Document:

EXHIBIT 10.1

 

CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

DOUBLE ASTERISKS
DENOTE SUCH OMISSIONS.

 

LICENSE AGREEMENT

 

THIS LICENSE AGREEMENT
(this “Agreement””), effective as of October 20, 2010 (the “Effective Date”), is entered into
between SurModics Pharmaceuticals, Inc., a Delaware corporation (“SurModics”), having a place of business at
750 Lakeshore Parkway, Birmingham, Alabama 35211, U.S.A., and Edge Therapeutics, Inc. a Delaware corporation (“Edge”),
having a place of business at 211 Warren Street, Newark, NJ 07103, with respect to the following facts:

 

WHEREAS, SurModics
is the owner or exclusive licensee of certain technology, patent rights and know-how rights related to the SurModics IP Rights
(as defined below);

 

WHEREAS, Edge is the
owner or exclusive licensee of certain technology, patent rights and know-how rights related to Edge IP Rights (as defined below);
and

 

WHEREAS, Edge desires
to obtain from SurModics and SurModics desires to grant to Edge, a license under the SurModics IP Rights upon the terms and conditions
of this Agreement.

 

NOW, THEREFORE, in
consideration of the foregoing premises and the mutual covenants herein contained, the Parties hereby agree as follows:

 

	1.	DEFINITIONS.

 

1.1             
“Active Agent” shall mean (a) nimodipine, (b) **, or (c) any of the Other Active Agents for which
Edge has obtained rights to in accordance with Section 5.4.

 

1.2             
“Affiliate” shall mean, with respect to a Party, any entity that controls or is controlled by
such Party, or is under common control with such Party. For purposes of this definition, an entity shall be deemed to control another
entity if it owns or controls, directly or indirectly, at least fifty percent (50%) of the voting equity of another entity (or
other comparable interest for an entity other than a corporation).

 

1.3             
“Clinical Trial” shall mean a human clinical trial in any country the results of which could be
used to establish safety or efficacy of a product as a basis for an NDA or foreign equivalent.

 

1.4             
“Clinical Trial Material” shall mean the Product manufactured by SurModics to support Clinical
Trials.

 

1.5             
“Combination Inventions” shall mean those Research Inventions set forth in Section 6(e)
of the Development Agreement.

 

1.6             
“Combination IP Rights” shall mean, collectively, the Combination Inventions and the Combination
Patent Rights.

 

1.7             
“Combination Patent Rights” shall mean any Patent Rights that claim or cover the Combination Inventions.

 

    	 

    	 

    

1.8             
“Competitor” shall mean a company that makes a Formulation that competes against SurModics’
Formulation.

 

1.9             
“Commercial Supply” shall mean Product manufactured by SurModics that has been approved by the
FDA or its foreign equivalent for commercial release.

 

1.10         
“Commercially Reasonable Efforts” shall mean those efforts and resources consistent with the exercise
of prudent scientific and business judgment, as applied to other pharmaceutical products of similar market potential and market
size and at a similar stage in the development or life of such product.

 

1.11         
“Confidential Information” shall mean all information and data that (a) is provided by one Party
to the other Party under this Agreement in any form, whether oral, visual or other form, and (b) if disclosed in writing or other
tangible medium is marked or identified as confidential at the time of disclosure to the recipient, is acknowledged at the time
of disclosure to be confidential, or otherwise should reasonably be deemed to be confidential. Notwithstanding the foregoing, Confidential
Information of a Party shall not include that portion of such information and data which, and only to the extent, the recipient
can establish by written documentation: (i) is known to the recipient as evidenced by its written records before receipt thereof
from the disclosing party, (ii) is disclosed to the recipient free of confidentiality obligations by a third person who has the
right to make such disclosure, (iii) is or becomes part of the public domain through no fault of the recipient, or (iv) the recipient
can reasonably establish is independently developed by persons on behalf of recipient without access to or use of the information
disclosed by the disclosing party (each, a “Confidentiality Exception”).

 

1.12         
“Development Agreement” shall mean that certain Feasibility Evaluation Agreement between the Parties
dated February 14, 2010, as may be amended or restated from time to time by the mutual written agreement of the Parties.

 

1.13         
“Development Program” shall mean the development program conducted by the Parties pursuant to
the Development Agreement.

 

1.14         
“Directly Competing Product” shall mean a pharmaceutical and therapeutic equivalent pharmaceutical
microparticle product incorporating an Active Agent. In this context, equivalence means that the dose, dosage form, dosing frequency,
route of administration, strength, and concentration are similar to the Product and the therapeutic indications are the same.

 

1.15         
“Edge IP Rights” shall mean, collectively, the Edge Patent Rights and the Edge Technology.

 

1.16         
“Edge Patent Rights” shall mean, collectively, all Patent Rights owned or controlled by Edge that
claim or cover the Edge Technology, including Improvements and derivatives. The Edge Patent Rights covered by this Agreement existing
as of the Effective Date are set forth on Appendix B attached and incorporated by reference into this Agreement.

 

1.17         
“Edge Research Inventions” shall mean those Research Inventions set forth in Section 6(c)
of the Development Agreement.

 

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1.18         
“Edge Research IP Rights” shall mean shall mean collectively the Edge Research Inventions and
the Edge Research Patent Rights.

 

1.19         
“Edge Research Patent Rights” shall mean all Patent Rights that claim or cover the Edge Research
Inventions.

 

1.20         
“Edge Technology” shall mean all Know-How owned or controlled by Edge, developed or acquired outside
of the Development Agreement, that is reasonably necessary or useful to develop, obtain regulatory approval for, manufacture, use,
or otherwise commercially exploit the Product. All Edge Technology that does not fall within the scope of a Confidentiality Exception
shall be the Confidential Information of Edge. The Edge Technology covered by this Agreement existing as of the Effective Date
is set forth on Appendix B attached and incorporated by reference into this Agreement.

 

1.21         
“Field” shall mean Intracranial Delivery for the prevention or treatment of delayed complications
following intracranial hemorrhage such as intracerebral, intraventricular, subdural or subarachnoid hemorrhage or a combination
thereof in humans.

 

1.22         
“First Commercial Sale” shall mean the first sale of the Product by Edge, its sublicensee or their
respective Affiliates to customers who are not Affiliates in any country after all applicable marketing approvals (if any) have
been granted by the applicable governing health authority.

 

1.23         
“Formulation” shall mean a biodegradable ** formulation imparting a controlled release of one
or more Active Agents.

 

1.24         
“Improvements” shall mean any and all enhancements, discoveries, inventions, additions, alterations,
modifications, design changes and other improvements, whether or not patentable, with respect to the Product owned or controlled
by a Party during the term of this Agreement.

 

1.25         
“including” shall mean including without limitation except to extent specifically provided herein.

 

1.26         
“IND” shall mean an Investigational New Drug application or similar application required to commence
human clinical testing of a product submitted to the FDA or its foreign equivalent.

 

1.27         
“Intracranial Delivery” shall mean the surgical placement by syringe, catheter or other
injection means directly into the intracerebral, intraventricular or subarachnoid space or other sites within the cranium. Intracranial
Delivery shall exclude intravascular procedures or techniques.

 

1.28         
“Know-How” shall mean any and all proprietary technical information, formulations, processes,
data, specifications, characterization methods, characterization results, and other proprietary information, excluding any Patent
Rights with respect thereto.

 

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1.29         
“NDA” shall mean a New Drug Application or similar application for marketing approval of a product
submitted to the FDA or its foreign equivalent.

 

1.30         
“Net Sales” shall mean the gross sales price of each Product (in final form for end use) invoiced
by Edge, its sublicensee or their respective Affiliates to customers who are not Affiliates (or who are Affiliates but are the
end users of the Product) less, to the extent reasonable and customary in the pharmaceutical industry and actually paid or accrued
by Edge, its sublicensee or their respective Affiliates (as applicable), (a) credits, allowances, discounts and rebates to, and
chargebacks from the account of, such customers for spoiled, damaged, out-dated and returned Product; (b) freight and insurance
costs incurred by Edge, its sublicensee or their respective Affiliates (as applicable) in transporting the Product in final form
to such customers; (c) cash, quantity and trade discounts, rebates and other price reductions for the Product given to such customers
under price reduction programs that are consistent with price reductions given for similar products by Edge, its sublicensee or
their respective Affiliates (as applicable); (d) sales, use, value-added and other direct taxes incurred on the sale of the Product
in final form to such customers; and (e) customs duties, surcharges and other governmental charges incurred in exporting or importing
the Product in final form to such customers. Such amounts shall be determined in accordance with Generally Accepted Accounting
Principles consistently applied.

 

1.31         
“Party” shall mean Edge and SurModics, individually, and “Parties” shall mean
Edge and SurModics, collectively, and their successors or assigns pursuant to Section 10.3 hereof.

 

1.32         
“Patent Infringement Claim” shall mean a third party lawsuit (a) brought against either Party
before a court of competent jurisdiction, (b) that includes a claim alleging that the Product infringes such third party’s
Patent Rights and (c) such claim of infringement relates primarily to the SurModics IP Rights used or incorporated in the Product.

 

1.33         
“Patent Rights” shall mean any of the following, whether existing now or in the future anywhere
in the world (a) any issued patent, including inventor’s certificates, substitutions, extensions, supplemental protection
certificates, confirmations, reissues, reexaminations, renewals, or any like governmental grant for protection of inventions; and
(b) any pending applications for any of the foregoing, including any continuation, divisional, substitution, continuations-in-part,
provisional and converted provisional applications.

 

1.34         
“Phase II Clinical Trial” shall mean a controlled and lawful study in humans designed with the
purpose of determining dosing of Product in patients for the Field or that would otherwise satisfy 21 CFR 312.21(b).

 

1.35         
“Phase III Clinical Trial” shall mean a pivotal human clinical trial in any country the results
of which could be used to establish safety and efficacy of a product as a basis for an NDA or that would otherwise satisfy requirements
of 21 CFR 312.21(c).

 

1.36         
“Phase III Clinical Trial Material” shall mean Product manufactured by SurModics to support Phase
III Clinical Trials.

 

1.37         
“the/each Product” shall mean one or more of the Active Agents (separate or in any combination)
incorporated into the Formulation for use in the Field.

 

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1.38         
“Research Inventions” shall mean collectively all inventions, Know-How, trade secrets, discoveries,
development, methods, techniques, formulae, processes and compositions of matter, whether or not patentable, resulting or derived
from or directly relating to SurModics’ and/or Edge’s activities under the Development Agreement or any other agreement
between the Parties.

 

1.39         
“Royalty Credit” shall mean an adjustment to the royalties owed to SurModics on Net Sales of a
Product following the adjudication of a Patent Infringement Claim involving such Product that is equal to the difference between
the royalties calculated using the royalty rate in Section 4.1.3 and the reduced royalty rate in Section 4.1.4 during
the pendency of the Patent Infringement Claim.

 

1.40         
“Royalty Term” shall mean, with respect to each country the longer of (a) the period of time during
which the manufacture, use or sale of each Product in such country is covered by a Valid Claim, or (b) the period ending twelve
(12) years from the First Commercial Sale of each Product in such country, if there is no Valid Claim that covers the manufacture,
use, or sale of the Product in such country.

 

1.41         
“Sublicensing Revenue” shall mean the aggregate cash consideration plus the fair market value
of any in kind consideration paid or payable to Edge or its Affiliates in connection with the grant of any sublicense, promotion,
marketing, distribution, joint venture, or other rights by Edge or its Affiliates to a third party relating to each Product including
sublicense fees, maintenance fees and milestone payments but excluding: (a) royalties calculated as a percentage of Net Sales of
the Product, (b) equity investments in Edge by a sublicensee for the fair market value of the equity purchased on the date of the
investment; however, the fair market value of any SurModics IP Rights transferred to such sublicensee as part of or coincident
with such investment shall not be excluded, (c) loan proceeds paid to Edge by a sublicensee in an arms length, full recourse debt
financing to the extent that such loan is not forgiven, and (d) sponsored research funding paid to Edge by a sublicensee in a bona
fide transaction for future research to be performed by Edge.

 

1.42         
“SurModics IP Rights” shall mean, collectively, the SurModics Technology and the SurModics Patent
Rights.

 

1.43         
“SurModics Patent Rights” shall mean, collectively, the Patent Rights that claim or cover the
SurModics Technology, including Improvements and derivatives. The SurModics Patent Rights covered by this Agreement existing as
of the Effective Date are set forth on Appendix A attached and incorporated by reference into this Agreement.

 

1.44         
“SurModics Research Inventions” shall mean those Research Inventions set forth in Section 6(d)
of the Development Agreement.

 

1.45         
“SurModics Research IP Rights” shall mean collectively the SurModics Research Inventions and the
SurModics Research Patent Rights.

 

1.46         
“SurModics Research Patent Rights” shall mean all Patent Rights that claim or cover the SurModics
Research Inventions.

 

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1.47         
“SurModics Technology” shall mean all Know-How (including any Improvements thereto) owned or controlled
by SurModics, developed or acquired outside of the Development Agreement, that is reasonably necessary or useful to develop, obtain
regulatory approval for, manufacture, use, or otherwise commercially exploit the Product. All SurModics Technology that does not
fall within the scope of a Confidentiality Exception shall be the Confidential Information of SurModics. The SurModics Know-How
covered by this Agreement existing as of the Effective Date is set forth on Appendix A attached and incorporated by reference
into this Agreement.

 

1.48         
“Sublicense” shall mean any license granted by Edge (including its Affiliates or sublicensees)
of the rights granted under Section 3.1.1 hereof (including any promotion, marketing, distribution, joint venture or other
arrangement conferring such rights and intending to provide for the commercialization of products, including each Product in the
Field) to a third party other than an Affiliate.

 

1.49         
 “Valid Claim” shall mean either (a) a claim of an issued and unexpired patent included within
the SurModics Patent Rights or SurModics Research Patent Rights, which has not been held permanently revoked, unenforceable or
invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the
time allowed for appeal, and which has not been admitted to be invalid or unenforceable through reissue or disclaimer or otherwise,
or (b) a claim of a pending patent application included within the SurModics Patent Rights or SurModics Research Patent Rights,
which claim was filed in good faith and has not been abandoned or finally disallowed without the possibility of appeal or refiling
of such application; provided, however, that if such pending claim has not issued as a claim or an issued patent within the SurModics
Patent Rights within ** years after the filing date from which such patent application takes priority, such pending claims shall
not be a Valid Claim for purposes of this Agreement.

 

	2.	REPRESENTATIONS AND WARRANTIES.

 

2.1             
Each Party represents and warrants to the other Party as follows:

 

2.1.1       
Organization. Such Party is duly organized, validly existing and in good standing under the laws of the jurisdiction
in which it is organized.

 

2.1.2       
Authorization and Enforcement of Obligations. Such Party (a) has the requisite power and authority and the
legal right to enter into this Agreement and to perform its obligations hereunder; and (b) has taken all requisite action on its
part to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder. This Agreement
has been duly executed and delivered on behalf of such Party, and constitutes a legal, valid, binding obligation, enforceable against
such Party in accordance with its terms.

 

2.1.3       
Consents. All necessary consents, approvals and authorizations of all governmental authorities and other persons
or entities required to be obtained by such Party in connection with this Agreement have been obtained.

 

2.1.4       
No Conflict. The execution and delivery of this Agreement and the performance of such Party’s obligations
hereunder (a) does not conflict with or violate any requirement of applicable laws, regulations or orders of governmental bodies;
and (b) does not conflict with, or constitute a default under, any contractual obligation of such Party or to which such Party
may be subject although not a Party.

 

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2.2             
Edge represents and warrants to SurModics as follows:

 

2.2.1       
Edge shall at all times during the term of this Agreement comply and cause its sublicensees and Affiliates to comply
with all laws that may control or apply to the research, testing, development, distribution or marketing of each Product or any
other activity undertaken pursuant to this Agreement.

 

2.2.2       
To the best of Edge’s knowledge and belief Edge has sufficient and/or beneficial title under the Edge IP Rights
to enable SurModics to perform the activities contemplated under the Development Program and that SurModics’ use of the Edge
IP Rights in performance of the Development Program will not constitute infringement or misappropriation of the intellectual property
rights of any third party.

 

2.3             
SurModics represents and warrants to Edge as follows:

 

2.3.1       
As of the Effective Date, Appendix A sets forth and includes a true and correct listing of all SurModics Patent
Rights and all SurModics Technology. To SurModics actual knowledge, SurModics has sufficient and/or beneficial title under the
SurModics IP Rights to grant Edge the license contemplated hereunder. There are no pending or threatened suits, legal proceedings,
claims or governmental investigations against SurModics relating to any claim that the SurModics IP Rights infringe or violate
any third party’s patents, copyrights, trademarks, trade secrets or other proprietary rights.

 

2.3.2       
SurModics has not granted any right, license, or interest in, to, or under the SurModics IP Rights or the SurModics
Research IP Rights that is inconsistent with the rights, licenses, and interests granted to Edge under the terms and conditions
of this Agreement.

 

2.3.3       
Upon request SurModics will promptly make available to Edge information material to the development and commercialization
of each Product in the Field and is necessary for any regulatory submission for the development of the Product regarding the SurModics
IP Rights or the SurModics Research IP Rights and Edge shall treat such information as Confidential Information under this Agreement.
SurModics shall not unreasonably withhold such information. Edge shall have the right to share this Confidential Information with
third parties bound by a confidentiality agreement no less restrictive than the confidentiality provisions set forth in this Agreement.
If there is a disagreement to provide certain material, the Parties shall, within ten (10) days of reaching the conclusion that
the disagreement cannot be resolved between them, engage an independent consultant mutually acceptable to the Parties for the purpose
of providing within thirty (30) days, after consideration of all evidence submitted by the Parties, an opinion that shall be binding
on the Parties. If the Parties are unable to agree upon an independent consultant, the Parties’ respective independent consultants
shall mutually decide on a third independent consultant that shall be responsible for rendering a binding opinion on the Parties
with regard to the information to be provided by SurModics to Edge. The expense of the independent consultant shall be borne by
the non-prevailing party. SurModics will make available to Edge, promptly upon Edge’s request, every Material Safety Data
Sheet(s) associated with the components of the Formulation that are subject to the control of SurModics, and shall update such
Material Safety Data Sheet(s) as required by applicable law, statute or regulation. The Product supplied to Edge, if manufactured
by SurModics, shall be produced in compliance with the applicable federal, state, and local laws of the jurisdiction in which the
Product is produced and where it will be registered and all required certifications, registrations, or licenses with respect to
the Product will be obtained by SurModics, if manufactured by SurModics and subject to further clarification with regard to cost
and specific requirements in a manufacturing supply agreement to be executed by the Parties subject to Section 3.2.1 hereof.

 

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2.3.4       
SurModics owns or controls the SurModics IP Rights.

 

2.3.5       
SurModics will not knowingly incorporate, infringe or misappropriate the intellectual property rights of a third
party during the course of the Development Program.

 

2.3.6       
EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 2, SURMODICS MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS
OR IMPLIED, REGARDING THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE FORMULATION AND EACH PRODUCT, OR ANY OF THE
RIGHTS LICENSED TO EDGE UNDER THIS AGREEMENT, INCLUDING ANY REPRESENTATION OR WARRANTY REGARDING VALIDITY, ENFORCEABILITY, OR NON-INFRINGEMENT.

 

 

	3.	LICENSE GRANT.

 

3.1             
License Grant to Edge.

 

3.1.1       
On the terms and conditions of this Agreement, SurModics hereby grants to Edge an exclusive (even as to SurModics),
worldwide, royalty-bearing license under the SurModics IP Rights, SurModics Research IP Rights, and SurModics’ rights under
the Combination IP Rights to make, have made (subject to Section 3.2.1) develop, use, offer for sale, sell, export and import
the Product for use in the Field.

 

3.1.2       
Edge shall have the right to grant Sublicenses and the recipient of a Sublicense from Edge shall have the right to
grant Sublicenses, provided that compensation to SurModics is not reduced or diminished by the Sublicense, subject to the Sublicensing
Revenue described in Section 4.1.5 hereof, to (a) third parties, other than Affiliates, for the purpose of developing or
commercializing each Product in each case jointly with, or for the benefit of, Edge, or (b) to Affiliates; provided, however, that
Edge shall allow its sublicensees only one layer of delegation with regard to Sublicensing. Additional Sublicensing layers must
be approved by SurModics; such approval shall not be unreasonably withheld. Edge shall provide SurModics with a copy of each Sublicense
agreement promptly after executing the same; provided, however, that Edge shall have the right to redact any confidential financial
terms from the copy provided to SurModics; provided, however, SurModics shall have the ability to access financial information
necessary to ascertain Edge’s compliance with the payment of Sublicensing Revenue. Any such Sublicense shall be subject and
subordinate to the terms and conditions of this Agreement and Edge shall remain responsible for all payments due to SurModics hereunder
and Edge shall remain liable for any breach of any Sublicenses.

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3.2             
Manufacturing Rights to SurModics.

 

3.2.1       
SurModics shall manufacture all Clinical Trial Material necessary to support Phase II Clinical Trials and any earlier
Clinical Trials. Subject to execution of the agreement described in this Section 3.2 and unless otherwise agreed to by the Parties,
SurModics will have the right to manufacture (a) Phase III Clinical Trial Material and (b) Commercial Supply subject to the following:

 

(a)               
Edge shall negotiate in good faith and exclusively with SurModics, for a period of no less than three (3) months,
an agreement for SurModics to manufacture Phase III Clinical Trial Material and Commercial Supply.

 

(b)              
The negotiations of such manufacturing agreement shall commence promptly following successful completion of the Phase
II Clinical Trials and after finalization of the manufacturing process for each Product.

 

3.2.2       
Edge shall not engage any third party to manufacture Phase III Clinical Trial Material or Commercial Supply unless
and until SurModics and Edge fail to agree upon a mutually agreeable manufacturing agreement. Any such agreement shall address
a mutually agreeable price for each Product and SurModics meeting of Edge’s reasonable requirements for timeliness, quality,
and quantity criteria for the Product. As part of such manufacturing agreement and for the purposes of SurModics manufacturing
Clinical Trial Material to support the Phase II Clinical Trial(s) and any earlier Clinical Trials conducted by Edge, Edge shall
grant to SurModics a royalty-free, nonexclusive, worldwide license (with the right to grant sublicenses, such sublicenses must
be approved by Edge, such approval shall not be unreasonably withheld) as may be necessary other than sublicenses that are unacceptable
to Edge for commercially reasonable reasons to fulfill any manufacturing and development obligations for the Clinical Trial Material
and Commercial Supply under the Edge IP Rights, Edge Research IP Rights and Edge’s rights under the Combination IP Rights
to make and have made the Product in the Field solely for sale to Edge, its sublicensees and their respective Affiliates.

 

3.2.3       
In the event Edge fulfills its duties pursuant to Section 3.2.1 (e.g., negotiations in good faith and exclusively
with SurModics) and the Parties are unable to negotiate a mutually agreeable manufacturing agreement and as a result Edge engages
a manufacturer other than SurModics to make the Product, then SurModics will provide Edge and such manufacturer(s) with the necessary
documentation to manufacturer the Product, at Edge’s expense, including the following: copy of batch records, production
specifications, right to reference the drug master file, if it exists, raw material specifications and standard test methods. Any
information obtained by Edge and such manufacturer(s) for manufacturing purposes shall be treated as the Confidential Information
of SurModics, provided that Edge and such manufacturer(s) shall be permitted to disclose such information to third parties bound
by a confidentiality agreement no less restrictive than the confidentiality provisions set forth in this Agreement and to regulatory
authorities.

 

3.2.4       
In the event either Party engages a subcontractor to assist in the development and manufacturing, such Party shall
require the subcontractor to comply with every provision of this Agreement as if the subcontractor itself were a party and such
Party shall be liable for all Liabilities resulting from such subcontractor’s breach of the same.

 

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3.3             
Inspection. SurModics will permit Edge or its duly authorized representatives (who is not a Competitor to
SurModics) to observe and consult with SurModics during the term of this Agreement. SurModics also agrees that Edge and its duly
authorized agents (who are not a Competitor to SurModics) will have access subject to request and approval by SurModics; during
normal operational hours and during active manufacturing of the Product, to inspect the facility and manufacturing process in regards
to (i) the equipment and materials, (ii) the storage facilities for the raw materials and the Product, and (iii) all records relating
to manufacturing of the Product. Edge’s right to access, inspect and audit the SurModics’ facility and manufacturing
process shall be subject to the following limitations:

 

3.3.1       
Any information obtained by Edge or its duly authorized representatives through such inspections and audits shall
be treated as the Confidential Information of SurModics, provided that Edge shall be permitted to disclose such information to
third parties under an obligation of confidentiality and to regulatory authorities.

 

3.3.2       
Edge’s access, inspection and audit of the SurModics’ facility and manufacturing process shall be at
Edge’s expense.

 

3.3.3       
SurModics shall be permitted to take reasonable measures to restrict Edge’s access, inspection and audit of
the SurModics’ facility and manufacturing process in order to protect the confidentiality of the SurModics’ other clients
and their products and processes including observation of the required security procedures at all facilities.

 

3.3.4       
Edge shall provide SurModics a summary of the findings from each report prepared in connection with any such access,
inspections and audits.

 

3.3.5       
Edge may access, inspect and audit the SurModics’ facility and manufacturing process not more than once per
calendar year; provided, however, that if Edge’s access, inspection or audit reveals a breach by the SurModics of its obligations
hereunder, then Edge may return until the breach has been cured.

 

3.3.6       
Edge shall provide SurModics no less than thirty (30) days advance notice of any access, inspection or audit visit
to the SurModics’ facility and the audit length will be no more than three (3) full business days, subject to necessary extension
by mutual agreement of the parties and the exact audit dates will be determined by mutual agreement of the Parties.

 

3.4             
No Implied Licenses; Reservation of Rights.

 

3.4.1       
Only the licenses and rights expressly granted herein shall be of legal force and effect. No license or other right
shall be created hereunder by implication, estoppel or otherwise. Edge acknowledges that SurModics’ business involves the
application of the SurModics Technology to numerous drugs and other products and that SurModics retains the right (expressly subject
to SurModics’ obligations under this Agreement or under any other agreement between the Parties) to apply its technology
to drugs or products owned by SurModics or any third party and to make, use or sell drugs or products owned by SurModics or any
third party. For the avoidance of doubt, no license is conferred to Edge under the SurModics IP Rights, SurModics Research IP Rights
or SurModics’ rights under the Combination IP Rights to research, develop, make, have made, use, offer to sell, sell, have
sold, import, export or otherwise deal in or with any product, item, device or technology other than the Product in the Field,
and SurModics retains and reserves all rights that are not explicitly granted to Edge herein including the sole and exclusive right
to use and exploit SurModics IP Rights, SurModics Research IP Rights and SurModics’ rights under the Combination IP Rights
to research, develop, make, have made, use, offer to sell, sell, have sold, import, export or otherwise deal in any product, process,
item, device, machine or other apparatus that is not the Product.

 

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3.4.2       
Only licenses and rights expressly granted herein shall be of legal force and effect. No license or other right shall
be created hereunder by implication, estoppel or otherwise. SurModics acknowledges that Edge’s business involves the intracranial
delivery of other agent(s) or composition(s) through different depot formulation and that Edge retains the right (expressly subject
to Edge’s obligations under this Agreement or under any other agreement between the Parties) to apply its technology to different
depot formulations owned by any third party. For the avoidance of doubt, no license is conferred to SurModics under the Edge IP
Rights, Edge Research IP Rights or Edge’s rights under the Combination IP Rights to research, develop, make, have made, use,
offer to sell, sell, have sold, import, export or otherwise deal in or with any product, item, device or technology, and Edge retains
and reserves all rights that are not explicitly granted to SurModics herein including the sole and exclusive right to use and exploit
Edge IP Rights, Edge Research IP Rights and Edge’s rights under the Combination IP Rights to research, develop, make, have
made, use, offer to sell, sell, have sold, import, export or otherwise deal in any product, process, item, device, machine or other
apparatus that is not the Product without SurModics.

 

	4.	FINANCIAL TERM.

 

4.1             
Royalties.

 

4.1.1       
Within thirty (30) days following the First Commercial Sale of each Product and achievement of a Milestone (as defined
below), Edge shall give written notice to SurModics thereof.

 

4.1.2       
Edge shall owe SurModics the following non-refundable, non-creditable amounts set forth below upon satisfaction of
the applicable Milestone for each Product (on a Product-by-Product basis including combinations thereof with the exception of the
“Initial Milestone” and Edge shall pay SurModics the following non-refundable, non-creditable amounts as set
forth below. For each Product developed by Edge (all references to regulatory milestones are intended to mean with the United States
FDA or the first agency applied to in any jurisdiction) each a “Milestone.”

