exv10w1



 






Exhibit 10.1




LONG TERM LIGHTERING CONTRACT




     Entered into this second day of September 2005 by and between Sunoco, Inc. (R&M), a
Pennsylvania corporation with offices at 1735 Market Street, Ste. LL, Philadelphia, PA 19103-7583
(Charterer), and Maritrans Operating Company L.P. with offices at 2 Harbour Place 302 Knights Run
Avenue Suite 1200, Tampa, FL 33602 (Owner). Charterer and Owner are sometimes referred to herein
individually as “party” and collectively as “parties.”



RECITALS



WHEREAS, Charterer has the need for barges and tank ships to lighter vessels Charterer brings
into Delaware Bay and offshore lightering locations outside Big Stone Beach Anchorage, and



WHEREAS Owner has barges and tank ships that can provide the lightering operations



NOW THEREFORE, the parties, each intending to be legally bound, in consideration of their mutual
promises, agree as follows:




ARTICLE 1. SERVICES




     (A) Charterer will offer to Owner all of Charterer’s requirements for the lightering of
crude oil from tank ships anchored in or about Delaware River, Delaware Bay, including designated
offshore lightering locations outside Big Stone Beach Anchorage. Owner will provide the necessary
lightering activities through use of the tugs, barges and tank ship listed in Schedule A,
(“Vessels”) or agreed substitute(s).



      




					
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     (B) Charterer may, but is not required to, offer Charterer’s other crude or dirty petroleum
product lightering or transportation requirements, and Owner may upon mutual agreement, provide
such additional services under the terms of this Charter.



     (C) To provide such services, the Owner commits to build three (3) new construction
Articulated Tug Barge (ATB) units which are purpose built for Delaware Bay lightering operations.
These Vessels will be delivered to Owner over a fourteen (14) month period expected to commence on
or about September 1, 2007. The vessels providing lightering services at the time of the execution
of this Contract are termed the “TBT Fleet;” the new build vessels are referred to as the “ATB
Fleet”.


This Agreement was not negotiated as part of arranging the Owner’s financing for the Owner’s
Vessels that will provide the contracted services.




     (D) If after commencement of the ATB units, one or more of the units is permanently removed
from Charterer’s service, the parties will mutually agree to equitably address the rate adjustment.
This paragraph is not intended to be invoked where vessel unavailability is temporary, such as
where the Vessel is temporarily removed from service for periodic maintenance, or for repairs.



ARTICLE 2. TERM




     The lightering performance and pricing terms of this contract will commence upon
arrival to Big Stone Beach Anchorage of the first ATB unit expected on or about September 1, 2007
and, unless terminated earlier as provided herein, shall continue for a period of ten (10) years.




      




					
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ARTICLE 3. GUARANTEED VOLUMES




     (A) During the Term, Charterer shall guarantee Owner a minimum [****] barrels of crude
oil or dirty petroleum products per month, (“Monthly Minimum Volume”), provided Owner can provide
the necessary Vessels in the time frame agreed upon by Charterer and Owner for each ship’s
lightering requirement. For Owner’s services in lightering the Monthly Minimum Volume, Charterer
shall pay the Base Rate per barrel set forth in Schedule B.



     (B) In the event Charterer is unable to provide the Monthly Minimum Volume for a given month,
the shortfall amount (“Cumulative Volume”) [****].




(1) Any Cumulative Volume existing under the Bridge Contract between Owner and
Charterer shall [****].




(2) Any Cumulative Volume existing at the expiration of this Contract, [****].



     (C) To the extent there is no Cumulative Volume outstanding, then, in any month where the
volume lightered for Charterer exceeds the Monthly Minimum Volume, (“Excess Volume”), Charterer
shall pay Owner at the Incentive Rate set forth in Schedule B for each barrel of Excess Volume. Any
Cumulative Volume outstanding shall be deducted from the Excess Volume before the Incentive Rate is
applicable.



     (D) The Monthly Minimum Volume set out herein shall not be changed or adjusted, except as
provided in Articles 3 and 23.



     (E) Adjustment of Monthly Minimum Volume




(1) If Charterer is unable to meet the Monthly Minimum Volume as a result of the
joint fault or neglect of the Owner, its officers, crew, representatives, or its




      




					
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independent contractors, and the Charterer, its officers, employees, agents, or its
independent contractors, an adjustment to the Monthly Minimum Volume shall be made
by mutual agreement based upon an apportionment of responsibility for the incident.




(2) Charterer’s Monthly Minimum Volume obligation for any month shall be reduced to
the extent that Charterer’s failure to move such Volume is the result of the sole
fault or neglect of the Owner, its officers, crew, representatives or its
independent contractors.



     (F) Change of Monthly Minimum Volume. The Monthly Minimum Volume shall be subject to change
through a mutual agreement in the event:




(1) Charterer’s rated refining capacity in the Delaware Valley as of September 1,
2005 should change, as a result of buying or selling a refinery; or




(2) Charterer should enter into a long term supply contract with another refinery in
the Delaware Valley.



     (G) Pricing. The [****] Pricing contained herein is based upon the guaranteed Monthly Minimum
Volumes.




(1) [****]




(a) [****]




(2) The pricing structure of this Agreement is subject to change if Charterer’s
required volumes change as a result of:




(a) A change in Charterer’s rated refining capacity in the Delaware Valley
as of September 1, 2005 resulting from buying or selling a refinery; or



      




					
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(b) Charterer entering into a long term supply contract with another
refinery in the Delaware Valley.




In such case the parties will mutually agree on a new price for the
services.




(3) The pricing structure will not change as a result of the exercise of Charterer’s
Cancellation option pursuant to Article 3 (H).



     (H) Cancellation Option




     (1) Charterer may, upon 180 days notice to Owner (or lesser notice if mutually
agreed), cancel portions of or the entire Monthly Minimum Volume during the term of
this Agreement pursuant to Article 3 (H).




     (2) The Base Contract Volume of [****] barrels per month, or [****] barrels per
year, is based upon service by three (3) ATB’s with a capacity of 335,000 barrels
per ATB;




     (3) Unless Owner otherwise agrees, if Charterer’s Monthly Minimum Volume is reduced
by [****] barrels per month or more, cumulative or otherwise, Charterer will either:




(a) Compensate the Owner for cancellation as per Cancellation Matrix
Schedule E on the date that the cancellation is effective
(cancellation is effective on the date Vessel is removed from
service, not the date notice is given to Owner). For the first
[****] barrel reduction, Charterer will pay the cancellation fee for
ATB 1; for the second, Charterer will pay the cancellation fee for
ATB 2;


      




					
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and for the final [****] Charterer will pay the cancellation fee for
ATB 3; or




(b) Time Charter the ATB Unit for a term commensurate with the term
of this Agreement at the rates set forth in Schedule E, using a
mutually agreed time charter form.



     (4) Time Charter Option




(a) Should Charterer exercise the time charter option, Charterer may
not use or permit the time chartered vessel(s) to perform crude oil
lightering in Delaware Bay/River and offshore lightering locations
outside Big Stone Beach Anchorage where Owner is presently performing
lightering operations for Charterer; otherwise Charterer shall have
full right to sub-charter in its discretion.




(b) If Charterer exercises the Time Charter option, it may, upon 180
days notice (or lesser notice if mutually agreed), cancel the Time
Charter and revert to the Cancellation Matrix at its option at any
time during the term of the contract.




(5) The Cancellation Option is effective on the date of execution of the Contract
and shall extend for the full contract period.



ARTICLE 4. SEAWORTHINESS




     Owner shall, before and at the beginning of each voyage,
exercise due diligence to make each Vessel seaworthy, properly manned, equipped and supplied for
the voyage and to make the cargo tanks, pipelines, and valves of each Vessel suitable for the
intended cargo and its pumps and heating coils in good working condition and shall exercise due
diligence to maintain such condition and shall use reasonable care in the loading, stowage,
custody, care and delivery of the cargo. Owner shall provide the required towing power as
described in Schedule A (or agreed



      




					
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substitute) to handle properly the barges furnished hereunder to Charterer while both in loaded and
light conditions.




     When the Vessels listed in Schedule A are unavailable for service due to maintenance or
repair, Owner may substitute, at Owner’s expense, alternative Vessels on a temporary basis that are
mutually agreed to be suitable for the lightering service.



ARTICLE 5. INSPECTION




     Charterer may, before loading, inspect all cargo tanks of
each vessel. Prior to loading Owner shall inform Charterer of prior cargo carried by Vessel. If
any tank is found to be unfit for the intended cargo, Charterer may refuse to load cargo in such
tank. If Charterer accepts the tank even though not clean Owner shall not be responsible if the
cargo shipped in such tank shall be contaminated solely by the tank not having been sufficiently
clean. No such inspection and acceptance shall relieve Owner of any other of its obligations to
make the Vessel seaworthy.



ARTICLE 6. INSURANCE




     Owner shall procure at its expense and maintain for the duration of the Contract
insurance coverage described below with financially responsible underwriters acceptable to
Charterer. Owner shall provide the Charterer certificates of insurance evidencing such insurance:



     (A) Hull Insurance including full collision coverage on all vessels, tugs and barges with
limits not less than the fair market value of the hull.



     (B) Protection & Indemnity Insurance (P&I) covering liability for personal injury, death, and
property damage (unless property damage is covered under Owner’s hull insurance), including
coverage for the indemnity for personal injury, death, or property damage as required by this
Contract, no less in scope and amounts than available under the rules of P&I clubs entered into the
international group of P&I clubs. Charterer will be a named assured under Maritrans’ P&I insurance,
without obligation for calls or other sums, subject to the following express limitation:



      




					
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     Notwithstanding the fact that the Charterers are hereby named as co-assured in this
Certificate of Entry, the cover of the P&I Insurer will only extend insofar as they may be
found liable to pay in the first instance for any liabilities which are properly the
responsibility of the tenant/member, and nothing herein contained shall be construed as
extending cover in respect of any amount which would not have been recoverable from the P&I
Insurer by the tenant/member had such claim been made or enforced against him. Once the P&I
Insurer has made indemnification under such cover, it shall not be under any further
liability, and shall not make any further payment to any person or company whatsoever,
including the tenant/member, in respect of that claim.



