**Exhibit 10.12**

 

**Codeword for this Charter Party**

**“SHELLTIME4”**

 

Issued December 1984amended December 2003

 

**TimeCharter Party**

**NewYork**

**May 10,2008**

 

IT ISTHIS DAY AGREED between : (A) Overseas Puget Sound LLC in its capacity asthe owner of the tanker Overseas Puget Sound (the “Vessel”) of Delaware(hereinafter referred to as “Owners”), (the vessel”) described as per Clause1 hereof; and (B) Overseas Puget Sound Charterer LLC of Delaware(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)           the vessel shall beclassed by a Classification Society which is a member of the InternationalAssociation of Classification Societies; classification will be ABS

 

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

 

(c)           she 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 vessel 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;

 

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

 

(f)            she 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)           she shall have on boardall certificates, documents and equipment required from time to time by anyapplicable law to enable her to perform the charter service without delay;

 

(h)           she shall comply withthe description in the OCIMF Harmonised Vessel Particulars Questionnaire,appended hereto as Appendix A, provided however that if there is any conflictbetween the provisions of this questionnaire and any other provision, includingthis Clause 1 , of this charter such other provisions shall govern;

 

(i)            the ownershipstructure, flag, registry, and classification society and management company ofthe 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;

 

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(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 vessel underthis charter and throughout the charter period:

 

(i)            she 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 vessel andthose loading the vessel or accepting discharge there from to be carried outquickly and efficiently;

 

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

 

(vi)          the nationality of the vessel’sofficers given in the OCIMF Vessel Particulars Questionnaire referred to in Clause1(h) will not change without Charterers’ prior agreement.

 

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(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 Owners shall,whenever the passage of time, wear and tear or any event (whether or not comingwithin Clause 27 hereof) requires steps to be taken to maintain orrestore the conditions stipulated in Clauses 1 and 2(a) ,exercise due diligence so to maintain or restore the vessels.

 

(b)           If at any time whilstthe vessel is on hire under this charter the vessel fails to comply with therequirements of Clauses 1 ,  2(a) or 10then hire shall be reduced to the extent necessary to indemnify Charterers forsuch failure. If and to the extent that such failure affects the time taken bythe vessel to perform any services under this charter, hire shall be reduced byan amount equal to the value, calculated at the rate of hire, of the time solost.

 

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.

 

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(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 be off-hire, and no further hire payments shall be due, untilOwners have so demonstrated that they are exercising such due diligence.

 

(d)           Owners shall adviseCharterers immediately, in writing, should the 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 withoutprejudice to any rights of Charterers or obligations of Owners under thischarter or otherwise (including without limitation Charterers’ rights under Clause21 hereof).

 

**Period,Trading Limits and Safe Places**

 

4.             (a)           Owners agree to let and Charterers agree tohire the vessel for a period commencing on or about February 12, 2009 andending on or about December 31, 2009 plus or minus **30**days in Charterers’ option commencing from the time and date of delivery of thevessel, for the purpose of carrying all lawful merchandise (subject always toClause 28 ) including in particular clean petroleum products:

 

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

 

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Institute Warranties andany subsequent amendments thereof. Notwithstanding the foregoing, but subject to Clause 35,Charterers may not order the vessel 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 vessel is 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 vessel shall be loaded and discharged atany 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.

 

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(d)           Unless otherwiseagreed, the vessel shall be delivered by Owners dropping outward pilot at aport chosen by Charterers and redelivered to Owners dropping outward pilot at aport chosen by Owners.

 

(e)           The vessel will deliverwith last cargo(es) of **clean petroleum product**and will redeliver with last cargo(es) of **clean petroleum 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 vessel shall notbe delivered to Charterers before **February 12, 2009**and Charterers shall have the option of cancelling this charter if the vesselis 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 and34 hereof, for all insurance on the vessel, for all Deck, cabin andengine-room stores, and for water (limited to crew only); for all drydocking,overhaul, maintenance and repairs to the vessel. Owners’ obligations under thisClause 6 extend to all liabilities for customs or import duties arising atany time during the performance of this charter in relation to the personaleffects of the master, officers and crew, and in relation to the stores,provisions and other matters aforesaid which Owners are to provide and pay forand Owners shall refund to Charterers any sums Charterers or their agents mayhave paid or been compelled to pay in respect of any such liability. Anyamounts allowable in general average for wages and provisions and stores shallbe credited to Charterers insofar as such amounts are in respect of a Periodwhen the vessel is 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 all charges for the said items shall be for Owners’ account whensuch items are consumed, employed or incurred for Owners’ purposes or while thevessel is off-hire (unless such items reasonably relate to any service given ordistance made good and taken into account under Clause 21 or 22); and provided further that any fuel used in connection with a general averagesacrifice or expenditure shall be paid for by Owners. OPA charges to be paid byCharterers, COFR to be arranged and paid for by Owners.

 

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(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 vessel at the rateof United States Dollars **$31,500** 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:                  **Fifth Third 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.

 

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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 vessel from the service of Charterers without prejudiceto 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.

 

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**SpaceAvailable to Charterers**

 

10.           The whole reach,burthen and decks on the vessel 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 IMO ResolutionA747(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)           The master (although appointed by Owners)shall be under the orders and direction of Charterers as regards employment ofthe vessels, agency and other arrangements, and shall sign Bills of Lading asCharterers or their agents may direct (subject always to Clauses 35(a) and40) without prejudice to this charter.  Charterers hereby indemnifyOwners against all consequences 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.