 

    	11

    	 

    

	Milestone 	Milestone

Payment

Amount
	Milestone Payment Due
	Upon execution of this Agreement “Initial Milestone”	** U.S. Dollars	The first ** paid within thirty days of execution of this Agreement, an additional ** within six months of execution of this Agreement (April 15, 2010) and the final ** no later than September 30, 2011.
	Upon dosing of first patient in the first Phase III Clinical Trial for a Product	** U.S. Dollars	Within ** of satisfaction of the Milestone
	Upon acceptance for review of the first application with the FDA (or foreign equivalent) for the purpose of obtaining regulatory approval to promote, market, distribute or sell a Product	** U.S. Dollars	Within ** of satisfaction of the Milestone
	Upon first approval from the FDA granting permission to promote, market, distribute or sell a Product in the United States	** U.S. Dollars	Within ** of satisfaction of the Milestone
	Upon first approval from a European regulatory agency granting permission to promote, market, distribute or sell a Product in Europe	** U.S. Dollars	Within ** of satisfaction of the Milestone
	Upon first approval from a Japanese regulatory agency granting permission to promote, market, distribute or sell a Product in Japan	** U.S. Dollars	Within ** of satisfaction of the Milestone
	Upon first achievement of worldwide Net Sales of Product in an amount equal or greater than ** U.S. Dollars in any calendar year	** U.S. Dollars	Within ** of satisfaction of the Milestone
	Upon first achievement of worldwide Net Sales of Product in an amount equal or greater than ** U.S. Dollars in any calendar year	** U.S. Dollars	Within ** of satisfaction of the Milestone
	Upon first achievement of worldwide Net Sales of Product in an amount equal or greater than ** U.S. Dollars in any calendar year	** U.S. Dollars	Within ** of satisfaction of the Milestone

    	12

    	 

    

 

4.1.3       
Earned Royalties. During the applicable Royalty Term, Edge shall pay to SurModics a royalty of ** of Net Sales
of each Product within forty-five (45) after the end of each calendar quarter following the First Commercial Sale of each Product
by Edge, its sublicensees or their respective Affiliates. For clarity sake, if Edge introduces more than one Product, Edge will
owe a royalty of ** of Net Sales on every Product regardless of which or if more than one of the compounds including combinations
thereof identified as Active Agent are commercialized utilizing SurModics IP Rights.

 

4.1.4       
Royalty Abatements. Edge shall be entitled to the following royalty reductions:

 

(a)               
Know-How Royalty. If, during any calendar quarter during the applicable Royalty Term there is no Valid Claim
in a country that covers the manufacture, use, offer for sale, sale or import of the Product then the applicable royalty rate in
such country shall be reduced by **.

 

(b)              
Directly Competing Product. In the event that a Directly Competing Product is sold by a third party in a particular
country and such Directly Competing Product attains in such country a market share of more than ** of aggregate gross dollar sales
of each Product in a calendar year then the applicable royalty rate in such country shall be reduced by **. For clarity, the royalty
rate payable to SurModics will not be reduced by more than ** and shall only be reduced with respect to the Product to which such
Directly Competing Product relates.

 

(c)               
Patent Infringement Claim. During the pendency of a Patent Infringement Claim in a particular country, the
applicable royalty rate in such country shall be reduced by **; provided, however, following an adjudication of the Patent Infringement
Claim (i) without a finding of infringement (final and non-appealable), the royalty rate shall return to the rate set forth in
Section 4.1.3 and Edge shall promptly pay SurModics the Royalty Credit associated with such Patent Infringement Claim, or (ii)
with a finding of infringement (final and non-appealable), the applicable royalty rate (as defined in Section 4.1.3) in such country
shall thereafter be further reduced by **.

 

(d)              
Maximum Royalty Reduction. For clarity, except as set forth in Section 4.1.4(c)(ii), during the applicable
Royalty Term, the royalty rate payable to SurModics will not be reduced by more than **.

 

4.1.5       
Sublicensing Revenue. In addition, in the event that Edge Sublicenses its rights under the SurModics IP Rights,
SurModics Research IP Rights, and SurModics rights under the Combination IP Rights to develop, use, offer for sale, sell, export
or import the Product for use in the Field to a third party, then Edge shall pay to SurModics ** of its Sublicensing Revenue. For
the avoidance of doubt, the Sublicensing Revenue shall be in addition to the royalties due and owing under Section 4.1.3
and Section 4.1.4 of this Agreement.

    	13

    	 

    

 

4.1.6       
If Edge, its sublicensees or their respective Affiliates sells the Product to a third party who also purchases other
products or services from Edge, its sublicensees or their respective Affiliates, and Edge, its sublicensees or their respective
Affiliates discounts the purchase price of each Product to a greater degree than it generally discounts the price of its other
products or services to such customer, then in such case the Net Sales for the sale of each Product to such third party shall equal
the arm’s length price that third parties would generally pay for each Product alone when not purchasing any other product
or service from Edge, its sublicensees or their respective Affiliates. For purposes of this provision “discounting”
includes establishing the list price at a lower-than-normal level.

 

4.2             
Royalty Reports.

 

4.2.1       
Within sixty (60) days after the end of each calendar quarter following the First Commercial Sale of each Product
by Edge, its sublicensees or their respective Affiliates, Edge shall furnish to SurModics a written report showing in reasonably
specific detail, on a country-by-country basis, (a) the gross sales of each Product sold by Edge, its sublicensees and their respective
Affiliates during such calendar quarter and the calculation of Net Sales from such gross sales; (b) the calculation of the royalties,
if any, which shall have accrued based upon such Net Sales; (c) the withholding taxes, if any, required by law to be deducted from
such royalties; and (d) the exchange rates, if any, used in determining the amount of United States dollars.

 

4.2.2       
With respect to sales of each Product invoiced in United States dollars, all such amounts shall be expressed in United
States dollars. With respect to sales of each Product invoiced in a currency other than United States dollars, all such amounts
shall be expressed both in the currency in which the sale is invoiced and in the United States dollar equivalent. The United States
dollar equivalent shall be calculated using the exchange rate (local currency per US$1) published in The Wall Street Journal,
United States Western Edition, under the heading “Currency Trading” on the last business day of the applicable calendar
quarter. All royalties payable hereunder shall be calculated based on Net Sales expressed in United States dollars.

 

4.2.3       
Edge shall keep complete and accurate records in sufficient detail to properly reflect all gross sales and Net Sales
and to enable the royalties payable to be determined.

 

4.2.4       
All royalties shown to have accrued by each royalty report provided under this Section 4.2 shall be payable
on the date such royalty report is due. Payment of royalties in whole or in part may be made in advance of such due date.

 

4.3             
Audits.

 

4.3.1       
Upon the written request of SurModics and not more than once in each calendar year, Edge shall permit an independent
certified public accounting firm of nationally recognized standing, selected by SurModics and reasonably acceptable to Edge, at
SurModics’ expense, to have access during normal business hours to such records of Edge as may be reasonably necessary to
verify the accuracy of the royalty reports hereunder for any year ending not more than thirty-six (36) months prior to the date
of such request. The accounting firm shall disclose to SurModics only whether the reports are correct or not and the specific details
concerning any discrepancies. No other information shall be shared.

 

    	14

    	 

    

4.3.2       
If such accounting firm concludes that additional royalties were owed during the audited period, Edge shall pay such
additional royalties within thirty (30) days of the date SurModics delivers to Edge such accounting firm’s written report
so concluding. The fees charged by such accounting firm shall be paid by SurModics; provided, however, if the audit discloses that
the royalties payable by Edge for such period are more than ** of the royalties actually paid for such period, then Edge shall
pay the reasonable fees and expenses charged by such accounting firm.

 

4.3.3       
SurModics shall treat all financial information subject to review under this Section 4.3 as confidential,
and shall cause its accounting firm to retain all such financial information in confidence.

 

4.4             
Withholding Taxes. Edge shall be entitled to deduct from the royalty payments otherwise due to SurModics hereunder
the amount of any withholding taxes, value-added taxes or other taxes, levies or charges with respect to such royalty payments
that are required to be withheld by Edge, to the extent Edge pays to the appropriate governmental authority on behalf of SurModics
such taxes, levies or charges. Edge shall use reasonable efforts to minimize any such taxes, levies or charges required to be withheld
on behalf of SurModics by Edge. Edge promptly shall deliver to SurModics proof of payment of all such taxes, levies and other charges,
together with copies of all communications from or with such governmental authority with respect thereto.

 

4.5             
Payment Method. All payments by Edge to SurModics hereunder shall be in United States Dollars in immediately
available funds and shall be made by wire transfer from a United States bank located in the United States to such bank account
as designated from time to time by SurModics to Edge.

 

4.6             
Interest. Edge additionally shall pay SurModics interest on all amounts due hereunder which are not paid on
or before the due date therefore, calculated at a rate equal to the lesser of **, or the maximum rate permitted by law, whichever
is lower, calculated on the number of days such payment is past due, compounded monthly.

 

	5.	DEVELOPMENT PROGRAM.

 

5.1             
Conduct. The Parties shall perform their respective obligations under the Development Agreement. Each Party
shall use its Commercially Reasonable Efforts to perform its obligations under the Development Agreement within the proposed time
schedules set forth therein. Any intellectual property rights (including any Know-How or Patent Rights) developed or conceived
by either Party shall be governed in accordance with the terms of the Development Agreement.

 

    	15

    	 

    

5.2             
Term. The Development Program shall terminate upon the completion of the activities described in the Development
Agreement, or such other date as the Parties mutually agree in writing.

 

5.3             
No Warranty. SurModics does not represent, warrant, or guarantee that the results or outcome of the Development
Program (or any portion thereof), or any products produced therefrom are merchantable or satisfactory for any particular purpose,
and there are no warranties, express or implied, to such effect. Edge bears the sole risk of acceptance, reliance on or use of
the results provided to Edge by SurModics under the Development Program.

 

5.4             
Other Active Agents. In the event the feasibility of using ** or ** (each, an “Other Active Agent”)
with the Formulation in the Field is demonstrated under a separate agreement between SurModics and Edge, then the meaning of the
term Active Agent shall be expanded to include such Other Active Agent (or both, as the case may be) (the “Active Agent
Option”). As long as Edge has an Active Agent Option, SurModics shall not sell, license, or grant rights to SurModics
IP Rights, SurModics Research IP Rights, and SurModics’ rights under the Combination IP Rights for use with the Other Active
Agents for use in the Field other than with Edge. The Active Agent Option shall be time limited for a ** period beginning with
the Effective Date of this Agreement. Edge may extend the Active Agent Option for an additional ** period subject to payment of
an extension fee of ** U.S. Dollars on or prior to the expiration of the initial ** period. The parties agree that each Product
incorporating an Other Active Agent (and each unique combination of Active Agents) shall be considered separate Products and shall
require payment of all the enumerated Milestones in Section 4 as the new Product meets the enumerated Milestones with the
exception of the Initial Milestone due upon execution of this Agreement and no credit will be given for previously paid Milestone
amounts. In addition, Edge shall owe the royalty pursuant to Section 4.1.3 and Sublicensing Revenue pursuant to Section
4.1.5 on each Product.

 

	6.	DEVELOPMENT AND COMMERCIALIZATION BY EDGE.

 

6.1             
Responsibility. Except as otherwise set forth in the Development Program and this Section 6.1, Edge
shall be solely responsible, at its sole cost, for conducting the development including Clinical Trials, regulatory approval and
commercialization of each Product, and shall own all regulatory applications, filings, approvals and licenses for each Product.

    	16

    	 

    

 

6.2             
Diligence.

 

6.2.1       
Edge shall use Commercially Reasonable Efforts to actively develop and obtain regulatory approvals to market each
Product in major markets throughout the world as expeditiously as possible, and following such approval, shall use Commercially
Reasonable Efforts to maximize Net Sales. Without limiting the generality of the foregoing, Edge shall use Commercially Reasonable
Efforts to achieve the following milestones within the applicable period commencing on the Effective Date:

 

	 	Period	 	Milestone
	 	**	 	**
	 	**	 	**

	 	**	 	**
	 	**	 	**
	 	**	 	**
	 	**	 	**

 

6.2.2       
The foregoing milestones are estimates only and shall not be interpreted as firm deadlines; provided, however, that,
unless the Parties otherwise mutually agree in writing, Edge’s failure to use Commercially Reasonable Efforts to achieve
the diligence obligations of this Section 6.2.1 shall constitute a material breach of this Agreement unless the delay is
solely attributable to SurModics.

 

6.3             
Development and Commercialization Reports. Edge shall keep complete and accurate records of its activities
conducted under this Agreement and the results thereof. Within thirty (30) days after the end of each calendar quarter until the
First Commercial Sale of each Product on a country-by-country basis, Edge shall prepare and provide SurModics with a reasonably
detailed written report of the activities conducted under this Agreement, and the results thereof, through such date of such report
to develop and obtain regulatory approvals to market each Product in major markets throughout the world.

 

6.4             
Regulatory Communications.

 

6.4.1       
If the FDA or the governing health authorities of any country initiates any oral communication with Edge directly
regarding the SurModics Technology and/or SurModics IP Rights, Edge shall have the right to respond to such communication to the
extent reasonably necessary or appropriate under the circumstances; provided, however, that (a) Edge shall use reasonable efforts
to limit the communications regarding the SurModics Technology and/or SurModics IP Rights that are conducted without the participation
of SurModics; (b) promptly thereafter, Edge shall provide SurModics with written notice thereof in reasonably specific detail describing
the communications regarding the SurModics Technology and/or SurModics IP Rights; and (c) Edge promptly shall provide SurModics
with copies of all minutes and other materials resulting therefrom directly regarding the SurModics Technology and/or SurModics
IP Rights.

 

6.4.2       
Edge promptly shall provide SurModics with copies of all written communications from the FDA or the governing health
authorities of any country directly regarding the SurModics Technology and/or SurModics IP Rights. With respect to any filing,
communication or other submission with the FDA or the governing health authorities of any country directly regarding the SurModics
Technology and/or SurModics IP Rights, (a) Edge shall provide SurModics with an advance copy of the reasonably complete draft thereof;
(b) SurModics shall have a reasonable opportunity (not to exceed ten (10) business days) to review, comment and consult on each
such draft, taking into consideration any response deadline; (c) the Parties shall discuss SurModics’ comments relating to
the SurModics Technology and/or SurModics IP Rights; and (d) Edge shall in good faith incorporate the reasonable comments of SurModics.

    	17

    	 

    

 

	7.	CONFIDENTIALITY.

 

7.1             
Confidentiality. During the term of this Agreement and for a period of seven (7) years following the expiration
or earlier termination hereof, each Party shall maintain in confidence the Confidential Information of the other Party, shall not
use or grant the use of the Confidential Information of the other Party except as expressly permitted hereby, and shall not disclose
the Confidential Information of the other Party except on a need-to-know basis to such Party’s Affiliates, directors, officers,
employees, sublicensees, and consultants, to the extent such disclosure is reasonably necessary in connection with such Party’s
activities as expressly authorized by this Agreement. To the extent that disclosure to any person is authorized by this Agreement,
prior to disclosure, a Party shall obtain written agreement of such person to hold in confidence and not disclose, use or grant
the use of the Confidential Information of the other Party except as expressly permitted under this Agreement. Each Party shall
notify the other Party promptly upon discovery of any unauthorized use or disclosure of the other Party’s Confidential Information.

 

7.2             
Terms of Agreement. Neither Party shall disclose any terms or conditions of this Agreement to any third party
without the prior consent of the other Party; provided, however, that a Party may disclose the terms or conditions of this Agreement,
(a) on a need-to-know basis to its legal and financial advisors to the extent such disclosure is reasonably necessary, and (b)
to a third party in connection with (i) an equity investment in such Party, (ii) a merger, consolidation or similar transaction
by such Party, or (iii) the sale of all or substantially all of the assets of such Party. Notwithstanding the foregoing, prior
to execution of this Agreement, the Parties have agreed upon the substance of information that can be used to describe the terms
and conditions of this transaction, and each Party may disclose such information, as modified by mutual written agreement of the
Parties, without the consent of the other Party.

 

7.3             
Permitted Disclosures. The confidentiality obligations under this Section 7 shall not apply to the
extent that a Party is required to disclose information by applicable law, regulation or order of a governmental agency or a court
of competent jurisdiction; provided, however, that such Party shall provide written notice thereof to the other Party, consult
with the other Party with respect to such disclosure and provide the other Party sufficient opportunity to object to any such disclosure
or to request confidential treatment thereof. In the event that confidential treatment or other remedy is not obtained, the receiving
Party shall furnish only that portion of the Confidential Information that is legally required to be furnished in the opinion of
the receiving Party’s counsel. Such disclosed information shall remain Confidential Information.

 

	8.	INDEMNIFICATION AND INSURANCE.

 

8.1             
By Edge. Edge shall indemnify and hold harmless SurModics, and its directors, officers, employees and agents,
from and against all losses, liabilities, damages and expenses, including reasonable attorneys’ fees and costs (collectively,
“Liabilities”), resulting from any claims, demands, actions or other proceedings brought or initiated by any
third party to the extent resulting from (a) the material breach of any representation, warranty or covenant by Edge under this
Agreement; or (b) the manufacture, use, sale, testing, handling or storage of each Product by or on behalf of Edge, its sublicensees
or their respective Affiliates, customers or end-users (including with respect to the infringement or misappropriation of intellectual
property rights of third parties) other than Liabilities arising from SurModics’ material breach of its obligations to Edge
or SurModics’ gross negligence or willful misconduct, or (c) the use of the Confidential Information of SurModics by Edge,
its sublicensees or their respective Affiliates in violation of this Agreement.

 

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8.2             
By SurModics. SurModics shall indemnify and hold harmless Edge, and its directors, officers, employees and
agents, from and against all Liabilities resulting from any claims, demands, actions or other proceedings brought or initiated
by any third party to the extent resulting from (a) the material breach of any representation, warranty or covenant by SurModics
under this Agreement; or (b) the use of the Confidential Information of Edge by SurModics, its sublicensees or their respective
Affiliates in violation of this Agreement.

 

8.3             
Procedure. If a Party (the “Indemnitee”) intends to claim indemnification under this Section
8, it shall promptly notify the other Party (the “Indemnitor”) in writing of any claim, demand, action or
other proceeding for which the Indemnitee intends to claim such indemnification, and the Indemnitor shall have the right to participate
in, and, to the extent the Indemnitor so desires, to assume the defense thereof with counsel mutually satisfactory to the Parties;
provided, however, that an Indemnitee shall have the right to retain its own counsel, with the fees and expenses to be paid by
the Indemnitor, if representation of such Indemnitee by the counsel retained by the Indemnitor would be inappropriate due to actual
or potential differing interests between the Indemnitee and any other Party represented by such counsel in such proceeding. The
obligations of this Section 8 shall not apply to amounts paid in settlement of any claim, demand, action or other proceeding
if such settlement is effected without the consent of the Indemnitor, which consent shall not be withheld or delayed unreasonably.
The failure to deliver written notice to the Indemnitor within a reasonable time after the commencement of any such action, if
prejudicial to its ability to defend such action, shall relieve the Indemnitor of any obligation to the Indemnitee under this Section
8, but the omission so to deliver written notice to the Indemnitor shall not relieve it of any obligation that it may have
to any Party claiming indemnification otherwise than under this Section 8. The Indemnitee, its employees and agents, shall
reasonably cooperate with the Indemnitor and its legal representatives in the investigation of any claim, demand, action or other
proceeding covered by this Section 8.

 

8.4             
Enforcement. At any time during the term of this Agreement, SurModics and Edge shall each promptly notify
the other in writing upon learning of any Infringing Product. As used herein, “Infringing Product” shall mean
any product sold by a third party that (a) is formulated as a biodegradable **; (b) contains the Active Agent; (c) infringes or
is alleged to infringe any of the SurModics IP Rights, SurModics Research IP Rights or the SurModics’ rights under the Combination
IP Rights licensed to Edge hereunder covering each Product.

 

8.4.1       
SurModics IP Rights. SurModics shall have the sole right, at its discretion and expense, to enforce the SurModics
IP Rights and any SurModics Research IP Rights against an Infringing Product to the extent such enforcement relates to the SurModics
Technology. Upon receipt of a written notice from Edge requesting that SurModics initiate legal proceedings against an Infringing
Product, SurModics agrees that it shall use its Commercially Reasonable Efforts to evaluate (a) whether it believes that such Infringing
Product infringes the SurModics IP Rights or the SurModics Research IP Rights, and (b) the merits of any and all appropriate legal
actions that may be brought against such third party to enforce the SurModics IP Rights or the SurModics Research IP Rights, taking
into consideration such factors as the likelihood of success on the merits of any such action, the likelihood that any such action
might impair or otherwise affect the scope of such rights, the likelihood that failure to initiate legal proceedings might impair
or otherwise negatively affect Edge’s ability to commercialize Product and other similar factors. In the event that SurModics
initiates an enforcement action, Edge shall assist SurModics in connection with any such action, upon request and at SurModics’
sole expense, and to the extent commercially reasonable; and in any event, SurModics shall keep Edge reasonably informed of the
progress of any such enforcement action. Any settlement or recovery shall be distributed in the following order: (i) to SurModics
for reimbursement of expenses related to such claim, including but not limited to attorneys’ fees and expenses associated
with the legal proceedings; and (ii) ** to Edge and ** to SurModics for damages related to the infringement, including lost profits.
SurModics shall not make any settlement or compromise that adversely affects the interests of Edge with respect to the Product
without the prior consent of Edge.

 

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Notwithstanding the
foregoing, in the event SurModics chooses not to initiate an enforcement action, Edge shall have the right but not the obligation
to initiate and prosecute such an action at its cost and expense provided, however that SurModics shall use its Commercially Reasonable
Efforts to cooperate with Edge, at Edge’s sole expense. The amount of any settlement or recovery obtained in such enforcement
action shall be retained by Edge, except that SurModics shall receive a portion equivalent to the royalties it would have received
in accordance with the terms of this Agreement as if such amount were Net Sales of Edge. Edge shall not make any settlement or
compromise that adversely affects the interests of SurModics without the prior consent of SurModics.

 

8.4.2       
Combination IP Rights. 

 

Edge shall have the
right, at its discretion and expense to enforce Combination IP Rights against an Infringing Product to the extent such enforcement
relates to the Product for use in the Field. If both Parties wish to participate in such action, the action shall be brought jointly
by both Parties and they will jointly select counsel and equally share any expenses. The Parties shall use their Commercially Reasonable
Efforts to cooperate with each other in connection with any such action to enforce Combination IP Rights.

 

Any settlement or recovery
shall be distributed in the following order: (i) to Edge (or pro rata to each Party if the Parties proceed jointly) for reimbursement
of expenses related to such claim, including but not limited to attorneys’ fees and expenses associated with the legal proceedings;
(ii) to Edge for any damages related to the license rights granted to it, including lost profits related to sales of Product in
the Field; provided, however, that any such amounts (after relevant adjustment to convert to Net Sales of Products) shall be subject
to the royalty obligations under this Agreement; and (iii) to the extent any settlement or recovery remains, to each Party equally.

 

No settlement, consent
judgment or other voluntary final disposition of a suit under this Section 8.4.2 may be undertaken without the prior consent of
the other Party if such settlement would require the other Party to be subject to an injunction or to make a monetary payment or
would otherwise adversely affect the other Party’s rights under this Agreement or the validity of the Combination IP Rights.

    	20

    	 

    

 

8.4.3SurModics
Costs. In any action brought by Edge pursuant to Section 8.4.1 (other than an action brought jointly by the Parties)
in which SurModics is named or becomes involuntarily involved (including, for example, as a result of a counterclaim by Edge, or
is required to respond to a subpoena), Edge shall indemnify and hold SurModics harmless from any damages, liabilities, costs or
expenses resulting from any such action, and in such event, SurModics may be represented by counsel, of its own choice, and Edge
shall promptly reimburse SurModics for its costs of retaining counsel.

 

8.5             
Insurance. Each Party shall maintain insurance, including product liability insurance, with respect to its
activities under this Agreement regarding each Product in such amount as such Party customarily maintains with respect to similar
activities for its other products, but not less than such amount as is reasonable and customary in the industry. Each Party shall
maintain such insurance for so long as it continues its activities under this Agreement, and thereafter for so long as such Party
customarily maintains insurance for itself covering similar activities for its other products.

 

	9.	TERM AND TERMINATION.

 

9.1             
Term. This Agreement shall commence on the Effective Date and, unless earlier terminated pursuant to this
Section 9, shall continue in effect until the expiration of Edge’s obligation to pay royalties hereunder.

 

9.2             
Termination for Breach. If a Party has materially breached this Agreement (other than a breach by Edge of
its obligations under Section 6.2 hereof), and such material breach shall continue for thirty (30) days after written notice
of such breach was provided to the breaching party by the nonbreaching party, the nonbreaching party shall have the right at its
option to terminate this Agreement effective at the end of such thirty (30) day period.

 

9.2.1       
If Edge has breached its obligations under Section 6.2 hereof, then, as its sole remedy for such breach, SurModics
shall have the right at its sole discretion either (a) to terminate this Agreement, or (b) to convert the license granted to Edge
to non-exclusive, in either case effective upon written notice to Edge.

 

9.3             
Termination by Edge. Edge may terminate this Agreement at any time upon ninety (90) days prior written notice
to SurModics.

 

9.4             
Effect of Expiration or Termination.

 

9.4.1       
Expiration or termination of this Agreement shall be without prejudice to any rights which shall have accrued to
the benefit of a Party prior to such expiration or termination. Without limiting the foregoing, Sections 7, 8,
9.4 and 10 hereof shall survive any expiration or termination of this Agreement.

 

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9.4.2       
Except as otherwise expressly set forth in this Agreement, promptly upon the expiration or earlier termination of
this Agreement, (a) Edge promptly shall prepare and provide SurModics with a final royalty report through the date of expiration
or termination, and shall pay to SurModics all royalties owing through such date, and (b) each Party shall return to the other
Party all tangible items regarding the Confidential Information of the other Party and all copies thereof; provided, however, that
each Party shall have the right to retain one (1) copy for its legal files for the sole purpose of determining its obligations
hereunder.

 

9.4.3       
Following termination of this Agreement, Edge may continue to sell the Product inventory for a wind-down period of
twelve (12) months subject to the required royalty payments, at which time any remaining Product shall be destroyed at Edge’s
expense.

 

	10.	MISCELLANEOUS.

 

10.1         
Governing Law. This Agreement shall be governed by, interpreted and construed in accordance with the laws
of the State of New Jersey, without regard to the conflicts of law principles thereof.

 

10.2         
Waiver. No waiver by a Party hereto of any breach or default of any of the covenants or agreements herein
set forth shall be deemed a waiver as to any subsequent and/or similar breach or default.

 

10.3         
Assignment. Neither this Agreement nor any right or obligation hereunder may be assigned or delegated, in
whole or Part, by either Party without the prior express written consent of the other; provided, however, that either Party may,
without the written consent of the other, assign this Agreement and its rights and delegate its obligations hereunder in connection
with the transfer or sale of all or substantially all of its business, or in the event of its merger, consolidation, change in
control or similar transaction. Any permitted assignee shall assume all obligations of its assignor under this Agreement. Any purported
assignment in violation of this Section 10.3 shall be void.

 

10.4         
Independent Contractors. The relationship of the Parties hereto is that of independent contractors. The Parties
hereto are not deemed to be agents, partners or joint venturers of the others for any purpose as a result of this Agreement or
the transactions contemplated thereby.

 

10.5         
Further Actions. Each Party shall execute, acknowledge and deliver such further documents and instruments
and to perform all such other acts as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.

 

10.6         
Amendment. No amendment or modification hereof shall be valid or binding upon the Parties unless made in writing
and signed by both Parties.

 

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10.7         
Notices. All requests and notices required or permitted to be given to the Parties hereto shall be given
in writing, shall expressly reference the section(s) of this Agreement to which they pertain, and shall be delivered to the other
Party, effective on receipt, at the appropriate address as set forth below or to such other addresses as may be designated in
writing by the Parties from time to time during the term of this Agreement.

 

	 	If to SurModics:	SurModics Pharmaceuticals Inc.

                           750 Lakeshore Parkway

                           Birmingham, Alabama 35211

                           U.S.A.

                           Attn: License Administration

	 	 	 
	 	with a copy to:	SurModics, Inc

        9924 West 74th Street

        Eden Prairie, Minnesota 55344

	 	 	U.S.A.

        Attention: General Counsel

	 	 	 
	 	If to Edge:	NJIT-EDC Biotechnology Incubator

        Edge Therapeutics, Inc.

