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HECO EXHIBIT 10.14
CONTRACT OF PRIVATE CARRIAGE
BY AND BETWEEN HAWAIIAN INTERISLAND TOWING, INC. AND
MAUI ELECTRIC COMPANY, LTD.
TABLE OF CONTENTS
I. TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Initial Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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1.2 Option to Extend Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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1.3 Early Termination for Material-Breach . . . . . . . . . . . . . . . . . . . . . . 2
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1.4 Final Voyage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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II. SPECIALIZED EQUIPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Tow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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2.2 Tug . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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2.3 Vessel Clarification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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2.4 Substitutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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2.5 Seaworthiness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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2.6 Tank Calibration and Gauging . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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2.7 Cargo Transfer Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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III. VESSEL PERSONNEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1 Complement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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3.2 Tankermen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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3.3 Employee Responsibility and Training . . . . . . . . . . . . . . . . . . . . . . . 6
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3.4 Master's Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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3.5 Mooring Master . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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3.6 Drug and Alcohol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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3.7 Equal Opportunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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3.8 Documented Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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3.9 Safety Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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IV. CARRIAGE, LOADING AND DISCHARGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.1 Alternate Ports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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4.2 Vessel Berth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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4.3 Marine Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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4.4 Tow Makeup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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4.5 Pumping In and Out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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4.6 Cargo Hose Markings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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4.7 Cargo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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4.8 Cargo and Bunker Sample and Survey . . . . . . . . . . . . . . . . . . . . . . . 11
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4.9 Cleaning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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4.10 Tow Retention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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4.11 Sailing Delays, Loading Port . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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4.12 Voyage Course and Speed . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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4.13 Dry Cargo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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4.14 Other Trades . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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4.15 Joint Voyages With HELCO . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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V. SERVICES AND RATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.1 Freight Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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5.2 Freight Reduction On Shipments Made In Conjunction With Third Parties . . . . . 14
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5.3 Cargo Volume . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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5.4 Laytime Duration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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5.5 Laytime Loading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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5.6 Laytime Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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5.7 Demurrage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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5.8 Tankermen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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5.9 Heating of Fuel Oil Aboard the Tow . . . . . . . . . . . . . . . . . . . . . . . 17
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5.10 Diesel Fuel Price Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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5.11 Additional Berths/Ports . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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5.12 Port, Dues, Taxes and Other Charges . . . . . . . . . . . . . . . . . . . . . . 18
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5.13 Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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5.14 Freight Earned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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5.15 Billing, Payment and Disputes . . . . . . . . . . . . . . . . . . . . . . . . . 19
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5.16 Waiver Of Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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VI. SCHEDULING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.1 Scheduling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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6.2 Shipper to Have First Priority . . . . . . . . . . . . . . . . . . . . . . . . . 20
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6.3 Notice of Cancellation or Delay . . . . . . . . . . . . . . . . . . . . . . . . 20
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VII. MAINTENANCE SERVICES AND OTHER REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . 20
7.1 Maintenance of the Tug and Tow . . . . . . . . . . . . . . . . . . . . . . . . . 20
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7.2 Other Required Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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7.3 Shipper's Representative . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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VIII. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.1 Carrier's Required Insurance Coverage . . . . . . . . . . . . . . . . . . . . . 21
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8.2 Shipper's Required Insurance Coverage . . . . . . . . . . . . . . . . . . . . . 23
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8.3 Deductibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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8.4 Continuation of Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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IX. INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.1 Indemnity For Tugs and Pilots . . . . . . . . . . . . . . . . . . . . . . . . . 24
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9.2 Shipper's Indemnification of Carrier . . . . . . . . . . . . . . . . . . . . . . 25
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9.3 Carrier's Indemnification of Shipper . . . . . . . . . . . . . . . . . . . . . . 26
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X. LIBERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.1 Deviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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XI. FORCE MAJEURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
11.1 Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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11.2 Carrier's Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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11.3 Shipper's Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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11.4 Notice of Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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11.5 Total Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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XII. LIMITATION OF LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
12.1 Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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12.2 Not A Charter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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XIII. GENERAL AVERAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
13.1 General Average Sacrifice . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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XIV. POLLUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
14.1 Compliance With Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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14.2 Oil Spill Response Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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14.3 Pollution Mitigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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14.4 Liability to Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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14.5 Liability For Transport Of Hazardous Material . . . . . . . . . . . . . . . . . 31
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XV. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
15.1 Business Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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15.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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15.3 Entire Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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15.4 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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15.5 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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15.6 Dispute Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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15.7 Limitations Applicable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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15.8 Notice of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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15.9 Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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15.10 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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15.11 Regulatory Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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15.12 Barrel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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15.13 Master . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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15.14 Carrier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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XVI. RENEGOTIATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
16.1 Additional Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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EXHIBIT A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
EXHIBIT B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
EXHIBIT C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
EXHIBIT D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
EXHIBIT E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
EXHIBIT F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
EXHIBIT G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
EXHIBIT H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
EXHIBIT I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
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CONTRACT OF PRIVATE CARRIAGE
This Contract is made on November 12, 1993 by and between HAWAIIAN
INTERISLAND TOWING, INC., (hereinafter called "Carrier"), a Hawaii corporation,
whose principal place of business and address is Dillingham Transportation
Building Suite 312, 735 Bishop Street, Honolulu, Hawaii 96813 and MAUI ELECTRIC
COMPANY, LTD., (hereinafter called "Shipper" or "MECO"), a Hawaii corporation,
whose principal place of business and address is P. 0. Box 398, Kahului, Hawaii
96732-0398.
W I T N E S S E T H :
WHEREAS, Shipper is in the business of generation, distribution,
purchase and sale of electrical power on the Islands of Maui, Lanai and
Molokai; and
WHEREAS, Shipper utilizes large quantities of diesel and residual fuel
oils in its generation process; and
WHEREAS, Shipper is in need of acquiring reliable and economical
transportation of such diesel and residual fuel oils between Oahu and Maui; and
WHEREAS, Shipper's needs can best be met by the use of specialized
equipment dedicated primarily to serving Shipper's needs; and
WHEREAS, Carrier is in the business of hauling liquid petroleum
products in bulk among and between the Hawaiian Islands; and
WHEREAS, Carrier has acquired specialized equipment that can
effectively meet Shipper's needs;
NOW THEREFORE, in consideration of these premises and of the mutual
promises herein contained, Shipper and Carrier hereby agree that Shipper will
ship and Carrier will transport all liquid petroleum products in bulk
(hereinafter "Cargo") shipped by inter-island barge and used by Shipper in its
power generation operations on the Island of Maui on the following terms and
conditions:
I. TERM
1.1 Initial Term The initial term of this Contract shall be for a
period of two (2) years, commencing on January 1, 1994 ("Initial Term").
Carrier will have the equipment necessary for service under this Contract ready
on the 1st day of January, 1994. Carrier warrants that as of the date of
commencement of this Contract, the Tug and Tow shall fulfill the descriptions,
particulars and capabilities in this Contract such as set forth in Article II
and Exhibits A, B and C. In the event such equipment is not in all respects
ready and in complete compliance with the
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requirements set forth herein as of the commencement, then Carrier shall
provide substitute comparable equipment pursuant to Section 2.4.
1.2 Option to Extend Term The term of this Contract may continue
after the expiration of the Initial Term set in Section 1.1 for up to three (3)
additional two (2) year periods (each two year period being an "Extension")
beginning January 1, 1996 unless Carrier or Shipper gives written notice of
termination at least 270 days before the beginning of an Extension. If neither
party makes a written declaration to terminate this Contract as provided
herein, then the Contract shall continue in effect without modification except
that the freight rates in Sections 5.1 and 5.2 ("Freight Rates") and demurrage
rates in Section 5.7 ("Demurrage Rates"), exclusive of the effect of any
adjustment to either the Freight Rates or the Demurrage Rates pursuant to
Section 5.10 or Article XVI, shall be subject to an annual escalation effective
as of January 1, 1996, and each January 1 thereafter, on the basis of the
arithmetic average of two components each weighted equally. One component is
the arithmetic average of the Producer Price Index for Industrial Commodities
("PPI") as published by the U.S. Department of Labor, Bureau of Labor
Statistics for the period July through September preceding every January 1 in
which service is rendered by Carrier hereunder commencing January 1, 1996,
divided by the arithmetic average of the PPI for the three months, July through
September, 1993. The second component is the arithmetic average of the hourly
earnings in dollars per hour for the water transportation services industry as
reported in "Employment and Earnings" published by the U.S. Department of
Labor, Bureau of Labor Statistics ("EE") for the period July through September
preceding every January 1 in which service is rendered by Carrier hereunder
commencing January 1, 1996, divided by the arithmetic average of the EE for the
three months, July through September, 1993. Such Freight Rates and Demurrage
Rates shall continue, subject to the provisions of Article XVI, during any
Extension.
1.3 Early Termination for Material-Breach A material breach of
performance or observation of any requirement, covenant, warranty,
representation, or condition under this Contract shall be grounds for early
termination of this Contract if such breach continues for 30 days after written
notice thereof is given to the breaching party. However, nothing in this
section should be construed to waive any legal or equitable rights of either of
the parties concerning such breach.
1.4 Final Voyage Should the Vessel be on a voyage laden with
Shipper's Cargo upon the expiry of the period of this Contract, Carrier's
obligation to provide the service contracted for herein shall continue at the
same rate and conditions for such extended time as may be necessary for the
completion of the delivery of Shipper's Cargo.
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II. SPECIALIZED EQUIPMENT
2.1 Tow A barge specially outfitted to carry liquid petroleum
products in bulk including, but not limited to, No. 6 Industrial Fuel Oil and
No. 2 Diesel Fuel Oil (called "Tow" herein) shall be used by Carrier to perform
transport services under this Contract. The Tow will be a seagoing barge of
all steel construction documented and licensed under the laws of the United
States, currently known as "HA'AHEO", Official Number 649 722, which vessel
shall bear the following certificates, classifications and registrations, to
wit: United States Coast Guard (hereinafter "USCG") Certificate of
Documentation; USCG Certificate of Inspection; International Loadline
Certificate; and American Bureau of Shipping Certificate of Classification for
Hull, Maltese Cross A-1 Fuel Oil Barge, being of the following approximate
specifications: Length: 340 feet; Breadth: 78 feet; Depth: 19 feet; Gross
Tons: 4185. In addition to the foregoing, the Tow shall be outfitted in
accordance with Exhibits A and C herein, or the equivalent. Such description,
particulars and capabilities of the Tow shall be maintained by Carrier
throughout the period of this Contract so far as possible by the exercise of
due diligence. Shipper shall, during the term of this Contract, have the first
call on the use of this Vessel, subject to the conditions stated in Sections
2.4, 4.14, 5.2 and 6.2 of this Contract.
2.2 Tug The Tug shall be a seagoing tug owned by Carrier (called
"Tug" herein) suitable and sufficient to tow, shift, and assist the Tow or any
substitute Tow which shall be used by Carrier to perform transport services
under this Contract. The Tug shall be licensed, certified and registered under
all applicable local, State and Federal laws, rules and regulations and be
certified in compliance with all applicable USCG and classification society
requirements, and is currently known as the "HOKULELE," Official Number 653612.
The Tug has the following approximate specifications: Shaft Horsepower: 3,900;
Length: 117 feet; Breadth: 34 feet; Depth: 17 feet; Gross Tons: 98.2. In
addition to the foregoing, the Tug shall be outfitted in accordance with
Exhibits B and C herein, or its equivalent. Such description, particulars and
capabilities of the Tug shall be maintained by Carrier throughout the period of
this Contract so far as possible by the exercise of due diligence. Shipper
shall, during the term of this Contract, have the first call on the use of this
Vessel, subject to the conditions stated in Sections 2.4, 4.14, 5.2 and 6.2 of
this contract.
2.3 Vessel Clarification For purposes of clarification, it is
understood that both the Tug and Tow described in this Contract, and any
substitute Tow and substitute Tug provided in accordance with Section 2.4
herein, shall be individually or collectively referred to by the term "Vessel"
in this Contract.
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2.4 Substitutions It is the intent of this Contract to provide
Shipper with complete assurance that Carrier's Tug and Tow will be available as
required by the Shipper during the term of this Contract. In this connection,
Carrier covenants that during any period in which the Vessel is out of service,
regardless of the duration of such service suspension or whether or not the
suspension of service was scheduled or anticipated except as provided in
Section 7.1, that a suitable substitute service, including but not limited to
the substitution of another Vessel of generally similar capability and capacity
and acceptable to Shipper, shall be employed by Carrier for service hereunder
at no additional cost to Shipper. All provisions of this Contract shall apply
to such suitable substitute service.
As confirmation of its ability to perform in accordance with
the preceding, Carrier warrants that during the period of this Contract it will
maintain an effective agreement acceptable to Shipper with an owner, bareboat
charterer or time charterer of a suitable substitute Tow, for the use of such
Vessel pursuant to Carrier's responsibility to provide suitable substitute
service hereunder. Carrier agrees to provide documentary evidence of such
arrangement for a substitute Tow to Shipper on or before January 1, 1994.
