans, earnings on
Permitted Investments and the level of operating expenses. Each Owner's
results of operations will depend on the charterhire payments for its Vessel
under the related Initial Charter and, upon any termination of such Initial
Charter, any Termination Payment, charterhire under any subsequent charter or
proceeds from any sale of such Vessel, and the level of operating expenses.
Earnings to Fixed Charges.
Because neither California Petroleum nor any of the Owners has an
operating history, no historical or pro forma ratio of earnings to fixed
charges for California Petroleum or the Owners herein included in this
Prospectus.
CHEVRON TRANSPORT AND CHEVRON
Chevron Transport, an indirect, wholly-owned subsidiary of
Chevron, is principally engaged in the marine transportation of oil and
refined petroleum products. As of September 30, 1994, Chevron Transport
operated 29 internationally flagged vessels which it owned or bareboat
chartered. In addition, at any given time, Chevron Transport typically has an
additional 35 to 45 ships on time or single-voyage charters. Chevron
Transport's primary transportation routes are from the Middle East, Indonesia,
Mexico, West Africa and the North Sea to ports in the United States, Europe,
the United Kingdom and Asia. Refined petroleum products are transported
worldwide. Chevron Transport expects to use each Vessel worldwide as
permitted under the Initial Charters.
Chevron is a major international oil company. Chevron provides
administrative, financial and management support for, and manages its
investment in, domestic and foreign subsidiaries and affiliates, which engage
in fully integrated petroleum operations, chemical operations, real estate
development and other mineral and energy related activities in the United
States and approximately 100 other countries. Petroleum operations consist of
exploring for, developing and producing crude oil and natural gas;
transporting crude oil, natural gas and petroleum products by pipelines,
marine vessels and motor equipment; refining crude oil into finished petroleum
products; and marketing crude oil, natural gas and the many products derived
from petroleum. Chemical operations include the manufacture and marketing of
a wide range of chemicals primarily for industrial uses.
CALIFORNIA PETROLEUM AND THE OWNERS
California Petroleum
California Petroleum Transport Corporation, a Delaware
corporation, is a special purpose corporation that has been recently organized
solely for the purpose of issuing, as agent on behalf of the Owners, the
Serial Mortgage Notes and the Term Mortgage Notes as full recourse obligations
of California Petroleum in order to facilitate the acquisition of the Vessels
by the Owners and the charter of the Vessels as described herein. Recourse
under the Serial Indenture against the incorporators, directors, officers and
stockholders of California Petroleum and its stockholders has been expressly
waived by the Indenture Trustee, on behalf of all Holders of the Serial
Mortgage Notes and, accordingly, the incorporators, directors, officers and
stockholders of California Petroleum and its stockholders will not be liable
for any payments of debt service on the Serial Mortgage Notes. California
Petroleum's capitalization is nominal and it has no source of income other
than payments to it by the Owners and investment proceeds thereon. All the
shares of California Petroleum are held by CalPet Trust, a Massachusetts
Charitable Lead Trust formed by J.H. Holdings, a Massachusetts
corporation, for the benefit of certain charitable institutions in
Massachusetts. All of the stock of J.H. Holdings is owned by The Glendale
Company, a private investment partnership. California Petroleum does not
have any subsidiaries.
The Owners
Each of CalPetro Bahamas I, CalPetro Bahamas II and CalPetro
Bahamas III has been recently organized as a special purpose corporation under
the laws of the Bahamas for the purpose of acquiring and chartering one of the
Vessels. CalPetro IOM has been recently organized as an Isle of Man company.
Each Owner, either pursuant to the terms of its Memorandum of Association
and/or pursuant to the terms of the related Mortgage, will engage in no
business other than the ownership and chartering of its Vessel and activities
resulting from or incidental to such ownership and chartering. Each Owner is
wholly-owned by California Tankers Investments Limited, a company organized
under the laws of the Bahamas, which is a wholly-owned subsidiary of CalPetro
Holdings Limited, an Isle of Man company. None of the Owners has any
subsidiaries. None of the Owners is owned by or is an affiliate of California
Petroleum, nor is any Owner owned by or an affiliate of Chevron Transport or
Chevron. See "Business--Operations" and "Certain Relationships and
Transactions--The Management Agreements."
The activities of each of the Owners, either pursuant to the terms
of the related Mortgage or the terms of its Memorandum of Association, shall
be limited to (i) borrowing money from California Petroleum pursuant to the
related loan agreements between California Petroleum and such Owner (each a
"Loan Agreement"), (ii) carrying out any other activity relating to or
contemplated by such Loan Agreements, but not to incur any indebtedness for
borrowed money or create any lien, security interest, charge or other
encumbrance over all or any part of the assets or interests of such Owner
other than as contemplated by and pursuant to the terms of such Mortgage or
its Memorandum of Association and such Loan Agreements, (iii) exercising and
enforcing all rights and powers conferred by, incidental to or arising out of
such Loan Agreements and the transactions contemplated thereby, (iv) entering
into, performing and delivering a purchase agreement with Chevron Transport
with respect to the purchase of its Vessel with a portion of the borrowings
under such Loan Agreements, (v) registering its Vessel under and pursuant to
the laws of the Registration Jurisdiction, (vi) entering into, performing and
delivering its Initial Charter, (vii) entering into any other agreement
contemplated by such Loan Agreements, including the Security Documents, (ix)
entering into other charters or contracts of affreightment relating to the
Vessel upon the termination of the Initial Charter in a form conforming to the
requirements of such Loan Agreements, (x) carrying out, entering into,
performing and delivering any and all applications, licenses, agreements and
instruments related to and in the furtherance of the foregoing and (xi)
engaging in those activities, including the entering into of agreements,
necessary, suitable or convenient to accomplish the foregoing or incidental
thereto or connected therewith.
BUSINESS
The Vessels
Suezmax-Sized Tankers.
All of the Vessels are Suezmax-sized tankers which are capable of
calling at a large number of ports. The main trading patterns of Suezmax
tankers are as follows: from West Africa to the United States, Europe or
Northeast Asia, from the North Sea to the United States, from the
Mediterranean to Western Europe and the United States and from the Arabian
Gulf to Europe or Southeast Asia. In contrast to very large crude carriers
("VLCCs") and ultra-large crude carriers ("ULCCs"), Suezmax tankers are not
dependent on the longer-haul routes from the Arabian Gulf.
Vessel Quality.
All of the Vessels are modern, high-quality tankers, three of
which are of double-hull construction, and all of which have been designed to
Chevron Transport's specifications to enhance safety and reduce operating and
maintenance costs, including such features as high performance rudders, extra
steel (minimal use of high tensile steels), additional fire safety equipment,
redundant power generation equipment, extra coating and electrolytic corrosion
monitoring and protection systems and additional crew quarters to facilitate
added manning. C. Rice, W.E. Crain and Chevron Mariner have been recently
constructed by Ishibras in its Brazilian shipyards. S. Ginn has been recently
constructed by IHI in its Japanese shipyard. Chevron Transport has advised
the Owners that an affiliate of Chevron Transport supervised the construction
of each of the Vessels. Personnel of this affiliate have been present at the
shipyards during the construction periods, monitoring construction to ensure
compliance with Chevron Transport's specifications. The Vessels have been
designed and constructed to increase fuel efficiency, lower operating costs
and meet the stringent operating and safety standards of charterers, including
Chevron Transport, and regulatory agencies.
Vessel Maintenance.
The Vessels will be maintained during the term of the Initial
Charters by Chevron Transport in accordance with good commercial maintenance
practice commensurate with other vessels in Chevron Transport's fleet of
similar size and trade, as required by the Initial Charters. See "The Initial
Charters--Covenants." Although not required by the Initial Charters,
currently Chevron Transport utilizes the maintenance and repair division
within the engineering department of one of its affiliates. In addition, in
an effort to promote high standards of quality control, California Petroleum
has been advised by Chevron Transport that, through its affiliate, it
currently has agreements with two shipyards, located in Europe and Asia, to
perform all scheduled maintenance for its fleet, including the Vessels,
although such agreements are not required under the Initial Charters. The
Initial Charters require Chevron Transport to return any terminated Vessel
to its respective Owner in class under the rules of the American Bureau of
Shipping (or other classification society previously approved by the
Owner). In addition, the Owner has the right to inspect the Vessel and to
require surveys upon redelivery, and Chevron Transport will be responsible
for making or compensating the Owner for certain necessary repairs in
connection with such redelivery.
Previous Operation of the Vessels by Chevron Transport
Chevron Transport took delivery, as purchaser, of W.E. Crain in
February 1992, of S. Ginn in March 1993, of C. Rice in August 1993 and of the
Chevron Mariner in October 1994. Chevron Transport has informed California
Petroleum and the Owners that, since their delivery, the W.E. Crain, S. Ginn
and the Chevron Mariner have been operating in the Pacific region, primarily
carrying Mideast or Indonesian crudes to Chevron's El Segundo and Richmond
refineries in California, although Chevron Transport will have the right to
operate the Vessels worldwide under the applicable Initial Charter. The C.
Rice has traded in the Atlantic region, primarily carrying Mexican crude to
Chevron's U.S. Gulf refinery in Pascagoula, Mississippi and West African crude
to Chevron's Philadelphia refinery; however, the Owners understand that
Chevron has entered into a contract to sell its Philadelphia refinery.
Operations
Charter and Operation of the Vessels.
California Petroleum has been organized for the sole purpose of
issuing, as agent on behalf of the Owners, the Serial Mortgage Notes and the
Term Mortgage Notes as full recourse obligations of California Petroleum, and
loaning the proceeds of the sale of the Notes to the Owners in order to fund
the acquisition of the Vessels by the Owners. Upon the acquisition of a
Vessel by the related Owner and the acceptance of the Vessel under the related
Initial Charter, the Vessel will be operated by Chevron Transport in the
business of marine transportation of oil. See "The Initial Charters" for a
discussion of the terms of the Initial Charters regarding the use and
operation of the Vessels.
Management.
Each Owner will enter into a Management Agreement pursuant to
which the Manager will manage the day-to-day business of such Owner and will
provide administrative, management and advisory services to the Owner in
return for a management fee ("Management Fee") equal to the sum of (i) for
each Vessel, $16,000 per annum during the period from the Closing Date to the
third anniversary of the Closing Date plus (ii) $3,500 per annum, during such
three-year period. Thereafter, the Management Fee will be adjusted as the
Manager and the Owner may agree from time to time. See "Certain Relationships
and Transactions--The Management Agreements." Each Initial Charter provides
that Chevron Transport will operate the related Vessel, except under certain
circumstances, during the term of the Initial Charter. See "The "Initial
Charters--Covenants."
Pursuant to the Management Agreements, the Owners have
commissioned Barber Ship Management a.s. ("Barber Ship Management") to provide
certain maritime operational services during the term of the Initial Charters
in return for a technical advisor's fee ("Technical Advisor's Fee"), for each
Vessel, equal to $12,500 per annum during the period from the Closing Date to
the third anniversary of the Closing Date. Thereafter, the Technical
Advisor's Fee will be adjusted as Barber Ship Management and the Owner may
agree from time to time. In addition, if Chevron Transport exercises its
option to terminate the Initial Charter for any Vessel, Barber Ship Management
has agreed to provide, if necessary, all technical management services for
such Vessel. Either the Manager or Barber Ship Management may terminate its
obligations under the Management Agreement on 30 days notice to the Owner.
Barber Ship Management, headquartered in Oslo, Norway, originated from the
Norwegian ship owning company Wilh. Wilhelmsen Limited A/S, which has more
than 130 years of experience in the maritime industry. Barber Ship
Management, founded in 1987, is a ship management group with over 200 shore
staff and approximately 5,900 sea staff. Barber Ship Management currently
provides professional ship management services to a fleet of 170 vessels.
Barber Ship Management has operational bases in Norway, the Arabian Gulf, Hong
Kong, London and the United States and manning agencies in India, Malaysia,
the Philippines and Poland. The Owners believe that the management
services of Barber Ship Management will enable them to continue to meet
the operating and safety standards of charterers and regulatory agencies if
the Initial Charter for any of the Vessels is terminated.
Business Strategy
The Owners' strategy is to acquire and charter the Vessels to
Chevron Transport under the Initial Charters which provide (a) charterhire
payments which California Petroleum and the Owners expect will be sufficient
to pay (i) the Owners' obligations under the Acquisition Loans so long as the
Initial Charters are in effect, (ii) the Management Fees and the Technical
Advisor's Fees under the Management Agreements, (iii) the Recurring Fees and
Taxes and (iv) any other costs and expenses incidental to the ownership and
chartering of the Vessels that are to be paid by the Owners, (b)
Termination Payments sufficient to make sinking fund and interest payments
on the Term Mortgage Notes, to the extent allocable to the Vessel for which
the related Initial Charter has been terminated, for at least two years
following any such termination, during which time the Vessel may be sold or
rechartered and (c) that the Vessels will be maintained in accordance with
the good commercial maintenance practices required by the Initial Charters,
and to arrange for vessel management and remarketing services to be
available in case any Initial Charter is terminated by Chevron Transport or
any Vessel is for any other reason returned to the possession and use of
the Owners while no longer subject to the related Initial Charter. See
"The Initial Charters" for a discussion of the terms of the Initial
Charters.
MANAGEMENT
Directors and Executive Officers - California Petroleum and the Owners
Directors and Executive
Officers of California Petroleum Age Position
Nancy D. Smith 26 President
Louise E. Colby 46 Secretary and Treasurer
Nancy D. Smith has been the president of California Petroleum
since 1994. She has been a director since 1994. Her term expires in 1995.
She has been the President of JH Management Corporation, a Massachusetts
business corporation that engages in the management of special purpose
corporations for structured financial transactions, since 1993. From 1987 to
1992, she was a legal secretary at Ropes & Gray, a law firm in Boston, MA.
From 1992 to 1993, she was a personal assistant at Bob Woolf Associates, Inc.
Louise E. Colby has been the secretary and treasurer of California
Petroleum since 1994. She has been a director since 1994. Her term expires
in 1995. She has been the Director, Secretary and Treasurer of JH Management
Corporation since 1989. She also has served as Trustee of The Cazenove Street
Realty Trust since 1983.
Director and Executive Officers
of CalPetro Bahamas I, CalPetro Bahamas
II and CalPetro Bahamas III Age Position
- ------------------------------------- --- ----------------------
Peter D. Gram 50 Director and
President
Lourey C. Smith 40 Secretary
Directors and Executive Officers
of CalPetro IOM Age Position
- ------------------------------------- --- ----------------------
Peter D. Gram 50 Director
Bernard Z. Galka 43 Director
John D. Clarke 48 Secretary
Peter D. Gram has been the president of CalPetro Bahamas I,
Calpetro Bahamas II and CalPetro Bahamas III since 1994. Mr. Gram has been
the sole director of each of CalPetro Bahamas I, CalPetro Bahamas II and
CalPetro Bahamas III since 1994. His term will expire only upon his death,
resignation or removal. Mr. Gram also has been a director of CalPetro IOM
since 1994. His term expires in 1995.
Lourey C. Smith has been the secretary of CalPetro Bahamas I,
CalPetro Bahamas II and CalPetro Bahamas III since 1994.
Bernard Z. Galka is a Chartered Accountant. He has been a
director of CalPetro IOM since 1994. His term expires in 1995.
John D. Clarke has been the secretary of CalPetro IOM since 1994.
He is a Chartered Accountant.
Executive Compensation
The directors and officers of California Petroleum are not
compensated.
Each of CalPetro Bahamas I, CalPetro Bahamas II and CalPetro
Bahamas III annually will pay Peter Gram $3,000. Lourey Smith will not be
compensated.
CalPetro IOM annually will pay Peter Gram $3,000, Bernard Galka
$1,200 and John Clarke $500.
Securities Ownership of Certain
Beneficial Owners and Management
of California Petroleum
The following table summarizes the beneficial ownership of
California Petroleum as of
September 30, 1994:
Name and address Title of class Number of Percent of
of beneficial owner of securities Shares Class
------------------- -------------- ---------- -----------
The CalPet Trust(1) Common 1,000 100%
c/o JH Holdings Corporation Stock
P.O. Box 4024
Room 6/8
Boston, MA 02101
_______
(1) JH Holdings Corporation serves as Trustee of The CalPet Trust and has sole
voting and investment powers over all securities owned by The CalPet Trust.
Steven M. Loring is the President of JH Holdings Corporation and may be
deemed to control it. The Glendale Company owns 100% of JH Holdings
Corporation. The address of The Glendale Company is P.O. Box 6339, Lincoln
Center, MA 01773-6339. The Glendale Company disclaims beneficial ownership
of the Common Stock of California Petroleum owned by The CalPet Trust within
the meaning of Rule 13d-3 under the Exchange Act.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
The Management Agreements
P.D. Gram & Co. as (the "Manager"), will enter into a Management
Agreement with each Owner and Barber Ship Management. The Manager is a
Norwegian privately-owned firm, established in 1982, which arranges and
manages shipping investments. Peter D. Gram, who is the sole director and an
executive officer of three of the Owners and a director of the fourth Owner,
is the managing director of the Manager. Since 1982, the Manager and its
owner have been the syndicators of approximately 30 vessels, with an
investment value of over $300 million. As of January 1, 1994 the Manager and
its associated companies had nine vessels under commercial management. Under
each Management Agreement, the Manager will agree to provide administrative,
management and advisory services to the Owners and Barber Ship Management will
agree to provide technical advisory services to the Owners. In addition, in
the event of termination of the Initial Charters, Barber Ship Management will
agree to provide, if necessary, all technical management services to the
Owners. Under each Management Agreement, the Manager will be entitled to the
Management Fee in consideration of its services and Barber Ship Management
shall be entitled to the Technical Advisor's Fee. The Management Fee equals
(i) an annual fee per Vessel, payable semi-annually in arrears, in an amount
equal to $16,000 per annum during the period from the Closing Date to the
third anniversary of the Closing Date, plus (ii) a fee of $3,500 per annum,
payable annually in arrears, during such three-year period. The Technical
Advisor's Fee equals $12,500 per annum, for each Vessel, payable semi-annually
in arrears, during such three-year period. Thereafter, the Management Fee and
the Technical Advisor's Fee will be adjusted as the Manager and the Owner may
agree from time to time. The Owners believe that the fees payable under the
Management Agreements are at rates comparable to market terms for comparable
management services.
The Underwriter will enter into an agreement with the Manager to
perform certain financial advisory services for any Owner upon the optional
termination of the related Initial Charter or at the end of the term of such
Initial Charter.
DESCRIPTION OF THE NOTES
General
The Serial Mortgage Notes will be issued under an indenture (the
"Serial Indenture") among California Petroleum, Chemical Trust Company of
California, as indenture trustee (the "Indenture Trustee"), and, solely for
purposes of the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), Chevron. The Serial Indenture will be governed by New York law. The
form of the Serial Indenture has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part. The statements under this
caption are summaries of certain provisions of the Serial Indenture and do not
purport to be complete. The summaries make use of terms defined in, and are
qualified in their entirety by reference to, all the provisions of the Serial
Indenture and the Trust Indenture Act, including the definitions of certain
terms in the Serial Indenture and those terms made a part of the Serial
Indenture by reference to the Trust Indenture Act.
The Serial Indenture will not contain any covenants specifically
designed to protect the Holders against a reduction in the creditworthiness of
California Petroleum in the event of a highly leveraged transaction.
California Petroleum will be prohibited under its Certificate of Incorporation
from incurring, and will covenant under the Serial Indenture not to incur, any
indebtedness other than the Serial Mortgage Notes and the Term Mortgage Notes
so long as any of the Notes are outstanding. Each Owner will covenant under
the related Mortgage not to incur any indebtedness other than the related
Acquisition Loans and other Permitted Indebtedness so long as any of the Notes
are outstanding.
The Serial Indenture will not contain any covenants specifically
designed to protect the Holders against a reduction in the creditworthiness of
Chevron in the event of a highly leveraged transaction. The Serial Indenture
will not limit the amount of additional indebtedness that may be incurred by
Chevron Transport or by Chevron or any of its subsidiaries.
The Serial Mortgage Notes will be originally issued in fully
registered book-entry form and will be represented by one or more global notes
(each, a "Global Note") registered in the name of Cede & Co. ("Cede") as the
nominee of The Depository Trust Company ("DTC") and no person acquiring an
interest in a Serial Mortgage Note (a "Beneficial Owner") will be entitled to
receive a certificated Serial Mortgage Note unless such certificates are
issued as described below. Unless certificated Serial Mortgage Notes are
issued, all references to actions by the Holders shall refer to actions taken
by DTC upon instructions from DTC Participants (as defined below), and all
references herein to distributions, notices, reports and statements to Holders
shall refer, as the case may be, to distributions, notices, reports and
statements to DTC or Cede, as the registered holder of the Serial Mortgage
Notes, or to DTC Participants for distribution to Beneficial Owners in
accordance with DTC procedures. See "Description of the Notes--Book-Entry
Procedures."
The Serial Mortgage Notes.
The Serial Mortgage Notes will be issued as full recourse
obligations of California Petroleum in the aggregate principal amount of
$168,500,000, and will be secured equally and ratably with the Term Mortgage
Notes by the assignment of a Mortgage on each Vessel, an assignment of any
charters for the Vessel including, so long as the Initial Charter relating
to a Vessel has not reached its first optional termination date, an
assignment of such Initial Charter, as well as by certain other property
and contract rights. The Collateral relating to a Vessel may be released
from the Lien of the Serial Indenture under certain circumstances prior to
the final maturity date of the Serial Mortgage Notes if such Vessel is
subject to a casualty or certain other events occur with respect to such
Vessel and such Vessel is a Total Loss as described below under "The
Initial Charters--Payment on Total Loss," or if the related Initial Charter
is terminated at the option of Chevron Transport as described under
"Security--Post-Termination Period."
The Serial Mortgage Notes will not be obligations of, or
guaranteed by, Chevron Transport or Chevron, and will not be share capital,
debentures or general obligations of any Owner or the Owners. California
Petroleum and the Owners, however, expect that the amounts payable by Chevron
Transport (other than the related Termination Payment, if any), and guaranteed
by Chevron, under the Initial Charters (whether or not the termination options
are exercised), together with an allocable amount of anticipated earnings on
the Permitted Investments, will be sufficient to pay in full when due all
principal of and interest on the Serial Mortgage Notes. See "Investment
Considerations--Certain Risks Not Related to Chevron Transport or Chevron."
The foregoing determination assumes that, during the term of the Serial
Mortgage Notes, amounts remaining in the Initial Revenue Account on each
Payment Date will be invested in Permitted Investments that will provide a 5%
annual rate of return. The Owners believe that guaranteed investment
contracts rated at least "AA" or "Aa" by Standard & Poor's or Moody's,
respectively, will be available with at least the assumed annual rate of
return. See "Trust Accounts" below for a discussion of the Initial Revenue
Account and Permitted Investments.
Interest on each series of Serial Mortgage Notes will accrue from
the date of issuance thereof at the rate per annum set forth on the cover of
this Prospectus for the respective Maturity Date, and will be payable on the
unpaid principal amount thereof on each _________ and _________, commencing on
_________, 1995 until the respective Maturity Date for such series of Serial
Mortgage Notes. Interest on the Serial Mortgage Notes will be calculated on
the basis of a 360-day year consisting of twelve 30-day months. Any overdue
payment of principal, interest or any other amount payable on any Serial
Mortgage Note will accrue interest from the due date for such amount to the
date such amount is paid in full at a rate per annum equal to 1.50% above
LIBOR (the "Default Rate"). There can be no assurance that, at anytime, the
Default Rate will at least equal the rate of interest applicable to the Serial
Mortgage Notes.
Each series of Serial Mortgage Notes will be issued in the
aggregate principal amount set forth below for the respective Maturity Date
thereof, which in each case will be payable in full on the Maturity Date for
such series of Serial Mortgage Notes. Set forth below is the Allocated
Principal Amount of Serial Mortgage Notes payable on each Maturity Date for
each Vessel and the aggregate amount of such Allocated Principal Amount
payable on each Maturity Date.
Allocated Principal Amount of Serial Mortgage Notes
Aggregate
Maturity Date S. Ginn C. Rice Chevron Mariner W.E. Crain Principal Amount
- ---------------- ------- ------- --------------- ---------- ----------------
_________ , 1995 $ 5,210,000 $ 5,210,000 $ 5,210,000 $ 2,530,000 $ 18,160,000
_________ , 1996 5,210,000 5,210,000 5,210,000 2,530,000 18,160,000
_________ , 1997 5,210,000 5,210,000 5,210,000 2,530,000 18,160,000
_________ , 1998 5,210,000 5,210,000 5,210,000 2,530,000 18,160,000
_________ , 1999 5,210,000 5,210,000 5,210,000 2,530,000 18,160,000
_________ , 2000 5,210,000 5,210,000 5,210,000 2,530,000 18,160,000
_________ , 2001 5,210,000 5,210,000 5,210,000 2,530,000 18,160,000
_________ , 2002 5,210,000 5,210,000 5,210,000 2,530,000 18,160,000
_________ , 2003 5,210,000 5,210,000 2,530,000 12,950,000
_________ , 2004 5,210,000 2,530,000 7,740,000
_________ , 2005 2,530,000 2,530,000
For each Vessel, Chevron Transport has the option to terminate the
Charter for such Vessel, exercisable on the dates and under the circumstances
described below under "The Initial Charters--Termination Options." The
earliest such termination date for any Initial Charter is __________, 2002.
The first optional termination date with respect to each Initial Charter
occurs on the payment date on which the Allocated Principal Amount of Serial
Mortgage Notes with respect to the related Vessel is scheduled to be paid in
full. Prior to the respective Maturity Dates of the 2003 Serial Mortgage
Notes, the 2004 Serial Mortgage Notes or the 2005 Serial Mortgage Notes, upon
payment in full of the Allocated Principal Amount of Serial Mortgage Notes for
a Vessel, the related Initial Charter, whether or not terminated by Chevron
Transport, will no longer be available as security for payments on the Serial
Mortgage Notes. Even if Chevron Transport exercises each of the termination
options available during the term of the Serial Mortgage Notes, California
Petroleum and the Owners expect that amounts payable by Chevron Transport, and
guaranteed by Chevron, under the Initial Charters prior to the final Maturity
Date for the Serial Mortgage Notes, together with an allocable amount of
anticipated earnings on the Permitted Investments, will be sufficient to pay
in full when due all principal of and interest on the Serial Mortgage Notes
outstanding after any such termination.
The Serial Mortgage Notes will not be subject to optional
redemption prior to the respective maturity dates thereof. If a casualty or
certain other events occur with respect to a Vessel and such Vessel is a Total
Loss, then the Serial Mortgage Notes will be subject to redemption in part,
equally and ratably with the Term Mortgage Notes, under the circumstances and
subject to the conditions described below under "Redemption--Mandatory
Redemption" below.
The Serial Indenture will not provide for any additional payment
by California Petroleum in the event that California Petroleum is required by
any applicable law to make, with respect to any payment to be made pursuant to
the Serial Mortgage Notes, any deduction or withholding for or on account of
any taxes, assessments or other governmental charges imposed on such payment
by any governmental or taxing authority. See "The Mortgages--Certain
Covenants."
The Term Mortgage Notes.
The Term Mortgage Notes will be issued under a separate indenture
(the "Term Indenture" and, together with the Serial Indenture, the
"Indentures") concurrently with the issuance of the Serial Mortgage Notes.
