Document:

Exhibit 10.7

 

Privileged and Confidential

 

TIME CHARTER PARTY

 

 

between

 

 

PETRÓLEO BRASILEIRO S.A.

 

 

as Charterer

 

 

and

 

 

GOLAR SPIRIT UK LIMITED

 

 

as Owner

 

 

mv Golar Spirit

 

 

Dated: 4th September 2007

 

 

Table of Contents

 

	
1.
    	
Definitions
    	
1
    
	
2.
    	
Vessel   to Be Chartered
    	
18
    
	
3.
    	
Charter   Period
    	
30
    
	
4.
    	
Vessel   Specifications and Characteristics
    	
33
    
	
5.
    	
Alterations   and Modifications
    	
37
    
	
6.
    	
Delivery,   Redelivery and Cancelling
    	
39
    
	
7.
    	
Bunkers   and LNG Heel at Delivery and Redelivery
    	
53
    
	
8.
    	
Charterer   to Provide
    	
54
    
	
9.
    	
Rate   of Hire
    	
55
    
	
10.
    	
Payment   of Hire
    	
57
    
	
11.
    	
Space   Available to Charterer
    	
64
    
	
12.
    	
Vessel   Deployment and Operation
    	
64
    
	
13.
    	
Bills   of Lading
    	
66
    
	
14.
    	
Pilots   and Tugs
    	
69
    
	
15.
    	
Assignment   by Owner
    	
70
    
	
16.
    	
Assignment   and Subletting by Charterer
    	
70
    
	
17.
    	
Loss   of Vessel
    	
71
    
	
18.
    	
Off-Hire
    	
71
    
	
19.
    	
Ship   to Ship Transfers
    	
74
    
	
20.
    	
Scheduled   Drydocking and Maintenance
    	
74
    
	
21.
    	
Representations   and Warranties
    	
76
    
	
22.
    	
Key   Vessel Performance Criteria
    	
78
    
	
23.
    	
Vessel   Performance Reviews and Claims
    	
81
    
	
24.
    	
Indemnification
    	
84
    
	
25.
    	
Salvage
    	
87
    
	
26.
    	
Liens
    	
88
    
	
27.
    	
Loss,   Damage, Delay and Force Majeure
    	
89
    
	
28.
    	
Default   and Remedies
    	
93
    
	
29.
    	
Guarantee   and Letter of Credit
    	
99
    
	
30.
    	
Injurious   Cargoes
    	
99
    
	
31.
    	
Laying-Up
    	
99
    
	
32.
    	
Requisition
    	
101
    
	
33.
    	
Outbreak   of War
    	
101
    
	
34.
    	
Additional   War Expenses
    	
101
    
	
35.
    	
War   Risks
    	
102
    
	
36.
    	
Both   to Blame Collision Clause
    	
103
    
	
37.
    	
New   Jason Clause
    	
103
    

 

i

 

	
38.
    	
Conditions   of Use
    	
104
    
	
39.
    	
Insurance
    	
105
    
	
40.
    	
Export   Restrictions
    	
105
    
	
41.
    	
Business   Principles
    	
106
    
	
42.
    	
Drugs   and Alcohol
    	
109
    
	
43.
    	
Pollution   and Emergency Response
    	
109
    
	
44.
    	
ISPS   Code/USMTSA 2002
    	
111
    
	
45.
    	
Law   and Litigation
    	
112
    
	
46.
    	
Confidentiality
    	
114
    
	
47.
    	
Construction
    	
115
    
	
48.
    	
Notices
    	
115
    
	
49.
    	
Miscellaneous
    	
118
    
	
Schedule I
    	
Particulars of   Vessel
    	
A1
    
	
Schedule II
    	
Detailed   Performance Criteria
    	
B1
    
	
Schedule III
    	
Certificates of   Acceptance and Redelivery
    	
C1
    
	
Schedule IV
    	
List of Primary   and Designated Terminals
    	
D1
    
	
Schedule V
    	
Compensation Fee
    	
E1
    
	
Schedule VI
    	
Form of   Performance Bank Guarantee
    	
F1
    
	
Schedule VII
    	
Quiet Enjoyment   Agreement
    	
G1
    
	
Schedule IX
    	
Insurance
    	
H1
    
				

 

ii

 

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH FIVE ASTERISKS (*****).

 

This Time Charter Party (this “Charter”), executed the 4th day of September 2007 by and between Golar Spirit UK Limited a company duly incorporated in England (Company number 04679402) and with its registered office at 30 Marsh Wall, London E14 9TP, (the “Owner”) and Petróleo Brasileiro S.A., a company duly incorporated in Brazil and with its registered office at Av. Almirante Barroso, 81-33rd floor 20031-004, Rio de Janeiro, RJ, Brazil, (the “Charterer”).

 

WHEREAS, Owner is the disponent owner of the good Vessel (as defined below) constructed by Kawasaki Heavy Industries Limited, Sakaide, Japan and currently registered in the name of Sovereign Spirit Limited (the “Legal Owner”) under the Marshall Islands flag;

 

WHEREAS, Owner desires to charter the Vessel to Charterer, and Charterer desires to charter the Vessel from Owner, which shall be able and ready at all times to receive, store, carry and regasify and discharge LNG (as defined below) and discharge regasified LNG subject to the terms and conditions set forth in this Charter.

 

WHEREAS, Owner shall appoint a Brazilian Affiliate to operate the Vessel under the Operation and Services Agreement.

 

Now, therefore, for and in consideration of the mutual undertakings set forth herein, Owner and Charterer hereby agree as follows:

 

1.                                      Definitions

 

1.1                                 Definitions

 

In this Charter and the Schedules, save where the context otherwise requires, the following words and expressions shall have the meanings respectively assigned to them in this Clause.

 

	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Acceptance   Option”
    	
 
    	
is defined in   Clause 6.4(c)(ii).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Achieved Speed”
    	
 
    	
is defined in   Schedule II, Part A, Article 2(f).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Affiliate”
    	
 
    	
means, with   respect to any Party, a person that controls, is controlled by, or is under   common 
    

 

1

 

	
 
    	
 
    	
 
    	
control with, such   Party. For the purposes of this definition, the term “control” means the   beneficial ownership of fifty percent (50%) or more of the voting shares of a   company or other entity, as applicable, or of the equivalent rights to   determine the decisions of such a company or other entity.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Alteration Work”
    	
 
    	
is defined in Clause 5.2(a).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Amended SAT”
    	
 
    	
is defined in   Schedule II Part A Article 2(a)(iii).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Applicable   Re-tender Date”
    	
 
    	
means the   Re-tender Date immediately prior to successful performance of the Delivery   Tests.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Approved   Documents”
    	
 
    	
is defined in Clause 26.3(c).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Availability   Notice”
    	
 
    	
is defined in   Clause 6.2(b).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Ballast Service   Speed”
    	
 
    	
is defined in   Clause 22.1(a)(ii).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Banking Day”
    	
 
    	
means any day when   banks in both Rio de Janeiro and the required place of payment or receipt (as   the case may be) are open for business.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Base Date”
    	
 
    	
means *****.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Bill of Lading”
    	
 
    	
means any bill of   lading, custody transfer sheet, volume certificate and other like document.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Boil-Off”
    	
 
    	
means the vapour   which results from vaporisation of LNG in the Vessel’s cargo tanks.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Boil-Off   Warranty”
    	
 
    	
is defined in   Clause 22.4(b).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Builder”
    	
 
    	
means the Person   performing the Modifications to the Vessel.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Cancelling Date”
    	
 
    	
is defined in   Clause 6.10(e).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Cargo Capacity”
    	
 
    	
means the maximum   safe LNG loading limit of 
    

 

2

 

	
 
    	
 
    	
 
    	
the Vessel as   specified in Schedule I.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Certificate of   Acceptance”
    	
 
    	
means the   certificate of acceptance of the Vessel, the form of which is attached in   Schedule III.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Certificate of   Financial Responsibility”
    	
 
    	
means a   certificate of financial responsibility as required by OPA 90.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Certificate of   Redelivery”
    	
 
    	
means the   certificate of redelivery, the form of which is attached in Schedule III.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Charter   Activities”
    	
 
    	
means the   performance by Owner of its obligations under this Charter and the   performance by Contractor of its obligations under the Operation and Services   Agreement.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Charter Period”
    	
 
    	
means (i) the   Initial Charter Period plus (ii) the First Extension Period, if any and   (iii) the Second Extension Period, if any.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Charterer   Indemnified Parties”
    	
 
    	
means Charterer,   Customer and all Charterer’s and Customer’s respective Affiliates and   Representatives.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Charterer’s   Facility”
    	
 
    	
means any of the   Rio de Janeiro Terminal or Pecém Terminal or any other terminal in Brazil   capable of receiving regasified LNG.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Charterer’s   Facility Delivery Option”
    	
 
    	
is defined in   Clause 6.2(c)(i).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Charterer’s   Personnel”
    	
 
    	
means those   Persons designated by Charterer.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Class” or   “Classification”
    	
 
    	
is defined in   Clause 2.9.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Classification   Society”
    	
 
    	
means an   internationally recognized classification society that is a member of IACS   and that has previous experience of LNG shipping.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Closed Loop Mode”
    	
 
    	
means an LNG   vaporisation system that operates in a closed loop mode using heat 
    

 

3

 

	
 
    	
 
    	
 
    	
generated by the   Vessel’s heating system.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Compensation Fee”
    	
 
    	
means the amount   payable by Charterer to Owner upon early termination of the Charter by   Charterer pursuant to Clause 3.6.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Completion Test”
    	
 
    	
means the   Equipment Test and Regasification Test.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Compulsory   Insurances”
    	
 
    	
is defined in   Schedule IX, Part A, Paragraph 4(a).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Condition   Assessment Programme” or “CAP”
    	
 
    	
means the   programme administered by an internationally recognised classification   society which is a member of IACS (or other similar organisation) providing   an independent evaluation of the condition of the Vessel and issuing a   certificate awarding a CAP rating.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Conditions of   Use”
    	
 
    	
is defined in   Clause 38.1.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Confidential   Information”
    	
 
    	
means the terms   and conditions of this Charter, the Operation and Services Agreement and all   other documents and agreements contemplated thereby, together with any and   all data, reports, records, correspondence, notes, compilations, studies and   other information relating to or in any way connected with this Charter, the   Operation and Services Agreement and all other documents and agreements   contemplated thereby, that is disclosed directly or indirectly by or on   behalf of the disclosing Party or any of its Representatives to the receiving   Party or any of its Representatives, whether such information is disclosed   orally or in writing.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Contractor”
    	
 
    	
means Golar   Serviços de Operação de Embarcações Limitada with its registered office at   c/o Domingues e Pinho Contadores, Avenida Rio Branco, 311 - 4o andar, Centro   - Rio de 
    

 

4

 

	
 
    	
 
    	
 
    	
Janeiro — RJ,   Brasil, CEP 20.040-903.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Coordination   Procedure”
    	
 
    	
is defined in   Clause 2.6(b)(iv).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Customer”
    	
 
    	
means Petróleo   Brasileiro S.A.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Customer’s   Personnel”
    	
 
    	
means those   Persons designated as such by Customer (as notified to Owner by Charterer).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Daily Hire”
    	
 
    	
is defined in   Clause 9.2.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Damages”
    	
 
    	
means   collectively, all claims, liabilities, obligations, losses, damages,   deficiencies, assessments, judgments, penalties, actions, suits,   out-of-pocket costs, expenses and disbursements of any kind or nature   whatsoever (including, without limitation, reasonable attorneys’ fees and   costs and expenses).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Delivery Date”
    	
 
    	
means the date   upon which delivery of the Vessel is accepted by Charterer, as evidenced by   the Parties’ execution of the Certificate of Acceptance.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Delivery   Instructions”
    	
 
    	
is defined in   Clause 6.2(c).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Delivery Test   Protocol”
    	
 
    	
is defined in   Clause 2.6(b)(i).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Delivery Tests”
    	
 
    	
means such   inspection and/or testing of the Vessel as may be required to determine   whether or not the Vessel meets the Required Performance Levels in accordance   with the Delivery Test Protocol.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Designated   Terminal”
    	
 
    	
means (i) the   terminals designated as such in Schedule IV and (ii) such other   terminals from which the Vessel is required to load or discharge LNG pursuant   to a Designated Trades as notified by Charterer to Owner in writing from time   to time.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Designated Trade”
    	
 
    	
means a contract   for sale and purchase of LNG 
    

 

5

 

	
 
    	
 
    	
 
    	
between Charterer   (as either buyer or seller) and a third party (as either seller or buyer) at   a Designated Terminal.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Discharge Rate   Warranty”
    	
 
    	
is defined in   Clause 22.2(b).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Dispute”
    	
 
    	
is defined in   Clause 45.2(a).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“DMA”
    	
 
    	
means marine   distillate fuel A.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“EOP”
    	
 
    	
is defined in   Schedule II, Part A, Article 4(a)(i).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Equipment Test”
    	
 
    	
is defined in   Clause 2.6(a).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Estimate”
    	
 
    	
is defined in   Clause 31.3.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Event of   Charterer’s Default”
    	
 
    	
is defined in   Clause 28.2.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Event of   Contractor’s Default”
    	
 
    	
means the   occurrence of any event that constitutes an “Event of Contractor’s Default”   under the Operation and Services Agreement.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Event of Customer’s   Default”
    	
 
    	
means the   occurrence of any event that constitutes an “Event of Customer’s Default”   under the Operation and Services Agreement.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Event of Owner’s   Default”
    	
 
    	
is defined in   Clause 28.1.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“FAOP”
    	
 
    	
is defined in   Schedule II, Part A, Article 4(a)(ii).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“First Extension   Period”
    	
 
    	
is defined in   Clause 3.2.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Flow Rate   Modulation”
    	
 
    	
*****.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Force Majeure”
    	
 
    	
is defined in   Clause 27.2.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Fuel Consumption   Warranty”
    	
 
    	
is defined in   Clause 22.3.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“fuel”
    	
 
    	
is defined in Schedule II,   Part A, Article 4(a)(iii).
    

 

6

 

	
 
    	
“fuel oil”
    	
 
    	
is defined in   Schedule II, Part A Article 4(a)(iii).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Fuel Oil   Equivalent”
    	
 
    	
refers   collectively to its two components, fuel oil and Boil-Off gas and is measured   in metric tonnes applying the Fuel Oil Equivalent Factor.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Fuel Oil   Equivalent Factor”
    	
 
    	
is defined in   Clause 22.4(a).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Fuel Price”
    	
 
    	
means, with   respect to fuel oil, gas oil or diesel oil, the last price duly documented,   in United States Dollars, paid for each item.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Gas Free”
    	
 
    	
means the Vessel’s   cargo tanks are free of all natural gas vapour and under an atmosphere of   inert gas.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Governmental   Authority”
    	
 
    	
means any   national, regional, state, municipal, local or other government, including   any subdivision, agency, board, department, commission or authority thereof,   including any harbour or marine authority, or any quasi-governmental   organisation therein, having jurisdiction over Owner, Charterer, Contractor,   Customer or the Vessel and acting within its legal authority (except that,   for the purposes of Clause 27.2 (Force Majeure) and Clause 32   (Requisition), Governmental Authority shall include such entities whether or   not they are acting within their legal authority).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Guaranteed Speed”
    	
 
    	
is defined in   Schedule II, Part A, Article 2(a)(iv).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Hague Rules”
    	
 
    	
is defined in   Clause 13.2(b).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Hague Visby   Rules”
    	
 
    	
is defined in   Clause 13.2(b).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Hamburg Rules”
    	
 
    	
is defined in   Clause 13.2(d).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Hire”
    	
 
    	
is defined in   Clause 9.1.
    

 

7

 

	
 
    	
“Hire Commencement   Date”
    	
 
    	
means the date set   forth in the Certificate of Acceptance as the date upon which Hire shall   commence, being the Tender Date, Re-tender Date or Delivery Date, as the case   may be.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Hourly Rate of   Hire”
    	
 
    	
is defined in   Clause 23.2(a).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“IACS”
    	
 
    	
means the   International Association of Classification Societies or any successor body   of the same.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Initial Charter   Period”
    	
 
    	
is defined in   Clause 3.1.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Institute   Warranty Limits” 
    	
 
    	
means trading   limits imposed by the hull insurers on the Vessel. 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“International   Standards”
    	
 
    	
means those   standards and practices from time to time in force applicable to the   ownership, design, equipment, operation or maintenance of LNG tankers   (including tankers with LNG regasification facilities on-board) and berthing   and loading facilities, including, without limitation, those established by   the International Maritime Organisation, the OCIMF, or SIGTTO (or any   successor body of the same) and/or any other internationally recognised agency   or organisation with whose standards and practices it is customary for   international operators of such tankers or facilities to comply.  
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“ISO”
    	
 
    	
means the   International Organisation for Standardisation.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“ISPS Code”
    	
 
    	
is defined in   Clause 44.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Issuing Party”
    	
 
    	
is defined in   Clause 10.6(a).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Laden Service   Speed”
    	
 
    	
is defined in   Clause 22.1(a)(i).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Law”
    	
 
    	
means any law   (including any zoning law or ordinance or any environmental law), treaty,   statute, rule, regulation, ordinance, order, 
    

 

8

 

	
 
    	
 
    	
 
    	
directive, code,   interpretation, judgment, decree, injunction, writ, determination, award,   permit, license, authorisation, direction, requirement, decision or agreement   of, with or by any Governmental Authority.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“LIBOR”
    	
 
    	
means the London   inter-bank offered rate for one-month U.S. dollar deposits which appears on   Reuters BBA Page LIBOR 01 (or such other page as may replace that page for   the purpose of displaying offered rates of leading banks for London   inter-bank deposits as aforesaid) as at 11.00 a.m. (London time) on the   relevant day; provided, however, that if this rate is not available, then the   rate quoted in London for 30-day U.S. dollar deposits by the London head   branch of Barclays Bank plc  at   approximately 11.00 a.m. (London time) on the relevant day for value two (2)   Banking Days later in London, or, if this rate is not available, the rate   published on the relevant date in the Financial Times at which U.S. Dollar   deposits were offered in the London inter-bank market for a period of one (1)   month, or, if this rate is not available, the rate then quoted by such bank   as Owner and Charterer may agree.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“LMAA Rules”
    	
 
    	
is defined in   Clause 45.2(a).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“LNG”
    	
 
    	
means natural gas   liquefied by cooling and which is in a liquid state at or near atmospheric   pressure.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“LNG Heel”
    	
 
    	
means cargo   retained in the cargo tanks of the Vessel on completion of discharge.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“LNG Loading   Terminal”
    	
 
    	
is defined in   Clause 6.6(a).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“LNG Price”
    	
 
    	
is defined in   Clause 49.8.
    

 

9

 

	
 
    	
“LNG SPA”
    	
 
    	
means a contract   for the sale and purchase of LNG between a third party and Charterer (or an   Affiliate thereof) for the loading and/or discharge of LNG on or from the   Vessel (as the case may be).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“LNG Transfer   Procedure”
    	
 
    	
is defined in   Clause 2.6(b)(iv).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Loading Rate   Warranty”
    	
 
    	
is defined in   Clause 22.2(a).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Manager”
    	
 
    	
is defined in the   Operation and Services Agreement.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Master”
    	
 
    	
is defined in the   Operation and Services Agreement.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Measurement   Period”
    	
 
    	
*****.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Modification   Contract”
    	
 
    	
means a   modification contract to be entered into between Builder and Owner in   relation to the Modifications.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Modification   Report”
    	
 
    	
is defined in   Clause 2.3.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Modifications”
    	
 
    	
means the   modifications to be made to the Vessel as required to ensure the Vessel   complies with the Specifications.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Monthly Hire   Invoice” 
    	
 
    	
is defined in   Clause 10.1(a).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Monthly Invoice   Due Date”
    	
 
    	
is defined in   Clauses 10.3(a).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Monthly Invoice   Payment Date”
    	
 
    	
is defined in   Clause 10.3(b).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Mortgage”
    	
 
    	
is defined in   Clause 26.3(b).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Mortgagor”
    	
 
    	
is defined in   Clause 26.3(b).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“MTSA”
    	
 
    	
is defined in   Clause 44.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Nomination   Procedure”
    	
 
    	
is defined in   Clause 2.6(b)(iv).
    

 

10

 

	
 
    	
“OCIMF” 
    	
 
    	
means the Oil   Companies International Marine Forum or any successor body of the same.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“off-Hire”
    	
 
    	
is defined in   Clause 18.1(a).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Off-Hire   Allowance”
    	
 
    	
is defined in   Clause 18.1(b).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Off-Load Payment”
    	
 
    	
is defined in   Clause 6.5(b).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Off-Load Period”
    	
 
    	
is defined in   Clause 6.5(a)(ii).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“OPA 90”
    	
 
    	
means the US Oil   Pollution Act of 1990.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Operation and   Services Agreement”
    	
 
    	
means the   operation and services agreement relating to the Vessel to be entered into   between Customer and Contractor in accordance with Clause 2.12.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Owner Indemnified   Parties”
    	
 
    	
means Owner,   Contractor and all Owner’s and Contractor’s respective Affiliates and   Representatives (including the Master, pilot, officers and crew of the   Vessel).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“P&I Club”
    	
 
    	
means a Protection   and Indemnity Club that is a member of the International Group of P&I   Clubs.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Parent”
    	
 
    	
means Golar LNG   Limited, a company established under the laws of Bermuda and having its   registered office at Par-la-Ville Place, Second Floor, 14 Par-la-Ville Road,   Hamilton HM08, Bermuda.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Party”
    	
 
    	
means Owner or   Charterer, as the case may be (and “Parties” will be construed accordingly).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Pecém Terminal”
    	
 
    	
means the   facilities to be located at Pecém harbour able to receive regasified LNG from   the Vessel.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Performance   Period”
    	
 
    	
is defined in   Clause 23.2.
    

 

11

 

	
 
    	
“Permitted Lien”
    	
 
    	
means:

 

(a)                                   liens for unpaid master’s   and crew’s wages in accordance with usual maritime practice;

 

(b)                                  liens for salvage; and

 

(c)                                   liens for master’s   disbursements incurred in the ordinary course of trading and any other lien   arising by operation of law or otherwise in the ordinary course of the   operation and repair of the Vessel;

 

***** and so long   as the existence of any such proceedings or the continued existence of any   such lien does not involve in the reasonable opinion of Charterer any   likelihood of the sale, forfeiture or loss of, or any interest in, the   Vessel.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Person”
    	
 
    	
means any   individual, firm, corporation, stock company, limited liability company,   trust, partnership, association, joint venture, or other business. 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“place of peril”
    	
 
    	
is defined in   Clause 35.2.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Pollution   Regulations”
    	
 
    	
is defined in   Clause 43.1.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Primary   Terminals”
    	
 
    	
means (i) the   terminals designated as such in Schedule IV and (ii) such other   terminals as may be proposed by Charterer in writing and approved by Owner   from time to time and (iii) any other terminals Charterer may propose, where   compatibility studies show that no extra costs in achieving compatibility as   normally required by the terminal shall be incurred by Owner, including costs   incurred to achieve physical and regulatory compatibility of the 
    

 

12

 

	
 
    	
 
    	
 
    	
Vessel.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Quiet Enjoyment   Agreement”
    	
 
    	
means an agreement   to be entered into pursuant to Clause 26.3(b), substantially in the form   attached as Schedule VIII.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Reais” or “R$”
    	
 
    	
means the lawful   currency of Brazil.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Refurbishment   Work”
    	
 
    	
is defined in   Clause 3.4.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Regas Option”
    	
 
    	
is defined in   Clause 6.5(a)(ii).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Regasification   Equipment”
    	
 
    	
means all   machinery and equipment on board the Vessel relating to the capability of the   Vessel to regasify LNG and discharge regasified LNG, including, but not   limited to, vaporisers, pumps and metering units.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Regasification   Flow Rate”
    	
 
    	
*****.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Regasification   Flow Rate Warranty”
    	
 
    	
is defined in   Clause 22.2(c).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Regasification   Test”
    	
 
    	
means such tests   as may be required to determine whether or not the Vessel is capable of   regasifying LNG and discharging regasified LNG at the maximum Regasification   Flow Rate and to perform the Flow Rate Modulation.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Registry”
    	
 
    	
is defined in   Clause 2.10.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Reimbursement   Invoice”
    	
 
    	
is defined in   Clause 10.1(b).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Reimbursement   Invoice Due Date”
    	
 
    	
is defined in   Clause 10.3(a).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Rejection Date”
    	
 
    	
is defined in   Clause 6.5(a).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Rejection Option”
    	
 
    	
is defined in   Clause 6.4(c)(i).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Relevant Date”
    	
 
    	
means the Monthly   Invoice Due Date, Monthly Invoice Payment Date or Reimbursement Invoice Due   Date, as the case may be.
    

 

13

 

	
 
    	
“Relevant Items”
    	
 
    	
means all   materials, accessories, spare parts and any other goods necessary for the   performance of this Charter and the Operation and Services Agreement.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Remaining LNG”
    	
 
    	
is defined in Clause 6.5(a)(ii).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Repair Option”
    	
 
    	
is defined in Clause 6.4(c)(iii).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Representatives”
    	
 
    	
means, with respect to any Party, such Party’s directors, officers,   employees, agents, representatives, accountants, consultants, attorneys and   advisors.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Required   Performance Levels” 
    	
 
    	
*****.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Re-Sale Buyer”
    	
 
    	
is defined in   Clause 6.5(c)(i).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Re-Sale Option”
    	
 
    	
is defined in   Clause 6.5(a)(ii).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Re-Sale Quantity”
    	
 
    	
is defined in   Clause 6.5(a)(ii).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Re-Sale Terminal”
    	
 
    	
is defined in   Clause 6.5(c)(i).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Re-Sale Voyage   Payment”
    	
 
    	
is defined in   Clause 6.5(d).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Re-tender Date”
    	
 
    	
is defined in   Clause 6.4(c)(C).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Restricted   Periods”
    	
 
    	
is defined in   Schedule II, Part A, Article 2(e)(vi).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Review Date”
    	
 
    	
is defined in   Clause 9.4.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Review Item”
    	
 
    	
is defined in   Clause 2.2(b). 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Rio de Janeiro   Terminal”
    	
 
    	
means the   facilities located at Rio de Janeiro harbour able to receive regasified LNG   from the Vessel.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“R.O.F. Code”
    	
 
    	
is defined in   Clause 2.20(b)(i).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Scheduled Arrival   Time” or 
    	
 
    	
is defined in   Schedule II, Part A, Article 2(a).
    

 

14

 

	
 
    	
“SAT”
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Scheduled   Delivery Date”
    	
 
    	
means 11 April   2008 (as may be amended pursuant to Clause 2.7 and Clause 6).  
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Scheduled   Drydocking”
    	
 
    	
is defined in   Clause 20.1.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“SECA”
    	
 
    	
means a Sulphur   Emissions Controlled Area as defined in Annex VI of the International   Convention for the Prevention of Pollution from Ships (MARPOL).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Second Extension   Period”
    	
 
    	
is defined in   Clause 3.3.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Security   Documents”
    	
 
    	
means (i) the   Approved Documents; (ii) all documents or instruments executed by any Person   granting security (or similar) rights over or in connection with the Vessel;   and (iii) any document or instrument executed in connection with the   foregoing. 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Service Speed”
    	
 
    	
means the Laden   Service Speed, Ballast Service Speed or Minimum Service Speed, as   appropriate, as such terms are used in Clause 22.1 or Schedule I.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Shipyard”
    	
 
    	
means the   Builder’s facilities at which Builder will perform the Modifications.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Shipyard Delivery   Option”
    	
 
    	
is defined in   Clause 6.2(c)(iii).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Shipyard Force   Majeure”
    	
 
    	
means any event   that is an event of “Force Majeure” as defined pursuant to the Modification   Contract. 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“SIGTTO”
    	
 
    	
means the Society   of International Gas Tanker and Terminal Operators or any successor body of   the same.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Special Customs   Regime”
    	
 
    	
means, strictly   for the purpose of this Charter and the Operation and Services Agreement, a   special customs regime that imposes a 
    

 

15

 

	
 
    	
 
    	
 
    	
differentiated   regime for temporary admission of goods into Brazil, that may be used to   alleviate or reduce the tax burden on the import of goods destined for the   storage, regasification, transfer or transport of liquefied natural gas and   natural gas.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Specifications”
    	
 
    	
means the   Particulars of the Vessel set forth in Schedule I (including the General   Technical Description) and the other provisions of this Charter.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Speed Performance   Warranty”
    	
 
    	
is defined in   Clause 22.1.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Tax”
    	
 
    	
means all forms of   taxation and statutory, governmental, state, provincial, local governmental   or municipal impositions, duties, contributions and levies, in each case, in   the nature of taxation including (without limitation), corporation tax,   supplementary charge, petroleum revenue tax, income taxes, sale taxes, use   taxes, stamp duty, transfer taxes, gross income taxes, value added taxes,   social contribution taxes, employment taxes, government royalties, customs   duties, excise duties, environmental taxes, and levies and withholding taxes   together with all penalties and interest relating thereto and any penalties   and surcharges in respect of the associated reporting requirements relating   to the movement of goods and provision of services, wherever or whenever   imposed.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Temporary   Admission Regime”
    	
 
    	
means the customs   and tax regime under applicable Brazilian Law that permits the entry of goods   and/or assets arriving from abroad without tax burdens arising from import   operations, or with a reduced tax burden proportional to the period during   which the 
    

 

16

 

	
 
    	
 
    	
 
    	
goods will remain   in the country.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Tender Date”
    	
 
    	
is defined in   Clause 6.4(a).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Terminal   Operator”
    	
 
    	
means the operator   of each Primary Terminal and each Designated Terminal.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“time”
    	
 
    	
is defined in   Clause 18.2(b).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“United States” or   “US”
    	
 
    	
means the United   States of America.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“United States   Dollars”, “$” or “US$”
    	
 
    	
means the lawful   currency of the United States of America.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“VCP Daily Rate”
    	
 
    	
is defined in   Clause 6.6(d).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“VCP Option”
    	
 
    	
is defined in   Clause 6.2(c)(ii).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Vessel”
    	
 
    	
is defined in   Clause 2.1.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Voyage”
    	
 
    	
is defined in   Schedule II, Article 4(b).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Voyage Charter   Party” or “VCP”
    	
 
    	
is defined in   Clause 6.6(a).
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
“Voyage Reports”
    	
 
    	
is defined in   Clause 23.3.
    

 

1.2                                 Interpretation

 

(a)                                  Unless the context otherwise requires, a reference to the singular shall include a reference to the plural and vice-versa, and a reference to any gender shall include a reference to the other gender.

 

(b)                                 The Schedules attached hereto shall form part of this Charter and in the event of any conflict between the body of this Charter and the Schedules, the body shall prevail.  Unless the context otherwise requires, a reference to the preamble, any clause, schedule or article shall be to the preamble, Clause, Schedule or Article (forming part of a Schedule) of this Charter.

 

(c)                                  The headings of the Clauses and Schedules in this Charter are inserted for convenience of reference only and shall not affect the meaning or interpretation of this Charter.

 

(d)                                 The words ‘include’ or ‘including’ shall be deemed to be followed by ‘without

 

17

 

limitation’ or ‘but not limited to’ whether or not they are followed by such words.

 

(e)                                  Any reference to a ‘day’ shall be construed as a reference to a calendar day.

 

(f)                                    Any reference to the calendar shall be construed as reference to the Gregorian calendar.

 

(g)                                 This Charter may be executed in the English and Portuguese languages, provided that, if there is any discrepancy between the English and Portuguese versions, the English language version shall prevail.

 

(h)                                 Any reference in this Charter to this Charter or any other agreement or document is a reference to this Charter or, as the case may be, the relevant other agreement or document as from time to time amended, supplemented or novated.

 

2.                                      Vessel to Be Chartered

 

2.1                                 The Vessel

 

The vessel to be hired for services under this Charter is mv Golar Spirit, IMO number 7373327, including its appurtenances, machinery, equipment and fittings (the “Vessel”).  On or after the date hereof, Owner shall procure that the Vessel is modified so as to comply with the Specifications.

 

2.2                                 Vessel Documents and Model

 

(a)                                  At no cost to Charterer, within ***** of entering into this Charter, Owner shall provide to Charterer two (2) true and complete copies of the plans, diagrams, drawings, specifications and manuals relating to the Vessel.

 

(b)                                 At no cost to Charterer, no later than ***** prior to the Scheduled Delivery Date, Owner shall provide to Charterer two (2) true and complete copies of the plans, diagrams, drawings, specifications and manuals relating to the Modifications, including the Regasification Equipment (each, a “Review Item”).

 

(c)                                  At no cost to Charterer, Owner shall:

 

(i)                                     within ***** of receipt by Owner of any updated, amended or final Review Item from Builder, Owner shall deliver to Charterer two (2) 

 

18

 

true and complete copies thereof; and

 

(ii)                                  provide to Charterer one model (with a scale of no less than 1:200) of the Vessel (incorporating the Modifications) and one 3D model designed in AutoCad studio (.3DS) format.

 

2.3                                 Modification Reports.

 

Owner shall provide Charterer with a monthly report (each a “Modification Report”) advising on the status of the Modifications, including, where applicable, Owner’s estimate of the period of any delay in delivery of the Vessel under this Charter and any other material developments relating to the Modifications.  The first Modification Report shall be provided by Owner one (1) month after the commencement of the Modifications.

 

2.4                                 Monitoring of Vessel Modification

 

(a)                                  As and when requested in writing by Charterer, Owner shall meet with Charterer and Customer at Owner’s facilities or at the Shipyard (or such other place mutually acceptable to the Parties) for the purpose of evaluating the progress of the Modifications.  Owner shall procure that Builder shall permit Charterer, Customer and a reasonable number of Charterer’s Personnel and Customer’s Personnel to be present at the Shipyard for such purposes; provided that any such meetings at the Shipyard shall occur during ordinary working hours and shall not unduly obstruct the normal or orderly modification of the Vessel.

 

(b)                                 Notwithstanding anything to the contrary in this Charter or the Operation and Services Agreement, neither the exercise nor the non-exercise (nor anything done or not done in the exercise or non-exercise) by Charterer or Customer of any respective right to monitor the Vessel or the Modifications, or any right of inspection or attendance or otherwise (including the receipt and review of any plans, drawings or instruction manuals relating to the Vessel or Regasification Equipment or any part thereof) in relation thereto shall (a) create or impose any obligation or liability whatsoever on Charterer or Customer with respect to the Vessel or the Modifications, (b) in any way affect or alter Charterer’s or Customer’s obligations or liabilities under this Charter or the Operation and Services Agreement or (c) in any way affect Owner’s responsibility and liability under this Charter.

 

19

 

2.5                                 Notice of Tests and Trials

 

Owner shall promptly notify Charterer and Customer of all tests and trials of the Vessel, its equipment and components (including the Equipment Test and Regasification Test) and procure that the Builder permits Charterer, Customer, Charterer’s Personnel and Customer’s Personnel to attend such tests and trials.

 

2.6                                 Tests and Programmes

 

(a)                                  Equipment Test

 

Owner shall procure that the Regasification Equipment (and each part thereof) is tested by Builder at the Shipyard to ensure compliance with the Regasification Equipment manufacturer’s recommendations and Classification Society requirements (the “Equipment Test”).  The Equipment Test shall be conducted at Builder’s or Owner’s cost and expense.

 

(b)                                 Regasification Test and Operations Programme

 

(i)                                     No later than ***** before the Scheduled Delivery Date, Owner shall deliver to Charterer a programme for testing the performance of the Vessel upon delivery, including the performance of the Delivery Tests (the “Delivery Test Protocol”).  Such Delivery Test Protocol shall include, in reasonable detail, technical and operational information relevant to such testing.  The Parties agree to use their respective best endeavours to agree and conclude such Delivery Test Protocol no later than ***** prior to the Scheduled Delivery Date.

 

(ii)                                  Owner shall conduct the Regasification Test at the Charterer’s Facility nominated by Charterer in the Delivery Instructions.  The Regasification Test shall be conducted at Owner’s cost and expense; provided that Charterer shall be solely responsible for purchasing (at Charterer’s sole cost) such LNG required to perform the Regasification Test.

 

(iii)                               No later than ***** before the Scheduled Delivery Date, Owner shall deliver to Charterer an operations manual providing (in reasonable detail) details as to the operation of the Regasification Equipment and the Vessel in order to ensure that regasified LNG is available to be 

 

20

 

discharged from the Vessel as may be required pursuant to this Charter.

 

(iv)                              No later than ***** before the Scheduled Delivery Date, the Parties shall agree the procedures to be used by (A) Owner (or Contractor), Charterer (or Customer) and any other LNG vessel for the transfer of LNG from such other LNG vessel to the Vessel (the “LNG Transfer Procedure”), (B) Owner (or Contractor) and Charterer (or Customer) for the request for delivery, and delivery, as the case may be, of regasified LNG under this Charter and the Operation and Services Agreement (such procedure, the “Nomination Procedure”) and (C) the Coordination between the LNG Transfer Procedures and the Nomination Procedures (the “Coordination Procedure”).

 

(c)                                  Rectification of Defects

 

In circumstances where the Vessel fails any Completion Test, Owner shall, or shall procure that Builder (or the Person otherwise responsible therefore) shall, correct any such defect or nonconformity prior to delivery of the Vessel under this Charter at no cost to Charterer.  If any such corrective work causes the delivery of the Vessel to be delayed, the provisions of Clause 6.10 shall apply.

 

(d)                                 Restriction on voyages

 

Other than in connection with the tests and trials or as otherwise permitted under this Charter, Owner shall not direct or permit the Vessel to perform any voyage or to transport LNG from the time of delivery of the Vessel to the Builder until the later of the Delivery Date and, if the Vessel is not accepted by Charterer, the date this Charter terminates.

 

2.7                                 Additional Changes

 

Owner shall approve and shall use all reasonable endeavours to procure that Builder undertakes to change or modify the Modifications as may be requested in writing by Charterer, including any changes required to meet the ship/shore requirements of the Primary Terminals or Designated Terminals; provided that any consequential adjustments or revision of the deadweight, cargo tank capacity, Boil-Off Rate, Regasification Flow Rate, speed, fuel consumption or any other changes to the Specifications of the Vessel are expressly agreed in writing between Charterer and Owner before Builder undertakes such changes.  All costs reasonably incurred by 

 

21

 

Owner with respect to such changes shall be allocated between Owner and Charterer in accordance with Clause 5.2.  In the event that such changes cause delay in the modification of the Vessel, the Scheduled Delivery Date shall be extended by the period of delay directly resulting from such changes.

 

2.8                                 Vessel Inspection

 

(a)                                  Charterer and Charterer’s Personnel shall have the right to inspect the Vessel (i) upon its arrival at the Charterer’s Facility and (ii) from time to time during the Charter Period, upon reasonable prior written notice by Charterer to Owner.  Such right referred to in (ii) above may be exercised as often and at such intervals as Charterer in its absolute discretion may determine and whether the Vessel is in port or on passage.  Such inspections shall include, but not be limited to, access to and examination of the Vessel’s hull and ballast tanks, the Regasification Equipment, compressor rooms, engine rooms, cargo control rooms, navigation bridge and deck areas.  Such inspections shall also include access to and the right to inspect the Vessel’s deck and engine scrap/rough and fair copy/official log books, all on board construction records and schedules, records of surveys by the Classification Society (and any relevant Governmental Authority) and the Vessel’s operating procedures.

 

(b)                                 Owner shall provide to Charterer up to date and accurate information on the Vessel’s performance history, including any material accidents or incidents in which the Vessel has been involved as well as up to date and accurate information on the Vessel’s performance from original delivery, including in relation to speed, fuel consumption, Boil-Off and LNG loading and discharge rates.  Owner shall allow Charterer or Charterer’s Personnel to survey and take samples of all the Vessel’s fuel tanks and cofferdams at loading, discharge and/or bunkering ports.  Charterer shall also have the right, as often and at such intervals as Charterer elects, on reasonable notice, to inspect and copy the Vessel’s Class and related records maintained by the Classification Society.  Owner shall, upon request of Charterer, promptly arrange with the Classification Society for such inspection(s) and copying.  Owner shall afford all necessary co-operation and accommodation in respect of the above rights of inspection; provided, however:

 

(i)                                     that neither the exercise nor the non-exercise, nor anything done or not done in the exercise or non-exercise, by Charterer of such right shall in any way reduce the Master’s or Owner’s authority over, or

 

22

 

responsibility to Charterer or third parties for, the Vessel and every aspect of her operation, nor increase Charterer’s responsibilities to Owner or third parties for the same;

 

(ii)                                  that Charterer shall not be liable for any act, neglect or default by itself, its servants or agents in the exercise or non-exercise of such rights;

 

(iii)                               that all reasonable costs incurred in relation to such inspection shall be for Charterer’s account; provided that any costs have been disclosed to and approved by Charterer in advance;

 

(iv)                              that any inspection carried out by Charterer shall be made without interference or hindrance to the Vessel’s safe and efficient operation, and shall be limited to a maximum of six (6) persons; and

 

(v)                                 that any overnight stays shall be subject to the provisions of Clause 9 in the Operation and Services Agreement.

 

(c)                                  Owner agrees to provide to Charterer or Charterer’s Personnel such information regarding the Vessel as may be reasonably necessary to verify the compatibility of the Vessel to each Primary Terminal and, as may be required by Charterer during the Charterer Period, each Designated Terminal.  Such information shall include drawings with sufficient detail to allow Charterer, any LNG seller or buyer and the applicable Terminal Operator to evaluate the compatibility of gangways, unloading arms, communications systems, mooring lines, breasting points, information regarding the Vessel’s compliance with laws applicable at each such Primary Terminal or Designated Terminal (as the case may be), the Vessel’s unloading rate, maximum draft and other physical dimensions.  Subject to Clause 5.2, the cost of any modification to the Vessel required to ensure the Vessel complies with the Specifications shall be for the account of Owner.

 

(d)                                 Subject to (i) Charterer’s satisfaction that the Vessel is in all respects as described in the Specifications and as warranted under this Charter and (ii) Charterer’s right to reject the Vessel pursuant to Clause 6.3, Charterer shall accept the Vessel at Charterer’s Facility upon its tendered delivery under this Charter.  Satisfaction of the above shall be evidenced by the execution and

 

23

 

delivery by the Parties of a Certificate of Acceptance as required pursuant to Clause 6.11.

 

(e)                                  Once the Vessel has been accepted by Charterer pursuant to this Clause 2.8 and without the Charterer’s prior written consent, Owner shall not, and shall not permit any other Person to, modify the Vessel in any manner whatsoever that would render it not in conformity with this Charter.

 

2.9                                 Vessel Classification

 

Owner shall cause the Vessel to be classed by the Classification Society as provided in Schedule I (“Class” or “Classification”).  Such Class shall be maintained by Owner throughout the Charter Period, unless the Parties otherwise agree to change the Class.  Any cost for change in Class prior to delivery of the Vessel under this Charter shall be for Owner’s account unless requested by Charterer, in which case the cost shall be for Charterer’s account.  Any cost for change in Class after delivery of the Vessel under this Charter shall be for the account of the Party who requests the Change of Class.

 

2.10                           Vessel Registry

 

Owner shall cause the Vessel to be registered under the laws and flag of the country specified in Schedule I (the “Registry”).  Such Registry shall be maintained by Owner throughout the Charter Period, except as may otherwise be agreed between Charterer and Owner.  Consent by either Party to the other Party’s request for any change of Registry shall not be unreasonably withheld.  All costs incurred in relation to a change in Registry prior to delivery of the Vessel under this Charter shall be for Owner’s account unless requested by Charterer, in which case the cost shall be for Charterer’s account.

 

2.11                           Name Change and Marking of Vessel

 

(a)                                  If Charterer requires a change in the name of the Vessel, such request for a change in the Vessel name not to be made later than ***** before the Scheduled Delivery Date, Owner shall at Charterer’s expense change the name of the Vessel in accordance with Charterer’s instructions.

 

(b)                                 Charterer may fly its house flag and paint the Vessel’s funnel, hull and superstructure with its own colours and affix thereto Charterer’s insignia.

 

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2.12                           Identity of Contractor

 

The Owner shall procure that the Contractor shall enter into the Operation and Services Agreement no later than ***** after the date hereof, such Person to be acceptable to Charterer as evidenced by Charterer ́s prior written consent, such consent not to be unreasonably withheld.

 

2.13                           Owner’s Responsibility

 

Except as expressly provided otherwise in this Charter, the exercise by Charterer of any rights it may have under this Charter in relation to the Vessel shall not affect or alter (a) the responsibility of Owner to deliver the Vessel in accordance with this Charter and the Specifications or (b) any other rights Charterer may have hereunder.

 

2.14                           Responsibility to Builder

 

Neither Charterer nor Customer shall have any responsibility for Owner’s performance of its obligations under the Modification Contract and Owner shall hold Charterer, Customer, Charterer’s Personnel and Customer’s Personnel harmless from and indemnify Charterer, Customer, Charterer’s Personnel and Customer’s Personnel against any claim and/or liability made by Builder or any other Person in respect of the Modification Contract or Owner’s performance thereunder.

 

2.15                           Importation of the Vessel

 

On behalf of Charterer, Owner (or a representative appointed by Owner) shall make arrangements directly with all competent bodies for the regular entry of the Vessel and all Relevant Items into Brazil.  Owner shall make arrangements, at Owner’s cost and expense, for the release, survey and registration of the Vessel and all Relevant Items, and the granting of the Temporary Admission Regime in respect of the Vessel and all Relevant Items.  The entry of the Vessel and all Relevant Items under the Temporary Admission Regime shall be in accordance with the terms of this Charter, the Operation and Services Agreement and all applicable Laws.

 

2.16                           Grant of the Temporary Admission Regime

 

(a)                                  Owner undertakes to:

 

(i)                                     send to Charterer, within ***** after customs clearance, copies of all import documents, including the Import Declaration (“Declaração de Importação”), supporting entry of the Vessel and all Relevant Items into Brazil;

 

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(ii)                                  if a new regime comes into force and/or is offered to the Vessel, and where requested by Charterer (and at Charterer’s cost) make all necessary arrangements for transferring the Vessel and all Relevant Items to a more beneficial regime than the one originally granted at the time of the Vessel’s entry into Brazil; and

 

(iii)                               provide to Charterer copies of all documents relating to the transfer of the Vessel and all Relevant Items from the original regime to a more beneficial regime, if applicable; and

 

(iv)                              comply with and observe all customs and import requirements, in particular the deadlines established by Law, and maintain all necessary records relating to the import of the Vessel and all Relevant Items admitted under the Temporary Admission Regime, and Owner shall be liable for any violations of such obligations and subsequent termination of the Temporary Admission Regime, if applicable.

 

(b)                                 If Charterer makes an express request to the Owner for the Vessel and all Relevant Items to be imported on a permanent basis, any Taxes applicable to and payable in respect of the Vessel and all Relevant Items which were suspended by the adoption of the Temporary Admission Regime and which then become due and payable, shall be advanced or reimbursed by Charterer against documentary evidence.

 

2.17                           Foreign Trade

 

(a)                                  On behalf of the Charterer, Owner shall import and, as necessary, export the Vessel and all Relevant Items and/or any other goods or materials expressly requested by Charterer.

 

(b)                                 Owner shall submit to Charterer every ***** commencing from the Delivery Date, or whenever required by a Governmental Authority or by Charterer, an updated list of all goods imported into Brazil and exported from Brazil in relation to this Charter and the Operation and Services Agreement.

 

(c)                                  Owner shall not be entitled to use, transfer, lend or rent the Vessel or any Relevant Items for any other purpose or agreement other than the performance of this Charter and the Operation and Services Agreement.

 

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(d)                                 Owner shall have sole responsibility and liability for (i) all costs related to the importation of the Vessel and all Relevant Items under the Temporary Admission Regime and the Vessel’s and all Relevant Items return abroad under this Charter, and (ii) the customs clearance of Relevant Items, including storage and warehousing rates and any other related expenses.

 

(e)                                  Charterer shall only be required to pay the Taxes (i) in relation to the Temporary Admission Regime and any new Temporary Admission Regime, if such a regime is imposed by Governmental Authorities or if the Vessel is transferred to a more beneficial regime as requested by Charterer pursuant to Clause 2.16(a)(ii), and (ii) in the event that the Vessel (or any Relevant Items) departs and returns to Brazil either at Charterer’s request or for Scheduled Drydocking at any time during the Term of this Charter.  Notwithstanding the immediately preceding sentence, if the Vessel (or any Relevant Items) departs from Brazil for any other reason than at the request of Charterer or for Scheduled Drydocking (including any drydocking, repairs or maintenance which is not considered Scheduled Drydocking under this Charter) the costs, expenses and Taxes related to any Temporary Admission Regime imposed by Governmental Authorities shall be for Owner’s account.

 

(f)                                    In the event this Charter is terminated, the Vessel and all Relevant Items shall depart from Brazil as soon as the Vessel has been redelivered to Owner in accordance with the provisions of this Charter, and Owner shall immediately apply for termination of the Temporary Admission Regime and deliver to the Charterer certified copies of all customs clearance documents.  Subject to Charterer’s obligation to pay any Taxes relating to the Vessel’s importation in accordance with Clauses 2.17(e) and (h), Owner shall be solely responsible for any costs, expenses or other liabilities in relation to any Taxes imposed, if any, or any other expenses incurred after termination, except where Clause 2.17(g) applies.

 

(g)                                 Where this Charter is terminated due to an Event of Charterer’s Default or at Charterer’s convenience in accordance with Clause 3.6, Charterer shall be responsible for any costs, expenses or other liabilities incurred in relation to any Taxes imposed, if any, or any other expenses incurred after termination provided that Vessel (and all Relevant Items) departs Brazilian waters as soon as is reasonably practicable and in compliance with safety and other applicable regulations upon such termination.

 

27

 

(h)                                 Notwithstanding that it is the responsibility of Charterer to pay any Taxes in relation to the Temporary Admission Regime, Owner is obliged to deliver in advance to Charterer the necessary documents to facilitate such payments, in order that Charterer may effect such payments without incurring delay. If Owner fails to present such documents and as a consequence Charterer is subject to the payment of any penalty or interest due to the delay, then Owner shall promptly reimburse Charterer for any such additional amounts.

 

2.18                           Special Customs Regime

 

(a)                                  Owner undertakes to comply with and shall be responsible for any and all obligations, regulations and/or requirements of the applicable tax authorities, and to take any actions or measures deemed necessary by the same, in relation to the granting, amendment or cancellation of the Special Customs Regime for the import and/or export of the Vessel and all Relevant Items, and Charterer shall reimburse Owner for all costs and expenses incurred therein.

 

(b)                                 Owner shall, in a timely manner and on behalf of Charterer, request from the competent tax authority the grant of the Special Customs Regime, if applicable, for the Vessel and all Relevant Items, including any goods required for replacement or repair of other goods already brought into the country.  Owner shall immediately notify Charterer when the Special Customs Regime is granted.

 

(c)                                  In the event that, following import of the Vessel into Brazil, a customs regime is granted that is more beneficial to the Parties than the Special Customs Regime adopted pursuant to Clause 2.18(b), Owner shall, upon receipt of a request from Charterer, apply on behalf of Charterer (but at Charterer’s cost) to the applicable tax authority for a transfer of the Vessel and/or all Relevant Items to the new customs regime as soon as possible.

 

(d)                                 Owner shall be liable for all costs and expenses incurred as a result of non-compliance with this Clause 2.18.

 

2.19                           Miscellaneous

 

(a)                                  Owner undertakes to maintain general and permanent control of the Vessel and all Relevant Items and shall be liable for all related costs and expenses thereto.

 

(b)                                 Owner shall comply with the Normative Ruling from the Federal Revenue 

 

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Office (Brazil) no. 285 of January 14, 2003 and any amendments thereto, regarding the Vessel and all Relevant Items admitted under the Temporary Admission Regime, and with the specific rules of any special regimes that may be enacted during the Charter Period which may apply to this Charter.  Charterer shall provide the requisite security pursuant to such Normative Ruling or, in the event that Owner has provided such security, shall indemnify Owner accordingly.

 

(c)                                  In order to allow Owner to take the measures referred to in Clauses 2.15, 2.16, 2.17, 2.18 and 2.19, Charterer shall grant to a customs clearance agent appointed by Owner (and approved by Charterer) a power of attorney granting such person specific powers to act on Charterer’s behalf in executing and performing Charterer’s obligations under this Charter in accordance with the requirements of, and in the standard required by, the Federal Revenue Office.  Owner undertakes to supervise the customs clearance agent with due diligence.  *****

 

(d)                                 Owner shall be liable for any actions or measures deemed necessary by the relevant governmental agencies in relation to any and all import licenses, Import Declarations and export registrations relating to the Vessel and all Relevant Items.

 

(e)                                  Owner shall, at Charterer’s request, submit evidence of Charterer’s compliance with all import/export regimes imposed (including any necessary record keeping) and the regular standing of the operations, regarding import and/or export of the Vessel and all Relevant Items.

 

(f)                                    For avoidance of doubt, any eventual costs, expenses and Taxes incurred by Charterer due to Owner’s failure in controlling and maintaining proper documentation in relation to importation and exportation of the Relevant Items will be for Owner’s account.

 

2.20                           Conditions Precedent

 

(a)                                 Charterer’s obligation to pay Hire under this Charter shall be conditional upon Owner providing Charterer with all necessary documentation to enable Charterer to apply for a Register of Financial Operations  code (Registro de Operacoes Financeiras) (the “R.O.F. Code”) as required pursuant to Brazilian Law, the Operation and Services Agreement or any other documents or agreements executed in connection with the Vessel.

 

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(b)                                If and to the extent that any Vessel inspections (of any kind) are required in order for Owner to provide Charterer with such documents required pursuant to Clause 2.20(a), then Owner shall (or shall procure that Contractor shall) submit the Vessel for all necessary inspections to enable the Charterer to apply for such R.O.F. Code.

 

(c)                                 If and to the extent Charterer is required to deliver to Owner any documents or to take any actions, in each case, as required under this Charter in order to permit Charterer to obtain the above referenced R.O.F. Code, then Charterer hereby agrees to provide such documents or perform such acts without unreasonable delay.  Further, Charterer agrees to submit the application for the R.O.F. Code promptly upon receipt of all necessary documentation for the same from Owner.

 

3.                                      Charter Period

 

3.1                                 Charter Period

 

Subject as provided in this Clause 3 and Clauses 6 and 27, the term of this Charter shall be ten (10) years commencing from the Delivery Date (the “Initial Charter Period”).

 

3.2                                 First Extension Period

 

Charterer shall have the right to continue chartering the Vessel at the end of the Initial Charter Period for a period of up to thirty six (36) months (the “First Extension Period”).  Charterer shall notify Owner of its election to exercise such right in writing not later than six (6) months prior to the end of the Initial Charter Period, and such notice shall specify the last date of such First Extension Period.  The terms and conditions of this Charter shall continue to apply during the First Extension Period.  Owner shall obtain all necessary authorisations, licences, tax regularisations and any other legal or contractual requirements as may be required for such extension.

 

3.3                                 Second Extension Period

 

Charterer shall have the right to continue chartering the Vessel at the end of the First Extension Period for a period of up to twenty four (24) months (the “Second Extension Period”).  Charterer shall notify Owner of its election to exercise such right in writing not later than six (6) months prior to the end of the First Extension Period and such notice shall specify the last date of such Second Extension Period.  The terms and conditions of this Charter shall continue to apply during the Second

 

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Extension Period.  Owner shall obtain all necessary authorisations, licences, tax regularisations and any other legal or contractual requirements as may be required for such extension.

 

3.4                                 Refurbishment Work

 

Either Party may request a longevity study of the Vessel to be conducted by an expert reasonably acceptable to Owner and Charterer to ascertain (a) the remaining useful life of the Vessel, (b) any refurbishment or other work (the “Refurbishment Work”) required to enable the Vessel to be used by Charterer for the Second Extension Period and (c) the cost of any such Refurbishment Work.  The cost of such study and any Refurbishment Work will be borne by Owner.

 

3.5                                 Extension for Time Off-Hire

 

Any time during which the Vessel is off-Hire for Scheduled Drydocking shall be added to the Initial Charter Period.  Any time during which the Vessel is off-Hire for any other reason (up to the total amount of off-Hire time) may be added to the Charter Period at Charterer’s option, such option shall be exercised by Charterer no later than ***** before the date on which this Charter would otherwise terminate.  Where such option is exercised, the Rate of Hire for any such extension period shall be that prevailing at the time this Charter would, but for the provisions of this Clause 3.5, have terminated by effluxion of time.  Any periods of off-Hire occurring after the time and date on which Charterer has declared its option may also be added to the Charter Period.

 

3.6                                 Early Termination Rights

 

Charterer shall have the right to terminate this Charter at any time after the fifth (5th) anniversary of the Delivery Date upon payment of the relevant Compensation Fee to Owner.  Charterer may exercise such right by providing six (6) months’ prior written notice thereof to Owner.  The Compensation Fee payable by Charterer to Owner on early termination pursuant to this Clause 3.6 shall be determined as follows:

 

(a)                                  where Charterer terminates this Charter on any of the ***** through ***** anniversaries of the Delivery Date, the Compensation Fee shall be the amount set forth next to such date in Schedule V; and

 

(b)                                 where Charterer terminates this Charter on date other than the ***** anniversaries of the Delivery Date in between the ***** and ***** anniversaries of the Delivery Date, the Compensation Fee shall be the amount 

 

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determined in accordance with the following formula:

 

*****

 

Where, at any point in time:

 

*****             *****

 

*****             *****

 

*****             *****

 

Charterer hereby agrees that if it serves an early termination notice on Owner pursuant to this Clause 3.6 it shall procure that Customer shall (at the same time) serve an early termination notice on Contractor pursuant to Clause 2.5 of the Operation and Services Agreement.  Similarly, Charterer agrees that if Customer serves a termination notice on Contractor pursuant to Clause 2.5 of the Operation and Services Agreement, Charterer shall, at the same time, serve a termination notice on Owner pursuant to this Clause 3.6.

 

3.7                                 Transfer of Title

 

If, at any time during the Charter Period, title to the Vessel is transferred with the prior written consent of the Charterer, then the Parties agree that:

 

(i)                                          where such transfer is to an Affiliate of Owner then this Charter shall continue in full force and effect between Owner’s Affiliate and Charterer; and

 

(ii)                                       where such transfer is to any other Person then this Charter shall immediately terminate and shall cease to have effect (except for the obligations in Clause 46 (Confidentiality)) and no Party shall, save in relation to any accrued rights or obligations as at such date, have any rights or liabilities under this Charter.

 

3.8                                 Co-termination

 

Without prejudice to Clause 3.6 and Clause 2.5 of the Operation and Services Agreement, the Parties hereby agree (a) that if this Charter terminates or is terminated by either Party for any reason whatsoever, then (i) Owner shall procure that Contractor terminates the Operation and Services Agreement and (ii) Charterer 

 

32

 

shall procure that Customer terminates the Operation and Services Agreement, in each case, with effect on the same date as this Charter so terminates, and (b) if the Operation and Services Agreement terminates for any reason whatsoever, then this Charter shall automatically terminate on the same date as the Operation and Services Agreement so terminates.

 

4.                                      Vessel Specifications and Characteristics

 

4.1                                 Owner’s Representations and Warranties

 

The Owner represents and warrants to Charterer in respect of the Vessel that at the Delivery Date, and throughout the Charter Period:

 

(a)                                  the Vessel has been modified in accordance with the Modification Contract and shall be classed by the Classification Society;

 

(b)                                 she shall comply with the requirements relating to CAP rating in accordance with Clause 4.6;

 

(c)                                  she shall be in every way fit and ready to load, handle, carry, discharge and measure LNG and to discharge regasified LNG, respectively, safely and in bulk and shall be suitable for all operations (including trading LNG) as contemplated in this Charter;

 

(d)                                 she shall be compatible with (i) the Primary Terminals and each Designated Terminal for berthing, unberthing, loading and discharging LNG cargo and (ii) the Rio de Janeiro Terminal and Pecém Terminal for berthing, unberthing, loading LNG and discharging regasified LNG, in each case without modification to the Vessel;

 

(e)                                  she shall be tight, staunch, strong, in good order and condition and in every way fit for service under this Charter including conditions prevailing at and around the Primary Terminals and each Designated Terminal, with her machinery, boilers, hull, cargo storage system, and other equipment (including but not limited to hull stress calculator, radar, computers and computer systems) in a good and efficient state;

 

(f)                                    her tanks, valves and pipelines shall be free of debris or other foreign matter and shall be liquid and gas tight;

 

(g)                                 she shall be in every way fitted for burning, in accordance with the grades specified in Clause 7.3:

 

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(i)                                          at sea, fuel oil in any proportion with Boil-Off for main propulsion and fuel oil or marine diesel oil for auxiliaries;

 

(ii)                                       in port, fuel oil in any proportion with Boil-Off in her boilers and marine diesel oil for auxiliaries;

 

(h)                                 she shall have her insulation spaces prepared as per her containment system design conditions;

 

(i)                                     she shall comply with the regulations in force so as to enable her, if her size permits, to pass through the Suez Canal by day and night without delay;

 

(j)                                     she shall have on board all certificates, documents, approvals, permits, permissions and equipment required from time to time by the Classification Society or any Law (including but not limited to the Vessel’s Certificate of Financial Responsibility), as may from time to time be necessary to enable the Vessel to enter, carry out all required operations (including load and unload LNG and discharge regasified LNG, as the case may be) at and leave, without delay or hindrance, all Primary Terminals, ports or places to which the Vessel may be directed under the terms of this Charter (as the case may be), and Owner hereby expressly confirms that it shall indemnify Charterer for any losses, damages, delays or expenses incurred by Charterer attributable to any failure by the Vessel to have on board any such valid documentation, authorisations, approvals, permits and permissions as aforesaid;

 

(k)                                  she is registered under the name specified in Schedule I and in the ownership of the Legal Owner under the laws of the Registry and shall comply in all material respects with the laws, regulations, treaties and conventions and other requirements in force for foreign flag vessels trading to Brazil and other countries in which she navigates and operates pursuant to and during the term of this Charter;

 

(l)                                     she shall comply with the Specifications (including the General Technical Description);

 

(m)                               her ownership structure, flag, Registry, Classification Society and management company shall be maintained in accordance with this Charter;

 

(n)                                 she is capable of a complete change of ballast water at sea within sixty (60) hours while maintaining Service Speed;

 

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(o)                                 she is equipped with tank gauges and devices (both primary and secondary) for sampling temperature, level and pressure which are acceptable to the relevant authorities and conform to generally acceptable practice in the trade in which the Vessel is engaged (including the regasification of LNG) and which are customarily maintained on board LNG vessels capable of regasifying LNG; and

 

(p)                                 she is equipped with VHF radiotelephone, satellite communications earth station, facsimile machine, radio teletypewriter, electronic mail capability, and such other radio telecommunication or other instantaneous communications equipment as may be required by the Classification Society, the Registry, international and port state regulations, and with a computer capable of maintaining and transmitting Charterer’s logs and other shipboard documents required to be transmitted via electronic mail to Charterer.  Charterer shall have the right, at its expense, to fit the Vessel with the ship information system to transmit Vessel position and other relevant data.

 

4.2                                 Cargo Measurement

 

(a)                                  The tank gauges and devices referred to in Clause 4.1(o) shall, at the time of their selection, be reasonably satisfactory to Charterer, be accurate and reliable in their practical application and comply with the maximum permissible tolerances provided for in Schedule I.  Compliance with the foregoing shall, when requested by Charterer, be verified by an internationally recognised independent marine surveyor selected by Charterer and arranged by Owner.

 

(b)                                 If required by the relevant inspectorate at any Primary Terminal or any Designated Terminal, Owner shall (upon request of Charterer) procure that the Vessel’s cargo measuring equipment and instrumentation shall be calibrated and certified at Owner’s cost.

 

(c)                                  Any testing or re-calibration required pursuant to Clause 4.2(a) shall be for Owner’s account unless, following testing, the equipment is found to be in good working condition, in which case the costs of such testing or re-calibration shall be for Charterer’s account.  Charterer’s Personnel shall be permitted to attend any test or verification of the measurement or calibration of the Vessel’s measuring equipment or cargo tanks, whether requested by Charterer or any other Person.  The testing or recalibration required pursuant to Clause 4.2(a) shall be performed at least once a year.

 

(d)                                 In the event that any of the Vessel’s calibration or measuring equipment is 

 

35

 

found to be incorrect, inaccurate or otherwise fails to meet applicable tolerances (a “failure”), Owner shall take all necessary steps within ***** of discovery of such failure, or as soon as may otherwise be convenient to Charterer, to remedy such failure to the satisfaction of an approved and independent marine surveyor.  After such period, Hire shall be reduced by ***** from the date such failure is discovered until the date the failure is remedied to the satisfaction of Charterer.

 

(e)                                  Charterer’s Personnel shall have the right to attend measurements, take samples and read and record indications from the cargo instrumentation and observe operations throughout the loading and discharge process.

 

4.3                                 Prospective Notice of Failure to Meet Specifications

 

Owner undertakes to notify Charterer promptly if at any time Owner has reason to believe that the Vessel may not be delivered by the Scheduled Delivery Date in accordance with the Specifications, and such notice shall specify:

 

(a)                                  the expected extent of variation from the Specifications; and

 

(b)                                 what steps, if any, can be taken to rectify or minimise or correct such expected deficiencies, variations and the anticipated impact of taking such steps on the Scheduled Delivery Date.

 

4.4                                 Duty to Maintain

 

(a)                                  Owner shall procure that Contractor shall perform all maintenance, repair and drydocking of the Vessel required throughout the Charter Period, such maintenance, repair and drydocking being at Owner’s (or Contractor’s) sole cost and expense.  Owner shall procure that Contractor shall adhere to a maintenance and repair programme throughout the Charter Period that ensures the Vessel is repaired and maintained to International Standards and can be operated safely, effectively and reliably throughout the Charter Period.

 

(b)                                 Any reduction of Hire permitted by the provisions of this Charter shall be without prejudice to any other remedy available to Charterer in respect of Owner’s breach of this Charter or Contractor’s breach of the Operation and Services Agreement, but where such reduction of Hire is in respect of time lost, such time shall be excluded from any calculation under Clause 18 (off-Hire) and Schedule II.

 

(c)                                  Owner shall advise Charterer immediately, in writing, should the Vessel fail 

 

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any inspection by a Governmental Authority (including, but not limited to, a governmental and/or port state authority) or any terminal operator.  Owner shall simultaneously advise Charterer of its proposed course of action to remedy the defects that caused the failure of such inspection.

 

4.5                                Duty to Operate, Navigate and Manage

 

(a)                                  Owner shall, in order to perform this Charter, appoint Contractor to provide certain services in relation to the Vessel throughout the Charter Period.

 

(b)                                 Owner shall procure that Contractor shall provide shipboard personnel required by the Operation and Services Agreement and comply with all provisions in the Operation and Services Agreement relating to such shipboard personnel.

 

(c)                                  Owner shall procure that Contractor shall navigate the Vessel throughout the Charter Period.  The Owner shall procure that Contractor shall comply with all requirements of Customer in relation to the operation and navigation of the vessel as set out in the Operation and Services Agreement.

 

(d)                                 Owner shall procure that Contractor shall pay all the expenses of the Vessel during the Charter Period, other than those expenses which are expressly to be paid by Charterer or Customer pursuant to this Charter or the Operation and Services Agreement, respectively.

 

4.6                                 LNG Condition Assessment Programme

 

When, and if, the Vessel is fifteen (15) years old and over, she shall, in relation to the hull only, obtain at each Scheduled Dry-docking a CAP rating of not less than two (2) or equivalent.

 

5.                                      Alterations and Modifications

 

5.1                                 Alterations and Modifications

 

(a)                                  After the Delivery Date Owner shall make all such modifications to the Vessel and its equipment as may be required (i) by the Vessel’s Classification Society or Registry, (ii) to permit the Vessel to load or discharge at each Primary Terminal, each Designated Terminal or any other terminal within its trading range, or (iii) by any Governmental Authority of any country in which the Vessel may be operating or trading.  Owner shall not make (or permit to be made) any other alterations to the Vessel after the Delivery Date without

 

37

 

Charterer’s prior written consent (such consent not to be unreasonably delayed or withheld).

 

(b)                                 Owner shall also, during the Charter Period, make such other modifications to the Vessel and its equipment as Charterer may request; provided, however, that any such modifications are consistent with requirements of Class and Law.

 

5.2                                 Cost and Hire Status

 

(a)                                  The cost of work required to make the modifications set forth in Clauses 5.1(a) and (b) (the “Alteration Work”) shall be the documented cost thereof and the time taken for such works shall be deemed to include Vessel’s deviation time to, time spent at, and time spent returning from the location where the Alteration Work is performed until the Vessel has regained a position equivalent to that when the Vessel deviated for the Alteration Work.

 

(b)                                 Subject to Clauses 5.2(c) and 5.4, the time taken and cost of any Alteration Work notified to Owner at any time after the Delivery Date shall be borne by Charterer.

 

(c)                                  The cost of any Alteration Work to the Vessel required by the Classification Society or the Registry after the Delivery Date shall be borne by the Charterer and Owner on a fair and equitable basis taking into account the remainder of the Charter Period and the remainder of the economic life of the Vessel (for these purposes, the economic life of the Vessel shall be deemed to be fifty (50) years).  The Vessel shall be off-Hire for the duration of such Alteration Work unless (i) the time to perform any such Alteration Work is within the allowance for a Scheduled Drydocking, and (ii) the Alteration Work is undertaken during a Scheduled Drydocking and does not extend the time taken for such Scheduled Drydocking beyond the Off-Hire Allowance.  Hire lost as a result of the Vessel being off-Hire during any Alteration Work required pursuant to this Clause 5.2(c) shall be treated as a “cost” to be shared between Owner and Charterer on a fair and equitable basis as provided in the first sentence of this Clause 5.2(c).

 

5.3                                 Notice and Consultation

 

(a)                                  Owner and Charterer shall consult together and agree on (i) the nature of the Alteration Work to be performed, (ii) the location for the performance of such Alteration Work, (iii) the estimated duration of the Alteration Work and (iv) 

 

38

 

the dates on which the Vessel can be taken out of service and is required to return to service.

 

(b)                                 After such consultation, Owner shall provide to Charterer a firm tender from the proposed agreed yard, detailing the cost and duration of the Alteration Work agreed to be performed (which Owner shall use all reasonable efforts to minimise).  Charterer shall, within ***** after receipt of the tender, confirm in writing to Owner whether it wishes the Alteration Work to proceed.

 

(c)                                  Any Alteration Work shall take place, if possible, during a Scheduled Dry-docking, unless Owner can show, to the reasonable satisfaction of Charterer, that this is not possible.  If any Alteration Work carried out pursuant to Clause 5.1(b) is done during a Scheduled Drydocking, and Owner can establish to the reasonable satisfaction of Charterer that such work extended the time of the Vessel drydocking time for such Scheduled Drydocking, the total duration of the off-Hire period, determined in accordance with Clause 18 shall be reduced by such amount of time by which such Alteration Work caused the actual drydocking time to exceed the Scheduled Drydocking time.

 

5.4                                 Compatibility of Vessel with other Port Facilities

 

If at any time during the Charter Period the Vessel ceases to be compatible with any Primary Terminal, any Designated Terminal or any other terminal within its trading range in accordance with the provisions of Clause 12, Owner and Charterer shall (if requested by either Party) meet and discuss the steps to be taken, if any, to alter or modify the Vessel to rectify such incompatibility.  Except where Clause 5.2(c) applies, Charterer shall be liable for the costs of, and time taken for, any rectification where such incompatibility arises due to any alteration or modification at any such terminal after the Delivery Date, and Owner shall be liable for the costs of, and time taken for, such rectification where such incompatibility arises (either before or after the Delivery Date) due to any modification or alteration to the Vessel required by the Classification Society or Law.

 

6.                                      Delivery, Redelivery and Cancelling

 

6.1                                 Delivery Place

 

Delivery of the Vessel under this Charter shall take place safely afloat at Charterer’s Facility or, if Charterer exercises the Shipyard Delivery Option, safely afloat at the Shipyard or (in any other case) such other place as may be agreed in writing by Owner and Charterer.

 

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6.2                                 Scheduled Delivery Date and Notice

 

(a)                                  Subject to Clauses 6.3 and 6.9, the Vessel shall be delivered by Owner to Charterer on the Scheduled Delivery Date, as such date may be adjusted in accordance with this Clause 6.

 

(b)                                 Owner shall promptly notify Charterer in writing as soon as the Vessel (i) has passed the Equipment Test and such other tests or procedures required to be conducted by Builder or Owner after completion of the Modifications, and (ii) is in all respects ready to sail to Charterer’s Facility for purposes of delivery under this Charter (the “Availability Notice”).  Such Availability Notice shall specify the expected arrival date of the Vessel at Charterer’s Facility.