     (C) Cargo legal liability for the cargo’s full value, provided under the P&I Policy under
standard P&I terms.



     (D) Collision Liability. Coverage may be provided under the P&I and/or Hull Policy, with
limits not less than the value of the hull or $50,000,000 whichever is greater.



     (E) Pollution Insurance in the amount of One Billion Dollars ($1,000,000,000.00) if available
through its entry in a P&I Club that is a member of the International Group of P&I Clubs. Owner
shall immediately notify Charterer if insurance sufficient to comply with the foregoing limit, the
minimum financial responsibility requirements established by the Federal Clean Water Act, Oil
Pollution Act of 1990, or any applicable state oil spill prevention and containment legislation is
not available under its P&I entry.




     (1) If Owner cannot obtain One Billion Dollars ($1,000,000,000.00) pollution insurance
coverage through entry in a P&I Club, Owner will maintain the maximum amount available under
its P&I Entry, and will seek to obtain such other available pollution insurance as Charterer
may require.




     (2) If pollution insurance available through Owner’s entry in a P&I Club is sufficient
to meet federal, state, or local financial responsibility requirements and



      




					
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Charterer requires additional insurance to cover, premiums for obtaining pollution
coverage in excess of that available from P&I shall be for Charterer’s account.



     (F) Owner shall maintain insurance sufficient to cover claims for personal injury or death,
wages, maintenance, cure, and transportation, by its employees and members of its crew and, to the
extent applicable, shall maintain Longshoremen’s and Harbor Workers’ insurance covering claims by
persons aboard the Vessels covered by the Longshoremen’s and Harbor Workers’ Compensation Act.



     (G) As applicable, Statutory Workers’ Compensation and Occupational Disease Insurance,
coverage under the Longshoremen’s and Harbor Workers’ Compensation Act, the Jones Act or other
Maritime Employer’s Liability, complying with laws of each jurisdiction in which any work is to be
performed or elsewhere as may be required.



     (H) Commercial Liability Insurance*, including all Premises and Operations, Broad Form
Property Damage Liability, Contractual Liability and if applicable, Watercraft and Aircraft
Liability, as well as coverage on all Contractor’s mobil equipment (other than motor vehicles
licensed for highway use) owned, hired or used in the performance of this Contract with limits not
less than:




$5,000,000 Bodily Injury, Personal Injury & Property Damage combined each occurrence and
aggregate.



     (I) Automobile Liability Insurance* covering all motor vehicles licensed for highway use and
employed in the performance of this Contract, with limits not less than:




$5,000,000 Bodily Injury, Personal Injury & Property Damage combined each occurrence and
aggregate.



     All premiums and deductibles shall be for Owner’s account. Failure of Owner to maintain
required insurance or notify the Charterer of any change in coverage status as described


      




					
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above will give the Charterer the right to immediately suspend its obligation to charter
Owner’s Vessels until such coverage is reinstated. Should Owner not cure the deficiency within 30
days, Charterer shall have the right to terminate this Charter.




     Owner shall provide certificates of insurance acceptable to Charterer prior to commencement of
performance hereunder. Such certificates shall provide that advance written notice shall be given
to Charterer a reasonable time in advance of any material change in, or cancellation of, such
insurance but in no event less than ten (10) days. Upon the request of Charterer, Owner shall also
provide certificates of insurance to Charterer evidencing such insurance covering periods
subsequent to the term of this contract.



     Upon notice to Charterer that the insurance coverages required by this Contract have been
reduced, terminated or are no longer commercially obtainable, Charterer may terminate this Contract
without having to make the cancellation payment if Owner cannot reinstate or obtain such coverages
prior to the insurance reduction/termination/cancellation.



     The Insurance requirements set forth herein shall not in any way limit Owner liability arising
out of this Contract or otherwise, and shall survive the termination/cancellation of this contract.



     To the extent any insurance coverage provided by Owner is under a “claims made” policy, Owner
shall assure continuing equivalent coverage for claims arising out of this Contract for a period of
three (3) years after the expiration of this Contract.


* Must cover Charterer, its parent, subsidiaries and affiliates and their respective officers,
directors, and employees as additional insureds. These insurance coverages shall include a waiver
of subrogation in favor of Charterer, its parents, subsidiaries and affiliates and their respective
officers, directors and employees.




      




					
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ARTICLE 7. MEASUREMENT OF CARGO




     A gauge reading of each cargo tank of the Vessel shall be made jointly by the Master or
Mate before and after loading and jointly by the Master or Mate and by a representative of
Charterer (an employee and/or an independent surveyor) before and after discharging and shall be
entered on ullage reports which shall be signed, with additional copies signed as required, and
which shall also state the temperature of cargo in the tank and the result of thieving the cargo
for water. To the extent practicable, all such readings shall be made while the Vessel is in still
water. Cargo quantity for each tank and each Vessel shall be computed from the Vessel’s current
calibration tables and adjusted to Total Calculated Volume (TCV) at 60 degrees F and for trim and
list as required.



ARTICLE 8. BERTHS




     (A) The loading and discharging berths shall be such terminal, wharf or other place or
alongside such vessel or craft designated by Charterer and accessible and ready when the Vessel
arrives. All wharfage and charges for use of berth shall be paid by Charterer. Any time lost by
the Vessel because of inaccessibility or non-readiness of berth shall count as used laytime or time
on demurrage.



     (B) Charterer agrees to use due diligence to furnish the Vessel with a safe berth at loading
and unloading points. Charterer shall not be liable for any loss or damage caused by any unsafe
condition at any berth to the extent that such loss or damage could have been avoided by the
exercise of due diligence by Owner or by the Master or other person in charge of the Vessel, nor
shall Charterer be liable for the consequences of errors in navigation or management of the Vessel
or any other acts, neglect, fault, default, or barratry of the captain, pilots, mariners or other
employees or representatives of Owner, nor for the consequence of any unsafe condition not
resulting from failure of Charterer to use due care in the selection of the berth.



     (C) If shifting between berths (not from anchorage to first berth) for loading and discharging
is required by Charterer, through no fault or neglect of Owner, the Vessel, its officers, crew or
other employees or independent contractors of Owner all time used in shifting



      




					
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shall count as used laytime or time on demurrage. In addition, in the event of such a shift,
Charterer shall reimburse Owner for expenses for additional tugboats (and/or pilotage if any)
incurred by reason of using more than one berth, unless the shift is necessitated by the fault or
neglect of Owners, the Vessel, the officers, crew, other employees or the independent contractors
of Owner, excluding any pilotage charges otherwise provided for in Article 46.




ARTICLE 9. LOADING AND DISCHARGING




     Cargo shall be pumped into the cargo tanks of the Owner’s vessels by Charterer at its
expense but at its risk and peril only to the point of the first connection on the Vessel receiving
the cargo, provided that the Vessel shall not be loaded at a greater rate than it can safely
receive the cargo as stated in writing by Owner. Cargo shall be pumped out of the cargo tanks by
Owner at its expense but at its risk and peril only to the point where the vessel’s hoses are
connected to the receiver’s lines, or if the Vessel’s hoses are not used, then to the permanent
hose connections on the Vessel discharging the cargo.



ARTICLE 10. FREIGHT




     Freight shall be earned and payable to the Owner under the terms and conditions of this
Contract, without discount, based on the Vessel quantity (TCV less onboard quantity) at the
discharge location as shown by the cargo discharge report prepared by the Owner and signed by the
Master and Charterer’s representative including an independent surveyor’s Certificate of such
quantity. Freight billing for the Monthly Minimum Volume shall be based on actual loading date for
each ship and the freight rates set forth in Schedule B.



ARTICLE 11. PAYMENT TERMS




     Freight shall be invoiced monthly and payable via wire transfer three (3) business days
after receipt for the prior month’s business. All other proper and correct invoices, except
demurrage as specified in Article 12, are due and payable thirty (30) days after receipt.



      




					
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     Each party reserves the right to impose late charges up to the maximum legal rate on any
undisputed invoice not paid by the other within thirty (30) days of the due date.



     Should there be a dispute as to any portion of an invoice, the undisputed portion shall be
paid within the specified time frame and written statements specifying the disputed amount and the
reasons therefore shall be immediately submitted and such matters shall be resolved pursuant to the
arbitration provisions of this agreement.



ARTICLE 12. LAYTIME AND DEMURRAGE




     (A) Except as set out below, laytime will commence at both loading and discharging
locations when the Vessel is all fast. Laytime shall continue until such time as hoses are
disconnected from the Vessel. If Owner elects to put two Vessels alongside the ship to be lightered
simultaneously even though ship to be lightered cannot transfer simultaneously, the waiting time
for the second Vessel shall not be counted as used laytime. In the event the ship to be lightered
is in position but unable to transfer cargo for any reason not caused by the Vessel or Owner or
Owner’s officers, crew, employees or independent contractors and Charterer directs Owner to hold
the Vessel until such time as ship to be lightered is able to transfer cargo, or a berth is not
available on the Vessel’s arrival at the discharge berth, laytime will commence when the Vessel
arrives off such discharge berth or at the nearest customary anchorage or hang-on berth for such
vessels awaiting such berth, but time from leaving such anchorage or hang-on berth until the
Vessel’s all fast shall not count as used laytime. In the event the channel(s) leading to or from
the designated berth is (are) obstructed such that the Vessel cannot proceed, laytime will commence
when the Vessel arrives at the nearest customary anchorage for such lightering Vessels awaiting
such berth or passage, and shall cease when Owner’s Vessel leaves such position. Any delay to the
Vessel in reaching or leaving its berth, caused by or attributable to the Vessel or Owner or
Owner’s officers crew, employees or independent contractors shall not count as used laytime or time
on demurrage. Any delay due to Vessel’s condition or breakdown or inability of the Vessel’s
facilities to load or discharge the cargo within the time allowed shall not count as used laytime
or time on demurrage. Charterer will use due diligence to provide a safe berth at no cost to Owner
until the channel(s) is (are) safe for transit by the Vessel. The Charterer shall provide at no
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in securing and releasing the Vessel’s lines at all loading and discharge ports. Vessel
personnel shall have the responsibility of tending mooring lines.