 

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(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 vessel 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 vessel or any other vessel or property belonging to Owners shouldbe 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,

 

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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 a personto whom Charterers ordered cargo to be delivered) claims to be entitled to suchcargo and/or if the vessel or any other property belonging to Owners isarrested 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.

 

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**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.

 

Vessel to be delivered toand redelivered from the charter with, at least, a quantity of bunkers on boardsufficient 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,tugboat personnel or stevedores are in fact the servants of Charterers theiragents or any 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 vessel caused by or arising out of the use ofstevedores, fair wear and tear excepted, to the extent that Owners are unableby the 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 the vessel.

 

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**Sub-letting/Assignment/Novation**

 

18.           Charterers may sub-letthe vessel, but shall always remain responsible to Owners for due fulfilment ofthis charter.

 

**FinalVoyage**

 

19.           If when a payment ofhire is due hereunder Charterers reasonably expect to redeliver the vesselbefore 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 onOwners’ 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.

 

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If at the time thischarter would otherwise terminate in accordance with Clause 4 the vesselis on a ballast voyage to a port of redelivery or is upon a laden voyage,Charterers shall continue to have the use of the vessel 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 vessel belost, this charter shall terminate and hire shall cease at noon (GMT) on theday of the loss; should the vessel be a constructive total loss, this chartershall terminate and hire shall cease at noon on the day on which the vessel’sunderwriters agree that the vessel is a constructive total loss; should thevessel be missing, this charter shall terminate and hire shall cease at noon onthe day on which she was last heard of.  Any hire paid in advance and notearned shall be returned to Charterers and Owners shall reimburse Charterersfor the value of the estimated quantity of bunkers on board at the time oftermination, at the price paid by Charterers at the last bunkering port.

 

**Off-hire**

 

21.           (a)           On each and every occasion that there isloss of time (whether by way of interruption in the vessel’s service or, fromreduction in the vessel’s 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 vessel or her equipment (including withoutlimitation tank coatings); overhaul, maintenance or survey; collision,stranding, accident or damage to the vessel; or any other similar causepreventing the efficient working of the vessel; and such loss continues formore than three consecutive hours (if resulting from interruption in the vessel’sservice) or cumulates to more than three hours (if resulting from partial lossof 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 thebody of any person (other than a Charterers’ representative), and such losscontinues 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;

 

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(v)            due to detention ofthe vessel by authorities at home or abroad attributable to legal actionagainst or breach of regulations by the vessel, the vessel’s owners, or Owners(unless brought about by the act or neglect of Charterers); then;

 

without prejudice toCharterers’ rights under Clause 3  or to any otherrights of Charterers hereunder, or otherwise, the vessel shall be off-hire fromthe commencement of such loss of time until she is again ready and in anefficient state to resume her 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 vessel whilst off-hireshall be taken into account in assessing the amount to be deducted from hire.

 

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(b)           If the vessel fails 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, thenthe period for which the vessel shall be off-hire under this  Clause 21  shall be the difference between:

 

(i)            the time the vesselwould 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 vessel 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 vessel shall be off-hire from thecommencement of such deviation until the time when she is again ready and in anefficient state to resume her service from a position not less favourable toCharterers than that at which the deviation commenced, provided, however, thatany service given or distance made good by the vessel whilst so off-hire shallbe taken into account in assessing the amount to be deducted from hire. If the vessel, for any cause or purpose mentioned in  Clause 21(a) , puts into any portother than the port to which she is bound on the instructions of Charterers,the port charges, pilotage and other expenses at such port shall be borne byOwners.  Should the vessel be driven into any port or anchorage by stressof weather hire shall continue to be due and payable during any time lostthereby.

 

(d)           If the vessel’s flagstate becomes engaged in hostilities, and Charterers in consequence of suchhostilities find it commercially impracticable to employ the vessel 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 vesselon 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  Clause 4(b) ).

 

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

 

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**PeriodicalDrydocking**

 

22.           (a)           Owners have the right and obligation todrydock the vessel at regular intervals **as required**On each occasion Owners shall propose to Charterers a date on which they wishto drydock the vessel, not less than **30 days**before such date and Charterers shall offer a port for such periodicaldrydocking and shall take all reasonable steps to make the vessel available asnear to such date as practicable.

 

Owners shall put thevessel 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 vessel 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;

 

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(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 thevessel, 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 vessel 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 theymay gain 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 vessel drydocks 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 thevessel 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 vessel is in port oron 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 vessel and every aspect of her operation, norincrease Charterers’ responsibilities to Owners or third parties for the same; and;

 

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(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 vessel 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 vessel or tortious liabilities to thirdparties) incurred in saving or attempting to save life or in successful orunsuccessful 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 .

 

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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 vesselfor 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)           The vessel, her 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 hereof shall be unaffected by the foregoing.  Further, neither thevessel, her master or Owners, nor Charterers shall, unless otherwise in thischarter expressly provided, be liable for any loss or damage or delay orfailure in performance hereunder arising or resulting from act of God, act ofwar, seizure under legal process, quarantine restrictions, strikes, lock-outs,riots, restraints of labour, civil commotions or arrest or restraint ofprinces, rulers or people.

 

(b)           The vessel 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 vessel 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 vessel 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 

 

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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 vessel 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 vessel.  IfOwners require the vessel to be supplied with more expensive bunkers they shallbe 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.

 

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**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 thevessel at a safe place nominated by Charterers, in which case the hire providedfor under this charter shall be adjusted to reflect any net increases inexpenditure 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 vessel berequisitioned by any government, de facto or de jure, during the period of thischarter, the vessel 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 vessel isordered 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 toCharterers.

