Document:

Exhibit 10.12

 

Code
word for this Charter Party

“SHELLTIME
4”

 

Issued December 1984
amended December 2003

 

Time
Charter Party

New
York

May 10,
2008

 

IT IS
THIS DAY AGREED between : (A) Overseas Puget Sound LLC in its capacity as
the owner of the tanker Overseas Puget Sound (the “Vessel”) of Delaware
(hereinafter referred to as “Owners”), (the vessel”) described as per Clause
1 hereof; and (B) Overseas Puget Sound Charterer LLC of Delaware
(hereinafter referred to as “Charterers”):

 

Description
and Condition of Vessel

 

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

 

(a)           the vessel shall be
classed by a Classification Society which is a member of the International
Association of Classification Societies; classification will be ABS

 

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

 

(c)           she shall be tight,
staunch, strong, in good order and condition, and in every way fit for the
service, with her machinery, boilers, hull and other equipment (including but
not limited to hull stress calculator, radar, computers and computer systems)
in a good and efficient state;

 

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

 

(e)           the vessel shall be in
every way fitted for burning, in accordance with the grades specified in Clause
29 hereof; IFO 380 CST RMG 380 ISO 8217:2005 (E) and ISO DMA 8217:2005 –
Charterers will endeavor to procure IFO with maximum 3.0% sulphur, provided it
is readily available within the port the Tug would normally bunker and without
incremental time or cost to Charterers, as compared to IFO that would otherwise
be supplied with maximum 4.5% sulphur content, or as required by law.  Charterers have no obligation whatsoever to
deviate the Vessels for the purpose of procuring IFO 3.0% maximum sulphur
unless required to comply with applicable law(s).

 

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

 

 

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

 

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

 

(g)           she shall have on board
all certificates, documents and equipment required from time to time by any
applicable law to enable her to perform the charter service without delay;

 

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

 

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

 

Safety
Management

 

(j)            Owners will operate:

 

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

 

(ii)           a documented safe
working procedures system (including procedures for the identification and
mitigation of risks);

 

(iii)          a documented
environmental management system;

 

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

 

(k)           Owners shall submit to
Charterers a monthly written report detailing all accidents/incidents and
environmental reporting requirements;

 

(l)            Owners shall maintain
Health Safety Environmental (“HSE”) records sufficient to demonstrate
compliance with the requirements of their HSE system and of this charter.  Charterers reserve the right to confirm
compliance with HSE requirements by audit of Owners.

 

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

 

Shipboard
Personnel and their Duties

 

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

 

(i)            she shall have a full
and efficient complement of master, officers and crew for a vessel of her
tonnage, who shall in any event be not less than the number required by the
laws of the flag state and who shall be trained to operate the vessel and her
equipment competently and safely;

 

(ii)           all shipboard personnel
shall hold valid certificates of competence in accordance with the requirements
of the law of the flag state;

 

(iii)          all shipboard personnel
shall be trained in accordance with the relevant provisions of the
International Convention on Standards of Training, Certification and
Watchkeeping for Seafarers, 1995 or any additions, modifications or subsequent
versions thereof;

 

(iv)          there shall be on board
sufficient personnel with a good working knowledge of the English language to
enable cargo operations at loading and discharging places to be carried out
efficiently and safely and to enable communications between the vessel and
those loading the vessel or accepting discharge there from to be carried out
quickly and efficiently;

 

(v)            the terms of
employment of the vessel’s staff and crew will always remain acceptable to The
International Transport Worker’s Federation and the vessel will at all times
carry a Blue Card;

 

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

 

2

 

(b)           Owners guarantee that
throughout the charter service the master shall with the vessel’s officers and
crew, unless otherwise ordered by Charterers;

 

(i)            prosecute all voyages
with the utmost despatch;

 

(ii)           render all customary
assistance; and

 

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

 

Duty to
Maintain

 

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

 

(b)           If at any time whilst
the vessel is on hire under this charter the vessel fails to comply with the
requirements of Clauses 1 ,  2(a) or 10
then hire shall be reduced to the extent necessary to indemnify Charterers for
such failure. If and to the extent that such failure affects the time taken by
the vessel to perform any services under this charter, hire shall be reduced by
an amount equal to the value, calculated at the rate of hire, of the time so
lost.

 

Any reduction of hire
under this sub-Clause (b) shall be without prejudice to any other
remedy available to Charterers, but where such reduction of hire is in respect
of time lost, such time shall be excluded from any calculation under Clause
24.

 

3

 

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

 

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

 

(e)           If, in Charterers
reasonably held view:

 

(i)            failure of an
inspection, or,

 

(ii)           any finding of an
inspection,

 

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

 

(f)            Furthermore, at any
time while the vessel is off-hire under this Clause 3 (with the
exception of Clause 3(e)(ii)), Charterers have the option to
terminate this charter by giving notice in writing with effect from the date on
which such notice of termination is received by Owners or from any Later date
stated in such notice.  This sub-Clause (f) is without
prejudice to any rights of Charterers or obligations of Owners under this
charter or otherwise (including without limitation Charterers’ rights under Clause
21 hereof).

 

Period,
Trading Limits and Safe Places

 

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

 

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

 

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

 

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

 

(c)           Charterers shall use
due diligence to ensure that the vessel is only employed between and at safe
places (which expression when used in this charter shall include ports, berths,
wharves, docks, anchorages, submarine lines, alongside vessels or lighters, and
other locations including locations at sea) where she can safely lie always
afloat.  Notwithstanding anything contained in this or any other clause of
this charter, Charterers do not warrant the safety of any place to which they
order the vessel and shall be under no liability in respect thereof except for
loss or damage caused by their failure to exercise due diligence as
aforesaid.  Subject as above, the vessel shall be loaded and discharged at
any places as Charterers may direct, provided that Charterers shall exercise
due diligence to ensure that any ship-to-ship transfer operations shall conform
to standards not less than those set out in the latest published edition of the
ICS/OCIMF Ship-to-Ship Transfer Guide.

 

5

 

(d)           Unless otherwise
agreed, the vessel shall be delivered by Owners dropping outward pilot at a
port chosen by Charterers and redelivered to Owners dropping outward pilot at a
port chosen by Owners.

 

(e)           The vessel will deliver
with last cargo(es) of clean petroleum product
and will redeliver with last cargo(es) of clean petroleum product

 

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

 

Laydays/Cancelling

 

5.             The vessel shall not
be delivered to Charterers before February 12, 2009
and Charterers shall have the option of cancelling this charter if the vessel
is not ready and at their disposal on or before

 

Owners
to Provide

 

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

 

Charterers
to Provide

 

7.             (a)           Charterers shall provide and pay for all
fuel (except for fuel used for domestic services), towage and pilotage and
shall pay agency fees, port charges, commissions, expenses of loading and
unloading cargoes, canal dues, and tax/dues on cargo/freight and all charges
other than those payable by Owners in accordance with Clause 6 hereof,
provided that all charges for the said items shall be for Owners’ account when
such items are consumed, employed or incurred for Owners’ purposes or while the
vessel is off-hire (unless such items reasonably relate to any service given or
distance made good and taken into account under Clause 21 or 22
); and provided further that any fuel used in connection with a general average
sacrifice or expenditure shall be paid for by Owners. OPA charges to be paid by
Charterers, COFR to be arranged and paid for by Owners.

 

6

 

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

 

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

 

Rate of
Hire

 

8.             Subject as herein
provided, Charterers shall pay for the use and hire of the vessel at the rate
of United States Dollars $31,500 per
day, and pro rata for any part of a day, from the time and date of her delivery
(local time) to Charterers until the time and date of redelivery (local time)
to Owners.

 

Payment
of Hire

 

9.             Subject to Clause
3 (c) and 3 (e), payment of hire shall be made in immediately
available funds

 

to:                  Fifth Third Bank

Cincinatti,
Ohio

Account:  ABA #042000314

For
Credit to Account No. 09990203987

in the
name of OSG America Operating Company LLC

 

in United States Dollars
per calendar month in advance, less:

 

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

 

(ii)           any amounts disbursed
on Owners’ behalf, any advances and commission therein, and charges which are
for Owners’ account pursuant to any provision hereof, and;

 

(iii)          any amounts due or
reasonably estimated to become due to Charterers under Clause 3(c) or
24 hereof,

 

any such adjustments to
be made at the due date for the next monthly payment after the facts have been
ascertained. Charterers shall not be responsible for any delay or error by
Owners’ bank in crediting Owners’ account provided that Charterers have made
proper and timely payment.

 

7

 

In default of such proper
and timely payment:

 

(a)           Owners shall notify
Charterers of such default and Charterers shall within seven days of receipt of
such notice pay to Owners the amount due, including interest, failing which
Owners may withdraw the vessel from the service of Charterers without prejudice
to any other rights Owners may have under this charter or otherwise; and;

 

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

 

8

 

Space
Available to Charterers

 

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

 

Segregated
Ballast

 

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

 

“The segregated ballast
tanks comply with the Regulation 13 of Annex 1 of the International Convention
for the Prevention of Pollution from Ships, 1973, as modified by the Protocol
of 1978 relating thereto, and the total tonnage of such tanks exclusively used
for the carriage of segregated water ballast is as
required The reduced gross tonnage which should be used for the
calculation of tonnage based fees has been provided to
Charterers”.

 

Instructions
and Logs

 

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

 

Bills of
Lading

 

13.           (a)           The master (although appointed by Owners)
shall be under the orders and direction of Charterers as regards employment of
the vessels, agency and other arrangements, and shall sign Bills of Lading as
Charterers or their agents may direct (subject always to Clauses 35(a) and
40) without prejudice to this charter.  Charterers hereby indemnify
Owners against all consequences or liabilities that may arise;

 

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

 

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

 

9

 

(b)           If Charterers by telex,
facsimile or other form of written communication that specifically refers to
this Clause request Owners to discharge a quantity of cargo either without
Bills of Lading and/or at a discharge place other than that named in a Bill of
Lading and/or that is different from the Bill of Lading quantity, then Owners
shall discharge such cargo in accordance with Charterer’s instructions in
consideration of receiving the following indemnity which shall be deemed to be
given by Charterers on each and every such occasion and which is limited in
value to 200% of the CIF value of the cargo carried on board;

 

(i)            Charterers shall
indemnify Owners and Owners’ servants and agents in respect of any liability
loss or damage of whatsoever nature (including legal costs as between attorney
or solicitor and client and associated expenses) which Owners may sustain by
reason of delivering such cargo in accordance with Charterers’ request.

 

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

 

(iii)          If the vessel or any other vessel or property belonging to Owners should
be arrested or detained, or if the arrest or detention thereof should be
threatened, by reason of discharge in accordance with Charterers instruction as
aforesaid, Charterers shall provide on demand such bail or other security as
may be required to prevent such arrest or detention or to secure the release of
such vessel or property and Charterers shall indemnify Owners in respect of any
loss, damage or expenses caused by such arrest or detention whether or not same
may be justified.

 

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

 

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

 

Provided however, if
Charterers have not received all such original Bills of Lading by 24.00 hours
on the day 36 calendar months after the date of discharge, that this indemnity
shall terminate at that time unless before that time Charterers have received
from Owners written notice that:

 

a)             Some person is making
a claim in connection with Owners delivering cargo pursuant to Charterers
request or,

 

10

 

b)            Legal proceedings have
been commenced against Owners and/or carriers and/or Charterers and/or any of
their respective servants or agents and/or the vessel for the same reason.

 

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

 

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

 

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

 

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

 

Conduct
of Vessel’s Personnel

 

14.           If Charterers complain
of the conduct of the master or any of the officers or crew, Owners shall
immediately investigate the complaint.  If the complaint proves to be well
founded, Owners shall, without delay, make a change in the appointments and
Owners shall in any event communicate the result of their investigations to
Charterers as soon as possible.

 

11

 

Bunkers
at Delivery and Redelivery

 

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

 

Vessel to be delivered to
and redelivered from the charter with, at least, a quantity of bunkers on board
sufficient to reach the nearest main bunkering port.

 

Notwithstanding anything
contained in this charter all bunkers on board the vessel shall, throughout the
duration of this charter, remain the property of Charterers and can only be
purchased on the terms specified in the charter at the end of the charter
period or, if earlier, at the termination of the charter.

 

Stevedores,
Pilots, Tugs

 

16.           Stevedores, when
required, shall be employed and paid by Charterers, but this shall not relieve
Owners from responsibility at all times for proper stowage, which must be
controlled by the master who shall keep a strict account of all cargo loaded
and discharged.  Owners hereby indemnify Charterers, their servants and
agents against all losses, claims, responsibilities and liabilities arising in
any way whatsoever from the employment of pilots, tugboats or stevedores, who
although employed by Charterers shall be deemed to be the servants of and in
the service of Owners and under their instructions (even if such pilots,
tugboat personnel or stevedores are in fact the servants of Charterers their
agents or any affiliated company); provided, however, that:

 

(a)           the foregoing indemnity
shall not exceed the amount to which Owners would have been entitled to limit
their liability if they had themselves employed such pilots, tugboats or
stevedores, and;

 

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

 

Super-Numeraries

 

17.           Charterers may send
representatives in the vessel’s available accommodation upon any voyage made
under this charter, Owners finding provisions and all requisites as supplied to
officers, except alcohol.  Charterers paying at the rate of United States
Dollars 15 (fifteen) per day for each representative while on board the vessel.