Carrier shall notify Shipper at least sixty (60) days prior to the expiration
of any such agreement the steps it has undertaken to extend or replace said
agreement with an alternative arrangement acceptable to Shipper.
Carrier warrants that any substitute Tow shall be fully
capable and ready to transport dirty petroleum products and is in all other
respects able to perform in accordance with the requirements set forth in this
Contract including but not limited to valid coverage under Carrier's oil spill
liability and other insurance policies and can lawfully operate under a USCG
Certificate of Financial Responsibility and approved oil spill response plan
(hereinafter "Plan") consistent with the Cargo, ports and facilities
characteristic of the service provided Shipper. It is further understood and
agreed that such substitute Tow must be regularly stationed at a port or place
in the Hawaiian Islands and thus be readily accessible to Carrier in the event
it shall be needed.
2.5 Seaworthiness With respect to any Vessel supplied by Carrier
under this Contract, the Carrier shall be bound, before and at the beginning of
each voyage to exercise due diligence to: (a) make the Vessel seaworthy, tight,
staunch, strong, fit and in a thoroughly efficient state, order and condition
for ocean service in the Hawaiian Islands; (b) properly man the Vessel in
accordance with Section III and Exhibit D attached hereto; (c) make the tanks
and all other parts of the Vessel in which Cargo is carried, fit and safe for
the Cargo's reception, carriage, discharge and preservation; (d) equip the Tow
(or any substitutes) in accordance with the provisions of Exhibits A and C
which are attached hereto; (e) equip the Tug (or any substitutes) in accordance
with the
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provisions of Exhibits B and C which are attached hereto; (f) warrant that the
Vessel is fully in class and rigged with appropriate towing gear, fenders,
hoses, reducers and all other necessary and appropriate equipment for the safe,
efficient and proper loading of Cargo at Honolulu Harbor, Barbers Point Harbor
or BHP Petroleum Americas Refining Inc. Single Point Mooring and Sea Berth
off-shore Barbers Point (hereinafter "BHP SPM") in accordance with Exhibit C
attached hereto, and for the discharging of Cargo at ports or places on the
Island of Maui; and (g) ensure that the Plan is approved and filed with all of
the appropriate governmental authorities as required and is in accordance with
the Vessel's configuration and equipment, nature and amount of Cargo carried on
board the Vessel; that the Plan provides for adequate response capability at
the ports, places and marine facilities called and for seas and places of
transit; that a copy of the Plan is carried on board the Vessel; and that the
Vessel's Master, crew and tankermen are familiar and experienced with the
Plan's implementation.
2.6 Tank Calibration and Gauging All cargo tanks of the Tow shall
have been calibrated and ullage tables prepared in accordance with applicable
API/ASTM standards by a reputable independent inspector. The Tow shall have
clearly legible draft markings both fore and aft. The ullage tables shall
provide trim corrections. Wedge volume tables shall also be provided. The
reference point for gauging the striking height at the gauging point, and the
compartment number shall be clearly indicated on the gauging hatch of each
cargo tank. Copies of the above mentioned ullage tables shall be provided to
the Shipper and a legible copy shall be available on the Tow during loading and
discharge.
2.7 Cargo Transfer Equipment Carrier will supply all necessary
hoses, fittings, reducers and couplings (American and Metric) required for the
USCG approved transfer of Cargo to any and all of Shipper's loading and
discharge headers and will ensure that such hoses, fittings and couplings will
be available on a timely basis so as to meet Shipper's delivery schedule. All
manifold valves and fittings, outboard of the last fixed support to the Tow's
deck, that are used in the transfer of Cargo and ballast shall be made of
steel, malleable iron or other suitable material. Cast iron valves or fittings
are not acceptable.
Carrier shall provide a sufficient number of cargo hoses of
sufficient length and diameter, of a type appropriate for the nature of
Shipper's Cargo, and suitable for the Cargo's efficient loading and
discharging. Any and all cargo hoses used by the Vessel in performance of this
Contract shall be appropriately inspected, hydrotested and marked no earlier
than 12 months preceding their use hereunder. Further, Carrier warrants that
any and all cargo hoses used in service to Shippers shall be inspected and
hydrotested at intervals not to exceed 12 months.
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III. VESSEL PERSONNEL
3.1 Complement Carrier warrants that during the period of this
Contract, the Vessel shall have a full and efficient complement of Master,
officers and crew, with adequate training and experience in operating all of
the Vessel's equipment; that the Master, officers, mates and crew shall possess
valid and current certificates/documents issued and approved by the USCG as
required; and that the Carrier's personnel shall be trained, experienced,
certificated and proficient in accordance with Exhibit D as attached hereto.
3.2 Tankermen Carrier will furnish the necessary personnel for
loading and discharging the Tow, including providing or arranging for a minimum
of two trained, licensed and certificated tankermen to attend the Vessel at all
times when the Vessel is arriving and departing the berth of Cargo loading and
discharge, during Cargo operations and at all times when the Vessel is at berth
in a laden condition.
3.3 Employee Responsibility and Training Carrier warrants that
the Vessel's Master, officers and tankermen have formal job descriptions which
include all duties and responsibilities. Carrier also warrants that such
responsibilities and duties of the Master, officers and tankermen in such areas
as seaworthiness of Vessel, safe navigation, weather and sea conditions, tow
wires, preventing leakage, towing and deck machinery, condition of tanks,
training and readiness, compliance with laws and regulations, including manning
laws and regulations, and display of documents, are spelled out and known by
them. Carrier further warrants that all personnel have received as of the date
of the commencement of this Contract, and will continue to receive throughout
the term of this Contract, formal instruction and informal training in
conformity with the requirements of Shipper and Shipper's Cargo suppliers'
terminal facilities in such areas as: general safety practices and procedures;
fire fighting, oil spill control and other emergency procedures; health hazards
including hazardous materials handling; and tank barge operations for
tankermen.
3.4 Master's Duties Carrier shall provide to Shipper professional
histories showing tank barge towing experience of the Master and officers
serving on board the Vessel at the commencement of this Contract. Similar
histories shall be furnished for any new Master and officer assigned to the
Vessel during the period of this Contract.
The Master shall determine whether operations requested by the
Shipper can safely be undertaken and whether the Vessel is capable of
undertaking or being employed to carry out the directions and orders of the
Shipper, provided that said Master shall not unreasonably refuse any request to
undertake operations or carry out any order or direction specified by the
Shipper. The Master, although appointed by and in the employ of the Carrier
and
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subject to the Carrier's direction and control, shall prosecute his voyage with
the utmost dispatch, shall render all reasonable assistance with the Vessel's
officers, crew and equipment and shall observe the orders of Shipper in
connection with Shipper's agencies and arrangements including but not limited
to Shipper's Cargo suppliers and receivers, the terminal and marine facility
personnel of Shipper's Cargo suppliers and receivers, and Cargo inspectors.
Nothing in this Contract shall be construed as vesting Shipper or its agents
with any control over the physical operation or navigation of the Vessel.
If the Shipper shall have reason to be dissatisfied with the
conduct of the Master, officers or tankermen, the Carrier shall, on receiving
particulars of the complaint, investigate and, if necessary, make a change in
the appointments or practices required to obtain the services contracted for
herein.
3.5 Mooring Master Carrier will use and employ the nominated
mooring master (hereinafter "Mooring Master) to advise in mooring, connecting
of hoses, discharging, loading, unmooring and departing from the BHP SPM as and
if required by the SPM terminal operator. However, at all times, the Master
of the Vessel remains solely responsible for the safety of the Vessel, its
officers and crew during these operations. The Mooring Master is supplied on
the condition that in the performance of any service rended to Carrier's
Vessel, he is the servant of the Vessel and the Carrier and not the servant of
the Shipper nor any of its associated or affiliated companies, nor any of
Shipper's Cargo suppliers and receivers, nor any of the employees,
representatives, servants and agents of any of the foregoing. The Vessel and
Carrier shall indemnify and hold Shipper, its associated and affiliated
companies, Shipper's Cargo suppliers and receivers, and any of the employees,
representatives, servants and agents of any of the foregoing harmless from any
losses, damages, delays, claims and liabilities arising out of the Mooring
Master's rendering of services to the Vessel. Presence of the Mooring Master
on board in no way relieves the Master of the Vessel of any legal
responsibilities or of any of the responsibilities of the Carrier, Vessel and
Vessel Master incurred under this Contract; and final decisions remain the
Master's prerogatives.
3.6 Drug and Alcohol Carrier warrants that it has a policy on
Drug and Alcohol Abuse ("Policy") applicable to the Vessel which meets or
exceeds the standards of the USCG including but not limited to those set forth
in 46 CFR Parts 4, 16 and 40 for "Procedures for Transportation Workplace Drug
Testing Programs" and "Chemical Testing" which provides for testing for alcohol
and drug impairments; provides that appropriate personnel including seafarers
and tankermen be tested; and provides that the drug/alcohol testing and
screening shall include reasonable cause testing, random testing,
pre-employment testing and testing during routine medical examinations.
Carrier understands and agrees that an objective of the Policy should be that
the testing act as an
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effective abuse deterrent. Carrier warrants that the Policy will remain in
effect during the term of this Contract and that Carrier shall exercise due
diligence to ensure that the Policy is complied with. It is understood that an
actual impairment or any test finding of impairment shall not in and of itself
mean the Carrier has failed to exercise due diligence.
3.7 Equal Opportunity During the period of this Contract, Carrier
warrants that it shall comply with the requirements of the Federal Government
and the State of Hawaii with respect to maintenance of non-segregated
facilities, equal employment opportunity, affirmative action for veterans,
disabled veterans, minorities and handicapped workers.
3.8 Documented Procedures Carrier warrants that it has formal
written procedures governing such crew activity as work vests, hard hats,
breathing apparatus, safe access, smoking, lighting and lifesaving equipment.
Carrier also warrants that it has formalized tankermen procedures in place
which cover operational subjects such as but not limited to the following:
emergency procedures; vessel inspection checklist covering towing gear, lights,
machinery, cargo tanks, mooring gear, cargo gear, engine room and deck
fittings; vessel mooring; cargo integrity; cargo transfer equipment
connections; pre-transfer conference; cargo inspection and gauging procedures;
trim and stress; static hazard procedures; specific cargo transfer procedures;
cargo heating procedures, topping off procedures; tank stripping operations;
transfer shutdown procedures; startup transfer procedures; operating logs;
pollution control; cargo tank ventilation and tank entry hazards; and damaged
barge management. Carrier further warrants that it has an audit or review
program in place which includes provision for penalties or other disciplinary
actions to assure compliance with prescribed safety practices and operating
procedures.
3.9 Safety Program Carrier is to maintain a formal safety program
concerning all procedures including but not limited to navigation, operations,
cargo handling, tank cleaning, voyage repairs and documented monthly safety
meetings.
Carrier is also to maintain formal procedures to track and
communicate events involving serious damage to Vessel or marine facilities,
injuries, oil spills and other casualties including "near miss" incidents
involving Carrier or its affiliates, whether or not the event is related
directly to services provided Shipper under this Contract. This program is to
inform personnel and the Shipper as to the causes, findings and recommendations
arising from an investigation of such incidents with the objectives of reducing
the likelihood of a recurrence and improving the effectiveness and state of
readiness of casualty response activities.
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IV. CARRIAGE, LOADING AND DISCHARGE
4.1 Alternate Ports The Cargo shall be loaded, transported and
discharged by Carrier at and between one or more ports and places within the
State of Hawaii as directed by Shipper.
4.2 Vessel Berth The Vessel shall not be required to proceed to
any location for loading or discharge which it cannot safely reach or at which
it cannot at all times of tide and weather safely lie afloat. Notwithstanding
anything contained in this Contract, Shipper shall not be deemed to warrant the
safety of any port or public channels, fairways, other waterways and approaches
thereto, or berth, dock, anchorage, and/or submarine line and shall not be
liable for any loss, damage, injury or delay resulting from conditions at such
ports or public channels, fairways, other waterways and approaches thereto, or
berths, docks, anchorages and/or submarine lines not caused by Shipper's fault
or neglect or which could have been avoided by the exercise of reasonable care
on the part of the Master or Carrier.
4.3 Marine Facilities Shipper shall provide a berth free of all
wharfage and dockage fees. All fees and other charges on the Vessel, including
without limitation those incurred for assist tugs, stand-by boats, pilots,
mooring masters, other port costs and taxes on services of Cargo transfer, with
the exception of such costs as are defined as being for the account of the
Shipper in Sections 5.11 and 5.12, shall be borne by the Carrier.
The Vessel shall operate in compliance with any and all
regulations including operating and safety regulations of the operator of any
marine terminal facility, wharf, berth or dock for which the Vessel is
nominated by Shipper to load or discharge Cargo hereunder when Vessel is
approaching, alongside or departing said facility, wharf, berth or dock.