 

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**WarRisks**

 

35.            (a)           The master shall not be required or bound to sign Bills of Lading for any placewhich in his or Owners’ reasonable opinion is dangerous or impossible for thevessel to enter or reach owing to any blockade, war, hostilities, warlikeoperations, civil war, civil commotions or 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 toload or discharge cargo at, any place to which the vessel has been orderedpursuant to this charter (a “place of peril”), then Charterers or their agentsshall be immediately notified in writing or by radio messages, and Charterersshall thereupon 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.

 

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(c)            The vessel 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 vessel sails 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 vessel does notproceed to any place of discharge to which she has been ordered pursuant tothis charter, the vessel may proceed to any place which the master or Owners inhis or their discretion select and there discharge the cargo or such part of itas may be affected. Such discharge shall be deemed to be due fulfilment ofOwners’ 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 suchloss or liability represents loss of, or damage to, or any claim whatsoever ofthe owners of the said cargo, paid or payable by the other or non-carrying shipor her owners to the owners of the said cargo and set off, recouped orrecovered by the other or non-carrying ship or her owners as part of theirclaim against the 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 vessel is involved fails to be determined in accordance with the lawsof 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 

 

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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.”

 

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“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.”

 

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**Insurance/ITOPF**

 

39.           Owners warrant that thevessel is 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 placeinsurance cover for oil pollution for the maximum on offer through theInternational Group of P & l Clubs but always a minimum of UnitedStates Dollars 1,000,000,000 (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.

 

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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 of Ladingbeing 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 vessel 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 force throughoutthe charter period, and Owners will exercise due diligence to ensure the policyis complied with.

 

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            (b) Owners warrant that the currentpolicy concerning drugs and alcohol on board is acceptable to ExxonMobil andwill remain so throughout the charter period.

 

**OilMajor Acceptability**

 

43.       If,at any time during the charter period, the vessel becomes unacceptable to anyOil Major, Charterers shall have the right to terminate the charter.

 

**Pollutionand Emergency Response**

 

44.       Ownersare to advise Charterers of organisational details and names of Ownerspersonnel together with their relevant telephone/facsimile/e-mail/telexnumbers, including the names and contact details of Qualified Individuals forOPA 90 response, who may be contacted on a 24 hour basis in the event of oilspills or emergencies.

 

**ISPSCode/US MTSA 2002**

 

45.       (a).        (i)         From the date of coming into force of the International Code for theSecurity of Ships and of Port Facilities and the relevant amendments to ChapterXI of SOLAS (ISPS Code) and the US Maritime Transportation Security Act 2002(MTSA) in relation to the Vessel and thereafter during the currency of thischarter, Owners shall procure that both the Vessel and “the Company” (asdefined by the ISPS Code) and the “owner” (as defined by the MTSA) shall complywith the requirements of the ISPS Code relating to the Vessel and “the Company”and the requirements of MTSA relating to the vessel and the “owner”.  Upon request Owners shall provide documentaryevidence of compliance with this Clause 45(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/Master withtheir full style contact details and shall ensure that the contact details ofall 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:

 

“The Charterers shall provide the Owners with their full style contactdetails and, where sub-letting is permitted under the terms of the charterparty, shall ensure that the contact details of all sub-charterers are likewiseprovided to the 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.

 

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(c).  Notwithstanding anything else contained in this charter costs orexpenses related to security regulations or measures required by the portfacility or any relevant authority in accordance with the ISPS Code/MTSAincluding, but not limited to, security guards, launch services, tug escorts,port security fees or taxes and inspections, shall be for Charterers’ account,unless such costs or expenses result solely from Owners’ negligence in whichcase such costs or expenses shall be for Owners’ account.  All measures required by Owners to complywith the security plan required by the ISPS Code/MTSA shall be for Owners’account.

 

(d).  Notwithstanding any other provision of this charter, the vessel shallnot be off-hire where there is a loss of time caused by Charterers’ failure tocomply with the ISPS code/MTSA (when in force).

 

(e).   If either party makes any payment which is for the other party’saccount according to this Clause, the other party shall indemnify the payingparty.

 

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**Law andLitigation**

 

46.       (Deleted)

 

**Confidentiality**

 

47.       Allterms and conditions of this charter arrangement shall be kept private andconfidential, except as required by applicable law

 

**Construction**

 

48.       Theside headings have been included in this charter for convenience of referenceand shall in no way affect the construction hereof.

 

Additional Clauses:  As attached, shall beincorporated herein.

 

 
| **SIGNED FOR OWNERS**        |                    |                                    | **SIGNED FOR CHARTERES** |
|------------------------------|-------------------------|-----------------------------------------|--------------------------|
| **Overseas Puget Sound LLC** |                    | **Overseas Puget Sound Charterer  LLC** |
| ** **                   | ** **              |                                    |                     |   |
| ** **                   | ** **              |                                    |                     |   |
| By:                          |  /s/  Jerry Miller |                                    |                     | By: | /s/ Janice K. Smith |
|                         |                    |                                    |                     |   |   |   |
|                         | Name: Jerry Miller      |                                    |                     |   | Name: | Janice K. Smith |
|                         | Title: Manager          |                                    |                     | Title: | Manager |

 

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**Additional Terms**

**to the time charter dated May 10, 2008 between Overseas PugetSound LLC and Overseas Puget Sound 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, Performanceand 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

3.18        SEA TERMINALS

 

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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 CENTERCERTIFICATES

 

**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

 

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

 

1.1       OWNER’S BANK

 

See clause 9 of the Shelltime 4 form.