The Term Mortgage Notes will be full recourse obligations of California
Petroleum in the aggregate principal amount of $117,900,000. The Term
Mortgage Notes will be secured equally and ratably with the Serial Mortgage
Notes by the Collateral. The Term Mortgage Notes will not be obligations of,
or guaranteed by, Chevron Transport or Chevron and will not be share capital,
debentures or general obligations of any Owner or the Owners.
The Term Mortgage Notes are subject to redemption through the
operation of the mandatory sinking fund on ____________ of each year,
commencing on __________, 2003 to and including , 2013 according to
the applicable schedule of sinking fund redemption payments set forth below.
The Term Mortgage Notes will mature on __________, 2014. Under each Initial
Charter, Chevron Transport may elect to terminate such Initial Charter on any
of four, in the case of the double-hulled Vessels, or three, in the case of
the single-hulled Vessel, termination dates which, for each Vessel, occur at
two-year intervals beginning in 2002, 2003, 2004 or 2005, as the case may be.
See "The Initial Charters--Termination Options." The exercise of such
termination right under each Initial Charter is completely within Chevron
Transport's discretion.
If an Initial Charter is terminated, the scheduled sinking fund
payments on the Term Mortgage Notes will be revised so that the Allocated
Principal Amount of Term Mortgage Notes for the related Vessel's sinking fund
will be redeemed on the remaining sinking fund redemption dates on a schedule
that approximates level debt service with a principal payment on the final
maturity date of $7,000,000, for the double-hulled Vessels, or $5,500,000,
for the single-hulled Vessel. The table below provides the scheduled sinking
fund redemption amounts on the Term Mortgage Notes (assuming an interest rate
per annum on the Term Mortgage Notes of 8.62%) prior to the final Maturity
Date for any Serial Mortgage Notes if none of the Initial Charters is
terminated and if all of the Initial Charters are terminated on the earliest
termination dates.
Sinking Fund Redemption*
Scheduled No Initial All Initial
Payment Date Charters Terminate Charters Terminate
------------ ------------------ ------------------
_____________, 2003 $ 3,355,000 $ 1,690,000
_____________, 2004 6,542,000 3,460,000
_____________, 2005 9,526,000 5,290,000
-------------------- --------------------
$19,423,000 $10,440,000
* The actual interest rate and the sinking fund redemption amount will depend
on final pricing information.
Set forth below are tables of the semi-annual charterhire payments
under the Initial Charters, anticipated earnings on Permitted Investments and
the scheduled payments of principal (including, in the case of the Term
Mortgage Notes, mandatory sinking fund payments) and interest on the Term
Mortgage Notes and the Serial Mortgage Notes (in each case, assuming for
illustrative purposes only that the interest rate per annum on the Term
Mortgage Notes is 8.62% and that the Serial Mortgage Notes bear interest at
rates ranging from 6.25% to 8.28% through maturity) if (i) none of the Initial
Charters is terminated and (ii) all of the Initial Charters are terminated on
the earliest optional termination dates.
No Initial Charter Is Terminated*
($ in millions)
Charterhire Anticipated Scheduled Scheduled
Under Earnings Payments on Payments on
Payment Initial on Permitted Serial Mortgage Term Mortgage
Date Charters Investments Notes Notes
- ---------------- ----------- ------------ --------------- -------------
________, 1995 $20.607 $0.000 $ 6.355 $ 5.081
________, 1995 20.607 0.224 24.515 5.081
________, 1996 20.039 0.000 5.788 5.081
________, 1996 20.039 0.224 23.948 5.081
________, 1997 19.412 0.000 5.161 5.081
________, 1997 19.412 0.224 23.321 5.081
________, 1998 18.749 0.000 4.499 5.081
________, 1998 18.749 0.224 22.659 5.081
________, 1999 18.068 0.000 3.816 5.081
________, 1999 18.068 0.224 21.976 5.081
________, 2000 17.369 0.000 3.116 5.081
________, 2000 17.369 0.224 21.276 5.081
________, 2001 16.658 0.000 2.406 5.081
________, 2001 16.658 0.224 20.566 5.081
________, 2002 15.935 0.000 1.683 5.081
________, 2002 15.935 0.224 19.843 5.081
________, 2003 14.287 0.000 0.952 5.081
________, 2003 14.287 0.201 13.902 8.436
________, 2004 12.615 0.000 0.423 4.937
________, 2004 12.615 0.176 8.163 11.479
________, 2005 10.915 0.000 0.105 4.655
________, 2005 10.915 0.149 2.635 14.181
* The actual interest rates, charterhire payments, anticipated earnings and
scheduled payments will depend on final pricing information.
All Initial Charters are Terminated on the Earliest
Optional Termination Dates*
Charterhire Anticipated Scheduled Scheduled
Under Earnings on Payments on Payments on
Payment Initial Termination Permitted Serial Mortgage Term Mortgage
Date Charters Payments Investments Notes Notes
- ---------------- ----------- ------------ --------------- ------------- -------------
________, 1995 $20.607 $ 0.000 $0.000 $ 6.355 $ 5.081
________, 1995 20.607 0.000 0.224 24.515 5.081
________, 1996 20.039 0.000 0.000 5.788 5.081
________, 1996 20.039 0.000 0.224 23.948 5.081
________, 1997 19.412 0.000 0.000 5.161 5.081
________, 1997 19.412 0.000 0.224 23.321 5.081
________, 1998 18.749 0.000 0.000 4.499 5.081
________, 1998 18.749 0.000 0.224 22.659 5.081
________, 1999 18.068 0.000 0.000 3.816 5.081
________, 1999 18.068 0.000 0.224 21.976 5.081
________, 2000 17.369 0.000 0.000 3.116 5.081
________, 2000 17.369 0.000 0.224 21.276 5.081
________, 2001 16.658 0.000 0.000 2.406 5.081
________, 2001 16.658 0.000 0.224 20.566 5.081
________, 2002 15.935 0.000 0.000 1.683 5.081
________, 2002 15.935 13.482 0.224 19.843 5.081
________, 2003 10.844 0.000 0.337 0.952 5.081
________, 2003 10.844 12.266 0.461 13.902 6.771
________, 2004 6.182 0.000 0.528 0.423 5.009
________, 2004 6.182 10.984 0.555 8.163 8.469
________, 2005 1.954 0.000 0.577 0.105 4.860
________, 2005 1.954 5.074 0.511 2.635 10.150
* The actual interest rates, charterhire payments, Termination Payments,
anticipated earnings and scheduled payments will depend on final pricing
information.
Book-Entry System
DTC has advised California Petroleum, Chevron Transport and
Chevron that DTC is a limited-purpose trust company organized under the laws
of the State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to Section 17A of the Exchange Act. DTC
was created to hold securities for its participants ("DTC Participants") and
to facilitate the clearance and settlement of securities transactions among
DTC Participants through electronic book-entries, thereby eliminating the need
for physical movement of certificates. DTC Participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations. Access to DTC's book-entry system is also available to
others, such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a DTC Participant, either directly
or indirectly ("Indirect Participants").
Beneficial Owners that are not DTC Participants but desire to
purchase, sell or otherwise transfer ownership of, or other interests in,
Serial Mortgage Notes may do so only through DTC Participants or Indirect
Participants. In addition, Beneficial Owners will receive all
distributions of principal and interest from the Indenture Trustee or any
paying agent through the DTC Participants. Under the rules, regulations
and procedures creating and affecting DTC and its operation, DTC is
required to make book-entry transfers of the Serial Mortgage Notes among
DTC Participants on whose behalf it acts and to receive and transmit
distributions of principal of, and interest on, the Serial Mortgage Notes.
Under the book-entry system, Beneficial Owners may experience some delay in
their receipt of payments, since such payments will be forwarded by the
Indenture Trustee or any paying agent to Cede, as nominee for DTC, and DTC
in turn will forward the payments to the appropriate DTC Participants.
Distributions by DTC Participants to Beneficial Owners will be the sole
responsibility of such DTC Participants and will be made in accordance with
customary industry practices. Accordingly, although Beneficial Owners will
not have possession of the Serial Mortgage Notes, the rules of DTC provide
a mechanism by which DTC Participants will receive payments and will be
able to transfer their interests. Although the DTC Participants are
expected to convey the rights represented by their interests in any global
security to the related Beneficial Owners, because DTC can only act on
behalf of DTC Participants, the ability of Beneficial Owners to pledge
Serial Mortgage Notes to persons or entities that are not DTC Participants,
or to otherwise act with respect to such Serial Mortgage Notes, may be
limited due to the lack of physical certificates for such Serial Mortgage
Notes.
Neither California Petroleum, Chevron, Chevron Transport the
Indenture Trustee nor any other agent of any of them will have any
responsibility or liability for any aspect of the records relating to, or
payments made on account of, beneficial ownership interests in the Serial
Mortgage Notes or for supervising or reviewing any records relating to such
beneficial interests. Since the only "Holder" will be Cede, as nominee of
DTC, Beneficial Owners will not be recognized by the Indenture Trustee as
Holders, as such term is used in the Serial Indenture, and Beneficial Owners
will be permitted to exercise the rights of Holders only indirectly through
DTC and DTC Participants.
The Serial Mortgage Notes will be issued in fully registered,
certificated form to Beneficial Owners, or their nominees, rather than to DTC
or its nominee, only if DTC advises the Indenture Trustee in writing that it
is no longer willing or able or qualified to discharge properly its
responsibilities as depository with respect to the Serial Mortgage Notes and
California Petroleum is unable to locate a qualified successor or if
California Petroleum, at its option, elects to terminate the book-entry
system through DTC. In such event, the Indenture Trustee will notify all
Beneficial Owners through DTC Participants of the availability of such
certificated Serial Mortgage Notes. Upon surrender by DTC of the
registered global certificates representing the Serial Mortgage Notes and
receipt of instructions for reregistration, the Indenture Trustee will
reissue the Serial Mortgage Notes in certificated form to Beneficial Owners
or their nominees. Such certificated Serial Mortgage Notes will be freely
transferable and exchangeable at the office of the Indenture Trustee upon
compliance with the requirements set forth in the Indenture. No service
charge will be imposed for any registration of transfer or exchange, but
payment of a sum sufficient to cover any tax or other governmental charge
may be required.
Security
At any time, the security described below for the payment and
performance of the obligations of California Petroleum under the Serial
Indenture, the Term Indenture or both, as the case may be, at such time shall
be referred to in this Prospectus as the "Collateral." The Indenture Trustee,
as indenture trustee under the Serial Indenture and the Term Indenture,
California Petroleum and Chemical Trust Company of California, as collateral
trustee (the "Collateral Trustee") will enter into a collateral trust
agreement (the "Collateral Agreement") pursuant to which the Collateral
Trustee will hold the Collateral for the benefit of the Holders of the Serial
Mortgage Notes and the Indenture Trustee under the Serial Indenture and the
holders of the Term Mortgage Notes and the Indenture Trustee under the Term
Indenture, and under which the Trust Accounts will be established and
maintained for the deposit and application of Trust Funds as described under
"Trust Accounts."
The Vessels are currently owned and operated by Chevron Transport.
Upon the sale of each Vessel to the related Owner and the commencement of the
related Initial Charter on the Closing Date, the Initial Charter and other
Collateral described below under "Initial Charter Period" will be assigned to
California Petroleum as security for the Acquisition Loans and California
Petroleum will assign the Initial Charter and the other Collateral to the
Collateral Trustee as security for the payment of principal of and interest on
the Serial Mortgage Notes and the Serial Mortgage Notes, equally and ratably.
Initial Charter Period.
On the Closing Date, each Owner will grant or assign and pledge,
as the case may be, to California Petroleum, which will in turn assign and
pledge to the Collateral Trustee, for the benefit of California Petroleum
and the benefit of the Holders of the Serial Mortgage Notes and the holders
of the Term Mortgage Notes, equally and ratably, each of the following
assets owned by such Owner on the Closing Date or acquired by such Owner
thereafter: (a) the mortgage of such Owner's Vessel; (b) such Owner's
right, title and interest in the Initial Charter relating to such Vessel,
including the right to receive all monies that become due thereunder or in
respect of such Vessel and all claims for damages arising under such
Initial Charter or relating to such Vessel; (c) the Chevron Guarantee;
(d) the freights and hires relating to such Vessel; (e) all policies and
contracts of insurance in effect from time to time in respect of such
Vessel; (f) such Owner's right, title and interest in the Management
Agreement relating to such Vessel; (g) such Owner's right, title and
interest in the purchase agreement relating to its Vessel (each, a "Vessel
Purchase Agreement"); and (h) all income, proceeds and products of any of
the foregoing. In addition, on the Closing Date, California Petroleum will
assign and pledge to the Collateral Trustee, for the benefit of the Holders
of the Serial Mortgage Notes and the holders of the Term Mortgage Notes,
equally and ratably, all cash, securities and other property held by the
Collateral Trustee as Trust Funds from time to time and all income,
proceeds and products of any of the foregoing.
Each Owner will mortgage its Vessel to California Petroleum
pursuant to a Mortgage and California Petroleum will in turn assign such
Mortgage to the Collateral Trustee. The earnings and insurance relating to
each Vessel will be collaterally assigned pursuant to an Assignment of
Earnings and Insurances between the related Owner and California Petroleum,
which will in turn assign such Assignment of Earnings and Insurances to the
Collateral Trustee. The Initial Charter and Chevron Guarantee relating to
each Vessel will be collaterally assigned pursuant to an Assignment of Initial
Charter and Assignment of Initial Charter Guarantee between the related Owner
and California Petroleum, which will in turn assign such Assignment of Initial
Charter and Assignment of Initial Charter Guarantee to the Collateral Trustee.
The Trust Funds will be pledged pursuant to the Collateral Agreement. The
capital stock of the Owners will be pledged pursuant to the Stock Pledge
Agreement.
Post-Termination Period.
For each Vessel, Chevron Transport has the option to terminate the
Initial Charter, exercisable on the dates and under the circumstances
described below under "The Initial Charters--Termination Options." If the
Allocated Principal Amount of Serial Mortgage Notes relating to a Vessel is
paid in full, the Collateral (including the related Initial Charter, if it
remains in effect) relating to such Vessel will be released from the Lien of
the Serial Indenture, but not the Lien of the Term Indenture. Although the
term of an Initial Charter with respect to which Chevron Transport exercises
its termination option will be extended for certain periods with respect to
Chevron Transport's obligation to make the related Termination Payment, such
extension would not benefit the Holders of the Serial Mortgage Notes since any
such Termination Payment will not secure the obligations of California
Petroleum under the Serial Indenture. See "Trust Accounts -- Termination
Account" below and "The Initial Charters -- Term of the Initial Charters".
So long as any Serial Mortgage Notes are outstanding, if an event
of default under a subsequent charter or Mortgage Event of Default occurs
with respect to a Vessel, for which the Allocated Principal Amount has been
paid in full, the Collateral Trustee may not pursue remedies under the Term
Indenture with respect to any Initial Charter that has not reached its
first optional termination date and that is not then in default, including
amounts paid or payable thereunder, and the related Security Documents. If
any Initial Charter is terminated and an Acceptable Replacement Charter or
other charter for the related Vessel has been entered into by the related
Owner, then such Owner will assign and pledge its right, title and interest
in such Acceptable Replacement Charter or other charter to California
Petroleum, which will in turn assign such Acceptable Replacement Charter or
other charter to the Collateral Trustee for the benefit of the Indenture
Trustee and the holders of the Term Mortgage Notes. Any such post-
termination period Collateral will not secure the obligations of California
Petroleum under the Serial Indenture.
Trust Accounts
General.
Each Initial Charter provides for semi-annual charterhire payments
on each ____ and _____, commencing on ___, 1995. So long as the Allocated
Principal Amount of Serial Mortgage Notes relating to a Vessel has not been
paid in full, the related Owner will direct Chevron Transport to deposit
the charterhire payments under the related Initial Charter directly into an
account established and maintained for such purpose by the Collateral
Trustee (the "Initial Revenue Account"). Each Owner will direct, as the
case may be, (i) the charterer under any Acceptable Replacement Charter or
other charter for such Owner's Vessel entered into after the payment in
full of the Allocated Principal Amount of Serial Mortgage Notes for such
Vessel or (ii) Chevron Transport, if such Initial Charter continues in
effect after all of the Allocated Principal Amount of the Serial Mortgage
Notes for such Vessel has been paid in full, to deposit the charterhire
payments under such Acceptable Replacement Charter, other charter or
Initial Charter, as the case may be, directly into an account established
and maintained for such purpose by the Collateral Trustee (the "Second
Revenue Account"). Each Owner will direct Chevron Transport to deposit the
Termination Payment, if any, payable under the Initial Charter for such
Owner's Vessel directly into an account established and maintained for such
purpose by the Collateral Trustee (the "Termination Account"). The
Collateral Trustee also will deposit into the Termination Account any net
proceeds from the sale, if any, of a Vessel for which the related Initial
Charter has been terminated that are in excess of the amount necessary to
pay all amounts due and payable in connection with the related mandatory
redemption. The Collateral Trustee will establish and maintain an account
into which, on each Payment Date that is not a sinking fund redemption date
or a date on which the payment of principal on the Term Mortgage Notes is due,
an amount, if any, equal to one-half of the aggregate sinking fund
redemption amount or amount of principal due and payable on the Term
Mortgage Notes on the next succeeding Payment Date will be deposited (the
"Sinking Fund Reserve Account") in accordance with the order of payments
for the applicable Payment Date. The Collateral Trustee will establish and
maintain an account into which the Recurring Fees and Taxes, the Management
Fee and the Technical Advisor's Fee relating to each Vessel will be
deposited (the "Operating Account") in accordance with the order of
payments for the applicable Payment Date. The Collateral Trustee will
establish and maintain an account into which the Equity Remainder, if any,
for each Vessel will be deposited (the "Equity Account") in accordance with
the order of payments for each Equity Transfer Date. The Collateral
Trustee will establish and maintain an account into which any insurance
proceeds or other payments in connection with the occurrence of a Total
Loss to any Vessel shall be deposited in accordance with the related
Mortgage (the "Casualty Account"). The Collateral Trustee will establish
and maintain an account into which the Collateral Trustee will deposit (i)
any proceeds received upon the exercise of remedies with respect to the
Collateral, (ii) other amounts received with respect to the Collateral
following receipt by the Collateral Trustee of an Enforcement Notice,
subject to the exceptions described in the fourth paragraph under "
- -Collateral Agreement Remedies" below and (iii) any other amount received
by the Collateral Trustee pursuant to any of the Security Documents for
which the Collateral Agreement does not specify another Trust Account into
which such amount is to be deposited (the "Collateral Account"). The
Initial Revenue Account, the Second Revenue Account, the Termination
Account, the Operating Account, the Equity Account, the Casualty Account
and the Collateral Account will be maintained by the Collateral Trustee as
collateral agent for the equal and ratable benefit of the holders of the
Term Mortgage Notes and (except for the Second Revenue Account, Termination
Account and Sinking Fund Reserve Account) the Holders of the Serial
Mortgage Notes in accordance with the Collateral Agreement, and are from
time to time referred to in this Prospectus as the "Trust Accounts." The
funds deposited in the Trust Accounts are from time to time referred to
herein as the "Trust Funds."
Payment Dates.
On each Payment Date on or prior to ____, 2002 (the first
termination date for a Vessel under any of the Initial Charters), the
Collateral Trustee will withdraw funds first from the Initial Revenue Account
and then from the Equity Account (except for clause (g) below) and make the
payments set forth below in the following order, in each case to the extent
funds are available after the preceding payment has been made in full:
(a) to deposit into the Operating Account the amount of the
Recurring Fees and Taxes then due and payable for each Vessel, or which
will become due and payable prior to the next succeeding Payment Date;
(b) to pay all interest then due and payable on the Serial
Mortgage Notes to the Holders of the Serial Mortgage Notes, ratably in
the proportion that the amount of such payment then due under each such
Serial Mortgage Note bears to the aggregate amount of the payments then
due under all such Serial Mortgage Notes;
(c) if such Payment Date is the maturity date for any Serial
Mortgage Notes, to pay the aggregate amount of principal then due and
payable on such Serial Mortgage Notes to the Holders of such Serial
Mortgage Notes, ratably in the proportion that the amount of such
principal then due under each such Serial Mortgage Note bears to the
aggregate amount of such principal then due under all such Serial
Mortgage Notes;
(d) to pay all interest then due and payable on the Term Mortgage
Notes to the holders of the Term Mortgage Notes, ratably in the
proportion that the amount of such payment then due under each such Term
Mortgage Note bears to the aggregate amount of the payments then due
under all such Term Mortgage Notes;
(e) to pay to the Indenture Trustees and the Collateral Trustee,
respectively, the fees and expenses then due and payable under the
Indentures to the Indenture Trustees and under the Collateral Agreement
to the Collateral Trustee;
(f) to deposit into the Operating Account the Management Fee and
the Technical Advisor's Fee then due and payable for each Vessel; and
(g) if such Payment Date is an Equity Transfer Date, to the
extent funds are available, to deposit the Equity Remainder for each
Vessel into the Equity Account.
After the foregoing payments have been made, the Collateral
Trustee will invest (and reinvest, as applicable) any balance remaining in the
Initial Revenue Account and the Equity Account in Permitted Investments that
will mature on or before the next succeeding Payment Date.
On each Payment Date that occurs after __________, 2002 (the first
optional termination date for a Vessel under any of the Initial Charters) and
on or before _____, 2005 (the final Maturity Date for any series of Serial
Mortgage Notes), the Collateral Trustee will withdraw funds from the Initial
Revenue Account, the Second Revenue Account, the Termination Account, the
Sinking Fund Reserve Account, the Equity Account, or the applicable
combination of the foregoing indicated below, as the case may be, and make the
payments set forth below in the following order, in each case to the extent
funds are available in the applicable Trust Accounts after the preceding
payment has been made in full:
(a) to deposit into the Operating Account the amount of the
Recurring Fees and Taxes then due and payable, or which will become due
and payable prior to the next succeeding Payment Date for each Vessel
then subject to an Initial Charter that has not reached its first
optional termination date, first from the Initial Revenue Account and
then from the Equity Account, in each case to the extent of the funds
available therein;
(b) to pay first from the Initial Revenue Account and then from
the Equity Account, in each case to the extent of the funds available
therein, all interest then due and payable on the Serial Mortgage Notes
to the Holders of the Serial Mortgage Notes, ratably in the proportion
that the amount of such payment then due under each such Serial Mortgage
Note bears to the aggregate amount of the payments then due under all
such Serial Mortgage Notes;
(c) if such Payment Date is the maturity date for any Serial
Mortgage Notes, to pay first from the Initial Revenue Account and then
from the Equity Account, in each case to the extent of the funds
available therein, the aggregate amount of principal then due and
payable on such Serial Mortgage Notes to the Holders of such Serial
Mortgage Notes, ratably in the proportion that the amount of such
principal then due under each such Serial Mortgage Note bears to the
aggregate amount of such principal then due under all such Serial
Mortgage Notes;
(d) to pay first from the Initial Revenue Account and then from
the Equity Account, in each case to the extent of the funds available
therein, all interest then due and payable on the Allocated Principal
Amount of Term Mortgage Notes for each Vessel subject to an Initial
Charter that has not reached its first optional termination date to the
holders of the Term Mortgage Notes, ratably in the proportion that the
amount of such payment then due under each such Term Mortgage Note bears
to the aggregate amount of the payments then due under all such Term
Mortgage Notes;
(e) to deposit into the Operating Account the amount of the
Recurring Fees and Taxes then due and payable, or which will become due
and payable prior to the next succeeding Payment Date for each Vessel
for which the related Initial Charter has reached its first optional
termination date, first from the Second Revenue Account, then from the
Termination Account and then from the Equity Account, in each case to
the extent of the funds available therein;
(f) to pay first from the Second Revenue Account, then from the
Termination Account and then from the Equity Account, in each case to
the extent of the funds available therein, all interest then due and
payable (A) on the Allocated Principal Amount of the Term Mortgage Notes
for each Vessel subject to an Initial Charter after the first optional
termination date thereof and (B) on the Allocated Principal Amount of
the Term Mortgage Notes for each Vessel not subject to an Initial
Charter, to the holders of the Term Mortgage Notes, ratably in the
proportion that the amount of such payment then due under each such Term
Mortgage Note bears to the aggregate amount of the payments then due
under all such Term Mortgage Notes;
(g) (A) if such Payment Date is a sinking fund redemption date or
a date for the payment of principal on the Term Mortgage Notes, to pay
first from the Sinking Fund Reserve Account, then from the Second
Revenue Account, then from the Termination Account and then from the
Equity Account, in each case to the extent of the funds available
therein, the aggregate sinking fund redemption amount or amount of
principal then due and payable on the Term Mortgage Notes, ratably, in
the case of payment due on maturity, in the proportion that the amount
of such payments then due under each such Term Mortgage Note bears to
the aggregate amount of the payment then due under all such Term
Mortgage Notes and (B) if such Payment Date is not a sinking fund
redemption date or a date for the payment of principal on the Term
Mortgage Notes, to deposit into the Sinking Fund Reserve Account first
from the Second Revenue Account, then from the Termination Account and
then from the Equity Account, in each case to the extent of the funds
available therein, an amount, if any, equal to one-half of the aggregate
sinking fund redemption amount or amount of principal due and payable on
the Term Mortgage Notes on the next succeeding Payment Date;
(h) to pay first from the Initial Revenue Account and then from
the Equity Account, in each case to the extent of the funds available
therein, to the Indenture Trustee and the Collateral Trustee,
respectively, the portion of the aggregate amount of the fees and
expenses then due under the Indentures to the Indenture Trustee and
under the Collateral Agreement to the Collateral Trustee, calculated by
multiplying the aggregate amount of such fees and expenses by a
fraction, the numerator of which is the number of Vessels then subject
to Initial Charters that have not reached their respective first
optional termination date and the denominator of which is the total
number of Vessels then subject to a Mortgage;
(i) to pay to the Indenture Trustee, and the Collateral Trustee,
respectively, first from the Second Revenue Account, then from the
Termination Account and then from the Equity Account, in each case to
the extent of the funds therein, the portion of the aggregate amount of
the fees and expenses then due under the Indentures to the Indenture
Trustee and under the Collateral Agreement to the Collateral Trustee,
calculated by multiplying the aggregate amount of such fees and expenses
by a fraction, the numerator of which is the number of Vessels for
which the Initial Charters have reached their respective first
optional termination date and the denominator of which is the total
number of Vessels then subject to a Mortgage;
(j) to deposit into the Operating Account first from the Initial
Revenue Account and then from the Equity Account, to the extent of the
funds available therein, the Management Fee and the Technical Advisor's
Fee then due and payable for each Vessel then subject to an Initial
Charter that has not reached its first optional termination date;
(k) to deposit into the Operating Account first from the Second
Revenue Account, then from the Termination Account and then from the
Equity Account, in each case to the extent of the funds available
therein, the Management Fee and the Technical Advisor's Fee then due and
payable for each Vessel for which the related Initial Charter has
reached its first optional termination date;
(l) if such Payment Date is an Equity Transfer Date, to withdraw
from the Initial Revenue Account, to the extent funds are available, and
to deposit into the Equity Account the Equity Remainder for each Vessel
then subject to an Initial Charter that has not reached its first
optional termination date; and
(m) if such Payment Date is an Equity Transfer Date, to withdraw
first from the Second Revenue Account and then from the Termination
Account, in each case to the extent of the funds available therein, and
to deposit into the Equity Account the Equity Remainder for each Vessel
for which the related Initial Charter has reached its first optional
termination date.
