______________________________________________________________________________
______________________________________________________________________________
[NAME OF OWNER]
- and -
CHEVRON TRANSPORT CORPORATION
BAREBOAT CHARTER
______________________________________________________________________________
______________________________________________________________________________
TABLE OF CONTENTS
Page No.
1. Vessel to be Chartered............................................... 1
2. Period of Charter.................................................... 1
3. Time and Place of Delivery........................................... 1
4. Charterers' right in respect of the Vessel........................... 3
5. Use and Trade of Vessel.............................................. 3
6. Documentation and House Flag......................................... 4
7. Maintenance and Operation............................................ 4
8. Redelivery and Status................................................ 7
9. Use of Vessel and Payment of Hire.................................... 9
10. Mortgage............................................................. 10
11. Insurance............................................................ 10
12. Total Loss, Requisition for Title, Capture, Seizure.................. 13
13. Requisition for Hire................................................. 14
14. Liens; Notice on Vessel.............................................. 15
15. Salvage.............................................................. 16
16. General Average...................................................... 16
17. Default; Remedies.................................................... 16
18. Termination.......................................................... 19
19. Payments on Termination.............................................. 20
20. Assignment and Sub Charter........................................... 20
21. Indemnity............................................................ 21
22. Purchase Option...................................................... 23
23. General.............................................................. 23
24. Definitions.......................................................... 26
BAREBOAT CHARTER
THIS BAREBOAT CHARTER (hereinafter called the "Charter") made as
of ____ day of ___________, 1994 BY and BETWEEN ___________________________,
(hereinafter called "Owners") and Chevron Transport Corporation (hereinafter
called "Charterers").
WITNESSETH AND IT IS HEREBY AGREED as follows:
1. Vessel to be Chartered
Owners hereby let and demise and Charterers hereby hire the m.t.
_________ (hereinafter called the "Vessel"), Official No. _______, of about
___ gross tons and ___ deadweight tons, built in 199_ in _____), together with
all her engines, boilers, machinery, masts, anchors, cables, rigging, tackle,
apparel, furniture, electronics, small boats, and all her other appurtenances,
whether aboard or removed from the Vessel, together with any and all additions,
improvements and/or replacements which may hereafter be made to, on or in the
Vessel.
2. Period of Charter
(a) This Charter shall be for a period of twenty (20) years from
the Commencement Date. Charterers shall have the option of terminating this
Charter on an Optional Termination Date. Charterers shall give Owners (i)
non-binding notice of their intent to exercise such option, determined on a
good faith basis, at least 12 months prior to such Optional Termination Date
and (ii) irrevocable notice of such exercise 9 months prior to such Optional
Termination Date, if such Optional Termination Date is the first of the
Optional Termination Dates, or 7 months prior to such Optional Termination
Date, if such Optional Termination Date is subsequent to the first such
Optional Termination Date, and shall pay the applicable Optional Termination
Amount on or prior to such Optional Termination Date.
(b) Should the Vessel be upon a voyage otherwise than under
requisition for hire at the time when the charter of the Vessel would (but for
the provisions of this clause) have terminated, the Charter Period shall be
extended for such additional time as may be necessary for the completion of
such voyage. The Charter Period shall also be extended for such additional
time as may be necessary to bring the Vessel to a port of redelivery as
hereinafter provided in Clause 8 hereof. During any such extension, hire
shall be paid pro-rata on a daily basis (assuming a 365-day year) at the rate
in force before the commencement of such extension.
3. Time and Place of Delivery
(a) On the Commencement Date, Charterers shall unconditionally
accept delivery of the Vessel under this Charter simultaneously with delivery
to and acceptance of the Vessel by Owners under the Purchase Agreement "as is,
where is", in whatsoever condition the Vessel may be at the time of such
delivery. Owners shall have no obligation whatsoever to deliver the Vessel to
Charterers except upon the simultaneous delivery and acceptance referred to
above. Such simultaneous delivery and acceptance shall take place at the
location specified for delivery in the Purchase Agreement and are referred to
herein as "Delivery of the Vessel". On Delivery of the Vessel, Charterers
shall execute and deliver to Owners a Certificate of Acceptance.
(b) OWNERS MAKE NO REPRESENTATION, WARRANTY OR GUARANTEE, OF ANY
KIND EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE AS TO THE TITLE,
SEAWORTHINESS, CONDITION, VALUE, EQUIPMENT DESIGN, OPERATION, MERCHANTABILITY
OR FITNESS FOR USE OF THE VESSEL FOR ANY PARTICULAR PURPOSE OR AS TO THE
ELIGIBILITY OF THE VESSEL FOR ANY PARTICULAR TRADE OR ANY OTHER
REPRESENTATION, WARRANTY OR GUARANTEE WITH RESPECT TO THE VESSEL AND NONE
SHALL BE IMPLIED FROM THIS CHARTER; PROVIDED, HOWEVER, THAT OWNERS WARRANT
THAT OWNERS HAVE AND SHALL RETAIN WHATEVER TITLE TO THE VESSEL THAT OWNERS
RECEIVE FROM CHARTERERS SUBJECT ONLY TO THE MORTGAGE, THIS CHARTER AND LIENS
AND ENCUMBRANCES WHICH CHARTERERS ARE OBLIGATED TO DISCHARGE OR SATISFY.
CHARTERERS HEREBY WAIVE AS AGAINST OWNERS AND THE VESSEL, ALL REMEDIES,
WARRANTIES NOT EXPRESSED IN SUBCLAUSE (b) OF THIS CLAUSE 3 OR LIABILITIES,
EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE WITH RESPECT TO OWNERS' TITLE
THERETO OR THE PHYSICAL CONDITION OF THE VESSEL INCLUDING, BUT NOT LIMITED TO
(i) ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, (ii) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE
OF DEALING OR USAGE OF TRADE, (ii) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR
REMEDY IN TORT, WHETHER OR NOT ARISING FROM OWNERS' NEGLIGENCE, ACTUAL OR
IMPUTED, OR WHETHER OR NOT FOUNDED IN STRICT LIABILITY IN TORT AND (iv) ANY
OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OR DAMAGE TO THE
VESSEL. The acceptance by Charterers of the Vessel under this Charter shall
constitute conclusive proof, as between Owners and Charterers, that the Vessel
is seaworthy, and otherwise in the condition required by this Charter, in good
working order and repair and without defect or inherent defect in title,
seaworthiness, condition, design, operation or fitness for use, whether or not
discoverable by Charterers as of the date of such tender, and generally in all
respects satisfactory to Charterers.
(c) Charterers warrant that upon Delivery of the Vessel to them
the Vessel shall be in Charterers' custody and under its control.
4. Charterers' right in respect of the Vessel
Owners hereby assign to Charterers, for the duration of the
Charter Period, except during periods when an Event of Default shall have
occurred and be continuing and except in respect of a Total Loss (unless
Charterers shall have made all payments required by Clause 12 hereof in
respect of a Total Loss) without representation, warranty or covenant of any
kind, effective upon delivery of the Vessel to Charterers, the right to
enforce and exercise all rights of warranty, guaranty and indemnity which
Owners may have in respect of the Vessel or otherwise directly against the
Builder or any manufacturer of any part of the Vessel. Charterers shall be
entitled to take such action in the name of Owners against the Builder or any
manufacturer of any part of the Vessel in relation to the terms of purchase
of, the condition of or any patent infringement or alleged patent infringement
in relation to the Vessel or any part thereof as Charterers see fit but
subject to Owners being indemnified and secured to its satisfaction by
Charterers against all losses, costs damages and expenses thereby incurred or
to be incurred. If as a result of any such action any moneys are received
from the Builder or any such other manufacturer of the Vessel as aforesaid the
same shall be received by Charterers. Charterers shall use diligence to
assert and enforce all such rights which have a material effect upon the value
of the Vessel.
