______________________________________________________________________________
______________________________________________________________________________
California Petroleum Transport Corporation
and
CalPetro Tankers (Bahamas I) Limited
___________________________________
ASSIGNMENT OF EARNINGS AND INSURANCES
Dated as of _______ 1, 1994
___________________________________
______________________________________________________________________________
______________________________________________________________________________
Table of Contents
Page No.
ARTICLE I
DEFINITIONS
ARTICLE II
ASSIGNMENT
Section 2.01 Security Interest........................................ 1
Section 2.02 Assignment of Earnings................................... 1
Section 2.03 Assignment of Insurances................................. 2
Section 2.04 Assignment of Proceeds of Requisition of Use............. 3
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE OWNER
Section 3.01 Organization, Power and Status of the Owner.............. 3
Section 3.02 Authorization; Enforceability; Execution and Delivery.... 3
Section 3.03 No Conflicts; Laws and Consents; No Default.............. 3
Section 3.04 Governmental Approvals................................... 4
Section 3.05 Litigation............................................... 4
Section 3.06 No Prior Assignment...................................... 4
ARTICLE IV
COVENANTS OF THE OWNER
Section 4.01 Covenants of Owner....................................... 4
Section 4.02 Owner to Remain Liable................................... 5
Section 4.03 Further Assurances....................................... 5
Section 4.04 Lender as Attorney-in-Fact of Owner...................... 5
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01 Amendment................................................ 5
Section 5.02 Severability............................................. 6
Section 5.03 Notices.................................................. 6
Section 5.04 Consent to Jurisdiction.................................. 6
Section 5.05 Captions................................................. 6
Section 5.06 Governing Law............................................ 6
Section 5.07 No Partnership........................................... 6
Section 5.08 Counterparts............................................. 7
Section 5.09 Survival................................................. 7
Section 5.10 Integration.............................................. 7
Section 5.11 Reproduction of Documents................................ 7
Section 5.12 Successors and Assigns; Assignment....................... 7
Section 5.13 General Interpretive Principles.......................... 7
Section 5.14 Effective Date of Transaction............................ 8
Assignment of Earnings and Insurances, dated as of _______ 1, 1994
(the "Assignment"), between California Petroleum Transport Corporation, a
corporation organized under the laws of the State of Delaware (the "Lender")
and CalPetro Tankers (Bahamas I) Limited, a company organized under the laws
of The Commonwealth of the Bahamas (the "Owner").
PRELIMINARY STATEMENT
The Owner has requested that the Lender make two loans to the
Owner: one loan in the aggregate principal amount equal to $____________ (the
"Term Loan") and one series of loans in the aggregate principal amount equal
to $____________ (collectively, the "Serial Loans" and, collectively with the
Term Loan, the "Loans"). The Loans will be made pursuant to the terms and
conditions of two Loan Agreements, each dated as of the date hereof, each
between the Lender and the Owner. The net proceeds of the Serial Loans and
the Term Loan will be used by the Owner to acquire the m.t. _________ (the
"Vessel") from Chevron Transport Corporation (the "Initial Charterer"). The
Vessel will be bareboat chartered to the Initial Charterer pursuant to the
Bareboat Charter (the "Initial Charter"), dated as of the date hereof, between
the Owner and the Initial Charterer. As collateral security for its
obligations under the Loan Agreements, the Owner will assign, pledge, mortgage
and grant the Lender a security interest in, inter alia, the Vessel, the
Initial Charter and the earnings and insurances of the Vessel.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and of other valuable consideration, receipt of
which is hereby acknowledged, the Owner and the Lender hereby agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used in this Assignment shall have the meanings
assigned to such terms in Schedule 1 to this Assignment, and the definitions
of such terms shall be equally applicable to both the singular and plural
forms of such terms.
ARTICLE II
ASSIGNMENT
Section 2.01 Security Interest. This Assignment is made and
delivered as security for the Serial Obligations and the Term Obligations,
equally and ratably; provided, however, in the event that the Serial
Obligations are satisfied and paid in full pursuant to the terms and
conditions of the Serial Loan Agreement, this Assignment will be security
solely and exclusively for the Term Obligations.