After the foregoing payments have been made, the Collateral
Trustee will invest (and reinvest, as applicable) any balance remaining in
each of the Initial Revenue Account (if such Payment Date is not the date
upon which all series of Serial Mortgage Notes are paid in full), the
Second Revenue Account, the Equity Account, the Termination Account and the
Sinking Fund Reserve Account in Permitted Investments that will mature on
or before the next succeeding Payment Date.
On the final Maturity Date for all series of Serial Mortgage
Notes, after all payments have been made in full to the Holders of the Serial
Mortgage Notes, any balance remaining in the Initial Revenue Account will be
transferred to the Second Revenue Account.
On each Payment Date after _______, 2005, (the final Maturity Date
for the Serial Mortgage Notes), the Collateral Trustee will withdraw funds
first from the Sinking Fund Reserve Account (only in the case of clause (iii)
below), then from the Second Revenue Account, then from the Termination
Account and then from the Equity Account, in each case to the extent of the
funds available therein, (i) to pay the Recurring Fees and Taxes for each
Vessel, (ii) to pay all interest then due and payable on the Term Mortgage
Notes, (iii) to pay the aggregate sinking fund redemption amount or amount of
principal, if any, then due and payable on the Term Mortgage Notes or to
deposit into the Sinking Fund Reserve Account an amount, if any, equal to
one-half of the aggregate sinking fund redemption amount or amount of
principal due and payable on the Term Mortgage Notes on the next succeeding
Payment Date, (iv) to fund the Sinking Fund Reserve Account, (v) to pay the
fees and expenses then due and payable under the Term Indenture to the
Indenture Trustee and under the Collateral Agreement to the Collateral
Trustee, (vi) to pay the Management Fee and the Technical Advisor's Fee for
each Vessel, and (vii) to the extent funds are available, to deposit the
Equity Remainder for each Vessel into the Equity Account, if such Payment Date
is an Equity Transfer Date. After the foregoing payments have been made, the
Indenture Trustee will invest (and reinvest, as applicable) any balance
remaining in each of the Sinking Fund Reserve Account, the Second Revenue
Account, the Equity Account and the Termination Account in Permitted
Investments that will mature on or before the next succeeding Payment Date.
If so directed by California Petroleum and if no Indenture Event of Default
has occurred and is continuing, the Indenture Trustee will purchase Term
Mortgage Notes in the open market from funds, if any, available in the Sinking
Fund Reserve Account, provided that (a) the purchase price of such Term
Mortgage Notes is less than 100% of the principal amount thereof plus accrued
and unpaid interest to the date of such purchase and (b) such Term Mortgage
Notes are used to satisfy California Petroleum's sinking fund obligations on
the Term Mortgage Notes on the next succeeding Payment Date.
If on any Payment Date the Notes are to be redeemed (other than by
operation of the mandatory sinking fund) in whole or in part, such redemption
will occur immediately prior to the payments described above for such Payment
Date.
Operating Account.
Funds deposited into the Operating Account on each Payment Date
will be disbursed by the Collateral Trustee (i) from time to time, to pay the
Recurring Fees and Taxes as such amounts become due and payable upon
presentation of invoices therefor pursuant to the Management Agreement, (ii)
to pay the Management Fee to the Manager and (iii) to pay the Technical
Advisor's Fee to Barber Ship Management, provided that the Management Fee and
the Technical Advisor's Fee shall be payable only to the extent that the funds
remaining in the Operating Account after any such payment would be sufficient
to pay the Recurring Fees and Taxes for the applicable period. Funds
remaining in the Operating Account will be invested by the Collateral Trustee
in Permitted Investments. See "Business--Operations" for a discussion of the
services provided under the Management Agreement.
Equity Account.
Funds remaining in the Equity Account will be invested by the
Collateral Trustee in Permitted Investments. Any balance remaining in the
Equity Account after payment in full of all amounts on the Notes will be
disbursed promptly to the Owners upon payment in full of all obligations due
under the Indentures.
Casualty Account.
Any proceeds or other amounts received by the Collateral Trustee,
whether pursuant to an insurance policy, as a requisition payment or
otherwise, in connection with the occurrence with respect to any Vessel of a
casualty or certain other events specified in the Indenture, will be deposited
into the Casualty Account and invested in Permitted Investments until such
funds are disbursed by the Collateral Trustee in accordance with the
Indentures, the Collateral Agreement and the related Security Documents. See
"Redemption."
Termination Account.
If the Initial Charter for a Vessel is terminated by Chevron
Transport, the Termination Payment deposited into the Termination Account in
connection with such termination will be disbursed by the Collateral Trustee
(i) if a notice of mandatory redemption is delivered by the Owners as a result
of such termination, to the extent of such Termination Payment and the net
proceeds from the sale of the related Vessel, to the Term Indenture Trustee to
fund such mandatory redemption or (ii) if a notice of mandatory redemption is
not delivered by the Owners as a result of such termination, to the extent
necessary on each succeeding Payment Date, to make payments designated to be
made from the Termination Account in accordance with the order of payments for
such Payment Date. Any net proceeds from the sale, if any, of a Vessel for
which the related Initial Charter has been terminated that are in excess of
the amount necessary to pay all amounts due and payable in connection with the
related mandatory redemption, will be deposited in the Termination Account and
disbursed by the Collateral Trustee, to the extent necessary on each
succeeding Payment Date, to make payments designated to be made from the
Termination Account in accordance with the order of payments for such Payment
Date. Funds in the Termination Account will be invested (and reinvested, as
applicable) by the Collateral Trustee in Permitted Investments prior to being
disbursed as described above. Funds in the Termination Account will not
secure the obligations of California Petroleum under the Serial Indenture.
Sinking Fund Reserve Account.
Funds deposited into the Sinking Fund Reserve Account on each
applicable Payment Date (1) if so directed by California Petroleum and if no
Indenture Event of Default has occurred and is continuing, will be used to
purchase Term Mortgage Notes in the open market provided that (a) the purchase
price of such Term Mortgage Notes is less than 100% of the principal amount
thereof plus accrued and unpaid interest to the date of such purchase and (b)
such Term Mortgage Notes are used to satisfy California Petroleum's sinking
fund obligations on the Term Mortgage Notes on the next succeeding Payment
Date and (2) if not so used as described in clause (1) above, will be used to
satisfy, in part, California Petroleum's sinking fund obligations on the Term
Mortgage Notes on such Payment Date. Funds in the Sinking Fund Reserve
Account will be invested (and reinvested, as applicable) by the Collateral
Trustee in Permitted Investments prior to being disbursed as described above.
Collateral Account.
Any proceeds received as a result of the exercise of remedies by
the Collateral Trustee with respect to the Collateral or, at any time while an
Enforcement Notice is in effect, any amounts received by the Collateral
Trustee with respect to the Collateral (but not including amounts received in
accordance with Security Documents relating to a Vessel that is under an
Initial Charter that has not reached its first optional termination date and
whose related Mortgage is not then in default as described in the fourth
paragraph under "Collateral Agreement Remedies" below), whether in connection
with the exercise of remedies or otherwise, will be disbursed by the
Collateral Trustee to pay certain fees and expenses of the Collateral Trustee
if paid by, or if due to, the Collateral Trustee or the Indenture Trustee
under the related Security Documents, interest due and unpaid on the Term
Mortgage Notes or the Serial Mortgage Notes, or both ratably, as the case may
be, and principal due and unpaid thereon. Notwithstanding the foregoing, any
such proceeds relating to Collateral with respect to which the Lien of the
Serial Indenture has been released shall be deposited in the Termination
Account and will be disbursed by the Collateral Trustee to pay certain fees
and expenses of the Collateral Trustee if paid by, or if due to, the
Collateral Trustee or the Term Indenture Trustee under the related Security
Documents, interest due and unpaid on the Term Mortgage Notes and principal
due and unpaid thereon.
Amounts received by the Collateral Trustee pursuant to any of the
Security Documents and deposited into the Collateral Account because the
Collateral Agreement does not specify another Trust Account into which such
amount should be deposited, will be applied by the Collateral Trustee to the
purposes for which they were paid or held pursuant to the applicable
provisions of such Security Documents.
Permitted Investments.
Permitted Investments include any of the following:
(a) direct general obligations of, or obligations fully and
unconditionally guaranteed as to the timely payment of principal and
interest by, the United States or any agency or instrumentality thereof,
provided such obligations are backed by the full faith and credit of the
United States, Federal Housing Administration debentures, FHLMC senior
debt obligations or FNMA senior debt obligations, but excluding any of
such securities whose terms do not provide for payment of a fixed dollar
amount upon maturity or call for redemption;
(b) federal funds, certificates of deposit, time and demand
deposits and banker's acceptances (having original maturities of not
more than one year) of any bank or trust company incorporated under the
laws of the United States or any state thereof, provided that the
short-term debt obligations of such bank or trust company at the date of
acquisitions thereof have been rated at least "A-1" or "P-1" by Standard
& Poor's and Moody's, respectively;
(c) commercial paper (having original maturities of not more than
one year) rated at least "A-1" or "P-1" by Standard & Poor's and
Moody's, respectively; or
(d) guaranteed investment contracts, investment agreements or
similar agreements rated at least "AA" or "Aa" by Standard & Poor's or
Moody's, respectively, that are treated as indebtedness for United
States federal income tax purposes.
For purposes of determining whether a Permitted Investment matures
on or before the next succeeding Payment Date, each payment received under a
Permitted Investment described in clause (d) above will be considered to be
the maturity of such Permitted Investment.
Redemption
If a casualty or certain other events occur or are declared with
respect to a Vessel as a result of which such Vessel is a Total Loss, then the
outstanding Notes will be redeemed in part in an aggregate principal amount
equal to the Allocated Principal Amount of Notes for such Vessel. Any such
redemption shall occur 90 days after the occurrence of the Total Loss and
shall be at a redemption price for each Note equal to the principal amount of
such Note to be redeemed, together with interest on such principal amount of
each such Note at the rate applicable to such Note to the date of payment of
such redemption price and all other amounts then due and payable any Holder
under the Indentures.
The Serial Mortgage Notes are not subject to optional redemption.
The Term Mortgage Notes may be redeemed in whole or in part at the direction
of the Owners on any Payment Date on or after _____, 2005, the final Maturity
Date for any Serial Mortgage Notes.
Selection and Notice.
In the event that the Serial Mortgage Notes are to be redeemed at
any time in part, the Indenture Trustee shall select Serial Mortgage Notes to
be redeemed ratably from each Holder such that the ratio of the principal
amount of Serial Mortgage Notes to be redeemed from each Holder to the
aggregate principal amount of Serial Mortgage Notes held by such Holder shall,
as nearly as practicable and subject to rounding, equal the ratio of the
aggregate principal amount of Serial Mortgage Notes to be redeemed on such
redemption date to the aggregate principal amount of Serial Mortgage Notes then
outstanding, provided that Serial Mortgage Notes of $1,000 principal amount or
less shall not be redeemed in part. Notice of redemption shall be mailed by
first class mail by the Indenture Trustee at least 30 but not more than 60
days before the redemption date to each Holder of Serial Mortgage Notes to be
redeemed at its registered address. If any Serial Mortgage Note is to be
redeemed in part only, the notice of redemption that relates to such Serial
Mortgage Note shall state the portion of the principal amount thereof to be
redeemed. On and after the redemption date, interest will cease to accrue on
Serial Mortgage Notes or portions thereof called for redemption.
Certain Covenants
The Serial Indenture contains certain covenants pursuant to which
California Petroleum will agree, among other things, that:
(a) California Petroleum will not create, incur, assume or issue,
directly or indirectly, guarantee or in any manner become, directly or
indirectly, liable for or with respect to the payment of any
indebtedness, except for its obligations under the Notes and the
Indentures;
(b) California Petroleum will not engage in any business other
than the issuance of the Notes and making the loans to the Owners in
accordance with California Petroleum's charter and by-laws;
(c) California Petroleum will not (i) commence any case,
proceeding or other action under any existing or future bankruptcy,
insolvency or similar law seeking to have an order for relief entered
with respect to it, or seeking reorganization, arrangement, adjustment,
winding up, liquidation, dissolution, composition or other relief with
respect to it or its debts, (ii) seek appointment of a receiver,
trustee, custodian or other similar official for it or any part of its
assets, (iii) make a general assignment for the benefit of creditors or
(iv) take any action in furtherance of, or consenting to or acquiescing
in, any of the foregoing;
(d) California Petroleum will not create, incur, assume or suffer
to exist any Lien on any of its assets or properties or on any of the
Collateral, except pursuant to the Collateral Agreement;
(e) California Petroleum will not consolidate with, or merge with
or into, any other Person or convey or transfer to any Person all or any
part of the Collateral;
(f) California Petroleum will not (i) declare or pay any dividend
or other distribution on any shares of its capital stock, (ii) make any
loans or advances to any affiliate of California Petroleum or (iii)
purchase, redeem or otherwise acquire or retire for value any shares of
its capital stock; and
(g) California Petroleum will not make any capital contributions,
advances or loans to, or investments or purchases of capital stock in,
any Person, except for its loan to each Owner.
Indenture Events of Default
Events of default under the Serial Indenture (each, an "Indenture
Event of Default") include the following events and occurrences:
(a) any Mortgage Event of Default shall have occurred and be
continuing (see "The Mortgages--Mortgage Events of Default");
(b) default in the payment of all or any part of the principal of
or interest on any of the Serial Mortgage Notes as and when such payment
becomes due and payable and the continuance of such default for a period
of two Business Days;
(c) failure on the part of California Petroleum to observe or
perform in any material respect any of the other agreements or covenants
contained in the Serial Indenture, the Serial Mortgage Notes, the
Security Documents or any document or certificate delivered pursuant
thereto, continued for a period of 30 days after the earlier of (i)
actual knowledge by California Petroleum of such failure and (ii) the
date on which written notice specifying such failure and stating that
such notice is a "Notice of Default" under the Indenture has been given
to California Petroleum by the Indenture Trustee or to California
Petroleum and the Indenture Trustee by the Holders of at least 25% in
aggregate principal amount of the Serial Mortgage Notes then outstanding;
(d) any representation or warranty of California Petroleum made
in the Serial Indenture, any Security Document or any document or
certificate delivered pursuant thereto proves to have been inaccurate in
any material respect when made, remains inaccurate in such material
respect for a period of 30 days after the earlier of (x) actual
knowledge by California Petroleum of such misrepresentation and (y) the
date on which written notice specifying such inaccuracy and stating
that such notice is a "Notice of Default" under the Serial Indenture
has been given to California Petroleum by the Indenture Trustee, or
to California Petroleum and the Indenture Trustee by the Holders of
at least 25% in aggregate principal amount of the Serial Mortgage
Notes then outstanding;
(e) the occurrence of specified events of bankruptcy, insolvency,
reorganization, winding up or liquidation with respect to California
Petroleum;
(f) any of the Initial Charters is repudiated or ceases to be in
full force and effect, other than pursuant to the terms thereof;
(g) any of the Security Documents is repudiated or ceases to be
in full force and effect or any of the Security Documents ceases to give
the Collateral Trustee, in any material respect, the Liens, rights,
powers and privileges purported to be created thereby, in each case
other than pursuant to the terms thereof; or
(h) the Chevron Guarantee is repudiated or ceases to be in full
force and effect, other than pursuant to the terms thereof.
If an Indenture Event of Default referred to in clause (e) of the
preceding paragraph occurs and is continuing then the entire principal of and
interest accrued on all the Serial Mortgage Notes shall immediately and
without further act become due and payable, without presentment, demand,
protest or notice by the Indenture Trustee or any Holder. If an Indenture
Event of Default (other than an Indenture Event of Default referred to in
clause (e) of the preceding paragraph) occurs and is continuing, then the
Indenture Trustee or the Holders of at least 25% in aggregate principal amount
of the outstanding Serial Mortgage Notes may, by written notice, declare the
entire principal of and interest accrued on all the Serial Mortgage Notes to
be due and payable immediately, and upon any such declaration such amounts
shall become due and payable immediately.
After a declaration of acceleration and before any judgment or
decree for the payment of money due has been obtained or entered, if
California Petroleum shall pay or deposit with the Indenture Trustee a sum
sufficient to pay all matured installments of interest upon all of the Serial
Mortgage Notes and the principal of all the Serial Mortgage Notes that shall
have become due otherwise than by acceleration (with interest on such
principal and, to the extent permitted by law, on overdue installments of
interest, at the same rate for each Serial Mortgage Note applicable to such
Serial Mortgage Note, to the date of such payment or deposit) and all amounts
payable to the Indenture Trustee under the Serial Indenture, and if any and
all Indenture Events of Default, other than the non-payment of the principal
of the Serial Mortgage Notes that shall have become due by acceleration, shall
have been cured, waived or otherwise remedied, then the Holders of a majority
in aggregate principal amount of outstanding Serial Mortgage Notes may, by
written notice, rescind and annul such declaration of acceleration and its
consequences, but no such recision and annulment shall extend to or shall
affect any subsequent default or shall impair any right consequent thereon.
The Holders of a majority in aggregate principal amount of the outstanding
Serial Mortgage Notes also have the right to waive any past default or
Indenture Event of Default, except a default in the payment of the principal
of or interest on any Serial Mortgage Note, or in respect of a covenant or
provision of the Serial Indenture which cannot be modified or amended without
the consent of the Holder of each affected Serial Mortgage Note.
If an Indenture Event of Default has occurred and is continuing,
the Indenture Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of and interest on the Serial
Mortgage Notes or to enforce the performance of any provision of the Serial
Mortgage Notes or the Serial Indenture.
No Holder has any right to institute any proceeding with respect
to the Serial Indenture or any remedy thereunder, unless the Holders of at
least 25% in aggregate principal amount of the outstanding Serial Mortgage
Notes have made written request, and offered reasonable indemnity, to the
Indenture Trustee to institute such proceeding as Indenture Trustee, the
Indenture Trustee has failed to institute such proceeding within 60 days after
receipt of such notice and the Indenture Trustee has not within such 60-day
period received directions inconsistent with such written request by the
Holders of a majority in aggregate principal amount of the outstanding Serial
Mortgage Notes. Such limitations do not apply, however, to a suit instituted
by a Holder of a Serial Mortgage Note for the enforcement of the payment of
the principal of or accrued interest on, such Serial Mortgage Note on or after
the respective due dates expressed in such Serial Mortgage Note.
The Holders of a majority in aggregate principal amount of the
outstanding Serial Mortgage Notes have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the
Indenture Trustee, or exercising any trust, or power conferred on the
Indenture Trustee by the Serial Indenture. The Indenture provides that,
subject to the duty of the Indenture Trustee during a default to act with
the required standard of care, the Indenture Trustee is entitled to
reasonable security or indemnity from the Holders before proceeding to
exercise any right or power under the Serial Indenture at the request of
the Holders.
Collateral Agreement Remedies
If an Indenture Event of Default has occurred and is continuing
and if such Indenture Event of Default is actually known by a responsible
officer of the Indenture Trustee charged with the administration of the Serial
Indenture, the Indenture Trustee must mail a notice of such Indenture Event
of Default (an "Enforcement Notice") to the Collateral Trustee and each Holder
within 90 days. Except in the case of a default in the payment of principal
of or interest on any Serial Mortgage Note, the Indenture Trustee will be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors or responsible
officers of the Indenture Trustee in good faith determines that the
withholding of such notice is in the interest of the Holders. If the
Collateral Trustee and the Indenture Trustee are the same entity, an
Enforcement Notice will be deemed to have been delivered to the Collateral
Trustee and to have become effective with respect to the Collateral Trustee
immediately upon the occurrence of an Indenture Event of Default described in
clause (b) in the first paragraph under "Indenture Events of Default" above or
upon written notice to or actual knowledge by a responsible officer of the
Indenture Trustee that an Indenture Event of Default has occurred, and will be
deemed to have been canceled with respect to the Collateral Trustee at such
time as the Indenture Trustee would have been required to cancel such
Enforcement Notice upon the rescission and annulment or waiver by the Holders,
as described above.
So long as an Enforcement Notice is in effect, the Collateral
Trustee (to the extent directed to do so by the appropriate Holders, as
discussed above), whether in its own right or as assignee of California
Petroleum, will proceed to exercise all the powers, remedies and rights
available under the Collateral Agreement and the other Security Documents,
including, without limitation, taking possession of and selling the Collateral
thereunder or any portion thereof or rights or interests therein, at one or
more public or private sales called and conducted in any manner permitted by
law and, during the continuance of a Mortgage Event of Default, exercising any
of its remedies under such Mortgage. Pursuant to the terms of the Initial
Charters and the Mortgages, the right of the Trustee to enforce each Mortgage
is subject to the right of Chevron Transport to the continued use and
operation of the related Vessel under such Initial Charter so long as no
Charter Event of Default shall have occurred and be continuing under such
Initial Charter and so long as Chevron Transport is performing its obligations
thereunder.
If an Enforcement Notice is delivered and becomes effective under
the Term Indenture, but not under the Serial Indenture, the holders of a
majority in aggregate principal amount of the outstanding Term Mortgage Notes
(the "Majority Term Noteholders") will have the right to direct the time,
method and place of conducting any proceeding for any right or remedy
available to the Collateral Trustee, or exercising any trust or power
conferred on the Collateral Trustee, or for the appointment of a receiver, or
to direct the taking or refraining from taking of any action authorized by any
Security Document. If an Enforcement Notice is delivered and becomes
effective under the Serial Indenture, but not under the Term Indenture, the
Holders of a majority in aggregate principal amount of the outstanding Serial
Mortgage Notes (the "Majority Serial Noteholders") will have the right to
direct the actions to be taken or not taken with respect to the Collateral
under the Collateral Agreement and the other Security Documents. If an
Enforcement Notice is delivered and becomes effective under both Indentures,
the holders of the Term Mortgage Notes and Serial Mortgage Notes then
outstanding having a principal amount in excess of 50% of all such Notes then
outstanding (the "Majority Noteholders") will have the right to direct the
actions to be taken or not taken with respect to the Collateral under the
Collateral Agreement and the other Security Documents. The Collateral Trustee
is entitled to be indemnified by the holders of the Term Mortgage Notes, or
the Holders of the Serial Mortgage Notes, or all of such holders, as the case
may be, before proceeding to act at their direction under the Collateral
Agreement.
There can be no assurance that the proceeds of the sale of any
Vessel in connection with the Collateral Trustee's exercise of remedies
following an Indenture Event of Default would be sufficient to redeem the
Allocated Principal Amount of Notes for such Vessel or that any buyers would
be available under the circumstances in which such sale would occur. Chevron
Transport has advised California Petroleum that its original tax basis for the
Vessels, based on the aggregate purchase price paid by Chevron Transport for
the Vessels and capitalized interest during construction of such Vessels, was
approximately $285 million. Chevron Transport's original book value for
financial reporting purposes (which amount excludes capitalized interest) was
approximately $275 million. The depreciated tax basis and book basis for
accounting purposes for the Vessels was approximately $269 million and
approximately $263 million, respectively, as of September 30, 1994. Based on
industry data provided by R.S. Platou, Economic Research a.s., the current
market value of an unchartered recently built double-hulled Suezmax tanker is
in the range of $55 to $60 million and the current market value of an
unchartered recently built single-hulled Suezmax tanker is in the range of
$45 to $50 million. None of the preceding amounts are indicative of the
current or future fair market value of the Vessels and related Initial
Charters. No appraisal of the fair market value of any Vessel has been
commissioned in connection with the purchase of such Vessel by the related
Owner from Chevron Transport. There can be no assurance that the price to be
paid by each Owner for its respective Vessel and the related Initial Charter
will reflect the fair market value of such Vessel and such Initial Charter at
the time such Vessel will be acquired by the related Owner and such Initial
Charter commences, or that the fair market value of such Vessel will at any
time exceed the Allocated Principal Amount of Notes for such Vessel. The fair
market value of oil tankers, including the Vessels, can be expected to
fluctuate, depending upon general economic and market conditions affecting the
tanker industry and competition from other shipping companies, types and sizes
of vessels, and other modes of transportation. In addition, as vessels grow
older, they may be expected to decline significantly in value.
If the Allocated Principal Amount of Serial Mortgage Notes
relating to a Vessel is paid in full, the Collateral (including the related
Initial Charter, whether or not terminated by Chevron Transport) relating to
such Vessel will no longer secure California Petroleum's obligations under the
Serial Indenture. So long as any Serial Mortgage Notes are outstanding, if an
event of default under a subsequent charter or a Mortgage Event of Default
occurs with respect to any Vessel for which the Allocated Principal Amount of
the Serial Mortgage Notes is paid in full, the Collateral Trustee may not
pursue remedies upon receipt of an Enforcement Notice under the Term Indenture
with respect to any Initial Charter that has not reached its first optional
termination date and that is not then in default, including amounts paid or
payable thereunder, and the related Securing Documents. In addition, the
right of the Collateral Trustee to enforce the Mortgages will be subject to
the rights of a charterer under its charter to the continued use and
operation of the related Vessel, so long as no event of default has
occurred and is continuing under such charter and so long as the charterer
is performing its obligations thereunder. So long as the same institution
or an affiliate of such institution serves as indenture trustee under the
Serial Indenture and the Term Indenture, an Indenture Event of Default that
is not an event of default under the Serial Indenture, such as described in
the preceding sentence, may result in a conflicting interest for such
institution or affiliate which would require it to seek an exemption under
the Trust Indenture Act or require it to be replaced as trustee under one
or more of the Indentures and the Collateral Agreement.
Modifications of the Serial Indenture
The Serial Indenture provides that California Petroleum, Chevron
and the Indenture Trustee may enter into a supplemental indenture to amend the
Serial Indenture or the Serial Mortgage Notes without the consent of any
Holder: (a) to convey, transfer, assign, mortgage or pledge to the Collateral
Trustee as security for the Serial Mortgage Notes any property or assets, (b)
to evidence the succession of another corporation to Chevron, or successive
successions, and the assumption by the successor corporation of the
covenants, agreements and obligations of Chevron; (c) to cure any
ambiguity, defect or inconsistency or (d) to comply with the requirements
of the Commission in order to maintain the qualification of the Serial
Indenture under the Trust Indenture Act.
The Serial Indenture and the rights and obligations of California
Petroleum, the Indenture Trustee and the Holders may be modified or amended at
any time with the consent of the Holders of not less than a majority in
aggregate principal amount of all outstanding Serial Mortgage Notes; provided
that without the consent of the Holder of each Serial Mortgage Note affected,
no such modification or amendment shall, among other things, change the fixed
maturity or redemption date thereof, reduce the rate of interest thereon,
extend the time of payment of interest, reduce the principal amount thereof,
reduce any amount payable upon the redemption thereof, or impair the right to
institute suit for the enforcement of any such payment, or reduce the
percentage of the Holders of such Serial Mortgage Notes whose consent is
required for any such modification or amendment or modify any provisions of
the Serial Indenture relating to the amendment thereof or the creation of a
supplemental indenture (unless the change increases the rights of the
Holders). Each of the Serial Indenture and the Term Indenture provide that
certain provisions contained therein may not be modified or amended without
the consent of the Collateral Trustee and the requisite Holders of the Serial
Mortgage Notes and holders of the Term Mortgage Notes.