 

1.2       TIME CHARTER HIRE RATE

 

See clause 8 of the Shelltime 4 form

 

1.3       OWNER’S ITEMS

 

Itis understood that Owner shall pay for all customary Owner’s costs including,but not limited to, sealing ship’s stores, legalization of crew list, gangway,garbage dues, sick mariner dues, sailor’s home, mission to seamen, lifeboatinstitution at each port 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

 

Notwithstandingthe provisions 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

 

Owneris responsible for periodic (annual or otherwise) OPA expenses.  Charterer is responsible for OPA premiumscharged on a per call basis.

 

**2.**         **Delivery/Redeliveryand Trading**

 

2.1       DELIVERY

 

SeeClause 4 (d) of the Shelltime 4 form.

 

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2.2       REDELIVERY

 

SeeClause 4 (d) of the Shelltime 4 form.

 

2.3       TRADING AREAS AND EXCLUSIONS

 

SeeClause 4 of the Shelltime 4 form.

 

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

### ** **

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

### ** **

2.5       BUNKERS ON DELIVERY/REDELIVERY

 

Bunkerson delivery to be settled at cost upon Owner’s verification of bunker invoiceof cost of bunkers.  If possible, vesselto be redelivered with approximately the same quantity fuel oil and gas oil tobe settled 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)

 

NotwithstandingClause 21(e) of the Shelltime 4 form, the time charter period may beextended by Charterer for all or any part of the time that the Vessel isoff-hire during the initial term of the charter. Charterer’s option to add backoff-hire time to the time charter period is to be exercised latest 20 daysprior to expiry.

 

2.7       BOYCOTT

 

Inaddition to the circumstances described in Clause 21(a)(ii) of theShelltime 4 form, and subject to Clause 5.11.B, in the event of that the Vesselis subject to boycott, are delayed or rendered inoperative by strikes, laborstoppages or any other difficulties arising from their flag, ownership,crew or terms of employment of crew or any other vessel under the sameownership, operation or control, such time lost is to be considered as off-hire and all expenses incurred thereby, including fuel consumed during suchperiods to be for Owner’s account. Charterer will not send the Vessel to any port or place where the Vesselis known to be boycotted for such reasons.

 

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2.8       TRADINGWHILE OFF-HIRE

 

Ownermay not under any circumstances trade the Vessel for its own account during anyperiod of off-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 Vessel to proceedto an appropriate port.  Owner shall besolely responsible for gas freeing the Vessel 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 Vessel isto load, discharge or bunker under Charterer’s orders, hire shall be suspendedfrom the time the Vessel is received free pratique on arrival, if in ballast,or upon completion of discharge of cargo, if loaded, until the Vessel is againready for service.  In case of drydockingat a port other than where the Vessel is to load, discharge, or bunker underCharterer’s orders, the following time and bunkers shall be deducted fromhire:  total time and bunkers includingrepair port call from the actual voyage from last port of call under Charterer’sorder to next port of call under Charterer’s orders, less theoretical voyagetime and bunkers for the direct voyage from said last port of call to said nextport of call.  The period during whichhire is suspended including drydocking and repairs until the Vessel again comeson hire under the terms hereof shall count as off-hire under the terms of thisCharter.

 

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

 

Charterershall have the option with Owner’s approval which is not to be unreasonablywithheld, of laying-up the Vessel at a safe place for all or any 

 

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portionof the term of this Charter in which case hire hereunder shall continue to bepaid, but there shall be credited against such hire the whole amount whichOwner shall save during such period of lay-up through reduction in expenses,less any extra expenses borne by Owner is put as result of such lay-upincluding, but not limited to, crew repatriation expenses and to keep theVessel well and properly maintained during such lay-up periods.  All reactivation expenses including but notlimited to crew joining expenses to be for Charterer’s account.  The place of such lay-up shall be subject toOwner’s approval, not to be unreasonably withheld.

 

**3.**         **VesselOperations, Performance and Warranties**

 

3.1       SPILL PREVENTION

 

Priorto commencement of loading or discharging operations, all overboard lines areto be checked to ensure that they are securely closed.  Pumproom stripping line overboard dischargesshall be suitably blanked off before arriving in port.  These blanks are to be installed and retainedin line through the entire period that the Vessel is in coastal waters.  All other precautions are to be taken toavoid any spillage and/or leakage.  Ifduring loading or discharging operations there is any indication of spillage orleakage of oil or CPP cargo, the Vessel shall immediately cease all pumpingoperations and notify the Owner’s DPA (Dedicated Position Ashore), terminalrepresentative(s) and/or Charterer’s supervisor(s).  The Vessel shall not resume loading ordischarging operations until a thorough investigation is conducted andappropriate remedies are taken, and any time lost shall be for Owner’s account,should such spillage or leakage of oil be found to have occurred due to thenegligence of Vessel’s crew or condition of the Vessel.  Notwithstanding the above, Owner shall alwayscomply with the terms of Clause 4.2.

 

3.2       OILY WASTE

 

TheVessel shall, during tank washing, segregate the tank washings into one cargocompartment and after maximum separation of the free water, discharge the freewater overboard to the extent permitted by applicable internationalregulations.  Thereafter, Charterer shallbe notified of the amount of oil and water in the segregated tankwashings.  On being so notified,Charterer will give instructions for the disposition of the segregated tankwashings and any other cargo oil residues on board (hereinafter collectivelycalled “residues”).  The residues will,at Charterer’s option, be pumped ashore at the loading terminal or retained onboard during the loaded passage.