Section 2.02 Assignment of Earnings. The Owner, to provide for the
payment of and as security for the Term Obligations and the Serial
Obligations, equally and ratably, has sold, assigned, transferred, set over
and granted a security interest in and does hereby sell, assign, transfer, set
over unto and grant a security interest unto the Lender, its successors and
assigns, for its and their successors' and assigns' own proper use and
benefit, all of the Owner's right, title and interest in and to (a) any and
all moneys due and to become due to the Owner under any and all present and
future charter parties, bills of lading, contracts and other engagements of
affreightment or for the carriage or transportation of cargo, salvage and
other operations of every kind whatsoever of the Vessel; and (b) any and all
claims and causes of action for money, loss or damages that may accrue arising
out of or in any way connected with the present or future use, operation or
management of the Vessel (including proceeds of insurance against requisition
for or other loss of hire or use of the Vessel) or arising out of or in any way
connected with any and all such present and future charter parties, bills of
lading, contracts and other engagements of affreightment or for the carriage
or transportation of cargo, salvage and other operations of the Vessel and any
and all guaranties with respect to any of the foregoing, together with the
income and proceeds of any and all of the foregoing (all such right, title and
interest herein called the "Freights"); provided, however, in the event that
the Serial Obligations are satisfied and paid in full pursuant to the terms
and conditions of the Serial Loan Agreement, this Assignment will be security
solely and exclusively for the Term Obligations.
Section 2.03 Assignment of Insurances. In addition to the
foregoing, the Owner, as security for the Serial Obligations and the Term
Obligations, equally and ratably, has sold, assigned, transferred and set
over, and does hereby sell, assign, transfer, and set over unto the Lender,
its successors and assigns, for its and their successors' and assigns' own
proper use and benefit, all of the Owner's right, title and interest in and to
(a) all moneys and claims for moneys due and to become due to the Owner with
respect to the actual, constructive, agreed, arranged or compromised total
loss, or requisition for title, seizure, condemnation, confiscation,
sequestration or compulsory acquisition or otherwise of ownership (but not
including proceeds of insurance against requisition for or other loss of hire
or use of the Vessel) by act of any country or any governmental authority or
otherwise, of the Vessel, and all claims for damages or compensation with
respect thereto, and (b) all policies and contracts of insurance of whatsoever
nature and all entries with protection and indemnity clubs or societies (to
the extent that the rules of the relevant club or society allow such
assignment) that have been or may hereafter during the subsistence of this
Assignment be taken out in respect of the Owner's interests in the Vessel,
including all machinery, materials, equipment, appurtenances and outfits
thereon, including without being limited to hull and machinery, off hire, war
risks, protection and indemnity and title requisition or otherwise howsoever
and all the benefits thereof, including all claims of whatsoever nature and
return of premiums, together with the income and proceeds of any and all of
the foregoing (all such right, title and interest herein called the
"Insurances"); provided, however, in the event that the Serial Obligations are
satisfied and paid in full pursuant to the terms and conditions of the Serial
Loan Agreement, this Assignment will be security solely and exclusively for
the Term Obligations. The foregoing assignment is in addition to, and not in
substitution for, the provisions with respect to insurance on the Vessel
contained in the Mortgage.
Section 2.04 Assignment of Proceeds of Requisition of Use. The
Owner, as security for the Serial Obligations and the Term Obligations,
equally and ratably, hereby assigns, transfers, pledges and sets over to the
Lender, its successors and assigns, and grants thereto a security interest in,
all of the Owner's right, title and interest to and in all charter hire and
compensation resulting from a requisition of use arising during the
continuance of this security, together with the income and proceeds of any and
all of the foregoing; provided, however, in the event that the Serial
Obligations are satisfied and paid in full pursuant to the terms and conditions
of the Serial Loan Agreement, this Assignment will be security solely and
exclusively for the Term Obligations. If, as a result of such requisition,
the requisitioner shall pay or become liable to pay any amount by reason of
the loss of or injury to or depreciation of the Vessel, any such amount is
hereby made payable to the Lender.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE OWNER
The Owner hereby represents and warrants to the Lender as follows:
Section 3.01 Organization, Power and Status of the Owner. The
Owner (a) is a corporation duly formed, validly existing and in good standing
under the laws of The Commonwealth of the Bahamas and (b) is duly authorized,
to the extent necessary, to do business in each jurisdiction where the
character of its properties or the nature of its activities makes such
qualification necessary. The Owner has all requisite corporate power and
authority to own and operate the property it purports to own and to carry on
its business as now being conducted and as proposed to be conducted in respect
of the Vessel.