 

12

 

Sub-letting/Assignment/Novation

 

18.           Charterers may sub-let
the vessel, but shall always remain responsible to Owners for due fulfilment of
this charter.

 

Final
Voyage

 

19.           If when a payment of
hire is due hereunder Charterers reasonably expect to redeliver the vessel
before the next payment of hire would fall due, the hire to be paid shall be
assessed on Charterers’ reasonable estimate of the time necessary to complete
Charterers’ programme up to redelivery, and from which estimate Charterers may
deduct amounts due or reasonably expected to become due for:

 

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

 

(b)           bunkers on board at
redelivery pursuant to Clause 15.

 

Promptly after redelivery
any overpayment shall be refunded by Owners or any underpayment made good by
Charterers.

 

13

 

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

 

Loss of
Vessel

 

20.           Should the vessel be
lost, this charter shall terminate and hire shall cease at noon (GMT) on the
day of the loss; should the vessel be a constructive total loss, this charter
shall terminate and hire shall cease at noon on the day on which the vessel’s
underwriters agree that the vessel is a constructive total loss; should the
vessel be missing, this charter shall terminate and hire shall cease at noon on
the day on which she was last heard of.  Any hire paid in advance and not
earned shall be returned to Charterers and Owners shall reimburse Charterers
for the value of the estimated quantity of bunkers on board at the time of
termination, at the price paid by Charterers at the last bunkering port.

 

Off-hire

 

21.           (a)           On each and every occasion that there is
loss of time (whether by way of interruption in the vessel’s service or, from
reduction in the vessel’s performance, or in any other manner):

 

(i)            due to deficiency of
personnel or stores; repairs; gas-freeing for repairs; time in and waiting to
enter dry dock for repairs; breakdown (whether partial or total) of machinery,
boilers or other parts of the vessel or her equipment (including without
limitation tank coatings); overhaul, maintenance or survey; collision,
stranding, accident or damage to the vessel; or any other similar cause
preventing the efficient working of the vessel; and such loss continues for
more than three consecutive hours (if resulting from interruption in the vessel’s
service) or cumulates to more than three hours (if resulting from partial loss
of service); or;

 

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

 

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

 

(iv)          due to any delay in
quarantine arising from the master, officers or crew having had communication
with the shore at any infected area without the written consent or instructions
of Charterers or their agents, or to any detention by customs or other
authorities caused by smuggling or other infraction of local law on the part of
the master, officers, or crew; or;

 

14

 

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

 

without prejudice to
Charterers’ rights under 
Clause 3  or to any other
rights of Charterers hereunder, or otherwise, the vessel shall be off-hire from
the commencement of such loss of time until she is again ready and in an
efficient state to resume her service from a position not less favourable to
Charterers than that at which such loss of time commenced; provided, however,
that any service given or distance made good by the vessel whilst off-hire
shall be taken into account in assessing the amount to be deducted from hire.

 

15

 

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

 

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

 

(ii)           the time actually taken
to perform such service (including any loss of time arising from interruption
in the performance of such service).

 

For the avoidance of
doubt, all time included under (ii) above shall be excluded from any
computation under Clause 24 .

 

(c)           Further and without
prejudice to the foregoing, in the event of the vessel deviating (which
expression includes without limitation putting back, or putting into any port
other than that to which she is bound under the instructions of Charterers) for
any cause or purpose mentioned in 
Clause 21(a) , the vessel shall be off-hire from the
commencement of such deviation until the time when she is again ready and in an
efficient state to resume her service from a position not less favourable to
Charterers than that at which the deviation commenced, provided, however, that
any service given or distance made good by the vessel whilst so off-hire shall
be taken into account in assessing the amount to be deducted from hire. 
If the vessel, for any cause or purpose mentioned in  Clause 21(a) , puts into any port
other than the port to which she is bound on the instructions of Charterers,
the port charges, pilotage and other expenses at such port shall be borne by
Owners.  Should the vessel be driven into any port or anchorage by stress
of weather hire shall continue to be due and payable during any time lost
thereby.

 

(d)           If the vessel’s flag
state becomes engaged in hostilities, and Charterers in consequence of such
hostilities find it commercially impracticable to employ the vessel and have
given Owners written notice thereof then from the date of receipt by Owners of
such notice until the termination of such commercial impracticability the
vessel shall be off-hire and Owners shall have the right to employ the vessel
on their own account.

 

(e)           Time during which the
vessel is off-hire under this charter shall count as part of the charter period
except where Charterers declare their option to add off-hire periods under  Clause 4(b) ).

 

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

 

16

 

Periodical
Drydocking

 

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

 

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

 

(b)           If a periodical
drydocking is carried out in the port offered by Charterers (which must have
suitable accommodation for the purpose and reception facilities for tank
washings and residues), the vessel shall be off-hire from the time she arrives
at such port until drydocking is completed and she is in every way ready to
resume Charterers’ service and is at the position at which they went off-hire
or a position no less favourable to Charterers, whichever she first attains.
However;

 

17

 

(i)            provided that Owners
exercise due diligence in gas-freeing, any time lost in gas-freeing to the
standard required for entry into drydock for cleaning and painting the hull
shall not count as off-hire, whether lost on passage to the drydocking port or
after arrival there (notwithstanding 
Clause 21 ), and;

 

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

 

Any time which, but for
sub-Clause (i) above, would be off-hire, shall not be included in any
calculation under Clause 24 .

 

The expenses of
gas-freeing, including without limitation the cost of bunkers, shall be for
Owners’ account.

 

(c)            If Owners require the
vessel, instead of proceeding to the offered port, to carry out periodical
drydocking at a special port selected by them, the vessel shall be off-hire
from the time when she is released to proceed to the special port until she
next presents for loading in accordance with Charterers’ instructions,
provided, however, that Charterers shall credit Owners with the time which
would have been taken on passage at the service speed had the vessel not
proceeded to drydock.  All fuel consumed shall be paid for by Owners but
Charterers shall credit Owners with the value of the fuel which would have been
used on such notional passage calculated at the guaranteed daily consumption
for the service speed, and shall further credit Owners with any benefit they
may gain in purchasing bunkers at the special port.

 

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

 

Ship
Inspection

 

23.           Charterers shall have
the right at any time during the charter period to make such inspection of the
vessel as they may consider necessary. 
This right may be exercised as often and at such intervals as Charterers
in their absolute discretion may determine and whether the vessel is in port or
on passage.  Owners affording all
necessary co-operation and accommodation on board provided, however:

 

(a)           that neither the exercise nor the non-exercise, nor anything done or not
done in the exercise or non-exercise, by Charterers of such right shall in any
way reduce the master’s or Owners’ authority over, or responsibility to Charterers
or third parties for, the vessel and every aspect of her operation, nor
increase Charterers’ responsibilities to Owners or third parties for the same; and;

 

18

 

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

 

Detailed
Description and Performance

 

24.            Owners guarantee that
the speed and consumption of the vessel shall be as agreed with Charterers.

 

Salvage

 

25.           Subject to the
provisions of Clause 21 hereof, all loss of time and all expenses
(excluding any damage to or loss of the vessel or tortious liabilities to third
parties) incurred in saving or attempting to save life or in successful or
unsuccessful attempts at salvage shall be borne equally by Owners and
Charterers provided that Charterers shall not be liable to contribute towards
any salvage payable by Owners arising in any way out of services rendered under
this Clause 25 .

 

19

 

All salvage and all
proceeds from derelicts shall be divided equally between Owners and Charterers
after deducting the master’s, officers’ and crew’s share.

 

Lien

 

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

 

Exceptions

 

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

 

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

 

(c)           Clause 27(a) shall
not apply to, or affect any liability of Owners or the vessel or any other
relevant person in respect of:

 

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

 

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

 

(d)           In particular and
without limitation, the foregoing subsections (a) and (b) of
this Clause shall 

 

20

 

not apply to or in any
way affect any provision in this charter relating to off-hire or to reduction
of hire.

 

Injurious
Cargoes

 

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

 

Grade of
Bunkers

 

29.           Charterers shall supply
fuel as required for the vessel.  If
Owners require the vessel to be supplied with more expensive bunkers they shall
be liable for the extra cost thereof.

 

Charterers warrant that
all bunkers provided by them in accordance herewith shall be of a quality
complying with ISO Standard 8217 for Marine Residual Fuels and Marine
Distillate Fuels as applicable.

 

21

 

Disbursements

 

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

 

Laying-up

 

31.           Charterers shall have
the option, after consultation with Owners, of requiring Owners to lay up the
vessel at a safe place nominated by Charterers, in which case the hire provided
for under this charter shall be adjusted to reflect any net increases in
expenditure reasonably incurred or any net saving which should reasonably be
made by Owners as a result of such lay up.  Charterers may exercise the
said option any number of times during the charter period.

 

Requisition

 

32.           Should the vessel be
requisitioned by any government, de facto or de jure, during the period of this
charter, the vessel shall be off-hire during the period of such requisition,
and any hire paid by such governments in respect of such requisition period
shall be for Owners’ account.  Any such requisition period shall not count
as part of the charter period.

 

Outbreak
of War

 

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

 

Additional
War Expenses

 

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

 

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

 

22

 

War
Risks

 

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

 

(b)           If in the reasonable
opinion of the master or Owners it becomes, for any of the reasons set out in
Clause 35(a)  or by the operation of international law,
dangerous, impossible or prohibited for the vessel to reach or enter, or to
load or discharge cargo at, any place to which the vessel has been ordered
pursuant to this charter (a “place of peril”), then Charterers or their agents
shall be immediately notified in writing or by radio messages, and Charterers
shall thereupon have the right to order the cargo, or such part of it as may be
affected, to be loaded or discharged, as the case may be, at any other place
within the trading limits of this charter (provided such other place is not
itself a place of peril).  If any place of discharge is or becomes a place
of peril, and no orders have been received from Charterers or their agents
within 48 hours after dispatch of such messages, then Owners shall be at
liberty to discharge the cargo or such part of it as may be affected at any
place which they or the master may in their or his discretion select within the
trading limits of this charter and such discharge shall be deemed to be due
fulfilment of Owners’ obligations under this charter so far as cargo so
discharged is concerned.

 

23

 

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

 

Charterers shall procure
that all Bills of Lading issued under this charter shall contain the Chamber of
Shipping War Risks Clause 1952.

 

Both to
Blame Collision Clause

 

36.           If the liability for
any collision in which the vessel is involved while performing this charter
fails to be determined in accordance with the laws of the United States of
America, the following provision shall apply:

 

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

 

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

 

Charterers shall procure
that all Bills of Lading issued under this charter shall contain a provision in
the foregoing terms to be applicable where the liability for any collision in
which the vessel is involved fails to be determined in accordance with the laws
of the United States of America.

 

New
Jason Clause

 

37.           General average
contributions shall be payable according to York/Antwerp Rules, 1994 as amended
from time to time, and shall be adjusted in London in accordance with English
law and 

 

24

 

practice but should
adjustment be made in accordance with the law and practice of the United States
of America, the following position shall apply:

 

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

 

25

 

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

 

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

 

Clause
Paramount

 

38.           Charterers shall
procure that all Bills of Lading issued pursuant to this charter shall contain
the following:

 

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

 

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

 

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

 

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

 

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

 

26

 

Insurance/ITOPF

 

39.           Owners warrant that the
vessel is now, and will, throughout the duration of the charter:

 

(a)            be owned or demise
chartered by a member of the International Tanker Owners Pollution Federation
Limited;

 

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

 

(c)            have in place
insurance cover for oil pollution for the maximum on offer through the
International Group of P & l Clubs but always a minimum of United
States Dollars 1,000,000,000 (one thousand million);

 

(d)           have in full force and
effect Hull and Machinery insurance placed through reputable brokers on
Institute Time Clauses or equivalent for the market value agreed by Owners and
Charterers.

 

27

 

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

 

Export
Restrictions

 

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

 

Charterers shall procure
that all Bills of Lading issued under this charter shall contain the following
clause:

 

“If any laws rules or
regulations applied by the government of the country in which the cargo was
produced and/or shipped, or any relevant agency thereof, impose a prohibition
on export of the cargo to the place of discharge designated in or ordered under
this Bill of Lading, carriers shall be entitled to require cargo owners
forthwith to nominate an alternative discharge place for the discharge of the
cargo, or such part of it as may be affected, which alternative place shall not
be subject to the prohibition, and carriers shall be entitled to accept orders
from cargo owners to proceed to and discharge at such alternative place. 
If cargo owners fail to nominate an alternative place within 72 hours after
they or their agents have received from carriers notice of such prohibition,
carriers shall be at liberty to discharge the cargo or such part of it as may
be affected by the prohibition at any safe place on which they or the master
may in their or his absolute discretion decide and which is not subject to the
prohibition, and such discharge shall constitute due performance of the
contract contained in this Bill of Lading so far as the cargo so discharged is
concerned”.

 

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

 

Business
Principles

 

41.           (Deleted)

 

Drugs
and Alcohol

 

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

 

28

 

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

 

Oil
Major Acceptability

 

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

 

Pollution
and Emergency Response

 

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

 

ISPS
Code/US MTSA 2002

 

45.       (a).        (i)         From the date of coming into force of the International Code for the
Security of Ships and of Port Facilities and the relevant amendments to Chapter
XI of SOLAS (ISPS Code) and the US Maritime Transportation Security Act 2002
(MTSA) in relation to the Vessel and thereafter during the currency of this
charter, Owners shall procure that both the Vessel and “the Company” (as
defined by the ISPS Code) and the “owner” (as defined by the MTSA) shall comply
with the requirements of the ISPS Code relating to the Vessel and “the Company”
and the requirements of MTSA relating to the vessel and the “owner”.  Upon request Owners shall provide documentary
evidence of compliance with this Clause 45(a) (i).