Satisfaction and Discharge
The Serial Indenture will be discharged and will cease to be of
further effect (except as to surviving rights or registration of transfer or
exchange of the Serial Mortgage Notes) as to all outstanding Serial Mortgage
Notes when either (a) California Petroleum shall have paid or caused to be
paid the principal of and interest on all the Serial Mortgage Notes
outstanding under the Serial Indenture, as and when the same shall have become
due and payable, (b) California Petroleum shall have delivered to the
Indenture Trustee for cancellation all Serial Mortgage Notes theretofore
authenticated (except lost, stolen or destroyed Serial Mortgage Notes which
have been replaced or paid); or (c) (i) all such Serial Mortgage Notes not
theretofore delivered to the Indenture Trustee for cancellation have become
due and payable, or are by their terms to become due and payable within one
year or are to be called for redemption under arrangements satisfactory to the
Indenture Trustee for the giving of notice of redemption and California
Petroleum shall have irrevocably deposited or caused to be deposited with the
Indenture Trustee as trust funds in trust for the purpose an amount of money
sufficient to pay at maturity or upon redemption all such Serial Mortgage
Notes not theretofore delivered to the Indenture Trustee for cancellation,
including principal and interest due or to become due to such date of maturity
as the case may be; and (ii) California Petroleum has paid all sums payable by
it under the Serial Indenture. In addition, California Petroleum must deliver
an Officers' Certificate and an Opinion of Counsel stating that all conditions
precedent to satisfaction and discharge have been complied with.
On the earlier of the payment in full of the Allocated Principal
Amount of Serial Mortgage Notes allocated to a Vessel and the discharge of the
Serial Indenture pursuant to the terms thereof, the Collateral for the related
Vessel will be released from the Lien of the Serial Indenture.
The Indenture Trustee; the Collateral Trustee
Chemical Trust Company of California will serve as Indenture
Trustee under the Serial Indenture and as Collateral Trustee under the
Collateral Agreement.
Governing Law
The Serial Indenture and each of the Security Documents, other
than the Mortgages, provide that they will be governed by the laws of the
State of New York.
Consent to Jurisdiction and Service
Each Owner will irrevocably appoint CT Corporation System as its
agent for service of process in any suit, action or proceeding with respect to
the Indenture, the Notes or the Security Documents, brought in any federal or
state court located in New York City and submits to such jurisdiction.
THE MORTGAGES
General
California Petroleum will loan a portion of the proceeds from the
sale of the Notes to each Owner pursuant to two loan agreements (for each
Owner, a "Term Loan Agreement" and a "Serial Loan Agreement" and, together,
the "Loan Agreements"). See "Use of Proceeds." Under each Term Loan
Agreement, California Petroleum will make a loan (the "Term Loan") to the
related Owner which will accrue interest at the same rate as the Term Mortgage
Notes, and upon which payments of interest will be scheduled to coincide with
interest Payment Dates for the Term Mortgage Notes and principal will be
scheduled to coincide with the Payment Dates for the Term Mortgage Notes. The
aggregate sinking fund redemption amount of Term Mortgage Notes scheduled to
be repaid on a Payment Date and the final principal payment due on the
maturity date will equal the aggregate amount of principal to be repaid on the
Term Loans for all of the Owners for such Payment Date and on the
maturity date. Under each Serial Loan Agreement, California Petroleum will
make a series of loans (the "Serial Loans" and, together with the Owner's Term
Loan, the "Acquisition Loans") to the related Owner, each of which will
correspond in maturity date and interest rate with the Serial Mortgage Notes
of a specific maturity date, to and including the date of the first optional
termination date for the related Initial Charter, on which date such Owner's
Serial Loans will be scheduled to be repaid in full. The aggregate principal
amount of Serial Mortgage Notes for each maturity date will equal the
aggregate amount of the Serial Loans for all of the Owners for each such
maturity date.
Each Owner will grant to California Petroleum a Mortgage on its
Vessel to secure the payment of the Acquisition Loans from California
Petroleum to the Owners. California Petroleum will assign each Mortgage to
the Collateral Trustee to secure the payment of the Notes. The Mortgages will
be recorded in accordance with the provisions of the law of the Registration
Jurisdiction.
Certain Covenants
So long as Chevron Transport is the charterer of a Vessel, the
related Mortgage will provide that the provisions of the related Initial
Charter, including, without limitation, provisions regarding the trade,
operation, documentation, registration, use, maintenance and insurance of such
Vessel, will supersede the Owner's covenants with respect to such matters in
the related Mortgage. Certain Initial Charter requirements differ materially
from the Mortgage covenants described below. See "The Initial Charters."
Each Mortgage will contain certain covenants of the Owner of the
related Vessel, including the following:
(a) such Owner will not cause or permit its Vessel to be operated
in any manner contrary to law, will not engage in unlawful trade,
violate any applicable law or carry any cargo that would expose the
Vessel to penalty, confiscation, forfeiture, capture or condemnation and
will not do, suffer or permit to be done anything which can or may
injuriously affect the registration or enrollment of its Vessel under
the laws and regulations of the Registration Jurisdiction;
(b) except for the lien of the Mortgage and other Permitted
Liens, the Owner will not have any right, power or authority to create,
incur or permit to be placed or imposed or continued any Lien on its
Vessel and will keep such Vessel free from any such Lien;
(c) such Owner will at all times and without cost or expense to
the Collateral Trustee maintain and preserve, or cause to be maintained
and preserved, its Vessel in good running order and repair, so that its
Vessel shall be, insofar as due diligence can make her so, tight,
staunch, strong and well and sufficiently tackled, apparelled,
furnished, equipped and in every respect seaworthy and in good operating
condition, as will entitle her to the highest classification of the
Classification Society or such other classification society of like
standing agreeable to California Petroleum and the Collateral Trustee,
and annually will furnish California Petroleum and the Collateral
Trustee a certificate by the Classification Society or such other
classification society that such classification is maintained in the
highest category for ships of the same type as the Owner's Vessel free
of recommendations and notations which have not been complied with in
accordance with their terms and shall furnish the Collateral Trustee,
from time to time and at any time upon demand, with all such information
and copies of all such documents as the Collateral Trustee may require
concerning the classification of the Owner's Vessel;
(d) such Owner will not change the flag or port of documentation
of its Vessel or through any action or inaction cause the registration
of its Vessel under the laws of the Registration Jurisdiction to be void
or voidable or to lapse;
(e) such Owner will not, without the prior written consent of the
Collateral Trustee, charter its Vessel by demise charter or by period,
time or voyage charter for any period other than to Initial Charterer
under the Initial Charter or any other charterer under an Acceptable
Replacement Charter. The Owner will not modify or amend the terms of
the related Initial Charter without the prior written consent of the
Collateral Trustee;
(f) such Owner will not directly or indirectly, create, incur,
issue, assume, guarantee or otherwise become directly or indirectly
liable with respect to, or become responsible for the payment of any
indebtedness, except for Permitted Indebtedness;
(g) such Owner will not engage in any business other than the
ownership and operation of its Vessel as described herein and in
accordance with such Owner's charter and by-laws;
(h) such Owner will not (i) commence any case, proceeding or
other action under any existing or future bankruptcy, insolvency or
similar law seeking to have an order for relief entered with respect to
it, or seeking reorganization, arrangement, adjustment, winding up,
liquidation, dissolution, composition or other relief with respect to
its debt, (ii) seek appointment of a receiver, trustee, custodian or
other similar official for it or any part of its assets, (iii) make a
general assignment for the benefit of creditors or (iv) take any action
in furtherance of, or consenting or acquiescing in, any of the foregoing;
(i) such Owner will not (i) declare or pay any dividend or other
distribution on any shares of its respective capital stock, (ii) make
any loans or advances to any affiliate of such Owner or (iii) purchase,
redeem or otherwise acquire or retire for value any shares of its
respective capital stock (a "Restricted Payment") unless: (A) no default
under the Mortgage shall have occurred and be continuing, (B) the Serial
Mortgage Notes shall have been repaid in full and (C) the Vessel shall
be on charter to Chevron Transport or under one or more Acceptable
Replacement Charters to one or more charterers whose unsecured credit
ratings from the Rating Agencies are at least equal to the respective
unsecured ratings of Chevron and the terms of such charters shall be at
least sufficient to pay in full all of the remaining payments of
principal and interest on the Term Mortgage Notes;
(j) such Owner will not make any capital contributions, advances
or loans to, or investments or purchases of capital stock in, any
Person, except for Allowable Investments; and
(k) such Owner will take any lawful action to the extent
necessary to prevent or avoid the imposition of any withholding taxes
(other than any withholding tax with respect to charterhire to the
extent required to be paid or reimbursed by any charterer pursuant to a
charter) by any taxing jurisdiction (including the Registration
Jurisdiction for such Owner) with respect to any payments under its
Acquisition Loans, including changing its jurisdiction of incorporation
or residence; provided that it shall not be required to take, or fail to
take, any action (i) if in the Opinion of Counsel such act or failure to
act would violate applicable law or (ii) if in the reasonable opinion of
the Owner the actions necessary to avoid or prevent imposition of such
withholding taxes would be unduly burdensome. For purposes of clause
(ii) above, a requirement to change the jurisdiction of the Owner's
incorporation or residence shall not be treated as unduly burdensome.
"Permitted Indebtedness" means for each Owner, the obligations
under such Owner's Acquisition Loans. "Permitted Liens" means for each Owner,
Liens created under the related Mortgage and Security Documents, the Initial
Charter for the related Vessel and any Acceptable Replacement Charter or other
charter for such Vessel permitted under the Mortgage, Liens for crew's wages
accrued for not more than three months or for collision or salvage, Liens in
favor of suppliers of necessaries or other similar Liens arising in the
ordinary course of business (accrued for not more than three months) or Liens
for loss, damage or expense, which are fully covered by insurance or, in
respect of which, a bond or other security has been posted by the Owner with
the appropriate court or other tribunal to prevent the arrest or secure the
release of the Vessel from arrest on account of such claim or Lien; provided
that, so long as the related Initial Charter is in effect, "Permitted Liens"
shall mean those Liens permitted under the Initial Charter (i.e., any lien or
encumbrance other than a lien or encumbrance incurred by Chevron Transport or
its agents, which might have priority over the title and interest of the Owner
in the Vessel). The Initial Charter requires that Chevron Transport indemnify
and hold the Owners harmless against any lien of whatsoever nature arising
upon the Vessel during the term of the Initial Charter while the Vessel is
under the control of Chevron Transport, and against any claims against the
Owners arising out of or in relation to the operation of the Vessel by Chevron
Transport. Should the Vessel be arrested by reason of claims or liens arising
out of its operation by Chevron Transport, Chevron Transport shall at its own
expense take all reasonable steps (including, at its own expense, providing
bail) to secure the Vessel's release within a reasonable time. "Allowable
Investments" means for each Owner, its investment in the related Vessel, and
in each case, any Restricted Payment permitted to be made by such Owner and
certain obligations incurred in the ordinary course of the performance of the
Management Agreement.
For each Initial Charter, the related Owner may not transfer or
assign to any other company all or part of its rights or obligations under
such Initial Charter, except to California Petroleum (which assignment
includes the reassignment by California Petroleum of such Initial Charter to
the Collateral Trustee), unless such transferee or assignee also assumes the
obligations of such Owner under the related Security Documents and the
Collateral Trustee shall have given its prior written consent to such
assignment and assumption, which consent shall not be unreasonably withheld.
Insurance
So long as Chevron Transport is the charterer of a Vessel, the
insurance requirements of the related Initial Charter will supersede the
Owner's covenants regarding insurance in the related Mortgage. The insurance
requirements of the Initial Charters differ materially from the Owner's
Mortgage covenants described below. Under the Initial Charters, Chevron
Transport may self-insure against the risks required to be covered thereunder.
Therefore, there can be no assurance that any insurance for such risks will be
carried during the term of any Initial Charter or, if it is carried, as to the
amount of such insurance. See "The Initial Charters--Insurance."
If a Vessel is no longer subject to the Initial Charter, the
requirements under the related Mortgage, which are summarized in this
paragraph, would be applicable to insurance coverage, unless the Vessel is
subject to a replacement charter that has different provisions which are
acceptable to the Rating Agencies and such provisions will not result in the
withdrawal or reduction of the then current ratings on the Term Mortgage
Notes. Each Owner, at its own expense, will insure its Vessel against all
risks whether marine or war and all risks of navigation, operation and
maintenance and working. In addition, each Owner shall also keep its Vessel
insured against all protection and indemnity risks in the joint names of the
Owner and any charterer. The protection and indemnity insurance shall include
cover against liabilities to persons who have suffered any loss, damage or
injury whatsoever in connection with anything done or not done by the Vessel,
any charterer or the Owner in connection with the Vessel or the employment or
use thereof (including in connection with any oil or other substance emanating
from the Vessel or any other vessel with which the Vessel may be involved in
collision) and against liability under OPA 90 or any re-enactment or
modification thereof under the law of any country into whose jurisdiction the
Vessel is permitted to come under the terms of the related charter. In
addition, such Owner must maintain mortgagee additional perils (oil
pollution) insurance in an amount equal to the Allocated Principal Amount
of Term Mortgage Notes and Serial Mortgage Notes for such Vessel. Each
insurance policy shall include a provision agreeing that no breach of
warranty or condition or want of due diligence on the part of the Owner or
any agent of such Owner shall defeat recovery of any claim by the
Collateral Trustee unless such provision shall conflict with the available
reinsurance arrangements of the issuers of such policy. Each insurance
policy shall also provide that fourteen days' written notice be given to
California Petroleum and the Collateral Trustee prior to the cancellation
or modification of any insurance. In addition, the insurance coverage
required under an Acceptable Replacement Charter or maintained by the Owner
or charterer in connection with any other charter entered into after the
termination of the related Initial Charter must be sufficient to maintain
the credit rating of the Term Mortgage Notes by Standard & Poor's, Moody's
and Duff & Phelps at least at the rating applicable to the Term Mortgage
Notes immediately prior to the effectiveness of such Acceptable Replacement
Charter or other charter.
Insurance Proceeds
Pursuant to the assignment of each Mortgage to the Collateral
Trustee, which will be acknowledged by the related Owner, the proceeds of any
insurance or entries referred to in the Mortgage will be applied as follows:
Until the occurrence of a Mortgage Event of Default:
(a) any claim under any such insurance (other than in respect of
a Total Loss) whether or not such claim is under the terms of the
relevant loss payable clause payable directly to the Owner, will be
applied by the Owner in making good the loss or damage in respect of
which it has been paid to the Owner in reimbursement of money expended
by it for such purpose; and
(b) any claim in respect of protection and indemnity insurance
shall be paid directly to the person, firm or company to which the
liability covered by such insurance was incurred or the Owner in
reimbursement of moneys expended by it in satisfaction of such
liability;
provided always that for as long as the Initial Charter in respect of the
Vessel remains in force, all payments other than in respect of a Total Loss
(which will be made to the Collateral Trustee) shall be made to Chevron
Transport.
Upon the occurrence of a Mortgage Event of Default, subject as
provided above, any claim under any such insurance and entry will be paid to
the Collateral Trustee, as assignee of California Petroleum, and will be
applied by the Collateral Trustee pursuant to the terms of the Initial Charter
unless Chevron Transport is in default thereunder, in which event the
Collateral Trustee shall apply such proceeds against payment of the Notes.
Any claim under such insurance and entry in respect of a Total
Loss will be paid to the Collateral Trustee, as assignee of California
Petroleum, and will be applied by the Collateral Trustee, after payment of the
costs of collecting such claim, as follows:
(a) to the payment of all reasonable expenses and charges,
including the expenses of any taking, attorney's fees, court costs and
other expenses or advances made or incurred by the Collateral Trustee in
the protection of its right or the pursuance of its remedies under the
Collateral Agreement, any Security Document or the Mortgage;
(b) to the payment of all amounts due to the Collateral Trustee
in respect of taxes, indemnities, fees, expenses, premiums, purchase of
liens or otherwise under the provisions of the Mortgage;
(c) to the payment of interest on each Term Mortgage Note and
Serial Mortgage Note pro rata in an amount equal to interest
calculated at the rate applicable to such Note;
(d) to the payment of principal on each Term Mortgage Note and
Serial Mortgage Note pro rata in an aggregate amount up to the
Allocated Principal Amount for the related Vessel; and
(e) to the payment of any surplus thereafter remaining to the
Owner or whomsoever may be lawfully entitled thereto.
The Owner will not alter so as to in any way restrict the cover of any
insurance or entries referred to in the Mortgage except to the extent
expressly permitted by the Collateral Trustee.
Mortgage Events of Default
The following constitute events of default under each Mortgage
("Mortgage Events of Default"):
(a) an event of default shall occur under any Serial Loan
Agreement or Term Loan Agreement relating to any Owner;
(b) failure to pay any amount payable under the Mortgage within
two business days after such amount is due;
(c) default by the related Owner in the due observance or
performance of any covenant with respect to merging, maintaining its
corporate existence, maintaining insurance on its Vessel, maintaining
the Vessel free of all Liens other than Permitted Liens, chartering the
Vessel, changing the flag of the Vessel and making Restricted Payments
of maintaining the Mortgage as a First Preferred Ship Mortgage under the
laws of the Registration Jurisdiction;
(d) default in any material respect in the performance, or breach
in any material respect, of any covenant of the Owner (other than those
described above) in the Mortgage or if any representation or warranty of
the Owner made in the Mortgage or in any certificate or other writing
delivered pursuant thereto or in connection therewith with respect to or
affecting the Vessel shall prove to be inaccurate in any material
respect as of the time when the same shall have been made, and, if such
breach or default or inaccuracy is curable, continuance of such default
or breach or inaccuracy for a period of 30 days after the earlier to
occur of (a) actual knowledge of such default, breach or inaccuracy by
the Owner or (b) the date on which there has been given by registered or
certified mail to the Owner by the Collateral Trustee a written notice
thereof;
(e) the entry of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Owner in any involuntary
case under any applicable bankruptcy, insolvency, or other similar law
now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, or sequestrator (or other similar
official) for the Owner or for any substantial part of its property, or
ordering the winding up or liquidation of its respective affairs, and the
continuance of any such decree or order unstayed and in effect for a
period of 60 consecutive days;
(f) the commencement by the Owner of a voluntary case under any
applicable bankruptcy, insolvency, or other similar law now or hereafter
in effect in any jurisdiction, or the consent by the Owner to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee or sequestrator (or other similar official) of the
Owner or any substantial part of its property, or the making by the
Owner of any general assignment for the benefit of creditors, or the
failure by the Owner generally to pay its debts as they become due, or
the taking of action by the Owner in furtherance of any such action;
(g) the Vessel is deemed a Total Loss and the insurance proceeds
thereof have not been received by the Collateral Trustee within 60 days
after the date on which the Vessel was deemed a Total Loss; provided,
however, if the Vessel is under charter to Chevron Transport pursuant
to the Initial Charter, such an event shall be a Mortgage Event of
Default if the Collateral Trustee has not received the amounts payable
by Chevron Transport in the event of a Total Loss pursuant to the
Initial Charter within 5 business days of the date on which such amounts
are due pursuant to the terms of the Initial Charter;
(h) the Owner shall abandon its Vessel;
(i) a default shall have occurred under the Initial Charter; or
(j) the Mortgage or any material provision thereof shall be
deemed invalidated in whole or in part by any present or future law of
the Registration Jurisdiction, or by any decision of any competent court.
Remedies
In the event any one or more Mortgage Events of Default shall have
occurred and be continuing then, in each and every such case the Collateral
Trustee, as assignee of California Petroleum, will have the right, subject in
all instances to the rights of Initial Charterer under the related the Initial
Charter, to:
(a) declare immediately due and payable all of the related
Owner's Acquisition Loans (in which case all of the same shall be
immediately due), and bring suit at law, in equity or in admiralty, as
it may be advised, to recover judgment for the Acquisition Loans and
collect the same out of any and all property of the Owners whether
covered by the Mortgage or otherwise;
(b) exercise all of the rights and remedies in foreclosure and
otherwise given to mortgagees by the provisions of applicable law;
(c) take and enter into possession of the Vessel, at any time,
wherever the same may be, without court decision or other legal process
and without being responsible for loss or damage and the Collateral
Trustee may, without being responsible for loss or damage, hold, lay-up,
lease, charter, operate or otherwise use such Vessel for such time and
upon such terms as it may deem to be for its best advantage, and demand,
collect and retain all hire, freights, earnings, issues, revenues,
income, profits, return premiums, salvage awards or recoveries,
recoveries in general average, and all other sums due or to become due
in respect of such Vessel or in respect of any insurance thereon from
any person whomsoever, accounting only for the net profits, if any,
arising from such use of the Vessel and charging upon all receipts from
use of the Vessel or from the sale thereof by court proceedings or by
private sale all costs, expenses, charges, damages or losses by reason
of such use, and if at any time the Collateral Trustee avails itself of
the right given to it to take the Vessel: (i) the Collateral Trustee
will have the right to dock the Vessel for a reasonable time at any
dock, pier or other premises of the Owner without charge, or to dock her
at any other place at the cost and expense of the Owner, and (ii) the
Collateral Trustee will have the right to require the Owner to deliver,
and the Owner will on demand, at its own cost and expense, deliver to
the Collateral Trustee the Vessel as demanded; and the Owner will
irrevocably instruct the master of the Vessel so long as the Mortgage is
outstanding to deliver the Vessel to the Collateral Trustee as demanded;
and
(d) sell the Vessel or any share therein with or without the
benefit of any charter party or other engagement by public auction or
private contract without legal process at any place in the world and
upon such terms as the Collateral Trustee in its absolute discretion may
determine with power to postpone any such sale and without being
answerable for any loss occasioned by such sale or resulting from the
postponement thereof and at any such public auction the Collateral
Trustee may become the purchaser and shall have the right to set off the
purchase price against the Notes. Any sale of the Vessel or any shares
therein made by the Collateral Trustee in pursuance of the Mortgage will
operate to divest all title, right and interest of any nature whatsoever
of the Owner therein and thereto and shall bar the Owner, its successors
and assigns, and all persons claiming by, through or under them,
provided such sale is by auction. Upon any such sale, the purchaser
will not be bound to see or inquire whether the Collateral Trustee's
power of sale has risen in the manner provided by the Mortgage and the
sale will be within the power of the Collateral Trustee and the receipt
of the Collateral Trustee for the purchase money will effectively
discharge the purchaser who will not be concerned with the manner of
application of the proceeds of sale or be in any way answerable or
otherwise liable therefor.
The Vessels will be registered under the laws of Bermuda, Liberia
or the Bahamas, as the case may be. In addition, in order to reflect the
Mortgage granted by California Petroleum thereunder, the Mortgage on the
Chevron Mariner will also be filed in the Isle of Man. The mortgages on the
Vessels registered under Liberian law will be preferred mortgage liens under
Liberian maritime law. Mortgages on Vessels registered under Bermudian or
Bahamian law will have similar status under Bermudian or Bahamian law,
respectively. Liberian, Bermudian and Bahamian law provide that such
mortgages may be enforced by the mortgagee by a proceeding substantially
identical to a suit in rem in admiralty in a proceeding against the vessel
covered by the mortgage.
The priority with respect to sale proceeds that such a mortgage
would have vis-a-vis the claims of other lien creditors in an enforcement
proceeding is generally determined by, and will vary in accordance with, the
law of the country where the proceeding is brought. Liberian maritime law
provides that a "preferred mortgage lien" is prior to all claims other than
the following: (i) liens arising prior in time to the recording of the
preferred mortgage; (ii) liens arising out of tort; (iii) liens for tonnage
taxes and annual fees payable under the Liberian Maritime Regulations; (iv)
liens for crew's wages; (v) liens for general average; (vi) liens for salvage;
and (vii) liens for expenses and fees allowed and costs imposed by courts of
competent jurisdiction. Bahamian law provides that a first priority ship
mortgage has priority over all other claims except: (i) costs allowed by the
court arising out of the arrest and sale proceedings; (ii) wages and other
sums due to the master, officers and other members of the vessel's complement
in respect of their employment on the vessel; (iii) port, canal, and other
waterway dues and pilotage dues and any other outstanding fees payable under
the Merchant Shipping Act of the Bahamas in respect of the vessel; (iv) claims
against the owner in respect of loss of life or personal injury occurring,
whether on land or on water, in direct communication with the operation of the
vessel; (v) claims against the owner, based on tort and not capable of being
based on contract, in respect of loss of or damage to property occurring,
whether on land or on water, in direct connection with the operation of the
vessel; and (vi) claims for salvage, wreck removal and contribution in general
average. Bermudian law provides that a registered first priority ship
mortgage has priority over all other claims except, (i) certain liens arising
prior to registration of the mortgage, (ii) liens arising by virtue of damage
done by a vessel, (iii) liens for salvage, (iv) liens for seaman's wages, (v)
liens for master's wages and disbursements, (vi) liens arising by virtue of
the master's ability to hypothecate the vessel or its cargo in order to ensure
its safety, (vii) possessory liens such as liens for unpaid construction or
repair bills and Bermudian Harbour Authorities' charges and (viii) costs and
expenses awarded in respect of such liens. Bermudian law also provides that
where a first priority ship mortgage is taken to cover future advances, the
first mortgagee cannot claim priority in respect of further advances made
after he has actual or constructive notice of a second mortgage.
Liberian, Bermudian and Bahamian ship mortgages may be enforced
against a vessel physically present in the United States, but the claim under
the mortgage would rank behind certain preferred maritime liens as defined
under the laws of the United States, including those for supplies and
necessaries provided in the United States. Since the Vessels will be trading
throughout the world, there is no assurance that, if enforcement proceedings
must be commenced against a Vessel, such Vessel will be located in a
jurisdiction having the same procedures and lien priorities as Liberia,
Bermuda, the Bahamas or the United States. Other jurisdictions may provide no
legal remedy at all for the enforcement of the Mortgages, or a remedy
dependent on court proceedings so expensive and time consuming as to be
impractical. Furthermore, certain jurisdictions, unlike Liberia, Bermuda, the
Bahamas or the United States, may not permit a Vessel to be sold prior to
entry of a judgment, entailing a long waiting time that could result in
increased custodial costs, deterioration in the condition of the Vessel and
substantial reduction in her value.
Since the Notes are also secured by a pledge of all of the stock
of each Owner, enforcement of this pledge, including foreclosure, subject to
any concerns that upon such enforcement the Collateral Trustee or the holders
of the Notes may be deemed "owners" or "operators" of the Vessel for liability
purposes, may provide in effect an alternative method to transfer control over
a Vessel.
Fraudulent Conveyance Statutes
The granting of the Mortgages might be subject to review under
relevant fraudulent conveyance statutes and other applicable insolvency laws
(the "Fraudulent Conveyance Laws") in a bankruptcy proceeding involving one or
more of the Owners. Due to the nature of the business of the Owners and
uncertainty as to where a Vessel foreclosure proceeding might be commenced, it
is not possible to predict where any such proceeding or attack might be
brought or made or the law that the court might apply, although applicable law
would likely be the law of the Bahamas or the Isle of Man, as the case may be.
Under Bahamian or the Isle of Man fraudulent conveyance law, if a
court were to find that, with respect to any particular Owner, at the time the
Mortgages were granted as joint and several obligations of the Owners (the
"Transfer"), it (a) made such Transfer with actual intent to hinder, delay or
defraud any present or future creditor or (b) received less than a reasonably
equivalent value or fair consideration for the Transfer and (i) was insolvent
at the time such Transfer was made or was rendered insolvent by virtue of such
Transfer, (ii) was engaged in a business or transaction, or was about to engage
in a business or transaction for which any property remaining with such Owner
was an unreasonably small capital or (iii) intended to incur, or believed that
it would incur, debts beyond its ability to pay as they matured (as the
foregoing terms are defined in or interpreted under the relevant Fraudulent
Conveyance Laws), such court could avoid the Transfer in whole or in part.