 

IfCharterer requires that the residues be pumped ashore at the loading port(s),any extra expenses incurred by the Vessel in pumping ashore shall 

 

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befor Charterer’s account.  If the residuesare to be kept on board, the Master shall arrange that the quantity be measuredin conjunction with the cargo suppliers, a note of the quantity shall be madein Vessel’s 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

 

Seeclause 24 of the Shelltime 4 form.

 

3.4       HEATING

 

Norequirements

 

3.5       SHIP TOSHIP TRANSFER

 

Charterershall have the right to perform loading and/or unloading of cargo via ship toship transfers (weather permitting and subject to Master’s approval which notto be unreasonably 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).

 

Fullor partial loading from or discharge to lighters/barges shall not be consideredship to ship transfers.

 

3.6       CARGO MANIFOLDS

 

Ownerwarrants that Vessel shall be equipped with pressure gauges fitted inboard ofthe valve at each discharge manifold connection.  Such gauges shall be maintained in properworking condition and each gauge shall have a valid test certificate.

 

Ownerwarrants that all piping, valves, spools, reducers and other fittingscomprising that portion of Vessel’s manifold system outboard of the last fixedrigid support to the Vessel’s deck and used in the transfer of cargo, bunkersor ballast, will be made of steel or nodular iron which shall comply with themost recent Oil Companies International Marine Forum (“OCIMF”) standards.  The fixed rigid support for the manifoldsystem 

 

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mustbe designed to prevent both lateral and vertical movement of the manifold.

 

Ownerfurther warrants that no more than one reducer or spacer will be used betweenVessel’s manifold valve and the terminal hose or loading arm connection inaccordance with OCIMF Guidelines.  TheVessel shall be equipped to present flanges of 10”, 12” and 16” (ASA) at allmanifold connections on one side of the Vessel.

 

3.7       CRUDE OIL WASH (COW)

 

N/A

 

3.8        INERT GAS SYSTEM

 

N/A

 

3.9       SURVEY AND SAMPLE

 

Charterer’srepresentative may survey and take samples from all Vessel tanks at any time,with cost to be for Charterer’s account.

 

3.10     COMMINGLING/BLENDING

 

Charterershall have the option to commingle and blend different grades of cargo as theyare loaded into the Vessel’s’ tanks, provided that such commingling andblending is within the Vessel’s technical capabilities and that theOwner/Master consider it safe to do so. To the extent that such commingling and blending operations are executedby the Vessel’s staff in accordance with the Charterer’s instructions,Owner/Master shall not be responsible for the quality of cargo resulting fromsuch blending operations.

 

3.11     CARGO RETENTION

 

Inthe event that any cargo remains on board upon completion of final discharge,Charterer shall have the right to invoice an amount equal to the CNF port ofdischarge value of such cargo plus freight due with respect thereto providedthat the volume of cargo remaining on board is liquid and pumpable andreachable by Vessel’s fixed equipment (or would have been but for the fault ornegligence of the Owner, Master, Vessel or her crew including non-compliancewith cargo heating requirements as set forth in this charter party and/orvoyage instructions) as determined by a qualified independent inspector.

 

Thefindings of the aforementioned inspector, whether appointed by Charterer, cargoreceiver, cargo Owner, or Owner, shall be binding on both 

 

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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 then beenliquid and free flowing to the extent that such quantity does not exceed thetotal quantity of cargo ROB upon completion of discharge.

 

3.12     LOADING WARRANTY

 

Ownerwarrants that the Vessel can routinely load a homogenous cargo at a maximumrate of 36,000 barrels/hour provided two cargo lines are connected (except forstart up and topping up operation).

 

3.13       PUMPING PERFORMANCE WARRANTY

 

A.        Owner warrants that Vessel is capable ofdischarging a full cargo in 24 hours (or prorata for part cargo) or maintainingan average pressure of 100 PSI at the Vessel’s manifold throughout the entireperiod of discharge excluding stripping and shore facilities permitting.

 

B.        Charterer is to be compensated at the HourlyRate of Hire for each hour, or pro rata for each part of an hour, that theVessel takes in excess of the pumping time allowed per the rates stipulated insub-paragraph (A) hereof.  Inaddition, Charterer reserves the right to order the Vessel from any berth atany time at the Owner’s time and expense when this warranty is breached.  Owner will receive no credit or compensationif the Vessel is able to discharge at a rate greater than those specifiedabove.  If the terminal or place ofdischarging does not allow or permit the Vessel to meet the above warranty, theMaster shall forthwith issue a Letter of Protest (for which the Master, ifpossible, shall obtain acknowledgement) to such terminal or place and shallimmediately advise Charterer in writing by telex or facsimile.  If the Master fails to issue the Letter ofProtest, Owner shall be deemed to waive any rights to contest that time waslost as a result of the Vessel’s failure to comply with the above pumpingwarranty.  Any delay to Vessel’sdischarge caused by shore conditions shall be taken into account in theassessment of pumping performance.

 

3.14       DRAWINGS/DATA

 

Thefollowing drawings/data shall be submitted to Charterer prior to delivery:

 

a)       GeneralArrangement Plan

b)       CapacityPlan

 

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c)       MooringArrangement

d)       BallastPiping Diagram/ Arrangement

e)       CargoPiping Diagram/Arrangement

f)       Anyother documents or data requested by Charterer

 

Inaddition, the OCIMF questionnaire, Revised Ship Inspection Report (SIRE) Programmeof Oil Companies International Marine Forum, for the vessels is deemed to befully incorporated into and forms an integral part of this Time Charter.