5. Use and Trade of Vessel
(a) Charterers shall have full use of the Vessel and may employ
the Vessel worldwide (within Institute Warranty Limits) in the carriage of
suitable lawful merchandise. In no event shall Charterers carry on board the
Vessel nuclear fuels or radioactive products; provided, however, with the
prior written consent of Owners, Charterers may carry on board the Vessel
radioisotopes used or intended to be used for any industrial, agricultural,
medical or scientific purposes.
(b) Charterers undertake not to employ the Vessel or suffer the
Vessel to be employed otherwise than in conformity with the terms of the
instruments of insurance (including any warranties expressed or implied
therein) without first obtaining the consent to such employment from their
insurers, protection and indemnity clubs and underwriters and complying with
such requirements as to extra premium or otherwise as the insurers may
prescribe.
(c) Charterers also undertake not to employ the Vessel or suffer
her employment in any trade or business which is forbidden by the law of any
country to which the Vessel may sail or is otherwise illicit or in carrying
illicit or prohibited goods.
(d) As to those trades in which the Vessel is employed,
Charterers 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 Owners or Charterers, as the case may
be, or ownership, use and operation of the Vessel (whether or not such
requirement has been lawfully imposed or not) to enable the 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 this Charter without delay. Charterers shall make and maintain
all arrangements for security bond or otherwise as may be necessary to satisfy
such requirements at Charterers' sole liability and expense and Charterers
shall indemnify Owners against any and all losses, damages, claims, expenses
or liabilities incurred by reason of Charterers failure to comply with this
Clause 5(d).
(e) Charterers shall enter and maintain the Vessel under the
TOVALOP Scheme or under any similar compulsory schedule during the Charter
Period.
6. Documentation and House Flag
(a) Charterers agree that it shall, throughout the Charter
Period, maintain the documentation of the Vessel under the laws of the
Registration Jurisdiction at Owners' cost and expense; provided, however, in
the event that the costs and expenses of maintaining such documentation are in
excess of $_____________, then Charterers 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. Owners agree to do all such
things whatsoever and execute and deliver all such documents whatsoever to
enable Charterers to maintain such documentation. Charterers will not change
the registry or port of documentation of the Vessel without the prior written
consent of Owners 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 Charterers change the
registry or port of documentation of the Vessel, Charterers shall, at time of
redelivery, if Owners so request and at Charterers' expense, change the
registry and port of documentation back to that of the Registration
Jurisdiction.
(b) Charterers shall have the right to re-name the Vessel, to
paint the Vessel in their own colors, install and display their funnel
insignia and fly their own house flag.
7. Maintenance and Operation
(a) Except as provided in Clause 20, the Vessel shall during the
Charter Period be in the full possession and at the absolute disposal for all
purposes of Charterers and under their complete control in every respect.
Charterers hereby covenant and agree with Owners that during the Charter
Period (and subject to the provisions of Clause 13):
(i) Charterers will at their expense maintain the Vessel,
her machinery, cargo handling equipment, boilers,
appurtenances and spare parts in a good state of
repair and in efficient operating condition in
accordance with good commercial maintenance practice
commensurate with other vessels in Charterers' fleet
of similar size and trade, ordinary wear and tear
excepted; and
(ii) Charterers will at their expense 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
Owners) and other required certificates in force and
shall make any improvement or structural changes or
acquire any new equipment necessary to comply with the
requirements of such classification; and
(iii) Charterers shall be at liberty to fit any additional
equipment required for the services of Charterers,
beyond that on board at the commencement of this
Charter, such work to be done at Charterers' expense
and on their time, and such equipment may be removed by
Charterers at their cost and on their time at any time
(provided, however, that such removal does not
adversely affect the class or seaworthiness of the
Vessel) prior to the expiration or any other
termination of the Charter. The Vessel is to be
redelivered to Owners in the same condition and class
as that in which she is delivered by Owner, ordinary
wear and tear excepted and any additional equipment
that cannot be or is not so removed shall become the
property of Owners; and
(iv) Charterers shall not permit the Vessel to proceed to
any port which is then subject to a prohibition by the
government of the Registration Jurisdiction or the
national government of the port in question; and
(v) in the event of hostilities in any part of the world
(whether war be declared or not) Charterers will not
employ the Vessel nor suggest her employment in
carrying any goods which are declared contraband nor
suffer her to enter or trade to any zone which is
declared a War Zone by the War Risks Insurers unless
Charterers have 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; and
(vi) Charterers will not use the Vessel in any manner or
for any purpose excepted from any insurance policy or
policies taken out in compliance with Clause 11 hereof
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; and
(vii) Charterers will not use the Vessel in any manner or
for any purpose or trade or permit or suffer to be
done any act which will prejudice Owners' ownership of
the Vessel or any part thereof.
(b) During the Charter Period, Charterers shall at their own
expense or by their own procurement man, victual, navigate, operate, supply,
fuel and repair the Vessel whenever required and shall, as between themselves
and Owners, be responsible for all charges and expenses of every kind and
nature whatsoever incidental to their use and operation of the Vessel under
this Charter, including any foreign, general, municipal, value added or other
taxes except that Charterers shall not be responsible for Owners'
documentation costs under clause 6(a) or for Owner Taxes. During the Charter
Period, the master, officers and crew of the Vessel shall be engaged and
employed by Charterers and shall remain Charterers' servants, navigating,
managing and working the Vessel on behalf of and at the risk of Charterers.
(c) As between themselves and Owners, Charterers shall also be
responsible for any charges and expenses incidental to the use and operation
of the Vessel while under requisition for hire, during the Charter Period.
The foregoing provision of this sub-clause shall be without prejudice to the
rights of Owners and Charterers against other parties in respect of any such
charges or expenses. Charterers shall, subject to the prior written approval
of Owners (such approval not to be unreasonably withheld), be entitled to take
action in the name of Owners against other parties in respect of such charges
or expenses. If as a result of any such action any moneys are received the
same shall be recovered by Charterers.
(d) Charterers shall make no changes in the structure of the
Vessel nor major changes in her machinery, appurtenances, spareparts or
boilers without in each instance first securing the written approval of
Owners, which approval shall not be unreasonably withheld. Provided that if
any such changes are required to meet classification society requirements,
applicable regulations and/or any relevant laws Owners shall not withhold such
approval and Charterers shall not be obliged to reinstate the Vessel to its
condition prior to the making of such changes.
(e) Charterers 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 provided in 7(a)(ii) to maintain the Vessel's
highest classification. Charterers shall give Owners not less than seven (7)
days prior notice of their intention to drydock the Vessel, such notice to
specify the intended time and place of drydocking.
(f) Owners (or such persons as they shall appoint or authorize)
shall have the right at any time on reasonable notice, and in a manner which
shall not interfere with the Vessel's trading requirements to inspect or
survey the Vessel in order to ascertain the condition of the Vessel and to
satisfy themselves that the Vessel is being properly repaired and maintained
in accordance with the provisions of this Charter. Inspection or survey in
drydock shall be made only when the Vessel is in drydock under the provisions
of sub-clause (e) of this Clause. However, Owners shall have the right to
require the Vessel to be drydocked for inspection, if Charterers are not
docking her at the required classification intervals. The costs incurred in
respect of such drydocking and any inspection or survey made under this
sub-clause shall be paid by Charterers to Owners. All repairs as shall be
shown to be required by any inspection or survey shall be made at Charterers'
expense and shall be completed within a reasonable period of time or such
other period as is specified by the relevant classification society referred
to in Clause 7(a)(ii). Time taken in respect of inspection, survey or repairs
shall form part of the Charter Period. Charterers shall whenever requested,
on reasonable notice, permit Owners to inspect the Vessel's log books and
furnish Owners promptly with full information regarding any casualties or
other damage to the Vessel.