 

(c)                                  Upon receipt by Charterer of the Availability Notice, Charterer shall promptly, and in any event within twenty (20) days of receipt of the Availability Notice:

 

(i)                                          instruct the Vessel to proceed directly to one of the Charterer’s Facilities for purposes of testing and delivery under this Charter as contemplated pursuant to Clause 6.4 (the “Charterer’s Facility Delivery Option”); or

 

(ii)                                       instruct the Vessel to perform a voyage charter party as contemplated pursuant to Clause 6.6 (the “VCP Option”); or

 

(iii)                                    instruct Owner to deliver the Vessel to Charterer at the Shipyard as contemplated pursuant to Clause 6.7 (the “Shipyard Delivery Option”),

 

(such instructions, the “Delivery Instructions”) and Owner shall be required to promptly effect such Delivery Instructions.  If Charterer does not issue such Delivery Instructions within twenty (20) days of receipt by Charterer of the Availability Notice, then Charterer shall be deemed for all purposes of this Charterer to have irrevocably selected the Charterer’s Facility Delivery Option, with delivery at the PecémTerminal.

 

6.3                                 Delivery Conditions

 

(a)                                  Subject to Clauses 6.6(e) and 6.7, Delivery shall be conditional upon the Vessel conforming fully to the Specifications and otherwise being as warranted under this Charter.  Acceptance of the Vessel by Charterer under 

 

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this Clause 6 shall not be construed as a waiver of any representations, warranties or undertakings by Owner hereunder or of any rights Charterer may otherwise have under this Charter.

 

(b)                                 Subject to Clauses 6.3(d), 6.4, 6.6(e) and 6.7, Charterer shall have the right to reject delivery of the Vessel and to terminate this Charter (by written notice to Owner) where the Required Performance Levels are not satisfied; provided, however, that Charterer shall not be entitled to reject delivery of the Vessel for failure to meet the Required Performance Levels where the Delivery Tests have not been commenced within thirty (30) days of the Tender Date.

 

(c)                                  For all purposes of this Clause 6, both Parties agree to use all reasonable endeavours to ensure the Delivery Tests are undertaken and completed without unreasonable delay.

 

(d)                                 Charterer’s right to reject the Vessel pursuant to Clause 6.4(c)(i) and Clause 6.5(a) shall be subject to Owner’s right to repair or modify the Vessel in such circumstances where the failure to achieve the Required Performance Levels satisfies each of the following criteria:

 

(i)                                          it is a minor or insubstantial defect or adjustment (as reasonably, but solely, determined by Charterer); and

 

(ii)                                       it can be repaired or made good at the applicable Charterer’s Facility (where the Delivery Tests were performed) by delivery of spare or replacement parts thereto; and

 

(iii)                                    it can be repaired or remedied within a reasonable period of time (as reasonably, but solely, determined by Charterer).

 

6.4                                 Delivery at Charterer’s Facility

 

(a)                                  Where Charterer exercises the Charterer’s Facility Delivery Option, Owner shall tender the Vessel for delivery to Charterer promptly upon the Vessel arriving at the applicable Charterer’s Facility specified in the Delivery Instructions (such date of tender, the “Tender Date”).  Thereafter Owner shall, when requested in writing by Charterer:

 

(i)                                          load LNG onto the Vessel and test the Vessel’s LNG loading capacity;

 

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(ii)                                       commence regasifying LNG and perform the Regasification Test in accordance with the agreed procedures for the Delivery Test,

 

in each case, as required pursuant to this Charter.  Owner shall promptly report the results of such LNG loading and re-gasification operations in writing to Charterer.

 

(b)                                 Where:

 

(i)                                          the Delivery Tests are commenced within thirty (30) days of the Tender Date and the Vessel meets or exceeds the Required Performance Levels; or

 

(ii)                                       the Delivery Tests are not commenced within thirty (30) days of the Tender Date,

 

then Charterer shall accept delivery of the Vessel and the Parties shall execute and deliver a Certificate of Acceptance in accordance with Clause 6.11 and Hire shall be due and payable from the Hire Commencement Date, such date to be the same date as the Tender Date for the purposes of this Clause 6.4(b).

 

(c)                                  Where the Delivery Tests are commenced within thirty (30) days of the Tender Date and the Vessel does not meet the Required Performance Levels, Charterer may elect to either:

 

(i)                                          subject to Clause 6.3(d), reject the Vessel (“Rejection Option”); or

 

(ii)                                       accept the Vessel (“Acceptance Option”); or

 

(iii)                                    require Owner to make the necessary repairs or modifications to the Vessel in order to achieve the Required Performance Levels (“Repair Option”).

 

Where:

 

(A)                           Charterer elects the Rejection Option, then Clause 6.5 shall apply;

 

(B)                             Charterer elects the Acceptance Option, then Charterer shall accept delivery of the Vessel and the Parties shall execute and deliver a 

 

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Certificate of Acceptance in accordance with Clause 6.11 and Hire shall be due and payable from the Hire Commencement Date, such date to be the same date as the Delivery Date for the purposes of Clause 6.4(c)(ii);

 

(C)                             Charterer elects the Repair Option, then Charterer shall promptly notify Owner thereof and Owner shall repair or modify (or shall procure the repair and modification of) the Vessel in order to achieve the Required Performance Levels.  When such repairs or modifications are completed, Owner shall give written notice thereof to Charterer and the Parties shall select a mutually acceptable date as soon as reasonably practicable thereafter (taking into account, as a matter of priority, Charterer’s use of the Vessel) on which Owner shall re-tender the Vessel to Charterer for purposes of re-performing the Delivery Tests (the date of such re-tender, the “Re-tender Date”), and the Delivery Tests shall be performed as soon as practicable thereafter.  If the Vessel meets the Required Performance Levels, Charterer shall accept delivery of the Vessel and the Parties shall execute and deliver the Certificate of Acceptance in accordance with Clause 6.11, and Hire shall be due and payable from the Hire Commencement Date, such date to be the same as the Applicable Re-tender Date for the purpose of Clause 6.4(c)(iii).

 

If the Vessel does not meet the Required Performance Levels upon exercise by Charterer of the Repair Option, then Charterer may again elect to exercise any of the Rejection Option, Acceptance Option or Repair Option and, in which case, the same procedures set forth in respect of sub-clauses (A), (B) and (C) above shall respectively apply.

 

(d)                                 Where the Delivery Tests are commenced more than thirty (30) days after the Tender Date and the Vessel fails to meet the Required Performance Levels, then, subject to Clause 6.4(e), the Vessel shall be put off-Hire for the period during which the Vessel is not at Charterer’s disposition (such period of off-Hire commencing from the date such Delivery Tests are completed).  In such case, Owner shall repair or modify (or procure the repair and modification) of the Vessel in order to achieve the Required Performance Levels.  When such repairs or modifications are completed, Owner shall give written notice thereof to Charterer and the same procedures set forth in Clause 6.4(c) (in relation to the Repair Option) shall apply (mutatis mutandis) in relation to the tendering, testing and delivery of the Vessel by Owner to Charterer and the 

 

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Vessel shall be on-Hire (and Hire shall be payable) from the Applicable Re-tender Date.

 

(e)                                  Notwithstanding Clauses 6.4(c) and 6.4(d) above, Charterer retains the right to accept delivery of the Vessel where the Required Performance Levels are not satisfied, and pay a reduced Daily Hire as follows (i) where such failure is in respect of the Vessel’s speed, LNG loading rate or Regasification Flow Rate, such reduction in Hire shall be in accordance with Clause 23, and (ii) where the failure is in respect of the Vessel’s draught, the parties shall mutually agree an equitable reduction  in Hire.  In such circumstances, the Charterer shall accept delivery of the Vessel and the Parties shall execute and deliver the Certificate of Acceptance in accordance with Clause 6.11 and Hire shall be due and payable from the Hire Commencement Date, such date being the same date as the Delivery Date for the purposes of this Clause 6.4(e).  Where this Clause 6.4(e) applies, Owner shall have the right (from time to time during the Charter Period) to demonstrate to Charterer that the Vessel is capable of satisfying the Required Performance Levels and, if required by Charterer, the Delivery Tests shall be re-performed to confirm the Vessel’s capability (such demonstration and/or Delivery Tests to be peformed at a time acceptable to Charterer, without unreasonable delay).  Where the Vessel satisfies the Delivery Tests, the original Hire amount shall again be due and payable from the date the Vessel passes such Delivery Tests.

 

(f)                                    Where pursuant to this Clause 6.4 the Parties are required to select a date on which Owner shall be permitted to re-tender the Vessel to Charterer for performance of the Delivery Tests, and such date is postponed upon Charterer’s request, then the Parties agree that the Cancelling Date shall be adjusted on a fair and reasonable basis to take account of any such delays in order to permit Owner to attempt such re-tender of the Vessel.

 

6.5                                 Rejection of Vessel

 

(a)                                  Where Charterer exercises the Charterer’s Facility Delivery Option and Charterer subsequently rejects the Vessel pursuant to Clause 6.3 (such date of rejection, the “Rejection Date”), then:

 

(i)                                          no Hire or other fee shall be payable by Charterer to Owner under this Charter (including for any period between the Tender Date and the Rejection Date);

 

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(ii)                                       Owner shall promptly notify Charterer in writing of the amount of LNG remaining on the Vessel at the Rejection Date (the “Remaining LNG”) and the period of time it would take for the Vessel to unload such Remaining LNG (the “Off-Load Period”).  Charterer shall have the right (in its sole discretion) by written notice to Owner to either (A) require Owner to regasify any Remaining LNG at the Charterer’s Facility (the “Regas Option”) or (B) instruct Owner to sail the Vessel to such other LNG terminal and deliver such quantity of LNG as Charterer may direct (not to exceed the amount of LNG remaining on the Vessel)(such amount, the “Re-Sale Quantity”) to such Person, in each case, as Charterer may direct (the “Re-Sale Option”);

 

(iii)                                    Charterer shall have the right to require Owner to as soon as reasonably practical, and in compliance with safety and other applicable regulations, move the Vessel from Charterer’s Facility; and

 

(iv)                                   refusal by Charterer to accept delivery of the Vessel pursuant to Clauses 6.3 or 6.4 shall not in any manner adversely affect Charterer’s rights under this Charter, including Clause 6.10.

 

(b)                                 Where Charterer elects to exercise the Regas Option, Owner shall promptly commence regasifying any Remaining LNG at the Charterer’s Facility and Charterer shall pay to Owner an amount equal to ***** of the VCP Daily Rate for each day of the Off-Load Period (pro-rated for any part of a day) (the “Off-Load Payment”).  The Off-Load Payment shall be payable by Charterer to Owner when all Remaining LNG has been regasified and otherwise in accordance with the provisions of Clause 10.  Should the Off-Load Period be extended due solely to any act or omission of Charterer or any Affiliate of Charterer, Charterer shall pay Owner an amount equal to the VCP Daily Rate for each such additional day it takes to off load the Remaining LNG (pro-rated for any part of a day).

 

(c)                                  Where Charterer exercises the Re-Sale Option, Owner shall:

 

(i)                                          procure that, the Vessel proceeds directly from the Charterer’s Facility to such terminal (the “Re-Sale Terminal”) and delivers the Re-Sale Quantity to such Person (the “Re-Sale Buyer”), in each case, as Charterer may direct in writing pursuant to Clause 6.5(a)(ii);

 

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(ii)                                       procure that, the Vessel is operated and crewed as required by Owner under this Charter and Contractor under the Operation and Services Agreement, as the case may be, to the same extent as if the Vessel was “on Hire” under both the Charter and Operation and Services Agreement); and

 

(iii)                                    be deemed to have the same obligations and duties in respect of the Vessel and its cargo as the Owner under this Charter, to the same extent as if the Vessel was “on Hire” under the Charter, in each case, at Owner’s sole cost and expense.

 

(d)                                 Where Charterer elects to exercise the Re-Sale Option, Charterer shall pay to Owner an amount equal to the VCP Daily Rate for each day that it takes to sail the Vessel from Charterer’s Facility directly to the Re-Sale Terminal and deliver the Re-Sale Quantity to the Re-Sale Buyer (the “Re-Sale Voyage Payment”).  The Re-Sale Voyage Payment shall be payable by Charterer to Owner upon delivery of the Re-Sale Quantity to the Re-Sale Buyer and otherwise in accordance with the provisions of Clause 10.  The provisions of Clause 6.6(f) shall apply (mutatis mutandis) in calculating the Re-Sale Voyage Payment.

 

(e)                                  In such circumstances where Clause 6.4(e) is applicable, Owner shall procure that the Fees payable by Charterer to Contractor under the Operation and Services Agreement are reduced in a similar manner.

 

6.6                                 VCP Option

 

(a)                                  Where Charterer exercises the VCP Option, Owner shall perform a voyage charter of the Vessel (i) from the Shipyard (or such other place as Charterer and Owner shall agree in writing) to an LNG loading terminal selected by Charterer (the “LNG Loading Terminal”), and (ii) from the LNG Loading Terminal to Charterer’s Facility (the “Voyage Charter Party” or “VCP”).

 

(b)                                 If the VCP Option is exercised, Charterer shall be required to accept delivery of the Vessel (for the purposes of the Voyage Charter Party only) after the Vessel has passed the Equipment Test and any Vessel inspection to be performed at the Shipyard by Builder or Owner, and such acceptance (for the purposes of the Voyage Charter Party only) shall be evidenced by the execution and delivery by the Parties of a Certificate of Acceptance substantially in the form attached as Schedule III.  Subject to Clause 6.6(e), 

 

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acceptance by Charterer of the Vessel for purposes of the Voyage Charter Party shall not affect Charterer’s right to reject delivery of the Vessel pursuant to Clauses 6.3 or 6.4 or Charterer’s other rights under this Charter or Customer’s rights under the Operation and Services Agreement.

 

(c)                                  If the VCP Option is exercised:

 

(i)                                          Owner shall:

 

(A)                            perform the voyages referred to in Clause 6.6(a) as and when required by Charterer;

 

(B)                              at the LNG Loading Terminal, load such LNG on the Vessel as Charterer shall require (within the Specification);

 

(C)                              operate and crew the Vessel as required by both Owner under this Charter and Contractor under the Operation and Services Agreement; and

 

(D)                             be deemed to have the same obligations and duties in respect of the Vessel and its cargo as Owner under this Charter (and Contractor shall be deemed to have the same obligations and duties under the Operation and Services Agreement), in each case, at Owner’s sole cost and expense; and

 

(ii)                                       Charterer shall be deemed to have the same obligations and duties in respect of the Vessel during the VCP as set forth in Clause 8.

 

(d)                                 If the VCP Option is exercised, Charterer shall pay Owner a voyage charter rate equal to ***** per day (the “VCP Daily Rate”) for each day that it takes to:

 

(i)                                          sail the Vessel from the Shipyard to the LNG Loading Terminal;

 

(ii)                                       load the Vessel with such LNG as Charterer may require at the LNG Loading Terminal; and

 

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(iii)                                    sail the Vessel from the LNG Loading Terminal to the Charterer’s Facility,

 

less the amount equal to (A) the VCP Daily Rate multiplied by the number of days it would have taken the Vessel to proceed directly from the Shipyard to Charterer’s Facility plus (B) the aggregate amount of costs and expenses that would have been payable by Charterer to Owner for the voyage referred to in the immediately preceding sub-paragraph (A), in each case, as if the VCP Option had not been exercised.  The Voyage Charter Party shall terminate upon arrival of the Vessel at Charterer’s Facility.

 

(e)                                  Promptly upon the Vessel’s arrival at the Charterer’s Facility, Owner shall tender the Vessel for delivery to Charterer, and the provisions of Clauses 6.3, 6.4 and 6.5 shall apply in relation to the delivery, testing and acceptance of the Vessel for purposes of this Charter to the same extent as if the Charterer had selected the Charterer’s Facility Delivery Option; provided that, Charterer shall not be entitled to reject delivery of the Vessel for failure to meet or exceed the requirements of item (iii) of the Required Performance Levels.

 

(f)                                    The amounts referred to in Clauses 6.5(d) and 6.6(d) shall be calculated on the following basis:

 

(i)                                          number of days it would take the Vessel to proceed between each applicable place at a speed no slower than the applicable Service Speed;

 

(ii)                                       the VCP Daily Rate payable shall be pro rated for any part of a day;

 

(iii)                                    the calculations shall be made without double counting applicable days; and

 

(iv)                                   the VCP Daily Rate shall be reduced to the same extent for any day during the Voyage Charter Party on which the Vessel would have been off-Hire under this Charter.

 

6.7                                 Shipyard Delivery Option

 

(a)                                  Where Charterer exercises the Shipyard Delivery Option, Charterer shall be required to accept delivery of the Vessel for all purposes of this Charter after 

 

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the Vessel has passed (i) the Equipment Test and (ii) the Vessel inspection to be performed at the Shipyard by Charterer and Owner.  Such acceptance shall be evidenced by the execution and delivery by the Parties of a Certificate of Acceptance in accordance with Clause 6.11, and the Hire Commencement Date shall be the Delivery Date.  If the Vessel fails the Vessel inspection, Charterer may either (i) require Owner to repair or modify and re-tender the Vessel at the Shipyard or (ii) reject the Vessel.

 

(b)                                 Notwithstanding Clause 6.7(a), Charterer shall have the right to perform the Delivery Tests (at Charterer’s Facility) on the Vessel at any time after accepting delivery of the Vessel pursuant to the Shipyard Delivery Option.  If such Delivery Tests are performed and the Vessel fails to meet the Required Performance Levels, Charterer may elect to keep the Vessel on-Hire and pay a reduction in Hire pursuant to Clause 23, or put the Vessel off-Hire for the period during which the Vessel is not at Charterer’s disposition (such period commencing from the date the Delivery Tests are completed).  In such case, Owner shall repair or modify (or procure the repair or modification) of the Vessel in order to achieve the Required Performance Levels.  When such repairs or modifications are completed, Owner shall give written notice thereof to Charterer and the same procedures set forth in Clause 6.4(c) (in relation to the Repair Option) shall apply (mutatis mutandis) in relation to the tendering, testing and delivery of the Vessel by Owner to Charterer and the Vessel shall be on-Hire (and Hire shall be due and payable) from the Applicable Re-tender Date.

 

6.8                                 Delays Due to Shipyard Force Majeure

 

If the completion date of the Modifications is postponed due to an event of Shipyard Force Majeure directly affecting Builder’s ability to complete the Modifications, then the Scheduled Delivery Date (and the Cancelling Date), if established, shall be postponed for the same period subject to a maximum postponement of *****; provided that:

 

(a)                                  such Shipyard Force Majeure was not caused or contributed to by the Builder’s own error, neglect, act or omission or that of its employees or sub contractors;

 

(b)                                 such Shipyard Force Majeure could not have been foreseen by the Builder;

 

(c)                                  since the occurrence of such Shipyard Force Majeure, the Builder has taken all reasonable and necessary steps to mitigate the consequences of such Shipyard 

 

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Force Majeure; and

 

(d)                                 the Builder has given notice immediately upon occurrence of such Shipyard Force Majeure to Owner with a copy to Charterer, such notice to include Builder’s reasonable estimate of the likely duration of such Shipyard Force Majeure.

 

As soon as practicable after the date on which Owner becomes aware that any such Shipyard Force Majeure no longer exists or is continuing, Owner shall give notice thereof to Charterer and shall provide Charterer with a revised Scheduled Delivery Date and Cancelling Date, in accordance with this Clause 6.

 

6.9                                 Early Delivery

 

(a)                                  Owner hereby agrees to use all reasonable endeavours to procure delivery of the Vessel to Charterer as soon as possible after the date hereof.  Promptly upon Owner being notified by Builder that the Vessel shall be ready for delivery at any time prior to the Scheduled Delivery Date (as set forth in this Charter on the date hereof), Owner shall issue to Charterer the Availability Notice (as required pursuant to Clause 6.2) and the other provisions of Clause 6.2 (and this Clause 6) shall then apply; provided that if the Delivery Date is prior to Scheduled Delivery Date (as set forth in this Charter on the date hereof), such earlier date shall become for all purposes of this Charter (except where expressly provided otherwise) the Scheduled Delivery Date.

 

(b)                                 In the event the Hire Commencement Date is prior to the Scheduled Delivery Date (as set forth in this Charter on the date hereof) Charterer shall pay to Owner an amount equal to ***** per day for each day (not exceeding *****) that the Hire Commencement Date is prior to the Scheduled Delivery Date (as set forth in this Charter on the date hereof); provided, however, that such payment shall not be payable where Clause 6.4(c) is applicable, whether or not Charterer exercises its rights pursuant to Clauses 6.4(c)(ii) or (iii).

 

6.10                           Late Delivery

 

(a)                                  Charterer may at any time request Owner to provide a written estimate of the actual date (and time) on which the Vessel will be delivered to Charterer.  If the delivery date so estimated falls after the Cancelling Date, Charterer shall advise Owner in writing within ***** of receipt of Owner’s estimate whether Charterer will (i) cancel this Charter, (ii) exercise its rights pursuant to Clause 28 or (iii) accept such proposed date as the new delivery date of the 

 

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Vessel (in which case, such later date shall become for all purposes of this Charter the “Scheduled Delivery Date”).  In the event there is a delay in the delivery of the Vessel by reason of Owner’s wilful misconduct, Charterer shall be entitled to recover from Owner such actual damages or losses suffered by reason of such delayed delivery.

 

(b)                                 In the event that the Vessel is not delivered to Charterer on the Scheduled Delivery Date for reasons other than an Event of Charterer’s Default or Force Majeure, Owner shall pay liquidated damages to Charterer in *****.

 

(c)                                  Owner shall, at its cost, diligently pursue any claim it may have under the Modification Contract for delay in delivery of the Vessel and shall keep Charterer fully informed of the status of such claims.

 

(d)                                 For the avoidance of doubt, Owner and Charterer hereby agree that the compensation payable pursuant to Clause 6.6(b) is (i) Charterer’s sole remedy for delay in delivery except where Clause 6.10(e) applies, and (ii) a reasonable and genuine pre-estimate of the damages that Charterer would suffer as a result of Owner’s failure to deliver the Vessel on the Scheduled Delivery Date.

 

(e)                                  Should Owner fail to deliver the Vessel within ***** of the Scheduled Delivery Date (such date, the “Cancelling Date”) or the date that replaces the Cancelling Date pursuant to Clauses 6.8, 6.9 or 6.10(a), Charterer will have the right to terminate this Charter at any time thereafter prior to delivery of the Vessel in accordance with Clause 6.10(a), and such right to terminate shall be without prejudice to Charterer’s right to receive compensation pursuant to Clause 6.10(b).

 

(f)                                    Delivery of the Vessel in accordance with this Clause 6 is a condition of this Charter and a fundamental obligation of Owner and, save as expressly provided in this Charter, Owner shall not be excused from performance of its obligations for any reason whatsoever including, without limitation, a failure by the Builder to deliver the Vessel to Owner for any reason including without limitation the liquidation or insolvency of Builder.

 

6.11                           Certificate of Acceptance

 

The Parties shall record the Delivery Date (and time) and the Hire Commencement Date and time in a Certificate of Acceptance (in the form of Schedule III) signed by or on behalf of Owner and Charterer.  This certificate shall also include confirmation of the quantity of bunkers and LNG on board at the time of delivery.  In addition, Owner 

 

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shall procure that Contractor, and Charterer shall procure that Customer, shall duly date, execute and deliver to each other the Certificate of Acceptance in the form attached as Schedule VII to the Operation and Services Agreement on the Delivery Date (such that the “Delivery Date” and “Fee Commencement Date” in such Schedule VII are the same date as the “Delivery Date” and “Hire Commencement Date” in Schedule III, respectively).

 

6.12                           Redelivery

 

(a)                                  Subject to Clause 28.4, the Vessel shall be redelivered to Owner on expiry (by effluxion of time) of this Charter at the last port of discharge or at a port to be nominated by Charterer ***** before the date of redelivery and a Certificate of Redelivery (as set forth in Schedule III) shall similarly be completed and signed on behalf of Owner and Charterer confirming the date and time of redelivery and the quantities of bunker and LNG on board the Vessel at the time of redelivery.

 

(b)                                 If at the time this Charter would otherwise terminate in accordance with Clause 3 when the Vessel is on a ballast voyage to a port of redelivery or is upon a laden voyage, Charterer shall continue to have the use of the Vessel at the same rate and conditions as stated herein for as long as necessary to complete such ballast voyage, or to complete such laden voyage and return to a port of redelivery as provided by this Charter, as the case may be.

 

(c)                                  Subject to Clause 27, the date and time of redelivery of the Vessel shall be established in accordance with the following procedures:

 

(i)                                          Charterer shall notify Owner of a ***** period (“Redelivery Window Period”) during which time redelivery of the Vessel is anticipated to occur, at least ***** prior to such Redelivery Window Period commencing;

 

(ii)                                       Charterer shall notify Owner of the firm date and estimated time of redelivery, at least ***** prior to the commencement of the Redelivery Window Period; and

 

(ii)                                       During the period from giving the notice in Clause 6.12(c)(ii) to actual redelivery of the Vessel Charterer shall promptly notify Owner of any anticipated variation of more than ***** in the estimated time of 

 

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redelivery.

 

7.                                      Bunkers and LNG Heel at Delivery and Redelivery

 

7.1                                 Delivery and Redelivery

 

(a)                                Charterer shall accept and pay for all bunkers (which shall include fuel oil, diesel oil and gas oil) and LNG Heel on board at the time of delivery at the respective Fuel Price and LNG Price.  Amounts owed under this Clause 7.1 shall be included in the first Monthly Hire Invoice issued after the Delivery Date, which shall separately identify the amount payable for fuels on such Monthly Hire Invoice.

 

(b)                               Owner shall on redelivery (whether it occurs at the end of the Charter Period or on the earlier termination of this Charter) accept and pay for all bunkers and LNG Heel remaining on board, valued respectively at the respective Fuel Price and LNG Price.  Charterer shall issue a Reimbursement Invoice to Owner within ***** after Redelivery of the Vessel.

 

(c)                                  The Vessel shall be delivered to Charterer:

 

(i)                                     with cargo tanks with inert gas ready to start the “gas up operation”; and

 

(ii)                                  with an adequate quantity of fuel oil and diesel oil to allow the operation of the regasification plant at full capacity for one week.

 

(d)                                 The Vessel shall be redelivered to Owner with:

 

(i)                                     at Owner’s option, either its (A) cargo tanks containing not less than ***** LNG Heel, (B) cargo tanks containing natural gas vapour; or (C) cargo tanks in a Gas Free condition, as notified in writing by Owner to Charterer no later than ***** after the date (if any) Charterer provides the notice referred to in Clause 6.12(a) to Owner; provided, however, that where redelivery occurs other than due to expiry (by effluxion of time) of this Charter, or in the event that Charterer does not provide a notice under Clause 6.12(a),  Owner shall give Charterer reasonable notice of its election of one of the above options, and Charterer shall use reasonable endeavours to comply with such request; and

 

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(ii)                                       not less than ***** of fuel oil and ***** of diesel oil.

 

7.2                                 Sufficiency of Bunkers

 

(a)                                  Throughout the Charter Period the Vessel shall operate with at least a quantity of bunkers or Fuel Oil Equivalent on board sufficient to safely complete each voyage.  The above amount shall be in addition to a safety reserve of fuel oil or diesel oil which would enable the Vessel to steam at maximum speed for a total of *****.

 

(b)                                 Notwithstanding anything to the contrary in this Charter, all bunkers and LNG Heel on board the Vessel shall remain the property of Charterer or its nominee throughout the Charter Period and can only be purchased on the terms specified herein at the end of the Charter Period or, if earlier, at the termination of this Charter.

 

7.3                                 Grade of Bunkers

 

(a)                                  Charterer shall supply fuel oil type RNH-45, (whose properties comply RMH-45 (being as set out in ISO Specification 8217-1996) and diesel oil whose properties comply with the standard for DMA and any applicable emission requirements.  If Owner requires the Vessel to be supplied with more expensive bunkers Owner shall be liable for the extra costs thereof.

 

(b)                                 Should Charterer trade the Vessel into a SECA, then Charterer shall supply low sulphur fuel oil of a quality which will satisfy the SECA requirements, sufficient for the Vessel’s need while in the restricted area, and Owner shall provide segregated storage for this fuel oil and ensure compliance with such regulations.

 

8.                                      Charterer to Provide

 

At all times throughout the term of this Charter, Charterer shall provide and/or pay for:

 

(a)                                  all fuels suitable for burning in the Vessel’s engines and auxiliaries including boil-off gas (up to the guaranteed daily boil-off rate) as fuel;

 

(b)                                 light and canal dues, port charges and all other charges or expenses relating to unloading, discharging and bunkering;

 

(c)                                  Charterer’s agency fees for normal ship’s husbandry at all places or ports of 

 

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call (except for Owner’s business, which shall be for Owner’s account);

 

(d)                                 towage, pilotage and all mooring, stevedorage, loading and discharging facilities and services, provided always that Charterer shall bear no liability for the negligence or misconduct exercised by the providers of such services and facilities; and

 

(e)                                  all customs or import duties arising in connection with the foregoing.

 

9.                                      Rate of Hire

 

9.1                                 Subject to the terms of this Charter, Charterer shall pay hire (“Hire”) commencing on the Hire Commencement Date and throughout the Charter Period (save for those times when the Vessel is off-Hire) monthly in advance to Owner pursuant to this Clause 9.  Hire shall be paid in United States Dollars.

 

9.2                                 Owner shall be paid a daily fixed amount of:

 

(a)                                  *****

 

(b)                                 *****

 

(c)                                  *****

 

in each case, covering the costs to Owner of the Vessel (including the Modifications) (the “Daily Hire”).  If costs of the Modifications to the Vessel increase or decrease due to a modification in the Specifications requested by Charterer, Owner and Charterer shall consult and agree on an appropriate adjustment to the Daily Hire during the Initial Charter Period.

 

9.3                                 The amount of Hire due and payable by Charterer for any calendar month shall equal the Daily Hire multiplied by the number of days in such calendar month plus any other amounts payable by Charterer to Owner under this Charter less the permitted deductions from Hire under the terms of this Charter.  Hire shall be pro-rated for any part of a day or, in respect of the first and last calendar months of this Charter, for part of a calendar month.  All calculations of Hire shall be made by reference to GMT.

 

9.4                                 Adjustment of Hire

 

(a)                                (i)                                       Hire shall be reviewed on the ***** of the Base Date, and ***** of such date thereafter during the Charter Period (such date, the “Review Date”), and adjusted in accordance with the formula below:

 

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*****

 

Where, at any time:

 

*****

 

(ii)                            Where data is not yet published then the Hire shall be held at the prevailing rate until such required data is published.  The Hire shall then be recalculated and any shortfall or surplus amount shall be reconciled within *****.

 

(b)                                 If in the opinion of either Party:

 

(i)                                     a publication needed to determine an element of the adjustment formula set out in Clause 9.4, above is not available; or

 

(ii)                                  any such publication fails or ceases to report the data necessary to calculate such element; or

 

(iii)                               such data has been published in error; or

 

(iv)                              such data is so changed that it affects materially the validity of the index comparison over time,

 

then that Party may give notice to the other Party and the Parties shall agree the action to be taken to take account of such circumstance.

 

(c)                               (i)                                        If the Parties are not able to reach agreement on the action to be taken within ***** of the notice provided under Clause 9.4(c), then the matter shall be referred to an expert, acting as an expert and not an arbitrator, to be appointed by agreement between the Parties and whose opinion on the matter shall be final and binding on the Parties.

 

For the purposes of this Clause 9.4(c), the Parties hereby shall endeavour to agree to nominate an expert.  If the parties fail to agree upon the identity of a mutually acceptable expert within *****, the appointment shall be made by the International Centre for Expertise in accordance with the provisions for the appointment of experts under the Rules for Expertise of the International Chamber of Commerce.  The costs of any expert appointed pursuant to this Clause 9.4(c) together with the costs of such proceedings shall be shared equally by the Parties.

 

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(ii)                                  Until the Parties have reached agreement on the course of action or (as the case may be) the expert has decided the matter in accordance with Clause 9.4(c)(i), Hire will provisionally be ***** of the previous Hire amount.

 

(iii)                               In the event of any revisions of the Hire escalation formula, the Hire provisionally calculated in accordance with Clause 9.4(c)(ii) above shall be recalculated and any over payment or underpayment from one Party to the other shall be revised to take account of the revised Hire.

 

(d)                                 Rounding of Calculations

 

No intermediate rounding of calculations made in accordance with this Clause 9.4 shall apply.  Final calculated Hire shall be expressed to two (2) decimal places (by rounding up the third decimal place where “5” or higher and rounding down where “4” or lower).

 

10.                               Payment of Hire

 

10.1                           Invoices

 

(a)                                  On the ***** or in any event on or before the ***** prior to each Measurement Period, Owner shall submit to Charterer a monthly Hire invoice in respect of the Hire for the following Measurement Period (the “Monthly Hire Invoice”), which shall include the following information:

 

(i)                                          the date and the number of days for which Hire is payable;

 

(ii)                                       the applicable Hire rate;

 

(iii)                                    the gross amount payable (expressed in figures and in words);

 

(iv)                                   the deductions, if any, allowed to Charterer pursuant to Clause 10.2;

 

(v)                                      the date and place of issue and serial number of the Monthly Hire Invoice;

 

(vi)                                   the serial number and date of execution of this Charter;

 

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(vii)                                the name and code number of the bank, its address and the account number to which payment should be made;

 

(viii)                             the Financial Operation Register (“R.O.F.”) number issued by the Central Bank of Brazil (Banco Central do Brasil) via the Brazilian Central Banking System (SISBACEN) in relation to this Charter, as provided by Charterer to Owner upon receipt by Charterer of such number; and

 

(ix)                                     the name of a contact person and such person’s address and fax number, in order that Charterer may notify Owner that payment has been made.

 

(b)                                 If any amounts are due from one Party to the other Party other than those set forth in the Monthly Hire Invoice, including any amounts paid but not incurred or incurred but not paid, then the Party to whom such sums are owed shall, as soon as detected, furnish to the other Party an invoice (“Reimbursement Invoice”) setting out, where applicable, the information required in Clause 10.1(a), together with calculations and relevant supporting documents.

 

(c)                                  Prior to the issue of an invoice where Owner requires clarification as to what the invoice is required to contain, Owner shall submit questions to Charterer and Charterer shall respond promptly.

 

10.2                           Deductions

 

(a)                                  Charterer shall be entitled, on production of reasonable documentary evidence (where applicable), to deduct from payments of Hire:

 

(i)                                          any amounts disbursed on Owner’s or Vessel’s behalf, any advances and commission thereon, and charges which are for Owner’s account pursuant to any provision hereof;

 

(ii)                                       off-Hire reasonably expected to occur and payments reasonably anticipated from Owner to Charterer under this Charter during the period for which payment of Hire is to be made;

 

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(iii)                                    lay up savings (including estimated savings);

 

(iv)                                   any previous overpayments of Hire, including payments made with respect to periods of off-Hire and related off-Hire expenses;

 

(v)                                      any sums due in respect of Owner’s failure to meet Owner’s performance undertakings as calculated pursuant to Clause 22;

 

(vii)                                any other sums to which Charterer is entitled under this Charter; and

 

(viii)                             to the extent not already paid or otherwise claimed under the Operation and Services Agreement, any amounts due and payable by Contractor to Customer in accordance with the terms of the Operation and Services Agreement.

 

(b)                                 Any such adjustments shall be made at the due date for the next monthly payment after facts have been ascertained.

 

10.3                           Invoicing

 

(a)                                  Each Monthly Hire Invoice delivered in accordance with Clause 10.1(a) shall become due and payable on the ***** of the Measurement Period to which it relates (“Monthly Invoice Due Date”).

 

(b)                                 Each Monthly Hire Invoice delivered after the ***** prior to each Measurement Period, and each Reimbursement Invoice received, shall become due and payable on the ***** following its receipt (“Monthly Invoice Payment Date” or “Reimbursement Invoice Due Date”, as applicable); provided that any amounts owed by Owner in accordance with any Reimbursement Invoice issued by Charterer that have been offset pursuant to Clause 10.2 shall not be payable under this Clause 10.3.

 

(c)                                  If with respect to any Monthly Hire Invoice or Reimbursement Invoice the Relevant Date is not a Banking Day, such Monthly Hire Invoice or Reimbursement Invoice shall become due and payable on the Banking Day immediately preceding such Relevant Date.

 

10.4                           Payment

 

(a)                                  Charterer shall pay or cause to be paid on the Relevant Date all amounts that 

 

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become due and payable by Charterer pursuant to Monthly Hire Invoices or Reimbursement Invoices, as the case may be, issued hereunder in immediately available funds to such account with such bank and in such location as shall have been designated by Owner in such invoices.

 

(b)                                 *****

 

(c)                                  Owner shall pay or cause to be paid, on the Reimbursement Invoice Due Date, all amounts that become due and payable by Owner pursuant to a Reimbursement Invoice issued hereunder in immediately available funds to such account with such bank and in such location as shall have been designated by Charterer.  Charterer shall notify Owner of such designated account in the said Reimbursement Invoice. *****.

 

(d)                                 Where payment is due by one Party to the other under this Charter then, provided the Party making payment issues prompt, accurate and complete payment instructions to its bank or agent, any delay or failure on the part of the receiving Party’s bank to credit the proceeds to the receiving Party shall not constitute a delay or failure on the part of the Party making such payments.

 

10.5                           Incomplete Invoices

 

(a)                                  In the event that a Monthly Hire Invoice is issued which contains errors or lacks the information required pursuant to Clause 10.1(a) of this Charter, it shall be returned to Owner by Charterer and Owner shall issue an amended Monthly Hire Invoice.

 

(b)                                 Payment of any such amended Monthly Hire Invoice shall become due and payable on the ***** following receipt by Charterer.

 

10.6                           Disputed Invoices

 

(a)                                  If a Party disagrees with any Monthly Hire Invoice and/or or Reimbursement Invoice Due Date, it shall pay all undisputed amounts of such Monthly Hire Invoice and/or Reimbursement Invoice (subject to adjustment for outstanding undisputed Monthly Hire Invoice and/or Reimbursement Invoice) and shall immediately notify the other Party (the “Issuing Party”) of the reasons for such disagreement, except that in the case of manifest error in computation the Party receiving the Monthly Hire Invoice and/or Reimbursement Invoice shall pay the correct amount after advising the Issuing Party of the error.  A Monthly Hire Invoice and/or Reimbursement Invoice may be contested by the 

 

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Party that received it or modified by the Party that sent it, by notice delivered to the other Party within a period of ***** after such receipt or sending, as the case may be.  Where a Party issues a new invoice to take into account any such modification(s), the new invoice should refer to the serial number of the disputed invoice.  Promptly after resolution of any dispute as to a Monthly Hire Invoice and/or Reimbursement Invoice, the amount agreed to be due shall be paid by Owner or Charterer (as the case may be) to the other Party, together with interest thereon at the rate provided in Clause 10.6(b) from the date of payment to the date of repayment of the due amount. In the event the Parties are unable to resolve the dispute as to a Monthly Hire Invoice and/or Reimbursement Invoice the matter shall be referred to arbitration in accordance with Clause 45.

 

(b)                                 If Charterer commits a breach of its obligation to pay Hire properly due pursuant to this Charter (for the avoidance of doubt an amount modified pursuant to Clause 10.6(a) shall not be considered properly due pending the resolution of any dispute in relation to such modification):

 

(i)                                          Owner shall notify Charterer of such default and Charterer shall within ***** of receipt of such notice pay to Owner the amount due, including interest, failing which Owner may withdraw the Vessel from the service of Charterer and terminate this Charter in accordance with Clause 28.3(b) without prejudice to any other rights Owner may have under this Charter or otherwise; and

 

(ii)                                       such unpaid amounts shall bear interest from due date until the date paid at a rate, compounded annually, equal to *****.

 

10.7                           Owner’s Representative

 

Where Owner has appointed a legal representative in Brazil by way of the grant of a power of attorney, such representative may issue invoices on Owner’s behalf providing that the power of attorney expressly authorises such action.  At least ***** prior to the issue of an invoice by Owner’s representative for the first time, Owner shall provide Charterer with a certified copy of such power of attorney.

 

10.8                           Language

 

(a)                                  Any invoice issued pursuant to Clause 10.7 is to be in Portuguese, providing that this does not contradict the terms of the R.O.F.

 

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(b)                                 Where an invoice is issued by Owner or Charterer in a language other than Portuguese, it shall be notarised and registered by the Brazilian Consulate and thereafter translated into Portuguese by a certified translator.

 

10.9                           Taxes

 

(a)                                  Charterer shall pay the full amount of Hire and other moneys due under this Charter without any deduction or withholding for or on account of present or future Taxes.  Notwithstanding the previous sentence, if Charterer shall be required by law to deduct or withhold any Taxes from Hire or other moneys payable under this Charter, then (i) Charterer shall make the necessary deduction or withholding, (ii) Charterer shall promptly pay the amount deducted or withheld to the relevant Governmental Authority, and (iii) Charterer shall provide Owner with evidence of payment of such deductions and withholdings in the form of self-certified receipts of payment.

 

(b)                                 Owner confirms that in contemplation of executing this Charter it has evaluated the Taxes applicable to the performance of Owner’s obligations hereunder, and Owner will not be entitled to an adjustment to the Hire rate due to an error in such evaluation.  However, if during the course of the Charter it is determined that such evaluation overstated Taxes imposed on Owner with respect to Owner’s performance of its obligations hereunder, the Hire rate shall be reduced or reimbursed by the amount of such overstatement. For the avoidance of doubt, any Taxes directly paid by Charterer in relation to the Vessel’s temporary admission shall not be included in the Hire.

 

(c)                                  If during the term of this Charter there are any new Brazilian Taxes, or there are any changes in Brazilian Tax rates and/or changes in the Brazilian Tax base that increase the Owner’s Tax burden with respect to the performance of its obligations hereunder, then Hire and other monies due under this Charter shall be increased in proportion to such increase in Owner’s Tax burden at the earliest opportunity.  However, Hire and other monies due under this Charter shall not be adjusted with respect to any new Brazilian Tax, changes in Brazilian Tax rates and/or changes in the Brazilian Tax base resulting from (i) a change in Owner’s jurisdiction of incorporation or Tax residence or domicile after the date of this Charter or (ii) a failure of Owner to comply with any applicable certification, information, documentation or other reporting requirement.

 

(d)                                 If during the term of the Charter there are any changes in any Brazilian Tax,

 

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changes in Brazilian Tax rates and/or changes in the Brazilian Tax base that reduce or extinguish or exempt the Owner’s Tax burden with respect to the performance of its obligations hereunder, then Hire and other monies due under this Charter shall be reduced in proportion to such reduction in Owner’s Tax burden at the earliest opportunity.

 

(e)                                  The Owner shall reimburse Charterer all amounts paid regarding Taxes, with respect to which any of the following events has occurred:

 

(i)                                          Acknowledgment of illegality or unconstitutionality, wholly or in part, of Tax collection in administrative or judicial proceedings that the Owner may be a party thereof;

 

(ii)                                       Judicial statement of illegality or unconstitutionality of Tax, wholly or in part, issued in final decision rendered by the Federal Supreme Court or by the Supreme Court of Justice, regarding matters that are object of declaratory actions of the Attorney General of the National Treasury, approved by the State Finance Minister, authorizing the non-filing of appeal, or to desist of appeal that had been filed;

 

(iii)                                    Judicial statement of unlawfulness or unconstitutionality of Tax, wholly or in part, issued in final decision rendered by the Federal Supreme Court through a Direct Action of Unconstitutionality (ADIN), or a Declaratory Action of Constitutionality (ADC);

 

(iv)                                   In the events provided for in sub-items (ii) and (iii) above, the obligation to reimburse on the part of the Owner is maintained independently of any judicial and/or administrative measure that may have been taken in connection with recovery and/or compensation.

 

10.10                     Reporting Requirements

 

Owner shall comply with any and all requirements of any applicable Governmental Authority regarding the reporting, filing of returns, maintenance of books and records and payment of any Taxes due.

 

10.11                     Evidence of Payment

 

Owner shall promptly upon request provide Charterer with evidence of payment of all 

 

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amounts required to be paid by Owner under this Clause 10 (any by Contractor under the Operation and Services Agreement), including if appropriate access to originals of such evidence.  *****.

 

11.                               Space Available to Charterer

 

The whole reach, burthen and decks on the Vessel and any passenger accommodation (including Owner’s suite) shall be at Charterer’s disposal, reserving only proper and sufficient space for the Vessel’s Master, officers, crew, tackle, apparel, furniture, provisions and stores, provided that the weight of stores on board shall not, unless specially agreed, exceed ***** tonnes at any time during the Charter Period.

 

12.                               Vessel Deployment and Operation

 

12.1                           Trading Limits

 

Subject to Clause 12.2, the Vessel shall be permitted to operate between any of the Primary Terminals and any other port in the world as Charterer shall direct within Institute Warranty Limits, as amended from time to time (and Charterer shall reimburse Owner in accordance with Clause 34 in relation to any additional insurance premiums, crew bonuses and other expenses incurred by Owner where the Vessel is ordered to trade in areas where there is war (de facto or de jure) or threat of war).  The Vessel shall not be permitted to operate or trade in contravention of any applicable United Nations Security Council resolution or other applicable Law.  If Charterer directs the Vessel to any LNG loading or receiving facilities other than the Primary Terminals, Charterer shall give notice to Owner sufficiently in advance thereof so as to enable Owner to comply with environmental, fire prevention, health, safety and other similar regulations applicable at such other place, including where any alteration or modification is required to the Vessel in order to be in compliance with such regulations.  The reasonable cost and the necessary time taken to comply with such regulations necessary solely to allow the Vessel to load or discharge at such other place shall be for Charterer’s account.  Charterer shall reimburse such costs to Owner against presentation to Charterer of appropriate invoices and supporting vouchers, except insofar as Owner is otherwise obliged to bear such costs in accordance with this Charter.  If the Vessel is directed by Charterer to call at a port within the United States of America so that a Certificate of Financial Responsibility must be issued in respect of pollution liability, with or without security therefor, or is directed to call at a port in another jurisdiction which requires a similar certificate to be issued for pollution liability or requires a vessel response plan to be issued to the appropriate authorities in respect of potential pollution, Charterer will give Owner sufficient prior 

 

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notice to enable Owner to comply with such requirements (or to procure that Contractor complies with such requirements), with actual expenses incurred by Owner for such compliance being for Charterer’s account.

 

12.2                           Ice

 

The Vessel shall not trade in waters with a temperature below the January isotherm of minus ten degrees Celsius (-10°C).  The Vessel shall not be sent to icebound waters without Owner’s prior consent and shall not force ice or follow ice breakers.  Despite the receipt of Owner’s consent, if the port at which the Vessel is ordered by Charterer to discharge cargo is, or could become, inaccessible owing to ice and the Master has notified Charterer thereof, then Charterer shall be bound to order the Vessel to an alternate ice-free port at which the Vessel can discharge the cargo.  Further, if the Master reasonably considers it dangerous for the Vessel to enter or remain at any discharging place for fear of the Vessel being frozen in or damaged and the Master so advises Charterer, Charterer shall provide the Master with orders to proceed to an alternate port that is ice-free at which the Vessel can discharge the cargo.  If no such orders are received by the Master from Charterer prior to the time when the Master must deviate or break ground to avoid the dangerous situations described in this Clause 12.2, Owner shall cause the Master to proceed to the nearest safe, ice-free anchorage to await further orders from Charterer.

 

12.3                           Safe Places

 

Charterer shall use due diligence to ensure that the Vessel is only employed between and at safe places (which expression when used in this Charter shall include ports, berths, wharves, docks, anchorages, submarine lines, alongside vessels or lighters, bunker barges and other locations including locations at sea) where she can safely lie always afloat.  Notwithstanding anything contained in this Clause 12.3 or any other Clause of this Charter, Charterer does not warrant the safety of any place (including any port or berth) to which it orders the Vessel and, except as provided in Clause 12.2, shall be under no liability in respect thereof except for loss or damage caused by its failure to exercise due diligence as aforesaid. Subject to the above, the Vessel shall be loaded and discharged at any place as Charterer may direct.

 

12.4                           Instructions and Logs

 

(a)                                  Charterer shall from time 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 Charterer or their agents may inspect as required.  The Master shall when required furnish Charterer or its agents with a true 

 

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copy of such log, with properly completed loading and discharging port sheets and Voyage Reports for each voyage, and other returns as Charterer may require.  Charterer shall be entitled to make copies at Owner’s expense of any such documents, which are not provided by the Master.

 

(b)                                 Charterer may issue orders directly to the Master to slow down or speed up the Vessel, consistent with the commercially reasonable safe operation of the Vessel and its machinery as determined by the Master, on ballast and/or laden passages.  A copy of any such orders shall also be sent to Owner.

 

12.5                           Controlled Passages

 

Passages that the Vessel shall not be permitted to use shall be instructed to the Master with Charterer’s standing orders.

 

12.6                           Infected Areas and Customs

 

Owner shall be liable for any loss of time and expense in quarantine arising from the Master’s or any of the Vessel’s officers or crew (other than any of Charterer’s Personnel or supernumeraries carried pursuant to the Operation and Services Agreement) having communication or interaction with the shore at any infected area without the consent or instructions of Charterer or its agent, and/or any detention by customs or other authorities caused by smuggling or other infraction of local laws by the Master, officers or crew.  Owner shall also be liable for any loss of time and expense attributable to the unavailability on board the Vessel of the appropriate certificates of inoculation/vaccination for all personnel on board, with the exception of any of Charterer’s Personnel.

 

13.                               Bills of Lading

 

13.1                           Bills of Lading

 

(a)                                  The Master (although appointed by Contractor pursuant to the Operation and Services Agreement) shall be under the orders and direction of Charterer as regards employment of the Vessel, agency and other arrangements, and shall sign Bills of Lading as Charterer or its agents may direct (subject always to Clauses 36.1 and 41) without prejudice to this Charter.  Charterer hereby indemnifies Owner against all consequences or liabilities that may arise:

 

(i)                                          from signing Bills of Lading in accordance with the directions of Charterer or its agents, to the extent that the terms of such Bills of 

 

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Lading fail to conform to the requirements of this Charter, or (except as provided in Clause 13.1(b)) from the Master otherwise complying with Charterer’s or its agents’ orders; and

 

(ii)                                   from any irregularities in papers supplied by Charterer or its agents.

 

(b)                                 If Charterer, by telex, facsimile or other form of written communication that specifically refers to this Clause 13, requests Owner to discharge a quantity of cargo either without Bills of Lading and/or at a discharge place other than that named in a Bill of Lading and/or that is different from the Bill of Lading quantity, then Owner shall discharge such cargo in accordance with Charterer’s instructions in consideration of receiving the following indemnity (or such other indemnity as may be required from time to time by Owner’s P&I Club), which shall be deemed to be given by Charterer on each and every such occasion and which is limited in value to two hundred per cent (200%) of the CIF value of the cargo carried on board:

 

Charterer shall indemnify Owner and Owner’s servants and agents in respect of any liability, loss or damage of whatsoever nature (including legal costs as between attorney or solicitor and client and associated expenses) which Owner may sustain by reason of delivering such cargo in accordance with Charterer’s request, provided that this indemnity shall not apply if such liability, loss or damage is a result of any act or omission of Owner (other than where such act or omission is the result of Owner acting in accordance with Charterer’s instructions).

 

(c)                                  If any proceeding is commenced against Owner or any of the Owner’s servants or agents in connection with the Vessel having delivered cargo in accordance with such request, Charterer shall provide Owner or any of Owner’s servants or agents from time to time on demand with sufficient funds to defend the said proceedings.

 

(d)                                 If the Vessel or any other vessel or property belonging to Owner should be arrested or detained, or if the arrest or detention thereof should be threatened, by reason of discharge in accordance with Charterer’s instruction as aforesaid, Charterer shall provide on demand such bail or other security as may be required to prevent such arrest or detention or to secure the release of such vessel or property and Charterer shall indemnify Owner in respect of any loss,

 

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damage or expenses caused by such arrest or detention whether or not the same may be justified.

 

(e)           Charterer shall, if called upon to do so at any time while such cargo is in Charterer’s possession, custody or control, redeliver the same to Owner.

 

(f)            As soon as all original Bills of Lading for such cargo which name as discharge port the place where delivery actually occurred have arrived and/or come into Charterer’s possession, Charterer shall produce and deliver the same to Owner whereupon Charterer’s liability hereunder shall cease; provided, however, if Charterer has not received all such original Bills of Lading by ***** on the day ***** after the date of discharge, this indemnity shall terminate at that time unless before that time Charterer has received from Owner written notice that (x) some Person is making a claim in connection with Owner delivering cargo pursuant to Charterer’s request or (y) legal proceedings have been commenced against Owner and/or carriers and/or Charterer and/or any of their respective servants or agents and/or the Vessel for the same reason.  If Charterer has received such a notice, then this indemnity shall continue in force until such claim or legal proceedings are settled.  Termination of this indemnity shall not prejudice any legal rights the Party may have outside this indemnity.

 

(g)           Owner shall promptly notify Charterer if any Person (other than a Person to whom Charterer ordered cargo to be delivered) claims to be entitled to such cargo and/or if the Vessel or any other property belonging to Owner is arrested by reason of any such discharge of cargo.

 

(h)           Owner warrants that the Master will comply with orders to carry and discharge against one or more Bills of Lading from a set of original negotiable Bills of Lading should Charterer so require.

 

13.2         Clause Paramount

 

Charterer shall procure that all Bills of Lading issued pursuant to this Charter shall contain, and in any event shall be deemed to contain, the following:

 

(a)           Subject to paragraphs (b), (c) and (d) below, this Bill of Lading shall be governed by, and have effect subject to, the Carriage of Goods by Sea Act of the United Kingdom, 1971, as amended.

 

(b)           If there is governing legislation which applies the rules contained in the

 

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International Convention for the Unification of Certain Rules relating to Bills of Lading 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”) compulsorily to this Bill of Lading, then this Bill of Lading shall have effect subject to the Hague Visby Rules.  Nothing contained herein shall be deemed to be either a surrender by the carrier of any of his rights or immunities or any increase of any of his responsibilities or liabilities under the Hague Visby Rules.

 

(c)           If there is governing legislation which applies the Hague Rules compulsorily to this Bill of Lading, to the exclusion of the Hague Visby Rules, then this Bill of Lading shall have effect subject to the Hague Rules.  Nothing therein contained shall be deemed to be either a surrender by the carrier of any of his rights or immunities or an increase of any of his responsibilities or liabilities under the Hague Rules.

 

(d)           If there is governing legislation which applies the United Nations Convention on the Carriage of Goods by Sea 1978 (hereafter the “Hamburg Rules”) compulsorily to this Bill of Lading, to the exclusion of the Hague Rules or Hague Visby Rules, then this Bill of Lading shall have effect subject to the Hamburg Rules.  Nothing therein contained shall be deemed to be either a surrender by the carrier of any of this rights or immunities or an increase of any of his responsibilities or liabilities under the Hamburg Rules.

 

(e)           If any term of this Bill of Lading is repugnant to the Hague Visby Rules, the Hague Rules or the Hamburg Rules, as applicable, such term shall be void to that extent but no further.

 

(f)            Nothing in this Bill of Lading shall be construed as in any way restricting, excluding or waiving the right of any relevant Party or Person to limit his liability under any available legislation and/or law.

 

(g)           Owner recognises that the Hague Rules, Hague-Visby Rules and Hamburg Rules are not applicable in Brazil, and shall therefore not apply to any obligations in such jurisdiction.

 

14.           Pilots and Tugs

 

14.1         Charterer shall procure that stevedores, when required, shall be employed and paid for by Customer in accordance with Clause 11.1 of the Operation and Services Agreement.

 

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14.2         Owner hereby indemnifies Charterer, its servants and agents against all losses, claims, responsibilities and liabilities arising in any way whatsoever from the employment of pilots or tugboats, stevedores, longshoremen or any other provider of port services who although employed by Charterer, in accordance with Clause 14.1, shall be deemed to be the servants of and in the service of Owner and under its instructions (even if such pilots, tugboat personnel, stevedores, longshoremen or any other provider of port services are in fact the servants of Charterer, its agents or any affiliated company); provided, however, that the foregoing indemnity shall not exceed the amount to which Owner would have been entitled to limit its liability if it had itself employed such pilots or tugboats.

 

15.           Assignment by Owner

 

15.1         Except as set forth in Clause 15.2, Owner may not assign, in whole or in part, novate or transfer any of its rights or obligations hereunder without the prior written consent of Charterer.  Owner shall remain jointly and severally liable with any of its assignees for the performance of Owner’s obligations hereunder.

 

15.2         Notwithstanding the foregoing provisions of Clause 15.1, Owner may assign its rights to receive payments under this Charter to a Person providing finance to Owner; provided that Owner and any such financier have first executed the Quiet Enjoyment Agreement (substantially in the form set out at Schedule VIII) with Charterer as required pursuant to Clause 26.3.

 

16.           Assignment and Subletting by Charterer

 

16.1         Except as set forth in Clauses 16.1 and 16.3, Charterer may not assign, in whole or in part, novate or transfer any of its rights or obligations hereunder without the prior written consent of Owner.

 

16.2         Notwithstanding the forgoing provisions of Clause 16.1, Charterer may assign, in whole or in part, novate or transfer any of its rights and obligations hereunder to any Person that is not an Affiliate of Charterer without the consent of Owner; provided that Charterer shall be jointly and severally liable with such Person for such Person’s payment obligations hereunder.

 

16.3         Notwithstanding the foregoing provisions of Clause 16.1, Charterer may assign, in whole or in part, novate or transfer any of its rights and obligations hereunder to any of Charterer’s Affiliates without the consent of Owner; provided that Charterer shall be jointly and severally liable with such Affiliate for its obligations hereunder.

 

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16.4         Provided that Charterer remains responsible for the continued performance of this Charter and that the rights of any sub-charterer are subject and subordinate to Owner’s rights under this Charter and the rights of any financing parties or mortgagees under the Security Documents, Charterer may sub-charter the Vessel to any other third party (on such terms and conditions as Charterer shall, in its sole discretion, deem appropriate) without the consent of Owner.

 

17.           Loss of Vessel

 

Should the Vessel be lost, this Charter shall terminate and Hire shall cease at noon on the day of her loss, or if such date of loss is unknown, at the time when the Vessel was last heard from.  Should the Vessel be a constructive total loss, this Charter shall be deemed to terminate at noon on the date on which the Vessel’s underwriters agree that the Vessel is a constructive total loss and Hire shall cease at noon on the day that the Charter terminates. Should the Vessel be missing, this Charter shall terminate and Hire shall cease at noon on the day on which she was last heard of.  Any Hire paid in advance and not earned shall be returned to Charterer and Owner shall reimburse Charterer for the value of the estimated quantity of bunkers on board at the time of termination, at the price paid by Charterer at the last bunkering port.  If the Vessel should be missing when a payment of Hire would otherwise be due, such payment shall be postponed until the safety of the Vessel is ascertained.

 

18.           Off-Hire

 

18.1         Off-Hire

 

(a)           On each and every occasion where the Vessel ceases to be at Charterer’s disposition where the Vessel is “off-Hire” under the Operation and Services Agreement (as such term is defined in the Operation and Services Agreement), then without prejudice to Charterer’s rights under this Charter or the Operation and Services Agreement, or otherwise, the Vessel shall be treated as “off-Hire” and no Hire shall be payable by Charterer from the commencement of such loss of time until the Vessel is again ready and in an efficient state to resume her service from (if applicable) a position not less favourable to Charterer than that at which such loss of time commenced including, without limitation, return to the queue position, berth or place occupied by the Vessel when she went off-Hire); provided, however, that any service given or (if applicable) distance made good by the Vessel whilst off-Hire shall be taken into account in assessing the amount to be deducted from Hire and further provided that in the event that as a result of any time spent off-Hire the Vessel

 

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misses a convoy to transit a canal or area, all time lost shall count as off-Hire.

 

The cost of all fuels, LNG Heel or vapour lost or consumed while the Vessel is off-Hire, as well as all port charges, pilotage, and other expenses incurred by the Vessel during such period or consequent to the putting into any port or place other than that to which the Vessel is bound, shall be borne by Owner.  Should the Vessel be driven into any port or anchorage by stress of weather Hire shall continue to be due and payable during any time lost thereby.

 

(b)           Owner shall be entitled to an allowance, such allowance not to be included as periods of off-Hire of one hundred and forty four (144) hours per annum (“Off-Hire Allowance”) counted from the Hire Commencement Date until the first anniversary thereof and thereafter for each twelve (12) month period beginning on each anniversary of the Hire Commencement Date.  The Off-Hire Allowance shall be applied in each such twelve (12) month period against the first one hundred and forty four (144) hours when the Vessel is off-Hire under this Clause 18.  Notwithstanding the foregoing, the Off-Hire Allowance may not be cumulated from year to year and may only be used in the period in which it accrues.

 

(c)           If the Vessel fails to proceed at any Guaranteed Speed or fails to load, discharge or regasify at the guaranteed loading, discharge or regasification rates set out in Clause 22.2, and such failure arises wholly or partly from any of the causes set out in Clause 18.1(a) then, if the Vessel is unable to maintain a speed of at least ***** of the Guaranteed Speed or to load, discharge or regasify at a rate of ***** of the relevant guaranteed loading, discharge or regasification rates set out in Clause 22.2, Charterer shall have the right to place the Vessel off-Hire.  If Charterer elects not to place the Vessel off-Hire and continues to use the Vessel, such failure shall result in a reduction in Hire pursuant to Clause 23.2 and the Vessel will not be off-Hire under this Clause 18.1(c).

 

(d)           In the event of any tank of the Vessel being unavailable for the carriage of cargo for any reason not caused by the fault of Charterer, Charterer shall have the option of utilising or not utilising the Vessel; provided, however, that Owner or Contractor shall have the right to effect full repairs on the Vessel subject to the consent of Charterer, which consent shall not be unreasonably withheld.  In the event Charterer nonetheless elects to utilise the Vessel, Hire shall be reduced pro rata during the period such tank remains unavailable for the carriage of cargo.  The amount of reduced Hire payable shall be calculated

 

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by multiplying the Daily Hire by the actual cargo capacity available divided by the Vessel’s maximum cargo capacity.

 

(e)           Notwithstanding the other provisions of Clause 18.1, any time lost in gas-freeing to the standard required for entry into drydock for cleaning and painting the hull which would be off-Hire but for Owner exercising due diligence in such gas-freeing shall not be included in any calculation under Schedule II.

 

18.2         Calculation of time

 

(a)           Time during which the Vessel is off-Hire under this Charter shall count as part of the Charter Period, except where Charterer declares its option to add off-Hire periods under Clause 3.5.

 

(b)           All references to “time” in this Charter shall be references to local time except where otherwise stated.

 

18.3         Termination for Extended Off-Hire

 

(a)           In the event that the Vessel is off-Hire for any reason other than in connection with Scheduled Drydocking for any period in excess of ***** or exceeding ***** in any period of *****, Charterer shall have the option to exercise its rights pursuant to Clause 28.3, provided that if Charterer elects to terminate this Charter, such termination shall not be effective until the Vessel is free of cargo (other than LNG Heel).  This Clause 18.3 is without prejudice to any other rights or obligations of Owner or Charterer under this Charter.  For the purposes of this Clause 18.3, in the event of partial loss of service, the period of off-Hire shall be the total period during which the Vessel is not fully efficient rather than the resulting loss of time.

 

(b)           The provisions of this Charter providing for Vessel off-Hire and related off-Hire expenses shall be fully operative regardless of any due diligence Owner or Charterer may have exercised.

 

(c)           Owner may not, under any circumstances, trade the Vessel for its own account during any period of off-Hire.

 

(d)           Nothing in this Clause 18 shall affect any other provision of this Charter stipulating loss of time for Vessel’s or Owner’s account or otherwise providing for suspension or cessation of Hire or other rights and remedies for loss or diminution of Vessel services under this Charter.

 

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19.           Ship to Ship Transfers

 

19.1         The loading or discharging of LNG from the Vessel at anchorage or alongside another vessel or lighter shall be allowed where there is an emergency or where Owner has been given reasonable advance notice and has consented (such consent not to be unreasonably withheld), but always subject to the Master’s reasonable discretion that such operation is, and remains, safe.

 

19.2         Any ship to ship operations shall meet or exceed the latest published edition of the International Chamber of Shipping (ICS)/OCIMF Ship to Ship Transfer Guide (Liquefied Gases) and any other recommendation published by SIGTTO.  Owner shall permit, at Owner’s expense (any such expense to be reasonable), personnel nominated by Charterer to attend on board to assist in the transhipment operation; provided that the risk of and liability for such operation shall always be for Owner.  Owner shall be entitled to insure any deductible under the Vessel’s hull policy and Charterer shall reimburse Owner for any documented commercially reasonable additional premiums required by the Vessel’s underwriters and/or the cost of insuring any deductible under the Vessel’s hull policy.

 

19.3         For all purposes of this Charter, any transfer of LNG at Charterer’s Facility shall not be (and shall be deemed not to be) a ship to ship transfer and shall not be subject to restrictions in this Clause 19.

 

19.4         For the avoidance of doubt, unloading terminals that include off-shore berthing and unloading facilities shall not be subject to this Clause 19.

 

20.           Scheduled Drydocking and Maintenance

 

20.1         Owner has the right and obligation to (i) drydock the Vessel, (ii) clean and paint the Vessel’s underwater hull and overhaul the Vessel, and (iii) undertake maintenance and other necessary repairs to the Vessel at regular intervals of ***** (each of (i), (ii) and (iii) above, the “Scheduled Drydocking”).  In addition, Scheduled Drydocking may be made at such other intervals as Owner and Charterer may mutually agree, but always in accordance with the Classification Society requirements and requirements of the Registry so that the Vessel is fit in every way for service under this Charter.  Owner shall also regularly undertake maintenance and other repairs as they become necessary.

 

20.2         Whenever Scheduled Drydocking of the Vessel is to be carried out, Owner shall give Charterer not less than ***** prior notice of the latest date by which such Scheduled Drydocking is required.  Following such notice, Owner and Charterer shall consult

 

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and co-operate with a view to agreeing the date on which such Scheduled Drydocking is to be carried out, taking into consideration, amongst other things, the maintenance schedule at the Primary Terminals, the Designated Terminals and Charterer’s schedule for deliveries under any LNG SPA, Designated Trade and any other relevant contract for the purchase or sale of LNG.  If Owner and Charterer cannot agree upon a date within ***** after Owner’s notice, then Charterer shall be entitled to select a date for Scheduled Drydocking (not later than the date first notified by Owner) by at least ***** prior notice to Owner.  Owner may not change the commencement date of any Scheduled Drydocking agreed or selected pursuant to this Clause 20.2 without the prior written consent of Charterer.

 

20.3         Notwithstanding Clause 20.2, if necessary, the first Scheduled Drydocking shall take place so as to ensure that the condition of the Vessel is checked within the validity period for the warranties and guarantees of the Builder under the Vessel’s shipbuilding contract.

 

(a)           Owner may choose the shipyard where the Scheduled Drydocking will take place, observing the requirements of the Classification Society and the Registry and any Laws or commercial restrictions applicable to the location of such shipyard. If required by Charterer, Owner shall solicit international competitive bids from shipyards approved by Charterer for any Scheduled Drydocking of the Vessel.  In such case, Owner shall submit a detailed drydocking/maintenance/repair specification for Charterer’s approval (not to be unreasonably withheld or delayed) prior to issuing the specification to tender.  Such specification shall include (but not be limited to) the estimated costs of the Scheduled Drydocking and the anticipated time out of service.

 

(b)           If Charterer has requested Owner to solicit the above referred bid, Owner shall notify Charterer of the shipyard it proposes (which must have suitable accommodation for the purpose and reception facilities for tank washings and residues).  If any tenders are required under Clause 20.3(a) then such notice shall be given following receipt of such tenders.  In selecting such shipyard Owner shall take into account not only price but also the anticipated time out of service, and any other costs associated with using the selected shipyard including (but without limitation) the costs of fuel expended and LNG Boil-Off to facilitate the Scheduled Drydocking.

 

(c)           Following Charterer’s receipt of notice of the proposed shipyard in accordance with Clause 20.3(b), Owner and Charterer shall consult and cooperate with a view to agreeing upon the shipyard at which the Scheduled Drydocking of the

 

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Vessel shall be carried out, taking into consideration, amongst other things, Charterer’s schedule for deliveries under any LNG SPA and Charterer’s schedule for the purchase or sale of LNG pursuant to a Designated Trade.

 

(d)           If Owner and Charterer cannot agree upon the shipyard to undertake the Scheduled Drydocking within ***** after Owner’s notice, then Charterer shall direct the Vessel to a shipyard of Charterer’s choice (which must have suitable accommodation for the purpose and reception facilities for tank washings and residues).

 

20.4         Charterer shall take all reasonable steps to place the Vessel at Owner’s disposal for Scheduled Drydocking after the last cargo discharge as near as possible to the date agreed with Owner or notified to Owner in accordance with Clause 20.2.  Owner shall put the Vessel in drydock as soon as practicable after Charterer places the Vessel at the Owner’s disposal clear of cargo.

 

(a)           Notwithstanding Clauses 20.2, 20.3 and 20.4, Owner may, with Charterer’s prior written consent (not to be unreasonably withheld or delayed), take the Vessel out of service for emergency repairs or unscheduled drydocking at a shipyard agreed between the Parties.  Owner shall consult with Charterer as far in advance as possible as regards any emergency repairs or unscheduled drydocking and both Parties shall provide any notices and consents promptly within the time available.  As early as possible before emergency repairs are made or unscheduled drydocking is due to take place, Contractor is required to submit a budget estimate (with any drydocking/maintenance/repair quotation and a detailed work specification from the shipyard agreed under this Clause 20.5, which the Parties shall consider with a view to agreeing as early as possible before drydocking, maintenance or repair commences.

 

(b)           The expenses of gas-freeing for the purpose of drydocking, including without limitation the cost of bunkers, shall be for Owner’s account.

 

21.           Representations and Warranties

 

21.1         Owner’s Representations

 

Owner hereby represents and warrants to Charterer that, as at the date hereof:

 

(a)           it is a corporation duly incorporated and validly existing and in good standing under the laws of the country of its incorporation and has the corporate power

 

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and authority to enter into and perform its obligations under this Charter and all necessary corporate, shareholder and other action has been taken to authorise the execution, delivery and performance of the same;

 

(b)           this Charter constitutes legal, valid and binding obligations applicable to it and the obligations are in full force and effect in accordance with their terms, and the delivery and performance by Owner of this Charter will not contravene any Law of any Governmental Authority having jurisdiction over Owner;

 

(c)           it has not taken nor to its knowledge has it omitted to take any actions which would adversely affect the enforceability of this Charter against it or the rights of Charterer under the terms of this Charter; and

 

(d)           this Charter, its execution and delivery will not conflict with or result in any breach of any terms of, or constitute a default under, any agreement or other instrument to which Owner is a party or its property is bound.

 

21.2         Charterer’s Representations

 

Charterer hereby represents and warrants to Owner that, as at the date hereof:

 

(a)           it is a corporation duly incorporated and validly existing and in good standing under the laws of the country of its incorporation and has the corporate power and authority to enter into and perform its obligations under this Charter and all necessary corporate, shareholder and other action has been taken to authorise the execution, delivery and performance of the same;

 

(b)           this Charter constitutes legal, valid and binding obligations applicable to it and the obligations are in full force and effect in accordance with their terms, and the delivery and performance by Charterer of this Charter will not contravene any Law of any Governmental Authority having jurisdiction over Charterer;

 

(c)           it has not taken nor to its knowledge has it omitted to take any actions which would adversely affect the enforceability of this Charter against it or the rights of Owner under the terms of this Charter; and

 

(d)           this Charter, its execution and delivery will not conflict with or result in any breach of any terms of, or constitute a default under, any agreement or other instrument to which Charterer is a party or its property is bound.

 

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22.                                  Key Vessel Performance Criteria

 

22.1                           Speed

 

(a)                                  Throughout the Charter Period, Owner warrants and guarantees that:

 

(i)                                     the Laden Service Speed of the Vessel shall be ***** knots;

 

(ii)                                  the Ballast Service Speed of the Vessel shall be ***** knots; and

 

(iii)                               the Minimum Service Speed of the Vessel shall be ***** knots,

 

(sub-paragraphs (i), (ii) and (iii) above, cumulatively the “Speed Performance Warranty”).

 

(b)                                 Owner warrants and guarantees that the Vessel is capable of steaming and, subject to Schedule II, Article 1, shall steam at the Laden Service Speed or Ballast Service Speed, as applicable.