Section 3.02 Authorization; Enforceability; Execution and Delivery.
(a) The Owner has all necessary corporate power and authority to execute,
deliver and perform under this Assignment.
(b) All action on the part of the Owner that is required for the
authorization, execution, delivery and performance of this Assignment has been
duly and effectively taken; and the execution, delivery and performance of
this Assignment does not require the approval or consent of any Person except
for such consents and approvals as have been obtained on or prior to the
Closing Date.
(c) This Assignment has been duly executed and delivered by the
Owner. This Assignment constitutes the legal, valid and binding obligation of
the Owner, enforceable against it in accordance with the terms thereof.
Section 3.03 No Conflicts; Laws and Consents; No Default. (a)
Neither the execution, delivery and performance of this Assignment nor the
consummation of any of the transactions contemplated hereby nor performance of
or compliance with the terms and conditions hereof (i) contravenes any
Requirement of Law applicable to the Owner or (ii) constitutes a default under
any Security Document.
(b) The Owner is in compliance with and not in default under any
and all Requirements of Law applicable to the Owner and all terms and
provisions of this Assignment.
Section 3.04 Governmental Approvals. All Governmental Approvals
which are required to be obtained in the name of the Owner in connection with
the execution, delivery and performance by the Owner of this Assignment have
been obtained and are in effect on the Closing Date.
Section 3.05 Litigation. There are no actions, suits or
proceedings at law or in equity or by or before any Governmental Authority now
pending against the Owner or, to the best of the Owner's knowledge, threatened
against the Owner or pending or threatened against any property or other
assets or rights of the Owner with respect to this Assignment.
Section 3.06 No Prior Assignment. The Owner has not assigned or
pledged, and hereby covenants that it will not assign or pledge, so long as
this Assignment shall remain in effect, the Initial Charter or any part of the
rights, titles and interests hereby assigned, to anyone other than the Lender,
or its successors or assigns.
ARTICLE IV
COVENANTS OF THE OWNER
Section 4.01 Covenants of Owner. (a) The Owner covenants (i) that
it shall forthwith give, or cause its broker to give, in the form attached as
Appendix I hereto, notice of this Assignment to all insurers, underwriters,
clubs and associations, with respect to all that is assigned pursuant to the
terms hereof and it shall cause its interest in all Insurances and moneys
hereby assigned to be paid over promptly to the Lender or as it may direct and
that it shall cause its interest in all policies of insurance on the Vessel to
be assigned to the Lender or as it may direct; provided, however, that so long
as the Initial Charter is in effect, the notices may be in the form set forth
in the Initial Charter, (ii) that it shall cause all moneys and Freights hereby
assigned to be paid over promptly to the Lender or as it may direct and that
it shall (A) deliver to any charterer (other than the Initial Charterer) a
Notice in the form annexed hereto as Appendix II and (B) cause any charterer
to execute and deliver to the Lender a Consent in the form annexed hereto as
Appendix III or in such other form as agreed to by the Lender and (iii) that
it shall promptly execute and deliver to the Lender such documents, if any,
and shall do and perform such acts, if any, as in the opinion of counsel for
the Lender may be necessary or useful to facilitate or expedite the collection
by the Lender of such claims arising out of any requisition of use.
(b) All moneys and Freights and Insurances received by the
Lender under this Assignment shall be treated and applied as provided in the
Loan Agreement and Mortgage, respectively.
Section 4.02 Owner to Remain Liable. Anything in this Assignment
contained to the contrary notwithstanding, the Owner shall remain liable under
any existing charters, and any future charter parties, bills of lading,
contracts and other engagements of affreightment or other carriage or
transportation of cargo and other operations of every kind whatsoever of the
Vessel and any such policies of insurance, and shall observe, perform and
fulfill all of the conditions and obligations to be observed, performed and
fulfilled by them thereunder, and the Lender shall have no obligation or
liability thereunder or by reason of or arising out of this Assignment, nor
shall the Lender be required or obligated in any manner to observe, perform or
fulfill any of the conditions or obligations of the Owner thereunder or
pursuant thereto, or to make any payment or to make any inquiry as to the
nature or sufficiency of any payment or to make any inquiry as to the nature
or sufficiency of any payment received by the Owner, or to present or file any
claim, or to take any other action to collect or enforce the payment of any
amounts which may have been assigned to the Lender or to which the Lender may
be entitled hereunder at any time or times. The obligations of the Owner
under any policies of insurance may (at the sole election of the Lender) be
performed by the Lender or its nominee, without releasing the Owner therefrom,
but the Lender or its nominee shall be under no duty whatsoever to perform or
incur any such obligations.