 

3.15       REMEASUREMENT

 

Ownerto advise all alternative loadlines and corresponding deadweights/draftsavailable at the time of charter. Charterer has the option of requesting Ownerto arrange for remeasurement of Vessel’s 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

 

Ownerwill instruct Vessel’s Master to advise Charterer of Vessel’s Estimated Time ofArrival (ETAs) at load and discharge ports as instructed by Charterer includingbut not limited to the following:

 

TheVessel shall advise load/discharge port terminal (via Agent) of its ETA at eachof the following times:

 

1.         Upon leaving last port of call or 96 hoursbefore arrival whichever is less.

2.         48 hours before arrival.

3.         24 hours before arrival.

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

 

Charterershall not be liable for any proven and documented lost time or additional portexpense with respect to delays in loading and discharging attributable to thefailure of the Vessel to give notice of their ETA in accordance with thisclause or as otherwise reasonably requested by Charterer and such proven anddocumented lost time shall count as off-hire as per Clause 21 (a)(ii).

 

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3.17     CBMMOORING EQUIPMENT

 

Ownerwarrants that the Vessel shall comply with the following requirementsthroughout the duration of this Time Charter, except as noted otherwise below:

 

TheVessel has a minimum of 6 mooring lines or mooring wires mounted on winches asdescribed below.  Each of these mooringlines or wires shall have a minimum length of 200 meters.  ***Charterer has the right to supplement the Vessel’s mooringlines as necessary.***

 

Wires/Ropes on winches:

 

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

 

Length:  Threehundred (300) meter required.  The Vesselis equipped with 250 meters.

 

Material:  Nylonor equivalent ropes are not acceptable. Wire or equivalent synthetic areacceptable.

 

Mounting:  Allwires/ropes must be mounted on their respective winch (see also locationbelow).

 

Certificates:  Allwire/rope certificates must be on board and available for Terminal review uponrequest.

 

Breaking Strength: dependent upon Vessel’s deadweight.

 

Location:  The Vessel must be able to run twowires/ropes from winches located on main deck forward, two (2) from maindeck aft, and three (3) from the poop deck (two (2) may beacceptable).

 

Pendants:  Vessel-furnishedpendants must conform to OCIMF guidelines, i.e., their breaking strength (B.S.)must be equal to one hundred and thirty-seven percent (137%) of B.S. of wiresif made of nylon, or one hundred and twenty-five percent (125%) of B.S. of wires if made byother synthetic fibers.

 

Chocks and Double-HornBitts:  The Vessel must have two (2) closedchocks and at least one (1) set of bitts at each mooring location on bothport and starboard side.  Only double-hornbitts are acceptable.  Roller-type chocksmay be acceptable only if they have been enclosed by welding a preventive baron top.  Open-type roller chocks are notacceptable.

 

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Winch Brake HoldingCapacity:  Must conform to OCIMFguidelines and must be set at sixty percent (60%) of the breaking strength ofwires/ropes on winch.

 

SecondaryRopes:  A second set of lines will be runto each buoy.  The Vessel must have onboard a minimum of seven (7) synthetic lines (nylon lines are notacceptable) in good condition, minimum two hundred (200) meters long and ofminimum seventy-five (75) metric tons breaking strength.

 

Boom:  Minimum fifteen (15) metric ton safe workingload boom or cranerequired.  The Vessel is equipped with5-ton boom.

 

Manifold:  Vessel must be able safely to connect twelve(12) and/or sixteen (16) inch hoses.  Ifreducers are used, all connections/flanges must be within the boundaries of thecontainment 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 Vessel 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 Vesselshall 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 Vessel. 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:

 

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3.21       MANNING

 

A.        Owner to advise, if so requested, the relief schedule of the Vessel’ssenior officers (Master, C/E, C/O and 1/E) and provide to Charterer the CV ofeach joining officer showing work experience.

 

B.        Charterer requires Master and chief officer to have combined minimumexperience of five years in rank (Similar for C/E and 1/E).  Exceptions to this requirement may bediscussed on a case by case basis and shall depend on the characteristics ofthe Vessel, their trade and past experience on the same class of the Vessel.

 

C.        Owner to endeavor, without guarantee, to maintain operationalcontinuity on the Vessel by maintaining the same senior officers in rotation.

 

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

 

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

 

3.22       OWNERSHIP/FLAG

 

Owner undertakes that theVessel will not change management, flag or be sold or otherwise disposed ofduring the currency of this charter without prior approval of Charterer, not tobe unreasonably withheld.

 

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

 

4.1             APPROVALS

 

A.        To the best of Owner’s knowledge at the time of delivery, the Vesselwill be acceptable to Charterer’s customers throughout the term of this charter

 

B.        Owner will endeavor to maintain all necessary oil company approvalsduring the course of this charter. Should the Vessel not be approved by any necessary oil company, theOwner will undertake at the earliest opportunity to adopt all reasonablecorrective measures at Owner’s time and expense and obtain the requiredapprovals, provided,  however,that Charterer trades the Vessel to ports and/or areas where the aforesaid oilcompanies can inspect them if inspection is required to reinstate their oilcompany approval.  If the Owner is unableto obtain the approval of the concerned oil company as a result of thecontinued unacceptability of the Vessel, after inspection and not as a resultof inability or want to inspect by the oil company, and as a consequence, theoil company and the Charterer 

 

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havingproved that despite its best efforts it is unable to find alternative employmentfor the Vessel, Charterer shall have the right to put them off hire for theactual time lost until alternative employment of no worse value than thatoriginally identified is found.