(g) Owners shall not be liable for any expense in repairing or
maintaining the Vessel or be liable to supply a vessel or any part thereof in
lieu if the Vessel or any part thereof is lost, damaged, rendered unfit for
use, confiscated, seized, requisitioned, restrained or appropriated and the
Charter Hire payable in respect of the Vessel shall continue to be payable
notwithstanding loss or damage (not amounting to a Total Loss) to the Vessel
or any part thereof (and notwithstanding that the Vessel or any part thereof
is rendered unfit for use or is requisitioned for hire). In the event of a
Total Loss the provisions of Clause 12 shall apply;
(h) Charterers shall not have or be deemed to have any authority
to pledge Owners' credit for any purpose, including any maintenance overhauls,
replacements, repairs and modification of the Vessel.
8. Redelivery and Status
(a) Unless the Vessel suffers a Total Loss or Charterers
purchase the Vessel pursuant to Clause 22, Charterers shall at the end of the
Charter Period redeliver the Vessel to Owners at a safe and ice-free port or a
place selected by Charterers 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 the parties but Charterers shall not be deemed to
warrant the safety of such port once redelivery has occurred. The Vessel shall
be redelivered to Owners free and clear of all mortgages, liens, claims,
charges and encumbrances which Charterers are obligated to discharge or
satisfy and in the same or as good structure, state and condition as those in
which she was delivered, ordinary wear and tear alone excepted. The time of
redelivery shall be the time when the Vessel is tendered for redelivery in
class without outstanding requirements or recommendations to enable the Vessel
to proceed without delay and free of cargo (other than slops).
(b) At or about the time of redelivery a survey shall, if Owners
so require, be made to determine the condition and fitness of the Vessel, her
machinery and equipment. In that event, Charterers and Owners shall each
appoint surveyors to be present at such survey and the surveyors present shall
determine and state the repairs or work necessary to place the Vessel at the
date of redelivery in the structure, state and condition required by
sub-clause (a) of this Clause. In the event that the Vessel has been
dry-docked within 30 months prior to redelivery and Charterers certify in
writing to Owners that, to the best of their knowledge, the Vessel has had no
bottom touching since such dry-docking, such survey may be conducted while the
Vessel is afloat. Owners may require a diver's survey of the Vessel.
Charterers shall bear all expenses of any such survey. Charterers shall at
their expense make all such repairs and do all such work so found to be
necessary before redelivery or at Owners' option shall discharge their
obligations hereunder by payment to Owners 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 such structure, state and condition. The
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 in this
Clause 8(b).
(c) The provisions of this Clause shall be subject to the
provisions of sub-clause (b) of Clause 13 hereof where the Vessel is under
requisition for hire at or until the end of the Charter Period.
(d) An inventory of consumable stores on board the Vessel shall
be made by Charterers in conjunction with Owners on delivery and again on
redelivery of the Vessel. Charterers and Owners shall respectively take over
and pay for all bunkers, lubricating oil, water and unbroached provisions,
paints, oils, ropes and other consumable stores remaining in the Vessel on
delivery and redelivery at the market prices current at the port of delivery
or redelivery but Charterers shall not be required to pay for lubricating oil
in the Vessel's system or for stores included in the Vessel's specification or
for stores arranged and put on board by Charterers' at their own expense or by
the Builder at its own expense.
(e) The Vessel upon redelivery shall have her survey cycles up
to date and class certificates valid for at least six (6) calendar months.
Notwithstanding the provisions of this Clause 8, Charterers shall ensure that
Vessel shall have been dry-docked within 30 months prior to redelivery.
9. Use of Vessel and Payment of Hire
(a) Charterers shall have the use of all equipment (which
expression includes cabin, crew and galley equipment, navigational aids and
technical equipment, furnishings, furniture and fittings and spare and
replacement parts) that is the property of Owners on board at the time of
Delivery of the Vessel or title to which is acquired by Owners pursuant to the
Purchase Agreement; and the same, or their substantial equivalent, shall be
returned to Owners on redelivery in good order and condition, ordinary wear
and tear alone excepted. Charterers shall from time to time during the
Charter Period replace at their expense such items of equipment as shall be so
damaged or worn as to be unfit for use. Such replaced equipment shall become
part of the Vessel and title to such replaced equipment shall vest in and the
same shall belong to Owners.
(b) Any hired equipment placed on the Vessel by Charterers may
be removed by Charterers prior to the expiration of the Charter Period. If so
requested by Owners, Charterers shall assist in transfer of equipment hire
agreements to Owners or their nominee, but Charterers shall not be required to
guarantee or assume any other liability with respect to a transferee's
performance under said hire agreements.
(c) During the Charter Period, the Charterer shall pay, without
offset or deduction, whether or not Vessel is under arrest, Charter Hire for
the use and hire of the Vessel at the times and in the amounts indicated on
Schedule 1 attached hereto and made a part hereof. Unless otherwise notified
by Owners, all payments of Charter Hire and other amounts payable by
Charterers to Owners hereunder shall be made to an account nominated by Owners
at _________________ (or to such other account as Owners may from time to time
nominate) and shall be made by wire transfer of immediately available funds.
(d) During any extension of the Charter Period, the rate of hire
shall be calculated on the basis of the then current Charter Hire rate
converted to a daily rate using a 365 days year.
(e) Time of payment shall be of the essence. If the date of
payment is a date upon which Owners' nominated bank is not open for business,
payment shall be made on the first preceding Business Day. Payment of sums
due under the provisions of this Charter shall be made (by close of business
New York Federal Reserve Bank) by wire transfer to Owners' nominated bank and
receipt of such wire transfer by such bank by 10:00 a.m. New York time on the
due date for payment (in accordance with all the provisions of this Charter)
shall constitute timely payment by the payer of the amount authorized by such
cable or telex to be paid even though the payee's account be not credited
until after such due date and the payer shall not be liable for any delays or
errors committed by such bank in processing payment instructions transmitted
properly on behalf of the Charterers.
(f) If any payment of Charter Hire hereunder shall not be paid
when due Owners shall be entitled in addition to call for interest thereon at
the rate of interest per annum equal to the Default Rate from and including
the due date to the date of actual payment (after as well as before judgment)
parts of a day being treated as complete days and Charterers shall thereupon
forthwith pay the same to Owners.
10. Mortgage
(a) Charterers agree that the financing of the Vessel will be
secured by the Charter on the Vessel and assignments of Owners' right, title
and interest under, in and to this Charter. Charterers shall execute and
deliver all such documents, opinions, reports, and agreements listed on
Exhibit A attached hereto.
(b) Charterers agree that this Charter and any other charters
permitted under Clause 20(a) hereof shall always be subordinated in all
respects to the Mortgage.
(c) Owners agree that the Mortgage and any other mortgage
hereinafter placed on the Vessel by Owners will contain a provision to the
effect that throughout the Charter Period, so long as no Event of Default
shall have occurred and be continuing and so long as Charterers shall have
performed their obligations hereunder, Charterers shall be entitled to quiet
enjoyment of the Vessel.
11. Insurance
(a) Insurance Obligations - Charterer shall, at its own expense,
provide and maintain the following insurance and shall
ensure that the value of the Vessel as stated in any valued
policy is equal to the amount insured thereunder:
(i) hull and machinery insurance for an amount not less
than the Stipulated Loss Value of the vessel as per
American Institute Hull Clauses (June 2, 1977) and the
American Hull Insurance Syndicate's Liner Negligence
Clause (June 2, 1977). Such insurance shall include
navigation limit adequate for the vessel's trade and
exclude collision liability.
