**Exhibit 10.11**

 

**Codeword for this Charter Party**

**“SHELLTIME4”**

 

Issued December 1984amended December 2003

 

**TimeCharter Party**

** New York**

** April 29, 2008**

 

IT ISTHIS DAY AGREED between : (A) OSG 243 LLC in its capacity as the owner ofthe barge OSG-243 (the “Barge”) and OSG Independence LLC in its capacity as theOwner of the tug OSG Independence (the “Tug”) of Delaware (hereinafter referredto as “Owners”), as the Barge and Tug each a “vessel” and together “the vessels”)described as per  Clause 1  hereof; and (B) OSG 243 Charterer LLC ofDelaware (hereinafter referred to as “Charterers”):

 

**Descriptionand Condition of Vessel**

 

1.             At the date ofdelivery of the vessel under this charter and throughout the charter period:

 

(a)           each shall be classedby a Classification Society which is a member of the International Associationof Classification Societies; classification will be ABS

 

(b)           the Barge shall be inevery way fit to carry crude oil and/or its products;

 

(c)           each shall be tight,staunch, strong, in good order and condition, and in every way fit for theservice, with her machinery, boilers, hull and other equipment (including butnot limited to hull stress calculator, radar, computers and computer systems)in a good and efficient state;

 

(d)           her tanks, valves andpipelines shall be oil-tight;

 

(e)           the Tug shall be inevery way fitted for burning, in accordance with the grades specified in Clause29 hereof; IFO 380 CST RMG 380 ISO 8217:2005 (E) and ISO DMA 8217:2005 –Charterers will endeavor to procure IFO with maximum 3.0% sulphur, provided itis readily available within the port the Tug would normally bunker and withoutincremental time or cost to Charterers, as compared to IFO that would otherwisebe supplied with maximum 4.5% sulphur content, or as required by law.  Charterers have no obligation whatsoever todeviate the Vessels for the purpose of procuring IFO 3.0% maximum sulphurunless required to comply with applicable law(s).

 

(i)            at sea, fuel oil formain propulsion and fuel oil/marine diesel oil* for auxiliaries;

 

----

 

(ii)           in port, fueloil/marine diesel oil* for auxiliaries;

 

(f)            Each shall comply withthe regulations in force so as to enable her to pass through the Suez andPanama Canals by day and night without delay;

 

(g)           Each shall have onboard all certificates, documents and equipment required from time to time byany applicable law to enable her to perform the charter service without delay;

 

(h)           Each shall comply withthe description in the OCIMF Harmonised Vessel Particulars Questionnaire, appendedhereto as Appendix A, provided however that if there is any conflict betweenthe provisions of this questionnaire and any other provision, including thisClause 1 , of this charter such other provisions shall govern;

 

(i)            the ownershipstructure, flag, registry, and classification society and management company ofeach Vessel shall not be changed, without approval of Charterers, which shallnot be unreasonably withheld;

 

**SafetyManagement**

 

(j)            Owners will operate:

 

(i)            a safety managementsystem certified to comply with the International Safety Management Code (“ISMCode”) for the Safe Operation of Ships and for Pollution Prevention;

 

(ii)           a documented safeworking procedures system (including procedures for the identification andmitigation of risks);

 

(iii)          a documentedenvironmental management system;

 

1

----

 

(iv)          documentedaccident/incident reporting system compliant with flag state requirements;

 

(k)   Owners shall submit toCharterers a monthly written report detailing all accidents/incidents andenvironmental reporting requirements;

 

(l)            Owners shall maintainHealth Safety Environmental (“HSE”) records sufficient to demonstratecompliance with the requirements of their HSE system and of this charter.  Charterers reserve the right to confirmcompliance with HSE requirements by audit of Owners.

 

(m)          Owners will arrange attheir expense for a SIRE inspection to be carried out at intervals of sixmonths plus or minus thirty days.

 

**ShipboardPersonnel and their Duties**

 

2.             (a)     At the date of delivery of the vesselsunder this charter and throughout the charter period:

 

(i)            Each shall have a fulland efficient complement of master, officers and crew for a vessel of hertonnage, who shall in any event be not less than the number required by thelaws of the flag state and who shall be trained to operate the vessel and herequipment competently and safely;

 

(ii)           all shipboard personnelshall hold valid certificates of competence in accordance with the requirementsof the law of the flag state;

 

(iii)          all shipboard personnelshall be trained in accordance with the relevant provisions of theInternational Convention on Standards of Training, Certification andWatchkeeping for Seafarers, 1995 or any additions, modifications or subsequentversions thereof;

 

(iv)          there shall be on boardsufficient personnel with a good working knowledge of the English language toenable cargo operations at loading and discharging places to be carried outefficiently and safely and to enable communications between the vessels andthose loading the Barge or accepting discharge there from to be carried outquickly and efficiently;

 

(v)           the terms of employmentof the vessels’ staff and crew will always remain acceptable to TheInternational Transport Worker’s Federation and the vessels will at all timescarry a Blue Card;

 

(vi)          the nationality of thevessels’ officers given in the OCIMF Vessel Particulars Questionnaire referredto in Clause 1(h) will not change without Charterers’ prior agreement.

 

2

----

 

(b)           Owners guarantee thatthroughout the charter service the master shall with the vessel’s officers andcrew, unless otherwise ordered by Charterers;

 

(i)            prosecute all voyageswith the utmost despatch;

 

(ii)           render all customaryassistance; and

 

(iii)          load and discharge cargoas rapidly as possible when required by Charterers or their agents to do so, bynight or by day, but always in accordance with the laws of the place of loadingor discharging (as the case may be) and in each case in accordance with anyapplicable laws of the flag state.

 

**Duty toMaintain**

 

3.             (a)     Throughout the charter service Ownersshall, whenever the passage of time, wear and tear or any event (whether or notcoming within  Clause 27  hereof) requires steps to be taken tomaintain or restore the conditions stipulated in  Clauses 1 and  2(a), exercise duediligence so to maintain or restore the vessels.

 

(b)           If at any time whilstthe vessels are on hire under this charter they fail to comply with therequirements of Clauses 1 ,  2(a) or10 then hire shall be reduced to the extent necessary to indemnifyCharterers for such failure. If and to the extent that such failure affects thetime taken by the vessels to perform any services under this charter, hireshall be reduced by an amount equal to the value, calculated at the rate ofhire, of the time so lost.

 

Any reduction of hireunder this sub-Clause (b) shall be without prejudice to any otherremedy available to Charterers, but where such reduction of hire is in respectof time lost, such time shall be excluded from any calculation under Clause24.

 

3

----

 

(c)           If Owners are in breachof their obligations under Clause 3(a)), Charterers may so notify Ownersin writing and if, after the expiry of 30 days following the receipt by Ownersof any such notice, Owners have failed to demonstrate to Charterers’ reasonablesatisfaction the exercise of due diligence as required in  Clause 3(a), the vessels shall beoff-hire, and no further hire payments shall be due, until Owners have sodemonstrated that they are exercising such due diligence.

 

(d)           Owners shall adviseCharterers immediately, in writing, should either vessel fail an inspection by,but not limited to, a governmental and/or port state authority, and/or terminaland/or major charterer of similar tonnage. Owners shall simultaneously adviseCharterers of their proposed course of action to remedy the defects which havecaused the failure of such inspection.

 

(e)           If, in Charterersreasonably held view:

 

(i)            failure of aninspection, or,

 

(ii)           any finding of aninspection,

 

referred to in Clause3(d), prevents normal commercial operations then Charterers have the optionto place the vessel off-hire from the date and time that the vessel fails suchinspection, or becomes commercially inoperable, until the date and time thatthe vessel passes a re-inspection by the same organisation, or becomescommercially operable, which shall be in a position no less favourable toCharterers than at which she went off-hire.

 

(f)            Furthermore, at anytime while the vessel is off-hire under this Clause 3 (with theexception of Clause 3(e)(ii)), Charterers have the option toterminate this charter by giving notice in writing with effect from the date onwhich such notice of termination is received by Owners or from any Later datestated in such notice.  This sub-Clause (f) is without prejudice to any rights of Charterersor obligations of Owners under this charter or otherwise (including withoutlimitation Charterers’ rights under Clause 21  hereof).

 

**Period,Trading Limits and Safe Places**

 

4.             (a)     Owners agree to let and Charterers agreeto hire the vessels for a period commencing on or about April 25, 2008 andending on or about December 31, 2009 plus or minus **30**days in Charterers’ option commencing from the time and date of delivery of thevessels, for the purpose of carrying all lawful merchandise (subject always to  Clause 28 ) including in particular crudeoil:

 

In any part of the world,as Charterers shall direct, subject to the limits of the current British 

 

4

----

 

Institute Warranties andany subsequent amendments thereof. Notwithstanding the foregoing, but subject to Clause 35,Charterers may not order the vessels to ice-bound waters or to any part of theworld outside such limits

 

(b)           Any time during whichthe vessel is off-hire under this charter may be added to the last firm charterperiod in Charterers’ option up to the total amount of time spentoff-hire.  In such cases the rate of hire will be that prevailing at thetime the vessel would, but for the provisions of this Clause, have beenredelivered.

 

(c)           Charterers shall usedue diligence to ensure that the vessels are only employed between and at safeplaces (which expression when used in this charter shall include ports, berths,wharves, docks, anchorages, submarine lines, alongside vessels or lighters, andother locations including locations at sea) where she can safely lie alwaysafloat.  Notwithstanding anything contained in this or any other clause ofthis charter, Charterers do not warrant the safety of any place to which theyorder the vessel and shall be under no liability in respect thereof except forloss or damage caused by their failure to exercise due diligence asaforesaid.  Subject as above, the vessels shall be loaded and dischargedat any places as Charterers may direct, provided that Charterers shall exercisedue diligence to ensure that any ship-to-ship transfer operations shall conformto standards not less than those set out in the latest published edition of theICS/OCIMF Ship-to-Ship Transfer Guide.

 

5

----

 

(d)           Unless otherwiseagreed, the vessels shall be delivered by Owners dropping outward pilot at aport chosen by Charterers

 

and redelivered to Ownersdropping outward pilot at a port chosen by Owners.

 

(e)           The vessels willdeliver with last cargo(es) of **clean product**and will redeliver with last cargo(es) of **clean product**

 

(f)            Owners are required togive Charterers **5** daysprior notice of delivery and Charterers are required to give Owners **5** days prior notice of redelivery.

 

**Laydays/Cancelling**

 

5.             The vessels shall notbe delivered to Charterers before **April 29, 2008**and Charterers shall have the option of cancelling this charter if the vesselsare not ready and at their disposal on or before

 

**Ownersto Provide**

 

6.             Owners undertake toprovide and to pay for all provisions, wages (including but not limited to allovertime payments), and shipping and discharging fees and all other expenses ofthe master, officers And crew; also, except as provided in  Clauses 4 and  34  hereof, for all insurance on the vessels, forall Deck, cabin and engine-room stores, and for water (limited to crew only);for all drydocking, overhaul, maintenance and repairs to the vessels. Owners’obligations under this  Clause 6  extend to all liabilities for customs orimport duties arising at any time during the performance of this charter inrelation to the personal effects of the master, officers and crew, and inrelation to the stores, provisions and other matters aforesaid which Owners areto provide and pay for and Owners shall refund to Charterers any sums Charterersor their agents may have paid or been compelled to pay in respect of any suchliability.  Any amounts allowable in general average for wages andprovisions and stores shall be credited to Charterers insofar as such amountsare in respect of a Period when the vessels are on-hire.