     (B) Charterer shall pay demurrage per running hour and prorata for a part thereof at the rate
specified in Schedule C for all time not excepted that used laytime exceeds the allowed laytime as
set forth in Schedule C. If, however, demurrage shall be incurred at ports of loading and/or
discharging by reason of fire, explosion, weather or by a strike, lockout, stoppage or restraint of
labor in or about the terminal of Charterer, supplier, shipper or receiver of the cargo, the time
so incurred shall be reduced one-half (1/2) in the calculation of allowed laytime or time on
demurrage. Charterer shall not be liable for any demurrage for delay caused by strike, lockout,
stoppage or restraint of the Master, Officers and crew of the Vessel or pilots.



     (C) Owner agrees that its failure to deliver to Charterer’s office a written notice of any
demurrage claim together with documentation sufficient to support the claim within sixty (60) days
of completion of each discharge shall constitute a waiver of such claim and shall discharge
Charterer from all liability with respect thereto. Documentation sufficient to support a demurrage
claim shall include but not be limited to: an invoice, laytime statements, formal or informal
notice of readiness, port logs and the pumping and heating logs for the voyage. Provided written
notice is given within timeframe specified above, Owner has the right to correct deficiencies in
documentation requirements.



     (D) Valid demurrage claims are payable within sixty (60) days of receipt of completed
documentation of the claim, unless Charterer disputes all or part of the demurrage claim. If
Charterer fails to notify Owner of a dispute in the claim within sixty (60) days after receipt, the
demurrage claim shall be deemed correct and payable in total. If Charterer disputes part of a
claim, it shall pay the undisputed portion when due.



ARTICLE 13. GENERAL EXCEPTIONS 




     Neither the Vessel nor the Master or Owner shall be held liable for any loss of or damage
or delay to the cargo or for any failure in performing hereunder arising or resulting from: any
act,



      




					
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neglect, default or barratry of the Master, pilots, mariners or other servants of Owner in the
navigation or management of the Vessel; fire, unless caused by the personal design or neglect of
Owner; collision, stranding, peril, danger or accident of the sea or other navigable waters; saving
or attempting to save life or property; wastage in weight or bulk, or any other loss or damage
arising from inherent defect, quality, or vice of the cargo; any act or omission of Charterer or
owner, shipper or consignee of the cargo, their agents or representatives; insufficiency of
packing; insufficiency or inadequacy of marks; explosion, bursting of boilers, breakage of shafts
or any latent defect in hull, equipment or machinery, unseaworthiness of the Vessel unless caused
by want of due diligence on the part of Owner to make the Vessel seaworthy or to have her properly
manned, equipped and supplied; or from any other cause of whatsoever kind arising without the
actual fault or privity of Owner.




     And neither the Vessel, her master or Owner, nor Charterer, shall, unless otherwise in this
Contract expressly provided, be responsible for any loss of or damage or delay to or failure to
discharge or deliver the cargo or for any failure in performing hereunder arising or resulting
from: act of God; act of war; perils of the seas; act of public enemies (unless caused by failure
to comply with regulations or to exercise due care in preventing such acts); pirates or assailing
thieves; arrest or restraint of princes, rulers or people, or seizure under legal process provided
bond is promptly furnished to release the Vessel or cargo; strike or lockout or stoppage or
restraint of labor from whatever cause either partial or general; or riot or civil commotion or
breakdown of machinery or equipment in or about Charterer’s facilities or any receiving terminals
(except for demurrage or Monthly Minimum Volume requirements). The Vessel shall have liberty to
sail with or without pilots, to tow or to be towed, to go to the assistance of vessels in distress
and to deviate for the purpose of saving life or property or of landing any ill or injured person
on board. Further, Charterer shall not be responsible for any loss of or damage or delay to or
failure to discharge or deliver the cargo or for any failure in performing hereunder arising or
resulting from fire, unless caused by Charterer’s failure to comply with applicable governmental
regulations or to exercise due care.



      




					
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ARTICLE 14. LIMITATION OF LIABILITY 




     (A) Any provision of this Contract to the contrary notwithstanding, Owner and Charterer
shall have the benefit of all limitations of, and exemptions from, liability accorded to the Owner
or Charterer of Vessels by any statute or rule of law for the time being in force. The terms and
conditions of this Contract shall not limit or deprive Owner or Charterer of any statutory or other
benefits of, all limitations of, and exemptions from liability on the theory of personal contract
or otherwise.



     (B) Any claim by either party shall be waived, unless presented, as provided for in this
Contract, is commenced by written notice given within 2 years from termination of the voyage or
event in question, except that either party may present claims for indemnity or contribution
arising from third party claims within 6 years from termination of the voyage or event in question.



ARTICLE 15. GENERAL AVERAGE




     (A) In the event of accident, danger, damage or disaster before or after commencements of
a voyage resulting from any cause whatsoever, whether due to negligence or not, for which or the
consequences of which the Owner is not responsible by statute, contract or otherwise, the cargo
shipper, receiver or owner of the cargo shall contribute with the Owner in General Average to the
payment of any sacrifices, losses or expense of a General Average nature that may be made or
incurred, and shall pay salvage and special charges incurred in respect of the cargo. If a
salvaging ship is owned or operated by Owner or Charterer, the charge for the use of such vessel
shall be paid for in full as if the salvaging ship or ships belong to strangers.



     (B) General Average shall be adjusted, stated and settled according to York-Antwerp Rules 1994
as amended, at such port or place in the United States as may be selected by Owner and as to
matters not provided by for those Rules according to the laws and usages at the Port of New York.



      




					
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ARTICLE 16. SUB-CHARTERING AND ASSIGNMENT




     Charterer may sub-charter or assign this Contract to any affiliate or subsidiary, but
Charterer shall always remain responsible for the due fulfillment of this Contract. Except as
stated above, this Contract shall not be assignable by either party without the consent of the
other. Such consent shall not be unreasonably withheld by either party. If the Charterer exercises
the Time Charter option for a new ATB per Article 3 (H), the Charterer shall have the right to
sub-charter the vessel at its discretion in the market, according to Article 3 (H).



ARTICLE 17. INDEMNITY




     Except as otherwise set forth in this Agreement, Owner agrees to defend, hold harmless
and indemnify Charterer, its parent, their subsidiaries and affiliates, as well as the employees,
agents, officers, directors, invitees, partners and the assigns, and successors in the interest of
any of them (“Indemnities”) from and against any and all claims, liabilities, expenses, (including
reasonable attorneys’ fees), losses, damages, demands, fines and causes of action, arising out of,
or related to the services provided herein, to the extent caused by the negligent acts or omission
of Owner, its suppliers, subcontractors, or their respective agents, servants or employees. The
Owner’s defense, hold harmless and indemnify requirements as set forth above, shall also extend to
the injuries sustained by Owner’s employees and shall not be limited by any applicable workers’
compensation law or similar statue, the application of which are waived to the extent that state
and/or federal law limits the terms and condition of this clause, it shall be deemed so limited to
comply with such state and/or federal law.



ARTICLE 18. DEMISE




     Nothing herein contained shall be construed as creating a demise of Owner’s Vessels to
Charterer.



      




					
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ARTICLE 19. POLLUTION/COMPLIANCE WITH LAWS 




     Owner will comply with all laws, rules and regulations applicable by their terms to a
vessel owner relating to, among other things, water, air pollution or federal financial
responsibility regulations. Owner certifies that:




(A) It has secured and will carry aboard the vessel a U.S. Coast Guard Certificate of
Financial Responsibility required by U.S. Oil Pollution Act of 1990.




(B) The Vessel at all times, will be in compliance with all applicable U.S, federal, state,
or local statutes, rules, regulations or orders, or, in the alternative, the Owner will
maintain on the Vessel evidence satisfactory to Charterer that the Vessel and the Owner are
exempt from such obligation.

In the event Owner shall be unable to comply with federal financial responsibility
requirements, Charterer may suspend obligation to Charter Owner’s Vessels until such
coverage is reinstated, and, should Owner not cure the deficiency within 30 days Charter
shall have the right to terminate this contract.




(C) Each party agrees all work performed incident to this Contract and by either party shall
conform with all applicable federal, state and local laws, regulations and executive orders,
and all amendments there to, unless specifically exempt.




(D) Owner warrants and agrees that it has used and will continue to use due diligence to
ensure that during the performance of this Agreement no officer, employee, agent or other
representative of Owner has made or will make any payment in violation of any applicable
federal, state or local law or regulation, and all amendments thereto.




(E) Charterer warrants that it will comply with all applicable laws and regulations
pertaining to the cargo to be carried.




(F) Each party shall supply such evidence of compliance as the other may reasonably require.



      




					
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ARTICLE 20. GOVERNING LAW AND ARBITRATION




     (A) Any and all contract differences or disputes not resolved by the Owner and Charterer
shall be put to arbitration in the City of Philadelphia, Pennsylvania, pursuant to the rules (but
not the administration) of the American Arbitration Association. Notwithstanding the foregoing,
either party may opt out of the arbitration provision and have the matter resolved in Federal
District Court for the Eastern District of Pennsylvania in Philadelphia. If the initiating party
decides to opt out, that party shall give the other party 10 working days notice before filing
suit. If the non-initiating party opts out, that party shall notify the initiating party within 10
working days of receipt of notification by the other party of intent to arbitrate. Absent opt out
notice as provided herein, disputes shall be resolved by arbitration as set forth below.