Should Vessel fail to comply with such rules and regulations or should the
terminal representative determine that an unsafe condition exists with respect
to the Vessel, the terminal representative shall have the right to order the
Vessel to immediately cease loading or discharge operations and leave its place
of mooring. Any and all time lost as a result of such Vessel non-compliance
shall not count as used laytime or as demurrage if Vessel is on demurrage and
all costs and expenses that arise as a result of such non-compliance shall be
for the account of the Carrier.
Carrier shall assume full responsibility for any damage
sustained by wharves, berths or docks located at a cargo loading or discharging
facility called in the process of providing service hereunder which arises out
of the negligent or improper operation of Vessel, assist tug, stand-by boat or
any other waterborne craft, either owned or operated by Vessel or Carrier or
being operated by an agent or subcontractor of Vessel or Carrier. Carrier
shall
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fully and completely indemnify Shipper, and the owner and operator of any such
facility, wharf, berth or dock for the consequences of any such negligent or
improper operation.
4.4 Tow Makeup Carrier shall be responsible for making up the Tow
and for determining the method and position in which it shall be towed.
4.5 Pumping In and Out All Cargo shall be loaded into the Tow by
shore pumps as designated by Shipper and at the expense and risk of Shipper up
to the connection to Carrier's hoses or, if Carrier's hoses are not used, to
the permanent hose connections on the Tow. All Cargo shall be discharged by
the Tow pumps and at the expense and risk of Carrier up to the connection of
Shipper's designated dock headers. Carrier shall provide all necessary and
sufficient pumps, power, hoses and hands required on board for safely mooring
and unmooring, connecting and disconnecting of hoses and loading and
discharging. Vessel shall load and/or discharge more than one grade of Cargo
simultaneously if Vessel is technically capable of doing so.
Vessel shall load at rates requested by Shipper, its agents or
terminal facility personnel having due regard for the safety of the Vessel and
the environment. Carrier warrants that Vessel shall discharge Cargo at the
rate of 3,000 barrels per hour or maintain a minimum pressure at the Vessel's
manifold of 100 psi in accordance with Exhibit A as attached hereto, provided
shore facilities permit.
All time lost as a result of Vessel being unable to discharge
its Cargo in accordance with the pumping warranty above shall not count as used
laytime or, if Vessel is on demurrage, as time on demurrage. If the terminal
or place of discharging does not allow or permit Vessel to meet the above
warranty or requires discharging grades consecutively, Master shall forthwith
issue a Letter of Protest (which should, if practical, be acknowledged in
writing) to such terminal or place. If Master fails to issue the Letter of
Protest, Carrier shall be deemed to waive any rights to contest that time was
lost as a result of Vessel's failure to comply with the above pumping warranty.
Any pumping time lost solely due to restrictions imposed by the terminal or
place of discharge shall count as used laytime or, if Vessel is on demurrage,
as time on demurrage.
4.6 Cargo Hose Markings Before making hose connections for
loading or discharging or before changing Cargo type to be transferred through
the same hose, or when two or more hoses are used simultaneously, both ends of
each hose shall be marked with Shipper's Cargo type and checked by Carrier's
and Shipper's representative before Cargo is moved. This is intended to avoid
contamination or mixtures.
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4.7 Cargo The Carrier shall properly and carefully load, handle,
stow, carry and discharge Shipper's Cargo. The types of Cargo carried under
this Contract shall be clean and dirty petroleum products, including but not
limited to aviation grade kerosine (to be used for non-aviation purposes only),
non-aviation gas turbine fuels, diesel fuel oils and residual fuel oils, with a
maximum of 2 grades within the Tow's natural segregation. It is the intention
of Shipper that Cargo transported under this Contract will include but not be
limited to No. 2 Diesel Fuel Oil and No. 6 Industrial Fuel Oil which are
approximately described in Exhibits E and F attached hereto. The Cargo shall
be considered the property of the Shipper in the custody of the Carrier from
the time that the Cargo reaches the flange between the loading terminal's
shorelines and the Carrier's Vessel's permanent hose connection (or the
Vessel's hose, if Cargo is loaded through a hose provided by the Vessel) until
the Cargo reaches the flange between the Vessel's hose and the receiving
terminal's shorelines (or between the Vessel's permanent hose connection and
the receiving terminal's hose if Cargo is discharged through a hose provided by
the receiving terminal).
No Cargo, thing or substance which, due to its composition,
size, shape, weight or any combination thereof, constitutes an unreasonable
hazard to the Vessel, its safe operation or equipment is to be shipped, nor any
voyage undertaken nor goods or Cargo loaded that would involve risk of seizure,
capture or penalty by any government or governmental authority and no
contraband of war shall be shipped. Neither Carrier, Master nor Vessel shall
be responsible for leakage, contamination or deterioration in quality of the
Cargo due to inherent vice of the Cargo. No product or quantities of products
shall be shipped which the Vessel is not designed to carry unless the same may
legally be carried onboard the Vessel and Carrier consents to the carriage
thereof; and products to be shipped shall be subject to any limitations which
may be imposed by any classification society or any regulatory authority.
4.8 Cargo and Bunker Sample and Survey Carrier agrees to allow an
independent inspector appointed by the Shipper and Shipper's representative to
survey and take samples of the cargo and bunker tanks, cofferdams, ballast and
slop tanks or any other void space on the Vessel prior to, during and after the
time of the loading and discharge of Shipper's Cargo.
4.9 Cleaning The Tow is to be presented in a condition suitable
for loading the specified Cargo. Upon the initial presentation of the Vessel to
Shipper for service hereunder and in the case where the Tow has transported
third-party cargo or been other than in dedicated service to Shipper or Hawaii
Electric Light Company, Inc. ("HELCO"), Shipper shall have the right to sample
the residue of prior cargo in the Tow before loading Cargo to determine the
suitability of the Tow. In such instance, Shipper's representative shall
inspect the Tow and satisfy themselves that
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the tanks, lines and pumps are free of any residue not compatible with the
Cargo to be loaded. The time required for such sampling shall not count as used
laytime or demurrage if Vessel is on demurrage. If as a result of such
inspection, the Tow is found to be unsuitable, Shipper may order cleaning or if
in Shipper's judgment cleaning will not make the Tow suitable, Shipper may
reject the Tow at no cost to Shipper. The cost such cleaning shall be for
Carrier's account and the time required for such initial cleaning shall not
count as used laytime or demurrage if the Vessel is on demurrage. The cost of
cleaning the Tow's cargo tanks subsequent to the initial presentation of the
Tow and provided the Tow remains in Shipper's dedicated service shall be for
the account of Shipper and the time required for such additional cleaning shall
count as used laytime or demurrage if Vessel is on demurrage.
4.10 Tow Retention Shipper shall normally take prompt delivery of
all Cargo loaded aboard the Tow for Shipper's account. However, Shipper, at its
option, may at times retain its Cargo aboard the Tow. Retention time shall be
paid at the rates of $150.00 per hour.
4.11 Sailing Delays, Loading Port If on completion of loading of
the Tow, the Tow is delayed from sailing by more than two (2) hours due to a
change of schedule by Shipper, Shipper shall pay Carrier demurrage on the Tow
at the rate of $150.00 per hour from the time loading is completed until the
time the Tow actually sails.
4.12 Voyage Course and Speed Carrier does not guarantee any
particular speed during any voyage and does not warrant delivery of the Cargo
at destination at any particular date or time or to meet any particular market
or in time for any particular use. However, due to the critical nature of the
Cargo, Carrier shall prosecute the voyages with the utmost dispatch and to
proceed safely to designated ports of loading and discharge for any particular
voyage and will in any event other than a Force Majeure, promise to take
whatever steps may be necessary, consistent with prudent seamanship, to make
delivery of the Cargo or a replacement Cargo within 10 days of the scheduled
delivery date. Carrier shall have the sole discretion to determine the speed
and course which is prudent considering factors including but not limited to
sea and weather conditions, Vessel capacities and capabilities, crew safety,
other vessel traffic, port conditions and environmental safety.
4.13 Dry Cargo Shipper shall have the option of shipping any
lawful packaged or general dry cargo in any suitable space on board the Vessel,
including on Vessel's deck, subject to the approval of the Vessel's Master as
to the kind, character, amount and stowage of such dry cargo. Any and all
expense for dunnage, loading, stowing and discharging of dry cargo so incurred
shall be for the account of the Shipper. The time used loading and discharging
such dry cargo shall count as used laytime or demurrage if Vessel is on
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demurrage, but only to the extent that such time is not concurrent with time
used loading and/or discharging the oil Cargo.
4.14 Other Trades Carrier shall have the right to employ the Tow
in other trades so long as Shipper's requirements are met. In the event that
Shipper has a requirement for services under this Contract at a time when the
Tow is in use for other trades, Carrier will provide with reasonable advance
notice a suitable substitute service at no additional cost to Shipper.
4.15 Joint Voyages With HELCO Carrier also has a contract to
transport petroleum products in bulk for HELCO, the term of which is
coextensive with the term of this Contract. On occasion, Carrier may load and
transport cargo for HELCO jointly on the same voyage with Cargo loaded and
transported for MECO. In such instances, unless clearly specified or clear in
the context, the rights and responsibilities of "Shipper" under this Contract
shall, as between MECO and HELCO, and except as to the Freight Rate to be paid
under Section 5.1, accrue solely to MECO for any portion of such voyage when
Carrier is transporting Cargo for MECO, but no cargo for HELCO, and shall be
shared with HELCO as to any portion of such voyage when Carrier is loading and
transporting both MECO's Cargo and cargo for HELCO ("Joint Voyage").
V. SERVICES AND RATES
5.1 Freight Rate The following freight rates ("Freight Rate")
include Tug (fully found with fuel) and Tow services as well as Tankermen
labor.
A. Freight Rate for liquid petroleum products in bulk
transported for MECO on voyages where petroleum
products are not also transported in bulk for HELCO
or another party shall be:
Rate Per Barrel
----------------------- Volume Range for
No. 6 No. 2 Combined Cargo Per
Port Fuel Oil Diesel Voyage in Barrels
---- -------- ------ -----------------
Kahului $1.10 $1.10 45,000 minimum
$0.75 $0.75 45,001 to 48,000
$0.66 $0.66 48,001 to 53,000
$0.50 $0.50 Above 53,000
Exhibit G attached hereto contains sample freight rate
calculations for voyages to Maui.
B. Freight Rate for MECO for liquid petroleum products
in bulk transported for MECO on a Joint Voyage where
liquid petroleum products in bulk are also
transported for HELCO shall be:
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1. For voyages on which total cargo loaded for
HELCO and MECO is less than 48,000 barrels:
Freight Rate = (48,000 x $1.55) - HELCO Freight
--------------------------------
MECO bbl.
2. For voyages on which total cargo loaded for
HELCO and MECO is between 48,000 and 53,000
barrels:
Freight Rate = (Total bbl. x $1.55) - HELCO Freight
------------------------------------
MECO bbl.
3. For voyages on which total cargo loaded for
HELCO and MECO is above 53,000 barrels:
Base Rate: $1.55 X 53,000 bbl. = $82,150
Freight Rate = $82,150 + ($0.75 x (Total bbl. - 53,000)) - HELCO Freight
---------------------------------------------------------
MECO bbl.
Where,
Freight Rate = the dollars per barrel paid by MECO
for Cargo transported on a Joint Voyage with HELCO
cargo.
HELCO Freight = the freight charges paid by HELCO on
the Joint Voyages as computed under Section 5.1 of
the Contract of Private Carriage between Hawaiian
InterIsland Towing, Inc. and HELCO referenced in
Section 4.15 of this Contract.
MECO bbl. = the volume of Cargo in barrels loaded on
the voyage which are to be delivered to MECO.
Total bbl. = the sum of cargo volumes in barrels
loaded for HELCO and MECO.
Sample freight rate calculations for Joint Voyages with HELCO are
attached hereto in Exhibit H.
5.2 Freight Reduction On Shipments Made In Conjunction With Third
Parties MECO shall accommodate to the extent practicable the hauling of
petroleum products in bulk for parties other than MECO or HELCO (hereinafter
"third-party cargo") on voyages performed under this Contract. For the purpose
of determining the freight cost of MECO's Cargo when transported by Carrier in
conjunction with such third-party cargo, MECO's Freight Rate shall be
calculated according to Section 5.1. of this Contract. Carrier shall reduce
MECO's freight cost by an amount equal to one-half of the highest base Freight
Rate in Section 5.1 (which is one half of
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$1.10 per barrel, or $0.55 per barrel), as amended, multiplied by the volume
of the third-party cargo. For the purpose of computing freight charges,
amounts collected for excess laytime, movement to additional berths and
demurrage will be excluded from freight charges. Sample Freight Rate
calculations for voyages performed in conjunction with third-party cargo are
attached hereto in Exhibit I.