 

**Charterersto Provide**

 

7.             (a)           Charterers shall provide and pay for allfuel (except for fuel used for domestic services), towage and pilotage andshall pay agency fees, port charges, commissions, expenses of loading andunloading cargoes, canal dues, and tax/dues on cargo/freight and all chargesother than those payable by Owners in accordance with  Clause 6 hereof, provided that allcharges for the said items shall be for Owners’ account when such items areconsumed, employed or incurred for Owners’ purposes or while the vessels areoff-hire (unless such items reasonably relate to any service given or distancemade good and taken into account under Clause 21  or  22 ); and provided further that any fuelused in connection with a general average sacrifice or expenditure shall bepaid for by Owners. OPA charges to be paid by Charterers, COFR to be arrangedand paid for by Owners.

 

6

----

 

(b)           In respect of bunkersconsumed for Owners’ purposes these will be charged on each occasion byCharterers on a “first-in-first-out” basis valued on the prices actually paidby Charterers.

 

(c)           If the trading limitsof this charter include ports in the United States of America and/or itsprotectorates then Charterers shall reimburse Owners for port specific chargesrelating to additional premiums charged by providers of oil pollution cover,when incurred by the vessel calling at ports in the United States of Americaand/or its protectorates in accordance with Charterers orders.

 

**Rate ofHire**

 

8.             Subject as hereinprovided, Charterers shall pay for the use and hire of the vessels at the rateof United States Dollars **$28,500** perday, and pro rata for any part of a day, from the time and date of her delivery(local time) to Charterers until the time and date of redelivery (local time)to Owners.

 

**Paymentof Hire**

 

9.             Subject to Clause3 (c) and 3 (e), payment of hire shall be made in immediatelyavailable funds

 

to:           **FifthThird Bank**

**Cincinatti,Ohio**

**Account: ABA#042000314**

**ForCredit to Account No. 09990203987**

**in thename of OSG America Operating Company LLC**

 

in United States Dollarsper calendar month in advance, less:

 

(i)            any hire paid whichCharterers reasonably estimate to relate to off-hire periods, and,

 

(ii)           any amounts disbursedon Owners’ behalf, any advances and commission therein, and charges which arefor Owners’ account pursuant to any provision hereof, and;

 

(iii)          any amounts due orreasonably estimated to become due to Charterers under Clause 3(c) or24 hereof,

 

any such adjustments tobe made at the due date for the next monthly payment after the facts have beenascertained. Charterers shall not be responsible for any delay or error byOwners’ bank in crediting Owners’ account provided that Charterers have madeproper and timely payment.

 

7

----

 

In default of such properand timely payment:

 

(a)           Owners shall notifyCharterers of such default and Charterers shall within seven days of receipt ofsuch notice pay to Owners the amount due, including interest, failing whichOwners may withdraw the vessels from the service of Charterers withoutprejudice to any other rights Owners may have under this charter or otherwise;and;

 

(b)           Interest on any amountdue but not paid on the due date shall accrue from the day after that date upto and including the day when payment is made, at a rate per annum which shallbe 1% above the U.S. Prime Rate as published by the Chase Manhattan Bank in NewYork at 12.00 New York time on the due date, or, if no such interest rate ispublished on that day, the interest rate published for the next preceding dayon which such a rate was so published, computed on the basis of a 360 day yearof twelve 30-day months, compounded semi-annualy.

 

8

----

 

**SpaceAvailable to Charterers**

 

10.           The whole reach,burthen and decks on the vessels and any passenger accommodation (includingOwners’ suite) shall be at Charterers’ disposal, reserving only proper andsufficient space for the vessel’s master, officers, crew, tackle, apparel,furniture, provisions and stores, provided that the weight of stores on boardshall not, unless specially agreed, exceed **5** tonnes atany time during the charter period.

 

**SegregatedBallast**

 

11.           In connection with theCouncil of the European Union Regulation on the Implementation of IMOResolution A747(18) Owners will ensure that the following entry is made on theInternational Tonnage Certificate (1969) under the section headed “Remarks”.

 

“The segregated ballasttanks comply with the Regulation 13 of Annex 1 of the International Conventionfor the Prevention of Pollution from Ships, 1973, as modified by the Protocolof 1978 relating thereto, and the total tonnage of such tanks exclusively usedfor the carriage of segregated water ballast is **asrequired** The reduced gross tonnage which should be used for thecalculation of tonnage based fees **has been provided toCharterers**”.

 

**Instructionsand Logs**

 

12.           Charterers shall fromtime to time give the master all requisite instructions and sailing directions,and the master shall keep a full and correct log of the voyage or voyages,which Charterers or their agents may inspect as required.  The mastershall when required furnish Charterers or their agents with a true copy of suchlog and with properly completed loading and discharging port sheets and voyagereports for each voyage and other returns as Charterers may require. Charterers shall be entitled to take copies at Owners’ expense of any suchdocuments which are not provided by the master.

 

**Bills ofLading**

 

13.           (a)     Themaster (although appointed by Owners) shall be under the orders and directionof Charterers as regards employment of the vessels, agency and otherarrangements, and shall sign Bills of Lading as Charterers or their agents maydirect (subject always to Clauses 35(a) and 40) withoutprejudice to this charter.  Charterers hereby indemnify Owners against allconsequences or liabilities that may arise;

 

(i)            from signing Bills ofLading in accordance with the directions of Charterers or their agents, to theextent that the terms of such Bills of Lading fail to conform to therequirements of this charter, or (except as provided in Clause 13(b) fromthe master otherwise complying with Charterers’ or their agents’ orders;

 

(ii)           from any irregularitiesin papers supplied by Charterers or their agents.

 

9

----

 

(b)           If Charterers by telex,facsimile or other form of written communication that specifically refers tothis Clause request Owners to discharge a quantity of cargo either withoutBills of Lading and/or at a discharge place other than that named in a Bill ofLading and/or that is different from the Bill of Lading quantity, then Ownersshall discharge such cargo in accordance with Charterer’s instructions inconsideration of receiving the following indemnity which shall be deemed to begiven by Charterers on each and every such occasion and which is limited invalue to 200% of the CIF value of the cargo carried on board;

 

(i)            Charterers shallindemnify Owners and Owners’ servants and agents in respect of any liabilityloss or damage of whatsoever nature (including legal costs as between attorneyor solicitor and client and associated expenses) which Owners may sustain byreason of delivering such cargo in accordance with Charterers’ request.

 

(ii)           If any proceeding iscommenced against Owners or any of Owners’ servants or agents in connectionwith the vessels having delivered cargo in accordance with such request,Charterers shall provide Owners or any of Owners’ servants or agents from timeto time on demand with sufficient funds to defend the said proceedings.

 

(iii)          If the vessels or any other vessel or property belonging to Ownersshould be arrested or detained, or if the arrest or detention thereof should bethreatened, by reason of discharge in accordance with Charterers instruction asaforesaid, Charterers shall provide on demand such bail or other security asmay be required to prevent such arrest or detention or to secure the release ofsuch vessel or property and Charterers shall indemnify Owners in respect of anyloss, damage or expenses caused by such arrest or detention whether or not samemay be justified.

 

(iv)          Charterers shall, if called upon to do so at any time while such cargois in Charterers’ possession, custody or control, redeliver the same to Owners.

 

(v)           As soon as all original Bills of Lading for the above cargo which nameas discharge port the place where delivery actually occurred shall have arrivedand/or come into Charterers’ possession, Charterers shall produce and deliverthe same to Owners whereupon Charterers’ liability hereunder shall cease.

 

Provided however, ifCharterers have not received all such original Bills of Lading by 24.00 hourson the day 36 calendar months after the date of discharge, that this indemnityshall terminate at that time unless before that time Charterers have receivedfrom Owners written notice that:

 

a)             Some person is makinga claim in connection with Owners delivering cargo pursuant to Charterersrequest or,

 

10

----

 

b)            Legal proceedings havebeen commenced against Owners and/or carriers and/or Charterers and/or any oftheir respective servants or agents and/or the vessel for the same reason.

 

When Charterers havereceived such a notice, then this indemnity shall continue in force until suchclaim or legal proceedings are settled. Termination of this indemnity shall not prejudice any legal rights aparty may have outside this indemnity.

 

(vi)          Owners shall promptly notify Charterers if any person (other than aperson to whom Charterers ordered cargo to be delivered) claims to be entitledto such cargo and/or if the vessels or any other property belonging to Ownersis arrested by reason of any such discharge of cargo.

 

(vii)         This indemnity shall be governed and construed in accordance with UnitedStates law.

 

(c)           Owners warrant that the Master will comply with orders to carry anddischarge against one or more Bills of Lading from a set of original negotiableBills of Lading should Charterers so require.

 

**Conductof Vessel’s Personnel**

 

14.           If Charterers complainof the conduct of the master or any of the officers or crew, Owners shallimmediately investigate the complaint.  If the complaint proves to be wellfounded, Owners shall, without delay, make a change in the appointments andOwners shall in any event communicate the result of their investigations toCharterers as soon as possible.

 

11

----

 

**Bunkersat Delivery and Redelivery**

 

15.           Charterers shall acceptand pay for all bunkers on board at the time of delivery, and Owners shall onredelivery (whether it occurs at the end of the charter or on the earliertermination of this charter) accept and pay for all bunkers remaining on board,at the price actually paid, on a “first-in-first-out” basis.  Such pricesare to be supported by paid invoices.

 

Vessels to be deliveredto and redelivered from the charter with, at least, a quantity of bunkers onboard sufficient to reach the nearest main bunkering port.

 

Notwithstanding anythingcontained in this charter all bunkers on board the vessel shall, throughout theduration of this charter, remain the property of Charterers and can only bepurchased on the terms specified in the charter at the end of the charterperiod or, if earlier, at the termination of the charter.

 

**Stevedores,Pilots, Tugs**

 

16.           Stevedores, whenrequired, shall be employed and paid by Charterers, but this shall not relieveOwners from responsibility at all times for proper stowage, which must becontrolled by the master who shall keep a strict account of all cargo loadedand discharged.  Owners hereby indemnify Charterers, their servants andagents against all losses, claims, responsibilities and liabilities arising inany way whatsoever from the employment of pilots, tugboats or stevedores, whoalthough employed by Charterers shall be deemed to be the servants of and inthe service of Owners and under their instructions (even if such pilots, tugboatpersonnel or stevedores are in fact the servants of Charterers their agents orany affiliated company); provided, however, that:

 

(a)           the foregoing indemnityshall not exceed the amount to which Owners would have been entitled to limittheir liability if they had themselves employed such pilots, tugboats orstevedores, and;

 

(b)           Charterers shall beliable for any damage to the vessels caused by or arising out of the use ofstevedores, fair wear and tear excepted, to the extent that Owners are unable bythe exercise of due diligence to obtain redress therefor from stevedores.

 

**Super-Numeraries**

 

17.           Charterers may sendrepresentatives in the vessel’s available accommodation upon any voyage madeunder this charter, Owners finding provisions and all requisites as supplied toofficers, except alcohol.  Charterers paying at the rate of United StatesDollars 15 (fifteen) per day for each representative while on board thevessels.

 

12

----

 

**Sub-letting/Assignment/Novation**

 

18.           Charterers may sub-letthe vessels, but shall always remain responsible to Owners for due fulfilmentof this charter.

 

**FinalVoyage**

 

19.           If when a payment ofhire is due hereunder Charterers reasonably expect to redeliver the vesselsbefore the next payment of hire would fall due, the hire to be paid shall beassessed on Charterers’ reasonable estimate of the time necessary to completeCharterers’ programme up to redelivery, and from which estimate Charterers maydeduct amounts due or reasonably expected to become due for:

 

(a)           disbursements on Owners’behalf or charges for Owners’ account pursuant to any provision hereof, and;

 

(b)           bunkers on board atredelivery pursuant to Clause 15.