 

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

 

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

 

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

 

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

 

29

 

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

 

(d).  Notwithstanding any other provision of this charter, the vessel shall
not be off-hire where there is a loss of time caused by Charterers’ failure to
comply with the ISPS code/MTSA (when in force).

 

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

 

30

 

Law and
Litigation

 

46.       (Deleted)

 

Confidentiality

 

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

 

Construction

 

48.       The
side headings have been included in this charter for convenience of reference
and shall in no way affect the construction hereof.

 

Additional Clauses:  As attached, shall be
incorporated herein.

 

 

	
  SIGNED FOR OWNERS

  	
   

  	
   

  	
  SIGNED FOR CHARTERES

  
	
  Overseas Puget Sound LLC

  	
   

  	
  Overseas Puget Sound Charterer
  LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   /s/
  Jerry Miller

  	
   

  	
   

  	
  By:

  	
  /s/ Janice K. Smith

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name: Jerry Miller

  	
   

  	
   

  	
   

  	
  Name: 

  	
  Janice K. Smith

  
	
   

  	
  Title: Manager

  	
   

  	
   

  	
  Title: 

  	
  Manager

  

 

31

 

Additional Terms

to the time charter dated May 10, 2008 between Overseas Puget
Sound LLC and Overseas Puget Sound Charterer LLC

 

1.         Charterhire, Payments and Expense

1.1          OWNER’S BANK

1.2          TIME CHARTER HIRE RATE

1.3          OWNER’S ITEMS

1.4          COMMISSION

1.5          HIRE PAYMENT

1.6          OPA/COFR EXPENSES

 

2.         Delivery/Redelivery and Trading

2.1          DELIVERY

2.2          REDELIVERY

2.3          TRADING AREAS AND EXCLUSIONS

2.4          NOTICE OF DELIVERY/REDELIVERY

2.5          BUNKERS ON DELIVERY/REDELIVERY

2.6          OFF-HIRE PERIOD(S)

2.7          BOYCOTT

2.8          TRADING WHILE OFF-HIRE

2.9          DRYDOCKING

2.10        LAY-UP

 

3.         Vessel Operations, Performance
and Warranties

3.1          SPILL PREVENTION

3.2          OILY WASTE

3.3          SPEEDS/CONSUMPTIONS

3.4          HEATING

3.5          SHIP TO SHIP TRANSFER

3.6          CARGO MANIFOLDS

3.7          CRUDE OIL WASH (COW)

3.8          INERT GAS SYSTEM

3.9          SURVEY AND SAMPLE

3.10        COMMINGLING/BLENDING

3.11        CARGO RETENTION

3.12        LOADING WARRANTY

3.13        PUMPING PERFORMANCE WARRANTY

3.14        DRAWINGS/DATA

3.15        REMEASUREMENT

3.16        ETA

3.17        CBM MOORING EQUIPMENT

3.18        SEA TERMINALS

 

32

 

3.19        COMMUNICATION EQUIPMENT

3.20        INMARSAT TRACKING

3.21        MANNING

3.22        OWNERSHIP/FLAG

 

4.         Eligibility and Compliance

4.1          APPROVALS

4.2          ELIGIBILITY

4.3          I.T.F.

4.4          DRUG AND ALCOHOL POLICY

4.5          SOLAS/MARPOL

4.6          ITOPF

4.7          JAPAN MARITIME DISASTER PREVENTION CENTER
CERTIFICATES

 

5.         Legal Provisions

5.1          LAW AND LITIGATION

5.2          AFFILIATES’ CLAIMS

5.3          ASSIGNMENT

5.4          TENDER OF NOTICE

5.5          INSURANCE

5.6          WAR

5.7          BILL(S) OF LADING/INDEMNITY

5.8          CONFIDENTIALITY

5.9          LOSS OF VESSEL

5.10        CONFLICTS OF INTEREST

5.11        CONTRACT INTERPRETATION

 

33

 

1.         Charterhire, Payments and Expense

 

1.1       OWNER’S BANK

 

See clause 9 of the Shelltime 4 form.

 

1.2       TIME CHARTER HIRE RATE

 

See clause 8 of the Shelltime 4 form

 

1.3       OWNER’S ITEMS

 

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

 

1.4       COMMISION:

 

None

 

1.5       HIRE PAYMENT

 

Notwithstanding
the provisions of Clause 9 of the Shelltime 4 form, Charterer shall: (a) not
be responsible for any delay or error by Owner’s bank in crediting Owner’s
account provided that Charterer has made proper and timely payments; and (b) be
responsible for any delay or error caused by Charterer’s bank.

 

1.6       OPA/COFR EXPENSES

 

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

 

2.         Delivery/Redelivery
and Trading

 

2.1       DELIVERY

 

See
Clause 4 (d) of the Shelltime 4 form.

 

34

 

2.2       REDELIVERY

 

See
Clause 4 (d) of the Shelltime 4 form.

 

2.3       TRADING AREAS AND EXCLUSIONS

 

See
Clause 4 of the Shelltime 4 form.

 

2.4      NOTICE OF
DELIVERY/REDELIVERY

 

.1             See Clause 5 of the
Shelltime 4 form.

 

2.5       BUNKERS ON DELIVERY/REDELIVERY

 

Bunkers
on delivery to be settled at cost upon Owner’s verification of bunker invoice
of cost of bunkers.  If possible, vessel
to be redelivered with approximately the same quantity fuel oil and gas oil to
be settled at cost upon Charterer’s verification of bunker invoice of cost of
bunkers.  In each case, quantities to be
no less than 300 mt fuel oil and 50 mt gas oil. 
Bunker survey to be held at locations of delivery and redelivery unless
otherwise mutually agreed.  Time and cost
of both surveys to be split 50/50 between Owner and Charterer.  Title of bunkers to pass to Charterer upon
delivery and to Owner upon redelivery.

 

2.6       OFF-HIRE PERIOD(S)

 

Notwithstanding
Clause 21(e) of the Shelltime 4 form, the time charter period may be
extended by Charterer for all or any part of the time that the Vessel is
off-hire during the initial term of the charter. Charterer’s option to add back
off-hire time to the time charter period is to be exercised latest 20 days
prior to expiry.

 

2.7       BOYCOTT

 

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

 

35

 

2.8       TRADING
WHILE OFF-HIRE

 

Owner
may not under any circumstances trade the Vessel for its own account during any
period of off-hire, unless agreed in advance by Charterer.

 

2.9       DRYDOCKING

 

A.        See clause 22 of the Shelltime 4 form.

 

B.        Emergency Drydocking

 

Should
emergency drydocking be required, Charterer shall allow the Vessel to proceed
to an appropriate port.  Owner shall be
solely responsible for gas freeing the Vessel upon such occasion, and all
towing, pilotage, fuel and other expense incurred while proceeding to and from
and while in drydock shall be for Owner’s account.  Fuel used during such drydocking or repair as
provided in this clause or in proceeding to or from the port of drydocking or
repair, will be charged to Owner by Charterer at the price charged to Charterer
by its bunker supplier at the last supply port.

 

In
case of emergency drydock pursuant to this clause at a port where the Vessel is
to load, discharge or bunker under Charterer’s orders, hire shall be suspended
from the time the Vessel is received free pratique on arrival, if in ballast,
or upon completion of discharge of cargo, if loaded, until the Vessel is again
ready for service.  In case of drydocking
at a port other than where the Vessel is to load, discharge, or bunker under
Charterer’s orders, the following time and bunkers shall be deducted from
hire:  total time and bunkers including
repair port call from the actual voyage from last port of call under Charterer’s
order to next port of call under Charterer’s orders, less theoretical voyage
time and bunkers for the direct voyage from said last port of call to said next
port of call.  The period during which
hire is suspended including drydocking and repairs until the Vessel again comes
on hire under the terms hereof shall count as off-hire under the terms of this
Charter.

 

C.        Cleaning Costs

 

Regardless
of whether the drydocking is a scheduled or emergency drydocking, any
incremental cleaning time and costs to clean for drydocking shall be for the
Owner’s account.

 

2.10     LAY-UP

 

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

 

36

 

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

 

3.         Vessel
Operations, Performance and Warranties

 

3.1       SPILL PREVENTION

 

Prior
to commencement of loading or discharging operations, all overboard lines are
to be checked to ensure that they are securely closed.  Pumproom stripping line overboard discharges
shall be suitably blanked off before arriving in port.  These blanks are to be installed and retained
in line through the entire period that the Vessel is in coastal waters.  All other precautions are to be taken to
avoid any spillage and/or leakage.  If
during loading or discharging operations there is any indication of spillage or
leakage of oil or CPP cargo, the Vessel shall immediately cease all pumping
operations and notify the Owner’s DPA (Dedicated Position Ashore), terminal
representative(s) and/or Charterer’s supervisor(s).  The Vessel shall not resume loading or
discharging operations until a thorough investigation is conducted and
appropriate remedies are taken, and any time lost shall be for Owner’s account,
should such spillage or leakage of oil be found to have occurred due to the
negligence of Vessel’s crew or condition of the Vessel.  Notwithstanding the above, Owner shall always
comply with the terms of Clause 4.2.

 

3.2       OILY WASTE

 

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

 

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

 

37

 

be
for Charterer’s account.  If the residues
are to be kept on board, the Master shall arrange that the quantity be measured
in conjunction with the cargo suppliers, a note of the quantity shall be made
in Vessel’s ullage record and a slop certificate shall be issued.  If Charterer requires that the residues be
kept on board, segregated from cargo, they shall, at Charterer’s option, be
discharged at the discharging port(s) in accordance with Charterer’s
instructions.

 

3.3       SPEEDS/CONSUMPTIONS

 

See
clause 24 of the Shelltime 4 form.

 

3.4       HEATING

 

No
requirements

 

3.5       SHIP TO
SHIP TRANSFER

 

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

 

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

 

3.6       CARGO MANIFOLDS

 

Owner
warrants that Vessel shall be equipped with pressure gauges fitted inboard of
the valve at each discharge manifold connection.  Such gauges shall be maintained in proper
working condition and each gauge shall have a valid test certificate.

 

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

 

38

 

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

 

Owner
further warrants that no more than one reducer or spacer will be used between
Vessel’s manifold valve and the terminal hose or loading arm connection in
accordance with OCIMF Guidelines.  The
Vessel shall be equipped to present flanges of 10”, 12” and 16” (ASA) at all
manifold connections on one side of the Vessel.

 

3.7       CRUDE OIL WASH (COW)

 

N/A

 

3.8        INERT GAS SYSTEM

 

N/A

 

3.9       SURVEY AND SAMPLE

 

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

 

3.10     COMMINGLING/BLENDING

 

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

 

3.11     CARGO RETENTION

 

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

 

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

 

39

 

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

 

3.12     LOADING WARRANTY

 

Owner
warrants that the Vessel can routinely load a homogenous cargo at a maximum
rate of 36,000 barrels/hour provided two cargo lines are connected (except for
start up and topping up operation).

 

3.13       PUMPING PERFORMANCE WARRANTY

 

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

 

B.        Charterer is to be compensated at the Hourly
Rate of Hire for each hour, or pro rata for each part of an hour, that the
Vessel takes in excess of the pumping time allowed per the rates stipulated in
sub-paragraph (A) hereof.  In
addition, Charterer reserves the right to order the Vessel from any berth at
any time at the Owner’s time and expense when this warranty is breached.  Owner will receive no credit or compensation
if the Vessel is able to discharge at a rate greater than those specified
above.  If the terminal or place of
discharging does not allow or permit the Vessel to meet the above warranty, the
Master shall forthwith issue a Letter of Protest (for which the Master, if
possible, shall obtain acknowledgement) to such terminal or place and shall
immediately advise Charterer in writing by telex or facsimile.  If the Master fails to issue the Letter of
Protest, Owner shall be deemed to waive any rights to contest that time was
lost as a result of the Vessel’s failure to comply with the above pumping
warranty.  Any delay to Vessel’s
discharge caused by shore conditions shall be taken into account in the
assessment of pumping performance.

 

3.14       DRAWINGS/DATA

 

The
following drawings/data shall be submitted to Charterer prior to delivery:

 

a)       General
Arrangement Plan

b)       Capacity
Plan

 

40

 

c)       Mooring
Arrangement

d)       Ballast
Piping Diagram/ Arrangement

e)       Cargo
Piping Diagram/Arrangement

f)       Any
other documents or data requested by Charterer

 

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

 

3.15       REMEASUREMENT

 

Owner
to advise all alternative loadlines and corresponding deadweights/drafts
available at the time of charter. Charterer has the option of requesting Owner
to arrange for remeasurement of Vessel’s deadweight from time to time.  Owner shall make best endeavors to comply
with such request if possible and practical. 
Charterer shall endeavor to notify Owner well in advance and give at
least three working days notice. All time and expenses in connection with the
remeasuring will be borne by Charterer.