Section 4.03 Further Assurances. The Owner will at any time and
from time to time, upon the written request of the Lender, promptly and duly
execute and deliver any and all such further instruments and documents and
take such action as the Lender may deem desirable in order to obtain the full
benefits of this Assignment and of the rights and powers herein granted.
Section 4.04 Lender as Attorney-in-Fact of Owner. The Owner hereby
constitutes the Lender, and its successors and assigns, its true and lawful
attorney-in-fact, irrevocably, with full power in its own name, in the name of
its agents or nominees or in the name of the Owner or otherwise, to ask,
require, demand, receive, enforce and give acquittance for, any and all moneys
and claims for moneys due and to become due and payable under or arising out
of the Initial Charter, to endorse any checks or other instruments or orders
in connection therewith and to file any claims or take any action or institute
any proceedings which to the Lender may seem to be necessary or advisable
under this Assignment. Any action or proceeding brought by the Lender
pursuant to any of the provisions of this Assignment or otherwise and any
claim made by the Lender hereunder may be compromised, withdrawn or otherwise
dealt with by the Lender without any notice to or approval of the Owner.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.01 Amendment. This Assignment may be amended from time
to time by written agreement signed by the parties hereto.
Section 5.02 Severability. If any provision of this Assignment is
held to be in conflict with any applicable statute or rule of law or is
otherwise held to be unenforceable for any reason whatsoever, such
circumstances shall not have the effect of rendering the provision in question
inoperative or unenforceable in any other case or circumstance, or of
rendering any other provision or provisions herein contained invalid,
inoperative, or unenforceable to any extent whatsoever. The invalidity of any
one or more phrases, sentences, clauses or Sections of this Assignment
contained, shall not affect the remaining portions of this Assignment, or any
part thereof.
Section 5.03 Notices. All demands, notices and communications
hereunder shall be in writing, personally delivered or mailed by certified
mail-return receipt requested, and shall be deemed to have been duly given
upon receipt (a) in the case of the Lender, at the following address: c/o JH
Management Corporation, Room 6/9, One International Place, Boston,
Massachusetts 02110-2624, (b) in the case of the Owner, at the following
address: United House, 14-16 Nelson Street, Douglas, Isle of Man, or at other
such address as shall be designated by such party in a written notice to the
other parties.
Section 5.04 Consent to Jurisdiction. Any legal suit, action or
proceeding against the Owner arising out of or relating to this Assignment, or
any transaction contemplated hereby, may be instituted in any federal or state
court in The City of New York, State of New York and the Owner hereby waives
any objection which it may now or hereafter have to the laying of venue of any
such suit, action or proceeding, and the Owner hereby irrevocably submits to
the jurisdiction of any such court in any such suit, action or proceeding.
The Owner hereby irrevocably appoints and designates CT Corporation System,
having an address at 1633 Broadway, New York, New York, its true and lawful
attorney-in-fact and duly authorized agent for the limited purpose of
accepting servicing of legal process and the Owner agrees that service of
process upon such party shall constitute personal service of such process on
the Owner. The Owner shall maintain the designation and appointment of such
authorized agent until all amounts payable under this Assignment shall have
been paid in full. If such agent shall cease to so act, the Owner shall
immediately designate and appoint another such agent satisfactory to the Lender
and shall promptly deliver to the Lender evidence in writing of such other
agent's acceptance of such appointment.
Section 5.05 Captions. The captions or headings in this Assignment
are for convenience only and in no way define, limit or describe the scope or
intent of any provisions or sections of this Assignment.
Section 5.06 Governing Law. This Assignment shall be governed by
and interpreted in accordance with the laws of the State of New York, without
giving effect to the principles of conflicts of law.
Section 5.07 No Partnership. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture among the parties
hereto and the services of each party shall be rendered as an independent
contractor and not as agent for any other party.