 

Promptly after redeliveryany overpayment shall be refunded by Owners or any underpayment made good byCharterers.

 

13

----

 

If at the time thischarter would otherwise terminate in accordance with Clause 4 the vesselsare on a ballast voyage to a port of redelivery or is upon a laden voyage,Charterers shall continue to have the use of the vessels at the same rate andconditions as stand herein for as long as necessary to complete such ballastvoyage, or to complete such laden voyage and return to a port of redelivery asprovided by this charter, as the case may be.

 

**Loss ofVessel**

 

20.           Should the vessels belost, this charter shall terminate and hire shall cease at noon (GMT) on theday of the loss; should the vessels be a constructive total loss, this chartershall terminate and hire shall cease at noon on the day on which the vessels’underwriters agree that the vessels are a constructive total loss; should thevessels be missing, this charter shall terminate and hire shall cease at noonon the day on which they were last heard of.  Any hire paid in advance andnot earned shall be returned to Charterers and Owners shall reimburseCharterers for the value of the estimated quantity of bunkers on board at thetime of termination, at the price paid by Charterers at the last bunkeringport.

 

**Off-hire**

 

21.           (a)     On each and every occasion that there isloss of time (whether by way of interruption in the vessels’ service or, fromreduction in the vessels’ performance, or in any other manner):

 

(i)            due to deficiency ofpersonnel or stores; repairs; gas-freeing for repairs; time in and waiting toenter dry dock for repairs; breakdown (whether partial or total) of machinery,boilers or other parts of the vessels or their equipment (including withoutlimitation tank coatings); overhaul, maintenance or survey; collision,stranding, accident or damage to the vessels; or any other similar causepreventing the efficient working of the vessels; and such loss continues formore than three consecutive hours (if resulting from interruption in thevessels’ service) or cumulates to more than three hours (if resulting frompartial loss of service); or;

 

(ii)           due to industrialaction, refusal to sail, breach of orders or neglect of duty on the part of themaster, officers or crew; or;

 

(iii)          for the purpose ofobtaining medical advice or treatment for or landing any sick or injured person(other than a Charterers’ representative carried under Clause 17 hereof)or for the purpose of landing the body of any person (other than a Charterers’representative), and such loss continues for more than three consecutive hours;or;

 

(iv)          due to any delay inquarantine arising from the master, officers or crew having had communicationwith the shore at any infected area without the written consent or instructionsof Charterers or their agents, or to any detention by customs or otherauthorities caused by smuggling or other infraction of local law on the part ofthe master, officers, or crew; or;

 

14

----

 

(v)           due to detention of thevessels by authorities at home or abroad attributable to legal action againstor breach of regulations by the vessels, the vessels’ owners, or Owners (unlessbrought about by the act or neglect of Charterers); then;

 

without prejudice toCharterers’ rights under Clause 3 or to any other rights ofCharterers hereunder, or otherwise, the vessels shall be off-hire from thecommencement of such loss of time until they are again ready and in anefficient state to resume service from a position not less favourable toCharterers than that at which such loss of time commenced; provided, however,that any service given or distance made good by the vessels whilst off-hireshall be taken into account in assessing the amount to be deducted from hire.

 

15

----

 

(b)           If the vessels fail toproceed at any guaranteed speed pursuant to Clause 24, and suchfailure arises wholly or partly from any of the causes set out in Clause 21(a) above,then the period for which the vessels shall be off-hire under this Clause 21shall be the difference between:

 

(i)            the time the vesselswould have required to perform the relevant service at such guaranteed speed,and;

 

(ii)           the time actually takento perform such service (including any loss of time arising from interruptionin the performance of such service).

 

For the avoidance ofdoubt, all time included under (ii) above shall be excluded from anycomputation under Clause 24 .

 

(c)           Further and withoutprejudice to the foregoing, in the event of the vessels deviating (whichexpression includes without limitation putting back, or putting into any portother than that to which she is bound under the instructions of Charterers) forany cause or purpose mentioned in Clause 21(a), the vessels shall beoff-hire from the commencement of such deviation until the time when they areagain ready and in an efficient state to resume her service from a position notless favourable to Charterers than that at which the deviation commenced,provided, however, that any service given or distance made good by the vesselwhilst so off-hire shall be taken into account in assessing the amount to bededucted from hire.  If the vessels, for any cause or purpose mentioned inClause 21(a), put into any port other than the port to which they are boundon the instructions of Charterers, the port charges, pilotage and otherexpenses at such port shall be borne by Owners.  Should the vessels bedriven into any port or anchorage by stress of weather hire shall continue tobe due and payable during any time lost thereby.

 

(d)           If the vessels’ flagstate becomes engaged in hostilities, and Charterers in consequence of suchhostilities find it commercially impracticable to employ the vessels and havegiven Owners written notice thereof then from the date of receipt by Owners ofsuch notice until the termination of such commercial impracticability thevessel shall be off-hire and Owners shall have the right to employ the vesselson their own account.

 

(e)           Time during which thevessel is off-hire under this charter shall count as part of the charter periodexcept where Charterers declare their option to add off-hire periods under Clause4(b)).

 

(f)            All references to “time”in this charter party shall be references to local time except where otherwisestated.

 

16

----

 

**PeriodicalDrydocking**

 

22.           (a)     Ownershave the right and obligation to drydock the vessels at regular intervals **as required** On each occasion Ownersshall propose to Charterers a date on which they wish to drydock the vessel,not less than **30 days** before such date andCharterers shall offer a port for such periodical drydocking and shall take allreasonable steps to make the vessel available as near to such date aspracticable.

 

Owners shall put thevessels in drydock at their expense as soon as practicable after Charterersplace the vessels at Owners’ disposal clear of cargo other than tank washingsand residues.  Owners shall be responsible for and pay for the disposalinto reception facilities of such tank washings and residues and shall have theright to retain any monies received therefore, without prejudice to any claimfor loss of cargo under any Bill of Lading or this charter.

 

(b)            If a periodicaldrydocking is carried out in the port offered by Charterers (which must havesuitable accommodation for the purpose and reception facilities for tankwashings and residues), the vessels shall be off-hire from the time she arrivesat such port until drydocking is completed and she is in every way ready toresume Charterers’ service and is at the position at which they went off-hireor a position no less favourable to Charterers, whichever she first attains.However;

 

17

----

 

(i)            provided that Ownersexercise due diligence in gas-freeing, any time lost in gas-freeing to thestandard required for entry into drydock for cleaning and painting the hullshall not count as off-hire, whether lost on passage to the drydocking port orafter arrival there (notwithstanding Clause 21 ), and;

 

(ii)           any additional timelost in further gas-freeing to meet the standard required for hot work or entryto cargo tanks shall count as off-hire, whether lost on passage to thedrydocking port or after arrival there.

 

Any time which, but forsub-Clause (i) above, would be off-hire, shall not be included in anycalculation under Clause 24 .

 

The expenses ofgas-freeing, including without limitation the cost of bunkers, shall be forOwners’ account.

 

(c)           If Owners require thevessels, instead of proceeding to the offered port, to carry out periodicaldrydocking at a special port selected by them, the vessel shall be off-hirefrom the time when she is released to proceed to the special port until shenext presents for loading in accordance with Charterers’ instructions,provided, however, that Charterers shall credit Owners with the time whichwould have been taken on passage at the service speed had the vessels notproceeded to drydock.  All fuel consumed shall be paid for by Owners butCharterers shall credit Owners with the value of the fuel which would have beenused on such notional passage calculated at the guaranteed daily consumptionfor the service speed, and shall further credit Owners with any benefit they maygain in purchasing bunkers at the special port.

 

(d)           Charterers shall,insofar as cleaning for periodical drydocking may have reduced the amount oftank-cleaning necessary to meet Charterers’ requirements, credit Owners withthe value of any bunkers which Charterers calculate to have been saved thereby,whether the vessels drydock at an offered or a special port.

 

**ShipInspection**

 

23.           Charterers shall havethe right at any time during the charter period to make such inspection of thevessels as they may consider necessary. This right may be exercised as often and at such intervals as Charterersin their absolute discretion may determine and whether the vessels are in portor on passage.  Owners affording allnecessary co-operation and accommodation on board provided, however:

 

(a)           that neither the exercise nor the non-exercise, nor anything done or notdone in the exercise or non-exercise, by Charterers of such right shall in anyway reduce the master’s or Owners’ authority over, or responsibility to Charterersor third parties for, the vessels and every aspect of their operation, norincrease Charterers’ responsibilities to Owners or third parties for the same; and;

 

18

----

 

(b)           that Charterers shall not be liable for any act, neglect or default bythemselves, their servants or agents in the exercise or non-exercise of theaforesaid right.

 

**DetailedDescription and Performance**

 

24.           Owners guarantee thatthe speed and consumption of the vessels shall be as agreed with Charterers.

 

**Salvage**

 

25.            Subject to theprovisions of Clause 21 hereof, all loss of time and all expenses(excluding any damage to or loss of the vessels or tortious liabilities tothird parties) incurred in saving or attempting to save life or in successfulor unsuccessful attempts at salvage shall be borne equally by Owners andCharterers provided that Charterers shall not be liable to contribute towardsany salvage payable by Owners arising in any way out of services rendered underthis Clause 25 .

 

19

----

 

All salvage and allproceeds from derelicts shall be divided equally between Owners and Charterersafter deducting the master’s, officers’ and crew’s share.

 

**Lien**

 

26.           Owners shall have alien upon all cargoes and all freights, sub-freights and demurrage for anyamounts due under this charter; and Charterers shall have a lien on the vesselsfor all monies paid in advance and not earned, and for all claims for damagesarising from any breach by Owners of this charter.

 

**Exceptions**

 

27.           (a)     Thevessels, their master and Owners shall not, unless otherwise in this charterexpressly provided, be liable for any loss or damage or delay or failurearising or resulting from any act, neglect or default of the master, pilots,mariners or other servants of Owners in the navigation or management of thevessel; fire, unless caused by the actual fault or privity of Owners; collisionor stranding; dangers and accidents of the sea; explosion, bursting of boilers,breakage of shafts or any latent defect in hull, equipment or machinery;provided, however, that Clauses 1 , 2 , 3 , and 24 hereofshall be unaffected by the foregoing.  Further, neither the vessels, theirmaster or Owners, nor Charterers shall, unless otherwise in this charterexpressly provided, be liable for any loss or damage or delay or failure inperformance hereunder arising or resulting from act of God, act of war, seizureunder legal process, quarantine restrictions, strikes, lock-outs, riots,restraints of labour, civil commotions or arrest or restraint of princes,rulers or people.

 

(b)           The vessels shall haveliberty to sail with or without pilots, to tow or go to the assistance ofvessels in distress and to deviate for the purpose of saving life or property.

 

(c)           Clause 27(a) shallnot apply to, or affect any liability of Owners or the vessels or any otherrelevant person in respect of:

 

(i)            loss or damage causedto any berth, jetty, dock, dolphin, buoy, mooring line, pipe or crane or otherworks or equipment whatsoever at or near any place to which the vessels mayproceed under this charter, whether or not such works or equipment belong toCharterers, or;

 

(ii)           any claim (whetherbrought by Charterers or any other person) arising out of any loss of or damageto or in connection with cargo.  Any such claim shall be subject to theHague-Visby Rules or the Hague Rules or the Hamburg Rules, as thecase may be, which ought pursuant to Clause 38 hereof to have beenincorporated in the relevant Bill of Lading (whether or not such Rules wereso incorporated) or, if no such Bill of Lading is issued, to the Hague-Visby Rules unlessthe Hamburg Rules compulsorily apply in which case to the Hamburg Rules.

