Document:

Exhibit 10.15

 

BIMCO
STANDARD BAREBOAT CHARTER

CODE
NAME: “BARECON 2001”

PART I

 

1.     Shipbroker

N/A

 

2.     Place and date

New York, New York

November 22  2008

 

3.     Owners/Place of business (CI. 1)

OSG 400 LLC in its capacity as the owner of the barge OSG 400 (the
“Barge”) and OSG Constitution LLC in Its capacity as the owner of the tug OSG
Constitution (the “Tug”) (hereinafter referred to as “Owners”)

302 Knights Run Ave – Suite 1200

Tampa, FL 33602

each “A Delaware Company”

 

4.     Bareboat Charterers/Place of business (CI.
1)

OSP 400 LLC

302 Knights Run Ave – Suite 1200

Tampa, FL 33602

or “A Delaware Company”

 

5.     Vessel’s name, call sign and flag (CI. 1
and 3)

OSG 400, WDD6731, United States

OSG Constitution, WDD6580 United States

 

6.     Type of Vessel

Tank Barge

 

7.     GT/NT

Barge – 27,471 / 20,182

Tug – 1513 / 453

 

8.     When/Where built

Barge: Galveston Shipbuilding Company / March 01, 1981

Tug:     Slidell, LA

 

9.     Total DWT (abt.) in metric tons on summer
freeboard

Barge – 54,062 on 2.05 Metres

Tug – 1548

 

10.   Classification Society (CI. 3)

American Bureau of Shipping A1, Tank Barge

 

11.   Date of last special survey by the Vessel’s
classification society

Barge - August 25, 2006

Tug    - August 31, 2008

 

12.   Further particulars of Vessel (also indicate minimum number of months’
validity of class certificates agreed acc. to CI. 3)

OSG 400 – 644’ x 105’ x 47.9’D. –
O.N. 632920 IMO – G.S.C. 124.

OSG Constitution – 145’ x 46’ x 30’D – O.N. 538087 IMO – 7209447.

 

13.   Port or Place of delivery (CI. 3)

Philadelphia, Pennsylvania

 

14.   Time for delivery (CI. 4)

November 22, 2008    

 

15.   Cancelling date (CI. 5)

As Mutually Agreed

 

16.   Port or Place of delivery (CI. 15)

Mutually Agreed U.S. Port

 

17.   No. of months’ validity of trading and
class certificates Upon redelivery (CI, 15)

Minimum 2 days

 

18.   Running days’ notice if other than stated in CI.
4

N/A

 

19.   Frequency of dry-docking (CI. 10(g))

As per class requirements

 

20.   Trading Limits (CI. 6)

East Coast of United States, North of Hatteras

 

21.   Charter period (CI. 2)

See Clause 35

 

22.   Charter hire (CI. 11)

See Clause 39

 

23.   New class and other safety requirements
(state percentage of Vessel’s insurance value acc. To Box 29)(CI.
10(a)(ii))

See Clause 38(c)

 

24.   Rate of interest payable acc. To CI. 11 (f) and,
if applicable, acc. to PART IV

N/A

 

25.   Currency and method of payment (CI. 11)

USD monthly in advance by wire transfer

 

1

 

	
  “BARECON
  2001” STANDARD BAREBOAT CHARTER

  	
  PART I

  

 

26.   Place of payment; also state beneficiary and
bank account (CI. 11)

JPMorgan Chase Bank

New York, New York

ABA # 021000021

For
Credit to Account #232-2-407251 in the name of OSG Bulk Ships, Inc.         

 

27.   Bank guarantee/bond (sum and place)  (CI. 24) (optional)

N/A

 

28.   Mortgage(s), if any (state whether 12(a) or (b) applies;
if 12(b) applies state date of Financial Instrument and name of Mortgagee(s)/Place
of business) (CI. 12)

N/A

 

29.   Insurance (hull and machinery and war risks) (state value acc. to CI.
13(f) or, if applicable, acc. to CI. 14(k)) (also state if CI. 14
applies)

See Clause 13; Clause 14 does Not apply

 

30.   Additional insurance cover, if any, for
Owners’ account limited to (CI. 13(b)

N/A

 

31.   Additional insurance cover, if any, for
Charterers’ account limited to (CI. 13(b)

N/A

 

32.   Latent defects (only to be filled in if
period other than stated in CI. 3

N/A

 

33.   Brokerage commission and to whom payable (CI.
27)

N/A 

 

34.   Grace period (state number of clear banking
days) (CI. 28)

N/A

 

35.   Dispute Resolution (state 30(a), 30(b) or
30(c); if 30(c) agreed Place of Arbitration must be
stated (CI. 30)

New York Law, New York Arbitration

 

36.   War cancellation (indicate countries agreed)
(CI. 26(f)

N/A

 

37.   Newbuilding Vessel (indicate with “yes” or
“no” whether PART III applies) (optional)

NO

 

38.   Name and place of Builders (only to be filled
in if PART III applies)

N/A

 

39.   Vessel’s Yard Building No. (only to be
filled in if PART III applies)

N/A

 

40.   Date of Building Contract (only to be filled
in if PART III applies)

N/A

 

41.   Liquidated damages and costs shall accrue to
(state party acc. to CI. 1)

a)     N/A

b)     N/A

c)     Owner

 

42.   Hire/Purchase agreement (indicate with “yes”
or “no” whether PART IV applies) (optional)

NO

 

43.   Bareboat Charter Registry (indicate with
“yes” or “no” whether PART V applies) (optional)

NO

 

44.   Flag and Country of the Bareboat Charter
Registry (only to be filled In if PART V applies)

N/A

 

45.   Country of the Underlying Registry (only to
be filled in if PART V applies)

N/A

 

46.   Number of additional clauses covering special
provisions, if agreed

22 total; Number 32-51 as attached

 

PREAMBLE
– It is mutually agreed that this Contract shall be performed subject to the
conditions contained in this Charter which shall include PART I and
PART II.  In the event of a
conflict of conditions, the provisions of PART I shall prevail over
those of PART II to the extent of such conflict but no
further.  It is further mutually agreed
that PART III and/or PART IV and/or PART V shall
only apply and only form part of this Charter if expressly agreed and stated in
Boxes 37, 42 and 43. 
If PART III and/or PART IV and/or PART V
apply, it is further agreed that in the event of a conflict of conditions, the
provisions of PART I and PART II shall prevail over those of PART III
and/or PART IV and/or PART V to the extent of such
conflict but no further.

 

	
  Signature
  (Owners)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  OSG
  400 LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Manager

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature
  (Charterers)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  OSP
  400 LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Manager

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  OSG
  CONSTITUTION LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Manager

  	
   

  

 

2

 

PART II

 

“BARECON 2001” Standard Bareboat
Charter

 

1.              Definitions

 

In this Charter, the following terms shall have the meanings hereby
assigned to them; “The Owners” shall mean the party
identified in Box 3; “The Charterers”
shall mean the party identified in Box 4; “The Vessel”
shall mean the vessel named in Box 5 and with particulars as stated in Boxes
6 to 12.”Financial Instrument”
means such financial security instrument as  annexed to this Charter and stated in Box 28.

 

2.              Charter Period

 

In consideration of the hire detailed in Box 22, the Owners have agreed
to let and the Charterers have agreed to hire the Vessel for the period stated
in Box 21 (“The Charter Period”).

 

3.              Delivery

 

(not applicable when part III applies, as indicated in Box 37).

(a)   The Vessel shall be delivered by the Owners
and taken over by the Charterers at the port or place indicated in Box 13
in such ready safe berth as the Charterers may direct.

(b)   The Vessel shall be properly documented on
delivery in accordance with the laws of the flag State indicated in Box 5
and the requirements of the classification society stated in Box 10.  The Vessel upon delivery shall have her
survey cycles up to date and trading and class certificates valid for at least
the number of months agreed in Box 12.

(c)   The delivery of the Vessel by the Owners and
the taking over of the Vessel by the Charterers shall constitute a full
performance by the Owners of all the Owners’ obligations under this Clause 3,
and thereafter the Charterers shall not be entitled to make or assert any claim
against the Owners on account of any conditions, representations or warranties
expressed or implied with respect to the Vessel.

 

4.              Time for Delivery

 

(not applicable when Part III applies, as indicated in Box 37).

The Vessel shall not be delivered before the date indicated in Box 14
without the Charterers’ consent and the Owners shall exercise due diligence to
deliver the Vessel not later than the date indicated in Box 15.  The Owners shall keep the Charterers closely
advised of possible changes in the Vessel’s position.

 

5.              Cancelling

 

(not applicable when Part III
applies, as indicated in Box 37).

(Intentionally omitted)

 

6.              Trading Restrictions

 

The Vessel shall be employed in lawful trades for the carriage of
suitable lawful merchandise within the trading limits in Box 20.

 

The Charterers undertake not to employ the Vessel or suffer the Vessel
to be employed otherwise than in conformity with the terms of the contracts of
insurance (including any warranties expressed or implied therein) without first
obtaining the consent of the insurers to such employment and complying with
such requirements as to extra premium or otherwise as the insurers may
prescribe.

 

The Charterers
also undertake not to employ the Vessel or suffer her employment in any trade
or business which is forbidden by the law of any country to which the Vessel
may sail or is otherwise illicit or in carrying illicit or prohibited goods or
in any manner whatsoever which may render her liable to condemnation, destruction,
seizure or confiscation.

 

Notwithstanding any other provisions contained in this Charter it is
agreed that nuclear fuels or radioactive products or waste are specifically
excluded from the cargo permitted to be loaded or carried under this
Charter.  This exclusion does not apply
to radio-isotopes used or intended to be used for any industrial, commercial,
agricultural, medical or scientific purposes provided the Owners’ prior
approval has been obtained to loading thereof.

 

7.              Surveys on Delivery and Redelivery

 

(Intentionally omitted)

 

8.              Inspection

 

The Owners shall have the right at any time after giving reasonable
notice to the Charterers to inspect or survey the Vessel or instruct a duly
authorised surveyor to carry out such survey on their behalf.

 

(a)          (intentionally omitted)

(b)   in dry-dock if the Charterers have not
dry-docked Her in accordance with Clause 10(g).  The costs and fees for such inspection or
survey shall be paid by the Charterers; and

(c)   for any other commercial reason they consider
necessary (provided it does not unduly interfere with the commercial operation
of the Vessel).  The costs and fees for
such inspection and survey shall be paid by the Owners.

 

All time used in respect of inspection, survey or repairs shall be for
the Charterers’ account and form part of the Charter Period.

 

The Charterers shall also permit the Owners to inspect the Vessel’s log
books whenever requested and shall whenever required by the Owners furnish them
with full information regarding any casualties or other accidents or damage to
the Vessel.

 

9.              Inventories, Oil and Stores

 

(Intentionally omitted)

 

3

 

10.       Maintenance and Operation

 

(a)(i)          Maintenance and Repairs – During the Charter Period the Vessel shall
be in the full possession and at the absolute disposal for all purposes of the
Charterers and under their complete control in every respect.  The Charterers shall maintain the Vessel, her
machinery, boilers, appurtenances and spare parts in accordance with good
commercial maintenance practice and, except as provided for in Clause 14(l),
if applicable, at their own expense they shall at all times keep the Vessel’s Class fully
up to date with the Classification Society indicated in Box 10 and
maintain all other necessary certificates in force at all times.

(ii)                    (intentionally omitted)

(iii)                Financial Security – The Charterers shall maintain financial
security or responsibility in respect of third party liabilities as required by
any government, including federal, state or municipal or other division or
authority thereof, to enable the Vessel, without penalty or charge, lawfully to
enter, remain at, or leave any port, place, territorial or contiguous waters of
any country, state or municipality in performance of this Charter without any
delay.  This obligation shall apply
whether or not such requirements have been lawfully imposed by such government
or division of authority thereof.

 

The
Charterers shall make and maintain all arrangements by bond or otherwise as may
be necessary to satisfy such requirements at the Charterers’ sole expense and
the Charterers shall indemnify the Owners against all consequences whatsoever
(including loss of time) for any failure or inability to do so.

 

(b)                      Operation of the Vessel – The Charterers shall at their own expense
and by their own procurement man, victual, navigate, operate, supply, fuel and,
whenever required, repair the Vessel during the Charter Period and they shall
pay all charges and expenses of every kind and nature whatsoever incidental to
their use and operation of the Vessel under this Charter, including annual flag
State fees and any foreign general municipality and/or state taxes.  The Master, officers and crew of the Vessel
shall be the servants of the Charterers for all purposes whatsoever, even if
for any reason appointed by the Owners.

 

Charterers shall comply with the regulations regarding officers and crew
in force in the country of the Vessel’s flag or any other applicable law.

 

(c)                      The Charterers shall keep the Owners and the
mortgagee(s) advised of the intended employment, planned dry-docking and
major repairs of the Vessel, as reasonably required.

 

(d)                      Flag and Name of Vessel – During the Charter Period, the Charterers
shall have the liberty to paint the Vessel in their own colours, install and
display their funnel insignia and fly their own house flag.  The Charterers shall also have the liberty,
with the Owners’ consent, which shall not be unreasonably withheld, to change
the flag and/or the name of the Vessel during the Charter Period.  Painting and re-painting, instalment and
re-instalment, registration and re-registration, if required by the Owners,
shall be at the Charterers’ expense and time.