5.3 Cargo Volume Freight charges will be based upon net quantity
loaded into the Tow as shown by shore tank gauges or positive displacement
meter unless otherwise requested and agreed upon in advance. The quantity of
Cargo so measured shall be corrected for liquid temperature to the quantity
equivalent at 60 degrees F. in accordance with the latest edition of the
ASTM-IP Petroleum Measurement Tables.
5.4 Laytime Duration Allowable laytime limits for loading shall
be twelve (12) hours ("Standard Loading Laytime") except for Cargo shipped in
conjunction with HELCO where the allowable laytime for loading both cargo
parcels shall be Standard Loading Laytime. The allowable loading laytime solely
for MECO for such Joint Voyage with HELCO cargo shall be that part of Standard
Loading Laytime which bears the same relationship to the total Standard Loading
Laytime as the number of MECO barrels of Cargo bears to the total number of
MECO and HELCO barrels of cargo. Allowable laytime for discharging at Maui
shall be twelve (12) hours for a Cargo of 45,000 barrels or less and for a
Cargo in excess of 45,000 barrels, one additional hour of laytime shall be
added to the twelve (12) hours for each 3,000 barrels, or part thereof, of
Cargo above 45,000 barrels ("Standard Discharge Laytime") except for Cargo
shipped in conjunction with HELCO where the allowable laytime for discharging
both cargo parcels shall be Standard Discharge Laytime. The allowable discharge
laytime solely for MECO for such Joint Voyage with HELCO cargo shall be that
part of Standard Discharge Laytime which bears the same relationship to the
total Standard Discharge Laytime as the number of MECO barrels of Cargo bears
to the total number of MECO and HELCO barrels of cargo. Allowable laytime for
Laytime for loading and discharge operations is non-reversible.
5.5 Laytime Loading Laytime for loading shall be as follows:
Laytime shall commence at loading berths, either in Honolulu Harbor or at
Barbers Point Harbor when the Tow is alongside and secured at loading pier.
Laytime shall commence at the BHP SPM when the Vessel is all fast to the buoy
or upon three (3) hours expiration after Vessel has tendered Notice of
Readiness, whichever first occurs. Laytime shall cease when the loading is
completed and the Tow is secured and ready for sea. Demurrage charges for
loading at Honolulu Harbor will apply only to the Tow until the loading is
completed and the Tow is secured and ready for sea. Demurrage charges for
loading at Barbers Point Harbor shall accumulate on the Tug for only that time
the Tug is standing by.
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5.6 Laytime Discharge Laytime shall commence at discharge berth
upon the expiration of three (3) hours after Vessel has tendered Notice of
Readiness or when the Vessel is alongside and secured at discharge pier,
whichever first occurs. Laytime shall cease when the discharge of the Cargo is
complete and the Tow is secured and ready for sea. Demurrage charges at
discharge shall accumulate on the Tug and tankermen for only that time the Tug
is standing by and tankermen attending the Tow.
5.7 Demurrage:
A. Tow per hour: $150.00
B. Tug per hour: $223.00 Not Under Power
C. Tug per hour: $398.00 Under Power
D. Tankerman per manhour: $41.00
On voyages where Carrier transports liquid petroleum products
in bulk for both Shipper and HELCO, Shipper shall be responsible only for that
part of demurrage for exceeding loading laytime limits as calculated in
accordance with Section 5.4.
However, all periods of delay in loading or discharging which
are caused by: (1) the Vessel in reaching or departing the berth (including
weather delays, awaiting daylight, tide, assist tugs or pilots) caused by any
reason or condition not reasonably within the Shipper's control, or (2) the
Vessel in moving from port anchorage to all fast in berth or time consumed by
the Vessel lining up, draining pumps/lines or cleaning tanks, pumps and lines,
except as in Section 4.9, or (3) any delay due to operational deficiency of the
Vessel or breakdown or inability of the Vessel's facilities to load or
discharge Cargo, or (4) prohibition of loading or discharging at any time by
the port authorities or by the terminal facilities due to a violation of an
operating and/or safety regulation due to the condition of the Vessel or act or
omission by the Vessel's Master, crew or tankermen or (5) escape or discharge
of oil or the threat of an escape or discharge of oil on or from the Vessel
whether or not due to the condition of the Vessel or any act or omission to act
of the Vessel's Master, crew or tankermen, or (6) the non-compliance with USCG
regulations or failure to obtain or maintain any and all required inspection
letters, certificates, oil spill response plan approval on the part of the
Vessel its Master, crew or tankermen, or (7) labor dispute, strike, go slow,
work to rule, lockout, stoppage or restraint of labor involving Vessel's
Master, officers, crew or tankermen or assist tugs, stand-by boats or pilots,
or (8) an event of Force Majeure as defined in this Contract, or (9) the
neglect or interference of Carrier, its agents, or employees, shall not be
considered as used laytime or as demurrage if Vessel is on demurrage. Carrier
shall take any and all reasonable steps available to minimize demurrage time
and charges.
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5.8 Tankermen The tankermen shall manipulate all the Tow valves
and handle all the Tow lines and Tow connections at the places of loading and
unloading, as well as the necessary pumping facilities to effect the discharge
of the Cargo. Carrier will furnish all mooring lines for the Tow. Terminals
are responsible for the hose connection to their facilities. However, the
Carrier will provide mating adapters as required. The Tow winches and booms
may be utilized as well as marine loading arms, when available.
Tankermen travel costs to and at the island of Cargo discharge
including but not limited to airfare, meals, lodging and ground transportation
shall be invoiced at cost to Shipper. Carrier's supervisory personnel shall
schedule transportation and hotels for tankermen for the Tow trips to outer
islands. Carrier's best effort will be directed toward minimizing costs to the
Shipper through prudent scheduling of flights and planned loading/ discharging
schedules. Carrier will submit monthly invoices to Shipper for the aforesaid
tankermen travel costs on a voyage by voyage basis. However, the above
notwithstanding, in no event shall total tankermen travel costs exceed $450.00
per discharge port.
5.9 Heating of Fuel Oil Aboard the Tow Shipper shall reimburse
Carrier for the actual documented cost of fuel consumed by the Vessel's cargo
heating system when operated in response to Shipper's express instructions.
5.10 Diesel Fuel Price Adjustment In addition to other charges
contained in Article V of this Contract, the Shipper shall pay, or receive a
credit for, a Diesel Fuel Price Adjustment (DFPA), reflecting month to month
changes in the cost of Tug fuel which shall be calculated on a voyage by voyage
basis, as follows:
DFPA = (AFC - BFP) x DFC x (MECO Volume / Total Volume)
Where,
AFC = The Actual Fuel Costs paid by Carrier for No. 2 Diesel
Fuel in dollars per gallon exclusive of any and all taxes,
based on the actual price of diesel on the first day of the
month in which the voyage commences.
BFP = The base diesel fuel price, in dollars per gallon,
which shall be defined as the average of the Friday high and
low West Coast Spot prices for .5% sulfur Number 2 Diesel Fuel
in Seattle, as reported in Platt's Oilgram Price Report during
the month of December 1993, expressed in dollars per gallon,
plus $.14 per gallon. If Platt's Oilgram does not publish a
high and low price for a particular Friday during the relevant
period, the high and low prices for the closest preceding day
for which Platt's Oilgram is published will be used.
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DFC = The actual diesel fuel consumed during the voyage, in gallons, as
determined by sounding the fuel tanks of the Tug, before and
after the voyage.
MECO Volume = The Cargo volume in barrels being transported
for MECO during the subject voyage.
Total Volume = The total cargo volume in barrels being
transported on the voyage including Shipper, HELCO, and others.
Provided, however, that no DFPA shall be due unless the absolute difference
between AFC and BFP is greater than 10% of AFC.
5.11 Additional Berths/Ports When more than one berth within a
port is required to complete the loading or discharge of Shipper's Cargo,
Shipper shall pay $500.00 to cover in full any and all additional expenses
incurred by Carrier by reason of calling at such additional berth. Such
additional expenses shall include but not be limited to shifting expense,
dockage and pilotage.
When more than one port (for which purpose the BHP SPM shall
constitute a separate port) is called to complete the loading of Shipper's
Cargo, Shipper shall reimburse Carrier for the amount of the normal port
charges of the second port of loading. Time spent in transit commencing at the
point of passing the sea buoy outbound at the first port of loading until
passing the sea buoy (or entering the normal anchorage area) inbound at the
second port of loading shall count as used laytime or demurrage if Vessel is on
demurrage.
5.12 Port, Dues, Taxes and Other Charges Carrier shall pay for the
cost of pilotage, port entry, and dockage for the Vessel except (1) Shipper
shall reimburse Carrier for the cost of the Mooring Master and stand-by boat
incurred solely as a result of the Vessel loading Cargo at the BHP SPM; and (2)
Shipper shall pay Carrier for the services of any tug engaged to escort or
assist the Vessel while entering, while at berth and while departing Barbers
Point Harbor, provided also that such tug escort or assist is required by the
USCG or the State Harbors authority, on the basis of the rate per hour
stipulated in Section 5.7 B for the hours commencing when the Vessel is
alongside and all secure until such time as loading operations are completed
and the Vessel ready to depart. Notwithstanding the provision for payment and
reimbursement of dockage in Section 7.2, Shipper is responsible for all Cargo
related costs, including but not limited to hose watch, independent inspection
and gauging of the Cargo, wharfage, tolls, and guard services while Tow is idle
and loaded with Shipper's Cargo. Dues and local, State and Federal taxes and
other charges imposed, levied or assessed against the Vessel shall be paid by
the Carrier and local, State and Federal taxes imposed, levied or assessed
against the Cargo shall be paid by Shipper subject to Section 7.2. Vessel
shall be free of charges for the use of any
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place(s) when used solely for the purpose of loading or discharging Shipper's
Cargo. However, Carrier shall be responsible for charges for any such place(s)
when used solely for Vessel's purposes, such as, but not limited to, awaiting
Shipper's orders, line, pump and tank cleaning, repairs, before, during or
after loading and/or discharging.
5.13 Losses Losses of Cargo of .5% or less by volume will be
regarded as normal industry practice and Carrier will not be responsible for
such shortage. Shipper shall present claim for loss of Cargo greater than .5%
by volume to Carrier latest 90 days after the completion of discharge of the
Cargo on the voyage with respect to which said claim arises. Such claim shall
include the cost of the Cargo lost and the freight charge paid or invoiced for
such non-delivered Cargo.
5.14 Freight Earned Full freight to destination on Shipper's Cargo
transported hereunder shall be completely earned when Cargo discharge is
complete at destination.
5.15 Billing, Payment and Disputes Payment for Tug, Tow,
tankermen, port and other charges shall be paid at Carrier's office address
first set out above within fifteen (15) days after receipt of Carrier's monthly
invoice. Invoices for charges must be accompanied by appropriate supporting
documents. In cases of dispute as to the amount of payment due, Shipper shall
not withhold any amounts due Carrier except for those amounts in dispute.
Shipper will notify Carrier in writing of any such disputed amounts within
fifteen (15) days following receipt of Carrier's invoice.
5.16 Waiver Of Claims Any claim for freight, demurrage and/or
charges or expenses under this Contract shall be deemed waived, extinguished
and absolutely barred if such claim is not received by Shipper or Carrier, as
the case may be, in writing with supporting documentation within 120 days from
the date of final discharge of the Cargo on the voyage with respect to which
said claim arises. This provision shall not apply with respect to claims for
damage, loss or shortage of Cargo, claims with respect to damage to shore
facilities, claims with respect to the injury of an employee of the Shipper,
Carrier, Shipper's Cargo suppliers and their agents, or claims arising in
connection to an escape or discharge of oil.
VI. SCHEDULING
6.1 Scheduling Carrier and Shipper understand and agree that to
meet Shipper's demands for the most efficient scheduling, loading and
discharging of the Vessel will require the general cooperation of each party.
To facilitate this objective, Shipper shall submit in writing to Carrier by the
10th of every month during the term of this Contract a proposed voyage schedule
for the following calendar month stating anticipated loading and discharging
times and location. Carrier shall make the appropriate
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berth reservations and other such arrangements consistent with said schedule
and as requested by Shipper. Carrier shall confirm to Shipper the making of
such reservations and arrangements verbally or by facsimile. It is understood
and agreed that this tentative schedule is not binding on Shipper and is to be
used only as a best-efforts estimate of Shipper's requirements.
6.2 Shipper to Have First Priority Notwithstanding Sections 4.14
and 5.2 above, except as provided for in this paragraph, the Carrier shall
provide the Tug and Tow described in Article II above, always giving Shipper
first priority for use of the Tug and Tow, above and beyond any other Carrier's
customers. However, if circumstances should arise whereby Shipper and its
sister Hawaiian Electric Company, Inc. ("HECO") subsidiary (HELCO), both need
and demand first priority use of the Tug and Tow at the same time, HECO will
determine the priority as between them and notify Carrier. Carrier will be
deemed to have fulfilled its obligation under this paragraph by following the
priority established by HECO. It is understood that it is the intent of this
section to provide Shipper with complete assurance that Tug and Tow services
will be available when and as ordered by Shipper.