 

(d)           In particular andwithout limitation, the foregoing subsections (a) and (b) ofthis Clause shall

 

20

----

 

not apply to or in anyway affect any provision in this charter relating to off-hire or to reductionof hire.

 

**InjuriousCargoes**

 

28.           No acids, explosives orcargoes injurious to the vessel shall be shipped and without prejudice to theforegoing any damage to the vessels caused by the shipment of any such cargo,and the time taken to repair such damage, shall be for Charterers’ account. No voyage shall be undertaken, nor any goods or cargoes loaded, thatwould expose the vessel to capture or seizure by rulers or governments.

 

**Grade ofBunkers**

 

29.           Charterers shall supplyfuel as required for the vessels.  IfOwners require the vessels to be supplied with more expensive bunkers theyshall be liable for the extra cost thereof.

 

Charterers warrant thatall bunkers provided by them in accordance herewith shall be of a qualitycomplying with ISO Standard 8217 for Marine Residual Fuels and MarineDistillate Fuels as applicable.

 

21

----

 

**Disbursements**

 

30.           Should the masterrequire advances for ordinary disbursements at any port, Charterers or theiragents shall make such advances to him, in consideration of which Owners shallpay a commission of two and a half per cent, and all such advances andcommission shall be deducted from hire.

 

**Laying-up**

 

31.           Charterers shall havethe option, after consultation with Owners, of requiring Owners to lay up thevessels at a safe place nominated by Charterers, in which case the hireprovided for under this charter shall be adjusted to reflect any net increasesin expenditure reasonably incurred or any net saving which should reasonably bemade by Owners as a result of such lay up.  Charterers may exercise thesaid option any number of times during the charter period.

 

**Requisition**

 

32.           Should the vessels berequisitioned by any government, de facto or de jure, during the period of thischarter, the vessels shall be off-hire during the period of such requisition,and any hire paid by such governments in respect of such requisition periodshall be for Owners’ account.  Any such requisition period shall not countas part of the charter period.

 

**Outbreakof War**

 

33.           If war or hostilitiesbreak out between any two or more of the following countries: U.S.A., thecountries or republics having been part of the former U.S.S.R. (except thatdeclaration of war or hostilities solely between any two or more of thecountries or republics having been part of the former USSR shall be exempted),P.R.C., U.K., Netherlands, then both Owners and Charterers shall have the rightto cancel this charter.

 

**AdditionalWar Expenses**

 

34.           If the vessels areordered to trade in areas where there is war (de facto or de jure) or threat ofwar, Charterers shall reimburse Owners for any additional insurance premia,crew bonuses and other expenses which are reasonably incurred by Owners as aconsequence of such orders, provided that Charterers are given notice of suchexpenses as soon as practicable and in any event before such expenses areincurred, and provided further that Owners obtain from their insurers a waiverof any subrogated rights against Charterers in respect of any claims by Ownersunder their war risk insurance arising out of compliance with such orders.

 

Any payments byCharterers under this Clause will only be made against provendocumentation.  Any discount or rebate refunded to Owners, for whateverreason, in respect of additional war risk premium shall be passed on to Charterers.

 

22

----

 

**War Risks**

 

35.           (a)     The master shall not be required or boundto sign Bills of Lading for any place which in his or Owners’ reasonableopinion is dangerous or impossible for the vessel to enter or reach owing toany blockade, war, hostilities, warlike operations, civil war, civil commotionsor revolutions.

 

(b)           If in the reasonableopinion of the master or Owners it becomes, for any of the reasons set out inClause 35(a) or by the operation of international law, dangerous,impossible or prohibited for the vessel to reach or enter, or to load ordischarge cargo at, any place to which the vessels have been ordered pursuantto this charter (a “place of peril”), then Charterers or their agents shall beimmediately notified in writing or by radio messages, and Charterers shallthereupon have the right to order the cargo, or such part of it as may beaffected, to be loaded or discharged, as the case may be, at any other placewithin the trading limits of this charter (provided such other place is notitself a place of peril).  If any place of discharge is or becomes a placeof peril, and no orders have been received from Charterers or their agentswithin 48 hours after dispatch of such messages, then Owners shall be atliberty to discharge the cargo or such part of it as may be affected at anyplace which they or the master may in their or his discretion select within thetrading limits of this charter and such discharge shall be deemed to be duefulfilment of Owners’ obligations under this charter so far as cargo sodischarged is concerned.

 

23

----

 

(c)           The vessels shall haveliberty to comply with any directions or recommendations as to departure,arrival, routes, ports of call, stoppages, destinations, zones, waters,delivery or in any other wise whatsoever given by the government of the stateunder whose flag the vessels sail or any other government or local authority orby any person or body acting or purporting to act as or with the authority ofany such government or local authority including any de facto government orlocal authority or by any person or body acting or purporting to act as or withthe authority of any such government or local authority or by any committee orperson having under the terms of the war risks insurance on the vessel theright to give any such directions or recommendations.  If by reason of orin compliance with any such directions or recommendations anything is done oris not done, such shall not be deemed a deviation.  If by reason of or incompliance with any such direction or recommendation the vessels do not proceedto any place of discharge to which she has been ordered pursuant to thischarter, the vessels may proceed to any place which the master or Owners in hisor their discretion select and there discharge the cargo or such part of it asmay be affected. Such discharge shall be deemed to be due fulfilment of Owners’obligations under this charter so far as cargo so discharged is concerned.

 

Charterers shall procurethat all Bills of Lading issued under this charter shall contain the Chamber ofShipping War Risks Clause 1952.

 

**Both toBlame Collision Clause**

 

36.           If the liability forany collision in which the vessel is involved while performing this charterfails to be determined in accordance with the laws of the United States ofAmerica, the following provision shall apply:

 

“If the ship comes intocollision with another ship as a result of the negligence of the other ship andany act, neglect or default of the master, mariner, pilot or the servants ofthe carrier in the navigation or in the management of the ship, the owners ofthe cargo carried hereunder will indemnify the carrier against all loss, orliability to the other or non-carrying ship or her owners in so far as such lossor liability represents loss of, or damage to, or any claim whatsoever of theowners of the said cargo, paid or payable by the other or non-carrying ship orher owners to the owners of the said cargo and set off, recouped or recoveredby the other or non-carrying ship or her owners as part of their claim againstthe carrying ship or carrier.”

 

“The foregoing provisionsshall also apply where the owners, operators or those in charge of any ship orships or objects other than, or in addition to, the colliding ships or objectsare at fault in respect of a collision or contact.”

 

Charterers shall procurethat all Bills of Lading issued under this charter shall contain a provision inthe foregoing terms to be applicable where the liability for any collision inwhich the vessels are involved fails to be determined in accordance with thelaws of the United States of America.

 

**NewJason Clause**

 

37.           General averagecontributions shall be payable according to York/Antwerp Rules, 1994 as amendedfrom time to time, and shall be adjusted in London in accordance with Englishlaw and 

 

24

----

 

practice but shouldadjustment be made in accordance with the law and practice of the United Statesof America, the following position shall apply:

 

“In the event ofaccident, danger, damage or disaster before or after the commencement of thevoyage, resulting from any cause whatsoever, whether due to negligence or not,for which, or for the consequence of which, the carrier is not responsible bystatute, contract or otherwise, the cargo, shippers, consignees or owners ofthe cargo shall contribute with the carrier in general average to the paymentof any sacrifices, losses or expenses of a general average nature that may bemade or incurred and shall pay salvage and special charges incurred in respectof the cargo.”

 

25

----

 

“If a salving ship isowned or operated by the carrier, salvage shall be paid for as fully as if thesaid salving ship or ships belonged to strangers.  Such deposit as thecarrier or his agents may deem sufficient to cover the estimated contributionof the cargo and any salvage and special charges thereon shall, if required, bemade by the cargo, shippers, consignees or owners of the cargo to the carrierbefore delivery.”

 

Charterers shall procurethat all Bills of Lading issued under this charter shall contain a provision inthe foregoing terms, to be applicable where adjustment of general average ismade in accordance with the laws and practice of the United States of America.

 

**ClauseParamount**

 

38.           Charterers shallprocure that all Bills of Lading issued pursuant to this charter shall containthe following:

 

“(1) Subject tosub-Clause (2) or (3) hereof, this Bill of Lading shall be governedby, and have effect subject to, the rules contained in the InternationalConvention for the Unification of Certain Rules relating to Bills ofLading signed at Brussels on 25th August 1924 (hereafter the “Hague Rules”)as amended by the Protocol signed at Brussels on 23rd February 1968(hereafter the “Hague-Visby Rules”).  Nothing contained herein shall bedeemed to be either a surrender by the carrier of any of his rights orimmunities or any increase of any of his responsibilities or liabilities underthe Hague-Visby Rules.”

 

“(2) If there isgoverning legislation which applies the Hague Rules compulsorily to thisBill of Lading, to the exclusion of the Hague-Visby Rules, then this Bill ofLading shall have effect subject to the Hague Rules.  Nothing thereincontained shall be deemed to be either a surrender by the carrier of any of hisrights or immunities or an increase of any of his responsibilities orliabilities under the Hague Rules.”

 

“(3) If there isgoverning legislation which applies the United Nations Convention on theCarriage of Goods by Sea 1978 (hereafter the “Hamburg Rules”) compulsorily tothis Bill of Lading, to the exclusion of the Hague-Visby Rules, then this Billof Lading shall have effect subject to the Hamburg Rules.  Nothing thereincontained shall be deemed to be either a surrender by the carrier of any of hisrights or immunities or an increase of any of his responsibilities orliabilities under the Hamburg Rules.”

 

“(4) If any term ofthis Bill of Lading is repugnant to the Hague-Visby Rules, or Hague Rules, orHamburg Rules, as applicable, such term shall be void to that extent but nofurther.”

 

“(5) Nothing in thisBill of Lading shall be construed as in any way restricting, excluding orwaiving the right of any relevant party or person to limit his liability underany available legislation and/or law.”

 

26

----

 

**Insurance/ITOPF**

 

39.           Owners warrant that thevessels are now, and will, throughout the duration of the charter:

 

(a)           be owned or demisechartered by a member of the International Tanker Owners Pollution FederationLimited;

 

(b)           be properly entered in **a** P & I Club, being amember of the International Group of P & I Clubs;

 

(c)           have in place insurancecover for oil pollution for the maximum on offer through the InternationalGroup of P & l Clubs but always a minimum of United States Dollars1,000,000,000 (one thousand million);

 

(d)           have in full force andeffect Hull and Machinery insurance placed through reputable brokers onInstitute Time Clauses or equivalent for the market value agreed by Owners andCharterers.

 

27

----

 

Owners will provide,within a reasonable time following a request from Charterers to do so,documented evidence of compliance with the warranties given in this Clause 39 .

 

**ExportRestrictions**

 

40.           The master shall not berequired or bound to sign Bills of Lading for the carriage of cargo to anyplace to which export of such cargo is prohibited under the laws, rules orregulations of the country in which the cargo was produced and/or shipped.

 

Charterers shall procurethat all Bills of Lading issued under this charter shall contain the followingclause:

 

“If any laws rules orregulations applied by the government of the country in which the cargo wasproduced and/or shipped, or any relevant agency thereof, impose a prohibitionon export of the cargo to the place of discharge designated in or ordered underthis Bill of Lading, carriers shall be entitled to require cargo ownersforthwith to nominate an alternative discharge place for the discharge of thecargo, or such part of it as may be affected, which alternative place shall notbe subject to the prohibition, and carriers shall be entitled to accept ordersfrom cargo owners to proceed to and discharge at such alternative place. If cargo owners fail to nominate an alternative place within 72 hours afterthey or their agents have received from carriers notice of such prohibition,carriers shall be at liberty to discharge the cargo or such part of it as maybe affected by the prohibition at any safe place on which they or the mastermay in their or his absolute discretion decide and which is not subject to theprohibition, and such discharge shall constitute due performance of thecontract contained in this Bill of Lading so far as the cargo so discharged isconcerned”.