     (B) The arbitration panel shall consist of three (3) persons — one arbitrator appointed by the
Owner, one appointed by the Charterer, and one appointed by the two so chosen. The decision of any
two of the three arbitrators on any point shall be final.



     (C) Until such time as the arbitrators close the hearings, either party shall have the right
to specify further disputes or differences under this Agreement for hearing and determination.
These disputes are to be submitted in writing to the arbitrators and to an officer of the other
party.



     (D) The arbitrators may grant any relief which they, or a majority of them, deem just and
equitable and is within the scope of these terms and conditions. Awards pursuant to this clause
may include costs, including a reasonable allowance for attorney’s fees, and a judgment may be
entered upon any award made hereunder in any court having jurisdiction in the premises.



      




					
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ARTICLE 21. BOARDING 




     Owner agrees to allow Charterer’s representatives to board the Vessel, at Charterer’s
time and expense, at load, discharge port or other port of call to observe operations in accordance
with all applicable laws but shall not cause interference with normal operations of the Vessel.



ARTICLE 22. VETTING




     (A) Owner shall complete such questionnaires as forwarded by Charterer from time to time
covering but not limited to spills, accidents, insurance coverage, contingency plans and
certifications programs. Owner shall not be required to disclose proprietary confidential
information or information relating to any pending or potential dispute arising under this
Contract.



     (B) During the term of this charter, Owner will exercise due diligence upon reasonable notice
from Charterer to obtain/maintain vetting acceptance. To the extent required, Owner shall take
corrective action to obtain such acceptance, always provided that the corrections are commercially
reasonable and substantial capital expenditures are not required. If so required, the Owner shall
contact the Charterer.



     (C) Each Vessel will be subject to inspections by other oil companies. The Owner shall
endeavor to conduct two OCIMF SIRE inspections annually. If the Owner can not acquire inspections
to fulfill this requirement, due to commercial limitations imposed by other oil companies, the
Owner shall seek the Charterer’s assistance in procuring these inspections. If the Charterer fails
to assist the Owner in procuring these inspections, the OCIMF SIRE inspection requirement will be
waived by the Charterer. In the event the Owner is able to have a SIRE inspection performed by an
oil company, one shall be arranged. The Owner shall ensure that response to observations noted is
provided to the inspection company. The inspecting oil company is responsible for ensuring the
SIRE inspection report is enter into the OCIMF SIRE system within the prescribed timeframe. The
Owner will request from the inspecting oil company that the inspection report be entered into the
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guarantee that an oil company will perform a SIRE inspection nor can it guarantee that an oil
company will be willing to perform at least two SIRE inspections per year, as they may not have a
commercial interest in the Vessel.




     (D) Owner will (if so requested by the Charterer) cooperate in having the vessel inspected by
other oil companies. Any loss of time, deviation costs and inspection fees in connection with the
inspection shall be for the Owner’s account.



     (E) Owner will allow Charterer to inspect each Vessel during the term of this contract to
ensure the Vessel is being operated and maintained to current industry regulations and standards.
The Charterer will not unreasonably withhold approval so long as the Vessel is being operated and
maintained to current industry regulations and standards. In the event a Vessel is found to be not
approved for service by the Charterer, based on the [****], the [****] an alternate vessel under
the commercial terms of this contract. This vetting clause, Article 22, is only applicable between
the Charterer and Owner and cannot be assigned to another entity.



ARTICLE 23. NOMINATION




     (A) Nomination procedure for each ship to be lightered will be as follows:




(1) Once per week, Charterer shall submit a thirty (30) day forecast of ships to be
lightered by Owner. Such forecast list shall include name(s) of the ship(s) to be
lightered, grade of oil to be lightered, estimated time of arrival (“ETA”) and name
of Charterer’s appointed vessel agent.




(2) Subsequent updates shall be provided by Charterer or Charterer’s agents for any
variances to the initial arrival ETA, volume to be lightered, API gravity and loaded
temperature of the oil to be lightered.



      




					
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(3) Four (4) days prior to a ship’s scheduled arrival date written or oral
notification shall be given to Owner of the requested lightering, including, but not
limited to, first Vessel ETA, quantity, type and description of cargo, discharge
berth(s) and heating instructions.




(4) Two (2) days prior to requested lightering, Owner shall submit its written or
oral lightering schedule including, but not limited to, the name of the Vessel, its
estimated time of arrival (ETA) at the ship and the previous cargo.




(5) Charterer shall review Owner’s nominated lightering schedule and advise Owner in
writing whether or not such schedule will create an operating problem for Charterer
or delays to Owner’s Vessels caused by the Charterer.




(6) If the parties are unable to resolve the schedule within 24 hours after
Charterer’s notice as required by (5) above and Charterer reasonably believes that
the proposed schedule may cause a material business disruption, Charterer shall have
the rights set forth in Article 23 (B). If the parties are unable to reach an
agreement, either may submit the issue to arbitration under Article 20.




(7) If and when an agreement on the schedule is reached, Owner shall provide
Charterer with timely advice in the event of any changes in scheduling and/or
timing. Such notice of ETA, however, shall not be construed in any way as a
guaranty of such arrival time. Owner shall make every reasonable effort to maintain
the schedule, but shall not be liable for any delay to cargo or lightered ship
except to the extent caused by negligence or fault of Owner, its officers, crew,
representatives or independent contractors.




(8) Should Charterer request a change in the agreed schedule, Owner will make
reasonable efforts to accommodate Charterer’s requests.



      




					
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     (B) If Owner is unable to provide crude oil lightering services in Delaware Bay, Delaware
River or offshore Big Stone Beach Anchorage, as set forth in Article 1 (A), Charterer may:




(1) Contract with other carriers to cover the part of the lightering that Owner
cannot accommodate; and




(2) Deduct a mutually agreed amount from the Monthly Minimum Volume as set forth in
Article 3.



     (C) As set forth in Article 1 (B), Charterer may offer other lightering or transportation
requirements to Owner. If Owner provides such services under this Charter, the volume actually
moved shall count toward the Monthly Minimum Volume. No deduction of volume shall be made to the
Monthly Minimum Volume if Owner does not provide the requested services.



     (D) Owner may lighter up to two (2) grades with TBT fleet and three (3) grades with the ATB
fleet of crude oil simultaneously within the design limitations of the Vessels. The Vessels are
fitted with at least two (2) cargo transfer systems on the TBT fleet and three (3) cargo transfer
systems on ATB fleet.



ARTICLE 24. DESCRIPTION OF CARGO




     Cargo to be carried shall be typical crude oil and/or dirty petroleum product. Unless
specifically agreed to by Owner, slops, tank washings and material other than the crude oil or
product cargo to be lightered shall not be discharged into Owner’s Vessels from the ship. The ship
shall not conduct crude oil washing in tanks from which cargo is being lightered without Owner’s
express prior agreement.



      




					
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ARTICLE 25. VAPOR PRESSURE




     Cargo shall not be lightered which has a vapor pressure exceeding 14.0 pounds at 100
degrees Fahrenheit as determined by the Reid Method.



ARTICLE 26. LOADING AND DISCHARGING RANGE




     (A) Unless otherwise agreed between the parties, all crude oil lightering in Delaware
Bay, Delaware River and offshore locations outside Big Stone Beach Anchorage shall be provided by
Owner pursuant to this Charter.



     (B) If Owner provides other lightering or transportation services under this Charter,
Charterer shall be charged according to the rates set forth in Schedule B and counted toward the
Monthly Minimum Volume described in Article 3. The transit time in excess of normal transit time
between Big Stone Beach Anchorage and berths on the Delaware River shall be counted as used laytime
and billed in accordance with Article 12. Charterer shall reimburse Owner for additional port
expenses and excess fuel consumption based on the last actual fuel price for the Vessel.



ARTICLE 27. DEFAULT/TERMINATION




     If either party shall be adjudged bankrupt, or become insolvent, or file for voluntary
bankruptcy or be subjected to involuntary bankruptcy proceeding, or enter receivership proceedings,
or make an assignment for the benefit of creditors, or persistently or repeatedly refuse or fail,
except in cases for which extension of time is provided, to perform its material functions
hereunder with the diligence necessary to insure its progress and completion as prescribed, and if
either shall fail to take such steps to remedy such default within (5) days after written notice
thereof from the innocent party, then the innocent party without prejudice to any of the other
rights or remedies expressly provided for herein, may terminate this Contract, or any part hereof,
by written notice to the party in default.



      




					
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ARTICLE 28. PUMPING WARRANTY




     Owner warrants (a) a cargo pump discharge rate of not less than 2,250 barrels per hour
per each pump for TBT fleet and 6,000 barrels per hour per pump for ATB fleet through an eight inch
shoreline, or (b) that the Vessel will maintain 100 P.S.I at the Vessel’s rail for the TBT fleet
and 150 P.S.I for the ATB Fleet at the Vessel’s discharge pump unless the facility cannot
accommodate the same. The warranty above shall not apply while the Vessel is stripping. Whenever
the Vessel fails to comply with the above requirements, such time shall not be counted as used
laytime or time on demurrage, if the Vessel is on demurrage. In any event, no time consumed in
excess of the warranted discharge time shall be counted as used laytime or time on demurrage,
unless caused by the negligence of the Charterer.



ARTICLE 29. HOSES 




     Hoses for loading and discharging shall be furnished by the Owner and shall be connected
and disconnected by ship/shore side personnel. The Vessel can load or discharge at least two
grades of cargo simultaneously utilizing its own hose handling equipment.