 

(e)                      Changes to the Vessel – Subject to Clause 10(a)(ii), the
Charterers shall make no structural changes in the Vessel or changes in the
machinery, boilers, appurtenances or spare parts thereof without in each
instance first securing the Owners’ approval thereof.

 

(f)                        Use of the Vessel’s Outfit, Equipment and Appliances – The Charterers shall have the use of all
outfit, equipment, and appliances on board the Vessel at the time of delivery,
provided the same or their substantial equivalent shall be returned to the
Owners on redelivery in the same good order and condition as when received,
ordinary wear and tear excepted.  The
Charterers shall from time to time during the Charter Period replace such items
of equipment as shall be so damaged or worn as to be unfit for use.  The Charterers are to procure that all repairs
to or replacement of any damaged, worn or lost parts or equipment be effected
in such manner (both as regards workmanship and quality of materials) as not to
diminish the value of the Vessel.  The
Charterers have the right to fit additional equipment at their expense and risk
but the Charterers shall remove such equipment at the end of the period if
requested by the Owners.  Any equipment
including radio equipment on hire on the Vessel at time of delivery shall be
kept and maintained by the Charterers and the Charterers shall assume the
obligations and liabilities of the Owners under any lease contracts in
connection therewith and shall reimburse the Owners for all expenses incurred
in connection therewith, also for any new equipment required in order to comply
with radio regulations.

 

(g)                     Periodical Dry-Docking –The Charterers shall drydock the Vessel and
clean and paint her underwater parts whenever the same may be necessary, but
not less than once during the period stated in Box 19 or, if Box 19
has been left blank, every sixty (60) calendar months after delivery or such
other period as may be required by the Classification Society or flag State.

 

11.       Hire

 

(a)                      The Charterers shall pay hire due to the
Owners punctually in accordance with the terms of this Charter in respect of
which time shall be of the essence.

(b)                      The Charterers shall pay to the Owners for the
hire of the Vessel a lump sum in the amount indicated in Box 22 which
shall be payable not later than every thirty (30) running days in advance, the
first lump sum being payable on the date and hour of the Vessel’s delivery to
the Charterers.  Hire shall be paid
continuously throughout the Charter Period.

(c)                      Payment of hire shall be made in cash without
discount in the currency and in the manner indicated in Box 25 and at
the place mentioned in Box 26.

(d)                      Final payment of hire, if for a period of less
than thirty (30) running days, shall be calculated proportionally according to
the number of days and hours remaining before redelivery and advance payment to
be effected accordingly.

(e)                      Should the Vessel be lost or missing, hire
shall cease from the date and time when she was lost or last heard of.  The date upon which the Vessel is to be
treated as lost or missing shall be ten (10) days after the Vessel was
last reported or when the Vessel is posted as missing by Lloyd’s, whichever
occurs first.  Any hire paid in advance
to be adjusted accordingly.

(f)                        (Intentionally omitted)

(g)                     (Intentionally omitted)

 

4

 

12.       Mortgage

 

(only to apply if Box 28 has been appropriately filled in)

*)             (a)       The Owners
warrant that they have not effected any mortgage(s) of the Vessel and that
they shall not effect any mortgage(s) without the prior consent of the
Charterers, which shall not be unreasonably withheld.

*)             (b)       The
Vessel chartered under this Charter is financed by a mortgage according to the
Financial Instrument.  The Charterers
undertake to comply, and provide such information and documents to enable the
Owners to comply, with all such instructions or directions in regard to the
employment, insurances, operation, repairs and maintenance of the Vessel as
laid down in the Financial Instrument or as may be directed from time to time
during the currency of the Charter by the mortgagee(s) in conformity with
the Financial Instrument.  The Charterers
confirm that, for this purpose, they have acquainted themselves with all
relevant terms, conditions and provisions of the Financial Instrument and agree
to acknowledge this in writing in any form that may be required by the
mortgagee(s).  The Owners warrant that
they have not effected any mortgage(s) other than stated in Box 28
and that they shall not agree to any amendment of the mortgage(s) referred
to in Box 28 or effect any other mortgage(s) without the prior
consent of the Charterers, which shall not be unreasonably withheld.

*)                (Optional, Clauses 12(a) and
12(b) are alternatives; indicate alternative agreed in Box 28).

 

13.       Insurance and Repairs

 

(a)       During the Charter Period the Vessel shall be
kept insured by the Charterers at their expense against hull and machinery, war
and Protection and Indemnity risks (and any risks against which it is
compulsory to insure for the operation of the Vessel, including maintaining financial
security in accordance with sub-clause 10(a)(iii) in such form as the
Owners shall in writing approve, which approval shall not be un-reasonably
withheld.  Such insurances shall be
arranged by the Charterers to protect the interests of both the Owners and the
Charterers and the mortgagee(s) (if any), and The Charterers shall be at
liberty to protect under such insurances the interests of any managers they may
appoint.  Insurance policies shall cover
the Owners and the Charterers according to their respective interests.  Subject to the provisions of the Financial
Instrument, if any, and the approval of the Owners and the insurers, the
Charterers shall effect all insured repairs and shall undertake settlement and
reimbursement from the insurers of all costs in connection with such repairs as
well as insured charges, expenses and liabilities to the extent of coverage
under the insurances herein provided for.

 

The
Charterers also to remain responsible for and to effect repairs and settlement
of costs and expenses incurred thereby in respect of all other repairs not
covered by the insurances and/or not exceeding any possible franchise(s) or
deductibles provided for in the insurances.

 

All
time used for repairs under the provisions of subclause 13(a) above, including
any deviation, shall be for the Charterers’ account.

 

(b)       If the conditions of the above insurances
permit additional insurance to be placed by the parties, such cover shall be
limited to the amount for each party set out in Box 30 and Box 31,
respectively.  The Owners or the
Charterers as the case may be shall immediately furnish the other party with
particulars of any additional insurance effected, including copies of any cover
notes or policies and the written consent of the insurers of any such required
insurance in any case where the consent of such insurers is necessary.

 

(c)       The Charterers shall upon the request of the
Owners, provide information and promptly execute such documents as may be
required to enable the Owners to comply with the insurance provisions of the
Financial Instrument.

 

(d)       Subject to the provisions of the Financial
Instrument, if any, should the Vessel become an actual, constructive,
compromised or agreed total loss under the insurances required under sub-clause
13(a), all insurance payments for such loss shall be paid to the Owners who
shall distribute the moneys between the Owners and the Charterers according to
their respective interests.  The
Charterers undertake to notify the Owners and the mortgagee(s), if any, of any
occurrences in consequence of which the Vessel is likely to become a total loss
as defined in this Clause.  

 

(e)       The Owners shall upon the request of the
Charterers, promptly execute such documents as may be required to enable the
Charterers to abandon the Vessel to insurers and claim a constructive total
loss.

 

(f)        For the purpose of insurance coverage against
hull and machinery and war risks under the provisions of sub-clause 13(a),
the value of the Vessel is the sum indicated in Box 29.

 

14.       Insurance, Repairs and
Classification (Intentionally omitted)

 

15.       Redelivery

 

At
the expiration of the Charter Period the Vessel shall be redelivered by the
Charterers to the Owners at a safe and ice-free port or place as indicated in Box
16, in such ready safe berth as the Owners may direct.

 

16.       Non-Lien

 

The
Charterers will not suffer, nor permit to be continued, any lien or encumbrance
incurred by them or their agents, which might have priority over the title and
interest of the Owners in the Vessel.

 

17.       Indemnity

 

(a)       The Charterers shall indemnify the Owners
against any loss, damage or expense incurred by the Owners arising out of or in
relation to the operation of the Vessel by the Charterers, and against any lien
of whatsoever nature arising out of an event occurring during the Charter
Period.  If the Vessel be arrested or
otherwise detained by reason of claims or liens arising out of her operation
hereunder by the Charterers, the Charterers shall at their own expense take all
reasonable steps to secure that within a reasonable time the Vessel is
released, including the provision of bail.

 

5

 

Without prejudice to the generality of the foregoing, the Charterers
agree to indemnify the Owners against all consequences or liabilities arising
from the Master, officers or agents signing Bills of Lading or other documents.

 

(b)       If the Vessel be arrested or otherwise
detained by reason of a claim or claims against the Owners, the Owners shall at
their own expense take all reasonable steps to secure that within a reasonable
time the Vessel is released, including the provision of bail.

 

In such circumstances the Owners shall indemnify the Charterers against
any loss, damage or expense incurred by the Charterers (including hire paid
under this Charter) as a direct consequence of such arrest or detention.

 

18.       Lien

 

The
Owners to have a lien upon all cargoes, sub-hires and sub-freights belonging or
due to the Charterers or any sub-charterers and any Bill of Lading freight for
all claims under this Charter, and the Charterers to have a lien on the Vessel
for all moneys paid in advance and not earned.

 

19.       Salvage

 

All
salvage and towage performed by the Vessel shall be for the Charterers’ benefit
and the cost of repairing damage occasioned thereby shall be borne by the
Charterers.

 

20.       Wreck Removal

 

In
the event of the Vessel becoming a wreck or obstruction to navigation the
Charterers shall indemnify the Owners against any sums whatsoever which the
Owners shall become liable to pay and shall pay in consequence of the Vessel
becoming a wreck or obstruction to navigation.

 

21.       General Average

 

The
Owner shall not contribute to General Average.

 

22.       Assignment, Sub-Charter and Sale

 

(a)       The Charterers shall not assign this Charter
nor sub-charter the Vessel on a bareboat basis except with the prior consent in
writing of the Owners, which shall not be unreasonably withheld, and subject to
such terms and conditions as the Owners shall approve.

(b)       SEE CLAUSE 41.

 

23.       Contracts of Carriage

 

*)             (a)       The
Charterers are to procure that all documents issued during the Charter Period
evidencing the terms and conditions agreed in respect of carriage of goods
shall contain a paramount clause incorporating any legislation relating to
carrier’s liability for cargo compulsorily applicable in the trade; if no such
legislation exists, the documents shall incorporate the USCOGSA.  The documents shall also contain the New
Jason Clause and the Both-to-Blame Collision Clause.

 

*)             (b)       (Intentionally omitted)

 

24.       Bank Guarantee (Intentionally omitted)

 

25.       Requisition/Acquisition

 

(a)       In the event of the Requisition for Hire of
the Vessel by any governmental or other competent authority (hereinafter
referred to as “Requisition for Hire”) irrespective of the date during the
Charter Period when “Requisition for Hire” may occur and irrespective of the
length thereof and whether or not it be for an indefinite or a limited period
of time, and irrespective of whether it may or will remain in force for the
remainder of the Charter period, this Charter shall not be deemed thereby or
thereupon to be frustrated or otherwise terminated and the Charterers shall
continue to pay the stipulated hire in the manner provided by this Charter
until the time when the Charter would have terminated pursuant to any of the
provisions hereof always provided however that in the event of “Requisition for
Hire” any Requisition Hire or compensation received or receivable by the Owners
shall be payable to the Charterers during the remainder of the Charter Period
or the period of the “Requisition for Hire” whichever be the shorter.

(b)       (Intentionally omitted)

 

26.       War

 

(a)       For the purpose of this Clause, the words “War
Risks” shall include any war (whether actual or threatened), act of war, civil
war, hostilities, revolution, rebellion, civil commotion, warlike operations,
the laying of mines (whether actual or reported), acts of piracy, acts of
terrorists, acts of hostility or malicious damage, blockades (whether imposed
against all vessels or imposed selectively against vessels of certain flags or
ownership, or against certain cargoes or crews or otherwise howsoever), by any
person, body, terrorist or political group, or the Government of any state
whatsoever, which may be dangerous or are likely to be or to become dangerous
to the Vessel, her cargo, crew or other persons on board the Vessel.

(b)       The Vessel, unless the written consent of the
Owners be first obtained, shall not continue to or go through any port, place,
area or zone (whether of land or sea), or any waterway or canal, where it
reasonably appears that the Vessel, her cargo, crew or other persons on board
the Vessel, in the reasonable judgement of the Owners, may be, or are likely to
be, exposed to War Risks.  Should the
Vessel be within any such place as aforesaid, which only becomes dangerous, or
is likely to be or to become dangerous, after her entry into it, the Owners
shall have the right to require the Vessel to leave such area.

(c)       The Vessel shall not load contraband cargo, or
to pass through any blockade, whether such blockade be imposed on all vessels,
or is imposed selectively in any way whatsoever against vessels of certain
flags or ownership, or against certain cargoes or crews or otherwise howsoever,
or to proceed to an area where she shall be subject, or is likely to be subject
to a belligerent’s right of search and/or confiscation.

(d)       If the insurers of the war risks insurance
should require payment of premiums and/or calls because, pursuant to the
Charterers’ orders, the Vessel is within, or is due to enter and remain within,
any area or areas which are specified by such insurers as being subject to
additional premiums because of War Risks, then such premiums and/or calls shall
be reimbursed by the Charterers to the Owners at the same time as the next
payment of hire is due.

 

6

 

(e)       The Charters 
shall have the liberty:

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

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

(iii)     to comply with the terms of any resolution
of the Security Council of the United nations, any directives of the European
Community, the effective orders of any other Supranational body which has the
right to issue and give the same, and with national laws aimed at enforcing the
same to which the Owners are subject, and to obey the orders and directions of
those who are charged with their enforcement.