 

The foregoing provisionshall apply mutatis mutandis to this charter, the references to a Bill ofLading being deemed to be references to this charter.

 

**BusinessPrinciples**

 

41.           (Deleted)

 

**Drugsand Alcohol**

 

42.           (a) Owners warrantthat they have in force an active policy covering the vessels which meets orexceeds the standards set out in the “Guidelines for the Control of Drugs andAlcohol On Board Ship” as published by the Oil Companies International MarineForum (OCIMF) dated January 1990 (or any subsequent modification, version,or variation of these guidelines) and that this policy will remain in forcethroughout the charter period, and Owners will exercise due diligence to ensurethe policy is complied with.

 

28

----

 

.               (b) Ownerswarrant that the current policy concerning drugs and alcohol on board isacceptable to ExxonMobil and will remain so throughout the charter period.

 

**OilMajor Acceptability**

 

43.           If, at any time duringthe charter period, the vessels become unacceptable to any Oil Major,Charterers shall have the right to terminate the charter.

 

**Pollutionand Emergency Response**

 

44.           Owners are to adviseCharterers of organisational details and names of Owners personnel togetherwith their relevant telephone/facsimile/e-mail/telex numbers, including thenames and contact details of Qualified Individuals for OPA 90 response, who maybe contacted on a 24 hour basis in the event of oil spills or emergencies.

 

**ISPSCode/US MTSA 2002**

 

45.           (a).     (i)     From the date of coming into force of theInternational Code for the Security of Ships and of Port Facilities and therelevant amendments to Chapter XI of SOLAS (ISPS Code) and the US MaritimeTransportation Security Act 2002 (MTSA) in relation to the Vessel andthereafter during the currency of this charter, Owners shall procure that boththe Vessel and “the Company” (as defined by the ISPS Code) and the “owner” (asdefined by the MTSA) shall comply with the requirements of the ISPS Coderelating to the Vessel and “the Company” and the requirements of MTSA relatingto the vessel and the “owner”.  Uponrequest Owners shall provide documentary evidence of compliance with this Clause45(a) (i).

 

                (ii)    Except as otherwise provided in this charter, loss, damage, expense ordelay, caused by failure on the part of Owners or “the Company”/”owner” tocomply with the requirements of the ISPS Code/MTSA or this Clause shall be forOwners’ account.

 

                (b).     (i)     Charterers shall provide Owners/Masterwith their full style contact details and shall ensure that the contact detailsof all sub-charterers are likewise provided to Owners/Master.  Furthermore, Charterers shall ensure that allsub-charter parties they enter into during the period of this charter containthe following provision:

 

“TheCharterers shall provide the Owners with their full style contact details and,where sub-letting is permitted under the terms of the charter party, shallensure that the contact details of all sub-charterers are likewise provided tothe Owners”.

 

                (ii)    Except as otherwise provided in this charter, loss, damage, expense ordelay, caused by failure on the part of Charterers to comply with this sub-Clause45(b) shall be for Charterers’ account.

 

29

----

 

                (c).     Notwithstandinganything else contained in this charter costs or expenses related to securityregulations or measures required by the port facility or any relevant authorityin accordance with the ISPS Code/MTSA including, but not limited to, securityguards, launch services, tug escorts, port security fees or taxes andinspections, shall be for Charterers’ account, unless such costs or expensesresult solely from Owners’ negligence in which case such costs or expensesshall be for Owners’ account.  Allmeasures required by Owners to comply with the security plan required by theISPS Code/MTSA shall be for Owners’ account.

 

                (d).     Notwithstandingany other provision of this charter, the vessels shall not be off-hire wherethere is a loss of time caused by Charterers’ failure to comply with the ISPScode/MTSA (when in force).

 

                (e).     Ifeither party makes any payment which is for the other party’s account accordingto this Clause, the other party shall indemnify the paying party.

 

30

----

 

**Law andLitigation**

 

46.           (Deleted)

 

**Confidentiality**

 

47.           All terms andconditions of this charter arrangement shall be kept private and confidential,except as required by applicable law

 

**Construction**

 

48.           The side headings havebeen included in this charter for convenience of reference and shall in no wayaffect the construction hereof.

 

Additional Clauses: Asattached, shall be incorporated herein.

 
| **SIGNED FOR OWNERS** |               | **SIGNED FOR CHARTERES**  |
|-----------------------|--------------------|---------------------------|
| **OSG 243 LLC**       |               | **OSG 243 CHARTERER LLC** |
|                  |               |                      |   |   |   |
|                  |               |                      |   |   |   |
| By:                   |               | /s/ Jerry Miller          |   | By: | /s/ Janice K. Smith |
|                  | Name: Jerry Miller |                      |   | Name: | Janice K. Smith |
|                  | Title: Manager     |                      |   | Title: | Manager |

 

 
| **OSG INDEPENDENCE LLC** |                |              |   |   |
|--------------------------|---------------------|-------------------|--------|--------|
|                     |                |              |   |   |   |   |
| By:                      |                | /s/ Henry Flinter |   |   |   |   |
|                     | Name: Henry Flinter |              |   |   |   |   |
|                     | Title: Manager      |              |   |   |   |   |

 

31

----

 

**Additional Terms**

**To the time charter dated April 29,2008 between: (a) OSG 243 LLC and OSG Independence LLC; and (b) OSG243 Charterer LLC**

 
| **1.** | **Charterhire,  Payments and Expense**            |
|--------|---------------------------------------------------|
|   | 1.1                                               | OWNER’S  BANK |
|   | 1.2                                               | TIME  CHARTER HIRE RATE |
|   | 1.3                                               | OWNER’S  ITEMS |
|   | 1.4                                               | COMMISSION |
|   | 1.5                                               | HIRE  PAYMENT |
|   | 1.6                                               | OPA/COFR  EXPENSES |
|   |                                              |   |
| **2.** | **Delivery/Redelivery  and Trading**              |
|   | 2.1                                               | DELIVERY |
|   | 2.2                                               | REDELIVERY |
|   | 2.3                                               | TRADING  AREAS AND EXCLUSIONS |
|   | 2.4                                               | NOTICE  OF DELIVERY/REDELIVERY |
|   | 2.5                                               | BUNKERS  ON DELIVERY/REDELIVERY |
|   | 2.6                                               | OFF-HIRE  PERIOD(S) |
|   | 2.7                                               | BOYCOTT |
|   | 2.8                                               | TRADING  WHILE OFF-HIRE |
|   | 2.9                                               | DRYDOCKING |
|   | 2.10                                              | LAY-UP |
|   |                                              |   |
| **3.** | **Vessel Operations, Performance and Warranties** |
|   | 3.1                                               | SPILL  PREVENTION |
|   | 3.2                                               | OILY  WASTE |
|   | 3.3                                               | SPEEDS/CONSUMPTIONS |
|   | 3.4                                               | HEATING |
|   | 3.5                                               | SHIP  TO SHIP TRANSFER |
|   | 3.6                                               | CARGO  MANIFOLDS |
|   | 3.7                                               | CRUDE  OIL WASH (COW) |
|   | 3.8                                               | INERT  GAS SYSTEM |
|   | 3.9                                               | SURVEY  AND SAMPLE |
|   | 3.10                                              | COMMINGLING/BLENDING |
|   | 3.11                                              | CARGO  RETENTION |
|   | 3.12                                              | LOADING  WARRANTY |
|   | 3.13                                              | PUMPING  PERFORMANCE WARRANTY |
|   | 3.14                                              | DRAWINGS/DATA |
|   | 3.15                                              | REMEASUREMENT |
|   | 3.16                                              | ETA |
|   | 3.17                                              | CBM  MOORING EQUIPMENT |

 

32

----

 
|   | 3.18                           | SEA  TERMINALS                                          |
|--------|--------------------------------|---------------------------------------------------------|
|   | 3.19                           | COMMUNICATION  EQUIPMENT                                |
|   | 3.20                           | INMARSAT  TRACKING                                      |
|   | 3.21                           | MANNING                                                 |
|   | 3.22                           | OWNERSHIP/FLAG                                          |
|   |                           |                                                    |
| **4.** | **Eligibility and Compliance** |
|   | 4.1                            | APPROVALS                                               |
|   | 4.2                            | ELIGIBILITY                                             |
|   | 4.3                            | I.T.F.                                                  |
|   | 4.4                            | DRUG  AND ALCOHOL POLICY                                |
|   | 4.5                            | SOLAS/MARPOL                                            |
|   | 4.6                            | ITOPF                                                   |
|   | 4.7                            | JAPAN  MARITIME DISASTER PREVENTION CENTER CERTIFICATES |
|   |                           |                                                    |
| **5.** | **Legal Provisions**           |
|   | 5.1                            | LAW  AND LITIGATION                                     |
|   | 5.2                            | AFFILIATES’  CLAIMS                                |
|   | 5.3                            | ASSIGNMENT                                              |
|   | 5.4                            | TENDER  OF NOTICE                                       |
|   | 5.5                            | INSURANCE                                               |
|   | 5.6                            | WAR                                                     |
|   | 5.7                            | BILL(S) OF  LADING/INDEMNITY                       |
|   | 5.8                            | CONFIDENTIALITY                                         |
|   | 5.9                            | LOSS  OF VESSEL                                         |
|   | 5.10                           | CONFLICTS  OF INTEREST                                  |
|   | 5.11                           | CONTRACT  INTERPRETATION                                |

 

33

----

 

**1.****        ****Charterhire, Payments and Expense**

 

1.1       OWNER’S BANK

 

Seeclause 9 of the Shelltime 4 form.

 

 

1.2       TIME CHARTER HIRE RATE

 

Seeclause 8 of the Shelltime 4 form

 

1.3       OWNER’S ITEMS

 

It is understood that Ownershall pay for all customary Owner’s costs including, but not limited to,sealing ship’s stores, legalization of crew list, gangway, garbage dues, sickmariner dues, sailor’s home, mission to seamen, lifeboat institution at eachport and, when off hire, fuel for domestic services.  Owner shall be responsible for settling allof its expenses directly with agents.

 

1.4       COMMISION:

 

None

 

1.5       HIRE PAYMENT

 

Notwithstanding theprovisions of Clause 9 of the Shelltime 4 form, Charterer shall: (a) notbe responsible for any delay or error by Owner’s bank in crediting Owner’saccount provided that Charterer has made proper and timely payments; and (b) beresponsible for any delay or error caused by Charterer’s bank.

 

1.6       OPA/COFR EXPENSES

 

Owner is responsible forperiodic (annual or otherwise) OPA expenses. Charterer is responsible for OPA premiums charged on a per call basis.

 

**2.**         **Delivery/Redelivery and Trading**

 

2.1       DELIVERY

 

See Clause 4 (d) of theShelltime 4 form.

 

2.2       REDELIVERY

 

34

----

 

See Clause 4 (d) of theShelltime 4 form.

 

2.3       TRADING AREAS AND EXCLUSIONS

 

See Clause 4 of theShelltime 4 form.

 

### **2.4**      NOTICE OFDELIVERY/REDELIVERY

### ** **

### **.1**                 See Clause 5 of theShelltime 4 form.

### ** **

2.5       BUNKERS ON DELIVERY/REDELIVERY

 

Bunkers on delivery to besettled at cost upon Owner’s verification of bunker invoice of cost ofbunkers.  If possible, vessel to beredelivered with approximately the same quantity fuel oil and gas oil to besettled at cost upon Charterer’s verification of bunker invoice of cost ofbunkers.  In each case, quantities to beno less than 300 mt fuel oil and 50 mt gas oil. Bunker survey to be held at locations of delivery and redelivery unlessotherwise mutually agreed.  Time and costof both surveys to be split 50/50 between Owner and Charterer.  Title of bunkers to pass to Charterer upondelivery and to Owner upon redelivery.