(ii) protection & indemnity insurance on a full entry basis
with an International Group P&I Club. Such insurance
shall include, but not be limited to, coverage for
injuries to or death of masters, mates and crew; full
(4/4ths) collision liabilities and pollution
liabilities imposed by federal and state laws as well
as TOVALOP liabilities (if applicable). Such
insurance shall be unlimited as per International
Group P&I Club rules except for pollution liabilities
which shall be limited to $700 million or the maximum
pollution limit offered by and through the P&I Clubs
of the International Group.
(iii) Hull War Risk Insurance for an amount not less than
the Stipulated Loss Value of the vessel as per
American Institute Hull War Risks and Strikes Clauses
12/1/77 and the American Hull Insurance Syndicate's
Addendum April 1, 1984 (War Risks). Such insurance
shall apply to all areas where the vessel trades.
(b) Insurance Practice
Charterers have, prior to the signing of this Charter, outlined to
Owners the insurance arrangements at present in force in relation to its fleet
(which arrangements shall apply to the Vessel on and after the date of
delivery of the Vessel). Owners hereby confirm their acceptance of such
arrangements as complying with Charterers' obligations under the preceding
sub-clause (a) (subject to adjustment thereof in the light of changes in
market practice and in accepted tanker practice). Charterers undertake not to
alter such arrangements in a manner that is in material breach of any other
provision of this Charter or otherwise materially adverse to Owners without
first notifying Owners and obtaining their written approval, such approval not
to be unreasonably withheld.
(c) Loss payable and notice of Cancellation
(i) Unless Owners shall have given their prior written
consent, all insurances effected pursuant to Clause
11(a)(i) and (iii) shall contain a loss payable and
notice of cancellation clause in the following form:
"LOSS PAYABLE AND NOTICE OF CANCELLATION CLAUSE"
(A) Until ________________________________ ("Owners")
shall have notified underwriters to the contrary:
(1) all recoveries up to the Stipulated Loss
Value hereunder in respect of a total loss
or constructive or compromised or agreed
or arranged total loss shall be paid in
full to Owners without any deduction or
deductions whatsoever; and
(2) all other recoveries shall be paid in full
to Chevron Transport Corporation
("Charterers") or to its order without any
deduction or deductions whatsoever; and
(B) Owners shall be advised:
(1) if any Hull and Machinery insurer cancels
or gives notice of cancellation of any
insurance or entry at least ten (10) days
before such cancellation is to take
effect; and
(2) if any hull War Risks insurer cancels or
gives notice of cancellation of any
insurance or entry at least seven (7) days
before such cancellation is to take
effect; and
(3) of any default in the payment of any Hull
and Machinery premium or call or failure
to renew any such insurance or entry ten
(10) days prior to the date of renewal
thereof; and
(4) of any default in the payment of any War
Risks premium or call or failure to renew
any such entry seven (7) days prior to the
date of renewal thereof."
(ii) Unless Owners shall have given their prior written
consent, all insurance and entries effected pursuant
to Clause 11(a)(ii) shall contain a loss payable and
notice of cancellation clause in the following form:
"LOSS PAYABLE AND NOTICE OF CANCELLATION CLAUSE
At the request of the Owners and with the consent of
the Charterers, the protection and indemnity club
managers may in their discretion, agree:
(a) to pay Owners, or to their order, any recovery
the Charterers are entitled to receive from the
funds of the P&I Club in respect of any
liability, costs or expenses incurred by the
Charterers on receipt of notice from the Owners
that the Charterers are in default under the
Charter; and
(b) to give the Owners ten (10) days' notice that
insurance in the P&I Club in respect of the
Vessel is to cease; and
(c) to give the Owners ten (10) days' notice of the
P&I Club's intention to cancel the insurance of
the Charterers by reason of their failure to pay
when due and demanded any sum due from them to
the P&I Club.
(d) Information as to insurances
Charterers shall give Owners and its insurance advisers such
information as to the insurances taken out or being or to be taken out in
compliance with Charterers' obligations under the foregoing provisions of this
Clause or as to any other matter which may be relevant to such insurances as
Owners or their advisers may reasonably request.
(e) Charterers Option to Self-Insure
Notwithstanding anything to the contrary herein contained in
Clause 11, Charterers shall have the right to self-insure against the risks
described in Clause 11(a).
12. Total Loss, Requisition for Title, Capture, Seizure
(a) If a Total Loss shall occur, this Charter and the obligation
of Charterers to pay Charter Hire hereunder shall continue and be payable as
set forth herein until Charterers have complied with this Clause 12.
Charterers shall forthwith notify Owners of the facts and circumstances of
such Total Loss and Charterers shall, on the date which is 90 days after the
Total Loss (the "Loss Date"), pay to Owners the amount determined pursuant to
paragraph (b) below. Charterers shall give Owners at least 15 days prior
notice in writing of the Loss Date. On the Loss Date, Charterers shall pay
such amount to Owners, and thereupon this Charter shall terminate and Charter
Hire payable hereunder shall cease.
(b) The amount payable on any such Loss Date shall be the sum of
(i) any deficiency between (A) the Stipulated Loss Value in relation to the
period in question calculated by the application of Schedule 2 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 Owners or the Mortgagee prior to or on
such Loss Date; and (ii) all Charter Hire accrued (on a daily basis) but
unpaid hereunder to such Loss Date and any other sums due under any provisions
of this Charter, together with interest thereon at the Default Rate from the
date upon which any such Charter Hire or other sums was due until the date
upon which the calculations are made for the purposes of this Clause which
date shall be the Loss Date. The foregoing obligations of Charterers under
this Clause 12 shall apply regardless of whether or not any moneys are payable
under the insurances effected in compliance with Clause 11 hereof 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. This Charter shall terminate upon the
fulfillment by Charterers of their obligations under this subclause.
(c) If Charterers shall have made a payment to Owners pursuant
to the foregoing provisions of sub-clause (b) of this Clause and Owners shall
subsequently receive any insurance monies or other compensation contemplated
under such Clause (b) the same shall be immediately applied first towards
repayment to Charterers of the amount of any such payment and second (to the
extent that the further insurance monies or compensation shall exceed the
amounts paid by Charterers and so repaid by Owners) to Charterers.
(d) Charterers shall be liable for any loss of any part of or
damage to the Vessel (other than a Total Loss in which event the foregoing
provisions of this clause shall apply) during the 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 Charterers or their servants and agents are acting as
agents of Owners). In the event of repairable damage to the Vessel or any part
thereof or loss of part of the Vessel, Owners shall, subject to their prior
right to retain any sums which may be due from Charterers to Owners under the
terms of this Charter, make payment to Charterers of moneys received under the
insurances effected in compliance with Clause 11 upon Charterers furnishing
evidence satisfactory to Owners that all such damage has been made good or
repaired or repairs have been put in hand.
(e) For the purpose of this Clause 12, insurers shall be deemed
to have admitted a claim either on the date that they inform Owners that the
claim is admitted or upon the date that they make payment to Owners even
though no claim has ever been admitted.
(f) Owners shall, upon the request of Charterers, promptly
execute such documents as may be required to enable Charterers to abandon the
Vessel to insurers and claim a constructive total loss provided that Owners
shall be entitled by notice in writing to Charterers to require that the
Vessel shall not be abandoned and that a partial loss only shall be claimed,
in which case this Charter shall terminate as from the date of the event
giving rise to such loss and any insurance payments in respect of the partial
loss shall be paid to Owners. Save as aforesaid, any moneys payable by
insurers for a partial loss shall be paid to Charterers and Owners shall, at
the request and expense of Charterers, take or procure to be taken all such
reasonable steps as Charterers may require for the recovery of such moneys.