        211 Warren Street

        Newark, New Jersey 07103

	 	 	Attn: Brian A. Leuthner, President &
CEO
	 	 	 
			
	 	With a copy to:	Fox Rothschild LLP

        2700 Kelly Road, Suite 300

        Warrington, PA 18976

        Attn: Loren D. Danzis

	 	 	 

 

10.8         
Force Majeure. Nonperformance of a Party (other than for the payment of money) shall be excused to the extent
that performance is rendered impossible by strike, fire, earthquake, flood, governmental acts or orders or restrictions, failure
of suppliers, or any other reason where failure to perform is beyond the reasonable control and not caused by the negligence, intentional
conduct or misconduct of the nonperforming Party; provided, however, that the nonperforming Party shall use Commercially Reasonable
Efforts to resume performance as soon as reasonably practicable.

 

10.9         
Bankruptcy; Intellectual Property. All rights and licenses granted under or pursuant to this Agreement by
a bankrupt Party to the other Party are, and shall be deemed to be, for purposes of Section 365(n) of the Bankruptcy Code and any
similar law or regulation in any other country, license of rights to “intellectual property” as defined under Section
101(35A) of the Bankruptcy Code. The Parties agree that all intellectual property rights licensed hereunder are part of the “intellectual
property” as defined under Section 101(35A) of the Bankruptcy Code subject to the protections afforded the non-terminating
Party under Section 365(n) of the Bankruptcy Code, and any similar law or regulation in any other country. Each Party shall be
entitled to all similar protections as licensee under bankruptcy laws of other countries.

 

10.10     
No Consequential Damages. IN NO EVENT SHALL A PARTY BE LIABLE FOR SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL
DAMAGES ARISING OUT OF THIS AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER, INCLUDING LOST PROFITS ARISING FROM OR RELATING
TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF SUCH DAMAGES, PROVIDED THAT THE FOREGOING LIMITATION ON LIABILITY
SHALL NOT APPLY TO THE LIABILITIES ARISING FROM EITHER PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. NOTHING IN THIS SECTION
10.10 IS INTENDED TO LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY UNDER SECTION 8 ABOVE
OR A PARTY’S RIGHT TO OBTAIN SUCH DAMAGES FOR A BREACH OF SECTION 7. A PARTY’S LIABILITY FOR THE SPECIAL, INCIDENTAL
OR CONSEQUENTIAL DAMAGES OF A THIRD PARTY SHALL CONSTITUTE THE DIRECT DAMAGES OF THE PARTY INCURRING THE LIABILITY.

 

    	23

    	 

    

10.11     
Complete Agreement. This Agreement constitutes the entire agreement between the Parties regarding the subject
matter hereof, and all prior representations, understandings and agreements regarding the subject matter hereof, either written
or oral, expressed or implied, are superseded and shall be and of no effect with the exception of the Development Agreement.

 

10.12     
Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original
and together shall be deemed to be one and the same agreement.

 

10.13     
Headings. The captions to the several sections hereof are not a part of this Agreement, but are included merely
for convenience of reference only and shall not affect its meaning or interpretation.

 

10.14     
Severability. Should one or several provisions of this Agreement be or become invalid, then the Parties shall
substitute such invalid provisions by valid ones, which in their economic effect come so close to the invalid provisions that it
can be reasonably assumed that the Parties would have contracted this Agreement also with those new provisions. In case such provisions
cannot be found, the invalidity of one or several provisions of this Agreement shall not affect the validity of the Agreement as
a whole, unless the invalid provisions are of such essential importance for this Agreement that it is to be reasonably assumed
that the Parties would not have contracted this Agreement without the invalid provisions.

 

    	24

    	 

    

IN WITNESS WHEREOF, the Parties hereto have
each caused this License Agreement to be executed by their duly-authorized representatives as of the Effective Date.

 

 

	 	SURMODICS PHARMACEUTICALS, INC.
	 
	 	 	 
	 	By:	/s/ Arthur Tipton

	 
	 	 	 	 
	 	Name:	Arthur Tipton	 
	 			 
	 	Title:	President	 
	 	 	 	 
	 	 	 	 
	 	EDGE THERAPEUTICS, INC.	 
	 	 	 	 
	 	By:	/s/ Brian A. Leuthner	 
	 	 	 	 
	 	Name:	Brian A. Leuthner	 
	 	 	 	 
	 	Title:	President & CEO	 

 

    	25

    	 

    

 

Appendix A

 

SurModics Patent Rights

 

**

 

**

 

**

 

**

 

**

 

**

 

**

 

**

 

**

 

**

 

AND ANY U.S. CONTINUATION(S), CONTINUATION(S) IN PART, OR
DIVISIONALS AND ANY FOREIGN COUNTERPART OF THE ABOVE.

 

SurModics Technology

 

Proprietary Know-How Owned or Controlled by SurModics relating
to:

 

**

 

    	

    	 

    

Appendix B

 

Edge’s Technology

 

Proprietary Know-How Owned or Controlled by Edge Therapeutics
Relating to:

 

**

 

Edge Patent Rights

 

**

 

Edge Trademark Rights

 

**Exhibit 10.7

 

Final Version

 

VL8 POOL INC.

 

As Company

 

-and-

 

GMR ATLAS LLC

 

As Participant

 

 

POOL AGREEMENT

 

 

Relating to “Genmar Atlas, to be renamed Gener8 Atlas”

 

 

INDEX

 

	
CLAUSE
    	
 
    	
PAGE
    
	
 
    	
 
    	
 
    	
 
    
	
1
    	
DEFINITIONS
    	
 
    	
1
    
	
2
    	
PURPOSE OF THE POOL –   SHARING OF REVENUES AND LIABILITIES
    	
 
    	
2
    
	
All Third Party   Charters shall, to the extent possible, be for the same period as the   Contract of Affreightment that is being covered
    	
 
    	
3
    
	
3
    	
PERIOD OF THE VESSEL’S   PARTICIPATION IN THE POOL
    	
 
    	
4
    
	
4
    	
POOL VESSEL TOTAL COSTS
    	
 
    	
4
    
	
5
    	
VESSEL’S TOTAL COSTS   UPON ENTRY
    	
 
    	
6
    
	
6
    	
TIME CHARTER PARTY
    	
 
    	
6
    
	
7
    	
COMMERCIAL MANAGEMENT   AGREEMENT/MANAGEMENT FEE
    	
 
    	
7
    
	
8
    	
DISTRIBUTION
    	
 
    	
8
    
	
9
    	
ACCOUNTING
    	
 
    	
9
    
	
10
    	
WORKING   CAPITAL CONTRIBUTION AND RETENTION
    	
 
    	
10
    
	
11
    	
POOL   COMMITTEE
    	
 
    	
11
    
	
12
    	
CALCULATION OF POOL NET REVENUE/LOSS; POOL GROSS REVENUE AND POOL EXPENSES
    	
 
    	
12
    
	
13
    	
INSURANCE
    	
 
    	
15
    
	
14
    	
ASSIGNMENT   OF EARNINGS
    	
 
    	
20
    
	
15
    	
WITHDRAWAL/TERMINATION
    	
 
    	
20
    
	
16
    	
NATURE   OF THE AGREEMENT
    	
 
    	
22
    
	
17
    	
CONFIDENTIALITY
    	
 
    	
23
    
	
18
    	
TOTAL   LOSS
    	
 
    	
23
    
	
19
    	
CHOICE   OF LAW AND JURISDICTION
    	
 
    	
24
    
	
20
    	
NOTICES
    	
 
    	
24
    
	
21
    	
ENTIRE   AGREEMENT
    	
 
    	
25
    
	
22
    	
RIGHTS   OF THIRD PARTIES
    	
 
    	
25
    
	
STANDARD   POOL TIME CHARTERAPPENDIX 3.2
    	
 
    	
29
    
	
[not applicable]
    	
 
    	
30
    

 

 

THIS POOL PARTICIPATION AGREEMENT is entered into on the 11 day of June 2015

 

BETWEEN

 

(1)                                 VL8 Pool Inc, a Marshall Island corporation having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960 (“the Company”) and

 

(2)                                 GMR Atlas LLC, a Marshall Island corporation having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands (“the Participant”)

 

WHEREAS

 

(A)                               The Participant is the owner or disponent owner of m.t.  “Genmar Atlas”, to be renamed “Gener8 Atlas” (“the Vessel”);

 

(B)                               The Company and the Participant have agreed that the Vessel should be entered into the pool defined below; and

 

(C)                               The Vessel will be entered into the Pool by way of a time charter party between the Company and the Participant.

 

IT IS HEREBY AGREED as follows:

 

1                                                DEFINITIONS

 

1.1                                      In this Agreement the following terms shall have the following meanings:

 

“Affiliate” :  in respect of any person, means a Subsidiary of that person or a Holding  Company of that person or any other Subsidiary of that Holding Company.

 

“Holding Company” :  in relation to any person, means any other person, company or corporation in respect of which it is a Subsidiary.

 

“Pool” :  the Pool of VLCC tankers operated by the Company.

 

 

“Pool Committee”  :  the committee described in Clause 11.

 

“Pool Participants” :  all entities having entered into Pool Participation Agreements with the Company.

 

“Pool Vessels” :  vessels entered and delivered into the Pool by Pool Participants.

 

“Quarter Date” :  each of 1st January, 1st April, 1st July and 1st October of any year.

 

“Sanctioned Person” :  any person, being an individual, corporation, company, association or government, who is listed as being subject to a sanction, regulation, official embargo or on any ‘Specially Designated Nationals List’ or ‘Blocked Persons’ lists’, or any equivalent lists maintained and imposed by the United Nations, European Union, Her Majesty’s Treasury in the United Kingdom or the United States Department of Treasury’s Office of Foreign Assets Control.

 

“Subsidiary” :  of a person means any other person:

 

(a)                          directly or indirectly controlled by such person; or

 

(b)                          of whose dividends or distributions on ordinary voting share capital such person is entitled to receive more than 50 per cent.

 

“Technical Committee” :  the committee described in Clause 4.

 

“Time Charter Party” :  the time charter party described in Clause 6.

 

“Third Party” :  a party which is neither a direct or indirect affiliate or subsidiary of or otherwise associated with the Participant.

 

2                                                PURPOSE OF THE POOL — SHARING OF REVENUES AND LIABILITIES

 

2.1                                      The main objective of the Pool is to enter into arrangements for the commercial employment and operation of the Pool Vessels, arranged by the Company, so as to secure for the Pool Participants the highest earnings per Pool Vessel on the basis of

 

2

 

pooling the  revenue of the Pool Vessels and dividing it between the Pool Participants on the terms hereof.

 

2.2                                      The Company shall in its own name (as disponent owner) enter into contracts for the employment of the Pool Vessels.  The Company shall have authority, as Time Charter Party owners, to negotiate and conclude spot charters, consecutive voyage charters, contracts of affreightment and time charters for performance by the Pool Vessels provided that the maximum possible period for such contracts shall not exceed seven (7) months.

 

2.3                                      All revenues earned from the operation of the Pool Vessels shall, after deduction of all costs involved in the operation of the Pool, be shared between the Pool Participants. The Company accordingly shall not participate in the financial result of the Pool’s activities but only serve as a vehicle for entering into contracts and for the marketing of the Pool.

 

2.4                                      The Pool shall operate as a profit unit, separately from any other activities of the Company.

 

2.5                                      The Company shall be entitled to enter into charters, as charterers, with third party owners or disponent owners (“Third Party Charters”), for the purpose of chartering in vessels from such third party owners or disponent owners (“Third Party Vessels”)  in order to perform any contract of affreightment time charter trips entered into by the Company pursuant to the provisions of clause 2.2 hereof (“Contracts of Affreightment”) and which cannot be performed (whether in whole or in part) by any of the existing Pool Vessels.

 

All Third Party Charters shall, to the extent possible, be for the same period as the Contract of Affreightment that is being covered.

 

3

 

3                                                PERIOD OF THE VESSEL’S PARTICIPATION IN THE POOL

 

3.1                                      The Vessel shall, subject to Clause 15 hereof, be placed at the disposal of the Company for a minimum period of twelve (12) months.

 

4                                                POOL VESSEL TOTAL COSTS

 

4.1                                      The Pool revenues shall be shared according to a distribution key based on the Pool’s total cost allocated to each Pool Vessel (“Total Costs”). The Total Costs allocated to the Vessel shall, as correctly as possible, reflect the relative operating costs of the Vessel compared with the other Pool Vessels.

 

4.2                                      The basis for the calculation of Total Costs is set out in Appendix 1. At the start of each year during January, the Company shall submit to the Pool Committee for its approval a proposal for the revised basis of calculations for the ensuing year commencing on 1 January (the “Annual Calculation Review”). Upon such approval by the Pool Committee, the Company will calculate or, as the case may be, recalculate Total Costs for each Pool Vessel in accordance with the revised principles of calculation which shall take effect for the whole calendar year from 1 January. The approved revised principles of calculation resulting from the Annual Calculation Review shall take effect as the new Appendix 1 to this Agreement with effect from 1 January of the relevant year, replacing the previous year’s version of Appendix 1.

 

4.3                                      The Vessel shall initially be allocated the Total Costs stated in 5.1 below (the “Initial Total Costs”). The Vessel’s performance shall be reviewed by the Technical Committee on the third Quarter Date occurring after the date the Vessel has entered into the Pool (the “Delivery Date”) or, in the event that there is insufficient data on such third Quarter Date, on the fourth Quarter Date occurring after the Delivery Date (the “Initial Performance Review”). The Initial Performance Review will be based on the actual speed and consumption data of the Vessel received since the Delivery Date and the Initial Total Costs will be revised to take into account the results of such review. The results of the Initial Performance Review shall be circulated to the Participant before, and apply on and from, the first Quarter Date falling after the Initial Performance

 

4

 

Review date. The new Total Costs determined from the Initial Performance Review shall apply:

 

(a)                          retrospectively from the Delivery Date up to (but not including) the third Quarter Date occurring after the Delivery Date as definitive performance-based Total Costs; and

 

(b)                          provisionally from the third Quarter Date occurring after the Delivery Date for the next three quarter periods until the results of the first Periodic Performance Review (as described in clause 4.4 below) are determined and circulated to the Participant. For the avoidance of doubt, the application of the results of the Initial Performance Review under this sub-paragraph (b) will involve a retrospective Total Costs adjustment to the first (or in some cases, the first two) of the above three quarter periods,

 

and the Participant’s entitlement to distributions for the above periods following the Initial Performance Review shall be adjusted accordingly. If this Agreement is terminated prior to the Initial Performance Review, the Vessel’s performance shall be reviewed by the Technical Committee based on the Vessel’s performance data received since the Delivery Date and the Initial Total Costs will be revised to take into account the results of such review (the “Termination Performance Review”). The new Total Costs, determined from the Termination Performance Review, shall apply retrospectively from the Delivery Date up to the date of termination of this Agreement as definitive performance-based Total Costs and the Participant’s entitlement to distributions for such period shall be adjusted accordingly.

 

4.4                                      Further on-going performance reviews of the Vessel based on the Vessel’s actual speed and consumption data shall be conducted on the fifth Quarter Date following the Delivery Date and on every second Quarter Date thereafter (each a “Periodical Performance Review”). Each Periodical Performance Review shall be based on the Vessel’s performance data from the previous twelve (12) months and following such review, the Vessel’s Total Costs shall be revised to take into account the results of such

 

5

 

review. The results of each Periodical Performance Review shall be circulated to the Participant before, and apply on and from, the first Quarter Date falling after such  Periodical Performance Review date. The new Vessel’s Total Costs determined from each Periodical Performance Review shall apply:

 

(a)                          retrospectively for the two quarter periods ending on (but not including) the relevant Periodical Performance Review date as definitive performance-based Total Costs; and

 

(b)                          provisionally for the next three quarter periods following such Periodical Performance Review date until the results of the next Periodic Performance Review are determined and circulated to the Participant. For the avoidance of doubt, the application of the results of such Periodical Performance Review under this sub-paragraph (b) will involve a retrospective Total Costs adjustment to the first of the above three quarter periods,

 

and the Participant’s entitlement to distributions for the above periods following each Periodical Performance Review shall be adjusted accordingly.

 

4.5                                      The Technical Committee shall consist of one member nominated by the Manager and one member elected by the Company every year.

 

5                                                VESSEL’S TOTAL COSTS UPON ENTRY

 

5.1                                      At the time that the Vessel enters into the Pool, the Total Costs that shall be allocated to the Vessel shall be US$ 24,758.

 

6                                                TIME CHARTER PARTY

 

6.1                                      The Participant/the Vessel shall at any and all times during the term of this Agreement comply with the conditions, terms and warranties expressed or implied in this Agreement and in the Time Charter Party which shall be deemed to be an integral part of this Agreement.  The terms of the main Pool Participation Agreement shall prevail if

 

6

 

a conflict should arise in the interpretation of the terms of the main Pool Participation Agreement and the terms of the Time Charter Party.

 

6.2                                      When a Participant enters a Vessel into the Pool where the Participant is the owner or the bareboat charterer of the Vessel then the time charter party between the Company and the Participant shall be in the form attached hereto at Appendix 3.1.

 

6.3                                      When a Participant enters a Vessel in the Pool where the Participant has the Vessel on time charter then the time charter party between the Company and the Participant shall be on back-to-back terms with the terms of the time charter between the Participant and the Vessel’s owners or disponent owners subject always to the cover page of Appendix 3.2.

 

6.4                                      The charter party entered into between the Company and the Participant, whether pursuant to clause 6.2 or clause 6.3 above, shall be the Time Charter Party.  In the event that the Time Charter Party departs from the standard time charter terms of the Pool (attached hereto as Appendix 3.1) and such variations, in the opinion of the Pool Committee, have an effect on the earning potential of the Vessel, then such difference shall be reflected in the Total Costs allocated to the Vessel.

 

6.5                                      Where the Participant is not the head owner of the Vessel, the Participant is obliged to notify the Company in advance and as soon as practicable of any planned change of Vessel ownership or technical management further up the charter chain for the Vessel. For the avoidance of doubt, any such change of Vessel ownership or technical management shall not affect any of the terms of this Agreement, including the Time Charter Party.

 

6.6                                      All time under the Time Charter Party shall be recorded in GMT.

 

7                                                COMMERCIAL MANAGEMENT AGREEMENT/MANAGEMENT FEE

 

7.1                                      The Company has entered into a Commercial Management Agreement with VL8 Management Inc. (“the Manager”).  The Commercial Management Agreement is

 

7

 

annexed hereto as Appendix 2.  The Company shall pay a management fee to the Manager (“the Management Fee”) in consideration of the services rendered by the  Manager under the Commercial Management Agreement and an administration fee to the Manager (“the Administration Fee”).

 

7.2                                      The Management Fee shall be a one point two five (1.25) percent commission on all income received under all contracts (voyage charters, consecutive voyage charters, contracts of affreightment and time charters) entered into for the account of the Company in relation to the Vessel (apart from the time charters which form part of the Pool Participation Agreement).  The commission shall be calculated by reference to and upon all hire, freight, deadfreight and demurrage collected on such transactions.

 

7.3                                      The Administration fee shall be three hundred and twenty five dollars ($325) per day during the term of this Agreement in relation to the Vessel and the Administration Fee shall be payable on a monthly basis in arrears at the end of the first week of each month.

 

8                                                DISTRIBUTION

 

8.1                                      The Company shall invoice and collect all hire, freight, demurrage and other revenues due as a result of the Pool activities.  The Company will, on behalf of the Pool, pay all expenses payable by it as the Charterer under the Time Charter Party and pay the Management Fee and Administration Fee.  The resulting Net Pool Revenue (as determined in accordance with Clause 12) shall be distributed as time charter hire to each Participant in accordance with the Total Costs of the individual Pool Vessels, adjusted for any off-hire, in accordance with the terms of this Agreement.

 

8.2                                      Distribution of time charter hire shall be made on a provisional basis, calculated on the basis outlined in Clause 12 hereof within the first week of each month. The provisional distribution to be based on the period up to the end of the previous month. The Participant’s entitlement to receive such provisional hire shall always be subject to the cash flow requirements of the Company.

 

8

 

8.3                                      The Company shall every quarter furnish the Participant with a provisional report on the financial result of the operation of the Pool for the preceding quarter and the Vessel’s earnings shall be adjusted taking into account the provisional monthly hire payments and the Vessel’s actual operating days in the Pool.

 

8.4                                      Further, the Company shall, not later than six (6) months after the end of its financial year (31 March) present to the Participant audited final accounts for the preceding financial year.

 

8.5                                      In the event that there is a breach by the Participant of its obligations under this Agreement (including the Time Charter Party), the Company has the right to set off an amount equal to the damages that the Company has incurred as a result of such breach against the distributions payable by the Company under clauses 8.1 and 8.2 or any working capital that is repayable by the Company under clause 10.

 

9                                                ACCOUNTING

 

9.1                                      The Manager shall keep such records and accounts as shall be necessary or appropriate for the proper operation of the Pool, including such accounts as shall be necessary for the calculation of distributions.

 

9.2                                      The Manager shall maintain systems of internal controls designed to provide reasonable assurance that transactions are properly executed sufficient to meet the requirements of an independent audit performed in accordance with International Auditing Standards.

 

9.3                                      The Manager shall no later than the 30th day following the end of each quarter, prepare and distribute to each Pool Participant unaudited accounts for the Pool (the “Pool Accounts”) and for each Pool Vessel for the period from 1 April to the end of the relevant quarter.  These quarterly, unaudited Pool Accounts shall include aggregate quarterly accounts with separate calculations made for each quarter.

 

9.4                                      The quarterly Pool Accounts must show:

 

9

 

(a)                          Net Pool Revenue and the total distributions made to Pool Participants to date;

 

(b)                          Time charter equivalent income for all voyages and charters performed by each Pool Vessel;

 

(c)                           The balance on the Company Bank Account and an appropriate reconciliation statement;

 

(d)                          Outstanding freight/demurrage due in respect of contracts performed by Pool Vessels;

 

(e)                           Off hire days for each Pool Vessel monthly and year to date;

 

9.5                                      The Pool Accounts will be maintained in United States Dollars

 

9.6                                      Messrs Moore Stephens or other major international accounting firm, on an annual basis, will audit the Pool’s books, including distributions.  Audited reports will be distributed to all Pool Participants.  All Pool records are available for review by each Pool Participant at the offices of the Manager.

 

9.7                                      At the request of the Participant the Company shall make available to an auditor nominated by the Participant all accounts and supporting documents required to verify the correct distribution of revenues to the Participant

 

10                                         WORKING CAPITAL CONTRIBUTION AND RETENTION

 

10.1                               The Participant shall, upon delivery of the Vessel under the Time Charter Party deposit in the Company’s account a working capital for the Vessel.  The working capital shall be determined by the Company and shall be $1,500,000, being the equivalent of the market value of forty-five (45) days of average bunker consumption for the Vessel together with the estimated costs and disbursements associated with three (3) port calls. Where there are bunkers on board the Vessel on delivery of the Vessel by the Participant to the Company, the value of the bunkers (based on last prices paid by the Participant on a first-in, first-out basis as evidenced by supporting invoices and bunker

 

10

 

delivery receipts) shall be set-off against the working capital to be paid by the Participant to the Company.

 

Such working capital shall be repaid to the Participant after the termination of the Vessel’s participation in the Pool.  An amount sufficient to cover possible reduced distribution to the Participant following adjustments of the provisional distribution of time charter hire shall nevertheless be withheld until final accounts are available. Where there are bunkers on board the Vessel on redelivery of the Vessel by the Company to the Participant, the value of the bunkers (based on last prices paid by the Company on a first-in, first-out basis as evidenced by supporting invoices and bunker delivery receipts) shall be set-off against the working capital to be repaid by the Company to the Participant.

 

10.2                               In the event that the cashflow position of the Company, as determined by the Manager and the Pool Committee, is insufficient to allow the Company to perform its commercial commitments, then the Pool Committee shall be entitled to recommend a further contribution to the working capital of the Company.  The Participant shall contribute such further contribution to the Company within ten (10) days of receipt of the Pool Committee’s written recommendation, which contribution shall be refunded as soon as the Company’s financial resources permit as determined by the Manager.

 

11                                         POOL COMMITTEE

 

11.1                               The Pool Committee shall consist of one (1) representative for each Pool Participant, two (2) representatives appointed by the Company and two (2) representatives of the Manager.  The two (2) representatives of the Manager shall not have the right to vote.

 

11.2                               Each voting Pool Participant shall have a number of votes corresponding to the number of Pool Vessels controlled by such Pool Participant.

 

11.3                               Members of the Pool Committee are elected for a one (1) year period.  If a member of the Pool Committee is a representative of a Pool Participant who no longer has a Pool 

 

11

 

Vessel in the Pool, such member shall automatically cease to be a member of the Pool Committee.

 

11.4                               The Pool Committee shall have the authority to make decisions in respect of the following matters as well as in respect of other matters put before by the Company:

 

(a)                          approval of the basis for the calculation of Total Costs;

 

(b)                          require further contributions to the working capital of the Company in accordance with Clause 10.2;

 

11.5                               The Pool Committee shall meet at least once a year.  The Pool Committee meeting can take place by teleconference as well as by physical meetings.  Representatives to the Pool Committee shall be entitled to participate through proxies.

 

11.6                               All decisions requiring the approval of the Pool Committee shall be taken on the basis of a simple majority of votes casted (excluding abstentions).

 

12                                         CALCULATION OF POOL NET REVENUE/LOSS; POOL GROSS REVENUE AND POOL EXPENSES

 

12.1                               The Net Pool Revenue shall be equal to the Gross Pool Revenue (as detailed in Clause 12.2) less the Pool Expenses (as detailed in Clause 12.3) and subject to the adjustments described in Clause 12.4.

 

12.2                               The Gross Pool Revenues consist of:

 

(a)                          each Pool Vessel’s total voyage income (including without limitation freight, deadfreight and demurrage);

 

(b)                          all freight, deadfreight, demurrage, charter hire or any other amount received for the Pool Vessels fixed on charters and any loss of hire insurance proceeds paid in respect of any of the Pool Vessels;

 

12

 

(c)                           all freight, deadfreight, demurrage, charter hire or any other amount received by the Company in respect of Third Party Vessels;

 

(d)                          currency exchange gains;

 

(e)                           interest earned on funds held in the Company’s bank accounts or otherwise arising from the commercial operation of the Pool Vessels;

 

(f)                            any damages or other amounts received in settlement of any claims relating to performance of any contracts of employment by Pool Vessels or vessels chartered in;

 

(g)                           any voyage expenses related rebates;

 

(h)                          any savings or rebates;

 

(i)                              Pool’s share of any salvage money.

 

12.3                               The Pool Expenses consist of:

 

(a)                          each Pool Vessel’s total voyage expenses, including, without limitation, agents, tugs, port expenses, wharfage, bunker, canal fees, voyage related COFR expenses, additional war risk premium etc;

 

(b)                          all freight, deadfreight, demurrage, charter hire or any other amount paid by the Company under or in respect of Third Party Charters;

 

(c)                           all commissions or brokerage payable in respect of all fixtures, charter parties and contracts of affreightment concluded on behalf of the Company;

 

(d)                          all legal fees and any other out of pocket expenses whatsoever incurred by the Pool, the Company and the Manager in connection with the commercial operation and management of the Pool;

 

13

 

(e)                           all fees, costs and expenses whatsoever incurred by the Pool and/or the Company, and/or by the Manager on behalf of the Pool and/or the Company, including, but not limited to, fees and expenses of independent consultants, professional advisors and representatives, supercargo, port captains, surveyors, superintendents or other specialists, whom the Manager may deem desirable to be employed from time to time in connection with the commercial operation of the Pool;

 

(f)                            any insurance premium payable by the Company in accordance with the provisions of Clause 13;

 

(g)                           all payments made by the Company pursuant to Clause 13.4 hereof;

 

(h)                          provisions for contingencies in respect of any amount in dispute and/or doubtful in recovery;

 

(i)                              any other expenses and charges whatsoever incurred by the Company and the Manager or in respect of any Pool Vessel or any chartered-in vessel for the Pool’s purposes directly and indirectly to the management, administration and operation of the Pool;

 

(j)                             external auditor’s fees for review of the Company Accounts as provided in his Agreement;

 

(k)                          remuneration payable to the Manager pursuant to Clause 7;

 

(l)                              currency exchange losses;

 

(m)                      interest and bank charges/commissions payable on the Company’s bank accounts.

 

12.4                               The Net Pool Revenues shall be adjusted by the Company to take account of, or make provisions for, the following:

 

14

 

(a)                          results of voyages in progress;

 

(b)                          amounts of voyage revenues earned by the Pool Vessels but not yet received;

 

(c)                           apportionment of prepaid expenses not included in the voyages expenses as detailed hereof and of expenses paid after the relevant accounting period and attributable in whole or in part to such accounting period;

 

(d)                          retention to cover claims in progress;

 

(e)                           adequate provisions for any outstanding or contingent liability or obligation that would be considered (when accrued) as a Pool Expense.

 

12.5                               Any and all taxes and dues on the vessel and on payments to the Participant under this Agreement are to be for the Participant’s account and settled directly by it, save for taxes and dues which are solely in the nature of voyage expenses.