 

2.6       OFF-HIRE PERIOD(S)

 

Notwithstanding Clause 21(e) ofthe Shelltime 4 form, the time charter period may be extended by Charterer forall or any part of the time that the Vessels are off-hire during the initialterm of the charter. Charterer’s option to add back off-hire time to the timecharter period is to be exercised latest 20 days prior to expiry.

 

2.7       BOYCOTT

 

In addition to thecircumstances described in Clause 21(a)(ii) of the Shelltime 4 form, andsubject to Clause 5.11.B, in the event of Vessels are subject to boycott, aredelayed or rendered inoperative by strikes, labor stoppages or any otherdifficulties arising from their flag, ownership, crew or terms of employment ofcrew or any other vessel under the same ownership, operation or control, suchtime lost is to be considered as off -hire and all expenses incurred thereby,including fuel consumed during such periods to be for Owner’s account.  Charterer will not send the Vessels to anyport or place where the Vessels are known to be boycotted for such reasons.

 

35

----

 

2.8       TRADING WHILE OFF-HIRE

 

Owner may not under anycircumstances trade the Vessels for its own account during any period ofoff-hire, unless agreed in advance by Charterer.

 

2.9       DRYDOCKING

 

A.        See clause 22 of the Shelltime 4 form.

 

B.        Emergency Drydocking

 

Shouldemergency drydocking be required, Charterer shall allow the Vessels to proceedto an appropriate port.  Owner shall besolely responsible for gas freeing the Vessels upon such occasion, and alltowing, pilotage, fuel and other expense incurred while proceeding to and fromand while in drydock shall be for Owner’s account.  Fuel used during such drydocking or repair asprovided in this clause or in proceeding to or from the port of drydocking orrepair, will be charged to Owner by Charterer at the price charged to Chartererby its bunker supplier at the last supply port.

 

Incase of emergency drydock pursuant to this clause at a port where the Vesselsare to load, discharge or bunker under Charterer’s orders, hire shall besuspended from the time the Vessels received free pratique on arrival, if inballast, or upon completion of discharge of cargo, if loaded, until the Vesselsare again ready for service.  In case ofdrydocking at a port other than where the Vessels load, discharge, or bunkerunder Charterer’s orders, the following time and bunkers shall be deducted fromhire:  total time and bunkers including repairport call from the actual voyage from last port of call under Charterer’s orderto next port of call under Charterer’s orders, less theoretical voyage time andbunkers for the direct voyage from said last port of call to said next port ofcall.  The period during which hire issuspended including drydocking and repairs until the Vessels again come on hireunder the terms hereof shall count as off-hire under the terms of this Charter.

 

C.        Cleaning Costs

 

Regardlessof whether the drydocking is a scheduled or emergency drydocking, anyincremental cleaning time and costs to clean for drydocking shall be for theOwner’s account.

 

2.10     LAY-UP

 

Charterer shall have theoption with Owner’s approval which is not to be unreasonably withheld, oflaying-up the Vessels at a safe place for all or 

 

36

----

 

any portion of the term ofthis Charter in which case hire hereunder shall continue to be paid, but thereshall be credited against such hire the whole amount which Owner shall saveduring such period of lay-up through reduction in expenses, less any extraexpenses borne by Owner is put as result of such lay-up including, but notlimited to, crew repatriation expenses and to keep the Vessels well andproperly maintained during such lay-up periods. All reactivation expenses including but not limited to crew joiningexpenses to be for Charterer’s account. The place of such lay-up shall be subject to Owner’s approval, not to beunreasonably withheld.

 

**3.**         **Vessel Operations, Performanceand Warranties**

 

3.1       SPILL PREVENTION

 

Prior to commencement ofloading or discharging operations, all overboard lines are to be checked toensure that they are securely closed. Pumproom stripping line overboard discharges shall be suitably blankedoff before arriving in port.  Theseblanks are to be installed and retained in line through the entire period thatthe Vessels are in coastal waters.  Allother precautions are to be taken to avoid any spillage and/or leakage.  If during loading or discharging operationsthere is any indication of spillage or leakage of oil or CPP cargo, the Vesselsshall immediately cease all pumping operations and notify the Owner’s DPA(Dedicated Position Ashore), terminal representative(s) and/or Charterer’ssupervisor(s).  The Vessels shall notresume loading or discharging operations until a thorough investigation isconducted and appropriate remedies are taken, and any time lost shall be forOwner’s account, should such spillage or leakage of oil be found to haveoccurred due to the negligence of Vessels’ crew or condition of theVessels.  Notwithstanding the above,Owner shall always comply with the terms of Clause 4.2.

 

3.2       OILY WASTE

 

The Vessels shall, duringtank washing, segregate the tank washings into one cargo compartment and aftermaximum separation of the free water, discharge the free water overboard to theextent permitted by applicable international regulations.  Thereafter, Charterer shall be notified ofthe amount of oil and water in the segregated tank washings.  On being so notified, Charterer will giveinstructions for the disposition of the segregated tank washings and any othercargo oil residues on board (hereinafter collectively called “residues”).  The residues will, at Charterer’s option, bepumped ashore at the loading terminal or retained on board during the loadedpassage.

 

If Charterer requires thatthe residues be pumped ashore at the loading port(s), any extra expensesincurred by the Vessels in pumping ashore shall 

 

37

----

 

be for Charterer’saccount.  If the residues are to be kepton board, the Master shall arrange that the quantity be measured in conjunctionwith the cargo suppliers, a note of the quantity shall be made in Vessels’ullage record and a slop certificate shall be issued.  If Charterer requires that the residues bekept on board, segregated from cargo, they shall, at Charterer’s option, bedischarged at the discharging port(s) in accordance with Charterer’sinstructions.

 

3.3       SPEEDS/CONSUMPTIONS

 

See clause 24 of theShelltime 4 form.

 

3.4       HEATING

 

No requirements

 

3.5       SHIP TO SHIP TRANSFER

 

Charterer shall have theright to perform loading and/or unloading of cargo via ship to ship transfers(weather permitting and subject to Master’s approval which not to beunreasonably withheld) at anchor or off any port.  Charterer will provide fenders, hoses and allother equipment necessary to perform the lighterage operations to Master’ssatisfaction.  Owner agrees to allowsupervisory personnel on board, including mooring master, to assist in theperformance of lighterage operations. Any such ship to ship transfer operations shall be conducted inaccordance with the latest edition of OCIMF Ship to Ship Transfer Guide(Petroleum).

 

Full or partial loading fromor discharge to lighters/barges shall not be considered ship to ship transfers.

 

3.6       CARGO MANIFOLDS

 

Owner warrants that Vesselsshall be equipped with pressure gauges fitted inboard of the valve at eachdischarge manifold connection.  Suchgauges shall be maintained in proper working condition and each gauge shallhave a valid test certificate.

 

Owner warrants that allpiping, valves, spools, reducers and other fittings comprising that portion ofVessels’ manifold system outboard of the last fixed rigid support to theVessels’ deck and used in the transfer of cargo, bunkers or ballast, will bemade of steel or nodular iron which shall comply with the most recent OilCompanies International Marine Forum (“OCIMF”) standards.  The fixed rigid support for the manifoldsystem 

 

38

----

 

must be designed to preventboth lateral and vertical movement of the manifold.

 

Owner further warrants thatno more than one reducer or spacer will be used between Vessels’ manifold valveand the terminal hose or loading arm connection in accordance with OCIMFGuidelines.  The Vessels shall beequipped to present flanges of 10”, 12” and 16” (ASA) at all manifoldconnections on one side of the Vessels.

 

3.7       CRUDE OIL WASH (COW)

 

N/A

 

3.8       INERT GAS SYSTEM

 

N/A

 

3.9       SURVEY AND SAMPLE

 

Charterer’s representativemay survey and take samples from all Vessel tanks at any time, with cost to befor Charterer’s account.

 

3.10     COMMINGLING/BLENDING

 

Charterer shall have the optionto commingle and blend different grades of cargo as they are loaded into theVessels’ tanks, provided that such commingling and blending is within theVessels’ technical capabilities and that the Owner/Master consider it safe todo so.  To the extent that suchcommingling and blending operations are executed by the Vessels’ staff inaccordance with the Charterer’s instructions, Owner/Master shall not beresponsible for the quality of cargo resulting from such blending operations.

 

3.11     CARGO RETENTION

 

In the event that any cargoremains on board upon completion of final discharge, Charterer shall have theright to invoice an amount equal to the CNF port of discharge value of suchcargo plus freight due with respect thereto provided that the volume of cargoremaining on board is liquid and pumpable and reachable by Vessels’ fixedequipment (or would have been but for the fault or negligence of the Owner,Master, Vessel or her crew including non-compliance with cargo heatingrequirements as set forth in this charter party and/or voyage instructions) asdetermined by a qualified independent inspector.

 

The findings of theaforementioned inspector, whether appointed by Charterer, cargo receiver, cargoOwner, or Owner, shall be binding on both 

 

39

----

 

parties.  In making the said invoice, Charterer shallcredit Owner for any quantity of cargo onboard immediately prior to the time ofcommencement of loading determined by an independent inspector to have thenbeen liquid and free flowing to the extent that such quantity does not exceedthe total quantity of cargo ROB upon completion of discharge.

 

3.12     LOADING WARRANTY

 

Owner warrants that Vesselscan routinely load a homogenous cargo at a maximum rate of 36,000 barrels/hourprovided two cargo lines are connected (except for start up and topping upoperation).

 

3.13       PUMPING PERFORMANCE WARRANTY

 

A.        Owner warrants that Vessels are capable of discharging a full cargo in24 hours (or prorata for part cargo) or maintaining an average pressure of 100PSI at the Vessels’ manifold throughout the entire period of dischargeexcluding stripping and shore facilities permitting.

 

B.        Charterer is to be compensated at the Hourly Rate of Hire for eachhour, or pro rata for each part of an hour, that the Vessels take in excess ofthe pumping time allowed per the rates stipulated in sub-paragraph (A) hereof.  In addition, Charterer reserves the right toorder the Vessels from any berth at any time at the Owner’s time and expensewhen this warranty is breached.  Ownerwill receive no credit or compensation if the Vessels are able to discharge ata rate greater than those specified above. If the terminal or place of discharging does not allow or permit theVessels to meet the above warranty, the Master shall forthwith issue a Letterof Protest (for which the Master, if possible, shall obtain acknowledgement) tosuch terminal or place and shall immediately advise Charterer in writing bytelex or facsimile.  If the Master failsto issue the Letter of Protest, Owner shall be deemed to waive any rights tocontest that time was lost as a result of the Vessels’ failure to comply withthe above pumping warranty.  Any delay toVessels’ discharge caused by shore conditions shall be taken into account inthe assessment of pumping performance.

 

3.14       DRAWINGS/DATA

 

The following drawings/datashall be submitted to Charterer prior to delivery:

 

a)         General Arrangement Plan

b)          Capacity Plan

 

40

----

 

c)           Mooring Arrangement

d)          Ballast Piping Diagram/ Arrangement

e)           Cargo Piping Diagram/Arrangement

f)           Any other documents or data requested by Charterer

 

In addition, the OCIMFquestionnaire, Revised Ship Inspection Report (SIRE) Programme of Oil CompaniesInternational Marine Forum, for the vessels is deemed to be fully incorporatedinto and forms an integral part of this Time Charter.