13. Requisition for Hire.
(a) If the Vessel is requisitioned for hire by any governmental
or other competent authority during the Charter Period, then unless and until
following such requisition the Vessel becomes a Total Loss, this Charter shall
continue in full force and effect for the remainder of the Charter Period (and
Charterers shall be fully responsible for due compliance with all its
obligations under (i) Clause 11 and (ii) the other provisions of this Charter,
other than those which Charterers are unable to comply with solely by virtue
of the aforesaid requisition for hire); provided, however, that if Charterers
shall duly comply with all of their obligations under this Charter save as
aforesaid, Charterers shall be entitled to all requisition hire paid to Owners
or to Charterers by such governmental or other competent authority or by any
person acting by the authority of the same on account of such requisition
during the Charter Period.
(b) Should the Vessel be under requisition for hire at or until
the end of the Charter Period:
(i) Charterers shall, if they are prevented by reason of
the requisition from redelivering the Vessel under
sub-clause (a) of Clause 8 hereof, be relieved from
their obligation so to do, provided that if the party
requisitioning the Vessel does not at the end of the
period of requisition redeliver the Vessel to Owners
at such place as Owners shall request, Charterers
shall upon the written request of Owners use their
best endeavors to redeliver the Vessel in accordance
with sub-clause (a) of Clause 8;
(ii) after such release Charterers shall be given a
reasonable opportunity of removing any such additional
or hired equipment as is referred to in sub-clause (b)
of Clause 9 hereof on the terms referred to in that
sub-clause;
(iii) notwithstanding any other provision of this Charter,
Charterers shall be under no liability to Owners in
respect of the structure, state or condition of the
Vessel insofar as such structure, state or condition
is due to the manner in which she has been used or
treated or to any events which have occurred during
the period of such requisition.
14. Liens; Notice on Vessel
(a) Charterers will not suffer, nor permit to be continued, any
lien or encumbrance incurred by them or their agents, which might have
priority over the title and interest of Owners in the Vessel. Charterers
shall indemnify and hold Owners harmless against any lien of whatsoever nature
arising upon the Vessel during the Charter Period while she is under the
control of Charterers, and against any claims against Owners arising out of or
in relation to the operation of the Vessel by Charterers. Should the Vessel
be arrested by reason of claims or liens arising out of her operation
hereunder by Charterers, Charterers shall at their own expense take all
reasonable steps to secure that within a reasonable time the Vessel is
released and at their own expense put up bail to secure release of the Vessel.
(b) Charterers will fasten to the Vessel in a conspicuous place
and will keep so fastened during the Charter Period a notice reading as
follows:
"This Vessel is the property of and is registered in the name of
__________________________; she is under charter by demise to and
operated by ______________________________ and neither Charterers
nor the Master nor any servant or agent thereof has any authority
whatsoever to contract on behalf of Owners or to pledge Owners'
credit or to involve Owners in any liability whatsoever"
or in such other form as Owners may reasonably require from time
to time.
15. Salvage
All salvage and all proceeds from derelicts shall be for
Charterers' benefit and the cost of repairing damage occasioned thereby shall
be borne by Charterers.
16. General Average
General Average, including Owners' portion, if any, shall be
payable by Charterers. General Average, if any, shall be adjusted according
to the York-Antwerp Rules 1974, as amended 1990, or any subsequent
modification thereof current at the time of the casualty.
17. Default; Remedies
(a) If during the term of this Charter:
(i) Charterers shall make default for two Business Days in
any payment in respect of Charter Hire due under the
terms of this Charter.
(ii) Charterers shall fail for a period of thirty (30)
Business Days after written notice thereof has been
given to Charterers by Owners to perform and observe
any of the covenants, conditions, agreements or
stipulations on the part of Charterers to be performed
or observed contained herein (other than sub-clause
(a)(i) and (v) of this Clause).
(iii) Charterers cease doing business as a going concern or
generally ceases to pay their debts as they become due
or any proceedings under any bankruptcy or insolvency
laws are instituted against Charterers or if a
receiver or trustee is appointed for Charterers or for
any of their assets or properties, and such proceeding
is not dismissed, vacated or fully stayed within sixty
(60) days.
(iv) Charterers 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. The foregoing provisions shall
not apply to any notice of abandonment which
Charterer's may give to insurers under the provisions
of Clause 12.
(v) Charterers fail to comply with any of their
obligations as to insurance contained in Clause 11.
(vi) Charterers shall within thirty (30) days of any
scheduled date of redelivery hereunder fail to provide
adequate bail or security when required so to do 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
Charterers fail to use their best endeavors to procure
the release of the Vessel therefrom within thirty (30)
days of any scheduled date of redelivery hereunder.
THEN AND IN ANY SUCH EVENT Owners may, by written notice to
Charterers, declare this Charter to be in default and Owners may:
(a) (i) Upon written demand, cause Charterers at Charterers'
expense to, and Charterers shall promptly, redeliver the Vessel or
cause the Vessel to be redelivered, with all reasonable dispatch
to Owners and in the condition required by the terms of Clause 8
as if the Vessel were being redelivered at the expiration of the
Charter Period, and all obligations of Charterers under said
Clause 8 shall apply to such redelivery, or (ii) Owners or their
agent, at Owners' option, without further notice, may, but shall
be under no obligation to, retake the Vessel wherever found,
whether upon the high seas or in any port, harbor, or other place
and irrespective of whether Charterers, any subcharterer or any
other Person may be in possession of the Vessel, all without prior
demand and without legal process, and for that purpose Owners or
their agent may enter upon any dock, pier or other premises where
the Vessel may be and may take possession thereof, without Owners
or their agent incurring any liability by reason of such retaking,
whether for the restoration of damage to property caused by such
retaking or otherwise. The exercise by Owners of their remedies
under this subparagraph (a) shall be without prejudice, and in
addition, to any of Owners' other remedies referred to below.
(b) Owners or their agent may sell the Vessel at public or
private sale, with or without notice to Charterers, advertisement
or publication, as Owners may determine, or otherwise may dispose
of, hold, use, operate, charter (whether for a period greater or
less than the balance of what would have been the Charter Period
in the absence of the termination of Charterers' rights to the
Vessel) to others or keep the Vessel idle, all on such terms and
conditions and at such place or places as Owners may determine and
all free and clear of any rights of Charterers and of any claim of
Charterers in admiralty, in equity, at law or by statute, whether
for loss or damage or otherwise, and without any duty to account
to Charterers.
(c) Charterers shall be liable for any and all Charter Hire
payable under this Charter before, during or after the exercise of
any of the foregoing remedies and for all reasonable costs
including all legal fees and any other costs and expenses
whatsoever incurred by Owners by reason of the occurrence of any
default or by reason of the exercise by Owners of any remedy
hereunder, including, without limitation, all costs and expenses
incurred by Owners in connection with any retaking of the Vessel
and, upon the redelivery or retaking of the Vessel in accordance
with this Clause 17, the placing of the Vessel in the condition and
seaworthiness required by the terms of Clause 8 hereof and
including interest on overdue Charter Hire.