 

12.6                               The Company shall not make any additional payments to the Participant under this Agreement in relation to communication, victualling and entertainment expenses, over and above the distributions payable under Clause 8.

 

13                                         INSURANCE

 

13.1                               The Participant shall maintain P&I cover for the Vessel insured in a manner acceptable to the Company.

 

13.2                               The Company will take out legal defence cover with a defence club acceptable to the Pool Committee.

 

13.3                               The Company shall take out P&I charterer’s liability insurance and such other insurances as it may from time to time consider to be appropriate.

 

13.4                               In the event that the Vessel is required to transit through areas within the Gulf of Aden or the Indian Ocean which are covered by the current Joint War Committee listings (together, the “IOR Risk Areas”) or the Vessel is required to call areas within the Gulf 

 

15

 

of Guinea in West Africa which are covered by the current Joint War Committee listings (the “WAF Risk Areas” and together with the IOR Risk Areas, the “Risk Areas”) the following provisions shall apply:

 

(a)                          subject to clause 13.4(j), all Pool Vessels transiting the Gulf of Aden will transit under the first available naval convoy. Vessels remain on hire during waiting time;

 

(b)                          subject to clause 13.4(j), in case the Participant requires the Vessel to transit the Gulf of Aden under a specific naval-led convoy, the Vessel will remain on-hire for a maximum of 24 hours waiting time.  Thereafter all waiting time to be off-hire and bunkers consumed during such time to be for Participants’ account;

 

(c)                           the Company will arrange for insurance cover for KnR (kidnap and ransom) on behalf of the Participant with a cap of USD 8 million for each transit undertaken by the Vessel through the IOR Risk Areas.  Any additional KnR cover required by the Participant shall be arranged by the Participant, at its cost;

 

(d)                          the Company will arrange for insurance cover for loss of hire on behalf of the Participant for each transit undertaken by the Vessel through the Risk Areas for a maximum ninety (90) day period at a daily rate equal to the average Pool return for the previous calendar month. Any additional loss of hire cover required by the Participant shall be arranged by the Participant, at its cost;

 

(e)                           crew bonuses are reimbursable and will be paid by the Company up to 100% of the crew’s basic wages, per transit for the full crew (including officers), in line with the IBF MOA/ ITF Agreements, for a period limited to the number of days of transit through the IBF High Risk Area and if applicable, the IBF Extended Risk Zone.  Any additional crew bonus paid ex-gratia by the Participant in respect of Risk Areas transits shall be for the Participant’s account;

 

(f)                            the Participant shall take out the Additional war risk cover for the Vessel, and provide necessary invoices and proof of payment to the Company for

 

16

 

reimbursement by the Company to the Participant. The Participant shall procure discounts from their war risk underwriters for the fact that kidnap and ransom and loss of hire insurance have been taken out separately and if applicable, to take into account the presence of armed or unarmed guards on board the Vessel and other Vessel hardening measures undertaken for the Risk Area transit;

 

(g)                           the Company shall reimburse the Participant towards all or part of the cost of various anti-piracy vessel hardening materials (being razor wire, personal protection equipment, anti-blast film and sandbags) to be acquired by the Participant and utilised on the Vessel during the Risk Area transit, up to a limit of US$3,500, subject to the Participant providing necessary invoices and proof of payment. Specifically in respect of razor wires and sandbags only which are subject to wear and tear (“Qualifying Hardening Materials”), the Company shall reimburse the replacement of such items up to the monetary limit advised above in the following circumstances and under the following conditions:

 

(i)                                     after one hundred and eighty (180) days following the last reimbursement of such Qualifying Hardening Materials (the “180 Day Period”) under this clause, in the event the Vessel has undertaken three or more transits through the Risk Area during such 180 Day Period; or

 

(ii)                                  prior to the Vessel undertaking a fourth transit through the Risk Area within a 180 Day Period; or

 

(iii)                               prior to the Vessel undertaking a transit through the Risk Area where more than 180 days has passed since a transit through the Risk Area was undertaken by the Vessel using the Qualifying Hardening Materials currently on board the Vessel.

 

In all the above cases the Company is not obliged to reimburse the cost of such Qualifying Hardening Materials where the Participant has tendered a withdrawal notice at that time under clause 15. The Participant is required to

 

17

 

notify the Company of its request for reimbursement under this paragraph reasonably in advance before a transit through the Risk Area.

 

(h)                          the Participant shall have the option of taking armed guards on the Vessel for Risk Area transits, subject to the conditions set out in clauses 13.4(i) and 13.4(j). If the Participant so wishes to take armed guards, the Company will arrange for the appointment of and pay for the cost of the armed guards on behalf of the Participant as long as such armed guards are ISO 28007 certified by one of the UKAS registered certifying bodies. In the case that the Participant insists on using  a different armed guards service from that of the Company’s preferred provider, then the Company agrees to reimburse the cost of the armed guards but such reimbursement shall be limited to the price that could have been obtained from using the Company’s preferred armed guards service provider and provided that such armed guards are ISO 28007 certified by one of the UKAS registered certifying bodies. The reimbursement of the cost of the Participant’s own armed guards is subject to the Participant providing the necessary invoices and proof of payment. The procurement of armed guards is subject to local laws and regulations and the availability of armed guard service providers in such areas;

 

(i)                              all waiting time and deviation for picking up and dropping off armed guards shall be for the account of the Company provided that the Company receives approval from the Participant for the use of the Company’s preferred armed guards service provider or confirmation of appointment of the Participant’s own choice of other armed guards service provider promptly and in a timely manner so as not to cause delay to the Vessel’s itinerary;

 

(j)                             the conditions for armed guards being taken on the Vessel for a Risk Area transit, are that:

 

18

 

(i)                                     if transiting the Gulf of Aden, the Vessel shall not wait for any naval convoy and shall proceed directly or transit with the first available MSCHOA grouped transit or naval convoy, whichever is earlier;

 

(ii)                                  the Vessel shall adopt a direct route through the Risk Areas, but always keeping a minimum distance of 300 nautical miles away from the East Somalian coast; and

 

(iii)                               it is agreed that no armed guards are required to be taken on board the vessel for any transits going from the southern tip of India to the Arabian Gulf (or vice versa) which hug the Western Indian, Pakistani and Gulf of Oman coastlines.

 

Any waiting time or deviation in contravention of the conditions for the taking of armed guards set out in this paragraph (j) shall be off-hire and for the Participant’s account;

 

(k)                          it is further agreed that the Participant / Vessel will follow and implement the latest edition of BMP when in or transiting the Risk Areas;

 

(l)                              other than as set out in the above paragraphs of this clause 13.4, the Company will not cover for any other security or additional insurance measures adopted by the Participants; and

 

(m)                      the above provisions of this clause 13.4 are based on the current situation in the Gulf of Aden, the Indian Ocean and the Gulf of Guinea, and this will be subject to review as and when the situation changes.

 

13.5                               If the Vessel is seized by pirates and the Vessel remains detained after ninety (90) days,  the Vessel shall be off-hired under this Agreement from the ninety-first (91st) day after the seizure and subject to clause 15.2, shall be put on-hire again once the Vessel is released and is made available to the Company in the same position as when the Vessel was seized.

 

19

 

13.6                               If additional war risk premium and crew bonus is paid out by the Participant in connection with an employment contract undertaken by the Vessel then subject to the other terms of this Agreement and the Time Charter Party, the Company will reimburse the Participant for the additional war risk premium and crew bonus at the next due pool distribution date, provided all relevant requirements in the Time Charter Party have been complied with and all relevant invoices and other requested documents have been submitted in good time by the Participant. However such reimbursement shall be done on the basis that the Company reserves its rights to reverse the reimbursement should the costs of the additional war risk premium and crew bonus be disputed and/or rejected by the sub-charterers under the relevant employment contract pursuant to which such costs were incurred.

 

13.7                               Should any dispute arise as to the quality of the bunkers supplied under the Time Charter Party (such to be time-barred unless notified by the Participant to the Company within 15 days of supply) then the Participant and the Company are to agree to a joint re-analysis of a representative sample, which has been witnessed and signed by the bunkering ship or barge representative, at a laboratory acceptable to the Participant and the Company. The sample for testing shall be the sample which has its seal number endorsed on the Bunker Delivery Receipt. The result of this analysis will be final and binding on all parties. The Participant will arrange to have the delivered fuel tested by an internationally recognized fuel testing laboratory such as DNV or similar.

 

14                                         ASSIGNMENT OF EARNINGS

 

14.1                               The earnings of the Pool may not be assigned by the Participant. The Participant may only assign the earnings distributed by the Pool pertaining to the Vessel.

 

15                                         WITHDRAWAL/TERMINATION

 

15.1                               The Vessel shall remain in the Pool for a minimum period of twelve (12) months from the date of delivery under the Time Charter Party subject only to the terms of this Clause.  The Participant and the Company shall be entitled to withdraw the Vessel

 

20

 

from the Pool and terminate this Agreement by giving ninety (90) days’ notice, plus or minus thirty (30) days in the Company’s option, in writing to the other at any time after the expiry of the initial nine (9) month period that the Vessel is in the Pool provided always that the Participant shall not be entitled to withdraw the Vessel from the Pool and terminate this Agreement until any contract entered into by the Company in respect of the Vessel (other than the Time Charter Party) has been fulfilled.  In such circumstances the termination notice shall take effect as expiring upon fulfilment of such contractual obligations.

 

15.2                               The Company may terminate this Agreement and the Vessel’s participation in the Pool with immediate effect by notice in writing to the Participant if any one of the following situations has arisen:

 

(a)                          the Vessel has been off-hire for periods totalling more than thirty (30) days over the last six (6) months;

 

(b)                          the Vessel’s or Participant’s performance of its tasks under the contract for which it has been used or its application or non-application of standard industry practices is, in the reasonable opinion of the Company, below the standard required (i) to maintain the reputation of the Pool/Company or (ii) to enable the Company to perform the contractual obligations towards the customers of the Pool/Company and to do so in an adequate and economic manner;

 

(c)                           the Vessel is, in the reasonable opinion of the Company, commercially untradeable to a significant proportion of the oil major company customers of the Pool/Company for any reason;

 

(d)                          the Participant is in breach with respect to its obligations under this Agreement (including the terms of the Time Charter Party) and the breach is of a nature which, in the reasonable opinion of the Company, warrants a cancellation of this Agreement;

 

21

 

(e)                           the Participant is insolvent and/or is subject to debt negotiations, bankruptcy and/or similar proceedings and/or is unable to or admits its inability to pay its debts as they fall due;

 

(f)                            except where clause 13.4 applies, the Vessel is captured, arrested, detained or confiscated and the Participant has not, within a period of fifteen (15) days in receipt of notification in writing from the Company thereof, remedied such situation;

 

(g)                           if the Participant or any of its Affiliates becomes a Sanctioned Person during the course of this Agreement; and

 

(h)                          if the Vessel is no longer controlled (whether by way of ownership or charter) by the Participant.

 

15.3                               Any termination of this Agreement and withdrawal of the Vessel from the Time Charter Party shall be without prejudice to any and all rights and obligations of the parties hereto attributable to such termination or withdrawal or to any event, circumstance or period, prior to the effective date of such termination or withdrawal or to any rights and obligations which survive such termination or withdrawal in accordance with this Agreement.

 

16                                         NATURE OF THE AGREEMENT

 

16.1                               This Agreement shall not constitute or give rise to any partnership between the Participant and the Company or other Pool Participants.   The Participant shall under no circumstances be responsible for the debt of any other Pool Participant nor (except as specifically provided for in this Agreement) for the debt of the Company.

 

16.2                               The Participant shall have no rights in respect of goodwill or other tangible or intangible assets of the Company apart from what is specifically stipulated in this Agreement.

 

22

 

17                                         CONFIDENTIALITY

 

17.1                               This Agreement including all terms, details, conditions, and period is to be kept private and confidential and beyond the reach of any third party, with the exception of the lending banks of the Participant or the Participant’s agents.  The terms and conditions of this Agreement are for the sole use of the parties to this Agreement and are not to be copied or used for any other purpose without the express written consent of the Pool.

 

18                                         TOTAL LOSS

 

18.1                               In the event of a total loss or constructive total loss of the Vessel, the Vessel’s participation in the Pool shall be deemed to be terminated at noon on the day of her loss or, should the Vessel be missing, at noon on the day on which she was last heard of.

 

19                                         CHOICE OF LAW AND JURISDICTION

 

19.1                               This Agreement is governed by and shall be interpreted in accordance with English law.

 

19.2                               All disputes arising under or in connection with this Agreement shall be referred to arbitration in London.  The arbitration shall be conducted in accordance with one of the following London Maritime Arbitrators’ Association (“LMAA”) Rules:

 

(a)                          where the amount claimed by the claimants is less than United States Dollars Fifty thousand (US$50,000), excluding interest, the reference shall be to a sole arbitrator and the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure;

 

(b)                          in any case where the LMAA procedures referred to above do not apply, the reference shall be to three arbitrators (one to be appointed by each of the parties and the third by the arbitrators so chosen) in accordance with the LMAA terms in force at the relevant time.

 

19.3                               In respect of clause 19.2(b), if either of the appointed arbitrators refuses to act or is incapable of acting, the party who appointed him shall appoint a new arbitrator in his

 

23

 

place. If one party fails to appoint an arbitrator, whether originally or by substitution for two weeks after the other party, having appointed his arbitrator, has (by email, fax or letter) called upon the defaulting party to make the appointment, the President for the time being of the London Maritime Arbitrators’ Association shall, upon application of the other party, appoint an arbitrator on behalf of the defaulting party and that arbitrator shall have the like powers to act in the reference and make an award (and, if the case so requires, the like duty in relation to the appointment of a third arbitrator) as if he had appointed in accordance with the terms of this Agreement.

 

20                                         NOTICES

 

20.1                               Notices or other communications under or with respect to this Agreement shall be in writing and shall be delivered personally or shall be sent by mail, telefax or email to the parties at their respective addresses set forth below or to such other address as to which notice is given:

 

To the Participant:

GMR Atlas LLC

Trust Company Complex, Ajeltake Road,

Ajeltake Island, Majuro, Marshall Islands

Attn to: Sean Bradley

Telefax: +1 212 763 5603

Email: chartering@gener8mgmt.com

 

To the Company:

 

VL8 Pool Inc.

Trust Company Complex, Ajeltake Road,

Ajeltake Island, Majuro, Marshall Islands MH 96960

Attn to: Jason Klopfer

Telefax: +44 (0)20 7467 5867

Email: notices@navig8group.com

 

Pool withdrawal notices should also be emailed to: ops@navig8group.com

 

Notice shall be deemed given upon sending except for notice by mail which shall be deemed given upon receipt.

 

24

 

21                                         ENTIRE AGREEMENT

 

21.1                               This Agreement constitutes the entire agreement and understanding of the parties and supersedes any previous agreement between the parties relating to the subject matter of this Agreement.  Each of the parties acknowledges and agrees that in entering into this Agreement it does not rely on any pre-contractual representation and/or statement whether in writing or in words.

 

21.2                               This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such separate counterparts shall together constitute one and the same instrument.

 

22                                         RIGHTS OF THIRD PARTIES

 

22.1                               Save as expressly provided in this Agreement, no terms of this Agreement shall be enforceable by a third party, being any person other than the parties hereto and their permitted successors and assignees.  The provisions of the Contracts (Rights of Third Parties) Act 1999 shall accordingly not apply to this Agreement.

 

25

 

IN WITNESS the Parties hereto have executed this Agreement the day and year first above written.

 

 

	
SIGNED by
    	
)
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
on behalf of GMR ATLAS   LLC
    	
)
    	
/s/ Dean Scaglione
    	
 
    	
Dean Scaglione
    
	
 
    	
 
    	
 
    	
 
    	
Manager
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SIGNED by
    	
)
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
on behalf of VL8 POOL   INC
    	
)
    	
/s/ Daniel Chu
    	
 
    	
Daniel Chu
    
	
 
    	
 
    	
 
    	
 
    	
Director
    

 

26

 

APPENDIX 1

 

POOL VESSEL EVALUATION SYSTEM

 

27

 

VL8 Pool — Vessel Evaluation Process - 2015

 

APPENDIX 1: VL8 POOL - VESSEL EVALUATION SYSTEM [VES] 2015

 

The evaluation of vessels entering the VL8 Pool consists of 3 parts:

 

The 1st part uses the vessels’ speed and consumption figures in order to calculate their Daily Bunker Cost basis the Pool’s weighting of the time a vessel spends in Ballast / Laden / Load / Discharge / Idle conditions.

 

The Daily HFO and MGO Consumptions for each vessel are calculated for the respective conditions basis:

 

1.              The individual weightings of the operating conditions of the vessels, which are:

 

	
Ballast
    	
 
    	
Laden
    	
 
    	
Load
    	
 
    	
Discharge
    	
 
    	
Idle
    	
 
    
	
20
    	
%
    	
50
    	
%
    	
5
    	
%
    	
5
    	
%
    	
20
    	
%
    

 

2.             A Pool Reference Speed of 10.00kn in Ballast and 13.00kn in Laden, which will provide for the distance that each vessel will be evaluated on over a 24hr period.

 

Basis the above figures, the vessels will be evaluated on 240 nm in Ballast and 312 nm in Laden condition.

 

3.             Bunker Prices of $480 per mt for HFO and $735 per mt for MGO

 

·                 Bunker Prices will be determined basis the average of the bunker prices for the ports of Rotterdam and Singapore as published by Platts.

·                 The average bunker price for the IFO380 fuel type will also be adjusted basis the SECA area percentage of MGO usage.

·                 On a provisional basis, the Bunker Prices for each port will be based on the average of the last 6 months of spot prices and 6 months of forward prices.

·                 The provisional Bunker Prices will be reviewed every 6 months just prior to 1st January and 1st July of each year and will be applicable for the following 6 month period. The 1st July provisional Bunker Prices will be informed to all Pool Participants.

·                 In addition, at the end of each 6 month period, the Pool will finalise the Bunker Prices for that period by inputting the actual average spot bunker prices for Singapore and Rotterdam during that period into the above calculation method. Each Vessel’s Total Cost for that prior 6 month period will therefore be adjusted retrospectively.

·                 The calculation method for the provisional Bunker Prices for the 1st Half of 2015 is as follows:

 

	
 
    	
 
    	
Singapore
    	
 
    	
Rotterdam
    	
 
    
	
Period
    	
 
    	
IFO380
    	
 
    	
MGO
    	
 
    	
IFO380
    	
 
    	
MGO
    	
 
    
	
6M Spot
    	
 
    	
562
    	
 
    	
844
    	
 
    	
530
    	
 
    	
802
    	
 
    
	
6M Fwd
    	
 
    	
401
    	
 
    	
643
    	
 
    	
373
    	
 
    	
649
    	
 
    
	
Average
    	
 
    	
482
    	
 
    	
743
    	
 
    	
452
    	
 
    	
725
    	
 
    

 

	
VL8 POOL
    	
IFO380*
    	
MGO
    
	
SECA*
    	
5%
    	
480
    	
735
    
				

 

Period from Jun14 to Nov14

Period from Dec14 to May15

 

 

1

 

4.              The Total Daily Cost for each vessel will be calculated basis the below formula:

 

Bunker Consumptions for Ballast/Laden:

Distance / Vessel’s Speed / 24 x Vessel’s Consumption x Bunker Prices x Weighting

 

PLUS

 

Bunker Consumptions for Load / Discharge / Idle:

Vessel’s Consumption x Bunker Prices x Weighting

 

The 2nd part of the evaluation takes into account the Rewards and Penalties’ Adjustments applied to each of the vessels based on their individual Physical and Trading characteristics.

 

By using the percentages as they are set out in the Penalties/Rewards Table, we calculate the TCE Adjustments that apply to each vessel on a USD$ per day basis each month’s Average Pool’s Daily TCE.

 

The 3rd part uses the vessel’s Daily Bunker Cost and TCE Adjustments to calculate the Total Cost of each vessel.

 

1.              The Total Cost of each vessel is equal to the Daily Bunker Cost minus the TCE Adjustments.

 

2.              Each of the pool vessels’ Total Cost is compared against the Pool’s Average Cost.

 

3.              The Pool’s Average Cost is the weighted average of all the participating pool vessels’ Total Cost basis the Trading Days each vessel has during the month.

 

Any references to “Pool Earning Points” or “Initial Pool Points” in the Pool Agreement shall be interpreted as references to the Vessel’s Total Cost or where applicable, the Vessel’s provisional Total Cost.

 

2

 

REVENUE ALLOCATION FORMULA

 

The formula used for Allocating Revenues in the Pool Distribution Module is as follows:

 

Pool’s Average Cost – Vessel’s Total Cost = Vessel’s Margin

Vessel’s Margin + Pool’s Average TCE = Vessel’s Distributable Income ($/Day)

The following table shows an example of a monthly distribution:

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
(3)
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
TRADING DAYS
    	
 
    	
NET INCOME
    	
 
    	
TCE $/DAY
    	
 
    	
DISTR. TCE $/DAY
    	
 
    
	
VESSEL
    	
 
    	
VSL MARGIN
    	
 
    	
155.00
    	
 
    	
$3,100,000
    	
 
    	
20,000 (*)
    	
 
    	
$20,000
    	
 
    
	
Vessel #1
    	
 
    	
-500.00
    	
 
    	
31.00
    	
 
    	
$
    	
573,500
    	
 
    	
$
    	
18,500
    	
 
    	
$
    	
19,500
    	
 
    
	
Vessel #2
    	
 
    	
0.00
    	
 
    	
31.00
    	
 
    	
$
    	
612,250
    	
 
    	
$
    	
19,750
    	
 
    	
$
    	
20,000
    	
 
    
	
Vessel #3
    	
 
    	
500.00
    	
 
    	
31.00
    	
 
    	
$
    	
635,500
    	
 
    	
$
    	
20,500
    	
 
    	
$
    	
20,500
    	
 
    
	
Vessel #4
    	
 
    	
800.00
    	
 
    	
31.00
    	
 
    	
$
    	
612,250
    	
 
    	
$
    	
19,750
    	
 
    	
$
    	
20,800
    	
 
    
	
Vessel #5
    	
 
    	
-800.00
    	
 
    	
31.00
    	
 
    	
$
    	
666,500
    	
 
    	
$
    	
21,500
    	
 
    	
$
    	
19,200
    	
 
    

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
(2)
    	
 
    
	
VESSEL
    	
 
    	
DAILY COST
    	
 
    	
TTL ADJ. (%)
    	
 
    	
TTL ADJ. ($)
    	
 
    	
TOTAL COST
    	
 
    	
VSL MARGIN
    	
 
    
	
Vessel #1
    	
 
    	
13,500.00
    	
 
    	
2.50
    	
%
    	
500.00
    	
 
    	
13,000.00
    	
 
    	
-500.00
    	
 
    
	
Vessel #2
    	
 
    	
12,500.00
    	
 
    	
0.00
    	
%
    	
0.00
    	
 
    	
12,500.00
    	
 
    	
0.00
    	
 
    
	
Vessel #3
    	
 
    	
13,000.00
    	
 
    	
5.00
    	
%
    	
1,000.00
    	
 
    	
12,000.00
    	
 
    	
500.00
    	
 
    
	
Vessel #4
    	
 
    	
12,000.00
    	
 
    	
1.50
    	
%
    	
300.00
    	
 
    	
11,700.00
    	
 
    	
800.00
    	
 
    
	
Vessel #5
    	
 
    	
13,000.00
    	
 
    	
-1.50
    	
%
    	
-300.00
    	
 
    	
13,300.00
    	
 
    	
-800.00
    	
 
    

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
(1)
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
POOL AVG. TOTAL COST
    	
 
    	
12,500.00
    	
 
    	
 
    	
 
    

 

(1) Pool Avg. Total Cost = Weighted average of Vessel’s Total Cost and Trading Days

(2) VSL Margin = Pool’s Average Cost – Vessel’s Total Cost

(3) Vessel’s Distr. TCE ($/Day) = VSL Margin + Pool’s Average TCE (*)

 

PENALTIES/REWARDS TABLE

 

	
TRADING   AREAS
    	
 
    	
 
    	
 
    
	
WWIDE WITHIN   IWL/ITF AND USUAL EXCLUSIONS
    	
 
    	
0.0
    	
%
    
	
 
    	
 
    	
 
    	
 
    
	
OIL   MAJOR APPROVALS
    	
 
    	
 
    	
 
    
	
2 OR MORE OIL   MAJOR APPROVALS
    	
 
    	
0.0
    	
%
    
	
BELOW 2   APPROVALS
    	
 
    	
-15.0
    	
%
    
	
 
    	
 
    	
 
    	
 
    
	
AGE
    	
 
    	
 
    	
 
    
	
BELOW 15 YEARS OF   AGE
    	
 
    	
0.0
    	
%
    
	
OVER 15 YEARS OF   AGE
    	
 
    	
-15.0
    	
%
    

 

In order to convert the above percentages into monetary value, they should be multiplied with the Pool’s Average TCE $/Day for the relevant month.

 

3

 

POOL PERFORMANCE REVIEWS PARAMETERS

 

In order to determine the eligible data for carrying out the Performance Reviews of the vessels as described in clauses 4.3 and 4.4 in the Pool Agreement the following parameters will apply:

 

·                  Up to and including Beaufort Scale 5 (As provided by FleetWeather)

·                  Up to and including Douglas Sea Scale 5 (As provided by FleetWeather)

·                  Ocean Currents (As provided by FleetWeather)

·                  Between 0.5 knots against the vessel (-0.5) and 0.5 knots in favour of the vessel (+0.5)

·                  Minimum length of a qualifying passage to be 48 hours

·                  Minimum amount of qualifying data from any qualifying passage to be 24 hours

·                  Instructed Speed Ranges of:

 

	
 
    	
 
    	
Ballast (kts)
    	
 
    	
Laden (kts)
    	
 
    
	
VL8 Pool
    	
 
    	
10.00
    	
 
    	
13.00
    	
 
    	
12.00
    	
 
    	
13.50
    	
 
    
										

 

Note: The Instructed Speed Ranges will be reviewed on an annual basis to reflect market conditions

 

In addition, performance days under the following conditions will be excluded from the eligible data:

 

·                  Manoeuvring operations

 

·                  Following Convoys

 

·                  Timed Arrivals

 

·                  Search & Rescue operations

 

Definitions

 

·                  Ocean Currents

 

·                  FleetWeather obtains our ocean current data from a high resolution, declassified ocean current model called HYCOM (https://hycom.org). Although we take into consideration any ocean current reports from the Master, the ‘Current Factor’ information within the performance reports is derived from complex trigonometric algorithms that incorporate the course of the vessel and the impact angles of the ocean currents over a given segment distance (noon report to noon report for example). The ‘Current Factor’ will either have a positive or negative effect on the performance speed of the ship.

 

4

 

APPENDIX 2

 

COMMERCIAL MANAGEMENT AGREEMENT

 

28

 

APPENDIX 2

 

VL8 MANAGEMENT INC,

as The Manager

 

and

 

VL8 POOL INC.

as The Company

 

 

COMMERCIAL MANAGEMENT AGREEMENT

 

 

 

CONTENTS

 

	
CLAUSE 
    	
 
    	
PAGE
    
	
 
    	
 
    	
 
    
	
1.
    	
DEFINITIONS
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
2.
    	
APPOINTMENT
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
3.
    	
BASIS OF AGREEMENT
    	
 
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
4.
    	
COMMERCIAL MANAGEMENT
    	
 
    	
2
    
	
 
    	
 
    	
 
    	
 
    
	
5.
    	
COMMISSION
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    
	
6.
    	
ACCOUNTS
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    
	
7.
    	
COMPANY’S UNDERTAKINGS
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    
	
8.
    	
LIABILITY
    	
 
    	
4
    
	
 
    	
 
    	
 
    	
 
    
	
9.
    	
TERMINATION
    	
 
    	
5
    
	
 
    	
 
    	
 
    	
 
    
	
10.
    	
GENERAL
    	
 
    	
6
    
	
 
    	
 
    	
 
    	
 
    
	
11.
    	
CONFIDENTIALITY
    	
 
    	
6
    
	
 
    	
 
    	
 
    	
 
    
	
12.
    	
NOTICES
    	
 
    	
6
    
	
 
    	
 
    	
 
    	
 
    
	
13.
    	
LAW AND JURISDICTION
    	
 
    	
7
    

 

 

THIS AGREEMENT is dated 1 September 2010 and is made between:

 

(1)                                 VL8 MANAGEMENT INC. with its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH 96960 (“the Manager”); and

 

(2)                                 VL8 POOL INC. with its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH 96960 (“the Company”),

 

(each a “Party” and, together, the “Parties”).