 

3.16       ETA

 

Owner
will instruct Vessel’s Master to advise Charterer of Vessel’s Estimated Time of
Arrival (ETAs) at load and discharge ports as instructed by Charterer including
but not limited to the following:

 

The
Vessel shall advise load/discharge port terminal (via Agent) of its ETA at each
of the following times:

 

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

2.         48 hours before arrival.

3.         24 hours before arrival.

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

 

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

 

41

 

3.17     CBM
MOORING EQUIPMENT

 

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

 

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

 

Wires/Ropes on winches:

 

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

 

Length:  Three
hundred (300) meter required.  The Vessel
is equipped with 250 meters.

 

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

 

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

 

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

 

Breaking Strength: 
dependent upon Vessel’s deadweight.

 

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

 

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

 

Chocks and Double-Horn
Bitts:  The Vessel must have two (2) closed
chocks and at least one (1) set of bitts at each mooring location on both
port and starboard side.  Only double-horn
bitts are acceptable.  Roller-type chocks
may be acceptable only if they have been enclosed by welding a preventive bar
on top.  Open-type roller chocks are not
acceptable.

 

42

 

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

 

Secondary
Ropes:  A second set of lines will be run
to each buoy.  The Vessel must have on
board a minimum of seven (7) synthetic lines (nylon lines are not
acceptable) in good condition, minimum two hundred (200) meters long and of
minimum seventy-five (75) metric tons breaking strength.

 

Boom:  Minimum fifteen (15) metric ton safe working
load boom or crane
required.  The Vessel is equipped with
5-ton boom.

 

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

 

All
delays, losses and expenses due to non-compliance with this clause will remain
solely for Owner’s account.

 

3.18       SEA TERMINALS

 

Owner warrants that when
calling at a sea terminal, the Vessel will maintain their engines in readiness
and will be loaded and discharged in such a manner that they are able
immediately to shut down cargo operations at any state of loading or
discharging, promptly disconnect hoses, release mooring lines, and proceed to
another anchorage or area.

 

3.19       COMMUNICATION EQUIPMENT

 

Owner warrants that Vessel
shall be equipped with VHF radiotelephone, satellite communications earth
station, facsimile machine,  GMS cellular
telephone, internet e-mail, and such other radio telecommunications equipment
as may be required by international, flag state, and port state regulations.

 

3.20       INMARSAT TRACKING

 

Charterer may employ an
Inmarsat C tracking system on the Vessel. 
All registration and communication costs relating to this tracking
system will be for Charterer’s account. 
Charterer will advise when the system is operative and confirm
termination on redelivery.  Owner to
supply the following information:

 

Inmarsat C number (9 digits
beginning with 4):

Manufacturer, make, etc.:

Model Number:

Terminal S/W version, if
known:

 

43

 

3.21       MANNING

 

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

 

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

 

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

 

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

 

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

 

3.22       OWNERSHIP/FLAG

 

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

 

4.   Eligibility and Compliance

 

4.1             APPROVALS

 

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

 

B.        Owner will endeavor to maintain all necessary oil company approvals
during the course of this charter. 
Should the Vessel not be approved by any necessary oil company, the
Owner will undertake at the earliest opportunity to adopt all reasonable
corrective measures at Owner’s time and expense and obtain the required
approvals, provided,  however,
that Charterer trades the Vessel to ports and/or areas where the aforesaid oil
companies can inspect them if inspection is required to reinstate their oil
company approval.  If the Owner is unable
to obtain the approval of the concerned oil company as a result of the
continued unacceptability of the Vessel, after inspection and not as a result
of inability or want to inspect by the oil company, and as a consequence, the
oil company and the Charterer 

 

44

 

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

 

.2         C.        Should Charterer require
other approvals, sufficient time and notice is to be given to Owner who will
then arrange for Vessel’s inspection at Charterer’s own expense.  Failure to obtain approvals shall give
Charterer the right to put the Vessel’s off hire, and costs to make good the
deficiencies will be for the Owner’s account.

 

4.2         ELIGIBILITY

 

Subject to Clause 5.11.B,
Owner warrants that the Vessel is in all respects eligible under applicable
conventions, laws and regulations for trading to the ports and places specified
in Clause 4 and Clause 2.3,  and that they
shall have on board for inspection by the appropriate authorities all
certificates, records, compliance letters, contingency plans and other
documents required for such service including, but not limited to, ISM Safety
Management Certificate, ISM Document of Compliance, and Certificates of
Financial Responsibility for Oil Pollution. 
Owner further warrants that the Vessel does, and will, fully comply with
all applicable conventions, laws, regulations and ordinances of any
international, national, state or local government entity having
jurisdiction.  In particular, Owner
warrants that for trading to or from ports in the United States, the Vessel
does and will comply with all requirements of the Federal Oil Pollution Act of
1990 (OPA 90), US Federal Water Pollution Control Act, SOLAS IX (ISM), MARPOL
1973/1978/1983, Civil Liability Convention and regulations issued pursuant
thereto and effective during the term of this charter party.  Any delays, losses, expenses or damages
arising as a result of failure to comply with this clause shall be for Owner’s
account and, where applicable, shall count as off-hire time per Clause 21.  In the interest of safety, Owner recommends
that the Master observe the recommendations as to traffic separation and
routing which are issued from time to time by the International Maritime
Organization (IMO) as promulgated by the state of the flag of the Vessel or the
state in which the effective management of the Vessel is exercised.

 

4.3         I.T.F.

 

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

 

45

 

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

 

4.4         DRUG AND ALCOHOL POLICY

 

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

 

4.5       SOLAS/MARPOL

 

N/A

 

4.6         ITOPF

 

Owner warrants that it is a member of the
International Tanker Owner’s Pollution Federation (“ITOPF”) and that Owner will
retain such membership during the term of this Charter.  Owner further warrants that the Vessel shall
be in full compliance with the 1992 Civil Liability Convention (CLC) and the
1992 Fund Convention during the term of this Charter.

 

5.       Legal Provisions

 

5.1         LAW AND LITIGATION

 

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

 

46

 

arbitrated in the City of
New York before a board of three persons, consisting of one arbitrator to be
appointed by the Owner, one arbitrator by the Charterer, and one by the two so
chosen who will act in the capacity as procedural chairman.  Their decision or that of any two of them
shall be final and binding, and for the purpose of enforcing the award, this
agreement and the award may be made a rule of the court.  Either party may call for such arbitration by
service upon the other, wherever it may be found, in the form of a written
notice specifying the nature of the claim and the name and contact details of
their appointed arbitrator.  If the other
party shall not, by written notice served on the first moving party within 20
days of the service of such first notice, appoint its arbitrator to arbitrate
the disputes or differences specified, then the first moving party shall have
the right without further notice to appoint a second arbitrator with precisely
the same force and effect as if said second arbitrator had been appointed by
the other party.  Awards by the panel, or
a majority thereof, may include costs and reasonable attorneys fees.  The arbitration proceedings shall be
conducted in accordance with the rules of the Society of Maritime
Arbitrators, Inc. and the applicable law will be the Federal Maritime Law
of the United States.

 

5.2         AFFILIATES’ CLAIMS

 

A.        If, whether directly or indirectly, any breach of this charter by Owner
shall cause any company or companies which, at the date of this charter, is or
are associated with and/or affiliated to Charterer to suffer any loss or damage
whatsoever or incur any liability whatsoever to any third party, Owner shall be
liable to Charterer to the full extent of Charterers’ Affiliates’ or Associates’
losses and/or damages and/or liabilities including those arising under any bill
of lading issued under this Charter and Charterer shall be entitled to claim in
respect thereof in accordance with the Arbitration Clause of this charter.  Charterer warrants that any sums actually
recovered by it in respect of its Affiliates’ or Associates’ losses and/or
damages and/or liabilities shall be received by it for the account of such
Affiliates and/or Associates, in reduction and/or mitigation of their loss.

 

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

 

5.3         ASSIGNMENT

 

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

 

47

 

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

 

5.4         TENDER OF NOTICE

 

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

 

For Owner:  OSG 300 LLC and OSG Liberty LLC

Fax: 212-251-1180

Email: PPopov@OSG.Com

For Charterer: OSP 300 LLC

Fax: 813-221-2649

Email: Fgordon@OSG.com

 

5.5         INSURANCE

 

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

 

·      Hull and Machinery Insurance including
collision liability with a limit equal to or greater than Owner’s yearly
declared value of the Vessel. Such insurance to waive all rights of subrogation
against Charterer to the extent of the liabilities and/or indemnity obligations
assumed by Owner under this Charter.

 

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

 

·      Hull and P&I war risk insurance with a
limit of not less than the Owner’s yearly declared value of the Vessel. Such
insurance to waive all rights of subrogation against Charterer to the extent of
the liabilities and/or indemnity obligations assumed by Owner under this
Charter.

 

48

 

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

 

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

 

5.6         WAR

 

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

 

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

 

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

 

(ii)             “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, in the
reasonable judgment of the Master and/or the Owner, may be dangerous or are
likely to be or to become dangerous to Vessel, her cargo, crew or other persons
on board the Vessel.

 

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

 

49

 

not be ordered to or
required to continue to or through, any port, place, area or zone (whether of
land or sea), or any waterway or canal, where it appears that the Vessel, its
cargo, crew or other persons on board them l, in the reasonable judgment of the
Master and/or the Owner, 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, they shall be at liberty to leave
it.

 

(c)   The Vessel shall not be required to 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 they shall be subject, or is likely to be subject to a
belligerent’s right of search and/or confiscation.

 

(f)          The Vessel shall have liberty:-

 

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

 

(ii)        To comply with the order, 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 Owner are subject, and to obey the orders and directions of
those who are charged with their enforcement;

 

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

 

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

 

50

 

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

 

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

 

5.7       BILL(S) OF LADING/INDEMNITY

 

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

 

If Charterer
requests Owner to deliver cargo at a discharge port or place:

 

(1)   Without prior presentation to the Vessel at the discharge
port or place of one of the original Bills of Lading issued for the cargo, duly
endorsed, and/or

 

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

 

Charterer
hereby indemnifies Owner, without further invocation, against claims brought by
holders of original Bills of Lading against Owner in accordance with Owner’s
letter of indemnity wording from Owner’s P&I Club which must be member of
the International Group of P&I Clubs. 
Owner and Charterer agree that any requirement contained in the above
referenced “letter of indemnity” wording for a bank guarantee is hereby
waived.  For consistency, letter of
indemnity choice of law and dispute resolution procedure is deemed to be as
provided under this charterparty Clause 5.1

 

5.8       CONFIDENTIALITY

 

The
terms and conditions of this Time Charter shall remain private and
confidential.

 

51

 

5.9       LOSS OF VESSEL

 

Should
the Vessel be lost, or be missing and presumed lost, hire shall cease at the
time of her loss, or if such time is unknown, at the time when the Vessel was
last heard from. If the Vessel should become a Constructive Total Loss (“CTL”),
hire shall cease at the time of the casualty resulting in such loss.  In either case, any hire paid in advance and
not earned shall be returned to Charterer. 
If the Vessel should be missing when a payment of hire would otherwise
be due, such payment shall be postponed until the safety of the Vessel is
ascertained.  If the Vessel should become
a CTL, Charterer shall have the option to cancel this Charter on written notice
to Owner.  The Vessel shall be deemed a
CTL under this Charter when the cost of recovering and repairing it is
reasonably estimated to exceed its value when repaired, without taking into
consideration any value of this Charter.

 

5.10     CONFLICTS OF INTEREST

 

No
director, employee or agent of Owner shall give or receive any commission, fee,
rebate, gift or entertainment of significant cost or value in connection with
this Charter Party (other than brokerage commissions and other commissions and
fees described in this Charter Party), or enter into any other business
arrangement with any director, employee or agent of Charterer or any of its
affiliates without prior written notification to Charterer.  Any representative(s) authorized by
Charterer may audit any and all records of Owner for the sole purpose of
determining whether there has been compliance with this clause.

 

5.11       CONTRACT INTERPRETATION

 

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

 

52Exhibit 10.13

 

Code
word for this Charter Party

“SHELLTIME
4”

 

Issued December 1984
amended December 2003

 

Time
Charter Party

New
York

May 10,
2008

 

IT IS
THIS DAY AGREED between : (A) Overseas Philadelphia LLC in its capacity as
the demise owner of the tanker Overseas Philadelphia (the “Vessel”) of Delaware
(hereinafter referred to as “Owners”), (the vessel”) described as per Clause
1  hereof; and (B) Overseas
Philadelphia Charterer LLC of Delaware (hereinafter referred to as “Charterers”):

 

Description
and Condition of Vessel

 

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

 

(a)       the vessel shall be classed by a
Classification Society which is a member of the International Association of
Classification Societies; classification will be ABS

 

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

 

(c)       she shall be tight, staunch, strong, in
good order and condition, and in every way fit for the service, with her
machinery, boilers, hull and other equipment (including but not limited to hull
stress calculator, radar, computers and computer systems) in a good and
efficient state;

 

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

 

(e)       the vessel shall be in every way fitted
for burning, in accordance with the grades specified in Clause 29 hereof; IFO
380 CST RMG 380 ISO 8217:2005 (E) and ISO DMA 8217:2005 – Charterers will
endeavor to procure IFO with maximum 3.0% sulphur, provided it is readily
available within the port the Tug would normally bunker and without incremental
time or cost to Charterers, as compared to IFO that would otherwise be supplied
with maximum 4.5% sulphur content, or as required by law.  Charterers have no obligation whatsoever to
deviate the Vessels for the purpose of procuring IFO 3.0% maximum sulphur
unless required to comply with applicable law(s).