Generally, for the purposes of the Fraudulent Conveyance Laws, a company is
considered insolvent at a particular time if the sum of its debts is greater
than all of its property at a fair valuation or if the present fair salable
value of its assets was then less than the amount that would be required to
pay its probable liabilities on its existing debts as they became absolute and
matured.
To the extent that a Transfer by any Owner exceeds the
consideration received by it, the determination of whether the Transfer in
question is a fraudulent conveyance depends on (1) whether the Transfer so
exceeds the value and benefit received by such Owner that, at least to the
extent of such excess, the Owner did not receive reasonably equivalent value
or fair consideration for the Transfer; and, if the answer to the foregoing
question is "yes," then (2) whether following the valuation of the assets and
liabilities of such Owner it is determined that such Owner is or has been
rendered insolvent. While there can be no assurance that a court, viewing the
transaction with hindsight, would determine that a particular Owner received
fair value for its Transfer, or was not rendered insolvent by the pertinent
Transfer, to the extent it exceeded the value of the consideration received by
that Owner, California Petroleum believes that each of the Owners will receive
proper consideration for its respective Transfer and that no such Owner will
be rendered insolvent by the contemplated Transfers. No assurance, however,
can be given that a court would concur with such belief.
THE INITIAL CHARTERS
General
The Vessels are currently owned and operated by Chevron Transport
in the business of maritime transportation of oil. Each Vessel is a Suezmax
oil tanker designed to Chevron Transport's specifications.
Term of the Initial Charters
On the Closing Date, the Owners will each purchase a Vessel from
Chevron Transport, and Chevron Transport will charter each such Vessel from
its Owner under an Initial Charter commencing on such date. Each Initial
Charter will expire on ______________, 2014, subject to Chevron Transport's
right to terminate each Initial Charter as described below. See "--Termination
Options." If (a) Chevron Transport exercises its termination option with
respect to an Initial Charter for any Vessel and makes the related Termination
Payment or (b) a Total Loss occurs with respect to a Vessel and Chevron
Transport makes the payments required under the related Initial Charter, then
such Initial Charter will continue in effect with respect to Chevron
Transport's obligation to make such Termination Payment or payment upon Total
Loss, as the case may be, until the expiration of certain periods specified in
the Initial Charter during which periods such Termination Payment or payment
upon Total Loss, as the case may be, might be a voidable payment under
applicable bankruptcy, insolvency, creditor's rights or similar laws. For any
Initial Charter, the period from the date of commencement of such Initial
Charter to the expiration or earlier termination of such Initial Charter will
be referred to in this Prospectus as the "Initial Charter Period."
Use and Trade of the Vessel
Chevron Transport will have full use of each Vessel during the
term of the Initial Charter Period and will have the right to operate the
Vessel throughout the world (within Institute Warranty Limits) in the carriage
of suitable lawful merchandise. As to those trades in which a Vessel is
employed, Chevron Transport shall comply with any and all requirements
regarding financial responsibility or security in respect of oil or other
pollution damage as required by any government, any state or other political
subdivision thereof, or any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government and any other governmental entity with authority over Chevron
Transport or the related Owner, as the case may be, or ownership, use and
operation of such Vessel (whether or not such requirement has been lawfully
imposed or not) to enable such Vessel, without penalty or charges, lawfully to
enter, remain at, or leave any port, place, territorial or contiguous waters
of any country, state or municipality in performance of the related Initial
Charter without delay. Chevron Transport shall make and maintain all
arrangements for a security bond or otherwise as may be necessary to satisfy
such requirements at Chevron Transport's sole expense and Chevron Transport
shall indemnify the related Owner against any and all losses, damages, claims,
expenses or liabilities incurred by reason of Chevron Transport's failure to
comply with the requirements described in this paragraph. Chevron Transport
shall enter and maintain each Vessel under the TOVALOP Scheme or under any
similar compulsory scheme during the term of each Initial Charter. In no
event will Chevron Transport carry on board a Vessel nuclear fuels or
radioactive products during the term of the related Initial Charter; provided,
however, with the prior written consent of the related Owner, Chevron
Transport may carry on board a Vessel radioisotopes used or intended to be
used for any industrial, agricultural, medical or scientific purposes.
Flag and Name of Vessel
Chevron Transport shall, throughout the term of each Initial
Charter, maintain the documentation of the Vessel under the laws of the
Registration Jurisdiction at the related Owner's cost and expense; provided,
however, in the event that the costs and expenses of maintaining such
documentation are in excess of $___________, then Chevron Transport shall
either (i) pay all amounts in excess of $____________ or (ii) cooperate with
the Owner to change the registry or port of documentation of the Vessel.
Chevron Transport will not change the registry or port of documentation of the
Vessel without prior written consent of the related Owner, which consent shall
not be unreasonably withheld, or do or suffer or permit to be done anything
which will injuriously affect the documentation of the Vessel as a vessel
documented under the laws and regulations of the Registration Jurisdiction. If
Chevron Transport changes the registry or port of documentation of the Vessel,
it shall, at the time of redelivery, if the related Owner so requests and at
Chevron Transport's expense, change the registry and port of documentation
back to that of the Registration Jurisdiction.
Chevron Transport shall have the right to re-name each Vessel, to
paint each Vessel in its own colors, install and display its funnel insignia
and fly its own house flag.
Covenants
Each Initial Charter will contain certain covenants pursuant to
which Chevron Transport will agree, among other things, that:
(a) Chevron Transport will maintain at their expense the Vessel
in a good state of repair and in efficient operating condition in
accordance with good commercial maintenance practice commensurate with
other vessels in Chevron Transport's fleet of similar size and trade,
ordinary wear and tear excepted;
(b) Chevron Transport will keep the Vessel with unexpired
classification in accordance with the highest classification of the
American Bureau of Shipping (or such other classification society as
shall previously have been approved in writing by the related Owner) and
other required certificates in force and shall make any improvement or
structural changes or acquire equipment necessary to comply with the
requirements of such classification;
(c) Chevron Transport shall not permit the Vessel to proceed to
any port which shall have been the subject of a prohibition by the
Registration Jurisdiction;
(d) in the event of hostilities in any part of the world Chevron
Transport will not employ the Vessel nor suggest her employment in
carrying any goods which are declared contraband nor suffer her to enter
to trade to any zone which is declared a "war zone" by the war risks
insurers unless Chevron Transport has made arrangements with the said
insurers for the payment of such additional premiums as said insurers
may require to maintain the relevant insurances in force or in any zone
in respect of which the war risks insurers have withdrawn cover for the
Vessel;
(e) Chevron Transport will not use the Vessel in any manner or
for any purpose excepted from any insurance policy or policies taken out
in compliance with the Initial Charter or for the purpose of carriage of
goods of any description excepted from the said insurance policy or
policies and shall not do or permit to be done anything which could
reasonably be expected to invalidate any of the said insurance policy or
policies;
(f) Chevron Transport shall man, victual, navigate, operate,
supply, fuel and repair the Vessel whenever required and shall be
responsible for all charges and expenses of every kind and nature
whatsoever incidental to their use and operation of the Vessel under the
Initial Charter, including any foreign, general, municipal, value added
or other taxes, except that Chevron Transport shall not be responsible
for documentation costs (except as otherwise provided for in the Initial
Charters) or for Owner Taxes; and
(g) Chevron Transport shall drydock the Vessel and clean and
paint her underwater parts in accordance with good commercial practice,
but not less than as may be required by the American Bureau of Shipping
(or such other classification society as shall previously have been
approved in writing by the related Owner) in order to maintain the
Vessel's highest classification.
(h) Chevron Transport will not allow, nor permit to be continued,
any Lien incurred by Chevron Transport or its agents, which might have
priority over the title and interest of the Owner in the related Vessel,
and will indemnify and hold the Owner harmless against any Lien arising
upon such Vessel during the Initial Charter Period while the Vessel is
under the control of Chevron Transport and against any claims against
the Owner arising out of or in relation to the operation of the Vessel
by Chevron Transport.
In general, all amounts, excluding certain indemnification
payments and documentation costs for the Owners' account, payable by Chevron
Transport shall be made without deduction for any taxes (including value
added, turnover, sales and use taxes) except as required by law and Chevron
Transport shall, in addition to the sums payable by Chevron Transport under
each Initial Charter, pay such taxes as aforesaid as are required from time to
time by law to be paid by Chevron Transport; provided, Chevron Transport shall
not be liable for documentation costs (except as otherwise provided for in the
Initial Charters). Under each Initial Charter, the related Owner will agree
to take any lawful action to the extent necessary to prevent or avoid the
imposition of any taxes, including any withholding tax with respect to
charterhire, by any taxing jurisdiction (including the Registration
Jurisdiction for such Owner), including changing its jurisdiction of
incorporation or residence; provided that it shall not be required to take, or
fail to take, any action (i) if in the opinion of counsel such act or failure
to act would violate applicable law or (ii) if in the reasonable opinion of
the Owner the actions necessary to avoid or prevent imposition of such taxes
would be unduly burdensome. For purposes of clause (ii) above, a requirement
to change the jurisdiction of the Owner's incorporation or residence shall not
be treated as unduly burdensome.
Charterhire
During the Initial Charter Period for each Vessel, Chevron
Transport shall pay charterhire for the use and hire of such Vessel on each __
and __, commencing on the first such date to occur following the commencement
of the related Initial Charter. During any extension of the Initial Charter
Period, the rate of hire shall be calculated on the basis of the then current
charterhire rate converted to a daily rate using a 365-day year. If any
payment of charterhire under the Initial Charter shall not be paid when due
interest shall accrue thereon at the Default Rate from and including the due
date to the date of actual payment (after as well as before judgment).
Insurance
Each Initial Charter provides that during the Initial Charter
Period the insurance arrangements in effect with respect to Chevron
Transport's fleet at the time of the commencement of such Initial Charter will
be applicable to the related Vessel and will satisfy the insurance
requirements of the Initial Charter, subject to adjustments of such insurance
arrangements in light of changes in market practice and in accepted tanker
practice. Currently, Chevron Transport's hull and machinery insurance
includes a deductible of $15 million per occurrence and its protection and
indemnity insurance is subject to a $1 million deductible per occurrence
(other than with respect to liabilities involving pollution, as to which there
is a nominal or no deductible). In addition, each Initial Charter provides
that Chevron Transport may self-insure against the risks required to be
covered thereunder. Therefore, there can be no assurance that any insurance
for such risks will be carried during the Initial Charter Period for any
Vessel or, if it is carried, as to the amount of such insurance.
Insurance Proceeds
The proceeds of any insurances or entries referred to in the
Initial Charter will be applied as follows:
Until the termination of the Initial Charter, any claim under any
such insurance proceeds in respect of the related Vessel (other than in
respect of Total Loss) shall be paid directly to Chevron Transport. Chevron
Transport shall be liable for any loss of any part of or damage to the Vessel
(other than a Total Loss) during the Initial Charter Period from whatsoever
cause such loss or damage may arise, unless the same shall have been caused by
the negligence or wilful act of Owners, their servants or agents (except where
Chevron Transport or its servants and agents are acting as agents of the
Owners).
Any claim in respect of a Total Loss shall be paid directly to the
related Owner or the Collateral Trustee, as assignee.
Payment on Total Loss
The amount payable on the date which is 90 days after the
occurrence of a Total Loss (the "Loss Date") by Chevron Transport shall be the
sum of (i) any deficiency between (A) the Stipulated Loss Value (which is an
amount at least sufficient to redeem the Allocated Principal Amount of Notes
for such Vessel) in relation to the period in question and (B) all insurance
proceeds for damage to or loss of the Vessel and amounts paid by any
governmental authority in connection with any requisition, seizure or
forfeiture actually received in hand by the related Owner or the Collateral
Trustee, as assignee of California Petroleum, prior to or on such Loss Date;
and (ii) all charterhire accrued (on a daily basis) but unpaid under the
Initial Charter to such Loss Date and any other sums due under any provisions
of the Initial Charter, together with interest thereon at the Default Rate
from the date upon which any such charterhire or other sums was due until the
date upon which such calculations are made. In the event of a Total Loss, the
Initial Charter and the obligation of Chevron Transport to pay charterhire
shall continue and be payable until Chevron Transport has paid the amounts
described above. The obligations of Chevron Transport described above will
apply regardless of whether or not any moneys are payable under the insurances
effected in compliance with the Initial Charter in respect of the Vessel,
regardless also of the amount payable thereunder, regardless also of the cause
of the Total Loss and regardless of whether or not any of the said
compensation shall be payable.
Charter Events of Default
The following constitute events of default under each Initial
Charter ("Charter Events of Default"):
(a) Chevron Transport shall default for two business days in the
payment of charterhire due under the terms of the Initial Charter;
(b) Chevron Transport shall fail for a period of 30 business days
after written notice to perform and observe any of the covenants,
conditions, agreements or stipulations on the part of Chevron Transport
to be performed or observed contained in the Initial Charter, other than
those referred to in clause (a) or (e) of this paragraph;
(c) Chevron Transport ceases doing business as a going concern or
generally ceases to pay its debts as they become due or any proceedings
under any bankruptcy or insolvency laws are instituted against Chevron
Transport or if a receiver or trustee is appointed for Chevron Transport
for any of its assets or properties, and such proceeding is not
dismissed, vacated or fully stayed within 60 days;
(d) Chevron Transport shall create or suffer to exist any
mortgage, charge, pledge or other like encumbrance over the Vessel or
any part thereof or shall have abandoned the Vessel (not including any
notice of abandonment which Chevron Transport may give to insurers under
the provisions of the Initial Charter regarding insurance in the event
of a Total Loss);
(e) Chevron Transport fails to comply with any of its obligations
as to insurance contained in the Initial Charter; and
(f) Chevron Transport shall within 30 days of any scheduled date
of redelivery under the Initial Charter fail to provide adequate bail or
security when required to do so in respect of any maritime lien,
possessory lien or statutory right in rem which may be acquired over the
Vessel in order to prevent the Vessel being arrested, impounded or
seized or if any such lien, right or claim over the Vessel is exercised
by the arrest, attachment, detention, impounding or seizure of the
Vessel under any distress, execution or other process, or any distress
or execution is levied thereon, and Chevron Transport fails to use its
best endeavors to procure the release of the Vessel therefrom within 30
days of any scheduled date of redelivery under the Initial Charter.
Remedies
If any Charter Event of Default shall have occurred and be
continuing, the Owner under the related Initial Charter may, by written notice
to Chevron Transport, declare such Initial Charter to be in default and
enforce any or all of the remedies under such Initial Charter, including:
(a) requiring Chevron Transport, at its expense, to redeliver the
Vessel to the related Owner with Chevron Transport to have the same
obligations in connection with such redelivery as described below in
connection with redelivery of the Vessel at the termination of the
Initial Charter;
(b) retaking the Vessel by the related Owner or its agent,
without prior demand or legal process;
(c) holding Chevron Transport liable for all charterhire payments
payable before, during or after exercise of the foregoing remedies and
the remedy described in paragraph (d) below and for all reasonable costs
and expenses incurred by the related Owner (including legal fees) by
reason of the occurrence of any default or the exercise of remedies by
the related Owner; and
(d) the related Owner or its agent may sell the Vessel at public
or private sale, with or without notice to Chevron Transport,
advertisement or publication, as such Owner may determine, or otherwise
may dispose of, hold, use, operate, charter to others or keep the Vessel
idle.
The Collateral Trustee, as assignee of California Petroleum, would
have the right to exercise the rights of an Owner under an Initial Charter
upon the occurrence of a Charter Event of Default.
Liquidated Damages
Whether or not the related Owner shall have exercised, or shall
thereafter at any time exercise, any options, rights or remedies described
above, upon or as a consequence of a breach of contract by Chevron Transport
amounting to repudiation by Chevron Transport of the Initial Charter, the
related Owner may immediately require Chevron Transport to pay to such Owner
as liquidated damages for loss of a bargain and not as a penalty, an amount
equal to (i) the sum of (A) the applicable Stipulated Loss Value, (B) all
outstanding accrued and unpaid charterhire and (C) any other amounts due to
such Owner under the Initial Charter on or prior to the date of payment and
(ii) interest thereon (as well after as before judgment) at the Default Rate
from the date such amounts were payable to the actual date of payment.
Chevron Transport shall not be entitled to any part of the net proceeds of the
Vessel (if any) whether by way of rebate of charterhire or otherwise.
Redelivery
Unless a Vessel is a Total Loss or Chevron Transport purchases
such Vessel pursuant to the terms of the Initial Charter, Chevron Transport
shall at the termination of the Initial Charter redeliver the Vessel to the
related Owner at a safe and ice-free port or a place selected by Chevron
Transport within the Vessel's trading limits (within 10 steaming days from a
recognized loading area) or at such other safe port as shall be agreed between
Chevron Transport and the related Owner.
At or about the time of redelivery if the related Owner so
requires, a survey shall be made to determine the condition and fitness of the
Vessel, her machinery and equipment. In the event that such Vessel has been
dry-docked within 30 months prior to redelivery and Chevron Transport
certifies in writing that, to the best of its knowledge, the Vessel has had no
bottom touching since such dry-docking, such survey may be conducted while the
Vessel is afloat. The related Owner may require a divers' survey of the
Vessel. Chevron Transport shall bear all expenses of any such survey. Chevron
Transport shall at its expense make all such repairs and do all such work so
found to be necessary before redelivery or, at the related Owner's option,
shall discharge its obligations by payment of a sum sufficient to provide, at
the prices current at the time of redelivery, for the work and repairs
necessary to place the Vessel in the required structure, state and condition.
The Initial Charter Period shall be extended until the completion of any such
repairs and work found to be necessary or the payment of the amounts described
above. Each Vessel upon redelivery shall have her survey cycles up to date
and class certificates valid for at least six calendar months and Chevron
Transport shall ensure that Vessel shall have been dry-docked within 30 months
prior to redelivery.
Assignment and Sub-Charter
Chevron Transport may not assign all or part of its rights and
obligations under any Initial Charter nor may it charter the related Vessel by
demise to any other entity without the prior written consent of the related
Owner, such consent not to be unreasonably withheld, subject always to the
Vessel being maintained and insured to the same standards as are adopted by
Chevron Transport in respect of the vessels owned by it; provided, however,
that Chevron Transport may assign its rights and obligations under any Initial
Charter to a corporation more than 50% of which is owned directly or
indirectly by Chevron so long as Chevron Transport remains responsible as
principal for the due fulfillment of the Initial Charter. Chevron Transport
may otherwise charter the Vessel without the prior consent of the related
Owner provided that Chevron Transport remains responsible as principal (or
appoints another person to be responsible in its stead) for navigating and
managing the Vessel throughout the period of such charter and for defraying
all expenses in connection with the Vessel throughout such period or
substantially all such expenses other than those directly incidental to a
particular voyage or to the employment of the Vessel during that period.
For each Initial Charter, the related Owner may not transfer or
assign to any other person or entity all or part of its rights or obligations
under such Initial Charter, except to California Petroleum (which assignment
includes the reassignment by California Petroleum of such Initial Charter as
Collateral to the Collateral Trustee), unless such transferee or assignee also
assumes the obligations of such Owner under the related Security Documents and
Chevron Transport shall have given its prior written consent to such
assignment and assumption, which consent shall not be unreasonably withheld.
Indemnity
Pursuant to each Initial Charter, Chevron Transport will indemnify
the related Owner against the following:
(a) all costs and expenses of operating and maintaining the
related Vessel and of operating, maintaining and replacing all parts
including (but without prejudice to the generality of the foregoing) all
fuel, oil, port charges, fees, taxes, levies, fines, penalties, charges,
insurance premiums, victualing, crew, navigation, manning, operating and
freight expenses and all other outgoings whatsoever payable by the Owner
or Chevron Transport in respect of the possession or operation of a
Vessel or any part thereof, or the purchase, ownership, delivery,
chartering, possession and operation, import to or export from any
country, return, sale or disposition of such Vessel or any part thereof
or upon the hire, receipts or earnings arising therefrom (other than
Owner Taxes or documentation costs except as otherwise provided for in
the Initial Charter);
(b) all liabilities, claims, proceedings (whether civil or
criminal), penalties, fines or other sanctions, judgements, charges,
taxes, impositions, liens, salvage, general average, costs and expenses
whatsoever which may at any time be made or claimed by Chevron Transport
or any employee, servant, agent or sub-contractor, passenger, owner,
shipper, consignee, and receiver of goods or any third party (including
governments or other authorities) or by their respective dependents
arising directly or indirectly in any manner out of the design,
construction, possession, management, repair, certification, manning,
provisioning, supply or servicing of the Vessel (whether at sea or not)
or the chartering thereof under the Initial Charter whether such
liability, claims, proceedings, penalties, fines, sanctions, judgments,
charges, taxes, impositions, liens, salvage, general average, costs or
expenses may be attributable to any defect in such Vessel or the design,
construction, testing or use thereof from any maintenance, service,
repair, overhaul or otherwise and regardless of when or where the same
shall arise and whether or not such Vessel or the relevant part thereof
is in the possession or control of Chevron Transport (other than Owner
Taxes or documentation costs except as otherwise provided for in the
Initial Charter); and
(c) any and all losses, damages and expenses which Owner may
incur as a result of any oil or other pollution damage resulting from
Chevron Transport's operation of the Vessel under the Initial Charter,
including, but not limited to, such Owner's liability under OPA 90 or
the laws of any other jurisdiction relating to oil spills.
Chevron Transport's indemnity under each Initial Charter shall
extend to claims of persons (including governments or other bodies whether
corporate or otherwise) who have suffered or allege that they have suffered
loss, damage or injury in connection with any thing done or not done by a
Vessel, including in connection with any oil or other substance emanating or
threatening to emanate from such Vessel and shall extend to levies,
impositions, calls or contributions on or required to be made by the Owner
during or in respect of the Initial Charter Period.
Termination Options
Under each Initial Charter, Chevron Transport has the right to
terminate such Initial Charter on any of four, in case of the double-hulled
Vessels, or three, in the case of the single-hulled Vessel, termination dates
which, for each Vessel, occur at two-year intervals beginning in 2002, 2003,
2004 or 2005, as the case may be. Chevron Transport is required to give the
related Owner (i) non-binding notice of its intent to exercise such option,
determined on a good faith basis, at least 12 months prior to such termination
date and (ii) irrevocable notice of such exercise 9 months prior to such
termination date, if such termination date is the first of the termination
dates for such Vessel, or 7 months prior to such termination date, if such
termination date is subsequent to the first such termination date. Chevron
Transport is required to pay the Termination Payment to such Owner on or prior
to the termination date.
Purchase Option
On the Term Mortgage Notes Maturity Date, so long as the related
Initial Charter has not been terminated earlier and no Charter Event of
Default has occurred and is continuing and all payments due under such Initial
Charter have been paid in full, Chevron Transport shall have the right to
purchase the related Vessel at a purchase price equal to $1.00. Chevron
Transport is required to give the related Owner at least 90 days' prior
written notice of its election to so purchase the related Vessel.
Chevron Guarantee
Chevron will fully and unconditionally guarantee the due and
faithful performance by Chevron Transport under each Initial Charter of all of
Chevron Transport's liabilities and responsibilities thereunder and under any
supplement, amendment, change or modification thereof agreed to by Chevron
Transport.
Governing Law
Each Initial Charter shall be governed by and be construed in
accordance with the federal laws of the United States of America and the laws
of the State of New York.
Non-Disturbance
Each Initial Charter states that it shall always be subordinate to
the related Mortgage. Pursuant to the terms of each Initial Charter, each
Owner agrees that the related Mortgage and any other mortgage thereafter
placed on the Vessel by such Owner will contain a provision to the effect that
throughout the term of the related Initial Charter, so long as no Charter
Event of Default shall have occurred and be continuing and so long as Chevron
Transport shall have performed its obligations thereunder, the Initial
Charterer shall be entitled to the quiet enjoyment of the Vessel.
UNDERWRITING
The Underwriter has agreed, subject to the terms and conditions of
the Underwriting Agreement, to purchase $168,500,000 aggregate principal
amount of the Serial Mortgage Notes.
The Underwriting Agreement provides that the Underwriter will be
obligated to purchase all of the Serial Mortgage Notes offered hereby if any
are purchased.
The Underwriter has advised California Petroleum and Chevron that
the Underwriter proposes to offer the Serial Mortgage Notes to the public
initially at the Price to the Public set forth on the cover page of this
Prospectus and to certain dealers at such price less a concession not in
excess of $__ per Serial Mortgage Note. The Underwriter may allow, and such
dealers may reallow, a discount not in excess of $__ per Serial Mortgage Note
on sales to certain other dealers. After the initial public offering, the
Price to the Public and other selling terms may be changed by the Underwriter.
The Underwriter does not intend to confirm sales to any account over which
they exercise discretionary authority.
In the Underwriting Agreement, the Owners have agreed, jointly and
severally, and Chevron has separately agreed, to indemnify the Underwriter,
and the Underwriter has agreed to indemnify each of the foregoing parties
against certain liabilities, including liabilities under the Securities Act.
Concurrently with the offering of the Serial Mortgage Notes,
California Petroleum is offering for sale to the public pursuant to a separate
prospectus $117,900,000 aggregate principal amount of ___% First Preferred
Mortgage Notes Due 2014. The consummation of the sale of the Serial Mortgage
Notes is dependent on the consummation of the sale of the Term Mortgage Notes.
See "Certain Relationships and Transactions--The Management
Agreements" for a discussion of certain services to be provided by the
Underwriter at the end of any Initial Charter Period.
LEGAL MATTERS
Certain legal matters in connection with the securities offered
hereby will be passed upon for California Petroleum by Ropes & Gray, Boston,
Massachusetts and Thacher Proffitt & Wood, New York, New York. Certain legal
matters will be passed upon for the Owners by Thacher Proffitt & Wood, New
York, New York. Certain legal matters will be passed upon for CalPetro
Bahamas I, CalPetro Bahamas II and CalPetro Bahamas III by McKinney,
Bancroft & Hughes, Nassau, Bahamas, with respect to Bahamas law. Certain
legal matters will be passed upon for CalPetro IOM by Cains, Douglas,
Isle of Man, with respect to Isle of Man law.
Certain legal matters will be passed upon for Chevron and
Chevron Transport by Pillsbury Madison & Sutro, San Francisco, California.
Certain legal matters will be passed upon for the Underwriter by Davis Polk &
Wardwell, New York, New York.
EXPERTS
The financial statements of California Petroleum as of September
30, 1994, included in this Prospectus, have been so included in reliance on
the report of Price Waterhouse LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting. The financial
statements of the Owners as of September 30, 1994, included in this
Prospectus, have been so included in reliance on the reports of Price
Waterhouse, chartered accountants, and are given on the authority of said firm
as experts in auditing and accounting.
The financial statements of Chevron incorporated in this
Prospectus by reference to Chevron's Annual Report on Form 10-K for the year
ended December 31, 1993 have been audited by Price Waterhouse LLP, independent
accountants. The financial statements of the Caltex Group of Companies
incorporated in this Prospectus by reference to Chevron's Annual Report on
Form 10-K for the year ended December 31, 1993 have been audited by KPMG Peat
Marwick LLP, independent accountants. Such financial statements have been so
incorporated in reliance on the reports of the respective independent
accountants given on the authority of such firms as experts in auditing and
accounting.