 

22.2                           Loading and Discharge Rates

 

(a)                                  Throughout the Charter Period, Owner warrants and guarantees that the Vessel shall be capable of loading cargo as follows:

 

(i)                                     when the Vessel is loading LNG at the Charterer’s Facility, provided the LNG in the cargo tanks of the offloading LNG carrier is at a homogeneous temperature corresponding to a saturation pressure of ***** (***** for the Petrobras reference LNG composition) and provided the Vessel’s cargo tanks are colder than the tank design temperature for commencement of loading, a cargo of LNG may be loaded at the rate of at least ***** of LNG per hour at not less than ***** bar (gauge) pressure at the flange connection between ship and terminal utilising a minimum of ***** liquid loading arms (it being understood that the Vessel must be capable of processing all Boil-Off generated when loading the Vessel at the above specified flow rate of LNG); and

 

(ii)                                  when the Vessel is loading LNG at any terminal other than at the Charterer’s Facility, a full cargo of LNG may be loaded within ***** if the Vessel’s cargo tanks are colder than the tank design temperature

 

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for commencement of loading, excluding the time for connecting, disconnecting, cooling down, topping up and custody transfer measurement, and provided that the loading terminal is capable of pumping at least ***** of LNG per hour to the Vessel at not less than ***** bar (gauge) pressure at the flange connection between ship and terminal utilising a minimum of ***** liquid loading arms, and provided that the terminal is capable of receiving all return vapour from the Vessel that may be generated when loading the Vessel at the above specified flow rate of LNG,

 

(sub-paragraphs (i) and (ii) above, cumulatively, the “Loading Rate Warranty”);

 

(b)                                 Throughout the Charter Period, Owner warrants and guarantees that a full cargo of LNG may be discharged within *****, excluding the time for connecting, disconnecting, cooling down, starting up pumps, ramping up, ramping down for stripping at end of discharge and custody transfer measurement, and provided that the discharge terminal is capable of (i) receiving LNG at a rate of at least ***** of LNG per hour with a back pressure at the flange connection between ship and terminal not exceeding ***** bar (gauge) and (ii) providing sufficient return vapour to the Vessel to compensate for the displacement of the LNG being discharged from the Vessel (the “Discharge Rate Warranty”);

 

(c)                                  Throughout the Charter Period, Owner warrants and guarantees that the Vessel shall be able to:

 

(i)                                     regasify LNG and discharge regasified LNG at the Regasification Flow Rate, provided the discharge terminal is capable of receiving regasified LNG at such rates;

 

(ii)                                  perform the Flow Rate Modulation in accordance with the Nomination Procedure (and that the Vessel shall be able to operate as set forth in Article 12 of Schedule II);

 

(sub-paragraphs (i) and (ii) above, cumulatively, the “Regasification Flow Rate Warranty”).  For all purposes of this Charter, the Regasification Flow Rate shall be based upon LNG with a chemical composition of standard LNG specifications.  The actual gas flow rate shall be measured using the metering

 

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unit installed on the Vessel for such purposes.

 

22.3                           Fuel Consumption

 

Throughout the Charter Period, the Vessel’s guaranteed maximum fuel consumption (a) on all sea passage and (b) when stationary and regasifying LNG in the Closed Loop Mode shall, in each case, be as specified in Articles 3 and 13 of Schedule II, (cumulatively, the “Fuel Consumption Warranty”).

 

22.4                           Boil-Off

 

Throughout the Charter Period:

 

(a)                                  the Fuel Oil Equivalent Factor shall be ***** (the “Fuel Oil Equivalent Factor”).

 

(b)           Owner warrants and guarantees that the maximum Boil-Off shall be as follows:

 

(i)                                     the maximum laden Boil-Off shall be ***** per day of the Cargo Capacity on fully laden sea passages (or pro-rated by the ratio of volumetric cargo loaded to Cargo Capacity if all tanks are not used); and

 

(ii)                                  the maximum ballast Boil-Off shall be ***** per day of the Cargo Capacity where the previous sea passage was fully laden (or pro-rated by the ratio of the number of tanks previously used to the total number of cargo tanks if all tanks were not utilised for the carriage of cargo on the previous laden passage),

 

(in respect of sub-paragraphs (i) and (ii) above, subject to Article 7 of Schedule II); and

 

(iii)                               the maximum Boil-Off when the Vessel is stationary and both receiving a transfer of LNG and regasifying LNG shall be ***** per day of the Cargo Capacity (or pro-rated by the ratio of volumetric cargo loaded to Cargo Capacity if all tanks are not used)

 

(in respect of this sub-paragraph (iii), subject to Article 14 of Schedule II)

 

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(sub-paragraphs (i) through (iii) above being, cumulatively, the “Boil-Off Warranty”).

 

22.5                           Tank Capacity

 

Throughout the Charter Period, the Vessel’s tanks shall be as specified in Article 8 of Schedule I, including as to Cargo Capacity.

 

23.                                  Vessel Performance Reviews and Claims

 

23.1                           Vessel Performance Deficiency Claims

 

(i)                                     Any claims by Charterer relating to the Vessel’s performance deficiencies shall be administered in accordance with this Clause 23 and shall be without prejudice to any other remedies of Charterer under this Charter (including Clause 18.1(d) in relation to reduced tank capacity).  Subject to Clause 23.4, Owner hereby irrevocably agrees that (a) it shall be liable for the Vessel’s performance deficiencies under this Charter notwithstanding (i) any default or failure by Contractor to operate the Vessel, or to perform its obligations, as required under the Operation and Services Agreement or (ii) any other act or omission whatsoever by Contractor and (b) that it shall accept and promptly pay (and shall not be permitted to dispute in any manner whatsoever) any claim by Charterer under this Charter in relation to the Vessel’s performance deficiencies.  Further, Owner shall be required to accept (and shall not be permitted to dispute in any manner whatsoever, other than manifest error) any information, data or calculations provided by Charterer or Contractor or its personnel under the Operation and Services Agreement in relation to the Vessel’s performance in relation to any deficiency claim made by Charterer under this Charter.  Promptly after the expiry of a Performance Period, Owner shall provide to Charterer all information, including but not limited to the information referred to in Clause 23.3, required for Charterer to conduct such performance review.

 

23.2                           Performance Review Frequency and Compensation

 

The Vessel’s actual performance shall be reviewed by Charterer and compared against the Speed Performance Warranty, Fuel Consumption Warranty, Loading Rate Warranty, Discharge Rate Warranty, Boil-off Warranty and Regasification Flow Rate

 

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Warranty approximately every ***** throughout the Charter Period (each a “Performance Period”).  The first Performance Period will commence with the Delivery Date and end on the first ***** anniversary of such date.  Each subsequent Performance Period shall be a ***** period commencing on the expiration of the previous Performance Period, except that the final Performance Period will end with redelivery of the Vessel to Owner.  Operations or, if applicable, sea passages in progress on the last day of a Performance Period will be included with the subsequent Performance Period.  If it is found that the Vessel has failed to maintain the Speed Performance Warranty, Fuel Consumption Warranty, Loading Rate Warranty, Discharging Rate Warranty, Boil-Off Warranty or Regasification Flow Rate Warranty during the preceding ***** period (or at any time during the Charter Period), Charterer shall be retroactively compensated in respect of such failings as follows:

 

(a)                                  Speed Warranty Compensation:  Subject to Articles 2(c) and 2(e) of Schedule II, Charterer is to be compensated at a rate of a sum *****.  Owner shall receive no credit or compensation if the Vessel’s performance with respect to speed is greater than the Speed Performance Warranty.

 

(b)                                 Loading Rate Warranty and Discharge Rate Warranty Compensation:  Charterer is to be compensated at the *****.  Owner shall receive no credit or compensation if the Vessel is able to load or discharge at a rate greater than the Loading Rate Warranty and the Discharge Rate Warranty.  If the loading or discharging terminal does not allow or permit the Vessel to meet the Loading Rate Warranty and the Discharge Rate Warranty, the Master shall forthwith issue a letter to the terminal protesting such conditions (which shall, if possible, be acknowledged) and shall immediately so notify Charterer.  If the Master fails to issue such letter, Owner shall be deemed to waive any rights to contest that time was lost as a result of the Vessel’s failure to comply with the Loading Rate Warranty and Discharge Rate Warranty.  Any delay to Vessel’s loading or discharge caused by shore conditions identified in Master’s letter of protest shall be taken into account in the assessment of loading and/or discharging performance.

 

(c)                                  Regasification Flow Rate Warranty Compensation:  Charterer is to be compensated by a reduction (*****) of the Daily Hire in the event of any interruption, failure or malfunctioning of the Vessel or its equipment which results in a failure to deliver the required daily volume of regasified LNG (in accordance with the Nomination Procedures); provided that there shall be no such reduction in Hire to the extent that (i) there is insufficient LNG on board the Vessel (other than due to excess Boil-Off or due to any fault or negligent

 

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act or omission by Owner), (ii) Charterer’s Facility is unable to receive regasified LNG or (iii) any request for delivery of regasified LNG was not made by Charterer in accordance with the Nomination Procedures.  Daily Hire shall be reduced in accordance with the below *****.

 

(d)                                 Fuel Consumption Warranty Compensation:  Charterer is to be compensated for each metric tonne, or the LNG equivalent thereof, or pro rata for part of a tonne, in excess of the guaranteed daily consumption under Clause 22.3 except where provided otherwise in Articles 3, 5, 6 and 13 of Schedule II, or the LNG equivalent thereof, for all purposes at sea for main engine and/or auxiliaries and while at anchor, in port or alongside the Charterer’s Facility, at the relevant price fixed pursuant to Clause 49.8.  The amount of any compensation payable pursuant to this Clause 23.2(d) shall be calculated as provided (i) in relation to any Voyage, pursuant to Article 5(e) of Schedule II and (ii) in all other circumstances, pursuant to Article 13(d) of Schedule II.  Charterer shall provide supporting price evidence for such fuel oil promptly after completion of the review for the specified Performance Period.  Owner will receive no credit or compensation if the Vessel’s fuel consumption is less than the Fuel Consumption Warranty.

 

(e)                                  Boil-Off Warranty Compensation:  Charterer is to be compensated at the LNG Price for excess Boil-Off where actual Boil-Off exceeds the Boil-Off Warranty in Clause 22.4(b).  The amount of any compensation payable pursuant to this Clause 23.2(e) shall be calculated as provided (i) in relation to any sea passage, pursuant to Article 8(d) of Schedule II and (ii) in all other circumstances, pursuant to Article 14(f) of Schedule II.  Charterer shall provide Owner with reasonable evidence in support of the relevant price.  To the extent that the excess Boil-Off was used as fuel for the purpose of propulsion and normal services of the Vessel, Owner will be given credit for the savings resulting from reduced bunker consumption.  The quantity of fuel oil saved on any sea passage shall be determined by consultation between Charterer and Owner.  The value of such savings or credit shall be determined by reference to the LNG price.  Charterer shall provide supporting price evidence promptly after completion of the review for the specified Performance Period.

 

Notwithstanding the above, the Parties agree that Charterer shall not be entitled to receive any compensation pursuant to Clause 23.2(a) to (e) for any period when the Vessel is off-Hire.

 

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23.3                           Performance Review Basis

 

The basis for determining the Vessel’s performance under Clause 22 shall be (i) the statistical data supplied by the Master in the Voyage Reports and port logs, and in the cargo logs provided by Charterer (the “Voyage Reports”), (ii) the custody transfer documentation for each cargo of LNG, (iii) the measuring devices used to measure and quantify regasified LNG, and (iv) for the Regasification Flow Rate Warranty, the Vessel’s daily logs and records documenting the volume of regasified LNG discharged by the Vessel.

 

23.4                           Performance Claims Review

 

Charterer shall provide Owner with an opportunity to review any claim submitted by Charterer under Clauses 22 and 23 and Owner shall complete such review and provide Charterer with the result thereof ***** from the date such claim was received in writing by Owner.  Charterer may deduct from Hire any amount to which it reasonably claims to be entitled under Clause 23 after the expiration of ***** from the date of Charterer’s sending of a claim relating thereto to Owner, unless, within that ***** period, Owner provides reasonable evidence that Charterer is not entitled to the proposed deduction from Hire.  Such deduction shall be without prejudice to Owner defending such claim or seeking a judgment or award for reimbursement of any sum Owner contends Charterer was not entitled to deduct.

 

23.5                           Claim for Final Period

 

In the event Charterer has any claim in respect of the Vessel’s performance during the final Performance Period, the amount of such claim shall be withheld from Hire in accordance with Charterer’s estimate made not earlier than ***** before the end of the Charter Period, and any necessary adjustment after the termination of this Charter shall be made by Owner to Charterer or Charterer to Owner, as the case may be.

 

24.                                  Indemnification

 

24.1                           Subject to Clause 24.4, Owner shall protect, defend, indemnify and hold Charterer Indemnified Parties harmless from and against any and all Damages (whether based on applicable Law, contract, equitable cause or otherwise) that may be imposed on, incurred by, or asserted against any Charterer Indemnified Party arising out of, attributable to or in connection with any of the following:

 

(a)                                  any injury (including fatal injury, illness or disease) or damage to or loss of property of any Person not being a Charterer Indemnified Party or an Owner

 

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Indemnified Party arising directly or indirectly from (i) the operation of the Vessel, (ii) performance of the Charter Activities or (iii) any negligent act, omission, error or other breach of duty by any Owner Indemnified Party, in each case, regardless of whether or not the negligence, act, omission, default, error or breach by any Charterer Indemnified Party caused or contributed to such Damages, unless such injury or damage to or loss of property is caused solely by any Charterer Indemnified Party.

 

(b)                                 any injury (including fatal injury, illness or disease) or damage to or loss of property of any Owner Indemnified Party, regardless of whether or not the negligence, act, omission, default, error or breach by any Charterer Indemnified Party caused or contributed to such Damages;

 

(c)                                  any injury (including fatal injury, illness or disease) or damage to or loss of property of any Charterer Indemnified Party arising directly or indirectly from (i) the operation of the Vessel, (ii) performance of the Charter Activities, (iii) any negligent act, omission, error or other breach of duty of any Owner Indemnified Party or (iv) any material misrepresentation, breach of warranty or covenant by Owner or Contractor under this Charter or the Operation and Services Agreement (as the case may be), in each case, regardless of whether or not the negligence, act, omission, default, error or breach of the terms of this Charter or the Operation and Services Agreement by any Charterer Indemnified Party caused or contributed to such Damages, unless such injury or damage to or loss of property is caused solely by any Charterer Indemnified Party.

 

(d)                                 any failure by any Owner Indemnified Party to comply with any applicable Law or for any contravention of such applicable Law (including all applicable Brazilian Laws, including, but not limited to, labour, environmental, taxation, immigration and social security Laws and such other applicable Brazilian Laws in force for reasons of Brazilian public policy);

 

(e)                                  any failure by any Owner Indemnified Party (i) to pay any Taxes relating to income or any other Tax required to be paid by any Owner Indemnified Party, (ii) to make any payments in respect of Taxes which are required to be paid by any Owner Indemnified Party in connection with the performance of the Charter Activities, (iii) to file Tax returns as required by applicable Law or comply with reporting or filing requirements under applicable Laws relating to Taxes, or (iv) arising by reason of any misrepresentation by or on behalf of any Owner Indemnified Party to any competent Governmental Authority in

 

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respect of Taxes; and

 

(f)                                    except to the extent Clause 24.2(c) applies, any and all damage or harm to the environment (including any repair and clean-up) arising directly or indirectly from (i) the operation of the Vessel, (ii) performance of the Charter Activities or (iii) any negligent act, omission, error, or other breach of duty of any Owner Indemnified Party.

 

24.2                          Subject to Clause 24.4, Charterer shall protect, defend, indemnify and hold Owner Indemnified Parties harmless from and against any and all Damages (whether based on applicable Law, contract, equitable cause or otherwise) that may be imposed on, incurred by, or asserted against any Owner Indemnified Party arising out of, attributable to or in connection with any of the following:

 

(a)                                  any failure by any Charterer Indemnified Party to comply with any applicable Law or for any contravention of such applicable Law (including all applicable Brazilian Laws, including, but not limited to, labour, environmental, taxation, immigration and social security Laws and such other applicable Brazilian Laws in force for reasons of Brazilian public policy);

 

(b)                                 any failure by any Charterer Indemnified Party (i) to pay any Taxes relating to income or any other Tax required to be paid by any Charterer Indemnified Party, (ii) to make any payments in respect of Taxes which are required to be paid by any Charterer Indemnified Party in connection with the performance by Charterer or Customer of their respective duties under this Charter and the Operation and Services Agreement (as the case may be), (iii) to file Tax returns as required by applicable Law or comply with reporting or filing requirements under applicable Laws relating to Taxes, or (iv) arising by reason of any misrepresentation by or on behalf of any Charterer Indemnified Party to any competent Governmental Authority in respect of Taxes; and

 

(c)                                  any and all damage or harm to the environment (including any repair and clean-up) caused by any negligent act, omission, error, or other breach of duty of any Charterer Indemnified Party.

 

24.3                           Charterer or Customer (or any respective Affiliate thereof) shall have the right, but not the obligation, to take any steps that are reasonably necessary in connection with remediating or cleaning up any damage or harm to the environment.  To the extent that any Owner Indemnified Party has responsibility under this Charter for such damage or harm, Owner shall reimburse Charterer or Customer (or their respective Affiliates) such remediation and/or cleanup costs and none of Charterer, Customer (or 

 

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any of their respective Affiliates) shall have any liability with respect to such remediation and/or cleanup actions; except to the extent such actions cause further damage or harm.  The performance or non-performance of any such actions by Charterer, Customer (or any of their respective Affiliates) shall not relieve Owner of any of Owner’s obligations under this Charter and shall be without prejudice to any other rights or remedies of any Charterer Indemnified Party hereunder or otherwise.

 

24.4                           Notwithstanding the forgoing provisions of this Clause 24:

 

(a)                                  Except as set forth in Clause 24.4(b), the aggregate payment due by either Party under this Clause 24 to any Charterer Indemnified Parties or the Owner Indemnified Parties (as the case may be) shall, in each case, not exceed the aggregate of (i) the maximum insurance cover available in respect of such risks (being no less than (A) in respect of hull and machinery cover, such values adopted by first class companies covering such risks, (B) protection and indemnity cover, the maximum level available in the protection and indemnity club group, and (C) in respect of any other insurance cover, such level of insurance generally adopted (and generally available in the international insurance market) by reasonable and prudent Persons in relation to such risks) and (ii) Fifty Five Million United States Dollars ($55,000,000).

 

(b)                                 The provisions of Clause 24.4(a) shall not apply to any Damages arising out of or in connection with (i) Clauses 24.1(d), (e) or (f) or (ii) Clauses 24.2(a), (b) or (c); provided, however, the liability of Charterer Indemnified Parties pursuant to Clause 24.2(c) shall not exceed the amount of insurance available in respect of any such liability.

 

(c)                                  In all other respects, the liability of each Party under this Clause 24 shall be subject to the limitation of liability afforded by any applicable Law, including without limitation the International Convention on Limitation of Liability for Maritime Claims or any other similar law or convention (and including any modifications, amendments and extensions thereto).

 

(d)                                 The exclusion of damages specified in Clauses 28.6(a) and (b) shall not apply in relation to Clauses 24.1(a), (f) and 24.2(c).

 

25.                               Salvage

 

25.1                           The Parties agree that subject to the provisions of Clause 18, all lost time and all expenses (excluding any damage to or loss of the Vessel or tortious liabilities to third parties) incurred in saving or attempting to save life or in successful or unsuccessful

 

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attempts at salvage shall be borne equally by Owner and Charterer (except to the extent reimbursed by the Vessel’s insurance); provided that Charterer shall not be liable to contribute towards any salvage payable by Owner or Contractor arising in any way out of services rendered under this Clause 25.  For the avoidance of doubt, the Vessel shall remain on-Hire during any salvage operations but such Hire shall be an expense to be borne equally by Owner and Charterer for the duration of the operation.

 

25.2         The Parties agree that all salvage and all proceeds from derelicts shall be divided equally between Contractor and Charterer after deducting (a) expenses (in accordance with Clause 25.1), and (b) the Master’s, officers’ and crew’s share.

 

26.           Liens

 

26.1         Owner Liens

 

Owner shall not have, or allow others (claiming through Owner) to have, a lien on any cargoes, fuel, freights, sub-freights or sub-hires or any sums payable to Charterer or others or with respect to sales of cargoes carried on the Vessel, except to the extent such lien arises by operation of Law.

 

26.2         Charterer Liens

 

Charterer shall not have, or allow others (in their dealings with Charterer) to have, a lien against the Vessel, except to the extent such lien arises by operation of Law.  Charterer shall however have a lien on the Vessel for all monies paid in advance and not earned, all disbursements and advances for Owner’s account, all amounts due to Charterer, including without limitation the value of fuels in the Vessel’s bunker tanks and LNG Heel and vapours on board the vessel supplied or paid for by Charterer, and for any damages sustained by Charterer as a result of the breach of this Charter by Owner.

 

26.3         Vessel Mortgage

 

(a)           Owner shall, subject to the confidentiality obligations the Owner has to other parties under such documentation, provide to Charterer particulars of the information regarding any loan financing, leasing and similar arrangements by Owner, including without limitation, copies of all loan, security and other related ancillary documents (which may be redacted as necessary to remove commercially confidential information).

 

(b)           Owner covenants that it will not effect any mortgage, charge, lien,

 

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encumbrance, security or third party right (other than Permitted Liens) on or over the Vessel (or any part thereof), any insurances and any right to receive Hire or any payment in relation to the Vessel (collectively referred to as a “Mortgage”) on or after the date of this Charter without Charterer’s prior written consent, such consent not to be unreasonably withheld, and provided that each Person which is a party to, or benefits from, such Mortgage (each, a “Mortgagor”) enters into an agreement substantially in the form of the Quiet Enjoyment Agreement on the date such Mortgage is entered into, which shall remain in full force and effect for so long as the Mortgage remains effective.

 

(c)           Owner has entered into certain lease and financing arrangements in relation to the Vessel (as further described in the Quiet Enjoyment Agreement) and shall procure that each applicable leasing or financing party enters into an agreement substantially in the form of the Quiet Enjoyment Agreement on the date hereof, which shall remain in full force and effect for so long as such leasing and financing arrangements remain effective.  Each Security Document (as defined in such Quiet Enjoyment Agreement), is an “Approved Document”.

 

26.4         Release of Lien

 

In the event that any lien shall attach by operation of law or in violation of this Clause 26, Owner or Charterer, as the case may be, shall take such steps as reasonably necessary to ensure that the lien does not interfere with the Vessel’s operations or with Charterer’s right to the Vessel and its cargo and to effect prompt release of such lien prior to the enforcement thereof.

 

 

27.           Loss, Damage, Delay and Force Majeure

 

27.1         Loss, Damage and Delay

 

(a)           The Vessel, Master and Owner shall not, unless otherwise expressly provided in this Charter, be liable for any loss or damage or delay or failure arising or resulting from:

 

(i)            any act, neglect or default of the Master, pilots, mariners or other servants of Owner in the navigation or management of the Vessel;

 

(ii)           fire, unless caused by the actual fault or privity of Owner;

 

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(iii)          collision or stranding, unless caused by Owner’s fault;

 

(iv)          dangers and accidents of the sea; or

 

(v)           explosion, bursting of boilers, breakage of shafts or any latent defect in hull, equipment or machinery of the Vessel, unless caused by the actual fault of Owner,

 

provided, however, that Clauses 2 (Vessel to be Chartered), 4 (Vessel Specifications and Characteristics), 6 (Delivery, Redelivery and Cancelling)), 18 (Off-Hire), 22 (Key Vessel Performance Criteria), 23 (Vessel Performance Review and Claims) or 24 (Indemnification) shall not be affected by the foregoing.

 

(b)           Provided the Vessel complies with any requirements as to compulsory pilotage, the Vessel shall have liberty to sail with or without pilots, to tow or go to the assistance of vessels in distress and to deviate for the purpose of saving life or property.

 

(c)           Clause 27.1(a) shall not apply to, or affect any liability of, Owner or the Vessel or any other relevant person in respect of:

 

(i)            loss or damage caused to any berth, jetty, dock, dolphin, buoy, mooring line, pipe, crane or other works or equipment whatsoever at or near any place to which the Vessel may proceed under this Charter, whether or not such works or equipment belong to Charterer; or

 

(ii)           any claim (whether brought by Charterer or any other person) arising out of any loss of or damage to or in connection with any cargo.  Any such claim shall be subject to the provisions of Clause 13.

 

(d)           Owner, while seeking to rely upon any provision of this Clause 27.1, shall, as a precondition of such reliance, give notice to Charterer of the event upon which it seeks to rely.  Such notice shall be given promptly upon Owner becoming aware that such event may occur or, if the event is unforeseeable, promptly upon becoming aware of its occurrence.  Owner shall make every reasonable effort to remove or remedy the event and to mitigate its effects as quickly as may be possible.

 

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27.2         Force Majeure

 

Subject always to Clause 27.3, and unless expressly provided otherwise in this Charter, none of the Vessel, Master, Owner or Charterer shall be responsible for any loss or damage or delay arising from a failure, delay or omission in performing their obligations hereunder or under the Operation and Services Agreement arising or resulting from any of the following events beyond the reasonable control of the affected Party to avoid, prevent or overcome, having due regard to the reasonable economic cost of avoiding, preventing or overcoming such event (each an event of “Force Majeure”):

 

(a)           fire, explosion, atmospheric disturbance, lightning, earthquake, tidal wave, tsunami, typhoon, tornado, hurricane or named storms, flood, landslide, soil erosion, subsidence, washout, perils of the sea or other acts of God;

 

(b)           war (whether declared or undeclared), blockade, civil war, act of terrorism, invasion, revolution, insurrection, acts of public enemies, mobilisation, civil commotion, riots, sabotage or assailing thieves;

 

(c)           acts of princes or rulers or acts of any Governmental Authority, or compliance with such acts or Laws, that directly affect such Party’s ability to perform its obligations hereunder;

 

(d)           plague or other epidemics or quarantines;

 

(e)           freight or other embargo or trade sanctions;

 

(f)            strike, lockout or industrial disturbance at a port or other facility at which the Vessel calls or to which or from which the Vessel transits;

 

(g)           chemical or radioactive contamination or ionising radiation;

 

(h)           seizure of the Vessel or cargo under legal process where security is promptly furnished to release Vessel or cargo but the Vessel or cargo is not released; or

 

(i)            any event affecting the transit of LNG vessels through the Suez Canal at any time, excluding any failure by Owner or Vessel to comply with the regulations of the Suez Canal.

 

27.3         Notice, Resumption of Normal Performance

 

Promptly upon the occurrence of an event that a Party considers may result in an event of Force Majeure, and in any event within ***** from the date of the

 

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occurrence of an event of Force Majeure, the Party affected shall give notice thereof to the other Party describing in reasonable detail:

 

(a)           the event giving rise to the potential or actual Force Majeure claim, including but not limited to the place and time such event occurred;

 

(b)           to the extent known or ascertainable, the obligations which may be or have actually been delayed or prevented in performance and the estimated period during which such performance may be suspended or reduced, including the estimated extent of such reduction in performance;

 

(c)           the particulars of the programme to be implemented to ensure full resumption of normal performance hereunder; and

 

(d)           the quantities of LNG which it reasonably expects to be able to transport during the period for which Force Majeure relief can reasonably expected to be claimed.

 

Such notices shall thereafter be supplemented and updated at weekly intervals during the period of such claimed Force Majeure specifying the actions being taken to remedy the circumstances causing such Force Majeure and the date on which such Force Majeure and its effects end.

 

27.4         Examination

 

The Party affected by an event of Force Majeure shall, at the request of the other Party, give or procure access if they are able so to do (at the expense and risk of the Party seeking access) at all reasonable times for a reasonable number of representatives of such Party (and of Charterer’s Personnel, in the case of Charterer) to examine the scene of the event and the facilities affected which gave rise to the Force Majeure claim.

 

In the event of a Force Majeure affecting the Vessel, Master, Owner or Charterer, the Party affected thereby shall take all measures reasonable in the circumstances to overcome or rectify the event of Force Majeure and its consequence and resume normal performance of this Charter as soon as reasonably possible once the event of Force Majeure has passed or been remedied; provided, however, the Parties agree that the settlement of any strike, lockout or industrial disturbance shall be in the sole discretion of the Party affected by such event of Force Majeure.

 

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27.5         Charterer’s Termination for Force Majeure

 

(a)           Cancellation for Force Majeure

 

If the occurrence of an event within Clause 27.2 excuses Owner from performing its obligations hereunder for a continuous period of *****.

 

(b)           No Compensation

 

Neither Party shall be required to pay the other Party any compensation whatsoever upon termination of this Charter pursuant to this Clause 27.5.

 

27.6         Vessel Remains on Hire

 

Notwithstanding the provisions of Clause 27.2 and the occurrence of Force Majeure events, the Vessel shall remain on-hire and Hire shall continue to be paid, provided that the Vessel remains at the effective disposal of Charterer during the period or periods of such Force Majeure events and the Vessel is not otherwise off-Hire during such periods.

 

27.7         Limitations on Force Majeure

 

The exceptions stated in this Clause 27 shall not affect Owner’s undertaking with respect to the condition, particulars and capabilities of the Vessel stipulated in Clauses 2 and 4 and elsewhere in this Charter, the provision for payment and cessation of hire stipulated in this Charter, the obligations of Owner under Clause 13 in respect of the loading, handling, stowage, carriage, custody, care and discharge of cargo in the Charter, and/or Charterer’s options to otherwise terminate this Charter in accordance with its terms.

 

28.           Default and Remedies

 

28.1         Event of Owner’s Default

 

Each of the following events affecting Owner shall be an event of Owner’s default (“Event of Owner’s Default”):

 

(a)           An Event of Contractor’s Default occurs under the Operation and Services Agreement;

 

(b)           Owner suspends payment of its debts or is unable to pay its debts or is otherwise insolvent;

 

(c)           Owner passes a resolution, commences proceedings, or has proceedings commenced against it (which are not stayed within ***** of service thereof),

 

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in the nature of bankruptcy or reorganisation resulting from insolvency, liquidation or the appointment of a receiver, trustee in bankruptcy or liquidator of its undertakings or assets;

 

(d)           Owner enters into any composition or scheme or arrangement with its creditors in circumstances where Clause 28.1(b) applies;

 

(e)           Without Charterer’s prior written consent:

 

(i)            Owner makes or consents to a material change to the specifications of the Vessel;

 

(ii)           the Vessel ceases to be registered under the laws of the Registry (or such other country where it had otherwise been registered by mutual agreement of the Parties);

 

(iii)          the Vessel ceases to hold a classification certificate with the Classification Society in accordance with Schedule I;

 

(iv)          Owner breaches its obligations under Clause 26.3 and fails to cause a lender or financing party to enter into a Quiet Enjoyment Agreement in accordance with the provisions herein;

 

(v)           the Vessel is arrested as a consequence of any claim or event (other than a claim arising by, through or under Charterer), and is not released from such arrest within ***** after being arrested;

 

(vi)          title to the Vessel is transferred to any person otherwise than in compliance with this Charter;

 

(vii)         Owner fails to maintain any of the insurances it is obliged to maintain under this Charter (and such default is not cured within *****);

 

(viii)        Owner makes an assignment, transfer or novation prohibited by this Charter; or

 

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(ix)           the performance bond or any of the other guarantees granted pursuant to Clause 29 becomes unenforceable or liquidation or bankruptcy proceedings are commenced against the parent guarantor or Owner fails to cure any defect or infirmity affecting the enforceability of such guarantee or performance bond or fails to renew, replace or extend such guarantee or performance bond, or the performance bond pursuant to Clause 29 is not provided within a period of ***** from the receipt of Charterer’s notice;

 

(f)            Owner is in material breach of any term or condition of this Charter and has failed to cure such breach within a reasonable period of time, but in no event longer than ***** after receipt of notice of such breach from Charterer;

 

(g)           Owner fails to deliver the Vessel by the Cancelling Date or, if pursuant to Clause 6.6(f) Charterer determines that Owner will not deliver the Vessel by the Cancelling Date;

 

(h)           Owner fails to comply with the business principles set forth in Clause 41; or

 

(i)            The Vessel is off-Hire for the period described in Clause 18.3.

 

28.2         Event of Charterer’s Default

 

Each of the following events shall be an event of Charterer’s default (“Event of Charterer’s Default”):

 

(a)           An Event of Customer’s Default occurs under the Operation and Services Agreement;

 

(b)           Charterer suspends payment of its debts or is unable to pay its debts when due or is otherwise insolvent;

 

(c)           Charterer passes a resolution, commences proceedings or has proceedings commenced against it (which are not stayed within ***** of service thereof), in the nature of bankruptcy or reorganisation resulting from insolvency, liquidation or the appointment of a receiver, trustee in bankruptcy or liquidator of its undertakings or assets;

 

(d)           Charterer enters into any composition or scheme or arrangement with its creditors in circumstances where Clause 28.2(b) applies;

 

(e)           Charterer is in material breach of any term or condition of this Charter (other

 

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than the obligation to pay Hire or other amounts when due) and has failed to cure such breach within a reasonable period of time, but in no event longer than ***** after receipt of notice of such breach from Owner;

 

(f)            Charterer fails to pay Hire or other amounts when due and payable and such failure continues for *****; or

 

(g)           prior to delivery of the Vessel, any event occurs in relation to Charterer or to any Primary Terminal or the LNG SPA which renders it impossible that: (i) Charterer will accept the Vessel on tender of delivery under this Charter; or (ii) Charterer will be able to pay Hire when due under this Charter.

 

28.3         Remedies

 

(a)           In addition to any other rights herein, in any other agreement or at law, upon the occurrence of an Event of Owner’s Default, Charterer may terminate this Charter by issuing a termination notice with immediate effect at any time after the expiry of ***** after having given notice of default (with reasonable particulars thereof) to Owner; provided, however, that if such Event of Owner’s Default is capable of being cured and is cured within the ***** notice period, Charterer shall not terminate this Charter. Notwithstanding the immediately preceding sentence, termination of this Charter shall take effect immediately upon Owner’s receipt of Charterer’s notice in respect of Clauses 28.1(b), (c), (d), (e)(vi), (vii) and (viii) or (h) (provided that, in respect of Clause 28.1(e)(vii), such notice may only be served after the specified cure period).  Owner shall immediately reimburse Charterer for any Hire in accordance with Clause 28.4 below and, if requested to do so by Charterer in the termination notice, as soon as reasonably practicable and in compliance with safety and other applicable regulations, remove the Vessel from Charterer’s Facility.

 

(b)           Upon the occurrence of any Event of Charterer’s Default (other than failure to pay Hire) Owner may terminate this Charter upon not less than ***** prior written notice to Charterer, provided, however, that if such Event of Charterer’s Default is capable of being cured and is cured within the ***** notice period, Owner shall not terminate this Charter.  If the Event of Charterer’s Default results from a failure by Charterer to pay Hire or any other amount due under this Charter by the due date for payment, then (without prejudice to Owner’s right to sue for recovery of any amounts due):

 

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Owner shall notify Charterer of such failure;

 

(i)            within ***** of such notification Charterer shall pay to Owner the amounts due and payable (including outstanding Hire plus any interest), failing which Owner shall have the right at any time to withdraw the Vessel and terminate this Charter;

 

(ii)           Charterer shall indemnify Owner in respect of any liabilities incurred by Owner under any Bill of Lading or any other contract of carriage issued by Owner or on behalf of Owner as a consequence of Owner’s withdrawal of the Vessel and termination of this Charter; and

 

(iii)          the exercise by Owner of any of its rights under this Clause 28.3 shall be without prejudice to any other rights or remedies Owner may have at law.

 

(c)           Charterer may terminate this Charter upon the occurrence of extended Force Majeure as described in Clause 27.5.

 

(d)           If this Charter is terminated pursuant to Clause 28.3(a), Charterer shall not be liable to Owner for any amounts in respect of such termination or in respect of Charterer’s obligations hereunder during the remainder of the term of this Charter (including, without limitation, the obligation to pay Hire hereunder for the period following the date of such termination).

 

(e)           Upon the occurrence of an Event of Owner’s Default pursuant to Clause 28.1(a) (in respect of an Event of Contractor’s Default under the Operation and Services Agreement) Owner shall automatically be deemed to be liable for all obligations of Contractor under the Operation and Services Agreement (and Charterer shall be entitled to proceed directly against the Parent under and in accordance with the guarantee provided under Clause 29(a)).

 

28.4         Reimbursement of Hire

 

If this Charter is terminated prior to the expiration of the Charter Period in accordance with any provision of this Charter or by reason of law, Owner shall immediately reimburse Charterer for any Hire paid in advance and not earned, the cost of bunker fuel, diesel oil or gas oil, at the price paid by Charterer at the last bunkering port or at the Fuel Price, as applicable, the value of any LNG Heel, including gas vapours, on

 

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board the Vessel at termination (valued at the LNG Price) and any other amounts for which Owner is liable to Charterer under this Charter, as well as any damages to which Charterer may be entitled if termination is due to Owner’s fault or breach of this Charter.

 

28.5                           Damages/Indemnification

 

(a) (i)                    Owner shall (whether or not Charterer terminates this Charter) indemnify and hold harmless Charterer against any and all Damages that Charterer may have sustained as a result of an Event of Owner’s Default, and Charterer may deduct from Hire any such Damages incurred by Charterer.

 

(ii)             Charterer shall (whether or not Owner terminates this Charter) indemnify and hold harmless Owner against any and all Damages that Owner may have sustained as a result of an Event of Charterer Default.

 

(b)                                 The exercise by either Party of their respective rights under this Clause 28 shall be without prejudice to any other rights or remedies each may have accrued prior to the date thereof, and any provisions of this Charter necessary for the exercise of such accrued rights and remedies shall survive termination of this Charter to the extent so required.

 

(c)                                  Charterer shall be entitled (but not obliged) to advance moneys or guarantees so as to settle any of the Vessel’s accounts or Owner’s accounts with respect to the Vessel and to secure the release of the Vessel from any arrest so as to exercise Charterer’s rights hereunder; provided that Charterer shall recover any expenditures made by Charterer hereunder through the Monthly Hire Invoice, together with interest thereon at the rate of *****.

 

28.6                           No Consequential Losses

 

Except as otherwise expressly provided in this Charter, neither Party shall be liable to the other Party under this Charter as a result of any act or omission in the course of or in connection with the performance of this Charter for or in respect of:

 

(a)                                  any indirect, incidental, consequential, exemplary or punitive loss or damages;

 

(b)                                 any loss of income or profits; or

 

(c)                                  any Damages incurred under or in connection with any other contracts between either of the Parties and any third parties, as applicable, including under any LNG SPA or Designated Trade.

 

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29.                               Guarantee and Letter of Credit

 

(a)                                  Owner shall procure that Parent shall execute and deliver to Charterer a written guarantee substantially in the form of Schedule VI.  Such guarantee shall be delivered to Charterer simultaneously with the execution of this Charter.

 

(b)                                 Within ***** of the date hereof, Owner shall procure that a letter of credit in the form of Schedule VII is issued to Charterer by a bank or financial institution acceptable to Charterer, from which Charterer shall be permitted to draw if Owner is in breach of its obligations to pay Charterer any amount due and payable under Clause 6.10(b).  Such letter of credit shall be issued in the amount of ****** United States Dollars ($*****) and shall be available for drawing by Charterer, upon notice to Owner, at any time up to (and including) ***** after the Scheduled Delivery Date.

 

30.                               Injurious Cargoes

 

No acids, explosives or cargoes injurious to the Vessel shall be shipped and, without prejudice to the foregoing, any damage to the Vessel caused by the shipment of any such cargo effected at Charterer’s request, and the time taken to repair such damage, shall be for Charterer’s account; provided however that LNG shall in no circumstances be considered as an acid, explosive or injurious cargo for the purposes of this Charter.  No voyage shall be undertaken, nor any goods or cargoes loaded, that would expose the Vessel to capture or seizure by rulers or governments.

 

31.                               Laying-Up

 

31.1                           Charterer’s Option

 

Pursuant to the Operation and Services Agreement, Charterer has the right (a) during the Charter Period to require Contractor to lay up the Vessel for all or any portion of the Charter Period at a safe place nominated by Charterer, taking into account questions of maintenance access and security and (b) during any period of lay up, to require Contractor to put the Vessel back into service and, upon receipt of any notice from Charterer to that effect, Contractor is required to immediately take steps to restore the Vessel to service as promptly as reasonably possible.  Charterer is permitted to exercise the above rights any number of times under the Operation and Services Agreement.  During any period of lay-up under this Clause 31, Owner’s duty under Clause 4.4 shall be equivalent to the standard ordinarily applied by prudent owners to vessels of the same type in lay-up and the provisions of Clauses 18 (Off-

 

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Hire) and 22 (Key Vessel Performance Criteria) shall not apply. Until such time as it is practicable for Owner to implement or complete all work that is required with respect to fouling (as determined during any survey conducted pursuant to Clause 31.2) to restore the Vessel to a condition it would have been in if it had not been laid-up, any reduction in the Vessel’s performance due to such fouling during a lay-up requested by Charterer under this Clause 31 shall not give rise to a performance claim against Owner pursuant to Clause 23 of this Charter or against the Contractor pursuant to Clause 17 of the Operation and Services Agreement.  Owner hereby acknowledges and consents to such rights of Charterer under the Operation and Services Agreement, subject only to Charterer obtaining Owner’s consent as to the location of any such lay up (such consent not to be unreasonably withheld or delayed).  During any period of such lay up the Hire provided for under this Charter shall be adjusted to reflect any net increases in expenditure reasonably incurred and any net savings (if any) which should reasonably be made by Owner as a result of such lay up.

 

31.2                           Surveys on Lay Up

 

Owner shall permit (or procure, if requested by Charterer) that an in-water survey of the hull is performed (a) each time the Vessel enters into lay up and (b) immediately prior to the end of any lay up period.  The Vessel shall remain on-Hire during such survey.

 

31.3                           Hire Adjustment

 

At or before the beginning of any lay up period pursuant to this Clause 31, Owner shall provide an estimate (“Estimate”) of the savings and extra expense to Charterer during the lay up period.  Upon Charterer’s acceptance of such Estimate, the Hire shall be adjusted based on the Estimate and such adjustment shall apply to the Hire payments thereafter due.

 

When assessing such saving or extra expense, the items to be taken into account shall include changes in amounts expended on administration, manning, stores, spare parts, lubricating oils, P&I Club and hull and machinery insurance (including the effect of any damage franchise), repairs and maintenance, surveys and drydocking.  As soon as practical after re-entry of the Vessel into service under this Charter, Owner shall make a calculation of the actual savings less actual extra expenses as aforesaid for the period of the lay up and a balancing payment shall be made by Owner or Charterer, as the case may be, assuming Charterer’s agreement with Owner’s calculations.

 

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32.                               Requisition

 

32.1                           Requisition of Title

 

In the event that title to the Vessel is requisitioned or seized by any Governmental Authority (or the Vessel is seized by any Person, entity or Governmental Authority under circumstances that are equivalent to requisition of title), the Vessel shall be off-Hire during the period of requisition and, if no assignment of this Charter can be made on terms acceptable to Charterer within a period of *****, then Charterer shall have the option, upon written notice to Owner, to terminate the Charter without payment of the Compensation Fee or any other fee or payment whatsoever, such termination shall be effective upon the date of such requisition.

 

32.2                           Other Requisition

 

In the event that the Vessel is requisitioned for use or seized by any Governmental Authority, Person or entity on any basis not involving or not equivalent to requisition of title, Charterer shall have the option immediately to terminate this Charter.

 

33.                               Outbreak of War

 

If war or hostilities break out between any two or more of the following countries: United States of America, the Russian Federation, the People’s Republic of China, United Kingdom, Brazil, and the country that the Vessel is registered in, then both Owner and Charterer shall have the right to cancel this Charter provided that such war or hostilities materially and adversely affect the trading of the Vessel for a period of at least *****.

 

34.                               Additional War Expenses

 

If the Vessel is ordered to trade in areas where there is war (de facto or de jure) or threat of war, Charterer shall reimburse Owner for any additional insurance premiums and other expenses which are reasonably incurred by Owner as a consequence of such orders, provided that Charterer is given notice of such expenses as soon as practicable and in any event before such expenses are incurred, and provided further that Owner obtain from its insurers a waiver of any subrogated rights against Charterer in respect of any claims by Owner under its war risk insurance arising out of compliance with such orders.

 

Any payments by Charterer under this Clause 34 will only be made against proven documentation.  Any discount or rebate refunded to Owner for whatever reason, in respect of additional war risk premium shall be passed on to Charterer.

 

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35.                               War Risks

 

35.1                           The Master shall not be required or bound to sign Bills of Lading for any place which in his or Owner’s reasonable opinion is dangerous or impossible for the Vessel to enter or reach owing to any blockade, war, hostilities, warlike operations, civil commotions, revolutions, act of piracy, acts of terrorists, acts of hostility or malicious damage.

 

35.2                           If in the reasonable opinion of the Master or Owner it becomes, for any of the reasons set out in Clause 35.1 or by the operation of international law, dangerous, impossible or prohibited for the Vessel to reach or enter, or to load or discharge cargo at, any place to which the Vessel has been ordered pursuant to this Charter (a “place of peril”), then Charterer or its agents shall be immediately notified in writing or by radio messages, and Charterer shall thereupon have the right to order the cargo, or such part of it as may be affected, to be loaded or discharged, as the case may be, at any other place within the trading limits of this Charter (provided such other place is not itself a place of peril).  If any place of discharge is or becomes a place of peril, and no orders have been received from Charterer or its agents within ***** after dispatch of such messages, then Owner shall be at liberty to discharge the cargo or such part of it as may be affected at any place which it or the Master may in its or his discretion select within the trading limits of this Charter and such discharge shall be deemed to be due fulfilment of Owner’s obligations under this Charter so far as cargo so discharged is concerned.

 

35.3                           The Vessel shall have liberty to comply with any directions or recommendations as to departure, arrival, routes, ports or call, stoppages, destinations, zones, waters, delivery or any other instructions whatsoever given by the government of the state of the Registry or any other Governmental Authority or by any Person or body acting or purporting to act as or with the authority of any such Governmental Authority including any de facto Governmental Authority or by any Person or body acting or purporting to act as or with the authority of any such Governmental 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 shall not be deemed a deviation.  If by reasons of or in compliance with any such direction or recommendations the Vessel does not proceed to any place of discharge to which she has been ordered pursuant to this Charter, the Vessel may proceed to any place which the Master or Owner in his or its discretion select and there discharge the cargo or such part of it as may be affected.  Such discharge shall be deemed to be due fulfilment of Owner’s obligations under this Charter so far as 

 

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cargo so discharged is concerned.

 

35.4                           Charterer shall procure that all Bills of Lading issued under this Charter shall contain provisions equivalent to this Clause 35.

 

36.                               Both to Blame Collision Clause

 

36.1                           Application to this Charter

 

If the liability for any collision in which the Vessel is involved while performing this Charter falls to be determined in accordance with the laws of the United States of America, the following provisions shall apply:

 

(a)                                  If the ship 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 carrier in the navigation or in the management of the ship, the owner of the cargo carried hereunder will indemnify the carrier against all loss or liability to the other or non-carrying ship of her owner in so far as such loss or liability represents loss of, or damage to, or any claim whatsoever of the owner of the said cargo, paid or payable by the other or non-carrying ship or her owner to the owner of the said cargo and set off, recouped or recovered by the other or non-carrying ship or her owner as part of their claim against the carrying ship or carrier.

 

(b)                                 The foregoing provisions shall also apply where the owner, operators or those in charge of any ship or ships or objects other than, or in addition to, the colliding ships or objects are at fault in respect of a collision or contact.

 

36.2                           Application to Bills of Lading

 

Charterer shall procure that all Bills of Lading issued under this Charter shall contain provisions in the terms at Clause 36.1(a) and (b), to be applicable where the liability for an collision in which the Vessel is involved falls to be determined in accordance with the laws of the United States of America.

 

37.                               New Jason Clause

 

37.1                           Application to this Charter

 

General average contributions shall be payable according to the York/Antwerp Rules 1974, as amended in 1994 or any amendment thereto, and shall be adjusted in London in accordance with English law and practice but should adjustment be made in 

 

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accordance with the law and practice of the United States of America, the following provisions shall apply:

 

(a)                                  In the event of accident, danger, damage or disaster before or after the commencement of the voyage, resulting from any cause whatsoever, whether due to negligence or not, for which, or for the consequence of which, the carrier is not responsible by statute, contract or otherwise, the cargo, shippers, consignees or owner of the cargo shall contribute with the carrier in general average to the payment of any sacrifices, losses or expenses of a general average nature that may be made or incurred and shall pay salvage and special charges incurred in respect of the cargo.

 

(b)                                 If a salving ship is owned or operated by the carrier, salvage shall be paid for as fully as if the said salving ship or ships belonged to strangers.  Such deposit as the carrier or his agents may deem sufficient to cover the estimated contribution of the cargo and any salvage and special charges thereon shall, if required, be made by the cargo, shippers, consignees or owner of the cargo to the carrier before delivery.

 

37.2                           Application to Bills of Lading

 

Charterer shall procure that all Bills of Lading issued under this Charter shall contain provisions in the terms at Clause 37.1(a) and (b), to be applicable where adjustment of general average is made in accordance with the laws and practice of the United States of America.

 

38.                               Conditions of Use

 

38.1                           Owner acknowledges and agrees that it will be bound by the terms of the conditions for use, including any liability regime and agreement (together, “Conditions of Use”), applicable to use of any Primary Terminal and (with reasonable notice) each Designated Terminal and port at which any such terminal is located, and agrees that it will execute, or cause its representative or the Master to execute, such Conditions of Use.

 

38.2                           The failure by Owner or its representative or the Master to execute in a timely manner any Conditions of Use identified in Clause 38.1 shall be considered a material breach of Owner’s obligation under this Charter and Charterer shall have the right to put the Vessel off-Hire or terminate this Charter pursuant to Clause 28.3.

 

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39.                               Insurance

 

39.1                           Coverage, Costs and Liability Levels

 

Owner shall effect and maintain insurance in accordance with the terms of Schedule IX and the Law throughout the Charter Period.  On or before the Delivery Date, and thereafter on each renewal of the Compulsory Insurances, Owner shall provide Charterer with a true copy of the insurance certificates, cover notes or certificates of entry, together with confirmation from the insurers that such insurance cover will be effective on and from the Delivery Date. Owner agrees to provide to Charterer copies of the policies of all Compulsory Insurances as soon as practicable, but not later than ***** after the Delivery Date; provided that Owner shall be entitled to remove from such policies all information relating to premiums or other similarly commercially sensitive information and all information which is confidential as between Owner and its insurers.

 

39.2                           Lapse of Coverage(s)

 

If there is a failure or lapse of the insurance(s) required by Clause 39.1 for any reason at any time during the Charter Period and if such failure or lapse remains unremedied, Charterer shall have the option after ***** notice to Owner to terminate this Charter when the Vessel is cargo-free.  A termination or failure to terminate this Charter in accordance with this Clause 39.2 shall be without prejudice to any claims for damages that Charterer may have by reason of Owner’s fault for non-coverage.

 

40.                               Export Restrictions

 

40.1                           The Parties acknowledge that the Master shall not be required or bound to sign Bills of Lading for the carriage of cargo to any place to which export of such cargo is prohibited under the laws, rules or regulations of the country in which the cargo was produced and/or shipped.

 

40.2                           Charterer shall procure that all Bills of Lading issued under this Charter shall contain the following clause:

 

“If any laws, rules or regulations applied by the government of the country in which the cargo was produced and/or shipped, or any relevant agency thereof, impose a prohibition on export of the cargo to the place of discharge designated in or ordered under this Bill of Lading, carriers shall be entitled to require cargo owners forthwith to nominate an alternative discharge place for the discharge of the cargo, or such part of it as may be affected, which 

 

105

 

alternative place shall not be subject to the prohibition, and carriers shall be entitled to accept orders from cargo owner to proceed to and discharge at such alternative place.  If cargo owners fail to nominate an alternative place within seventy two (72) hours after they 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 may be affected by the prohibition at any safe place on which they or the master may in their or his absolute discretion decided and which is not subject to the prohibition, and such discharge shall constitute due performance of the contract contained in the Bills of Lading so far as the cargo so discharged is concerned”.

 

The foregoing provision shall apply mutatis mutandis to this Charter, with references to a Bill of Lading being deemed to be references to this Charter.

 

41.                               Business Principles

 

41.1                           Compliance with Law

 

Owner agrees to comply with all laws, decrees, ordinances, directives and lawful regulations of any Governmental Authority in connection with this Charter or applicable to any activities carried out by Owner in the name, or otherwise on behalf of, Charterer under the provisions of this Charter.

 

41.2                           Proper Practice

 

Owner shall not pay any fee, commission, rebate or anything of value to or for the benefit of any employee of Charterer, nor will Owner do business with any company knowing the results might directly benefit an employee of Charterer.  Owner shall use its best efforts not to permit any of Owner’s employees, servants, agents or representatives to engage in any activities contrary or detrimental to the best interests of Charterer.

 

(a)                                  Owner and Charterer mutually agree that, in connection with this Charter and the activities contemplated herein, neither of them nor any of their respective employees, servants, agents, representatives or Affiliates will take action, or omit to take any action, that would cause the other Party to be in violation of any Law related to the other Party’s business practices, including the U.S. Foreign Corrupt Practices Act or any similar statute of any Governmental Authority.

 

(b)                                 Owner agrees that all invoices rendered by Owner to Charterer, as provided 

 

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for in this Charter, shall, in reasonable detail, accurately and fairly reflect the facts about all activities and transactions handled for the account of Charterer.

 

(c)                                  Notwithstanding the generality of the foregoing, Owner represents and warrants that neither Owner nor any officer, director, commissioner, shareholder, employee, servant, agent or representative thereof will make or cause to be made any payment, loan, or gift of any money or anything of value, directly or indirectly:

 

(i)                                          to or for the benefit of any official or employee of any Governmental Authority thereof; or

 

(ii)                                       to any other Person or entity,

 

where such payment, loan, or gift of any money or anything of value is intended to influence a decision in favour of Charterer in a manner that is inconsistent with the principles set forth in this Clause 41.  Breach of this Clause 41.2 by Owner shall constitute sufficient grounds for Charterer forthwith to terminate this Charter under Clause 28, by so notifying Owner in writing.

 

41.3                           Ethical Policy

 

Charterer and Owner may each from time to time advise the other Party of any ethical or business practices policy which apply to the relevant Party and the other Party shall use reasonable endeavours to adhere to such policy, provided it does not affect the safe or reliable operation of the Vessel or give rise to the other Party incurring any unnecessary cost.

 

41.4                           Petrobras Practice

 

Owner acknowledges that at the time of entry into service of the Vessel, it will have been provided with a copy of the Charterer’s rules and instructions relating to the operation of the Vessel at Rio de Janeiro Terminal, Pecém Terminal and each other terminal located in Brazil and in Brazilian waters, and undertakes that Owner and the Manager of the Vessel shall at all times comply with the requirements and recommendations therein and as amended.

 

41.5                           SIGTTO

 

The Vessel shall perform in accordance with SIGTTO 2000 edition of liquefied gas

 

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handling principles on ships and in terminals and the 1995 edition of ICS Vessel safety guide (liquefied gases), as they may be amended from time to time.

 

41.6                           Automated Manifest System (AMS)

 

(a)                                  If the Vessel loads or carries cargo destined for the US or passes through US ports in transit, Owner shall comply with the current US Customs regulations (19 CFR 4.7) or any subsequent amendments thereto and shall (unless Charterer requests otherwise) undertake the role of carrier for the purposes of such regulations and shall, in its own name, time and expense:

 

(i)                                          have in place a SCAC (Standard Carrier Alpha Code);

 

(ii)                                       have in place an ICB (International Carrier Bond); and

 

(iii)                                    submit cargo declarations by AMS (Automated Manifest System) to the US Customs.

 

(b)                                 Charterer shall provide all necessary information to Owner and/or its agents to enable Owner to submit a timely and accurate cargo declaration.

 

41.7                           Liabilities

 

(a)                                  Charterer shall assume liability for and shall indemnify, defend and hold harmless Owner against any loss and/or damage (excluding consequential and indirect loss and/or damage) and/or any expenses, fines, penalties and any other claims, including but not limited to legal costs, arising from the Charterer’s failure to comply with any of the provisions of this Clause 41.  Should such failure result in any delay then, notwithstanding any provision in this Charter to the contrary, the Vessel shall remain on-Hire.

 

(b)                                 Owner shall assume liability for and shall indemnify, defend and hold harmless Charterer against any loss and/or damage (excluding consequential and indirect loss and/or damage) and any expenses, fines, penalties and any other claims, including but not limited to legal costs, arising from Owner’s failure to comply with any of the provisions of this Clause 41.  Should such failure result in any delay then, notwithstanding any provision in this Charter to the contrary, the Vessel shall be off-Hire for all time lost.

 

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41.8                           Identity of Carrier

 

The assumption of the role of carrier by Owner pursuant to this Clause 41.8 and for the purpose of the US Customs Regulations (19 CFR 4.7) shall be without prejudice to the identity of carrier under any bill of lading, other contract, law or regulation.

 

42.                               Drugs and Alcohol

 

Owner warrants that it has in force an active policy covering the Vessel which meets or exceeds the standards set out in the “Guidelines for the Control of Drugs and Alcohol On Board Ship” as published by OCIMF dated June 1995 (or any subsequent modification, version, or variation of these guidelines), and in Schedule II of the Operation and Services Agreement, and that this policy will remain in force throughout the Charter Period, and Owner will exercise due diligence to ensure the policy is complied with.

 

43.                               Pollution and Emergency Response

 

43.1                           Owner shall exercise all due diligence to ensure that no oil or harmful or hazardous substances of any description shall be discharged or escape accidentally or otherwise from the Vessel; and that Owner, Vessel, its officers and crew shall comply with all international, national and state oil and air pollution and environmental laws, conventions or regulations (“Pollution Regulations”) applying in or to international waters and the territorial waters of the countries into which the Vessel may trade under this Charter.  Owner shall produce evidence satisfactory to Charterer demonstrating Owner’s compliance with any financial responsibility requirements that may exist under any Pollution Regulations.

 

43.2                           Owner warrants that it is a member of the International Tanker Owner’s Pollution Federation, or any successor body of the same, and that Owner will retain such membership during the Charter Period.

 

43.3                           Owner shall advise Charterer of its organisational details and names of Owner’s personnel together with their relevant telephone/facsimile/e-mail/telex numbers, including the names and contact details of Qualified Individuals for OPA 90 response, who may be contacted on a twenty four (24) hour basis in the event of oil spills or emergencies.  Owner shall update such information and provide Charterer with such revised details on a regular basis so as to ensure that Charterer has up to date and correct information.

 

Notice to Owner’s Pollution and Emergency Response Department:

 

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1)                                     Weston B. Fizgerald (Designated Person Ashore)

 

Office: +65 6 220 7291

 

Fax : +65 6 795 3123

 

Home : +65 6 898 2762

 

Mobile: +65 9 626 7520

 

2)                                     Stephen Ainscough (General Manager Gas)

 

Office: +65 6 220 7291

 

Fax : +65 6 795 3123

 

Home : +65 6 271 6934

 

Mobile: +65 9 823 7150

 

Address:

 

THOME SHIP MANAGEMENT PTE LTD

 

16 Raffles Quay, #43-01, Hong Leong Building, Singapore 048581

 

P.O.Box 2844 Singapore 904844

 

Email : office@thome.com.sg

 

24 hours emergency number is:

+65 9 631 6304

 

Notice to Charterer’s Pollution and Emergency Response Department:

 

00-55-21-3224-6555 (24 hours)

 

Marco José de Macedo Derton
 Environmental Manager
 Avenida Almirante Barroso, 81
 20030-003, Rio de Janeiro
 Brazil

 

Luis Claudio Malaguti
 Safety, Environment and Health Manager
 Avenida Almirante Barroso, 81
 20030-003, Rio de Janeiro
 Brazil

 

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Tel: 00-55-21-3229-1299 / 4790
 Out of office hours: 00-55-21-8131-7459 / 00-55-21-9624-0036

 

43.4                           In the event of any spillage, discharge or release of LNG or other substance from the Vessel, Owner shall, or shall procure that Contractor shall, immediately and at its cost and expense, take all necessary measures to minimize such spillage, discharge or release.  Notwithstanding the foregoing, Charterer may, at its option, and upon notice to Owner and the Master undertake measures to prevent or minimize damage in case of an accidental escape of LNG or other substance from the Vessel.  In such instances, Charterer shall be deemed to take all measures on behalf of Owner and all costs and expenses shall be for Owner’s account.

 

43.5                          Owner shall, or shall procure that Contractor shall, promptly notify Charterer, and in any event not later than twenty-four (24) hours after such occurrence, in the event whether occurring at sea or in port, of any fire, explosion, accident, collision, grounding, cargo release or spill or any other reason that could result in a significant delay or serious damage to the Vessel, the Vessel’s crew or cargo.

 

44.                               ISPS Code/USMTSA 2002

 

This Clause 44 makes reference to the International Code for the Security of Ships and of Port Facilities and the relevant amendments to Chapter XI of SOLAS (“ISPS Code”) and the US Maritime Transportation Security Act 2002 (“MTSA”).

 

44.1                           (a)                                  During the Charter Period, Owner shall procure that both the Vessel and “the Company” (as defined by the ISPS Code) and the “owner” (as defined by the MTSA) shall comply with the requirements of the ISPS Code relating to the Vessel and “the Company” and the requirements of the MTSA relating to the Vessel and the “owner”.  Upon request Owner shall provide documentary evidence of compliance with this Clause 44.1(a).

 

(b)                                 Except as otherwise provided in this Charter, loss, damage, expense or delay caused by failure on the part of Owner or “the Company”/”owner” to comply with the requirements of the ISPS Code/MTSA or this Clause 44 shall be for Owner’s account.

 

(c)                                  Notwithstanding any other provision of this Charter, the Vessel shall not be off-Hire where there is a loss of time caused by Charterer’s failure to comply with the ISPS Code/MTSA.

 

44.2                           (a)                                  Charterer shall provide Owner with its full contact details and shall ensure that 

 

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the contact details of all sub-charterers are likewise provided to Owner.  Furthermore, Charterer shall ensure that all sub-charter parties it enters into during the Charter Period contain the following provision: “The charterer shall provide the owner of the Vessel with its full contact details and, where sub-letting is permitted under the terms of the charter parties, shall ensure that the contact details of all sub-charterers are likewise provided to the owner of the Vessel.”

 

(b)                                 Except as otherwise provided in this Charter, loss, damage, expense or delay, caused by failure on the part of Charterer to comply with this sub-Clause 44.2 shall be for Charterer’s account.

 

44.3                          Notwithstanding anything else contained in this Charter, costs or expenses related to security regulations or measures required by a port facility or any relevant authority in relation to the ISPS Code/MTSA including, but not limited to, security guards, launch services, tug escorts, port security fees or taxes and inspections, shall be for Charterer’s account, unless such costs or expenses result solely from Owner’s act or omission in which case such costs or expenses shall be for Owner’s account.  All measures required by Owner to comply with the security plan required by the ISPS Code/MTSA shall be for Owner’s account.

 

44.4                           If either Party makes any payment, which is for the other Party’s account according to this Clause 44, the other Party shall indemnify the paying Party.

 

45.                               Law and Litigation

 

45.1                           Governing Law

 

This Charter shall be governed by the laws of England and Wales.

 

45.2                           Arbitration

 

(a)                                  Any dispute, controversy or claim arising out of or in connection with this Charter (a “Dispute”) shall be finally and (except as expressly provided otherwise in this Clause 45.2) exclusively determined by referral to arbitration in London, England in accordance with the rules of the London Maritime Arbitrators Association (the “LMAA Rules”), as amended, by a panel of three (3) arbitrators who shall be familiar with the maritime or LNG industry, fluent in English, familiar with the general principles of English law, and experienced in arbitrations conducted under the LMAA Rules.  Notwithstanding the above provisions, either Party may seek interlocutory 

 

112

 

relief in equity, if appropriate.  Each Party shall appoint one arbitrator, and the two so appointed shall thereafter appoint the third arbitrator.

 

Nothing herein shall prevent the Parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.

 

In cases where neither the claim nor any counterclaim exceeds the sum of ***** (or such other sum as the Parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced.

 

(b)                                 The language of the arbitration shall be English.

 

(c)                                  The arbitrators are not authorised to make any decision or award ex aequo et bono but shall apply the governing law chosen by the Parties.

 

(d)                                 The arbitral panel shall issue its reasoned award in writing, and is authorised to award costs and attorneys’ fees to the prevailing Party as part of its award.

 

(e)                                  Any award shall be binding and enforceable against the Parties in any court of competent jurisdiction, and the Parties hereby waive any right to appeal such award on the merits or to challenge the award except on the grounds set forth in Article V of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

 

(f)                                    Notwithstanding the foregoing agreement to arbitrate, the Parties expressly reserve the right to seek provisional relief from any court of competent jurisdiction to preserve their respective rights pending arbitration, and in seeking such relief shall not waive the right of arbitration.

 

(g)                                 The Parties shall continue to perform this Charter during arbitration proceedings and the arbitral panel shall have the authority to determine the validity of this Charter and to arbitrate any Dispute submitted to it.

 

(h)                                 Subject to Clause 45.2(i), if any Dispute raises an issue of fact or law substantially related to one or more such issues raised in any Dispute (as that term is defined in the Operation and Services Agreement) in connection with the Operation and Services Agreement, then, notwithstanding that an arbitration may have been commenced under the Operation and Services Agreement, any Party may, by written notice, require such Dispute in connection with the Operation and Services Agreement to be referred to and/or consolidated with and finally settled by arbitration under this Charter.

 

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The arbitral panel is authorised to order that such Dispute in connection with the Operation and Services Agreement be consolidated with an arbitration under this Charter.

 

(i)                                     The Parties may not issue a notice pursuant to Clause 45.2(h), and the effects of any notice purported to be issued pursuant to Clause 45.2(h) shall not apply, if an evidentiary hearing on the merits has been commenced or is scheduled to commence within ***** of the date of the Dispute hereunder in an arbitration under the Operation and Services Agreement.

 

(j)                                     This arbitration agreement is binding upon the Parties, their principals, successors, assigns and Affiliates.

 

45.3                           Caveat

 

Notwithstanding the reference of a Dispute for resolution, the Parties shall continue diligently to observe and perform their respective obligations and duties under this Charter as if no Dispute had arisen, except if a Party has given notice to terminate this Charter.  This Clause 45 shall survive termination of this Charter.

 

46.                               Confidentiality

 

46.1                           The Parties agree to keep Confidential Information strictly confidential, except in the following cases when the receiving Party shall be permitted to disclose such information:

 

(a)                                  It is already known to the public or becomes available to the public other than through the act or omission of the receiving Party; or

 

(b)                                 It is required to be disclosed under Law (provided that the receiving Party shall give notice of such required disclosure to the disclosing Party prior to the disclosure); or

 

(c)                                  In filings with a court or arbitral body in proceedings in which the Confidential Information is relevant and in discovery arising out of such proceedings; or

 

(d)                                 To any of the following persons to the extent necessary for the proper performance of their duties or functions:

 

(i)                                          A buyer or seller or potential buyer or seller of LNG shipped or to be shipped on the Vessel only to the extent that such information 

 

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disclosed is necessary for the operational purposes of the Vessel under this Charter and does not contain any information relating to pricing or other similarly commercially sensitive information;

 

(ii)                                       An Affiliate of the receiving Party;

 

(iii)                                    Employees, officers, directors and agents of the receiving Party;

 

(iv)                                   Professional consultants retained by the receiving Party; and

 

(v)                                      Financial institutions advising on, providing or considering the provision of financing to the receiving Party or any Affiliate thereof,

 

(vii)                                Provided that the receiving Party shall exercise due diligence to ensure that no such person shall disclose Confidential Information to any unauthorized party or persons.

 

46.2                           The provisions of this Clause 46 shall survive for a period of two (2) years after the termination or expiry of this Charter.

 

47.                               Construction

 

47.1                           This Charter constitutes the entire agreement between the Parties bound hereby and supersedes and replaces all other written or oral negotiations, representations, warranties, agreements and undertakings made or entered into by or between Owner and Charterer with respect to the subject matter herein prior to the date hereof.

 

47.2                          No provision of this Charter shall be interpreted or construed against a Party because that Party or its legal representative drafted the provision.

 

48.                               Notices

 

48.1                           Address for Notices

 

Any notice given, or required to be given, by either Party to the other Party hereunder, shall be sent by telex, fax, registered mail, e-mail or registered airmail to the following addresses:

 

	
Notice   to Owner:
    	
Gary   Smith, Chief Executive Officer
    
	
 
    	
Golar   Management (UK) Limited
    

 

115

 

	
 
    	
30   Marsh Wall
    
	
 
    	
London   E14 9TP
    
	
 
    	
Tel:   + 44 20 7517 8600
    
	
 
    	
Fax:   + 44 20 7517 8601
    
	
 
    	
Email:   gary.smith@golar.com
    
	
 
    	
Copy   to: Graham Robjohns, Chief Finance Officer
    
	
 
    	
 
    
	
Notice   to Charterer:
    	
Antonio   Eduardo Monteiro de Castro
    
	
 
    	
Petrobras   S.A.
    
	
 
    	
AV.   Almirante Barroso
    
	
 
    	
81-34th   Floor
    
	
 
    	
20031-004,   Rio de Janeiro
    
	
 
    	
Brazil
    
	
 
    	
Tel:   00-55-21-3229-2055
    
	
 
    	
Fax:   00-55-21-3229-4703
    
	
 
    	
Email:   aemcastro@petrobras.com.br
    
	
 
    	
 
    
	
Copy   to:
    	
Domingos   José de Oliveira
    
	
 
    	
Petrobras   S.A.
    
	
 
    	
AV.   Almirante Barroso
    
	
 
    	
81-33rd   Floor
    
	
 
    	
20031-004,   Rio de Janeiro
    
	
 
    	
Brazil
    
	
 
    	
Tel:   00-55-21-3229-4998
    
	
 
    	
Fax:   00-55-21-3229-4852
    
	
 
    	
Email:   domingo@petrobras.com.br
    
	
 
    	
 
    
	
Notice to Owner’s Operations Department:
    
	
 
    	
 
    
	
 
    	
Jon   Rossing
    
	
 
    	
Operations   Manager
    
	
 
    	
Golar   LNG
    
	
 
    	
Bryggegata   3
    
	
 
    	
P.O. Box   2008 - Vika
    
	
 
    	
N-0125   Oslo
    
	
 
    	
Norway
    
	
 
    	
 
    
	
 
    	
Tel:   +47 32 11 41 33
    
	
 
    	
Mobile:   +47 208 00 472
    
	
 
    	
Fax:   +47 23 11 41 21
    

 

116

 

	
 
    	
e-mail:   jon.rossing@golar.com
    
	
 
    	
 
    
	
Notice to Charterer’s Operations   Department:
    
	
 
    	
 
    
	
 
    	
Celso   Luiz Silva Pereira Souza
    
	
 
    	
General   Manager for Planning and Implementation of Natural Gas Logistics
    
	
 
    	
Petrobras   S.A.
    
	
 
    	
Almirante   Barroso 81, 36th floor
    
	
 
    	
Rio   de Janeiro - RJ - Brazil
    
	
 
    	
20031-004
    
	
 
    	
 
    
	
 
    	
Phone:   +55-21- 3229-0152
    
	
 
    	
Mobile:   +55-21-9605-7070
    
	
 
    	
Fax:   +55-21-3229-4855/4854
    
	
 
    	
E.mail:   celsopsouza@petrobras.com.br
    

 

or to such other addresses as the Parties may respectively from time to time designate by notice in writing.  Any failure to transmit a copy of the notice to a Party listed as entitled to receive a copy shall not in any way affect the validity of any notice otherwise properly given as provided in this Clause 48.

 

48.2                           Notices in Writing

 

Any notice required to be given pursuant to this Charter shall be deemed to be duly received:

 

(a)                                  In the case of a telex, at the time of transmission recorded on the message if such time is within normal business hours on a working day at the place of receipt, otherwise at the commencement of normal business hours on the next working day there;

 

(b)                                 In the case of a letter, whether delivered in course of the post or by hand or by courier, at the date and time of its actual delivery if within normal business hours on a working day at the place of receipt otherwise at the commencement of normal business on the next such working day; and

 

(c)                                  In the case of a facsimile or e-mail, at the time of transmission recorded on the message if such time is within normal business hours (09:00 - 17:00) in the country of receipt, otherwise at the commencement of normal business hours on the next working day at the place of receipt.

 

117

 

48.3                           Communications

 

Unless otherwise expressly provided in this Charter, all notices, approvals, agreements, rejections, requests, consents, elections, instructions, designations, authorisations, responses, and all other communications required to be given by either Owner or Charterer to the other under or in connection with this Charter shall be in writing and in the English language.

 

49.                               Miscellaneous

 

49.1                           Rights of Third Parties

 

Owner and Charterer agree that the provisions of The Contracts (Rights of Third Parties) Act 1999 shall not apply to this Charter save and except in respect of the Master as provided for in this Charter, which rights may be amended, varied or waived at any time by agreement between the Parties without reference to the Master.

 

49.2                           Banking Days

 

Any payment which is due to be made under this Charter on a day that is not a Banking Day shall be made on the next Banking Day in the same calendar month (if there is one) or the succeeding Banking Day (if there is not).

 

49.3                           Partial Invalidity

 

If, at any time, any provision of this Charter is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.

 

49.4                           Remedies and Waivers

 

No failure or delay by either Party in exercising any right or remedy under this Charter shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy.  The rights and remedies provided in this Charter are cumulative and not exclusive of any rights or remedies provided by law.

 

49.5                           Amendments

 

This Charter may only be amended by written instrument signed by both Parties.

 

118

 

49.6                           Counterparts

 

This Charter may be executed in counterpart, and this has the same effect as if the signatures on each counterpart were on a single copy hereof.

 

49.7                           Waiver of immunity

 

Each Party (to the fullest extent permitted by law) irrevocably and unconditionally:

 

(a)                                  agrees not to claim any immunity from proceedings brought against it by the other Party in relation to this Charter, and to ensure that no such claim is made on its behalf;

 

(b)                                 waives all rights of immunity in respect of it or its assets; and

 

(c)                                  consents generally in respect of such proceedings to the giving of relief or the issue of any process in connection with such proceedings.