 

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

 

 

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

 

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

 

(g)      she shall have on board all certificates,
documents and equipment required from time to time by any applicable law to
enable her to perform the charter service without delay;

 

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

 

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

 

Safety
Management

 

(j)        Owners will operate:

 

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

 

(ii)       a documented safe working procedures
system (including procedures for the identification and mitigation of risks);

 

(iii)      a documented environmental management
system;

 

1

 

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

 

(k)       Owners shall submit to Charterers a
monthly written report detailing all accidents/incidents and environmental
reporting requirements;

 

(l)        Owners shall maintain Health Safety
Environmental (“HSE”) records sufficient to demonstrate compliance with the
requirements of their HSE system and of this charter.  Charterers reserve the right to confirm
compliance with HSE requirements by audit of Owners.

 

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

 

Shipboard
Personnel and their Duties

 

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

 

(i)        she shall have a full and efficient
complement of master, officers and crew for a vessel of her tonnage, who shall
in any event be not less than the number required by the laws of the flag state
and who shall be trained to operate the vessel and her equipment competently
and safely;

 

(ii)       all shipboard personnel shall hold valid
certificates of competence in accordance with the requirements of the law of
the flag state;

 

(iii)      all shipboard personnel shall be trained
in accordance with the relevant provisions of the International Convention on
Standards of Training, Certification and Watchkeeping for Seafarers, 1995 or
any additions, modifications or subsequent versions thereof;

 

(iv)     there shall be on board sufficient
personnel with a good working knowledge of the English language to enable cargo
operations at loading and discharging places to be carried out efficiently and
safely and to enable communications between the vessel and those loading the
vessel or accepting discharge there from to be carried out quickly and
efficiently;

 

(v)      the terms of employment of the vessel’s
staff and crew will always remain acceptable to The International Transport
Worker’s Federation and the vessel will at all times carry a Blue Card;

 

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

 

2

 

(b)      Owners guarantee that throughout the charter
service the master shall with the vessel’s officers and crew, unless otherwise
ordered by Charterers;

 

(i)        prosecute all voyages with the utmost
despatch;

 

(ii)       render all customary assistance; and

 

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

 

Duty to
Maintain

 

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

 

(b)           If at any time whilst the vessel is
on hire under this charter the vessel fails to comply with the requirements of
Clauses 1 ,  2(a)  or
10  then hire shall be reduced to
the extent necessary to indemnify Charterers for such failure. If and to the
extent that such failure affects the time taken by the vessel to perform any
services under this charter, hire shall be reduced by an amount equal to the
value, calculated at the rate of hire, of the time so lost.

 

Any reduction of hire
under this sub-Clause (b) shall be without prejudice to any other
remedy available to Charterers, but where such reduction of hire is in respect
of time lost, such time shall be excluded from any calculation under Clause
24.

 

3

 

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

 

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

 

(e)           If, in Charterers reasonably held
view:

 

(i)            failure of an inspection, or,

 

(ii)           any finding of an inspection,

 

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

 

(f)            Furthermore, at any time while the
vessel is off-hire under this Clause 3 (with the exception of Clause 3(e)(ii)),
Charterers have the option to terminate this charter by giving notice in
writing with effect from the date on which such notice of termination is
received by Owners or from any Later date stated in such notice.  This sub-Clause
(f)  is without prejudice to any rights of Charterers or
obligations of Owners under this charter or otherwise (including without
limitation Charterers’ rights under Clause 21  hereof).

 

Period,
Trading Limits and Safe Places

 

4.             (a)           Owners agree to let and Charterers
agree to hire the vessel for a period commencing on or about January 11,
2009 and ending on or about December 31, 2009 plus or minus 30 days in Charterers’ option
commencing from the time and date of delivery of the vessel, for the purpose of
carrying all lawful merchandise (subject always to Clause 28 ) including
in particular clean product:

 

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

 

4

 

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

 

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

 

(c)           Charterers shall use due diligence to
ensure that the vessel is only employed between and at safe places (which
expression when used in this charter shall include ports, berths, wharves,
docks, anchorages, submarine lines, alongside vessels or lighters, and other
locations including locations at sea) where she can safely lie always
afloat.  Notwithstanding anything contained in this or any other clause of
this charter, Charterers do not warrant the safety of any place to which they
order the vessel and shall be under no liability in respect thereof except for
loss or damage caused by their failure to exercise due diligence as
aforesaid.  Subject as above, the vessel shall be loaded and discharged at
any places as Charterers may direct, provided that Charterers shall exercise
due diligence to ensure that any ship-to-ship transfer operations shall conform
to standards not less than those set out in the latest published edition of the
ICS/OCIMF Ship-to-Ship Transfer Guide.

 

5

 

(d)           Unless otherwise agreed, the vessel
shall be delivered by Owners dropping outward pilot at a port chosen by
Charterers and redelivered to Owners dropping outward pilot at a port chosen by
Owners.

 

(e)           The vessel will deliver with last
cargo(es) of clean product and will
redeliver with last cargo(es) of clean product

 

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

 

Laydays/Cancelling

 

5.             The
vessel shall not be delivered to Charterers before January 11,
2009 and Charterers shall have the option of cancelling this
charter if the vessel is not ready and at their disposal on or before                     

 

Owners
to Provide

 

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

 

Charterers
to Provide

 

7.             (a)           Charterers shall provide and pay for
all fuel (except for fuel used for domestic services), towage and pilotage and
shall pay agency fees, port charges, commissions, expenses of loading and
unloading cargoes, canal dues, and tax/dues on cargo/freight and all charges
other than those payable by Owners in accordance with Clause 6 hereof,
provided that all charges for the said items shall be for Owners’ account when
such items are consumed, employed or incurred for Owners’ purposes or while the
vessel is off-hire (unless such items reasonably relate to any service given or
distance made good and taken into account under Clause 21  or 22 ); and provided further that any
fuel used in connection with a general average sacrifice or expenditure shall
be paid for by Owners. OPA charges to be paid by Charterers, COFR to be
arranged and paid for by Owners.

 

6

 

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

 

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

 

Rate of
Hire

 

8.             Subject
as herein provided, Charterers shall pay for the use and hire of the vessel at
the rate of United States Dollars $31,500 per
day, and pro rata for any part of a day, from the time and date of her delivery
(local time) to Charterers until the time and date of redelivery (local time)
to Owners.

 

Payment
of Hire

 

9.             Subject
to Clause 3 (c) and 3 (e), payment of hire shall be made in
immediately available funds

 

to:           Fifth Third Bank

Cincinatti,
Ohio

Account:
ABA #042000314

For
Credit to Account No. 09990203987

in the
name of OSG America Operating Company LLC

 

in United States Dollars
per calendar month in advance, less:

 

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

 

(ii)           any amounts disbursed on Owners’
behalf, any advances and commission therein, and charges which are for Owners’
account pursuant to any provision hereof, and;

 

(iii)          any amounts due or reasonably
estimated to become due to Charterers under Clause 3(c) or 24
hereof,

 

any such adjustments to
be made at the due date for the next monthly payment after the facts have been
ascertained. Charterers shall not be responsible for any delay or error by
Owners’ bank in crediting Owners’ account provided that Charterers have made
proper and timely payment.

 

7

 

In default of such proper
and timely payment:

 

(a)           Owners shall notify Charterers of
such default and Charterers shall within seven days of receipt of such notice
pay to Owners the amount due, including interest, failing which Owners may
withdraw the vessel from the service of Charterers without prejudice to any
other rights Owners may have under this charter or otherwise; and;

 

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

 

8

 

Space
Available to Charterers

 

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

 

Segregated
Ballast

 

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

 

“The segregated ballast
tanks comply with the Regulation 13 of Annex 1 of the International Convention
for the Prevention of Pollution from Ships, 1973, as modified by the Protocol
of 1978 relating thereto, and the total tonnage of such tanks exclusively used
for the carriage of segregated water ballast is as
required The reduced gross tonnage which should be used for the
calculation of tonnage based fees has been provided to
Charterers”.

 

Instructions
and Logs

 

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

 

Bills of
Lading

 

13.           (a)           The master (although appointed by
Owners) shall be under the orders and direction of Charterers as regards
employment of the vessels, agency and other arrangements, and shall sign Bills
of Lading as Charterers or their agents may direct (subject always to Clauses 35(a)  and
40) without prejudice to this charter.  Charterers hereby indemnify
Owners against all consequences or liabilities that may arise;

 

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

 

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

 

9

 

(b)           If Charterers by telex, facsimile or
other form of written communication that specifically refers to this Clause
request Owners to discharge a quantity of cargo either without Bills of Lading
and/or at a discharge place other than that named in a Bill of Lading and/or
that is different from the Bill of Lading quantity, then Owners shall discharge
such cargo in accordance with Charterer’s instructions in consideration of
receiving the following indemnity which shall be deemed to be given by
Charterers on each and every such occasion and which is limited in value to
200% of the CIF value of the cargo carried on board;

 

(i)            Charterers shall indemnify Owners
and Owners’ servants and agents in respect of any liability loss or damage of
whatsoever nature (including legal costs as between attorney or solicitor and
client and associated expenses) which Owners may sustain by reason of
delivering such cargo in accordance with Charterers’ request.

 

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

 

(iii)          If the vessel or any other vessel or property belonging to Owners should
be arrested or detained, or if the arrest or detention thereof should be
threatened, by reason of discharge in accordance with Charterers instruction as
aforesaid, Charterers shall provide on demand such bail or other security as
may be required to prevent such arrest or detention or to secure the release of
such vessel or property and Charterers shall indemnify Owners in respect of any
loss, damage or expenses caused by such arrest or detention whether or not same
may be justified.

 

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

 

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

 

Provided however, if
Charterers have not received all such original Bills of Lading by 24.00 hours
on the day 36 calendar months after the date of discharge, that this indemnity
shall terminate at that time unless before that time Charterers have received
from Owners written notice that:

 

a)             Some
person is making a claim in connection with Owners delivering cargo pursuant to
Charterers request or,

 

10

 

b)            Legal
proceedings have been commenced against Owners and/or carriers and/or
Charterers and/or any of their respective servants or agents and/or the vessel
for the same reason.

 

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

 

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

 

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

 

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

 

Conduct
of Vessel’s Personnel

 

14.           If
Charterers complain of the conduct of the master or any of the officers or
crew, Owners shall immediately investigate the complaint.  If the
complaint proves to be well founded, Owners shall, without delay, make a change
in the appointments and Owners shall in any event communicate the result of
their investigations to Charterers as soon as possible.

 

11

 

Bunkers
at Delivery and Redelivery

 

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

 

Vessel to be delivered to
and redelivered from the charter with, at least, a quantity of bunkers on board
sufficient to reach the nearest main bunkering port.

 

Notwithstanding anything contained
in this charter all bunkers on board the vessel shall, throughout the duration
of this charter, remain the property of Charterers and can only be purchased on
the terms specified in the charter at the end of the charter period or, if
earlier, at the termination of the charter.

 

Stevedores,
Pilots, Tugs

 

16.           Stevedores,
when required, shall be employed and paid by Charterers, but this shall not
relieve Owners from responsibility at all times for proper stowage, which must
be controlled by the master who shall keep a strict account of all cargo loaded
and discharged.  Owners hereby indemnify Charterers, their servants and
agents against all losses, claims, responsibilities and liabilities arising in
any way whatsoever from the employment of pilots, tugboats or stevedores, who
although employed by Charterers shall be deemed to be the servants of and in
the service of Owners and under their instructions (even if such pilots,
tugboat personnel or stevedores are in fact the servants of Charterers their agents
or any affiliated company); provided, however, that:

 

(a)           the foregoing indemnity shall not
exceed the amount to which Owners would have been entitled to limit their
liability if they had themselves employed such pilots, tugboats or stevedores,
and;

 

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

 

Super-Numeraries

 

17.           Charterers
may send representatives in the vessel’s available accommodation upon any
voyage made under this charter, Owners finding provisions and all requisites as
supplied to officers, except alcohol.  Charterers paying at the rate of
United States Dollars 15 (fifteen) per day for each representative while on
board the vessel.

 

12

 

Sub-letting/Assignment/Novation

 

18.           Charterers
may sub-let the vessel, but shall always remain responsible to Owners for due
fulfilment of this charter.

 

Final
Voyage

 

19.           If
when a payment of hire is due hereunder Charterers reasonably expect to
redeliver the vessel before the next payment of hire would fall due, the hire
to be paid shall be assessed on Charterers’ reasonable estimate of the time
necessary to complete Charterers’ programme up to redelivery, and from which
estimate Charterers may deduct amounts due or reasonably expected to become due
for:

 

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

 

(b)           bunkers on board at redelivery
pursuant to Clause 15.

 

Promptly after redelivery
any overpayment shall be refunded by Owners or any underpayment made good by
Charterers.

 

13

 

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

 

Loss of
Vessel

 

20.           Should
the vessel be lost, this charter shall terminate and hire shall cease at noon
(GMT) on the day of the loss; should the vessel be a constructive total loss,
this charter shall terminate and hire shall cease at noon on the day on which
the vessel’s underwriters agree that the vessel is a constructive total loss;
should the vessel be missing, this charter shall terminate and hire shall cease
at noon on the day on which she was last heard of.  Any hire paid in
advance and not earned shall be returned to Charterers and Owners shall
reimburse Charterers for the value of the estimated quantity of bunkers on
board at the time of termination, at the price paid by Charterers at the last
bunkering port.