(d) Each and every right, power and remedy herein given to
Owners shall be cumulative and shall be in addition to every other
right, power and remedy herein given or now or hereafter existing
at law, in equity, admiralty or by statute and each and every
power and remedy whether herein given or otherwise existing may
be exercised from time to time and as often and in such order as
may be deemed expedient by Owners, and the exercise or the
beginning of the exercise of any right, power or remedy shall not
be construed to be a waiver of the right to exercise at the same
time or thereafter any other power or remedy. No delay or
omission of Owners to exercise any right or power vested in it
hereunder shall impair such right or power or be construed as a
waiver of or as acquiescence in any default by Owners or be deemed
a waiver of any right arising out of any future default or of any
past default. In the event Owners at any time agree to waive any
such right or power, such waiver shall be revocable by Owners at
any time and the right or power shall henceforth be again
exercisable as though there had been no such waiver unless the
Event of Default has been cured. In the event Owners shall have
proceeded to enforce any right or pursue any power under this
Charter and such proceedings shall have been discontinued or
abandoned for any reason, or shall have been determined adversely
to Owners, then and in every such case Charterers and Owners shall
be restored to their former positions and rights hereunder with
respect to the property subject or intended to be subject to this
Charter and all rights, remedies and powers of Owners shall
continue as if no such proceedings had been taken.
(e) The rights and powers of Owners and the obligations of
Charterers under this Clause 17 shall be effective and enforceable
regardless of the pendency of any proceeding which has or might
have the effect of preventing Owners or Charterers from complying
with the terms of this Charter. No express or implied waiver by
Owners of any default shall in any way be, or be construed to be a
waiver of any further or subsequent default.
18. Termination
In the event (a) the Charterers shall exercise the option granted
to them pursuant to Section 2(a) and Charterers shall have remitted to Owners
an amount equal to the Optional Termination Amount, (b) a Total Loss shall
have occurred and Charterers shall have remitted to Owners the amounts
described in Clause 12(b) or (c) Charterers shall have remitted to Owners the
amounts described in Clause 19, then, notwithstanding anything to the contrary
contained herein, the Charter shall continue with respect to Charterers'
obligation to pay such amount to Owners and shall terminate on (x) the date
which is 367 days after the date on which such amounts have been remitted to
Owners or the Owners' assignee or (y) if (i) Charterers commence a voluntary
case under any applicable bankruptcy, insolvency, or other similar law now or
hereafter in effect, (ii) a receiver, liquidator, assignee, custodian, trustee
or sequestrator (or other similar official) is appointed for Charterers or for
any substantial part of their property, (iii) Charterers generally fail to pay
their debts as they become due or (iv) Charterers make a general assignment
for the benefit of creditors, the expiration of the period during which any
payment made by or on behalf of Charterers may be avoided under any applicable
bankruptcy, insolvency, creditors' rights or similar laws.
19. Payments on Termination
Whether or not Owners shall have exercised, or shall thereafter at
any time exercise, any options, rights or remedies under Clause 17, upon or as
a consequence of a breach of contract by Charterers amounting to repudiation
by Charterers of this Charter, Owners may immediately require Charterers to
pay to Owners, and Charterers shall pay to Owners as liquidated damages for
loss of a bargain and not as a penalty, an amount equal to (i) the sum of (A)
the Stipulated Loss Value in relation to the period in question calculated by
the application of Schedule 2, (B) all outstanding accrued and unpaid Charter
Hire and (C) any other amounts due to Owners under this 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.
Charterers shall not be entitled to any part of the net proceeds
of the Vessel (if any) whether by way of rebate of Charter Hire or otherwise.
20. Assignment and Sub Charter
(a) Charterers may not assign all or part of their rights and
obligations under this Charter nor may they charter the Vessel by demise to
any other entity without the prior written consent of Owners, such consent,
subject always to the Vessel being maintained and insured to the same
standards as are adopted by Charterers in respect of the vessels owned by
them, not to be unreasonably withheld; provided, however, that Charterers may
assign their rights and obligations hereunder to a corporation more than 50%
of which is owned, directly or indirectly, by Chevron Corporation so long as
Charterers remain responsible as principals for the due fulfillment of this
Charter and provide such assurances of responsibility to Owners as they may
reasonably request.
(b) Charterers may otherwise charter the Vessel without the
prior consent of Owners provided that Charterers remain responsible as
principals (or appoint another person to be responsible in their 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.
(c) Owners may not transfer or assign to any other person or
entity all or part of its rights or obligations under this Charter (except to
the Lender pursuant to the Assignment of Charter and the reassignment of this
Charter to the Collateral Trustee under the Assignment of Assignment of
Charter (collectively, the Assignment of Charter and the Assignment of
Assignment of Charter shall be referred to as the "Security Assignment"))
unless such transferee or assignee also assumes the obligations of Owners
under the related Security Documents and Charterers shall have given its prior
written consent to such assignment and assumption, which consent shall not be
unreasonably withheld. In addition, any transfer of Owners' interest in this
Charter (other than the Security Assignment) may only be effected by surrender
of this Charter and its reissuance by Charterers to such Owners' assignee or
transferee.
21. Indemnity
(a) Charterers hereby indemnify Owners and shall keep Owners
fully indemnified at all times whether during the currency
of this Charter or at any time in respect of events arising
during the currency of this Charter against:
(i) All costs and expenses of operating and maintaining
the 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 Owners
or Charterers in respect of the possession or
operation of the 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 the Vessel or any part
thereof or upon the hire, receipts or earnings arising
therefrom (other than Owners Taxes or documentation
costs except as otherwise provided in Clause 6(a))
which shall be promptly paid by Charterers;
(ii) 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
Charterers 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 hereunder whether such liability, claims,
proceedings, penalties, fines, sanctions, judgments,
charges, taxes, impositions, liens, salvage, general
average, cost or expenses may be attributable to any
defect in the Vessel or the design, construction,
testing or use thereof or from any maintenance,
service, repair, overhaul or otherwise and regardless
of when or where the same shall arise and whether or
not the Vessel or the relevant part thereof is in the
possession or control of Charterers (other than Owners
Taxes or documentation costs except as otherwise
provided in Clause 6(a)); and
(iii) Charterers accept all liability for oil or other
pollution damage resulting from Charterers' operation
of the Vessel under this Charter and agree to promptly
indemnify and hold Owners harmless from and against
any and all losses, damages and expenses which Owners
may incur as a result of any oil or other pollution
damage resulting from Charterers' operation of the
Vessel under this Charter, including, but not limited
to, Owners' liability under the Oil Pollution Act of
1990, as amended, and/or the laws of any other
jurisdiction relating to oil spills.
(iv) Owners shall use good faith efforts to notify
Charterers promptly of any tax for which it may seek
indemnity. Charterers shall, subject to the prior
written approval of Owners (such approval not to be
unreasonably withheld), be entitled to take action in
the name of Owners at Charterers' expense against any
taxing authority in respect of any taxes for which
Charterers have indemnified such Owners, and Owners
agree to reasonably cooperate with Charterers in
taking such action. If as a result of any such action
any moneys are received that are attributable to such
indemnified taxes (including any interest thereon paid
by such taxing authority) the same shall be recovered
by Charterers.
(b) Without prejudice to its generality, the provisions of this
sub-clause 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 the Vessel, including in connection with any oil or other substance
emanating or threatening to emanate from the Vessel and shall extend to
levies, impositions, calls, or contributions on or required to be made by
Owners during or in respect of the Charter Period.
(c) If any obligation of Charterers under the foregoing
sub-clause or under subclause (d) below shall not be discharged when due,
Charterers shall on demand forthwith pay to Owners not only the amount of such
obligation but also interest thereon at the Default Rate from the date Owners
paid the same to the date of reimbursement by Charterers (after as well as
before judgment)
(d) In the event of the Vessel becoming a wreck or obstruction
to navigation, Charterers shall indemnify Owners against all losses, costs,
damages and expenses which Owners may in consequence thereof incur including
those incurred in respect of the removal or destruction of the wreck or
obstruction under statutory or other powers.