6.3 Notice of Cancellation or Delay Shipper will endeavor to
advise Carrier, orally or in writing, as promptly as is reasonably practicable
of the cancellation or delay of previously scheduled and confirmed Tug and Tow
service; giving at least four (4) hours notice for cancellation or delay of
previously scheduled and confirmed Tow service, and at least four (4) hours
notice for cancellation or delay of previously scheduled and confirmed Tow
shifting service. If less than four (4) hours notice of cancellation or delay
of scheduled and confirmed services is given Carrier, then Shipper will pay for
charges, if such charges are incurred, up to an amount of four (4) hours of
demurrage at rates provided in Article V. Carrier shall exercise its best
efforts to minimize these charges by employing such tankermen and crew on its
other vessels or otherwise utilizing their services in an effort to reduce
these cancellation or delay charges. In such case, Carrier shall credit
Shipper with the amount of these savings.
VII. MAINTENANCE SERVICES AND OTHER REQUIREMENTS
7.1 Maintenance of the Tug and Tow The Carrier shall be solely
responsible for maintenance of the Tug and Tow. Carrier specifically covenants
and agrees that it will maintain the Vessel, its appliances and appurtenances,
in a state of repair that will allow for safe and efficient operation during
the term of the Contract, including but without limitation, keeping said Vessel
in full unexpired classification as may be required by the USCG or other
regulatory agencies having jurisdiction. As required, Carrier shall, at its
expense, drydock the Vessel for the purpose of keeping the Vessel in full
unexpired classification and meeting all USCG inspection requirements and
drydocking, and all charges
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incurred in connection therewith shall be for the Carrier's account. Shipper
and Carrier agree to arrange scheduled shipments to accommodate required
maintenance periods of up to ten (10) continuous calendar days, but not to
exceed twenty (20) total calendar days annually. It is further agreed that
Carrier must notify Shipper in writing no later than 90 days prior to the first
day of any period when the Vessel is expected to be out of service and
unavailable for the transport of Shipper's Cargo because of scheduled
maintenance, repair or drydocking in order to permit such an arrangement of
scheduled shipments. Failing such notification, Carrier shall arrange such
suitable substitute service as aforesaid. Carrier shall designate a company
representative to liaise with Shipper and report on the fulfillment of
Carrier's responsibility to carry out routine hull and equipment inspections,
preventative maintenance and schedule of Vessel repair, maintenance and
drydocking.
7.2 Other Required Services Carrier shall provide the following
additional services to Shipper: coordinating with Shipper and consignees the
loading and discharge of the Tow; making arrangement for berthing and pilotage
at ports or places on neighbor islands; making follow-up arrangements when
necessary due to schedule changes, weather and other operational
considerations, whether anticipated or unanticipated; scheduling the loading
and discharge of the Tow to meet required arrival and sailing times; preparing
loading plans for the Tow; computing and advancing dockage for which amounts
the Shipper shall make timely reimbursement to Carrier; computing, advancing
and filing with the State of Hawaii, Harbors Division, all required fees and
reports with respect to pipeline fees incurred during loading Cargo at Barbers
Point Harbor and Cargo discharge at Kahului, Maui, for which advances Shipper
shall make timely reimbursement to Carrier; and performing other operational
services not specified hereinabove concerning the movement of the Tow. Charges
for the aforesaid services are included in the Freight Rates charged in Article
V.
7.3 Shipper's Representative Shipper shall have the right and
privilege of having its representative(s) visit the Vessel and observe
operations while in port or at sea. Shipper's representatives shall have
access to the entire Vessel and the Master, officers and crew of the Vessel
shall cooperate with and render any reasonable assistance that Shipper's
representative may require.
VIII. INSURANCE
8.1. Carrier's Required Insurance Coverage The Carrier shall
maintain insurance as set forth below and that may be required under the
applicable laws, ordinances and regulations of any governmental authority.
Carrier shall present satisfactory evidence of the required insurance to the
Shipper prior to the commencement of this Contract including as follows:
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A. Workers' Compensation and Employers' Liability
Insurance as prescribed by applicable law, including
insurance covering liability under the Longshoremen's
and Harbor Workers' Act, the Jones Act and the Outer
Continental Shelf Land Act, if applicable; and
B. Commercial General Liability Insurance including
Bodily Injury and Property Damage Insurance with a
limit not less than $1,000,000 combined single limit
per occurrence; and
C. Hull and Machinery Insurance including collision
liability on vessels engaged in towage with a limit
at least equal to the full and actual value of each
and every Vessel Carrier owns or charters which is
used in the performance of work required under this
Contract; and
D. Protection and Indemnity Insurance under one of the
two following options:
(1) Full and valid Protection and Indemnity
Insurance including but not limited to
coverage for injuries to or death of masters,
mates and crew, and excess collision
liabilities. The limits of such insurance
shall not be less than $25 million per
occurrence. Full and valid vessel pollution
liability insurance including coverage for
TOVALOP liabilities and pollution liabilities
imposed by federal and state laws in an
amount not less than $500 million per
incident. Valid Excess Pollution Liability
Insurance must cover like liabilities for
Pollution for an amount not less than $200
million per incident, or the maximum
available; or
(2) Protection and 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; excess
collision liabilities and pollution
liabilities imposed by the 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
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$500 million or the maximum pollution limited
offered by the P&I Clubs of the International
Group. Such insurance shall also include
Excess Pollution Liability which must cover
like liability for pollution for an amount
not less than $200 million per occurrence or
the maximum amount available.
Carrier shall have the applicable insurance policies endorsed
to include:
a. a 30-calendar day written notice to Shipper prior to the
effective date of cancellation or material change of the
insurance; and
b. naming Shipper and Shipper's Cargo suppliers as an
additional insured in the coverage described in Sections
8.1 B, 8.1 C and 8.1 D (1); and
c. a waiver of all rights of subrogation and an assignment
of statutory lien, if applicable, against the Shipper and
Shipper's Cargo suppliers in the coverage described in
Sections 8.1 A and 8.1 C; and
d. a clause making Carrier's insurance primary in relation
to any other insurance available from Shipper; and
e. a Standard Cross Liability Endorsement or Severability of
Interest Clause, where applicable.
8.2 Shipper's Required Insurance Coverage Shipper shall procure
and maintain Cargo insurance for all Cargo loaded aboard the Tow in an amount
equal to the full actual value of the Cargo and on a form customary in the
American or London Insurance market. Such insurance shall include loading and
discharge.
8.3 Deductibles Any deductible amounts due under any of the
insurance coverage shall be paid by the Carrier or the Shipper for their own
respective required insurance coverage.
8.4 Continuation of Coverage Carrier warrants that it has
obtained the insurance coverage described in Section 8.1 and that during the
initial term
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of this Contract or any Extension thereof, Carrier agrees to continue such
coverage in force subject also the provisions of Article XVI herein.
IX. INDEMNITY
9.1 Indemnity For Tugs and Pilots Neither the Shipper nor any of
its associated or affiliated companies, nor any of Shipper's Cargo suppliers
and receivers, nor any of the employees, representatives, servants and agents
of any of the foregoing shall be responsible for any losses, damages, delays or
liabilities arising from any negligence, incompetence, or incapacity of any
pilot, stevedore, longshoreman, mooring master, Master or other personnel of
any assist tug or stand-by boat, or line handler arising from the terms of the
contract of employment thereof which terms Carrier hereby agrees to accept and
be bound by, or arising from any unseaworthiness or insufficiency of any assist
tug or stand-by boat the services for which were arranged by Shipper on behalf
of Carrier; and Carrier agrees to indemnify and hold harmless the Shipper, its
associated or affiliated companies, Shipper's Cargo suppliers and receivers,
and any of the employees, representatives, servants and agents of any of the
foregoing from and against any and all such losses, damages, delays or
liabilities.
When any pilot, mooring master, or Master or other officer of
an assist tug or stand-by boat furnished to or engaged in the service of
supplying tug power or assistance to the Vessel, (whether or not said person is
an employee, servant or representative of Shipper, its affiliated or associated
companies, Shipper's agents or Shipper's Cargo suppliers or receivers) goes
onboard the Vessel, it is understood and agreed that such person or persons are
to be considered independent contractors and become the borrowed servant of the
Carrier and the Vessel for all purposes and in every respect and shall be
subject to the exclusive supervision and control of the Vessel and her
personnel, and neither the Shipper nor any of its associated or affiliated
companies, nor any of Shipper's Cargo suppliers and receivers, nor any of the
employees, representatives, servants and agents of any of the foregoing nor
those providing the pilots, mooring master, Master or other officers of any
assist tug or stand-by boat shall be under any liability for errors of
navigation, management of the Vessel, or other losses, damages, delays and
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liabilities resulting therefrom. This shall include but not be limited to the
giving of orders to any tug or stand-by boat engaged in assisting Vessel and in
respect to the handling of the Vessel and to the order of the number and
horsepower of tugs assisting or standing by the Vessel. In respect to the
foregoing, Carrier hereby agrees to indemnify and hold harmless Shipper, any of
its associated or affiliated companies, any of Shipper's Cargo suppliers and
receivers, and any of the employees, representatives, servants and agents of
any of the foregoing from any and all losses, damages, delays and liabilities
whatsoever whether to third parties or otherwise, arising from the acts or
omissions of such pilot, mooring master, Master and other officers of any
assist tug or stand-by boat.
9.2 Shipper's Indemnification of Carrier To the fullest extent
permitted by law, Shipper shall indemnify and hold harmless the Carrier, its
affiliates and parent corporation and their respective officers, directors,
agents and employees from and against all claims, damages, losses, liabilities
or expenses (including but not limited to attorneys' fees) arising out of or in
any way connected with Shipper's performance under this Contract, excepting
only such losses as may be caused solely by the gross negligence or willful
misconduct of Carrier. Carrier, at its election, may control and defend the
proceedings or require the Shipper to defend at Carrier's direction, except
where such control is in conflict with any provisions of the Shipper's
insurance policies under which the Carrier is named as additional insured. In
either case, all parties will fully cooperate in providing all necessary
evidence (as determined by the Carrier to be reasonably required) for defense
of the proceeding.
Notwithstanding the preceding or the provisions of Article
XII, Shipper shall indemnify, defend and hold harmless Carrier, its directors,
officers, employees and agents (including but not limited to affiliates and
contractors and their employees) from and against all liabilities, damages,
losses, penalties, claims, demands, suits, costs, expenses, and proceedings of
any nature whatsoever directly or indirectly arising out of or attributable to
the release, threatened release, discharge, disposal or presence of oil or
hazardous material related to the Cargo transported under this Contract when in
the custody of Shipper except to the extent such release, threatened release,
discharge, disposal or presence of oil or hazardous material may be
attributable to the negligence or willful action of Carrier, including without
limitation: (1) all foreseeable and unforeseeable consequential damages; (2)
the reasonable costs of any required or necessary repair, cleanup or
detoxification of an area of oil or hazardous material and the preparation and
implementation of any closure, remedial or other required plans; (3) the
reasonable costs of the investigation of any environmental claims by Carrier;
(4) the reasonable cost of Carrier's enforcement of this Contract; and
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(5) all reasonable costs and expenses incurred by Carrier in connection with
clauses (1), (2), (3), and (4), including without limitation reasonable
attorney's fees and court costs.
9.3 Carrier's Indemnification of Shipper To the fullest extent
permitted by law, Carrier shall indemnify and hold harmless the Shipper, its
affiliates and parent corporation and their respective officers, directors,
agents and employees from and against all claims, damages, losses, liabilities
or expenses (including but not limited to attorneys' fees) arising out of or in
any way connected with Carrier's performance under this Contract, excepting
only such losses as may be caused solely by the gross negligence or willful
misconduct of Shipper. Shipper, at its election, may control and defend the
proceedings or require the Carrier to defend at Shipper's direction, except
where such control is in conflict with any provisions of the Carrier's
insurance policies under which the Shipper is named as additional insured. In
either case, all parties will fully cooperate in providing all necessary
evidence (as determined by the Shipper to be reasonably required) for the
defense of the proceeding.
Notwithstanding the preceding or the provisions of Article
XII, Carrier shall indemnify, defend and hold harmless Shipper, its directors,
officers, employees and agents (including but not limited to affiliates and
contractors and their employees) from and against all liabilities, damages,
losses, penalties, claims, demands, suits, costs, expenses, and proceedings of
any nature whatsoever directly or indirectly arising out of or attributable to
the release, threatened release, discharge, disposal or presence of oil or
hazardous material related to the Cargo transported under this Contract when in
the custody of Carrier except to the extent such release, threatened release,
discharge, disposal or presence of oil or hazardous material may be
attributable to the negligence or willful action of Shipper, including without
limitation: (1) all foreseeable and unforeseeable consequential damages; (2)
the reasonable costs of any required or necessary repair, cleanup or
detoxification of an area of oil or hazardous material and the preparation and
implementation of any closure, remedial or other required plans; (3) the
reasonable costs of the investigation of any environmental claims by Shipper;
(4) the reasonable cost of Shipper's enforcement of this Contract; and (5) all
reasonable costs and expenses incurred by Shipper in connection with clauses
(1), (2), (3), and (4), including without limitation reasonable attorney's fees
and court costs.