(f)        (Intentionally omitted)

 

27.       Commission (Intentionally
omitted)

 

28.       Termination

 

(a)       Charterers’ Default

The
Owners shall be entitled to withdraw the Vessel from the service of the
Charterers and terminate the Charter with immediate effect by written notice to
the Charterers if:

(i)       the Charterers fail to pay hire in accordance
with Clause 11.  However, where
there is a failure to make punctual payment of hire due to oversight,
negligence, errors or omissions on the part of the Charterers or their bankers,
the Owners shall give the Charterers written notice of the number of clear
banking days stated in Box 34 (as recognised at the agreed place of
payment) in which to rectify the failure, and when so rectified within such
number of days following the Owners’ notice, the payment shall stand as regular
and punctual.  Failure by the Charterers
to pay hire within the number of days stated in Box 34 of their
receiving the Owners’ notice as provided herein, shall entitle the Owners to
withdraw the Vessel from the service of the Charterers and terminate the
Charter without further notice;

(ii)      The Charterers fail to comply with the
requirements of:

(1)         Clause 6 (Trading Restrictions)

(2)         Clause 13(a) (Insurance and Repairs) provided that the Owners shall have the
option, by written notice to the Charterers, to give the Charterers a specified
number of days grace within which to rectify the failure without prejudice to
the Owners’ right to withdraw and terminate under this Clause if the Charterers
fail to comply with such notice;

(iii)                the Charterers fail to rectify any failure to
comply with the requirements of sub-clause 10(a)(i) (Maintenance and
Repairs) as soon as practically possible after the Owners have requested them
in writing so to do and in any event so that the Vessel’s insurance cover is
not prejudiced.

(b)       Owners’ Default

If
the Owners shall by any act or omission be in breach of their obligations under
this Charter to the extent that the Charterers are deprived of the use of the
Vessel and such breach continues for a period of fourteen (14) running days
after written notice thereof has been given by the Charterers to the Owners,
the Charterers shall be entitled to terminate this Charter with immediate
effect by written notice to the Owners.

(c)       Loss of Vessel

This
Charter shall be deemed to be terminated if the Vessel becomes a total loss or
is declared as a constructive or compromised or arranged total loss.  For the purpose of this sub-clause, the
Vessel shall not be deemed to be lost unless she has either become an actual
total loss or agreement has been reached with her underwriters in respect of
her constructive, compromised or arranged total loss or if such agreement with
her underwriters is not reached it is adjudged by a competent tribunal that a
constructive loss of the Vessel has occurred.

(d)       Either party shall be entitled to terminate
this Charter with immediate effect by written notice to the other party in the
event of an order being made or resolution passed for the winding up,
dissolution, liquidation or bankruptcy of the other party (otherwise than for
the purpose of reconstruction or amalgamation) or if a receiver is appointed,
or if it suspends payment, ceases to carry on business or makes any special
arrangement or composition with its creditors.

(e)       The termination of this Charter shall be
without prejudice to all rights accrued due between the parties prior to the
date of termination and to any claim that either party might have.

 

29.       Repossession

 

In
the event of the termination of this Charter in accordance with the applicable
provisions of Clause 28, the Owners shall have the right to repossess
the Vessel from the Charterers at her current or next port of call, or at a
port or place convenient to them without hindrance or interference by the
Charterers, courts or local authorities. 
Pending physical repossession of the Vessel in accordance with this Clause
29, the Charterers shall hold the Vessel as gratuitous bailee only to the
Owners.  The Owners shall arrange for an
authorised representative to board the Vessel as soon as reasonably practicable
following the termination of the Charter. 
The Vessel shall be deemed to be repossessed by the Owners from the
Charterers upon the boarding of the Vessel by the Owners’ representative.  All arrangements and expenses relating to the
settling of wages, disembarkation and repatriation of the Charterers’ Master,
officers and crew shall be the sole responsibility of the Charterers.

 

30.       Dispute Resolution (Intentionally omitted)

 

31.       Notices

 

(a)       Any notice to be given by either party to the
other party shall be in writing and may be sent by fax, telex, registered or
recorded mail or by personal service.

(b)       The address of the Parties for service of such
communication shall be as stated in Boxes 3 and 4 respectively.

 

7

 

OPTIONAL

PART

 

 “BARECON 2001” Standard Bareboat
Charter

 

PART III

PROVISIONS TO APPLY FOR NEWBUILDING VESSELS ONLY

(Optional, only to apply if expressly agreed and stated in Box 37)

 

(Intentionally Omitted)

 

8

 

OPTIONAL

PART

 

“BARECON 2001” Standard Bareboat Charter

 

PART IV

HIRE/PURCHASE AGREEMENT

(Optional, only to apply if expressly agreed and stated in Box 42)

 

(Intentionally omitted)

 

9

 

OPTIONAL

PART

 

“BARECON 2001” Standard Bareboat Charter

 

PART V

PROVISIONS TO APPLY FOR VESSELS REGISTERED IN A BAREBOAT CHARTER
REGISTRY

(Optional, only to apply if expressly agreed and stated in Box 43)

 

(Intentionally omitted)

 

10

 

ADDITIONAL CLAUSES

OSG 400/OSG
CONSTITUTION

 

	
  TABLE OF CONTENTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  32.

  	
  Definitions

  	
  12

  
	
  33.

  	
  Agreement to
  Charter

  	
  13

  
	
  34.

  	
  INTENTIONALLY
  OMITTED

  	
  13

  
	
  35.

  	
  Charter Period

  	
  13

  
	
  36.

  	
  INTENTIONALLY
  OMITTED

  	
  14

  
	
  37.

  	
  Use and Operation
  of the Vessels

  	
  14

  
	
  38.

  	
  Maintenance and
  Classification

  	
  15

  
	
  39.

  	
  Charter Hire

  	
  15

  
	
  40.

  	
  Insurance

  	
  16

  
	
  41.

  	
  Liens, Sale and
  Attachment

  	
  17

  
	
  42.

  	
  Event of Loss

  	
  17

  
	
  43.

  	
  INTENTIONALLY
  OMITTED

  	
  18

  
	
  44.

  	
  Further
  Undertakings

  	
  18

  
	
  45.

  	
  Additional Events
  of Demise Default

  	
  19

  
	
  46.

  	
  Governing Law

  	
  20

  
	
  47.

  	
  Representations and
  Warranties

  	
  20

  
	
  48.

  	
  Dispute Resolution

  	
  21

  
	
  49.

  	
  Quiet Enjoyment

  	
  21

  
	
  50.

  	
  Notices

  	
  21

  
	
  51.

  	
  Miscellaneous

  	
  22

  
				

 

11

 

ADDITIONAL CLAUSES TO
THAT CERTAIN BIMCO STANDARD BAREBOAT CHARTER (the “Charter”).

 

32.                     Definitions.

 

As
used in this Charter, the following terms shall have the meanings ascribed to
them below:

 

“Barecon” has the meaning given to such term in
Clause 51(f) hereof.

 

“Barge” has the meaning given such term
in Clause 3 of Part I of the Barecon.

 

“Business
Day” means a day that is not a Saturday, Sunday or
other day on which banking institutions doing business in Tampa,
Florida.

 

“Charter
Hire” has
the meaning given to such term in Clause 39(a) hereof.

 

“Charter
Period” means
the term of this Charter.

 

“Classification
Society” means
the American Bureau of Shipping.

 

“Compulsory
Acquisition” means
the condemnation, confiscation, requisition (other than for hire), purchase or
other taking of title of the Vessels by any governmental or other competent
authority.

 

“Crew’s
Wages” means
crew’s wages (including the wages of the Master, to the extent provided by 46
USC § 11112, as amended from time to time).

 

“Event
of Demise Default”
means any event described in Clause 28(a), Clause 39(a) or Clause 45
hereof.

 

“Event
of Loss” means
any of the following events occurring during the Charter Period: (i) the
actual or constructive total loss of the Vessels or the agreed or compromised
total loss of the Vessels; or (ii) Compulsory Acquisition.  An Event of Loss shall be deemed to have
occurred on the date indicated in Clause 39(f) hereof.

 

“Flag
State”
means, subject to Clause 37(c) hereof, the United States.

 

“Lien” means any mortgage, pledge, lien,
charge, encumbrance, lease, right, security interest or claim.

 

“Managers” means OSG Ship Management, Inc.

 

“Permitted
Liens”
means:

 

(i)                                               Liens for Crew’s Wages
and salvage (including contract salvage) which shall not have been due and
payable for more than ten (10) days after termination of a voyage or which
shall then be contested by Owners in good faith;

 

(ii)                                            Liens for Crew’s Wages, salvage
(including contract salvage), general average and damages arising out of tort which
are covered by insurance;

 

(iii)                                         Liens incident to current operations
(except for Crew’s Wages, salvage (including contract salvage) and general
average), or liens for the wages of a stevedore when employed directly by
Owners or the operator, Master or agent

 

12

 

of the Vessels, in all cases, which are
not yet due and payable or which shall then be contested by Owners in good
faith and for which adequate reserves are being maintained;

 

(iv)                Liens covered by insurance and any
deductible applicable thereto;

 

(v)                   Liens for repairs or with respect to any
changes made in the Vessels required by applicable laws, treaties and
conventions or by applicable rules and regulations thereunder which are
not yet due and payable or which shall then be contested by Owners in good
faith and for which adequate reserves are being maintained; and,

 

“Person”
means any individual, corporation, general or limited partnership, joint
venture, association, joint-stock company, limited liability
company, trust, unincorporated organization or government or any agency or political
subdivision thereof.

 

“Subsidiary”
means any Person with respect to
which a specified Person (and/or any Subsidiary thereof) owns a majority of the
equity securities or other equity interests or has the power to elect a
majority of that Person’s board of directors or similar governing body, or
otherwise has the power, directly or indirectly, to direct the business and
policies of that Person.

 

“Tug” has the meaning
given in Clause 3 of Part I of the Barecon.

 

“Vessel” shall mean, individually, the Tug
and the Barge, and collectively, the Tug and the Barge shall be the “Vessels”.

 

Any and all references in this Charter to any
rule, regulation and/or statute shall be to such rule, regulation and/or
statute and the regulations promulgated thereunder, as such rule, regulation
and/or statute may be amended, modified or supplemented from time to time, and
any successor rule, regulation and/or statute thereto.

 

33.                               Agreement to Charter.

 

(a)                                  Subject to the satisfaction of all the
terms and conditions of this Charter, Owners commit to bareboat charter to
Charterer, and Charterer commits to bareboat charter from Owners, the Vessels.

 

(b)                                 Charterer and Owners agree that this
Charter is, and is intended to be, a bareboat charter, that Owners have title
to and is the owner of the Vessels, and that the relationship between Owners
and Charterer pursuant hereto shall always be only that of owner and
charterer.  Charterer does not hereby
acquire any right, equity, title or interest in or to the Vessels, except the
right to use the same under the terms hereof, subject to law and regulatory
authority.  The parties agree to treat
this Charter as a bareboat charter under which Owners are the title owner of
the Vessels, and Charterer is deemed to be the owner pro hac vice
for the entire Charter Period.

 

34.                               INTENTIONALLY OMITTED

 

35.                               Charter Period.

 

Charterer
shall bareboat charter the Vessels for a term commencing with the successful
marriage of the Tug and the Barge in Philadelphia, Pennsylvania following the
return

 

13

 

of the Tug from dry
dock and subject to the Charterer’s reasonable determination of the Vessels’
ability to resume trading in its intended trade, estimated to be on or about November 22,
2008, and ending on January 1, 2010, as such period may be mutually
extended; provided that Charterer shall have the option of redelivering the
Vessels at any time after August 29, 2009 upon 30 days prior notice to
Owners.

 

36.                               INTENTIONALLY OMITTED

 

37.                               Use and Operation of the Vessels.

 

(a)                                  Charterer agrees that the Vessels shall
not be operated in any manner contrary to the applicable laws of the Flag State
or in any manner that may affect documentation of the Vessels under the laws
and regulations of the Flag State or in any area in which the insurance
required by Clause 40 hereof shall not be in full force and effect.

 

(b)                                 Charterer shall, without expense to
Owners, throughout the Charter Period, maintain the documentation of the
Vessels under the laws and flag of the Flag State (and, in
the case of documentation under U.S. flag, with a coastwise endorsement) in the
name of Owners, and Owners shall, upon the request of Charterer, execute such
documents and furnish such information as Charterer may reasonably require to
enable Charterer to maintain such documentation.  The Vessels shall, and Charterer covenants
that it will, at all times comply with the requirements of all applicable laws,
treaties and conventions, and rules and regulations issued thereunder, of
all international organizations and national, state and local governments and
agencies thereof having jurisdiction in connection with the use, operation and
maintenance of the Vessels, and Charterer covenants that it will have on board,
when required thereby, valid certificates showing compliance therewith.  Charterer will not suffer or permit anything
to be done which might injuriously affect the documentation of the Vessels
under the laws and regulations of the Flag State, and Charterer will not
abandon the Vessels in a foreign port (unless advisable in connection with an
Event of Loss), engage in any unlawful trade or violate any law or regulation
or carry any cargo that may expose the Vessels to penalty, forfeiture or
seizure.