 

WHEREAS

 

(A)                               The Company operates a pool of tankers (the “Pool”); and

 

(B)                               The Company does not itself have the personnel required to perform the various tasks involved in the operation of the Pool; and

 

(C)                               The Manager has the necessary personnel and other resources to undertake the management of the commercial affairs of the Pool, including preparing accounts for the Pool and the Company, and the Company wishes to appoint the Manager as the commercial manager of the Vessels in accordance with the terms of this Agreement.

 

THEREFORE IT IS AGREED AS FOLLOWS

 

1                                         DEFINITIONS

 

In this Agreement

 

“Affiliate” means any entity that directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with a Party, “control” being at least 50% (fifty percent) ownership.

 

“Business Day” means days on which banks are open for business and not authorised to close in Singapore, London, New York and Muscat.

 

“Management Services” means the services provided by the Manager to the Company pursuant to Clause 4.1 of this Agreement.

 

“Vessels” means any vessels operated by the Company on a chartered in and/or chartered out basis, and/or, all of which are subject to this Agreement and “Vessel” means any of them.

 

2                                         APPOINTMENT

 

2.1                               With effect from the date hereof and continuing unless and until terminated as provided herein, the Company hereby appoints the Manager as its exclusive provider of Management Services and the Manager hereby accepts such appointment.

 

3                                         BASIS OF AGREEMENT

 

3.1                               Subject to the terms and conditions of this Agreement, during the period of this Agreement, the Manager shall carry out the Management Services in respect of any Vessel as agents for and on behalf of the Company.

 

3.2                               The Manager shall have authority to take such actions as it may from time to time in its absolute discretion consider to be necessary to enable it to perform its obligations under this Agreement in accordance with sound commercial management and/or brokerage practice for vessels similar to the Vessels and the market in which the Vessels operate or will operate.

 

1

 

The Manager undertakes to use its best endeavours to manage the Vessels on behalf of the Company in accordance with sound commercial management practise, and to protect and promote the interest of the Company in all matters related to the efficient management of the Vessels.

 

3.3                               The Company agrees that the Manager shall not be restricted from carrying on or being concerned or interested in other enterprises either for its own account or on behalf of parties for whom it may be acting as commercial manager, charter broker or otherwise.

 

4                                         COMMERCIAL MANAGEMENT

 

4.1                               In consideration of the Management Services Commission payable by the Company to the Manager pursuant to Clause 5 below, the Manager shall provide the commercial operation of the Vessels, as required by the Company, which includes, but is not limited to, the following functions:

 

(a)                                 providing marketing services on behalf of the Company in respect of the Vessels, including, but not limited to, seeking, negotiating and concluding time charters no longer than three (3) months, voyage charters and/or contracts of affreightment in respect of the Vessels. However the Manager may negotiate and conclude time charters longer than three (3) months if mutually agreed by the Company, such agreement not to be unreasonably withheld;

 

(b)                                 arranging the invoicing of all hire and/or freight revenues or other monies of whatsoever nature to which the Company may be entitled arising out of or otherwise in connection with the Vessels. For the avoidance of doubt in the receipt and handling of any funds of the Company, the Manager shall have fiduciary responsibilities with respect thereto in accordance with normal vessel agency practices and applicable law. Any discounts or rebates that are, or become, available are to be credited to the Company;

 

(c)                                  providing voyage estimates and accounts and calculating and collecting hire, freights, demurrage and/or despatch monies due from or due to the charterers of the Vessels;

 

(d)                                 issuing of voyage instructions, supervising and arranging bunkering, monitoring of voyage performance, speed and use of weather routing services, if deemed necessary by the Manager;

 

(e)                                  to approve letters of indemnity (“LOI”) provided that such LOIs are in conformity with the charterparties entered into between the Company and each of the Pool Participants;

 

(f)                                   arranging the scheduling of the Vessels according to the terms of the Vessels’ employment;

 

(g)                                  appointing agents and negotiating tug-boat service contracts;

 

(h)                                 arranging surveys associated with the commercial operation of the Vessels;

 

(i)                                     maintaining such documents, records, accounts, statements and supporting vouchers (if any), obtained in connection with the Management Services (all of which documents, records, accounts, statements and supporting vouchers (if any) are and will remain the sole property of the Manager) and making them available to the Company upon request, including, but not limited to, any of the foregoing which the Manager deems necessary or advisable in order to comply with any charter or other contract in effect with respect to the Vessels from time to time; and

 

(j)                                    arranging kidnap and ransom insurance as and when required on behalf of the owners and same to accounted as pool expenses.

 

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4.2                               To submit all necessary financial, accounting and business reports to the Company so as to enable the Company to comply with its reporting obligations to the Pool Participants in accordance with the terms of the Pool Participation Agreements entered into between the Company and the Pool Participants. The Manager expressly acknowledges that it has seen copies of such Pool Participation Agreements and has full notice of such obligations.

 

4.3                               In the performance of its obligations under this Agreement, the Manager shall only be required to spend the amount of time and attention on the Vessels that a commercial manager would reasonably be expected to spend in the proper discharge of its obligations under this Agreement.

 

5                                         COMMISSION

 

5.1                               The Company shall pay to the Manager a commission fee equal to one point two five per cent (1.25%) of all hire, demurrage, freights, any freight accessories and miscellaneous revenues arising from or in connection with the employment or operation of the Vessels during the term of this Agreement (apart from the time charters which form part of the Pool Participation Agreement entered into between the Company and the Pool Participants) (the “Management Services Commission”).

 

5.2                               The Management Services Commission shall be payable by the Company to the Manager on the dates when such hire, demurrage, freights, freight accessories or miscellaneous revenues (as the case may be) is due to be paid.

 

5.3                               The Company shall pay an administration fee equal to three hundred and twenty five dollars ($325) per day per Vessel during the term of this Agreement and such administration fee shall be payable on a monthly basis in arrears at the end of the first week of each month.

 

5.4                               The Company hereby authorises the Manager to deduct the Management Services Commission from any amounts received by the Manager arising from or in connection with the employment or operation of the Vessels.

 

5.5                               The Parties agree that any Management Services Commission payable by the Company to the Manager in accordance with this Agreement shall remain payable for the duration of any underlying charterparty, contract of affreightment or fixture of a Vessel notwithstanding the termination of this Agreement for any reason whatsoever prior to the expiry of such charterparty, contract of affreightment or fixture.

 

6                                         ACCOUNTS

 

6.1                               The Management Services Commission and all expenses incurred by the Manager in respect of the provision of the Management Services under the terms of this Agreement on behalf of the Company shall in any event remain payable by the Company to the Manager on demand.

 

6.2                               The Manager shall keep proper books, records and accounts related to the Vessels and shall make the same available for inspection and audit on behalf of the Company at such time as may be mutually agreed.

 

7                                         COMPANY’S UNDERTAKINGS

 

7.1                               The Company undertakes as follows:

 

(a)                       to indemnify and hold the Manager and/or its appointed agent harmless from all consequences or liabilities in signing bills of lading, issuing letters of indemnity in lieu of bills of lading or changes of destination from bills of lading or other documents relating to the relevant charterparty, contract of affreightment or fixture for any Vessel or from any irregularity in documents supplied to the Manager and/or its appointed agent or from complying with orders given to it;

 

3

 

(b)                       to immediately notify the Manager of the Company’s decision to re-deliver a Vessel which shall include details of the delivery date, port of delivery or range of ports of delivery, any pre-delivery inspections and any other information which may affect the operations or employment of such Vessel. Following receipt of such notice, the Manager shall not contract to employ that Vessel for periods in excess of the intended delivery date of that Vessel as specified in the Company’s notice to the Manager as aforesaid;

 

(c)                        the Company shall notify the Manager of any decision made by the Pool Committee; and

 

(d)                       the Manager shall at his own expense provide all office accommodation, equipments, stationeries and staff required for the provision of its services hereunder.

 

8                                         LIABILITY

 

8.1                               Force Majeure

 

Neither the Company nor the Manager shall be under any liability for any failure to perform any of their obligations hereunder by reason of any cause whatsoever of any nature or kind beyond their reasonable control.

 

8.2                               Liability to Company

 

Without prejudice to Clause 8.1 above, the Manager shall be under no liability whatsoever to the Company for any loss, damage, delay or expense of whatsoever nature, whether direct or indirect (including but not limited to loss of profit arising out of or in connection with detention of or delay to a Vessel) and howsoever arising in the course of performance of the Management Services UNLESS the same is proved to have resulted solely from the negligence, gross negligence or wilful default of the Manager or its employees in connection with the Vessel, in which case (save where loss, damage, delay or expense has resulted from the Manager’s personal act or omission committed with the intent to cause same or recklessly and with knowledge that such loss, damage, delay or expense would probably result) the Manager’s liability for each incident or series of incidents giving rise to a claim or claims shall never exceed a total of US$500,000 (five hundred thousand United States Dollars);

 

8.3                               Indemnity

 

Except to the extent and solely for the amount therein set out that the Manager would be liable under Clause 9.2 above, the Company hereby undertakes to keep the Manager and their employees, and to hold them harmless against all actions, proceedings, claims, demands or liabilities whatsoever or howsoever arising which may be brought against them or incurred or suffered by them arising out of or in connection with the performance of the Agreement, and against and in respect of all costs, losses, damages and expenses (including legal costs and expenses on a full indemnity basis) which the Manager may suffer or incur (either directly or indirectly) in the course of the performance of this Agreement.

 

8.4                               “Himalaya”

 

It is hereby expressly agreed that no employee, or sub contractor or agent of the Manager shall in any circumstances whatsoever be under any liability whatsoever to the Company for any loss, damage or delay of whatsoever kind arising or resulting directly or indirectly from any act, neglect or default on his part while acting in the course of or in connection with his employment and, without prejudice to the generality of the foregoing provisions in this Clause, every exemption, limitation, condition and liberty herein contained and every right, exemption from liability, defence and immunity of whatsoever nature applicable to the Manager or to which the Manager is entitled hereunder shall also be available and shall extend to protect every such employee or agent of the Manager acting as aforesaid and for the purpose of all the foregoing provisions of this clause the Manager is or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all persons who are or might be their

 

4

 

servants or agents from time to time (including sub-contractors as aforesaid) and all such persons shall to this extent be or be deemed to be parties to this Agreement.

 

9                                         TERMINATION

 

9.1                               Termination on Notice

 

Either the Manager or the Company may terminate this Agreement by giving ninety (90) days’ written notice to the other,

 

9.2                               Manager’s Default

 

If the Manager fails to meet its obligations under Clauses 3 and 4 of this Agreement for any reason within the control of the Manager, the Company may give notice in writing to the Manager of the default, requiring it to remedy the default as soon as practically possible. In the event that the Manager fails to remedy it within a reasonable time to the reasonable satisfaction of the Company, the Company shall be entitled to terminate this Agreement with immediate effect by giving notice in writing to the Manager.

 

9.3                               Company’s Default

 

If the Company fails to pay the Management Services Commission or any other commission or amount due to the Manager in accordance with the terms of this Agreement, the Manager shall give notice of the default in writing and demand that the outstanding amount is paid within fourteen (14) days from the date of such notice. In the event that such outstanding amount is not paid within this time by the Company, the Manager shall be entitled to terminate this Agreement (and its appointment as Manager hereunder) with immediate effect by giving the notice in writing to the Company.

 

9.4                               Extraordinary Termination

 

(a)                       Upon the re-delivery of a Vessel or if a Vessel becomes a total loss or is declared as a constructive or compromised or arranged total loss or is requisitioned, this Agreement shall continue in full force and effect in relation to the other Vessel(s) only

 

If, for the reasons contemplated in this clause 9.4, only one Vessel remains, then, upon the sale or re-delivery of such Vessel or if such Vessel becomes a total loss or is declared as a constructive or compromised or arranged total loss or is requisitioned, this Agreement shall terminate.

 

(b)                                 For the purposes of this Clause 9.4:

 

(i)                                     the date upon which a Vessel is to be treated as having been sold or otherwise disposed of shall be the date on which the Company ceases to be charterer of that Vessel;

 

(ii)                                  a Vessel shall not be deemed to be lost unless either she has become an actual total loss or agreement has been reached with her underwriters in respect of her constructive, compromised or arranged total loss or if such agreement with her underwriters is not reached it is adjudged by a competent tribunal that a constructive loss of that Vessel has occurred.

 

9.5                               This Agreement shall terminate forthwith in the event of an order being made or resolution passed for the winding up, dissolution, liquidation or bankruptcy of either Party (otherwise than for the purpose of reconstruction or amalgamation) or if a receiver is appointed, or if a Party suspends payment, ceases to carry on business or make any special arrangement or composition with its creditors.

 

5

 

9.6                               The termination of this Agreement shall be without prejudice to all rights accrued by and between the Parties under this Agreement prior to the date of such termination, including, but without limitation, the Manager’s rights under Clause 5.1 above.

 

10          GENERAL

 

10.1                        No variation of this Agreement shall be effective unless given in writing and signed by or on behalf of the Parties.

 

10.2                        If any term or provision in this Agreement is held to be illegal or unenforceable, in whole or in part, under any enactment or rule of law, such term or provision or part shall to that extent be deemed not to form part of this Agreement but the enforceability of the remainder of this Agreement shall not be affected.

 

10.3                        Neither this Agreement nor any of the rights, obligations or duties arising under this Agreement may be assigned or transferred by either Party without the prior written consent of the other Party.

 

10.4                        The arrangements contemplated by this Agreement are not intended to and shall not (and shall not be construed so as to) constitute any kind of partnership between the Parties.

 

10.5                        No neglect, delay or indulgence on the part of either Party in enforcing any term of this Agreement will be construed as a waiver of that term and no single or partial exercise by either Party of any rights or remedy under this Agreement will preclude or restrict the further exercise or enforcement of any such right or remedy or any other rights or remedies under this Agreement.

 

10.6                        This Agreement, and the documents referred to in it, shall not form part of the Pool Participation Agreements but shall be exhibited to such Agreements as Appendix 2.

 

10.7                        A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement, but this does not affect any right or remedy of a third party which exists or is available apart from that Act.

 

10.8                        This Agreement can be executed in counterparts, each of which when executed and delivered is an original and all of which together evidence the same agreement.

 

11                                  CONFIDENTIALITY

 

11.1                        Each Party shall keep, and shall seek to ensure its officers, employees, agents and consultants keep confidential all information gained by it or them during the term of this Agreement concerning the business and affairs of the other Party (and the terms of this Agreement) and will not disclose or use the same for any purpose whatsoever except:

 

(a)                                 as required by any applicable law; and

 

(b)                                 as reasonably required to be disclosed to its professional advisers, including without limitation, its lawyers and auditors.

 

12                                  NOTICES

 

12.1                        Any notice given under this Agreement shall be in writing and should be delivered personally or sent by first class pre-paid post or by fax to the Parties’ respective addresses set out below in this Agreement or as otherwise notified by them from time to time in accordance with the provisions of this Clause

 

12.2                        The address and fax number (and the person for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered in connect with this Agreement is:

 

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To the Manager:

 

VL8 Management Inc.

Trust Company Complex

Ajeltake Road

Ajeltake Island

Majuro

Marshall Islands

MH 96960

 

Fax:                       + 65 66 22 00 99

Email:            gary@navig8group.com

Attn:                    Gary Brocklesby

 

Copy:

 

Oman Shipping Company S.A.O.C.

PO Box 104, PC 118

Muscat

Sultanate of Oman

 

Fax:                       + 968 24400922

Email:            tarik.aljunaidi@omanship.co.om

Attn:                    Tarik Al Junaidi

 

To the Company:

 

VL8 Pool Inc.

Trust Company Complex

Ajeltake Road

Ajeltake Island

Majuro

Marshall Islands

MH 96960

 

Fax:                       +44 207 467 5867

Email:            ugo@navig8group.com

Attn:                    Ugo Romano

 

In the absence of evidence of earlier receipt, a notice or other communication is deemed given:

 

(a)                       If delivered personally, when left at the address referred to in Clause 13.2 above;

 

(b)                       If sent by post, on the third (3rd) Business Day next following the day of posting it;

 

(c)                        If sent by fax, on completion of its transmission, if transmitted during normal business hours (9.30am — 5.30pm) on any Business Day. A notice given by a fax transmitted after midnight but on or before 9.30am on Business Day shall be deemed to be given at 9.30am on that Business Day and a notice by a fax transmitted after 5.30pm but on or before midnight on any Business Day shall be deemed to be given at 9.30am on the following Business Day.

 

13                                  LAW AND JURISDICTION

 

13.1                        This Agreement shall be governed by English law and any dispute arising out of or in connection with this Agreement which cannot be settled by mutual agreement of the Parties shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof for the time being in force.

 

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13.2                        Save as provided otherwise in this Clause 13, the arbitration shall be conducted in accordance with the London Maritime Arbitrators’ (LMAA) Terms current at the time when the arbitration is commenced.

 

13.3                        The reference will be to a sole arbitrator if the Parties can agree upon the identity of a sole arbitrator within fourteen (14) days following a Party giving notice in writing to the other Party of its intention to commence arbitration proceedings, failing which the reference shall be to three (3) arbitrators.

 

13.4                        In cases where neither the claim nor any counterclaim exceeds the sum of US$50,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced.

 

IN WITNESS WHEREOF the Parties have entered into this Agreement on the date first written above

 

EXECUTED by the Parties

 

	
Signed by
    	
)
    	
 
    	
 
    
	
For and on   behalf of
    	
)
    	
 
    	
 
    
	
VL8   MANAGEMENT INC.
    	
)
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
/s/ Gary Brocklesby
    
	
 
    	
 
    	
 
    	
Gary Brocklesby
    
	
 
    	
 
    	
 
    	
Director
    
	
Signed by
    	
)
    	
 
    	
 
    
	
For and on   behalf of
    	
)
    	
 
    	
 
    
	
VL8   POOL INC.
    	
)
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
/s/ Peder J Moller
    
	
 
    	
 
    	
 
    	
Peder J Moller
    
	
 
    	
 
    	
 
    	
Director
    

 

8

 

APPENDIX 3.1

 

STANDARD POOL TIME CHARTER

 

29

 

	
Code word for this   Charter Party
    	
Time Charter Party
    
	
“SHELLTIME 4”
    	
LONDON 11   June 2015
    
	
 
    	
 
    
	
Issued   December 1984
    	
 
    
	
 
    	
 
    

 

	
 
    	
 
    	
IT IS THIS DAY AGREED between GMR Atlas   LLC of Trust Company Complex,   Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands (   hereinafter referred to as “Owners” ), being owners of the good tanker vessel called “Genmar Atlas” (to be   renamed “Gener8 Atlas”) (hereinafter referred to as “the vessel” )   described as per Clause 1 hereof and VL8 POOL   INC.

 

of  a Marshall Islands corporation having its registered office at Trust   Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH   96960  (hereinafter referred   to as “Charterers”):
    
	
 
    	
 
    	
 
    
	
Description and Condition of Vessel
    	
1
    	
 
    	
At the date of delivery of the vessel under this charter
    
	
 
    	
 
    	
(a)
    	
she shall   be classed by Det Norske Veritas
    
	
 
    	
 
    	
(b)
    	
she shall   be in every way fit to carry crude petroleum and/or its products;
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Dirty   petroleum products, crude oil and all cargoes, maximum three (3) grades   within the vessel’s natural segregation permitted by the vessel’s class and   coating manufacturer’s resistance list.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
(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 and radar) in a good and   efficient state;
    
	
 
    	
 
    	
 
    	
(d)
    	
her   tanks, valves and pipelines shall be oil-tight;
    
	
 
    	
 
    	
 
    	
(e)
    	
she shall   be in every way fitted for burning (See additional clause   52)
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
at sea -   fueloil with a maximum viscosity of Centistokes at 50 degrees Centigrade/any commercial   grade of fuel oil (“ACGFO”) for main propulsion, marine diesel oil/ACGFO for auxiliaries   in port - marine diesel oil/ACGFO 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 Form B    Q88 and time charter description appended   hereto, provided however that if there is any conflict between the provisions   of Form B  Q88 and time charter   description and any other provision, including this Clause 1,   of this charter such other provision shall govern.
    
	
 
    	
 
    	
 
    	
 
    
	
Shipboard Personnel and their Duties
    	
2
    	
(a)
    	
At the date of delivery of the vessel under this   charter
    
	
 
    	
 
    	
(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 rained 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, 1978;
    
	
 
    	
 
    	
 
    	
(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 therefrom to be carried out quickly and efficiently.
    
	
 
    	
 
    	
(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
    	
(i)
    	
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 vessel.
    
	
 
    	
 
    	
(ii)
    	
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 (ii) 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.
    
	
 
    	
 
    	
(iii)
    	
If Owners are in breach of their obligation under Clause   3(i) 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 Charterer’s reasonable satisfaction the   exercise of due diligence as required in Clause 3(i), the vessel shall   be off-hire, and no further hire payments shall be due, until Owners have so   demonstrated that they are exercising such due diligence.
    
	
 
    	
 
    	
 
    	
Furthermore, at any time while the vessel is   off-hire under this Clause 3 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 (iii) 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
    	
4
    	
 
    	
Owners agree to let and Charterers agree to hire the   vessel for a period of as per Pool Agreement 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
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Dirty petroleum products, crude   oil and all cargoes, maximum three (3) grades within the vessel’s   natural segregation permitted by the vessel’s class and coating   manufacturer’s resistance list.

in any part of the world, as Charterers shall   direct, subject to the limits of the current British Institute Warranties and   any subsequent amendments thereof.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
The vessel may trade worldwide   as Charterers shall direct, subject to the limits of the current I.W.L   between safe ports/berths/anchorages and always afloat and excluding   countries that are at any time boycotted by or under embargoes from the   United Nations and/or European Union and/or United States and/or the country   of the vessel’s registry. For the purpose of clarity, the vessel shall not   trade in areas declared as war risk areas by the underwriter’s joint war   committee except in accordance with clauses 33, 34, 35 and 86 of this   Charter.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
The Owners warrants that at the   time of delivery under this charter, the vessel is not blacklisted by the   Arab Boycott League.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Notwithstanding the foregoing, but subject to Clause   35. Charterers may order the vessel to ice-bound waters or to any part of   the world outside such limits provided that Owners consent thereto (such   consent not to be unreasonably withheld) and that Charterers pay for any   insurance premium required by the vessel’s underwriters as a consequence of   such order.
    
	
 
    	
 
    	
 
    	
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.
    
	
 
    	
 
    	
 
    	
The vessel shall be delivered by Owners   at a port in
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Notices from Owners to   Charterers prior to delivery:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Owners are to give Charterers   immediate approximate notice of delivery on fixing. Following this Owners are   to give the Charterers approximate notices 30, 20, 15 days prior to delivery   and then definite notices of delivery including date and place 10, 7, 5, 3, 2   and 1 day prior to delivery to the Charterers. Owners are to advise   Charterers immediately if there is any change of more than 24 hours to the   approximate notices or 12 hours to the actual notices.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
at Owners’ option and redelivered to Owners at a   port in
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
The vessel will be delivered   back to Owners on passing or after dropping last outbound sea pilot at any   worldwide port.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Notices from Charterers to   Owners prior to redelivery:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Charterers are to give Owners   approximate notice of redelivery 20, 10 and 7 days prior to redelivery.   Charterers to give Owners firm notices of date and place of redelivery of the   vessel 5, 3, 2 and 1 day prior to redelivery.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
at Charterers’ option.
    
	
 
    	
 
    	
 
    	
 
    
	
Laydays/ Cancelling
    	
5
    	
 
    	
The vessel shall not be delivered to Charterers before   15 June 2015 and Charterers   shall have the option of cancelling this charter if the vessel is not ready   and at their disposal on or before 15 August 2015
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Owners to 
    	
6
    	
 
    	
Owners undertake to provide and to pay for all   provisions, wages, and shipping and discharging fees
    

 

 

	
Provide
    	
 
    	
 
    	
and all other expenses of the master, officers and   crew; also, except as provided in Clause 4 and 34 hereof, for   all insurance on the vessel, for all deck, cabin and engine-room stores, and   for water; for all drydocking, overhaul, maintenance and repairs to the   vessel; and for all fumigation expenses and de-rat certificates. 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
    	
 
    	
Charterers shall provide and pay for all fuel   (except fuel used for domestic services), towage and Pilotage (except where such towage and pilotage are not compulsorily required   by the relevant authorities) and shall pay agency fees, port   charges, commissions, expenses of loading and unloading cargoes, canal dues   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.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Rate of Hire
    	
8
    	
 
    	
Subject as herein provided, Charterers shall pay for   the use and hire of the vessel at the rate of as per   Pool Agreement per day, and pro rata for any part of a day, from   the time and date of her delivery (local time) until the time and date of her   redelivery (local time) to Owners.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Payment of Hire
    	
9
    	
 
    	
Subject to Clause 3 (iii), payment of hire   shall be made in immediately available funds to:
    
	
 
    	
 
    	
 
    	
 
    	
GMR ATLAS LLC

Account   Number  

Nordea Bank

437   Madison Avenue

New   York, NY 10022

ABA/Routing   No: 

Swift   Address: 
    
	
 
    	
 
    	
 
    	
 
    	
Account
    	
 
    
	
 
    	
 
    	
 
    	
in                                             per   calendar month in advance, less: as per Pool Agreement
    
	
 
    	
 
    	
(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 thereon, 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(ii) 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.
    
	
 
    	
 
    	
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 Interest   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 on 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-annually.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Space Available to Charterers
    	
10
    	
 
    	
The whole reach, burthen and decks of the vessel and   any passenger accommodation (including Owner’s 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 2000 mts (excluding bunkers, fresh water and lubes) tonnes   at any time during the charter period.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Overtime
    	
11
    	
 
    	
Overtime pay of the master, officers and   crew in accordance with ship’s articles shall be for account when incurred,   as a result of complying with the request of Charterers of their agents, for   loading,Charterers’ discharging, heating of cargo, bunkering or tank   cleaning.  Hire is   inclusive of overtime.
    
	
 
    	
 
    	
 
    	
 
    
	
Instructions And Logs
    	
12
    	
 
    	
Charterers shall from time to time give the master   all requisite instructions and sailing directions, and he 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   vessel, 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.
    
	
 
    	
 
    	
(b)
    	
Notwithstanding the foregoing, Owners shall not be obliged   to comply with any orders from Charterers to discharge all or part of the   cargo
    
	
 
    	
 
    	
 
    	
(i)
    	
at any place other than that shown on the bill of   lading and/or
    
	
 
    	
 
    	
 
    	
(ii)
    	
without presentation of an original bill of lading unless   they have received from Charterers both written confirmation of such orders   and an indemnity in a form acceptable to Owners.
    
	
 
    	
 
    	
 
    	
 
    
	
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.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
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 period or on the earlier   termination of this charter) accept and pay for all bunkers remaining on   board, at the then-current market prices at the port of delivery or   redelivery, as the case may be, or if such prices are not available payment   shall be at the then-current market prices at the nearest port at which such   prices are available; provided that if delivery or redelivery does not take   place in a port payment shall be at the price paid at the vessel’s last port   of bunkering before delivery or redelivery, as the case may be. Owners shall   give Charterers the use and benefit of any fuel contracts they may have in   force from time to time, if so required by Charterers, provided suppliers   agree.  See   additional clauses 52 and 53
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
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
    
	
 
    	
 
    	
 
    	
(i)
    	
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
    
	
 
    	
 
    	
 
    	
(ii)
    	
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.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Supernumeraries
    	
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   liquors. Charterers paying at the rate of US$20.00   per day for each representative while on board the vessel.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Sub-letting
    	
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
    
	
 
    	
 
    	
 
    	
(i)
    	
disbursements on Owners’ behalf or charges for   Owners’ account pursuant to any provision hereof, and
    
	
 
    	
 
    	
 
    	
(ii)
    	
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.
    
	
 
    	
 
    	
 
    	
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 on the day of her 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
    
	
 
    	
 
    	
 
    	
(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.
    
	
 
    	
 
    	
(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 on 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 charter period.
    
	
 
    	
 
    	
 
    	
 
    
	
Periodical Drydocking
    	
22
    	
(a)
    	
Owners have the right and obligation to drydock the   vessel at regular intervals of

On each occasion Owners shall propose to   Charterers a date on which they wish to drydock the vessel, not less than                      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 vessel 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 therefor, 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 she went off-hire or a position no less favourable   to Charterers , whichever she first attains. However,

(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.
    
	
 
    	
 
    	
 
    	
See   additional clause 115
    
	
 
    	
 
    	
 
    	
 
    
	
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,
    
	
 
    	
 
    	
 
    	
(i)
    	
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
    
	
 
    	
 
    	
 
    	
(ii)
    	
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
    	
(a)
    	
Owners   guarantee that the speed and consumption of the vessel shall be as follows: -
    
	
 
    	
 
    	
 
    	
Average speed
    	
Maximum average bunker consumption
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
In knots
    	
main propulsion
    	
auxiliaries
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
fuel oil/diesel oil
    	
fuel oil/diesel oil
    
	
 
    	
 
    	
 
    	
 
    	
Laden
    	
tonnes
    	
tonnes
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Ballast
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
The foregoing bunker consumptions are for all   purposes except cargo heating and tank cleaning and shall be pro-rated   between the speeds shown.
    