X. LIBERTIES
10.1 Deviations The Vessel shall have liberty to sail with or
without pilots, tow or be towed, and to deviate for the purpose of assisting
vessels in distress, saving life or property, landing any ill or injured person
on board or taking on fuel, supplies or other necessaries, or for repair,
provided that if it is necessary
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for the Tug to leave the Tow during any such deviation, the Tow shall be left
in a position of safety and the towage service resumed immediately upon
completion of the deviation, except the Carrier may at any time without penalty
take such reasonable action as necessary for the saving of life. No charges
for services under this Contract shall be charged Shipper during the period of
any such deviation.
XI. FORCE MAJEURE
11.1 Force Majeure For purposes of this Contract, an event or act
of "Force Majeure" shall mean: acts of God and the public enemy, hostilities
or war (declared or undeclared), embargo, riots, civil unrest, revolution,
sabotage, insurrection, blockades, strikes, epidemics, landslides, lightning,
earthquakes, fires, hurricanes, tsunamis, floods, tidal waves, volcanic
eruptions, explosions, total or partial expropriation, nationalization,
confiscation, requisitioning or abrogation of a government concession, closing
of, or restriction on the use of, a port or pipeline, inability to secure
petroleum product by reason of governmental regulations or otherwise, failure
of Shipper's suppliers' or its affiliated companies' machinery or pipelines,
loss or shortage of suitable crude oil or product supply or the suspension or
termination Shipper's suppliers' crude oil or petroleum supply contracts,
suspension or termination of Shipper's petroleum product supply contracts, or
an event affecting Shipper's Cargo suppliers' production, manufacturing,
distribution, refining, delivery or receiving facilities, power generation or
power distribution affecting Shipper's Cargo suppliers' facilities,
unavailability of Cargo or any other cause or contingency affecting Shipper's
Cargo suppliers or otherwise not reasonably within the control of the Shipper
which materially affects the Shipper's ability to fulfill any provisions of
this Contract. An event of Force Majeure shall also be taken to mean Carrier's
inability to comply with the State of Hawaii or USCG rules or regulations with
respect to required Certificates of Financial Responsibility, or its
equivalent, and any other cause not reasonably within the control of the
Carrier which materially affect Carrier's ability to fulfill any provisions of
this Contract.
11.2 Carrier's Obligation Carrier and its officers, directors, the
owners, operators, agents or charterers of Vessel shall not be liable for any
loss, damage or delay resulting from an event or act of Force Majeure.
Carrier's obligations including but not limited to rendering service under this
Contract shall be reduced or suspended for any period in which an event or act
of Force Majeure exists as to the Carrier and which can not be overcome by
Carrier through providing Shipper with a suitable substitute service as
provided in Section 2.4. In the event of any reduction or suspension of
Carrier's obligation to render service under this Contract, Shipper may obtain
towage service from another party for the period of Force Majeure.
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11.3 Shipper's Obligation Shipper and its officers, directors,
employees, agents and affiliated entities shall not be liable for any loss,
damage or delay resulting from an event or act of Force Majeure. Shipper's
obligations under this Contract shall be reduced or suspended for any period in
which an event or act of Force Majeure exists as to Shipper, or Shipper's
supplier, either singularly or collectively. However, nothing in this Article
XI shall excuse Shipper from its obligation to make payments of monies due
hereunder for towage service rendered prior to said act or event of Force
Majeure.
11.4 Notice of Force Majeure The party claiming Force Majeure
shall give the other party verbal notice of such act or event of Force Majeure
within twenty-four (24) hours of the occurrence and shall also send written
confirmation of the same to the other party immediately thereafter. The party
claiming Force Majeure shall use due diligence to cure any act or event of
Force Majeure, and shall give the other party verbal notice within twenty-four
(24) hours after the act or event of Force Majeure has terminated and shall
send written confirmation of the same to the other party immediately
thereafter.
11.5 Total Loss It is understood and agreed that in the event of a
total loss or constructive total loss being declared by Vessel underwriters to
the HA'AHEO, Carrier shall supply a replacement Tow for a period of one hundred
and twenty (120) days. Within thirty (30) days following the event which caused
the declaration of total loss or constructive total loss, Carrier shall declare
in writing to Shipper whether it will supply a Tow for service under the
Contract, meeting the requirements set forth herein. Such Tow shall be
tendered for delivery and approval of Shipper in accordance with the terms of
this Contract within ninety (90) days following such declaration, failing
which, Shipper shall have the unilateral right to terminate this Contract,
notwithstanding anything herein to the contrary.
XII. LIMITATION OF LIABILITY
12.1 Limitation of Liability Except as otherwise agreed in this
Contract, Carrier and Shipper shall be entitled to assert by way of limitation
of liability any principle of law or provision of any statute or regulation of
the United States that would afford either Carrier or Shipper, a limitation of
such liability and the provisions of any such statute or regulations limiting
liability as aforesaid are incorporated herein by reference and made applicable
hereto, as though fully set forth herein. For purposes of such limitation of
liability, Shipper and Carrier waive any claim that this is a personal contract
of the other party.
12.2 Not A Charter The parties agree that this Contract
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shall be construed as a private contract for carriage and not a charter and
that no provision of this Contract shall be construed as creating a demise of
the Vessel to Shipper.
XIII. GENERAL AVERAGE
13.1 General Average Sacrifice In the event of imminent danger,
peril, disaster, damage or accident before or after the commencement of the
voyage, subjecting the Tug, Tow and Cargo to a common peril, resulting from any
cause whatsoever, whether due to negligence or not, for which, or for the
consequences of which, the Carrier is not responsible by statute, contract or
otherwise, the Shipper and the owners of the Cargo, shall contribute with the
Carrier in general average to the payment of any sacrifices, losses or expenses
of a General Average nature that may be made or incurred and shall pay salvage
and special charges incurred in respect of the Cargo. If a salving ship is
owned or operated by the Carrier or its affiliates, salvage shall be paid for
based upon the regular hourly rates hereunder.
General Average shall be adjusted, stated, and settled
according to York/Antwerp Rules of 1974 (except Rule XXII), as amended 1990,
and, as to matters not provided for by those Rules, at such port or place in
the United States as may be selected by Carrier, and as to matters not therein
provided for, according to laws and usages in the Port of New York (except that
any payment made by Carrier to Shipper pursuant to Article XIV or to the
government or to others to remove oil or a threat of oil pollution as defined
in TOVALOP and used herein, as well as any other payments , with respect to
Vessel or Carrier's liability for oil pollution damage, shall not be deemed to
be General Average sacrifices or expenditures). If a General Average statement
is required, it shall be prepared by adjusters appointed by Carrier, who are to
attend to the settlement and collection of the General Average, subject to
customary charges. General Average Agreements and/or security shall be
furnished by Carrier and/or Shipper, if requested. Any cash deposit being made
as security to pay General Average and/or salvage shall be remitted in a duly
authorized and licensed bank at the place where the General Average statement
is prepared. For purposes of any General Average determination, it is
expressly agreed by and between the Carrier and Shipper, that the Tow, from
commencement of the voyage to its completion is under control of the Master of
the Tug.
XIV. POLLUTION
14.1 Compliance With Regulations During the period of this
Contract, Carrier and Vessel will comply with all local, State and Federal
laws, rules and regulations of whatsoever kind with respect to oil spill or
other water pollution liability or prevention applicable to the Vessel loading
at, discharging at, entering,
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leaving, remaining or passing through ports, places or waters in the
performance of this Contract. Carrier at its sole risk and expense shall make
all arrangements by equipping the Vessel, insurance, bonds, securities or other
evidence of financial responsibility, capability or security, USCG approved
Vessel-specific oil spill response plan and related employee training, formal
drills and exercises, and otherwise and shall obtain all such certificates and
documentary evidence and take all such other action as may be necessary to
satisfy such laws, rules and regulations including but not limited to USCG
pollution prevention regulations including but not limited to 33 CFR parts 154,
155, 156 and 157 and the U.S. Federal Water Pollution Control Act, as amended.
Vessel shall carry onboard a current USCG Certificate of Financial
Responsibility (Water Pollution). Carrier agrees to indemnify the Shipper
against any and all claims, damages, losses, liabilities, expenses, including
but not limited to reasonable attorney's fees and all other consequences
resulting from its failure to accomplish the foregoing.
14.2 Oil Spill Response Plan Carrier shall provide Shipper with
the Plan approved by and on file with the USCG and other local, State and
Federal authorities having jurisdiction for the response by the Vessel and
Carrier's organization to an oil spill incident. This Plan must include a
first aid response within the first thirty minutes of an incident and a
reliable source of follow-up clean up supplies (e.g. booms, skimmers, vacuum
trucks, manpower etc). As evidence of its ability to access such oil spill
response resources, Carrier warrants that it shall provide sufficient oil spill
response capability with respect to both small- and large-size oil spill events
occurring in near- shore and open-ocean environments by, including but not
limited to, maintaining contracts for spill response service with USCG-approved
response organizations including but not limited to the Clean Islands Council
and the Marine Preservation Association/Marine Spill Response Corporation for
the term of this Contract and any Extension and supplement thereto.
Information provided Shipper with respect to Carrier's
Vessel's oil spill response plan should include but not be limited to the
following:
a. Company response team format.
b. Communication flow chart including names and
24-hour contacts of participating company
personnel.
c. Procedures for assembly of response team.
d. Check list for reporting minor oil spill
events and check list which assists shore
personnel in obtaining accurate information
about major spill events from the Vessel.
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e. Contact reference data for oil spill
responders contracted to provide assistance
to Carrier.
14.3 Pollution Mitigation When an escape or discharge of oil or any
polluting substance occurs from or is caused by the Vessel or marine facility
or occurs from or is caused by loading or discharging operations and results in
or threatens to cause pollution damage, or when there is the threat of an
escape or discharge of oil (e.g. a grave and imminent danger of the escape or
discharge of oil which, if it occurred, would create a serious danger of
pollution damage), Carrier or Shipper or their representatives, agents or
employees shall promptly take whatever measures are necessary and reasonable to
prevent or mitigate such environmental damage (without regard to whether or not
said discharge was caused by a negligent act or omission by the facility, by
the Vessel or Shipper or Carrier or others). Carrier hereby authorizes
Shipper, or its agent, at Shipper's option, upon notice to Carrier or Master,
to undertake such measures as are reasonable and necessary to prevent or
mitigate the pollution damage. The party undertaking such measures shall keep
the other advised of the nature and results of any measure taken by it, and, if
time permits, the nature of the measures intended to be taken by it. Any of
the aforementioned measures actually taken by Shipper shall be deemed taken on
the Carrier's authority, and shall be at Carrier's sole expense (except to the
extent such discharge was caused by the negligence or willful action of Shipper
or its agent) and prompt reimbursement shall be made as appropriate for the
costs of measures taken pursuant to this clause; provided, however, that should
Carrier or its agent give notice to Shipper to discontinue said measures (and
to the extent government authorities allow Shipper to discontinue said
measures) the continuance of Shipper's cleanup actions will no longer be deemed
to have been taken pursuant to the provisions of this clause. No Vessel or
tankermen charges will be incurred for Shipper's account during any lost time
resulting from the events dealt within this subparagraph if such events were
caused or contributed to by Carrier.
14.4 Liability to Third Parties Notwithstanding any other
provision in this Contract, the provisions of Section 14.3 shall be applicable
only between Carrier and Shipper and shall not affect, as between Carrier and
Shipper, any liability of Carrier to any third parties, including the
government, if Carrier shall have such liability nor any liability of Shipper
to any third parties, including the State of Hawaii and the U.S. Government, if
Shipper shall have such liability.
14.5 Liability For Transport Of Hazardous Material Should Shipper
incur any liability under Chapter 128D, of the Hawaii Revised Statutes as a
result of an escape or discharge of oil from the Vessel at berth or during
transit or occurs from or is caused by loading or discharging operations,
Carrier shall indemnify and
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hold Shipper harmless except to the extent such escape or discharge was caused
by or contributed to by the negligence or willful action of the Shipper or its
agents or employees.
XV. GENERAL PROVISIONS
15.1 Business Policy Carrier agrees to comply with all laws and
lawful regulations applicable to any activities carried out in the name, or
otherwise on behalf, of Shipper under the provisions of this Contract. Carrier
agrees that all financial settlements, billings and reports rended by Carrier
to Shipper, as provided for in this Contract, shall, in reasonable detail,
accurately and fairly reflect the facts about all activities and transactions
handled for the account of the Shipper.