 

(c)                                  In the event of the repeal, modification,
supplement or amendment of those provisions of Title 46 of the U.S. Code which
exclusively reserve the U.S. coastwise trade for U.S.-built and flagged Vessels
operated by citizens of the United States, within the meaning of 46 U.S.C.
§ 50501 (“Jones Act Vessels”) (i) such that the U.S. coastwise
trade is no longer exclusively reserved for Jones Act Vessels and (ii) such
that the Vessels will not permanently lose its eligibility to operate in the
U.S. coastwise trade if it is registered under a foreign flag, then Charterer
shall have the right to register the Vessels under another country’s flag
subject to the prior consent by Owners, which shall not be unreasonably
withheld; provided, however, that all costs associated with the de-registration
of the Vessels from the U.S. flag and the registration of the Vessels under the
new flag shall be for Charterer’s account.

 

(d)           Owners represent and warrant that
following completion of the dry dock of the Tug, the Vessels shall be in good
working order and repair and shall be fit for the Vessels’ intended use.  Owners agree that during the Charter Period,
on each and every occasion thereafter that there is loss of time (whether by
way of interruption in the Vessels’ service or, from reduction in the Vessels’
performance, or in any other manner) due to breakdown (whether partial or
total) of machinery, boilers or other parts of the Vessels or equipment
(including without limitation tank coatings), and such loss continues for more
than one (1) day (if resulting from interruption in the Vessels’ service)
Charterer shall have the right to redeliver the Vessels, and the Charter Period
shall

 

14

 

be deemed to be
terminated with no party having any further liability to the other. If the
Charterer elects not to redeliver the Vessels, Owners shall be solely
responsible for paying the cost of any and all repairs required in the
reasonable opinion of the Charterer necessary for the operation of the Vessels  and Charter Hire hereunder for the
duration of the repair period until Owners redeliver the Vessels to Charterer
shall be reduced, commencing on the date the repair period begins, by an amount
equal to Nine Thousand United States Dollars ($9,000) per day. Owners agree to use commercially reasonable efforts to
have the Vessels returned to Charterer as soon as possible following completion
of such repairs. Owners jointly and severally agree to indemnify Charterer for
any and all losses incurred by Charterer during the period the Vessels are
unavailable to Charterer during the repair period, including transit time to
and from the repair facility until returned to Charterer, provided that Owners’
indemnity obligations shall not exceed an amount equal to Twenty Five Thousand
United States Dollars ($25,000) per day for each day of such period, without
duplication of the Nine Thousand United States Dollars
($9,000) per day reduction in Charter Hire.  Charterer has the right to require Owners to
complete repairs and return the Vessels to Charterer for multiple successive
instances of loss of time due to breakdown during the Charter Period.

 

38.                               Maintenance and Classification.

 

(a)                                  Charterer shall maintain the Vessels so
as to entitle the Vessels to the classification and rating with the Classification
Society of +A1 Oil Tank Barge and +A1, Towing Service, +AMS
respectively.  Charterer shall submit the
Vessels to all required surveys of the Classification Society and shall give Owners prior written
notice thereof.  Charterer shall furnish
to Owners annually a confirmation of class letter issued by the Classification
Society.

 

(b)                                 Charterer shall give Owners written
notice of each proposed dry-docking of the Vessels 30 days in advance, if
possible, but otherwise as far in advance as possible under the circumstances,
so that Owners may, if Owners so desires, have a representative present at such dry-docking and otherwise inspect the
Vessels at Owners’ expense.

 

(c)                                  In the event that any improvement,
structural change or new equipment becomes necessary for the continued
operation of the Vessels by reason of new class requirements or by compulsory
legislation, Owners shall make such changes and Charter Hire hereunder for the
remainder of the Charter Period  shall be
adjusted, commencing on the date such costs are incurred, by an amount equal to
the cost of compliance therewith divided by the number of days remaining in the
agreed useful life of the Vessels, beginning with the date such costs are
incurred.

 

39.                               Charter Hire.

 

(a)                                  Charterer shall pay, throughout the
Charter Period, Charter Hire to Owners at the rate of Eleven Thousand Five
Hundred United States Dollars ($11,500) per day (the “Charter Hire”), as
adjusted pursuant to Clause 37(d) and 38(c) hereof, and pro rata for any partial day.  Charter Hire shall be due and payable monthly
in advance beginning on the Delivery Date and on the first Business Day of each
calendar month thereafter (each such date a “Payment Date”).  Failure by Charterer to pay Charter Hire when
due shall be an Event of Demise Default hereunder.

 

(b)                                 All payments by Charterer hereunder shall
be made in United States Dollars in readily available funds, free and clear of
any bank charges, to such bank account number as shall be
advised to Charterer by Owners from time to time.  If any day for the making of any payment
hereunder shall not be a Business Day, the due date for such payment shall be
extended to the

 

15

 

next
following Business Day unless, in the case of a payment of Charter Hire, the
next following Business Day falls in the following calendar month, in which
case the due date for such payment of Charter Hire shall be the immediately
preceding Business Day.

 

(c)                                  Notwithstanding anything to the contrary
contained in this Charter, if an Event of Loss shall occur, hire shall cease on
the date such Event of Loss is deemed to have occurred.  For purposes of this Charter, an Event of
Loss shall be deemed to have occurred as follows:

 

(i)                                     an actual total loss of the Vessels shall
be deemed to have occurred at the actual date and time the Vessels was lost
but, in the event of the date of the loss being unknown, then the actual total
loss shall be deemed to have occurred on the date on which the Vessels was last
reported;

 

(ii)                                  a constructive total loss shall be deemed
to have occurred at the date and time notice of abandonment of a Vessel is
given to the insurers of the Vessels for the time being (hereinafter called the “Insurers”)
(provided a claim for such constructive total loss is admitted by the Insurers)
or, if the Insurers do not admit such a claim, at the date and time at which a
constructive total loss is subsequently adjudged by a competent court of law or
arbitration tribunal to have occurred;

 

(iii)                               a compromised, agreed or arranged total loss shall be deemed to have
occurred on the date of the relevant compromise, agreement or arrangement; and

 

(iv)                              an Event of Loss (A) as the result of capture, taking,
seizure, restraint, detention, confiscation or expropriation occurring under
the conditions of the “War Risks” policy of the Vessels, or (B) Compulsory
Acquisition shall be deemed to have occurred at the time admitted by the
Insurers.

 

40.                               Insurance.

 

(a)                                  Charterer shall provide and maintain
marine risk hull insurance or port risk hull insurance (when permitted under
this Clause 40(a)), and marine war risk hull insurance, in amounts
consistent with the level of insurance maintained by Owners on its other
Vessels of similar age.  While a Vessel
is laid up, in lieu of the aforesaid marine risk hull insurance, port risk hull
insurance may be taken out on the Vessels by Charterer; provided, however, that
at all times the Vessels shall be covered by marine war risk hull insurance and
Protection and Indemnity Insurance.

 

(b)                                 All insurance shall be taken out in the name of Owners, with
Charterer as an additional named insured, and the policies or certificates, to
the extent available, shall provide that there shall be no recourse against
Owners for the payment of premiums.

 

(c)                                  Owners shall, at their sole cost and
expense, have the duty and responsibility to make all proofs of loss and take
any and all other steps necessary to effect collections from underwriters
for any loss under any insurance on or with respect to the Vessels or the
operation thereof.  Charterer shall
cooperate in making all proofs of loss and take all other reasonable steps
necessary to effect collection from underwriters.

 

(d)                                 Charterer will provide and maintain all
insurance required to be provided and maintained by this Charter with marine
insurance companies, underwriters associations or underwriting funds
approved by Owners, which approval shall not be unreasonably withheld or
delayed.

 

16

 

(e)                                  If the Vessels shall be arrested, seized,
levied upon or taken into custody by virtue of proceedings in any court or
tribunal in any country or nation of the world or by any governmental or other
authority because of any liens or claims, Charterer shall, without expense to Owners,
cause the Vessels to be released within 30 Business Days and any such claims or
liens to be discharged when such claims or the obligations or charges secured by such liens are
due and payable and are not being contested in good faith by appropriate proceedings.  In the event a Vessel is levied upon or taken
into custody or detained by any authority whatsoever, Charterer agrees
forthwith to notify Owners thereof by facsimile transmission, confirmed by
letter.

 

(f)                                    Charterer shall not declare or agree upon
a compromised, constructive or agreed total loss of the Vessels without the
prior written consent of Owners.

 

(g)                                 If Owners desire to insure the Vessels in an amount in
excess of the amount that Charterer is required to maintain in accordance with
Clause 40(a) hereof, Charterer agrees to arrange such insurance on Owners’s
behalf through the fleet policy covering the Vessels at the same rates
available to Charterer.  The cost of such
additional insurance shall be for Owners’s account.

 

41.                               Liens, Sale and Attachment.

 

(a)                                  Owners shall have the right to sell,
assign or otherwise transfer the ownership of the Vessels and assign this
Charter to a new owner.  Notwithstanding the foregoing, in no event shall Owners
sell, assign or otherwise transfer, in whole or part, any interest in the
Vessels or the Charter (A) to a Person who (i) is not qualified to
document a vessel under the U.S. flag pursuant to 46 U.S.C. § 12103(b) (2006),
and the regulations promulgated thereunder, as such statute and regulations may
be amended or supplemented from time to time, and any successor statute or
regulations thereto, with a coastwise endorsement pursuant to 46 U.S.C. § 12119(b) (2006),
and the regulations promulgated thereunder, as such statute and regulations may
be amended or supplemented from time to time, and any successor statute or
regulations thereto.

 

(b)                                 Except for Permitted Liens, Charterer
agrees that: (i) it will not create, incur, assume or suffer to exist, and
will not permit any affiliate of Charterer, the Master, officers or crew
of the Vessels or any other servant or agent under Charterer’s control to
create, incur or assume or suffer to exist, any Lien upon or in respect of the
Vessels without the prior written consent of Owners; and (ii) if Charterer
shall breach its agreement contained in the preceding subclause (i), Charterer
will promptly take such action as shall be necessary to release or discharge
such Lien and, if Charterer fails to take such action, Owners may, but shall
not have any obligation to, upon notice to Charterer, take such action as shall
be necessary to release or discharge the same at Charterer’s expense.

 

42.                               Event of Loss.

 

Charterer shall give Owners prompt written
notice of any event that might give rise to an Event of Loss, together with the
details thereof.  Upon the occurrence of
an Event of Loss, this Charter shall terminate and neither party shall have any
further obligations hereunder other than obligations which arose prior to the
date of such termination.

 

17

 

43.                               INTENTIONALLY OMITTED

 

44.                               Further Undertakings.

 

Charterer
undertakes and agrees that throughout the Charter Period it shall:

 

(a)                                  Upon request from Owners, allow Owners to inspect and make copies of:

 

(i)                                     all class records, class certificates and survey reports
issued with respect to the Vessels; and

 

(ii)                                  any inspection reports obtained or prepared by Charterer or
the Managers in respect of the Vessels.

 

(b)                                 At all times ensure compliance with all
applicable environmental laws and all other laws and regulations, in each case
as relating to the Vessels and the operation and management thereof, and take
all reasonable precautions to ensure that the crews, employees, agents or
representatives of Charterer at all times comply with such environmental laws
and other applicable laws.

 

(c)                                  At all times ensure compliance with all
required international conventions, codes and regulations, the STCW 95, the ISM
Code and the ISPS
Code, in each case as relating to the Vessels and the operation and management
thereof, and ensure such compliance by any company performing ship management
services in respect of the Vessels on behalf of Charterer.

 

(d)                                 Obtain and promptly renew from time to
time, and, whenever so required, promptly furnish copies to Owners of, all such
authorizations, approvals, consents and licenses as may be required under any
applicable law or regulation to enable Charterer to perform its obligations
under this Charter or required for the validity or enforceability of this Charter,
and Charterer shall in all material respects comply with the terms of the same.

 

(e)                                  Notify Owners forthwith by letter, or in case of
urgency, by facsimile of:

 

(i)                                     any accident to the Vessels involving repairs, the
cost of which is likely to exceed Five Hundred Thousand United States Dollars
(US$500,000) (or the equivalent in any other currency);

 

(ii)                                  any occurrence in consequence whereof any
Vessel has become a total loss; or

 

(iii)                               any arrest of the Vessels or the exercise
or purported exercise of any Lien on the Vessels.

 

(f)                                    Notify Owners in writing of any Event of
Demise Default of which Charterer is aware (or an event of which Charterer is
aware which, with
the giving of notice and/or lapse of time, would constitute an Event of Demise
Default and which is not likely to be remedied before becoming an Event of
Demise Default).

 

(g)                                 Provide to Owners in respect of
Charterer, as soon as practicable after the same are instituted, details of any
litigation, arbitration or administrative proceedings which if adversely
determined would have a significant impact on their ability to perform their
obligations hereunder or in connection herewith.

 

(h)                                 Obtain and promptly renew from time to time, and will
whenever so required, promptly furnish certified copies to Owners of, all such
authorizations, approvals, consents and licenses as

 

18

 

may
be required under any applicable law or regulation to enable Charterer to
perform its obligations under this Charter or as may be required for the
validity or enforceability of this Charter, and Charterer shall in all material
respects comply with the terms of the same.

 

(i)                                     Shall not, without the prior written
consent of Owners, in a single or a series of transactions, dispose of all or
substantially all of its business or reorganize or otherwise change its business or
operations in a manner so that or as a result of which its financial condition
and/or its ability to fulfill its obligations under this Charter (as the case may
be) would be materially weakened.

 

(j)                                     Obtain or procure the obtaining of all
necessary ISM Code documentation in connection with the Vessels and at all
times be, or procure that the
manager of the Vessels be, in full compliance with the ISM Code.