 

3.15       REMEASUREMENT

 

Owner to advise allalternative loadlines and corresponding deadweights/drafts available at thetime of charter. Charterer has the option of requesting Owner to arrange forremeasurement of Vessels’ deadweight from time to time.  Owner shall make best endeavors to complywith such request if possible and practical. Charterer shall endeavor to notify Owner well in advance and give atleast three working days notice. All time and expenses in connection with theremeasuring will be borne by Charterer.

 

3.16       ETA

 

Owner will instruct Vessel’sMaster to advise Charterer of Vessels’ Estimated Time of Arrival (ETAs) at loadand discharge ports as instructed by Charterer including but not limited to thefollowing:

 

Vessels shall adviseload/discharge port terminal (via Agent) of their ETA at each of the followingtimes:

 

1.         Upon leaving last port of call or 96 hours before arrival whichever isless.

2.         48 hours before arrival.

3.         24 hours before arrival.

4.         Any time ETA changes by more than 12 hours.

 

Charterer shall not beliable for any proven and documented lost time or additional port expense withrespect to delays in loading and discharging attributable to the failure of theVessels to give notice of their ETA in accordance with this clause or asotherwise reasonably requested by Charterer and such proven and documented losttime shall count as off-hire as per Clause 21 (a)(ii).

 

41

----

 

3.17       CBM MOORING EQUIPMENT

 

Owner warrants that theVessels shall comply with the following requirements throughout the duration ofthis Time Charter, except as noted otherwise below:

 

The Vessels have a minimumof 6 mooring lines or mooring wires mounted on winches as described below.  Each of these mooring lines or wires shallhave a minimum length of 200 meters.  ***Chartererhas the right to supplement the Vessels’ mooring lines as necessary.***

 

Wires/Ropeson winches:

 

Number:  Seven (7) preferred, six (6) acceptableprovided they are in the correct location (see below).

 

Length:  Three hundred (300) meter required.  The Vessels are equipped with 250 meters.

 

Material:  Nylon or equivalent ropes are not acceptable.Wire or equivalent synthetic are acceptable.

 

Mounting:  All wires/ropes must be mounted on theirrespective winch (see also location below).

 

Certificates:  All wire/rope certificates must be on boardand available for Terminal review upon request.

 

BreakingStrength:  dependent upon Vessels’deadweight.

 

Location:  Vessels must be able to run two wires/ropesfrom winches located on main deck forward, two (2) from main deck aft, andthree (3) from the poop deck (two (2) may be acceptable).

 

Pendants:  Vessel-furnished pendants must conform toOCIMF guidelines, i.e., their breaking strength (B.S.) must be equal to onehundred and thirty-seven percent (137%) of B.S. of wires if made of nylon, orone hundred and twenty-five percent (125%) of B.S. of wires if made by othersynthetic fibers.

 

Chocks and Double-HornBitts:  Vessels must have two (2) closedchocks and at least one (1) set of bitts at each mooring location on bothport and starboard side.  Onlydouble-horn bitts are acceptable.  Roller-typechocks may be acceptable only if they have been enclosed by welding apreventive bar on top.  Open-type rollerchocks are not acceptable.

 

42

----

 

Winch Brake HoldingCapacity:  Must conform to OCIMF guidelines and must be set atsixty percent (60%) of the breaking strength of wires/ropes on winch.

 

SecondaryRopes:  A second set of lines will be runto each buoy.  Vessels must have on boarda minimum of seven (7) synthetic lines (nylon lines are not acceptable) ingood condition, minimum two hundred (200) meters long and of minimumseventy-five (75) metric tons breaking strength.

 

Boom:  Minimum fifteen (15) metric ton safe workingload boom or crane required.  The Vesselsare equipped with 5-ton boom.

 

Manifold: Vessels must be able safely to connect twelve (12) and/or sixteen (16)inch hoses.  If reducers are used, allconnections/flanges must be within the boundaries of the containment area underthe manifolds.

 

Alldelays, losses and expenses due to non-compliance with this clause will remainsolely for Owner’s account.

 

3.18       SEA TERMINALS

 

Owner warrants that whencalling at a sea terminal, the Vessels will maintain their engines in readinessand will be loaded and discharged in such a manner that they are ableimmediately to shut down cargo operations at any state of loading ordischarging, promptly disconnect hoses, release mooring lines, and proceed toanother anchorage or area.

 

3.19       COMMUNICATION EQUIPMENT

 

Owner warrants that Vesselsshall be equipped with VHF radiotelephone, satellite communications earthstation, facsimile machine,  GMS cellulartelephone, internet e-mail, and such other radio telecommunications equipmentas may be required by international, flag state, and port state regulations.

 

3.20       INMARSAT TRACKING

 

Charterer may employ anInmarsat C tracking system on the Vessels. All registration and communication costs relating to this trackingsystem will be for Charterer’s account. Charterer will advise when the system is operative and confirmtermination on redelivery.  Owner tosupply the following information:

 

Inmarsat C number (9 digitsbeginning with 4):

Manufacturer, make, etc.:

Model Number:

Terminal S/W version, ifknown:

 

43

----

 

3.21       MANNING

 

A.        Owner to advise, if so requested, the reliefschedule of Vessels’ senior officers (Master, C/E, C/O and 1/E) and provide toCharterer the CV of each joining officer showing work experience.

 

B.        Charterer requires Master and chief officer tohave combined minimum experience of five years in rank (Similar for C/E and1/E).  Exceptions to this requirement maybe discussed on a case by case basis and shall depend on the characteristics ofthe Vessels, their trade and past experience on the same class of Vessels.

 

C.        Owner to endeavor, without guarantee, tomaintain operational continuity on Vessels by maintaining the same seniorofficers in rotation.

 

D.        Should Charterer identify an issue of concernrelating to the crew, Owner is to take corrective action without delay.

 

E.         Vessel’s senior officers shall be fluent(written and spoken) in English.

 

3.22       OWNERSHIP/FLAG

 

Ownerundertakes that the Vessels will not change management, flag or be sold orotherwise disposed of during the currency of this charter without priorapproval of Charterer, not to be unreasonably withheld.

 

**4.****     ****Eligibility and Compliance**

 

4.1         APPROVALS

 

A.        To the best of Owner’s knowledge at the timeof delivery, the Vessels will be acceptable to Sunoco throughout the term ofthis charter

 

B.        Owner will endeavor to maintain all necessaryoil company approvals during the course of this charter.  Should the Vessels not be approved by anynecessary oil company, the Owner will undertake at the earliest opportunity toadopt all reasonable corrective measures at Owner’s time and expense and obtainthe required approvals, provided, however, that Charterer trades the Vessel to ports and/or areaswhere the aforesaid oil companies can inspect them if inspection is required toreinstate their oil company approval.  Ifthe Owner is unable to obtain the approval of the concerned oil company as aresult of the continued unacceptability of the Vessels, after inspection andnot as a result of inability or want to inspect by the oil company, and as aconsequence, the oil company and the Charterer having proved that despite itsbest efforts it is unable to find 

 

44

----

 

alternativeemployment for the Vessels, Charterer shall have the right to put them off hirefor the actual time lost until alternative employment of no worse value thanthat originally identified is found.

 

### **2**          C.        Should Charterer requireother approvals, sufficient time and notice is to be given to Owner who willthen arrange for Vessels’ inspection at Charterer’s own expense.  Failure to obtain approvals shall giveCharterer the right to put the Vessels off hire, and costs to make good thedeficiencies will be for the Owner’s account.

### ** **

4.2         ELIGIBILITY

 

Subjectto Clause 5.11.B, Owner warrants that the Vessels are in all respects eligibleunder applicable conventions, laws and regulations for trading to the ports andplaces specified in Clause 4 and Clause 2.3, and that they shall have on board for inspection by the appropriateauthorities all certificates, records, compliance letters, contingency plansand other documents required for such service including, but not limited to,ISM Safety Management Certificate, ISM Document of Compliance, and Certificatesof Financial Responsibility for Oil Pollution. Owner further warrants that the Vessels do, and will, fully comply withall applicable conventions, laws, regulations and ordinances of anyinternational, national, state or local government entity havingjurisdiction.  In particular, Owner warrantsthat for trading to or from ports in the United States, the Vessels do and willcomply with all requirements of the Federal Oil Pollution Act of 1990 (OPA 90),US Federal Water Pollution Control Act, SOLAS IX (ISM), MARPOL 1973/1978/1983,Civil Liability Convention and regulations issued pursuant thereto andeffective during the term of this charter party.  Any delays, losses, expenses or damagesarising as a result of failure to comply with this clause shall be for Owner’saccount and, where applicable, shall count as off-hire time per Clause 21.  In the interest of safety, Owner recommendsthat the Master observe the recommendations as to traffic separation androuting which are issued from time to time by the International MaritimeOrganization (IMO) as promulgated by the state of the flag of the Vessels orthe state in which the effective management of Vessels is exercised.

 

4.3     I.T.F.

 

Ownerwarrants that the officers and crew are employed under an agreement recognizedand approved by the ITF and will remain so throughout the currency of thisCharter Party.  In the event that theVessels are subject to boycott by ITF or any other body, or delayed or renderedinoperative by strikes, labor stoppages/slowdowns or any other difficultiesarising from their flag, ownership, crew or terms of employment of other 

 

45

----

 

crewof the same ownership, operations or control, such time lost is to beconsidered as off-hire and all expenses incurred thereby, including fuelconsumed during such period to be for Owner’s account.

 

4.4         DRUGAND ALCOHOL POLICY

 

Ownerwarrants that it has a policy on Drug and Alcohol Abuse (“Policy”) applicableto the Vessels which meets or exceeds the standards in the OCIMF Guidelines forthe Control of Drugs and Alcohol Onboard Ship. Under the Policy, alcohol impairment shall be defined as a blood alcoholcontent of 40 mg/100 ml or greater: the appropriate seafarers to be testedshall be the Vessels’ officers and crew and the drug/alcohol testing andscreening shall include unannounced testing in addition to routine medicalexaminations.  An objective of the policyshould be that the frequency of the unannounced testing be adequate to act asan effective abuse deterrent and that officers and crew be tested at least oncea year through a combined program of unannounced testing and routine medicalexaminations.  Owner further warrantsthat the Policy will remain in effect during the term of this Charter and thatOwner shall exercise due diligence to ensure that the Policy is followed.  It is understood that an actual impairment,or any test finding of impairment, shall not in and of itself mean Owner hasfailed to exercise due diligence. Persons who test positive, refuse to test, or are unfit for duty(impaired because of drug or alcohol use) shall be removed from the Vessels andshall not be reassigned to them or to any other vessel on charter to Chartereror its affiliates.

 

4.5       SOLAS/MARPOL

 

N/A

 

4.6         ITOPF

 

Owner warrants that it is a member of theInternational Tanker Owner’s Pollution Federation (“ITOPF”) and that Owner willretain such membership during the term of this Charter.  Owner further warrants that the Vessels shallbe in full compliance with the 1992 Civil Liability Convention (CLC) and the1992 Fund Convention during the term of this Charter.

 

**5.****      ****Legal Provisions**

 

5.1         LAW AND LITIGATION

 

Anyand all disputes arising out of or relating to this contract shall bearbitrated in the City of New York before a board of three persons, 

 

46

----

 

consistingof one arbitrator to be appointed by the Owner, one arbitrator by theCharterer, and one by the two so chosen who will act in the capacity asprocedural chairman.  Their decision orthat of any two of them shall be final and binding, and for the purpose ofenforcing the award, this agreement and the award may be made a rule ofthe court.  Either party may call forsuch arbitration by service upon the other, wherever it may be found, in theform of a written notice specifying the nature of the claim and the name andcontact details of their appointed arbitrator. If the other party shall not, by written notice served on the firstmoving party within 20 days of the service of such first notice, appoint itsarbitrator to arbitrate the disputes or differences specified, then the firstmoving party shall have the right without further notice to appoint a secondarbitrator with precisely the same force and effect as if said secondarbitrator had been appointed by the other party.  Awards by the panel, or a majority thereof,may include costs and reasonable attorneys fees.  The arbitration proceedings shall beconducted in accordance with the rules of the Society of MaritimeArbitrators, Inc. and the applicable law will be the Federal Maritime Lawof the United States.