 

49.8                           Fuel Prices

 

Where, under this Charter, either Owner or Charterer are required to pay for or reimburse the other Party for the value of fuel oil or diesel oil, the transfer price shall be the last documented price paid for each item.  Where, under this Charter, either Owner or Charterer are required to pay for or reimburse the other party for the value of LNG heel or natural gas vapours, the transfer price shall be the price for such LNG in US$ per mmBtu, as stipulated in the applicable LNG SPA or Designated Trade to which such LNG or natural gas vapours relate; provided, however, that if such LNG or natural gas vapours do not relate to one of the LNG SPAs or Designated Trades, then the price shall be the FOB price when such LNG or natural gas vapours are loaded on the Vessel (the “LNG Price”).  Notwithstanding the foregoing, the price for LNG or natural gas vapours consumed for cooling-down during the off-hire period of the Vessel shall be the FOB price.

 

49.9                           Liquidated Damages

 

The Parties agree that any liquidated damages or other adjustments to the monetary consideration that Owner is to provide Charterer under this Charter (including the liquidated damages set forth in Clause 6.10(b)) are reasonable estimates of the damages that Charterer may suffer in light of the anticipated harm associated with the event related thereto and that such liquidated damages or other adjustments to the monetary consideration that Owner is to provide Charterer do not constitute penalties.  Further, Owner hereby expressly waives any right to claim or assert in any arbitration 

 

119

 

or in any other action with respect to this Charter (or the Operation and Services Agreement) that the exclusive remedy set forth in Clause 6.10(b) do not represent a genuine pre-estimate by the Parties as to the loss or damage likely to be suffered by Charterer in each such circumstance.

 

49.10                    Intellectual Property

 

It is expressly agreed that all intellectual property rights related to the Vessel and related regasification technology, including any intellectual property rights developed by or for Owner or Contractor in relation to the Vessel, shall be or remain the sole and exclusive property of Owner or Contractor (as the case may be).

 

[This space left blank intentionally]

 

120

 

IN WITNESS WHEREOF, each Party has executed this Charter on the date first above written.

 

	
By OWNER
    	
 
    	
By CHARTERER
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
GOLAR SPIRIT UK   LIMITED
    	
 
    	
PETRÓLEO   BRASILEIRO S.A.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Gary Smith
    	
 
    	
By: 
    	
/s/ Antonio   Eduardo Monteiro de Castro
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name: 
    	
Gary Smith
    	
 
    	
Name: 
    	
Antonio Eduardo   Monteiro de Castro
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title: 
    	
Director
    	
 
    	
Title: 
    	
Executive Manager   Corporate Affairs
    

 

 

SCHEDULE I

 

PARTICULARS OF VESSEL

 

Particulars of Vessel

 

	
(a)
    	
 
    	
Ship’s Name
    	
 
    	
GOLAR SPIRIT
    
	
(b)
    	
 
    	
Builder and Yard
    	
 
    	
Kawasaki Heavy Industries Ltd.   Sakaide Japan
    
	
(c)
    	
 
    	
Hull No.
    	
 
    	
1220
    
	
(d)
    	
 
    	
Year Built
    	
 
    	
30 September 1981
    
	
(e)
    	
 
    	
Port of Registry and Flag
    	
 
    	
Marshall Islands - Majuro
    
	
(f)
    	
 
    	
IMO Number
    	
 
    	
7373327
    
	
(g)
    	
 
    	
Call Sign
    	
 
    	
V7HA4
    
	
(h)
    	
 
    	
Classification Society
    	
 
    	
DNV
    
	
(i)
    	
 
    	
Protection and Indemnity Club
    	
 
    	
GARD
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
1.
    	
 
    	
Principal   Particulars
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(a)
    	
 
    	
Length overall
    	
 
    	
289.00 m
    
	
(b)
    	
 
    	
Length Between Perpendiculars
    	
 
    	
275.00 m
    
	
(c)
    	
 
    	
Breadth moulded
    	
 
    	
44.60 m
    
	
(d)
    	
 
    	
Depth moulded
    	
 
    	
25.688 m
    
	
(e)
    	
 
    	
Draught at summer freeboard (Extreme)
    	
 
    	
12.476 m
    
	
(f)
    	
 
    	
Height overall — keel to highest fixed point
    	
 
    	
68.8
    
	
(g)
    	
 
    	
Maximum air draught (with full ballast and half bunkers)   (corresponding draughts)
    	
 
    	
58.8 m
    
	
(h)
    	
 
    	
Gross Tonnage (International)
    	
 
    	
106577 MT
    
	
(i)
    	
 
    	
Net Tonnage (International)
    	
 
    	
31974 MT
    
	
(j)
    	
 
    	
Gross Tonnage (Suez)
    	
 
    	
93815.14 MT
    

 

A-1

 

	
(k)
    	
 
    	
Net Tonnage (Suez)
    	
 
    	
70102.87 MT
    
	
(l)
    	
 
    	
Light Ship Displacement
    	
 
    	
33913 MT
    
	
(m)
    	
 
    	
Displacement (maximum)
    	
 
    	
114152 MT
    
	
(n)
    	
 
    	
Windage: 
    	
Lateral
    	
 
    	
6840 m2 at   12.5 m draft
    
	
 
    	
 
    	
 
    	
Longitudinal
    	
 
    	
m2
    
	
(o)
    	
 
    	
Classification designation
    	
 
    	
DNV - 1A1 Tanker for liquefied   Gas, E0
    
	
(p)
    	
 
    	
Conditions of Carriage (as defined on Certificate of   Fitness):
    	
 
    	
Methane (LNG) 
   Butane 1)
    	
All tanks
    
	
 
    	
 
    	
 
    	
 
    	
Butane/Propane Mixture 1)
    	
Min temp - 163 
    
	
 
    	
 
    	
 
    	
 
    	
Propane 1)
    	
Max press 0.7 bar
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
Max Vacc 0.05 bar 
    
	
 
    	
 
    	
 
    	
 
    	
Note 1)
    	
Relative to hold space   surrounding the tanks) LPG Liquefaction plant to be Re-commissioned and   subject to Survey prior to loading LPG cargo 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
The ship must be loaded so that   the still water bending moments and Shear forces are within the allowables   limits given for the longitudinal strength of the hull
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
2.
    	
 
    	
Operating   Draught and Deadweight
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(a)
    	
 
    	
Draught filling to 98.5% (@ cargo density 0.47 kg/m3)
    	
 
    	
11.90 m
    
	
(b)
    	
 
    	
Deadweight filling to 98.5% (@ cargo density 0.47 kg/m3)
    	
 
    	
72 840 MT
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
3.
    	
 
    	
Ballast   System
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(a)
    	
 
    	
Total capacity of ballast water tanks
    	
 
    	
67 824 m3
    
	
(b)
    	
 
    	
Number, capacity and head of pumps for handling ballast
    	
 
    	
2 x 2750 m3/h at 40m
    
	
(c)
    	
 
    	
Is Vessel able to ballast/de-ballast within the cargo   loading/  discharging   period?
    	
 
    	
Yes
    
								

 

A-2

 

	
(d)
    	
 
    	
Can the Vessel undertake ballast exchange at sea within 24   hours
    	
 
    	
Yes
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
4.
    	
 
    	
Details   of Principal Certification
    	
 
    	
 
    

 

	
(List conventions   complied with/Certificates obtained, including protocols, amendments and date   of issue)
    
	
 
    
	
 
    	
 
    	
 
    	
 
    	
Date issued / expire
    
	
(a)
    	
 
    	
Loadline
    	
 
    	
01 Nov   2005 / 30 Jun 2008
    
	
(b)
    	
 
    	
SOLAS
    	
 
    	
Cargo Ship Safety Equipment   certificate
   Cargo Ship Safety Construction Certificate
   Cargo Ship Safety Radio Certificate
    
	
(c)
    	
 
    	
IGC Code
    	
 
    	
International Certificate of   Fitness
    
	
(d)
    	
 
    	
Tonnage
    	
 
    	
20 May 2005 / Permanent
    
	
(e)
    	
 
    	
Marine Pollution (MARPOL)
    	
 
    	
10 Aug 2005 / 30 Jun 2008
    
	
(f)
    	
 
    	
I.M.O. Certificate of Fitness
    	
 
    	
28 June 2005 / 30   June 2008
    
	
(g)
    	
 
    	
USCG Certificate of Compliance
    	
 
    	
28 Aug 2004 / 290 May 2007
    
	
(h)
    	
 
    	
Independent Sworn Measurer Certificate
    	
 
    	
29 Aug 2006 / 30 Aug 2008
    
	
(i)
    	
 
    	
SIRE Inspection
    	
 
    	
Pyeong Taek, 24-Oct-06
    
	
(j)
    	
 
    	
Port state control
    	
 
    	
Pyeong Taek, 19 Jul-06
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Is certification held   indicating compliance with the following?
    
	
 
    
	
(k)
    	
 
    	
ISPS Code
    	
 
    	
Yes
    
	
(l)
    	
 
    	
Rules and Regulations of Suez Canal Authorities
    	
 
    	
Yes
    
	
(m)
    	
 
    	
ISM
    	
 
    	
Yes
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
5.
    	
 
    	
Propulsion
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(a)
    	
 
    	
Type and make of propulsion plant
    	
 
    	
Steam Turbine Kawasaki UC-450
    

 

A-3

 

	
(b)
    	
 
    	
Maximum rated power and RPM
    	
 
    	
45 000 SHP Metric / 105 RPM
    
	
(c)
    	
 
    	
Proposed service power and RPM
    	
 
    	
40 500 SHP / 103 RPM
    
	
(d)
    	
 
    	
Grade of Fuel
    	
 
    	
RMH55 - ISO8217 (1996) or better
    
	
(e)
    	
 
    	
Dual Fuel Burning
    	
 
    	
Yes LNG
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
6.
    	
 
    	
Speed/Consumption
    	
 
    	
 
    

 

	
(a)
    	
 
    	
 
    	
 
    	
Maximum fuel consumption
    
	
 
    	
 
    	
Speed
    	
 
    	
(Tonnes of Fuel Oil Equivalent/day)
    
	
 
    	
 
    	
(Knots)
    	
 
    	
Laden
    	
 
    	
Ballast
    
	
 
    	
 
    	
Abt 19,70
    	
 
    	
200
    	
 
    	
200
    
	
 
    	
 
    	
19,00
    	
 
    	
190
    	
 
    	
190
    
	
 
    	
 
    	
18,50
    	
 
    	
185
    	
 
    	
185
    
	
 
    	
 
    	
18,00
    	
 
    	
175
    	
 
    	
175
    
	
 
    	
 
    	
17,50
    	
 
    	
165
    	
 
    	
165
    

 

	
(b)
    	
 
    	
Trial Speed at Maximum Power
    	
 
    	
22 Knots
    
	
(c)
    	
 
    	
Service Speed
    	
 
    	
19 Knots
    
	
(d)
    	
 
    	
In Port (cargo operations) Load/Disch.
    	
 
    	
60 / 30 MT per day
    
	
(e)
    	
 
    	
In Port (idle)
    	
 
    	
30 MT per day
    
	
(f)
    	
 
    	
For inert gas generation
    	
 
    	
8.3 MT per day of Gas Oil
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
7.
    	
 
    	
Boilers   and Steam Capacity
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(a)
    	
 
    	
Number and type of boilers
    	
 
    	
2 - Kawasaki UMG 77/69, two-drum water tube   natural circulation boilers
    
	
(b)
    	
 
    	
Maximum steam output available
    	
 
    	
77 000 kg/hr each
    
	
(c)
    	
 
    	
Normal service output corresponding to 5(b)
    	
 
    	
69 000 kg/hr each
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
8.
    	
 
    	
Cargo   Tanks
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(a)
    	
 
    	
Number of tanks
    	
 
    	
5 Spherical Tanks
    
	
(b)
    	
 
    	
Capacity of LNG tanks at normal filling level
    	
 
    	
 
    

 

A-4

 

	
 
    	
 
    	
(98,5%)
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
No 1 Tank
    	
 
    	
22 901 m3
    
	
 
    	
 
    	
No 2 Tank
    	
 
    	
26 136 m3
    
	
 
    	
 
    	
No 3 Tank  
    	
 
    	
26 136 m3
    
	
 
    	
 
    	
No 4 Tank  
    	
 
    	
26 127 m3
    
	
 
    	
 
    	
No 5 Tank  
    	
 
    	
26 126 m3
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Total
    	
 
    	
127 426 m3 @ -160 Deg   C
    
	
(c)
    	
 
    	
Gross Capacity of LNG tanks at 100% 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
No 1 Tank
    	
 
    	
23 250 m3
    
	
 
    	
 
    	
No 2 Tank
    	
 
    	
26 534 m3
    
	
 
    	
 
    	
No 3 Tank
    	
 
    	
26 534 m3
    
	
 
    	
 
    	
No 4 Tank
    	
 
    	
26 525 m3
    
	
 
    	
 
    	
No 5 Tank
    	
 
    	
26 524 m3
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Total
    	
 
    	
129 367 m3 @ -160 Deg   C
    
	
(d)
    	
 
    	
Partial loading/filling restrictions
    	
 
    	
None
    
	
(e)
    	
 
    	
The Vessel’s cargo tanks can be cooled down from ambient   in:
    	
 
    	
38 Hours
    
	
(f)
    	
 
    	
Maximum filling rate
    	
 
    	
10 800 m3 per hour
    
	
(g)
    	
 
    	
Relief valve settings (MARVS)
    	
 
    	
250 mb (gauge)
    
	
(h)
    	
 
    	
Loaded Boil-Off rate
    	
 
    	
0.25%
    
	
(i)
    	
 
    	
Ballast Boil-Off rate
    	
 
    	
N/A
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
9.
    	
 
    	
Cargo   Discharge
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(a)
    	
 
    	
Number of cargo pumps per tank
    	
 
    	
2 Each tank, Total = 10
    
	
(b)
    	
 
    	
Make and type of cargo pumps
    	
 
    	
JC CARTER CRYOGENICS   ELECTRIC/MOTOR DRIVEN SUBMERGED
    
	
(c)
    	
 
    	
Design rated capacity of each cargo pump and corresponding   discharge head
    	
 
    	
1100 m3/H x 140 M HEAD
    
	
(d)
    	
 
    	
Number of spray (stripping) pumps per tank
    	
 
    	
2 OFF (CT 3 AND CT 4)
    

 

A-5

 

	
(e)
    	
 
    	
Make and type of spray (stripping) pumps
    	
 
    	
JC CARTER CRYOGENICS   ELECTRIC/MOTOR DRIVEN SUBMERGED
    
	
(f)
    	
 
    	
Design rated capacity of each spray pump and corresponding   discharge head (2 units)
    	
 
    	
50 m3/H x 140 M HEAD
    
	
(g)
    	
 
    	
Number, Make and Capacity of Auxiliary Pumps
    	
 
    	
n/a
    
	
(h)
    	
 
    	
Bulk discharge time (not including start up and stripping   periods) — assume head at ship’s rail = 80 mlc and no restrictions on vapour   return from shore
    	
 
    	
12 hours
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
10.
    	
 
    	
Cryogenic   Systems
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(a)
    	
 
    	
Type   of LNG containment system
    	
 
    	
MOSS   ROSEMBERG SPHERICAL Aluminium 5083-0
    
	
(b)
    	
 
    	
Design   temperature
    	
 
    	
-1630C
    
	
(c)
    	
 
    	
Make   and type of vapour return compressors (2)
    	
 
    	
Airco steam driven
    
	
(d)
    	
 
    	
Number   and rated capacity of vapour return compressors and corresponding discharge   head
    	
 
    	
27000   kg/h x 2.03 kg/cm2 suc press : 1.06 kg/cm2 A
    
	
(e)
    	
 
    	
Is a   steam dump system provided?
    	
 
    	
Yes
    
	
 
    	
 
    	
If   so, is the capacity sufficient to deal with all excess steam generated by the   boilers at max designed Boil-Off rate with engines stopped according to   Class & USCG Rules?
    	
 
    	
Yes
    
	
(f)
    	
 
    	
Total   capacity of liquid nitrogen storage tanks (if nitrogen generator not  fitted)
    	
 
    	
50 m3
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
11.
    	
 
    	
LNG   Measurement and Tank Calibration
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(a)
    	
 
    	
Are all tanks calibrated and certified by a qualified   agency?
    	
 
    	
Intertek Calb Brett-KIMSCO
    

 

A-6

 

	
 
    	
 
    	
(Specify agency)
    	
 
    	
 
    
	
(b)
    	
 
    	
Make and type of primary system for measuring cargo level,   temperature and pressure
    	
 
    	
Saab Rosemount Marine AB SW
   Saab Tank Radar G# level unit
   G1046, Workstation V7F1
    
	
 
    	
 
    	
Level measuring system accuracy and range  
    	
 
    	
Max error: ±5.0 mm
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Temperature measuring system accuracy and range
    	
 
    	
Max Error:
    	
±0.12 C @ -160C
    
	
 
    	
 
    	
 
    	
 
    	
± 0.19 C @ -100C
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
± 0.38 C @ =/- 0C
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Pressure measuring system accuracy and range
    	
 
    	
2.0 mb 0r 0.33% of span
    
	
(c)
    	
 
    	
Is secondary system for measuring LNG liquid level fitted   and, if so, state type and measuring accuracy
    	
 
    	
Yes. Whessoe ±6.0 mm
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
12.
    	
 
    	
Cargo   Manifolds
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(a)
    	
 
    	
Do manifolds follow requirements of Vol Category “B” of   OCIMF “Recommendations for Manifolds for Refrigerated   Liquefied Natural Gas Carriers (LNG)”  2nd Edition - 1994? If “No”,   state variations)
    	
 
    	
*****
    
	
(b)
    	
 
    	
State layout of liquid and vapour connections
    	
 
    	
L-L-V-L-L
    
	
(c)
    	
 
    	
Distance of the centre of manifolds from amidships
    	
 
    	
28.20 m Fwd
    
	
(d)
    	
 
    	
Distance of presentation flange from ship’s side
    	
 
    	
3.50 m
    
	
(e)
    	
 
    	
Distance of presentation flange from ship’s rail 
    	
 
    	
3.50 m
    
	
 
    	
 
    	
Centre manifold to main deck
    	
 
    	
4.95 m
    
	
(f)
    	
 
    	
Height of manifold centre above keel
    	
 
    	
30.64 m
    
	
(g)
    	
 
    	
Size and location of liquid nitrogen loading connection
    	
 
    	
Manifold 2.5 inch # 150 ANSI
    

 

A-7

 

	
13.
    	
 
    	
Details   Regarding Regasification Equipment
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(a)
    	
 
    	
Maximum   gas send-out (open / closed loop)
    	
 
    	
*****
    
	
(b)
    	
 
    	
Flow   variation (%)
    	
 
    	
*****
    
	
(c)
    	
 
    	
Operation   pressure  (min / max)
    	
 
    	
*****
    
	
(d)
    	
 
    	
Operation   temperature
    	
 
    	
*****
    
	
(e)
    	
 
    	
Fuel   consumption at  maximum gas send-out
    	
 
    	
*****
    
	
(f)
    	
 
    	
Fuel consumption   at  minimum send-out
    	
 
    	
*****
    
	
(g)
    	
 
    	
Number   of modules
    	
 
    	
*****
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
14.
    	
 
    	
Emergency   Shutdown System and Ship/Shore Compatibility
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(a)
    	
 
    	
At what cargo level (%) is overflow protection activated?
    	
 
    	
99.8 of volume
    
	
(b)
    	
 
    	
Does overflow protection activate the following:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Trip ESD system?
    	
 
    	
Yes
    
	
 
    	
 
    	
Close manifold valves?
    	
 
    	
Yes
    
	
 
    	
 
    	
Trip cargo pumps?
    	
 
    	
Yes
    
	
 
    	
 
    	
Trip ship/shore link system?
    	
 
    	
Yes
    
	
(c)
    	
 
    	
What ship/shore link systems are installed: 
    	
 
    	
Yes
    
	
 
    	
 
    	
Optical Fibre Link  Electric Links — Pyle-National/Miyake   connector
    	
 
    	
Miykai
   N/a
    
	
 
    	
 
    	
Pneumatic ESD link
    	
 
    	
Yes Nitta 1/2”
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
15.
    	
 
    	
Bunkers
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(a)
    	
 
    	
Capacity of fuel oil bunker tanks @ 98% (SG 0.99)
    	
 
    	
7838 MT
    
	
(b)
    	
 
    	
Capacity of diesel oil bunker tanks @ 98% (SG 0.86)
    	
 
    	
344 MT
    
	
(c)
    	
 
    	
Maximum bunker loading 
    	
 
    	
700 MT/hr
    

 

A-8

 

	
 
    	
 
    	
rate
    	
 
    	
 
    
	
(d)
    	
 
    	
Segregated low sulphur fuel oil storage capacity
    	
 
    	
N/A
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
16.
    	
 
    	
Fresh   Water Capacity
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(a)
    	
 
    	
Capacity of fresh water generators
    	
 
    	
55 m3/24hr
    
	
(b)
    	
 
    	
Distilled capacity
    	
 
    	
320 MT
    
	
(c)
    	
 
    	
Domestic capacity
    	
 
    	
267 MT
    
	
(d)
    	
 
    	
Distilled consumption
    	
 
    	
30 MT per day
    
	
(e)
    	
 
    	
Domestic consumption
    	
 
    	
15 MT per day
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
17.
    	
 
    	
Inert   Gas Generation
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(a)
    	
 
    	
Type and make of equipment
    	
 
    	
Moss Rosenberg LPI 5000-02
    
	
(b)
    	
 
    	
Capacity
    	
 
    	
5000 m3/hr,   0.2 bar
    
	
(c)
    	
 
    	
Quality of gas O2 Max
    	
 
    	
1.2% to 2% by Volume (Last operation, 1.9%)
    
	
(d)
    	
 
    	
Quality of gas CO Max
    	
 
    	
0.1% by Volume
    
	
(e)
    	
 
    	
Qualify of gas SO2 Max
    	
 
    	
App. 15 ppm
    
	
(f)
    	
 
    	
Qualify of gas NOx Max
    	
 
    	
N/A
    
	
(g)
    	
 
    	
Dew point
    	
 
    	
-30 to -40
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
18.
    	
 
    	
Nitrogen
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(a)
    	
 
    	
Type and capacity of nitrogen generation system
    	
 
    	
N/A
    
	
(b)
    	
 
    	
Consumption
    	
 
    	
0.4 / 0.6 m3/day
    
	
(c)
    	
 
    	
Liquid nitrogen storage
    	
 
    	
50 KL equal 50 m3
    
	
(d)
    	
 
    	
Nitrogen generator capacity
    	
 
    	
N/A
    
	
(e)
    	
 
    	
Pressure tank
    	
 
    	
N/A
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
19.
    	
 
    	
Gas   Compressors
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(a)
    	
 
    	
Low duty (fuel gas compressor): No. and
    	
 
    	
6700 m3/h
    

 

A-9

 

	
 
    	
 
    	
capacity
    	
 
    	
 
    
	
(b)
    	
 
    	
Low duty (fuel gas compressor): make
    	
 
    	
Airco Cryogenics
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
20.
    	
 
    	
Electrical   Generating
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(a)
    	
 
    	
Number of electric generators
    	
 
    	
Main:
    	
2
    
	
 
    	
 
    	
 
    	
 
    	
Auxiliary:
    	
2
    
	
(b)
    	
 
    	
Type of electric generators
    	
 
    	
Main: 
    	
Steam Turbine 2 pcs
    
	
 
    	
 
    	
 
    	
 
    	
Auxiliary: 
    	
Diesel 2 pcs
    
	
 
    	
 
    	
 
    	
 
    	
Emergency:
    	
 
    
	
(c)
    	
 
    	
Output of electric generators
    	
 
    	
Main:
    	
2 x 2480 kW
    
	
 
    	
 
    	
 
    	
 
    	
Auxiliary:
    	
1500 kW
    
	
 
    	
 
    	
 
    	
 
    	
Auxiliary:
    	
1300 kW
    
	
(d)
    	
 
    	
Fuel type and quantity at full load of electric generators
    	
 
    	
MGO 0.5 MT/hr
    
	
(e)
    	
 
    	
Power required for discharge/de-ballasting at full rate
    	
 
    	
7000 kw available. (90%)
   4700 Kw normal consumption (10 cargo pums + 1 ballast Pump)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
21.
    	
 
    	
Deck   Machinery
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(a)
    	
 
    	
Winches
    	
 
    	
No: 10
   Pull Type: Steam driven
   Brake Holding Force: 30 Tons
    
	
(b)
    	
 
    	
Wires   (as per certificates)
    	
 
    	
Size: 41
 MBL: 114 Tons
    
	
(c)
    	
 
    	
No. Wires   Forward
    	
 
    	
10
    
	
(d)
    	
 
    	
No. Wires   Aft
    	
 
    	
11
    
	
(e)
    	
 
    	
Wires   Fitted with Synthetic Tails
    	
 
    	
Length and Size: 11m x 96 mm
 MBL: 158
    
	
(f)
    	
 
    	
Cranes   - Type and SWL
    	
 
    	
2 x   2.5 Manifold
    2   x 3 Aft
    

 

A-10

 

	
22.
    	
 
    	
Navigation   and Communications
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(a)
    	
 
    	
Type and number of radar sets fitted
    	
 
    	
3 sets
    
	
(b)
    	
 
    	
Is an approved GMDSS installed? (Type?)
    	
 
    	
Yes, Furuno (2) Kevin Hodges   (1)
    
	
(c)
    	
 
    	
Is an additional SatCom system installed? (Type?)
    	
 
    	
Sat B and Fleet 77
    
	
(d)
    	
 
    	
Is Suez Canal Projector fitted?
    	
 
    	
Yes
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
23.
    	
 
    	
Crew
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(a)
    	
 
    	
The Officers may be of the following Nationalities
    	
 
    	
Scandinavians/Spanish/Indonesians
    
	
(b)
    	
 
    	
Number of Officers (Minimum)
    	
 
    	
Minimum 8 (actual 12)
    
	
(c)
    	
 
    	
Number of Crew (Minimum)
    	
 
    	
Minimum 8 (actual 17)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
24.
    	
 
    	
List   of Compatible LNG Terminals
    	
 
    	
 
    

 

	
Load
    Ports
    	
 
    	
Discharge
    Ports
    
	
Blang Lancang
    	
 
    	
Pyeong Taek
    
	
Bontang
    	
 
    	
Inchon
    
	
Das Island
    	
 
    	
Sodegaura
    

 

	
25.
    	
 
    	
List   of Visited LNG Terminals at the Date of Vessel Delivery
    

 

	
Load
    Ports
    	
 
    	
Discharge
    Ports
    
	
Blang Lancang
    	
 
    	
Pyeong Taek
    
	
Bintulu
    	
 
    	
 
    
	
Ras Laffan
    	
 
    	
 
    

 

A-11

 

SCHEDULE II

 

DETAILED PERFORMANCE CRITERIA

 

	
Part A — Shipping Operations
    
	
 
    	
 
    	
 
    
	
Article 1
    	
 
    	
Speed
    
	
 
    	
 
    	
 
    
	
Article 2
    	
 
    	
Timeliness
    
	
 
    	
 
    	
 
    
	
Article 3
    	
 
    	
Guaranteed   Daily Fuel Consumption
    
	
 
    	
 
    	
 
    
	
Article 4
    	
 
    	
Definitions   for Fuel Consumption Calculations
    
	
 
    	
 
    	
 
    
	
Article 5
    	
 
    	
Basis   of Calculating Fuel Consumption during a Voyage
    
	
 
    	
 
    	
 
    
	
Article 6
    	
 
    	
Actual   Fuel Consumption on a Voyage
    
	
 
    	
 
    	
 
    
	
Article 7
    	
 
    	
Boil-Off
    
	
 
    	
 
    	
 
    
	
Article 8
    	
 
    	
Boil-Off   Calculations
    
	
 
    	
 
    	
 
    
	
Article 9
    	
 
    	
Spray   Cooling, Forced Vaporisation and use of Boil-Off
    
	
 
    	
 
    	
 
    
	
Article 10
    	
 
    	
Provisions   for Gauging
    
	
 
    	
 
    	
 
    
	
Article 11
    	
 
    	
Underwater   Cleaning/Waiting at Anchorage
    
	
 
    	
 
    	
 
    
	
Part B —Loading, Storage, Regas and Gas   Delivery
    
	
 
    	
 
    	
 
    
	
Article 12
    	
 
    	
LNG   Regasification Equipment performance guarantee
    
	
 
    	
 
    	
 
    
	
Article 13
    	
 
    	
Guaranteed   Daily Fuel Consumption of Vessel (other than during a Voyage)
    
	
 
    	
 
    	
 
    
	
Article 14
    	
 
    	
Boil-Off   Calculations during Storage and Regasification Operations
    
	
 
    	
 
    	
 
    
	
Article 15
    	
 
    	
Interpretation
    

 

B-1

 

Part A - Shipping Operations

 

1.                                      Speed

 

Charterer may order the Vessel to steam at the Laden Service Speed or the Ballast Service Speed, as applicable, or at any lesser average speed, but not less than the Minimum Service Speed and not at a greater average speed, except with Owner’s consent (which shall be deemed to be given if Contractor consents thereto) which shall not be unreasonably withheld.  For the avoidance of doubt, it is acknowledged that Contractor may decline orders to steam at any lesser average speed than the Minimum Service Speed or at any greater average speed than the Service Speed for operational reasons.

 

2.                                      Timeliness

 

(a)                                  Prior to each voyage Charterer may, subject to Article 1, instruct the Vessel to proceed so as to arrive at the pilot boarding station at each port at a given date and time (the “Scheduled Arrival Time” or “SAT”).  Provided however:

 

(i)                                     in the event that Charterer fails to provide a SAT to Contractor,  the SAT shall be deemed to be the estimated arrival time of the Vessel assuming the Vessel steams at the Service Speed by the shortest safe route to the named port measured from pilot station to pilot station (a “Sea Passage”) (or the route specified by Charterer, if different) from the time Charterer instructs the Vessel to proceed;

 

(ii)                                  the SAT shall  in any event not be earlier than the estimated arrival time calculated in accordance with Article 2(a)(i);

 

(iii)                               subject to Article 1, Charterer may amend the SAT from time to time during or prior to each voyage to accommodate changes in circumstances concerning the voyage (the “Amended SAT”); and

 

(iv)                              the speed at which the Vessel needs to steam in order to meet the SAT or the Amended SAT or any permissible speed ordered by the Charterer shall be a “Guaranteed Speed”.

 

(b)                                 Charterer shall compare the actual time of arrival of the Vessel at the pilot station at each port with the SAT; provided that if the SAT was amended solely for reasons not attributable to any failure in performance by the Vessel, then such comparison shall be made with the Amended SAT.

 

(c)                                  If the Vessel arrives at the pilot station at the arrival port not later than three (3) hours after the SAT or Amended SAT, where applicable, the Vessel shall be deemed to have arrived “On Time”.  If the Vessel arrives at the pilot station more than three (3) hours after the SAT, or Amended SAT where applicable, the Vessel shall be deemed to have arrived “Late”.

 

(d)                                 Subject to Articles 2(e) and (f), Charterer shall be entitled to make a deduction from Hire in respect of any period by which the Vessel arrives Late, in accordance with Clause 23.2.(a).

 

B-2

 

(e)                                  Notwithstanding the foregoing but subject to Article 2(f), Charterer shall not be entitled to make any deduction from Hire if the Vessel arrives Late to the extent that such late arrival is caused by one or more of the following during the voyage:

 

(i)                                     the incidence of bad weather, being any day in which the Vessel has to proceed in wind force in excess of Beaufort Force 5 for more than eight (8) hours noon to noon; or

 

(ii)                                  poor visibility; or

 

(iii)                               congested waters; or

 

(iv)                              alterations in speed or course to avoid areas of bad weather; or

 

(v)                                 any period spent at a waiting area following arrival; or

 

(vi)                              the saving of life or (with Charterer’s consent) property, (Articles 2(e)(i),(ii),(iii),(iv) and (v) being known as “Restricted Periods”); or

 

(vii)                           any period when the Vessel is off-Hire at sea on any individual voyage. The Master shall record in his daily noon report the time lost in the previous twenty four (24) hours due to any of the matters referred to in this Article 2(e).

 

(f)                                    If the Vessel arrives Late, the following calculation shall be made to assess the period in respect of which Charterer shall be entitled to deduct Hire.  The speed of the Vessel shall be calculated over the Sea Passage, excluding all Restricted Periods (the “Achieved Speed”).  If the Achieved Speed equals or exceeds the Guaranteed Speed, Owner shall be deemed to have met the speed Performance Warranty.  If the Achieved Speed is less than the Guaranteed Speed, Charterer shall apply the Achieved Speed to the total Sea Passage and the time at which the Vessel would have arrived (if steaming at the Achieved Speed) shall be the “Deemed Arrival Time”.  Charterer shall be entitled to deduct Hire to the extent to which the Deemed Arrival Time exceeds the SAT by more than *****.

 

3.                                      Guaranteed Daily Fuel Consumption

 

(a)                                  Owner guarantees that subject to the other provisions of Schedule II, the maximum daily fuel consumption of the Vessel for all purposes shall not exceed the quantities set forth in Article 6(a) of Schedule I, which shall be prorated between the speeds shown.

 

(b)                                 For the purposes of Article 3(a) of this Schedule II, the average speed in knots on any Voyage (as defined in Article 4) shall be calculated by reference to the observed distance steamed and the duration of the Voyage, but excluding from the calculation of average speed the (i) duration of all off-Hire periods and distance covered in such periods and (ii) distance covered during any deviation which is not an off-Hire period because the Vessel arrives On Time.

 

B-3

 

4.                                      Definitions for Fuel Consumption

 

(a)

 

(i)                                     “EOP” means the time the Vessel records End of Passage on arrival after any voyage.

 

(ii)                                  “FAOP” means the time the Vessel proceeds Full Away On Passage from her departure point on a voyage.

 

(iii)                               “fuel” refers collectively to its two components, fuel oil and Boil-Off, measured in tonnes of Fuel Oil Equivalent, while “fuel oil” refers only to the oil component of the fuel.

 

(b)                                 For the purposes of Article 3(a) of this Schedule II, a voyage shall, where applicable, be divided into separate segments (each a “Voyage”).  A Voyage shall be deemed to have started either:

 

(i)                                     at FAOP; or

 

(ii)                                  immediately after an off-Hire period; or

 

(iii)                               at the time the Vessel alters speed to comply with an Amended SAT or otherwise pursuant to Charterer’s orders, as the case may be.

 

(c)                                  A Voyage shall be deemed to have ended either:

 

(i)                                        at EOP; or

 

(ii)                                     immediately before an off-Hire period; or

 

(iii)                               at the time the Vessel alters speed to comply with an Amended SAT or otherwise pursuant to Charterer’s orders, as the case may be.

 

5.                                      Basis of Calculating Fuel Consumption during a Voyage

 

(a)                                  For each Voyage, the guaranteed fuel consumption shall be calculated by multiplying the maximum daily consumption as determined pursuant to Article 3 by the duration of the Voyage, calculated on the assumption that the Vessel steamed at the Guaranteed Speed.  In calculating both the guaranteed fuel consumption and the actual fuel consumption, Restricted Periods shall be excluded.  Subject as provided, there shall be (i) a saving of fuel for that Voyage equal to the amount by which the guaranteed fuel consumption exceeds the actual fuel consumption and (ii) excess fuel consumption for that Voyage equal to the amount, if any, by which the actual fuel consumption exceeds the guaranteed fuel consumption.  Such saving or excess shall be adjusted to take into account the Restricted Periods by dividing such saving or excess by the number of miles over which the fuel consumption has been calculated and multiplying by the same number of miles plus the miles steamed during the Restricted Periods in order to establish the total saving or excess in fuel consumption for the Voyage.

 

B-4

 

(b)                                 If on any Voyage the Vessel has to steam faster than the Service Speed or slower than the Minimum Speed pursuant to Charterer’s orders, or in order to achieve the SAT (provided this is not attributable to any failure in Vessel performance), the Vessel shall be deemed to have complied with the fuel consumption guarantees for the duration of such Voyage.

 

(c)                                  Owner’s warranties relating to speed and fuel consumption set forth in Article 6(a) of Schedule I shall not apply to the period between the end of one Voyage and the start of the next Voyage as described in Article 4.

 

(d)                                 As soon as practicable Owner shall, or shall procure that Contractor shall, furnish Charterer with its calculations determining the Vessel’s fuel consumption on each Voyage.

 

(e)                                  At the conclusion of each Performance Period, the quantities of excess fuel used and the quantities of fuel saved on all Voyages in the Performance Period shall each be added up.  The total fuel saved during the Performance Period shall then be subtracted from the total of excess fuel used during the Performance Period and, if the balance is positive, Charterer shall deduct from Hire due under Clause 9  an amount calculated by multiplying the net excess quantity of fuel consumed during the Performance Period by the weighted average price paid by the Charterer for fuel oil for the Vessel during the Performance Period in question.  If such balance is zero or negative, Owner shall be deemed to have complied with its Fuel consumption obligations during the Performance Period.

 

6.                                      Actual Fuel Consumption during a Voyage

 

(a)                                  The actual fuel consumption on a Voyage shall, subject to Article 6(b), be the sum of:

 

(i)                                     the fuel oil consumed during the Voyage (expressed in tonnes), and excluding any fuel oil used in any off-Hire period on that Voyage; and

 

(ii)                                  the fuel equivalent of the total volume of cargo lost as Boil-Off during the Voyage (expressed in tonnes of Fuel Oil Equivalent), excluding any Boil-Off in any off-Hire period on that Voyage and excluding any Boil-Off in excess of guaranteed maximum Boil-Off under the provisions of Article 8.

 

(b)                                 For the purpose of this Article 6, the Fuel Oil Equivalent of the LNG lost as Boil-Off which is available as fuel during the Voyage shall be assumed to be the total volumetric loss of the cargo, measured in cubic meters, as determined from the difference between gaugings at the loading and discharging ports (in accordance with Article 9), pro rated for the difference between the on Hire Voyage and gauging times and multiplied by the Fuel Oil Equivalent Factor.

 

7.                                      Boil-Off

 

(a)                                  If Charterer gives orders that would require the temperature or vapour pressure of a cargo to fall during a laden or ballast sea passage and that order is complied with, the Boil-Off Warranty shall be deemed to have been complied with on that sea passage.

 

B-5

 

8.                                      Boil-Off Calculations whilst the Vessel is in Transit

 

(a)                                  The Boil-Off excess or saving on any sea passage  shall be calculated by comparing the guaranteed Boil-Off during sea passage (i.e., the daily guaranteed maximum laden or ballast Boil-Off (as the case may be) multiplied by the time between gaugings) with the actual Boil-Off.

 

(b)                                 The actual amount of Boil-Off on a sea passage shall be calculated by subtracting the volume of LNG contained in the Vessel’s tanks at gauging after the sea passage from the volume in the Vessel’s tanks at gauging before such sea passage.

 

(c)                                  If the Vessel was off-Hire during any sea passage the excess or saving shall be pro rated in the same proportion as the time on Hire is to the total time between gaugings.

 

(d)                                 At the conclusion of each  Performance Period, the quantities of excess Boil-Off and the quantities of Boil-Off saved on  all the Vessel’s sea passages in the Performance Period shall each be added up.  The total Boil-Off saved for any such period shall then be subtracted from the total excess Boil-Off in the same period and if the balance is positive Charterer may deduct from Hire due under Clause 9 an amount calculated by multiplying the said balance by the LNG Price or, if more than one LNG Price is applicable during the Performance Period, the arithmetical average of such LNG Prices.  If such balance is zero or negative, then Owner shall be deemed to have complied with this Article 8(d) for the Performance Period.

 

9.                                      Spray Cooling, Forced Vaporisation and use of Boil-Off

 

(a)                                  If Contractor requires or if Charterer so requests, the Vessel shall spray cool as necessary in a manner consistent with Contractor’s or Charterer’s requirements so as to maximise the use of the available Boil-Off for propulsion, whilst using due diligence to avoid the generation of any excess Boil-Off.

 

(b)                                 If during any sea passage Charterer orders the Vessel to force vaporise LNG to eliminate or minimise the use of bunkers and the order is complied with, the Boil-Off guarantee relevant to such operation shall be deemed to have been complied with for the tank from which the LNG has been pumped.

 

(c)                                  The Parties agree that the Master shall notify Charterer if he is of the opinion that the Vessel will not, on arrival at any LNG loading port, be able to commence bulk loading within ***** after cooling of the loading arms without spray cooling on the ballast sea passage.

 

(d)                                 Without prejudice to any of Owner’s or Charterer’s obligations under this Article 9, if Owner or Contractor intends to order spray cooling at any time during the Charter Period, Owner agrees, if requested by Charterer, to provide written notice of the reasons and technical basis for spray cooling.

 

(e)                                  Subject to the provisions of this Charter, Owner shall have free use of Boil-Off. Except when otherwise required pursuant to Charterer’s orders, Owner shall exercise due diligence to minimise any venting or steam dumping of Boil-Off during periods of low fuel demand.

 

B-6

 

10.                               Provisions for Gauging

 

(a)                                  The time at which any volume of LNG is determined is referred to in this Charter as a gauging time.

 

(b)                                 In relation to any laden sea passage the cargo volume shall be (i) on loading at the start of the laden sea passage, the volume of LNG contained in the Vessel’s cargo tanks measured promptly after the closing of the Vessel’s manifold vapour return valve in the loading port and (ii) on discharge at the end of the laden sea passage,  the volume of LNG contained in the Vessel’s cargo tanks measured promptly before the opening of the Vessel’s manifold vapour return valve in the discharge port.

 

(c)                                  In relation to any ballast sea passage the LNG heel volume shall be (i) after discharge (i.e. at the start of the ballast sea passage), the volume of LNG contained in the Vessel’s cargo tanks measured promptly after the closing of the manifold vapour return valve in the discharge port and (ii) on loading (i.e. at the end of the ballast sea passage), shall be the volume of LNG contained in the Vessel’s cargo tanks measured promptly before the opening of the Vessel’s manifold vapour return valve in the loading port.

 

(d)                                 In relation to the LNG storage and regasification activities of the Vessel, the measurement of LNG shall be effected continuously throughout the entire Performance Period.

 

11.                               Underwater Cleaning/Waiting at Anchorage

 

(a)                                  Charterer may at any time request Owner to procure that Contractor  shall, pursuant to the Operation and Services Agreement, arrange for the cleaning afloat of the Vessel’s underwater hull and propeller, whereupon Owner shall procure that Contractor shall arrange for such cleaning to take place, provided that:

 

(i)                                     the Vessel is free of cargo but may be under vapour if permitted by the port authority; and

 

(ii)                                  in Owner’s or Contractor’s opinion, such cleaning will not damage in any way the Vessel’s underwater hull coatings; and

 

(iii)                               such cleaning afloat can be carried out safely at a place approved by Owner or Contractor and where the water is sufficiently clear for an underwater survey to be made of cleanliness of the Vessel’s hull and propeller immediately thereafter.

 

(b)                                 The cost of such underwater hull and propeller cleaning and underwater survey referred to in Article 11(a) shall be for Charterer’s account and the Vessel shall remain on Hire for their duration.  If the underwater survey shows that both the Vessel’s underwater hull and propeller are clean, a successful cleaning shall be deemed to have occurred.

 

(c)                                  If Charterer orders the Vessel to stay alongside at Charterer’s Facility, to wait at anchorage or in lay up for more than ***** and, if as a result of such service,

 

B-7

 

waiting or lay up Owner has good reason to believe that the performance of the Vessel or her fuel consumption will be affected and speed and/or fuel warranties can no longer be met because of fouling, then Owner shall so state by written notice to Charterer and, if Charterer requests, Owner shall carry out an underwater inspection at Charterer’s expense to see if there is fouling of the hull and/or propeller.

 

(d)                                 If as a result of the aforesaid inspection, Owner considers that there is evidence of such fouling, then if Charterer so requests, Owner shall arrange and carry out cleaning afloat of the Vessel’s underwater hull and propeller provided that the provisions of Article 11(a)(i), (ii) and (iii) apply.

 

(e)                                  The cost of such underwater hull and propeller cleaning and underwater survey referred to in Article 11(d) shall be for Charterer’s account and the Vessel shall remain on Hire for their duration.  If the underwater survey shows that both the Vessel’s underwater hull and propeller are clean, a successful cleaning shall be deemed to have occurred.

 

(f)                                    If any inspection pursuant to Article 11(c) reveals the presence of hull or propeller fouling, or if Charterer declines to request an inspection following receipt of a notice from Owner under Article 11(c), then from the time Owner gives written notice that performance is affected by fouling, Owner shall be deemed to have complied with the speed and fuel warranties until the completion of the next Scheduled Drydocking or successful cleaning, whichever occurs sooner.

 

B-8

 

Part B - Loading, Storage, Regas and Gas Delivery

 

12.                               LNG Regasification Equipment performance guarantee

 

(a)                                Owner guarantees that the Vessel is capable of the Flow Rate Modulation, in accordance with the Nomination Procedure.

 

(b)                               Owner guarantees that the Vessel is capable of regasifyng LNG at a minimum temperature of ***** and a maximum of ***** at the main deck isolation valve.

 

13.                               Guaranteed Daily Fuel Consumption of Vessel Regasification Equipment

 

(a)                                  Owner guarantees that subject to the other provisions of Schedule II, the maximum daily fuel consumption of the Regasification Equipment shall not exceed the quantities tabulated in Article 13 of Schedule I and, where applicable, shall be pro-rated between the fuel consumption of minimum and maximum regasification rates.

 

(b)                                 For each Performance Period the guaranteed fuel consumption shall be calculated by multiplying the maximum daily consumption as determined pursuant to Article 13(a) of this Schedule II to the regasification rates measured daily at the discharge point of the Regasification Equipment.  In calculating the guaranteed fuel consumption, off-Hire Periods shall be excluded.

 

(c)                                  The actual fuel consumption on each Performance Period shall be the sum of:

 

(i)                                     the fuel oil consumed during the Performance Period (expressed in tonnes) and excluding any fuel oil used in any off-Hire period on that Performance Period; and

 

(ii)                                  the fuel equivalent of the total volume of Boil-Off calculated for the Performance Period (expressed in tonnes of Fuel Oil Equivalent) excluding any Boil-Off in any off-Hire period and excluding any steam damping of Boil-Off during periods of low fuel demand.

 

(d)                                 At the conclusion of each Performance Period, the quantities of excess fuel used and the quantities of fuel saved (other than during a Voyage) in the Performance Period shall each be added up.  The total fuel saved (other than during a Voyage) for the Performance Period shall then be subtracted from the total of excess fuel used (other than during a Voyage) for the Performance Period and if the balance is positive Charterer shall deduct from Hire due under Clause 9 an amount calculated by multiplying the net excess quantity of such fuel consumed for the Performance Period by the weighted average price paid by the Charterer for fuel oil for the Vessel over the Performance Period in question.  If such balance is zero or negative, Owner shall be deemed to have complied with its Fuel consumption obligations (other than during a Voyage) for the Performance Period.

 

B-9

 

14.                               Boil-Off Calculations during storage and regasification operations

 

(a)                                  The Boil-Off will be calculated by the difference between the LNG loaded by the Vessel during loading operations and the LNG discharged to the Regasification Equipment and to the forced vapourising equipment.

 

(b)                                 The balance of excessive Boil-off or “saving” will be calculated by the comparison of guaranteed Boil-Off for the period (i.e. the daily guaranteed maximum Boil-Off (set forth in Clause 22.4(b)(iii)) multiplied by the Performance Period) with the Boil-off calculated pursuant to Article 14(a).

 

(c)                                  If the Vessel is put off-Hire during any part of the Performance Period, gaugings shall be carried out at the start and end of the off-Hire period and the Boil-off so determined shall be excluded from the calculations.

 

(d)                                 If during any part of the Performance Period the Charterer or Customer orders the Vessel to force vaporise LNG to eliminate or minimise the use of bunkers and the order is complied with, the Boil-Off guarantee relevant to such period shall be deemed to have been complied with for the tank from which the LNG has been pumped and that period shall be excluded from the calculations.

 

(e)                                  If Contractor requires or Charterer so requests, the Owner and Contractor shall maximise the use of the available Boil-Off for Vessel’s utilities and the Regasification Equipment.  Except when otherwise required pursuant to Charterer’s orders, Owner shall exercise due diligence to minimise any venting or steam dumping of Boil-Off during periods of low fuel demand.

 

(f)                                    The Boil-Off calculations (other than in respect of any sea passage) shall be carried out at the end of each Performance Period or at the end of the storage and regasification period (whichever first occurs).  If the Vessel has exceeded the maximum Boil-Off permitted pursuant to Clause 22.4(b)(iii), Charterer may deduct from Hire due under Clause 9 an amount calculated by multiplying the amount of such excess by the LNG Price or, if more than one LNG Price is applicable during the Performance Period, the arithmetical average of such LNG Prices.  If there is no such excess amount of Boil-Off, then Owner shall be deemed to have complied with this Article for the Performance Period.

 

15.                               Interpretation

 

In this Schedule II, and unless the contrary intention appears, “Article” shall mean an Article of this Schedule II, and “Clause” shall mean a Clause of the Charter.

 

B-10

 

SCHEDULE III

 

CERTIFICATES OF ACCEPTANCE 
 AND REDELIVERY

 

CERTIFICATE OF ACCEPTANCE
 FOR [VOYAGE CHARTERPARTY/TIME CHARTERPARTY]*

 

FOR

 

LNG VESSEL mv GOLAR SPIRIT

 

The LNG Carrier mv GOLAR SPIRIT, IMO No. 7373327 was accepted by Petróleo Brasileiro S.A. on [insert date of signing this certificate] under [the Voyage Charter Party in accordance with the Time Charter Party/the Time Charter Party]* dated                                    2007 made between Petróleo Brasileiro S.A. as Charterer and Golar Spirit UK Limited as Owner.

 

Delivery Date:  [Date of signing this certificate]

 

Quantity of bunkers on board Vessel on Delivery Date:  [Quantity]

 

Quantity of LNG on board Vessel on Delivery Date:  [Quantity]

 

Place of acceptance of the Vessel:  [Place]

 

Hire Commencement Date:  [Tender Date, Re-tender Date or Delivery Date as applicable]**

 

 

	
FOR CHARTERER:
    	
FOR   OWNER:
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
 
    
	
Title:
    	
 
    	
 
    	
Title:
    	
 
    
	
Date Signed:
    	
 
    	
 
    	
Date Signed:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Witnessed by:
    	
 
    	
 
    	
Witnessed by:
    	
 
    
	
Title:
    	
 
    	
 
    	
Title:
    	
 
    
	
Date Signed:
    	
 
    	
 
    	
Date Signed:
    	
 
    

 

*   Delete as applicable

** For Time Charter Party only

 

C-1

 

CERTIFICATE  OF REDELIVERY

 

FOR

 

LNG VESSEL mv GOLAR SPIRIT

 

The LNG Carrier mv GOLAR SPIRIT, IMO No. 7373327 was redelivered to                                                    under the Time Charter Party dated                                         , made between                                      and                                  at                hours on the                  day of                       , 20    , at                                             .

 

Place of redelivery of the Vessel:  [Place]

 

Date of redelivery of the Vessel:  [Date]

 

 

	
FOR CHARTERER:
    
	
 
    
	
By:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
Date Signed:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Witnessed by:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
Date Signed:
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
FOR OWNER:
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
Date Signed:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Witnessed by:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
Date Signed:
    	
 
    	
 
    

 

C-2

 

SCHEDULE IV

 

LIST OF PRIMARY AND DESIGNATED TERMINALS

 

1.                                      The Vessel shall be capable of loading and discharging LNG at the following terminals (each a Primary Terminal):

 

*****

 

2.                                      The Vessel shall be capable of loading and discharging LNG at the following terminals (each a Designated Terminal).

 

Each of the Primary Terminals as listed under Clause 1 above.

 

D-1

 

SCHEDULE V

 

COMPENSATION FEE

 

Charterer shall pay the following fee (“Compensation Fee”) to Owner upon the exercise of its early termination rights in any of the years set out below pursuant to Clause 3.6:

 

	
Anniversary of Delivery Date
    	
 
    	
Amount (US$)
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
*****
    	
 
    	
*****
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
*****
    	
 
    	
*****
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
*****
    	
 
    	
*****
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
*****
    	
 
    	
*****
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
*****
    	
 
    	
*****
    	
 
    

 

E-1

 

SCHEDULE VI

 

DEED OF GUARANTEE

 

This deed of guarantee (this “Guarantee”), is made by Golar LNG Limited, a company organised and existing under the laws of Bermuda (the “Guarantor”).

 

WHEREAS, Petróleo Brasileiro S.A., a company organised under the laws of Brazil (including its successors and permitted assigns, “Charterer”) has agreed to enter into a Time Charter Party with Golar Spirit UK Limited, a company organised and existing under the laws of England (including its successors and permitted assigns, “Owner”)  dated on or about the date hereof, for the modification and chartering of the Vessel (as the same may be amended, modified or supplemented from time to time, the “Charter”), and an Operation and Services Agreement with Golar Serviços de Operação de Embarcações Limitada, a company organised and existing under the laws of Brazil (including its successors and permitted assigns, “Contractor”) dated within ***** of the date hereof, for certain services to be provided in relation to the Vessel (as the same may be amended, modified or supplemented from time to time) (“the Operation and Services Agreement”) (the Time Charter Party and the Operation and Services Agreement, together the “Contract”).

 

WHEREAS, the Contract requires that Owner procures that Parent delivers to Charterer this Guarantee as part of Owner’s obligations under the Contract;

 

WHEREAS, the Guarantor is an Affiliate of both Owner and Contractor.

 

WHEREAS, the Guarantor will obtain benefits as a result of Owner’s and Contractor’s performance of the Contract.

 

NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to the Guarantor, the receipt and sufficiency of which are hereby acknowledged, the Guarantor hereby makes the following representations and warranties to and hereby covenants and agrees with Charterer, as follows:

 

1.                                      Definitions

 

Capitalised terms not otherwise defined herein shall have their respective meanings set forth in the respective Contract.

 

2.                                      Guarantee

 

The Guarantor hereby irrevocably and unconditionally guarantees (as primary obligor and not merely as surety) to Charterer: (a) the prompt payment in full of all amounts which are at any time due, owing or payable by Owner or Contractor, as applicable, under the Contract; (b) the prompt and complete performance and discharge of each and all of the obligations, warranties, duties, liabilities and undertakings of Owner or Contractor, as applicable, under the Contract; and (c) the indemnity provided in Clause 6 hereof (all obligations and amounts so guaranteed, the “Guaranteed Obligations”).  Charterer shall not be obliged before enforcing this Guarantee to take any action (including any court or arbitral proceedings) against Owner or Contractor, as applicable, or against any other guarantor of the Guaranteed Obligations or any other person, or resort to any other means

 

F-1

 

of obtaining payment or performance of any of the Guaranteed Obligations, including but not limited to making any claim against or any demand of Owner or Contractor, as applicable, enforcing any other security held by it in respect of the obligations of Owner or Contractor, as applicable, under the Contract or exercising any distress, diligence or other process of execution against Owner or Contractor, as applicable.  In the event of a failure, breach or default in performance or payment of any Guaranteed Obligation by Owner or Contractor, as applicable, the Guarantor shall take whatever steps as may be necessary and promptly perform or cause to be performed or pay or cause to be paid such Guaranteed Obligation upon receipt of written demand to do so from Charterer, and the Guarantor shall be responsible for any and all obligations, damages, costs and expenses, including legal fees and related costs and expenses, howsoever arising from such failure, breach or default as if the Guarantor were the original obligor under the Contract.  The Guarantor further agrees to pay all costs and expenses (including, without limitation, legal fees and related costs and expenses) paid or incurred by Charterer in endeavouring to enforce or collect the Guaranteed Obligations and in connection with the enforcement of this Guarantee.

 

All sums due and payable by the Guarantor under this Guarantee shall be made in full without set-off or counterclaim and free and clear of and without deduction for or on account of any future or present taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter levied, collected, withheld or assessed by a Governmental Authority.

 

3.                                      Obligations Unconditional

 

The obligations of the Guarantor herein are absolute and unconditional, irrespective of the value, genuineness, validity, legality, regularity or enforceability of any provision of the Contract or the insolvency, bankruptcy, reorganisation, dissolution or liquidation of Owner or Contractor, as applicable, or any change in status, function, control, ownership or shareholding of Owner or Contractor, as applicable, or any purported assignment by Owner or Contractor, as applicable, or any other circumstance whatsoever which might otherwise constitute a discharge or defence of a surety or guarantee, until all the obligations to be performed or discharged by Owner or Contractor, as applicable, under the Contract or that would have been performed or discharged by Owner or Contractor, as applicable, but for the above, are performed or discharged in full and the Guarantor shall nevertheless be liable to Charterer in respect of such obligations as if the same were legal, valid and enforceable and the Guarantor were the principal obligor in respect thereof.

 

This Guarantee is irrevocable and is in addition to and not in substitution for or derogation of and shall not merge with any other security held by Charterer under the Contract or otherwise.  This Guarantee shall be in addition to, and not in substitution for, any rights or remedies that Charterer may have against Owner or Contractor, as applicable, arising from the Contract or otherwise.

 

F-2

 

4.                                      Waiver, Amendment etc.

 

The obligations of the Guarantor under this Guarantee shall not be affected, discharged or impaired by any act, omission, matter or thing which, but for this provision, might operate to reduce, release or prejudice the Guarantor from any of the Guaranteed Obligations or prejudice or diminish the Guaranteed Obligations in whole or in part, including (whether or not known to it, or Charterer):

 

(a)                                  any time, consent or waiver granted to, or composition made with, Owner or Contractor, as applicable, or any other person;

 

(b)                                 any incapacity or lack of powers, authority or legal personality of or dissolution or change in the members or status of, or any amalgamation or reconstruction of, Owner or Contractor, as applicable, or any other person;

 

(c)                                  any variation of the Contract so that references to the Contract in this Guarantee shall include each variation;

 

(d)                                 any unenforceability, illegality or invalidity of any obligation of any person under the Contract or any unenforceability, illegality or invalidity of the obligations of the Guarantor under this Guarantee or the unenforceability, illegality or invalidly of the obligations of any person under any other document or guarantee, to the intent that each obligation under this Guarantee shall remain in full force as a separate, continuing and primary obligation, and its obligations be construed accordingly, as if there were no unenforceability, illegality or invalidity;

 

(e)                                  any variation, compromise, renewal, partial or entire release, neglect to perfect or enforce any right or remedy against Owner or Contractor, as applicable,  or any guarantor or other party primarily or secondarily liable or responsible for the performance, payment or observance of any of the Guaranteed Obligations; or by any extension, waiver, or amendment whatsoever which may release Owner or Contractor, as applicable, or a guarantor (other than performance or indefeasible payment of a Guaranteed Obligation);

 

(f)                                    the Charterer compounding with, discharging, releasing or varying the liability of Owner or Contractor, as applicable, or concurring in, accepting or varying any compromise, arrangement or settlement or omitting to claim or enforce payment from the Owner or Contractor, as applicable,;

 

(g)                                 any act or omission which would have discharged or affected the liability of the Guarantor had it been a principal debtor or obligor instead of Guarantor; or

 

(h)                                 any other circumstance which would (but for the provisions of this Guarantee) constitute a legal or equitable discharge or defence of a guarantor.

 

The Guarantor authorises Owner or Contractor, as applicable, and Charterer to make any amendments, supplement or variation to the Contract and the Guarantor shall guarantee the due and punctual performance of Owner’s or Contractor’s obligations, as applicable,   in accordance with the amended Contract under the terms of this Guarantee.

 

F-3

 

5.                                      Bankruptcy, Insolvency etc.

 

If, and to the extent that, for any reason Owner or Contractor, as applicable, becomes insolvent or enters or threatens to enter into any proceedings in bankruptcy or reorganisation, liquidation or administration or any similar proceedings whether compulsory or voluntary, or if, for any other reason whatsoever, the performance or payment by Owner or Contractor, as applicable, of the Guaranteed Obligations becomes or may reasonably be expected to become impossible, then all Guaranteed Obligations shall be promptly paid or performed, as relevant, by the Guarantor.

 

6.                                      Indemnity

 

As an original, independent and primary obligation under this Guarantee, without prejudice to Clause 2 hereof, the Guarantor unconditionally and irrevocably agrees to:

 

(a)                                  indemnify Charterer and keep Charterer indemnified against any cost, loss, expense or liability of any kind due and owing to Charterer resulting from the breach or failure by Owner or Contractor, as applicable, to make due and punctual payment or to perform any of its obligations, warranties, duties, liabilities or undertakings under and pursuant to the Contract or resulting from any of the obligations under the Contract being or becoming void, voidable, unenforceable or ineffective against Owner or Contractor, as applicable, (including, but without limitation, all legal and other costs, charges and expenses incurred or sustained by Charterer in connection with: (i) preserving or enforcing, or attempting to preserve or enforce, its rights under this Guarantee, or (ii) any breach by the Guarantor of any of its covenants or obligations to Charterer under this Guarantee); and

 

(b)                                 pay on demand the amount of such cost, loss, expense or liability whether or not Charterer has attempted to enforce any rights against Owner or Contractor, as applicable, or any other person or otherwise.

 

7.                                      Claims by the Guarantor

 

The Guarantor represents and undertakes that it has not taken any security in respect of its liability under this Guarantee whether from Owner or Contractor, as applicable, or any other person. So long as any sum remains owing by Owner or Contractor, as applicable, under any Contract, the Guarantor shall not exercise any right of subrogation, indemnity or any other rights of a surety or enforce any security or other right or claim (including claim any right to contribution in relation to any payment made by the Guarantor) against Owner or Contractor, as applicable, (whether in respect of its liability under this Guarantee or otherwise) or claim in the insolvency or liquidation of Owner or Contractor, as applicable, or any such other person in competition with Charterer.  If the Guarantor receives any payment or benefit in breach of this Clause 7, it shall hold the same upon trust for Charterer.

 

8.                                      Waiver of Notice of Acceptance etc.

 

(a)                                  The Guarantor hereby waives notice of acceptance of this Guarantee and notice of any liability to which it may apply, and waives presentment, demand of payment,

 

F-4

 

protest, notice of dishonour or non-payment of any such liability, suit or taking of other action by Charterer against, and any other notice to, any party liable thereon.

 

(b)                                  The Guarantor shall not set-off or withhold from monies due under this Guarantee any amounts in respect of sums due or alleged to be due to it from Charterer.

 

(c)                                  If the Guarantor is required by law to withhold any part of a sum payable pursuant to this Guarantee, the amount payable by the Guarantor shall be increased to such extent that the amount received by Charterer shall be equal to the amount which Charterer would have received had such withholding not been legally required.

 

9.                                      Representations and Warranties

 

The Guarantor represents and warrants to Charterer that:

 

(a)                                  it is duly incorporated and validly existing under the laws of Bermuda and has the power to own its assets and carry on its business; it has the corporate power to execute, deliver and perform the terms and provisions of this Guarantee and has taken all necessary corporate action to authorise the execution, delivery and performance by it of this Guarantee; the Guarantor has duly executed and delivered this Guarantee, and this Guarantee constitutes its legal, valid and binding obligation enforceable in accordance with its terms except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles;

 

(b)                                  neither the execution, delivery or performance by the Guarantor of this Guarantee, nor compliance by it with the terms and provisions hereof, (i) will contravene any material provision of any law, statute, rule or regulation or any order, writ, injunction, judgment or decree of any court or governmental instrumentality, (ii) will conflict or be inconsistent with or result in any breach of any of the material terms, covenants, conditions or provisions of, or constitute a default under any agreement, contract or instrument to which the Guarantor is a party or by which it or any of its property or assets is bound or (iii) will violate any provision of the Guarantor’s constitutional documents; and

 

(c)                                   no order, consent, approval, license, authorisation or validation of, or filing, recording or registration with (except as have been obtained or made prior to the date hereof), or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorise, or is required in connection with: (i) the execution, delivery and performance of this Guarantee; or (ii) the legality, validity, binding effect or enforceability of this Guarantee.

 

10.                               Continuing Guarantee

 

This Guarantee is a continuing guarantee and all liabilities to which it applies or may apply under the terms hereof shall be conclusively presumed to have been created in reliance hereon.  No failure or delay on the part of Charterer in exercising any right, power or privilege hereunder and no course of dealing between Charterer and the Guarantor, or Owner or Contractor, as applicable, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder preclude any

 

F-5

 

other or further exercise thereof or the exercise of any other right, power or privilege. The rights, powers and remedies herein expressly provided are cumulative and not exclusive of any rights, powers or remedies which Charterer would otherwise have. No notice to or demand on the Guarantor in any case shall entitle the Guarantor to any other further notice or demand in similar or other circumstances or constitute a waiver of the rights of Charterer to any other or further action in any circumstances without notice or demand.  Charterer may make several demands under this Guarantee.

 

11.                               Miscellaneous

 

(a)                                   If any one or more of the provisions contained in this Guarantee are or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby, and the Guarantor shall enter into good faith negotiations with Charterer to replace the invalid, illegal or unenforceable provision.

 

(b)                                  The Guarantor hereby agrees to execute and deliver all such instruments and take all such actions as may be necessary to make effective fully the purposes of this Guarantee.

 

(c)                                   This Guarantee may be executed in one or more duplicate counterparts, and when executed and delivered by the Guarantor and Charterer shall constitute a single binding agreement.

 

(d)                                  The agreements set out in this Guarantee shall continue in effect until all Guaranteed Obligations have been indefeasibly paid in full and the Guarantor receives written notice thereof from Charterer (such notice to be issued promptly upon such occurrence).  Accordingly, to the extent consistent with the foregoing, this Guarantee shall be capable of surviving the termination of the Contract.

 

(e)                                   Any notice, request or other communication to be given or made under this Guarantee shall be in writing addressed to the Guarantor at the location set opposite its signature hereto and in the manner as set out in respect of notices under the Contract.

 

(f)                                     This Guarantee shall be governed by, and construed in accordance with, the laws of England.

 

(h)                                  Submission

 

For the benefit of Charterer, the Guarantor agrees that the courts of England have jurisdiction to settle any disputes in connection with this Guarantee and accordingly submits to the jurisdiction of the English courts.

 

(i)                                    Service of Process

 

Without prejudice to any other mode of service, the Guarantor:

 

(a)                                irrevocably appoints as its agent for service of process Golar Management (UK) Limited at 30 Marsh Wall, London, E14 9TP, United Kingdom,  in relation to any proceedings before the English courts in connection with this Guarantee;

 

F-6

 

(b)                               agrees to maintain such an agent for service of process in, respectively, England for so long as this Guarantee remains in force;

 

(c)                                agrees that failure by a process agent to notify it of the process will not invalidate the proceedings concerned;

 

(d)                               consents to the service of process relating to any such proceedings by prepaid posting of a copy of the process to its address for the time being applying under Clause 11(e); and

 

(e)                                agrees that unless and until a new agent or revised contact details for the existing authorised agent for service of process mentioned in sub-clause (a) above are provided as required hereunder, the above named agent shall always remain the authorised agent to receive such service of legal process in any action, suit or proceeding in relation to this Guarantee.

 

(j)                                    Forum convenience and enforcement abroad

 

The Guarantor:

 

(i)                                   waives objection to the English courts on grounds of inconvenient forum or otherwise as regards proceedings in connection with this Guarantee; and

 

(ii)                                agrees that a judgment or order of an English court in connection with the Guarantee is conclusive and binding on it and may be enforced against it in the courts of any other jurisdiction.

 

(k)                                  Non exclusivity

 

Nothing in this Clause 11(k) limits the right of a Charterer to bring proceedings against the Guarantor in connection with the Guarantee:

 

(i)                                    in any other court of competent jurisdiction; or

 

(ii)                                 concurrently in more than one jurisdiction.

 

(l)                                      Charterer may assign or transfer all or any part of its interest herein to any permitted assignee or transferee of Charterer pursuant to the Charter.  The Guarantor shall not assign or transfer any of its rights or obligations under this Guarantee.

 

(m)                                This Guarantee shall not be amended or modified except by a modification in writing signed by the Guarantor and Charterer.

 

(n)                                  Any right under this Guarantee shall not be waived except by a waiver in writing signed by the Guarantor and Charterer and shall apply only in the circumstances for which it is given and shall not prevent the party who has given the waiver from subsequently relying on the provision it has waived.

 

(o)                                  This deed is made for the benefits of the parties hereto and their successors and permitted assigns, and is not intended to benefit, or be enforceable by, any other person.

 

F-7

 

IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be executed and delivered as a deed on the date first above written.

 

	
Executed as a Deed   by
    	
 
    
	
Golar   LNG Limited
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
Date:
    	
 
    
	
Witnessed by:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
	
Date:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Accepted and   agreed:
    	
 
    
	
 
    	
 
    
	
Petróleo   Brasileiro S.A.
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
				

 

F-8

 

SCHEDULE VII

 

FORM OF PERFORMANCE BANK GUARANTEE

 

(To be issued on Nordea Bank Norge ASA’s letterhead.)

 

Date:               

 

Issuing Bank: Nordea Bank Norge ASA, hereby issue an irrevocable Standby Letter of Credit No.               

 

Address: Middelthunsgate 17, 0107, Oslo, Norway

 

Applicant: Golar Spirit UK Limited (“Applicant”)

 

Address: 30 Marsh Wall, London, E14 9TP, UK

 

Beneficiary: Petróleo Brasileiro S.A. (“Beneficiary”)

 

Address: AV. Almirante Barroso 81, 20031-004, Rio de Janeiro, Brazil

 

Attention: [Name]

 

Advising Bank: Deutsche Bank S.A. — Banco Alemão (“Advising Bank”)

 

	
Address:
    	
 
    	
UA   Alexandre Dumas, 2200 — 2o Andar
    
	
 
    	
 
    	
04717-910   — São Paulo — SP — Brazil
    
	
 
    	
 
    	
 
    
	
Attention:
    	
 
    	
Honorato   Nantes
    
	
Swift:
    	
 
    	
Deutbrspspo
    
	
Telex:
    	
 
    	
11   53251 or 11 53256
    

 

At the request and on behalf of Applicant, we hereby establish our irrevocable standby letter of credit no.                           (insert number) effective on                  2007 in favour of Beneficiary in the maximum amount of USD ***** (the “Maximum Amount”). Effective immediately and expiring at the close of business on ***** (the “Expiry Date”) at the counters of the Advising Bank.

 

We hereby undertake that the payment in settlement of claims lodged with us in accordance with the terms and conditions of this Standby Letter of Credit, shall be effected 5 (five) business days after receipt by us of such claim, by Wire Transfer in immediately available funds to the Beneficiary’s account at its designated bank.

 

Payments under this Standby Letter of Credit shall be made by us to the order of the Beneficiary upon receipt of a Demand letter in the form attached as a schedule to this Standby Letter of Credit, signed by the Chief Executive Officer or the Director, Gas & Energy, of the Beneficiary, presented to us on or before the Expiry Date by swift message

 

G-1

 

authenticated by the Advising Bank with the original Demand letter delivered to us by courier.

 

Multiple or partial drawings are permitted under this Standby Letter of Credit. The amount of any drawing under this Standby Letter of Credit shall not exceed the Maximum Amount and each such drawing shall reduce the Maximum Amount by an amount corresponding to such drawing.  Notwithstanding the terms of ISP98 (as defined below), any failure by you to make any one or a number of scheduled or permitted drawings hereunder will not waive or prejudice your right to make future drawings.

 

Payment details: if payment falls due on a Sunday or Monday bank holiday in New York City and/or London, payment shall be made on the following first New York City and London banking day. If payment falls due on a Saturday or any New York City and/or London bank holiday other than a Monday, then payment is to be made on the immediate preceding New York City and London banking day.

 

Any payment made hereunder shall be made free and clear of and without deduction for or on account of present or future taxes, levies, imposts, duties, charges, fees, deductions or withholding of any nature whatsoever and by whomsoever imposed.

 

All bank charges including issuing, reimbursing and negotiating costs shall be for applicant’s account. Only advising costs of the Advising Bank shall be for Beneficiary’s account.

 

We hereby irrevocably submit to the exclusive jurisdiction of the High Court of Justice in London for the purposes of any suit, action, or other proceeding arising out of this Standby Letter of Credit or the subject matter hereof brought by you or your successors or assigns.

 

This Standby Letter of Credit is subject to the International Standby Practices (1998 revision) — International Chamber of Commerce Publication nr. 590 (the “ISP98”). Any matter not covered by the ISP98 shall be governed by English law.

 

Our obligations under this Standby Letter of Credit are absolute, unconditional and irrevocable, and autonomous from the obligations from the Applicant to the Beneficiary. This Standby Letter of Credit sets forth in full our undertaking to the Beneficiary and such undertaking shall not in any way be modified, amended or limited by reference to any other document, instrument or agreement.