INDEX TO FINANCIAL STATEMENTS
California Petroleum Transport Corporation
Page
----
Report of Independent Accountants................................ F-2
Balance Sheet at September 30, 1994
Note to the Balance Sheet........................................ F-3
Unaudited Combined Balance Sheet of Owners at September 30, 1994. F-4
CalPetro Tankers (Bahamas I) Limited
Report of Independent Accountants................................ F-5
Balance Sheet at September 30, 1994
Note to the Balance Sheet........................................ F-7
CalPetro Tankers (Bahamas II) Limited
Report of Independent Accountants................................ F-8
Balance Sheet at September 30, 1994
Note to the Balance Sheet........................................ F-10
CalPetro Tankers (IOM) Limited
Report of Independent Accountants................................ F-11
Balance Sheet at September 30, 1994
Note to the Balance Sheet........................................ F-13
CalPetro Tankers (Bahamas III) Limited
Report of Independent Accountants................................ F-14
Balance Sheet at September 30, 1994
Note to the Balance Sheet........................................ F-16
The Owners' Pro Forma Condensed Combined Financial Data............. F-17
Report of Independent Accountants
October 24, 1994
To the Board of Directors and Shareholders
of California Petroleum Transport Corporation
In our opinion, the accompanying balance sheet presents fairly, in all
materials respects, the financial position of California Petroleum Transport
Corporation at September 30, 1994, in conformity with generally accepted
accounting principles. This financial statement is the responsibility of the
Company's management; our responsibility is to express an opinion on this
financial statement based on our audit. We conducted our audit of this
statement in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statement is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.
/s/ Price Waterhouse
PRICE WATERHOUSE
Boston, Massachusetts
CALIFORNIA PETROLEUM TRANSPORT CORPORATION
BALANCE SHEET
Assets SEPTEMBER 30, 1994
Current Assets
Cash $1,000
------
Total Assets $1,000
======
Stockholders' Equity
Common Stock; 1,000 shares authorized,
issued and outstanding $1,000
------
Stockholders' Equity $1,000
======
Note to the Balance Sheet:
California Petroleum Transport Corporation (the "Company") was incorporated as
a Delaware company on May 18, 1994, and has had no operations since that date.
THE OWNERS
UNAUDITED COMBINED BALANCE SHEET AS AT 30 SEPTEMBER 1994
Assets
Cash $1,300
------
Total Assets $1,300
======
Total Shareholders' Equity $1,300
======
Notes to the combined balance sheet
The combined balance sheet represents the aggregated assets and shareholders
equity of the following companies (the "Owners"):
Calpetro Tankers (IOM) Limited
Calpetro Tankers (Bahamas I) Limited
Calpetro Tankers (Bahamas II) Limited
Calpetro Tankers (Bahamas III) Limited
The above companies were incorporated as follows:
Calpetro Tankers (IOM) Limited was incorporated as an Isle of Man company on
13 May 1994 and has had no operations since that date. The Company is a
wholly owned subsidiary of California Tankers Investments Limited, a company
incorporated under the laws of the Bahamas.
Calpetro Tankers (Bahamas I) Limited was incorporated as a Bahamian company on
13 May 1994 and has had no operations since that date. The Company is a
wholly owned subsidiary of California Tankers Investments Limited, a company
incorporated under the laws of the Bahamas.
Calpetro Tankers (Bahamas II) Limited was incorporated as a Bahamian company
on 13 May 1994 and has had no operations since that date. The Company is a
wholly owned subsidiary of California Tankers Investments Limited, a company
incorporated under the laws of the Bahamas.
Calpetro Tankers (Bahamas III) Limited was incorporated as a Bahamian company
on 13 May 1994 and has had no operations since that date. The Company is a
wholly owned subsidiary of California Tankers Investments Limited, a company
incorporated under the laws of the Bahamas.
AUDITORS' REPORT TO THE DIRECTORS OF
CALPETRO TANKERS (BAHAMAS I) LIMITED
We have audited the balance sheet and accompanying note of Calpetro Tankers
(Bahamas I) Limited at 30 September 1994 which have been prepared under the
historical cost convention.
Respective responsibilities of directors and auditors
It is the directors' responsibility to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the
company and of the profit and loss of the company for that period. In
preparing those financial statements, it is the directors' responsibility to:
bullet select suitable accounting policies and then apply them consistently;
bullet make judgments and estimates that are reasonable and prudent;
bullet prepare the financial statements on the going concern basis;
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company. They are also responsible for safeguarding the assets of the company
and hence for taking reasonable steps for the prevention and detection of fraud
and other irregularities.
It is our responsibility to form an independent opinion, based on our audit,
on those statements and to report our opinion to you.
Basis of opinion
We conducted our audit in accordance with Auditing Standards issued by the
Auditing Practices Board in the United Kingdom. An audit includes
examination, on a test basis, of evidence relevant to the amounts and
disclosures in the financial statements. It also includes an assessment of
the significant estimates and judgments made by the directors in the
preparation of the financial statements, and of whether the accounting
policies are appropriate to the company's circumstances, consistently applied
and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the balance sheet and
accompanying note are free from material misstatement, whether caused by fraud
or other irregularity or error. In forming our opinion we also evaluated the
overall adequacy of the presentation of information in the balance sheet and
accompanying note.
Opinion
In our opinion the balance sheet and accompanying note give a true and fair
view of the state of the company's affairs as at 30 September 1994.
/s/ Price Waterhouse
Price Waterhouse 28 October 1994
Chartered Accountants
Douglas
Isle of Man
CALPETRO TANKERS (BAHAMAS I) LIMITED
BALANCE SHEET AS AT 30 SEPTEMBER 1994
Assets
Cash $100
----
Total assets $100
====
Shareholders' Equity
Unclassified stock of $1 par value
Authorised - 1,000 shares
Issued - 100 shares $100
====
Total Shareholders' Equity $100
====
See accompanying note to the balance sheet
Note to the balance sheet
Incorporation of the company
Calpetro Tankers (Bahamas I) Limited was incorporated as a Bahamian company of
13 May 1994 and has had no operations since that date. The company is a
wholly owned subsidiary of California Tankers Investments Limited, a company
incorporated under the laws of the Bahamas.
___________________________
Director
28 October 1994
AUDITORS' REPORT TO THE DIRECTORS OF
CALPETRO TANKERS (BAHAMAS II) LIMITED
We have audited the balance sheet and accompanying note of Calpetro Tankers
(Bahamas II) Limited at 30 September 1994 which have been prepared under the
historical cost convention.
Respective responsibilities of directors and auditors
It is the directors' responsibility to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the
company and of the profit and loss of the company for that period. In
preparing those financial statements, it is the directors' responsibility to:
bullet select suitable accounting policies and then apply them consistently;
bullet make judgments and estimates that are reasonable and prudent;
bullet prepare the financial statements on the going concern basis;
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company. They are also responsible for safeguarding the assets of the company
and hence for taking reasonable steps for the prevention and detection of fraud
and other irregularities.
It is our responsibility to form an independent opinion, based on our audit,
on those statements and to report our opinion to you.
Basis of opinion
We conducted our audit in accordance with Auditing Standards issued by the
Auditing Practices Board in the United Kingdom. An audit includes
examination, on a test basis, of evidence relevant to the amounts and
disclosures in the financial statements. It also includes an assessment of
the significant estimates and judgments made by the directors in the
preparation of the financial statements, and of whether the accounting
policies are appropriate to the company's circumstances, consistently applied
and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the balance sheet and
accompanying note are free from material misstatement, whether caused by fraud
or other irregularity or error. In forming our opinion we also evaluated the
overall adequacy of the presentation of information in the balance sheet and
accompanying note.
Opinion
In our opinion the balance sheet and accompanying note give a true and fair
view of the state of the company's affairs as at 30 September 1994.
/s/ Price Waterhouse
Price Waterhouse 28 October 1994
Chartered Accountants
Douglas
Isle of Man
CALPETRO TANKERS (BAHAMAS II) LIMITED
BALANCE SHEET AS AT 30 SEPTEMBER 1994
Assets
Cash $100
----
Total assets $100
====
Shareholders' Equity
Unclassified stock of $1 par value
Authorised - 1,000 shares
Issued - 100 shares $100
====
Total Shareholders' Equity $100
====
See accompanying note to the balance sheet
Note to the balance sheet
Incorporation of the company
Calpetro Tankers (Bahamas II) Limited was incorporated as a Bahamian company
of 13 May 1994 and has had no operations since that date. The company is a
wholly owned subsidiary of California Tankers Investments Limited, a company
incorporated under the laws of the Bahamas.
___________________________
Director
28 October 1994
AUDITORS' REPORT TO THE DIRECTORS OF
CALPETRO TANKERS (IOM) LIMITED
We have audited the balance sheet and accompanying note of Calpetro Tankers
(IOM) Limited at 30 September 1994 which have been prepared under the
historical cost convention.
Respective responsibilities of directors and auditors
Company law requires the directors to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the
company and of the profit and loss of the company for that period. In
preparing those financial statements, the directors are required to:
bullet select suitable accounting policies and then apply them consistently;
bullet make judgments and estimates that are reasonable and prudent;
bullet prepare the financial statements on the going concern basis;
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company and to enable them to ensure that the financial statements comply with
the Isle of Man Companies Acts 1931 to 1993. They are also responsible for
safeguarding the assets of the company and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
It is our responsibility to form an independent opinion, based on our audit,
on those statements and to report our opinion to you.
Basis of opinion
We conducted our audit in accordance with Auditing Standards issued by the
Auditing Practices Board in the United Kingdom. An audit includes
examination, on a test basis, of evidence relevant to the amounts and
disclosures in the financial statements. It also includes an assessment of
the significant estimates and judgments made by the directors in the
preparation of the financial statements, and of whether the accounting
policies are appropriate to the company's circumstances, consistently applied
and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the balance sheet and
accompanying note are free from material misstatement, whether caused by fraud
or other irregularity or error. In forming our opinion we also evaluated the
overall adequacy of the presentation of information in the balance sheet and
accompanying note.
Opinion
In our opinion the balance sheet and accompanying note give a true and fair
view of the state of the company's affairs as at 30 September 1994 and have
been properly prepared in accordance with the Isle of Man Companies Acts 1931
to 1993.
/s/ Price Waterhouse
Price Waterhouse 28 October 1994
Chartered Accountants
Douglas
Isle of Man
CALPETRO TANKERS (IOM) LIMITED
BALANCE SHEET AS AT 30 SEPTEMBER 1994
Assets
Cash $1,000
------
Total assets $1,000
======
Shareholders' Equity
Unclassified stock of Pound Sterling1 (pound sterling)
Authorised - 2,000 shares
Issued - 2 shares $1,000
======
Total Shareholders' Equity $1,000
======
Note to the balance sheet
Incorporation of the company
Calpetro Tankers (IOM) Limited was incorporated as an Isle of Man company on
13 May 1994 and has had no operations since that date. The company is a
wholly owned subsidiary of California Tankers Investments Limited, a company
incorporated under the laws of the Bahamas.
___________________________
Director
___________________________
Director
28 October 1994
AUDITORS' REPORT TO THE DIRECTORS OF
CALPETRO TANKERS (BAHAMAS III) LIMITED
We have audited the balance sheet and accompanying note of Calpetro Tankers
(Bahamas III) Limited at 30 September 1994 which have been prepared under the
historical cost convention.
Respective responsibilities of directors and auditors
It is the directors' responsibility to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the
company and of the profit and loss of the company for that period. In
preparing those financial statements, it is the directors' responsibility to:
bullet select suitable accounting policies and then apply them consistently;
bullet make judgments and estimates that are reasonable and prudent;
bullet prepare the financial statements on the going concern basis;
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company. They are also responsible for safeguarding the assets of the company
and hence for taking reasonable steps for the prevention and detection of fraud
and other irregularities.
It is our responsibility to form an independent opinion, based on our audit,
on those statements and to report our opinion to you.
Basis of opinion
We conducted our audit in accordance with Auditing Standards issued by the
Auditing Practices Board in the United Kingdom. An audit includes
examination, on a test basis, of evidence relevant to the amounts and
disclosures in the financial statements. It also includes an assessment of
the significant estimates and judgments made by the directors in the
preparation of the financial statements, and of whether the accounting
policies are appropriate to the company's circumstances, consistently applied
and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the balance sheet and
accompanying note are free from material misstatement, whether caused by fraud
or other irregularity or error. In forming our opinion we also evaluated the
overall adequacy of the presentation of information in the balance sheet and
accompanying note.
Opinion
In our opinion the balance sheet and accompanying note give a true and fair
view of the state of the company's affairs as at 30 September 1994.
/s/ Price Waterhouse
Price Waterhouse 28 October 1994
Chartered Accountants
Douglas
Isle of Man
CALPETRO TANKERS (BAHAMAS III) LIMITED
BALANCE SHEET AS AT 30 SEPTEMBER 1994
Assets
Cash $100
----
Total assets $100
====
Shareholders Equity
Unclassified stock of $1 par value
Authorised - 1,000 shares
Issued - 100 shares $100
====
Total Shareholders' Equity $100
====
See accompanying note to the balance sheet
Note to the balance sheet
Incorporation of the company
Calpetro Tankers (Bahamas III) Limited was incorporated as a Bahamian company
of 13 May 1994 and has had no operations since that date. The company is a
wholly owned subsidiary of California Tankers Investments Limited, a company
incorporated under the laws of the Bahamas.
___________________________
Director
28 October 1994
THE OWNERS
PRO FORMA CONDENSED COMBINED FINANCIAL DATA
The following pro forma condensed combined financial data presents pro forma
financial data for each of the four vessel owners, CalPetro Tankers (Bahamas
I) Limited, CalPetro Tankers (Bahamas II) Limited, CalPetro Tankers (IOM)
Limited and CalPetro Tankers (Bahamas III) Limited (the "Owners").
The following unaudited pro forma condensed combined income statement for the
nine months ended September 30, 1994 gives effect to the transaction as if it
had occurred on January 1, 1994, the beginning of the Company's fiscal year.
The unaudited pro forma financial data are based on the assumptions and
adjustments described in the accompanying notes. The unaudited pro forma
condensed combined income statement does not purport to represent what the
Company's results of operations actually would have been if the transaction
had occurred as of the dates indicated or what such results will be for any
future periods. The following unaudited pro forma condensed combined balance
sheet at September 30, 1994 was prepared as if the transaction had occurred on
such date. The unaudited pro forma financial data are based upon assumptions
that the Company believes are reasonable and should be read in conjunction with
the Financial Statements and accompanying notes thereto included elsewhere in
this Prospectus.
THE OWNERS
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
SEPTEMBER 30, 1994
Pro Forma Adjustments
Combined Combined
Historical Bahamas I Bahamas II IOM Bahamas III Pro Forma
---------- -------------- ------------- ---------------- ------------------ ------------
Assets
Current assets
Cash $ 1,300 $ $ $ $ $ 1,300
Current portion
of net investment in
direct financing leases 11,576,000(A) 11,544,000(A) 11,516,000(A) 5,698,000(A) 40,334,000
---------- -------------- -------------- ---------------- -------------- ------------
Total current assets 1,300 11,576,000 11,544,000 11,516,000 5,698,000 40,335,300
Net investment in
direct financing leases 70,366,000(A) 70,398,000(A) 70,426,000(A) 34,876,000(A) 246,066,000
---------- -------------- -------------- ---------------- -------------- ------------
Total assets $1,300 $81,942,000 $81,942,000 $81,942,000 $40,574,000 $286,401,300
========== ============== ============== ================ ============== ============
Liabilities and
shareholders' equity
Current Liabilities
Current portion of
serial loans $ $ 5,210,000(B) $ 5,210,000(B) $ 5,210,000(B) $ 2,530,000(B) $ 18,160,000
---------- -------------- -------------- -------------- -------------- ------------
Total current
liabilities 5,210,000 5,210,000 5,210,000 2,530,000 18,160,000
Term loans 40,262,000(B) 35,052,000(B) 29,842,000(B) 12,744,000(B) 117,900,000
Serial loans 36,470,000(B) 41,680,000(B) 46,890,000(B) 25,300,000(B) 150,340,000
---------- -------------- -------------- -------------- -------------- ------------
Total liabilities 81,942,000 81,942,000 81,942,000 $40,574,000 $286,400,000
Shareholders' equity
Common stock issued 1,300 1,300
---------- -------------- -------------- -------------- -------------- ------------
Total shareholders' equity 1,300 1,300
---------- -------------- -------------- -------------- -------------- ------------
Total liabilities and
shareholders' equity $ 1,300 $81,942,000 $81,942,000 $81,942,000 $40,574,000 $286,401,300
========== ============= ============== ============== ============== ============
THE OWNERS
UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENT
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994
Pro Forma Adjustments
Combined Combined
Historical Bahamas I Bahamas II IOM Bahamas III Pro Forma
---------- -------------- -------------- -------------- -------------- ------------
Income from direct
financing leases $ - $ 181,636(C) $ 173,615(C) $ 165,532(C) $ 98,920(C) $ 619,703
Operating costs
and expenses
Ship expenses - 75,000(D) 75,000(D) 75,000(D) 75,000(D) 300,000
---------- -------------- -------------- -------------- -------------- ------------
Income from operations - 106,636 98,615 90,532 23,920 319,703
Interest income - 4,871,517(E) 4,859,732(E) 4,847,683(E) 2,427,884(E) 17,006,816
Interest expense - (4,970,173)(F) (4,951,233)(F) (4,934,981)(F) (2,441,061)(F) (17,297,448)
---------- ------------- -------------- -------------- -------------- ------------
Net income $ - $ 7,980 $ 7,114 $ 3,234 $ 10,743 $ 29,071
========== ============ ============== ============== ============== ============
THE OWNERS
NOTES TO THE PRO FORMA CONDENSED COMBINED FINANCIAL DATA
Pro forma adjustments are made to reflect:
(A) Represents the net investment value of the direct financing leases.
Proceeds from the borrowings discussed in (B) are used to purchase four oil
tankers, one tanker purchase by each of the four vessel owners. The
purchased tankers are then leased to Chevron Transport Corporation. The
leases between the four vessel owners, CalPetro Tankers (Bahamas I)
Limited, CalPetro Tankers (Bahamas II) Limited, CalPetro Tankers (Bahamas
III) Limited and CalPetro Tankers (IOM) Limited and Chevron Transport
Corporation contain bargain purchase options and as such are recorded as
direct financing leases in accordance with Financial Accounting Standards
No. 13.
(B) Represents the borrowings by each of the four vessel owners. The term
loans bear interest at an assumed rate of 8.62% per annum. The serial
loans bear interest at assumed rates ranging from 6.25% to 8.28% through
maturity. Principal will be payable on the term notes in accordance with
a sinking fund schedule commencing in 2003 and continuing through 2014, the
maturity date. Serial notes will mature beginning in 1995 and continuing
through 2005. Interest is assumed to be payable semi-annually on July 1
and January 1 of each year.
(C) Represents the amortization of unearned income in accordance with
Financial Accounting Standards No. 13.
(D) Represents management's estimate of ship expenses which include tonnage
taxes, ship registration fees, accounting fees and other general and
administrative expenses including the reimbursement of general and
administrative expenses of California Petroleum Transport Corporation.
(E) Represents the following components of assumed interest income:
Bahamas I Bahamas II IOM Bahamas III
---------- ---------- ---------- ----------
Interest income relating $4,839,357 $4,827,572 $4,815,523 $2,412,267
to the direct financing
leases recorded in
accordance with Financial
Accounting Standard No. 13
Interest income computed 32,160 32,160 32,160 15,617
on the expected excess cash
on hand during the period
---------- ---------- ---------- ----------
$4,871,517 $4,859,732 $4,847,683 $2,427,884
========== ========== ========== ==========
(F) Represents the following components of assumed interest expense:
Bahamas I Bahamas II IOM Bahamas III
---------- ---------- ---------- -----------
Interest on term loans
and serial loans $4,928,292 $4,910,317 $4,895,078 $2,421,215
Amortization of discount
on loans 41,881 40,916 39,903 19,846
---------- ---------- ---------- ----------
$4,970,173 $4,951,233 $4,934,981 $2,441,061
========== ========== ========== ==========
APPENDIX A
CERTAIN SHIPPING TERMS
The following shipping terms are used in this Prospectus.
"Bareboat charter" means the contract for hire of a ship for a
certain period of time during which the Charterer is responsible for the
operating costs and voyage costs of the ship. Sometimes called a demise
charter.
"Charter" means the hire of a ship for a specified period of time or
to carry a cargo for a fixed fee from a loading port to a discharging port.
The contract for a charter is called a charterparty.
"Classification society" means a private organization which has as
its purpose the supervision of vessels during their construction and
afterward, in respect to their seaworthiness and upkeep, and the placing of
vessels in grades or "classes" according to the society's rules for each
particular type of vessel.
"Double hull" means hull construction technique by which a ship has
an inner and outer hull separated by void space, usually several feet in width.
"dwt (Deadweight tonne)" means a unit of a vessel's capacity, for
cargo, fuel oil, stores and crew, measured in metric tonnes of 1,000
kilograms. A vessel's dwt or total deadweight is the total weight the vessel
can carry when loaded to a particular load line.
"Freight" means the compensation for carriage of cargo.
"Lay-up" means mooring a ship at a protected anchorage, shutting down
substantially all of its operating systems and taking measures to protect
against corrosion and other deterioration.
"OPA 90" means the United States Oil Pollution Act of 1990, as
amended.
"Protection and indemnity insurance" means the insurance obtained
through a mutual association formed by shipowners to provide protection from
financial loss to one member by contribution towards that loss by all members.
"Suezmax tanker" means a vessel of approximately 100,000 to 200,000
dwt, of a maximum length, breadth and draught capable of passing through the
Suez Canal.
"Tanker" means a ship designed for the carriage of liquid cargoes in
bulk, her cargo space consisting of many tanks. Tankers carry a variety of
products including crude oil, refined products, liquid chemicals and liquid
gas. Tankers load their cargo by gravity from the shore or by pumps and
discharge using their own pumps.
"Tonne" means a metric tonne of 1,000 kilograms.
"TOVALOP Scheme" means the Tankers Owners Voluntary Agreement
concerning Liability for Oil Pollution dated January 7, 1969, as amended.
"Voyage charter" means a contract of carriage in which the charterer
pays for the use of a ship's cargo capacity for one, or sometimes more than
one, voyage. Under this type of charter, the shipowner pays all the operating
costs of the ship (including bunkers, canal and port changes, pilotage, towage
and ship's agency) while payment for cargo handling charges are subject of
agreement between the parties. Freight is generally paid per unit of cargo,
such as a tonne, based on an agreed quantity, or as a lump sum irrespective of
the quantity loaded.
Shipping terms supplied by the Dictionary of Shipping Terms and other
sources.
GLOSSARY OF CERTAIN TERMS
The following is a glossary of certain terms used in this Prospectus.
The definitions of terms used in this glossary that are also used in the
Serial Indenture, the Initial Charters or the Mortgages are qualified in their
entirety by reference to the definition of such terms contained therein.
"Acceptable Replacement Charter" means any replacement charter which
satisfies each of the following requirements: (i) the charter is a bareboat
charter and requires that the charterer thereunder "gross up" charterhire
payments to indemnify and hold the holders of the Term Mortgage Notes harmless
from any withholding tax imposed on the charterhire payments or on the
payments of the Term Mortgage Notes, (ii) the charterhire payments payable
during the non-cancellable term of such replacement charter, after giving
effect to (1) any "gross up" of such amounts as a result of any withholding
tax on such charterhire payments, (2) the receipt of the Termination Payment
and (3) all fees and expenses incurred in connection with the recharter of the
Vessel, provide sufficient funds for the payment in full when due of (A) the
Allocated Principal Amount of the Term Mortgage Notes for the related Vessel
and interest thereon in accordance with the revised schedule of sinking fund
and principal payments, that is applicable upon termination of the related
Initial Charter, (B) the amount of Recurring Fees and Taxes for such Vessel
and the cost of insurance not maintained by the charterer under such charter,
(C) the amount of Management Fees and Technical Advisor's Fees for such
Vessel, (D) the amount of fees and expenses of the Indenture Trustee and
Collateral Trustee allocable to such Vessel and (E) an amount at least equal
to 30% of the estimated amounts, on a per annum basis, referred to in clauses
(B), (C) and (D) above for miscellaneous or unexpected expenses and (iii) the
Rating Agencies shall have confirmed in writing to the Indenture Trustee that
the terms and conditions of such proposed charter will not result in the
withdrawal or reduction of the then current ratings of the Term Mortgage Notes.
"Acquisition Loans" means, for any Owner, the Term Loan and Serial
Loans by California Petroleum to such Owner.
"Allocated Principal Amount of the Serial Mortgage Notes" means, when
used with reference to the Serial Mortgage Notes relating to any Vessel at any
time, an aggregate principal amount of outstanding Serial Mortgage Notes equal
to the aggregate principal amount of Serial Loans of the related Owner then
outstanding.
"Allocated Principal Amount of the Term Mortgage Notes" means, when
used with reference to the Term Mortgage Notes relating to any Vessel at any
time, an aggregate principal amount of outstanding Term Mortgage Notes equal
to the aggregate principal amount of the Term Loans of the related Owner then
outstanding.
"Allowable Investments" means for each Owner, its investment in the
related Vessel, and in each case, any Restricted Payment permitted to be made
by such Owner or California Petroleum and certain obligations incurred in the
ordinary course of the performance of the Management Agreement.
"Casualty Account" means the account established and maintained by
the Collateral Trustee into which any insurance proceeds or other payments in
connection with the occurrence of a Total Loss to any Vessel shall be
deposited in accordance with the related Mortgage.
"Charter Event of Default" means, for each Initial Charter, each of
the events designated as an event of default in such Initial Charter. For a
description of certain events constituting Charter Events of Default, see "The
Initial Charters--Charter Events of Default."
"Chevron" means Chevron Corporation, a Delaware corporation.
"Chevron Transport" means Chevron Transport Corporation, a Liberian
corporation.
"Chevron Guarantee" means for each Initial Charter, the guarantee of
the obligations of Chevron Transport thereunder given by Chevron.
"Collateral" shall have the meaning set forth in "Description of the
Notes--Security."
"Collateral Account" means the account established and maintained by
the Collateral Trustee into which the Collateral Trustee will deposit (i) any
proceeds received upon exercise of remedies with respect to the Collateral,
(ii) other amounts, with certain exceptions, received with respect to the
Collateral after receipt of an Enforcement Notice and (iii) any other amount
received by the Collateral Trustee pursuant to any of the Security Documents
for which the Collateral Agreement does not specify another Trust Account into
which such amount is to be deposited.
"Collateral Agreement" means the collateral trust agreement among the
Collateral Trustee, California Petroleum, the Indenture Trustee under the Term
Indenture and the Indenture Trustee under the Serial Indenture, pursuant to
which California Petroleum assigns and pledges to the Collateral Trustee all
of its right, title and interest in the Collateral for the benefit of the
holders of the Term Mortgage Notes and the Holders of the Serial Mortgage
Notes.
"Collateral Trustee" means Chemical Trust Company of California, not
in its individual capacity but solely as Collateral Trustee under the
Collateral Agreement.
"Compulsory Acquisition" means requisition for title or other
compulsory acquisition of any Vessel (otherwise than by requisition for hire),
capture, seizure, condemnation, destruction, detention or confiscation of such
Vessel by any government or by persons acting or purporting to act on behalf
of any governmental authority.
"Default Period" means the period commencing on the due date of the
charterhire payment until such payment shall be paid in full.
"Default Rate" means a rate per annum for each day during the Default
Period until such payment shall be paid in full equal to 1.50% above LIBOR at
the commencement of such period.
"DTC" means The Depository Trust Company.
"Enforcement Notice" means a notice of an Indenture Event of Default
delivered to the Collateral Trustee and the Holders pursuant to the Serial
Indenture or the Term Indenture.