ARTICLE 30. CARGO LIEN




     In the event of nonpayment of valid freight, deadfreight, demurrage and all other
applicable charges, if any, Owner shall be entitled to a lien on cargo. Such lien shall survive
delivery of cargo so long as the cargo remains identifiable or is not in possession of a buyer who
has received the cargo without notice of the lien.



ARTICLE 31. ICE




     (A) The Vessels shall not be required to operate in or enter any icebound port or place
or anywhere lights, lightships, marks or buoys on Vessel’s arrival are or are likely to be
withdrawn by reason of ice of where there is a risk that ordinarily the Vessels will not be able on
account of ice to enter, reach or leave the place. The Vessels shall not be obligated to force the
ice.




      




					
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     (B) If on account of ice the Master considers it dangerous to enter or remain at any loading
or discharging place for fear of the Vessels being frozen in and/or damaged, the Owner shall notify
the Charterer and request orders for an alternate ice-free port or place and failing Charterer’s
complying with the request, Owner shall have the liberty to sail to the nearest available place or
port which is free from ice and there await Charterer’s further instructions. The whole of the
time occupied from the time the Vessels are diverted by reasons of ice until their arrival at an
ice-free place or port as well as any detention by reason of ice or any of the above causes shall
be paid by the Charterer at the applicable rate shown on Schedule D, unless caused by the Owner’s
negligence and not a simple error in judgment. Charterer will be notified and rebilled if
additional assist tugs are required to operate in ice condition.



ARTICLE 32. WEATHER




     (A) For lightering in Delaware Bay or Delaware River, provided the Vessel is in a state
of readiness for either loading or discharge, delays incurred because of weather or sea conditions,
or any other weather related cause beyond the reasonable control of the Owner or Charterer, shall
be charged at 50% of the demurrage rate set forth in Schedule C. Such delays shall commence if, in
the reasonable opinion of the master, it is unsafe to proceed and Charterer directs Owner to hold
the Vessel until such time as weather and sea conditions are safe for lightering operation. Such
delays shall include any time necessary to reach a safe anchorage or lay berth and return to the
ship, as well as time spent waiting for the weather or sea conditions to moderate. Delays
incurred because of weather shall count as used laytime on a per voyage basis. Delays for weather
shall be deducted first from the calculation of demurrage and billed as stated above and the
remainder shall then be construed as demurrage and billed in accordance with Article 12.



     (B) For lightering offshore Big Stone Beach Anchorage, provided the Vessel is in a state of
readiness for loading or discharge, delays incurred because of weather or sea condition or any
other weather related cause beyond the reasonable control of the Owner or Charterer shall be
charged at 50% of the demurrage rate set forth in Schedule C. Such delays shall commence upon the
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location, if in the reasonable opinion of the master, it is unsafe to proceed and Charterer directs
Owner to hold the Vessel until such time as weather or sea conditions are safe for lightering
operation. Such delays shall not include the time spent for the Vessel to position or reposition at
the offshore location to determine if the weather or sea conditions are safe for the offshore
lightering operation. Such delays shall include any time necessary to reach a safe layberth and
return to the ship, as well as time spent waiting for weather or sea conditions to moderate. Delays
incurred because of weather shall count as used laytime on a per voyage basis. Delays for weather
shall be deducted first from the calculation of demurrage and billed as stated above and the
remainder shall then be construed as demurrage and billed in accordance with Article 12.




ARTICLE 33. QUARANTINE




     Should the Charterer send the Vessels to any port or place where a quarantine exists, any
demurrage thereby caused to the Vessels shall be paid by the Charterer at the applicable rates
shown on Schedule C.



ARTICLE 34. ASSIST TUGS




     Charterer shall be responsible for the costs of assist tug(s) at all piers, berths, docks
or waterways where regulations require the use of assist tug(s). Charterer shall be responsible for
escort tugs where U.S. Coast Guard, any other federal or state agency, or Government issue
regulations or laws. Owner shall furnish to Charterer vendor invoices and documentation supporting
any such charge. The tug and any assist tug(s) which may be used, will at all times be servants of
the Owner.



     At piers, berths, docks or waterways where regulations do not require assist tugs(s), the
Owner may use same at his own cost except to the extent otherwise provided for in this Contract.



      



					
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ARTICLE 35. TOLLS AND USER CHARGES




     Charterer shall pay all tolls or waterway user charges, which may be imposed by the
Federal Government or by any State, City or County government on the cargo and/or equipment forming
the subject of this Contract.



ARTICLE 36. DIVERSION OF VESSELS BY OWNER




     At any time during this Contract, the Vessel may go to the assistance of vessels in
distress for the purpose of saving life or property, call at any port for fuel, repairs, supplies
or other necessaries or to land disabled seamen at the expense of Owner.



ARTICLE 37. FUEL PRICE




     The freight rates set forth in Schedule B are based on a #2 fuel oil price of
$[****]/gallon. If the published posted #2 Fuel Price (#2FP) is greater or less than
$[****]/gallon, both the base and incentive freight rates shall be adjusted on the first day of
each calendar month by the following adjustment calculations:



     Adjusted Freight Rate = Base Freight Rate + Freight Adjustment



     Adjusted Incentive Freight Rate = Incentive Freight Rate + Freight Adjustment




Where:



     Freight Adjustment = BFR x A (#2FP — $[****])




and:



     BFR = the base freight rate as shown in Schedule B expressed in dollars per barrel



     A = the adjustment factor for fuel price change, which is [****]




			
	     #2FP =	 	the average #2 fuel oil price calculated on a quarterly basis by averaging the low
“NY barge consumer #2 oil” fuel price as published in The Journal of Commerce
Oil Price Daily of the first business day of each calendar month during the
prior calendar quarter. The Owner will supply the Charterer with copies of The








      



					
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	       	 	Journal of Commerce Oil Price Daily via fax. This fax will provide the information needed in order to determine the #2FP.








     Rate adjustments shall be made on a quarterly basis. In the quarter where the Base Freight
Rate changes in accordance with Article 49, the rate adjustment shall be made the first day of each
calendar month. Rate adjustments shall be rounded to three (3) decimal places, and applied to all
loadings during the month. Owner shall reference the #2FP and the AFR calculation on the monthly
freight invoice per Article 11. The Charterer may also require Owner to notify the Charterer in
writing of all rate adjustments within five (5) days of any change.



ARTICLE 38. HEAT




     If Charterer or its receiver requires any of the cargo to be heated before discharge from
a Vessel, the Charterer will be billed at $[****]/hour or pro rata for part thereof. The heating
rate is based on a #2 Fuel Price of $[****] per gallon. If the published posted #2 Fuel Price
(#2FP), as calculated per Article 37, is greater than or less than $[****]/gallon, for every
$[****] /gallon the heating rate shall be adjusted on the first day of each calendar month by the
following adjustment calculation:



          Adjusted Heater Rate per Hour = Base Heater Rate + Heater Adjustment





Where:



          Heater Adjustment = ((#2FP- $[****]) / A) x $[****]





and:



          BHR = as specified above




          A = the adjustment factor of $[****]/gallon




     Heater rate adjustments shall be made on a quarterly basis. Owner shall reference this #2FR
and AHR calculation on the monthly freight invoice per Article 11. The Charterer may



      



					
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also require Owner to notify the Charterer in writing of all rate adjustments within five (5) days
of any change.




ARTICLE 39. PERFORMANCE REQUIREMENTS




     (A) The parties, through an Association Agreement, as specified in Appendix A, shall
measure various scheduling, operational and administrative functions of lightering. The Association
or any delegated sub-group shall meet, at a minimum, on a quarterly basis, or as deemed necessary
to discuss operational and strategic issues and address conflicts. The required measurements
are:




	 	(1)	 	Lightering Service Time which includes ship arrival time,
Vessel alongside time and Nominated Time to the ship.
	 
	 	(2)	 	Monthly recap of cumulative volumes and pilotage charges.
	 
	 	(3)	 	The Association will develop other necessary measurements as
they are identified.





     (B) Safety Management Systems: During the term of this Agreement Owner will maintain a
Management System which contains the following elements:




	 	(1)	 	Health, Environment and Safety
	 
	 	(2)	 	Operational Integrity
	 
	 	(3)	 	Documented monitoring and measurement procedures
	 
	 	(4)	 	Periodic third party and verification of compliance with
Charterer’s requirements





ARTICLE 40. CLAUSE PARAMOUNT




     Carriage and performance under this Contract shall be subject to the provisions of the
Carriage of Goods by Sea Act of the United States, approved April 16, 1936, which shall be deemed
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the Owner of any of its rights or immunities or an increase of any of its responsibilities or
liabilities under said Act. The provisions stated in said Act shall (except as may be otherwise
specifically provided herein) govern before the goods are loaded on and after they are discharged
from the Vessel and throughout the entire time the goods are in the custody of the Owner. The
Owner shall not be liable in any capacity whatsoever for any delay, non-delivery or mis-delivery,
or loss of or damage to the goods occurring while the goods are not in the actual custody of the
Owner or its representatives.




ARTICLE 41. BOTH TO BLAME




     If the Vessel comes into collision with another ship as a result of the negligence of the
other ship and any act, neglect or default of the Master, mariner, pilot or the servants of the
Owner in the navigation or in the management of the Vessel, the owners of the cargo carried
hereunder shall indemnify the Owner against all loss or liability to the other or non-carrying ship
or her owners in so far as such loss or liability represents loss of, or damage to, or any claim
whatsoever of the owners of said cargo, paid or payable by the other or recovered by the other or
non-carrying ship or her owners as part of their claim against the Vessel or Owner. The foregoing
provisions shall also apply where the owners, operators or those in charge of any ships or objects
other than, or in addition to, the colliding ships or object are at fault in respect of a
collisions or contact.