 

45.                               Additional Events of Demise Default.

 

(a)                                  The following events shall constitute additional Events of
Demise Default:

 

(i)                                     it becomes impossible or unlawful for
Charterer to fulfill any of its covenants or obligations hereunder, or for
Owners to exercise any of the rights vested in it hereunder, unless due to an
act or omission by Owners or an Event of Loss with respect to the Vessels; or

 

(ii)                                  one or more judgments or decrees shall be
entered against Charterer or the Guarantor involving in the aggregate a liability
(not paid or fully covered by insurance, net of approved deductible) of One
Million United States Dollars (US$1,000,000), or more, and all such judgments
or decrees shall not have been vacated, discharged, stayed or bonded pending
appeal within sixty (60) days from the entry thereof; or

 

(iii)                               this Charter, or any material provision
hereof or thereof shall cease, for any reason (other than due to an act or
omission by Owners or an Event of Loss with respect to the Vessels) to be in
full force and effect, or any action or suit at law or in equity or other legal
proceeding to cancel, revoke or rescind this
Charter, or any material provision hereof or thereof shall be commenced by or
on behalf of Charterer, or any governmental authority having competent
jurisdiction for any reason other than due to an act or omission of Owners; or

 

(iv)                              Charterer shall be enjoined, restrained or in any way prevented
by the order of any court or any governmental authority from conducting any
material part of its business (unless due an act or omission by Owners), and
such order shall continue in effect for more than thirty (30) days; or

 

(v)                                 there shall occur the loss, suspension or revocation of, or
failure to renew, any license or permit now held or hereafter acquired by
Charterer if such loss, suspension, revocation or failure to renew would have a
material adverse effect on the continuing operation of the Vessels and/or the
business of Charterer; or

 

(vi)                              the entry of a decree or order by a court
having jurisdiction in the premises adjudging Charterer a bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of Charterer under the
Federal Bankruptcy Act or any other applicable Federal or State law, or
appointing a receiver, liquidator, assignee, trustee, sequestrator or other
similar official

 

19

 

of Charterer or of any substantial part
of their respective property, or ordering the winding-up or liquidation of the
affairs of Charterer, and the continuance of such decree or order unstayed and
in effect for a period of sixty (60) consecutive days; or

 

(vii)                           the institution by Charterer of
proceedings to be adjudicated a bankrupt or insolvent or the consent by
Charterer to the institution of bankruptcy or insolvency proceedings against
it, or the filing by Charterer of a petition or answer or consent seeking
reorganization or relief under the Federal Bankruptcy Act or any
other applicable Federal or State law, or the consent by Charterer to the
filing of any such petition or to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator or other similar official of Charterer or of
any substantial part of their respective property, or the making by Charterer
of an assignment for the benefit of creditors, or the admission by Charterer in
writing of its inability to pay its debts generally as they become due, or the
taking of corporate action by Charterer in furtherance of any such action.

 

(b)                                 No express or implied waiver by Owners of
any Event of Demise Default shall in any way be, or be construed to be, a
waiver of any further or subsequent Event of Demise Default.

 

46.                               Governing Law.

 

This Charter shall be governed by and construed
in all respects in accordance with the U.S. Federal maritime laws and, to the
extent such laws are not applicable, the laws of the State of New York (without
reference to its conflicts of law principles).

 

47.                               Representations and Warranties.

 

Charterer
hereby represents and confirms that:

 

(i)                                     it is a limited liability company duly
incorporated and existing under the laws of the State of Delaware and has due
limited liability company power and authority to enter into and perform its
obligations under this Charter;

 

(ii)                                  all consents, approvals or public authorizations which may
be required in connection with the entering into and performance of its
obligations under this Charter have been obtained;

 

(iii)                               no Event of Demise Default or event that
could lead to an Event of Demise Default under this Charter has occurred and is
continuing;

 

(iv)                              it is not aware of any fact or circumstances in existence
which could adversely affect its ability to perform its obligations under this
Charter;

 

(v)                                 the entry into and performance of this Charter does
not and will not during the Charter Period violate in any material respect any
agreement, contract or other undertaking to which it is a party or which is
binding on it or any of its assets; and

 

(vi)                              under the laws of the State of Delaware and the federal
laws of the United States of America in force at the date hereof, it will not
be required to make any deduction or withholding from any payment it may make
to Owners hereunder.

 

20

 

48.                               Dispute Resolution.

 

All
disputes hereunder shall be settled by arbitration in the City of New York, New
York pursuant to the Rules of the Society of Maritime Arbitrators, Inc.,
before one mutually agreed upon arbitrator or, failing agreement, a panel of
three persons consisting of one arbitrator to be appointed by Owners, one to be
appointed by Charterer, and one to be appointed by the two so chosen.  The single arbitrator or the third arbitrator
shall be an attorney practicing maritime law. 
The decision of the sole arbitrator or any two of the panel of three on
any point or points shall be final and binding, and may include costs,
including reasonable attorney fees. 
Judgment may be entered upon any award made hereunder in any court having
jurisdiction.  The parties agree that any
dispute relating to claims of One Hundred Thousand United States Dollars
(US$100,000) or less in the aggregate shall be governed by the Shortened
Arbitration Procedures adopted by the Society of Maritime Arbitrators.

 

WAIVER OF JURY TRIAL.  IT IS MUTUALLY AGREED BY AND BETWEEN CHARTERER
AND OWNER THAT BOTH OF THEM HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BROUGHT BY OWNER AGAINST CHARTERER PURSUANT TO CLAUSE 48(b) HEREOF.

 

49.                               Quiet Enjoyment.

 

So long as no Event of Demise Default has
occurred, neither Charterer nor any permitted sub-charterer shall be disturbed
or interfered with in its quiet and peaceful use, possession and engagement of
the Vessels.  Owners shall procure that
any mortgage on the Vessels provides an equivalent right to quiet enjoyment.

 

50.                               Notices.

 

Except as otherwise expressly provided herein,
all notices and other communications hereunder shall be in writing and shall be
delivered personally, by first-class, registered or certified mail, postage
prepaid, or by a nationally-recognized overnight courier service, or sent
by facsimile transmission, and addressed  as follows:

 

If
to Owners, addressed to them:

 

c/o
OSG Ship Management, Inc.

Knights
Run Av – Ste 1200

Tampa,
FL 33602

Attention:
Capt. Robert Johnston

Facsimile:
(813) 221-2769

 

With a copy to:

 

Overseas
Shipholding Group, Inc.

666
Third Avenue

New
York, New York 10017

Attention:
General Counsel

Facsimile:
212-251-1180

 

21

 

If to Charterer:

 

OSP 400 LLC

302 Knights Run Av – STE 1200

Tampa, FL 33603

Attention:  Mr. Eric F. Smith

Facsimile:  (813) 221-2769

 

With a copy to:

 

Overseas Shipholding Group, Inc. 

666 Third Avenue

New York, New York 10017

Attention:  General Counsel

Facsimile:  212-251-1180

 

or, as to each such Person, at such other
address or to the attention of such other individual as shall be designated by
such Person in a written notice to the other Person named above.

 

51.                               Miscellaneous.

 

(a)                                  Owners represent, warrant and covenant
that on the date hereof it either (i) is a citizen of the United States
within the meaning of 46 USC § 50501, as amended, qualified to engage in
the coastwise trade of the United States, or (ii) is eligible to own a
vessel operating in the coastwise trade of the United States pursuant to 46 USC
§ 12119, or (iii) is otherwise qualified or meets the requirements of
all applicable laws so as to entitle the Vessels to engage in the coastwise
trade of the United States, and throughout the Charter Period shall remain so
qualified or continue to meet such requirements.

 

(b)                                 Charterer represents, warrants and
covenants that at the time of execution of this Charter, it either (i) is
a citizen of the United States within the meaning of 46 USC § 50501, as
amended, qualified to engage in the coastwise trade of the United States, or (ii) is
otherwise qualified or meets the requirements of all applicable laws so as to
entitle the Vessels to engage in the coastwise trade of the United States, and
throughout the Charter Period shall remain so qualified or continue to meet
such requirements.

 

(c)                                  Owners and Charterer severally agree to
perform or cause to be performed such action, and to execute, deliver or
furnish or to cause to be executed, delivered or furnished, all such further
assurances, certificates, opinions and other documents necessary or proper to
carry out this Charter.

 

(d)                                 No change in, or modification of, this
Charter shall be effective unless reduced to writing and signed by Owners and
Charterer.

 

(e)                                  The invalidity of any provision of this Charter
shall not affect the remainder hereof, which shall in such event be construed
as if such invalid provision had not been inserted.

 

(f)                                    This Charter consists of Parts I, II
and III of the Bimco Standard Bareboat Charter (Barecon 2001) Form (“Barecon”), these
Additional Clauses, and the exhibits hereto.  All parts of this Charter shall be read
together as a single agreement and in a manner that promotes consistency
between all parts of this Charter.  No
single part of this Charter shall be given

 

22

 

greater
weight than any other part of this Charter in determining the intended
agreement of the parties hereto.

 

(g)                                 This Charter may be executed in one or more counterparts,
each of which shall be deemed an original and all of which, taken together,
shall constitute one and the same instrument. 
Original signatures hereto may be delivered by facsimile which shall be
deemed originals.

 

23Exhibit 10.1

        EMPLOYMENT AGREEMENT

        This Employment Agreement (this “Agreement”) is entered into by and between Mannatech, Incorporated (the “Company”) and Randy S. Bancino (the “Employee”), and has an effective date of March 2, 2009 (“Effective Date”). The Company desires to employ the Employee, and the Employee desires to be employed by the Company. Therefore, in
        consideration of the mutual promises and agreements contained herein, the Company and the Employee (each a “Party” and collectively, the “Parties”) hereby agree as follows:

         

        SECTION 1.

        EMPLOYMENT

        1.1.Employment. The Company hereby employs the Employee, and the Employee hereby accepts employment by the Company, for the period and upon the other terms and conditions contained in this Agreement.

        1.2.      Office and Duties. The Employee shall serve as the Senior Vice President - Global Business Operations of the Company, with the authority, duties and responsibilities described herein and those customarily incident to such office. The Employee shall report
        directly to the Chief Executive Officer of the Company (the “CEO”)and shall perform such other services, duties and responsibilities commensurate with Employee’s position as may from time to time be assigned to Employee by the CEO or the Board of Directors of the Company (the “Board”).

        1.3.      Performance. During Employee’s employment under this Agreement, the Employee shall devote on a full-time basis all of his time, energy, skill and best efforts to the performance of Employee’s duties hereunder in a manner that will faithfully and
        diligently further the business and interests of the Company. The Employee may, however, engage in civic, charitable, and professional or trade activities so long as those activities do not interfere with the performance of Employee’s duties hereunder. The Employee shall comply with the employee policies and written manuals of the Company that are applicable generally to executive employees of the Company, as they exist and/or are modified from time to time. In the event of
        conflict or inconsistency between this Agreement and the employee policies and written manuals of the Company, the terms of this Agreement shall govern. Except as specifically contemplated herein, the Employee shall not work either on a part-time or independent contractor basis for any other business or enterprise during the Term of Employment.

        1.4.      Place of Work. The Employee shall perform services under this Agreement at the Company’s principal office in the City of Coppell, Dallas County, Texas, and at such other place or places as the Employee’s duties and responsibilities may require. The
        Employee understands and agrees that Employee may be required to travel in connection with the performance of his duties.

         

        
            

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        1.5.      Directors’ and Officers’ Liability Insurance. To the extent that the Company maintains one or more policies of directors’ and officers’ liability insurance during the Employee’s employment under this Agreement (the “D&O
        Policies”), then the Company will provide the Employee coverage under the D&O Policies for acts or omissions by the Employee in the performance of his duties to the Company under this Agreement as an officer of the Company.

        1.6.      Indemnity. As of the Effective Date, the Company shall defend, indemnify and hold harmless the Employee against all claims, actions, lawsuits, judgments, penalties, fines, settlements and reasonable expenses that are filed, pursued, or otherwise sought by
        third parties, as applicable, in any proceeding resulting from the performance of the Employee’s duties to the Company under this Agreement.

        1.7.      Exclusive Employment. Without limiting Section 1.3 hereof, during the term of employment, the Employee will not, without the prior written consent of the Board:

        a.         serve as a spokesman, representative, employee, consultant, agent, officer, or member of any board of directors (or any similar governing body) for any for-profit business other than the Company;

        b.         serve as a spokesman, representative, employee, owner, consultant, agent, officer, or member of any board of directors (or any similar governing body) for any business which is a supplier to the Company or which competes with the Company, in each case whether directly or indirectly;

        c.         own any equity or economic interest in any company that competes directly or indirectly with the Company, except that this does not preclude ownership of less than 5% of the outstanding equity securities of any public reporting company; or

        d.         promote or endorse at Company business functions any other organization(s) with which Employee may be associated or affiliated.

         

        SECTION 2.