22. Purchase Option
(a) On ________, 2014, so long as this Charter has not earlier
terminated and no Event of Default has occurred and is continuing and all
payments due hereunder have been paid in full, Charterers shall have the right
to purchase the Vessel at a purchase price equal to $1.00. Charterers shall
give Owners at least 90 days prior written notice of its election to purchase
the Vessel on ________, 2014.
(b) Owners agree to do all such things whatsoever and execute
and deliver all such documents whatsoever to enable Charterers to register
title to the Vessel in the name of Charterers or its designee.
(c) Charterers shall pay all fees, taxes (other than Owner
Taxes), costs and expenses which may become payable as a result of or in
connection with this Clause 22.
23. General
(a) Charterers shall give to Owners all such information as
Owners may reasonably request with regard to the performance by Charterers of
their obligations hereunder.
(b) Charterers shall pay all expenses (including legal and other
costs) incurred by Owners in connection with the enforcement of any rights
conferred upon Owners by this Charter or in or incidental to any action
brought by Owners to recover any hire or other payments due hereunder or for
breach of any covenant, agreement, condition or stipulation herein contained
or to recover possession of the Vessel or any part thereof whether any such
action proceeds to judgment or not. Owners shall pay all expenses (including
legal and other costs) incurred by Charterers in connection with the
enforcement of any rights conferred upon Charterers against Owners by this
Charter.
(c) No failure or delay on the part of Owners in exercising any
power or right hereunder shall operate as a waiver thereof nor shall any
single or partial exercise of any such right or power preclude any other or
further exercise of any such right or power.
(d) This Charter shall not be varied in its terms by an oral
agreement or representation or otherwise than by an instrument in writing of
even date herewith or subsequent hereto executed by all the parties hereto or
by their duly authorized representatives.
(e) If any term or provision of this Charter or the application
thereof to any person or circumstance shall to any extent be invalid or
unenforceable, the remainder of this Charter or application of such term or
provision to persons or circumstances other than those as to which it is
already invalid or unenforceable shall not be affected thereby and each term
and provision of this Charter shall be valid and be enforceable to the fullest
extent permitted by law.
(f) The title to the Clauses and sub-clauses of this Charter
shall not in any way affect the interpretation thereof; the terms defined in
this Charter have the meanings assigned to them in this Charter and include
the plural as well as the singular, and the use of any gender herein shall be
deemed to include the other gender.
(g) Any demand, consent, record, election or notice required or
permitted to be given under this Charter shall be in writing and sent by
recorded or registered letter or telefax (and in the case of telefax confirmed
by recorded or registered letter) addressed as follows:
(i) If to Owners to:
United House
14-16 Nelson Street
Douglas, Isle of Man
Fax No: ________________________
Attention:______________________
(ii) If to Charterers to:
Chevron House
11 Church Street
Hamilton, Bermuda HM111
Fax No:_________________________
Attention:______________________
or in case to such other person or address or addresses or telefax number as
any party may notify in writing to the other parties hereto. Any such notice
shall be deemed to have reached the party to whom it is addressed (in the case
of notice given by letter) five (5) days after despatch by first class
pre-paid post (airmail if from abroad) or (in the case of notice given by
telefax) when confirmed by a correct transmission report when despatched and
for this purpose confirmation by letter of notice given by telefax, shall be
disregarded.
(h) This Charter shall be governed by and construed and
performance thereof shall be determined in accordance with the federal laws of
the United States of America and the laws of New York. The obligations,
rights and remedies of the parties hereunder shall be determined in accordance
with such laws, without giving effect to principles of conflicts of law.
(i) All matters of difference between the parties hereto (other
than as herein expressly provided to the contrary and other than in respect of
any action by Owners for possession of the Vessel) shall be referred to
arbitration in New York by an arbitrator to be agreed between Owners and
Charterers or in default of such agreement within 30 days to be nominated by
the President for the time being of the Society of Maritime Arbitrators.
(j) Where it is provided in this Charter that in default of
agreement a matter is to be determined by an expert under this sub-clause, the
same shall be determined by such person, firm, corporation or body as may be
agreed between Owners and Charterers (or in default of agreement as may be
nominated by the Chairman for the time being of the Baltic and Mercantile
Shipping Exchange) who shall be deemed to act as expert and not as arbitrator
and whose determination shall be final and binding on the parties.
(k) All payments (other than payments pursuant to Clauses
21(a)(i) and 21(a)(ii) and documentation costs for Owners' account pursuant to
Clause 6(a)) made to Owners shall be made without deduction for or on account
of any present or future taxes (including value added, turnover, sales and use
taxes), levies, imposts, duties, deduction, withholdings and other charges of
whatsoever nature (collectively, "Charges") unless such deduction is required
by law. If such deduction is required by law (i) the sum payable by
Charterers shall be increased as may be necessary so that, after making all
required withholdings and deductions (including those applicable to additional
sums payable under this Clause 23(k)), Owners shall receive an amount equal to
the sum that Owners would have received had no such withholdings and
deductions been made and (ii) as required by applicable law Charterers shall
withhold or deduct the amount required and pay such amount to the relevant
taxing or other governmental authority. If any Charges paid by Charterers are
recoverable by Owners from such taxing or other governmental authority,
Charterers shall be entitled to the same rights provided in Clause 21(a)(iv).
Owners shall consult with Charterers and use reasonable efforts to agree to a
method of avoiding or minimizing any such deduction that is not in breach of
applicable law or governmental regulation or of any of the financing documents
entered into with the Mortgagee and which will leave the parties in
substantially the same contractual relation as is herein contained. Without
limiting the generality of the foregoing, the Owners shall take any lawful
action to the extent necessary to prevent or avoid the imposition of any
taxes, including any withholding taxes with respect to Charter Hire, by any
taxing jurisdiction (including the Registration Jurisdiction, except with
respect to any taxes included in documentation costs for Owners' account
pursuant to Clause 6(a) hereof), including changing its jurisdiction of
incorporation or residence; provided however, that it shall not be required to
take, or fail to take, any action (x) if in the opinion of counsel such act or
failure to act would violate applicable law or (y) if in the reasonable
opinion of Owners the actions necessary to avoid or prevent imposition of such
taxes would be unduly burdensome. For purposes of clause (y) of the
immediately preceding sentence a requirement to change the jurisdiction of the
Owners' incorporation or residence shall not be treated as unduly burdensome.
(l) If any provision of this Charter shall be, or shall be
rendered, unenforceable in whole or in part (which for the purposes of this
Clause shall include being contrary to an official code or order for the time
being in force to which either of the parties hereto is required by law to
have regard and the contravention or the continued contravention of which
could be considered or be made unlawful) Owners and Charterers shall use their
best endeavors to agree to an amendment or amendments to the terms of this
Charter which would result in this Charter as so amended being fully
enforceable and achieving substantially the same result (both financially and
otherwise) so far as concerns Owners and Charterers as this Charter in its
executed form would have achieved if the same had been fully enforceable. If
Owners and Charterers are unable to agree such an amendment or amendments then
either party may by notice request that an arbitrator be appointed pursuant to
the provisions to Clause 23(i) to determine whether an amendment or amendments
which would achieve the result set out above are possible, he shall be asked
to specify them and the terms of this Charter shall be amended accordingly.
(m) The indemnities of Owners by Charterers contained in this
Charter shall continue in full force and effect (in respect of events
occurring during the currency of this Charter) notwithstanding the termination
of the charter of the Vessel, the repudiation by Charterers of this Charter or
the expiration of the charter period by effluxion of time or otherwise.