ARTICLE 42. JASON CLAUSE




     In the event of accident, danger, damage or disaster before or after the commencement of
a voyage, resulting form any cause whatsoever, whether due to negligence or not, for which, or for
the consequence of which, the Owner is not responsible, by statute, contract or otherwise, and
provided that Owner has exercised Due Diligence to provide a seaworthy vessel, the Charterer shall
contribute with the Owner in General Average to the payment of any sacrifices, losses or expenses
of a General Average nature that may be made or incurred and shall pay salvage and special charges
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Owner, salvage shall be paid for as fully as if the said salving ship or ships belonged to
strangers. Such deposit as the Owner or his agents may deem sufficient to cover the estimated
contributions of the cargo and any salvage and special charges thereon shall, if required, be made
by the cargo, shippers, consignees or owners of the cargo to the carrier before delivery.




ARTICLE 43. NEW LAWS/REGULATIONS




     (A) Freight rates are based upon federal, state, local and other laws, taxes and
regulations, in force as of September 1, 2005 governing the cargo or vessels forming the subject
matter of the Contract. Changes in the operation or carrying capacity of the Vessels which may be
required by laws or regulations enacted after September 1, 2005 shall not constitute a breach of
any Owner warranty under this Contract.



     (B) If:




     (1) The U.S. Coast Guard, any other federal or state governmental agency or
Government issue regulations or laws subsequent to September 1, 2005 which




	 	(a)	 	Materially affect the carrying capacity of the Vessels;
	 
	 	(b)	 	Materially affect the method of operation of
the Vessels, including pumping rates and emissions;
	 
	 	(c)	 	Require material additions or installation of
new or improved safety or anti-pollution equipment; or
	 
	 	(d)	 	Require structural alterations to the Vessels; or
	 
	 	(e)	 	Require additional manning levels: or
	 
	 	(f)	 	Materially increase Owner’s operating costs because of new regulations:






(2) Rates shall be adjusted to compensate Owner for the costs of compliance with the
new regulations.




	 	(a)	 	A maximum of [****]% of such costs shall be
incorporated into the rate under this Charter, based upon [****];





      



					
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	 	(c)	 	Costs will be allocated over the remaining life
of the Vessel;
	 
	 	(d)	 	Owner shall substantiate the amount of such
increased or decreased costs to the reasonable satisfaction of
Charterer.






(3) Should a rate adjustment be required under this Article, the parties shall
mutually agree on an equitable method to compensate the Owner for the additional
costs, either through adjustment of the cost escalation or through direct increase
in the rate, but which does not result in “double counting” of cost increases.




(4) In any case where new laws and regulations impose requirements resulting in
material increases in Owner’s costs that would require a rate adjustment pursuant to
this Article 43, Owner will notify Charterer and consult with Charterer regarding
the requirements and planned compliance measures before undertaking the expenditure.
Recognizing its duty to mitigate the cost of compliance, in responding to the
requirements of new laws and regulations, Owner agrees to cooperate with Charterer
to




	 	(a)	 	Address foreseeable proposed
requirements in order to minimize the impact on the Vessels
operating under this Charter;
	 
	 	(b)	 	Undertake reasonable steps to
challenge the regulations if appropriate;
	 
	 	(c)	 	Investigate least cost
alternatives.





ARTICLE 44. WAR RISK




     (A) “War risks” shall include acts of terrorism or port/facility security measures
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     (B) If owing to the application of the Relevant Security Regulations or Other Security
Regulations, including any measures required by any port facility or any relevant authority, any
war, hostilities, warlike operations, civil war, civil commotions, safety or security threat,
revolutions or the operation of international law (1) entry to any such port is considered by the
Master or Owners in his or their discretion dangerous or prohibited; (2) it is considered by the
Master or Owners in his or their discretion dangerous or impossible for the Vessel to reach any
such port of loading or discharge; or (3) the port is closed by governmental authorities, and such
inability to enter port continues for more than 15 days, the Charterer shall have the right to
order the cargo, or such part of it as may be affected, to be loaded or discharged at any other
port of loading or of discharge within the range of loading or discharging ports respectively
established under the provisions of the Contract (provided such other port is not blockaded or
that entry thereto or loading or discharge of cargo thereat is not in the Master’s or Owner’s
discretion dangerous or prohibited). If in respect of a port of discharge no orders are received
from the Charterer within 48 hours after they or their agents have received from the Owners a
request for the nomination of a substitute port, the Owners shall then be at liberty to discharge
the cargo at any port which they or the Master may in their or his discretion decide on (whether
within the range of discharging ports established under the provisions of this Contract or not) and
such discharge shall be deemed to be due fulfillment of this Contract so far as cargo so discharged
is concerned. In the event of the cargo being loaded or discharged at any such other port within
the respective range of loading or discharging ports established under the provisions of this
Contract the Contract shall be read in respect of freight and all other conditions whatsoever as if
the voyage performed were that originally designated. In the event, however, that the Vessel
discharges the cargo at a port outside the range of discharging ports established under the
provisions of this Contract, with Charterer’s approval freight shall be paid by the Charterers. In
the latter event the Owners shall have a lien on the cargo for all such extra expenses reasonably
incurred.



     (C) The Vessel shall have liberty to comply with any directions or recommendations as to
departure, arrival, routes, ports of call, stoppages, destinations, zones, waters, delivery or
otherwise whatsoever given by the government of the nations under whose flag the Vessel sails or
any other government or local authority including any de facto government or local authority



      



					
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or by any person or body acting or purporting to act as or with the authority of any such
government or authority or by any committee or person having under the terms of the war risks
insurance on the Vessel the right to give any such directions or recommendations. If by reason of
or in compliance with any such directions or recommendations, anything is done or is not done such
action or non-action shall not be deemed a deviation.




     (D) If by reason of or in compliance with any such direction or recommendation, the Vessel
does not proceed to the port or ports of discharge originally designated or to which she may have
been ordered, the Vessel may proceed to any port of discharge which the Master or Owners in his or
their discretion may decide on as a safe place and, with Charterer’s written approval, there
discharge the cargo. Such discharge shall be deemed to be due fulfillment of this Contract and the
Owners shall be entitled to freight as if discharge has been effected at the port or ports
originally designated or to which the vessel may have been ordered. All extra expenses reasonably
incurred involved in reaching and discharging the cargo at any such other port of discharge shall
be paid by the Charterer and the Owner shall have a lien on the cargo for freight and all such
expenses reasonably incurred.



     (E) Owner shall not be responsible for delays in Owner’s Vessels arrival at the ship caused by
port closure or security restrictions not caused by the fault or neglect of the Vessel, the Owner
or its officers, crew, other employees or its independent contractors. If such port closure or
security restrictions prevent the Vessel from proceeding to the ship or performing lightering
operations for a period in excess of 6 hours, Owner may withdraw the nomination and operate the
Vessel for its own account. Owner and Charterer shall mutually agree upon a rescheduling of the
lightering after resumption of lightering is permitted. If port closures or security restrictions
imposed before loading would prevent discharge, Charterer may cancel the lightering without
penalty, and Owner and Charterer shall mutually agree upon a rescheduling of the lightering after
removal of the port restrictions.



     (F) If the Vessel is delayed after loading because of port closure or security restrictions
imposed either by governmental authority or the discharge terminal/facility designated by the
Charterer, and not caused by the fault or neglect of Owner the Vessel, the



      



					
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officers, crew, or other employees or independent contractor of Owners such delays shall for
Charterer’s account and shall be charged at the demurrage rates set forth herein.




     (G) Any costs, expenses, losses and liabilities which may be incurred by the Owner in relation
to the application of the Relevant Security Regulations or Other Security Regulations, including
any measures required by any port facility or relevant authority, shall be for the Charterer’s
account, unless the costs, expenses, losses or liabilities result from (a) the Vessel’s
non-compliance with any ship security plan required by the Relevant Security Regulations, the costs
of compliance with any such plans being for the Owner’s account, (b) the Owner’s failure to comply
with obligations imposed upon it or the Vessel under the Relevant Security Regulations or (c) the
Owner’s breach of this Charter.



ARTICLE 45. OZONE ACTION DAYS




     Delays incurred because of an Ozone Action Day (as defined by the Division of Air and
Waste Management of the State of Delaware) which shall become Appendix B hereto shall be charged at
one-half the demurrage rate set forth in Schedule C. Delays incurred because of an Ozone Action
Day shall be considered part of laytime. The Owner shall promptly notify the Charterer when an
Ozone Action Day is declared. In accordance with the regulation, delays shall commence when (1)
the Vessel stops loading when alongside the Ship, (2) the Vessel anchors at Big Stone waiting to go
alongside the Ship or (3) the Vessel is secured alongside a ship but not able to lighter due to an
Ozone Action Day declaration. Time will end when the transfer resumes or the Vessel resumes its
voyage.



     If Charterer elects to lighter at a designated offshore location outside Big Stone Beach
Anchorage due to legally restricted Ozone Action Days, Charterer shall be responsible for all
offshore pilot charges and customs fees.



ARTICLE 46. PILOTAGE CHARGES




     Owner shall pay for pilotage charges associated with all offshore lightering by Owner’s
Vessels outside Delaware Bay, except as specified in Article 45, up to the annual maximum.



      



					
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Charterer shall reimburse Owner in full for all pilotage charges that exceed the annual maximum of:




	 	 	 	 	 
	Year 1
	 	$	[****]	 
	Year 2
	 	$	[****]	 
	Year 2
	 	$	[****]	 
	Year 3
	 	$	[****]	 
	Year 4
	 	$	[****]	 
	Year 5
	 	$	[****]	 
	Year 6
	 	$	[****]	 
	Year 7
	 	$	[****]	 
	Year 8
	 	$	[****]	 
	Year 9
	 	$	[****]	 
	Year 10
	 	$	[****]	 





The increase for the annual maximum is [****] percent in each year for the term of this Contract.