15.2 Notices Except as otherwise expressly provided herein, all
notices and communications required by the terms hereof from the Carrier to
Shipper and from Shipper to Carrier shall be made in writing, facsimile or
telex to the following addresses, or such other address as the parties may
designate by notice, and shall be deemed given upon receipt:
Carrier: President
Hawaiian Interisland Towing, Inc.
Dillingham Transportation Building
735 Bishop Street, Suite 312
Honolulu, Hawaii 96813 FAX: (808) 524-5312
Shipper: Manager, Purchasing and Materials Management
Hawaiian Electric Company, Inc.
P.O. Box 2750
Honolulu, Hawaii 96840 FAX: (808) 543-5621
15.3 Entire Contract This instrument constitutes the entire
Contract of the parties with respect to all matters and things herein
mentioned. It is expressly acknowledged and agreed by and between the parties
that neither party is now relying upon any collateral, prior or contemporaneous
agreement, written or oral, assurance or assurances, representation or
warranty, or any kind or nature as to or respecting the condition or
capabilities of the Tug and Tow and the other matters and things, rights and
responsibilities herein fixed and described. No modifications, waiver or
discharge of any term or provision of this Contract shall be implied in law,
equity or admiralty, nor shall any alternation, modification or acquittance of
any such term or provision be effective for any purpose unless in writing
signed by or upon behalf of the party charged therewith.
15.4 Captions Captions used herein are for convenience of
reference only and shall have no force or effect or legal meaning in the
construction or enforcement of this Contract.
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15.5 Assignment This Contract shall not be assigned by either
party without the prior written consent of the other party, which consent shall
not be unreasonably withheld, provided that: This Contract may be assigned by
Maui Electric Company, Ltd. to the Trustee under said Company's First Mortgage
Indenture dated March 1, 1948, as amended.
15.6 Dispute Resolution
A. Good Faith Negotiations Before any dispute under
this Contract is subjected to the provisions of this
Section 15.6 or any litigation, a representative of
Shipper and a representative of Carrier, both having
full authority to settle the dispute shall personally
meet in Honolulu and diligently attempt in good faith
to resolve the dispute.
B. Voluntary Arbitration If within thirty (30) days the
parties are unable to resolve the dispute under the
procedures of Section 15.6 A, on mutual agreement the
parties may submit the dispute to arbitration. The
party initiating the arbitration shall give to the
other written notice in sufficient detail of the
existence and nature of any dispute proposed to be
arbitrated under this Section 15.6. The notice shall
be signed by an appropriate company officer and be
addressed to an appropriate company officer of the
other party.
1. Appointment of Arbitrator
The parties shall attempt to agree on a
person with special knowledge and expertise
with respect to the hauling of petroleum
products in bulk to serve as arbitrator under
the procedures established by the rules of
the American Arbitration Association unless
other specific rules and procedures are by
mutual agreement established to apply to
disputes submitted to arbitration under
Section 15.6 B. If the parties cannot agree
on an arbitrator within ten (10) days after a
party initiates such process, each shall then
appoint one person to serve as an arbitrator
and the two thus appointed shall select a
third arbitrator with such special knowledge
and expertise to serve as chairman of the
panel of arbitrators; and such three
arbitrators shall determine all matters by
majority vote; provided, however, if the two
arbitrators appointed by the parties are
unable to agree upon the appointment of the
third arbitrator within
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five (5) days after their appointment, both
shall give written notice of such failure to
agree to the parties, and, if the parties
fail to agree upon the selection of such
third arbitrator within five (5) days
thereafter, then either of the parties upon
written notice to the other may require an
appointment from and pursuant to the rules
for commercial arbitration of the American
Arbitration Association. Prior to
appointment, each arbitrator shall agree to
conduct such arbitration in accordance with
the terms of this Section 15.6. The
arbitration panel may choose legal counsel to
advise it on the remedies it may grant,
procedures and such other legal issues as the
panel deems appropriate.
2. Arbitration Procedures
The parties shall have thirty (30) calendar
days from the completion of the appointment
process to perform discovery and present
evidence and argument to the arbitrators.
During that period, the arbitrators shall be
available to receive and consider all such
evidence as is relevant, within reasonable
limits due to the restricted time period, and
to hear as much argument as is feasible,
giving a fair allocation of time to each
party to the arbitration. The arbitrators
shall use all reasonable means to expedite
discovery and to sanction non compliance with
reasonable discovery requests or any
discovery order. The arbitrators shall not
consider any evidence or argument not
presented during such period and shall not
extend such period except by the written
consent of both parties. At the conclusion
of such period, the arbitrators shall have
thirty (30) calendar days to reach a
determination. To the extent not in conflict
with the procedures set forth herein, such
arbitration shall be held in accordance with
the prevailing rules of the American
Arbitration Association for commercial
arbitration.
3. Arbitrator Limitations
The arbitrators shall have the right only to
interpret and apply the terms and conditions
of this Contract in accordance with the laws
of the United States and the State of Hawaii,
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as appropriate, and to order any remedy
allowed by this Contract.
4. Written Decision
The arbitrators shall give a written decision
to the parties stating their findings of
fact, conclusions of law and final order, and
shall furnish to each party a copy thereof
signed by them within five (5) calendar days
from the date of their determination.
5. Decision Binding on the Parties
Unless the parties agree otherwise, the
arbitrator's decision shall become binding on
the parties at such time as the decision is
confirmed by order of a court of competent
jurisdiction pursuant to Chapter 658, Hawaii
Revised Statutes, or the United States
District Court for the District of Hawaii
pursuant to 9 U.S.C. Section 9, as
appropriate.
6. Cost of Arbitration
The parties shall each pay fifty (50) percent
of the cost of the arbitrator or arbitrators
and any legal counsel appointed pursuant to
Section 15.6A.1.
C. Commencement of Suit Any suit, action or proceeding
by either party in consequence of or toenforce any
term or provision of this Contract shall be commenced
in the First Circuit Court of the State of Hawaii, or
the United States District Court of the District of
Hawaii at Honolulu, Hawaii, as appropriate. The
prevailing party in any such suit, action or
proceeding shall be entitled to recover its costs of
the suit and reasonable attorneys' fees.
15.7 Limitations Applicable All limitations of and exemptions from
liabilities and entitlement to indemnity provided by law or the terms of this
Contract shall apply to Carrier and the Shipper, and affiliates of either and
all officers, directors, employees, agents thereof, and to any Vessel owned or
chartered by any of the above, and the master and crew thereof.
15.8 Notice of Claim Unless notice in writing of loss of or damage
to any Cargo carried pursuant to this Contract shall be given to Carrier within
120 days after delivery of the Cargo to the designated port, place, or vessel,
such delivery shall be deemed to be prima facie evidence of the delivery of the
Cargo in good order
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39
and condition. Carrier and the Vessel shall be discharged from all liability
in respect of loss of or damage to such Cargo unless suit or action is brought
within two (2) years after the delivery of the Cargo to the designated port,
place or vessel or after the date when the Cargo should have been so delivered.
15.9 Choice of Law The interpretation of this Contract and of the
rights and obligations of the parties hereunder in law, equity, or admiralty
shall be governed by the substantive law of the State of Hawaii or the general
maritime law of the United States, whichever as applicable.
15.10 Severability Carrier and Shipper agree that if, and in the
event, any term or provision of this Contract shall be rendered or declared
invalid or unenforceable by reason of any existing or subsequently enacted
legislation or by decree or judgement of any court which shall have or acquire
jurisdiction over the parties and each of them or jurisdiction "in rem" of the
Vessel, the invalidation or unenforceability of such term or provision of this
Agreement shall not thereby affect the remaining terms, provisions, rights and
obligations herein contained.
15.11 Regulatory Approval This Contract is required to be filed
with the Hawaii Public Utilities Commission ("PUC") for approval. If in the
proceedings initiated as a result of the filing of this Contract, the PUC
disapproves or fails to authorize the recovery of the transportation and other
costs incurred under this contract through the Shipper's rate schedule fuel
adjustment clause, Shipper may terminate this Contract by 30 days written
notice to Carrier. Both parties agree to use their best good faith efforts to
obtain such approval.
15.12 Barrel For purposes of this Contract, a barrel shall mean 42
U.S. gallons at 60 degrees F.
15.13 Master This term shall include the person or persons in
charge of Vessel or any of the vessels referred to in Sections 2.3, 2.4 or
elsewhere in this Contract.
15.14 Carrier This term shall include the Vessel and other vessel
or vessels, substitute carrier or the owner, bareboat charterer, time charterer
and voyage charterer and the Master, officers, crew and tankermen of any of the
foregoing, whether any shall be acting as carrier or bailee.
XVI. RENEGOTIATION
16.1 Additional Costs The Carrier shall comply with the conditions
of the Contract including the provision of such additional certificates,
contingency plans, and P&I Club insurance as may be necessary to enable the
Vessel to trade in an among the ports and places in accordance with Article IV.
It is understood
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and agreed that both parties entered into the Contract in reliance on Federal
and State government laws, rules, regulations and requirements or
interpretations of implementations thereof, or P&I Club or equivalent insurance
in effect on the date of the Contract or same known, or which should have been
known, to both parties to take effect during the period of this Contract and
any supplements and Extension thereof (hereafter "Requirements"). If at any
time, any of the said Requirements change or if new Requirements become
effective, and the effect of such change or new Requirements is/are not covered
elsewhere in this Contract or has/have significant economic effect on either
party, then either party shall have the option, upon written notice to the
other party, to call for renegotiation of the Freight Rate or other terms
provided for in this Contract as to the allocation of such new costs. As
regards the cost of the insurance coverage required by the terms of this
Contract, significant economic effect shall be held to mean that the Carrier's
cost of insurance coverage for protection and indemnity, including liability
for oil pollution damage, required by Section 8.1B has increased by more than
25 percent during any twelve month period of this Contract.
Upon receiving written notice of renegotiation with cost
estimates for said items from either party, the parties shall enter into good
faith negotiations within fifteen (15) days of receiving said notice. In the
event that the parties do not agree upon a modified Freight Rate or the terms
satisfactory to both parties within thirty (30) days after such notification is
received, either party shall have the right to terminate this Contract by
giving written notice to that effect to the other party, such termination to be
effective 150 days after the expiration of said negotiation period.
Notwithstanding the above, Carrier shall have no right to terminate so long as
Shipper is willing to pay a fair and prorated share of such new costs. Until a
mutually satisfactory revised Freight Rate or other terms have been agreed
upon, or until this Contract is terminated as provided herein, the Freight Rate
which was in effect when the request for renegotiation was made and all other
terms and provisions shall continue in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have caused this Contract to be
executed as of the day and year first above written.
HAWAIIAN INTERISLAND TOWING, INC.
"Carrier"
By /s/ Gordon L. Smith
----------------------------------
Its President
MAUI ELECTRIC COMPANY, LTD.
"Shipper"
By /s/ Edward Y. Hirata
----------------------------------
Its Vice President
By /s/ Molly M. Egged
----------------------------------
Its Secretary
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EXHIBIT A
The following are warranted by Carrier with respect to the Tow and its
equipment and machinery employed under this Contract.
CAPACITY
25,000 bbl. No. 6 Industrial Fuel Oil minimum.
30,000 bbl. No. 2 Diesel Fuel Oil minimum.
CARGO SEGREGATION
Any Tow used in service to Shipper shall be equipped with a system of
cargo tanks and piping that will provide for the segregation of two
Cargo grades with double valve separation.
BALLAST
Any Tow used in service to Shipper shall be capable of segregating
water ballast from the cargo tank/pipeline system with a minimum
double valve interface.
DISCHARGE PUMPING RATES
No. 6 Industrial Fuel Oil: 3,000 barrels per hour (BPH) at 110
Degrees F minimum.
No. 2 Diesel Fuel Oil: 3,000 BPH minimum.
Rail pressure: 100 psi at manifold
MANIFOLDS
Any Tow used in service to Shipper shall be equipped with cargo
manifolds and piping sufficient to permit Cargo loading and/or
discharge operations on either port or starboard side.
MULTIPLE GRADES
Any Tow used in service to Shipper shall be equipped with cargo
manifolds, pumps and piping sufficient to permit the loading and
discharge of two different Cargo grades simultaneously.
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EMERGENCY SHUTDOWN
Any Tow used in service to Shipper shall be equipped to permit
emergency shutdown of the pumping system from more than one location,
of which one shall be on deck.
ECOLOGY DAM
Any Tow used in service to Shipper shall be equipped with a deck
containment coaming or ecology dam at least 4 inches high but not more
than 8 inches high to reduce the likelihood that cargo spilled from
cargo hatches, oil loading manifolds, above-deck lines and valves and
transfer connections may enter the water or land environment.
HEATING
All cargo tanks in which residual fuel oil type cargo, such as No. 6
Industrial Fuel Oil, is to be carried shall be fitted with heating
coils with heat supplied by a diesel fired retort system of 5.0
million BTU's/hr capacity.