	
 
    	
 
    	
 
    	
The service speed of the vessel is 12.5 knots laden   and 12.5 knots in ballast and in the absence of Charterers’ orders to the   contrary the vessel shall proceed at the service speed. However if more than   one laden and one ballast speed are shown in the table above Charterers shall   have the right to order the vessel to steam at any speed within the range set   out in the table (the “ordered speed”).
    
	
 
    	
 
    	
 
    	
If the vessel is ordered to proceed at any speed   other than the highest speed shown in the table, and the average speed   actually attained by the vessel during the currency of such order exceeds   such ordered speed plus 0.5 knots (the “maximum recognised speed”), then for   the purpose of calculating any increase or decrease of hire under this Clause   24 the maximum recognised speed shall be used in place of the average   speed actually attained.
    
	
 
    	
 
    	
 
    	
For the purposes of this charter the “guaranteed   speed” at any time shall be the then-current ordered speed or the service   speed, as the case may be.
    
	
 
    	
 
    	
 
    	
The average speeds and bunker consumptions shall for   the purposes of this Clause 24 be calculated by reference to the   observed distance from pilot station to pilot station on all sea passages   during each period stipulated in Clause 24 (c), but excluding any time   during which the vessel is (or but for Clause 22(b) (i) would be)   off-hire and also excluding “Adverse Weather Periods”, being (i) any   periods during which reduction of speed is necessary for safety in congested   waters or in poor visibility (ii) any days, noon to noon, when winds exceed   force 8 on the Beaufort Scale for more than 12 hours.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
(b)
    	
If during any year from the date on which the vessel   enters service (anniversary to anniversary )
    
								

 

 

	
 
    	
 
    	
 
    	
the vessel falls below or exceeds the performance   guaranteed in Clause 24(a) then if such shortfall or excess results
    
	
 
    	
 
    	
 
    	
(i)
    	
from a reduction or an increase in the average speed   of the vessel, compared to the speed guaranteed in Clause 24(a), then   an amount equal to the value at the hire rate of the time so lost or gained,   as the case may be, shall be deducted from or added to the hire paid;
    
	
 
    	
 
    	
 
    	
(ii)
    	
from an increase or a decrease in the total bunkers   consumed, compared to the total bunkers which would have been consumed had   the vessel performed as guaranteed in Clause 24 (a), an amount   equivalent to the value of the additional bunkers consumed or the bunkers   saved, as the case may be, based on the average price paid by Charterers for   the vessel’s bunkers in such period, shall be deducted from or added to the   hire paid. The addition to or deduction from hire so calculated for laden and   ballast mileage respectively shall be adjusted to take into account the   mileage steamed in each such condition during Adverse Weather Periods, by   dividing such addition or deduction by the number of miles over which the   performance has been calculated and multiplying by the same number of miles   plus the miles steamed during the Adverse Weather Periods, in order to   establish the total addition to or deduction from hire to be made for such   period. Reduction of hire under the foregoing sub-Clause (b) shall   be without prejudice to any other remedy available to Charterers.
    
	
 
    	
 
    	
(c)
    	
Calculations under this Clause 24 shall be   made for the yearly periods terminating on each successive anniversary of the   date on which the vessel enters service, and for the period between the last   such anniversary and the date of termination of this charter if less than a   year. Claims in respect of reduction of hire arising under this Clause   during the final year or part year of the charter period shall in the first   instance be settled in accordance with Charterers’ estimate made two months   before the end of the charter period. Any necessary adjustment after this   charter terminates shall be made by payment by Owners to Charterers or by   Charterers to Owners as the case may require.
    
	
 
    	
 
    	
 
    	
Payments in respect of increase of hire arising   under this Clause shall be made promptly after receipt by Charterers   of all the information necessary to calculate such increase. 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Clause 24 to be amended by and   read with additional clauses 51, 54 and 55.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
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.
    
	
 
    	
 
    	
 
    	
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. All such claims shall be subject to the Hague-Visby Rules or the   Hague 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.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
any claim (whether brought by   Charterers or any other person) arising out of any loss of, or damage to, or   in connection with, the cargo shall be subject to the Hague Visby Rules, or   the Hague Rules, or the Hamburg Rules as the case may be. Such rules which   ought, pursuant to clause 38 (as replaced by additional clause 88) hereof, to   have been incorporated in the relevant Bill of Lading (whether or not such   rules were so incorporated) shall apply, or if no such bill of lading is   issued, the Hague Visby Rules are to apply, unless the Hamburg   Rules are compulsorily in which case the Hamburg Rules are to apply   instead.

 

Also see additional clause 88
    
	
 
    	
 
    	
(d)
    	
 
    	
In particular and without   limitation, the foregoing subsections (a) and (b) of this Clause   shall 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 marine diesel oil/fuel oil   with a maximum viscosity of                      Centistokes   at 50 degrees Centigrade/ACGFO for main propulsion and diesel oil/ACGFO for   the auxiliaries. 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 the International Marine Bunker Supply Terms and   Conditions of Shell International Trading Company and with its specification   for marine fuels as amended from time to time.See additional clauses 51 and 52.
    
	
 
    	
 
    	
 
    	
 
    
	
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 government in respect of such   requisition period shall be for Owners’ account. Any such requisition period   shall 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.,  U.S.S.R.   Russian Federation, P.R.C.,   U.K., Netherlands-  and the vessel’s flag state   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 as determined by the Joint War Committee Listed Areas, Charterers   shall reimburse Owners for any additional insurance premia, crew bonuses for areas designated by the International Bargaining Forum (IBF)   framework agreement 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.
    
	
 
    	
 
    	
 
    	
 
    
	
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 by telex or 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.
    
	
 
    	
 
    	
 
    	
(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 falls   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, operations 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 falls 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 the York/Antwerp Rules, 1994 (as   subsequently amended from time to time), and shall be adjusted in   London in accordance with English law and practice but should adjustment be   made in accordance with the law and practice of the United States of America,   the following provision 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.”
    
	
 
    	
 
    	
 
    	
“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 clause:

                “(1) Subject   to sub-clause (2) 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 herein 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   any term of this bill of lading is repugnant to the Hague-Visby Rules, or   Hague Rules if applicable, such term shall be void to that extent but no   further.”

                “(4) 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.”See additional clause 88
    
	
 
    	
 
    	
 
    	
 
    
	
TOVALOP
    	
39
    	
 
    	
Owners warrant that the vessel is
    
	
 
    	
 
    	
 
    	
(i)    a   tanker in TOVALOP and
    
	
 
    	
 
    	
 
    	
(ii)   properly   entered in                      P &   I Club

and will so remain during the currency   of this charter.
    
	
 
    	
 
    	
 
    	
                When   an escape or discharge of Oil occurs from the vessel and causes or threatens   to cause Pollution Damage, or when there is the threat of an escape or   discharge of Oil (i.e. a grave and imminent danger of the escape or discharge   of Oil which, if it occurred, would create a serious danger of Pollution   Damage, whether or not an escape or discharge in fact subsequently occurs),   then Charterers may, at their option, upon notice to Owners or master,   undertake such measures as are reasonably necessary to prevent or minimize   such Pollution Damage or to remove the Threat, unless Owners promptly   undertake the same. Charterers shall keep Owners advised of the nature and   result of any such measures taken by them and, if time permits, the nature of   the measures intended to be taken by them. Any of the aforementioned measures   taken by Charterers shall be deemed taken on Owners’ authority as Owners’   agent, and shall be at Owners’ expense except to the extent that:
    
	
 
    	
 
    	
 
    	
(1)
    	
any such escape or discharge or Threat was caused or   contributed to by Charterers, or
    
	
 
    	
 
    	
 
    	
(2)
    	
by reason of the exceptions set out in   Article III, paragraph 2, of the 1969 International Convention on Civil   Liability for Oil Pollution Damage, Owners are or, had the said Convention   applied to such Escape or discharge or to the Threat, would have been exempt   from liability for the same, or
    
	
 
    	
 
    	
 
    	
(3)
    	
the cost of such measures together with all other   liabilities, costs and expenses of Owners arising out of or in connection   with such escape or discharge or Threat exceeds one hundred and sixty United   States 
    

 

 

	
 
    	
 
    	
 
    	
 
    	
Dollars (US $160 ) per ton of the vessel’s Tonnage   or sixteen million eight hundred thousand United States Dollars (US   $16,800,000), whichever is the lesser, save and insofar as Owners shall be   entitled to recover such excess under either the 1971 International   Convention on the Establishment of an International Fund for Compensation for   Oil Pollution Damage or under CRISTAL;
    
	
 
    	
 
    	
 
    	
                PROVIDED   ALWAYS that if Owners in their absolute discretion consider said measures should   be discontinued. Owners shall so notify Charterers and thereafter Charterers   shall have no right to continue said measures under the provisions of this   Clause 39 and all further liability to Charterers under this Clause 39 shall   thereupon cease.

                The   above provisions are not in derogation of such other rights as Charterers or   Owners may have under this charter or may otherwise have or acquire by law or   any International Convention or TOVALOP.

                The   term “TOVALOP” means the Tanker Owners’ Voluntary Agreement Concerning   Liability for Oil Pollution dated 7th January 1969, as amended from time   to time, and the term “CRISTAL” means the Contract Regarding an Interim   Supplement to Tanker Liability for Oil Pollution dated 14th   January 1971, as amended from time to time. The terms “Oil”, “Pollution   Damage”, and “Tonnage” shall for the purposes of this Clause 39 have the   meanings ascribed to them in TOVALOP.  See additional clause 80(k)
    
	
 
    	
 
    	
 
    	
 
    
	
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.
    
	
 
    	
 
    	
 
    	
 
    
	
Law and Litigation
    	
41
    	
(a)
    	
This charter shall be construed and the relations   between the parties determined in accordance with the laws of England.
    
	
 
    	
 
    	
(b)
    	
Any dispute arising under this charter shall be   decided by the English Courts to whose jurisdiction the parties hereby agree.
    
	
 
    	
 
    	
(c)
    	
Notwithstanding the foregoing, but without prejudice   to any party’s right to arrest or maintain the arrest of any maritime   property, either party may, by giving written notice of election to the other   party, elect to have any such dispute referred to the arbitration of a single   arbitrator in London in accordance with the provisions of the Arbitration Act   1950, or any statutory modification or re-enactment thereof for the time   being in force.
    
	
 
    	
 
    	
 
    	
(i)
    	
A party shall lose its right to make such an   election only if:
    
	
 
    	
 
    	
 
    	
 
    	
(a)
    	
it   receives from the other party a written notice of dispute which -
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
(1)   states expressly that a dispute has   arisen out of this charter;
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
(2)   specifies the nature of the dispute; and
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
(3)   refers expressly to this clause 41(c)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
and
    
	
 
    	
 
    	
 
    	
 
    	
(b)
    	
it fails to give notice of election to have the   dispute referred to arbitration not later than 30 days from the date of   receipt of such notice of dispute.
    
	
 
    	
 
    	
 
    	
(ii)
    	
The parties hereby agree that either party may -
    
	
 
    	
 
    	
 
    	
 
    	
(a)
    	
appeal to the High Court on any question of law   arising out of an award;
    
	
 
    	
 
    	
 
    	
 
    	
(b)
    	
apply to the High Court for an order that the   arbitrator state the reasons for his award;
    
	
 
    	
 
    	
 
    	
 
    	
(c)
    	
give notice to the arbitrator that a reasoned award   is required; and
    
	
 
    	
 
    	
 
    	
 
    	
(d)
    	
apply to the High Court to determine any question of   law arising in the course of the reference.
    
	
 
    	
 
    	
(d)
    	
It shall be a condition precedent to the right of   any party to a stay of any legal proceedings in which maritime property has   been, or may be, arrested in connection with a dispute under this charter,   that that party furnishes to the other party security to which that other   party would have been entitled in such legal proceedings in the absence of a   stay. See additional clause 89
    
	
 
    	
 
    	
 
    	
 
    
	
Construction
    	
42
    	
 
    	
The side headings have been   included in this charter for convenience of reference and shall in no way affect   the construction hereof.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
IN WITNESS WHEREOF, The parties   have caused this charter to be executed in duplicate the day and year herein   first above written.
    
							

 

 

	
 
    	
 
    	
 
    
	
Owners
    	
 
    	
Charterers
    

 

Privy parties

The following companies are involved and related to this deal:

 

	
Owners
    
	
Owners’ parent company / organisation:
    	
 
    	
Gener8 Maritime Inc.
    
	
Address:
    	
 
    	
Trust Company Complex,
   Ajeltake Road,
   Ajeltake Island,
   Majuro, Marshall Islands,
   MH 96960
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Contact Details:
    	
 
    	
Sean Bradley
    
	
 
    	
 
    	
chartering@gener8mgmt.com
    

 

	
Head Owners
    	
 
    	
GMR Atlas LLC
    
	
Full style:
    	
 
    	
 
    
	
Address:
    	
 
    	
Trust Company Complex,
   Ajeltake Road,
   Ajeltake Island,
   Majuro,
   Marshall Islands,
   MH 96960
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Contact:
    	
 
    	
Sean Bradley
    
	
 
    	
 
    	
chartering@gener8mgmt.com
    

 

	
Current Owners’ full style:
    	
 
    	
Same as Head Owners
    
	
Owners’ address:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Contact details:
    24 hour contact name and number:
    	
 
    	
 
    

 

	
Owners’ chartering management company:
    	
 
    	
Gener8 Maritime Management LLC
    
	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
299 Park Ave., 2nd Floor
    
	
 
    	
 
    	
New York, NY 10171 USA
    
	
Contact details for
    Chartering and operations
    	
 
    	
+1 212 763 5600

chartering@gener8mgmt.com
    

 

	
Owners Broker:
    	
 
    	
NA
    
	
Contact details for
    chartering and operations:
    	
 
    	
 
    

 

	
Chartering
    
	
Charterers’ full Style:
    	
 
    	
VL8 Pool Inc
    
	
Charterers’ address:
    	
 
    	
Trust Company Complex,
   Ajeltake Road,
   Ajeltake Island
    
	
 
    	
 
    	
Majuro, Marshall Islands MH 96960
    
	
Contact:
    	
 
    	
Jason Klopfer
    
	
 
    	
 
    	
jason@navig8group.com
    

 

	
Charterers’ Broker:
    	
 
    	
NA
    
	
Contact details for
    	
 
    	
 
    

 

 

	
chartering and operations:
    	
 
    	
 
    

 

In addition to clauses 1 through 42 of the SHELLTIME4 (issued December 1984) charter party the following additional clauses 43-118 are to apply. In any instance of a conflict the additional clauses are to overrule those of SHELLTIME4 (issued December 1984) and are to be binding.

 

The existence and details of this fixture to be kept strictly private and confidential between these parties and the same is not to be reported.

 

 

Additional Clauses 43-118

 

The Vessel

 

43. Additional description.

 

In addition to the vessel’s Questionnaire 88, the vessel is further described as follows:

 

	
Detailed   description of M/T Genmar Atlas (to be renamed Gener8 Atlas)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Vessel’s actual class:
    	
 
    	
D.N.V. +1A1 TANKER FOR OIL, ESP EO, PLUS-1,   NAUT-OC, SPM, VCS-2, TMON, BIS, NAUTICUS (NEWBUILDING)
    
	
Ice class (if any):
    	
 
    	
N/A
    	
 
    	
 
    	
 
    	
 
    
	
Vessel’s flag:
    	
 
    	
MARSHALL ISLANDS
    	
 
    	
Vessel’s flag:
    	
 
    	
MARSHALL ISLANDS
    
	
Deadweight:
    	
 
    	
306506.6   MT- SUMMER
    	
 
    	
Deadweight:
    	
 
    	
306506.6 MT- SUMMER
    
	
Hull type:
    	
 
    	
Single   skin
    	
 
    	
Hull   type:
    	
 
    	
Single   skin
    
	
 
    	
 
    	
No
    	
 
    	
Yes
    	
 
    	
No
    
	
Fitted equipment:
    	
 
    	
I.G.S.
    	
 
    	
Fitted   equipment:
    	
 
    	
I.G.S.
    
	
 
    	
 
    	
Yes
    	
 
    	
Yes
    	
 
    	
Yes
    
	
Heating ability and heating equipment:
    	
 
    	
Coiled
    	
 
    	
Heating ability and heating equipment:
    	
 
    	
Coiled
    
	
 
    	
 
    	
NO (SLOP   TANKS ONLY for TC purposes)
    	
 
    	
40A SMLS PE LA-BRASS
    	
 
    	
Oily water: 44°C to 66°C in 24 h
    
	
SWL of   derricks (mt):
    	
 
    	
2 X 20 T
    	
 
    	
 
    	
 
    	
 
    
	
Vessel’s   approvals:
    	
 
    	
See Q88
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Hull and   machinery insured value 
    	
 
    	
 
    	
 
    	
See   Q88
    	
 
    	
 
    

 

	
Tank   groupings, segregations and tank capacity.
    

 

	
Group
    	
 
    	
Tanks used
    	
 
    	
Capacity of each tank (m3)
    	
 
    	
Total capacity (m3)
    	
 
    
	
1
    	
 
    	
2 C, 4 P/S,
   SLOP P/S
    	
 
    	
2C — 31793.8 M3; 4P — 20132.5 M3
   4S — 20132.5 M3;
   SLOP P — 5034.7 M3
   SLOP S — 5034.7 M3
    	
 
    	
82128.3 M3
    	
 
    
	
2
    	
 
    	
3 C, 1 P/S,
   5 P/S
    	
 
    	
3C — 31793.7 M3; 1P — 15462.8 M3
   1S — 15462.8 M3; 5P — 12852 M3
   5S — 12852 M3
    	
 
    	
88423.4 M3
    	
 
    
	
3
    	
 
    	
1 C, 4 C, 5 C,
   2 P/S, 3 P/S
    	
 
    	
1C — 28657 M3; 4C - 31793.7 M3
   5C — 28735.9 M3; 2P — 20132.5 M3
   2S — 20132.5 M3; 3P — 20132.5 M3
   3S — 20132.5 M3
    	
 
    	
169716.6 M3
    	
 
    
	
4
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

	
Capacity for bunkers and stores
    
	
Fuel oil (mt)
    	
 
    	
7023
    	
 
    	
Diesel/gas oil (mt)
    	
 
    	
356
    
	
Fresh water (mt)
    	
 
    	
554
    	
 
    	
Stores (mt)
    	
 
    	
430
    

 

	
Cargo transfer rates. Loading capacity and discharging   capacity.
    
	
Loading rate (m3ph)
    	
 
    	
21,000
    	
 
    	
Discharging rate (m3ph)
    	
 
    	
15,000
    

 

 

	
Note restriction per ONE LINE is 7,000 m3/h
    
	
Ballast transfer rates
    
	
Taking on ballast (m3ph)
    	
 
    	
6,000
    	
 
    	
Discharging ballast (m3ph)
    	
 
    	
6,000
    
	
Maximum percentage of the deadweight in fully   ballasted condition:
    	
 
    	
33 %
    
									

 

	
Nationality of ships complement and   communications
    
	
 
    	
 
    	
 
    
	
Nationality of Master and name
    	
 
    	
BULGARIAN — RUSEV RUMEN HRISTOV
    
	
Nationality of officers
    	
 
    	
POLISH, RUSSIAN, ROMANIAN, UKRAINIAN
    
	
Nationality of crew
    	
 
    	
FILIPINO
    
	
Vessel’s call sign
    	
 
    	
V7IW5
    
	
Vessel’s email
    	
 
    	
master.gatlas@gmmfleet.com
    
	
Vessel’s phone number
    	
 
    	
+870 773 207 317 ; 765066973/74
    
	
Vessel’s fax number
    	
 
    	
 
    
	
Vessel’s telex number
    	
 
    	
453836033 ; 453840855
    

 

 

44. Documentation.

 

For all time charters in excess of 30 days in period, the Owners shall arrange to deliver the following documents electronically within three working days of all subjects being lifted and the time charter confirmed:

 

	
a)
    	
Questionnaire 88 (latest edition).
    
	
b)
    	
General arrangement and capacity plans.
    
	
c)
    	
Deadweight scale.
    
	
d)
    	
Detailed cargo manifold arrangement drawing, loading   scale and mooring plan.
    
	
e)
    	
Cargo/ballast pumping and pipeline arrangement plans
    
	
 
    	
(types of valves fitted to be clearly show).
    
	
g)
    	
Plan of cargo tank ventilating and inert gas   systems.
    
	
h)
    	
Mooring arrangement plan.
    
	
i)
    	
O.C.I.M.F. Ship Information Questionnaire (latest   edition).
    

 

In the event that the above documents are not received with in time, the Charterers shall, in its option, be entitled to cancel the time charter or postpone delivery of the vessel until such documents have been received in full.

 

Owners shall provide Charterers with read only access for the vessel if she is registered with Q88.com. If the Owners has not registered the vessel with Q88.com, then they are to provide a copy of the OCIMF VPQ in .vpz format. The Q88.com is to be kept updated with all the required information, including but not limited to class certificates and approvals.

 

45. Fixed equipment.

 

a) Inert gas system.

 

The Owners warrants that the vessel has a working inert gas system and that the officers and crew are experienced in the operation of the system. The Owners further warrants that the vessel will arrive at load port with cargo tanks inerted when required by Charterers and that tanks will remain inerted throughout the voyage and during discharge.

 

The vessel’s inert gas system shall fully comply with regulation 62, chapter 11-2 of the SOLAS Convention 1974 as modified by its protocol of 1978 and Owners’ undertake that such system shall be operated by the officers and crew in accordance with the operational procedures set out in the IMO publication entitled “Inert Gas System 1983” as may, from time to time, be amended.

 

The Master may be requested by terminal personnel or independent inspector to breach the IGS for purpose of gauging, sampling, temperature determination and or determining the quantity of cargo remaining on board after discharge. The Master shall comply with these requests consistent with the safe operation of the vessel.

 

If the Charterers so requires, the Owners shall arrange for the vessel’s tanks to be de-inerted to facilitate inspection, gauging and sampling. Any time taken in de-inerting, inspecting, gauging, sampling, and re-inerting thereafter shall count as on-hire.

 

b) Crude oil washing.

 

The Owners warrant that the vessel is equipped with a fully functional crude oil washing system complying with the latest edition of the MARPOL, and have officers and crew skilled and competent in the operation of such a system. The Charterers shall have the right to require the vessel to crude oil wash the tanks in which the cargo is carried. The Owners agrees to conduct crude oil washing of all cargo tanks at discharge port(s) simultaneously with cargo discharge operations and the same is to be to the Charterers’ satisfaction.

 

 

c) Heating.

 

The Owners warrants that the vessel is fully fitted with tight and functioning heating coils in all cargo tanks, or with heat exchangers, and is capable of applying heat to the cargo as agreed in this charter. The vessel is to be able to receive cargo up to a maximum temperature of 165 degrees Fahrenheit. The vessel’s heating system is to be able to maintain a cargo temperature, if required to do so, up to a maximum of 135 degrees Fahrenheit. The vessel is to be able to increase the temperature of the whole cargo on board by at least 4 degrees Fahrenheit per day if so instructed.

 

Any delays and or expenses resulting from non-compliance with this clause shall be for the Owners’ account. Any lost time owing to deficient or improper operation of the inert gas system or otherwise resulting from non-compliance with this clause to be considered as off hire.

 

46. Cast iron.

 

The Owners warrant that all piping, valves, spools, reducers and other fittings comprising that portion of the 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 and that only steel reducer or spacer will be used between the ship’s valve and the loading arm.

 

The fixed rigid support for the manifold system must be designed to prevent both lateral and vertical movement of the manifold.  Owners further warrants that no more than one reducer or spacer will be used between the vessel’s manifold valve and the terminal hose or loading arm connection.  Owners warrants that all piping, valves, fittings and reducers on the manifold system or area used in the transfer of cargo and ballast will be made of steel or nodular iron.

 

47. Re-measurement.

 

The Charterers are to have the option to re-measure the vessel for the purpose of satisfying certain port or terminal regulations at any time during c/p period as often as required. All costs and time used for re-measuring to be for Charterers’ account. Owners are to advise if vessel has multiple load lines and if so, the corresponding deadweights.

 

48. Management and flag.

 

The Owners shall not change the Ownership or management of the vessel, or change the vessel’s flag or registry during the period of this charter without prior and written approval of the Charterers.

 

Any delay to the vessel caused by her flag or the nationality of her crew shall count as off hire.  All extra expenses and consequences, whatsoever, incurred by the Charterers attributable to the vessel’s flag or the nationality of her crew, will be for the Owners’ account.

 

49. Major oil company approvals.

 

	
(a)
    	
The Owners will have the vessel regularly vetted by   major or other oil companies always at the Charterers’ time to ensure as many   as possible vetting approvals are maintained or obtained and to keep the   Charterers regularly informed of the vetting status of the vessel.
    
	
 
    	
 
    
	
(b)
    	
Unless the vessel is a newbuilding and has not   traded prior to its delivery under this charter then the vessel shall at all   times comply with the following:
    

 

	
 
    	
(i)
    	
have approval / acceptance from a minimum of 4 of   the following majors: Shell, BP, Exxonmobil, Chevtex, TotalFinaElf and   Statoil (each an “Oil Major” and   together, the “Oil Majors”); and
    

 

 

	
 
    	
(ii)
    	
have at least one (1) positive hydrocarbon   discharge SIRE report from an Oil Major always less than six months old and   its latest hydrocarbon discharge SIRE report from an Oil Major shall always   be positive.
    

 

	
 
    	
Immediately after a positive hydrocarbon discharge   SIRE report from an Oil Major, it is assumed for the purpose of this clause   that the vessel shall have approval / acceptance from all the Oil Majors   except where an Oil Major has put in place a technical hold in relation to   the Vessel and in all other cases, until proven otherwise as per the   definition in clause 49 (d)(i).
    

 

(c)     If the vessel has been trading in areas where SIRE inspectors are unwilling to visit, the Owners are obliged to arrange a SIRE hydrocarbon discharge inspection at the first opportunity that the Vessel is in a discharge port where SIRE inspectors are willing to visit. If the Owners complies with this obligation, there shall be a grace period of three (3) weeks after the date of such inspection before the Charterers can exercise its rights as a result of a breach of clause 49(b)(ii).

 

	
(d)
    	
For the purpose of this clause 49:
    
	
 
	
 
    	
 
    
	
 
	
i)
    	
the Vessel shall cease to have “approval/ acceptance” from an Oil Major   if (x) the Vessel has a technical hold put over the Vessel by such Oil   Major or (y) the Vessel is, for whatever reason, rejected or not   accepted, approved or preferred by such Oil Major for a prospective voyage   charter when nominated by the Charterers who shall, if possible, disclose to   Owners material facts for such nomination and shall, if possible, provide the   Owners with the opportunity to refer to such Oil Major for the reasons of non   acceptance; and
    
	
 
	
 
    	
 
    
	
 
	
ii)
    	
a SIRE report is “positive”   if (x) it contains no recommendations / deficiencies, or any   deficiencies noted have been rectified by the Owners and (y) the   vessel’s technical manager listed in the SIRE report has not changed.
    

 

(e)  The Owners represents and warrants that the Oil Majors approving of the vessel at the time of delivery are:

 

	
Major   oil company name
    	
 
    	
Approval expires
    
	
STATOIL
    	
 
    	
 
    
	
SHELL
    	
 
    	
 
    
	
TOTAL
    	
 
    	
 
    
	
CHEVRON
    	
 
    	
 
    
	
TESORO
    	
 
    	
 
    
	
BP
    	
 
    	
 
    
	
PHILLIPS66
    	
 
    	
 
    

 

If there is any misrepresentation of the Oil Major approvals of the vessel at the time of the delivery by the Owners, the Charterers shall have the right to cancel the Charter and redeliver the vessel back to the Owners forthwith.

 

(f) If the Vessel is a newbuilding and has obtained a BP Newbuilding Questionnaire and a Shell Idle Inspection, the Owners shall have a grace period of 3 months from the date of delivery under this charter before the Charterers can exercise their rights as a result of a breach by Owners of the provisions of clause 49(b).

 

 

	
(g)
    	
If the Charterers so requests, the Owners shall also   arrange for further inspections by other oil company(ies) as required, as per   Charterers’ trading program. The cost for such further inspection shall   (provided the Owners first informs the cost to the Charterers) be for the   Charterers’ account save where the SIRE report for such inspection is not   positive, in which case all inspection costs incurred for such inspection   shall be for Owners’ account.
    