ARTICLE 47. HIMALAYA CLAUSE




     It is hereby expressly agreed that no servant or agent of the carrier (including every
independent contractor form time to time employed by the carrier) shall in any circumstances
whatsoever be under any liability whatsoever to the shipper, consignee or owner of the goods or to
any holder of a bill of lading (if any) for any loss, damage or delay of whatsoever kind arising or
resulting directly or indirectly from any act, neglect or default on his part while acting in the
course of or in connection with this employment and, but without prejudice to the generality of the
foregoing provision in this clause, every exemption, limitation, condition and liberty herein
contained and every right, exemption from liability, defense and immunity of whatsoever nature
applicable to the carrier or to which the carrier is entitled hereunder shall also be available and
shall extend to protect every such servant or agent of the carrier acting as aforesaid and for the
purpose of all the foregoing provisions of this clause the carrier is or shall be deemed to be
acting as agent or trustee of behalf or and for the benefit of all persons who are or might be his
servants or agents from time to time (including independent contractors as aforesaid) and all such
persons



      



					
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shall to this extent be or be deemed to be parties to the contract in or evidenced by this
bill of lading.





			
	ARTICLE 48.	 	CONSTRUCTION COST FREIGHT RATE ADJUSTMENT








     (A) Upon commencement of the Term as set forth in Article 2, the freight rate shall be
increased $[****] per barrel to reflect the cost of construction of the ATB fleet. The
construction cost increase is incorporated into the rates set forth in Schedule B.




(1) The freight rate increase is based upon the anticipated cost of construction
for the ATB fleet. The Anticipated Cost is $79,561,216.00 per vessel
as follows:



	 	 	 	 	 
	(a) Bender Shipbuilding and Repair
	 	$	76,461,216	 
	(b) Maritrans site supervision and contractors
	 	$	[****]	 
	(c) Owner Furnished Materials
	 	$	[****]	 
	(d) Contingency
	 	$	[****]	 







(2) The rate increase of $[****] per barrels reflects a [****] of
approximately [****]% on [****] barrels of lightered volume per year. If the
Vessels carried only the Charterer’s volume of [****] barrels per year at the
contract rates established by this Agreement, with the total cost of the ATB fleet
of $238,683,648.00, Owner’s internal rate of return would be [****]% or less.
[****].



     (B) The Base Freight Rate in Schedule B will be adjusted to reflect differences between the
average newbuild completed cost and the average newbuild Anticipated Cost, up to a maximum of
$[****]. For every $[****] in the average cost differential, the rate shall be adjusted (higher or
lower) by $[****] per barrel. Charterer shall have the right to audit any newbuild related costs
for the duration of the newbuild project, and one (1) year thereafter.



      



					
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     (C) The Base Freight Rate adjustment in Schedule B shall be reconciled upon delivery of the
third ATB unit to Owner, and shall be adjusted retroactively to the date of tender of the first
unit in Delaware Bay for lightering service. The adjustment shall be computed by multiplying the
rate adjustment times the Monthly Minimum Volume times the number of months between delivery of the
first ATB and the third ATB, less any deductions pursuant to Article 3 (H) and 23 and paid in a
lump sum.



ARTICLE 49. OPERATING COST ADJUSTMENT




     (A) The operating cost adjustment will be determined by comparing Owner’s actual
operating costs, based on its normal operating costs in the ordinary course of business rather than
those directly resulting from Owner’s negligence, with Owner’s modeled costs for each contract year
contained in Schedule F. The model is based upon the following cost components:




	 	•	 	Crew Cost
	 
	 	•	 	Routine Maintenance
	 
	 	•	 	Major Maintenance
	 
	 	•	 	Insurance
	 
	 	•	 	Supplies





     (B) The adjustment is calculated as follows:




(1) For costs components except major maintenance, Owner’s actual costs shall

be compared to the cost in Schedule F;




(2) The major maintenance cost component contained in Schedule F was computed using
an expense accrual methodology acceptable under GAAP, which is based upon
anticipated future expenditures for shipyarding and maintenance events to keep the
fleet certified under USCG, ABS, and then current regulatory regimes consistent with
best practices. In determining the operating cost adjustment under this contract,
the major maintenance cost component will be computed based upon a cost accrual
pursuant to the same methodology, and



      



					
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Owner’s accrual number shall be compared to the major maintenance accrual amount in
Schedule F.



     (C) The operating cost adjustment will be made annually. The first adjustment shall occur upon
the first anniversary of delivery of the first ATB unit for lightering services in Delaware Bay,
and each year thereafter on the anniversary date of the delivery of the first ATB to Delaware Bay.
This will be a lagging review that compares actual costs of the previous twelve months to the
Owner’s modeled cost for the previous calendar year in Schedule F.



     (D) [****]% of the cost adjustment shall be paid in a lump sum payment by Charterer to Owner
if costs exceed Schedule F or by Owner to Charterer if the costs are less than Schedule F.
However, regardless of the increase or decrease in Owner’s costs, the adjustment will not exceed
(higher or lower) [****]% of annual modeled revenue.



     (E) The escalation rate will be determined annually. The first escalation shall occur upon
the delivery of the first ATB unit for lightering service in Delaware Bay, and each year thereafter
on the anniversary date of the delivery of the first ATB to Delaware Bay. This will be a lagging
review that compares costs for the previous twelve months, and applies the escalation to the
upcoming year.



     (F) Charterer may, at its expense, audit the operating expenses of Owner’s Delaware Bay ATB
lightering fleet that form the basis for the escalation increase or decrease.



     (G) The operating cost adjustment set forth in this Article is in addition to other rate
increases that may be permitted by this Agreement.



ARTICLE 50. CONFIDENTIALITY 




     No press release or other announcement related to this Contract or the transactions
contemplated herein will be issued without the joint review and approval of Owner and Charterer,
except any public disclosure which either party in its good faith judgment believes is required by
law or by any stock exchange on which its securities or those of its Affiliates are



      



					
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listed (in which case the party making the disclosure will use all commercially reasonable
efforts to consult with the other party prior to making any such disclosure). The terms of
confidentiality set forth in the Memorandum of Understanding between the parties dated February 8,
2005 shall be deemed incorporated herein by reference. Except as required by applicable law or as
otherwise agreed, all information relating to this Contract or otherwise supplied to one party by
the other shall be maintained in strict confidence by the receiving party and its employees,
advisors and agents, which obligation shall survive termination of this Contract.



Incorporated herein by reference Schedules A through F and Appendices A through D.




      



					
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     IN WITNESS WHEREOF, the parties, through their duly authorized representative executes this as
their final agreement.



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Maritrans Operating Company L.P.	 	 	 	Sunoco, Inc. (R&M)	 	   
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By

	 	 	 	/s/ Jonathan Whitworth
	 	 	 	By
	 	 	 	/s/ D.A. Hepworth	 	 
	 

	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	     Jonathan Whitworth
	 	 	 	 	 	 	 	     D. A. Hepworth	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Title:	 	President	 	 	 	Title:	 	Vice-President Crude & Raw	 	 
	 

	 	 	 	Maritrans General Partner Inc.,
	 	 	 	 	 	 	 	Material Supply, Trading	 	 
	 

	 	 	 	its managing general partner
	 	 	 	 	 	 	 	& Transportation	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Witness	 	/s/ Stephen M. Hackett	 	 	 	Witness	 	/s/ Kathleen C. Yates	 	 
	 

	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	     Stephen M. Hackett
	 	 	 	 	 	 	 	     Kathleen C. Yates	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Title:

	 	 	 	Vice-President
	 	 	 	Title:
	 	 	 	Sr. Commercial Operations	 	 
	 

	 	 	 	Maritrans General Partner Inc.,
	 	 	 	 	 	 	 	Specialist & Supply Chain	 	 
	 

	 	 	 	its managing general partner
	 	 	 	 	 	 	 	Analyst	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Date: September 2, 2005	 	 	 	Date: September 2, 2005	 	 






      



					
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SCHEDULE A

MARITRANS OPERATING COMPANY L.P. — SUNOCO, INC. (R & M)

LIGHTERING CONTRACT

BIG STONE BEACH ANCHORAGE LIGHTERING

AS OF SEPTEMBER 1, 2005




LIGHTERING FLEET LIST




TUG / BARGE / TANKSHIP FLEET (TBT FLEET)




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	UNIT	 	DRAFT	 	BEAM	 	LOA*	 	CAPACITY
	MARITRANS 400 /
CONSTITUTION
	 	40 FT	 	105 FT	 	690 FT	 	 	375,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	MARITRANS 300 /
LIBERTY
	 	36 FT	 	92 FT	 	625 FT	 	 	250,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	INTEGRITY
	 	40 FT	 	 	96FT2IN	 	 	 	651FT	 	 	 	260,000	 






ARTICULATED TUG BARGE FLEET (ATB FLEET)




	 	 	 	 	 	 	 	 	 
	UNIT	 	DRAFT	 	BEAM	 	LOA*	 	CAPACITY
	ATB 1 (TBN)

	 	36 FT.
	 	105 FT.
	 	700 FT.
	 	335,000 BBLS.
	 
	 	 	 	 	 	 	 	 
	ATB 2 (TBN)

	 	36 FT.
	 	105 FT.
	 	700 FT.
	 	335,000 BBLS.
	 
	 	 	 	 	 	 	 	 
	ATB 3 (TBN)

	 	36 FT.
	 	105 FT.
	 	700 FT.
	 	335,000 BBLS.






	 	 	 	 	 
	 	 	HORSEPOWER
	TUG 1 (TBN)
	 	 	12,000	 
	 
	 	 	 	 
	TUG 2 (TBN)
	 	 	12,000	 
	 
	 	 	 	 
	TUG 3 (TBN)
	 	 	12,000	 








 




			
	*	 	LOA INCLUDES TUG / BARGE COMBINED





      



					
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SCHEDULE B

MARITRANS OPERATING COMPANY L.P. — SUNOCO, INC. (R & M)

LIGHTERING CONTRACT

BIG STONE BEACH ANCHORAGE LIGHTERING

AS OF SEPTEMBER 1, 2005




FREIGHT RATE SCHEDULE




	 	 	 	 	 	 	 	 	 
	 	 	BASE FREIGHT RATE	 	INCENTIVE RATE
	Year 1
	 	$	[****]	 	 	$	[****]	 
	Year 2
	 	$	[****]	 	 	$	[****]	 
	Year 3
	 	$	[****]	 	 	$	[****]	 
	Year 4
	 	$	[****]	 	 	$	[****]	 
	Year 5
	 	$	[****]	 	 	$	[****]	 
	Year 6
	 	$	[****]	 	 	$	[****]	 
	Year 7
	 	$	[****]	 	 	$	[****]	 
	Year 8
	 	$	[****]	 	 	$	[****]	 
	Year 9
	 	$	[****]	 	 	$	[****]	 
	Year 10
	 	$	[****]	 	 	$	[****]	 






Note: Fuel adjustment for Incentive Rate will be subject to Article 37.