 

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

### ** **

4.2         ELIGIBILITY

 

Subject to Clause 5.11.B,Owner warrants that the Vessel is in all respects eligible under applicableconventions, laws and regulations for trading to the ports and places specifiedin Clause 4 and Clause 2.3,  and that theyshall have on board for inspection by the appropriate authorities allcertificates, records, compliance letters, contingency plans and otherdocuments required for such service including, but not limited to, ISM SafetyManagement Certificate, ISM Document of Compliance, and Certificates ofFinancial Responsibility for Oil Pollution. Owner further warrants that the Vessel does, and will, fully comply withall applicable conventions, laws, regulations and ordinances of anyinternational, national, state or local government entity havingjurisdiction.  In particular, Ownerwarrants that for trading to or from ports in the United States, the Vesseldoes and will comply with all requirements of the Federal Oil Pollution Act of1990 (OPA 90), US Federal Water Pollution Control Act, SOLAS IX (ISM), MARPOL1973/1978/1983, Civil Liability Convention and regulations issued pursuantthereto and effective 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 Vessel or thestate in which the effective management of the Vessel is exercised.

 

4.3         I.T.F.

 

Owner warrants that theofficers and crew are employed under an agreement recognized and approved bythe ITF and will remain so throughout the currency of this Charter Party.  In the event that the Vessel is subject toboycott by ITF or any other body, or delayed or rendered inoperative by strikes,labor stoppages/slowdowns or any other difficulties 

 

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arising from their flag,ownership, crew or terms of employment of other crew of the same ownership,operations or control, such time lost is to be considered as off-hire and allexpenses incurred thereby, including fuel consumed during such period to be forOwner’s account.

 

4.4         DRUG AND ALCOHOL POLICY

 

Owner warrants that it has apolicy on Drug and Alcohol Abuse (“Policy”) applicable to the Vessel whichmeets or exceeds the standards in the OCIMF Guidelines for the Control of Drugsand Alcohol Onboard Ship.  Under thePolicy, alcohol impairment shall be defined as a blood alcohol content of 40mg/100 ml or greater: the appropriate seafarers to be tested shall be theVessel’s officers and crew and the drug/alcohol testing and screening shallinclude unannounced testing in addition to routine medical examinations.  An objective of the policy should be that thefrequency of the unannounced testing be adequate to act as an effective abusedeterrent and that officers and crew be tested at least once a year through acombined program of unannounced testing and routine medical examinations.  Owner further warrants that the Policy willremain in effect during the term of this Charter and that Owner shall exercisedue 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 Vessel andshall not be reassigned to it or to any other vessel on charter to Charterer orits 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 Vessel 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

 

Any and all disputes arisingout of or relating to this contract shall be 

 

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arbitrated in the City ofNew York before a board of three persons, consisting of one arbitrator to beappointed by the Owner, one arbitrator by the Charterer, and one by the two sochosen who will act in the capacity as procedural chairman.  Their decision or that of any two of themshall be final and binding, and for the purpose of enforcing the award, thisagreement and the award may be made a rule of the court.  Either party may call for such arbitration byservice upon the other, wherever it may be found, in the form of a writtennotice specifying the nature of the claim and the name and contact details oftheir appointed arbitrator.  If the otherparty shall not, by written notice served on the first moving party within 20days of the service of such first notice, appoint its arbitrator to arbitratethe disputes or differences specified, then the first moving party shall havethe right without further notice to appoint a second arbitrator with preciselythe same force and effect as if said second arbitrator had been appointed bythe other party.  Awards by the panel, ora 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, any breach of this charter by Ownershall cause any company or companies which, at the date of this charter, is orare associated with and/or affiliated to Charterer to suffer any loss or damagewhatsoever or incur any liability whatsoever to any third party, Owner shall beliable to Charterer to the full extent of Charterers’ Affiliates’ or Associates’losses and/or damages and/or liabilities including those arising under any billof lading issued under this Charter and Charterer shall be entitled to claim inrespect thereof in accordance 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 charter is negotiated or assignedto Charterer, all claims asserted by Charterer against Owner under the Bill ofLading shall be subject to arbitration in accordance with the terms of theArbitration Clause of the charter.

 

5.3         ASSIGNMENT

 

Charterer may sub-charter orassign this charter to any individual or 

 

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company, but Charterer shallalways remain responsible for the due fulfillment of this Charter.  Unless Charterer provides its express writtenconsent, not to be unreasonably withheld, Owner may not assign this Charter orits obligations hereunder and any such assignment will be void.

 

5.4         TENDER OF NOTICE

 

Any notice due under thischarter shall be sent on open CC format by each authorized party via fax oremail as below or as otherwise instructed by the parties.

 

For Owner:  OSG 300 LLC and OSG Liberty LLC

Fax: 212-251-1180

Email: PPopov@OSG.Com

For Charterer: OSP 300 LLC

Fax: 813-221-2649

Email: Fgordon@OSG.com

 

5.5         INSURANCE

 

Ownerwarrants that from the time the obligation to proceed to the loading port(s) andthroughout the Vessel’s service under this Charter Party, they shall be insuredat Owner’s expense for:

 

·      Hull and Machinery Insurance includingcollision liability with a limit equal to or greater than Owner’s yearlydeclared value of the Vessel. Such insurance to waive all rights of subrogationagainst Charterer to the extent of the liabilities and/or indemnity obligationsassumed 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 Vessel. Suchinsurance to waive all rights of subrogation against Charterer to the extent ofthe liabilities and/or indemnity obligations assumed by Owner under thisCharter.