ELECTRICITY
Diesel generator of sufficient capacity to safely provide electrical
power to all Tow equipment and machinery in any and all operations.
AIR COMPRESSOR
Any Tow used in service to Shipper shall be equipped with an air
compressor of sufficient capacity and piping to safely clear cargo
hoses of retained Cargo after completion of Cargo operations.
OIL SPILL ABATEMENT EQUIPMENT
Any Tow used in service to Shipper shall have oil spill abatement
equipment and supplies including, but not limited to, a minimum of
1200 feet of oil spill boom, spare bridles and two lines anchor/buoy
system, sweeps, sorbent sheets, transfer pumps, personal protective
clothing and gear and other related emergency oil spill cleanup
equipment consistent with the Vessel's oil spill response plan and all
USCG requirements.
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INSURANCE WIRE
Any Tow used in service to Shipper shall be rigged for towing
operations with an emergency towing pennant or insurance wire.
MOORING EQUIPMENT
Any Tow used in service to Shipper shall be equipped with appropriate
mooring bitts and sufficient forward winch/capstan and
winch/capstan-drum capacity to lift the mooring hawser and chafe chain
of the BHP SPM and shall be equipped with a crane or A-frame type
gallows, tie off bitts and manifold rail suitable for lifting and
tieing off the floating hose at that facility pursuant to the
requirements set forth in Exhibit C attached hereto.
CERTIFICATION
U.S. Coast Guard Certification of Inspection for ocean service as an
unmanned tank barge.
American Bureau of Shipping Classification.
International Load Line Certificate.
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EXHIBIT B
The following are warranted by Carrier with respect to the Tug and its
equipment and machinery employed under this Contract.
POWER PLANT CAPACITY
The minimum horsepower of any Tug used in service to Shipper shall be
3,000 bhp except that upon the express written permission of the
Shipper, a Tug having a power system of a minimum of 2,800 bhp may be
employed on a single voyage basis.
POWER PLANT CONFIGURATION
Any Tug used in service to Shipper shall be equipped with a dual power
plants in a twin-shaft/twin-screw configuration.
NAVIGATION EQUIPMENT
Any Tug used in service to Shipper shall be equipped with appropriate
VHF and SSB communication equipment, radar, fathometer, Global
Positioning System receiver or equivalent position finding equipment.
EMERGENCY TOW RETRIEVAL EQUIPMENT
Any Tug used in service to Shipper shall be equipped with an Orville
Hook or equivalent emergency tow retrieval capability.
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EXHIBIT C
The following are warranted by Carrier with respect to outfitting of any Tug
and any Tow and their respective equipment and machinery employed under this
Contract:
MINIMUM REQUIREMENTS FOR BARGES CALLING AT
BHP PETROLEUM AMERICAS REFINING INC.
OFFSHORE SINGLE POINT MOORING TERMINAL
A. The BHP Petroleum Americas Refining Inc. Single Point Mooring and sea
berth terminal facility off shore Barbers Point (hereinafter "SPM
terminal") specifies that any barge must be configured to moor
stern-to-the-buoy with the hose connections at the starboard-side
manifolds. Bow-to mooring will only be accepted on a case by case
basis with appropriate modifications to the barge layout and
procedures as determined by the SPM terminal operator.
B. Mooring equipment: winches, must be capable of heaving the end of the
76mm chafe chain on board and adjacent to the barge mooring connection
in a safe and efficient method acceptable to the SPM terminal
operator.
C. Mooring connection: The Vessel must be capable of accepting
OCIMF-standard tri-plate at the end of the mooring hawser/chafe chain
assembly. The Vessel must have appropriately positioned bitts for the
snotter connection, Smit-type towing bracket or other suitable
approved connection acceptable to the SPM terminal operator.
D. Hose handling equipment: It shall be located at the starboard side
cargo manifolds. The Safe Working Load of the hose derrick, crane or
A-frame shall be 5 tons. Manifolds and hose hang off points must be
capable of sustaining the weight of the standard 12 inch floating
cargo hose in the opinion of the SPM terminal operator.
E. A suitable mooring assist/stand-by boat must attend the Vessel at all
times when approaching, when moored and when departing the SPM
terminal.
F. The towing tug shall at all times maintain a steady pull on the barge
in order to maximize the available distance from the SPM buoy. Common
procedure is for the barge to moor stern to the buoy with the towing
tug always engaged with the tow wire.
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G. The barge shall be prohibited from mooring by the sole use of the
mooring hawser pick up line. A mooring connection utilizing the chafe
chain shall always be required.
H. A minimum of two (2) qualified tankermen shall be required to attend
the Vessel during all oil transfer operations at the SPM terminal.
I. The Carrier or barge operator shall take full responsibility in
responding to any spill originating from the Vessel. The barge shall
be equipped with an ocean oil containment boom equal in length to
twice the length of the barge and which shall be capable of being
deployed by available personnel and boats.
J. The Vessel, Master, officers, crew, tankermen and Carrier shall
operate in compliance with any and all laws, rules, regulations and
required procedures as set forth in the BHP SPM terminal Operations
Manual as submitted to the USCG and in compliance with an USCG
approved oil spill contingency plan.
K. Deviations, if any, from the preceding requirements must be expressly
granted by the BHP SPM terminal operator.
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EXHIBIT D
The following are warranted by Carrier with respect to the Vessel's Master,
officers, crew and tankermen employed under this Contract.
ALL OPERATING PERSONNEL: TRAINING/PROFICIENCY
All operating personnel including Vessel's Master, officers and crew
and tankermen and the immediate supervisors of the foregoing, are to
receive training and exhibit proficiency in such areas as including,
but not limited to, mandatory compliance with the various federal and
State laws concerning safety and hazardous materials (OSHA, USCG,
Hawaii DOH, Hawaii DOT), oil transfer procedures, fire fighting, oil
spill prevention, oil spill contingency planning, oil spill response
and other emergency operations and such proficiency and state of
readiness shall be assessed through a program of continuous planning
review, periodic exercises and drills.
TUG PERSONNEL: LICENSES/ENDORSEMENTS/QUALIFICATIONS
The Master, officers and crew of any Tug providing service to Shipper
shall have the appropriate licenses and endorsements, have received
the appropriate experience and training for the seas, ports cargo and
size and capability of the equipment employed in the performance of
this Contract. In addition, such personnel are to continue to receive
whatever further training and experience is required to ensure that
towing operations are conducted in a safe, efficient and professional
manner consistent with the highest standards in the industry.
Inasmuch as the Master shall be held responsible for the quality of
overall voyage operations, management and safety, it is a requirement
that he have the appropriate USCG license and endorsement.
The Master shall be appropriately qualified by education at a college
level or at an accredited maritime academy and/or by the equivalent
progressive experience in navigation, pilotage, engine room
operations, vessel classes, making/breaking tow, barge mooring, cargo
transfer operations and safety procedures and shall have experience
and/or the appropriate formal training in such areas as hazardous
materials operations, fire fighting, oil spill clean-up and mitigation
and other situations requiring emergency response.
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Carrier agrees and understands that a Master appointed to any Tug used
in service to Shipper under this Contract shall have demonstrated
reliability, leadership, crew management ability and evidence the very
highest regard for the safety of Vessel and its crew, Cargo and the
environment.
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EXHIBIT E
The No. 2 Diesel Fuel Oil to be transported hereunder shall have the
following approximate characteristics:
Specification Test
Item Units Limits Method
- ---- ----- ------ ------
Gravity Degrees API 30.0 Min. D1298, or
@ 60 deg F. Specific Gravity .88 Max. D4052-86
Viscosity SSU 32.6-40.1 D445, or
@ 100 deg F. D2161
Pour Point Degrees F. 35 Max. D97
Flash Point, PM Degrees F. 150 Min. D93
Ash PPM, Wt. 100 Max. D482
Cetane Index 40 Min. D976
Carbon Residue, %, Wt. 0.35 Max. D524
10% Residuum
Sediment & Water %, Vol. 0.05 Max. D1796
Sulfur %, Wt. 0.40 Max. D1552, D2622,
or D4294
Distillation,
90% Recovered Degrees F. 540-640 D86
Sodium +
Potassium PPM, Wt. 0.5 Max D3605
Nitrogen PPM, Wt. Report D4629
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EXHIBIT F
The No. 6 Industrial Fuel Oil to be transported hereunder shall have
the following approximate characteristics:
Specification Test
Item Units Limits Method
- ---- ----- ------ ------
Gravity D1298, or
@ 60 deg F. Degrees API 6.5 Min. D4052-86
Viscosity SSU 179 Min. D445, or
@ 122 deg F. 226 Max. D2161
Pour Point Degrees F. 55 Max. D-97
Flash Point, PM Degrees F. 150 Min. D93
BS & W %, Vol. 0.5 Max. D1796
Sulfur %, Wt. 2.00 Max. D1552, D2622,
or D4294
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52
EXHIBIT G
Sample Freight Calculations
(Only MECO Cargo on Vessel)
A. Total volume of Cargo is equal or less than 45,000 bbl:
Freight = ($1.10/bbl x 45,000 bbl) = $49,500.00
+ 4.167% tax = $ 2,062.67
----------
TOTAL MECO FREIGHT $51,562.67
B. Total volume of Cargo is 48,000 bbl:
Freight = ($1.10/bbl x 45,000 bbl) = $49,500.00
($0.75/bbl x 3,000 bbl) = $ 2,250.00
+ 4.167% tax = $ 2,156.42
----------
TOTAL MECO FREIGHT $53,906.42
C. Total volume of Cargo is 54,00 bbl:
Freight = ($1.10/bbl x 45,000 bbl) = $49,500.00
($0.75/bbl x 3,000 bbl) = $ 2,250.00
($0.66/bbl x 5,000 bbl) = $ 3,300.00
($0.50/bbl x 1,000 bbl) = $ 500.00
+ 4.167% tax = $ 2,314.77
----------
TOTAL MECO FREIGHT $57,864.77
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53
EXHIBIT H
Sample Freight Calculations
(For Joint Voyages with HELCO)
Sample Price Calculation A, B and C below are based on 30,000 Barrels being
transported for HELCO. HELCO Freight is calculated as follows:
Freight = ($1.76/bbl x 38,000 bbl) = $ 66,880.00
+ HGET of 4.167% = $ 2,786.89
-----------
= $ 69,666.89
A. Total volume of cargo is 48,000 bbl:
Freight Rate = (48,000 bbl x $1.55/bbl) - HELCO Freight
----------------------------------------
MECO bbl
= (48,000 bbl x $1.55/bbl) - $69,666.89
-------------------------------------
18,000 bbl
= $74,400.00 - $69,666.89
-----------------------
18,000 bbl
= $4,733.11
------------
18,000 bbl
= $0.26/bbl
MECO Freight = ($0.26/bbl x 18,000 bbl) = $ 4,680.00
+ HGET of 4.167% = 195.02
----------
TOTAL MECO FREIGHT $ 4,875.02
B. Total volume of cargo is 53,000 bbl:
Freight Rate = ((Total bbl) x $1.55/bbl) - HELCO Freight
-----------------------------------------
MECO bbl
= ((53,000 bbl) x $1.55/bbl) - $69,666.89
---------------------------------------
23,000 bbl
= $82,150 - $69,666.89
--------------------
23,000 bbl
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54
= $12,483.11
------------
23,000 bbl
= $0.54/bbl
MECO Freight = ($0.54/bbl x 23,000 bbl) = $ 12,420.00
+ HGET of 4.167% = 517.54
-----------
TOTAL MECO FREIGHT $ 12,937.54
C. Total volume of cargo is 54,000 bbl:
Freight Rate =
For first 53,000 bbl:
(53,000 bbl x $1.55/bbl) = $82,150.00
$82,150 +(($0.75/bbl x (Total bbl - 53,000 Bbl)) - HELCO Freight
----------------------------------------------------------------
MECO bbl
$82,150 +(($0.75/bbl x (54,000 - 53,000 bbl) - $69,666.89
---------------------------------------------------------
24,000 bbl
= $82,150 + ($750) - $69666.89
----------------------------
24,000 bbl
= $13,233.11
----------
24,000 bbl
= $0.55/bbl
MECO Freight = ($0.55/bbl x 24,000 bbl) = $ 13,200.00
+ HGET of 4.167% = 550.04
-----------
TOTAL MECO FREIGHT $ 13,750.04
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55
EXHIBIT I
Sample Freight Calculation
(For voyages with third-party cargo)
Sample Price Calculation is based on 48,000 barrels being transported for MECO
in conjunction with 7,000 barrels of third-party cargo. MECO freight is
calculated as follows:
Freight = ($1.10/bbl x 45,000 bbl) = $49,500.00
+ ($0.75/bbl x 3,000 bbl) = 2,250.00
+ HGET of 4.167% = 2,156.42
----------
$53,906.42
Less: Reduction for third-party cargo
= $0.55/bbl x 7,000 bbl = $ 3,850.00
----------
TOTAL MECO FREIGHT = $50,056.42
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