      



					
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SCHEDULE C

MARITRANS OPERATING COMPANY L.P. — SUNOCO, INC.(R & M)

LIGHTERING CONTRACT

BIG STONE BEACH ANCHORAGE LIGHTERING

AS OF SEPTEMBER 1, 2005




DEMURRAGE RATE SCHEDULE




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	ALLOWABLE	 	EACH END	 	HOURLY
	 	 	PUMPING RATE (BPH)	 	(HOURS)	 	RATE ($)
	MARITRANS 400/
CONSTITUTION
	 	 	[****]	 	 	 	[****]	 	 	 	[****]	 
	MARITRANS 300/
LIBERTY
	 	 	[****]	 	 	 	[****]	 	 	 	[****]	 
	INTEGRITY
	 	 	[****]	 	 	 	[****]	 	 	 	[****]	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	NEW ATB*
	 	 	[****]	 	 	 	[****]	 	 	$	[****]	 





Allowed laytime shall be that time calculated using the Vessel quantity at discharge location
divided by Allowable Pumping Rate plus Each End Hours multiplied by two.
(e.g. ((300,000 barrels / [****] ) +[****] hours) 2)






 




			
	*	 	Allowed laytime for 135,000 barrel lot size or less shall be a minimum of [****] hours.




Demurrage rates will escalate at [****] percent annually in accordance with the escalation in
Schedule B.




      



					
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SCHEDULE D

MARITRANS OPERATING COMPANY L.P. — SUNOCO, INC. (R & M)

LIGHTERING CONTRACT

BIG STONE BEACH ANCHORAGE LIGHTERING



AS OF SEPTEMBER 1, 2005




ICE RATE SCHEDULE




	 	 	 	 	 
	UNIT	 	UNIT HOURLY RATE ($)
	MARITRANS 400
	 	$	[****]	 
	MARITRANS 300
	 	$	[****]	 
	INTEGRITY
	 	$	[****]	 
	NEW ATB
	 	$	[****]	 






Ice rates will escalate at [1.0] percent annually.




      



					
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SCHEDULE E



Maritrans Operating Company L.P. — Sunoco, Inc. (R & M)



LIGHTERING CONTRACT



CANCELLATION MATRIX




[****]




      



					
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SCHEDULE F



MARITRANS OPERATING COMPANY L.P. — SUNOCO, INC. (R & M)



LIGHTERING CONTRACT



OPERATING COST AND RATE ESCALATION PROJECTION



[****]




      



					
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APPENDIX A




MARITRANS OPERATING COMPANY L.P. — SUNOCO, INC. (R & M)




LIGHTERING CONTRACT

BIG STONE BEACH ANCHORAGE LIGHTERING

AS OF SEPTEMBER 1, 2005




ASSOCIATION AGREEMENT




      



					
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Sunoco, Inc. (R&M) (“Charterer”) and Maritrans Operating Company L.P. (“Owner”) have entered into
this Association Agreement:



Mission Statement:



Our mutual goal is to create and maintain a long-term Preferred Customer/Supplier Association
that provides service and economic benefits to each party. This will be accomplished by:





	 	v	 	Focusing on total value added;
	 
	 	v	 	Taking a system-wide view and jointly exploring all opportunities to
optimize logistics;
	 
	 	v	 	Enhancing communications and flow of information; and
	 
	 	v	 	Establishing and achieving measurement goals for continuous improvement.





     Both Charterer and Owner see distinct value in being separate companies, each focusing on its
core competencies.



     Both Charterer and Owner believe that a preferred customer/supplier association is a logical
outgrowth of the already significant economic and operational interdependence of the two companies.
Therefore, both parties believe that their respective business objectives are best served by entry
into an “Association” relationship whereby both parties are equally committed to (i)
improvement in project execution (ii) continuous improvement in project execution, (iii) open and
direct communication, (iv) fair and equitable treatment of one another, (v) quality and, (vii) a
cooperative approach to problem solving.


The principal strategic elements of the preferred Customer / Supplier Association are:





	1.	 	Structure: A deeply held commitment to the customer/supplier concept and the
techniques and effort to develop, implement, nurture and sustain it. The strategic objectives
of the Association are clearly defined and mutually understood. Owner and





      



					
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	 	 	 	Charterer will share realistic expectations. The defining document would include statement
of manual commitment, agreed upon requirements, and team formation/roles
	 
	 	2.	 	Business Agreements: Business planning and implements are key
to assuring that the strategic objectives
of the association are met. These
activities will be accomplished through a
joint effort that addresses strategy,
regulatory, legislative, environmental,
economic and other issues as they arise.
Separate and discrete contractual
transactions, agreements for lightering,
dirty petroleum products, etc., would be
negotiated over time appropriate to meet
the Needs of the customer and the
capabilities of the supplier. An
Association agreement would describe the
formal methods we would use for:
identification of opportunities,
negotiation, and evaluation/follow-up.
	 
	 	3.	 	Continuous Improvement: Continuous improvement is the primary
focus for the preferred Customer/Supplier
Association. A document program would
include methods for identification of
opportunities, process improvement, and
measurement/evaluation. One of the
objectives of this program will be to
maintain an ISO/ISM or equivalent
certification.




It is Owners and Charterer’s intent to conduct all Association activities in the spirit of the
principal strategic elements of the Mission Statement. The preferred Customer/Supplier Association
is value driven and based upon mutual trust. The long-term viability of the Association rests upon
the objectives and requirements of both parties being met.




     Success will result in the improved competitiveness and profitability of both companies.
The Association shall be governed by the following blended requirements:




	 	1.	 	Owner will provide reliable and predictable services that meet mutually agreed-upon
requirements. These services will continue to improve over time.
	 
	 	2.	 	Charterer and Owner will each maintain its “license to operate” in all areas relating to
the Association.





      



					
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	 	3.	 	All operations and services will be performed in a safe, reliable and environmentally sound
way, consistent with mutually agreed-upon safety standards.
	 
	 	4.	 	Owner will maintain ISO/ISM or equivalent certification within a mutually agreed-upon time
frame.
	 
	 	5.	 	Short and long-term management decisions of both Charterer and Owner will be consistent
with the mission of the Association.
	 
	 	6.	 	Commitment to the Association mission and strategies must permeate all levels of both
organizations.
	 
	 	7.	 	Continuous Improvement (‘CI”) in lightering is the initial focus for the Association. As
the relationship develops, both Charterer and Owner will explore other mutually beneficial
opportunities.
	 
	 	8.	 	The total cost for the services under this Association will be competitive.
	 
	 	9.	 	Owner must earn a return commensurate with risk and performance, which will permit and
encourage reinvestment in applicable business segments.
	 
	 	10.	 	Information, which is proprietary to each of the Associates and that of its customers and
suppliers, must remain so. Confidential information shared to benefit the partnership shall
not be used by either party to gain advantage.
	 
	 	11.	 	Benefits resulting from the relationship will be shared, with neither gaining at the
expense of the other.
	 
	 	12.	 	Open lines of communications will be maintained to obtain feedback and share information
regarding changes and market developments, which impact the relationship both short and
long-term.
	 
	 	13.	 	Charterer and Owner commit to periodic partnering meetings and activities to review the
performance of the Association and to constructively resolve issues that are critical to the
relationship.





      



					
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APPENDIX B




MARITRANS OPERATING COMPANY L.P. — SUNOCO, INC. (R & M)




LIGHTERING CONTRACT

BIG STONE BEACH ANCHORAGE LIGHTERING




AS OF SEPTEMBER 1, 2005




OZONE ACTION DAY

AS DEFINED BY THE DIVISION OF AIR AND WASTE MANAGEMENT OF THE STATE OF DELAWARE




      



					
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APPENDIX C




MARITRANS OPERATING COMPANY L.P. — SUNOCO, INC. (R & M)




LIGHTERING CONTRACT

BIG STONE BEACH ANCHORAGE LIGHTERING




AS OF SEPTEMBER 1, 2005




CORPORATE GUARANTEE




Filed as Exhibit 10.4 of Maritrans Quarterly Report on Form 10-Q dated November 7, 2005.




      



					
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APPENDIX D

MARITRANS OPERATING COMPANY L.P. — SUNOCO, INC. (R & M)

LIGHTERING CONTRACT

BIG STONE BEACH ANCHORAGE LIGHTERING



AS OF SEPTEMBER 1, 2005




NEW ATB SPECIFICATION SUMMARY




      



					
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12,000 HP ATB TUG — PRINCIPAL CHARACTERISTICS



[****]



 



*Note: Information based on shipyard specifications and may change upon
final design specifications.



      



					
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335,000 BBL ATB TANK BARGE PRINCIPAL CHARACTERISTICS




[****]

Cargo Tank Capacity in BBL..(100%)/(98%).... ...... 342,775/335,920 BBL

[****]




 


*Note: Information based on shipyard specifications and may change upon
final design specifications.



      



					
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