Section 5.08 Counterparts. This Assignment may be executed in any
number of counterparts and by different parties hereto on separate
counterpart, each of which shall be deemed to be an original. Such
counterparts shall constitute one and the same agreement.
Section 5.09 Survival. The representations, covenants and
agreements contained in or made pursuant to this Assignment in respect of
either party hereto shall survive the execution and delivery of this
Assignment and shall continue in effect so long as such party's obligations
hereunder remain outstanding.
Section 5.10 Integration. This Assignment and the Schedule and
Exhibits hereto constitute the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements, understandings or representations pertaining to the subject
matter hereof, whether oral or written. There are no warranties,
representations or other agreements between the parties in connection with the
subject matter hereof except as specifically set forth or incorporated herein.
Section 5.11 Reproduction of Documents. This Assignment and all
documents relating thereto, including, without limitation, (a) consents,
waivers and modifications which may hereafter be executed, (b) documents
received by any party at the closing, and (c) financial statements,
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made in the regular course
of business) and that any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence.
Section 5.12 Successors and Assigns; Assignment. This Assignment
shall be binding upon and inure to the benefit of the Owner and the Lender and
their respective successors and assigns. The Owner shall not have the right
to assign its rights hereunder or any interest herein without the prior
written consent of the Lender. The Lender, at its sole option, shall have the
right to assign this Assignment, the Serial Loan Agreement, the Term Loan
Agreement, the Security Documents and any of its rights and interest hereunder
and thereunder.
Section 5.13 General Interpretive Principles. For purposes of this
Assignment except as otherwise expressly provided or unless the context
otherwise requires:
(a) the defined terms in this Assignment shall include the
plural as well as the singular, and the use of any gender herein shall be
deemed to include any other gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles as in effect on the date hereof;
(c) references herein to "Articles", "Sections", "Subsections",
"paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, paragraphs and other subdivisions
of this Assignment;
(d) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to paragraphs and
other subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Assignment as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
Section 5.14 Effective Date of Transaction. Notwithstanding and
the fact that this Assignment is dated as of _______ 1, 1994, the transactions
set forth herein shall not be effective until the Closing Date.
IN WITNESS WHEREOF, the Owner and the Lender have caused this
Assignment to be duly executed and delivered by their respective officers
thereunto duly authorized all as of the day and year first above written.
CALIFORNIA PETROLEUM TRANSPORT
CORPORATION, as Lender
By:________________________________
Name:______________________________
Title:_____________________________
CALPETRO TANKERS (BAHAMAS I) LIMITED, as Owner
By:________________________________
Name:______________________________
Title:_____________________________
APPENDIX I
NOTICE OF ASSIGNMENT
California Petroleum Transport Corporation, as mortgagee (the
"Lender") and CalPetro Tankers (Bahamas I) Limited (the "Owner"), owner of the
m.t. [Name of Vessel] (the "Vessel"), hereby give notice that by an assignment
contained in an Assignment of Earnings and Insurances, dated as of _______ 1,
1994, between the Owner and the Lender, the Owner assigned to the Lender all
of its right, title and interest under, to and in all policies and contracts of
insurance of whatsoever nature and all entries with protection and indemnity
clubs or societies now or hereafter taken out in respect of the Vessel, its
rights, disbursements, profits, including all claims of whatsoever nature
thereunder or otherwise. This Notice is to be endorsed on all policies and
certificates of entry evidencing such insurances.
All claims payable shall be subject to the following conditions:
(i) Any claim payable in respect of an actual or
constructive or arranged or agreed or compromised total loss, or
loss in the event of the confiscation, compulsory acquisition or
requisition of the Vessel, for title or use, by any government of
any country or any department, agency or representative thereof,
pursuant to any present or future law, proclamation, order, decree
or otherwise, shall be payable to the Lender, provided always that
the written consent of the Lender shall be obtained prior to the
arranged or agreed or compromised total loss being agreed with the
underwriters (insurers);
(ii) All other claims shall be released to (the repairer or
salvor for the repair, salvage or other charges involved or to the
Owners as reimbursement if it has fully repaired the damages and
paid all of the salvage and other charges;
Notwithstanding the foregoing, if there exists an Event of Default under
the First Preferred Ship Mortgage, dated ________ __, 1994, on the Vessel
given by the Owner in favor of the Lender and the brokers and/or Underwriters
(insurers) have been so notified by the Lender, all claims shall be payable to
the Lender.