"Equity Account" means the account established and maintained by the
Collateral Trustee into which the Equity Remainder, if any, relating to each
Vessel will be deposited in accordance with the order of payments on each
Equity Transfer Date.
"Equity Remainder" means, for any Vessel on the applicable Payment
Date for so long as the Initial Charter with respect to such Vessel remains
in effect, the positive difference, if any, between (a) $100,000 and (b)
the sum of (i) the Management Fee and the Technical Advisor's Fee for such
Vessel deposited into the Operating Account on such Payment Date and the
immediately preceding Payment Date plus (ii) the aggregate amount of
Recurring Fees and Taxes for such Vessel deposited into the Operating
Account on such Payment Date and the immediately preceding Payment Date.
On and after the termination of such Initial Charter, the "Equity Remainder"
for such Vessel on the applicable Payment Date shall be zero.
"Equity Transfer Date" means the Payment Date scheduled to occur on
_____ of each year, commencing _________, 1995.
"Holder" means the Person in whose name a Serial Mortgage Note is
registered in the securities register maintained by the Indenture Trustee.
"Indentures" means the Serial Indenture and the Term Indenture,
collectively.
"Indenture Event of Default" means each of the events designated as
an event of default under the Serial Indenture. For a description of certain
events constituting Indenture Events of Default, see "Description of the
Notes--Indenture Events of Default."
"Indenture Trustee" means Chemical Trust Company of California, not
in its individual capacity but solely as Indenture Trustee under the Serial
Indenture or the Term Indenture, or both, as the case may be.
"Initial Charter" means, for each Vessel, the bareboat charter
between the related Owner and Chevron Transport.
"Initial Charter Period" means for any Initial Charter the period
from the date of commencement of such Initial Charter to the expiration or
earlier termination of such Initial Charter pursuant to the terms and
conditions thereof.
"Initial Revenue Account" means, so long as the Serial Mortgage Notes
are outstanding, the account established and maintained by the Collateral
Trustee for deposits of charterhire payments by Chevron Transport under each
Initial Charter until the first optional termination date thereunder.
"LIBOR" means the rate calculated on the basis of the offered rates
for deposits in dollars for a month period which appear on the Reuters Screen
LIBO Page as of 11:00 A.M., London time, on the date that is two London
Banking Days preceding the date of calculation. If at least two such offered
rates appear on the Reuters Screen LIBO Page, LIBOR will be the arithmetic
mean of such offered rates (rounded to the nearest .0001 percentage point).
If, at any time of determination, the Reuters Screen LIBO Page is not
available, LIBOR will be calculated as the average (rounded upward, if
necessary, to the next higher 1/16 of 1%) of the respective ratio per annum at
which deposits in dollars for a one month period are offered to each of three
reference banks in the London interbank market at approximately 11:00 A.M.,
London time, on the date that is two London Banking Days preceding the date of
calculation. Each of Chevron Transport and the Collateral Trustee (as
assignee of the Owner) will select a reference bank and the third reference
bank will be selected by Chevron Transport and the Collateral Trustee together
or, failing agreement, by the previously selected reference banks together.
"Lien" means any mortgage, pledge, lien (statutory or other), charge,
encumbrance, lease, claim, security interest, hypothecation, assignment for
security, deposit arrangement or preference or other security agreement of any
kind or nature whatsoever.
"London Banking Day" means any day on which dealings in deposits in
United States dollars are carried on in the London interbank market and on
which commercial banks are open for domestic and international business
(including dealings in dollar deposits) in London and New York.
"Majority Noteholders" means the holders of a majority in aggregate
principal amount of the outstanding Notes.
"Majority Serial Noteholders" means the Holders of a majority in
aggregate principal amount of the outstanding Serial Mortgage Notes.
"Majority Term Noteholders" means the holders of a majority in
aggregate principal amount of the outstanding Term Mortgage Notes.
"Management Agreement" means, for each Owner, the management
agreement between such Owner, the Manager and Barber Ship Management.
"Management Fee" means the sum of (i) for each Vessel, an annual fee
payable to the Manager, semi-annually in arrears, which shall be an amount
equal to $16,000 per annum during the period from the Closing Date to the
third anniversary of the Closing Date plus (ii) a fee of $3,500 per annum,
payable annually in arrears, during such three-year period. Thereafter, the
Management Fee will be adjusted as provided in the Management Agreement.
"Manager" means P.D. Gram & Co. ans.
"Maturity Date" means, for any Serial Mortgage Notes, _______ of the
respective year of maturity.
"Mortgage" means, for each Vessel, the first preferred ship mortgage
on such Vessel granted by the related Owner to California Petroleum and
assigned by California Petroleum to the Collateral Trustee.
"Mortgage Event of Default" means, for any Mortgage, each of the
events designated as an event of default in such Mortgage. For a description
of certain events constituting Mortgage Events of Default, see "The
Mortgages--Mortgage Events of Default."
"Notes" means the Serial Mortgage Notes together with the Term
Mortgage Notes.
"Operating Account" means the account established and maintained by
the Collateral Trustee into which the Recurring Fees and Expenses, the
Management Fee and the Technical Advisor's Fee relating to each Vessel will be
deposited in accordance with the order of payments for the applicable Payment
Date.
"Owners" means, collectively, CalPetro Tankers (Bahamas I) Limited,
CalPetro Tankers (Bahamas II) Limited, CalPetro Tankers (IOM) Limited and
CalPetro Tankers (Bahamas III) Limited.
"Owner Taxes" means any income, franchise or equivalent tax, imposed
upon or measured by the net income, stated capital or earned surplus of an
Owner by any federal, state, local or other taxing authority of any
jurisdiction worldwide, or any tax imposed pursuant to Section 887 of the
United States Internal Revenue Code of 1986, as amended, or any taxes that
result from the willful misconduct or gross negligence of such Owner or from
the inaccuracy or breach of any representation, warranty or covenant of such
Owner contained in certain clauses of the related Initial Charter or in any
document furnished in connection with such clauses by such Owner, or any taxes
that would not have been imposed but for the failure of such Owner (a) to
provide to Chevron Transport (for filing by Chevron Transport with the taxing
jurisdiction imposing such taxes or retention in Chevron Transport's records)
upon Chevron Transport's timely request such certifications, information,
documentation or reports concerning such Owner's identity, jurisdiction of
incorporation or residency, or in connection with such taxing jurisdiction or
(b) to promptly file upon Chevron Transport's timely request such reports or
returns (which shall be prepared with reasonable care in accordance with
Chevron Transport's written instructions) claiming (or availing itself of) any
applicable extensions or exemptions (to the extent that timely notice thereof
is provided by Chevron Transport); provided that Owner Taxes shall not include
any such tax imposed on any amount that is (i) an indemnity or reimbursement
of an Owner, (ii) an operating or maintenance expense or (iii) a tax for which
Chevron Transport is otherwise liable under the related Initial Charter; and
provided further that Owner Taxes shall not include any such tax imposed by
any government, jurisdiction or taxing authority other than the United States
Federal government solely as a result of the location of the Vessel or the
Vessel's use by Chevron Transport.
"Payment Dates" means each _____ and _____, commencing ______, 1995.
"Permitted Indebtedness" means for each Owner, (i) the obligations
under such Owner's Acquisition Loans, (ii) certain trade payables and expense
accruals incurred in the ordinary course and (iii) other indebtedness
contemplated by the Loan Agreements or any other Security Document.
"Permitted Liens" means for each Owner, Liens created under the
related Mortgage and Security Documents, the Initial Charter for the related
Vessel and any Acceptable Replacement Charter or other charter for such Vessel
permitted under the Mortgage, Liens for crew's wages accrued for not more than
three months or for collision or salvage, Liens in favor of suppliers of
necessaries or other similar Liens arising in the ordinary course of its
business (accrued for not more than three months) or Liens for loss, damage or
expense, which are fully covered by insurance, in respect of which, a bond or
other security has been posted by the Owner with the appropriate court or
other tribunal to prevent the arrest or secure the release of any Vessel from
arrest on account of such claim or Lien; provided that, so long as the related
Initial Charter is in effect, "Permitted Liens" shall mean those Liens, claims
and encumbrances permitted under the Initial Charter.
"Rating Agencies" means Moody's Investors Service, Inc., Standard &
Poor's Rating Group and Duff & Phelps Credit Rating Co.
"Recurring Fees and Taxes" means, for any Vessel, any registration
fees and tonnage taxes necessary to maintain the documentation of the Vessel
under the laws of the registry or port of documentation of the Vessel, any
periodic fees necessary to maintain the corporate status of the related Owner,
any filing or other fees necessary to maintain the status of such Owner as a
reporting company under the Exchange Act and to comply with any covenants of
such Owner under the related Mortgage, any fees and expenses (including the
cost of insurance required by the related Mortgage and not maintained by
the charterer under the charter to which such Vessel is then subject)
necessary to comply with any covenants under the related Mortgage, any
other fees and expenses contemplated to be paid pursuant to the Management
Agreement which the Manager certifies to the Collateral Trustee are
qualified to be paid thereunder and any accounting or other professional
fees and other expenses, including any fees and expenses of the Rating
Agencies, incurred in connection with the foregoing. In addition, each
Owner's Recurring Fees and Taxes will include a pro rata portion of the
fees and expenses, including any accounting or other professional fees,
necessary to maintain the registration of the Notes under the Securities
Act, to maintain the corporate status of California Petroleum and the
status of California Petroleum as a reporting company (if necessary) under
the Exchange Act and to comply with any covenants under the Indenture or
the Collateral Agreement.
"Second Revenue Account" means the account established and maintained
by the Collateral Trustee for deposits of charterhire payments under an
Acceptable Replacement Charter, other charter or Initial Charter (if such
Initial Charter continues in effect after the Allocated Principal Amount of the
Serial Mortgage Notes relating to the related Vessel have been paid in full),
as the case may be.
"Security Documents" means, for each Vessel, the Collateral
Agreement, the Loan Agreements, the Mortgage, the Assignment of the Mortgage,
the Assignment of the Initial Charter Guarantee, the Collateral Assignment of
the Initial Charter Guarantee, the Assignment of Earnings and Insurances, the
Assignment of the Management Agreement, the Assignment of Initial Charter, the
Collateral Assignment of Initial Charter, the Stock Pledge, the Vessel
Purchase Agreement and any additional security agreement assignment or
mortgage document entered into by California Petroleum in connection with the
Indentures and the Notes or received by California Petroleum from the Owners in
connection with such Owner's Loan Agreements
"Serial Indenture" means the indenture among California Petroleum,
the Indenture Trustee and, solely for purposes of the Trust Indenture Act,
Chevron, pursuant to which the Serial Mortgage Notes will be issued.
"Serial Loan Agreement" means, for any Owner, one of two loan
agreements pursuant to which California Petroleum will loan to such Owner a
portion of the proceeds of the sale of the Notes.
"Serial Loans" means, for any Owner, the series of loans, each of
which will correspond in maturity date and interest rate with the Serial
Mortgage Notes of a specific maturity date, to and including the first
optional termination date for the related Initial Charter, made by California
Petroleum to such Owner under the related Serial Loan Agreement.
"Serial Mortgage Notes" means the Serial First Preferred Term
Mortgage Notes which will mature serially from ____, 1995 to ____, 2005 issued
in the initial aggregate amount of $168,500,000 concurrently with the offering
of the Term Mortgage Notes.
"Sinking Fund Reserve Account" means the account established and
maintained by the Collateral Trustee for deposits on each Payment Date that is
not a sinking fund redemption date or a date for the payment of principal on
the Term Mortgage Notes of an amount, if any, equal to one-half of the
aggregate sinking fund redemption amount or amount of principal due and
payable on the Term Mortgage Notes on the next succeeding Payment Date. Funds
deposited into the Sinking Fund Reserve Account on each applicable Payment
Date (1) if so directed by the Manager and if no Indenture Event of Default
has occurred and is continuing, will be used to purchase Term Mortgage Notes
in the open market provided that (a) the purchase price of such Term Mortgage
Notes is less than 100% of the principal amount thereof plus accrued and
unpaid interest to the date of such purchase and (b) such Term Mortgage Notes
are used to satisfy California Petroleum's sinking fund obligations on the
Term Mortgage Notes on the next succeeding Payment Date and (2) if not so used
as described in clause (1) above, will be used to satisfy, in part, California
Petroleum's sinking fund obligations on the Term Mortgage Notes on such
Payment Date.
"Stipulated Loss Value" means, for any Vessel on any date, the amount
specified in the related Initial Charter as the "Stipulated Loss Value" for
such date, which amount will be at least sufficient to redeem in full the
Allocated Principal Amount of Notes for such Vessel.
"Technical Advisor's Fee" means, for each Vessel, an annual fee
payable to Barber Ship Management, semi-annually in arrears, which shall be an
amount equal to $12,500 per annum during the period from the Closing Date to
the third anniversary of the Closing Date. Thereafter, the Technical
Advisor's Fee will be adjusted as provided in the Management Agreement.
"Term Indenture" means the indenture pursuant to which the Term
Mortgage Notes will be issued.
"Term Loan Agreement" means, for any Owner, one of two loan
agreements pursuant to which California Petroleum will loan to such Owner a
portion of the proceeds of the sale of the Notes.
"Term Loans" means, for any Owner, the loan made by California
Petroleum to such Owner under the related Term Loan Agreement, which will
accrue interest at the same rate as the Term Mortgage Notes, and upon which
payments of principal and interest will be scheduled to coincide with
principal Payment Dates for the Term Mortgage Notes.
"Term Mortgage Notes" means __% First Preferred Mortgage Notes Due
2014 issued in the initial aggregate amount of $117,900,000 by California
Petroleum concurrently with the offering of the Serial Mortgage Notes.
"Term Mortgage Notes Maturity Date" means _______, 2014.
"Termination Account" means the account established and maintained by
the Collateral Trustee for deposits of the Termination Payment payable under
the Initial Charter for such Owner's Vessel by Chevron Transport.
"Termination Payment" means the payment that Chevron Transport is
required to make pursuant to the applicable Initial Charter if Chevron
Transport elects to terminate the Initial Charter for any Vessel on a
specified termination date.
"Total Loss" means (a) an actual or constructive or comprised or
arranged total loss of a Vessel, (b) a Compulsory Acquisition of a Vessel or
(c) if so declared by Chevron Transport at any time and in its sole discretion
a requisition for hire of the Vessel for a period in excess of 180 days.
"Trust Accounts" means the Initial Revenue Account, the Second
Revenue Account, the Termination Account, the Operating Account, the Equity
Account, the Casualty Account, the Collateral Account and the Sinking Fund
Reserve Account which will be maintained by the Collateral Trustee as
collateral agent for the benefit of the holders of the Term Mortgage Notes and
the Holders of the Serial Mortgage Notes in accordance with the Collateral
Agreement.
"Trust Funds" means the funds deposited in the Trust Accounts.
"Vessels" means, collectively, the Suezmax-size tankers S. Ginn, C.
Rice, Chevron Mariner and W.E. Crain.
California Petroleum
Transport Corporation
Chevron Transport Corporation
Chevron Corporation
PART II
INFORMATION NOT REQUIRED
IN THE PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
Expenses in connection with the issuance and distribution of the
securities being registered, other than underwriting discounts and
commissions, are estimated as follows:
SEC registration fee............................. $58,103.86
Blue Sky and Legal Investment
fee and expenses............................... *
Printing and engraving expenses.................. *
Legal fees and expenses.......................... *
Rating Agency Fees............................... *
Accountants' fees and expenses................... *
Trustee's fees and expenses...................... *
Miscellaneous costs.............................. *
Total......................................... *
----------
$ *
==========
_____________
* To be filed by amendment.
All of these expenses will be paid by California Petroleum.
Item 14. Indemnification of Directors and Officers.
Chevron Transport
Article N of Chevron Transport's Certificate of Incorporation, as
amended, provides as follows:
"N. The Corporation shall indemnify its directors or officers, or
former directors or officers, or any person who may have served at its
request as a director or officer of another corporation in which it owns
shares of capital stock or of which it is a creditor, against expenses
actually and necessarily incurred by them in connection with the defense
of any action, suit or proceeding in which they, or any of them, are
made parties, or a party by reason of being or having been directors or
officers of the Corporation, except in relation to matters as to which
any such director or officer or person shall be adjudged in such action,
suit or proceeding to be liable for negligence or misconduct in
performance of duty. Such indemnification shall not be deemed exclusive
of any other rights to which those indemnified may be entitled, under
any by-law, agreement, vote of stockholders or otherwise."
Chevron Transport is a corporation organized under the laws of the
Republic of Liberia. Section 6.13 of the Liberian Business Corporation Act of
1976 provides that a Liberian corporation shall have the power to indemnify
any person who was or is a party or is threatened to made a party to any
threatened, pending or completed action, suit or proceeding whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that he is or was a director
or officer of the corporation, or is or was serving at the request of the
corporation as a director or officer of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding
if he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of no contest, or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. A Liberian corporation also has the power to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he
is or was a director or officer of the corporation, or is or was serving at
the request of the corporation as a director or officer of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him
or in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of its duty to the corporation unless and only
to the extent that the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expense which the court shall deem
proper.
To the extent that a director or officer of a Liberian corporation
has been successful on the merits or otherwise in defense of any action, suit
or proceeding referred to in the preceding paragraph, or in the defense of a
claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith. Expenses incurred in defending a civil or criminal
action, suit or proceeding may be paid in advance of the final disposition of
such action, suit or proceeding as authorized by the board of directors in the
specific case upon receipt of an undertaking by or on behalf of the director
or officer to repay such amount unless it shall ultimately be determined that
he is entitled to be indemnified by the corporation as authorized in this
section.
In addition, a Liberian corporation has the power to purchase and
maintain insurance on behalf of any person who is or was a director or officer
of the corporation or is or was serving at the request of the corporation as a
director or officer against any liability asserted against him and incurred
by him in such capacity whether or not the corporation would have the power to
indemnify him against such liability under the provisions of Section 6.13.
Chevron
Article IX of Chevron's restated Certificate of Incorporation
provides as follows:
"1. A director of the Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (a) for any breach of the director's
duty of loyalty to the Corporation or its stockholders; (b) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (c) pursuant to section 174 of the Corporation Law;
or (d) for any transaction from which the director derived an improper
personal benefit.
2. To the fullest extent authorized by the Corporation Law, the
Corporation shall indemnify any Corporate Servant who was or is a party or is
threatened to be made a party to any proceeding by reason of the fact that
such person was or is a Corporate Servant.
3. In serving or continuing to serve the Corporation, a Corporate
Servant is entitled to rely and shall be presumed to have relied on the rights
granted pursuant to the foregoing provisions of this Article IX, which shall
be enforceable as contract rights and inure to the benefit of heirs, executors
and administrators of the Corporate Servant; and no repeal or modification of
the foregoing provisions of this Article IX shall adversely affect any right
existing at the time of such repeal or modification.
4. The Board of Directors is authorized, to the extent permitted
by the Corporation Law, to cause the Corporation to pay expenses incurred by
Corporate Servants in defendant Proceedings and to purchase and maintain
insurance on their behalf whether or not the Corporation would have the power
to indemnify them under the provisions of this Article IX or otherwise.
5. Any right or privilege conferred by or pursuant to the
provisions of this Article IX shall not be exclusive of any other rights to
which any Corporate Servant may otherwise be entitled.
6. As used in this Article IX:
(a) 'Corporate Servant' means any natural person who is or
was a director, officer, employee or agent of the Corporation, or is or
was serving at the request of the Corporation as a director, officer,
manager, partner, trustee, employee or agent of another corporation,
partnership, joint venture, trust or other organization or enterprise,
nonprofit or otherwise, including an employee benefit plan;
(b) 'Corporation Law' means the General Corporation Law of
the State of Delaware, as from time to time amended;
(c) 'indemnify' means to hold harmless against expenses
(including attorneys' fees), judgments, fines (including excise taxes
assessed with respect to an employee benefit plan) and amounts paid in
settlement actually and reasonably incurred by the Corporate Servant in
connection with a Proceeding;
(d) 'Proceeding' means any threatened, pending or
completed action, suit or proceeding, whether civil, criminal or
administrative; and
(e) 'request of the Corporation' includes any written
authorization by an officer of the Corporation."
Section 145 of the General Corporation Law of the State of
Delaware, in which Chevron is incorporated, permits, subject to certain
conditions, the indemnification of directors or officers of a Delaware
corporation for expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement incurred in connection with the defense of any
action, suit or proceeding in relation to certain matters against them as such
directors or officers.
The directors and officers of Chevron are covered by policies of
insurance under which they are insured, within limits and subject to
limitations, against certain expenses in connection with the defense of
actions, suits or proceedings, and certain liabilities which might be imposed
as a result of such actions, suits or proceedings, in which they are parties
by reason of being or having been directors or officers; Chevron is similarly
insured with respect to certain payments it might be required to make to its
directors or officers under the applicable statutes and Chevron's by-law
provisions.
California Petroleum
California Petroleum is a corporation organized under the General
Corporation Law of the State of Delaware. Reference is made to Section 145 of
the Delaware General Corporation Law as to indemnification by California
Petroleum of officers and directors.
Section II of the Certificate of Incorporation of California
Petroleum provides for indemnification of directors and officers as follows:
"11. This corporation shall, to the maximum extent permitted
from time to time under the law of the State of Delaware,
indemnify and upon request shall advance expenses to any person
who is or was a party or is threatened to be made a party to any
threatened, pending or completed action, suit, proceeding or
claim, whether civil, criminal, administrative or investigative,
by reason of the fact that such person is or was or has agreed to
be a director or officer of this corporation or while a director
or officer is or was serving at the request of this corporation as
a director, officer, partner, trustee, employee or agent of any
corporation, partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, against
expenses (including attorney's fees and expenses), judgments,
fines, penalties and amounts paid in settlement incurred in
connection with the investigation, preparation to defend or
defense of such action, suit, proceeding or claim; provided,
however, that the foregoing shall not require this corporation to
indemnify or advance expenses to any person in connection with any
action, suit, proceeding, claim or counterclaim initiated by or on
behalf of such person. Such indemnification shall not be
exclusive of other indemnification rights arising under any by-law,
agreement, vote of directors or stockholders or otherwise and
shall inure to the benefit of the heirs and legal representatives
of such person. Any person seeking indemnification under this
paragraph 11 shall be deemed to have met the standard of conduct
required for such indemnification unless the contrary shall be
established. Any repeal or modification of the foregoing
provisions of this paragraph 11 shall not adversely affect any
right or protection of a director or officer of this corporation
with respect to any acts or omissions of such director or officer
occurring prior to such repeal or modification."
CalPetro Bahamas I, CalPetro Bahamas II and CalPetro Bahamas III
Each of CalPetro Bahamas I, CalPetro Bahamas II and CalPetro
Bahamas III is a company organized under the laws of the Commonwealth of the
Bahamas.
Section 7 of the International Business Act 1989 provides that "no
member, director, officer, agent or liquidator of a company incorporated under
this Act shall be liable for any debt, obligation or default of the company
unless it is proved that he did not act in good faith or unless it is
specifically provided in this Act or in any other law for the time being in
force in The Bahamas and except in so far as he may be liable for his own
conducts or acts".
Section 56 of the Act further states that:
"(1) Subject to subsection (2) and any limitation in its
Memorandum or Articles, a company incorporated under this Act may indemnify
against all expenses, including legal fees, and against all judgments, fines
and amounts paid in settlement and reasonably incurred in connection with
legal, administrative or investigative proceedings any person who:-
(a) is or was a party or is threatened to be made a party to any
threatened, pending or completed proceedings, whether civil, criminal,
administrative or investigative, by reason of the fact that the person
is or was a director, an officer or a liquidator of the company; or
(b) is or was, at the request of the company, serving as a
director, officer or liquidator of, or in any other capacity is or was
acting for, another company or a partnership, joint venture, trust or
other enterprise.
(2) Subsection (1) only applies to a person referred to in that
subsection if the person acted honestly and in good faith with a view to the
best interests of the company and, in the case of criminal proceedings, the
person had no reasonable cause to believe that his conduct was unlawful.
(3) The decision of the directors as to whether the person acted
honestly and in good faith and with a view to the best interests of the
company and as to whether the person has no reasonable cause to believe that
his conduct was unlawful is, in the absence of fraud, sufficient for the
purposes of this section, unless a question of law is involved.
(4) The termination of any proceedings by any judgment, order,
settlement, conviction or the entering of a nolle prosequi does not, by
itself, create a presumption that the person did not act honestly and in good
faith and with a view to the best interests of the company or that the person
had reasonable cause to believe that his conduct was unlawful.
(5) If a person referred to in subsection (1) has been successful
in defense of any proceedings referred to in subsection (1), the person is
entitled to be indemnified against all expenses, including legal fees, and
against all judgments, fines and amounts paid in settlement and reasonably
incurred by the person in connection with the proceedings."
Articles 90-95 of the Articles of Association of [CalPetro Bahamas
I] [CalPetro Bahamas II] [CalPetro Bahamas III] provides for indemnification
of directors and officers as follows:
"90. Subject to Article 91 the Company may indemnify against
all expenses including legal fees, and against all judgements,
fines and amounts paid in settlement and reasonably incurred in
connection with legal, administrative or investigative proceedings
any person who
(a) is or was a party or is threatened to be made a party
to any threatened, pending or completed proceedings,
whether civil, criminal, administrative or
investigative, by reason of the fact that the person
is or was a director, an officer or liquidator of the
Company; or
(b) is or was, at the request of the Company, serving as a
director, officer or liquidator of, or in any other
capacity is or was acting for, another company or a
partnership, joint venture, trust or other enterprise.
91. Article 90 only applies to a person referred to in that
Article if the person acted honestly and in good faith with a view
to the best interests of the Company and, in the case of criminal
proceedings, the person had no reasonable cause to believe that
his conduct was unlawful.
92. The decision of the directors as to whether the person
acted honestly and in good faith and with a view to the best
interest of the Company and as to whether the person had no
reasonable cause to believe that his conduct was unlawful, is in
the absence of fraud, sufficient for the purposes of these
Articles, unless a question of law is involved.
93. The termination of any proceedings by any judgement,
order, settlement, convictions or the entering of a nolle prosequi
does not, by itself, create a presumption that the person did not
act honestly and in good faith and with a view to the best
interest of the Company or that the person had reasonable cause to
believe that his conduct was unlawful.
94. If a person referred to in Article 90 has been
successful in defence of any proceedings referred to in that
Article the person is entitled to be indemnified against all
expenses, including legal fees, and against all judgements, fines
and amounts paid in settlement and reasonably incurred by the
person in connection with the proceedings.
95. The Company may purchase and maintain insurance in
relation to any person who is or was a director, an officer or a
liquidator of the Company, or who at the request of the Company is
or was serving as a director, an officer or a liquidator of, or in
any other capacity is or was acting for, another company or a
partnership, joint venture, trust or other enterprise, against any
liability asserted against the person and incurred by the person
in that capacity, whether or not the Company has or would have had
the power to indemnify the person against the liability under
Article 90."
CalPetro IOM
CalPetro Tankers (IOM) Limited is a corporation incorporated under
the laws of the Isle of Man. Section 151 of the Isle of Man Companies Act
1931 provides that any provision (whether contained in the articles of
association of the corporation or elsewhere) exempting any director, officer
or auditor (together "Officer") or indemnifying him against any liability
which would attach to him in relation to any negligence, default, breach of
duty or breach of trust is void. However, Section 151 also provides that an
Isle of Man corporation may indemnify any Officer against any liability
incurred by him in defending any proceedings, whether civil or criminal, in
which judgment is given in his favour or in which he is acquitted or in
connection with any application under Section 337 of the Companies Act 1931
in which relief is granted by the Court. Section 337 provides that if in any
proceedings for negligence, default, breach of duty or breach of trust against
any Officer it appears to the court hearing the case that that person is or
may be liable in respect of the negligence, default, breach of duty or breach
of trust, but that he has acted honestly and reasonably and that having regard
to all the circumstances of the case, including those connected with his
appointment, he ought fairly be excused, that court may relieve him either
wholly or partly from his liability on such terms as the court thinks fit.