 

G-2

 

Schedule

 

Form of Demand

 

	
To
    	
Nordea Bank Norge   ASA
    
	
 
    	
Middelthunsgate 17
    
	
 
    	
0107
    
	
 
    	
Oslo
    
	
 
    	
Norway
    

 

[Date]

 

Dear Sir/Madam

 

STANDBY LETTER OF CREDIT No. [                        ]

 

We hereby confirm that we are entitled to draw under the Standby Letter of Credit as a result of a failure by the Applicant to pay to us an amount of [amount in words] United States Dollars US$[amount in figures] in respect of liquidated damages due and payable under Clause 6.10(b) of the Time Charter Party dated [          ], notwithstanding our notice thereof to the Applicant in accordance with the terms of Clause 29(b) of the said Time Charter Party. We therefore request payment by wire transfer of the said amount of [amount in words] United States Dollars (US$[amount in figures]) to the following account in immediately available funds.

 

The account details are:

 

[Name of account]

[Account details]

[Wire instructions]

 

Yours faithfully

 

For Petróleo Brasileiro S.A.

 

	
By:
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    	
 
    
	
Title: [ Chief Executive Officer / Director,   Gas & Energy]
    	
 
    	
 
    

 

G-3

 

SCHEDULE VIII

 

QUIET ENJOYMENT AGREEMENT

 

[Letterhead of issuing party]

 

	
To:
    	
Petróleo   Brasileiro S.A. (as Charterer)
    
	
 
    	
AV. Almirante   Barroso 81
    
	
 
    	
20031-004
    
	
 
    	
Rio de Janeiro
    
	
 
    	
Brazil
    
	
 
    	
 
    
	
 
    	
 
    
	
To:
    	
[Owner, if   applicable]
    
	
 
    	
 
    
	
 
    	
 
    
	
To:
    	
Golar Spirit UK Ltd (as [Lessee, or other applicable term as   appropriate])
    
	
 
    	
30 Marsh Wall
    
	
 
    	
London
    
	
 
    	
E14 9TP
    
	
 
    	
 
    
	
 
    	
 
    
	
To:
    	
Golar Serviços De Operação De Embarcações Limitada (as Contractor)
    
	
 
    	
Avenida Rio Branco, 311 - 4o andar
    
	
 
    	
Centro - Rio de Janeiro - RJ
    
	
 
    	
Brasil
    
	
 
    	
CEP 20.040-903
    
	
 
    	
 
    
	
 
    	
 
    
	
To:
    	
[other relevant parties e.g. Agents; any Party having a security   interest]
    

 

[                                                   ] (the “Effective Date”)

 

 

Dear Sirs:

 

 

Re: “GOLAR SPIRIT” (the “Vessel”)

 

 

We refer to:

 

(a)                                  [insert relevant agreements];

 

(b)                                  the Time Charter Party dated [                    ] 2007 between the [Lessee] and Petróleo Brasileiro S.A. (the “Charterer”) in respect of the Vessel (the “Charter”); and

 

(c)                                  the Operation and Services Agreement to be entered into between Golar Serviços de Operação de Embarcações Limitada (the “Contractor”) and Petróleo Brasileiro S.A. (the “Customer”) within ***** of the Charter in respect of the operation and services to be provided to the Vessel (the “OSA”);

 

H-1

 

(the Charter and OSA, collectively, the “Charter Documents”).

 

1.                                       References in this letter (this “Agreement”) to the Charter Documents shall include such documents as amended, supplemented or varied from time to time. References to paragraphs are to paragraphs of this Agreement.

 

For the purposes of this Agreement, “you,” “your” and “yours” shall mean the Charterer and Petrobras, as the case may be.

 

In this Agreement the following expressions have the following meanings:

 

“Confidential Information” means the terms and conditions of the Charter Documents and any and all data, reports, records, correspondence, notes, compilations, studies and other information relating to or in any way connected with the Charter Documents that are disclosed directly or indirectly by or on behalf of the disclosing party or any of its representatives or agents (the “Disclosing Party”) to the receiving party or any of its representatives or agents (the “Receiving Party”), whether such information is disclosed orally or in writing.

 

“Eligible Person” means:

 

(a)                                  ourselves, our successors, [any of the Finance Parties or any of their subsidiaries or holding companies]; or

 

(b)                                 a receiver and/or manager appointed under the Security Documents; or

 

(c)                                  a person directly or indirectly owned or controlled by us [or any of the Finance Parties]; or

 

(d)                                 any other person subject as provided in paragraph 4.

 

[“Finance Parties” means [insert relevant parties].]

 

“Security Documents” means [insert relevant agreements].

 

“Step-in Rights” means any and all of our rights or powers under the Security Documents or otherwise to:

 

(a)                                  effect a change of ownership of the Vessel; or

 

(b)                                 take actual or constructive possession of the Vessel; or

 

(c)                                  effect a change of management of the Vessel.

 

[“Swap Provider” means [insert party].]

 

2.                                       We confirm that:

 

(a)                                  we consent to the execution of the Charter Documents by the [Lessee] and the Contractor, respectively; and

 

(b)                                 we have received a copy of the Charter Documents and are familiar with the terms thereof.

 

H-2

 

3.                                       We undertake for ourselves [and on behalf of the Finance Parties,] during the period in which the Charterer and Customer continue to have use of the Vessel pursuant to the Charter Documents, not to do any of the following without the prior written consent of Charterer and/or other than as contemplated by this Agreement:

 

(a)                                  issue any arrest, detention or similar proceedings against the Vessel in any jurisdiction; or exercise any power of sale or other disposal of the Vessel or of foreclosure to which we may be entitled or make any application for the sale of the Vessel or any share therein in any part of the world whether by public auction or private treaty or otherwise; or

 

(b)                                 take possession of, manage, maintain or repair the Vessel, or employ, navigate or lay-up the Vessel; or

 

(c)                                  appoint a receiver in respect of the Vessel; or

 

(d)                                 exercise against the Vessel any right or remedy which would diminish, prejudice or otherwise interfere with your rights, options, benefits or privileges under the Charter Documents or otherwise interfere with the quiet use and enjoyment of the Vessel by you under the Charter Documents; or

 

(e)                                  take any step to wind up, liquidate, place in administration or receivership, the [Lessee] or Contractor nor commence or continue any analogous proceedings in any jurisdiction;

 

[(other than in the case of (a), (c) and (e) above, any proceedings required to protect the rights of the Finance Parties under the Security Documents in respect of the Vessel where third parties have commenced proceedings of the type described in the said sub-paragraphs (a), (c) and (e) above); and provided, further however, that such undertaking shall not apply where:

 

(i)                                     there has occurred and is continuing an Event of Charterer’s Default, as defined in the Charter, or an Event of Customer’s Default, as defined in the OSA, subject to any cure and notice periods as provided in the respective Charter Document; or

 

(ii)                                  the Vessel has become an actual, agreed, arranged or constructive total loss.]

 

4.                                       (a)                                  In consideration of the undertakings contained in paragraph 3 above and for other good and valuable consideration (receipt and the sufficiency of which you, by your counter-signature of this Agreement, acknowledge), you agree and accept that the undertakings contained in paragraph 3 shall, at all times, be subject to the Step-in Rights.

 

(b)                                 We acknowledge and agree that any transfer of ownership or change in management of the Vessel pursuant to the exercise by us of the Step-in Rights shall be to an Eligible Person and is conditional upon the transferee or manager first agreeing, in terms acceptable to you, to acknowledge and be bound by the respective terms of the Charter Documents. Further, we acknowledge and agree that the transferee or manager must, unless it is an

 

H-3

 

Eligible Person described in paragraphs (a) to (c) of the definition thereof [or is an entity guaranteed by the Finance Parties], be acceptable to you (such acceptance not to be unreasonably withheld or delayed) and that additionally, in the case of a manager, such person must be a manager whom the [Lessee] would otherwise be permitted to appoint under the terms of the respective Charter Document.

 

For avoidance of doubt, but without limitation, we acknowledge that it is reasonable for you to withhold your consent to the exercise by us of the Step-in Rights if:

 

(i)                                     as a consequence thereof, you would be likely to incur any increased cost or become liable to make any deduction or withholding on account of tax from any payment of hire or other moneys under the Charter Documents which you would not otherwise have incurred or been liable to make; or

 

(ii)                                  the transferee or manager does not have the financial standing, the legal status or authority or the operational experience or capacity to perform the [Lessee’s] and Contractor’s obligations under the Charter Documents; or

 

(iii)                               the transferee or manager is a current competitor of you or of any subsidiary of you in the sale and/or carriage of liquefied natural gas,

 

in each case, as determined in your sole discretion, but acting reasonably.

 

(c)                                  It is a condition precedent to the exercise by us of any Step-in Right that:

 

(i)                                     exercise of the Step-in Rights shall not disrupt or otherwise adversely affect your right to the quiet use and enjoyment of the Vessel in accordance with the respective Charter Documents;

 

(ii)                                  an event entitling you to terminate either Charter Document (for [Lessee] or Contractor default thereunder) or an event entitling us or any Finance Party to enforce the security constituted by the Security Documents (either such event, an “[Lessee’s]  Default”), in each case, has occurred and is continuing;

 

(iii)                               either we have notified you or you have notified us of such [Lessee’s]  Default in writing; and

 

(iv)                              such [Lessee’s] Default has not been cured within the time specified in the applicable Charter Document or, as the case may be, Security Document.

 

(d)                                 Upon the Step-in Rights becoming exercisable by us, we shall provide ***** written notice to you of our intention to exercise such rights. Such notice shall contain reasonable detail of the action we propose to take, including the identity of the Eligible Person to whom the ownership and/or management of the Vessel is to be transferred.

 

(e)                                  Subject to:

 

(i)                                     your rights under paragraph 4(b) of this Agreement; and

 

(ii)                                  where applicable, the relevant event entitling you to terminate either Charter Document having been cured to your satisfaction,

 

H-4

 

you agree to enter into such novation agreement as may be necessary to effect the novation of the [Lessee’s] and Contractor’s rights and obligations under the respective Charter Document to the Eligible Person.

 

(f)                                    Where, upon the exercise of the Step-in Rights an Eligible Person takes possession or becomes manager of the Vessel, then performance by that Eligible Person of the [Lessee]’s and Contractor’s respective obligations under the Charter Documents shall constitute performance by the [Lessee] and Contractor, as the case may be, thereunder.

 

5.                                       (a)                                  You hereby agree to provide us ***** prior written notice (the “Preliminary Notification”) of your intention to terminate either Charter Document due to [Lessee] or Contractor default thereunder (for the avoidance of doubt, you will have no such obligation where your termination of either Charter Document is other than for default by [Lessee] or Contractor thereunder).

 

(b)                                   Upon giving the Preliminary Notification you agree, without prejudice to any of your rights under the Charter but prior to serving notice of termination (and for a period of no more than ***** after giving the Preliminary Notification (the “Negotiation Period”)), to negotiate with us, on a reasonable endeavours basis (but without any commitment on your part to agree any particular solution proposed by us), to agree a solution (whether involving the exercise by us of a Step-in Right or otherwise) to cure the relevant [Lessee] or Contractor default.

 

(c)                                    If, by the end of the Negotiation Period, a  [Lessee] or Contractor default is continuing and agreement cannot be reached on a cure acceptable to you, you are free to terminate the Charter Documents. If you do not exercise such right within ***** (or, if you continue to perform all your obligations under the Charter Documents including, without limitation, the payment of Hire and Fees (as defined in the relevant Charter Document), *****) of the expiry of the Negotiation Period, the Step-in Rights shall become exercisable as provided in paragraph 4 (but the ***** period specified in paragraph 4(d) shall be replaced with a requirement for prompt notice to you).

 

(d)                                   Nothing in this Agreement shall be construed as prejudicing our right, whether before or during the Negotiation Period, to take any action, provided that the action does not breach paragraph 3.

 

6.                                       We acknowledge that the terms of this Agreement shall enure to the benefit of your successors and assigns.

 

7.                                       [We confirm that we have been duly authorised to issue this Agreement on behalf of the Finance Parties. We shall notify you immediately if we are no longer authorised to act as agent and as security trustee of the Finance Parties and of the identity of our successor. We acknowledge that it is a condition of this Agreement that each successor of ours agrees to be bound by the terms of this Agreement.]

 

8.                                       Each of the [Lessee] and [insert relevant parties] has counter-signed this Agreement to confirm its agreement to the terms hereof but shall have no rights or benefits hereunder.

 

H-5

 

9.                                       We agree to keep Confidential Information strictly confidential, except in the following cases when the receiving Party shall be permitted to disclose such information:

 

(a)                                  It is already known to the public or becomes available to the public other than through the act or omission of the receiving Party; or

 

(b)                                 It is required to be disclosed under law or pursuant to the rules of any stock exchange on which the shares or other securities of the Lessor or the Swap Bank or any related company are listed by any governmental or regulatory body (provided that the receiving Party shall give notice of such required disclosure to the disclosing Party prior to the disclosure); or

 

(c)                                  In filings with a court or arbitral body in proceedings in which the Confidential Information is relevant and in discovery arising out of such proceedings; or

 

(d)                                 To any of the following persons to the extent necessary for the proper performance of their duties or functions:

 

(i)                                     an Affiliate of the receiving Party;

 

(ii)                                  employees, officers, directors and agents of the receiving Party;

 

(iii)                               professional consultants and advisors including insurers, underwriters and brokers retained by the receiving Party; and

 

(iv)                              financial institutions advising on, providing or considering the provision of financing to the receiving Party or any Affiliate thereof,

 

Provided that the receiving Party shall exercise due diligence to ensure that no such person shall disclose Confidential Information to any unauthorized party or persons.

 

The provisions of this paragraph shall survive for a period of two (2) years after the termination or expiry of the Charter Documents.

 

10.                                 We agree that we shall not effect any mortgage or charge over the Vessel unless the person to whom such interest or right is granted first undertakes to enter into an agreement with you on terms substantially similar to this Agreement.

 

11.                                 The terms of this Agreement shall be governed by and construed in accordance with English law and the provisions of Clause 45 of the Charter (Law and Litigation) shall apply, mutatis mutandis, to any dispute arising out of this Agreement as if such provisions were set out in this Agreement.

 

12.                                 The undertakings in this Agreement shall apply from the Effective Date.

 

Please will you acknowledge your receipt of, and your agreement to, the terms of this Agreement by signing the attached copy where indicated and returning it to us.

 

Each of the parties signing this Agreement intends that the agreement constituted by this Agreement shall take effect as a deed.

 

 

Yours faithfully,

 

H-6

 

	
 
    	
 
    	
 
    

for and on behalf of

[insert issuing party]

 

 

We, [Lessee], hereby confirm our agreement to the provisions of this Agreement.

 

 

	
Dated:
    	
 
    	
 
    
	
 
    	
 
    	
 
    

for and on behalf of

Golar Spirit UK Limited

 

 

We, [insert relevant party] hereby confirm our agreement to the provisions of this Agreement.

 

 

	
Dated:
    	
 
    	
 
    
	
 
    	
 
    	
 
    

for and on behalf of

[insert name of relevant party]

 

 

We, Contractor, hereby confirm our agreement to the provisions of this Agreement.

 

 

	
Dated:
    	
 
    	
 
    
	
 
    	
 
    	
 
    

for and on behalf of

Golar Serviços de Operação de Embarcações Limitada

 

 

We, Charterer, hereby confirm our agreement to the provisions of this Agreement.

 

 

	
Dated:
    	
 
    	
 
    
	
 
    	
 
    	
 
    

for and on behalf of

Petróleo Brasileiro S.A.

 

H-7

 

SCHEDULE IX

 

INSURANCE

 

PART A - Types of Insurance Coverage

 

Owner shall at all times during the Charter Period procure and maintain insurance on the Vessel in accordance with the following provisions and the requirements of the Governmental Authorities.

 

1.                                      Hull and Machinery Insurance

 

(a)                                  Owner shall take out and maintain Hull and Machinery insurance with first class marine underwriters in the London, European, Japanese, American or Scandinavian markets for such amount as Owner may require, for amounts equal to the greater of the full replacement value of the Vessel or the amount required by Owner’s financiers.

 

(b)                                  The Hull and Machinery insurance shall be placed annually on terms equivalent to the Standard London Institute Hull Form applicable at the date of original issue and the date of each renewal, respectively, or their Japanese, American or Scandinavian equivalents.

 

(c)                                  The Hull and Machinery insurance shall include specifically: Additional Perils Clause (LNG vessel), or the (London) Institute Additional Perils Clause-Hulls or the American Hull Syndicate Liner Negligence Clause, and Four-fourths Running Down Clause cover provided that one-fourth of such risk may be taken out by means of Protection and Indemnity insurance placed with one of the leading P&I Clubs, and such additional coverage and amounts as Charterer may reasonably require.

 

(d)                                  Owner shall arrange for, and Charterer shall approve (such approval not to be unreasonably withheld or delayed), a deductible on Hull and Machinery insurance which results in the most economical premiums recognising conditions or restrictions within the financial arrangements pertaining to the Vessel and the standards which prudent shipowners operating first class LNG carriers should observe in insuring LNG carriers of similar type, size, age and trade as the Vessel which take into consideration outfitting and operation of the Vessel as a floating LNG storage, regasification and transportation vessel and which deductible otherwise conforms with the terms of the Charter.

 

2.                                      Protection & Indemnity Insurance

 

(a)                                  P&I Insurance shall be placed as an unlimited entry (or if the same is not available at the maximum possible entry) with and subject to and on the basis of the rules of one of the Approved Clubs.

 

(b)                                  The terms of the P&I Insurance shall be consistent with the standard rules of one of the Approved Clubs.

 

I-1

 

(c)                                  In the event Four-fourths Running Down Clause cover is taken out by means of Hull and Machinery Insurance, P&I Insurance coverages shall be reduced, but only to the extent necessary to avoid overlap.

 

(d)                                  P&I Insurance shall include full pollution coverage (at the maximum level available for LNG tankers in the P&I Club group) and coverage for removal of wreck at or in the vicinity of any loading terminal or discharge terminal, including between the designated arrival point and such loading terminal or discharge terminal.

 

3.                                      War Risks Insurance

 

(a)                                  Owner shall (save as specifically provided in this Paragraph 3) have the same rights and obligations in respect of insurance of war risks as provided for all the risks referred to in Paragraphs 1 and 2 hereof and, where applicable, up to the same cover amounts.

 

(b)                                  Hull and Machinery War Risks insurance shall cover no less than the American Institute Hull War Risks and Strikes Clauses (December 1, 1977) or their Japanese or London Institute equivalents, and shall correspond with the applicable Hull and Machinery Clauses.

 

4.                                      Compulsory Insurances

 

(a)                                  The insurances required under Paragraphs 1, 2 and 3 hereof and the DPEM insurance — Insurance for Damages to Individuals caused by Vessels or their Cargo-  are hereinafter sometimes together referred to as the “Compulsory Insurances”.

 

(b)                                  Owner may consider obtaining Increased Value Insurance and/or Hull Interest and/or Time Charter Hire or Freight Interest Insurance for an amount recommended by underwriters for a portion of the Insured Value on Hull and Machinery on terms (so far as applicable) similar to those for the Hull and Machinery insurance and with same insurers or others of similar standing.  The decision whether to use such insurance and the percentage of the Insured Value to be covered by such insurance shall be made by Owner, taking into consideration the adequacy of the insurance coverage.

 

(c)                                  When the Vessel is idle or laid up, Owner may (or subject to availability, at the request of Charterer, Owner shall), in lieu of the insurance required hereunder, arrange port risk insurance under such forms as Charterer may approve in writing such approval not to be unreasonably withheld, insuring the Vessel against the usual risks covered by such forms and for the amounts set forth in Paragraph 1.

 

I-2

 

PART B - Premiums and Claims

 

1.                                      Payment of Premiums

 

(a)                                  Owner shall be responsible for the prompt payment of any and all premiums and calls of whatsoever nature lawfully demanded by insurers for all insurance taken out on the Vessel.

 

(b)                                  If Owner shall default in the payment of any premiums or calls as aforesaid, Charterer may, but shall not in any circumstances be obliged to, pay any such premiums or calls direct to the insurers in question and Charterer shall then be entitled to deduct any such payments made from the next due payment of Hire.

 

2.                                      Claims

 

Owner shall diligently pursue all claims which can be made under the Compulsory Insurances.

 

PART C - Placing of Insurances: Miscellaneous

 

1.                                      Additional War Zone Expenses

 

Notwithstanding any other provision in this Schedule IX and subject as provided in Clause 34 of the Charter, all extra expenses incurred by Owner (in relation to Insurances) if the Vessel is required to trade in areas where there is war or, as determined by the insurers of the Vessel, a warlike situation (de facto or de jure) shall be reimbursed by Charterer to Owner, provided that, if practicable, Charterer shall be given an opportunity of signifying its approval before such expenses are incurred.

 

2.                                      Waiver of Subrogation

 

Unless Charterer otherwise agrees, Owner undertakes that all Approved P&I Club entries relating to the Vessel and its operations shall (a) subject to the limits of the Approved Club, waive insurers’ rights of subrogation against Charterer, and (b) otherwise recognise, in a manner acceptable to Charterer, Charterer’s interests in the Vessel and its operations.  Except for war risks insurances, Owner shall cause all insurers to agree in writing to give Charterer as much prior written notice as possible, but in no event less than ***** prior written notice, of the cancellation of Compulsory Insurances which such insurers arrange and to provide Charterer with an opportunity to cure any default by Owner that would otherwise result in such cancellation.  Provided that in respect of Approved Club entries, the Approved Club will undertake to give Charterer notice in writing with the same period of notice as to Owner in all cases where the Approved Club terminates the entry, except that if such termination is attributable to the failure by Owner to pay when due and demanded any premium or contribution due from it to the Approved Club, the Approved Club will undertake not to exercise such rights without giving Charterer ***** notice in writing.

 

3.                                      No Prejudice to Charterer Clause

 

Owner shall cause to be inserted in all policies a clause stating that the insurance under the policy or entry, as to the interest only of Charterer, shall not be impaired in any way by any change in the interest of Owner in the property described in the policy or entry, or the transfer or possession thereof without the consent of Charterer, or by any breach of warranty or condition of the policy or entry, or by any omission or neglect, or by the performance of any act in violation of any terms or conditions of the policy or entry or

 

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because of any failure to perform any act required by the terms or conditions of the policy or entry or because of the subjection of the property to any conditions, uses or operation not permitted by the policy or entry, or because of any false statement concerning the policy or entry or the subject thereof, by Owner or Owner’s employees, contractors, subcontractors, agents or representatives; whether occurring before or after the attachment of the policy or entry, or whether before or after any loss or damage.

 

4.                                      Other Insurances

 

Nothing herein provided shall prevent Owner from arranging, for its sole benefit, additional insurance cover of the types included in the Compulsory Insurance and/or insurance of other types on such terms as Owner thinks fit.

 

I-4Exhibit 10.8

 

Privileged and Confidential

 

 

OPERATION AND SERVICES AGREEMENT

 

 

between

 

 

PETRÓLEO BRASILEIRO S.A.

 

 

as Customer

 

 

and

 

 

GOLAR SERVIÇOS DE OPERAÇÃO DE EMBARCAÇÕES LIMITADA

 

 

as Contractor

 

 

mv Golar Spirit

 

 

Dated: 4th September 2007

 

 

Table of Contents

 

	
1.
    	
Definitions
    	
1
    
	
2.
    	
Term
    	
11
    
	
3.
    	
Shipboard Personnel and their   Duties
    	
14
    
	
4.
    	
Contractor’s and Customers   Obligations
    	
17
    
	
5.
    	
Fees
    	
23
    
	
6.
    	
Payment of Fees
    	
27
    
	
7.
    	
Bills of Lading
    	
34
    
	
8.
    	
Vessel Manager and Conduct of   Vessel’s Personnel
    	
38
    
	
9.
    	
Super-Numeraries
    	
38
    
	
10.
    	
Vessel Temperature and LNG   Retention
    	
39
    
	
11.
    	
Pilots and Tugs
    	
42
    
	
12.
    	
Vessel Deployment and Operation
    	
42
    
	
13.
    	
Loss of Vessel
    	
45
    
	
14.
    	
Off-Hire
    	
45
    
	
15.
    	
Ship to Ship Transfers
    	
51
    
	
16.
    	
Scheduled Drydocking and   Maintenance
    	
52
    
	
17.
    	
Representations and Warranties
    	
53
    
	
18.
    	
Indemnification
    	
59
    
	
19.
    	
Salvage
    	
62
    
	
20.
    	
Liens
    	
63
    
	
21.
    	
Loss, Damage, Delay and Force   Majeure
    	
63
    
	
22.
    	
Default and Remedies
    	
67
    
	
23.
    	
Injurious cargoes
    	
72
    
	
24.
    	
Laying-Up
    	
72
    
	
25.
    	
Requisition
    	
73
    
	
26.
    	
War
    	
74
    
	
27.
    	
Both to Blame Collision Clause
    	
76
    
	
28.
    	
New Jason Clause
    	
76
    
	
29.
    	
Insurance
    	
77
    
	
30.
    	
Assignment by Contractor
    	
78
    
	
31.
    	
Assignment by Customer
    	
78
    
	
32.
    	
Business Principles
    	
78
    
	
33.
    	
Drugs and Alcohol
    	
81
    
	
34.
    	
Pollution and Emergency Response
    	
81
    
	
35.
    	
ISPS Code/US MTSA 2002
    	
84
    
	
36.
    	
Law and Litigation
    	
85
    
	
37.
    	
Confidentiality
    	
86
    
				

 

i

 

	
38.
    	
Construction
    	
87
    
	
39.
    	
Notices
    	
88
    
	
40.
    	
Miscellaneous
    	
90
    
	
 
    	
 
    	
 
    
	
Schedule I
    	
Operating Costs
    	
A1
    
	
Schedule II
    	
HSSE Requirements
    	
B1
    
	
Schedule III
    	
Spare Parts
    	
C1
    
	
Schedule IV
    	
Insurance
    	
D1
    
	
Schedule V
    	
List of Primary and Designated Terminals
    	
E1
    
	
Schedule VI
    	
Detailed Performance Criteria
    	
F1
    
	
Schedule VII
    	
Certificate of Acceptance
    	
G1
    
				

 

ii

 

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH FIVE ASTERISKS (*****).

 

This Operation and Services Agreement (this “Agreement”), executed the 4th day of September 2007 by and between Petróleo Brasileiro S.A. of Av. Aimirante Barroso, 81 — 33rd Floor, 20031-004, Rio de Janeiro, RJ, Brazil, (“Customer”) and Golar Serviços de Operação de Embarcações Limitada with its registered office at c/o Domingues e Pinho Contadores, Avenida Rio Branco, 311 - 4o andar, Centro - Rio de Janeiro — RJ, Brasil, CEP 20.040-903, (the “Contractor”).

 

WHEREAS, Owner is the disponent owner of the Vessel.

 

WHEREAS, Owner has appointed Contractor to carry out certain services to be performed in relation to the Vessel during the Term.

 

WHEREAS, Contractor has been authorised by Owner to enter into this Agreement and to provide the services to the Customer.

 

WHEREAS, Contractor and Customer wish to enter into this Agreement, the object of which is the provision by Contractor of certain services in relation to operating the Vessel and providing for the supervision and maintenance, including any necessary drydocking, of the Vessel.  Such services for operation and maintenance shall be in respect of, but are not limited, to the receiving, storage and regasification of LNG (as defined below) on the Vessel and discharge of LNG and/or regasified LNG to such place as nominated by Customer;

 

Now, therefore, for and in consideration of the mutual undertakings set forth herein, Customer and Contractor hereby agree as follows:

 

1.             Definitions

 

1.1           Definitions

 

In this Agreement and the Schedules, save where the context otherwise requires, the following words and expressions shall have the meanings respectively assigned to them in this Clause:

 

	
“Affiliate”
    	
 
    	
means, with respect to any Party, a person that   controls, is controlled by, or is under common control with, such Party. For   the purposes of this definition, the term “control” means the beneficial   ownership of fifty 
    

 

1

 

	
 
    	
 
    	
percent (50%) or more of the voting shares of a   company or other entity, as applicable, or of the equivalent rights to   determine the decisions of such a company or other entity.
    
	
 
    	
 
    	
 
    
	
“Approved Clubs”
    	
 
    	
means the leading P&I associations which are   members of the international group of P&I Clubs.
    
	
 
    	
 
    	
 
    
	
“Ballast Service Speed”
    	
 
    	
means ***** knots.
    
	
 
    	
 
    	
 
    
	
“Banking Day”
    	
 
    	
means any day when banks in Rio de Janeiro and   the required place of payment or receipt (as the case may be) are open for   business.
    
	
 
    	
 
    	
 
    
	
“Base Date”
    	
 
    	
means *****.
    
	
 
    	
 
    	
 
    
	
“Bill of Lading”
    	
 
    	
means any bill of lading, custody transfer sheet,   volume certificate and other like document.
    
	
 
    	
 
    	
 
    
	
“Blue Card”
    	
 
    	
means the certification issued by the   International Transport Workers’ Federation in relation to the employment and   working conditions of the Vessel’s Master, officers and crew.
    
	
 
    	
 
    	
 
    
	
“Boil-Off”
    	
 
    	
means the vapour which results from vaporisation   of LNG in the Vessel’s cargo tanks.
    
	
 
    	
 
    	
 
    
	
“Cargo Capacity”
    	
 
    	
means the maximum safe LNG loading limit of the   Vessel.
    
	
 
    	
 
    	
 
    
	
“CDI”
    	
 
    	
means an “Interbanking Certificate of Deposit” as   issued by financial institutions during interbanking operations.
    
	
 
    	
 
    	
 
    
	
“Classification”
    	
 
    	
means the classification of the Vessel.
    
	
 
    	
 
    	
 
    
	
“Classification Society”
    	
 
    	
means an internationally recognised   classification society that is a member of the International Association of   Classification Societies and that has previous experience of LNG shipping.
    
	
 
    	
 
    	
 
    
	
“Closed Loop Mode”
    	
 
    	
means an LNG vaporisation system that operates in   a
    

 

2

 

	
 
    	
 
    	
closed loop mode using heat generated by the   Vessel’s heating system.
    
	
 
    	
 
    	
 
    
	
“Compulsory Insurances”
    	
 
    	
is defined in Schedule IV, Part A, Paragraph   3(a).
    
	
 
    	
 
    	
 
    
	
“Conditions of Use”
    	
 
    	
is defined in Clause 4.6.
    
	
 
    	
 
    	
 
    
	
“Confidential Information”
    	
 
    	
means the terms and conditions of this Agreement   and all other documents and agreements contemplated thereby, together with   any and all data, reports, records, correspondence, notes, compilations,   studies and other information relating to or in any way connected with this   Agreement that is disclosed directly or indirectly by or on behalf of the   disclosing Party or any of its Representatives to the receiving Party or any   of its Representatives, whether such information is disclosed orally or in   writing.
    
	
 
    	
 
    	
 
    
	
“Contractor Indemnified Parties”
    	
 
    	
means Contractor and all Contractor’s Affiliates   and Representatives.
    
	
 
    	
 
    	
 
    
	
“Coordination Procedure”
    	
 
    	
is defined in Clause 2.7(c).
    
	
 
    	
 
    	
 
    
	
“Customer’s Facilities”
    	
 
    	
means the facilities located at Rio de Janeiro   harbour able to receive regasified LNG from the Vessel or the facilities   located at Pecém harbour able to receive regasified LNG from the Vessel, or   any other terminal in Brazil capable of receiving regasified LNG.
    
	
 
    	
 
    	
 
    
	
“Customer Indemnified Parties”
    	
 
    	
means Customer and all Customer’s Affiliates and   Representatives.
    
	
 
    	
 
    	
 
    
	
“Customer’s Personnel”
    	
 
    	
means those persons designated as such by   Customer to Contractor.
    
	
 
    	
 
    	
 
    
	
“Daily Fee”
    	
 
    	
is defined in Clause 5.1(b).
    
	
 
    	
 
    	
 
    
	
“Damages”
    	
 
    	
means collectively, all claims, liabilities,   obligations, losses, damages, deficiencies, assessments, judgments,   penalties, actions, suits, out-of-pocket costs, expenses and disbursements of   any kind or nature whatsoever
    

 

3

 

	
 
    	
 
    	
(including, without limitation, reasonable   attorneys’ fees and costs and expenses).
    
	
 
    	
 
    	
 
    
	
“Debit Note”
    	
 
    	
is defined in Clause 6.1(c).
    
	
 
    	
 
    	
 
    
	
“Debit Note Due Date”
    	
 
    	
is defined in Clause 6.3(b).
    
	
 
    	
 
    	
 
    
	
“Delivery Date”
    	
 
    	
means the date upon which Contractor and Customer   execute and deliver the Certificate of Acceptance in the form attached at   Schedule VII.
    
	
 
    	
 
    	
 
    
	
“Depot Spare Parts”
    	
 
    	
is defined in Clause 4.4(b).
    
	
 
    	
 
    	
 
    
	
“Designated Terminal”
    	
 
    	
means (i) the terminals designated as such   in Schedule V and (ii) such other terminals from which the Vessel is required   to load or discharge LNG pursuant to a Designated Trade as notified by   Customer to Contractor from time to time.
    
	
 
    	
 
    	
 
    
	
“Designated Trade”
    	
 
    	
means a contract for the sale and purchase of LNG   between Customer (as buyer or seller) and a third party (as either seller or   buyer) at a Designated Terminal.
    
	
 
    	
 
    	
 
    
	
“Discharge Rate Warranty”
    	
 
    	
is defined in Clause 17.3(b)(iii).
    
	
 
    	
 
    	
 
    
	
“Dispute”
    	
 
    	
is defined in Clause 36.2(a).
    
	
 
    	
 
    	
 
    
	
“Estimate”
    	
 
    	
is defined in Clause 24.3.
    
	
 
    	
 
    	
 
    
	
“Event of Contractor’s Default”
    	
 
    	
is defined in Clause 22.1.
    
	
 
    	
 
    	
 
    
	
“Event of Customer’s Default”
    	
 
    	
is defined in Clause 22.2.
    
	
 
    	
 
    	
 
    
	
“Fee”
    	
 
    	
is defined in Clause 5.1(a).
    
	
 
    	
 
    	
 
    
	
“Fee Commencement Date”
    	
 
    	
means the date set forth in the Certificate of   Acceptance as the “Fee Commencement Date.”
    
	
 
    	
 
    	
 
    
	
“FGTS”
    	
 
    	
means Length of Service Guarantee Fund (Fundo de
    

 

4

 

	
 
    	
 
    	
Garantia de Tempo de Serviço).
    
	
 
    	
 
    	
 
    
	
“First Extension Period”
    	
 
    	
is defined in Clause 2.2.
    
	
 
    	
 
    	
 
    
	
“Flow Rate Modulation”
    	
 
    	
*****
    
	
 
    	
 
    	
 
    
	
“Force Majeure”
    	
 
    	
is defined in Clause 21.2.
    
	
 
    	
 
    	
 
    
	
“GMT”
    	
 
    	
means Greenwich Mean Time.
    
	
 
    	
 
    	
 
    
	
“Governmental Authority”
    	
 
    	
means any national, regional, state, municipal,   local or other government, including any subdivision, agency, board,   department, commission or authority thereof, including any harbour or marine   authority, or any quasi-governmental organisation therein having jurisdiction   over Owner, Contractor, Customer or the Vessel and acting within its legal   authority (except that, for the purposes of Clause 21.2 (Force Majeure) and   Clause 25 (Requisition), Governmental Authority shall include such entities   whether or not they are acting within their legal authority).
    
	
 
    	
 
    	
 
    
	
“Guaranteed Speed”
    	
 
    	
means the speed at which the Vessel needs to   steam in order to meet the Scheduled Arrival Time, as may be amended by   Customer, or any permissible speed ordered by Customer.
    
	
 
    	
 
    	
 
    
	
“Hague Rules”
    	
 
    	
is defined in Clause 7.2(b).
    
	
 
    	
 
    	
 
    
	
“Hague Visby Rules”
    	
 
    	
is defined in Clause 7.2(b).
    
	
 
    	
 
    	
 
    
	
“Hamburg Rules”
    	
 
    	
is defined in Clause 7.2(d).
    
	
 
    	
 
    	
 
    
	
“Hourly Fee Rate”
    	
 
    	
is defined in Clause 17.4(b)(i).
    
	
 
    	
 
    	
 
    
	
“HSSE”
    	
 
    	
means health, safety, security and environment.
    
	
 
    	
 
    	
 
    
	
“Initial Term”
    	
 
    	
is defined in Clause 2.1.
    
	
 
    	
 
    	
 
    
	
“International Standards”
    	
 
    	
means those standards and practices from time to   time in force applicable to the ownership, design, equipment, operation or   maintenance of LNG tankers (including 
    

 

5

 

	
 
    	
 
    	
tankers with LNG regasification facilities   on-board) and berthing and loading facilities, including, without limitation,   those established by the International Maritime Organisation, the OCIMF, or   the Society of International Gas Tanker and Terminal Operators, (SIGTTO), (or   any successor body of the same) and/or any other internationally recognised   agency or organisation with whose standards and practices it is customary for   international operators of such tankers or facilities to comply.
    
	
 
    	
 
    	
 
    
	
“ISM Code”
    	
 
    	
is defined in Clause 4.2(b).
    
	
 
    	
 
    	
 
    
	
“ISPS Code”
    	
 
    	
is defined in Clause 35.
    
	
 
    	
 
    	
 
    
	
“Issuing Party”
    	
 
    	
is defined in Clause 6.6(a).
    
	
 
    	
 
    	
 
    
	
“Laden Service Speed”
    	
 
    	
means *****.
    
	
 
    	
 
    	
 
    
	
“Law”
    	
 
    	
means any law (including any zoning law or   ordinance or any environmental law), treaty, statute, rule, regulation,   ordinance, order, directive, code, interpretation, judgment, decree,   injunction, writ, determination, award, permit, license, authorisation,   direction, requirement, decision or agreement of, with or by any Governmental   Authority.
    
	
 
    	
 
    	
 
    
	
“LMAA Rules”
    	
 
    	
is defined in Clause 36.2(a).
    
	
 
    	
 
    	
 
    
	
“LNG”
    	
 
    	
means natural gas liquefied by cooling and which   is in a liquid state at or near atmospheric pressure.
    
	
 
    	
 
    	
 
    
	
“LNG Heel”
    	
 
    	
means cargo retained in the cargo tanks of the   Vessel on completion of discharge.
    
	
 
    	
 
    	
 
    
	
“LNG Price”
    	
 
    	
is defined in Clause 40.8.
    
	
 
    	
 
    	
 
    
	
“LNG SPA”
    	
 
    	
means a contract for the sale and purchase of LNG   between a third party and Customer or an Affiliate of Customer for the   loading and/or discharge of LNG on or 
    

 

6

 

	
 
    	
 
    	
from the Vessel (as the case may be).
    
	
 
    	
 
    	
 
    
	
“LNG Transfer Procedure”
    	
 
    	
is defined in Clause 2.7(c).
    
	
 
    	
 
    	
 
    
	
“Loading Rate Warranty”
    	
 
    	
is defined in Clause 17.3(b).
    
	
 
    	
 
    	
 
    
	
“Manager”
    	
 
    	
is defined in Clause 8.1.
    
	
 
    	
 
    	
 
    
	
“Master”
    	
 
    	
means the designated master of the Vessel from   time to time, as determined by Contractor and notified to Customer.
    
	
 
    	
 
    	
 
    
	
“Measurement Period”
    	
 
    	
*****.
    
	
 
    	
 
    	
 
    
	
“Minimum Service Speed”
    	
 
    	
means not less than ***** knots.
    
	
 
    	
 
    	
 
    
	
“Monthly Fee”
    	
 
    	
is defined in Clause 5.1(c).
    
	
 
    	
 
    	
 
    
	
“Monthly Fees Invoice”
    	
 
    	
is defined in Clause 6.1(a).
    
	
 
    	
 
    	
 
    
	
“Monthly Invoice Due Date”
    	
 
    	
is defined in Clauses 6.3(a).
    
	
 
    	
 
    	
 
    
	
“Monthly Invoice Payment Date”
    	
 
    	
is defined in Clause 6.3(b).
    
	
 
    	
 
    	
 
    
	
“MTSA”
    	
 
    	
is defined in Clause 35.
    
	
 
    	
 
    	
 
    
	
“Nomination Procedure”
    	
 
    	
is defined in Clause 2.7(c).
    
	
 
    	
 
    	
 
    
	
“OCIMF”
    	
 
    	
means the Oil Companies International Marine   Forum or any successor body of the same.
    
	
 
    	
 
    	
 
    
	
“off-Hire”
    	
 
    	
is defined in Clause 14.1(a).
    
	
 
    	
 
    	
 
    
	
“Off-Hire Allowance”
    	
 
    	
is defined in Clause 14.1(b).
    
	
 
    	
 
    	
 
    
	
“Operating Costs”
    	
 
    	
is defined in Clause 5.1 (b).
    
	
 
    	
 
    	
 
    
	
“Operation Activities”
    	
 
    	
means the performance by Contractor of its   obligations under this Agreement.
    
	
 
    	
 
    	
 
    
	
“Owner”
    	
 
    	
means Golar Spirit UK Limited being the current   disponent owner of the Vessel or such other permitted
    

 

7

 

	
 
    	
 
    	
Person as may own the Vessel from time to time.
    
	
 
    	
 
    	
 
    
	
“P&I Club”
    	
 
    	
means a Protection and Indemnity Club that is a   member of the International Group of P&I Clubs.
    
	
 
    	
 
    	
 
    
	
“Party”
    	
 
    	
means Customer or Contractor, as the case may be   (and “Parties” will be construed   accordingly).
    
	
 
    	
 
    	
 
    
	
“Performance Period”
    	
 
    	
is defined in Clause 17.4(b).
    
	
 
    	
 
    	
 
    
	
“Person”
    	
 
    	
means any individual, firm, corporation, stock   company, limited liability company, trust, partnership, association, joint   venture, or other business.
    
	
 
    	
 
    	
 
    
	
“place of peril”
    	
 
    	
is defined in Clause 26.2(b).
    
	
 
    	
 
    	
 
    
	
“Pollution Regulations”
    	
 
    	
is defined in Clause 34.1.
    
	
 
    	
 
    	
 
    
	
“Primary Terminals”
    	
 
    	
means (i) the terminals designated as such   in Schedule V and (ii) such other terminals as may be proposed by   Customer in writing and approved by Owner from time to time and   (iii) any other terminals Charterer may propose, where compatibility   studies show that no extra costs in achieving compatibility as normally   required by the terminal shall be incurred by Owner, including costs incurred   to achieve physical and regulatory compatibility of the Vessel.
    
	
 
    	
 
    	
 
    
	
“QA/QM System”
    	
 
    	
is defined in Clause 4.2(a).
    
	
 
    	
 
    	
 
    
	
“Reais” or “R$”
    	
 
    	
means the lawful currency of Brazil.
    
	
 
    	
 
    	
 
    
	
“Regasification Equipment”
    	
 
    	
means all machinery and equipment on board the   Vessel relating to the capability of the Vessel to regasify LNG and discharge   regasified LNG, including, but not limited to, vaporisers, pumps and metering   units.
    
	
 
    	
 
    	
 
    
	
“Regasification Flow Rate”
    	
 
    	
*****.
    
	
 
    	
 
    	
 
    
	
“Regasification Flow Rate Warranty”
    	
 
    	
is defined in Clause 17.3(b)(iv).
    

 

8

 

	
“Regasified LNG Delivery Instructions”
    	
 
    	
means those instructions or orders received by   Contractor from Customer or its agents in automated, written or any other   form relating to the delivery, flow modulation and scheduling of regasified   LNG.
    
	
 
    	
 
    	
 
    
	
“Regasification Test”
    	
 
    	
means such tests as may be required to determine   whether or not the Vessel is capable of regasifying LNG and discharging   regasified LNG at the maximum Regasification Flow Rate and to perform the   Flow Rate Modulation.
    
	
 
    	
 
    	
 
    
	
“Registry”
    	
 
    	
means the registry under the laws and flag of the   country where the Vessel is registered.
    
	
 
    	
 
    	
 
    
	
“Relevant Date”
    	
 
    	
means the Monthly Invoice Due Date, the Monthly   Invoice Payment Date, or the Debit Note Due Date, as the case may be.
    
	
 
    	
 
    	
 
    
	
“Representatives”
    	
 
    	
means, with respect to   any Party, such Party’s directors, officers, employees, agents,   representatives, accountants, consultants, attorneys and advisors.
    
	
 
    	
 
    	
 
    
	
“Review Date”
    	
 
    	
is defined in Clause 5.2(a).
    
	
 
    	
 
    	
 
    
	
“Scheduled Arrival Time”
    	
 
    	
means a given date and time for arrival of the   Vessel at the pilot boarding station at each port.
    
	
 
    	
 
    	
 
    
	
“Scheduled Drydocking”
    	
 
    	
is defined in Clause 16.1(a).
    
	
 
    	
 
    	
 
    
	
“Second Extension Period”
    	
 
    	
is defined in Clause 2.3.
    
	
 
    	
 
    	
 
    
	
“Service Speed”
    	
 
    	
means the Laden Service Speed, Ballast Service   Speed or the Minimum Service Speed as appropriate.
    
	
 
    	
 
    	
 
    
	
“SIRE”
    	
 
    	
means the Ship Inspection Report Programme   managed by OCIMF.
    
	
 
    	
 
    	
 
    
	
“Speed Performance Warranty”
    	
 
    	
is defined in Clause 17.3(a).
    
	
 
    	
 
    	
 
    
	
“Super-numerary”
    	
 
    	
means a representative of Customer or any of its
    

 

9

 

	
 
    	
 
    	
Affiliates who may be on board the Vessel at any   time in accordance with Clause 9.
    
	
 
    	
 
    	
 
    
	
“Taxes”
    	
 
    	
means all forms of taxation and statutory,   governmental, state, provincial, local governmental or municipal impositions,   duties, contributions and levies, in each case, in the nature of taxation   including (without limitation), corporation tax, supplementary charge,   petroleum revenue tax, income taxes, sale taxes, use taxes, stamp duty,   transfer taxes, gross income taxes, value added taxes, social contribution   taxes, employment taxes, government royalties, customs duties, excise duties   and environmental taxes and levies and withholding taxes together with all   penalties and interest relating thereto and any penalties and surcharges in   respect of the associated reporting requirements relating to the movement of   goods and provision of services, wherever or whenever imposed.
    
	
 
    	
 
    	
 
    
	
“Term”
    	
 
    	
means (i) the Initial Term plus   (ii) the First Extension Period if any and (iii) the Second   Extension Period, if any.
    
	
 
    	
 
    	
 
    
	
“United States” or “US”
    	
 
    	
means the United States of America.
    
	
 
    	
 
    	
 
    
	
“United States Dollars”, “$” or “US$”
    	
 
    	
means the lawful currency of the United States of   America.
    
	
 
    	
 
    	
 
    
	
“Vessel”
    	
 
    	
means Golar Spirit, with IMO number 7373327,   including its appurtenances, machinery, equipment and fittings.
    
	
 
    	
 
    	
 
    
	
“Vessel Spare Parts”
    	
 
    	
is defined in Clause 4.4(a).
    
	
 
    	
 
    	
 
    
	
“Voyage Reports”
    	
 
    	
is defined in Clause 17.4(c).
    

 

1.2           Interpretation

 

(a)           Unless the context otherwise requires, a reference to the singular shall include a reference to the plural and vice-versa, and a reference to any gender shall include

 

10

 

a reference to the other gender.

 

(b)           The Schedules attached hereto shall form part of this Agreement and in the event of any conflict between the body of this Agreement and its Schedules, the body shall prevail.  Unless the context otherwise requires, a reference to the preamble, any clause, schedule or article shall be to the preamble, a Clause, Schedule or Article (forming part of a Schedule) of this Agreement.

 

(c)           The headings of the Clauses and Schedules in this Agreement are inserted for convenience of reference only and shall not affect the meaning or interpretation of this Agreement.

 

(d)           The words ‘include’ or ‘including’ shall be deemed to be followed by ‘without limitation’ or ‘but not limited to’ whether or not they are followed by such words.

 

(e)           Any reference to a ‘day’ shall be construed as a reference to a calendar day.

 

(f)            Any reference to the calendar shall be construed as reference to the Gregorian calendar.

 

(g)           This Agreement may be executed in both the English and Portuguese languages, provided that, if there is any discrepancy between the English and Portuguese versions, the English language version shall prevail.  Notwithstanding the foregoing, in relation to Schedule II, Attachments A to H thereto, the Portuguese version of such Attachments shall prevail if there is any discrepancy between the English and Portuguese versions.

 

(h)           Any reference in this Agreement to this Agreement or any other agreement or document is a reference to this Agreement or, as the case may be, the relevant other agreement or document as from time to time amended, supplemented or novated.

 

2.             Term

 

2.1           Term

 

Subject as provided in this Clause 2 and Clause 21, the Term of this Agreement shall be ten (10) years commencing from the Delivery Date (the “Initial Term”).

 

11

 

2.2           First Extension Period

 

Customer shall have the right to continue this Agreement at the end of the Initial Term for a period of up to thirty six (36) months (the “First Extension Period”).  Customer shall notify Contractor of its election to exercise such right in writing not later than six (6) months prior to the end of the Initial Term, and such notice shall specify the last date of such First Extension Period.  The terms and conditions of this Agreement shall continue to apply during the First Extension Period.  Contractor shall obtain all necessary authorisations, licences, tax regularisations and any other legal or contractual requirements, as may be required for such extension.

 

2.3           Second Extension Period

 

Customer shall have the right to continue this Agreement at the end of the First Extension Period for a period of up to twenty four (24) months (the “Second Extension Period”).  Customer shall notify Contractor of its election to exercise such right in writing not later than six (6) months prior to the end of the First Extension Period and such notice shall specify the last date of such Second Extension Period.  The terms and conditions of this Agreement shall continue to apply during the Second Extension Period.  Contractor shall obtain all necessary authorisations, licences, tax regularisations and any other legal or contractual requirements, as may be required for such extension.

 

2.4           Extension for Time Off-Hire

 

Any time during which the Vessel is off-Hire for Scheduled Drydocking shall be added to the Initial Term.  Any time during which the Vessel is off-Hire for any other reason (up to the total amount of off-Hire time) may be added to the Term at Customer’s option, such option to be exercised no later than *****  before the date on which this Agreement would otherwise terminate.  Where such option is exercised, the Fees payable for any extension period shall be those which would, but for the provisions of this Clause 2.4, have been otherwise paid.  Any periods of off-Hire occurring after the time and date on which Customer has declared its option may also be added to the Term.

 

2.5           Early Termination Rights

 

Customer shall have the right to terminate this Agreement at any time after the fifth (5th) anniversary of the Delivery Date by providing six (6) months’ prior written notice thereof to Contractor.  No fee or other payment shall be payable by either Party to the other Party upon the termination of this Agreement pursuant to this Clause 2.5 or Clause 2.6.

 

12

 

2.6           Transfer of Title

 

If, at any time during the Term, title to the Vessel is transferred with the prior written consent of the Customer, then the Parties agree that:

 

(a)           where such transfer is to an Affiliate of Owner then this Agreement shall continue in full force and effect; and

 

(b)           where such transfer is to any other Person then this Agreement shall immediately terminate and shall cease to have effect (except for the obligations in Clause 37 (Confidentiality)) and no  Party shall, save in relation to any accrued rights or obligations as at such date, have any rights or liabilities under this Agreement.

 

2.7           Regasification Test and Operations Programme

 

(a)           Contractor shall conduct the Regasification Test at Customer’s Facilities nominated by Customer.  The Regasification Test shall be conducted at Contractor’s cost and expense, provided that Customer shall be solely responsible for purchasing (at Customer’s sole cost) such LNG required to perform the Regasification Test. Customer shall have the right to attend the Regasification Test.

 

(b)           Contractor shall procure that Owner delivers to Contractor and Customer as soon as reasonably practicable after the date hereof an operations manual providing (in reasonable detail) details as to the operation of the Regasification Equipment and the Vessel in order to ensure that regasified LNG is available to be discharged from the Vessel as may be required pursuant to this Agreement.

 

(c)           Contractor shall procure that Owner delivers to Contractor and Customer as soon as reasonable practicable after the date hereof the procedures to be used by (A) Contractor and Customer and any other LNG vessel for the transfer of LNG from such other LNG vessel to the Vessel (the “LNG Transfer Procedure”), (B) Contractor and Customer for the request for delivery, and delivery, as the case may be, of regasified LNG under this Agreement (such procedure, the “Nomination Procedure”) and (C) the coordination between the LNG Transfer Procedures and the Nomination Procedures (the “Coordination Procedure”).

 

13

 

3.             Shipboard Personnel and their Duties

 

3.1           Personnel

 

(a)           At the Delivery Date and throughout the Term, Contractor shall provide shipboard personnel on the following terms:

 

(i)            the Vessel shall have a full and efficient complement of Master, officers and crew for a vessel of her tonnage, who shall in any event be not less than the number and nationality required by the laws of the Registry and, when the Vessel is in Brazilian waters, under Brazilian Law and who shall be trained to operate the Vessel and her equipment competently and safely;

 

(ii)           all shipboard personnel shall hold valid certificates of competence in accordance with the requirements of the laws of the Registry and any requirements of the laws of Brazil necessary for the Vessel to trade thereto;

 

(iii)          all shipboard personnel shall be trained and certified to a standard customary for a reasonable and prudent operator of an LNG tanker and in accordance with the relevant provisions of the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, 1995 or any additions, modifications or subsequent versions thereof;

 

(iv)          there shall be on board sufficient personnel with a good working knowledge of the written and spoken English language to enable operations at LNG and regasified LNG loading and discharging places to be carried out efficiently and safely and to enable communications between the Vessel and those loading the Vessel or accepting discharge therefrom to be carried out quickly and efficiently;

 

(v)           the terms of employment of the Vessel’s staff and crew will always remain acceptable to the International Transport Worker’s Federation and the Vessel will at all times carry a Blue Card; and

 

(vi)          the Vessel shall be manned and operated in accordance with International Standards and Laws by a full, qualified and

 

14

 

competent crew including a Master, chief engineer, chief mate and cargo engineer who each have a minimum of eighteen (18) months aggregate seagoing experience on LNG tankers in any position on board a similar Vessel and such other officers having responsibilities associated with the operation of the Vessel who are experienced in LNG tanker operations having at least twelve (12) months experience on LNG tankers; Customer reserves the right to review officer LNG experience from time to time if appropriate for safety of operations, or if required by LNG buyers.

 

(b)           Contractor shall, at all times during the Term, comply with all Laws and requirements of any Governmental Authority in respect of the provision of shipboard personnel under this Agreement.

 

(c)           The Contractor must submit to Customer upon request by Customer, and /or any Brazilian Governmental Authorities, such documentation as may be required to satisfy such Governmental Authority as to Contractor’s compliance with Brazilian labour laws, including security contributions and FGTS deposits. Such obligation shall apply in respect of all employees and workers, whether Brazilian or foreign, who have an employment contract signed under Brazilian labour laws.

 

(d)           Contractor must submit the following documents to Customer:

 

(i)            One (1) notarized copy of the GFIP (the collection form for the FGTS and information to Social Security (Guia de Recolhimento do Fundo de Garantia por Tempo de Serviço/Previdência Social), as required pursuant to Brazilian labour laws), completed and paid for, and proof of its delivery, under the terms of the laws in effect;

 

(ii)           One (1) notarized copy of the GPS (Social Security Collection Form (Guia da Previdência Social), as required pursuant to Brazilian labour laws) paid in the amount stated in the GFIP, and

 

(iii)          in respect of foreign employees or workers employed under labour contracts signed under Brazilian Laws, Contractor must also submit to Customer the documents mentioned in Clauses 3.1(d)(i) and (ii).

 

(e)           Contractor shall, without any effect on Customer or on any of Contractor’s obligations hereunder, remove and immediately replace any of their employees or

 

15

 

workers whose presence on-board the Vessel or at Customer’s Facilities has not been or would not be accepted by Customer.

 

(f)            The Parties confirm that, in respect of any obligations under this Agreement and in relation to Brazilian social security laws, no employees or workers will be subject to any activities in a manner that may harm their health or physical integrity.

 

(g)           Contractor agrees to provide to any workers or employees employed in connection with the performance of this Agreement, medical, hospital and dental assistance, providing them with, at least, a collective company health plan, pursuant to articles 10 and 16, Part VII.c of Law no 9.656/98 and article 2 of Resolution CONSU no 10, dated November 3, 1998, with coverage for all procedures in respect of work accidents, professional diseases and occupational health, and such coverage shall extend to the spouse or partner of any such employee or worker and their children up to the age of 21 years old.

 

3.2           Duties

 

(a)           Contractor hereby covenants and agrees that throughout the Term, the Master shall, with the Vessel’s officers and crew, unless otherwise ordered by Customer:

 

(i)            prosecute all voyages with the utmost dispatch;

 

(ii)           render all customary assistance;

 

(iii)          load and discharge LNG and discharge regasified LNG as rapidly as possible when required by Customer or its agents to do so, by night or by day, but always in accordance with Laws of the place of loading or discharging (as the case may be) and in each case in accordance with any Laws of the Registry;

 

(iv)          operate all equipment on board, including the Regasification Equipment, in a safe and proper manner and as required by any Law;

 

(v)           observe the orders of Customer or its agents relating to employment of the Vessel, including sending of any required notices and keeping full and up to date records and logs of voyages;

 

16

 

(vi)          operate the Vessel and the Regasification Equipment as necessary to deliver regasified LNG pursuant to the Regasified LNG Delivery Instructions;

 

(vii)         provide Customer with the data reasonably required by Customer to make any calculations in respect of the performance of the Vessel or the services provided by the Contractor hereunder, including any data/documents requested by any Governmental Authority; and

 

(viii)        cooperate with Customer as far as necessary to comply with and satisfy any requirements of any Governmental Authority.

 

(b)           Contractor shall at all times have responsibility for the proper stowage of the cargo and shall keep a strict account of all cargo loaded, Boil-Off, and cargo discharged.

 

(c)           Contractor shall at all times during the Term operate, maintain and repair the Regasification Equipment, including procuring any equipment or material required to fulfil such obligation.

 

(d)           If Contractor intends to order spray cooling at any time during the Term, Contractor agrees, if requested by Customer, to discuss the reasons and technical basis for spray cooling.

 

(e)           Subject to the provisions of this Agreement, Contractor shall have free use of Boil-Off.  Except when otherwise required pursuant to Customer’s orders, Contractor shall exercise due diligence to minimise any venting or steam dumping of Boil-Off during periods of low fuel demand.

 

4.             Contractor’s and Customers Obligations

 

4.1           Contractor’s Obligations

 

Contractor undertakes to provide and to pay for the following during the Term:

 

(a)           all provisions, wages (including but not limited to all overtime payments), and shipping and discharging fees and all other expenses of the Master, officers and crew;

 

(b)           all insurance on the Vessel as determined in accordance with Schedule IV;

 

17

 

(c)                                  all deck, cabin and engine-room stores, water, spare parts and lubricating oil;

 

(d)                                 all drydocking, overhaul, maintenance and repairs to the Vessel;

 

(e)                                  all fumigation expenses and de-rat certificates;

 

(f)                                    all radio traffic and communication equipment or charges, unless otherwise provided by Customer;

 

(g)                                 all deck and gangway watchmen (at port night and day);

 

(h)                                 sufficient lighting with Vessel’s lights at port;

 

(i)                                     nitrogen gas and inert gas for inerting cargo spaces;

 

(j)                                     tonnage certificates and Classification certificates and fees;

 

(k)                                  all customs or import duties arising in connection with any of the foregoing;

 

(l)                                     all licences and authorisations required by Governmental Authorities for the operation of the Vessel and other activities of Contractor under this Agreement, except any authorisation for Customer to charter the Vessel, or as otherwise provided for in this Agreement; and

 

(m)                               other items and amounts in connection with the performance of Customer’s obligations under this Agreement, except to the extent expressly required to be paid or provided by Customer hereunder.

 

4.2                                 Safety and Quality Management

 

(a)                                  Contractor warrants that the Manager shall implement and maintain throughout the Term a quality assurance and quality management system (the “QA/QM System”) which shall be completed, implemented and submitted to Customer by the Delivery Date.  The QA/QM System shall cover all management activities in relation to the Vessel and its operation, and include an HSSE programme which is satisfactory to Customer in accordance with Schedule II.   Notwithstanding the requirements of Schedule II, Contractor shall supply documentation on each anniversary date of the Delivery Date confirming such continued maintenance.  Customer reserves the right to verify compliance with the QA/QM System by an independent audit with a view to monitor key operational activities to ensure conformance with the highest International Standards, established safety, quality,

 

18

 

security and environmental objectives and continuous improvement of the HSSE programme.

 

(b)                                 Contractor further undertakes to ensure that throughout the Term the Manager fully complies with  the International Safety Management Code (“ISM Code”) and establishes and maintains:

 

(i)                                     a documented safe working procedures system (including procedures for the identification and mitigation of risks);

 

(ii)                                  a documented environmental management system; and

 

(iii)                               a documented accident/incident reporting system compliant with the requirements of the Registry, Schedule II and Customer’s standards for operation of vessels in Brazilian waters.

 

(c)                                  Contractor shall submit to Customer a monthly written report detailing all accidents, incidents and environmental reporting requirements in accordance with the forms appended hereto at Schedule II.

 

(d)                                 Contractor shall maintain HSSE records sufficient to demonstrate compliance with the requirements of their HSSE system and this Agreement.  Customer reserves the right to confirm compliance with HSSE requirements by audit of Contractor.

 

(e)                                  During periods in which the Vessel is undertaking LNG trading operations, Contractor shall arrange at its expense for a SIRE Inspection to be carried out at intervals of not less than six (6) months plus or minus thirty (30) days.  Contractor shall ensure that the Manager responds without undue delay to any SIRE inspection report and promptly addresses all outstanding issues and observations.

 

(f)                                    Contractor shall comply with all local environmental laws, regarding the rendering of services and the requirements of the Governmental Authorities, and shall keep Customer fully informed of all communications exchanged between Contractor and such Governmental Authorities. Contractor agrees that it shall always follow Customer’s orders in respect of environmental procedures and the obtaining of the required licences.

 

19

 

4.3                                 Duty to Maintain

 

(a)                                  Contractor shall perform all maintenance, repair and drydocking of the Vessel as required (save for Scheduled Drydocking, where costs shall be allocated in accordance with Clause 16) throughout the Term, such maintenance, repair and drydocking being at Contractor’s sole cost and expense.  Contractor shall adhere to a maintenance and repair programme throughout the Term which ensures that the Vessel is repaired and maintained to International Standards and can be operated safely, effectively and reliably throughout the Term.

 

(b)                                 Any reduction of Fees permitted by the provisions of this Agreement shall be without prejudice to any other remedy available to Customer in respect of Contractor’s breach, but where such reduction of Fees is in respect of time lost, such time shall be excluded from any calculation under Clause 14.

 

(c)                                  If Contractor is in breach of its obligations under Clauses 3 or 4, Customer may notify Contractor in writing thereof and if, after the expiry of ***** following the receipt by Contractor of such notice, Contractor shall have failed to demonstrate to Customer’s satisfaction that Contractor has cured any such breach, the Vessel shall be off-Hire until such time that Contractor has so demonstrated to Customer’s satisfaction that such breach has been cured.

 

(d)                                 Contractor shall advise Customer immediately, in writing, should the Vessel fail any inspection by a Governmental Authority (including, but not limited to, a governmental and/or port state authority).  Contractor shall simultaneously advise Customer of its proposed course of action to remedy the defects that caused the failure of such inspection.

 

(e)                                  If Customer reasonably determines:

 

(i)                                     the Vessel’s failure to pass an inspection; or

 

(ii)                                  the findings or conclusion of any inspection referred to in Clause 4.3(e);

 

prevents normal commercial operations of the Vessel, then Customer shall have the option to place the Vessel off-Hire from the date and time that the Vessel fails such inspection or becomes commercially inoperable until the date and time that the Vessel passes a re-inspection by the same organisation or becomes commercially operable, and the Vessel is in a position no less favourable to Customer than when she went off-Hire.

 

20

 

4.4                                 Spare Parts

 

(a)                                  Throughout the Term, Contractor undertakes that it will have and shall maintain as Vessel spare parts those spare parts to be specified (in accordance with the next sentence) in Part I of Schedule III (“Vessel Spare Parts”).  Contractor shall procure that Owner shall deliver to Customer a list of such spare parts no later ***** prior to the Scheduled Delivery Date, such list to be reasonably acceptable to Customer (the Parties shall then update Part I of Schedule III accordingly).

 

(b)                                 Further, throughout the Term, there shall be available to Contractor those spare parts to be specified (in accordance with the next sentence) in Part II of Schedule III (“Depot Spare Parts”).  Contractor shall procure that Owner shall deliver to Customer a list of such spare parts no later ***** prior to the Scheduled Delivery Date, such list to be reasonably acceptable to Customer (the Parties shall then update Part II of Schedule III accordingly).

 

(c)                                  Contractor shall procure the prompt replacement of any Vessel Spare Part or Depot Spare Part taken out of the inventory referred to above.

 

(d)                                 Contractor may enter into sharing agreements as to the use and storage of Depot Spare Parts in respect of the Vessel and any sister ship to the Vessel.

 

(e)                                  Customer shall have the right to inspect both the Vessel Spare Parts and Depot Spare Parts to ensure compliance with this Clause 4.4.

 

4.5                                 Refunds and Credits to Customer

 

Contractor’s obligations under this Clause 4 shall extend to all liabilities for customs or import duties arising at any time during the performance of this Agreement in relation to the personal effects of the Master, officers and crew, and in relation to the stores, provisions and other matters aforesaid which Contractor is to provide and pay for and Contractor shall refund to Customer any sums Customer or its agents may have paid or been compelled to pay in respect of any such liability.  Any amounts allowable in general average for wages and provisions and stores shall be credited to Customer insofar as such amounts are in respect of a period when the Vessel is on-Hire.

 

4.6                                 Conditions of Use

 

Contractor acknowledges and agrees that it will assist with developing the conditions for use, including any liability regime and agreement (together, “Conditions of Use”),

 

21

 

applicable to use of any Primary Terminal and (with reasonable notice) each Designated Terminal and port at which any such terminal is located.

 

4.7                                 Underwater Cleaning/Waiting at Anchorage

 

(a)                                  Customer may request Contractor at any time to arrange for the cleaning afloat of the Vessel’s underwater hull and propeller whereupon Contractor shall arrange for the said cleaning to take place provided that:

 

(i)                                     the Vessel is free of cargo but may be under vapour if permitted by the port authority; and

 

(ii)                                  in Contractor’s opinion such cleaning will not damage in any way the Vessel’s underwater hull coatings; and

 

(iii)                               such cleaning afloat can be carried out safely at a place approved by Contractor and where the water is sufficiently clear for an underwater survey to be made of cleanliness of the Vessel’s hull and propeller immediately thereafter.

 

(b)                                 The cost of such underwater hull and propeller cleaning and underwater survey referred to in Clause 4.7(a) shall be for Customer’s account and the Vessel shall remain on Hire for their duration.  If the underwater survey shows that both the Vessel’s underwater hull and propeller are clean, a successful cleaning shall be deemed to have occurred.

 

(c)                                  If Customer orders the Vessel to stay alongside at Charterer’s Facility, to wait at anchorage or in lay up for more than ***** and, if as a result of such service, waiting or lay up Contractor has good reason to believe that the performance of the Vessel or her fuel consumption will be affected and speed and/or fuel warranties can no longer be met because of fouling, then Contractor shall so state by written notice to Customer and, if Customer requests, Contractor shall carry out an underwater inspection at Customer’s expense to see if there is fouling of the hull and/or propeller.

 

(d)                                 If as a result of the aforesaid inspection Contractor considers that there is evidence of such fouling then, if Customer so requests, Contractor shall arrange and carry out cleaning afloat of the Vessel’s underwater hull and propeller provided that the provisions of Clause 4.7(a)(i), (ii) and (iii) apply.

 

22

 

(e)                                  The cost of such underwater hull and propeller cleaning and underwater survey referred to in Clause 4.7(d) shall be for Customer’s account and the Vessel shall remain on Hire for their duration.  If the underwater survey shows that both the Vessel’s underwater hull and propeller are clean, a successful cleaning shall be deemed to have occurred.

 

(f)                                    If any inspection pursuant to Clause 4.7(c) reveals the presence of hull or propeller fouling, or if Customer declines to request an inspection following receipt of a notice from Contractor under Clause 4.7(c), then from the time Contractor gives written notice that performance is affected by fouling, Contractor shall be deemed to have complied with the speed and fuel warranties until the completion of the next Scheduled Drydocking or successful cleaning, whichever occurs sooner.

 

4.8                                 Customer’s Obligations

 

Customer shall provide all marine fuel required by the Vessel during the Term of the Agreement.

 

5.                                      Fees

 

5.1                                 Fees

 

(a)                                  Subject to the terms of this Agreement, Customer shall pay Contractor a fee for operating the Vessel and providing the services (as required hereunder) in relation to the Vessel (the “Fee”) commencing on the Fee Commencement Date and throughout the Term (save for those times when the Vessel is off-Hire pursuant to Clause 14) monthly in advance pursuant to this Clause 5.  The Fee shall be paid in Reais.

 

(b)                                 Contractor shall be paid a daily fee amount (“Daily Fee”) for performing its obligations under this Agreement, as calculated in accordance with Schedule I (“Operating Costs”).

 

(c)                                  The total Fee due and payable by Customer for any calendar month shall equal the Daily Fee multiplied by the number of days in such calendar month (“Monthly Fee”) plus any other amounts payable by Customer to Contractor under this Agreement less the permitted deductions from Fees under the terms of this Agreement.  The Fee shall be pro-rated for any part of a day, or in respect of the first and last calendar months of this Agreement, for part of a calendar month. 

 

23

 

All Fee calculations shall be made by reference to GMT.

 

(d)                                 No Fee shall be payable for any period when the Vessel is off-Hire in accordance with Clause 4.3(d), 4.3(e) or Clause 14 as applicable.

 

5.2                                 Fee Review

 

(a)                                  The Fee payable for the first year of this Agreement, commencing on the Fee Commencement Date, but calculated on the Base Date, shall be *****.  Thereafter, the Fee, except those Operating Costs relating to Super-Numeraries, shall be readjusted annually on each anniversary of the Base Date (each such anniversary, the “Review Date”) in accordance with the formula below:

 

Ti = *****

 

where at any time:

 

	
 
    	
Ti 
    	
=
    	
Daily Fee, as adjusted in Reais on each Review   Date
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
TXCo 
    	
=
    	
the exchange rate from Reais to United States   Dollars (being the amount of Reais to purchase One United States Dollar) on the   Base Date which the Parties agree is *****.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
TXCi 
    	
=
    	
exchange rate from Reais to United States Dollars   (being the amount of Reais to purchase One United States Dollar) on the   Review Date
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
FRP 
    	
=
    	
*****
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
CPI 
    	
=
    	
Value of the index “Consumer Price Index — All   Urban Consumers - US city average — All items”, code CUUR0000SA0, published   by the “United States Department of Labor - Bureau of Labor Statistics Data”
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
CPIo 
    	
=
    	
the CPI for the month of the Base Date, which the   Parties agree is *****.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
CPIi 
    	
=
    	
the CPI for the month of the applicable Review   Date
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
INPCo 
    	
=
    	
National Consumer Price Index as issued by the   Brazilian Institute of Geography and Statistics (the “IBGE” for the month of   the Base Rate which the Parties agree is *****.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
INPCi 
    	
=
    	
National Consumer Price Index as issued by the   IBGE for the month of the Review Date
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
MEQi =
    	
rate for wholesale prices available internally in   Brazil in relation to production assets, such as machinery, vehicles 
    

 

24

 

	
 
    	
 
    	
 
    	
 
    	
and equipment, as issued by the Getulio Vargas   Foundation in its Economic Structure Journal, as column 15, under the code   (A0161724) (the “MEQ”) for the month of the Review Date
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
MEQo  =
    	
the MEQ for the month of the Base Date, which the   Parties agree is *****.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
To        =
    	
Daily Fee in Reais on the Base Date being R$*****
    

 

(b)                                 The Super-Numerary accommodation costs shall be adjusted annually from the Base Date, whether increased or decreased, as a consequence of the variation in the elements that comprise the adjustment formula, set forth below:

 

	
 
    	
TSCo 
    	
=
    	
Daily fee for   individual accommodation of each Super-Numerary on the Base Date being R$*****.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
TSCi 
    	
=
    	
*****
    

 

Where, at any time:

 

	
 
    	
TSCi   
    	
=
    	
daily rate per   individual accommodation, as adjusted in   Reais on each Review Date
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
ABRi 
    	
=
    	
Consumer Price Index   for the internal availability in Brazil regarding edibles (Indice de Preços ao consumidor de disponibilidade interna no Brasil   para alimentação) from FGV (A0201475), column 1 of the Economic   Structure Journal (“ABR”), on the Base Date;
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
ABRo
    	
 
    	
the ABR for the month of the Base Date, which the   Parties agree is *****.
    

 

(c)                                  The Super-Numerary meal costs shall be adjusted annually from the Base Date, whether increased or decreased, as a consequence of the variation in the elements that comprise the adjustment formula, set forth below

 

	
 
    	
TRAo   
    	
=
    	
price per individual   meal for each Super-Numerary on the Base Date, being R$*****.
    

 

25

 

	
 
    	
TRAi   
    	
=
    	
*****
    

 

Where, at any time:

 

	
 
    	
TRAi   
    	
=
    	
fee per individual   meal, as adjusted in Reais on each Review Date
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
ABRi   
    	
=
    	
the ABR on the Review   Date
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
ABRo  
    	
=
    	
the ABR for the month of the Base Date, which the   Parties agree is *****.
    