The underwriters (insurers) agree that the Lender shall be advised
immediately of the termination of this policy (entry), and in the event of any
failure by the Owner to pay premiums (dues or Club calls) as and when due the
Lender shall be given at least fourteen (14) days' prior telegraphic or telex
notice of the cancellation or material alteration of this policy (entry).
The Lender shall have no obligations whatsoever to pay any premiums or
costs (dues or Club calls), but shall have the right to do so in the event of
non-payment by the Owner. The underwriters (insurers) shall promptly advise
the Lender of any act of omission of which the Underwriters (insurers) are
aware that might void this policy (entry) or make the same invalid or
unenforceable in whole or in part.
Endorsement
California Petroleum Transport Corporation, as mortgagee (the
"Lender") and CalPetro Tankers (Bahamas I) Limited (the "Owner"), owner of the
m.t. [Name of Vessel] (the "Vessel"), hereby give notice that by an assignment
contained in an Assignment of Earnings and Insurances, dated as of _______ 1,
1994, between the Owner and the Lender, the Owner assigned to the Lender all
of its right, title and interest under, to and in all policies and contracts of
insurance of whatsoever nature and all entries with protection and indemnity
clubs or societies now or hereafter taken out in respect of the Vessel, its
rights, disbursements, profits or otherwise.
It is hereby noted that all claims shall be paid to the Owner
unless and until the Lender, as mortgagee, shall have given notice in writing
that the Owner is in default under the First Preferred Ship Mortgage, _______
__, 1994 on the Vessel given by the Owner in favor of the Lender, as
mortgagee, in which event such claims shall be payable to the Lender, as
mortgagee. Any modification of the terms of this insurance or cancellation or
termination by reason of nonpayment of premiums, dues, assessments,
contributions or other amounts which may become due shall not become effective
against the interests of the Lender, as mortgagee its successors or assigns
until fourteen (14) days' prior telegraphic or telex notice is given to the
Lender, as mortgagee its successors or assigns of such modification,
cancellation or termination.
CALPETRO TANKERS (BAHAMAS I)
LIMITED
By: __________________________
Name:_________________________
Title:________________________
APPENDIX II
NOTICE OF ASSIGNMENT
CalPetro Tankers (Bahamas I) Limited (the "Owner"), owner of the m.t.
[Name of Vessel] (the "Vessel"), hereby gives you notice that by an assignment
contained in an Assignment of Earnings, dated as of _______ 1, 1994, between
the Owner and California Petroleum Transport Corporation (the "Lender"), the
Owner assigned to the Lender all of its right, title and interest under, to
and in (a) any and all moneys due and to become due to the Owner under any and
all present and future charter parties, bills of lading, contracts and other
engagements of affreightment or for the carriage or transportation of cargo,
salvage and other operations of every kind whatsoever of the Vessel; and (b)
any and all claims and causes of action for money, loss or damages that may
accrue arising out of or in any way connected with the present or future use,
operation or management of the Vessel (including proceeds of insurance against
requisition for or other loss of hire or use of the Vessel) or arising out of
or in any way connected with any and all such present and future charter
parties, bills of lading, contracts and other engagements of affreightment or
for the carriage or transportation of cargo, salvage and other operations of
the Vessel and any and all guaranties with respect to any of the foregoing,
together with the income and proceeds of any and all of the foregoing (all
such right, title and interest herein called the "Freights").
So long as the Assignment remains effective, upon your receipt of notice
of the occurrence of an Event of Default under the Term Loan Agreement or
Serial Loan Agreement referred to in the Assignment, pay any and all sums
under your charter with the Owner directly to Account No. ________________, at
______________, or otherwise to such other account as you may be notified in
writing at any time or from time to time.
Please execute the attached Letter of Consent and Acknowledgement of
Assignment and return it to the undersigned.
CALPETRO TANKERS (BAHAMAS I)
LIMITED
By:__________________________
Name:________________________
Title:_______________________
Appendix III
LETTER OF CONSENT AND ACKNOWLEDGEMENT OF ASSIGNMENT
__________ __, 1994
[Name of Charterer]
Dear Sirs:
The undersigned hereby consents to and acknowledges receipt of a signed
copy of the Assignment of Earnings and Insurances (the "Assignment"), dated as
of __________ 1, 1994, between CalPetro Tankers (Bahamas I) Limited (the
"Owner") and yourselves as adequate notice of such assignment to you of the
Charter (the "Charter"), dated __________, ____ between us and the Owner and
of all the right, title and interest of the Owner in, to and under the Charter.