        EMPLOYMENT TERM

        2.1.      Term. The term of the Employee’s employment under this Agreement commences on the Effective Date and shall continue through two (2) years, unless terminated earlier by either the Company or Employee giving the other at least 30 days’ prior written
        notice of termination, for any or no reason, to the other Party (“Notice of Early Termination”) or unless terminated earlier in accordance with Section 9 hereof. If a Notice of Early Termination is given in accordance with the preceding sentence, then (a) the term of employment under this Agreement will continue until the expiration of the notice period specified in the Notice of Early Termination, and (b) the Company may instruct the Employee not to come into
        the Company’s offices or to attend any of the Company’s business functions through the last date of employment, and the Employee’s following such instruction will not constitute Cause for termination or otherwise impair the Employee’s rights hereunder. If the Agreement is not

         

        
            

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        terminated by either Party as provided for herein, it will renew for successive one (1) year terms, unless either Party gives the other at least thirty (30) days’ prior written notice of its intent not to renew.

         

        SECTION 3.

        COMPENSATION FOR EMPLOYMENT

        3.1.      Base Salary. The base salary of the Employee for all of Employee’s services, duties and responsibilities to the Company and all of Employee’s agreements and covenants with or to the Company under this Agreement shall be at the annual rate of Two
        Hundred Ninety Thousand Dollars ($290,000), which the Company shall pay to the Employee in equal installments in accordance with its normal payroll policies.

        a.         Employee’s performance and salary shall be reviewed by the CEO and the Compensation Committee annually in accordance with the Company’s annual performance review process.

        b.         Employee’s Base Salary for any partial year will be prorated based upon the number of days elapsed in such year. Employee’s pay may be raised by the Company from time to time as the Company deems appropriate in its sole discretion, by way of an addendum or other documentation, without otherwise effecting this Agreement.
        Notwithstanding any pay increase, the employment of Employee shall be construed as continuing under this Agreement.

        3.2.      Annual Bonus. During Employee’s employment under this Agreement, the Employee is also eligible to participate in the Company’s annual executive bonus program (the “Executive Bonus Program”). The opportunity to earn a bonus and the
        amount of any bonus compensation under the Executive Bonus Program will be determined in accordance with criteria established by the Board or the Compensation Committee, which will comply with the requirements of Section 409A of the Internal Revenue Code, unless the payment of the bonus is exempt as not constituting a deferral of income. The Employee acknowledges that any bonus compensation under the Bonus Program will be discretionary, with the sole discretion resting with the
        Board or the Compensation Committee. Further, unless otherwise determined by the Compensation Committee, the Employee must remain employed by the Company at the time the bonus is paid in order to be eligible to receive the bonus.

        3.3.      Payment and Reimbursement of Work-Related Expenses. During Employee’s employment under this Agreement, the Company shall pay or reimburse the Employee, in accordance with the applicable policies and procedures of the Company, for all reasonable travel
        and other reasonable expenses incurred by the Employee in performing his obligations under this Agreement, provided that the Employee properly accounts for such expenses in accordance with the regular policies of the Company.

        3.4.      Relocation Allowance. In the event it is necessary for Employee to relocate residences, the Company shall pay the Employee a one-time relocation allowance in the amount

         

        
            

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        of Twenty Five Thousand Dollars ($25,000) (the “Relocation Allowance”). The Relocation Allowance will be payable in a lumpsum.

        3.5.      Health Insurance/401(k). During Employee’s employment under this Agreement, the Employee shall be entitled to participate in or receive benefits under any employee-benefit plan or arrangement made available by the Company to its employees generally
        (including any medical, dental, short-term and long-term disability, life insurance and 401(k) programs), subject to eligibility conditions or requirements and to the terms, conditions and overall administration of each of such plans and arrangements. Nothing in this Agreement will preclude the Company from amending or terminating any of the benefit plans or programs applicable to Employee as long as such amendment or termination is applicable to all similarly situated employees,
        without otherwise effecting this Agreement. Notwithstanding any change in benefits, the employment of Employee shall be construed as continuing under this Agreement.

        3.6.      Executive Vehicle Program. During Employee’s employment under this Agreement, the Employee will also be eligible to participate in the Company’s executive vehicle program, subject to all of its terms, regarding a vehicle with a lease cost to the
        Company no greater than that afforded to other similarly situated executive officers of the Company, with auto liability insurance coverage (comprehensive, collision and liability) for the leased vehicle paid by the Company and all routine and necessary repairs to the leased vehicle paid for by the Company or reimbursed to the Employee, subject to approval by the Chief Financial Officer of the Company.

        3.7.      Vacation. During Employee’s employment under this Agreement, the Employee shall be entitled to 20 days of paid vacation annually, in accordance with the regular policies of the Company.

        3.8.      Tax Withholding. The Company may deduct from any compensation or other amount payable to the Employee under this Agreement social security (FICA) taxes and all federal, state, municipal, or other such taxes or governmental charges as may now be in effect or
        that may hereafter be enacted or required.

         

        SECTION 4.

        CONFIDENTIAL INFORMATION

        
            	
                         

                    	
                        4.1.

                    	
                        Definition of “Confidential Information.”

                    

        

        a.         “Confidential Information” means material, data, ideas, inventions, formulae, patterns, compilations, programs, devices, methods, techniques, processes, know how, plans (marketing, business, strategic, technical or otherwise), arrangements, pricing and/or other information of or relating to the Company (as well as its
        customers and/or vendors) that is confidential, proprietary, and/or a trade secret (a) by its nature, (b) based on how it is treated or designated by the Company, (c) such that its appropriation, use or disclosure would have a material adverse effect on the business or planned business of the Company, or (d) as a matter of

         

        
            

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        law. All Confidential Information is the property of the Company, the appropriation, use and/or disclosure of which is governed and restricted by this Agreement.

        b.         Exclusions. Confidential Information does not include material, data, and/or information that (i) the Company has voluntarily placed in the public domain; (ii) has been lawfully and independently developed and publicly disclosed by third parties; (iii) constitutes
        the knowledge and skills gained by Employee during the Employment Period; or (iv) otherwise enters the public domain through lawful means; provided, however, that the unauthorized appropriation, use, or disclosure of Confidential Information by Employee, directly or indirectly, shall not affect the protection and relief afforded by this Agreement regarding such information.

        4.2.      Provision of Confidential Information. Irrespective of the Term of Employment, and in consideration of the Employee’s promises in Section 4.3 of this Agreement, the Company promises to immediately provide the Employee with access to Confidential
        Information, including (but not limited to) the new Confidential Information that the Company is separately and concurrently providing to the Employee. The Parties stipulate and agree that Employee has never before seen or had access to the new Confidential Information referenced herein.

        4.3.      Protection of Confidential Information. Both during and after the Employment Period, the Employee shall not in any manner, directly or indirectly: (i) appropriate, download, print, copy, remove, use, disclose, divulge, or communicate Confidential
        Information to any Person, including (without limitation) originals or copies of any Confidential Information, in any media or format, except for the Company’s benefit within the course and scope of the Employee’s employment or with the prior written consent of the CEO; or (ii) take or encourage any action which would circumvent, interfere with or otherwise diminish the value or benefit of Confidential Information to the Company. The Employee agrees to use
        Employee’s best efforts and utmost diligence to protect and safeguard the Confidential Information as prescribed in this Section 4.

        
            	
                         

                    	
                        4.4.

                    	
                        Return and Review of Information.

                    

        

        a.         Company Property. All Confidential Information and other information and property affecting or relating to the business of the Company within the Employee’s possession, custody or control, regardless of form or format, shall remain at all times the property of the
        Company.

        b.         Upon Request. At any time that the Company may request, during or after the Employment Period, the Employee shall deliver to the Company all Confidential Information and other information and property affecting or relating to the business of the Company within Employee’s
        possession, custody or control, regardless of form or format. Both during and after the Employment Period, the Company shall have the right of reasonable access to review, inspect, copy, and/or confiscate any Confidential Information within the Employee’s possession, custody or control.

         

        
            

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        c.         Upon Termination. The Employee shall return to the Company all Confidential Information and other information and property affecting or relating to the business of the Company within the Employee’s possession, custody or control, regardless of form or format, without the
        necessity of a request, forthwith upon resignation or termination of Employee’s employment, regardless of whether the resignation or termination is voluntary, involuntary, for Cause or not for Cause.

        4.5.      Response to Third Party Requests. Upon receipt of any formal or informal request, by legal process or otherwise, seeking the Employee’s direct or indirect disclosure or production of any Confidential Information to any Person, the Employee shall promptly
        and timely notify the Company and provide a description and, if applicable, hand deliver a copy of such request to the Company. The Employee irrevocably nominates and appoints the Company, as the Employee’s true and lawful attorney-in-fact to act in the Employee’s name, place and stead to perform any act that the Employee might perform to defend and protect against any disclosure of Confidential Information.

         

        SECTION 5.

        OWNERSHIP OF INFORMATION, INVENTIONS, AND ORIGINAL WORK

        5.1.      Definition of Work Product. As used in this Agreement, the term “Work Product” means all patents and patent applications, all inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports, creative works,
        discoveries, software, computer programs, modifications, enhancements, know-how, product, formula or formulations, concepts and ideas, and all similar or related information (in each case whether or not patentable), all copyrights and copyrightable works, all trade secrets, confidential information, and all other intellectual property and intellectual property rights that (in any case above) are conceived, reduced to practice, created, developed or made by the Employee, either alone or
        with others, in the course of employment with the Company (including, without limitation, any such employment before the Effective Date).

        5.2.      Ownership and Assignment of Work Product. The Employee hereby agrees that all Work Product will be the exclusive property of the Company, and in consideration of this Agreement, without further compensation, hereby assigns, and (as necessary) agrees to assign,
        to the Company all right, title, and interest to all Work Product that: (a) relates to: (i) all or any aspect of the Company Parties’ actual or anticipated business, research, and development or existing or future products or services, or (ii) an actual or demonstrably anticipated research or development project of the Company; (b) is conceived, created, reduced to practice, developed, or made entirely or in any part: (i) during his employment or on
        Company time, or (ii) using any equipment, supplies, facilities, assets, materials, information (including, without limitation, Confidential Information) or resources of any of the Company Parties (including, without limitation, any intellectual property rights); or (c) results from any work performed by the Employee for the Company. Any creative works, discoveries, designs, software, computer programs, inventions, improvements, modifications, enhancements, know-how, product,
        formula or formulation, concept or idea that the Employee has within one year following the resignation or termination of employment with the Company shall be deemed to be Work Product owned by

         

        
            

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        the Company under this Section 5, unless proved by the Employee to have been outside each of the criteria specified above in this Section 5.2.

        5.3.      Disclosure and Cooperation. The Employee shall promptly disclose Work Product to the CEO and perform all actions reasonably requested by the Company (whether during or after the Employment Period) to establish and confirm the ownership and proprietary interest
        of any of the Company Parties in any Work Product (including, without limitation, the execution of assignments, consents, powers of attorney, applications and other instruments). The Employee agrees to assist the Company in obtaining any patent for, copyright on or other intellectual-property protection for the Work Product, and to execute and deliver or otherwise provide such documentation and provide such other assistance as is necessary to or reasonably requested by the Company or
        its agents or counsel to obtain such patent, copyright, or other protection. The Employee shall maintain adequate written records of the Work Product, in such format as may be specified by the Company, and make such records available to, as the sole property of, the Company at all times. The Employee shall not file any patent or copyright applications related to any Work Product except with the written consent of the CEO.

         

        SECTION 6.

        NON-COMPETITION AND NON-SOLICITATION

        6.1.      Consideration. In consideration of the Confidential Information and specialized training being provided to Employee as stated in Section 4 of this Agreement, and other valuable consideration as stated in this Agreement, including (without limitation) the
        business relationships, Company goodwill, customer and vendor relationships, and work experience that the Employee will have the opportunity to obtain, use and develop under this Agreement, the Employee agrees to the restrictive covenants stated in this Section 6.

        
            	
                         

                    	
                        6.2.

                    	
                        Acknowledgements.

                    

        

        a.         Ancillary Agreement. The Employee acknowledges and agrees that the restrictive covenants contained in this Section 6 are ancillary to and part of an otherwise enforceable agreement, such being the agreements concerning Confidential Information and other consideration as stated
        in this Agreement.

        b.         Valuable Information. The Employee acknowledges and agrees that the Confidential Information and specialized training provided by the Company is highly valuable to the Company and, therefore, that the Company’s investment in the training and the protection and maintenance of
        the Confidential Information constitutes a legitimate interest to be protected by the Company by the restrictive covenants set forth in this Section 6.

        c.         Unique Relationships with Customers and Associates. The Employee acknowledges and agrees that (i) in the highly competitive business in which the Company is engaged, personal contact is of primary importance in securing new and retaining present Associates and Customers;
        (ii) the Company has a legitimate interest in maintaining its relationships with its Associates and Customers; and (iii) it would be unfair for the Employee to

         

        
            

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        solicit the business of the Company’s Associates and Customers, exploiting the personal relationships the Employee develops with the Company’s Associates and Customers by virtue of the Employee’s employment by the Company.

        d.         Reasonableness. The Employee acknowledges and agrees that at the time that the restrictive covenants of this Section 6 are made, the limitations as to time, geographic scope, and activity to be restrained, as described herein, are reasonable and do not impose a greater
        restraint than necessary to protect the good will and other legitimate business interests of the Company, including (without limitation) Confidential Information (including, without limitation, trade secrets), customer and vendor relationships, and goodwill.

        e.         Termination. The Employee acknowledges and agrees that Employee has carefully read this Agreement and has given careful consideration to the restraints imposed upon Employee by this Agreement, and consents to the terms of the restrictive covenants in this Section 6 in
        conjunction with the provisions in this Agreement for the termination of his employment, with no expectation or promise of employment for a substantial period of time.

        f.         Post-Termination Enforcement. The Employee acknowledges and agrees that, based on the benefits to Employee and new consideration as recited herein, the restrictive covenants of this Section 6, as applicable according to their terms, shall remain in full force and effect even
        in the event of the resignation or termination of his employment under this Agreement for any reason, whether voluntary or involuntary or with or without Cause.

        g.         Other Employment. The Employee acknowledges and agrees that (i) in the event of the resignation or termination of Employee employment under this Agreement, Employee experiences and capabilities are such that he can obtain gainful employment without violating this Agreement, in
        a business engaged in other lines and/or of a different nature, without Employee incurring undue hardship; and (ii) the enforcement of a remedy under this Section 6 by way of injunction will not prevent the Employee from earning a livelihood.