 

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Anyadditional, per voyage, Hull and Machinery or Protection and Indemnity, WarRisk insurance premiums or required crew bonuses, which are specificallyapplicable to a particular port or location to which the Charterer directs theVessel shall be for Charterer’s account (provided always that Charterer isgiven notice of the amount of such additional premiums prior to the Vesselentering the area to which the additional coverage and premiums apply, and thatthe benefit of all discounts on such premiums received by Owner from its WarRisks insurers, underwriters or brokers are credited to Charterer in full andthat Owner obtains from its insurers waivers of subrogation against Chartererin respect of any claims by Owner under its war risk insurance arising out ofcompliance with such orders).  Charterershall reimburse Owner any amounts due under this Clause upon receipt of Owner’sinvoice together with full supporting documentation including all associateddebit and credit notes.

 

Ifso requested by Charterer, Owner shall promptly furnish to the Charterer properevidence of such insurance.  Thiswarranty is to be regarded as an essential part of this Charter Party, which isconditional on its truth or performance, so that its breach entitles Charterer,at its option, to terminate the Charter Party and/or to recover any damagesallowable.  Such insurance shall bemaintained in full force and effect for the duration of this Charter Party.

 

5.6         WAR

 

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

 

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

 

(i)              “Owner” shall include the ship Owner,bareboat charterer, disponent Owner, managers or other operators who arecharged with the management of the Vessel, and the Master; and

 

(ii)             “War Risks” shall include any war (whetheractual or threatened), act of war, civil war, hostilities, revolution,rebellion, civil commotion, warlike operations, the laying of mines (whetheractual or reported), acts of piracy, acts of terrorists, acts of hostility ormalicious damage, blockades (whether imposed against all vessels or imposedselectively against vessels of certain flags or Ownership, or against certaincargoes or crews or otherwise howsoever), by any person, body, terrorist orpolitical group, or the Government of any state whatsoever, which, in thereasonable judgment of the Master and/or the Owner, may be dangerous or arelikely to be or to become dangerous to Vessel, her cargo, crew or other personson board the Vessel.

 

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

 

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not be ordered to orrequired to continue to or through, any port, place, area or zone (whether ofland or sea), or any waterway or canal, where it appears that the Vessel, itscargo, crew or other persons on board them l, in the reasonable judgment of theMaster and/or the Owner, may be, or are likely to be, exposed to WarRisks.  Should the Vessel be within anysuch place as aforesaid, which only becomes dangerous, or is likely to be or tobecome dangerous, after her entry into it, they shall be at liberty to leaveit.

 

(c)   The Vessel shall not be required to load contraband cargo, or to passthrough any blockade, whether such blockade be imposed on all vessels, or isimposed selectively 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 Vessel shall have liberty:-

 

(i)         To comply with all orders, directions,recommendations or advice as to departure, arrival, routes, sailing in convoy,ports of call, stoppages, destinations, discharge of cargo, delivery, or in anyother way whatsoever, which are given by the Government of the Nation underwhose flag the Vessel sails, or other Government to whose laws the Owner issubject, or any other Government, or any other body or group whatsoever actingwith the power to compel compliance with their orders or directions;

 

(ii)        To comply with the order, directions orrecommendations of any war risks underwriters who have the authority to givethe same under the terms of the war risks insurance;

 

(iii)       To comply with the terms of any resolution ofthe Security Council of the United Nations, any directives of the EuropeanCommunity, the effective orders of any other Supranational body which has theright to issue and give the same, and with national laws aimed at enforcing thesame to which the Owner are subject, and to obey the orders and directions ofthose who are charged with their enforcement;

 

(iv)      To divert and discharge at any other port acargo or part thereof which may render the Vessel liable to confiscation as acontraband carrier;

 

(v)       To divert and call at any other port to change the crew or any partthereof or other persons on board the Vessel when there is reason to believethat they may be subject to internment, imprisonment or other sanctions.

 

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(g)         If in accordance with their rights under theforegoing provisions of this clause, the Owner shall refuse to proceed to theloading or discharging ports, or any one or more of them, they shallimmediately inform the Charterer.  Nocargo shall be discharged at any alternative port without first giving theCharterer notice of the Owner’s intention to do so and requesting them tonominate a safe port for such discharge. Failing such nomination by the Charterer within 48 hours of the receiptof such notice and request, the Owner may discharge the cargo at any safe portof their own choice.

 

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

 

5.7       BILL(S) OF LADING/INDEMNITY

 

***The dischargeport(s) shown in the original Bill of Lading shall not constitute adeclaration of discharge port(s) and Charterer shall have the right toorder the Vessel to any port(s) within the terms of this Charter Party.***

 

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

 

***(1)******  ******Without prior presentation to the Vessel 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.

 

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5.9       LOSS OF VESSEL

 

Shouldthe Vessel 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 Vessel waslast heard from. If the Vessel 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 Vessel should be missing when a payment of hire would otherwisebe due, such payment shall be postponed until the safety of the Vessel isascertained.  If the Vessel should becomea CTL, Charterer shall have the option to cancel this Charter on written noticeto Owner.  The Vessel shall be deemed aCTL under this Charter when the cost of recovering and repairing it isreasonably estimated to exceed its value when repaired, without taking intoconsideration any value of this Charter.

 

5.10     CONFLICTS OF 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 inserted for convenience of referenceand shall be ignored in the interpretation and construction of thisCharter.  In the event of any conflictbetween these rider clauses and Shelltime 4 provisions, these rider clauses shalltake precedence.  This Time Charteragreement constitutes the entire agreement among the parties and supercedes anyearlier agreements and discussions.  Anyamendments to this Time Charter must be in writing from authorized persons.

 

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