So long as the Assignment remains effective, we hereby agree that, upon
your notification to us of the occurrence of an Event of Default under the
Term Loan Agreement or Serial Loan Agreement referred to in the Assignment, we
shall pay any and all sums which we are legally obligated to pay to the Owner
or otherwise as stated in and according to the Charter directly to your
Account No. ________________, at ______________, or otherwise to such other
account as you may at any time or from time to time, designate by notice to us
in writing.
Payments of moneys under the Charter may be adjusted, reduced or
withheld only as expressly provided therein. Payments to you shall not be
subject to any right of set-off or defense by way of counterclaim or otherwise
which the undersigned may have against the Owner or any entity substituted for
it other than under the Charter and all payments once made to you will be
final, and once paid we will not, for any reason whatsoever, seek to recover
any such payment made to you by virtue of the Assignment or this Letter of
Consent.
We confirm that the terms of the Charter remain in full force and effect
and constitute the entire agreement between the parties thereto with respect
to the Vessel and that the Owner is not presently in breach of the terms of
the Charter. We further confirm that the terms of the Charter have not been
varied or modified and that the terms of the Charter will not after the date
hereof be varied or modified without your prior written consent.
We confirm that we have received no prior notice of any assignment by
the Owner of any interest in the Charter.
The undersigned will not permit any amendment, modification,
cancellation or other alteration in the Charter, nor will it consent to or
accept the substitution thereunder of any party for the Owner without your
prior written consent.
[Name of Charterer], as Charterer
By:_________________________________
Name:_______________________________
Title:______________________________
SCHEDULE 1
Defined Terms Used in the Assignment
"Assignment of Charter" means the assignment between the Owner and the
Lender, as amended from time to time in accordance with the terms thereof,
pursuant to which the Owner assigns to the Lender all of its right, title and
interest in, to and under the Initial Charter to secure its obligations under
the Loan Agreements.
"Assignment" or "Assignment of Earnings and Insurances" means the
assignment between the Owner and the Lender, as amended from time to time in
accordance with the terms thereof, pursuant to which the Owner assigns to the
Lender all of its right, title and interest in, to and under the freights and
hires (as well as any charters entered into after the Closing Date) with
respect to the Vessel to secure its obligations under the Loan Agreements.
"Assignment of Guarantee" means the assignment between the Owner and the
Lender, as amended from time to time in accordance with the terms thereof,
pursuant to which the Owner assigns to the Lender all of its right, title and
interest in, to and under the Chevron Guarantee to secure its obligations
under the Loan Agreements.
"Assignment of Management Agreement" means the assignment between the
Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner assigns to the Lender all of its
right, title and interest in, to and under the Management Agreement to secure
its obligations under the Loan Agreements.
"Assignment of Purchase Agreement" means the assignment between the
Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner assigns to the Lender all of its
right, title and interest in, to and under the Purchase Agreement to secure
its obligations under the Loan Agreements.
"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 Trustee's principal offices are located, are authorized or are
obligated by law, executive order or governmental decree to be closed.
"Chevron" means Chevron Corporation, a Delaware corporation.
"Chevron Guarantee" means the guarantee of the obligations of the
Initial Charterer under the Initial Charter given by Chevron.
"Closing Date" means _________ __, 1994.
"Collateral" means (i) an assignment of the Initial Charter, (ii) a
mortgage on the Vessel, (iii) an assignment of the earnings and insurances on
the Vessel, (iv) an assignment of the Chevron Guarantee, (v) an assignment of
the Management Agreement relating to the Vessel, (vi) an assignment of the
Purchase Agreement, (vii) the pledge of the shares of the Owner by Owner's
shareholder and (viii) a blanket security interest on all of the assets of the
Owner now existing or hereafter created, together with all income and proceeds
thereof.
"Event of Default" means an Event of Default under Section 6.01 of the
Loan Agreements.
"Governmental Approval" means any authorization, consent, approval,
license, franchise, lease, ruling, permit, tariff, rate, certification,
exemption, filing or registration by or with any Governmental Authority
relating to the ownership of the Collateral or to the execution, delivery or
performance of the Loan Agreement or any Security Document.