 

(d)                                 Where the data in Clauses 5.2(a), (b) or (c) above is not yet published, then the Fee shall be held at the prevailing rate until such required data is published.  The Fee shall then be recalculated and any shortfall or surplus amount shall be reconciled within ***** days.

 

(e)                                  If in the opinion of either Party:

 

(i)                                     a publication needed to determine an element of an adjustment formula set out in 5.2(a) to (c), above is not available; or

 

(ii)                                  any such publication fails or ceases to report the data necessary to calculate such element; or

 

(iii)                               such data has been published in error; or

 

(iv)                              such data is so changed that it affects materially the validity of the index comparison over time,

 

then that Party may give notice to the other Party and the Parties shall agree the action to be taken to take account of such circumstance.

 

(f)                                                                                    (i)            If the Parties are not able to reach agreement on the action to be taken within ***** of the notice provided under Clause 5.2(e), then the matter shall be referred to an expert, acting as an expert and not an arbitrator, to be appointed by agreement between the Parties and whose opinion on the matter shall be final and binding on the Parties.

 

For purposes of this Clause 5.2(f), the Parties hereby shall endeavour to agree to nominate an expert. If the parties fail to 

 

26

 

agree upon the identity of a mutually acceptable expert within *****, the appointment shall be made by the International Centre for Expertise in accordance with the provisions for the appointment of experts under the Rules for Expertise of the International Chamber of Commerce.  The costs of any expert appointed pursuant to this Clause 5.2(f) together with the costs of such proceedings shall be shared equally by the Parties.

 

(ii)                                  Until the Parties have reached agreement on the course of action or (as the case may be) the expert has decided the matter in accordance with Clause 5.2(f)(i), the Fee will provisionally be increased to *****% of the previous  Fee amount.

 

(iii)                               In the event of any revisions of the Fee escalation formula, the Fee provisionally calculated in accordance with 5.2(f)(ii) above shall be recalculated and any over payment or underpayment from one Party to the other shall be revised to take account of the revised Fee.

 

(g)                                 Rounding of Calculations

 

No intermediate rounding of calculations made in accordance with this Clause 5.2 shall apply.  The final calculated Fee shall be expressed to two decimal places (by rounding up the third decimal place where “5” or higher and rounding down where “4” or lower).

 

6.                                      Payment of Fees

 

6.1                                 Invoices

 

(a)                                  On the ***** or in any event on or before the ***** prior to each Measurement Period, Contractor shall submit to Customer a monthly Fees invoice in respect of the Fees for the following Measurement Period (the “Monthly Fees Invoice”), which shall include the following information:

 

(i)                                     the date and the number of days for which the Fee is payable;

 

(ii)                                  the applicable Fee rate;

 

(iii)                               the gross amount payable (expressed in figures and in words);

 

27

 

(iv)                              the deductions, if any, allowed to Customer pursuant to Clause 6.2;

 

(v)                                 the date and place of issue and serial number of the Monthly Fees Invoice;

 

(vi)                              the serial number and date of execution of this Agreement;

 

(vii)                           the name and code number of the bank, its address and the account number to which payment should be made; and

 

(viii)                        the name of a contact person and such person’s address and fax number, in order that Customer may notify Contractor that payment has been made.

 

(b)                                 Contractor shall submit the following documents to the Customer by attaching to each Monthly Fees Invoice:

 

(i)                                     One (1) notarized copy of the GFIP (the collection form for the FGTS and information to Social Security (Guia de Recolhimento do Fundo de Garantia por Tempo de Serviço/Previdência Social), as required pursuant to Brazilian labour laws), completed and paid for, and proof of its delivery, under the terms of the laws in effect;

 

(ii)                                  One (1) notarized copy of the GPS (Social Security Collection Form (Guia da Previdência Social), as required pursuant to Brazilian labour laws) paid in the amount stated in the GFIP; and

 

(iii)                               A copy of the payroll entries for all of Contractor’s employees rendering services under or connection with this Agreement

 

(c)                                  If any amounts are due from one Party to the other Party other than those set forth in a Monthly Fees Invoice, including any amounts paid but not earned or earned but not paid, then the Party to whom such sums are owed shall, as soon as detected, furnish to the other Party an invoice or debit note (“Debit Note”) setting out, where applicable, the information required in Clause 6.1(a), together with calculations and relevant supporting documents.

 

(d)                                 Prior to the issue of an invoice where Contractor requires clarification as to what the invoice is required to contain, Contractor shall submit questions to Customer and Customer shall respond promptly.

 

28

 

6.2                                 Deductions

 

(a)                                  Customer shall be entitled, on production of reasonable documentary evidence (where applicable), to deduct from payments of Fees:

 

(i)                                     any amounts disbursed on Contractor’s or Vessel’s behalf, any advances and commission thereon, and charges which are for Contractor’s account pursuant to any provision hereof;

 

(ii)                                  lay up savings (including estimated savings);

 

(iii)                               off-Hire reasonably expected to occur and payments reasonably anticipated from Contractor to Customer under this Agreement during the period for which payment of such Fee is to be made;

 

(iv)                              any previous overpayments of Fees, including payments made with respect to periods of off-Hire and related off-Hire expenses;

 

(v)                                 Operating Costs incurred during off-Hire periods; and

 

(vi)                              any other sums to which Customer is entitled under this Agreement.

 

(b)                                 Any such adjustments shall be made at the due date for the next monthly payment after facts have been ascertained.

 

6.3                                 Invoicing

 

(a)                                  Each Monthly Fees Invoice delivered in accordance with Clause 6.1(a) shall become due and payable on the ***** of the Measurement Period to which it relates (“Monthly Invoice Due Date”).

 

(b)                                 Each Monthly Fees Invoice delivered after the ***** prior to each Measurement Period, shall become due and payable on the ***** following its receipt (“Monthly Invoice Payment Date”).  Each Debit Note shall become due and payable on the ***** following its receipt (“Debit Note Due Date”) by the Party to whom it is addressed; provided, however, that, any amounts owed by Contractor in accordance with a Debit Note issued by Customer that have been offset pursuant to Clause 6.2.(a)(iii) shall not be payable under this Clause 6.3.

 

(c)                                  If with respect to any Monthly Fees Invoice or Debit Note, the Relevant Date is 

 

29

 

not a Banking day, such Monthly Fees Invoice or Debit Note shall become due and payable on the Banking Day immediately preceding such Relevant Date.

 

6.4                                 Payment

 

(a)                                  Customer shall pay or cause to be paid, on the Relevant Date, all amounts that become due and payable by Customer pursuant to Monthly Fees Invoices or Debit Notes, as the case may be, issued hereunder in immediately available funds to such account with such bank and in such location as shall have been designated by Contractor in such Monthly Fees Invoice or Debit Note, as applicable.

 

(b)                                 Notwithstanding anything to the contrary in this Agreement, Contractor shall not require and Customer shall not make any payment under this Agreement to any Person or account located outside Brazil.

 

(c)                                  *****

 

(d)                                 Where payment is due by one Party to the other under this Agreement then, provided the Party making payment issues prompt, accurate and complete payment instructions to its bank or agent, any delay or failure on the part of the receiving Party’s bank to credit the proceeds to the receiving Party shall not constitute a delay or failure on the part of the Party making such payments.

 

6.5                                 Incomplete Invoices

 

(a)                                  In the event that a Monthly Fees Invoice is issued which contains errors or lacks the information required pursuant to Clause 6.1(a) of this Agreement shall be returned to Contractor by Customer and Contractor shall issue an amended Monthly Hire Invoice.

 

(b)                                 Payment of any such amended Monthly Hire Invoice shall become due and payable on the ***** following receipt by Customer.

 

6.6                                 Disputed Invoices

 

(a)                                  If a Party disagrees with any Monthly Fees Invoice and/or Debit Note, it shall pay all undisputed amounts of such Monthly Fees Invoice and/or Debit Note (subject to adjustment for outstanding undisputed Monthly Fees Invoice and/or Debit Notes) and shall immediately notify the other Party (the “Issuing Party”) of the reasons for such disagreement, except that in the case of manifest error in computation the Party receiving the Monthly Fees Invoice or the Debit Note shall 

 

30

 

pay the correct amount after advising the Issuing Party of the error.  A Monthly Fees Invoice or Debit Note may be contested by the Party that received it or modified by the Party that sent it, by notice delivered to the other Party within a period of ***** after such receipt or sending, as the case may be.   Where a Party issues a new invoice to take into account any such modification(s), the new invoice should refer to the serial number of the disputed invoice.  Promptly after resolution of any dispute as to a Monthly Fees Invoice or Debit Note, the amount agreed to be due shall be paid by Contractor or Customer (as the case may be) to the other Party, together with interest thereon at the rate provided in Clause 6.6(b) from the date of payment to the date of repayment of the due amount.  In the event the Parties are unable to resolve the dispute as to a Monthly Fees Invoice or Debit Note the matter shall be referred to arbitration in accordance with Clause 36.2.

 

(b)           If Customer commits a breach of its obligation to pay any Fee properly due pursuant to this Agreement (for the avoidance of doubt an amount modified pursuant to Clause 6.6(a) shall not be considered properly due pending the resolution of any dispute in relation to such modification):

 

(i)                                     Contractor shall notify Customer of such default and Customer shall within ***** of receipt of such notice pay to Contractor the amount due, including interest, failing which Contractor may cease to perform its obligations hereunder and terminate this Agreement in accordance with Clause 22.3 without prejudice to any other rights Contractor may have under this Agreement or otherwise; and

 

(ii)                                  such unpaid amounts shall bear interest from due date until the date paid at a rate, compounded annually, equal to *****.

 

6.7                                 Taxes

 

(a)                                  All Taxes, due as a direct or indirect result of this Agreement or its performance, shall be the sole responsibility of the taxpayer as provided for in tax rules, and it will not be entitled to reimbursement.  For this purpose, the taxpayer shall, with respect to a Tax, not include the person required by law to withhold such Tax on payments made hereunder.  Customer shall pay the full amount of Fees and other moneys due under this Agreement without any deduction or withholding for or on account of present or future Taxes.  Notwithstanding the previous sentence, if 

 

31

 

Customer shall be required by law to deduct or withhold any Taxes from Fees or other moneys payable under this Agreement, then (i) Customer shall make the necessary deduction or withholding, (ii) Customer shall promptly pay the amount deducted or withheld to the relevant Governmental Authority, and (iii) Customer shall provide Contractor with evidence of payment of such deductions and withholdings in the form of self-certified receipts of payment.

 

(b)                                 Contractor confirms that in contemplation of executing this Agreement it has evaluated the Taxes applicable to the performance of Contractor’s obligations hereunder, and Contractor will not be entitled to an adjustment to the Fees due to an error in such evaluation.  However, if during the course of the  Agreement it is determined that such evaluation overstated Taxes imposed on Contractor with respect to Contractor’s performance of its obligations hereunder, the Fees shall be reduced or reimbursed by the amount of such overstatement.

 

(c)                                  If during the term of this Agreement there is any new Brazilian Tax, or there is any change in Brazilian Tax rates and/or change in the Brazilian Tax base that increases the Contractor’s Tax burden with respect to the performance of its obligations hereunder, then Fees and other monies due under this Agreement shall be increased in proportion to such increase in Contractor’s Tax burden at the earliest opportunity.  However, Fees and other monies due under this Agreement shall not be adjusted with respect to any new Brazilian Tax, changes in Brazilian Tax rates and/or changes in the Brazilian Tax base resulting from (i) a change in Contractor’s jurisdiction of incorporation or Tax residence or domicile after the date of this Agreement or (ii) a failure of Contractor to comply with any applicable certification, information, documentation or other reporting requirement.

 

(d)                                 If during the term of the Agreement there are any changes in any Brazilian Tax, changes in Brazilian Tax rates and/or changes in the Brazilian Tax base that reduce or extinguish or exempt the Contractor’s Tax burden with respect to the performance of its obligations hereunder, then Hire and other monies due under this Agreement shall be reduced in proportion to such reduction in Contractor’s Tax burden at the earliest opportunity.

 

(e)                                  The Contractor shall reimburse Customer all amounts paid regarding Taxes imposed with respect to the performance of Contractor’s obligations hereunder, to the extent that any of the following events has occurred:

 

32

 

(i)                                     Acknowledgment of illegality or unconstitutionality, wholly or in part, of Tax collection in administrative or judicial proceedings that the Contractor may be a party thereof;

 

(ii)                                  Judicial statement of illegality or unconstitutionality of Tax, wholly or in part, issued in final decision rendered by the Federal Supreme Court or by the Supreme Court of Justice, regarding matters that are object of declaratory actions of the Attorney General of the National Treasury, approved by the State Finance Minister, authorizing the non-filing of appeal, or to desist of appeal that had been filed;

 

(iii)                               Judicial statement of unlawfulness or  unconstitutionality of Tax, wholly or in part, issued in final decision rendered by the Federal Supreme Court through a Direct Action of Unconstitutionality  (ADIN), or a Declaratory Action of Constitutionality (ADC);

 

(iv)                              In the events provided for in sub-items (ii) and (iii) above, the obligation to reimburse on the part of the Contractor is maintained independently of any judicial and/or administrative measure that may have been taken in connection with recovery and/or compensation.

 

6.8                                 Taxes and Levies on Officers and Crew

 

Contractor shall be solely responsible for, and shall bear and pay any and all Taxes and other charges of any Governmental Authority which are imposed, levied or assessed at any time, whether under laws and regulations in effect as of the Term or enacted subsequent thereto, against or with respect to Contractor’s officers and crew, wages, salaries, or benefits earned and paid to said officers and crew, or for their or their families’ benefit.

 

6.9                                Reporting Requirements

 

Contractor shall comply with any and all governmental requirements regarding reporting, filing of returns, maintenance of books and records, and payment of Taxes.

 

6.10                           Evidence of Payment

 

Contractor shall promptly upon request provide Customer with evidence of payment of 

 

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all amounts required to be paid by Contractor under this Clause 6, including if appropriate access to originals of such evidence.  *****

 

7.                                      Bills of Lading

 

7.1                                 Bills of Lading

 

(a)                                  The Master shall be under the orders and direction of Customer as regards employment of the Vessel, agency and other arrangements, and shall sign Bills of Lading as Customer or its agents may direct (subject always to Clauses 7.3 and 27.2(a)) without prejudice to this Agreement.  Customer hereby indemnifies Contractor against all consequences or liabilities that may arise:

 

(i)                                     from signing Bills of Lading in accordance with the directions of Customer or its agents, to the extent that the terms of such Bills of Lading fail to conform to the requirements of this Agreement, or (except as provided in Clause 7.1(b)) from the Master otherwise complying with Customer’s or its agents’ orders; and

 

(ii)                                  from any irregularities in papers supplied by Customer or its agents.

 

(b)                                 If Customer, by telex, facsimile or other form of written communication that specifically refers to this Clause 7, requests Contractor to discharge a quantity of cargo either without Bills of Lading and/or at a discharge place other than that named in a Bill of Lading and/or that is different from the Bill of Lading quantity, then Contractor shall discharge such cargo in accordance with Customer’s instructions in consideration of receiving the following indemnity, which shall be deemed to be given by Customer on each and every such occasion and which is limited in value to two hundred percent (200%) of the CIF value of the cargo carried on board:

 

(i)                                     Customer shall indemnify Contractor and Contractor’s servants and agents in respect of any liability, loss or damage of whatsoever nature (including legal costs as between attorney or solicitor and client and associated expenses) which Contractor may sustain by reason of delivering such cargo in accordance with Customer’s request, provided that this indemnity shall not apply if such liability, loss or damage is a result of any act or omission of Contractor.

 

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(ii)                                  If any proceeding is commenced against Contractor or any of the Contractor’s servants or agents in connection with the Vessel having delivered cargo in accordance with such request, Customer shall provide Contractor or any of Contractor’s servants or agents from time to time on demand with sufficient funds to defend the said proceedings.

 

(iii)                               If the Vessel or any other vessel or property belonging to Contractor should be arrested or detained, or if the arrest or detention thereof should be threatened, by reason of discharge in accordance with Customer’s instruction as aforesaid, Customer shall provide on demand such bail or other security as may be required to prevent such arrest or detention or to secure the release of such vessel or property and Customer shall indemnify Contractor in respect of any loss, damage or expenses caused by such arrest or detention whether or not the same may be justified.

 

(iv)                              Customer shall, if called upon to do so at any time while such cargo is in Customer’s possession, custody or control, redeliver the same to Contractor.

 

(v)                                 As soon as all original Bills of Lading for such cargo which name as discharge port the place where delivery actually occurred shall have arrived and/or come into Customer’s possession, Customer shall produce and deliver the same to Contractor whereupon Customer’s liability hereunder shall cease;

 

provided however, if Customer has not received all such original Bills of Lading by ***** on the ***** after the date of discharge, this indemnity shall terminate at that time unless before that time Customer has received from Contractor written notice that (A) some Person is making a claim in connection with Contractor delivering cargo pursuant to Customer’s request or (B) legal proceedings have been commenced against Contractor and/or carriers and/or Customer and/or any of their respective servants or agents and/or the Vessel for the same reason.  If Customer has received such a notice, then this indemnity shall continue in force until such claim or legal proceedings are settled.  Termination of this indemnity shall not prejudice any legal rights the Party may have outside this indemnity.

 

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(vi)                              Contractor shall promptly notify Customer if any Person (other than a Person to whom Customer ordered cargo to be delivered) claims to be entitled to such cargo and/or if the Vessel or any other property belonging to Contractor is arrested by reason of any such discharge of cargo.

 

(c)                                  Contractor warrants that the Master will comply with orders to carry and discharge against one or more Bills of Lading from a set of original negotiable Bills of Lading should Customer so require.

 

7.2                                 Clause Paramount

 

Customer shall procure that all Bills of Lading issued pursuant to this Agreement shall contain, and in any event shall be deemed to contain, the following:

 

(a)                                  Subject to Clauses 7.2(b), (c) and (d) below, this Bill of Lading shall be governed by, and have effect subject to, the Carriage of Goods by Sea Act of the United Kingdom, 1971, as amended.

 

(b)                                 If there is governing legislation which applies the rules contained in the International Convention for the Unification of Certain Rules relating to Bills of Lading 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”), compulsorily to this Bill of Lading, then this Bill of Lading shall have effect subject to the Hague Visby Rules.  Nothing contained herein shall be deemed to be either a surrender by the carrier of any of his rights or immunities or any increase of any of his responsibilities or liabilities under the Hague Visby Rules.

 

(c)                                  If there is governing legislation which applies the Hague Rules compulsorily to this Bill of Lading, to the exclusion of the Hague Visby Rules, then this Bill of Lading shall have effect subject to the Hague Rules.  Nothing therein contained shall be deemed to be either a surrender by the carrier of any of his rights or immunities or an increase of any of his responsibilities or liabilities under the Hague Rules.

 

(d)                                 If there is governing legislation which applies the United Nations Convention on the Carriage of Goods by Sea 1978 (hereafter the “Hamburg Rules”) compulsorily to this Bill to this Bill of Lading, to the exclusion of the Hague Rules or Hague Visby Rules, then this Bill of Lading shall have effect subject to 

 

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the Hamburg Rules.  Nothing therein contained shall be deemed to be either a surrender by the carrier of any of this rights or immunities or an increase of any of his responsibilities or liabilities under the Hamburg Rules.

 

(e)                                  If any term of this Bill of Lading is repugnant to the Hague Visby Rules, the Hague Rules or the Hamburg Rules, as applicable, such term shall be void to that extent but no further.

 

(f)                                    Nothing in this Bill of Lading shall be construed as in any way restricting, excluding or waiving the right of any relevant Party or Person to limit his liability under any available legislation and/or law.

 

(g)                                 Contractor recognises that the Hague Rules, Hague-Visby Rules and Hamburg Rules are not applicable in Brazil, and shall therefore not apply to any obligations in such jurisdiction.

 

7.3                                 Export Restrictions

 

(a)                                  The Master shall not be required or bound to sign Bills of Lading for the carriage of cargo to any place to which export of such cargo is prohibited under the laws, rules or regulations of the country in which the cargo was produced and/or shipped.

 

(b)                                 Customer shall procure that all Bills of Lading issued under this Agreement shall contain the following clause:

 

“If any laws, rules or regulations applied by the government of the country in which the cargo was produced and/or shipped, or any relevant agency thereof, impose a prohibition on export of the cargo to the place of Discharge designated in or ordered under this Bill of Lading, carriers shall be entitled to require cargo owners forthwith to nominate an alternative discharge place for the discharge of the cargo, or such part of it as may be affected, which alternative place shall not be subject to the prohibition, and carriers shall be entitled to accept orders from cargo owner to proceed to and discharge at such alternative place.  If cargo owners fail to nominate an alternative place within seventy two (72) hours after they 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 may be affected by the prohibition at any safe place on which they or the master may in their or his absolute discretion decided and which is not subject to the prohibition, and such discharge shall constitute due performance of the contract contained in

 

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the Bills of Lading so far as the cargo so discharged is concerned”.

 

(c)                                  The foregoing provision shall apply mutatis mutandis to this Agreement, the references to a Bill of Lading being deemed to be references to this Agreement.

 

8.                                      Vessel Manager and Conduct of Vessel’s Personnel

 

8.1                                 Thome Ship Management PTE LTD is the manager of the Vessel (the “Manager”).  Contractor shall not change or replace the Manager without Customer’s prior written consent, such consent not to be unreasonably withheld.

 

8.2                                 The Manager will manage the Vessel in accordance with good ship management practice and International Standards and with a staff qualified and experienced in operating LNG carrier vessels.

 

8.3                                 In the event that Customer reasonably determines that the Manager has failed to comply with its obligations under Clause 8.2 and that Manager’s performance, if continued, would be reasonably likely to materially prejudice the operation of the Vessel under the terms of this Agreement, then Customer shall notify Contractor of its concern and of the reasons for its concern.  Contractor shall promptly take all necessary and practicable measures to rectify any such concern of Customer and notify Customer of the measures taken.  Such remedy shall include, where necessary, replacement of the Manager with an alternative Manager, who shall be approved by Customer.

 

8.4                                 If Contractor acting reasonably determines that the concern is not justified or that the Manager should not be replaced, Contractor shall notify Customer promptly, and if the Parties fail to resolve their difference to their mutual satisfaction within a period of ***** after receipt of the notice from Customer, then the dispute shall be referred to arbitration as provided in Clause 36.2.

 

8.5                                 If Customer has reasonable grounds to complain about the conduct of the Master, or any of the officers or crew, Contractor shall immediately investigate the complaint.  If the complaint proves to be well-founded Contractor shall without delay make a change in the appointments and Contractor shall communicate the results of its investigation to Customer as soon as reasonably possible.

 

9.                                      Super-Numeraries

 

9.1                                 At all times during the Term Contractor shall provide accommodation for four (4) Super-numeraries.

 

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9.2                                 Providing Customer gives reasonable notice, and subject to available accommodation, Customer may send up to six (6) Super-numeraries in the Vessel’s available accommodation upon any voyage made under this Agreement, Contractor providing provisions and all requisites as supplied to officers, except alcohol, and Customer reimbursing Contractor the cost of such provisions or requisites for each Super-numerary while on board the Vessel as part of the Operating Costs.

 

9.3                                 During such time as any Super-numeraries are on board pursuant to Clause 9.2, Contractor shall facilitate the training of each Super-numerary by competent members of the crew on the operation of the Vessel and the Regasification Equipment.  Such training shall be based on a programme to be agreed between the Parties and may include training that is onshore at the places of loading and discharging.  Contractor shall be responsible for, and Customer and its Affiliates shall not have any liability for, any actions taken by a Super-numerary during the course of any such training.

 

10.                               Vessel Temperature and LNG Retention

 

10.1                           LNG Heel

 

Except

 

(a)                                  on the Vessel’s maiden voyage under this Agreement;

 

(b)                                 following a Scheduled Drydocking or lay-up; or

 

(c)                                  when otherwise instructed by Customer,

 

Contractor undertakes that the Vessel shall always (A) when waiting to load LNG at Customer’s Facilities and (B) when arriving at an LNG loading port other than Customer’s Facilities, be in a ready-to-load condition with the average temperature of each cargo tank being either, for a membrane type Vessel, no warmer than minus one hundred and thirty degrees Celsius (-130oC) or, for a moss type Vessel (measured at the equatorial ring of each tank) no warmer than minus one hundred and ten degrees Celsius (-110oC) with the ability to maintain such temperature for a period of not less than twenty four (24) hours after the later of 00:00 hours on the scheduled loading date or of the time of tendering of notice of readiness for the loading of LNG.  Contractor, the Master and Customer shall agree, from time to time based on current experience, the quantity of LNG to be retained on board following regasification of LNG or cargo discharge for the purpose of cooling and, where applicable, propulsion on a ballast passage.  However, the Master shall at all times endeavour to keep to a minimum the 

 

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quantity of LNG retained on board following such regasification of LNG or cargo discharge;

 

provided, however, that the Master shall make such determination only after confirming the Vessel’s schedule for the receipt or delivery of LNG under any applicable LNG SPAs and any Designated Trades (as the same may vary from time to time).  If either (X) on arrival of another vessel at Customer’s Facilities from which the Vessel is required to receive a transfer of LNG or (Y) on arrival of the Vessel at a loading terminal other than Customer’s Facilities from which the Vessel is required to load LNG, the Vessel is not in a ready-to-load condition, the extra time and LNG supplied to the Vessel for the purpose of cooling the Vessel’s cargo tanks shall be for Contractor’s account unless:

 

(i)                                     the applicable LNG transfer or loading, as the case may be, is delayed on Customer’s orders;

 

(ii)                                  where the Vessel is required to receive a transfer of LNG from another vessel at Customer’s Facilities, such other vessel did not arrive at Customer’s Facilities on schedule;

 

(iii)                               where the Vessel is required to load LNG at a terminal other than Customer’s Facility, the Vessel did not arrive on schedule (as such schedule may have been amended by Customer’s orders to slow steam or Customer’s other instructions) at the relevant loading terminal due to port congestion or unfavourable weather conditions;

 

(iv)                              the amount of LNG Heel in the Vessel’s cargo tanks, as agreed by Customer and Contractor, was not enough to maintain the required temperature; or

 

(v)                                 the Vessel’s failure to be in a ready-to-load condition is due to Force Majeure affecting such Vessel.

 

LNG normally required for gassing up and cooling for loading LNG after regularly Scheduled Drydocking, its maiden voyage under this Agreement or following lay-up shall be for Customer’s account.  In all cases, even where the cost of LNG for gassing up and cooling down is for Contractor’s account, Customer will nonetheless procure the supply of all LNG required for gassing up and cooling down.

 

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10.2                           Cool-Down

 

(a)                                  Customer shall provide and pay for LNG required for cooling the Vessel’s cargo tanks and other handling systems to the temperatures necessary to commence loading only in the following circumstances:

 

(i)                                     in the event that the quantity of LNG Heel retained on board as agreed by Contractor and Customer pursuant to Clause 10.1 is not sufficient to enable the Vessel to (X) receive a transfer of LNG at Customer’s Facilities or (Y) load LNG on arrival at a loading port other than Customer’s Facilities, in each case, in a cold and ready to load condition unless such insufficiency is the result of an act or omission on the part of Contractor or fault of the Vessel; and

 

(ii)                                  when LNG is required due to:

 

(A)                              strikes, quarantine restrictions, seizure under legal process, restraint of labour, none of which arise in connection with the Vessel or crew;

 

(B)                                an act of God, act of war, lock outs, riots, civil commotions, restraint of princes, rulers or people;

 

(C)                                any period when the Vessel arrives late at the pilot station at the arrival port as a result of (a) bad weather (being any day in which the Vessel has to proceed in wind force in excess of Beaufort Force 5 for more than 12 (twelve) hours noon to noon), (b) poor visibility, (c) congested waters, (d) alterations in speed or course to avoid areas of bad weather, (e) any time spent at a waiting area following arrival or (f) the saving of life or (with Customer’s consent) property;

 

(D)                               Customer (a) changing the Scheduled Arrival Time of the Vessel, (b) ordering the Vessel to steam at any speed other than the Service Speed or (c) otherwise delaying loading of the Vessel;

 

(E)                                 return of the Vessel to the first load port after any lay-up ordered by Customer pursuant to Clause 24, after any underwater cleaning ordered by Customer, or after the Vessel has been withdrawn from service at the request or convenience of Customer as a result of 

 

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which the Vessel has been warmed up and/or gas freed; or

 

(F)                                 Customer’s breach of this Agreement.

 

(b)                                 Subject to Clause 10.2(a), Contractor shall provide and pay for LNG required for cooling the Vessel’s cargo tanks at the LNG Price in all other circumstances, including, but not limited to:

 

(i)                                     following periods of off-Hire;

 

(ii)                                  following requisition in accordance with Clause 25; and

 

(iii)                               where the LNG is required and caused by Contractor’s breach of this Agreement.

 

11.                               Pilots and Tugs

 

11.1                        Pilots, tugboats, stevedores, longshoremen or any other provider of port services, when required, shall be employed and paid for by Customer, provided always that Customer shall bear no liability for the negligence or misconduct exercised by the providers of such services and facilities, but this shall not relieve Contractor from responsibility at all times for proper stowage, which must be controlled by the Master who shall keep a strict account of all cargo loaded and discharged.

 

11.2                        Contractor hereby indemnifies Customer, its servants and agents against all losses, claims, responsibilities and liabilities arising in any way whatsoever from the employment of pilots or tugboats, stevedores, longshoremen or any other provider of port services who, although employed by Customer in accordance with Clause 11.1, shall be deemed to be the servants of and in the service of Contractor and under its instructions (even if such pilots, tugboat personnel, stevedores, longshoremen or any other provider of port services are in fact the servants of Customer, its agents or any affiliated company); provided, however, that the foregoing indemnity shall not exceed the amount to which Contractor would have been entitled to limit its liability if it had itself employed such pilots or tugboats.

 

12.                               Vessel Deployment and Operation

 

12.1                        Trading Limits

 

Subject to Clause 12.2, the Vessel shall be permitted to operate between any of the Primary Terminals and any other port in the world as Customer shall direct within 

 

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Institute Warranty Limits, as amended from time to time (and Customer shall reimburse Contractor in accordance with Clause 26.3 in relation to any additional insurance premiums, crew bonuses and other expenses incurred by Contractor where the Vessel is ordered to trade in areas where there is a war (defacto or de jure) or threat of war).  The Vessel shall not be permitted to operate or trade in contravention of any applicable United Nations Security Council resolution or other applicable Law.  If Customer directs the Vessel to any LNG loading or receiving facilities other than the Primary Terminals, shall give notice to Contractor sufficiently in advance thereof so as to enable Contractor to comply with environmental, fire prevention, health, safety and other similar regulations applicable at such other place, including any alteration or modification required to the Vessel.  The reasonable cost and the necessary time taken to comply with such regulations necessary solely to allow the Vessel to load or discharge at such other place shall be for Customer’s account.  Customer shall reimburse such costs to Contractor against presentation to Customer of appropriate invoices and supporting vouchers, except insofar as Contractor is otherwise obliged to bear such costs in accordance with this Agreement.  If the Vessel is directed by Customer to call at a port within the United States of America so that a Certificate of Financial Responsibility must be issued in respect of pollution liability, with or without security therefore, or is directed to call at a port in another jurisdiction which requires a similar certificate to be issued for pollution liability or requires a vessel response plan to be issued to the appropriate authorities in respect of potential pollution, Customer will give Contractor sufficient prior notice to enable Contractor to comply with such requirements, with actual expenses incurred by Contractor for such compliance up to a maximum of *****, such amount to be reimbursed by Customer in the corresponding amount in Reais (R$), each year to be increased yearly at a rate corresponding to the U.S. Consumer Price Index (provided by the Bureau of Labor Statistics of the US Bureau of Labor) with the cost of such compliance being for Customer’s account.

 

12.2                           Ice

 

The Vessel shall not trade in waters with a temperature below the January isotherm of minus ten degrees (-10°) Celsius.  The Vessel shall not be sent to icebound waters without Contractor’s prior consent and shall not force ice or follow ice breakers.  Despite the receipt of Contractor’s consent, if the port at which the Vessel is ordered by Customer to discharge cargo is, or could become, inaccessible owing to ice and the Master has notified Customer thereof, then Customer shall be bound to order the Vessel to an alternate ice-free port at which the Vessel can discharge the cargo.  Further, if the Master reasonably considers it dangerous for the Vessel to enter or remain at any 

 

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discharging place for fear of the Vessel being frozen in or damaged and the Master so advises Customer, Customer shall provide the Master with orders to proceed to an alternate port that is ice-free at which the Vessel can discharge the cargo.  If no such orders are received by the Master from Customer prior to the time when the Master must deviate or break ground to avoid the dangerous situations described in this Clause 12.2, Contractor shall cause the Master to proceed to the nearest safe, ice-free anchorage to await further orders from Customer.

 

12.3         Safe Places

 

Customer shall use due diligence to ensure that the Vessel is only employed between and at safe places (which expression when used in this Agreement shall include ports, berths, wharves, docks, anchorages, submarine lines, alongside vessels or lighters, bunker barges and other locations including locations at sea) where she can safely lie always afloat.  Notwithstanding anything contained in this Clause 12.3 or any other clause of this Agreement, Customer does not warrant the safety of any place (including any port or berth) to which it orders the Vessel and, except as provided in Clause 12.2, shall be under no liability in respect thereof except for loss or damage caused by its failure to exercise due diligence as aforesaid.  Subject as above, the Vessel shall be loaded and discharged at any places as Customer may direct.

 

12.4         Instructions and Logs

 

(a)                                  Customer shall from time 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 Customer or its agents may inspect as required.  The Master shall when required furnish Customer or its agents with a true copy of such log and with properly completed loading and discharging port sheets and Voyage Reports for each voyage and other returns as Customer may require.  Customer shall be entitled to make copies at Contractor’s expense of any such documents, which are not provided by the Master.

 

(b)                                 Customer may issue orders directly to the Master to slow down or speed up the Vessel, consistent with the commercially reasonable safe operation of the Vessel and its machinery as determined by the Master, on ballast and/or laden passages.  A copy of any such orders shall also be sent to Contractor.

 

12.5         Controlled Passages

 

Passages that the Vessel shall not be permitted to use shall be instructed to the Master 

 

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with Customer’s standing orders.

 

12.6                           Infected Areas and Customs

 

Contractor shall be liable for any loss of time and expense in quarantine arising from the Master’s or any of the Vessel’s officers or crew (other than any of Customer’s Personnel or any Supernumeraries) having communication or interaction with the shore at any infected area without the consent or instructions of Customer or its agents and/or any detention by customs or other authorities caused by smuggling or other infraction of local laws by the Master, officers or crew.  Contractor shall also be liable for any loss of time and expense attributable to the unavailability on board the Vessel of the appropriate certificates of inoculation/vaccination for all personnel on board, with the exception of any of Customer’s Personnel.

 

13.                               Loss of Vessel

 

Should the Vessel be lost, this Agreement shall terminate and payment of the Fees shall cease at noon on the day of her loss, or if such date of loss is unknown, at the time when the Vessel was last heard from.  Should the Vessel be a constructive total loss, this Agreement shall be deemed to terminate at noon on the date on which the Vessel’s underwriters agree that the Vessel is a constructive total loss and the payment of Fees shall cease at noon on the day that this Agreement terminates.  Should the Vessel be missing, this Agreement shall terminate and payment of the Fees shall cease at noon on the day on which she was last heard of.  Any Fees paid in advance and not earned shall be returned to Customer and Contractor shall reimburse Customer for the value of the estimated quantity of bunkers on board at the time of termination, at the price paid by Customer at the last bunkering port.  If the Vessel should be missing when a payment of Fees would otherwise be due, such payment shall be postponed until the safety of the Vessel is ascertained.

 

14.                               Off-Hire

 

14.1                           Off-Hire

 

(a)                                  On each and every occasion where the Vessel ceases to be at Customer’s disposition:

 

(i)                                     due to any damage, defect, breakdown, deficiency (whether partial or total) of, or accident to, the Vessel’s hull, boilers, machinery, equipment or cargo containment and handling facilities (including 

 

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the Regasification Equipment, tank coatings and insulation); or

 

(ii)                                  due to deficiency of personnel or stores; repairs; gas-freeing or inerting for repairs; time in and waiting to enter dry dock for repairs; overhaul, maintenance or survey; collision, stranding, accident or damage to the Vessel; or any other similar cause preventing the efficient working of the Vessel; or

 

(iii)                               due to industrial action, any default and/or deficiency of Owner, Contractor, the Master, officers or crew, including the failure or refusal or inability of the Master, officers and/or crew to perform the services required under this Agreement or breach of orders or neglect of duty on the part of the Master, officers or crew, whether as a result of a breach of orders or neglect of duty by, or as a consequence of illness or injury to, or labour disputes or strikes by, or refusal to sail on the part of, the Master, officers or crew, or any other dispute relating to Contractor’s wages or crew employment policy; or

 

(iv)                              due to deviation for the purpose of obtaining medical advice or treatment for or landing any sick or injured Person (other than a Super-numerary or a Customer’s Personnel) or for the purpose of landing the body of any Person (other than a Customer’s Personnel); or

 

(v)                                 due to any delay in quarantine arising from the Master, officers or crew having had communication or interaction with the shore at any infected area without the written consent or instructions of Customer or its agents, or to any detention by customs or other authorities caused by smuggling or other infraction of local law on the part of the Master, officers, or crew; or due to detention, delay or other interference with the Vessel attributable to the Vessel carrying or having carried stowaways; or

 

(vi)                              due to detention of or interference with the Vessel by authorities at home or abroad attributable to legal action against, or alleged or actual breach of regulations by the Vessel, Owner, Contractor, the Master, officers or crew (unless brought about by the act or neglect of Customer); or

 

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(vii)                           due to the inability of the Vessel to proceed to or enter, load, discharge, regasify LNG and leave without delay any terminal due to a failure by the Vessel to comply with Laws, regulations, physical requirements or operational practices at such terminal; or

 

(viii)                        due to pre-docking and repair procedures including warming, gas freeing and inerting (other than that required for regularly Scheduled Drydocking); or

 

(ix)                                due to Scheduled Drydocking and maintenance, maintaining, overhauling, repairing, painting, cleaning or drydocking the Vessel and submitting her for survey (it being understood that normal inerting, purging, gassing and cooling after regularly Scheduled Drydocking and after any drydocking following lay-up shall be on Customer’s time but that purging, gassing and cooling after unscheduled maintenance, drydocking, repairing, cleaning and painting shall be treated as lost time hereunder); waiting for any of the aforesaid purposes; proceeding to or from, and whilst at, any port or place for any of the aforesaid purposes; or

 

(x)                                   due to post-docking or repair procedure including inerting, purging, gassing and cooling in excess of that undertaken for normal loading; or

 

(xi)                                due to damage caused by the Vessel to any loading, discharging or regasification berths or any equipment forming part thereof, such that loading or discharging of cargo or the regasification of LNG by the Vessel thereto or therefrom is prevented; or

 

(xii)                             due to non-compliance by Owner, Contractor, the Master, officers or crew with any Law and international maritime conventions, including any Pollution Regulations and the ISPS Code; or

 

(xiii)                          due to any alterations to the Vessel required by the Classification Society or the Registry unless the time taken is within the allowance for a Scheduled Drydocking, is undertaken during a Scheduled Drydocking and does not extend the time taken for such Scheduled Drydocking beyond the relevant allowance; or

 

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(xiv)                         due to any other circumstances where the Vessel is off-Hire under this Agreement,

 

then, without prejudice to Customer’s rights under this Agreement, or otherwise, the Vessel shall be treated as “off-Hire” and no Fees shall be payable by Customer from the commencement of such loss of time until the Vessel is again ready and in an efficient state to resume her service from (if applicable) a position not less favourable to Customer than that at which such loss of time commenced including, without limitation, return to the queue position, berth or place occupied by the Vessel when she went off-Hire; provided; however, that any service given or (if applicable) distance made good by the Vessel whilst off-Hire shall be taken into account in assessing the amount to be deducted from the Fee and further provided that in the event that as a result of any time spent off-Hire the Vessel misses a convoy to transit a canal or area all time lost shall count as off-Hire.

 

The cost of all fuels, LNG Heel or vapour lost or consumed while the Vessel is off-Hire hereunder, as well as all port charges, pilotage, and other expenses incurred by the Vessel during such period or consequent to the putting into any port or place other than that to which the Vessel is bound, shall be borne by Contractor.  Should the Vessel be driven into any port or anchorage by stress of weather the Fees shall continue to be due and payable during any time lost thereby.

 

(b)                                 Contractor shall be entitled to an allowance, such allowance not be included as periods of off-Hire, of one hundred and forty four (144) hours per annum (“Off-Hire Allowance”), counted from the Fee Commencement Date until the first anniversary thereof and thereafter for each twelve (12) month period beginning on each anniversary of the Delivery Date.  The Off-Hire Allowance shall be applied in each such twelve (12) month period against the first one hundres and forty four (144) hours when the Vessel is off-Hire under this Clause 14. Notwithstanding the foregoing, the Off-Hire Allowance may not be cumulated from year to year and may only be used in the period in which it accrues.

 

(c)                                  If the Vessel fails to proceed at any Guaranteed Speed or fails to load, discharge or regasify at the guaranteed loading, discharge or regasification rates set out in Clause 17.3 and such failure arises wholly or partly from any of the causes set out in Clause 14.1(a), then, if the Vessel is unable to maintain a speed of at least ***** of the Guaranteed Speed or to load, discharge or regasify at a rate ***** of the relevant guaranteed loading, discharge or regasification rates set out in Clause

 

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17.3,  Customer shall have the right to place the Vessel off-hire. If Customer elects not to place the Vessel off-Hire and continues to use the Vessel, such failure shall result in a reduction of Fees pursuant to Clause 17.4 and the Vessel will not be off-Hire under this Clause 14.1(c).

 

(d)                                 Further and without prejudice to the foregoing, in the event of the Vessel deviating (which expression includes, without limitation, putting back or putting into any port other than that to which she is bound under the instructions of Customer) for any cause or purpose mentioned in Clause 14.1(a), the Vessel shall be off-Hire from the commencement of such deviation until the time when she is again ready and in an efficient state to resume her service from a position not less favourable to Customer than that at which the deviation commenced including, without limitation, return to the queue position, berth, or place (whichever is relevant) occupied by the Vessel when the Vessel went off-Hire; provided, however, that any service given or distance made good by the Vessel whilst so off-Hire shall be taken into account in assessing the amount to be deducted from Fees and further provided that in the event that as a result of any time spent off-Hire the Vessel misses a convoy to transit a canal or area, all time lost shall count as off-Hire.

 

(e)                                  If the Vessel’s Registry becomes engaged in hostilities, and Customer in consequence of such hostilities finds it commercially impracticable to employ the Vessel and has given Contractor written notice thereof, then from the date of receipt by Contractor of such notice until the termination of such commercial impracticability the Vessel shall be off-Hire and Contractor shall have the right to employ the Vessel on its own account.

 

(f)                                    In the event of any tank of the Vessel being unavailable for the carriage of cargo for any reason not caused by the fault of Customer, Customer shall have the option of utilising or not utilising the Vessel; provided, however, that Contractor shall have the right to effect full repairs on the Vessel subject to the consent of Customer, which consent shall not be unreasonably withheld.  In the event Customer nonetheless elects to utilise the Vessel, Fees shall be reduced pro rata during the period such tank remains unavailable for the carriage of cargo.  The amount of reduced Fees payable shall be calculated by multiplying the Daily Fee by the actual cargo capacity available divided by the Vessel’s maximum cargo capacity.

 

(g)                                 If for reasons attributable to Owner, Contractor, the Master, the Vessel or any of

 

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their respective servants, agents or representatives, (i) the Vessel delays or is delayed in vacating the berth after unloading ends and return lines have been finally disconnected and the Vessel is cleared by the applicable terminal operator for departure and (ii) as a result of the unavailability of the berth, Customer is liable for demurrage for the Vessel, then the period of such delay shall be off-Hire.

 

14.2                           Calculation of time

 

(a)                                  Time during which the Vessel is off-Hire under this Agreement shall count as part of the Term except where Customer declares its option to add off-Hire periods under Clause 2.4.

 

(b)                                 All references to “time” in this Agreement shall be references to local time except where otherwise stated.

 

14.3                          Additional Cooling

 

(a)                                  The Master shall notify Customer if he is of the opinion that the Vessel will not, on arrival at the loading port, be able to commence bulk loading within 1/2 (half) an hour after cooling of the loading arms without spray cooling on the ballast sea passage.

 

(b)                                 If as a consequence of any cause or purpose mentioned in this Clause 14 or in Clause 10 or the failure of the Master to notify Customer in accordance with Clause 14.3(a), the Vessel is not ready to load LNG at either Customer’s Facilities or any other LNG terminal with tank temperatures at such levels as to permit bulk loading to commence within 1/2 (half) an hour after cooling of the loading arms, any time lost as a consequence thereof, including any time lost in additional cooling of tanks prior to loading or any time waiting to berth, shall count as off-Hire and the cost of any LNG supplied for such additional cooling shall be paid for by Contractor at the LNG Price.

 

14.4                           Boil-Off During Off-Hire

 

(a)                                  If any LNG is lost as Boil-Off during periods of off-Hire, Contractor shall reimburse Customer for the LNG lost at the LNG Price.

 

(b)                                 Where accurate measurement of LNG lost as Boil-Off during any such off-Hire period is impossible for whatever reason, the LNG lost as Boil-Off shall be

 

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assumed to have occurred at a constant rate equal to that obtained by measurement between official gaugings of the Vessel’s cargo tanks.  Where, due to the off-Hire occurring during a ballast passage, all LNG Heel is lost as Boil-Off prior to the Vessel next commencing to load, such Boil-Off shall be deemed to have occurred at a constant rate equal to that which occurred during the Vessel’s last previous ballast voyage.

 

14.5                           Termination for Extended off-Hire

 

(a)                                  In the event that the Vessel is off-Hire for any reason other than in connection with Scheduled Drydocking for any period in excess of ***** or exceeding ***** in any period of *****, Customer shall have the option to exercise its rights pursuant to Clause 22.3, provided that if Customer elects to terminate this Agreement, such termination shall not be effective until the Vessel is free of cargo (other than LNG Heel).  This Clause 14.5 is without prejudice to any other rights or obligations of Contractor or Customer under this Agreement.  For the purposes of this Clause 14.5, in the event of partial loss of service, the period of off-Hire shall be the total period during which the Vessel is not fully efficient rather than the resulting loss of time.

 

(b)                                 The provisions of this Agreement providing for Vessel off-Hire and related off-Hire expenses shall be fully operative regardless of any due diligence Contractor or Customer may have exercised.

 

(c)                                  Contractor may not, under any circumstances, trade the Vessel for its own account during any period of off-Hire.

 

(d)                                 Nothing in Clause 14 shall affect any other provision of this Agreement stipulating loss of time for Vessel’s or Contractor’s account or otherwise providing for suspension or cessation of payment of Fees or other rights and remedies for loss or diminution of services under this Agreement.

 

15.                               Ship to Ship Transfers

 

15.1                           The loading or discharging of LNG from the Vessel at anchorage or alongside another vessel or lighter shall be allowed where there is an emergency or where Contractor has been given reasonable advance notice and has consented (such consent not to be unreasonably withheld), but always subject to the Master’s reasonable discretion that such operation is, and remains, safe.

 

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15.2                           Any ship to ship operations shall meet or exceed the latest published edition of the International Chamber of Shipping (ICS)/OCIMF Ship to Ship Transfer Guide (Liquefied Gases) and any other recommendations published by SIGTTO.  Contractor shall permit, at Contractor’s expense (any such expense to be reasonable), personnel nominated by Customer to attend on board to assist in the transhipment operation provided that the risk and liability for such operation shall always be for Contractor.

 

15.3                           For all purposes of this Agreement, any transfer of LNG at Customer’s Facilities shall not be (and shall be deemed not to be) a ship to ship transfer and shall not be subject to this Clause 15.

 

15.4                           For the avoidance of doubt, unloading terminals that include off-shore berthing and unloading facilities shall not be subject to the restrictions in this Clause 15.

 

16.                               Scheduled Drydocking and Maintenance

 

16.1                           Contractor shall at all times during the Term comply with orders and instructions from Owner in respect of:

 

(a)                                  drydocking the Vessel, cleaning and painting the Vessel’s underwater hull and overhauling the Vessel and undertaking any necessary maintenance and other necessary repairs (“Scheduled Drydocking”); and

 

(b)                                 taking the Vessel out of service for emergency repairs or unscheduled drydocking.

 

16.2                           Contractor shall take all reasonable steps to place the Vessel at Owner’s disposal for Scheduled Drydocking after the last cargo discharge as near as possible to the date agreed between Owner and Customer.

 

16.3                           If Scheduled Drydocking is carried out in a port nominated by Customer, the Vessel shall be off-Hire from the time she deviates to such port until drydocking is completed and she is in every way ready to resume Customer’s service and is at the position at which she went off-Hire or a position no less favourable to Customer, whichever she first attains; provided, however:

 

(a)                                  where Contractor exercises due diligence in gas-freeing, any time lost in gas-freeing to the standard required for entry into drydock for cleaning and painting the hull shall not count as off-Hire, whether lost on passage to the drydocking port or after arrival there (notwithstanding Clause 14 (Off-Hire)); and

 

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(b)                                 any additional time lost in further gas-freeing to meet the standard required for hot work or entry to cargo tanks shall count as off-Hire, whether lost on passage to the drydocking port or after arrival there.

 

16.4                           If Scheduled Drydocking is carried out in a port nominated by Contractor, the Vessel shall be off-Hire from the time when she is released to proceed to such port until the Vessel next presents for loading in accordance with Customer’s instructions, provided, however, that Customer shall credit Contractor with the time which would have been taken on passage at the Service Speed had the Vessel not proceeded to drydock.

 

16.5                           Any natural gas vapour lost in gas-freeing for the purposes of drydocking shall be for Customer’s account provided that during the last discharge prior to drydocking Contractor shall use its reasonable endeavours to pump out the maximum amount of cargo.

 

17.                               Representations and Warranties

 

17.1                           Contractor’s Representations

 

Contractor hereby represents and warrants to Customer that, as at the date hereof:

 

(a)                                  it is a corporation duly incorporated and validly existing and in good standing under the laws of the country of its incorporation and has the corporate power and authority to enter into and perform its obligations under this Agreement and all necessary corporate, shareholder and other action has been taken to authorise the execution, delivery and performance of the same;

 

(b)                                 this Agreement constitutes legal, valid and binding obligations applicable to it and the obligations are in full force and effect in accordance with their terms, and the delivery and performance by Contractor of this Agreement will not contravene any Law of any Governmental Authority, having jurisdiction over Contractor;

 

(c)                                  it has not taken nor to its knowledge has it omitted to take any actions which would adversely affect the enforceability of this Agreement against it or the rights of Customer under the terms of this Agreement; and

 

(d)                                 this Agreement, its execution and delivery will not conflict with or result in any breach of any terms of, or constitute a default under, any agreement or other instrument to which Contractor is a party or its property is bound.

 

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17.2                           Customer’s Representations

 

Customer hereby represents and warrants to Contractor that, as at the date hereof:

 

(a)                                  it is a corporation duly incorporated and validly existing and in good standing under the laws of the country of its incorporation and has the corporate power and authority to enter into and perform its obligations under this Agreement and all necessary corporate, shareholder and other action has been taken to authorise the execution, delivery and performance of the same;

 

(b)                                 this Agreement constitutes legal, valid and binding obligations applicable to it and the obligations are in full force and effect in accordance with their terms, and the delivery and performance by Customer of this Agreement will not contravene any Law of any Governmental Authority, having jurisdiction over Customer;

 

(c)                                  it has not taken nor to its knowledge has it omitted to take any actions which would adversely affect the enforceability of this Agreement against it or the rights of Contractor under the terms of this Agreement; and

 

(d)                                 this Agreement, its execution and delivery will not conflict with or result in any breach of any terms of, or constitute a default under, any agreement or other instrument to which Customer is a party or its property is bound.

 

17.3                           Performance Warranties

 

(a)                                  Speed

 

Throughout the term, Contractor warrants and guarantees that:

 

(i)                                     the Laden Service Speed of the Vessel shall be ***** knots;

 

(ii)                                  the Ballast Service Speed of the Vessel shall be ***** knots; and

 

(iii)                               the Minimum Service Speed of the Vessel shall be not less than ***** knots,

 

(the sub-paragraphs (i), (ii), and (iii) above, cumulatively, the “Speed Performance Warranty”).

 

(b)                                 Contractor warrants and guarantees that the Vessel is capable of steaming and, subject to Article 1 of Schedule VI, shall steam at the Laden Service Speed or Ballast Service Speed, as applicable.

 

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(c)                                  Loading and Discharge Rates

 

Throughout the Term, Contractor warrants and guarantees that the Vessel shall be capable of loading cargo as follows:

 

(i)                                     when the Vessel is loading LNG at Customer’s Facility, provided the LNG in the cargo tanks of the offloading LNG carrier is at a homogeneous temperature corresponding to a saturation pressure of ***** (***** for the Petrobras LNG composition) and provided the Vessel’s cargo tanks are colder than the tank design temperature for commencement of loading, a cargo of LNG may be loaded at the rate of at least ***** of LNG per hour at not less than ***** bar (gauge) pressure at the flange connection between ship and terminal utilising a minimum of ***** liquid loading arms (it being understood that the Vessel must be capable of processing all Boil-Off generated when loading the Vessel at the above specified flow rate of LNG); and

 

(ii)                                  when the Vessel is loading LNG at any terminal other than at Customer’s Facilities, a full cargo of LNG may be loaded within ***** if the Vessel’s cargo tanks are colder than the tank design temperature for commencement of loading, excluding the time for connecting, disconnecting, cooling down, topping up and custody transfer measurement, and provided that the loading terminal is capable of pumping at least ***** of LNG per hour to the Vessel at not less than ***** bar (gauge) pressure at the flange connection between ship and terminal utilising a minimum of ***** liquid loading arms, and provided that the terminal is capable of receiving all return vapour from the Vessel that may be generated when loading the Vessel at the above specified flow rate of LNG,

 

(sub-paragraphs (i) and (ii) above, cumulatively, the “Loading Rate Warranty”);

 

(iii)                               throughout the Term, Contractor warrants and guarantees that a full cargo of LNG may be discharged within *****, excluding the time for connecting, disconnecting, cooling down, starting up pumps, ramping up, ramping down for stripping at end of

 

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discharge and custody transfer measurement, and provided that the discharge terminal is capable of (i) receiving LNG at a rate of at least ***** of LNG per hour with a back pressure at the flange connection between ship and terminal not exceeding ***** bar (gauge) and (ii) providing sufficient return vapour to the Vessel to compensate for the displacement of the LNG being discharged from the Vessel (the “Discharge Rate Warranty”);

 

(iv)                              throughout the Term, Contractor warrants and guarantees that the Vessel shall be able to:

 

(A)                              regasify LNG and discharge regasified LNG at the Regasification Flow Rate, provided the discharge terminal is capable of receiving regasified LNG at such rates; and

 

(B)                                perform the Flow Rate Modulation in accordance with the Nomination Procedure (and that the Vessel shall be able to operate as set forth in Article 6 of Schedule VI).

 

(sub-paragraphs (A) and (B) above, cumulatively, the “Regasification Flow Rate Warranty”).  For all purposes of this Agreement, the Regasification Flow Rate shall be based upon LNG with a chemical composition of standard LNG specifications.  The actual gas flow rate shall be measured using the metering unit installed on the Vessel for such purposes.

 

17.4                           Vessel Performance Reviews and Claims

 

(a)                                  Vessel Performance Deficiency Claims

 

Any claims by Customer relating to the Vessel’s performance deficiencies shall be administered in accordance with this Clause 17.4 and Schedule VI and shall be without prejudice to any other remedies of Customer under this Agreement (including Clause 14.1(f) in relation to reduced tank capacity).  Subject to Clause 17.4(d) Contractor hereby irrevocably agrees that (a) it shall be liable for the Vessel’s performance deficiencies under this Agreement notwithstanding (i) any default or failure by Contractor to operate the Vessel or to perform its obligations as required hereunder, (ii) any other act or omission whatsoever by Contractor or (iii) any act or omission by Owner and (b) that it shall accept and promptly pay (and shall not be permitted to dispute in any manner whatsoever) any claim by

 

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Customer under this Agreement in relation to the Vessel’s performance deficiencies.  Promptly after the expiry of a Performance Period, Contractor shall provide to Customer all information, including but not limited to the information referred to in Clause 17.4(c) below, required for Customer to conduct such performance review.

 

(b)                                 Performance Review Frequency and Compensation

 

The Vessel’s actual performance shall be reviewed by Customer and compared against the Speed Performance Warranty, Loading Rate Warranty, Discharge Rate Warranty and Regasification Flow Rate Warranty approximately every ***** throughout the Term (each a “Performance Period”). The first Performance Period will commence on the Delivery Date and end on the first ***** anniversary of such date.  Each subsequent Performance Period shall be a ***** period commencing on the expiration of the previous Performance Period, except that the final Performance Period will end on the date of termination of this Agreement.  Operations or, if applicable, sea passages in progress on the last day of a Performance Period will be included with the subsequent Performance Period.  If it is found that the Vessel has failed to maintain the Speed Performance Warranty, Loading Rate Warranty, Discharge Rate Warranty or Regasification Flow Rate Warranty during the succeeding three (3) month period (or at any time during the Term), Customer shall be retroactively compensated in respect of such failings as follows:

 

(i)                                     Speed Warranty Compensation:  Subject to Articles 2(c) and 2(e) of Schedule VI, Customer is to be compensated at a rate of a sum equal to *****.  Contractor shall receive no credit or compensation if the Vessel’s performance with respect to speed is greater than the Speed Performance Warranty.

 

(ii)                                  Loading Rate Warranty and Discharge Rate Warranty Compensation:  Customer is to be compensated at ******.  Contractor shall receive no credit or compensation if the Vessel is able to load or discharge at a rate greater than the Loading Rate Warranty and the Discharge Rate Warranty.  If the loading or discharging terminal does not allow or permit the Vessel to meet the Loading Rate Warranty and the Discharge Rate Warranty, the Master shall forthwith issue a letter to the terminal protesting such conditions (which shall, if possible, be acknowledged) and shall

 

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immediately so notify Customer.  If the Master fails to issue such letter, Contractor shall be deemed to waive any rights to contest that time was lost as a result of the Vessel’s failure to comply with the Loading Rate Warranty and Discharge Rate Warranty.  Any delay to Vessel’s loading or discharge caused by shore conditions identified in Master’s letter of protest shall be taken into account in the assessment of loading and/or discharging performance.

 

(iii)                               Regasification Flow Rate Warranty Compensation:  Customer is to be compensated by a reduction ***** of the Daily Fee in the event of any interruption, failure or malfunctioning of the Vessel or its equipment which results in a failure to deliver the required daily volume of regasified LNG (in accordance with the Nomination Procedure), provided that there shall be no such reduction of the Daily Fee to the extent that (i) there is insufficient LNG on board the Vessel (other than due to excess Boil-Off or due to any fault or negligent act or omission by Contractor), (ii) Customer’s Facility is unable to receive regasified LNG or (iii) any request for delivery of regasified LNG was not made by Customer in accordance with the Nomination Procedures.  Daily Hire shall be reduced in accordance with the below *****:

 

*****

 

Notwithstanding the above, the Parties agree that Customer shall not be entitled to receive any compensation pursuant to Clause 17.4(b) for any period where the Vessel if off-Hire.

 

(c)                                  Performance Review Basis

 

The basis for determining the Vessel’s performance under Clause 17.3 shall be (i) the statistical data supplied by the Master in the voyage reports and port logs, and in the cargo logs provided by Customer (the “Voyage Reports”); (ii) the custody transfer documentation for each cargo of LNG; (iii) the measuring devices used to measure and quantify regasified LNG; and (iv) for the Regasification Flow Rate Warranty, the Vessel’s daily logs and records documenting the volume of regasified LNG discharged by the Vessel.

 

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(d)                                 Performance Claims Review

 

Customer shall provide Contractor with an opportunity to review any claim submitted by Customer under Clauses 17.3 and 17.4 and Contractor shall complete such review and provide Customer with the result thereof within ***** from the date such claim was received in writing by Contractor.  Customer may deduct from the Fees any amount to which it reasonably claims to be entitled under Clause 17.4 after the expiration of ***** from the date of Customer’s sending of a claim relating thereto to Contractor, unless, within that ***** period, Contractor provides reasonable evidence that Customer is not entitled to the proposed deduction from the Fees.  Such deduction shall be without prejudice to Contractor defending such claim or seeking a judgment or award for reimbursement of any sum Contractor contends Customer was not entitled to deduct.

 

(e)                                  Claim for Final Period

 

In the event Customer has any claim in respect of the Vessel’s performance during the final Performance Period, the amount of such claim shall be withheld from the Fees in accordance with Customer’s estimate made not earlier than ***** before the end of the Term, and any necessary adjustment after the termination of this Agreement shall be made by Contractor to Customer or Customer to Contractor, as the case may be.

 

18.                               Indemnification

 

18.1                           Subject to Clause 18.4, Contractor shall protect, defend, indemnify and hold Customer, harmless from and against any and all Damages (whether based on applicable Law, contract, equitable cause or otherwise) that may be imposed on, incurred by, or asserted against any Customer Indemnified Party arising out of, attributable to or in connection with any of the following:

 

(a)                                  any injury (including fatal injury, illness or disease) or damage to or loss of property of any Person not being a Customer Indemnified Party or Contractor Indemnified Party arising directly or indirectly from (i) the operation of the Vessel, (ii) performance of the Operation Activities or (iii) any negligent act, omission, error or other breach of duty by any Contractor Indemnified Party, in each case, regardless of whether or not the negligence, act, omission, default, error or breach by any Customer Indemnified Party caused or contributed to such Damage, unless such injury or damage to or loss of property is caused solely by any Customer Indemnified Party;

 

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(b)                                 any injury (including fatal injury, illness or disease) or damage to or loss of property of any Contractor Indemnified Party regardless of whether or not the negligence, act, omission, default, error or breach by any Customer Indemnified Party caused or contributed to such Damages;

 

(c)                                  any injury (including fatal injury, illness or disease) or damage to or loss of property of any Customer Indemnified Party arising directly or indirectly from (i) the operation of the Vessel, (ii) performance of the Operation Activities, (iii) any negligent act, omission, error or other breach of duty by any Contractor Indemnified Party, or (iv) any material misrepresentation, breach of warranty or covenant by Contractor under this Agreement, in each case regardless of whether or not the negligence, act, omission, default, error or breach of the terms of this Agreement by any Customer Indemnified Party caused or contributed to such Damages, unless such injury or damage to or loss of property is caused solely by any Customer Indemnified Party;

 

(d)                                 any failure by any Contractor Indemnified Party to comply with any Law or for any contravention of such applicable Law (including all applicable Brazilian Laws, including, but not limited to, labour, environmental, taxation, immigration and social security Laws and such other applicable Brazilian Laws in force for reasons of Brazilian public policy;

 

(e)                                  any failure by any Contractor Indemnified Party (i) any Contractor Indemnified Party to pay any Taxes relating to income or any other Taxes required to be paid by any Contractor Indemnified Party; (ii) to make any payments in respect of Taxes which are to be paid by any Contractor Indemnified Party in connection with the performance of the Operation Activities; (iii) to file Tax returns as required by applicable Law or comply with reporting or filing requirements under applicable Laws relating to Taxes; or (iv) arising by reason of any misrepresentation by or on behalf of any Contractor Indemnified Party to any Governmental Authority in respect of Taxes; and

 

(f)                                    except to the extent Clause 18.2(c) applies, any and all damage or harm to the environment (including any repair and clean-up) arising directly or indirectly from (i) the operation of the Vessel, (ii) performance of the Operation Activities,  or (iii) any negligent act, omission, error, or other breach of duty of any Contractor Indemnified Party.

 

18.2                           Subject to Clause 18.4, Customer shall protect, defend, indemnify and hold Contractor,

 

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Indemnified Parties harmless from and against any and all Damages (whether based on applicable Law, contract, equitable cause or otherwise) that may be imposed on, incurred by, or asserted against any Contractor Indemnified Party arising out of, attributable to or in connection with any of the following:

 

(a)                                  any failure by any Customer Indemnified Party to comply with any applicable Law or for any contravention of such applicable Law (including all applicable Brazilian Laws, including, but not limited to, labour, environmental, taxation, immigration and social security Laws and such other applicable Brazilian Laws in force for reasons of Brazilian public policy);

 

(b)                                 any failure by any Customer Indemnified Party (i) to pay any Taxes relating to income or any other Tax required to be paid by any Customer Indemnified Party, (ii) to make any payments in respect of Taxes which are required to be paid by any Customer Indemnified Party in connection with the performance by Customer of its duties under this Agreement, (iii) to file Tax returns as required by applicable Law or comply with reporting or filing requirements under applicable Laws relating to Taxes, or (iv) arising by reason of any misrepresentation by or on behalf of any Customer Indemnified Party to any competent Governmental Authority in respect of Taxes; and

 

(c)                                  any and all damage or harm to the environment (includuing any repair and clean-up) caused by any negligent act, ommission, error, or other breach of duty of any Customer Indemnified Party.

 

18.3                           Customer (or any Affiliate thereof) shall have the right, but not the obligation, to take any steps that are reasonably necessary in connection with remediating or cleaning up any damage or harm to the environment.  To the extent that any Contractor Indemnified Party has responsibility under this Agreement for such damage or harm, Contractor shall reminburse Customer (or its Affiliates) such remediation and/or cleanup costs and none of Customer or its Affiliates shall have any liability with respect to such remediation and/or cleanup actions; except to the extent such actions cause further damage or harm.  The performance or non-performance of any such actions by Customer (or its Affiliates) shall not relieve Contractor of any of Contractor’s obligations under this Agreement and shall be without prejudice to any other rights or remedies of any Customer Indemnified Party hereunder or otherwise.

 

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18.4                           Notwithstanding the forgoing provisions of this Clause 18:

 

(a)                                  Except as set forth in Clause 18.4(b), the aggregate payment due by either Party under this Clause 18 to any Customer Indemnified Parties or the Contractor Indemnified Parties (as the case may be) shall, in each case, not exceed the aggregate of (i) the maximum insurance cover available in respect of such risks (being no less than (A) in respect of hull and machinery cover, such values adopted by first class companies covering such risks, (B) protection and indemnity cover, the maximum level available in the protection and indemnity club group, and (C) in respect of any other insurance cover, such level of insurance generally adopted (and generally available in the international insurance market) by reasonable and prudent Persons in relation to such risks) and (ii) Fifty Five Million United States Dollars ($55,000,000).

 

(b)                                 The provisions of Clause 18.4(a) shall not apply to any Damages arising out of or in connection with (i) Clauses 18.1(a), (e) or (f), or (ii) Clauses 18.2(a), (b) or (c), provided, however, the liability of Customer Indemnified Parties pursuant to Clause 18.2(c) shall not exceed the amount of insurance available in respect of any such liability.

 

(c)                                  In all other respects, the liability of each Party under this Clause 18 shall be subject to the limitation of liability afforded by any applicable Law, including without limitation  the International Convention on Limitation of Liability for Maritime Claims or any other similar law or convention (and including any modifications, amendments and extensions thereto).

 

(d)                                 The exclusion of damages specified in Clauses 22.6(a) and (b) shall not apply in relation to Clauses 18.1(a), 18.1(f) and 18.2(c).

 

19.                               Salvage

 

19.1                           Subject to the provisions of Clause 14, all lost time and all expenses (excluding any damage to or loss of the Vessel or tortious liabilities to third parties) incurred in saving or attempting to save life or in successful or unsuccessful attempts at salvage shall be borne equally by Contractor and Customer (except to the extent reimbursed by the Vessel’s insurance); provided that Customer shall not be liable to contribute towards any salvage payable by Contractor arising in any way out of services rendered under this Clause 19.  For the avoidance of doubt, the Vessel shall remain on-Hire during any salvage operations and any Fees due shall be an expense to be borne equally by Contractor and

 

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Customer for the duration of the operation.

 

19.2                           All salvage and all proceeds from derelicts shall be divided equally between Contractor and Customer after deducting expenses in accordance with Clause 19.1 and the Master’s, officers’ and crew’s share.

 

20.                               Liens

 

20.1                           Contractor Liens

 

Contractor shall not have, or allow others (claiming through Contractor) to have, a lien on any cargoes, fuel, freights, sub-freights or sub-hires or any sums payable to Customer or others or with respect to sales of cargoes carried on the Vessel, except to the extent such lien arises by operation of Law.

 

20.2                           Customer Liens

 

Customer shall not have, or allow others (in their dealings with Customer) to have, a lien against the Vessel, except to the extent such lien arises by operation of Law.  Customer shall however have a lien on the Vessel for all monies paid in advance and not earned, all disbursements and advances for Contractor’s account, all amounts due to Customer, including without limitation the value of fuels in the Vessel’s bunker tanks and LNG Heel and vapours on board the vessel supplied or paid for by Customer, and for any damages sustained by Customer as a result of the breach of this Agreement by Contractor.

 

20.3                           Release of Lien

 

In the event that any lien shall attach by operation of law or in violation of this Clause 20, Contractor or Customer, as the case may be, shall take such steps as reasonably necessary to ensure that the lien does not interfere with the Vessel’s operations or with Customer’s right to the Vessel and its cargo and to effect prompt release of such lien prior to the enforcement thereof.

 

21.                               Loss, Damage, Delay and Force Majeure

 

21.1                           Loss, Damage and Delay

 

(a)                                  The Vessel, Master and Contractor shall not, unless otherwise expressly provided in this Agreement, be liable for any loss or damage or delay or failure arising or resulting from:

 

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(i)                                     any act, neglect or default of the Master, pilots, mariners or other servants of Contractor in the navigation or management of the Vessel;

 

(ii)                                  fire, unless caused by the actual fault or privity of Contractor;

 

(iii)                               collision or stranding unless caused by Contractor’s fault;

 

(iv)                              dangers and accidents of the sea; or

 

(v)                                 explosion, bursting of boilers, breakage of shafts or any latent defect in hull, equipment or machinery of the Vessel, unless caused by the actual fault of Contractor,

 

provided, however, that Clauses 11 (Pilots and Tugs), 14 (Off-Hire), 17(b)(iii) (Regasification Flow Rate Compensation) and 18 (Indemnification) shall not be affected by the foregoing.

 

(b)                                 Provided the Vessel complies with any requirements as to compulsory pilotage, the Vessel shall have liberty to sail with or without pilots, to tow or go to the assistance of vessels in distress and to deviate for the purpose of saving life or property.

 

(c)                                  Clause 21.1(a) shall not apply to, or affect any liability of, Contractor or the Vessel or any other relevant person in respect of:

 

(i)                                     loss or damage caused to any berth, jetty, dock, dolphin, buoy, mooring line, pipe, crane or other works or equipment whatsoever at or near any place to which the Vessel may proceed under this Agreement, whether or not such works or equipment belong to Customer; or

 

(ii)                                  any claim (whether brought by Customer or any other person) arising out of any loss of or damage to or in connection with any cargo.  Any such claim shall be subject to the provisions of Clause 7.

 

(d)                                 Contractor, while seeking to rely upon any provision of this Clause 21.1, shall, as a precondition of such reliance, give notice to Customer of the event upon which it seeks to rely.  Such notice shall be given promptly upon Contractor becoming aware that such event may occur or, if the event is unforeseeable, promptly upon

 

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becoming aware of its occurrence.  Contractor shall make every reasonable effort to remove or remedy the event and to mitigate its effects as quickly as may be possible.

 

21.2                           Force Majeure

 

Subject always to Clause 21.3, and unless expressly provided otherwise in this Agreement, none of the Vessel, Master, Contractor or Customer shall be responsible for any loss or damage or delay arising from a failure, delay or omission in performing their obligations hereunder arising or resulting from any of the following events beyond the reasonable control of the affected Party to avoid, prevent or overcome, having due regard to the reasonable economic cost of avoiding, preventing or overcoming such event (each an event of “Force Majeure”):

 

(a)                                  fire, explosion, atmospheric disturbance, lightning, earthquake, tidal wave, tsunami, typhoon, tornado, hurricane or named storms, flood, landslide, soil erosion, subsidence, washout, perils of the sea or other acts of God;

 

(b)                                 war (whether declared or undeclared), blockade, civil war, act of terrorism, invasion, revolution, insurrection, acts of public enemies, mobilisation, civil commotion, riots, sabotage or assailing thieves;

 

(c)                                  acts of princes or rulers or acts of any Governmental Authority, or compliance with such acts, that directly affect such Party’s ability to perform its obligations hereunder;

 

(d)                                 plague or other epidemics or quarantines;

 

(e)                                  freight or other embargo or trade sanctions;

 

(f)                                    strike, lockout or industrial disturbance at a port or other facility at which the Vessel calls or to which or from which the Vessel transits;

 

(g)                                 chemical or radioactive contamination or ionising radiation;

 

(h)                                 seizure of the Vessel or cargo under legal process where security is promptly furnished to release Vessel or cargo but the Vessel or cargo is not released; or

 

(i)                                     any event affecting the transit of LNG vessels through the Suez Canal at any time, excluding any failure by Contractor or Vessel to comply with the regulations of the Suez Canal.