 

Off-hire

 

21.           (a)           On each and every occasion that there
is loss of time (whether by way of interruption in the vessel’s service or,
from reduction in the vessel’s performance, or in any other manner):

 

(i)            due to deficiency of personnel or
stores; repairs; gas-freeing for repairs; time in and waiting to enter dry dock
for repairs; breakdown (whether partial or total) of machinery, boilers or
other parts of the vessel or her equipment (including without limitation tank
coatings); overhaul, maintenance or survey; collision, stranding, accident or
damage to the vessel; or any other similar cause preventing the efficient
working of the vessel; and such loss continues for more than three consecutive
hours (if resulting from interruption in the vessel’s service) or cumulates to
more than three hours (if resulting from partial loss of service); or;

 

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

 

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

 

(iv)          due to any delay in quarantine arising
from the master, officers or crew having had communication with the shore at
any infected area without the written consent or instructions of Charterers or
their agents, or to any detention by customs or other authorities caused by
smuggling or other infraction of local law on the part of the master, officers,
or crew; or;

 

14

 

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

 

without prejudice to
Charterers’ rights under Clause 3 or to any other rights of
Charterers hereunder, or otherwise, the vessel shall be off-hire from the
commencement of such loss of time until she is again ready and in an efficient
state to resume her service from a position not less favourable to Charterers
than that at which such loss of time commenced; provided, however, that any
service given or distance made good by the vessel whilst off-hire shall be
taken into account in assessing the amount to be deducted from hire.

 

15

 

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

 

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

 

(ii)           the time actually taken to perform
such service (including any loss of time arising from interruption in the
performance of such service).

 

For the avoidance of
doubt, all time included under (ii) above shall be excluded from any
computation under Clause 24 .

 

(c)           Further and without prejudice to the
foregoing, in the event of the vessel deviating (which expression includes
without limitation putting back, or putting into any port other than that to
which she is bound under the instructions of Charterers) for any cause or
purpose mentioned in Clause 21(a), the vessel shall be off-hire from the
commencement of such deviation until the time when she is again ready and in an
efficient state to resume her service from a position not less favourable to
Charterers than that at which the deviation commenced, provided, however, that
any service given or distance made good by the vessel whilst so off-hire shall
be taken into account in assessing the amount to be deducted from hire. 
If the vessel, for any cause or purpose mentioned in Clause 21(a), puts
into any port other than the port to which she is bound on the instructions of
Charterers, the port charges, pilotage and other expenses at such port shall be
borne by Owners.  Should the vessel be driven into any port or anchorage
by stress of weather hire shall continue to be due and payable during any time
lost thereby.

 

(d)           If the vessel’s flag state becomes
engaged in hostilities, and Charterers in consequence of such hostilities find
it commercially impracticable to employ the vessel and have given Owners
written notice thereof then from the date of receipt by Owners of such notice
until the termination of such commercial impracticability the vessel shall be
off-hire and Owners shall have the right to employ the vessel on their own
account.

 

(e)           Time during which the vessel is
off-hire under this charter shall count as part of the charter period except
where Charterers declare their option to add off-hire periods under Clause 4(b)).

 

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

 

16

 

Periodical
Drydocking

 

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

 

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

 

(b)           If a periodical drydocking is carried
out in the port offered by Charterers (which must have suitable accommodation
for the purpose and reception facilities for tank washings and residues), the
vessel shall be off-hire from the time she arrives at such port until
drydocking is completed and she is in every way ready to resume Charterers’
service and is at the position at which they went off-hire or a position no
less favourable to Charterers, whichever she first attains. However;

 

17

 

(i)            provided that Owners exercise due
diligence in gas-freeing, any time lost in gas-freeing to the standard required
for entry into drydock for cleaning and painting the hull shall not count as
off-hire, whether lost on passage to the drydocking port or after arrival there
(notwithstanding Clause 21 ), and;

 

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

 

Any time which, but for
sub-Clause (i) above, would be off-hire, shall not be included in any
calculation under Clause 24 .

 

The expenses of
gas-freeing, including without limitation the cost of bunkers, shall be for
Owners’ account.

 

(c)           If Owners require the vessel, instead
of proceeding to the offered port, to carry out periodical drydocking at a
special port selected by them, the vessel shall be off-hire from the time when
she is released to proceed to the special port until she next presents for
loading in accordance with Charterers’ instructions, provided, however, that
Charterers shall credit Owners with the time which would have been taken on
passage at the service speed had the vessel not proceeded to drydock.  All
fuel consumed shall be paid for by Owners but Charterers shall credit Owners
with the value of the fuel which would have been used on such notional passage
calculated at the guaranteed daily consumption for the service speed, and shall
further credit Owners with any benefit they may gain in purchasing bunkers at
the special port.

 

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

 

Ship
Inspection

 

23.                   Charterers
shall have the right at any time during the charter period to make such
inspection of the vessel as they may consider necessary.  This right may be exercised as often and at
such intervals as Charterers in their absolute discretion may determine and
whether the vessel is in port or on passage. 
Owners affording all necessary co-operation and accommodation on board
provided, however:

 

(a)           that neither the exercise nor the non-exercise, nor anything done or not
done in the exercise or non-exercise, by Charterers of such right shall in any
way reduce the master’s or Owners’ authority over, or responsibility to
Charterers or third parties for, the vessel and every aspect of her operation,
nor increase Charterers’ responsibilities to Owners or third parties for the
same; and;

 

18

 

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

 

Detailed
Description and Performance

 

24.           Owners
guarantee that the speed and consumption of the vessel shall be as agreed with
Charterers.

 

Salvage

 

25.           Subject
to the provisions of Clause 21 hereof, all loss of time and all expenses
(excluding any damage to or loss of the vessel or tortious liabilities to third
parties) incurred in saving or attempting to save life or in successful or
unsuccessful attempts at salvage shall be borne equally by Owners and
Charterers provided that Charterers shall not be liable to contribute towards
any salvage payable by Owners arising in any way out of services rendered under
this Clause 25 .

 

19

 

All salvage and all
proceeds from derelicts shall be divided equally between Owners and Charterers
after deducting the master’s, officers’ and crew’s share.

 

Lien

 

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

 

Exceptions

 

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

 

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

 

(c)           Clause 27(a) shall not
apply to, or affect any liability of Owners or the vessel or any other relevant
person in respect of:

 

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

 

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

 

(d)           In particular and without limitation,
the foregoing subsections (a) and (b) of this Clause
shall

 

20

 

not apply to or in any
way affect any provision in this charter relating to off-hire or to reduction
of hire.

 

Injurious
Cargoes

 

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

 

Grade of
Bunkers

 

29.           Charterers
shall supply fuel as required for the vessel. 
If Owners require the vessel to be supplied with more expensive bunkers
they shall be liable for the extra cost thereof.

 

Charterers warrant that
all bunkers provided by them in accordance herewith shall be of a quality
complying with ISO Standard 8217 for Marine Residual Fuels and Marine
Distillate Fuels as applicable.

 

21

 

Disbursements

 

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

 

Laying-up

 

31.           Charterers
shall have the option, after consultation with Owners, of requiring Owners to
lay up the vessel at a safe place nominated by Charterers, in which case the
hire provided for under this charter shall be adjusted to reflect any net
increases in expenditure reasonably incurred or any net saving which should
reasonably be made by Owners as a result of such lay up.  Charterers may
exercise the said option any number of times during the charter period.

 

Requisition

 

32.           Should
the vessel be requisitioned by any government, de facto or de jure, during the
period of this charter, the vessel shall be off-hire during the period of such
requisition, and any hire paid by such governments in respect of such
requisition period shall be for Owners’ account.  Any such requisition
period shall not count as part of the charter period.

 

Outbreak
of War

 

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

 

Additional
War Expenses

 

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

 

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

 

22

 

War
Risks

 

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

 

(b)           If in the reasonable opinion of the
master or Owners it becomes, for any of the reasons set out in
Clause 35(a)  or by the operation of international law,
dangerous, impossible or prohibited for the vessel to reach or enter, or to
load or discharge cargo at, any place to which the vessel has been ordered
pursuant to this charter (a “place of peril”), then Charterers or their agents
shall be immediately notified in writing or by radio messages, and Charterers
shall thereupon have the right to order the cargo, or such part of it as may be
affected, to be loaded or discharged, as the case may be, at any other place
within the trading limits of this charter (provided such other place is not
itself a place of peril).  If any place of discharge is or becomes a place
of peril, and no orders have been received from Charterers or their agents
within 48 hours after dispatch of such messages, then Owners shall be at
liberty to discharge the cargo or such part of it as may be affected at any
place which they or the master may in their or his discretion select within the
trading limits of this charter and such discharge shall be deemed to be due
fulfilment of Owners’ obligations under this charter so far as cargo so
discharged is concerned.

 

23

 

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

 

Charterers shall procure
that all Bills of Lading issued under this charter shall contain the Chamber of
Shipping War Risks Clause 1952.

 

Both to
Blame Collision Clause

 

36.           If
the liability for any collision in which the vessel is involved while
performing this charter fails to be determined in accordance with the laws of
the United States of America, the following provision shall apply:

 

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

 

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

 

Charterers shall procure
that all Bills of Lading issued under this charter shall contain a provision in
the foregoing terms to be applicable where the liability for any collision in
which the vessel is involved fails to be determined in accordance with the laws
of the United States of America.

 

New
Jason Clause

 

37.           General
average contributions shall be payable according to York/Antwerp Rules, 1994 as
amended from time to time, and shall be adjusted in London in accordance with
English law and

 

24

 

practice but should
adjustment be made in accordance with the law and practice of the United States
of America, the following position shall apply:

 

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

 

25

 

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

 

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

 

Clause
Paramount

 

38.           Charterers
shall procure that all Bills of Lading issued pursuant to this charter shall
contain the following:

 

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

 

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

 

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

 

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

 

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

 

26

 

Insurance/ITOPF

 

39.           Owners
warrant that the vessel is now, and will, throughout the duration of the
charter:

 

(a)           be owned or demise chartered by a
member of the International Tanker Owners Pollution Federation Limited;

 

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

 

(c)           have in place insurance cover for oil
pollution for the maximum on offer through the International Group of P &
l Clubs but always a minimum of United States Dollars 1,000,000,000 (one
thousand million);

 

(d)           have in full force and effect Hull
and Machinery insurance placed through reputable brokers on Institute Time
Clauses or equivalent for the market value agreed by Owners and Charterers.

 

27

 

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

 

Export
Restrictions

 

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

 

Charterers shall procure
that all Bills of Lading issued under this charter shall contain the following
clause:

 

“If any laws rules or
regulations applied by the government of the country in which the cargo was
produced and/or shipped, or any relevant agency thereof, impose a prohibition
on export of the cargo to the place of discharge designated in or ordered under
this Bill of Lading, carriers shall be entitled to require cargo owners
forthwith to nominate an alternative discharge place for the discharge of the
cargo, or such part of it as may be affected, which alternative place shall not
be subject to the prohibition, and carriers shall be entitled to accept orders
from cargo owners to proceed to and discharge at such alternative place. 
If cargo owners fail to nominate an alternative place within 72 hours after
they or their agents have received from carriers notice of such prohibition,
carriers shall be at liberty to discharge the cargo or such part of it as may
be affected by the prohibition at any safe place on which they or the master
may in their or his absolute discretion decide and which is not subject to the
prohibition, and such discharge shall constitute due performance of the
contract contained in this Bill of Lading so far as the cargo so discharged is
concerned”.

 

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

 

Business
Principles

 

41.           (Deleted)

 

Drugs
and Alcohol

 

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

 

28

 

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

 

Oil
Major Acceptability

 

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

 

Pollution
and Emergency Response

 

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

 

ISPS
Code/US MTSA 2002

 

45.           (a).          (i)            From the date of coming into force
of the International Code for the Security of Ships and of Port Facilities and
the relevant amendments to Chapter XI of SOLAS (ISPS Code) and the US Maritime
Transportation Security Act 2002 (MTSA) in relation to the Vessel and
thereafter during the currency of this charter, Owners shall procure that both
the Vessel and “the Company” (as defined by the ISPS Code) and the “owner” (as
defined by the MTSA) shall comply with the requirements of the ISPS Code
relating to the Vessel and “the Company” and the requirements of MTSA relating
to the vessel and the “owner”.  Upon
request Owners shall provide documentary evidence of compliance with this Clause
45(a) (i).

 

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

 

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

 

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

 

                (ii)           Except as otherwise provided in this charter, loss,
damage, expense or delay, caused by failure on the part of Charterers to comply
with this sub-Clause 45(b) shall be for Charterers’ account.

 

29

 

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

 

                (d).          Notwithstanding
any other provision of this charter, the vessel shall not be off-hire where
there is a loss of time caused by Charterers’ failure to comply with the ISPS
code/MTSA (when in force).

 

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

 

30

 

Law and
Litigation

 

46.           (Deleted)

 

Confidentiality

 

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

 

Construction

 

48.           The
side headings have been included in this charter for convenience of reference
and shall in no way affect the construction hereof.

 

Additional Clauses:     As attached, shall be incorporated herein.