 

5.2         AFFILIATES’ CLAIMS

 

A.        If, whether directly or indirectly, anybreach of this charter by Owner shall cause any company or companies which, atthe date of this charter, is or are associated with and/or affiliated toCharterer to suffer any loss or damage whatsoever or incur any liabilitywhatsoever to any third party, Owner shall be liable to Charterer to the fullextent of Charterers’ Affiliates’ or Associates’ losses and/or damages and/orliabilities including those arising under any bill of lading issued under thisCharter and Charterer shall be entitled to claim in respect thereof inaccordance with the Arbitration Clause of this charter.  Charterer warrants that any sums actuallyrecovered by it in respect of its Affiliates’ or Associates’ losses and/ordamages and/or liabilities shall be received by it for the account of suchAffiliates and/or Associates, in reduction and/or mitigation of their loss.

 

B.        If a Bill of Lading issued under this charteris negotiated or assigned to Charterer, all claims asserted by Chartereragainst Owner under the Bill of Lading shall be subject to arbitration inaccordance with the terms of the Arbitration Clause of the charter.

 

5.3         ASSIGNMENT

 

Charterermay sub-charter or assign this charter to any individual or company, butCharterer shall always remain responsible for the due 

 

47

----

 

fulfillmentof this Charter.  Unless Chartererprovides its express written consent, not to be unreasonably withheld, Ownermay not assign this Charter or its obligations hereunder and any suchassignment will be void.

 

5.4         TENDER OF NOTICE

 

Anynotice due under this charter shall be sent on open CC format by eachauthorized party via fax or email as below or as otherwise instructed by theparties.

 

For Owner: OSG 300 LLC and OSG Liberty LLC

Fax: 212-251-1180

Email: PPopov@OSG.Com

 

ForCharterer: OSP 300 LLC

Fax:813-221-2649

Email:Fgordon@OSG.com

 

5.5         INSURANCE

 

Owner warrants that from thetime the obligation to proceed to the loading port(s) and throughout theVessels’ service under this Charter Party, they shall be insured at Owner’sexpense for:

 

·      Hull and Machinery Insurance includingcollision liability with a limit equal to or greater than Owner’s yearlydeclared value of the Vessels. Such insurance to waive all rights ofsubrogation against Charterer to the extent of the liabilities and/or indemnityobligations assumed by Owner under this Charter.

 

·      Protection and Indemnity Insurance on a fullentry basis with an International Group P&I Club.  Such insurance shall include, but not belimited to: coverage for injuries to or death of masters, mates and crew;collision liabilities not insured under the H&M policy, excess collisionliabilities, cargo legal liabilities and pollution liabilities.  The limit of such insurance shall be asestablished by the rules of the International Group of P&I Clubsexcept for pollution liabilities which shall be limited to the maximumpollution limit offered through the P&I Clubs of the International Group(currently US $1 billion).

 

·      Hull and P&I war risk insurance with alimit of not less than the Owner’s yearly declared value of the Vessels. Suchinsurance to waive all rights of subrogation against Charterer to the extent ofthe liabilities and/or indemnity obligations assumed by Owner under thisCharter.

 

48

----

 

Any additional, per voyage,Hull and Machinery or Protection and Indemnity, War Risk insurance premiums orrequired crew bonuses, which are specifically applicable to a particular portor location to which the Charterer directs the Vessels shall be for Charterer’saccount (provided always that Charterer is given notice of the amount of suchadditional premiums prior to the Vessels entering the area to which theadditional coverage and premiums apply, and that the benefit of all discountson such premiums received by Owner from its War Risks insurers, underwriters orbrokers are credited to Charterer in full and that Owner obtains from itsinsurers waivers of subrogation against Charterer in respect of any claims byOwner under its war risk insurance arising out of compliance with suchorders).  Charterer shall reimburse Ownerany amounts due under this Clause upon receipt of Owner’s invoice together withfull supporting documentation including all associated debit and credit notes.

 

If so requested byCharterer, Owner shall promptly furnish to the Charterer proper evidence ofsuch insurance.  This warranty is to beregarded as an essential part of this Charter Party, which is conditional onits truth or performance, so that its breach entitles Charterer, at its option,to terminate the Charter Party and/or to recover any damages allowable.  Such insurance shall be maintained in fullforce and effect for the duration of this Charter Party.

 

5.6         WAR

 

This clause reprints BIMCO CONWARTIME 93 except for strikeouts ofsubclause (d)(i),(ii) and (e) which are addressed by clause 5.5.

 

(a)   For thepurpose of this clause, the words:

 

(i)              “Owner”shall include the ship Owner, bareboat charterer, disponent Owner, managers orother operators who are charged with the management of the Vessel, and theMaster; and

 

(ii)             “WarRisks” shall include any war (whether actual or threatened), act of war, civilwar, hostilities, revolution, rebellion, civil commotion, warlike operations,the laying of mines (whether actual or reported), acts of piracy, acts ofterrorists, acts of hostility or malicious damage, blockades (whether imposedagainst all Vessels or imposed selectively against Vessels of certain flags orOwnership, or against certain cargoes or crews or otherwise howsoever), by anyperson, body, terrorist or political group, or the Government of any statewhatsoever, which, in the reasonable judgment of the Master and/or the Owner,may be dangerous or are likely to be or to become dangerous to Vessel, hercargo, crew or other persons on board the Vessel.

 

(b)   The Vessels,unless the written consent of the Owner be first obtained, 

 

49

----

 

shallnot be ordered to or required to continue to or through, any port, place, areaor zone (whether of land or sea), or any waterway or canal, where it appearsthat Vessels, their cargo, crew or other persons on board them l, in thereasonable judgment of the Master and/or the Owner, may be, or are likely tobe, exposed to War Risks.  Should theVessels be within any such place as aforesaid, which only becomes dangerous, oris likely to be or to become dangerous, after her entry into it, they shall beat liberty to leave it.

 

(c)   The Vesselsshall not be required to load contraband cargo, or to pass through anyblockade, whether such blockade be imposed on all Vessels, or is imposedselectively in any way whatsoever against Vessels of certain flags orOwnership, or against certain cargoes or crews or otherwise howsoever, or toproceed to an area where they shall be subject, or is likely to be subject to abelligerent’s right of search and/or confiscation.

 

(f)         The Vessels shall have liberty:-

 

(i)        To comply with all orders, directions, recommendations or advice as todeparture, arrival, routes, sailing in convoy, ports of call, stoppages,destinations, discharge of cargo, delivery, or in any other way whatsoever,which are given by the Government of the Nation under whose flag the Vesselssail, or other Government to whose laws the Owner is subject, or any otherGovernment, or any other body or group whatsoever acting with the power tocompel compliance with their orders or directions;

 

(ii)       To comply with the order, directions or recommendations of any warrisks underwriters who have the authority to give the same under the terms ofthe war risks insurance;

 

(iii)      To comply with the terms of any resolution of the Security Council ofthe United Nations, any directives of the European Community, the effectiveorders of any other Supranational body which has the right to issue and givethe same, and with national laws aimed at enforcing the same to which the Ownerare subject, and to obey the orders and directions of those who are chargedwith their enforcement;

 

(iv)      To divert and discharge at any other port a cargo or part thereof whichmay render the Vessels liable to confiscation as a contraband carrier;

 

(v)       To divert and call at any other port to change the crew or any part thereofor other persons on board the Vessels when there is reason to believe that theymay be subject to internment, imprisonment or other sanctions.

 

50

----

 

(g)           If in accordance with their rights under the foregoing provisions ofthis clause, the Owner shall refuse to proceed to the loading or dischargingports, or any one or more of them, they shall immediately inform theCharterer.  No cargo shall be dischargedat any alternative port without first giving the Charterer notice of the Owner’sintention to do so and requesting them to nominate a safe port for suchdischarge.  Failing such nomination bythe Charterer within 48 hours of the receipt of such notice and request, theOwner may discharge the cargo at any safe port of their own choice.

 

(h)           If in compliance with any of the provisions of subclauses (b) to (f) ofthis Clause anything is done or not done, such shall not be deemed a deviation,but shall be considered as due fulfillment of this Charter.

 

5.7       BILL(S) OF LADING/INDEMNITY

 

***The discharge port(s) shown in the original Bill ofLading shall not constitute a declaration of discharge port(s) andCharterer shall have the right to order the Vessels to any port(s) withinthe terms of this Charter Party.***

 

***If Chartererrequests Owner to deliver cargo at a discharge port or place:***

 

***(1)******  ******Without prior presentation to the Vessels at the dischargeport or place of one of the original Bills of Lading issued for the cargo, dulyendorsed, and/or***

 

***(2)******  ******At a discharge port or place other than that specificallynamed in said Bills of Lading,***

 

***Chartererhereby indemnifies Owner, without further invocation, against claims brought byholders of original Bills of Lading against Owner in accordance with Owner’sletter of indemnity wording from Owner’s P&I Club which must be member ofthe International Group of P&I Clubs. Owner and Charterer agree that any requirement contained in the abovereferenced “letter of indemnity” wording for a bank guarantee is herebywaived.  For consistency, letter ofindemnity choice of law and dispute resolution procedure is deemed to be asprovided under this charterparty Clause 5.1***

 

***5.8******      ******C***ONFIDENTIALITY

 

Theterms and conditions of this Time Charter shall remain private andconfidential.

 

51

----

 

5.9       LOSS OFVESSEL

 

Shouldthe Vessels be lost, or be missing and presumed lost, hire shall cease at thetime of her loss, or if such time is unknown, at the time when the Vessels werelast heard from. If the Vessels should become a Constructive Total Loss (“CTL”),hire shall cease at the time of the casualty resulting in such loss.  In either case, any hire paid in advance andnot earned shall be returned to Charterer. If the Vessels should be missing when a payment of hire would otherwisebe due, such payment shall be postponed until the safety of the Vessels areascertained.  If the Vessels shouldbecome a CTL, Charterer shall have the option to cancel this Charter on writtennotice to Owner.  The Vessels shall bedeemed a CTL under this Charter when the cost of recovering and repairing themis reasonably estimated to exceed their value when repaired, without takinginto consideration any value of this Charter.

 

5.10     CONFLICTSOF INTEREST

 

Nodirector, employee or agent of Owner shall give or receive any commission, fee,rebate, gift or entertainment of significant cost or value in connection withthis Charter Party (other than brokerage commissions and other commissions andfees described in this Charter Party), or enter into any other businessarrangement with any director, employee or agent of Charterer or any of itsaffiliates without prior written notification to Charterer.  Any representative(s) authorized byCharterer may audit any and all records of Owner for the sole purpose ofdetermining whether there has been compliance with this clause.

 

5.11       CONTRACT INTERPRETATION

 

A.        The headings of these clauses are insertedfor convenience of reference and shall be ignored in the interpretation andconstruction of this Charter.  In theevent of any conflict between these rider clauses and Shelltime 4 provisions,these rider clauses shall take precedence. This Time Charter agreement constitutes the entire agreement among theparties and supercedes any earlier agreements and discussions.  Any amendments to this Time Charter must bein writing from authorized persons.

 

52

----