	
 
    	
 
    
	
(h)
    	
If the vessel fails to comply with the Oil Major   and/or SIRE requirements in clause 49(b), Charterers have the option either:   (i) to redeliver the vessel under this Charter to Owners by giving   minimum 30 days notice without penalty to either party and such redelivery to   take place within the agreed redelivery range as provided in the charter   party or (ii) put the vessel off-hire under this charter until   such failure to comply has been rectified. In the event that the vessel has   been placed off-hire for a period of more than thirty (30) consecutive days   within the terms of this clause, then Charterers shall have the right to   cancel this Charter and redeliver the vessel to Owners in accordance with the   terms of the this Charter without any further liability to either party.
    
	
 
    	
 
    
	
(i)
    	
The Owners agrees that they shall participate in   OCIMF’s TMSA (Tanker Management Self Assessment) and the Owners will keep the   Charterers informed of the levels reached or obtained in such programme. The   Owners failing to achieve TMSA acceptance with OCIMF will give Charterers the   right either (i) to redeliver the vessel to Owners by giving minimum 30 days notice   without penalty to either party and such redelivery to take place within the   agreed redelivery range as provided in the charter or (ii) put   the vessel off-hire under this charter until such failure to comply has been   rectified. In the event that the vessel has been placed off-hire for a period   of more than thirty (30) consecutive days within the terms of this clause,   then Charterers shall have the right to cancel this Charter and redeliver the   vessel to Owners in accordance with the terms of the this Charter without any   further liability to either party.
    

 

50. English Language and effective communication.

 

The vessel will be manned/crewed with a Master and Officers able to communicate both verbally and in written English, so as to ensure smooth communication with the Charterers, its agents and the shore personnel of any suppliers and receivers.

 

The Owners guarantees that the vessel is equipped with the technical and human means capable to send and receive via satellite or radio, all messages necessary to the commercial operation of the Charterers.

 

The communication costs paid by the Charterers to the Owners cover access to the vessel’s email, telex, fax and phone facilities, without restrictions. This access is to be extended to the Charterers’ agents, brokers, bunker suppliers and all such parties involved in the vessel’s voyage.

 

Bunkers, Speed and consumptions, Performance.

 

51. Speed and consumption warranty.

 

The Owners warrants that the vessel will perform as follows. The following speeds and consumptions to be applicable up to and including force 5 on the Beaufort Scale.

 

Please complete in full:

 

 

Speeds and consumptions for main engine steaming in open waters - IFO:

 

	
Type of
    	
 
    	
Speed (Knots)
    	
 
    	
Consumption (MT per day)
    	
 
    
	
steaming
    	
 
    	
Laden
    	
 
    	
Ballast
    	
 
    	
Laden
    	
 
    	
Ballast
    	
 
    
	
Full speed
    	
 
    	
16
    	
 
    	
17
    	
 
    	
123
    	
 
    	
105
    	
 
    
	
Performing speed
    	
 
    	
13
    	
 
    	
13.5
    	
 
    	
85
    	
 
    	
65
    	
 
    
	
Economic speed
    	
 
    	
11
    	
 
    	
12.5
    	
 
    	
70
    	
 
    	
53
    	
 
    

 

Speeds and consumptions for main engine steaming in open waters — MGO (SECA Areas only):

 

	
Type of
    	
 
    	
Speed (Knots)
    	
 
    	
Consumption (MT per day)
    	
 
    
	
steaming
    	
 
    	
Laden
    	
 
    	
Ballast
    	
 
    	
Laden
    	
 
    	
Ballast
    	
 
    
	
Full speed
    	
 
    	
 
    	
 
    	
 
    	
 
    	
unknown
    	
 
    	
unknown
    	
 
    
	
Performing speed
    	
 
    	
 
    	
 
    	
 
    	
 
    	
unknown
    	
 
    	
unknown
    	
 
    
	
Economic speed
    	
 
    	
 
    	
 
    	
 
    	
 
    	
unknown
    	
 
    	
unknown
    	
 
    

 

Extra consumptions for auxiliary engines:

 

	
Additional IFO
    	
 
    	
5.0
    	
 
    	
Additional MGO
    	
 
    	
Additional MDO
    

 

Bunker consumptions in port and discharging

 

	
Activity
    	
 
    	
Amount of IFO
    	
 
    	
Amount of MDO
    	
 
    	
Time allocated (hrs)
    	
 
    
	
Idle
    	
 
    	
10.5
    	
 
    	
N/A
    	
 
    	
24
    	
 
    
	
Manoeuvring in shallow water
    	
 
    	
Unknown
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Loading full cargo
    	
 
    	
20
    	
 
    	
N/A
    	
 
    	
38 hrs
    	
 
    
	
Discharge full cargo
    	
 
    	
130
    	
 
    	
N/A
    	
 
    	
38 hrs
    	
 
    

 

Bunker consumptions for other activities:

 

	
Activity
    	
 
    	
Amount of IFO
    	
 
    	
Amount of MDO
    	
 
    	
Time allocated (hrs)
    	
 
    
	
To clean from clean to clean
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
 
    	
 
    
	
To clean from dirty to clean
    	
 
    	
77
    	
 
    	
N/A
    	
 
    	
24 hrs
    	
 
    
	
To inert vessel
    	
 
    	
80
    	
 
    	
N/A
    	
 
    	
48 hrs
    	
 
    
	
To gas free vessel
    	
 
    	
15
    	
 
    	
N/A
    	
 
    	
48 hrs
    	
 
    
	
To maintain 135Deg F
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
 
    	
 
    
	
To raise cargo temp
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
 
    	
 
    
	
To ballast
    	
 
    	
7.5
    	
 
    	
N/A
    	
 
    	
24 hrs
    	
 
    
	
To de-ballast
    	
 
    	
7.5
    	
 
    	
N/A
    	
 
    	
24 hrs
    	
 
    
	
Crude Oil Wash
    	
 
    	
20
    	
 
    	
N/A
    	
 
    	
14
    	
 
    

 

To the extent that there is any conflict between SHELLTIME4 clause 24 and this clause 51, this clause 51 shall take precedence.

 

52. Bunker quality and supply.

 

The Owners confirms that the bunker specification and quantity on board at delivery, which is to be confirmed with supporting documents, to be as follows:

 

	
Fuel Type
    	
 
    	
Specific Grade
    	
 
    	
Quantity R.O.B. (mt)
    	
 
    
	
IFO
    	
 
    	
HFO 380cst
    	
 
    	
TBA
    	
 
    
	
MDO
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
MGO
    	
 
    	
LSMGO
    	
 
    	
TBA
    	
 
    
	
Other
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Other
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

The Charterers are to make best endeavours to provide bunkers of the quality and type suitable for burning in the vessel’s main engine, auxiliary engines and boilers with a maximum viscosity of 380 CST and which conforms to the specifications of RMG 380 in ISO 8217 as last amended and to supply marine diesel oil of grade DMA conforming to the specifications of ISO 8217 as last amended. If Owners require the vessel to be supplied with more expensive bunkers they shall be liable for the extra cost thereof.

 

In areas of the world where such bunkers are not available, ISO standards are exceeded or ISO standards cannot be guaranteed (for example in countries where local state oil company specifications apply), the Charterers must supply bunkers as available locally. In such circumstances the local bunker specifications are to meet with the Owners’, or the Master’s, approval that is not to be unreasonably withheld.

 

Owners are solely responsible for checking the quality and quantity of the bunkers supplied and Charterers’ responsibility is limited to an obligation of due diligence to order the correct grade and quantity. Any discrepancy in the quantity of bunkers supplied and received, where the received quantity is less than the supplied quantity, is to be protested by master immediately upon receipt of bunkers. Owners are responsible for any discrepancy that is not immediately protested as above, or is only subsequently identified, and the value of the shortfall in bunkers received can at Charterers’ option be deducted from hire. Charterers shall have the right to ullage, inspect and sample vessel’s bunker tanks as well as inspect vessel’s void spaces and other tanks whatsoever.

 

The gauging of bunker barge soundings (of all tanks, whether or not nominated for discharge) and the sealing of the bunker sample must be witnessed by the vessel’s master or chief engineer in accordance with Charterers’ standard general instructions to masters provided to the Master from time to time. Owners shall be barred from bringing any claims against Charterers as to the quality of bunkers supplied under this Charter after such time-bar described in next paragraph has expired.

 

Should any dispute arise as to the quality of the bunkers supplied under this Charter (such to be time-barred unless notified by Owners to Charterers within 15 days of supply) then the Owners and the Charterers are to agree to a joint re-analysis of a representative sample, which has been witnessed and signed by the bunkering ship or barge representative, at a laboratory acceptable to Owners and Charterers. The sample for testing shall be the sample which has its seal number endorsed on the Bunker Delivery Receipt. The result of this analysis will be final and binding on all parties. Owners will arrange to have the delivered fuel tested by an internationally recognized fuel testing laboratory such as DNV or similar.

 

53. Bunker settlement.

 

The Charterers will accept and purchase the bunkers onboard the vessel at time and place of delivery. The Charterers shall pay for the bunkers on delivery at the price that the Owners last bunkered the vessel prior to delivery on a first-in, first-out basis, as evidenced by supporting invoices and bunker delivery receipts. An independent inspector will verify the actual quantity of bunkers remaining on board at time of delivery. The cost of such a bunker survey is to be split 50/50 between the Owners and the Charterers. Vessel shall be delivered by Owners to Charterers with minimum amount of bunkers required to safely reach the nearest bunkering port.

 

The Charterers shall endeavour to re-deliver the vessel to the Owners with a similar quantity of bunkers on board at re-delivery to those at the time of delivery. The Owners will accept and purchase the bunkers onboard the vessel at time and place of redelivery. The Owners shall pay for the bunkers on redelivery at the price that the Charterers last bunkered the vessel prior to redelivery on a first-in, first-out basis, as evidenced by supporting invoices and bunker delivery receipts. An independent inspector will verify the actual quantity remaining on board at the time of re-delivery. The cost of such bunker survey is to be split 50/50 between the Owners and the Charterers. Vessel shall be

 

 

redelivered by Charterers to Owners with minimum amount of bunkers required to safely reach the nearest bunkering port.

 

54. Performance warranty.

 

The speed and consumptions of the vessel provided by the Owners in accordance with Clause 51 will be binding to this charter. Where the vessel is a newbuild upon delivery under this Charter, the speed, consumptions at sea and consumptions in ports will be reviewed and actualised on the basis of performance data over the first 3 months. Such actualisation will be calculated separately for laden, ballast and in port consumptions.

 

The data will be used for the purposes of reviewing and determining the vessel’s total costs under the pool agreement for the vessel. Save for adjustments to the vessel total costs, no claims for over performance or under performance to be allowed. SHELLTIME4 clause 24 shall be read together with this clause 54 and to the extent that there is conflict between the two provisions, this clause 54 shall take precedence.

 

55. Monitoring vessel’s performance.

 

The parties agree that the vessel’s performance shall be monitored by a third party independent weather routing service nominated by the Charterers. Charterers shall pay all cost and expenses of such service provider. Owners agree that the Master’s daily noon and other required reports for the vessel shall be sent to the weather routing service provider and such data regarding distance sailed and bunkers consumed shall be used to evaluate the vessel’s performance for the purposes of the semi-annual Periodic Performance Review of the vessel under the Pool Agreement for the vessel. The weather routing service provider’s data regarding weather conditions during the vessel’s voyages shall be used for the purposes of such evaluation.

 

56. Vessel tracking.

 

It is agreed that the Charterers may from the time of fixing until completion of the charter period employ an Inmarsat C tracking system on the vessel. Such tracking system works using data provided automatically from the vessel’s on-board Inmarsat C system and can be installed simply, either remotely, or on some older systems, with minimal set up. The system will automatically provide information on the vessel’s position at set intervals.  Such information is displayed through password controlled Internet access.  (Charterers will, if required, supply the Owners with read-only access to this information through a website).

 

All registration and direct communication costs relating to this tracking system will be for the Charterers’ account. The Charterers will advise the Owners when the system is operative and confirm termination on completion of this charter. The OWNERS are required to supply the following information to the Charterers to enable installation, such information to form part of this charter.

 

	
VESSEL’S NAME
    	
 
    	
GENMAR ATLAS
    
	
INMARSAT   NUMBER 9 DIGITS (1ST IS 4)
    	
 
    	
453836033
    
	
MAKE   AND MODEL OF TERMINAL
    	
 
    	
JRC JUE-75C
    
	
MODEL   NUMBER
    	
 
    	
 
    
	
TERMINAL   S/W VERSION
    	
 
    	
 
    
	
SERIAL   NUMBER
    	
 
    	
GY 69280
    

 

57. Sailing plan and notice of any delay.

 

The Master is to notify the Charterers, before commencing next ocean passage and prior to sailing from port, his intended sailing plan, routing, estimated duration of the voyage and estimated arrival date and time at the next destination. If during the course of any voyage the vessel experiences a delay, of any nature, which will affect the Master’s estimated arrival time at the next port in excess of six hours the Master is to

 

 

immediately contact the Charterers by phone then follow up in writing. The Master is to provide a detailed explanation of the reason for the delay, any problems that have been caused to the vessel and provide the Charterers with a revised estimated time of arrival.

 

58. Weather routing service.

 

Owners hereby acknowledge that Fleetweather is currently Charterers’ nominated weather routing service provider.

 

Charterers may provide suggestions concerning navigation based on advice from the weather routing service provider and such suggestions shall be followed by Master. The Master, at his reasonable discretion, may not follow suggested route if such route will cause a threat to the vessel and or cargo or the performance will not be improved. In such case the Master is to describe in detail the reasons for departing from the suggested route.

 

59. Traffic separation.

 

In the interests of safety Owners will recommend that the Master is to observe the recommendations as to traffic separation and routing as issued from time to time by the I.M.O. or as promulgated by the state of the flag of the vessel, or the state in which the effective management of the vessel is exercised.

 

Financial

 

60. Commission.

 

Commission is payable as per the terms of the Pool Agreement.

 

61. Taxes on the vessel or the hire.

 

Any and all taxes and or dues on the vessel and or the hire payments to the Owners are to be for the Owners’ account and settled directly by them.

 

62. Extension of period.

 

Any loss of time during which the vessel is off hire shall count as part of the charter period.  The Charterers, however, in its option shall be able to add any or all of the off hire time to the period of the charter as an extension of the charter period.

 

Cargo Operations

 

63. Pumping performance.

 

On the basis of homogeneous cargo, the Owners warrants that the vessel can discharge the entire cargo within 24 (twenty four) hours or maintain a minimum pressure of 100 P.S.I. (pounds per square inch) at the vessel’s manifolds providing shore facilities are capable of receiving the same, excluding crude oil washing and stripping time. The vessel shall be equipped with pressure gauges at each manifold that are maintained in a proper working condition. Furthermore each gauge shall have a valid test certificate. The Owners are requested to instruct the Master to clarify by protest letter whenever the pumping time exceeds the warranted period.

 

Failing the above, the Charterers will deduct from hire excessive pumping time over and above such warranted time. If the vessel’s performance is below the referenced standard and pumping is delayed, due to the vessel’s deficiency, the Charterers have the right to withdraw the vessel from the berth until such deficiencies are remedied. All extra costs incurred as a result of this to be for Owners’ account and all time lost as a result is to be deducted from hire. The Owners will receive no credit or compensation if the vessel is able to discharge at a rate greater than specified above.

 

At each port of discharge, the vessel is to maintain a proper and accurate discharge pumping record. This log must be countersigned by Master, Discharge Port Inspector and

 

 

representative of the receiving terminal, if available. On completion of discharge, this record is to be promptly faxed to the Charterers.

 

64. Tank cleaning.

 

On delivery, the vessel is to be suitably clean to carry Charterers nominated cargo, within the terms of this charter party, in all tanks (inclusive slop tanks).

 

Owners warrant that the Master, Officers and crew are familiar with and trained in tank cleaning procedures including wall washing techniques to enable Charterers to maximize the vessel’s carrying capacity within the limits of the permitted cargoes and tank coating manufacturer’s restrictions. A copy of any such restrictions is to be faxed to Charterers latest 7 days after the day of this charter party.

 

The Owners shall be responsible for cleaning tanks, lines and pumps between voyages in such manner as to enable vessel to pass inspection for the Charterers’ next nominated cargo upon arrival at the port of loading providing sailing / delivery time between voyages permit. The master is to advise his intended cleaning procedure to the Charterers.

 

Charterers to supply cleaning detergents and chemicals at their cost as required. Charterers have the right to put on board their supercargo as an advisor to the crew to carry out the cleaning process.

 

Where applicable, the vessel’s crew is to perform sweeping (squeegeeing) and tank cleaning after vegoil, palmoil, molasses cargo to water white standard when required by Charterers. The Charterers will pay USD 100 per tank for this combined sweeping and cleaning service after vegoil, palmoil, molasses cargo.

 

Chemicals for special cleaning are to be paid for by the Charterers.

 

Should the vessel fail a tank inspection, all time, bunker and costs incurred from the time when notice of readiness was originally tendered prior to the failed tank inspection will be for Owners account. Vessel will be off-hired from the time the Vessel originally tendered notice of readiness prior to the failed tank inspection until the Vessel passes the tank inspection and retenders her NOR.

 

65. Ballasting and deballasting operations.

 

The Owners warrants that the vessel is able to ballast and de-ballast concurrently with cargo operation. Under normal ballasting pattern, the vessel will take a maximum of 4 hours to de-ballast ready for loading. Should the vessel have to ballast for safety reasons (storm ballast), the maximum time for de-ballasting shall not apply. Any time lost by vessel being unable to ballast or de-ballast concurrently with cargo operation to be for the Owners’ account and may be deducted from hire unless such ballasting or de-ballasting concurrently with cargo operation is prohibited by local regulations.

 

66. Tank washings and prevention of pollution.

 

The vessel is to be delivered to the Charterers and re delivered back to the Owners free of slops, however, if this is not operationally possible then the following clause to apply.

 

In relation to tank washings the Master shall:

 

At the start of the ballast passage before presenting for loading at the commencement of this charter, retain on board all oil residues remaining in the vessel from one previous cargo in one slop tank, which the Charterers are to accept and arrange disposal of at Owners’ cost and time.

 

During tank washing collect the washing into one cargo compartment and, after maximum separation of free water, discharge such water overboard always, however, in accordance with international pollution legislation.

 

 

Notify the Charterers by email or telephone of the amounts of oil and water in segregated tank washings.

 

On being so notified the Charterers shall, before the vessel’s arrival at the loading port, give instructions for the disposal of such segregated tank washing. The Owners shall ensure that the Master, on the vessel’s arrival at the loading port, is to arrange in conjunction with the cargo suppliers for the measurement of the quantity of such segregated tank washings and make a note of such quantity in the vessel’s Oil record book.  Owners shall ensure that the Master shall keep the water in such segregated tank washing to a minimum.

 

On re-delivery the Owners will accept the vessel back into their control with the washings from one previous cargo on board in one slop tank.  The Charterers are to make best endeavours to keep such washings and or slops to a minimum. Owners shall arrange for such disposal at the vessel’s next port of call after re-delivery at Charterers’ cost and time.

 

67. Cargo retention.

 

In the event that any cargo remains on board upon completion of discharge, the Charterers shall have the right to deduct from hire an amount equal to the FOB port loading value of such cargo plus voyage freight due with respect thereto provided that the volume of cargo remaining on board is pumpable and reachable by the vessel’s fixed pumps, or would have been pumpable and reachable but for the fault or negligence of the Owners, the Master, the vessel or her crew, as determined by an independent surveyor appointed by the Charterers and acceptable to both the Owners and the Charterers, whose findings shall be final and binding. Any action or lack of action in accordance with this provision shall be without prejudice to any rights or obligations of the Charterers. For the purposes of this clause, any surveyor from an internationally reputable surveyor company shall be considered acceptable to both the Owners and the Charterers.

 

68. In transit loss.

 

The Owners are to be responsible for any cargo in-transit loss exceeding 0.3 % as determined by an independent surveyor appointed by the Charterers and acceptable to both the Owners and the Charterers, whose findings shall be final and binding. In-transit loss is defined as, the difference between net vessel’s volume after loading at the load port and before unloading at the discharge port, based on the independent surveyor’s figures. Calculation is always to be based on same cargo temperature. Such cargo in-transit losses are to be deducted from hire at an amount equal to the FOB load port value of such cargo, plus hire and bunkers with respect thereto. For the purposes of this clause, any surveyor from an internationally reputable surveyor company shall be considered acceptable to both the Owners and the Charterers.

 

69. Cargo transfer inspection.

 

The Charterers may, in its option, at their time and at its risk and expense place a representative on board to observe preparations for loading or discharging of the cargo during the period that the vessel is proceeding to or is in a port. Such representative to be suitably insured for all personal risk and liability by the Charterers. Such visits shall include, without limitation, access to the pump room, the engine room, the cargo control room, the navigation bridge and the deck area. The Charterers’ representative may render advice to the Master.  He will not, however, under any circumstances order or direct the taking of any particular action by vessel or crew or interfere in any way with the Master’s exercise of his authority.

 

70. Ship to ship transfer.

 

The Charterers shall have the option to load and discharge and/or lighten the vessel via ship-to-ship transfer at sea, at anchor or underway off any port or berth to berth, or

 

 

double banking in any port within the trading limits of this Charter. The Charterers will provide all fenders, hoses and equipment necessary to perform the lightering operation. The Owners are to agree to allow supervisory personnel on board, including but not limited to a qualified/experienced Mooring Master, to assist in the performance of the lightering operation.

 

Owners and Charterers warrant that any ship-to-ship operation and equipment shall be carried out in accordance with the procedures set out in the last revised edition of the International Chamber of Shipping Oil Companies International Marine Forum, Ship-to-Ship Transfer Guide for Petroleum. Owners warrant that the vessel, master, officers and crew are, and shall remain during this Charter, capable of safely carrying out all the procedures in the current edition of the ICS/ OCIMF Ship to Ship Transfer Guide (Petroleum).

 

Operations shall be made under the exclusive direction, supervision and control of the vessel’s master and to the satisfaction of the mooring master and/or cargo STS advisor. Vessel’s master shall continue to be fully responsible for the operation, management and navigation of the Vessel during the entire STS operation. It is understood and agreed that the crew of the vessel will be required to assist handling fenders and cargo hoses as well as mooring and unmooring as designated by the Mooring Master at the transfer site at no additional cost to the Charterers.

 

Charterers shall notify Owners in advance when, where and how much cargo shall be carried out under such ship to ship transfer operations as well as any other relevant information required prior to the arrival of the Vessel at the intended ship to ship transfer site.

 

The vessel may be required to accept dirty ballast from one or more of Charterers lightering vessels in performance of the lightering operation if technically and operationally feasible and the Owners warrants that the Master will co-operate with the Mooring Master concerning dirty ballast to the extent possible in the Master’s discretion. The Charterers are to pay all costs related to removal of such ballast water ashore on a regular basis, and vessel shall be redelivered with no such waters/ROB.

 

Owners’ consent is required if Charterers wish to use the Vessel for more than two (2) consecutive ship-to-ship transfer operations, however such consent not to be unreasonably withheld.

 

71. Sea terminal.

 

The Owners warrants that the vessel, when calling at a sea terminal, will maintain her engines in readiness.  The vessel will be loaded and discharged in such manner that she, at any stage of loading or discharging operation, is able if necessary, for any reason, to immediately shut down cargo operations and promptly disconnect hoses and mooring lines to proceed to another anchorage at sea.

 

72. Agents and watchmen.

 

The Owners are to appoint their own agents when and if there is major Owners’ business such as extensive repairs, docking, and other extended off-hire periods. However, the Charterers’ choice of agents are to attend, at cost, to minor matters such as postage, cash advance to Master, crew transportations, medical, telexes, etc., on the Owners’ behalf.

 

Gangway watchmen and fire watchmen to be for the Owners’ account unless compulsory in which case the cost to be for the Charterers’ account, unless watchmen from vessel’s crew are sufficient and may be used.

 

 

73. Adherence to voyage orders.

 

Owner undertakes that, unless Charterers require otherwise, the Master will follow voyage instructions issued by Charterers which instructions shall include Charterers’ standard general instructions contained in the Masters Manual and/or Charterers’ Vessels Circular provided by Charterers to the Master from time to time. Owner shall be responsible for any time, cost, delay or loss associated with vessel deviating from Charterers’ voyage instructions including, without limitation, loading any cargo quantity in excess of, or short of, that instructed within the voyage orders.  If a discrepancy arises at loading terminal, Master is to contact Charterers at once concerning said discrepancy, before loading, to clarify the situation. If a conflict arises between terminal order and Charterers’ voyage instructions, the Master is to stop cargo operations and to contact Charterers at once. Terminal orders shall never supersede Charterers’ voyage instructions and any conflict shall be resolved prior to resumption of cargo operations. The vessel is not to resume cargo operations until Charterers have directed the vessel to do so.

 

74. International transport workers federation.

 

The Owners guarantees that the employment of the vessel’s officers and crew is covered by a bona-fide trade union agreement acceptable to the International Transport Workers Federation worldwide and will remain so during the currency of this charter. The vessel is to carry such agreement on board during the service. In the event that the vessel is delayed by strikes, labour disputes or any other discrimination or difficulties against the vessel because of: previous trade prior to commencement of this Charter; the Ownership; the flag; the officers, crew and the officer’s and crew’s employment conditions, all such time lost is to be considered as off hire and expenses directly incurred thereby including bunker fuel consumed during such periods to be for the Owners’ account.

 

Eligibility, Insurance and Certification

 

75. Classification and eligibility.

 

The Owners warrants that the vessel is in all respect eligible under applicable conventions, laws and regulations for trading to and from the port and places specified in clause 4 of this time charter party.  Furthermore, the vessel is not in any way listed as unacceptable by any Government or other organization whatsoever, nor is she debarred by any activity of any port within the agreed trading areas.  The vessel shall have on board for inspection by the authorities all certificates, records, compliance letters and other documents required for such services, including, but not limited to, a U.S. Coast Guard Certificate of Financial Responsibility (Oil Pollution) and the certificate required by Article VII of International Convention on Civil Liability for Oil Pollution Damage of 1969, as amended.

 

The Owners warrants that the vessel does and will throughout the duration of this charter fully comply with all applicable conventions, laws, regulations and ordinances of any international, national, state or local governmental entity having jurisdiction including, but not limited to:

 

(a)         the US Port and Tanker Safety Act, as amended,

(b)         the US Federal Water Pollution Control Act (Clean Water Act), as amended,

(c)          MARPOL 1973/78 as amended and extended,

(d)         SOLAS 1974/1978/1983 as amended and extended,

(e)          OPA 1990, as amended,

(f)           The EU Directive 2005/33/EC, as amended.

 

 

The Owners further warrants that any alterations (including time for alterations) to the ship to comply with any of these conventions, laws, regulations, ordinances and/or their amendments will be entirely at Owners’ expense.

 

The Owners further warrants to keep the vessel with unexpired classification in force at all time during the charter period.

 

Any delays, losses, expenses or damages arising as a result of failure to comply with any part of this clause shall be for the Owners’ account and the Charterers shall not be liable for any delay caused by failure to comply with these warranties.  Any resultant loss of time will be considered as off hire.

 

76. USCG compliance.

 

The Owners certifies that the vessel complies with the provisions of current U.S. Coast Guard regulations and any subsequent amendment thereto and all other applicable state pollution and safety laws, rules and regulations as may be promulgated and subsequent amendments thereto. The Owners further certifies that the vessel is not presently under an outstanding letter of discrepancy issued by the U.S. Coast Guard as a result of Coast Guard inspection of the vessel at a prior call at a U.S.A. port.

 

Owners warrant that they are aware of the requirements of the U.S Bureau of Customs and Border Protection ruling issued on December 5th 2003 under Federal Register Part II Department of Homeland Security 19 CFR Parts 4, 103, et al. and will comply fully with these requirements for entering U.S ports.

 

The vessel must possess a valid U.S.C.G Certificate of Compliance (COC) Certificate. Owners appreciate that without a COC in force, the Vessel may not be able to tender a valid NOR under Charterer’s sub-charter party, with loss of demurrage as a result. The Vessel will be off-hire for the period of time for which Charterers are unable to collect voyage charter laytime/demurrage due to the Vessel arriving in the U.S. without a valid U.S.C.G COC. Should the vessel be overdue for an annual interim COC exam and the U.S.C.G deems the vessel to be cargo restricted, the Vessel shall be considered as not being in possession of a valid COC. Should the vessel have to deviate, proceed to a layberth and / or incur additional costs to complete the COC exam, all deviation time, bunkers and port costs incurred will be for Owner’s account. The Vessel will return on hire at a position not less favourable to Charterers.

 

Should the Vessel fail the U.S.C.G COC inspection or Owners fail to arrange COC inspection prior to arrival, then the entire period of time in which Charterers are unable to collect Voyage laytime/demurrage shall be off-hire.