        
            	
                         

                    	
                        6.3.

                    	
                        Non-Competition and Non-Solicitation.

                    

        

        a.         Non-Competition During Employment. During the Employment Period, the Employee shall not engage in any other business or employment which may detract from Employee’s full performance of Employee’s duties hereunder or which competes in any manner with the Company, and the
        Employee shall not directly or indirectly render any services of a business, commercial or professional nature, to any other Person without the Company’s prior written consent. Further, during employment, the Employee shall not directly or indirectly contact, solicit, entice, sponsor or accept any of the Associates into, or in any way promote to any such Associates opportunities in marketing programs of any direct sales company or organization other than the Company.

        
            	
                         

                    	
                        b.

                    	
                        [Intentionally Deleted]

                    

        

        c.         Customer Non-Solicitation. During the Restricted Period, the Employee shall not in any manner, directly or indirectly, on Employee’s own behalf or on the behalf of any other Person, induce, solicit or attempt to induce or solicit any Customer (i) to do business with a
        Competing Business, or (ii) to reduce, cease, restrict, terminate or otherwise adversely alter

         

        
            

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        business or business relationships with the Company for the benefit of a Competing Business, regardless of whether the Employee initiates contact for that purpose.

        d.         Employee Non-Solicitation and No-Hire. During the Restricted Period, the Employee shall not directly or indirectly, on Employee’s own behalf or on behalf of any other Person (i) solicit, recruit, persuade, influence, or induce, or attempt to solicit, recruit, persuade,
        influence, or induce any Person employed or otherwise retained by the Company (including, without limitation, any independent contractor or consultant), to cease or leave their employment or contractual or consulting relationship with the Company, regardless of whether the Employee initiates contact for such purposes, or (ii) hire, employ or otherwise attempt to establish, for any Person, any employment, agency, consulting, independent contractor or other business relationship with
        any Person who is or was employed or otherwise retained by the Company (including any independent contractor or consultant), for the benefit of a Competing Business.

        6.4.      Definitions. The following definitions are for the purposes of this Agreement, including (without limitation) this Section 6. The scope of these definitions is in recognition of the Company-wide scope of the Employee’s responsibilities, the broad
        geographic scope of the Company’s business operations throughout the entire United States of America and in certain foreign countries, and the potential ease of competing with the Company in the absence of the provisions of this Section 6.

        a.         “Competing Business” means any business operation which engages in the business of providing products and services that are the same or substantially similar or directly competes with those that any of the Company manufactured, produced, provided, sold, and/or marketed during the Employee’s tenure with the
        Company, such as the direct selling business, including (without limitation) the direct sale, network and/or multi-level marketing of dietary supplements, skin care or wellness products.

        b.         “Customer” means (i) any independent distributor of Company (“Associate”) or other Person (as defined in 12.9.d) with whom or which the Company has had any contract any time during this Agreement or any time during the one year period immediately preceding the Effective Date, and/or (ii) any
        customer, vendor, supplier, licensor or other Person in a business relationship with the Company for which the Employee or employees working under the Employee’s supervision had any direct or indirect responsibility during the Employment Period.

        c.         “Geographic Area” means (i) those cities and states in the United States of America and foreign countries in which the Company does business during the Employment Period; and/or (ii) the geographic area of Employee’s responsibilities during the Employment Period.

        d.         “Restricted Period” means the Employment Period and the one year period commencing on the Termination Date, regardless of whether the Employee’s termination from the Company is voluntary or involuntary, for Cause or not for Cause. This time period shall be extended by one day for each day that Employee is
        determined to be in violation of Sections 4, 5 and/or 6 of this Agreement, as determined by a court or arbitrator of competent jurisdiction.

         

        
            

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        6.5.      Fiduciary Duty. The Employee acknowledges and agrees that Employee owes a fiduciary duty of loyalty, fidelity, and allegiance to act at all times in the best interests of the Company. In keeping with these duties, the Employee shall make full disclosure to the
        Company of all business opportunities pertaining to the Company’s business, and shall not appropriate for Employee’s own benefit, any business opportunities concerning the subject matter of the fiduciary relationship.

        6.6.      Survival. This Section 6 shall survive the cessation or termination of the Employee’s employment under this Agreement, subject to the time and scope limitations set forth in this Section 6.

        6.7.      Substitution/Revision. If, at the time of enforcement of the restrictive covenants in this Section 6, a court holds that the restrictions stated in this Section 6 are unreasonable under circumstances then existing, then the maximum duration, scope or
        geographical area reasonable under such circumstances shall automatically be substituted for the stated duration, scope or geographic area and the court shall be allowed and is hereby requested to revise the restrictions contained herein to cover the maximum duration, scope and geographic area permitted by law. The covenants contained in Sections 6.3a., 6.3c., and 6.3d. hereof are independent of and severable from one another.

        6.8.      Independent Covenants. All covenants contained in Section 6 of this Agreement shall be construed as agreements independent of any other provision of this Agreement, and the existence of any claim or cause of action by Employee against Employer, whether
        predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of such covenants.

         

        SECTION 7.

        NON-DISPARAGEMENT

        7.1.      Non-Disparagement. The Employee agrees that, both during and after the Employment Period, the Employee will not make any statements which would constitute libel, slander or disparagement of the Company or any of its directors, officers, shareholders, or
        affiliates, provided however, that the terms of this Section 7.1 shall not apply to communications between the Employee and, as applicable, the Employee’s attorneys or other Persons with whom or which communications would be subject to a claim of privilege existing under common law, statute or rule of procedure.

         

        SECTION 8.

        REMEDIES

        8.1.      Remedies. In the event of a breach of this Agreement by any Party, and subject to the remaining provisions of this Section 8, the aggrieved Party shall be entitled to all appropriate equitable and legal relief, including, but not limited to: (a) an
        injunction to enforce this Agreement or prevent conduct in violation of this Agreement; (b) damages incurred as a

         

        
            

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        result of the breach; and (c) attorneys’ fees and costs incurred in enforcing the terms of this Agreement.

        8.2.      Arbitration. SUBJECT TO THE RIGHTS OF EITHER PARTY TO SEEK INJUNCTIVE OR OTHER EQUITABLE RELIEF IN A COURT OF EQUITY, BINDING ARBITRATION SHALL BE THE EXCLUSIVE REMEDY FOR ANY AND ALL DISPUTES, CLAIMS, OR CONTROVERSIES BETWEEN THE PARTIES HERETO, WHETHER
        STATUTORY, CONTRACTUAL OR OTHERWISE, ARISING UNDER OR RELATING TO THIS AGREEMENT OR THE EMPLOYEE’S EMPLOYMENT BY OR TERMINATION FROM THE COMPANY (INCLUDING, BUT NOT LIMITED TO, THE AMOUNT OF DAMAGES, OR THE CALCULATION OF ANY BONUS OR OTHER AMOUNT OR BENEFIT DUE) (COLLECTIVELY, “DISPUTES”). THE PARTIES EACH WAIVE THE RIGHT TO A JURY TRIAL AND WAIVE THE RIGHT TO ADJUDICATE THEIR DISPUTES UNDER THIS AGREEMENT OUTSIDE THE ARBITRATION FORUM PROVIDED FOR IN THIS AGREEMENT,
        EXCEPT AS SPECIFICALLY PROVIDED IN THIS AGREEMENT. In the event either party provides a notice of arbitration of any dispute to the other party, the parties agree to submit that dispute to a single arbitrator selected from a panel of arbitrators of JAMS located in Dallas, Texas. The arbitration will be governed by the JAMS Comprehensive Arbitration Rules and Procedures in effect at the time the arbitration is commenced. If for any reason JAMS cannot serve as the arbitration
        administrator, the Company may select an alternative arbitration administrator, such as the American Arbitration Association, to serve under the terms of this Agreement. The parties further agree to abide by and perform any award rendered by the arbitrator.

        a.         VENUE. THE PARTIES STIPULATE AND AGREE THAT THE EXCLUSIVE VENUE OF ANY SUCH ARBITRATION PROCEEDING (AND OF ANY OTHER PROCEEDING, INCLUDING (WITHOUT LIMITATION) ANY COURT PROCEEDING, UNDER THIS AGREEMENT) SHALL BE DALLAS COUNTY, TEXAS (THE “AGREED VENUE”).

        b.         Authority and Decision. The arbitrator shall have the authority to award the same damages and other relief that a court could award. The arbitrator shall issue a reasoned award explaining the decision and any damages awarded. The arbitrator’s decision will be final and
        binding upon the parties and enforceable by a court of competent jurisdiction. The parties will abide by and perform any award rendered by the arbitrator. In rendering the award, the arbitrator shall state the reasons therefore, including (without limitation) any computations of actual damages or offsets, if applicable.

        c.         Fees and Costs. In the event of arbitration under the terms of this Agreement, the fees charged by JAMS or other arbitration administrator and the arbitrator shall be borne by the parties as determined by the arbitrator, except for any initial registration fee, which the parties
        shall bear equally. Otherwise, the parties shall each bear their own costs, expenses and attorneys’ fees incurred in arbitration; provided, however, that the prevailing party shall be entitled to recover and have awarded its attorneys’ fees, court costs, arbitration expenses, and its portion of the fees and costs charged by JAMS or other arbitration administrator, regardless of which Party initiated the proceedings, in addition to any other relief to which it may be
        entitled. The determination of the “prevailing party” and the amount of fees, costs and

         

        
            

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        expenses awarded shall be in the discretion of the arbitrator and shall be based upon such evidence as the arbitrator deems appropriate, including the relief awarded as compared to the last bona fide settlement offer made by the opposing party prior to the initiation of the arbitration proceeding, as well as any bona fide settlement offer made during the proceeding taking into account the fees, costs and
        expenses incurred thereafter.

        d.         Limited Scope. The following are excluded from binding arbitration under this Agreement: claims for workers’ compensation benefits or unemployment benefits; replevin; and claims for which a binding arbitration agreement is invalid as a matter of law.

        e.         Statutes of Limitations. All statutes of limitations that would otherwise be applicable (as well as other laws and statutes of applicability to any Dispute in issue) shall apply to any arbitration proceeding hereunder, and the arbitrator is specifically empowered to decide any
        question pertaining to limitations.

        f.         Injunctive Relief. The parties hereto may seek injunctive relief in arbitration; provided, however, that as an exception to the arbitration agreement set forth in Section 8.2 hereof, the parties, in addition to all other available remedies, shall each have the right to
        initiate an action in any court of competent jurisdiction in order to request injunctive or other equitable relief regarding the terms of this Agreement. The exclusive venue of any such proceeding shall be in the Agreed Venue. The parties agree (a) to submit to the jurisdiction of any competent court in the Agreed Venue, (b) to waive any and all defenses the Executive may have on the grounds of lack of jurisdiction of such court, and (c) that neither party shall be
        required to post any bond, undertaking or other financial deposit or guarantee in seeking or obtaining such equitable relief. Evidence adduced in any such proceeding for an injunction may be used in arbitration as well. The existence of this right shall not preclude or otherwise limit the applicability or exercise of any other rights and remedies that a party hereto may have at law or in equity.

         

        SECTION 9.

        TERMINATION OF EMPLOYMENT

        9.1.      Events of Termination. In addition to termination of employment in accordance with Section 2 hereof, the Employee’s employment by the Company under this Agreement (1) shall terminate upon the death of the Employee, and (2) may be
        terminated by the Company, immediately upon written notice of termination to the Employee, upon the Employee’s Disability or for Cause. In this Agreement:

        a.         “Disability” means the Employee’s becoming incapacitated by accident, sickness, or other circumstances that, in the reasonable judgment of the Board renders or is expected to render the Employee mentally or physically incapable of performing the essential duties and services required of him hereunder, with or
        without reasonable accommodation, for a period of at least 90 consecutive calendar days.

        
            	
                         

                    	
                        b.

                    	
                        “Cause” means any of the following:

                    

        

         

        
            

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                        i.

                    	
                        the Company’s determination that the Employee has neglected, failed, or refused to render the services or perform any other of his duties or obligations in or under this Agreement (including, without limitation, because of any alcohol or drug abuse);

                    

        

        
            	
                         

                    	
                        ii.

                    	
                        the Employee’s violation of any provision of or obligation under this Agreement;

                    

        

        
            	
                         

                    	
                        iii.

                    	
                        the Employee’s indictment for, or entry of a plea of no contest with respect to, any crime that adversely affects or (in the Board’s reasonable judgment) may adversely affect the Company or the utility of the Employee’s services to the Company; or

                    

        

        
            	
                         

                    	
                        iv.