 

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21.3                           Notice, Resumption of Normal Performance

 

Promptly upon the occurrence of an event that a Party considers may result in an event of Force Majeure, and in any event within ***** from the date of the occurrence of an event of Force Majeure, the Party affected shall give notice thereof to the other Party describing in reasonable detail:

 

(a)                                  the event giving rise to the potential or actual Force Majeure claim, including but not limited to the place and time such event occurred;

 

(b)                                 to the extent known or ascertainable, the obligations which may be or have actually been delayed or prevented in performance and the estimated period during which such performance may be suspended or reduced, including the estimated extent of such reduction in performance;

 

(c)                                  the particulars of the programme to be implemented to ensure full resumption of normal performance hereunder; and

 

(d)                                 the quantities of LNG which it reasonably expects to be able to transport during the period for which Force Majeure relief can reasonably expected to be claimed.

 

Such notices shall thereafter be supplemented and updated at weekly intervals during the period of such claimed Force Majeure specifying the actions being taken to remedy the circumstances causing such Force Majeure and the date on which such Force Majeure and its effects end.

 

21.4                           Examination

 

The Party affected by an event of Force Majeure shall, at the request of the other Party, give or procure access if they are able so to do (at the expense and risk of the Party seeking access) at all reasonable times for a reasonable number of representatives of such Party (and of Customer’s Personnel, in the case of Customer) to examine the scene of the event and the facilities affected which gave rise to the Force Majeure claim.

 

In the event of a Force Majeure affecting the Vessel, Master, Contractor or Customer, the Party affected thereby shall take all measures reasonable in the circumstances to overcome or rectify the event of Force Majeure and its consequences and resume normal performance of this Agreement as soon as reasonably possible once the event of Force Majeure has passed or been remedied; provided, however, the Parties agree that the settlement of any strike, lockout or industrial disturbance shall be in the sole discretion of

 

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the Party affected by such event of Force Majeure.

 

21.5                           Customer’s Termination for Force Majeure

 

(a)                                  Cancellation for Contractor’s Force Majeure

 

If the occurrence of an event within Clause 21.2 affecting the Vessel excuses Contractor from performing its obligations hereunder for a continuous period of *****.

 

(b)                                 Compensation

 

Neither Party shall be required to pay to the other Party any compensation whatsoever upon termination of this Agreement pursuant to this Clause 21.5.

 

21.6                           Vessel Remains on Hire

 

Notwithstanding the provisions of Clause 21.2 and the occurrence of Force Majeure events, the Vessel shall remain on hire and Fees shall continue to be paid, provided that the Vessel remains at the effective disposal of Customer during the period or periods of such Force Majeure events and the Vessel is not otherwise off-Hire during such periods.

 

21.7                           Limitations on Force Majeure

 

The exceptions stated in this Clause 21 shall not affect the provision for payment and cessation of Fees stipulated in this Agreement, the obligations of Contractor under Clause 4 in respect of the loading, handling, stowage, carriage, custody, care and discharge of cargo in this Agreement and/or Customer’s options to otherwise terminate this Agreement in accordance with its terms.

 

22.                               Default and Remedies

 

22.1                           Event of Contractor’s Default

 

Each of the following events affecting Contractor shall be an event of Contractor’s default (“Event of Contractor’s Default”):

 

(a)                                  Contractor or Owner suspends payment of its debts or is unable to pay its debts or is otherwise insolvent;

 

(b)                                 Contractor or Owner passes a resolution, commences proceedings, or has proceedings commenced against it (which are not stayed within ***** of service thereof), in the nature of bankruptcy or reorganisation resulting from insolvency,

 

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liquidation or the appointment of a receiver, trustee in bankruptcy or liquidator of its undertakings or assets;

 

(c)                                  Contractor or Owner enters into any composition or scheme or arrangement with its creditors in circumstances where Clause 22.1(a) applies;

 

(d)                                 Without Customer’s prior written consent:

 

(i)                                     the Vessel ceases to be registered under the laws of the Registry (or such other country where it has otherwise been registered by mutual agreement of the Parties);

 

(ii)                                  the Vessel ceases to hold a classification certificate with the Classification Society;

 

(iii)                               Owner or Contractor effects a mortgage, charge, lien, encumbrance, security or third party right on or over the Vessel, any insurance and any rights to receive any payment in relation to the Vessel without Customer’s consent and fails to cause a lender or financing party to enter into a quiet enjoyment agreement in a form acceptable to Customer;

 

(iv)                              the Vessel is arrested as a consequence of any claim or event (other than a claim arising by, through or under Customer), and is not released from such arrest within ***** after being arrested;

 

(v)                                 Owner transfers title to the Vessel to any other Person otherwise than in compliance with this Agreement;

 

(vi)                              Owner or Contractor fails to maintain any of the insurances it is obliged to maintain under this Agreement or in respect of the Vessel and such default is not cured within *****;

 

(vii)                           Contractor makes an assignment, transfer or novation prohibited by this Agreement;

 

(viii)                        a change of the Manager is made in a manner prohibited by this Agreement; or

 

(e)                                  Contractor is in material breach of any term or condition of this Agreement and has failed to cure such breach within a reasonable period of time, but in no event

 

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longer than ***** after receipt of notice of such breach from Customer;

 

(f)                                    Contractor or Owner fails to comply with the business principles set forth in Clause 32; or

 

(g)                                 The Vessel is off-Hire for the period described in Clause 14.5.

 

22.2                           Event of Customer’s Default

 

Each of the following events shall be an Event of Customer’s Default (“Event of Customer’s Default”):

 

(a)                                  Customer suspends payment of its debts or is unable to pay its debts when due or is otherwise insolvent;

 

(b)                                 Customer passes a resolution, commences proceedings, or has proceedings commenced against it (which are not stayed within ***** of service thereof), in the nature of bankruptcy or reorganisation resulting from insolvency, liquidation or the appointment of a receiver, trustee in bankruptcy or liquidator of its undertakings or assets;

 

(c)                                  Customer enters into any composition or scheme or arrangement with its creditors in circumstances where Clause 22.2(a) applies;

 

(d)                                 Customer is in material breach of any condition of this Agreement (other than the obligation to pay Fees or other amounts when due) and has failed to cure such breach within a reasonable period of time, but in no event longer than ***** after receipt of notice of such breach from Contractor as applicable or

 

(e)                                  Customer fails to pay Fees or other amounts when due and payable and such failure continues for *****.

 

22.3                           Remedies

 

(a)                                  In addition to any other rights herein, in any other agreement or at law, upon the occurrence of an Event of Contractor’s Default, Customer may terminate this Agreement by issuing a termination notice with immediate effect at any time after the expiry of ***** after having given notice of default (with reasonable particulars thereof) to Contractor, provided, however, that if such Event of Contractor’s Default is capable of being cured and is cured within the ***** notice period, Customer shall not terminate this Agreement.  Notwithstanding the

 

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immediately preceding sentence, termination of this Agreement shall take effect immediately upon Contractor’s receipt of Customer’s notice in respect of Clauses 22.1(a), (b), (c), (d), (vi), (vii) and (viii) or (f) (provided that, in respect of Clause 22.1(d)(vi), such notice may only be served after the specified cure period).  If this Agreement is terminated, Contractor shall immediately reimburse Customer in accordance with Clause 22.4 below, and, if requested to do so by Customer in the termination notice, as soon as reasonably practical, and in compliance with Safety and other applicable regulations, remove the Vessel from Customer’s Facilities.

 

(b)                                 Upon the occurrence of any Event of Customer’s Default (other than failure to pay Fees) Contractor may terminate this Agreement upon not less than ***** prior written notice to Customer, provided, however, that if such Event of Customer’s Default is capable of being cured and is cured within the ***** notice period, Contractor shall not terminate this Agreement.  If the Event of Customer’s Default results from a failure by Customer to pay Fees or any other amount due under this Agreement by the due date for payment, then (without prejudice to Contractor’s right to sue for recovery of any amounts due):

 

(i)                                     Contractor shall notify Customer of such failure;

 

(ii)                                  within ***** of such notification Customer shall pay to Contractor the amounts due and payable (including outstanding Fees plus any interest), failing which Contractor shall have the right at any time to withdraw the services provided hereunder and terminate this Agreement;

 

(iii)                               Customer shall indemnify Contractor in respect of any liabilities incurred by Contractor under any Bill of Lading or any other contract of carriage issued by Contractor or on behalf of Contractor as a consequence of Contractor’s withdrawal of the services provided hereunder and termination of this Agreement; and

 

(iv)                              the exercise by Contractor of any of its rights under this Clause 22.3 shall be without prejudice to any other rights or remedies Contractor may have at law.

 

(c)                                  Customer may terminate this Agreement upon the occurrence of extended Force

 

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Majeure as provided in Clause 21.5.

 

(d)                                 If this Agreement is terminated pursuant to Clause 22.3(a), Customer shall not be liable to Contractor for any amounts in respect of such termination or in respect of Customer’s obligations hereunder during the remainder of the Term (including, without limitation, the obligation to pay Fees hereunder for the period following the date of such termination).

 

22.4                           Reimbursement of Fees

 

If this Agreement is terminated prior to the expiration of the Term in accordance with any provision of this Agreement or by reason of law, Contractor shall immediately reimburse Customer for the value of any Fees paid but not earned and any other sums for which Customer is entitled to under this Agreement, as well as any damages to which Customer may be entitled if termination is due to Contractor’s fault or breach of this Agreement.

 

22.5                           Damages/Indemnification

 

(a)          (i)                                     Contractor shall (whether or not Customer terminates this Agreement) indemnify and hold harmless Customer against any and all Damages that Customer may have sustained as a result of an Event of Contractor’s Default, and Customer may deduct from Fees any such Damages incurred by Customer.

 

(ii)                               Customer shall (whether or not Contractor terminates this Agreement) indemnify and hold harmless Contractor against any and all Damages that Owner may have sustained as a result of an Event of Customer Default.

 

(b)                                 The exercise by either Party of their respective rights under this Clause 22 shall be without prejudice to any other rights or remedies that each may have accrued prior to the date thereof, and any provisions of this Agreement necessary for the exercise of such accrued rights and remedies and shall survive termination of this Agreement to the extent so required.

 

(c)                                  Customer shall be entitled (but not obliged) to advance moneys or guarantees so as to settle any of the Vessel’s accounts or Contractor’s accounts with respect to the Vessel and to secure the release of the Vessel from any arrest so as to exercise Customer’s rights hereunder; provided that Customer shall recover any expenditures made by Customer hereunder through the Monthly Fees Invoice,

 

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together with interest thereon at the rate of *****.

 

22.6                           No Consequential Losses

 

Except as otherwise expressly provided in this Agreement, neither Party shall be liable to the other Party under this Agreement as a result of any act or omission in the course of or in connection with the performance of this Agreement for or in respect of:

 

(a)                                  any indirect, incidental, consequential, exemplary or punitive loss or damages;

 

(b)                                 any loss of income or profits; or

 

(c)                                  any Damages incurred under or in connection with any other contracts between either of the Parties and any third parties, as applicable, including under any LNG SPA or Designated Trade.

 

23.                               Injurious cargoes

 

No acids, explosives or cargoes injurious to the Vessel shall be shipped and, without prejudice to the foregoing, any damage to the Vessel caused by the shipment of any such cargo effected at Customer’s request, and the time taken to repair such damage, shall be for Customer’s account; provided however that LNG shall in no circumstances be considered as an acid, explosive or injurious cargo for the purposes of this Agreement.  No voyage shall be undertaken, nor any goods or cargoes loaded, that would expose the Vessel to capture or seizure by rulers or governments.

 

24.                              Laying-Up

 

24.1                           Customer’s Option

 

Customer shall have the right (a) during the Term to require Contractor to lay up the Vessel for all or any portion of the Term at a safe place nominated by Customer, taking into account questions of maintenance access and security and (b) during any period of lay up, to require Contractor to put the Vessel back into service and, upon receipt of any notice from Customer to that effect, Contractor shall immediately take steps to restore the Vessel to service as promptly as reasonably possible.  Customer may exercise the above rights any number of times during the Term.  During any period of lay-up under this Clause 24, Contractor’s duty of maintenance under Clause 4.3 shall be reduced to the standard ordinarily applied by prudent owners to vessels of the same type in lay-up and the provisions of Clauses 14 (Off-Hire) and 17.3 (Performance Warranties) shall not apply. Until such time as it is practicable for Contractor to implement or complete all

 

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work that is required with respect to fouling (as determined during any survey conducted pursuant to Clause 24.2) to restore the Vessel to a condition it would have been in if it had not been laid-up, any reduction in the Vessel’s performance due to such fouling during a lay-up requested by Charterer under this Clause 24 shall not give rise to a performance claim against Contractor pursuant to Clause 17.4 of this Agreement.  During any period of such lay up the Fees shall be adjusted to reflect any net increases in expenditure reasonably incurred and any net savings (if any) which should reasonably be made by Contractor as a result of such lay up.

 

24.2                           Surveys on Lay Up

 

Contractor shall permit (or procure, if requested by Customer) that an in-water survey of the hull is performed (a) each time the Vessel enters into lay up and (b) immediately prior to the end of any lay up period.  The Vessel shall remain on Hire during such survey.

 

24.3                           Fee Adjustment

 

At or before the beginning of any lay up period pursuant to this Clause 24, Contractor shall provide an estimate (“Estimate”) of the savings and extra expense to Customer during the lay up period.  Upon Customer’s acceptance of such Estimate, the Fees shall be adjusted based on the Estimate and such adjustment shall apply to the Fee payments thereafter due.

 

When assessing such saving or extra expense, the items to be taken into account shall include changes in amounts expended on administration, manning, stores, spare gear, lubricating oils, P&I Club insurance (including the effect of any damage franchise), repairs and maintenance, surveys and drydocking.  As soon as practical after re-entry of the Vessel into service under this Agreement, Contractor shall make a calculation of the actual savings less actual extra expenses as aforesaid for the period of the lay up and a balancing payment shall be made by Contractor or Customer, as the case may be, assuming Customer’s agreement with Contractor’s calculations.

 

25.                               Requisition

 

25.1                           Requisition of Title

 

In the event that title to the Vessel is requisitioned or seized by any Governmental Authority (or the Vessel is seized by any Person, entity or Governmental Authority under circumstances that are equivalent to requisition of title), the Vessel shall be off-Hire

 

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during the period of requisition and, if no assignment of this Agreement can be made on terms acceptable to Customer within a period of *****, then Customer shall have the option upon written notice to Contractor to terminate this Agreement without payment of any fee whatsoever, such termination effective upon the date of such requisition.

 

25.2                           Other Requisition

 

In the event that the Vessel is requisitioned for use or seized by any Governmental Authority, Person or entity on any basis not involving or not equivalent to requisition of title, Customer shall have the option immediately to terminate this Agreement.

 

26.                               War

 

26.1                           Outbreak of War

 

If war or hostilities break out between any two or more of the following countries: United States of America, the Russian Federation, the People’s Republic of China, United Kingdom, Brazil, and the country that the Vessel is registered in, then both Contractor and Customer shall have the right to cancel this Agreement provided that such war or hostilities materially and adversely affect the trading of the Vessel for a period of at least *****.

 

26.2                           War Risks

 

(a)                                  The Master shall not be required or bound to sign Bills of Lading for any place which in his or Contractor’s reasonable opinion is dangerous or impossible for the Vessel to enter or reach owing to any blockade, war, hostilities, warlike operations, civil commotions, revolutions, act of piracy, acts of terrorists, acts of hostility or malicious damage.

 

(b)                                 If in the reasonable opinion of the Master or Contractor it becomes, for any of the reasons set out in this Clause 26.2(a) or by the operation of international law, dangerous, impossible or prohibited for the Vessel to reach or enter, or to load or discharge cargo at, any place to which the Vessel has been ordered pursuant to this Agreement (a “place of peril”), then Customer or its agents shall be immediately notified in writing or by radio messages, and Customer shall thereupon have the right to order the cargo, or such part of it as may be affected, to be loaded or discharged, as the case may be, at any other place within the trading limits of this Agreement (provided such other place is not itself a place of peril).  If any place of discharge is or becomes a place of peril, and no orders have

 

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been received from Customer or its agents within ***** after dispatch of such messages, then Contractor shall be at liberty to discharge the cargo or such part of it as may be affected at any place which it or the Master may in its or his discretion select within the trading limits of this Agreement and such discharge shall be deemed to be due fulfilment of Contractor’s obligations under this Agreement so far as cargo so discharged is concerned.

 

(c)                                  The Vessel shall have liberty to comply with any directions or recommendations as to departure, arrival, routes, ports or call, stoppages, destinations, zones, waters, delivery or any other instructions whatsoever given by the government of the state of the Registry or any other Governmental Authority or by any Person or body acting or purporting to act as or with the authority of any such Governmental Authority including any de facto Governmental Authority or by any Person or body acting or purporting to act as or with the authority of any such Governmental 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 shall not be deemed a deviation.  If by reasons of or in compliance with any such direction or recommendations the Vessel does not proceed to any place of discharge to which she has been ordered pursuant to this Agreement, the Vessel may proceed to any place which the Master or Contractor in his or its discretion select and there discharge the cargo or such part of it as may be affected.  Such discharge shall be deemed to be due fulfilment of Contractor’s obligations under this Agreement so far as cargo so discharged is concerned.

 

(d)                                 Customer shall procure that all Bills of Lading issued under this Agreement shall contain provisions equivalent to this Clause 26.2.

 

26.3                           Additional War Expenses

 

If the Vessel is ordered to trade in areas where there is war (de facto or de jure) or threat of war, Customer shall reimburse Contractor for any additional insurance premiums, crew bonuses and other expenses which are reasonably incurred by Contractor as a consequence of such orders, provided that Customer is given notice of such expenses as soon as practicable and in any event before such expenses are incurred, and provided further that Contractor obtain from its insurers a waiver of any subrogated rights against Customer in respect of any claims by Contractor under its war risk insurance arising out of compliance with such orders.

 

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Any payments by Customer under this Clause 26.3 will only be made against proven documentation.  Any discount or rebate refunded to Contractor for whatever reason, in respect of additional war risk premium shall be passed on to Customer.

 

27.                               Both to Blame Collision Clause

 

27.1                           Application to this Agreement

 

If the liability for any collision in which the Vessel is involved while performing this Agreement falls to be determined in accordance with the laws of the United States of America, the following provisions shall apply:

 

(a)                                  If the ship 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 carrier in the navigation or in the management of the ship, the owner of the cargo carried hereunder will indemnify the carrier against all loss or liability to the other or non-carrying ship of her owner in so far as such loss or liability represents loss of, or damage to, or any claim whatsoever of the owner of the said cargo, paid or payable by the other or non-carrying ship or her owner to the owner of the said cargo and set off, recouped or recovered by the other or non-carrying ship or her owner as part of their claim against the carrying ship or carrier.

 

(b)                                 The foregoing provisions shall also apply where the owner, operators or those in charge of any ship or ships or objects other than, or in addition to, the colliding ships or objects are at fault in respect of a collision or contact.

 

27.2                           Application to Bills of Lading

 

Customer shall procure that all Bills of Lading issued under this Agreement shall contain provisions in the terms at Clause 27.1(a) and (b), to be applicable where the liability for an collision in which the Vessel is involved falls to be determined in accordance with the laws of the United States of America.

 

28.                               New Jason Clause

 

28.1                           Application to this Agreement

 

General average contributions shall be payable according to the York/Antwerp Rules 1974, as amended in 1994 or any amendment thereto (“York/Antwerp Rules”), and shall be adjusted in London in accordance with English law and practice but should

 

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adjustment be made in accordance with the law and practice of the United States of America, the following provisions shall apply:

 

(a)                                  In the event of accident, danger, damage or disaster before or after the commencement of the voyage, resulting from any cause whatsoever, whether due to negligence or not, for which, or for the consequence of which, the carrier is not responsible by statute, contract or otherwise, the cargo, shippers, consignees or owner of the cargo shall contribute with the carrier in general average to the payment of any sacrifices, losses or expenses of a general average nature that may be made or incurred and shall pay salvage and special charges incurred in respect of the cargo.

 

(b)                                 If a salving ship is owned or operated by the carrier, salvage shall be paid for as fully as if the said salving ship or ships belonged to strangers.  Such deposit as the carrier or his agents may deem sufficient to cover the estimated contribution of the cargo and any salvage and special charges thereon shall, if required, be made by the cargo, shippers, consignees or owner of the cargo to the carrier before delivery.

 

28.2                           Application to Bills of Lading

 

Customer shall procure that all Bills of Lading issued under this Agreement shall contain provisions in the terms at Clause 28.1(a) and (b), to be applicable where adjustment of general average is made in accordance with the laws and practice of the United States of America.

 

29.                               Insurance

 

29.1                           Coverage, Costs and Liability Levels

 

Contractor shall procure that Owner shall effect and maintain insurance in accordance with the terms of Schedule IV and the Law throughout the Term.  On or before the Delivery Date, and thereafter on each renewal of the Compulsory Insurances, Contractor shall provide Customer with a true copy of the insurance certificates, cover notes or certificates of entry, together with confirmation from the insurers that such insurance cover will be effective on and from the Delivery Date.  Contractor agrees to provide to Customer copies of the policies of all Compulsory Insurances as soon as practicable, but not later than ***** after the Delivery Date; provided that Contractor shall be entitled to remove from such policies all information relating to premiums or other similarly commercially sensitive information and all information which is confidential as between

 

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Owner, Contractor and their insurers.

 

29.2                          Lapse of Coverage(s)

 

If there is a failure or lapse of the insurance(s) required by Clause 29.1 for any reason at any time during the Term and if such failure or lapse remains unremedied, Customer shall have the option after *****  notice to Contractor to terminate this Agreement when the Vessel is cargo-free. A termination or failure to terminate this Agreement in accordance with this Clause 29.2 shall be without prejudice to any claims for damages that Customer may have by reason of Contractor’s fault for non-coverage.

 

30.                               Assignment by Contractor

 

Contractor may not assign, in whole or in part, novate or transfer any of its rights or obligations hereunder without the prior written consent of Customer.  Contractor shall remain jointly and severally liable with any of its assignees for the performance of Contractor’s obligations hereunder.

 

31.                               Assignment by Customer

 

31.1                           Except as set forth in Clauses 31.2 and 31.3, Customer may not assign, in whole or in part, novate or transfer any of its rights or obligations hereunder without the prior written consent of Contractor.

 

31.2                           Notwithstanding the forgoing provisions of Clause 31.1, Customer may assign, in whole or in part, novate or transfer any of its rights and obligations hereunder to any Person that is not an Affiliate of Customer without the consent of Contractor; provided that Customer shall be jointly and severally liable with such Person for such Person’s payment obligations hereunder.

 

31.3                           Notwithstanding the forgoing provisions of Clause 31.1, Customer may assign, in whole or in part, novate or transfer any of its rights and obligations hereunder to any of Customer’s Affiliates without the consent of Contractor; provided that Customer shall be jointly and severally liable with such Affiliate for its obligations hereunder.

 

32.                               Business Principles

 

32.1                          Compliance with Law

 

Contractor agrees to comply with all laws, decrees, ordinances, directives and lawful regulations of any Governmental Authority in connection with this Agreement or

 

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applicable to any activities carried out by Contractor in the name, or otherwise on behalf, of Customer under the provisions of this Agreement.

 

32.2                          Proper Practice

 

Contractor shall not pay any fee, commission, rebate or anything of value to or for the benefit of any employee of Customer, nor will Contractor do business with any company knowing the results might directly benefit an employee of Customer.  Contractor shall use its best efforts not to permit any of Contractor’s employees, servants, agents or representatives to engage in any activities contrary or detrimental to the best interests of Customer.

 

(a)                                  Contractor and Customer mutually agree that, in connection with this Agreement and the activities contemplated herein, neither of them nor any of their respective employees, servants, agents, representatives or Affiliates will take action, or omit to take any action, that would cause the other Party to be in violation of any Law related to the other Party’s business practices, including the U.S. Foreign Corrupt Practices Act or any similar statute of any Governmental Authority.

 

(b)                                 Contractor agrees that all invoices rendered by Contractor to Customer, as provided for in this Agreement, shall, in reasonable detail, accurately and fairly reflect the facts about all activities and transactions handled for the account of Customer.

 

(c)                                  Notwithstanding the generality of the foregoing, Contractor represents and warrants that neither Contractor nor any officer, director, commissioner, shareholder, employee, servant, agent or representative thereof will make or cause to be made any payment, loan, or gift of any money or anything of value, directly or indirectly:

 

(i)                                     to or for the benefit of any official or employee of any Governmental Authority thereof; or

 

(ii)                                  to any other Person or entity,

 

where such payment, loan, or gift of any money or anything of value is intended to influence a decision in favour of Customer in a manner that is inconsistent with the principles set forth in this Clause 32.  Breach of this Clause 32.2 by Contractor shall constitute sufficient grounds for Customer forthwith to terminate this Agreement under Clause 22, by so notifying Contractor in writing.

 

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32.3                           Ethical Policy

 

Customer and Contractor may each from time to time advise the other Party of any ethical or business practices policy which apply to the relevant Party and the other Party shall use reasonable endeavours to adhere to such policy, provided it does not affect the safe or reliable operation of the Vessel or give rise to the other Party incurring any unnecessary cost.

 

32.4                          Customer Practice

 

Contractor acknowledges that at the time of entry into service of the Vessel, it will have been provided with a copy of Customer’s rules and instructions relating to the operation of the Vessel at Customer’s Facilities and each other terminal located in Brazil and in Brazilian waters, and undertakes that Contractor and the Manager of the Vessel shall at all times comply with the requirements and recommendations therein and as amended.

 

32.5                          SIGTTO

 

The Vessel shall perform in accordance with SIGTTO 2000 edition of liquefied gas handling principles on ships and in terminals and the 1995 edition of ICS Vessel safety guide (liquefied gases), as they may be amended from time to time.

 

32.6                          Automated Manifest System (AMS)

 

(a)                                  If the Vessel loads or carries cargo destined for the United States of America or passes through United States of America ports in transit, Contractor shall comply with the current US Customs regulations (19 CFR 4.7) or any subsequent amendments thereto and shall (unless Customer requests otherwise) undertake the role of carrier for the purposes of such regulations and shall, in its own name, time and expense:

 

(i)                                     have in place a SCAC (Standard Carrier Alpha Code);

 

(ii)                                  have in place an ICB (International Carrier Bond); and

 

(iii)                               submit cargo declarations by AMS (Automated Manifest System) to the US Customs.

 

(b)                                 Customer shall provide all necessary information to Contractor and/or its agents to enable Contractor to submit a timely and accurate cargo declaration.

 

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32.7                          Liabilities

 

(a)                                  Customer shall assume liability for and shall indemnify, defend and hold harmless Contractor against any loss and/or damage (excluding consequential and indirect loss and/or damage) and/or any expenses, fines, penalties and any other claims, including but not limited to legal costs, arising from Customer’s failure to comply with any of the provisions of this Clause 32.  Should such failure result in any delay then notwithstanding any provision in this Agreement to the contrary, the Vessel shall remain on hire.

 

(b)                                 Contractor shall assume liability for and shall indemnify, defend and hold harmless Customer against any loss and/or damage (excluding consequential and indirect loss and/or damage) and any expenses, fines, penalties and any other claims, including but not limited to legal costs, arising from Contractor’s failure to comply with any of the provisions of this Clause 32.  Should such failure result in any delay then notwithstanding any provision in this Agreement to the contrary, the Vessel shall be off-Hire for all time lost.

 

32.8                         Identity of Carrier

 

The assumption of the role of carrier by Contractor pursuant to this Clause 32.8 and for the purpose of the US Customs Regulations (19 CFR 4.7) shall be without prejudice to the identity of carrier under any bill of lading, other contract, law or regulation.

 

33.                               Drugs and Alcohol

 

Contractor warrants that it has in force an active policy covering the Vessel which meets or exceeds the standards set out in the “Guidelines for the Control of Drugs and Alcohol On Board Ship” as published by OCIMF dated June 1995 (or any subsequent modification, version, or variation of these guidelines) and in Schedule II, and that this policy will remain in force throughout the Term, and Contractor will exercise due diligence to ensure the policy is complied with.

 

34.                               Pollution and Emergency Response

 

34.1                          Contractor shall exercise all due diligence to ensure that no oil or harmful or hazardous substances of any description shall be discharged or escape accidentally or otherwise from the Vessel; and that the Vessel, its officers and crew shall comply with all international, national and state oil and air pollution and environmental laws, conventions or regulations (“Pollution Regulations”) applying in or to international waters and the

 

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territorial waters of the countries into which the Vessel may trade under this Agreement, as well as the rules set out in Schedule II.  Contractor shall produce evidence satisfactory to Customer demonstrating Contractor’s compliance with any financial responsibility requirements that may exist under any Pollution Regulations.  For the avoidance of doubt, should the Vessel, Owner, Contractor or Master breach any of the undertakings hereunder or commit any offence under any Pollution Regulations and as a result the Vessel is unavailable for service under this Agreement, the Vessel shall be off-Hire until the Vessel is again in a state to resume service under this Agreement and has regained a point of progress at least equivalent to that when the hire ceased.

 

34.2                        Contractor warrants that it is a member of the International Tanker Owner’s Pollution Federation (“ITOPF”), or any successor body of the same, and that Contractor will retain such membership during the Term.

 

34.3                        Contractor shall advise Customer of its organisational details and names of Contractor’s personnel together with their relevant telephone/facsimile/e-mail/telex numbers, including the names and contact details of Qualified Individuals for OPA 90 response, who may be contacted on a twenty four (24) hour basis in the event of oil spills or emergencies.  Contractor shall update such information and provide Customer with such revised details on a regular basis so as to ensure that Customer has up to date and correct information.

 

Notice to Contractor’s Pollution and Emergency Response Department:

 

1) Weston B. Fizgerald (Designated Person Ashore)

 

Office: +65 6 220 7291

 

Fax : +65 6 795 3123

 

Home : +65 6 898 2762

 

Mobile: +65 9 626 7520

 

2) Stephen Ainscough (General Manager Gas)

 

Office: +65 6 220 7291

 

Fax : +65 6 795 3123

 

Home : +65 6 271 6934

 

Mobile: +65 9 823 7150

 

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Address:

 

THOME SHIP MANAGEMENT PTE LTD

 

16 Raffles Quay, #43-01, Hong Leong Building, Singapore 048581

 

P.O.Box 2844 Singapore 904844

 

Email : office@thome.com.sg

 

24 hours emergency number is: +65 9 631 6304

 

Notice to Customer’s Pollution and Emergency Response Department:

 

00-55-21-3224-6555 (24 hours)

 

Marco José de Macedo Derton
 Environmental Manager
 Avenida Almirante Barroso, 81
 20030-003, Rio de Janeiro
 Brazil

 

Luis Claudio Malaguti
 Safety, Environment and Health Manager
 Avenida Almirante Barroso, 81
 20030-003, Rio de Janeiro
 Brazil

 

Tel: 00-55-21-3229-1299 / 4790
 Out of office hours: 00-55-21-8131-7459 / 00-55-21-9624-0036

 

34.4                        In the event of any spillage, discharge or release of LNG or other substance from the Vessel, Contractor shall immediately and at its cost and expense, take all necessary measures to minimize such spillage, discharge or release.  Notwithstanding the foregoing, Customer may, at its option, and upon notice to Contractor and the Master undertake measures to prevent or minimize damage in case of an accidental escape of LNG or other substance from the Vessel.  In such instances, Customer shall be deemed to take all measures on behalf of Contractor and all costs and expenses shall be for Contractor’s account.

 

34.5                        Contractor shall promptly notify Customer, and in any event not later than twenty-four (24) hours after such occurrence, in the event whether occurring at sea or in port, of any fire, explosion, accident, collision, grounding, cargo release or spill or any other reason

 

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that could result in a significant delay or serious damage to the Vessel, the Vessel’s crew or cargo.

 

35.                               ISPS Code/US MTSA 2002

 

This Clause 35 makes reference to the International Code for the Security of Ships and of Port Facilities and the relevant amendments to Chapter XI of SOLAS (“ISPS Code”) and the US Maritime Transportation Security Act 2002 (“MTSA”).

 

35.1                          (a)                                  During the Term, Contractor shall procure that both the Vessel and “the Company” (as defined by the ISPS Code) and the “owner” (as defined by the MTSA) shall comply with the requirements of the ISPS Code relating to the Vessel and “the Company” and the requirements of the MTSA relating to the Vessel and the “owner”.  Upon request Contractor shall provide documentary evidence of compliance with this Clause 35.1(a).

 

(b)                                  Except as otherwise provided in this Agreement, loss, damage, expense or delay caused by failure on the part of Contractor or “the Company”/”owner” to comply with the requirements of the ISPS Code/MTSA or this Clause 35 shall be for Contractor’s account.

 

35.2                          (a)         Customer shall provide Contractor and the Master with its full contact details and shall ensure that the contact details of all sub-charterers are likewise provided to Contractor and the Master.  Further more, Customer shall ensure that all sub-charter parties it enters into during the Term contain the following provision: “The charterer shall provide the owner of the Vessel with its full contact details and, where sub-letting is permitted under the terms of the charter parties, shall ensure that the contact details of all sub-charterers are likewise provided to the owner of the Vessel.”

 

(b)                                 Except as otherwise provided in this Agreement, loss, damage, expense or delay, caused by failure on the part of Customer to comply with this sub-Clause 35.2 shall be for Customer’s account.

 

35.3                           Notwithstanding anything else contained in this Agreement, costs or expenses related to security regulations or measures required by a port facility or any relevant authority in relation to the ISPS Code/MTSA including, but not limited to, security guards, launch services, tug escorts, port security fees or taxes and inspections, shall be for Customer’s account, unless such costs or expenses result solely from Contractor’s act or omission in which case such costs or expenses shall be for Contractor’s account.  All measures

 

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required by Contractor to comply with the security plan required by the ISPS Code/MTSA shall be for Contractor’s account.

 

35.4                           Notwithstanding any other provision of this Agreement, the Vessel shall be off-Hire where there is a loss of time caused by Contractor’s or Owner’s failure to comply with the ISPS Code/MTSA.

 

35.5                           Notwithstanding any other provision of this Agreement, the Vessel shall not be Off-Hire where there is a loss of time caused by the Customer’s failure to comply with the ISPS Code/MTSA.

 

35.6                           If either Party makes any payment, which is for the other Party’s account according to this Clause 35, the other Party shall indemnify the paying Party.

 

36.                               Law and Litigation

 

36.1                          Governing Law

 

This Agreement shall be governed by the laws of England and Wales.

 

36.2                           Arbitration

 

(a)                                  Any dispute, controversy or claim arising out of or in connection with this Agreement (a “Dispute”) shall be finally and (except as expressly provided otherwise in this Clause 36.2) exclusively determined by referral to arbitration in London, England in accordance with the rules of the London Maritime Arbitrators Association (the “LMAA Rules”), as amended, by a panel of three (3) arbitrators who shall be familiar with the maritime or LNG industry, fluent in English, familiar with the general principles of English law, and experienced in arbitrations conducted under the LMAA Rules.  Notwithstanding the above provisions, either Party may seek interlocutory relief in equity, if appropriate.  Each Party shall appoint one arbitrator, and the two so appointed shall thereafter appoint the third arbitrator.

 

Nothing herein shall prevent the Parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.

 

In cases where neither the claim nor any counterclaim exceeds the sum of ***** (or such other sum as the Parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced.

 

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(b)                                 The language of the arbitration shall be English.

 

(c)                                  The arbitrators are not authorised to make any decision or award ex aequo et bono but shall apply the governing law chosen by the Parties.

 

(d)                                 The arbitral panel shall issue its reasoned award in writing, and is authorised to award costs and attorneys’ fees to the prevailing Party as part of its award.

 

(e)                                  Any award shall be binding and enforceable against the Parties in any court of competent jurisdiction, and the Parties hereby waive any right to appeal such award on the merits or to challenge the award except on the grounds set forth in Article V of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

 

(f)                                    Notwithstanding the foregoing agreement to arbitrate, the Parties expressly reserve the right to seek provisional relief from any court of competent jurisdiction to preserve their respective rights pending arbitration, and in seeking such relief shall not waive the right of arbitration.

 

(g)                                 The Parties shall continue to perform this Agreement during arbitration proceedings and the arbitral panel shall have the authority to determine the validity of this Agreement and to arbitrate any Dispute submitted to it.

 

36.3                          Caveat

 

Notwithstanding the reference of a Dispute for resolution, the Parties shall continue diligently to observe and perform their respective obligations and duties under this Agreement as if no Dispute had arisen, except if a Party has given notice to terminate this Agreement.  This Clause 36 shall survive termination of this Agreement.

 

37.                               Confidentiality

 

37.1                          The Parties agree to keep Confidential Information strictly confidential, except in the following cases when the receiving Party shall be permitted to disclose such information:

 

(a)                                  It is already known to the public or becomes available to the public other than through the act or omission of the receiving Party; or

 

(b)                                 It is required to be disclosed under Law (provided that the receiving Party shall give notice of such required disclosure to the disclosing Party prior to the disclosure); or

 

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(c)                                  In filings with a court or arbitral body in proceedings in which the Confidential Information is relevant and in discovery arising out of such proceedings; or

 

(d)                                 To any of the following persons to the extent necessary for the proper performance of their duties or functions:

 

(i)                                     A buyer or seller or potential buyer or seller of LNG shipped or to be shipped on the Vessel only to the extent that such information disclosed is necessary for the operational purposes of the Vessel under this Agreement and does not contain any information relating to pricing or other similarly commercially sensitive information;

 

(ii)                                  An Affiliate of the receiving Party;

 

(iii)                               Employees, officers, directors and agents of the receiving Party;

 

(iv)                              Professional consultants retained by the receiving Party; and

 

(v)                                 Financial institutions advising on, providing or considering the provision of financing to the receiving Party or any Affiliate thereof,

 

Provided that the receiving Party shall exercise due diligence to ensure that no such person shall disclose Confidential Information to any unauthorized party or persons.

 

37.2                           The provisions of this Clause 37 shall survive for a period of two (2) years after the termination or expiry of this Agreement.

 

38.                               Construction

 

38.1                           This Agreement constitutes the entire agreement between the Parties bound hereby and supersedes and replaces all other written or oral negotiations, representations, warranties, agreements and undertakings made or entered into by or between Contractor and Customer with respect to the subject matter herein prior to the date hereof.

 

38.2                           No provision of this Agreement shall be interpreted or construed against a Party because that Party or its legal representative drafted the provision.

 

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39.          Notices

 

39.1         Address for Notices

 

Any notice given, or required to be given, by either Party to the other Party hereunder, shall be sent by telex, fax, registered mail, e-mail or registered airmail to the following addresses:

 

Notice to Contractor:           Gary Smith, Chief Executive Officer
 Golar Management (UK) Limited
 30 Marsh Wall
 London E14 9TP
 England

 

Tel: + 44 20 7517 8600
 Fax: + 44 20 7517 8601
 Email: gary.smith@golar.com
 Copy to: Graham Robjohns, Chief Finance Officer

 

Notice to Contractor’s Operations Department:
 Jon Rossing
 Operations Manager 
 Golar LNG 
 Bryggegata 3 
 P.O. Box 2008 - Vika 
 N-0125 Oslo 
 Norway

 

Tel: +47 32 11 41 33 
 Mobile: +47 208 00 472 
 Fax: +47 23 11 41 21 
 e-mail: jon.rossing@golar.com

 

Notice to Customer:             Antonio Eduardo Monteiro de Castro 
 Petrobras S.A.
 AV. Almirante Barroso 
 81-34th Floor 
 20031-004, Rio de Janeiro
 Brazil

 

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Tel: 00-55-21-3229-2055
 Fax: 00-55-21-3229-4703
 Email:  aemcastro@petrobras.com.br

 

Copy to:                                 Domingos José de Oliveiro
 Petrobras S.A.
 AV. Almirante Barroso
 81-33rd Floor
 20031-004, Rio de Janeiro
 Brazil

 

Tel: 00-55-21-3229-4998
 Fax: 00-55-21-3229-4852
 Email:  domingo@petrobras.com.br

 

Notice to Customer’s Operations Department:

 

Celso Luiz Silva Pereira Souza
 General Manager for Planning and Implementation of Natural Gas Logistics
 Petrobras S.A.
 Almirante Barroso 81, 36th floor
 Rio de Janeiro - RJ - Brazil
 20031-004

 

Tel:       +55-21- 3229-0152
 Mobile: +55-21-9605-7070
 Fax:  +55-21-3229-4855/4854
 E.mail:  celsopsouza@petrobras.com.br

 

or to such other addresses as the Parties may respectively from time to time designate by notice in writing.  Any failure to transmit a copy of the notice to a Party listed as entitled to receive a copy shall not in any way affect the validity of any notice otherwise properly given as provided in this Clause 39.

 

39.2         Notices in Writing

 

Any notice required to be given pursuant to this Agreement shall be deemed to be duly received only:

 

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(a)           In the case of a telex, at the time of transmission recorded on the message if such time is within normal business hours on a working day at the place of receipt, otherwise at the commencement of normal business hours on the next working day there;

 

(b)           In the case of a letter, whether delivered in course of the post or by hand or by courier, at the date and time of its actual delivery if within normal business hours on a working day at the place of receipt otherwise at the commencement of normal business on the next such working day; and

 

(c)           In the case of a facsimile or e-mail, at the time of transmission recorded on the message if such time is within normal business hours (09:00 - 17:00) in the country of receipt, otherwise at the commencement of normal business hours on the next working day at the place of receipt.

 

39.3        Communications

 

Unless otherwise expressly provided in this Agreement, all notices, approvals, agreements, rejections, requests, consents, elections, instructions, designations, authorisations, responses, and all other communications required to be given by either Contractor or Customer to the other one under or in connection with this Agreement shall be in writing and in the English language.

 

40.          Miscellaneous

 

40.1         Rights of Third Parties

 

Contractor and Customer agree that the provisions of The Contracts (Rights of Third Parties) Act 1999 shall not apply to this Agreement save and except in respect of the Master as provided for in this Agreement, which rights may be amended, varied or waived at any time by agreement between the Parties without reference to the Master.

 

40.2         Banking Days

 

Any payment which is due to be made under this Agreement on a day that is not a Banking Day shall be made on the next Banking Day in the same calendar month (if there is one) or the succeeding Banking Day (if there is not).

 

40.3         Partial Invalidity

 

If, at any time, any provision of this Agreement is or becomes illegal, invalid or

 

90

 

unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.

 

40.4         Remedies and Waivers

 

No failure or delay by either Party in exercising any right or remedy under this Agreement shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy.  The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.

 

40.5         Amendments

 

This Agreement may only be amended by written instrument signed by both Parties.

 

40.6         Counterparts

 

This Agreement may be executed in counterpart, and this has the same effect as if the signatures on each counterpart were on a single copy hereof.

 

40.7         Waiver of immunity

 

Each Party (to the fullest extent permitted by law) irrevocably and unconditionally:

 

(a)           agrees not to claim any immunity from proceedings brought against it by the other Party in relation to this Agreement, and to ensure that no such claim is made on its behalf;

 

(b)           waives all rights of immunity in respect of it or its assets; and

 

(c)           consents generally in respect of such proceedings to the giving of relief or the issue of any process in connection with such proceedings.

 

40.8         Fuel Prices

 

Where, under this Agreement, either Contractor or Customer are required to pay for or reimburse the other Party for the value of fuel oil or diesel oil, the transfer price shall be the last documented price paid for each item.  Where, under this Agreement, either Contractor or Customer are required to pay for or reimburse the other Party for the value of LNG Heel or natural gas vapours, the transfer price shall be the price for such LNG in

 

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US$ per mmBtu, as stipulated in the applicable LNG SPA or Designated Trade to which such LNG or natural gas vapours relate; provided, however, that if such LNG or natural gas vapours do not relate to one of the LNG SPAs or Designated Trades, then the price shall be the FOB price when such LNG or natural gas vapours are loaded on the Vessel (the “LNG Price”).  Notwithstanding the foregoing, the price for LNG or natural gas vapours consumed for cooling-down during the off-hire period of the Vessel shall be the FOB price.

 

40.9         Monetary Adjustments

 

The Parties agree that any adjustments to the monetary consideration that Contractor is to provide Customer under this Agreement are reasonable estimates of the damages that Customer may suffer in light of the anticipated harm associated with the event related thereto and such adjustments to the monetary consideration that Contractor is to provide Customer do not constitute penalties.

 

40.10       Intellectual Property

 

It is expressly agreed that all intellectual property rights related to the Vessel and related regasification technology, including any intellectual property rights developed by or for Owner or Contractor in relation to the Vessel, shall be or remain the sole and exclusive property of Owner, or Contractor, as the case may be.

 

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IN WITNESS WHEREOF, each Party hereto has executed this Agreement on the date first above written.

 

	
By CONTRACTOR
    	
By CUSTOMER
    
	
 
    	
 
    
	
 
    	
 
    
	
GOLAR SERVIÇOS DE OPERAÇÃO DE EMBARCAÇÕES   LIMITADA
    	
PETRÓLEO BRASILEIRO S.A.
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Gary Smith
    	
 
    	
By:
    	
/s/ Antonio Eduardo Monteiro de Castro
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
Gary Smith
    	
 
    	
Name:
    	
Antonio Eduardo Monteiro de Castro
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
Director
    	
 
    	
Title:
    	
Executive Manager Corporate Affairs
    
							

 

 

SCHEDULE I

 

OPERATING COSTS

 

1.                                      Operating Costs

 

For the period from the Fee Commencement Date to Base Date in the calendar year following the calendar year in which the Vessel is delivered to Customer under this Agreement, the Fee will be a fixed amount of ***** per day (the “Operating Costs”), adjusted annually in accordance with Clause 5.2.

 

2.                                      Escalation

 

(a)                                  The Operating Costs, except those related to the Super-Numeraries (as provided below), refer to the Operating Costs as agreed on *****, but calculated on the Base Date.  Thereafter, the Operating Costs shall be readjusted annually on each Review Date in accordance with the formula set out at Clause 5.2(a) of this Agreement.

 

(b)                                 The Super-Numerary accommodation costs shall be adjusted annually from the *****, whether increased or decreased, as a consequence of the variation in the elements that comprise the adjustment formula, set forth in Clause 5.2(b) of this Agreement.

 

(c)                                  The Super-Numerary meal costs shall be adjusted annually from *****, whether increased or decreased, as a consequence of the variation in the elements that comprise the adjustment formula, set forth in Clause 5.2(c) of this Agreement.

 

3.                                      Good Shipping Practice

 

It is agreed that the operating practices employed by Contractor and the actual operating costs incurred by Contractor should reasonably accord with the operating practices and operating costs of owners and operators of LNG tankers who operate such similar vessels in accordance with good shipping practice and in similar trades.

 

4.                                      Fees/Off-Hire

 

The Fee will not be paid if the Vessel is off-Hire.

 

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SCHEDULE II

 

HSSE REQUIREMENTS

 

TABLE OF CONTENTS

 

1. OBJECTIVE

 

2. REFERENCE AND ADDITIONAL DOCUMENTS

 

3. CONTRACTOR’S OBLIGATIONS AND RESPONSIBILITIES

 

4. INDUSTRIAL SAFETY, ENVIRONMENTAL AND OCCUPATIONAL HEALTH PLAN

 

4.1. HSSE Diagnosis

 

4.2. Planning

 

4.2.1. Safety, Environmental and Health Policy

 

4.2.2. Aspect and Danger Study and Impact and Risk Assessment

 

4.2.3. legal adequacy

 

4.2.4. Licenses and Certificates

 

4.2.5. Aims and Objectives

 

4.2.6. Safety, Environmental And Health Management Programs

 

4.2.7. Environmental Requirements

 

4.2.8. Organization And Cleaning

 

4.3. Implementation and Execution

 

4.3.1. HSSE Training

 

4.3.2. Organizational Structure and Responsibilities

 

4.3.3. Engagement and Communication

 

4.3.4. Documentation

 

4.3.5. Data and Document Control

 

4.3.6. Rules and Procedures for Operational Control

 

4.3.7. Emergency Assistance Plan

 

4.3.8. Investigation And Analysis Of Accidents, Incidents And Deviations

 

 

B-1

 

4.3.9. Service Suspension due to HSSE Risks

 

4.4. Performance Evaluation and Monitoring

 

4.4.1. HSSE Reacting Indicators

 

4.4.2. HSSE Proactive Indicators

 

4.4.3. Inspection, Maintenance and  Calibration Of Critical Equipment

 

4.4.4. Handling of Accidents, Incidents and Exceptions

 

4.5. Continuous Improvement

 

4.5.1. Auditing of HSSE and Behavior Managing System

 

4.5.2. Customer HSSE Auditing

 

4.5.3. Critique by Higher Management

 

5. INSPECTION AND PENALTIES

 

6. SUBCONTRACTING

 

7. ADDITIONAL CONDITIONS

 

7.1. Deadline for Documentation Delivery

 

7.2. Limitations

 

7.3. Documentation Presentation

 

8. ATTACHMENTS

 

A.  Standard Form of HSSE Training And Refreshment Program

 

B. Standard Form of Request For Accreditation Of PT (Work Permit) Requester

 

C.  Ral Standard Form

 

D. CADO Standard Form

 

E. CAT Standard Form

 

F. Rem Standard Form

 

G. RTA Standard Form

 

H. Rpa Standard Form

 

HSSE CONTRACTUAL REQUIREMENTS - INDUSTRIAL SAFETY, ENVIRONMENTAL PROTECTION AND OCCUPATIONAL HEALTH FOR CONTRACTORS.

 

B-2

 

1. OBJECTIVE

 

1.1. These requirements specify the obligations and the responsibilities of the CONTRACTOR, and establish the guidelines and procedures concerning HSSE activities - industrial safety, Environment and occupational health, that must be complied with, with the purpose of protecting CUSTOMER’S and CONTRACTOR’S employees or visitors, equipment and premises, and promote the preservation of the environment and the work capacity of their employees, as a result of the services contracted herein.

 

1.2. CUSTOMER’S HSSE management, through their representatives, shall assist in the inspection of the contract, and may, if needed, act directly as CUSTOMER’S Inspection Agent, as a means of guaranteeing that CONTRACTOR complies with his obligations relating to industrial safety, environmental protection and occupational health.

 

2. REFERENCE AND ADDITIONAL DOCUMENTS

 

2.1. In addition to the requirements in this Attachment, the CONTRACTOR shall meet the requirements of the following documents:

 

a) HSSE Aspects in the Federal Constitution, Laws, Decrees, Ordinances, Regulation Rules, and Resolutions in the Federal, State and Municipal spheres applicable to their activity;

 

b) CUSTOMER’S HSSE rules and operation standards, and ABNT’s Technical Rules — Brazilian Association of Technical Rules, applicable to their activity.

 

c) Safety rules from the Navy, Department of Labour and the Federal Environmental Department of Brazil (“Ibama”).

 

3. CONTRACTOR’S OBLIGATIONS AND RESPONSIBILITIES

 

3.1. CONTRACTOR, upon signing the Agreement with CUSTOMER, undertakes to fully comply with the present requirements and all work Regulations and Procedures concerning HSSE in force at CUSTOMER, including those in the CUSTOMER premises as well as those outside CUSTOMER, and will allow wide and total inspection of their premises and services, by CUSTOMER’S REPRESENTATIVES.

 

3.2. CONTRACTOR is responsible for the actions of their employees and the employees of their SUBCONTRACTORS, and for the civil and criminal consequences resulting from non-compliance of any HSSE Laws, Rules and Regulations in force in the country.

 

3.3. CONTRACTOR shall select and instruct their employees, so that all may be capable of reading and interpreting safety texts, messages and signs.

 

B-3

 

4. INDUSTRIAL SAFETY, ENVIRONMENTAL AND OCCUPATIONAL HEALTH PLAN

 

4.1. HSSE DIAGNOSIS

 

4.1.1. CONTRACTOR shall submit to CUSTOMER’S REPRESENTATIVES, before the beginning of the services at a date to be specified by the CUSTOMER’S REPRESENTATIVES, their industrial safety, environmental and occupational health plan, observing and consolidating the sub-items listed below, whose contents are requirements of the present contract:

 

4.2. PLANNING

 

4.2.1. SAFETY, ENVIRONMENTAL AND HEALTH POLICY

 

4.2.1.1. CONTRACTOR shall present their HSSE Policy and their means of communication to employees and policy control.

 

4.2.2. ASPECT AND DANGER STUDY AND IMPACT AND RISK ASSESSMENT

 

4.2.2.1. CONTRACTOR shall plan in advance as necessary, all activities to be developed.

 

4.2.2.2. CONTRACTOR shall identify aspects and danger, as well as assess impacts and risks, including in critical systems, taking into consideration local safety conditions, organization and structure of the area where the activities will be developed, and implement actions relating to prevention and control.

 

4.2.2.3. CONTRACTOR shall identify the eventual impacts that their activities may cause to communities and implement actions relating to prevention and control.

 

4.2.3. LEGAL ADEQUACY

 

4.2.3.1. CONTRACTOR shall present device for identification, update, interpretation (development in technical requirements), and for control of legal requirements (legislation, license conditions and similar ones) regarding Safety, Environment and Health.

 

4.2.3.2. CONTRACTOR shall meet all legal requirements applicable to their activity and premises, in particular to the legislation and rules of the Navy, Department of Labour and the Federal Environmental Department of Brazil (“Ibama”).

 

4.2.3.3. CONTRACTOR shall implement actions for the handling of nonconformities relating to legal adequacy of Safety, Environment and Health.

 

4.2.3.4. CONTRACTOR when making proof of the compliance with the Law shall observe the specifications below:

 

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4.2.3.4.1. NR-04-SESMT (Normative Regulation No. 04 on Specialized Safety Engineering and Work-Related Medical Service)

 

4.2.3.4.1.1. The CONTRACTOR, when providing services in CUSTOMER’S operational areas, will install SESMT pursuant to NR-04, to attend Degree of Risk 4.

 

4.2.3.4.1.2. When services are rendered on their premises, CONTRACTOR shall install SESMT pursuant to NR-04, to attend the Degree of Risk inherent to the main activity and to the total number of employees on the premises (registered company).

 

4.2.3.4.1.3. Notwithstanding the provisions of NR-4, should the total number of workers be less than 50 (fifty), the CONTRACTOR shall have at least 1 (one) Work safety Technician at each CUSTOMER base of operations where the VESSEL is placed.

 

4.2.3.4.2. NR-05_CIPA (Normative Regulation No. 05 regarding Internal Accident Prevention Committee — “CIPA”)

 

4.2.3.4.2.1. Attendance by the CONTRACTOR’S CIPA president or his substitute is mandatory at CUSTOMER’S CIPA meetings, when called upon to do so.

 

4.2.3.42.2. The CONTRACTOR, when not qualified pursuant to Item 1 of this NR, must obligatorily appoint an employee to be responsible for compliance with the objectives hereof, and who must obligatorily attend the CUSTOMER CIPA meetings.

 

4.2.3.4.3. NR-06 - EPI (Normative Regulation No. 06 regarding Individual Protection Equipment - “EPI”)

 

4.2.3.4.3.1. The CONTRACTOR is responsible for selecting and technically specifying the EPI based on the risks inherent to the services to be performed, said EPI to be effective and efficient to assure the preservation of workers’ health from the risks of the work environment in which work will be carried out, the particularities of CUSTOMER’S installations and the levels to which workers may be exposed to be fully observed.

 

4.2.3.4.3.2. The lack of EPI, or the use of non-qualified safety equipment or the use of inadequate EPI being ascertained, it is upon the CONTRACTOR to remedy such non-conformity immediately or to remove the employee from exposure to aggressive agents, and to adopt the measures they consider necessary for the preservation of the workers’ integrity and assure continuity of the services, CONTRACTOR not being exempt from the applicable contractual sanctions.

 

4.2.3.4.3.3. When applicable, CONTRACTOR is to supply work apparel to all their employees free of charge, in type and quantity compatible with the services to be performed, the minimum being two sets per employee.

 

4.2.3.4.4. NR-09_ PPRA (Normative Regulation No. 09 regarding Environmental Risk Prevention Program — “PPRA”)

 

4.2.3.4.4.1. The CONTRACTOR shall prepare their PPRA and present it to CUSTOMER prior to the inception of the contract.

 

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4.2.3.4.4.2. The CONTRACTOR, when working on CUSTOMER premises, shall adapt their PPRA to the environmental risks present, said risks to be informed upon request.

 

4.2.3.4.5. NR-07_ PCMSO (Normative Regulation No. 07 regarding Medical And Occupational Health Control Program — “PCMSO”)

 

4.2.3.4.5.1. The CONTRACTOR shall prepare a PCMSO, and present it to CUSTOMER prior to the inception of the contract.

 

4.2.3.4.5.2. In addition to medical and complementary exams as defined in NR-7, all employees shall be subjected to dental examinations at the same time as the ASO examinations.

 

4.2.3.4.5.3.  (The employee will be considered qualified for offshore work when, after submitting to admission, periodic, change of activity, return to work exams, does not show pathological alterations described below. The employee will be considered qualified if, after ongoing the examinations, does not show:

 

a) infectious, contagious or parasitic illnesses;

 

b) neurological and psychiatric disturbances;

 

c) evident symptoms of cardiovascular and respiratory disease;

 

d) endocrine and metabolic illnesses without laboratory control, including obesity, with Body Mass Index equal to or greater than 32 (thirty-two);

 

e) immunological disturbances

 

f) congenital anomalies that may compromise the function of organs or systems;

 

g) psychosis

 

h) neuroses that may impair functional performance;

 

i) epilepsy;

 

j) serious visual deficiency;

 

k) chronic and evolutionary cardio-pulmonary illness;

 

l) insulin-dependent diabetes;

 

m) DPOC — Chronic Obstructive Pulmonary disease with evident symptoms.

 

n) advanced periodontitis (mobility III), deep dental cavities (affecting the pulp), dental foci (cysts and abscesses) and lesions caused by cancer.

 

4.2.3.4.5.4. Such restrictions do not constitute discrimination, and aim at protecting the physical integrity of employees performing activities in an offshore environment.

 

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4.2.3.4.5.5. The employee that does not meet the minimum health requirements pursuant to 4.2.3.4.5.3, may be considered fit for work after concluding the respective treatments.

 

4.2.3.4.5.6. The employee disqualified for reasons of the illnesses below, will NOT undergo a new qualification process:

 

a) congenital anomalies that may compromise the function of organs or systems;

 

b) psychosis;

 

c) neuroses that may impair functional performance;

 

d) epilepsy;

 

e) serious visual deficiency;

 

f) chronic and evolutionary cardio-pulmonary illness;

 

g) insulin-dependent diabetes;

 

h) DPOC — “Chronic Obstructive Pulmonary” disease with evident symptoms.

 

4.2.3.4.5.7. Once the requirements of sub-item 4.2.3.4.5.3. have been met, the employees will be registered with SISPAT (Integrated Asset Safety System) or other equivalent program, and the validity of such registration will be for a maximum of 12 (twelve) months.

 

4.2.3.4.5.8. The qualified (fit) employee may, within the period of validity, lose said qualification whenever an audit ascertains non-compliance with sub-item 4.2.3.4.5.3.

 

4.2.3.4.5.9. The CONTRACTOR will immediately inform Inspection of the list of disqualified employees following periodic or dismissal examinations by forwarding a copy of the ASO —“Occupational Health Certificate” of all employees.

 

4.2.3.4.5.10. Without cost to CUSTOMER, the CONTRACTOR shall effect the immediate substitution of the employee whose health conditions do not meet the requirements of health qualification.

 

4.2.3.4.6. NR-10 (Normative Regulation No. 10, regarding Electrical Installations And Services Safety)

 

4.2.3.4.6.1. The CONTRACTOR shall maintain temporary or permanent in conformity with legislation in force and CUSTOMER procedures.

 

4.2.3.4.7.  NR-15 (Normative Regulation No. 15, regarding Unhealthy Activities And Operations)

 

4.2.3.4.7.1. In the event the adoption of administrative, work organization, general, or collective or individual measures do not provide full protection against professional and work-related illnesses individual health reports must be prepared by a legally qualified professional, considering the activities performed, characteristics of the process, work

 

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environment, work shifts, characteristics of physical, chemical and biological agents and, where applicable, the results of quantitative evaluations evidencing the intensity of such agents, in addition to other pertinent information pursuant to NR-15.

 

4.2.3.4.7.2. The CONTRACTOR shall forward such reports to Inspection for their information and analysis of CUSTOMER before being submitted to the DRT or the INSS.

 

4.2.3.4.8. NR-16 (Normative Regulation No. 16, regarding Hazardous Activities And Operations)

 

4.2.3.4.8.1. It is upon the CONTRACTOR to prepare technical hazard reports to be issued by legally qualified professionals, considering hazardous activities and operations with the presence of flammable and explosive substances, as per NR-16 and, in the case of electric power and ionizing radiation pertinent legislation must be considered.

 

4.2.3.4.8.2 It is upon the CONTRACTOR to issue technical hazard reports, classifying areas or activities to be performed under hazardous conditions.

 

4.2.3.4.8.3. The CONTRACTOR shall forward the hazard reports to Inspection for CUSTOMER’S information and analysis prior to submitting them to the DRT or the INSS.

 

4.2.3.4.9. NR-23 (Normative Regulation No. 23, regarding Fire Protection)

 

4.2.3.4.9.1. The CONTRACTOR shall maintain the installations and work environment under their responsibility in accordance with the technical fire protection and firefighting standards in force, in addition to those contained in state and municipal legislation and in CUSTOMER’S standards.

 

4.2.3.4.9. NR-30 (Normative Regulation No. 30, regarding Occupational Health And Safety Regulations For Work On Water)

 

4.2.3.4.9.1. The CONTRACTOR shall provide evidence of the implementation of the On-Board Occupational Health and Safety Group —GHSSE pursuant to NR-30, focusing on the services object of the Agreement and on the environments in which said services will be performed.

 

4.2.3.5. TRAFFIC OF VEHICLES

 

4.2.3.5.1. CONTRACTOR shall guarantee that their vehicles are operated by professionals trained in defensive driving, in accordance with the Brazilian Traffic Code, and that such vehicles, in order to  enter CUSTOMER premises, shall be duly authorized by the Property Safety Department

 

4.2.3.6. TRANSPORTATION OF PERSONS AND MATERIALS

 

4.2.3.6.1. CONTRACTOR shall prohibit the transporting of persons in inadequate areas of vehicles, such as cans, bodies, forks of forklifts, etc., facilitating the possibility of falls and other risks, as well as the simultaneous transporting of persons and cargos in the same compartment of the vehicle.

 

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4.2.3.6.2. CONTRACTOR shall have, for the transporting of persons and materials, a driver qualified in defensive driving and first-aid.

 

4.2.3.6.3. CONTRACTOR shall, for the transporting of employees with health impairments caused by illness or accident, use, of necessity, a vehicle that is adequate and suitable for the employee’s health condition, indicated by a health professional.

 

4.2.3.6.4. DECREE 96.044 — Brazilian National Regulation on Transportation of Dangerous Goods.

 

In addition to the provisions set forth in the Brazilian National Regulation on Transportation of Dangerous Goods, CONTRACTOR shall also comply with the provisions in the following sub-items below.

 

4.2.3.6.4.1. CONTRACTOR shall comply with the Rules for Transportation of Dangerous Goods in vessels, in accordance with the IMDG-Code (International Maritime Dangerous Goods Code), including Brazilian Navy rules.

 

4.2.3.6.4.2. CONTRACTOR shall, for the transportation of radioactive cargo, comply with the rules established by the CNEN — Brazilian National Council on Nuclear Energy.

 

4.2.3.6.4.3. CONTRACTOR shall, for the transportation of controlled goods, comply with the specific rules of the Federal Police, as well as with CUSTOMER standards, for the operation unit where they are performing their activity.

 

4.2.3.6.4.4. CONTRACTOR shall make arrangements for specific training of all employees involved in transporting dangerous cargos.

 

4.2.4. LICENSES AND CERTIFICATES

 

4.2.4.1. CONTRACTOR shall present the CUSTOMER’S REPRESENTATIVES under this contract all mandatory licenses and certificates relating to industrial safety, environment and occupational health, in accordance with the nature of the CONTRACTOR’S activity and pertinent legislation.

 

4.2.5. AIMS AND OBJECTIVES

 

4.2.5.1. CONTRACTOR shall present the CUSTOMER’S REPRESENTATIVES under this contract an action plan for the compliance of the HSSE aims and objectives established in the contract.

 

4.2.6. SAFETY, ENVIRONMENTAL AND HEALTH MANAGEMENT PROGRAMS.

 

4.2.6.1. CONTRACTOR shall implement HSSE Management Programs, focusing on employee’s safety and activities, environmental protection and conservation, and employee quality of life.

 

4.2.6.2. CONTRACTOR shall implement a suggestion programme in respect with HSSE for its employees.

 

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4.2.7. ENVIRONMENTAL REQUIREMENTS

 

4.2.7.1. CONTRACTOR shall present Environmental Program, contemplating possible modifications in the work environment due to remedial activities and actions in order to revert impacts.

 

4.2.7.2. CONTRACTOR shall present a Residue Management and Selective Collection Plan, in anticipation of the residues generated by the activity (recyclable, regular, dangerous, and health), as well as measures relating to the collection, packaging, transportation, treatment and final discarding.

 

4.2.7.3. CONTRACTOR shall ensure that, during the handling of each type of residue, the basic safety procedures will be observed, and that employees will utilize adequate EPI’s.

 

4.2.7.4. CONTRACTOR shall comply with procedures in the latest version of the CUSTOMER Residue Management Manual (MGR), as well as with ANVISA stipulations, for residue discarding, whenever the activity is being performed within (National Agency of Sanitation Surveillance) CUSTOMER’S premises.

 

4.2.7.5. CONTRACTOR shall present the CUSTOMER’S REPRESENTATIVES evidence of a residue monitoring system, from its generation up to its final discarding, including:

 

a) copy of environmental licenses of both transporter and receiver, covering the specific generated residues;

 

b) copy of residue manifest;

 

c) copy of residue inventory.

 

4.2.7.6. Materials that are considered useless, owned by CONTRACTOR, such as paper, cans, plastic and other residues, must have appropriate purpose, and specific programs for selective collection must be used.  Or, when not practical, they should be discarded in accordance with legislation or written procedures issued by environmental authority, manufacturer or by the CUSTOMER’S REPRESENTATIVES.

 

4.2.7.7. CONTRACTOR shall ensure that the standards for effluents disposal meet with the provisions set forth in rules and  legislation in force.

 

4.2.7.8. CONTRACTOR shall present to the CUSTOMER’S REPRESENTATIVES, when requested, evidence of an effluent monitoring system, including:

 

a) copy of technical report relating to evidence analysis of effluent disposal parameters within the established limits.

 

4.2.7.9. CONTRACTOR shall ensure that standards for gas emission of their vehicles meet with the established limits and standards set forth in rules and legislation in force.

 

4.2.7.10. CONTRACTOR shall present to the CUSTOMER’S REPRESENTATIVES, when requested, evidence of a gas emission monitoring system for diesel vehicles and equipment, including:

 

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a) copy of auto-inspection for gas emission plan;

 

b) copy of monitoring of gas emission.

 

4.2.7.11. CONTRACTOR shall implement device for incentive to use optimization of such items as water, energy and materials.

 

4.2.7.12. The transportation and final disposal of materials, residues, effluents or emissions generated by the contracted services shall be on the account of the CONTRACTOR.

 

4.2.7.13. CONTRACTOR shall know and have influence on their employees and subcontractors in connection with the complete process of final disposal of the generated residues.

 

4.2.7.14. CONTRACTOR shall be responsible for indemnification of all costs and services necessary for environmental recovery resulting from the unwanted impacts caused by CONTRACTOR, including civil and criminal liabilities due to CONTRACTOR’S willful misconduct or fault or those of their  employees or subcontractors

 

4.2.8. ORGANIZATION AND CLEANING

 

4.2.8.1. CONTRACTOR shall keep the premises and the work environment under their responsibility in adequate tidiness, order and cleanness, in order to ensure the safety and health of employees, and conservation of the environment.

 

4.3. IMPLEMENTATION AND EXECUTION

 

4.3.1. HSSE TRAINING

 

4.3.1.1. CONTRACTOR shall present, before the beginning of the services, an HSSE Training and Recycling Program for all their employees, including a device for efficiency evaluation and training control, compatible with the aspects and impacts relating to their activities, and Attachment A may be used as a standard.

 

4.3.1.2. INDUSTRIAL SAFETY TRAINING

 

4.3.1.2.1. The CONTRACTOR shall, for services to be rendered on CUSTOMER’S premises, program obligatory training in Industrial Safety; BST-Basic Safety Training for employees working offshore, or BSO-Basic Onshore Training for employees working onshore, prior to the beginning of activities, and considering the peculiarities and risks existent in the work areas, as established in the standard for MEETING THE SAFETY, ENVIRONMENTAL AND HEALTH TRAINING NEEDS OF OWN EMPLOYEES, CONTRACTORS’ EMPLOYEES, AND TRAINEES, issued by the operating unit in which they are performing their activities.

 

4.3.1.2.2. All employees who, after having undergone the obligatory training, are registered with SISPAT — Contractors’ Data Management System or equivalent system at the operating unit in which their activities are being performed will be considered Qualified in Industrial Safety and fit for work, and will have access to the areas.

 

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4.3.1.2.3. The validity of registry with SISPAT or equivalent will be of 4 (four) years for training focused on maritime activities, 5 (five) years for activities focused on shore activities, and may be changed by CUSTOMER’S at any time to adjust the workers’ training profiles to their needs.

 

4.3.1.2.4. CONTRACTORS’ and SUBCONTRACTORS’ employees will have their registrations in Industrial Safety at SISPAT or equivalent cancelled whenever they suffer more than 1 (one) accident involving absence from work. In such cases they can be re-qualified pursuant to the criteria set forth in sub-item 4.3.1.2.1., to continue performing their activities. ;

 

4.3.1.2.5. It will be upon the Contractor to bear all training and re-qualification costs of their employees.

 

4.3.1.3.  Training in PT — “Work Permit”

 

4.3.1.3.1. CONTRACTOR’S Supervisors or Representatives or Work Executors responsible for Equipment Maintenance Inspection or Repair services to be performed on CUSTOMER’S premises, must be qualified to request PT, as establish in the standard for REQUISITION/ISSUANCE OF PERMISSION TO WORK of the operating unit in which they are performing their activities.

 

4.3.1.3.2. CONTRACTOR shall indicate their employees described in 4.3.1.3.1. through a specific form REQUEST FOR ACCREDITATION of PT REQUESTOR through Inspection, as per Attachment B..

 

4.3.1.3.3. Approved employees  will receive a Credential valid for 1 (one) year.

 

4.3.1.4. In addition to the foregoing training, all CONTRACTOR’s employees are obliged to attend training, presentations and simulated safety exercises when so called upon to do so, at the discretion of the Unit Manager of the unit where he is performing the service.

 

4.3.2 ORGANISATIONAL STRUCTURE AND RESPONSIBILITIES

 

4.3.2.1. The CONTRACTOR must present a functional organization chart containing the attributions and responsibilities in top management HSSE, HSSE leaders and HSSE group relative to HSSE performance.

 

The following responsibilities equivalent to those of CUSTOMER establish as a model:

 

	
 
    	
 
    	
CUSTOMER
    	
 
    	
CONTRACTOR
    
	
a) Established Policy
    	
 
    	
Leadership Team
    	
 
    	
General Manager
    
	
b) Organization
    	
 
    	
Logistics Manager CUSTOMER REPRESENTATIVE
    	
 
    	
General Manager
    
	
c) Planning and implementation
    	
 
    	
Contract Executor
    	
 
    	
Operations Manager
    
	
d) Metering Performance
    	
 
    	
Contract Executor
    	
 
    	
Safety/Quality Manager
    

 

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e) Auditing
    	
 
    	
Contract Executor
    	
 
    	
Safety/Quality Manager Person in Charge of Safety
    
	
f) Performance Review
    	
 
    	
Contract Executor
    	
 
    	
CONTRACTOR’S REPRESENTATIVE

Operations Manager
    

 

4.3.2.2. The CONTRACTOR will implement mechanisms to assure communication of attributions and responsibilities and to demonstrate a visible commitment on the part of top management and HSSE leaders, such as participation in audits, including behavioral audits, and HSSE inspections, accident and incident investigations HSSE meetings establishing a high standard of performance and leadership by example.

 

4.3.3. ENGAGEMENT AND COMMUNICATION

 

4.3.3.1. CONTRACTOR shall present and implement devices for HSSE engagement and communication for the work force (employees and subcontractors), at least the minimum standard DDHSSE (Daily Discuss on Safety, Environment and Health).

 

4.3.3.2. CONTRACTOR shall record, in a way that they may evidence, attendance at the DDHSSE by means of an attendance list and discussed issues.

 

4.3.4.      DOCUMENTATION

 

4.3.4.1. CONTRACTOR shall present and implement a device for the structuring and organization of the HSSE Management Documentation, in order to ensure the use of updated procedures.

 

4.3.5.   DATA AND DOCUMENT CONTROL

 

4.3.5.1. CONTRACTOR shall present and implement a device to ensure the recording, updating, storing and recovering of HSSE information, as well a its traceability.