"Governmental Authority" means the federal government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any other governmental entity with authority over the Owner
or operation of the Vessels.
"Indentures" means the Indenture, dated as of ____________, ___ between
the Lender and the Trustee pursuant to which the Term Mortgage Notes will be
issued and the Indenture, dated as of _____________, ___ between the Lender
and the Trustee pursuant to which the Serial Mortgage Notes will be issued.
"Initial Charter" means with respect to each Vessel, the Bareboat
Charter, dated _________, between the Initial Charterer and the Owner.
"Initial Charterer" means Chevron Transport Corporation, a Liberian
corporation.
"Issue of One Debenture" means each Issue of One Debenture between the
Owner and the Lender, as amended from time to time in accordance with the
terms thereof, pursuant to which the Owner grants to the Lender a security
interest in all of its assets.
"Law" means any statute, law, rule, regulation, ordinance, order, code,
policy or rule of common law, now or hereafter in effect, and any judicial or
administrative interpretation thereof by a Governmental Authority or
otherwise, including any judicial or administrative order, consent decree or
judgment.
"Lender" means California Petroleum Transport Corporation, a corporation
organized under the laws of the State of Delaware.
"Loan Agreements" means, collectively, the Serial Loan Agreement and the
Term Loan Agreement.
"Loans" means, collectively, the Serial Loans and the Term Loan.
"Loss Date" means the date which is 90 days after the occurrence of a
Total Loss of the Vessel.
"Management Agreement" means the agreement, dated the Closing Date,
among the Owner, the Manager and the Technical Adviser.
"Manager" means the Person performing the duties of the Manager under the
Management Agreement, initially P.D. Gram & Co. ans.
"Mortgage" means, with respect to the Vessel, the first preferred ship
mortgages on the Vessel granted by the Owner to the Lender, as amended from
time to time in accordance with the terms of such Mortgage.
"Owner" means CalPetro Tankers (Bahamas I) Limited, a company organized
under the laws of The Commonwealth of the Bahamas.
"Payment Date" means each ________ and ______________ commencing
___________ 1995.
"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.
"Purchase Agreement" means the Vessel Purchase Agreement, dated as of
_________________, between the Owner and the Initial Charterer wherein the
Owner purchases the Vessel from the Initial Charterer.
"Registration Jurisdiction" means the jurisdiction in which the Vessel
is or will be registered.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or partnership agreement or other organizational or
governing documents of such Person, and, any Law applicable to or binding upon
such Person or any of its properties or to which such Person or any of its
properties is subject.
"Securities" means, collectively, the Term Mortgage Notes and the Serial
Mortgage Notes.
"Security Documents" means the Serial Loan Agreement, the Term Loan
Agreement, the Mortgage, the Assignment of Charter, the Assignment of Earnings
and Insurances, the Assignment of Guarantee, the Assignment of Management
Agreement, the Assignment of Purchase Agreement, the Issue of One Debenture,
collectively.
"Serial Loan Agreement" the Loan Agreement, dated as of _______ 1, 1994
between the Lender and the Owner pursuant to which the Lender will make the
Serial Loan to the Owner.
"Serial Loans" shall have the meaning assigned to such term in the
Preliminary Statement of this Assignment.
"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.
"Serial Obligations" means the payment, performance or obligations of
any kind or nature whatsoever of the Owner under and pursuant to the Serial
Loan Agreement, any Security Document and any instrument, agreement or
document referred to therein.
"State" means any state of the United States of America and, in
addition, the District of Columbia.
"Technical Adviser" means the person performing the duties of the
Technical Adviser under the Management Agreement, initially Barber Ship
Management Group.
"Term Loan" shall have the meaning assigned to such term in the
Preliminary Statement of this Assignment.
"Term Loan Agreement" means the Loan Agreement, dated as of _______ 1,
1994 between the Owner and the Lender pursuant to which the Lender makes the
Term Loan to the Owner.
"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.
"Term Obligations" means the payment, performance or obligations of any
kind or nature whatsoever of the Owner under and pursuant to the Term Loan
Agreement, any Security Document and any instrument, agreement or document
referred to therein.
"Trustee" means Chemical Trust Company of California.
"Vessel" shall have the meaning assigned to such term in the Preliminary
Statement of the Assignment.