Additionally, under Section 337, where any Officer has reason to believe that
any claim will or might be made against him, he may apply to court for relief
as if an action had already been brought against him.
An Isle of Man corporation has the power to purchase and maintain
insurance on behalf of an Officer against any liability alleged against him
for negligence, default, breach of duty or breach of trust.
Article 146 of the Articles of Association of CalPetro IOM
provides for indemnification of directors and officers as follows:
"146. Every director or other officer of the Company shall be
entitled to be indemnified out of the assets of the Company
against all losses or liabilities (including any such
liability as is mentioned in paragraph (c) of the proviso to
Section 151 of the Companies Act, 1931) which he may sustain
or incur in or about the execution of the duties of his
office or otherwise in relation thereto, and no director or
other officer shall be liable for any loss, damage or
misfortune which may happen to or be incurred by the Company
in the execution of the duties of his office or in relation
thereto, but this Article shall only have effect in so far
as its provisions are not avoided by the said section.
The directors may execute, in the name on or behalf of the
Company, in favour of any director or other person who may
incur or be about to incur any personal liability for the
benefit of the Company such debentures or mortgages of the
company's property (present and future) as they think fit,
and such mortgages may contain a power of sale and such
other powers, covenants and provisions as shall be agreed
upon."
The effectiveness of such article is subject to the provisions of
Section 151 of the Isle of Man Companies Act 1931 as set out above.
Item 15. Recent Sales of Unregistered Securities.
Not Applicable.
Item 16. Exhibits and Financial Statement Schedule.
(a) Exhibits
Exhibit
Number Description
------- ------------
1.1 Form of Underwriting Agreement*
3.1 Certificate of Incorporation of California Petroleum
Transport Corporation (filed as Exhibit 3.1 to
Registrant's Registration Statement on Form S-1,
Commission File Number 33-79220, and incorporated herein
by reference)
3.2 Bylaws of California Petroleum Transport Corporation
(filed as Exhibit 3.2 to Registrant's Registration
Statement on Form S-1, Commission File Number 33-79220,
and incorporated herein by reference)
3.3 Certificate of Incorporation and Memorandum of Association
of CalPetro Tankers (Bahamas I) Limited (filed as Exhibit
3.3 to Registrant's Registration Statement on Form F-1,
Commission File Number 33-79220, and incorporated herein
by reference)
3.4 Articles of Association of CalPetro Tankers (Bahamas I)
Limited (filed as Exhibit 3.4 to Registrant's Registration
Statement on Form F-1, Commission File Number 33-79220,
and incorporated herein by reference)
3.5 Certificate of Incorporation and Memorandum of Association
of CalPetro Tankers (Bahamas II) Limited (filed as Exhibit
3.5 to Registrant's Registration Statement on Form F-1,
Commission File Number 33-79220, and incorporated herein
by reference)
3.6 Articles of Association of CalPetro Tankers (Bahamas II)
Limited (filed as Exhibit 3.6 to Registrant's Registration
Statement on Form F-1, Commission File Number 33-79220,
and incorporated herein by reference)
3.7 Certificate of Incorporation of CalPetro Tankers (IOM)
Limited (filed as Exhibit 3.7 to Registrant's Registration
Statement on Form F-1, Commission File Number 33-79220,
and incorporated herein by reference)
3.8 Memorandum and Articles of Association of CalPetro Tankers
(IOM) Limited (filed as Exhibit 3.8 to Registrant's
Registration Statement on Form F-1, Commission File Number
33-79220, and incorporated herein by reference)
3.9 Certificate of Incorporation and Memorandum of Association
of CalPetro Tankers (Bahamas III) Limited (filed as
Exhibit 3.9 to Registrant's Registration Statement on Form
F-1, Commission File Number 33-79220, and incorporated
herein by reference)
3.10 Articles of Association of CalPetro Tankers (Bahamas III)
Limited (filed as Exhibit 3.10 to Registrant's
Registration Statement on Form F-1, Commission File Number
33-79220, and incorporated herein by reference)
4.1 Form of Serial Indenture between California Petroleum
Transport Company and Chemical Trust Company of
California, as Indenture Trustee
4.2 Form of Serial Mortgage Notes (included in Exhibit 4.1).
4.3 Form of First Preferred Ship Mortgage by CalPetro Tankers
(Bahamas III) Limited to California Petroleum Transport
Corporation (including the form of assignment of such
Mortgage to Chemical Trust Company of California, as
Collateral Trustee by California Petroleum Transport
Corporation)
4.4 Form of Bahamian Statutory Ship Mortgage and Deed of
Covenants by [CalPetro Tankers (Bahamas I) Limited]
[CalPetro Tankers (Bahamas II) Limited] to California
Petroleum Transport Corporation (including the form of
assignment of such Mortgage to Chemical Trust Company of
California, as Collateral Trustee by California Petroleum
Transport Corporation)
4.5 Form of Bermudian Statutory Ship Mortgage and Deed of
Covenants by CalPetro Tankers (IOM) Limited to California
Petroleum Transport Corporation (including the form of
assignment of such Mortgage to Chemical Trust Company of
California, as Collateral Trustee by California Petroleum
Transport Corporation)
4.6 Form of Stock Pledge Agreement
4.7 Form of Assignment of Initial Charter Guarantee by
[CalPetro Tankers (Bahamas I) Limited] [CalPetro Tankers
(Bahamas II) Limited] [CalPetro Tankers (IOM) Limited]
[CalPetro Tankers (Bahamas III) Limited] to California
Petroleum Transport Corporation (including the form of
Collateral Assignment of such Initial Charter Guarantee to
Chemical Trust Company of California, as Collateral
Trustee by California Petroleum Transport Corporation)
4.8 Form of Assignment of Earnings and Insurances from
[CalPetro Tankers (Bahamas I) Limited] [CalPetro Tankers
(Bahamas II) Limited] [CalPetro Tankers (IOM) Limited]
[CalPetro Tankers (Bahamas III) Limited] to California
Petroleum Transport Corporation
4.9 Form of Assignment of Initial Charter from [CalPetro
Tankers (Bahamas I) Limited] [CalPetro Tankers (Bahamas
II) Limited] [CalPetro Tankers (IOM) Limited] [CalPetro
Tankers (Bahamas III) Limited] to California Petroleum
Transport Corporation (including the form of Collateral
Assignment of such Initial Charter to Chemical Trust
Company of California, as Collateral Trustee by California
Petroleum Transport Corporation)
4.10 Form of Management Agreement between P.D. Gram & Co., and
[CalPetro Tankers (Bahamas I) Limited] [CalPetro Tankers
(Bahamas II) Limited] [CalPetro Tankers (IOM) Limited]
[CalPetro Tankers (Bahamas III) Limited]
4.11 Form of Assignment of Management Agreement from [CalPetro
Tankers (Bahamas I) Limited] [CalPetro Tankers (Bahamas
II) Limited] [CalPetro Tankers (IOM) Limited] [CalPetro
Tankers (Bahamas III) Limited] to California Petroleum
Transport Corporation
4.12 Form of Serial Loan Agreement between California Petroleum
Transport Corporation and [CalPetro Tankers (Bahamas I)
Limited] [CalPetro Tankers (Bahamas II) Limited]
[CalPetro Tankers (IOM) Limited] [CalPetro (Bahamas
III) Limited]
4.13 Form of Term Loan Agreement between California Petroleum
Transport Corporation and [CalPetro Tankers (Bahamas I)
Limited] [CalPetro Tankers (Bahamas II) Limited] [CalPetro
Tankers (IOM) Limited] [CalPetro (Bahamas III) Limited]
4.14 Form of Collateral Agreement between California Petroleum
Transport Corporation, the Indenture Trustee under the
Serial Indenture, the Indenture Trustee under the Term
Indenture and Chemical Trust Company of California, as
Collateral Trustee.
4.15 Form of Issue of One Debenture From [CalPetro Tankers
(Bahamas I) Limited] [CalPetro Tankers (Bahamas II)
Limited] [CalPetro Tankers (IOM) Limited] [CalPetro
Tankers (Bahamas III) Limited] to California Petroleum
Transport Corporation.
5.1 Opinion of Thacher Proffitt & Wood regarding the legality
of the Serial Mortgage Notes*
10.1 Form of Initial Charter Guarantee by Chevron Corporation
10.2 Form of Bareboat Charter between [CalPetro Tankers
(Bahamas I) Limited] [CalPetro Tankers (Bahamas II)
Limited] [CalPetro Tankers (IOM) Limited] [CalPetro
Tankers (Bahamas III) Limited] and Chevron Transport
Corporation
10.3 Form of Vessel Purchase Agreement between [CalPetro
Tankers (Bahamas I) Limited] [CalPetro Tankers (Bahamas
II) Limited] [CalPetro Tankers (IOM) Limited] [CalPetro
Tankers (Bahamas III) Limited] and Chevron Transport
Corporation (including the form of Assignment of such
Vessel Purchase Agreement to California Petroleum
Transport Corporation by [CalPetro Tankers (Bahamas I)
Limited] [CalPetro Tankers (Bahamas II) Limited] [CalPetro
Tankers (IOM) Limited] [CalPetro Tankers (Bahamas III)
Limited])
23.1 Consent of Thacher Proffitt & Wood (included in Exhibit
5.1)*
23.2 Consent of Price Waterhouse LLP, independent accountants,
for Form S-3
23.3 Consent of KPMG Peat Marwick LLP, independent accountants,
for Form S-3
23.4 Consent of Price Waterhouse LLP, independent accountants,
for Form S-1
23.5 Consent of Price Waterhouse, chartered accountants,
for Form F-1
23.6 Consent of McKinney, Bancroft & Hughes
23.7 Consent of Cains
24.1 Powers of Attorney for directors and certain officers of
Chevron Corporation
24.2 Powers of Attorney for directors and certain officers of
Chevron Transport Corporation (included on applicable
signature pages)
24.3 Powers of Attorney for directors and certain officers of
CalPetro Tankers (Bahamas I) Limited (included on
applicable signature pages)
24.4 Powers of Attorney for directors and certain officers of
CalPetro Tankers (Bahamas II) Limited (included on
applicable signature pages)
24.5 Powers of Attorney for directors and certain officers of
CalPetro Tankers (IOM) Limited (included on applicable
signature pages)
24.6 Powers of Attorney for directors and certain officers of
CalPetro Tankers (Bahamas III) Limited (included on
applicable signature pages)
24.7 Certified copy of resolutions of Chevron Corporation
authorizing signature pursuant to power of attorney
25.1 Statement of Eligibility on Form T-1 of Chemical Trust
Company of California, as Indenture Trustee
_____________
* To be filed by amendment.
(b) Financial Statement Schedules
All schedules for which provision is made in the applicable
accounting regulations of the commission are either not required, are
inapplicable or have been disclosed in the notes to the consolidated
financial statements and therefore have been omitted.
Item 17. Undertakings.
Insofar as indemnifications for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant or co-registrants pursuant to the foregoing
provisions or otherwise, the registrant and co-registrants have been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrants of
expenses incurred or paid by a director, officer or controlling person of the
registrant or co-registrants in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant or
co-registrants will, unless in the opinion of their respective counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
The undersigned registrants hereby undertake that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of the prospectus filed as
part of this registration statement in reliance upon Rule 430A and contained
in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Chevron Corporation hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
Chevron Corporation's annual report pursuant to Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
Chevron Corporation certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City and County of San Francisco, State of
California, on the 3rd day of November, 1994.
CHEVRON CORPORATION
/s/ Kenneth T. Derr
By _________________________
Kenneth T. Derr
Chairman of the Board and
Chief Executive Officer
/s/ Malcolm J. McAuley
*By_________________________
Malcolm J. McAuley
(Attorney-in-fact)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on the 3rd day of November, 1994:
Principal Executive Officers:
Signature Title
--------- -----
/s/ Kenneth T. Derr Chairman of the Board
________________________ and Director
Kenneth T. Derr
/s/ J. Dennis Bonney Vice-Chairman of the
________________________ Board and Director
J. Dennis Bonney
/s/ James N. Sullivan Vice-Chairman of the
________________________ Board and Director
James N. Sullivan
Principal Financial Officer:
/s/ Martin R. Klitten Vice-President, Finance
________________________
Martin R. Klitten
Principal Accounting Officer:
/s/ Donald G. Henderson Vice-President and
________________________ Comptroller
Donald G. Henderson
Directors:
/s/ Samuel H. Armacost
________________________
Samuel H. Armacost
/s/ Sam Ginn
________________________
Sam Ginn
/s/ Carla A. Hills
________________________
Carla A. Hills
/s/ Charles M. Pigott
________________________
Charles M. Pigott
/s/ Condoleezza Rice
________________________
Condoleezza Rice
/s/ S. Bruce Smart, Jr.
________________________
S. Bruce Smart, Jr.
/s/ George H. Weyerhaeuser
________________________
George H. Weyerhaeuser
/s/ John A. Young
________________________
John A. Young
*By /s/ Malcolm J. McAuley
______________________
Malcolm J. McAuley
(Attorney-in-Fact)
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Chevron
Transport Corporation certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Hamilton, Colony of Bermuda, on the
3rd day of November, 1994.
CHEVRON TRANSPORT CORPORATION
By /s/ J.C. Wilcox-Black
__________________________
J.C. Wilcox-Black
Secretary
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints G.R. Pitman, P.I. Martin and J.C.
Wilcox-Black and each of them acting alone, his true and lawful
attorneys-in-fact and agents, each with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments, including post-effective
amendments, to this Registration Statement, and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents and purposes
as he might or could do in person, hereby ratifying and confirming all that
each of said attorneys-in-fact and agents or their substitute or substitutes
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ G.R. Pitman President (Principal
________________________ Executive Officer),
G.R. Pitman Treasurer (Principal
Financial Officer),
and Director
/s/ P.I. Martin Vice-President
________________________ (Principal Accounting
P.I. Martin Officer) and Director
/s/ T.R. Moore
________________________
T.R. Moore Director
/s/ J.C. Wilcox-Black
________________________
J.C. Wilcox-Black Director
/s/ L.A. Gyorfi
________________________
L.A. Gyorfi Director
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement on Form S-1 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
city of Boston, State of Massachusetts, on the 3rd day of November, 1994.
CALIFORNIA PETROLEUM TRANSPORT CORPORATION
/s/ Nancy D. Smith
By:_________________________
Nancy D. Smith
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or amendment thereto has been signed by the following
persons in the capacities indicated on the 3rd day of November, 1994.
Signature Title
--------- -----
/s/ Nancy D. Smith President
________________________ (Principal Executive
Nancy D. Smith Officer) and Director
/s/ Louise E. Colby Secretary and Treasurer
________________________ (Principal Financial and
Louise E. Colby Accounting Accounting
Officer) and Director
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing a Form F-1 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Oslo, Republic of
Norway, on the 3rd day of November, 1994.
CalPetro Tankers (Bahamas I) Limited
/s/ Peter D. Gram
By:________________________
Peter D. Gram
President and Director
Each person whose signature appears below, constitutes and
appoints Charles A. Dietzgen and Maria M. Livanos, either of whom may act
without the joinder of the other, as his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for and in his or
her name, place and stead, in any and all capacities, to sign any or all
amendments or supplements (including post-effective amendments) to this
Registration Statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as might or could be done in person, hereby ratifying and confirming
all that said attorney-in-fact and agent, or his substitute or substitutes,
may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Peter D. Gram
________________________ President and Director
Peter D. Gram (Principal Executive,
Financial and Accounting
Officer)
/s/ Nancy D. Smith
________________________ Authorized Representative
Nancy D. Smith in the United States
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing a Form F-1 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Oslo, Republic of
Norway, on the 3rd day of November, 1994.
CalPetro Tankers (Bahamas II) Limited
/s/ Peter D. Gram
By: ________________________
Peter D. Gram
President and Director
Each person whose signature appears below, constitutes and appoints
Charles A. Dietzgen and Maria M. Livanos, either of whom may act without the
joinder of the other, as his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for and in his or her name,
place and stead, in any and all capacities, to sign any or all amendments or
supplements (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as might or could be done in person, hereby ratifying and confirming
all that said attorney-in-fact and agent, or his substitute or substitutes,
may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Peter D. Gram
________________________ President and Director
Peter D. Gram (Principal Executive,
Financial and Accounting
Officer)
/s/ Nancy D. Smith
________________________ Authorized Representative
Nancy D. Smith in the United States
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing a Form F-1 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Oslo, Republic of
Norway, on the 3rd day of November, 1994.
CalPetro Tankers (IOM) Limited
/s/ Peter D. Gram
By: ________________________
Peter D. Gram
Director
Each person whose signature appears below, constitutes and appoints
Charles A. Dietzgen and Maria M. Livanos, either of whom may act without the
joinder of the other, as his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for and in his or her name,
place and stead, in any and all capacities, to sign any or all amendments or
supplements (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as might or could be done in person, hereby ratifying and confirming
all that said attorney-in-fact and agent, or his substitute or substitutes,
may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Peter D. Gram
________________________ Director
Peter D. Gram (Principal Executive,
Financial and Accounting
Officer)
/s/ Bernard Galka
________________________ Director
Bernard Galka
/s/ Nancy D. Smith
________________________ Authorized Representative
Nancy D. Smith in the United States
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing a Form F-1 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Oslo, Republic of
Norway, on the 3rd day of November, 1994.
CalPetro Tankers (Bahamas III) Limited
/s/ Peter D. Gram
By: ________________________
Peter D. Gram
President and Director
Each person whose signature appears below, constitutes and appoints
Charles A. Dietzgen and Maria M. Livanos, either of whom may act without the
joinder of the other, as his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for and in his or her name,
place and stead, in any and all capacities, to sign any or all amendments or
supplements (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as might or could be done in person, hereby ratifying and confirming
all that said attorney-in-fact and agent, or his substitute or substitutes,
may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Peter D. Gram
________________________ President and Director
Peter D. Gram (Principal Executive,
Financial and Accounting
Officer)
/s/ Nancy D. Smith
________________________ Authorized Representative
Nancy D. Smith in the United States
EXHIBIT INDEX
Exhibit
No. Description
------- -----------
1.1 Form of Underwriting Agreement*
3.1 Certificate of Incorporation of California Petroleum
Transport Corporation (filed as Exhibit 3.1 to
Registrant's Registration Statement on Form S-1,
Commission File Number 33-79220, and incorporated herein
by reference)
3.2 Bylaws of California Petroleum Transport Corporation
(filed as Exhibit 3.2 to Registrant's Registration
Statement on Form S-1, Commission File Number 33-79220,
and incorporated herein by reference)
3.3 Certificate of Incorporation and Memorandum of Association
of CalPetro Tankers (Bahamas I) Limited (filed as Exhibit
3.3 to Registrant's Registration Statement on Form F-1,
Commission File Number 33-79220, and incorporated herein
by reference)
3.4 Articles of Association of CalPetro Tankers (Bahamas I)
Limited (filed as Exhibit 3.4 to Registrant's Registration
Statement on Form F-1, Commission File Number 33-79220,
and incorporated herein by reference)
3.5 Certificate of Incorporation and Memorandum of Association
of CalPetro Tankers (Bahamas II) Limited (filed as Exhibit
3.5 to Registrant's Registration Statement on Form F-1,
Commission File Number 33-79220, and incorporated herein
by reference)
3.6 Articles of Association of CalPetro Tankers (Bahamas II)
Limited (filed as Exhibit 3.6 to Registrant's Registration
Statement on Form F-1, Commission File Number 33-79220,
and incorporated herein by reference)
3.7 Certificate of Incorporation of CalPetro Tankers (IOM)
Limited (filed as Exhibit 3.7 to Registrant's Registration
Statement on Form F-1, Commission File Number 33-79220,
and incorporated herein by reference)
3.8 Memorandum and Articles of Association of CalPetro Tankers
(IOM) Limited (filed as Exhibit 3.8 to Registrant's
Registration Statement on Form F-1, Commission File Number
33-79220, and incorporated herein by reference)
3.9 Certificate of Incorporation and Memorandum of Association
of CalPetro Tankers (Bahamas III) Limited (filed as
Exhibit 3.9 to Registrant's Registration Statement on Form
F-1, Commission File Number 33-79220, and incorporated
herein by reference)
3.10 Articles of Association of CalPetro Tankers (Bahamas III)
Limited (filed as Exhibit 3.10 to Registrant's
Registration Statement on Form F-1, Commission File Number
33-79220, and incorporated herein by reference)
4.1 Form of Serial Indenture between California Petroleum
Transport Company and Chemical Trust Company of
California, as Indenture Trustee
4.2 Form of Serial Mortgage Notes (included in Exhibit 4.1).
4.3 Form of First Preferred Ship Mortgage by CalPetro Tankers
(Bahamas III) Limited to California Petroleum Transport
Corporation (including the form of assignment of such
Mortgage to Chemical Trust Company of California, as
Collateral Trustee by California Petroleum Transport
Corporation)
4.4 Form of Bahamian Statutory Ship Mortgage and Deed of
Covenants by [CalPetro Tankers (Bahamas I) Limited]
[CalPetro Tankers (Bahamas II) Limited] to California
Petroleum Transport Corporation (including the form of
assignment of such Mortgage to Chemical Trust Company of
California, as Collateral Trustee by California Petroleum
Transport Corporation)
4.5 Form of Bermudian Statutory Ship Mortgage and Deed of
Covenants by CalPetro Tankers (IOM) Limited to California
Petroleum Transport Corporation (including the form of
assignment of such Mortgage to Chemical Trust Company of
California, as Collateral Trustee by California Petroleum
Transport Corporation)
4.6 Form of Stock Pledge Agreement
4.7 Form of Assignment of Initial Charter Guarantee by
[CalPetro Tankers (Bahamas I) Limited] [CalPetro Tankers
(Bahamas II) Limited] [CalPetro Tankers (IOM) Limited]
[CalPetro Tankers (Bahamas III) Limited] to California
Petroleum Transport Corporation (including the form of
Collateral Assignment of such Initial Charter Guarantee to
Chemical Trust Company of California, as Collateral
Trustee by California Petroleum Transport Corporation)
4.8 Form of Assignment of Earnings and Insurance from
[CalPetro Tankers (Bahamas I) Limited] [CalPetro Tankers
(Bahamas II) Limited] [CalPetro Tankers (IOM) Limited]
[CalPetro Tankers (Bahamas III) Limited] to California
Petroleum Transport Corporation
4.9 Form of Assignment of Initial Charter from [CalPetro
Tankers (Bahamas I) Limited] [CalPetro Tankers (Bahamas
II) Limited] [CalPetro Tankers (IOM) Limited] [CalPetro
Tankers (Bahamas III) Limited] to California Petroleum
Transport Corporation (including the form of Collateral
Assignment of such Initial Charter to Chemical Trust
Company of California, as Collateral Trustee by California
Petroleum Transport Corporation)
4.10 Form of Management Agreement between P.D. Gram & Co., and
[CalPetro Tankers (Bahamas I) Limited] [CalPetro Tankers
(Bahamas II) Limited] [CalPetro Tankers (IOM) Limited]
[CalPetro Tankers (Bahamas III) Limited]
4.11 Form of Assignment of Management Agreement from [CalPetro
Tankers (Bahamas I) Limited] [CalPetro Tankers (Bahamas
II) Limited] [CalPetro Tankers (IOM) Limited] [CalPetro
Tankers (Bahamas III) Limited] to California Petroleum
Transport Corporation*
4.12 Form of Serial Loan Agreement between California Petroleum
Transport Corporation and [CalPetro Tankers (Bahamas I)
Limited] [CalPetro Tankers (Bahamas II) Limited]
[CalPetro Tankers (IOM) Limited] [CalPetro (Bahamas
III) Limited]
4.13 Form of Term Loan Agreement between California Petroleum
Transport Corporation and [CalPetro Tankers (Bahamas I)
Limited] [CalPetro Tankers (Bahamas II) Limited] [CalPetro
Tankers (IOM) Limited] [CalPetro (Bahamas III) Limited]
4.14 Form of Collateral Agreement between California Petroleum
Transport Corporation, the Indenture Trustee under the
Serial Indenture, the Indenture Trustee under the Term
Indenture and Chemical Trust Company of California, as
Collateral Trustee.
4.15 Form of Issue of One Debenture From [CalPetro Tankers
(Bahamas I) Limited] [CalPetro Tankers (Bahamas II)
Limited] [CalPetro Tankers (IOM) Limited] [CalPetro
Tankers (Bahamas III) Limited] to California Petroleum
Transport Corporation.
5.1 Opinion of Thacher Proffitt & Wood regarding the legality
of the Serial Mortgage Notes*
10.1 Form of Initial Charter Guarantee by Chevron Corporation
10.2 Form of Bareboat Charter between [CalPetro Tankers
(Bahamas I) Limited] [CalPetro Tankers (Bahamas II)
Limited] [CalPetro Tankers (IOM) Limited] [CalPetro
Tankers (Bahamas III) Limited] and Chevron Transport
Corporation
10.3 Form of Vessel Purchase Agreement between [CalPetro
Tankers (Bahamas I) Limited] [CalPetro Tankers (Bahamas
II) Limited] [CalPetro Tankers (IOM) Limited] [CalPetro
Tankers (Bahamas III) Limited] and Chevron Transport
Corporation (including the form of Assignment of such
Vessel Purchase Agreement to California Petroleum
Transport Corporation by [CalPetro Tankers (Bahamas I)
Limited] [CalPetro Tankers (Bahamas II) Limited] [CalPetro
Tankers (IOM) Limited] [CalPetro Tankers (Bahamas III)
Limited])
23.1 Consent of Thacher Proffitt & Wood (included in Exhibit
5.1)*
23.2 Consent of Price Waterhouse LLP, independent accountants,
for Form S-3
23.3 Consent of KPMG Peat Marwick LLP, independent accountants,
for Form S-3
23.4 Consent of Price Waterhouse LLP, independent accountants,
for Form S-1
23.5 Consent of Price Waterhouse LLP, independent accountants,
for Form F-1
23.6 Consent of McKinney, Bancroft & Hughes
23.7 Consent of Cains
24.1 Powers of Attorney for directors and certain officers of
Chevron Corporation
24.2 Powers of Attorney for directors and certain officers of
Chevron Transport Corporation (included on applicable
signature pages)
24.3 Powers of Attorney for directors and certain officers of
CalPetro Tankers (Bahamas I) Limited (included on
applicable signature pages)
24.4 Powers of Attorney for directors and certain officers of
CalPetro Tankers (Bahamas II) Limited (included on
applicable signature pages)
24.5 Powers of Attorney for directors and certain officers of
CalPetro Tankers (IOM) Limited (included on applicable
signature pages)
24.6 Powers of Attorney for directors and certain officers of
CalPetro Tankers (Bahamas III) Limited (included on
applicable signature pages)
24.7 Certified copy of resolutions of Chevron Corporation
authorizing signature pursuant to power of attorney
25.1 Statement of Eligibility on Form T-1 of Chemical Trust
Company of California, as Indenture Trustee
_____________
* To be filed by amendment.