 

4.3.6.      RULES AND PROCEDURES FOR OPERATIONAL CONTROL

 

4.3.6.1. CONTRACTOR shall present and implement specific operational HSSE rules and procedures and others that may specify HSSE requirements, in line with the procedures established by CUSTOMER, in order to ensure control over the risks associated with CONTRACTOR’S activities.

 

4.3.6.2. CONTRACTOR shall present and implement procedures for change management, in line with the procedures for the Change Management of  the operational unit where their are carrying out their activity.

 

4.3.7.      EMERGENCY ASSISTANCE PLAN

 

4.3.7.1. CONTRACTOR shall present and implement an emergency assistance plan for the premises under his responsibility in accordance with activity risk and compatible with CUSTOMER procedures, including procedure for review and update.

 

4.3.7.2. CONTRACTOR shall carry out training and simulated exercises described in their emergency assistance plan and record them in order to evidence said training.

 

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4.3.7.3. CONTRACTOR shall present and implement the Accident Emergency Plan in connection with vessels regarding their respective contractual object, in accordance with their activity risks, including procedure for review and update.

 

4.3.7.4. CONTRACTOR shall send a copy of these documents to CUSTOMER’S REPRESENTATIVES.

 

4.3.7.5. CONTRACTOR shall, in cases of emergency at CUSTOMER’S premises or whenever the alarm rings,  instruct their employees to follow the guidelines established in the CUSTOMER’S emergency plans.

 

4.3.7.6. Whenever CONTRACTOR deem necessary, they will select CONTRACTOR’S employees to make part of emergency control teams when CUSTOMER’S employees are not available, and such services shall not constitute in service rendering on the part of the CONTRACTOR.

 

4.3.7.7. Expenses resulting from eventual Emergency Medical Services rendered by CUSTOMER to CONTRACTOR’S employees, including those in connection with rescue and transportation, shall be deducted from the following invoice(s) or payment(s).

 

4.3.8. INVESTIGATION AND ANALYSIS OF ACCIDENTS, INCIDENTS AND DEVIATIONS

 

4.3.8.1. CONTRACTOR shall present procedures for accident information and investigation, in line with CUSTOMER procedures for Accidents and Abnormal Events and Criteria for Investigation and Analysis of Accidents, Incidents and Deviations, of the operation unit where they are carrying out their activity.

 

4.3.8.2. Said procedures shall include instructions for information and investigation on accidents, incidents and deviations, evidencing immediate and basis causes, as well as the recording and monitoring of HSSE recommendations from investigations on accidents, as well as device for quality assessment of investigations.

 

4.3.8.3. CONTRACTOR shall, for all accidents and incidents, communicate them to the CUSTOMER’S REPRESENTATIVES, within a maximum of 2 hours after verifying their occurrence, independent of the mandatory communications set forth by legislation.

 

4.3.8.3.1 CONTRACTOR shall, for all accidents, within a maximum of 1 business day, present to the CUSTOMER’S REPRESENTATIVES the respective RPA (Preliminary Accident Report), Attachment H.

 

4.3.8.4. CONTRACTOR shall, for all accidents and incidents involving high risk potential and critical deviation, send the formal communication to the CUSTOMER’S REPRESENTATIVES, within a maximum of 24 hours after verifying the occurrence of the event.

 

4.3.8.5. CONTRACTOR shall, for all work-related accidents, within a maximum of 03 business days, present to the CUSTOMER’S REPRESENTATIVES the following documents:

 

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· RAL / ROA, Attachment C

 

· CADO (Information on Accident, Illness and Death), Attachment D

 

· CAT (Information on Work-Related Accident), Attachment E

 

· Medical Report

 

4.3.8.6. CONTRACTOR shall, for all work-related accident, provide all necessary clarifications regarding the event, and the corrective and preventive measures adopted.

 

4.3.8.7. In the event of a Fatal Accident, CONTRACTOR shall, together with CUSTOMER, take the following measures:

 

a) Immediately stop services and isolate the area directly related to the accident and preserving its characteristics, until its release by the CUSTOMER’S REPRESENTATIVES, which shall hear the competent police authority and the DRT (Regional Labor Office), in accordance with legislation in force;

 

b) Immediately inform the accident to CUSTOMER’S REPRESENTATIVES  and all competent authorities on Federal, State and Municipal levels;

 

c) Urgently make arrangements so that family members are notified regarding the event, as well as providing the appropriate social support;

 

d) CONTRACTOR’S REPRESENTATIVES shall report to the event site.

 

e) Formally organize, in conjunction with CUSTOMER’S REPRESENTATIVES, an Investigation Committee within up to 48 (forty eight) hours after the accident, in order to, within a maximum of 15 (fifteen) days, identify the causes and recommend the necessary measures with the purpose of preventing similar  accidents;

 

f) Compose a report including, at a minimum, the following:

 

· Description of the accident;

 

· Precise accident site, including a written layout;

 

· Data relating to the injured persons;

 

· Immediate and basic causes;

 

· Measures to be taken, with the purpose of preventing similar accidents;

 

g) Ensure that the Committee has appropriate and sufficient authority and autonomy to conduct investigations without any restrictions;

 

h) After conclusion of investigations on the part of the Committee, CONTRACTOR shall be also responsible, together with the CUSTOMER’S REPRESENTATIVES, to meet with the General Manager for the Operational Unit, in order to present the Accident Report and establish the appropriate means to inform the report results, with the purpose of communicating the accident experience to all other CONTRACTOR’S companies.

 

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4.3.8.8. CONTRACTOR shall present to the CUSTOMER’S REPRESENTATIVES, up to the 3rd. business day of the subsequent month, statistics on work-related accidents through the REM document (Monthly Statistic Summary, of accidents occurred during the period, in accordance with standard form proposed by ABNT NBR 14280 (Data on Work-Related Accidents — Procedures and Classification) Attachment F.

 

·                  Hours of risk exposure

 

·                  Number of employees victims of accidents with and without suspension

 

·                  Frequency rate of accidents with suspension

 

·                  Frequency rate of accidents without suspension

 

·                  Gravity Rate

 

·                  Number of accidents on the way to site

 

·                  Number of occupational diseases

 

·                  Number of accidents involving subcontractors

 

·                  Number of Accidents and Environmental non compliance Occurrences

 

4.3.8.9. CONTRACTOR shall present the REM, even when no accident occurs during the period, for indicator feedback.

 

4.3.9. SERVICE SUSPENSION DUE TO HSSE RISKS

 

4.3.9.1. The CUSTOMER’S REPRESENTATIVES, Supervision, PT issuing person, as well as the HSSE Teams, may suspend any services in which imminent risks, safety or health threats to employees and persons, to the environment and the safety of the premises are evident.

 

4.3.9.2. The suspension of services due to unsafe conditions and consequent noncompliance to the rules, instructions and regulations herein, does not exempt CONTRACTOR of the obligations and penalties provided for in the contract clauses in connection with deadlines and penalties.

 

4.4. PERFORMANCE EVALUATION AND MONITORING

 

4.4.1. HSSE REACTING INDICATORS

 

4.4.1.1. CONTRACTOR shall present to the CUSTOMER’S REPRESENTATIVES on a monthly basis, HSSE reacting indicators, which will include:

 

· Number of notifications in connection with Safety, Environment and Health from outside inspection authorities.

 

· Number of nonconformities in connection with Safety, Environment and  Health recorded by  CUSTOMER’S audits.

 

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·  Number of HSSE complaints recorded by user and Community.

 

· Number of complaints recorded by CUSTOMER’S for noncompliance with contractual requirements.

 

4.4.2. PROACTIVE HSSE INDICATORS

 

4.4.2.1. The CONTRACTOR shall present, on a monthly basis, the Inspectors with proactive HSSE indicators containing:

 

· Program implementation percentages focused on defense and preservation of the environment.

 

· Inspection program and critical system control percentages.

 

· Implementation percentages for programs focused on quality of life.

 

· Attendance control of persons at HSSE meetings.

 

· Compliance with Safety, Environmental and Health Dialogues (DHSSE)

 

· Workforce HSSE suggestions implementation program percentages.

 

· Controls for acceptance of workforce HSSE suggestions.

 

· Incident Statistics.

 

· Incident Statistics involving Subcontractors.

 

· Deviation indicators relative to the Behavioral HSSE Audit Program

 

· Periodic Medical Examination Compliance Percentages according to the professional profiles determined by PCMSO and PPRA.

 

Note: (*) when requested by inspectors.

 

4.4.3. INSPECTION, MAINTENANCE AND CALIBRATION OF CRITICAL EQUIPMENT

 

4.4.3.1. The CONTRACTOR shall present and implement an Inspection, Maintenance and Calibration Plan for critical equipment under their responsibility that may cause negative impacts to Safety, Environment and Health.

 

4.4.3.2. The CONTRACTOR must present to the Inspectors, when so requested, the Certificates of Calibration of critical equipment under their responsibility.

 

4.4.3.3. The CONTRACTOR must present and implement an Area Inspection Program, at least on a monthly basis, for purposes of verifying

 

· use, quality and distribution of EPI;

 

· cargo hoisting cables and apparatus;

 

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· hand tools and small equipment.

 

4.4.3.4. The CONTRACTOR shall present and implement a Monthly Inspection and Maintenance Program for the Equipment and Machinery listed in Addendum C, Attachment II of the Contractual Instrument (Technical Specification).

 

4.4.4. HANDLING OF ACCIDENTS, INCIDENTS AND EXCEPTIONS

 

4.4.4.1. CONTRACTOR shall present and implement a system for the handling of accidents, incidents and exceptions in cases of noncompliance with any item established in the industrial safety, environmental and occupational health plan, and Attachment G may be used as a standard form, including, at a minimum, the following information:

 

· description of exception;

 

· immediate action;

 

· analysis of causes;

 

· corrective action / preventive action;

 

· verification of action efficiency.

 

4.5. CONTINUOUS IMPROVEMENT

 

4.5.1. AUDITING OF HSSE AND BEHAVIOR MANAGING SYSTEM

 

4.5.1.1. CONTRACTOR shall present and implement an Auditing Plan for the HSSE Managing System, with the purpose of verifying the operational, inspection and critical maintenance systems controls.

 

4.5.1.2. CONTRACTOR shall implement a control system of the recommendations of the Audits of the HSSE Managing System.

 

4.5.1.3. CONTRACTOR shall present and implement a Behavior Auditing Program, in line with CUSTOMER’S procedure, Behavior Auditing Program.

 

4.5.2. CUSTOMER’S HSSE AUDITING

 

4.5.2.1. CONTRACTOR shall have their employees available to be interviewed during CUSTOMER HSSE auditing, with the purpose of verifying compliance with HSSE Requirements set forth in this contract.

 

4.5.2.2. CONTRACTOR shall provide easy access to information, persons, records and other objective evidence that ensure compliance with the HSSE Requirements set forth in this contract, whenever so requested by the CUSTOMER’S REPRESENTATIVES.

 

4.5.2.3. CONTRACTOR shall, based on the results of CUSTOMER HSSE auditing, establish an action plan for handling of the nonconformities and observations identified in the Auditing Report sent by the CUSTOMER’S REPRESENTATIVES, whose actions and deadlines shall be transcribed to a Commitment Agreement, to be signed between CONTRACTOR and CUSTOMER, to be incorporated to CONTRACTOR’S 

 

B-18

 

set of obligations, and compliance therewith shall constitute in a contractual obligation, with the purpose of establishing commitments and goals for performance improvement of the defined HSSE results.

 

4.5.2.4. CONTRACTOR shall assign parties responsible for the implementation of the actions set forth in the Commitment Agreement and meet with the negotiated deadlines, under penalty of noncompliance with contractual requirement.

 

4.5.3. CRITIQUE BY HIGHER MANAGEMENT

 

4.5.3.1. CONTRACTOR shall present, whenever requested by the CUSTOMER’S REPRESENTATIVES, results and action plans for critique of HSSE Management made by Higher Management, as well as evidence of its compliance.

 

5. INSPECTION AND PENALTIES

 

5.1. The noncompliance with any of the requirements specified in this Contractual Attachment shall result in the application of the contractual penalties set forth herein.

 

6. SUBCONTRACTING

 

6.1. CONTRACTOR shall present, in cases of subcontracting, except for the provisions under the Assignment and Transfer clause herein, device in order to ensure that the HSSE contractual requirements applicable to subcontracting are complied with by a subcontractor.

 

7. ADDITIONAL CONDITIONS

 

7.1. DEADLINE FOR DOCUMENTATION DELIVERY

 

7.1.1. CUSTOMER shall stipulate the deadlines for delivery of the requested DOCUMENTATION, whenever not provided in this Attachment, as well as the deadline for each document update.

 

7.1.1.1. The deadlines shall be transcribed to a Commitment Agreement, to be signed between CONTRACTOR and CUSTOMER, to be incorporated to CONTRACTOR’s set of obligations, and compliance therewith shall constitute in a contractual obligation, with the purpose of establishing commitments and goals for performance improvement of the defined HSSE results.

 

7.1.1.1.1. CONTRACTOR shall assign parties responsible for the implementation of the HSSE actions set forth in this Attachment for compliance with deadlines, under penalty of noncompliance with contractual requirement.

 

7.2. LIMITATIONS

 

7.2.1. CONTRACTOR shall allow easy and total inspection of their premises and services, concerning HSSE activities - industrial safety, environment and occupational health by their representatives.

 

B-19

 

7.3. DOCUMENTATION PRESENTATION

 

7.3.1. CONTRACTOR shall organize and made available to CUSTOMER, in electronic form, the HSSE Management DOCUMENTATION.

 

7.3.2. The CONTRACTOR, registered and holder of an updated CRCC — Registration and Classification Certificate, may have, at the discretion of the CUSTOMER’S REPRESENTATIVES, the presentation of their basic documentation, already presented to CUSTOMER (to the registration group of the materials area).

 

B-20

 

8.                                      ATTACHMENTS

 

ATTACHMENT A - HSSE TRAINING AND REFRESHMENT PROGRAM

 

	
TOPIC
    	
 
    	
ACTIVITY
    	
 
    	
DESCRIPTION
    	
 
    	
TARGET AUDIENCE
    	
 
    	
RESPONSIBILITY
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
HSSE Integration
    	
 
    	
Deals with basic HSSE information of the unit,   such as: emergency instructions, basic EPI, use restrictions for cellular   phones, cameras, restrict areas, etc.
    	
 
    	
Visitors and parties rendering quick services
    	
 
    	
The company rendering services, together with   CUSTOMER’S HSSE area, shall provide the necessary resources and manage the   integration, and keep updated records.
    
	
 

 

 

 

 

 

HSSE Integration
    	
 
    	
HSSE Integration
    	
 
    	
Awareness regarding the following items:

- importance of complying with policies,   standards and requirements do HSSE Management System; 

- HSSE consequences, actual or potential, of   their work activities and benefits for their safety and health resulting from   improvement of personal performance; 

- their duties and responsibilities in complying   with policies, standards and requirements of the HSSE Management System,   including requirements for preparation and emergency handling;

- correct utilization of EPI and EPC and need for   Work Permit (PT) in operational areas.
    	
 
    	
Recently-contracted employees, including   subcontractors

 
    	
 
    	
The company rendering services shall be   responsible, and CUSTOMER shall give support and shall inspect the quality of   this integration and its efficiency.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 

 

 

 

 

 

 

 

 

 

Events
    	
 
    	
Environment Day
    	
 
    	
Develop awareness activities in connection with   environmental protection, such as: talks, visits, tree planting, launching of   recycling programs, statistics on residue generating/recycling, reduction in   consume of water, energy, etc.
    	
 
    	
Contracted personnel in general, local community   representatives and some CUSTOMER’S REPRESENTATIVES of other Units, etc, may   also be invited.
    	
 
    	
The company rendering services shall be   responsible, and CUSTOMER shall give support and shall inspect the quality   and efficiency
    
	
 
    	
 
    	
SIPAT
    	
 
    	
Awareness talks and contests shall be held,   demonstrating to the employee that HSSE Management will being benefits to all,   ensuring that the employee shall be working with health and will go back to   this family, with the same health level he had when starting his activity
    	
 
    	
Contracted personnel in general, local community   representatives and some CUSTOMER’S REPRESENTATIVES of other Units, etc, may   also be invited.
    	
 
    	
The company rendering services shall be   responsible, and CUSTOMER shall give support and shall inspect quality and   efficiency.
    

 

B-21

 

	
TOPIC
    	
 
    	
ACTIVITY
    	
 
    	
DESCRIPTION
    	
 
    	
TARGET AUDIENCE
    	
 
    	
RESPONSIBILITY
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 

 

Events
    	
 
    	
Worker’s Health Day
    	
 
    	
Show the contracted employee the importance of   the correct use of EPI (Individual Protection Equipment) and EPC (Collective   Protection Equipment), in order to maintain his health and safety in view of   the recognized and assessed risks of his activities with the company   rendering services and/or with CUSTOMER, as well as of the basic body hygiene   concepts, continuous medical examinations, etc.
    	
 
    	
Contracted personnel in general, local community   representatives and some CUSTOMER’S REPRESENTATIVES. Representatives of other   Units, etc, may also be invited.
    	
 
    	
The company rendering services shall be   responsible, and CUSTOMER shall give support and shall inspect quality and   efficiency.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Civil and Criminal Liability
    	
 
    	
Inform and make leaders aware of the liabilities   set forth in the civil and criminal codes.
    	
 
    	
Managers, engineers, supervisors and persons in   charge.
    	
 
    	
The company rendering services shall be   responsible, and CUSTOMER shall give support and shall inspect quality and   efficiency.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Fire fighting
    	
 
    	
Develop and communicate the topic.
    	
 
    	
Everyone
    	
 
    	
Ditto
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 

Talks
    	
 
    	
Quality of Life
    	
 
    	
Develop and communicate the topic.
    	
 
    	
Everyone
    	
 
    	
Ditto
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Ergonomics
    	
 
    	
Develop and communicate the topic.
    	
 
    	
Everyone
    	
 
    	
Ditto
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Mouth Health
    	
 
    	
Develop and communicate the topic.
    	
 
    	
Everyone
    	
 
    	
Ditto
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Chemical Dependency
    	
 
    	
Develop and communicate the topic.
    	
 
    	
Everyone
    	
 
    	
Ditto
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Hygiene Principles
    	
 
    	
Develop and communicate the topic.
    	
 
    	
Everyone
    	
 
    	
Ditto
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Vaccination
    	
 
    	
Facilitate internal assistance to vaccination   campaigns from Federal, State and/or Municipal governments, as well as   promote independent campaigns due to local needs.
    	
 
    	
Everyone
    	
 
    	
The company rendering services shall be   responsible, and CUSTOMER shall give support and shall inspect quality and   efficiency.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Campaigns
    	
 
    	
Antismoking
    	
 
    	
Awareness and support.
    	
 
    	
Everyone
    	
 
    	
Company rendering services.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Ant alcoholism
    	
 
    	
Awareness and support.
    	
 
    	
Everyone
    	
 
    	
Company rendering services.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Selective collection
    	
 
    	
Awareness in order to facilitate the recycling of   materials.
    	
 
    	
Everyone
    	
 
    	
The company rendering services shall be   responsible, and CUSTOMER shall give support.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
CIPA Member
    	
 
    	
Regular course for CIPA members, NR-5
    	
 
    	
CIPA members
    	
 
    	
Company rendering services.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
First Aid
    	
 
    	
Theory and practical knowledge of medical   emergency handling.
    	
 
    	
Electricians and fire fighters.
    	
 
    	
Company rendering services.
    

 

B-22

 

	
TOPIC
    	
 
    	
ACTIVITY
    	
 
    	
DESCRIPTION
    	
 
    	
TARGET AUDIENCE
    	
 
    	
RESPONSIBILITY
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 

Legal Training
    	
 
    	
Fire fighting
    	
 
    	
Theory and practical knowledge of fire fighting.
    	
 
    	
Electricians and fire fighters.
    	
 
    	
Company rendering services.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
At hiring and periodic
    	
 
    	
Workplace conditions, risks inherent to position,   EPI use in accordance with NR-18, minimum of 6 hours.
    	
 
    	
Everyone
    	
 
    	
Company rendering services.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 

 

 

Legal Training
    	
 
    	
Emergency Control
    	
 
    	
Fire fighting, first aid, victim rescuing, leak   control and area evacuation.
    	
 
    	
20% of personnel
    	
 
    	
Company rendering services.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Area evacuation
    	
 
    	
Evacuation plan
    	
 
    	
Everyone
    	
 
    	
Company rendering services.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Defensive driving
    	
 
    	
Training set forth in article 150 of the Brazilian   National Traffic Code, minimum of 16 hours.
    	
 
    	
Contracted personnel that drive vehicles of the   company rendering services or of CUSTOMER.
    	
 
    	
Company rendering services.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Services in operational areas and PT
    	
 
    	
Contracted personnel must be instructed regarding   caution and risks in the operational areas where services will be carried   out, and some person, at the client’s discretion, shall have specific   training for preparation and issuance of PTs (“Work Permit”).
    	
 
    	
PT issuing personnel.
    	
 
    	
Company rendering services and CUSTOMER.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Work in confined environment
    	
 
    	
Instructions and awareness of work force   regarding risks involved in activities carried out in a confined environment.
    	
 
    	
Teams involved in activities, whether or not   continuous, in confined environment.
    	
 
    	
Company rendering services.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Works involving abrasive jetting and/or hydro   jetting
    	
 
    	
Instructions and awareness of work force   regarding risks in connection with activities involving jetting and hydro   jetting.
    	
 
    	
Teams involved in jetting activities
    	
 
    	
Company rendering such services.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Special training by activity 
    	
 
    	
HSSE in connection with works involving welding,   cutting and generating of sparks.
    	
 
    	
Instructions and awareness of work force   regarding risks in connection with activities involving cutting and welding
    	
 
    	
Teams involved in activities, whether or not   continuous, regarding cutting and welding
    	
 
    	
Company rendering such services.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Handling and storage of compressed gas cylinders
    	
 
    	
Instructions and awareness of work force   regarding risks in connection with activities involving the handling and   storage of compressed gas cylinders
    	
 
    	
Everyone
    	
 
    	
Company rendering such services.
    

 

B-23

 

	
TOPIC
    	
 
    	
ACTIVITY
    	
 
    	
DESCRIPTION
    	
 
    	
TARGET AUDIENCE
    	
 
    	
RESPONSIBILITY
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Safe use of manual rotating machinery.
    	
 
    	
Safety instructions and awareness for use of   manual rotating electrical tools, such as sanding machines, boring machines,   grinders, etc.
    	
 
    	
Professionals that use such tools in the exercise   of their duties
    	
 
    	
Company rendering such services.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Cargo handling
    	
 
    	
Instructions and awareness of work force   regarding risks in connection with activities involving cargo handling
    	
 
    	
Everyone.
    	
 
    	
Company rendering services.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Special training by activity
    	
 
    	
Seamanship
    	
 
    	
Basic knowledge of fire fighting, rescuing and   survival at sea.
    	
 
    	
Vessel crew.
    	
 
    	
Company rendering services.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Environmental protection
    	
 
    	
Instructions and awareness of work force   regarding reduction in generating and final discarding of residues, soil   contamination, selective garbage collection, etc.
    	
 
    	
Everyone.
    	
 
    	
Company rendering services.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Organization and cleaning
    	
 
    	
Instructions and awareness of work force   regarding the principles of organization and cleaning.
    	
 
    	
Everyone.
    	
 
    	
Company rendering services.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Risks involving works at high places
    	
 
    	
Basic awareness of risks involved in works at   high places (scaffolding, platforms, metallic structures, stairs, etc.),   as well as care and measures to be taken in order to prevent accidents   involving falls from height
    	
 
    	
Teams involved in works at high places, at the   appropriate time of the schedule. For mechanics and crew, please include them   in the DDS.
    	
 
    	
Company rendering services.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Defensive driving
    	
 
    	
Contracted personnel must have preventive   training in order to prevent accidents to/from work and outside work place
    	
 
    	
Qualified contracted personnel.
    	
 
    	
The company rendering services shall be   responsible, and CUSTOMER shall give support and shall inspect quality and   efficiency.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 

 

General Training
    	
 
    	
HSSE Management/ Integrated Management System
    	
 
    	
Knowledge of CUSTOMER’S management systems.
    	
 
    	
Leaders and HSSE professionals
    	
 
    	
The company rendering services shall be   responsible, and CUSTOMER shall give support.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Prevention of Accidents to/from work place
    	
 
    	
Riding bicycles and motorcycles, hitting   prevention, transportation in body of vehicles, use of protection gear   (helmets, HSSE belts, signals, etc.), traffic signals.
    	
 
    	
Everyone.
    	
 
    	
All.
    

 

B-24

 

	
TOPIC
    	
 
    	
ACTIVITY
    	
 
    	
DESCRIPTION
    	
 
    	
TARGET AUDIENCE
    	
 
    	
RESPONSIBILITY
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Safety Assessment at Work Place (AST)
    	
 
    	
Assessment of risks involved in tasks and control   measures in order to prevent accidents.
    	
 
    	
Supervisors and persons in charge.
    	
 
    	
Company rendering services.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 

 

 

 

 

General Training
    	
 
    	
Investigation and assessment of Incidents and   Accidents
    	
 
    	
Investigation and assessment techniques of   accidents, high-risk and systematic incidents, and critical and systematic   deviations, in order to find the basic cause and take the corrective and   preventive measures
    	
 
    	
Leaders and HSSE professionals of the company   rendering services.
    	
 
    	
Company rendering services.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 

General Training
    	
 
    	
HSSE signaling.
    	
 
    	
Instruction and awareness of work force regarding   CUSTOMER’S HSSE signals (based on NR-26).
    	
 
    	
Everyone
    	
 
    	
Company rendering services.
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Training as a result of   recommendations
    	
 
    	
Assorted issues
    	
 
    	
Assorted training defined due to recommendations   as a result of: accident investigation, risk assessment, deviation   statistics, changes in work conditions, recycling of HSSE policies and   principles, etc.
    	
 
    	
Wherever applicable.
    	
 
    	
Company rendering services.
    

 

B-25

 

 

ATTACHMENT B — REQUEST FOR ACCREDITATION OF PT REQUESTER

 

	
COMPANY   
   LOGO
    	
 
    	
COMPANY NAME, CNPJ (TAXPAYER)   NUMBER, FULL ADDRESS, POST CODE, TELEPHONE, FAX
    

 

REQUEST FOR ACCREDITATION OF WORK PERMIT REQUESTER

 

TO:

 

Mr..:

 

EMPLOYEE NUMBER:

 

TELEPHONE:

 

INSPECTOR FOR CONTRACT

No.

 

U.O. — OPERATIONAL UNIT:

 

 

WE HEREBY REQUEST THE ACCREDITATION AS WORK PERMIT REQUESTER(S) FOR OUR EMPLOYEE(S) BELOW:

 

 

	
NAME: 
    	
 
    
	
 
    	
,
    

 

	
POSITION: 
    	
 
    	
,
    
	
 
    
	
CPF TAXPAYER NUMBER: 
    	
 
    	
/
    	
 
    	
 
    
							

 

	
[PLACE]:  
    	
 
    	
DATE:                                , 20      .
    

 

 

	
 
    	
 
    	
 
    
	
INITIALS AND STAMP OF THE REQUESTING PARTY
    	
 
    	
INITIALS AND STAMP OF THE CONTRACT INSPECTOR
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
INITIALS AND STAMP OF THE MANAGER
    	
 
    	
INITIALS AND STAMP OF THE SAFETY TECHNICIAN
    

 

B-26

	
  

  	
  27 ATTACHMENT C
  – RAL / ROA Accident Report with lesion with AGENCY 1 ACCIDENT 2 LESION 3
  Occ. Illness l .4 Contractor’s Employee 1 - Typical 2 – To/from work
  1-W/Absence 1 - Yes 2 - No Code Year No. 3 - Rest 2-Wt/Absence Contract No.:
  INJURED PARTY (name) 5 Injured Party’s CPF 6 POST 7 SEX 8 AGE 9 M or F
  (years) Years with Company 10 Years at Post 11 Regime Work Day 13 Work 14
  Activity 15 Nature of Lesion 16 17 Location 1 - Adm. 2 - Shift 1 - Normal 2 -
  Extra 1 - Normal 2 – Maint. Lesion Source 18 Personal Accident 19 Invidual
  Accident 20 Environ. Condition 21 AG.Ident 22 UNSAFE ACT 23 Immediate Cause
  24 Basic Cause 25 Classification 26 Date 27 Accident 1- RISR 3- RCRA 5- IP 2-
  RSRA 4- ITT 6- M ___/___/___ Time Acc. 28 DATE Rel. Date 30 Deducted Days 31
  COUNTRY 32 Lesion Cost 33 : / / Place 34 STATE 35 CITY 36 37 ACCIDENT
  DESCRIPTION PLEASE DESCRIBE WHAT THE INJURED PARTY WAS DOING AT THE TIME OF
  ACCIDENT, THE INJURES SUSTAINED, AND WHETHER ANY MATERIAL DAMAGES OCCURRED AS
  A RESULT OF THIS ACCIDENT. IF THERE WAS AN IMPERSONAL ACCIDENT THAT CAUSED
  THIS ACCIDENT, PLEASE FILL OUT THE “ROA”. 38 PREVENTION PLEASE LIST ALL
  ACTIONS TAKEN OR TO BE TAKEN IN ORDER TO PREVENT SIMILAR ACCIDENTS. Assign.
  AGENCY 39 INDUSTRIAL SAFETY 40 AGENCY Date 42 ___/___/___ Employee aboard for
  days. Accident occurred after : work hours. 

  

 

B-27

	
  

  	
  28 Supervisor
  of injured person: Nursing Technician: Member of a CIPA: Contract Inspector:
  REPORT ON ATYPICAL OCCURRENCE – ROA (1) AGENCY (2) ACTIVITY CONTRACTOR: UN-BC
  CONTRACT NO.: CÓDE YEA R NUMBER 160 (3) OCCURRENCE (4) ACCID. NO. (5) UNIT
  (6) SYSTEM (7) EQUIPMENT (8) DATE (9) TIME (10) BASIC CAUSE (11) IMMEDIATE
  CAUSE (12) CONTROL means (13) Product (14) Quantity (15) Product Cost (16) Other
  Costs (17) TOTAL cost (18) PLACE (19) STATE (20)COUNTRY (21) D E S C R I P T
  I O N (22) M E A S U R E S (23) Assign. AGENCY (24) INDUSTRIAL SAFETY (25)
  AGENCY Head (26) DATE AREA SUPERVISOR MEMBER OF A CIPA 

  

 

B-28

	
  

  	
  29 ATTACHMENT D
  – CADO – ACCIDENT, ILLNESS OR DEATH COMMUNICATION COMMUNICATION OF ACCIDENT,
  ILLNESS OR DEATH (C.A.D.O.) HEALTH UNIT DATE NAME EMPL. NO./ID/CPF DATE OF
  BIRTH AGE SEX M F MARITAL STATUS POSITION LOCATION HOME ADDRESS TELEPHONE
  COMPANY ACCIDENT WITH ABSENCE WITHOUT ABSENCE SERIOUSNESS ILLNESS
  OCCUPATIONAL NON- OCUPATIONAL DEATH CID CID CID CID DATE OF OCCURRENCE TIME
  PLACE OF ACCIDENTNTE Y DEBOARDING Y N DESCRIPTION OF ACCIDENT/ILLNESS
  PROBABLE DIAGNOSIS PROCEDURE WITNESS EMPL. NO./CPF WITNESS EMPL. NO./CPF
  NURSING TECHNICIAN PHYSICIAN MANAGER SAFETY TECHNICIAN EMPL. NO. EMPL. NO
  EMPL. NO EMPL. NO TO : ( ) RH/AM ( ) HSSE ( ) EXTERNAL HEALTH 

  

 

B-29

	
  

  	
  30 ATTACHMENT E
  – CAT – WORK-RELATED ACCIDENT COMMUNICATION 1- Issuer SOCIAL SECURITY
  NATIONAL SOCIAL SECURITY INSTITUTE 1- employer 2- Union 3- Physician 4-
  Insured or dependent 5- Public authority WORK-RELATED ACCIDENT COMMUNICATION
  - CAT 2Type of CAT 1- Initial 2- Reopening 3- Communication of death on: I -
  ISSUER Employer 3- Company Name /Name 4- Type 1- CGC/CNPJ 2- CEI 3- CPF 4-
  NIT 5- CNAE 6- Address - Street/Ave. Complement (continuation) District CEP
  7- Municipality 8-State 9- Telephone Injured Party 10- Name 11- Mother’s Name
  12- Date of Birth. 13- Sex 1- Masc. 3- Fem. 14- Marital status 1- Single 2-
  Married 3- Widower 4- Legal Sep. 5- Other 6 –Not known 15- CTPS- No
  /SerialDate of issue 16- State 17- Mopnthly Compensation 18- ID Card Date of
  issue Issued by 19- State 20- PIS/PASEP/NIT 21- Address- Street/Ave/ District
  CEP 22- Municipality 23- State 24- Telephone 25- Occupation 26- CBO consult
  CBO 27- Enrollment in Social Security 1- Employee 2- Individual worker 7
  Special assured 8- Resident physician 28- Retired? 1- Yes 2- No 29-Areas 1-
  Urban 2- Rural Accident or Illness 30- Date of accident 31- Time of accident
  32-After how many hours of work? 33- type 1-Typical 2- Illness 3- Itinerary
  34- Was there absence? 1-yes 2-no 35Last day worked 36- Place of accident 37
  – Specification of place of accident 38- CGC/CNPJ 39- State 40-Municipality
  of accident 41-Part(s) of body affected 42- Causal agent 

  

 

B-30

	
  

  	
  31 44- Was
  there a police report ? 1- yes 2- no 43- Description of situation generating
  accident/illness 45- Was there death ? 1- yes 2- no Witnesses 46- Name 47-
  Address - Street/Ave/no/compl. CEP 48- Municipality 49- State Telephone
  District 50- Name 51- Address - Street/Ave/no/compl. CEP 52- Municipality 53-
  State Telephone District Place and date
  _______________________________________ Signature and stamp of issuer II –
  MEDICAL REPORT To be filled-in by a health professional. Attendance 54-
  Medical attendance unit 55-Date 56- Time 57- Was there hospitalization 1-yes
  2- no 58- Probable duration of treatment days 59- Will the injured party be
  absent from work during treatment? 1-yes2-no Injury 60 - Description and
  nature of injury Diagnosiso 61- Probable diagnosis 62- CID-10 63- Comments:
  Place and date _______________________ Signature and stamp, of physician with
  CRM number 

  

 

B-31

	
  

  	
  32 III - INSS
  64- Received on 65- Unit Code 66- CAT Number 67 Employee number of public
  servant Notes: 1- Imprecise information hereon implies sanctions set forth in
  Arts. 171 and 299 of the Criminal Code Employee number
  _______________________________________ Signature of public servant 2-
  Communication of work-related accidents must be effected by the 1st working
  day after the accident, under penalty of fine, as provided in Art. 22 of Law
  no 8.213/91. THE COMMUNICATION OF THE ACCIDENT IS OBLIGATORY, EVEN IN THE
  CASE OF THERE NOT BEING ABSENCE FROM WORK. 

  

 

B-32

 

ATTACHMENT F – REM – MONTHLY STATISTICS SUMMARY

 

	
 
    	
WORK-RELATED ACCIDENTS
    	
CONTRACTOR
    	
MONTH
    	
YEAR
    
	
 
    	
MONTHLY   STATISTICS SUMMARY
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Q
    	
 
    	
 
    	
 
    

 

CHART I — SUMMARY

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
TYPICAL ACCIDENTS
    	
 
    	
ATYPICAL ACCIDENTS
    
	
 
    	
 
    	
 
    	
 
    	
MAN-HOUR
    	
 
    	
INJURED
    	
 
    	
DAYS
   LOST
    	
 
    	
RATES
    	
 
    	
INJURED
    	
 
    	
DAYS
   LOST
    
	
MONTH
    	
 
    	
EMPLOYEES
    	
 
    	
WITH RISK
   EXPOSURE
    	
 
    	
WITH
    LEAVE
    	
 
    	
WITHOUT
    LEAVE
    	
 
    	
AND
    DEDUCTED
    	
 
    	
FREQ.
    WITH
    	
 
    	
FREQ.
    WITHOUT
    	
 
    	
OCCURREN
   CE
    	
 
    	
SERIOUS
   NESS
    	
 
    	
WITH
    LEAVE
    	
 
    	
WITHOUT
    LEAVE
    	
 
    	
AND
    DEDUCTED
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
JANUARY
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
FEBRUARY
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
MARCH
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
APRIL
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
MAY
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
JUNE
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
JULY
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AUGUST
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SEPTEMBER
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
OCTOBER
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
NOVEMBER
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
DECEMBER
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ACCUMM.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

B-33

 

ATTACHMENT G — RTA —  REPORT ON EXCEPTION HANDLING

 

Part A = RTA FORM

 

	

    	
REPORT ON EXCEPTION HANDLING NO.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Actual person in charge 
    	
 
    	
Situation
    	
 
    	
 
    
	
Name  
    	
 
    	
 
    	
 
    	
P or R
    
	
(Assignment)
    	
 
    	
 
    	
 
    	
 
    

 

Registration

 

	
Scope of certification
    [ abc ] x
    	
Managing Agency
    [ abc ] x
    
	
Type of exception
    [ abc ] x
    	
Identification Type
    [ abc ] x
    
	
Free field 1
    	
Free field 2
    
	
Free field 3
    	
Free field 4
    
	
Free field 5
    	
Free field 6
    

 

	
·  Larger
    ·  Lesser
    	
·  Real
    ·  Potential
    	
·  Initial  
    ·  Recurrent
    	
·  Inclusive
    ·  Not inclusive
    

 

	
Start of exception  Date:
    dd/mm/aaaa                         Time:   hh:mm
    	
End of exception  Date:
    dd/mm/aaaa                          Time:   hh:mm
    

 

	
Description of exception
    [ abc ]
    	
 
    	
 
    
	
Immediate action
    [ abc ]
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Concluded by
    Name
    	
Assignment agency
    Assignment
    	
Date of conclusion
    dd/mm/aaaa  hh:mm
    

 

From Registration section (above): Field with title in red is MANDATORY.

 

Assessment

 

Failure inspection (additional information for exception assessment)

[ abc ]

Cause assessment

[ abc ]

Correction (action in order to exclude  exception / return to previous condition)   (1)

[ abc ]

Proposal for corrective action (action in order to exclude cause of exception)   (2)

[ abc ]

Proposal for preventive action (action in order to prevent occurrence of exception)   (3)

[ abc ]

 

	
Concluded by
    Name
    	
Assignment agency
    Assignment
    	
Date of conclusion
    dd/mm/aaaa hh:mm
    

 

From Assessment section (above): Field with title in red is MANDATORY.  From Assessment section (above): (1), (2), (3):  Filling out at least ONE of these fields is MANDATORY. The three fields can also be filled out.

 

B-34

 

Approved by:

 

	
Corrective Action —   Responsible Parties (1)
    	
Deadlines
    
	
Add: · Eliminate: ·
    	
 
    
	
1- [ abc ] x   ( Up to FIVE Responsible parties and respective   deadlines for corrective  actions )
    	
 
    
	
 
    	
 
    
	
Corrective Action —   Responsible Parties (2)
    	
Deadlines
    
	
Add: · Eliminate: ·
    	
 
    
	
1- [ abc ] x   ( Up to FIVE Responsible parties and respective   deadlines for corrective  actions )
    	
 
    
	
 
    	
 
    
	
Preventive Action -   Responsible Parties (3)
    	
Deadlines
    
	
Add: · Eliminate: ·
    	
 
    
	
1- [ abc ] x   (Up to FIVE Responsible parties and respective   deadlines for preventive  actions)
    	
 
    

 

Analysis of action proposals

[ abc ]

 

	
Concluded by
    Name
    	
Assignment agency
    Assignment
    	
Date of conclusion
    dd/mm/aaaa  hh:mm
    

 

From Approval section (above): Field with title in red is MANDATORY.. From Approval section (above): (1), (2), (3): Become MANDATORY due to fields filled out in Assessment section (one, two or all three).

 

Implementation

 

	
Correction (1)
    	
Date
    
	
1- [ abc ] ( Implementation of up to FIVE CORRECTIONS and   respective dates )
    	
 
    
	
 
    	
 
    
	
Corrective Action (2)
    	
Date
    
	
1- [ abc ] ( Implementation of up to FIVE CORRECTIVE actions and   respective  dates )
    	
 
    
	
 
    	
 
    
	
Preventive Action (3)
    	
Date
    
	
1- [ abc ] (Implementation of up to FIVE PREVENTIVE actions and   respective  dates)
    	
 
    

 

Deadline for efficiency assessment

 

	
Concluded by
    Name
    	
Assignment agency
    Assignment
    	
Date of conclusion
    dd/mm/aaaa  hh:mm
    

 

From Implementation section (above): Field with title in red is MANDATORY. From Implementation section (above): (1), (2), (3): Become MANDATORY due to Approval section. Fields to be automatically generated (in this section) to cover as many responsible parties as necessary (in the Approval section).

 

Assessed by:

 

Efficiency

[ abc ]

 

	
Concluded by
    Name
    	
Assignment agency
    Assignment
    	
Date of conclusion
    dd/mm/aaaa  hh:mm
    

 

From Assessment section (above): Field with title in red is MANDATORY.

 

B-35

 

Part B = Description and instructions as to how to fill out the RTA fields (by section):

 

B1 - HEADING

 

The heading is organized by the fields shown and described below.

 

REPORT ON EXCEPTION HANDLING NO.

 

	
Actual person in charge
    Name
    (Assignment)
    	
Situation
    	
Situation
    

 

	
Name
    	
 
    	
Description
    	
 
    	
Format
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(Logo)
    	
 
    	
PETROBRAS logo.
    	
 
    	
“Glued” picture.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Report name  No
    	
 
    	
REPORT ON EXCEPTION HANDLING  RTA sequential number
    	
 
    	
The RTA number is generated by the system, in   sequence, by the Managing Agency or by year.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Actual responsible party
    	
 
    	
The party qualified to edit RTA’s. Only one   person, each time, may actually be the present responsible party.
    	
 
    	
Filled out by the system, with name and   assignment of present responsible party.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Status
    	
 
    	
Status of the RTA. There are nine possible   status.
    	
 
    	
Filled out by the system.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
(Visualization)
    	
 
    	
Indicates whether the document is public   (P) or restricted (R).
    	
 
    	
Every RTA is created as public (P), and may be   changed into restricted (R).
    

 

Additional information to the field description:

 

No: Number (automatically) generated by the system, at the exact moment when the Record section is filled out.  It is composed of the abbreviation of the Managing Agency, a sequential number of four digits, a letter identifying the version, and year (in the aaaa format) in the exception record. Example: E&P-SERV/US-TA/HSSE 0016A/2004.

 

Present responsible party:  Filled (automatically) by the system with the ‘name and assignment’ of the present responsible party for RTA editing, and which allows for other sections to be subsequently filled out.

 

Status: Filled (automatically) by the system. Indicates RTA status, and may register the following categories:

 

1 – ON RECORD

2 – RECORDED

3 – ANALYZED

4 – ANALYSIS APPROVED

5 – ANALYSIS REJECTED

6 – IMPLEMENTED

7 – CONCLUDED WITH EFFICIENT TREATMENT

8 – CONCLUDED WITH INEFFICIENT TREATMENT

9 – CONCLUDED WITHOUT TREATMENT

 

(Visualization): Field (to the right of Status) which identifies whether the RTA is public (P) (with unrestricted access), or restricted (R) (of restricted access). If restricted (R), it will be viewed by the Managing Agency, by those parties that participated in the handling of the exception, and those who were informed of the nonexistence of the exception.

 

B-36

 

B2 — REGISTRATION SECTION

 

The registration section is organized by the fields shown and described below.

 

Registration

 

	
Scope of certification

[ abc ]   x
    	
Managing Agency

[ abc ]   x
    
	
Type of exception

[ abc ]   x
    	
Identification Type

[ abc ]   x
    
	
Free field 1
    	
Free field 2
    
	
Free field 3
    	
Free field 4
    
	
Free field 5
    	
Free field 6
    
	
 
    	
 
    
	
·  Larger
    	
·  Real
    	
·  Initial
    	
·  Inclusive
    
	
·  Lesser
    	
·  Potential
    	
·  Recurrent
    	
·  Not inclusive
    
	
 
    	
 
    	
 
    	
 
    
	
Start   of exception
    	
End of exception  
    
	
Date: dd/mm/aaaa                       Time: hh:mm
    	
Date: dd/mm/aaaa                                Time:   hh:mm
    
	
 
    	
 
    
	
Description of exception

[ abc ]   
    	
 
    
	
Immediate action

[ abc ]   
    	
 
    
					

 

	
Concluded by 
    Name
    	
 
    	
Assignment agency

Assignment
    	
 
    	
Date of conclusion

dd/mm/aaaa  hh:mm
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

	
Name
    	
 
    	
Description
    	
 
    	
Format
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Scope of certification
    	
 
    	
Choose, if needed, scope of purpose(s) for   certification that better describes the exception to be registered.
    	
 
    	
Filled out according to table. Accepts more than   one value.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Managing Agency
    	
 
    	
Agency responsible for promoting the handling of   the identified exception. It is the main responsible party for the area,   system, process or product where the exception was identified. It is the   party mostly affected by the exception.
    	
 
    	
Filled out according to table.x.  MANDATORY.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Type   of exception
    	
 
    	
Refers to a macro-classification of the   exception.
    	
 
    	
Filled out according to table. Accepts more than   one value.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Identification Type
    	
 
    	
Defines the manner through which the exception   was identified, how it became known, and through what mechanism it has been   identified.
    	
 
    	
Filled out according to table.x.  MANDATORY.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Free fields 1 to 6
    	
 
    	
Filled out in accordance with the titles   (contents) adopted for each one of these fields.
    	
 
    	
Only shown if they are utilized.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Larger  Lesser
    	
 
    	
Classification of the exception in connection   with its seriousness. Its filling out is of a subjective nature.
    	
 
    	
Accepts only one of the two indicated options.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Real  Potential
    	
 
    	
Informs whether the exception is real (if it has   already occurred) or potential (may occur).
    	
 
    	
Accepts only one of the two indicated options.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Initial  Recurrent
    	
 
    	
Informs whether the exception is initial or   recurrent.
    	
 
    	
Accepts only one of the two indicated options.
    

 

B-37

 

	
Inclusive  Not inclusive
    	
 
    	
Informs whether the exception is inclusive or not   for another area/ management/ activity
    	
 
    	
Accepts only one of the two indicated options.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Start of exception

Date:

Time:
    	
 
    	
Informs date and time of the start of the   exception. Date comes previously filled out with the “date of opening of the   RTA’, which may be changed.
    	
 
    	
Standards for filling out: Date: dd/mm/aa. Does   not accept future date.  Time:   hh:mm.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
End of exception

Date:

Time:
    	
 
    	
Informs date and time of the end of the   exception.
    	
 
    	
Standards for filling out: Date: dd/mm/aa. Does   not accept future date.  Time:   hh:mm.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Description of exception
    	
 
    	
Describe the exception occurred, identified,   verified. Must include the most detailed, adequate and realistic details of   the exception.
    	
 
    	
Rich text.
    MANDATORY.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Immediate   action
    	
 
    	
The action implemented in order of control or   reduce exception impact. Also known as mitigating action.
    	
 
    	
Rich text.
    MANDATORY.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Concluded by
    	
 
    	
Name of user that concluded the Registration section.
    	
 
    	
Filled out by the system.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Assignment agency
    	
 
    	
Name of user that concluded the Registration   section
    	
 
    	
Filled out by the system.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date of conclusion
    	
 
    	
Date and time of conclusion of the Registration   section.
    	
 
    	
Filled out by the system. Standard: dd/mm/aaaa hh:mm.
    

 

Field with title in red is MANDATORY

 

B-38

 

B3 — ASSESSMENT ANALYSIS

 

The assessment section is organized by the fields shown and described below.

 

Failure inspection (additional information for exception assessment)

[ abc ]  

Cause assessment

[ abc ]

Correction (action in order to exclude  exception / return to previous condition)   (1)

[ abc ]

Proposal for corrective action (action in order to exclude cause of exception)   (2)

[ abc ]

Proposal for preventive action (action in order to prevent occurrence of exception)   (3)

[ abc ]

 

	
Concluded by

Name
    	
 
    	
Assignment agency

Assignment
    	
 
    	
Date of conclusion

dd/mm/aaaa  hh:mm
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

	
Name
    	
 
    	
Description
    	
 
    	
Format
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Failure inspection (additional information for exception assessment)
    	
 
    	
Description of the failure(s) in order to   facilitate cause identification. They are additional information in order to   allow for a correct exception assessment.
    	
 
    	
Rich text
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cause assessment
    	
 
    	
Description of cause assessment of the exception   occurred/detected.
    	
 
    	
Rich text.
    MANDATORY.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Correction (action in order to exclude exception / return to   previous condition)   (1)
    	
 
    	
Action to exclude the exception and return to   previous condition.
    	
 
    	
Rich text
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Proposal for corrective action (action in order to exclude cause of exception) (2)
    	
 
    	
Action to exclude cause of exception.
    	
 
    	
Rich text
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Proposal for preventive action (action in order to prevent occurrence of exception) (3)
    	
 
    	
Action to prevent occurrence of exception.
    	
 
    	
Rich text
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Concluded by
    	
 
    	
Name of user that concluded the Assessment   section.
    	
 
    	
Filled out by the system.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Assignment agency
    	
 
    	
Name of user that concluded the Assessment   section.
    	
 
    	
Filled out by the system.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date of conclusion
    	
 
    	
Date and time of conclusion of the Assessment   section.
    	
 
    	
Filled out by the system. Standard: dd/mm/aaa hh:mm.
    

 

Field with title in red is MANDATORY

(1), (2), (3):  Filling out at least ONE of these fields is MANDATORY. The three fields can also be filled out

 

B-39

 

B4 — APPROVAL SECTION

 

The approval section is organized by the fields shown and described below

 

	
Approval
    	
 
    
	
Corrective Action —   Responsible Parties  (1)

Add:  ·         Eliminate: ·
    	
Deadlines
    
	
1- [ abc ]   x   ( Up to  FIVE   Responsible parties and respective deadlines for corrective actions )
    	
 
    
	
 
    	
 
    
	
Corrective Action —   Responsible Parties  (2)

Add:  ·         Eliminate: ·
    	
Deadlines
    
	
1- [ abc ]   x   ( Up to  FIVE   Responsible parties and respective deadlines for corrective actions )
    	
 
    
	
 
    	
 
    
	
Preventive Action -   Responsible Parties  (3)

Add:  ·         Eliminate: ·
    	
Deadlines
    
	
1- [ abc ]   x  (Up to  FIVE   Responsible parties and respective deadlines for preventive actions)
    	
 
    
	
 
    	
 
    
	
Analysis of action proposals

[ abc ]
    	
 
    

 

	
Concluded by

Name
    	
 
    	
Assignment agency

Assignment
    	
 
    	
Date   of conclusion

dd/mm/aaaa  hh:mm
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

	
Name
    	
 
    	
Description
    	
 
    	
Format
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Corrective Action — Responsible   Parties (1)  

 

Add: ·   Eliminate: ·
    	
 
    	
Identifies the responsible party(ies)for the   corrective action. Up to five responsible parties, only click on Add. To   exclude one responsible party (from the 5th to the 1st), click on Exclude.
    	
 
    	
Filled out according to table, but accepts   extra-table values
    
	
Deadlines
    	
 
    	
Deadline defined for each of the indicated   responsible parties.
    	
 
    	
dd/mm/aa.
    
	
Corrective Action — Responsible   Parties (2)  

 

Add: ·   Eliminate: ·
    	
 
    	
Identifies the responsible party(ies)for the   corrective action. Up to five responsible parties, only click on Add. To   exclude one responsible party (from the 5th to the 1st), click on Exclude.
    	
 
    	
Filled out according to table, but accepts   extra-table values
    
	
Deadlines
    	
 
    	
Deadline defined for each of the indicated   responsible parties
    	
 
    	
dd/mm/aa.
    
	
Preventive Action - Responsible   Parties (3)  

 

Add: ·   Eliminate: ·
    	
 
    	
Identifies the responsible party(ies)for the   corrective action. Up to five responsible parties, only click on Add. To   exclude one responsible party (from the 5th to the 1st), click on Exclude.
    	
 
    	
Filled out according to table, but accepts   extra-table values
    
	
Deadlines
    	
 
    	
Deadline defined for each of the indicated   responsible parties.
    	
 
    	
dd/mm/aa.
    
	
Analysis of action proposals
    	
 
    	
For comments regarding the action proposals   submitted.
    	
 
    	
Rich Text.  Mandatory.
    
	
Concluded by
    	
 
    	
Name of user that concluded the Approval section.
    	
 
    	
Filled out by the system.
    
	
Assignment agency
    	
 
    	
Name of user that concluded the Approval section.
    	
 
    	
Filled out by the system.
    
	
Date of conclusion
    	
 
    	
Name of user that concluded the Approval section.
    	
 
    	
Filled out by the system. Padrão dd/mm/aaaa   hh:mm.
    

 

Field with title in red is MANDATORY

(1), (2), (3):  Filling out at least ONE of these fields is MANDATORY. The three fields can also be filled out

 

B-40

 

 

B5 — IMPLEMENTATION SECTION

 

The implementation section is organized by the fields shown and described below.

 

	
Implementation
    	
 
    
	
Correction (1)
    	
Date
    
	
1- [ abc ]  ( Implementation of up to FIVE CORRECTIONS and respective   dates )
    	
 
    
	
 
    	
 
    
	
Corrective Action (2)
    	
Date
    
	
1- [ abc ]   ( Implementation of up to FIVE CORRECTIVE actions and   respective dates )
    	
 
    
	
 
    	
 
    
	
Preventive Action (3)
    	
Date
    
	
1- [ abc ]   (Implementation of up to FIVE PREVENTIVE actions and   respective dates)
    	
 
    
	
 
    	
 
    
	
Deadline   for efficiency assessment
    	
 
    
	
 
    	
 
    
	
Concluded by
    Name
    	
 
    	
Assignment agency
    Assignment
    	
 
    	
Date of conclusion

dd/mm/aaaa  hh:mm     
    
						

 

	
Name
    	
 
    	
Description
    	
 
    	
Format
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Correction (1)
    	
 
    	
Description of corrective action(s). There can be   up to five actions. Fields to be automatically generated to cover as many   responsible parties as necessary in the Approval section.
    	
 
    	
Rich text.
    
	
Date
    	
 
    	
Definition of date (deadline) for implementation   of corrective action(s).
    	
 
    	
dd/mm/aa.
    
	
Corrective Action (2)
    	
 
    	
Description of corrective action(s). There can be   up to five actions. Fields to be automatically generated to cover as many   responsible parties as necessary in the Approval section.
    	
 
    	
Rich text
    
	
Date
    	
 
    	
Definition of date (deadline) for implementation   of corrective action(s).
    	
 
    	
dd/mm/aa.
    
	
Preventive Action (3)
    	
 
    	
Description of preventive action(s). There can be   up to five actions. Fields to be automatically generated to cover as many   responsible parties as necessary in the Approval section.
    	
 
    	
Rich text
    
	
Date
    	
 
    	
Definition of date (deadline) for implementation   of preventive action(s).
    	
 
    	
dd/mm/aa.
    
	
Deadline   for efficiency assessment
    	
 
    	
Period established so that the above actions can   be assessed regarding their efficiency. The user informs the first date only.   The second date (“up to”) shall be automatically generated, with the addition   of 15 days to the first date.
    	
 
    	
1st. date: dd/mm/aa (since).  2nd. date: dd/mm/aa (up to).  MANDATORY.
    
	
Concluded   by
    	
 
    	
Name of user that concluded the Implementation   section
    	
 
    	
Filled out by the system.
    
	
Assignment   agency
    	
 
    	
Name of user that concluded the Implementation   section
    	
 
    	
Filled out by the system.
    
	
Date of conclusion
    	
 
    	
Date and time of conclusion of Implementation   section.
    	
 
    	
Filled out by the system. Standard: dd/mm/aaaa hh:mm.
    

 

Field with title in red is MANDATORY..

(1), (2), (3): Become MANDATORY due to Approval section. Fields to be automatically generated (in this section) to cover as many responsible parties as necessary (in the Approval section

 

B-41

 

B6 —  VERIFICATION SECTION

 

The verification section is organized by the fields shown and described below

 

Efficiency

[ abc ]

 

	
Concluded by

Name
    	
 
    	
Assignment Agency

Assignment
    	
 
    	
Date of conclusion

dd/mm/aaaa  hh:mm     
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

	
Name
    	
 
    	
Description
    	
 
    	
Format
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Efficiency
    	
 
    	
Provides information on efficiency assessment of   implemented actions.
    	
 
    	
Rich text.
    
	
Concluded by
    	
 
    	
Name of user that concluded the Verification   section
    	
 
    	
Filled out by the system.
    
	
Assignment agency
    	
 
    	
Name of user that concluded the Verification   section
    	
 
    	
Filled out by the system.
    
	
Date of conclusion
    	
 
    	
Date and time of conclusion of Verification   section.
    	
 
    	
Filled out by the system. Standard: dd/mm/aaaa hh:mm.
    

 

Field with title in red is MANDATORY..

 

B-42

 

ATTACHMENT H — RPA — PRELIMINARY ACCIDENT REPORT

 

ATTACHMENT - H

 

Draft - RPA (Preliminary Accident Report)

 

ACCIDENT REPORT

 

Vessel/ UM :                                                                                         Date / Time of Communication:

 

Date / Time of the Incident :                                                                           Sea conditions :

 

Current ( dir./int. ) :   Knots                                                                  Winds (dir./int) :   Knots

 

Direction / Speed :                                                                              Place /Position :

 

Officer on Duty :

 

Means Involved :

 

Material Damages and Operational Restrictions? :

 

Need for External Support? :

 

Urgent? :             

 

Injuries involving personnel :

 

Name(s) of the injured party(ies) :

 

Injuries? :                      

 

Need for Removal? :

 

Brief description of the accident, including whether there was nay equipment failure and immediate measures taken :

 

Master :

 

Name

 

B-43

 

SCHEDULE III

 

SPARE PARTS

 

PART I - VESSEL SPARE PARTS

 

[Note: Contractor to provide no later than 60 days prior to the Scheduled Delivery Date in accordance with Clause 4.4(a) of the Agreement.]

 

PART II - DEPOT SPARE PARTS

 

[Note: Contractor to provide no later than 60 days prior to the Scheduled Delivery Date in accordance with Clause 4.4(b) of the Agreement.]

 

C-1

 

SCHEDULE IV

 

INSURANCE

 

PART A - Types of Insurance Coverage

 

Contractor shall at all times during the Term procure, or shall procure that Owner shall procure, and maintain insurance on the Vessel in accordance with the following provisions and the requirements of the Governmental Authorities.

 

1.                                      Protection & Indemnity Insurance

 

(a)                                 P&I Insurance shall be placed as an unlimited entry (or if the same is not available at the maximum possible entry) with and subject to and on the basis of the rules of one of the Approved Clubs.

 

(b)                                The terms of the P&I Insurance shall be consistent with the standard rules of one of the Approved Clubs.

 

(c)                                 P&I Insurance shall include full pollution coverage (at the maximum level available for LNG tankers in the P&I Club group) and coverage for removal of wreck at or in the vicinity of any loading terminal or discharge terminal, including between the designated arrival point and such loading terminal or discharge terminal.

 

2.                                      War Risks Insurance

 

Contractor shall have the same rights and obligations in respect of insurance of war risks as provided for all the risks referred to in Paragraph 1 hereof and, where applicable, up to the same cover amounts.

 

3.                                      Compulsory Insurances

 

(a)                                 The insurances required under Paragraphs 1 and 2 hereof and the DPEM  insurance — Insurance for Personal Damages caused by Vessels or their Cargo -,  are hereinafter sometimes together referred to as the “Compulsory Insurances”.

 

(b)                                When the Vessel is idle or laid up, Contractor may (or subject to availability, at the request of Customer, Contractor shall), in lieu of the insurance required hereunder, arrange port risk insurance under such forms as Customer may approve in writing such approval not to be unreasonably withheld, insuring the Vessel against the usual risks covered by such forms and for the amounts set forth in Paragraph 1.

 

D-1

 

PART B - Premiums and Claims

 

1.                                      Payment of Premiums

 

(a)                                 Contractor shall be responsible for the prompt payment of any and all premiums and calls of whatsoever nature lawfully demanded by insurers for all insurance taken out on the Vessel.

 

(b)                                If Contractor shall default in the payment of any premiums or calls as aforesaid, Customer may, but shall not in any circumstances be obliged to, pay any such premiums or calls direct to the insurers in question and Customer shall then be entitled to deduct any such payments made from the next due payment of Fees.

 

2.                                      Claims

 

Contractor shall diligently pursue all claims which can be made under the Compulsory Insurances.

 

PART C - Placing of Insurances: Miscellaneous

 

1.                                      Additional War Zone Expenses

 

Notwithstanding any other provisions of this Schedule IV, and subject as provided in Clause 28 of the Agreement, all extra expenses incurred by Contractor (in relation to Insurances) if the Vessel is required to trade in areas where there is war or, as determined by the insurers of the Vessel, a warlike situation (de facto or de jure) shall be reimbursed by Customer to Contractor, provided that, if practicable, Customer shall be given an opportunity of signifying its approval before such expenses are incurred.

 

2.                                      Waiver of Subrogation, Customer’s Named Assured etc.

 

Unless Customer otherwise agrees, Contractor undertakes that all Approved Club entries relating to the Vessel and its operations shall (a) subject to the limits of the Approved Club, waive insurers’ rights of subrogation against Customer and (b) otherwise recognise, in a manner acceptable to Customer, Customer’s interests in the Vessel and its operations.  Except for war risks insurances, Contractor shall cause all insurers to agree in writing to give Customer as much prior written notice as possible, but in no event less than *****  prior written notice, of the cancellation of Compulsory Insurances which such insurers arrange and to provide Customer with an opportunity to cure any default by Contractor that would otherwise result in such cancellation.  Provided that in respect of Approved Club entries, the Approved Club will undertake to give Customer notice in writing with the same period of notice as to Contractor in all cases where the Approved Club terminates the entry, except that if such termination is attributable to the failure by Contractor to pay when due and demanded any premium or contribution due from it to the Approved Club, the Approved Club will undertake not to exercise such rights without giving Customer thirty (30) days notice in writing.

 

D-2

 

3.                                      No Prejudice to Customer Clause

 

Contractor shall cause to be inserted in all policies a clause stating that the insurance under the policy or entry, as to the interest only of Customer, shall not be impaired in any way by any change in the interest of Contractor in the property described in the policy or entry, or the transfer or possession thereof without the consent of Customer, or by any breach of warranty or condition of the policy or entry, or by any omission or neglect, or by the performance of any act in violation of any terms or conditions of the policy or entry or because the failure to perform any act required by the terms or conditions of the policy or entry or because of the subjection of the property to any conditions, uses or operation not permitted by the policy or entry, or because of any false statement concerning the policy or entry or the subject thereof, by Contractor or Contractors’ employees, contractors, subcontractors, agents or representatives; whether occurring before or after the attachment of the policy or entry, or whether before or after any loss or damage.

 

4.                                      Other Insurances

 

Nothing herein provided shall prevent Contractor from arranging, for its sole benefit, additional insurance cover of the types included in the Compulsory Insurance and/or insurance of other types on such terms as Contractor thinks fit.

 

D-3

 

SCHEDULE V

 

LIST OF PRIMARY AND DESIGNATED TERMINALS

 

1.                                      The Vessel shall be capable of loading and discharging LNG at the following terminals (each a Primary Terminal):

 

*****

 

2.                                      The Vessel shall be capable of loading and discharging LNG at the following terminals (each a Designated Terminal).

 

Each of the Primary Terminals as listed under Clause 1 above.

 

E-1

 

SCHEDULE VI

 

DETAILED PERFORMANCE CRITERIA

 

CONTENTS

 

	
Part A
    	
Shipping Operations
    
	
 
    	
 
    
	
Article 1
    	
Speed
    
	
 
    	
 
    
	
Article 2
    	
Timeliness
    
	
 
    	
 
    
	
Article 3
    	
Spray Cooling, Forced Vaporisation and use of Boil-Off
    
	
 
    	
 
    
	
Article 4
    	
Provisions for Gauging
    
	
 
    	
 
    
	
Article 5
    	
Underwater Cleaning/Waiting at Anchorage
    
	
 
    	
 
    
	
Part B
    	
Operation of Loading, Storage, Regas and Gas Delivery
    
	
 
    	
 
    
	
Article 6
    	
LNG Regasification plant performance guarantee
    
	
 
    	
 
    
	
Article 7
    	
Interpretation
    

 

PART A

 

SHIPPING OPERATIONS

 

1.                                      Speed Warranties

 

Customer may order the Vessel to steam at the Laden Service Speed or the Ballast Service Speed, as applicable, or at any lesser average speed but not less than the Minimum Service Speed and not at a greater average speed, except with Contractor’s consent, which shall not be unreasonably withheld.  For the avoidance of doubt, it is acknowledged that Contractor may decline orders to steam at any lesser average speed than the Minimum Service Speed or at any greater average speed than the Service Speed for operational reasons.

 

2.                                      Timeliness

 

(a)                                  Prior to each voyage Customer may, subject to Article 1, instruct the Vessel to proceed so as to arrive at the pilot boarding station at each port at a given date and time (the “Scheduled Arrival Time” or “SAT”).  Provided however that:

 

(i)                                     in the event that Customer fails to provide a SAT to Contractor, the SAT shall be deemed to be the estimated arrival time of the Vessel

 

F-1

 

assuming the Vessel steams at the Service Speed by the shortest safe route to the named port measured from pilot station to pilot station (a “Sea Passage”) (or the route specified by Customer, if different) from the time Customer instructs the Vessel to proceed;

 

(ii)                                  the SAT shall in any event not be earlier than the estimated arrival time calculated in accordance with Article 2(a)(i);

 

(iii)                               subject to Article 1, Customer may amend the SAT from time to time during or prior to each voyage to accommodate changes in circumstances concerning the voyage (the “Amended SAT”); and

 

(iv)                              the speed at which the Vessel needs to steam in order to meet the SAT or the Amended SAT or any permissible speed ordered by the Customer shall be a “Guaranteed Speed”.

 

(b)                                 Customer shall compare the actual time of arrival of the Vessel at the pilot station at each port with the SAT save that if the SAT was amended solely for reasons not attributable to any failure in performance by the Vessel, then such comparison shall be made with the Amended SAT.

 

(c)                                  If the Vessel arrives at the pilot station at the arrival port not later than ***** after the SAT or Amended SAT, where applicable, the Vessel shall be deemed to have arrived “On Time”.  If the Vessel arrives at the pilot station more than ***** after the SAT, or Amended SAT where applicable, the Vessel shall be deemed to have arrived “Late”.

 

(d)                                 Subject to Articles 2(e) and 2(f), Customer shall be entitled to make a deduction from the Fee in respect of any period by which the Vessel arrives Late, in accordance with Clause 17.4(b)(i).

 

(e)                                  Notwithstanding the foregoing but subject to Article 2(f), Customer shall not be entitled to make any deduction from the Fee if the Vessel arrives Late to the extent that such late arrival is caused by one or more of the following during the voyage:

 

(i)                                     the incidence of bad weather, being any day in which the Vessel has to proceed in wind force in excess of Beaufort Force 5 for more than twelve (12) hours noon to noon; or

 

(ii)                                  poor visibility; or

 

(iii)                               congested waters; or

 

(iv)                              alterations in speed or course to avoid areas of bad weather; or

 

(v)                                 any period spent at a waiting area following arrival; or

 

(vi)                              the saving of life or (with Customer’s consent) property, (Articles 2(e)(i),(ii),(iii),(iv) and (v) being known as “Restricted Periods”); or

 

F-2

 

(vii)                           any period when the Vessel is off-Hire at sea on any individual voyage. The Master shall record in his daily noon report the time lost in the previous twenty four (24) hours due to any of the matters referred to in this Article 2(e).

 

(f)                                    If the Vessel arrives Late, the following calculation shall be made to assess the period in respect of which Customer shall be entitled to deduct Fees.  The speed of the Vessel shall be calculated over the Sea Passage, excluding all Restricted Periods (the “Achieved Speed”).  If the Achieved Speed equals or exceeds the Guaranteed Speed, Contractor shall be deemed to have met the Speed Performance Warranty.  If the Achieved Speed is less than the Guaranteed Speed Customer shall apply the Achieved Speed to the total Sea Passage and the time at which the Vessel would have arrived (if steaming at the Achieved Speed) shall be the “Deemed Arrival Time”.  Customer shall be entitled to deduct Fees to the extent to which the Deemed Arrival Time exceeds the SAT by more than three hours.

 

3.                                      Spray Cooling, Forced Vaporisation and use of Boil-Off

 

(a)                                  If Contractor requires or if Customer so requests, the Vessel shall spray cool as necessary in a manner consistent with Contractor’s or Customer’s requirements so as to maximise the use of the available Boil-Off for propulsion, whilst using due diligence to avoid the generation of any excess Boil-Off.

 

(b)                                 If during any sea passage Customer orders the Vessel to force vaporise LNG to eliminate or minimise the use of bunkers and the order is complied with, the Boil-Off guarantee relevant to such operation shall be deemed to have been complied with for the tank from which the LNG has been pumped.

 

(c)                                  The Parties agree that the Master shall notify Customer if he is of the opinion that the Vessel will not, on arrival at any LNG loading port, be able to commence bulk loading within half an hour after cooling of the loading arms without spray cooling on the ballast sea passage.

 

(d)                                 Without prejudice to any of Contractor’s or Customer’s obligations under this Article 3, if Contractor intends to order spray cooling at any time during the Term, Contractor agrees, if requested by Customer, to provide written notice of the reasons and technical basis for spray cooling.

 

(e)                                  Subject to the provisions of this Agreement, Contractor shall have free use of Boil-Off.  Except when otherwise required pursuant to Customer’s orders, Contractor shall exercise due diligence to minimise any venting or steam dumping of Boil-Off during periods of low fuel demand.

 

4.                                      Provisions for Gauging

 

(a)                                  The time at which any volume of LNG is determined is referred to in this Agreement as a gauging time.

 

F-3

 

(b)                                 In relation to any laden sea passage the cargo volume shall be (i) on loading at the start of the laden sea passage, the volume of LNG contained in the Vessel’s cargo tanks measured promptly after the closing of the Vessel’s manifold vapour return valve in the loading port, and (ii) on discharge at the end of the laden sea passage, the volume of LNG contained in the Vessel’s cargo tanks measured promptly before the opening of the Vessel’s manifold vapour return valve in the discharge port.

 

(c)                                  In relation to any ballast sea passage the LNG heel volume shall be (i) after discharge (i.e. at the start of the ballast sea passage), the volume of LNG contained in the Vessel’s cargo tanks measured promptly after the closing of the manifold vapour return valve in the discharge port and (ii) the LNG heel volume on loading (i.e. at the end of the ballast sea passage), the volume of LNG contained in the Vessel’s cargo tanks measured promptly before the opening of the Vessel’s manifold vapour return valve in the loading port.

 

(d)                                 In relation to the LNG storage and regasification activities of the Vessel, the measurement of LNG shall be effected continuously throughout the entire Performance Period.

 

F-4

 

PART B

 

OPERATION OF LOADING, STORAGE, REGAS AND GAS DELIVERY

 

6.                                    LNG Regasification Equipment performance guarantee

 

(a)                                Contractor guarantees that the Vessel is capable of the Flow Rate Modulation, in accordance with the Nomination Procedure.

 

(b)                               Contractor guarantees that the Vessel is capable of regasifyng LNG at a minimum temperature of five degrees Celsius (5oC) and a maximum of fifty degrees Celsius (50 oC) at the main deck isolation valve.

 

7.                                    Interpretation

 

In this Schedule VI, and unless indicated to the contrary, “Article” shall mean an Article of this Schedule VI, and “Clause” shall mean a Clause of the Agreement.

 

F-5

 

SCHEDULE VII

 

CERTIFICATE OF ACCEPTANCE

 

CERTIFICATE OF ACCEPTANCE

 

FOR

 

LNG VESSEL mv Golar Spirit

 

The LNG Carrier mv GOLAR SPIRIT, IMO No. 7373327 was accepted by Petróleo Brasileiro S.A. on [insert date of signing this certificate] under the Operation and Services Agreement dated                        , made between Petróleo Brasileiro S.A. (as Customer) and Golar Serviços de Operaçóes de Embarcaçóes Limitada (as Contractor).

 

Delivery Date:   [Actual date of signing this certificate]

 

Place of acceptance of the Vessel:  [Place]

 

Fee Commencement Date:  [Date]

 

Quantity of bunkers on board Vessel on Delivery Date:  [Quantity]

 

Quantity of LNG on board Vessel on Delivery Date:  [Quantity]

 

 

	
FOR   CUSTOMER:
    	
 
    	
FOR   CONTRACTOR:
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
Date Signed:
    	
 
    	
Date Signed:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Witnessed by:
    	
 
    	
Witnessed by:
    
	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
Date Signed:
    	
 
    	
Date Signed:
    
					

 

G-1

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