(n) Charterers and Owners agree that for United States tax
purposes this Charter is intended to be a financing arrangement and not a true
lease, and Charterers and Owners further agree to file their respective tax
returns and reports consistent with such intention. This Charter shall be in
registered form within the meaning of section 163(f) of the United States
Internal Revenue Code of 1986, as amended, and Owners shall provide Charterers
upon request, any forms or reports reasonably requested by Charterers to
evidence such position, specifically including United States Internal Revenue
Service Form W-8 or any successor form.
24. Definitions
"Assignment of Charter" means the Assignment of this Charter by
Owners as collateral for the Owners obligations to the Lender.
"Assignment of Assignment of Charter" means the assignment of this
Charter by the Lender to the Collateral Trustee as security for the Lender's
obligations under the Indentures.
"Builder" means _____________________.
"Business Day" means any day other than a Saturday, a Sunday or a
day on which banking institutions in New York, New York, or in the city and
state where the Mortgagee's principal offices are located, are authorized or
are obligated by law, executive order or governmental decree to be closed.
"Certificate of Acceptance" means the certificate executed by
Charterers on the Commencement Date indicating Charterers' acceptance of the
Vessel under this Charter.
"Charter Hire" means the charter hire payable by Charterers for
the use and possession of the Vessel payable at the times and in the amounts
set forth on Schedule 1 attached hereto and made a part hereof.
"Charter Period" means the period of time from the Commencement
Date to the expiration or earlier termination of this Charter, pursuant to the
provisions hereof.
"Collateral Trustee" means Chemical Trust Company of California,
not in its individual capacity but solely as collateral trustee under the
Collateral Trust Agreement, dated as of ____________ 1, 1994, among the
Lender, the Collateral Trustee and the Trustee.
"Commencement Date" means the date on which the Vessel is accepted
by Owners under the Purchase Agreement and by Charterers under this Charter.
"Compulsory Acquisition" means requisition for title or other
compulsory acquisition of the Vessel (otherwise than by requisition for hire),
capture, seizure, condemnation, destruction, detention or confiscation of the
Vessel by any government or by persons acting or purporting to act on behalf
of any government or governmental authority.
"Default Rate" means a rate per annum equal to the sum of 1.50%
and LIBOR as of the commencement of such period.
"Event of Default" means an event described in sub-clauses (a)(i)
through (a)(vi) of Clause 17.
"Indentures" means the Indenture, dated as of _______ 1, 1994
between the Lender and the Trustee pursuant to which the Term Mortgage Notes
will be issued and the Indenture, dated as of ________ 1, 1994 between the
Lender and the Trustee pursuant to which the Serial Mortgage Notes will be
issued.
"Institute Warranty Limits" means the Institute Warranties as
defined by the Institute of London Underwriters.
"Lender" means California Petroleum Transportation Corporation, a
corporation organized under the laws of the State of Delaware.
"LIBOR" means the rate calculated on the basis of the offered
rates for deposits in dollars for a one-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 Charterers and Owners (or Owners' assignee) will select
a reference bank and the third reference bank will be selected by Charterers
and Owners (or Owners' assignee) together or, failing agreement, by the
previously selected reference banks together.
"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 United States dollar deposits) in London and New York.
"Mortgage" means the Mortgage, dated the date hereof, between
Owners and the Mortgagee or any other mortgage relating to the financing of
the Vessel by Owners.
"Mortgagee" means the Lender and any successor thereto or any
other mortgagee of the Vessel.
"Optional Termination Amount" means the amount indicated below
with respect to the Optional Termination Dates:
Optional Termination Date Optional Termination
Amount
____________, 200_ $___________
____________, 200_ $___________
____________, 200_ $___________
[____________, 200_] $___________
"Optional Termination Date" means the [8th, 10th, 12th or 14th]
[9th, 11th, 13th or 15th] [10th, 12th, 14th or 16th] [11th, 13th or 15th]
anniversary of the Commencement Date.
"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 an Owner or from the
inaccuracy or breach of any representation, warranty or covenant of an Owner
contained in any of Clauses 6(a), 20, 21(a)(iv), 23(k) or 23(n) of this
Charter or in any document furnished in connection with such Clauses by an
Owner, or any taxes that would not have been imposed but for the failure of any
Owner (a) to provide to Charterers (for filing by Charterers with the taxing
jurisdiction imposing such taxes or retention in Charterers' records) upon
Charterers' timely request such certifications, information, documentation or
reports concerning such Owner's identity, jurisdiction of incorporation or
residency, or connection with such taxing jurisdiction or (b) to promptly file
upon Charterers' timely request such reports or returns (which shall be
prepared with reasonable care in accordance with Charterers' written
instructions) claiming (or availing itself of) any applicable extensions or
exemptions (to the extent that timely notice thereof is provided by
Charterers); 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 Charterers are
otherwise liable under this 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 Charterers.
"Person" means an individual, a partnership, a corporation, a
joint venture, an unincorporated association, a joint-stock company, a trust,
or other entity or a government or any agency or political subdivision thereof.
"P&I Club" means a protection and indemnity association.
"Purchase Agreement" means the Vessel Purchase Agreement, dated as
of _______, 1994, between Owners and Charterers.
"Registration Jurisdiction" means the [Republic of Liberia]
[Commonwealth of the Bahamas] [Islands of Bermuda].
"Security Documents" means all of the agreements executed and
delivered by Owners to the Lender as collateral security for Owners'
obligations to the Lenders.
"Serial Mortgage Notes" means the Serial First Preferred Term
Mortgage Notes which will mature serially from _____________, 1995 to
_____________, 2005 in the initial aggregate amount of $168,500,000 issued by
the Lender concurrently with the issuance of the Term Mortgage Notes.
"Stipulated Loss Value" means, as of any date, the amount
corresponding to such date as indicated on Schedule 2 hereto and made a part
hereof.
"Term Mortgage Notes" means __% First Preferred Mortgage Notes Due
2014 in the initial aggregate amount of $117,900,000 issued by the Lender
concurrently with the issuance of the Serial Mortgage Notes.
"Total Loss" means either (a) actual or constructive or
compromised or arranged total loss of the Vessel, (b) Compulsory Acquisition
of the Vessel or (c) if so declared by Charterers at any time and in their
sole discretion a requisition for hire of the Vessel for a period in excess of
180 days. Any actual loss of the Vessel shall be deemed to have occurred at
1200 hours Greenwich Mean Time (GMT) on the actual date on which the Vessel
was lost or in the event of the date of the loss being unknown then the actual
total loss shall be deemed to have occurred at 1200 hours GMT on the day next
following the day on which the Vessel was last heard of. A constructive total
loss shall be deemed to have occurred at 1200 hours GMT on the earliest of: 1)
the date that notice of abandonment of the Vessel is given to the insurers
provided a claim for total loss is admitted by the insurers, or 2) if the
insurers do not admit such a claim, at the date and time GMT at which a total
loss is subsequently adjudged by a competent court of law or arbitration
tribunal to have occurred, or 3) the date that a report is rendered by one or
more experts in marine surveying and vessel valuation (said experts to be
appointed by Charterers at their expense and approved by Owners, such approval
not to be unreasonably withheld) concluding that salvage, repair and
associated costs in restoring the Vessel to the condition specified in Clause
7 exceed the Vessel's fair market value in sound condition.
"TOVALOP Scheme" means the Tankers Owners Voluntary Agreement
concerning Liability for Oil Pollution dated January 7, 1969, as amended.
"Trustee" means Chemical Trust Company of California, not in its
individual capacity but solely as indenture trustee under the Indentures.
IN WITNESS WHEREOF the parties have caused this Charter to be
signed the date and year first above written.
[NAME OF OWNER]
By:___________________________
Name:_________________________
Its:__________________________
CHEVRON TRANSPORT CORPORATION
By:___________________________
Name:_________________________
Its:__________________________