 

 

	
  SIGNED FOR OWNERS

  	
              SIGNED
  FOR CHARTERES

  
	
  Overseas Philadelphia LLC

  	
  Overseas Philadelphia Charterer
  LLC

  
	
   

  	
   

  
	
  By:

  	
          /s/
  Jerry Miller

  	
   

  	
   

  	
  By:

  	
  /s/ Janice K. Smith

  
	
   

  	
  Name: Jerry Miller

  	
   

  	
   

  	
   

  	
  Name:

  	
  Janice K. Smith

  
	
   

  	
  Title: Manager

  	
   

  	
   

  	
   

  	
  Title:

  	
  Manager

  

 

31

 

Additional Terms

To the time charter dated May 10,
2008 between Overseas Philadelphia LLC and OSG Philadelphia Charterer LLC

 

	
  1.

  	
  Charterhire,
  Payments and Expense

  
	
   

  	
  1.1

  	
  OWNER’S
  BANK

  
	
   

  	
  1.2

  	
  TIME
  CHARTER HIRE RATE

  
	
   

  	
  1.3

  	
  OWNER’S
  ITEMS

  
	
   

  	
  1.4

  	
  COMMISSION

  
	
   

  	
  1.5

  	
  HIRE
  PAYMENT

  
	
   

  	
  1.6

  	
  OPA/COFR
  EXPENSES

  
	
   

  	
   

  
	
  2.

  	
  Delivery/Redelivery
  and Trading

  
	
   

  	
  2.1

  	
  DELIVERY

  
	
   

  	
  2.2

  	
  REDELIVERY

  
	
   

  	
  2.3

  	
  TRADING
  AREAS AND EXCLUSIONS

  
	
   

  	
  2.4

  	
  NOTICE
  OF DELIVERY/REDELIVERY

  
	
   

  	
  2.5

  	
  BUNKERS
  ON DELIVERY/REDELIVERY

  
	
   

  	
  2.6

  	
  OFF-HIRE
  PERIOD(S)

  
	
   

  	
  2.7

  	
  BOYCOTT

  
	
   

  	
  2.8

  	
  TRADING
  WHILE OFF-HIRE

  
	
   

  	
  2.9

  	
  DRYDOCKING

  
	
   

  	
  2.10

  	
  LAY-UP

  
	
   

  	
   

  
	
  3.

  	
  Vessel Operations, Performance and Warranties

  
	
   

  	
  3.1

  	
  SPILL
  PREVENTION

  
	
   

  	
  3.2

  	
  OILY
  WASTE

  
	
   

  	
  3.3

  	
  SPEEDS/CONSUMPTIONS

  
	
   

  	
  3.4

  	
  HEATING

  
	
   

  	
  3.5

  	
  SHIP
  TO SHIP TRANSFER

  
	
   

  	
  3.6

  	
  CARGO
  MANIFOLDS

  
	
   

  	
  3.7

  	
  CRUDE
  OIL WASH (COW)

  
	
   

  	
  3.8

  	
  INERT
  GAS SYSTEM

  
	
   

  	
  3.9

  	
  SURVEY
  AND SAMPLE

  
	
   

  	
  3.10

  	
  COMMINGLING/BLENDING

  
	
   

  	
  3.11

  	
  CARGO
  RETENTION

  
	
   

  	
  3.12

  	
  LOADING
  WARRANTY

  
	
   

  	
  3.13

  	
  PUMPING
  PERFORMANCE WARRANTY

  
	
   

  	
  3.14

  	
  DRAWINGS/DATA

  
	
   

  	
  3.15

  	
  REMEASUREMENT

  
	
   

  	
  3.16

  	
  ETA

  
	
   

  	
  3.17

  	
  CBM
  MOORING EQUIPMENT

  
	
   

  	
  3.18

  	
  SEA
  TERMINALS

  
	
   

  	
  3.19

  	
  COMMUNICATION
  EQUIPMENT

  

 

32

 

	
   

  	
  3.20

  	
  INMARSAT
  TRACKING

  
	
   

  	
  3.21

  	
  MANNING

  
	
   

  	
  3.22

  	
  OWNERSHIP/FLAG

  
	
   

  	
   

  
	
  4.

  	
  Eligibility and Compliance

  
	
   

  	
  4.1

  	
  APPROVALS

  
	
   

  	
  4.2

  	
  ELIGIBILITY

  
	
   

  	
  4.3

  	
  I.T.F.

  
	
   

  	
  4.4

  	
  DRUG
  AND ALCOHOL POLICY

  
	
   

  	
  4.5

  	
  SOLAS/MARPOL

  
	
   

  	
  4.6

  	
  ITOPF

  
	
   

  	
  4.7

  	
  JAPAN
  MARITIME DISASTER PREVENTION CENTER CERTIFICATES

  
	
   

  	
   

  
	
  5.

  	
  Legal Provisions

  
	
   

  	
  5.1

  	
  LAW
  AND LITIGATION

  
	
   

  	
  5.2

  	
  AFFILIATES’
  CLAIMS

  
	
   

  	
  5.3

  	
  ASSIGNMENT

  
	
   

  	
  5.4

  	
  TENDER
  OF NOTICE

  
	
   

  	
  5.5

  	
  INSURANCE

  
	
   

  	
  5.6

  	
  WAR

  
	
   

  	
  5.7

  	
  BILL(S) OF
  LADING/INDEMNITY

  
	
   

  	
  5.8

  	
  CONFIDENTIALITY

  
	
   

  	
  5.9

  	
  LOSS
  OF VESSEL

  
	
   

  	
  5.10

  	
  CONFLICTS
  OF INTEREST

  
	
   

  	
  5.11

  	
  CONTRACT
  INTERPRETATION

  

 

33

 

1.                          Charterhire,
Payments and Expense

 

1.1                    OWNER’S BANK

 

See clause 9 of the Shelltime 4 form.

 

1.2                    TIME CHARTER HIRE RATE

 

See
clause 8 of the Shelltime 4 form

 

1.3                    OWNER’S ITEMS

 

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

 

1.4                    COMMISION:

 

None

 

1.5                    HIRE PAYMENT

 

Notwithstanding
the provisions of Clause 9 of the Shelltime 4 form, Charterer shall: (a) not
be responsible for any delay or error by Owner’s bank in crediting Owner’s
account provided that Charterer has made proper and timely payments; and (b) be
responsible for any delay or error caused by Charterer’s bank.

 

1.6                    OPA/COFR EXPENSES

 

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

 

2.                          Delivery/Redelivery and Trading

 

2.1                    DELIVERY

 

See
Clause 4 (d) of the Shelltime 4 form.

 

34

 

2.2                    REDELIVERY

 

See
Clause 4 (d) of the Shelltime 4 form.

 

2.3                    TRADING AREAS AND EXCLUSIONS

 

See
Clause 4 of the Shelltime 4 form.

 

2.4                  NOTICE OF
DELIVERY/REDELIVERY

 

.1                         See Clause 5 of
the Shelltime 4 form.

 

2.5                    BUNKERS ON DELIVERY/REDELIVERY

 

Bunkers
on delivery to be settled at cost upon Owner’s verification of bunker invoice
of cost of bunkers.  If possible, vessel
to be redelivered with approximately the same quantity fuel oil and gas oil to
be settled at cost upon Charterer’s verification of bunker invoice of cost of
bunkers.  In each case, quantities to be
no less than 300 mt fuel oil and 50 mt gas oil. 
Bunker survey to be held at locations of delivery and redelivery unless
otherwise mutually agreed.  Time and cost
of both surveys to be split 50/50 between Owner and Charterer.  Title of bunkers to pass to Charterer upon
delivery and to Owner upon redelivery.

 

2.6                    OFF-HIRE PERIOD(S)

 

Notwithstanding
Clause 21(e) of the Shelltime 4 form, the time charter period may be
extended by Charterer for all or any part of the time that the Vessel is off-hire
during the initial term of the charter. Charterer’s option to add back off-hire
time to the time charter period is to be exercised latest 20 days prior to
expiry.

 

2.7                    BOYCOTT

 

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

 

35

 

2.8                    TRADING WHILE OFF-HIRE

 

Owner
may not under any circumstances trade the Vessel for its own account during any
period of off-hire, unless agreed in advance by Charterer.

 

2.9                    DRYDOCKING

 

A     See clause 22 of the Shelltime 4 form.

 

B.                         Emergency Drydocking

 

Should
emergency drydocking be required, Charterer shall allow the Vessel to proceed
to an appropriate port.  Owner shall be
solely responsible for gas freeing the Vessel upon such occasion, and all
towing, pilotage, fuel and other expense incurred while proceeding to and from
and while in drydock shall be for Owner’s account.  Fuel used during such drydocking or repair as
provided in this clause or in proceeding to or from the port of drydocking or
repair, will be charged to Owner by Charterer at the price charged to Charterer
by its bunker supplier at the last supply port.

 

In
case of emergency drydock pursuant to this clause at a port where the Vessel is
to load, discharge or bunker under Charterer’s orders, hire shall be suspended
from the time the Vessel is received free pratique on arrival, if in ballast,
or upon completion of discharge of cargo, if loaded, until the Vessel is again
ready for service.  In case of drydocking
at a port other than where the Vessel is to load, discharge, or bunker under
Charterer’s orders, the following time and bunkers shall be deducted from
hire:  total time and bunkers including repair
port call from the actual voyage from last port of call under Charterer’s order
to next port of call under Charterer’s orders, less theoretical voyage time and
bunkers for the direct voyage from said last port of call to said next port of
call.  The period during which hire is
suspended including drydocking and repairs until the Vessel again comes on hire
under the terms hereof shall count as off-hire under the terms of this Charter.

 

C.                         Cleaning Costs

 

Regardless
of whether the drydocking is a scheduled or emergency drydocking, any
incremental cleaning time and costs to clean for drydocking shall be for the
Owner’s account.

 

2.10              LAY-UP

 

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

 

36

 

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

 

3.                          Vessel Operations, Performance
and Warranties

 

3.1                    SPILL PREVENTION

 

Prior
to commencement of loading or discharging operations, all overboard lines are
to be checked to ensure that they are securely closed.  Pumproom stripping line overboard discharges
shall be suitably blanked off before arriving in port.  These blanks are to be installed and retained
in line through the entire period that the Vessel is in coastal waters.  All other precautions are to be taken to
avoid any spillage and/or leakage.  If
during loading or discharging operations there is any indication of spillage or
leakage of oil or CPP cargo, the Vessel shall immediately cease all pumping
operations and notify the Owner’s DPA (Dedicated Position Ashore), terminal
representative(s) and/or Charterer’s supervisor(s).  The Vessel shall not resume loading or
discharging operations until a thorough investigation is conducted and
appropriate remedies are taken, and any time lost shall be for Owner’s account,
should such spillage or leakage of oil be found to have occurred due to the
negligence of Vessel’s crew or condition of the Vessel.  Notwithstanding the above, Owner shall always
comply with the terms of Clause 4.2.

 

3.2                    OILY WASTE

 

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

 

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

 

37

 

be
for Charterer’s account.  If the residues
are to be kept on board, the Master shall arrange that the quantity be measured
in conjunction with the cargo suppliers, a note of the quantity shall be made
in Vessel’s ullage record and a slop certificate shall be issued.  If Charterer requires that the residues be
kept on board, segregated from cargo, they shall, at Charterer’s option, be
discharged at the discharging port(s) in accordance with Charterer’s
instructions.

 

3.3                    SPEEDS/CONSUMPTIONS

 

See
clause 24 of the Shelltime 4 form.

 

3.4                    HEATING

 

No
requirements

 

3.5                    SHIP TO SHIP TRANSFER

 

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

 

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

 

3.6                    CARGO MANIFOLDS

 

Owner
warrants that Vessel shall be equipped with pressure gauges fitted inboard of
the valve at each discharge manifold connection.  Such gauges shall be maintained in proper
working condition and each gauge shall have a valid test certificate.

 

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

 

38

 

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

 

Owner
further warrants that no more than one reducer or spacer will be used between
Vessel’s manifold valve and the terminal hose or loading arm connection in
accordance with OCIMF Guidelines.  The
Vessel shall be equipped to present flanges of 10”, 12” and 16” (ASA) at all
manifold connections on one side of the Vessel.

 

3.7                    CRUDE OIL WASH (COW)

 

N/A

 

3.8                    INERT GAS SYSTEM

 

N/A

 

3.9                    SURVEY AND SAMPLE

 

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

 

3.10              COMMINGLING/BLENDING

 

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

 

3.11              CARGO RETENTION

 

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

 

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

 

39

 

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

 

3.12              LOADING WARRANTY

 

Owner
warrants that the Vessel can routinely load a homogenous cargo at a maximum
rate of 36,000 barrels/hour provided two cargo lines are connected (except for
start up and topping up operation).

 

3.13                    PUMPING PERFORMANCE WARRANTY

 

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

 

B.                         Charterer is to be compensated at the Hourly
Rate of Hire for each hour, or pro rata for each part of an hour, that the
Vessel takes in excess of the pumping time allowed per the rates stipulated in
sub-paragraph (A) hereof.  In
addition, Charterer reserves the right to order the Vessel from any berth at
any time at the Owner’s time and expense when this warranty is breached.  Owner will receive no credit or compensation
if the Vessel is able to discharge at a rate greater than those specified
above.  If the terminal or place of
discharging does not allow or permit the Vessel to meet the above warranty, the
Master shall forthwith issue a Letter of Protest (for which the Master, if
possible, shall obtain acknowledgement) to such terminal or place and shall
immediately advise Charterer in writing by telex or facsimile.  If the Master fails to issue the Letter of
Protest, Owner shall be deemed to waive any rights to contest that time was
lost as a result of the Vessel’s failure to comply with the above pumping
warranty.  Any delay to Vessel’s
discharge caused by shore conditions shall be taken into account in the assessment
of pumping performance.