                    	
                        any other act or omission of the Employee involving fraud, theft, dishonesty, disloyalty, or illegality with respect to, or that harms or embarrasses or (in the Board’s reasonable judgment) may harm or embarrass, the Company or any of its subsidiaries, affiliates, customers, dealers or suppliers.

                    

        

        Notwithstanding any other provision of this Agreement, if the Company gives notice of termination for Cause under clauses i. or ii. above in this Section 9.1(b), then the Employee at his sole option shall have sixty (60) days from the date of such notice to effect a cure or resolution of the reasons giving rise to the termination (the “Employee Remedy Period”) before the termination
        becomes effective. If the reasons giving rise to such termination are cured or resolved by the Employee within the Employee Remedy Period, then the termination will be deemed to be without Cause for the purposes of this Agreement, unless it is withdrawn by the Company by the end of the Employee Remedy Period.

        
            	
                         

                    	
                        c.

                    	
                        “Good Reason” means any of the following:

                    

        

        
            	
                         

                    	
                        i.

                    	
                        the Company’s denial of compensation due and owing to Employee under this Agreement, where such denial is by any means, including but not limited to a material act or omission of fraud, theft, or dishonesty in the Company’s accounting practices or otherwise;

                    

        

        
            	
                         

                    	
                        ii.

                    	
                        the requirement by the Company that Employee be based anywhere other than Dallas County, Texas, except for travel incident to the Company’s business;

                    

        

        
            	
                         

                    	
                        iii.

                    	
                        the Company’s demotion of the Employee in title or pay, or the Company’s removal of a material portion of the Employee’s significant duties or responsibilities pursuant to this Agreement, without the Employee’s consent; or

                    

        

        
            	
                         

                    	
                        iv.

                    	
                        the Company’s material breach of this Agreement.

                    

        

         

        
            

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        Notwithstanding any other provision of this Agreement, if the Employee gives notice of resignation for Good Reason under clauses i., ii., iii., or iv. above in this Section 9.1(c), then the Company at its sole option shall have sixty (60) days from the date of such notice to effect a cure or resolution of the reasons giving rise to the resignation (the “Company Remedy Period”), before
        the resignation becomes effective. If the reasons giving rise to such resignation are cured or resolved by the Company within the Company Remedy Period, then the resignation will be deemed to be without Good Reason for the purposes of this Agreement, unless it is withdrawn by the Employee by the end of the Company Remedy Period.

        9.2.      Non-Renewal. In the event the Company gives notice to the Employee that it will terminate this Agreement at the expiration of the initial two (2) year term, then the Agreement will automatically terminate at the end of such term.

        
            	
                         

                    	
                        9.3.

                    	
                        Severance.

                    

        

        a.         Nothing contained in this Agreement shall be construed as impacting the right of the Company to terminate the Employee’s employment with the Company.

        b.         Unless Employee resigns without Good Reason, or is terminated by the Company for Cause or due to the death of the Employee, the Employee shall continue to receive his base salary as set forth in Section 3 of this Agreement through the end of his initial two (2) year term or for twelve (12) months from Employee’s last
        date of employment, whichever is longer (the “Termination Date”).

        c.         Any amount owed to Employee under this paragraph will be paid in regular installments on the usual and customary pay dates of the Company.

        9.4.      Release. As a condition to the receipt of any Severance payment under paragraph 9.3 of this Agreement, Employee shall be required to execute a release, in the form established by the Company, releasing Company and Company’s shareholders, partners,
        officers, directors, employees, and agents from any and all claims and from any and all causes of any kind or character, including, but not limited to, all claims or causes of action arising out of the employee’s employment with the Company, the termination of such employment, or any actions or omissions occurring during such employment, and the performance of Employee’s and Company’s obligations hereunder.

        9.5.      Effects of Termination. Paragraph 9.3 notwithstanding, upon any cessation or termination of employment under this Agreement, all further rights of the Employee to employment and compensation and benefits from the Company under this Agreement will cease,
        except that the Company shall pay the Employee the following:

        a.         Any amount of base salary earned by, but not yet paid to, the Employee through the last date of the Employment Period;

        b.         Any annual bonus, or portion thereof, that is earned by, but not yet paid to, the Employee through the Termination Date;

         

        
            

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        c.         All reimbursable expenses due, but not paid, to the Employee as of the Termination Date in accordance with Section 3.4 hereof;

        d.         All benefits (or an amount equivalent thereto) that have been earned by or vested in, and are payable to, the Employee under, and subject to the terms of, the employee-benefit plans or arrangements of the Company in which the Employee participated through the Termination Date in accordance with Section 3.5 hereof;
        and

        Any amount due under clause b. above in this Section 9.5 shall be paid in the same manner and on the same date as would have occurred if the Employee’s employment under this Agreement had not ceased. Any amount due under clause d. above in this Section 9.5 shall be paid in accordance with the terms of the employee-benefit plans or arrangements under which such amounts are due to the
        Employee. Any amounts due under clause c. of this Section 9.5 shall be paid in accordance with the terms of the Company’s policies, practices, and procedures regarding reimbursable expenses. Except as modified in paragraph 9.3 hereof for the payment of such amounts when due, the Company shall have no further obligation or liability under this Agreement for any other compensation, payment, or benefit to the Employee. The stock option agreements between the Parties
        and the plan shall govern the Employee’s outstanding stock options upon or after cessation or termination of employment. Also, upon cessation or termination of employment hereunder (unless the Employee continues otherwise to be employed by the Company), the Employee (1) shall return to the Company the leased vehicle provided for the Employee’s use in accordance with Section 3.6 hereof, and (2) shall resign or shall be deemed to have resigned from any position
        as an officer or director, or both, of any subsidiary or affiliate of the Company.

        9.6.      Post-employment Cooperation. Upon and for a period of six (6) months after the Termination Date, the Employee will cooperate fully with the Company in connection with (a) any matter related to the Company’s business and activities, by being
        available at mutually agreeable times, in person or by telephone, and without any unreasonable interference with Employee’s other activities, to provide such information as may from time to time be requested by the Company regarding various matters in which Employee was involved during Employee’s employment with the Company, and (b) any and all pending or future litigation or administrative claims, investigations, or proceedings involving the Company, including (without
        limitation) Employee’s meeting with the Company’s counsel and advisors at reasonable times upon their request, and providing testimony (in court or at depositions) that is truthful, and complete in accordance with information known to him. For all activities required of Employee under this Section 9.4, Employee shall be compensated at Employee’s then hourly rate, except to the extent prohibited by law.

         

        SECTION 10.

        MEDIA NON-DISCLOSURE

        10.1.    Media Nondisclosure. The Employee agrees that, both during and after the Employment Period, except as may be authorized in writing by the Company, the Employee will not directly or indirectly disclose or release to the Media any information concerning or
        relating

         

        
            

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        to any aspect of the Employee’s employment or cessation or termination of Employee’s employment with the Company and/or any aspect of any Dispute that is the subject of this Agreement. For the purposes of this Agreement, “Media” includes, without limitation, any news organization, station, publication, show, website, web log (blog), bulletin board, chat room and/or program (past,
        present and/or future), whether published through the means of print, radio, television and/or the Internet or otherwise, and any member, representative, agent and/or employee of the same.

         

        SECTION 11.

        REPRESENTATION BY EMPLOYEE

        11.1.    No Conflict. The Employee hereby represents and warrants to the Company that Employee’s execution of this Agreement and Employee’s performance of Employee’s duties and obligations hereunder will not conflict with, cause a default under, or give any
        party a right to damages under any other agreement or obligation to which the Employee is a party or is bound.

         

        SECTION 12.

        GENERAL

        12.1.    Governing Law. This Agreement shall be governed by, and enforced and construed under, the laws of the State of Texas, except to the extent preempted by federal law.

        12.2.    Binding Effect; Assignment. All of the terms and provisions of this Agreement shall be binding upon, inure to the benefit of, and be enforceable by the respective heirs, representatives, successors (including, without limitation, any successor as a result of a merger or
        similar reorganization) and assigns of the Parties, except that the Employee’s rights, benefits, duties and responsibilities hereunder are of a personal nature and shall not be assignable in whole or in part by the Employee.

        12.3.    Notices. All notices required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given and received (a) when personally delivered or delivered by same-day courier, (b) on the third business day after mailing by
        registered or certified mail, postage prepaid, return receipt requested, or (c) upon delivery when sent by prepaid overnight delivery service, in any case addressed as follows:

        
            	
                         

                    	
                        If to the Employee:

                    	
                        Mr. Randy S. Bancino

                    

        

        2711 Pin Oak Dr.

        Grapevine, TX 76051

         

        
            	
                         

                    	
                        If to the Company:

                    	
                        Mannatech, Incorporated

                    

        

        Attn: General Counsel

         

        
            

            Page 16 of 19

             

            

        

         

        
            

        

        600 S. Royal Lane, Suite 200

        Coppell, TX 75019

        A Party’s address may be changed from time to time by written notice to the other Party in accordance with this Section 12.3.

        12.4.    Prior Agreements Superseded. This Agreement supersedes all prior agreements between the Parties of any and every nature whatsoever, including (without limitation) agreements for additional compensation or benefits. All such prior agreements are null and void.

        12.5.    Duration. Notwithstanding the cessation or termination of Employee’s employment under this Agreement, this Agreement shall continue to bind the Parties for so long as any obligations remain under the terms of this Agreement.

        12.6.    Amendment; Waiver. No amendment to or modification of this Agreement, or waiver of any term, provision, or condition of this Agreement, will be binding upon a Party unless the amendment, modification, or waiver is in writing and signed by the Party to be bound. Any
        waiver by a Party of a breach or violation of any provision of this Agreement by the other Party shall not be deemed a waiver of any other provision or of any subsequent breach or violation.

        12.7.    Enforcement and Severability. The Parties intend all provisions of this Agreement to be enforced to the fullest extent permitted by law. Accordingly, should a court of competent jurisdiction determine that the scope of any provision of this Agreement is too broad to be
        enforced as written, the Parties intend for the court to reform the provision to such narrower scope as it determines to be reasonable and enforceable. If, however, any provision of this Agreement is held to be illegal, invalid, or unenforceable, the provision shall be severed, this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision were never a part of it, and the remaining provisions shall remain in full force and effect.

        12.8.    Subsidiaries Included. Wherever the “Company” is referred to in this Agreement, it shall include all subsidiaries of the Company as they may exist from time to time, even where the term
        “subsidiaries” is not explicitly stated in connection with such reference.

        
            	
                         

                    	
                        12.9.

                    	
                        Certain Defined Terms; Headings. As used in this Agreement:

                    

        

        a.         “business day” means any Monday through Friday other than any such weekday on which the executive offices of the Company are closed.

        b.         “Employment Period” means the term of Employee’s employment under this Agreement, from the Effective Date through the last date of Employee’s work for the Company under this Agreement, regardless of whether the termination is voluntary, involuntary, for Cause, or not for Cause.

        c.         “herein,” “hereof,” “hereunder,” and similar terms are references to this Agreement as a whole and not to any particular provision of this Agreement.

         

        
            

            Page 17 of 19

             

            

        

         

        
            

        

        d.         “Person” means an individual, an independent contractor, a sole proprietor, a partnership, a limited liability company, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, a governmental entity, court, department, agency or political subdivision, or other
        individual, business, or governmental entity, as applicable.

        In addition, the use herein of “annual” or “monthly” (or similar terms) to indicate a measurement period shall not itself be deemed to grant rights to Employee for employment or compensation for such period. The Section and other descriptive headings in this Agreement are only for convenience of reference and are not to be used to construe or interpret this Agreement or any of its
        provisions.

        12.10.  Employee Acknowledgment. The Employee affirms and attests, by signing this Agreement, that the Employee has read this Agreement before signing it and that the Employee fully understands its purposes, terms, and provisions, which the Employee hereby expressly acknowledges to be
        reasonable in all respects. The Employee further acknowledges receipt of one copy of this Agreement.

        12.11.  Section 409A Compliance. It is the intention of the Company and the Employee that this Agreement not result in unfavorable tax consequences to the Employee under Section 409A of the Code. The Company and the Employee acknowledge that only limited guidance has been issued by the Internal Revenue Service
        with respect to the application of Code Section 409A to certain arrangements, such as this Agreement. It is expected by the Company and the Employee that the Internal Revenue Service will provide further guidance regarding the interpretation and application of Section 409A of the Code in connection with finalizing its recently proposed regulations. The Company and the Employee acknowledge further that the full effect of Section 409A of the Code on potential payments
        pursuant to this Agreement cannot be determined at the time that the Company and the Employee are entering into this Agreement. The Company and the Employee agree to work together in good faith in an effort to comply with Section 409A of the Code including, if necessary, amending the Agreement based on further guidance issued by the Internal Revenue Service from time to time, provided that neither party shall be required to assume an economic burden beyond what is already required
        by this Agreement.

         

         

        [Remainder of Page Intentionally Left Blank]

         

        
            

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        IN WITNESS WHEREOF, the Parties, intending to be legally bound, have duly entered into this Agreement as of the Effective Date.

         

        EMPLOYEE

         

        By: _____________________________________

        
            	
                         

                    	
                        Randy S. Bancino

                    

        

         

         

        Date:_____________________________________

         

         

        MANNATECH, INCORPORATED

         

        By: _____________________________________

        
            	
                         

                    	
                        Wayne Badovinus, President and CEO

                    

        

         

        Date:_____________________________________

         

        
            

            Page 19 of 19

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