 

3.14                    DRAWINGS/DATA

 

The
following drawings/data shall be submitted to Charterer prior to delivery:

 

	
  a)

  	
  General
  Arrangement Plan

  
	
  b)

  	
  Capacity
  Plan

  

 

40

 

c)                                Mooring Arrangement

d)                               Ballast Piping Diagram/ Arrangement

e)                                Cargo Piping Diagram/Arrangement

f)                                  Any other documents or data requested by
Charterer

 

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

 

3.15                    REMEASUREMENT

 

Owner
to advise all alternative loadlines and corresponding deadweights/drafts
available at the time of charter. Charterer has the option of requesting Owner
to arrange for remeasurement of Vessel’s deadweight from time to time.  Owner shall make best endeavors to comply
with such request if possible and practical. 
Charterer shall endeavor to notify Owner well in advance and give at
least three working days notice. All time and expenses in connection with the
remeasuring will be borne by Charterer.

 

3.16                    ETA

 

Owner
will instruct Vessel’s Master to advise Charterer of Vessel’s Estimated Time of
Arrival (ETAs) at load and discharge ports as instructed by Charterer including
but not limited to the following:

 

The
Vessel shall advise load/discharge port terminal (via Agent) of its ETA at each
of the following times:

 

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

2.                           48 hours before arrival.

3.                           24 hours before arrival.

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

 

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

 

41

 

3.17                    CBM MOORING EQUIPMENT

 

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

 

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

 

Wires/Ropes on winches:

 

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

 

Length:  Three
hundred (300) meter required.  The Vessel
is equipped with 250 meters.

 

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

 

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

 

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

 

Breaking Strength: 
dependent upon Vessel’s deadweight.

 

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

 

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

 

Chocks and Double-Horn
Bitts:  The Vessel must have two (2) closed
chocks and at least one (1) set of bitts at each mooring location on both
port and starboard side.  Only
double-horn bitts are acceptable. 
Roller-type chocks may be acceptable only if they have been enclosed by
welding a preventive bar on top. 
Open-type roller chocks are not acceptable.

 

42

 

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

 

Secondary Ropes: 
A second set of lines will be run to each buoy.  The Vessel must have on board a minimum of
seven (7) synthetic lines (nylon lines are not acceptable) in good
condition, minimum two hundred (200) meters long and of minimum seventy-five
(75) metric tons breaking strength.

 

Boom:  Minimum fifteen (15) metric
ton safe working load boom or crane required.  The Vessel is
equipped with 5-ton boom.

 

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

 

All delays, losses and expenses due to non-compliance
with this clause will remain solely for Owner’s account.

 

3.18                   SEA TERMINALS

 

Owner
warrants that when calling at a sea terminal, the Vessel will maintain their
engines in readiness and will be loaded and discharged in such a manner that
they are able immediately to shut down cargo operations at any state of loading
or discharging, promptly disconnect hoses, release mooring lines, and proceed
to another anchorage or area.

 

3.19                   COMMUNICATION EQUIPMENT

 

Owner
warrants that Vessel shall be equipped with VHF radiotelephone, satellite
communications earth station, facsimile machine,  GMS cellular telephone, internet e-mail, and
such other radio telecommunications equipment as may be required by
international, flag state, and port state regulations.

 

3.20                   INMARSAT TRACKING

 

Charterer
may employ an Inmarsat C tracking system on the Vessel.  All registration and communication costs
relating to this tracking system will be for Charterer’s account.  Charterer will advise when the system is
operative and confirm termination on redelivery.  Owner to supply the following information:

 

Inmarsat
C number (9 digits beginning with 4):

Manufacturer,
make, etc.:

Model
Number:

 

43

 

Terminal
S/W version, if known:

 

3.21                   MANNING

 

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

 

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

 

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

 

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

 

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

 

3.22                   OWNERSHIP/FLAG

 

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

 

4.        Eligibility and Compliance

 

4.1                         APPROVALS

 

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

 

B.                         Owner will endeavor to maintain all necessary
oil company approvals during the course of this charter.  Should the Vessel not be approved by any
necessary oil company, the Owner will undertake at the earliest opportunity to
adopt all reasonable corrective measures at Owner’s time and expense and obtain
the required approvals, provided, 
however, that Charterer trades the Vessel to ports and/or areas
where the aforesaid oil companies can inspect them if inspection is required to
reinstate their oil company approval.  If
the Owner is unable to obtain the approval of the concerned oil company as a
result of the continued unacceptability of the Vessel, after inspection and not
as a result of inability or want to inspect by the oil company, and as a
consequence, the oil company and the Charterer

 

44

 

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

 

.2                          C.        Should Charterer require other approvals, sufficient time and
notice is to be given to Owner who will then arrange for Vessel’s inspection at
Charterer’s  own expense.  Failure to obtain approvals shall give
Charterer the right to put the Vessel’s off hire, and costs to make good the
deficiencies will be for the Owner’s account.

 

4.2                         ELIGIBILITY

 

Subject
to Clause 5.11.B, Owner warrants that the Vessel is in all respects eligible
under applicable conventions, laws and regulations for trading to the ports and
places specified in Clause 4 and Clause 2.3, 
and that they shall have on board for inspection by the appropriate
authorities all certificates, records, compliance letters, contingency plans
and other documents required for such service including, but not limited to,
ISM Safety Management Certificate, ISM Document of Compliance, and Certificates
of Financial Responsibility for Oil Pollution. 
Owner further warrants that the Vessel does, and will, fully comply with
all applicable conventions, laws, regulations and ordinances of any
international, national, state or local government entity having
jurisdiction.  In particular, Owner
warrants that for trading to or from ports in the United States, the Vessel
does and will comply with all requirements of the Federal Oil Pollution Act of
1990 (OPA 90), US Federal Water Pollution Control Act, SOLAS IX (ISM), MARPOL
1973/1978/1983, Civil Liability Convention and regulations issued pursuant
thereto and effective during the term of this charter party.  Any delays, losses, expenses or damages
arising as a result of failure to comply with this clause shall be for Owner’s
account and, where applicable, shall count as off-hire time per Clause 21.  In the interest of safety, Owner  recommends that the Master observe the
recommendations as to traffic separation and routing which are issued from time
to time by the International Maritime Organization (IMO) as promulgated by the
state of the flag of the Vessel or the state in which the effective management
of the Vessel is exercised.

 

4.3                         I.T.F.

 

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

 

45

 

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

 

4.4                         DRUG AND ALCOHOL POLICY

 

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

 

4.5                   SOLAS/MARPOL

 

N/A

 

4.6                         ITOPF

 

Owner warrants that it is a member of the
International Tanker Owner’s Pollution Federation (“ITOPF”) and that Owner will
retain such membership during the term of this Charter.  Owner further warrants that  the Vessel shall be in full compliance with
the 1992 Civil Liability Convention (CLC) and the 1992 Fund Convention during
the term of this Charter.

 

5.                    Legal Provisions

 

5.1                         LAW AND LITIGATION

 

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

 

46

 

arbitrated
in the City of New York before a board of three persons, consisting of one
arbitrator to be appointed by the Owner, one arbitrator by the Charterer, and
one by the two so chosen who will act in the capacity as procedural
chairman.  Their decision or that of any
two of them shall be final and binding, and for the purpose of enforcing the
award, this agreement and the award may be made a rule of the court.  Either party may call for such arbitration by
service upon the other, wherever it may be found, in the form of a written
notice specifying the nature of the claim and the name and contact details of
their appointed arbitrator.  If the other
party shall not, by written notice served on the first moving party within 20
days of the service of such first notice, appoint its arbitrator to arbitrate
the disputes or differences specified, then the first moving party shall have
the right without further notice to appoint a second arbitrator with precisely
the same force and effect as if said second arbitrator had been appointed by
the other party.  Awards by the panel, or
a majority thereof, may include costs and reasonable attorneys fees.  The arbitration proceedings shall be
conducted in accordance with the rules of the Society of Maritime
Arbitrators, Inc. and the applicable law will be the Federal Maritime Law
of the United States.

 

5.2                         AFFILIATES’ CLAIMS

 

A.                       If, whether directly or indirectly, any
breach of this charter by Owner shall cause any company or companies which, at
the date of this charter, is or are associated with and/or affiliated to
Charterer to suffer any loss or damage whatsoever or incur any liability
whatsoever to any third party, Owner shall be liable to Charterer to the full
extent of Charterers’ Affiliates’ or Associates’ losses and/or damages and/or
liabilities including those arising under any bill of lading issued under this
Charter and Charterer shall be entitled to claim in respect thereof in
accordance with the Arbitration Clause of this charter.  Charterer warrants that any sums actually
recovered by it in respect of its Affiliates’ or Associates’ losses and/or
damages and/or liabilities shall be received by it for the account of such
Affiliates and/or Associates, in reduction and/or mitigation of their loss.

 

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

 

5.3                         ASSIGNMENT

 

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

 

47

 

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

 

5.4                         TENDER OF NOTICE

 

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

 

For
Owner:  OSG 300 LLC and OSG Liberty LLC

Fax:
212-251-1180

Email:
PPopov@OSG.Com

 

For
Charterer: OSP 300 LLC

Fax:
813-221-2649

Email:
Fgordon@OSG.com

 

5.5                         INSURANCE

 

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

 

·                  Hull
and Machinery Insurance including collision liability with a limit equal to or
greater than Owner’s yearly declared value of the Vessel. Such insurance to
waive all rights of subrogation against Charterer to the extent of the
liabilities and/or indemnity obligations assumed by Owner under this Charter.

 

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

 

·                  Hull
and P&I war risk insurance with a limit of not less than the Owner’s yearly
declared value of the Vessel. Such insurance to waive all rights of subrogation
against Charterer to the extent of the liabilities and/or indemnity obligations
assumed by Owner under this Charter.

 

48

 

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

 

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

 

5.6                         WAR

 

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

 

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

 

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

 

(ii)                                      “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, in the
reasonable judgment of the Master and/or the Owner, may be dangerous or are
likely to be or to become dangerous to Vessel, her cargo, crew or other persons
on board the Vessel.

 

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

 

49

 

not
be ordered to or required to continue to or through, any port, place, area or
zone (whether of land or sea), or any waterway or canal, where it appears that
the Vessel, its cargo, crew or other persons on board them l, in the reasonable
judgment of the Master and/or the Owner, 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, they shall be at liberty
to leave it.

 

(c)          The
Vessel shall not be required to 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 they shall be subject, or is likely to be subject to a
belligerent’s right of search and/or confiscation.

 

(f)                              The Vessel shall have liberty:-

 

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

 

(ii)       To comply with the order, 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 Owner are subject, and to obey the orders and directions of
those who are charged with their enforcement;

 

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

 

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

 

50

 

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

 

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

 

5.7                    BILL(S) OF LADING/INDEMNITY

 

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

 

If
Charterer requests Owner to deliver cargo at a discharge port or place:

 

(1)   Without prior presentation to the Vessel at the discharge
port or place of one of the original Bills of Lading issued for the cargo, duly
endorsed, and/or

 

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

 

Charterer hereby indemnifies Owner, without further
invocation, against claims brought by holders of original Bills of Lading
against Owner in accordance with Owner’s letter of indemnity wording from Owner’s
P&I Club which must be member of the International Group of P&I
Clubs.  Owner and Charterer agree that
any requirement contained in the above referenced “letter of indemnity” wording
for a bank guarantee is hereby waived. 
For consistency, letter of indemnity choice of law and dispute
resolution procedure is deemed to be as provided under this charterparty Clause
5.1

 

5.8                    CONFIDENTIALITY

 

The
terms and conditions of this Time Charter shall remain private and
confidential.

 

51

 

5.9                    LOSS OF VESSEL

 

Should
the Vessel be lost, or be missing and presumed lost, hire shall cease at the
time of her loss, or if such time is unknown, at the time when the Vessel was
last heard from. If the Vessel should become a Constructive Total Loss (“CTL”),
hire shall cease at the time of the casualty resulting in such loss.  In either case, any hire paid in advance and
not earned shall be returned to Charterer. 
If the Vessel should be missing when a payment of hire would otherwise
be due, such payment shall be postponed until the safety of the Vessel is
ascertained.  If the Vessel should become
a CTL, Charterer shall have the option to cancel this Charter on written notice
to Owner.  The Vessel shall be deemed a
CTL under this Charter when the cost of recovering and repairing it is
reasonably estimated to exceed its value when repaired, without taking into
consideration any value of this Charter.

 

5.10              CONFLICTS OF INTEREST

 

No
director, employee or agent of Owner shall give or receive any commission, fee,
rebate, gift or entertainment of significant cost or value in connection with
this Charter Party (other than brokerage commissions and other commissions and
fees described in this Charter Party), or enter into any other business
arrangement with any director, employee or agent of Charterer or any of its
affiliates without prior written notification to Charterer.  Any representative(s) authorized by
Charterer may audit any and all records of Owner for the sole purpose of
determining whether there has been compliance with this clause.

 

5.11                   CONTRACT INTERPRETATION

 

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

 

52

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