 

Should it be feasible to carry out the COC inspection at a port outside the USA (such as for example Singapore or Rotterdam), Charterers may request that Owners have the vessel inspected at such a location at Owners’s time and expense. Should Owners refuse to carry out the inspection as requested, the Vessel shall be off-hire from arrival at the US port of inspection and until the COC certificate has been issued.

 

In respect of US/Canadian Asian Gyspy Moth (AGM) regulations, Owners shall ensure that pre-departure certifications are obtained prior to departing AGM-affected ports and:

 

(a) all costs and associated costs of AGM certification;

(b) any time lost waiting for and undertaking the certification inspections; and

(c) any fines, delays, claims or other losses that are incurred in connection with non-compliance with AGM regulations,  shall be for Owners’ account.

 

 

77. AMS and CBSA requirements.

 

(a)  If the Vessel loads or carries cargo destined for the US or passing through US ports in transit, the Owners shall comply with the current US Customs regulations (19 CFR 4.7) or any subsequent amendments thereto and shall undertake the role of carrier for the purposes of such regulations and shall submit a cargo declaration by AMS (Automated Manifest System) to the US Customs using the Charterers’ service provider and Charterers’ SCAC (Standard Carrier Alpha Code) and ICB (International Carrier  Bond). Similarly, if the Vessel loads or carries cargo destined for Canada or passing through Canadian ports in transit, the Owners shall comply with the current Canadian customs regulations and any Canada Border Services Agency (CBSA) requirements, including those related to the Bonded Carrier Code.

 

(b) The Charterers shall provide all necessary information to the Owners and/or their agents to enable the Owners to submit a timely and accurate cargo declaration.

 

The Charterers shall assume liability for and shall indemnify, defend and hold harmless the Owners against any loss and/or damage whatsoever (including consequential loss and/or damage) and/or any expenses, fines, penalties and all other claims of whatsoever nature, including but not limited to legal costs, arising from the Charterers’ failure to comply with any of the provisions of this sub-clause.

 

(c) The Owners shall assume liability for and shall indemnify, defend and hold harmless the Charterers against any loss and/or damage whatsoever (including consequential loss and/or damage) and any expenses, fines, penalties and all other claims of whatsoever nature, including but not limited to legal costs, arising from the Owners’ failure to comply with any of the provisions of sub-clause (a).

 

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

 

The Owners will submit the cargo declaration via the Charterers service provider to the US or Canadian (as applicable) customs authorities, however the Charterers are obliged to provide all the necessary cargo information enabling Owners to submit the cargo declaration in a timely fashion. In this regard, Charterers indemnify and hold the Owners harmless against any loss or damage whatsoever arising out of the non-compliance by the Charterers with the obligations under this clause.

 

Furthermore Owners to indemnify the Charterers for loss and/or damage arising from the Owners’ failure to comply with the regulation as it has been outlined.

 

In the event the vessel is delayed, detained as a result of Charterers failure to comply with its obligations under this clause; in these instances vessel will remain On hire unless delays has been caused by the Owners breach of its obligations hereunder.

 

78. ISPS.

 

(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) in relation to the Vessel and thereafter during the currency of this charter, the Owners shall procure that both the Vessel and “the Company” (as defined by the ISPS Code) shall comply with the requirements of the ISPS Code relating to the Vessel and the Company. Upon request the Owners shall provide a copy of the relevant International Ship Security Certificate (or the Interim International Ship Security Certificate) to the Charterers. The Owners shall provide the Charterers with the full style contact details of the Company Security Officer (CSO).

 

(ii) Except as otherwise provided in this charter, loss, damage, expense or delay, excluding consequential loss, caused by failure on the part of the Owners or the

 

 

Company to comply with the requirements of the ISPS Code or this Clause shall be for the Owners account.

 

(b) (i) The Charterers shall provide the CSO and or the Ship Security Officer (SSO)/Master with their full style contact details and, where sub-letting is permitted under the terms of this charter, shall ensure that the contact details of all sub-Charterers are likewise provided to the CSO and or the SSO/Master.

 

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, excluding consequential loss, caused by failure on the part of the Charterers to comply with this Clause shall be for the Charterers account.

 

(c)  Security guards posted on the vessel due to crew issues by the USCG will be for Owners’ account.

 

79. Drug and alcohol abuse.

 

The Exxon Drug and Alcohol Policy, blanket declaration is to be deemed a part of this charter. The Owners warrants such blanket declaration is registered with Exxon. The Owners further warrants that it has an active policy on drug and alcohol abuse, applicable to the vessel, in full force at all times which meets or exceeds the standards set down in the Oil Companies International Marine Forum Guidelines for the control of drugs and alcohol onboard ship. The policy will remain in effect during the term of this charter and will be fully complied with at all times.  The Charterers are not to be held responsible for any and all consequences of the Owners failing to comply with this clause.

 

80. Insurance and financial responsibility.

 

a) Owners warrant that, throughout Vessel’s service under this Charter, Owners shall have full and valid Protection and Indemnity Insurance (“P&I Insurance”) for the Vessel, as described in this clause, with the P&I Insurance placed with a P&I Club which is a member of the International Group of P&I Clubs.  This P&I Insurance and any Excess Insurance shall be at no cost to Charterers.

 

(b) The P&I Insurance must include coverage against liability for cargo loss and or damage and coverage against liability for pollution for an amount not less than US$1 Billion per incident.  Owners will also obtain any additional oil pollution insurance cover which becomes available, either through their P&I Club(s) or through underwriters providing first class security.

 

(c) Owners hereby warrant and represent that the insured value of the Vessel is [***].  Owners warrant that it has in full force and effect Hull and Machinery insurance placed through reputable Brokers on International Hull clauses, or equivalent, for the value of the Vessel with first class underwriters. Such insurance to be maintained for the duration of this Charter.

 

(d) Owners warrant that the Vessel carries on board a certificate (which will be maintained in effect throughout the duration of the charter) issued by Owners’ P&I Club in compliance with Article VII of the International Convention on Civil Liability for Oil Pollution Damage 1992 (and any amendments thereto). Any delay or consequences due to failure to have on board or to maintain in effect such certificate to be for Owners’ account.

 

(e) DELETED

 

 

(f) Nothing in this Charter shall prejudice Charterers’ rights to take such preventive measures in relation to pollution or threatened pollution as may be permissible under applicable laws and the rights and duties of Owners and Charterers herein shall be and remain subject to and in accordance with any such applicable law.

 

(g)   If requested by Charterers, Owners shall promptly furnish to Charterers proper evidence of such P&I Insurance and Hull & Machinery Insurance (including but not limited to certificates of Entry / Endorsement Slip) immediately upon entering into this Charter or at any time during the Charter term.

 

(h)   The Owners further guarantees to keep the vessel with un-expired classification in force at all time during the charter period and are to provide evidence of the same in accordance with this clause.

 

(i) Water Quality and FMC Clause

 

The Owners warrants to have, and to carry, on board the vessel the U.S. Federal Maritime Commission Certificate of Financial Responsibility and to comply with the U.S. Federal Water Pollution Control Act as amended by the Clean Water Act 1977(water pollution and any subsequent amendment thereto). The Owners are to provide evidence of Financial Responsibility in respect not only of oil but also of hazardous substance.

 

(j) State of California.

 

The Owners warrants that the vessel carries on board documentation of proof of financial responsibility satisfying requirements of the California Oil Spill Prevention and Response Act of 1990.

 

(k) I.T.O.P.F (revised Tovalop 1987)

 

The Owners warrants that it is a member of the International Tanker Owners Pollution Federation (I.T.O.P.F.) and that it will retain such membership during the entire period of the services of its vessel under this charter.

 

(l) I.S.M.

 

The Owners warrants that this vessel complies fully with the I.S.M. code and is in possession of a valid Safety Management Certificate and this will remain so for the entirety of her employment under this charter.

 

Without prejudice to any rights or remedies available under the terms of this charter or under English law, in the event of a breach of the above undertaking, any loss, damage, expense or delay following there from shall be for the Owners’ account and the Charterers shall have the absolute right to cancel this Charter if such breach is not rectified within three (3) days.

 

81. Oil pollution.

 

(a)           Subject to the terms of this Charter, as between Owners and Charterers, in the event of an oil pollution incident involving any discharge or threat of discharge of oil, oily mixture, or oily residue from the Vessel (the “Pollution Incident”), Owners shall have sole responsibility for responding to the Pollution Incident as may be required of the vessel interests by applicable law or regulation.

 

(b)           Without prejudice to the above, as between the parties it is hereby agreed that:

 

(i)             Owners shall indemnify, defend and hold Charterers harmless in respect of any liability for criminal fine or civil penalty arising out of or in connection with a Pollution Incident, to the extent that such Pollution Incident results from a negligent act or omission, or breach of this Charter by Owners, their servants or agents;

 

(ii)              Charterers shall indemnify, defend and hold Owners harmless in respect of any liability for criminal fine or civil penalty arising out of or in connection

 

 

with a Pollution Incident, to the extent that such Pollution Incident results from a negligent act or omission, or breach of this Charter by Charterers, their servants or agents;

 

provided always that if such fine or penalty has been imposed by reason wholly or partly of any fault of the party seeking the indemnity, the amount of the indemnity shall be limited accordingly and further provided that the law governing the Charter does not prohibit recovery of such fines.

 

(c)           The rights of Owners and Charterers under this clause shall extend to and include an indemnity in respect of any reasonable legal costs and/or other expenses incurred by or awarded against them in respect of any proceedings instituted against them for the imposition of any fine or other penalty in circumstances set out in paragraph (b), irrespective of whether any fine or other penalty is actually imposed.

 

(d)           Nothing in this Clause shall prejudice any right of recourse of either party, or any defences or right to limit liability under any applicable law.

 

(e)           Owners warrants that the vessel will be able to trade to and from Canadian ports.

 

82. Extra insurance.

 

Owners warrants that any extra insurance, if any, due to the Vessel’s age shall be for the Owners’ account.

 

83. Hull and machinery value.

 

The value of hull and machinery insurance may be changed every year, however, such change to be understood as the adjustment of this type of vessel’s market value or as required by holders of the mortgage at that time only and Owners will inform Charterers of new value, if changed accordingly.

 

84. Air pollution.

 

Owners will comply with all applicable laws, regulations and ordinances by any national, state, regional or local, government having jurisdiction regarding air pollution.

 

85. Return insurance.

 

Charterers to have the benefit of any return insurance premium received by Owners from underwriters (as and when received from underwriters) by reason of the vessel being in port for a minimum period of 30 days, provided the vessel is on hire.

 

86. War risk and Piracy.

 

a)            Charterers shall not be liable for late redelivery under this charter resulting from seizure of the vessel by pirates.

 

b)            Owners shall not be allowed to claim blocking and trapping insurance.

 

c)             No contraband of war shall be shipped, but petroleum and/or its products shall not be deemed contraband of war for the purposes of this clause. Vessel shall not, however, be required, without the consent of Owners, which shall not be unreasonably withheld, to enter any port or zone which is involved in a state of war, warlike operations or hostilities, civil strike, insurrection or piracy whether there be a declaration of war or not, where it might reasonably be expected to be subjected to capture, seizure or arrest, or to be a hostile act by a belligerent power (the term “power meaning any de jure or de facto authority or any other purported governmental organization maintaining naval, military or air forces).

 

d)            For the purpose of this clause it shall be unreasonable for Owners to withhold consent to any voyage, route or port of loading or discharge if (i) insurance against all risks defined in paragraph c) is then available commercially or under a government

 

 

program in respect of such voyage, route or port of loading or discharge and (ii) it continues to be customary tanker shipping industry practice for vessels to undertake such voyage, route or port of loading or discharge. If such consent is given by Owners, Charterers will pay the provable additional war risk premium of insuring the vessel against hull war risk in an amount equal to the value under her ordinary hull policy net of all discounts, rebates and no claims bonuses. The benefit of discounts, rebates and no claims bonuses on additional premiums received by Owners from their War Risks insurers, underwriters or brokers shall be credited to Charterers in full. Charterers shall reimburse Owners any amounts due under this clause upon receipt of Owners’ invoice, together with full supporting documentation including all associated debit and credit notes.

 

e)             If additional insurance for hull war risk is not obtainable commercially or through a government program, vessel shall not be required to enter or remain at any such port or zone.

 

f)             In addition, Owners may purchase at their own cost war risk insurance on ancillary risks such as loss of hire, freight, disbursements, etc. if they carry such insurance for ordinary marine hazards.

 

g)             Owners must submit all reimbursement claims together with all required supporting documents under this Charter to Charterers within 3 months of Owners being invoiced the relevant costs otherwise Owners’ claim shall be time-barred under this Charter.

 

h)            Where there is a conflict between the provisions of this clause 86 and clause 105, the provisions of clause 105 shall take precedence.

 

Bills of Lading, Documentation, Arbitration

 

87A. Letter of Indemnity and Bill of Lading.

 

If Charterers by facsimile, email or other form of written communication that specifically refers to this clause request Owners to discharge a quantity of cargo either:

 

a)           Without Bills of Lading and/or;

 

b)           at a discharge place other than that named in a Bill of lading and/or;

 

c)           that is different from the Bill of Lading quantity;

 

In consideration of Owners complying with Charterers’ specific instructions, as above, Charterers shall, upon giving formal notification to Owners, invoke Owners’ P and I Club Letter of Indemnity Wording for such activity. Owners’ P and I Club Letter of Indemnity Wording are always to be issued without a bank guarantee.

 

Owners’ blanket Letter of Indemnity wordings are to have been provided by Owners prior to delivery under this Charter and are incorporated into this Charter. Charterers always have the option to invoke the same as and when necessary either verbally or by facsimile or email to the Owners and when invoked, the Letter of Indemnity is deemed to have been issued by Charterers with the relevant cargo quantity, description of cargo, vessel’s name and receiver’s name (as given in the relevant voyage/discharge instructions to the vessel) incorporated into such Letter of Indemnity and, therefore, to be in full force and effect on each and every occasion when discharge as aforesaid takes place.

 

 

Such indemnity shall automatically be null and void upon presentation of the relevant Bill of Lading, or 12 (twelve) months after completion of discharge of cargo to which such indemnity is relevant.

 

87B. Electronic Bills of Lading.

 

Notwithstanding anything contained in this Charter, Charterers may require Owners to sign up to an electronic document trading platform system that is approved by Owners P&I Club so that Owners can, upon instructions from Charterers, issue and sign in electronic form and transmit electronically any bill of lading, waybill, delivery order, certificate or other document (each, an “eDoc”) issued pursuant to, or in connection with, this Charter (whether or not signed on behalf of Owners or Charterers or any sub-charterers). It is expressly agreed that any applicable requirement of law, contract, custom or practice that any bill of lading, waybill, delivery order, certificate or other document or communication issued pursuant to this Charter shall be made or evidenced in writing, signed or sealed shall be satisfied by such eDoc and the parties agree not to contend in any dispute arising out of or in connection with any eDoc or any eDoc which has been converted to paper that such eDoc is invalid on the grounds that it is not in writing or that it is not equivalent to an original paper document signed by hand, or, as the case may be, sealed.

 

Charterers agree to hold Owners harmless in respect of any liability, cost or expense arising from the use of any electronic trading system, to the extent that such liability, cost or expense would not have arisen under a paper trading system.

 

88. New paramount.

 

Charterers shall endeavor to ensure that all Bills of Lading issued pursuant to this charter shall contain the following clauses:

 

1. Subject to sub-clauses (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 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 that 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 herein contained shall be deemed to be either 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 that applies 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 herein contained shall be deemed to be either 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.

 

If any term of this Bill of Lading is repugnant to the Hague-Visby Rules, or Hague Rules or Hamburg Rules, if applicable, such term shall be void to that extent, but no further.  Nothing in the Bill of Lading shall be constructed as in any way to restrict, exclude or waive the right of any of the relevant parties or person to limit liability under any available legislation and or law.

 

 

89. Arbitration (London Maritime Arbitrators’ Association).

 

This Charter is governed by English law and the provisions of clause 20 of the Pool Agreement for the vessel shall apply to this Charter as if the same was set out in full, mutatis mutandis, herein.

 

90. Onboard blending / Commingling.

 

Charterers shall have the right to perform onboard blending and/or commingling of cargo whilst loading or during sea passage, being two or more grades, over the designated  cargo tanks to be loaded. Vessel’s staff shall ensure that proper stability maintained during the entire operation. Charterers’ nominated cargo inspector to supervise such onboard blending and vessel’s staff is to follow the inspector’s recommendations. In the absence of Charterers’ cargo inspector, Owners to follow Charterers’ instructions subject to ship’s safety. Charterers will issue L.O.I. in Owners P&I Club wording.

 

91. Dye / Additive.

 

In case Charterers request additive to be added to a cargo while in the vessel’s cargo tanks Owners will accept to do the operation provided it is proper/permissible and within the industry practice and Charterers to provide a LOI to that effect agreeable to Owners. Charterers have the option to add ‘liquid dye’ to cargo in vessel’s tanks just prior to the commencement of discharge at their risk and expense. The time and cost for the dye shall be for Charterers’ account. The dye can only be added with total compliance under the full instruction and supervision of the Master and/or Chief Officer who will always have final authority to how the dye is added. Charterers to indemnify Owners as per Owners’ P&I Club wording for adding dye. Owners’ standard instructions for adding dye to cargo which Charterers to comply in full.

 

All dye must only be added under direct supervision of Master and /or Chief Officer.

 

Miscellaneous

 

92. Smuggling.

 

Any delays, expenses and/or fines incurred on the account of smuggling to be for Owners’ account if caused by the Master, Officers, Crew or Owners’ servants.

 

93. Third Party Arrest Clause.

 

In the event of arrest (by a party other than authorities at home or abroad) or other sanction levied against the vessel or the Charterers arising out of the Owners’ breach or any fault of the Owners or out of any incident in which Charterers are not at fault, the Owners shall immediately and, forthwith upon receiving notice of the arrest of the vessel or of its detention in exercise or purported exercise of any lien or claim, procure its release by providing bail or otherwise as the circumstances may require and agree to assume full responsibility for all penalties, claims from cargo receivers, sub charterers and other third parties arising due to such event of arrest or other sanction and for putting up security and the vessel shall be considered off-hire during any delay or detention arising therefrom. Owners shall further be liable for all consequential losses caused by an arrest, seizure, detention or other claims against the vessel arising out of any matters in which Charterers are not at fault.

 

94. Detention Clause.

 

Should the vessel be seized or detained by any authority, or arrested at the suit of any party having or purporting to have a claim against the vessel or having or purporting to have any interest in the vessel, hire shall not be payable in respect of any period during which the vessel is not fully at the Charterers’ use and all extra expenses shall be for the Owners’ account and Owners shall immediately and, forthwith upon receiving notice of the arrest of the vessel or of its detention in exercise or purported exercise of any lien or claim, procure its release by providing bail or otherwise as the circumstances may

 

 

require and will also be responsible for claims from cargo receivers, sub charterers and other third parties arising due to such event of seizure, detention or arrest and, unless such seizure, detention or arrest is occasioned by any personal act or omission or default of the Charterers or their agents or by reason of cargo carried. Owners shall further be liable for all consequential losses caused by an arrest, seizure, detention or other claims against the vessel arising out of any matters in which Charterers are not at fault.

 

95. Vaccination Clause.

 

Owners are to arrange at its expense for the Master, Officer and Crew of the vessel, to hold valid vaccination certificates against yellow fever, cholera, as per International Health Regulations 1969 or any other future legislation and subsequent amendments, upon delivery of the vessel and throughout the time charter period. Any other vaccination requirement, which may come up from time to time throughout the world and are relevant to the vessel’s trading, shall be carried out at Owners’ expense.

 

96. Clean Ballast Clause.

 

Throughout the duration of this charter, the vessel is always to arrive at all load port(s) with clean ballast only.

 

97. Notice Of Readiness (NOR) Clause.

 

At every load port and discharge port, throughout the duration of this time charter, the vessel shall tender her NOR immediately on arrival in the customary way. Until such time as the vessel is all fast at the berth/jetty, the Master shall re-tender vessel’s NOR, daily, at 09:00 hours local time, to all parties if so instructed in the Charterers’ load/discharge orders.

 

The text of subsequent daily NOR, as above, to be:

 

“Without prejudice to original NOR tendered                     Hrs on                     20         (to be completed as appropriate), on vessel’s arrival, please be advised that my vessel is/remains ready in all respects to commence loading/discharging (delete as appropriate) of the cargo of                     (complete as appropriate)”.

 

98. Slop Clause.

 

The vessel shall have efficient and safe means of transferring engine room / pump room bilge liquids to designated holding tanks on board for disposal in accordance with international regulations.

 

99. Gauges Clause.

 

The vessel to be equipped with closed venting, gauging and sampling systems and cargo tanks to be equipped with high level alarms. Sufficient portable pressure gauges to be on board all times for the manifolds.

 

100. Slow Steam.

 

Owners agree to allow Charterers to issue orders to slow down the vessel consistent with safe operation of the vessel and its machinery on ballast and / or laden passage.

 

101. Oil Pollution Prevention.

 

Owners shall instruct the Master to retain on board all oily residues of oil of a persistent nature remaining in the vessel from the previous cargo. The Master shall, during tank washing, collect the washing into one cargo compartment and after maximum separation of the free water, discharge the water so separated overboard as permitted by MARPOL regulations so as not to conflict with any applicable local laws. The Master shall keep the Charterers notified of estimated tonnage of all segregated tank washings from previous cargoes.

 

 

102. U.S. Compliance Clause.

 

Owners warrants and guarantees that it and the vessel are not in any way directly or indirectly owned, controlled by or related to any Cuban, North Korean, Iranian, Serbian or Montenegro interests.

 

103. Baltic Navigation Clause.

 

Before entering Baltic waters vessel to have all navigation aids in perfect condition and while in the Baltic and / or Finnish Gulf strictly observe all regulations and recommendations. No oil or oily residues or wastes to be let overboard into the sea whilst in the Baltic or in the Gulf of Finland.

 

104. Low Sulphur Fuel Clause.

 

(a) Owners warrant that the vessel will be fitted with the required piping, tanks and equipment to comply with Marpol Annex VI requirements and have on board procedures to carry out and comply with the change to and from Low Sulphur Fuel (LSF) (or MDO as the area may require) in the Sulphur Emission Controlled Areas (SECAs) as stipulated in Marpol Annex VI and/or zones regulated by regional and/or national authorities such as, but not limited to, the EU and the US Environmental Protection Agency. Owners undertake that they will comply with any worldwide regional and international regulations in regards to bunker quality, bunker specifications, supply and any technical, mechanical issue throughout the duration of the time charter.

 

(b) Charterers will ensure and arrange for the supply of sufficient LSFO or MDO, at all times necessary to trade in SECA. Any time lost or deviation as a result of supplying or waiting for supply of such fuels shall be for the Charterers account and shall not be considered off-hire and any and all expenses shall be for Charterers account.

 

(c) Charterers shall not otherwise be liable for any loss, delay, fines, costs or expenses arising or resulting from Owners’ breach of its obligations under this clause 104 and/or non-compliance with bunker regional and international regulations or the vessel’s failure to comply with Regulations 14 and 18 of Marpol Annex VI, which shall be for Owners account.

 

105. Gulf Of Aden and Indian Ocean Clause.

 

Please refer to clauses 14.4 and 14.5 of the Pool Agreement for the vessel.

 

106. Fame Clause.

 

[DELETE]

 

107.  Breach of Warranty Clause.

 

Should Owners be in breach of any of their warranties or representations under this charter, Charterers may put Owners on notice. In the absence of any express provision relating to such specific breach in this charter, Owners have 30 days thereafter to rectify the breach, failing which the vessel will be considered as off-hired. If such an offhire continues for another 10 days, Charterers shall have the option to terminate the CP without penalty to any party.

 

108. Vegoil Cargoes - Load over the top.

 

[DELETE]

 

109. Vegetable Oils Carriage.

 

[DELETE]

 

110. Switching of bills of lading.

 

Charterers shall have the option of switching bills of lading. The procedure will be as below:

 

a.                            Charterers to confirm that full set of first original bills of lading which are to be re-issued are in Charterers’ custody;

 

 

b.                            The full set of the first original bills of lading (full set 3/3) are to be marked ‘null and void’ and sent by fax/email to Owners;

c.                             The original cancelled bills of lading are to be couriered to Owners;

d.                            Specimens of the new bills of lading are to be faxed to Owners for their comments/approval;

e.                             upon receipt by Owners’ representative at the Charterers’ requested port of the full and complete set of relevant original cancelled bills of lading, Owners will then revert with their written authorisation for Charterers to be issued a new set of original bills of lading, in accordance with the specimen faxed copy.

 

111. Storage Clause.

 

Charterers shall have the option to instruct the vessel to remain idle, at a safe place, at anchor or drifting for a continuous period not exceeding 180 days. If this option is exercised, any bottom cleaning due to excessive fouling required will be for Charterers account. Furthermore if this option is exercised, Charterers shall reimburse Owners for hull cleaning but only if the anti-fouling paint cycle is current and not overdue.

 

112. Vessel Inspection Clause.

 

(a) The on-hire survey shall be held at the last port of call prior to delivery to Charterers. The off-hire survey shall be held at the last port of call prior to redelivery to Owners. The costs of both surveys shall be split fifty/fifty (50/50) between Owners and Charterers and shall be conducted by an independent surveyor acceptable to both parties.

 

(b) In addition to the joint on-hire/off-hire surveys and further to their rights of inspection as set out elsewhere in this Charter, Charterers’ right to make such inspection of the vessel as they may consider necessary includes but is not limited to the right to place on board the vessel an inspector, surveyor and/or representative to inspect and/or test:

 

(i) the vessel’s hull, machinery and equipment and living spaces;

 

(ii) the vessel’s operational procedures both in port and at sea; and

 

(iii) the vessel’s certificates, records and documents,

 

to determine whether Owners are complying in all respects with their obligations and that the vessel is in full compliance with international, national, state or local conventions, laws, regulations and ordinances currently in force or which may come into force in respect of the waters and trading areas to which the vessel may be ordered during the Charter period. Any delay caused by such inspection or test will be for Charterers’ account but any repair or delay by reason of Owners’ non-compliance will be for Owners’ account.

 

(c) Charterers shall also have the right to require inspection of the vessel’s tanks at loading and/or discharging ports to ascertain the condition of the tanks, the quality of the cargo, water and residues on board. In that respect Charterers’ inspector, surveyor and/or representative has the right to ullage, inspect and take samples from the vessel’s cargo tanks, bunker tanks, void spaces and other non-cargo tanks. Depressurisation of the tanks to permit such inspection and/or ullaging shall be carried out under the supervision of the vessel’s Master in accordance with the recommendations in the latest edition of the International Safety Guide for Oil Tankers and Terminals.

 

(d) Charterers are further entitled from time to time during the Charter period on reasonable notice to arrange for their representative(s) to attend Owners’ offices or the offices of Owners’ managers or managing agents as the case may be in order to audit, assess and/or investigate Owners’ safety management system, policies, management, crewing and operations in relation to the services to be provided by the vessel under this Charter.

 

 

(e) Whether or not Charterers exercise their rights under this clause no action or inaction on their part (including any action or inaction taken following an exercise of a right under this Clause) shall be deemed to be a waiver of their rights and shall be without prejudice to Charterers’ rights and remedies including under clause 3.

 

113. Turkish Customs.

 

If the vessel is discharging cargo in a Turkish port and there is any short or overlanded cargo issue with the Turkish customs, Charterers are to take up the matter with the loadport agents and arrange for the issue of a quantity correcting document or other similar document required by the Turkish customs. All costs, delays etc associated with the above to be for Charterers account, provided the vessel has discharged her full cargo and obtained a dry tank certificate.

 

114. EU Advance Cargo Declaration Clause.

 

(a) If the vessel loads cargo in any EU port or place destined for a port or place outside the EU or loads cargo outside the EU destined for an EU port or place, Charterers shall comply with the current EU Advance Cargo Declaration Regulations (the Security Amendment to the Community Customs Code, Regulations 648/2005; 1875/2006; and 312/2009) or any subsequent amendments thereto and shall undertake the role of carrier for the purposes of such regulations and in their own name, time and expense shall:

 

(i) Have in place an EORI number (Economic Operator Registration and Identification);

 

(ii) Provide Owners with a timely confirmation of (i) above as appropriate; and

 

(iii) Submit an ENS (Entry Summary Declaration) cargo declaration electronically to the EU Member States’ Customs and provide the Owners at the same time with a copy thereof.

 

(b) Charterers assume liability for and shall indemnify, defend and hold harmless Owners against any loss and/or damage whatsoever (including consequential loss and/or damage) and/or any expenses, fines, penalties and all other claims of whatsoever nature, including but not limited to legal costs, arising from Charterers’ failure to comply with any of the provisions of sub-clause (a). Should such failure result in any delay then, notwithstanding any provision in this Charter Party to the contrary, the Vessel shall remain on hire.

 

(c) The assumption of the role of carrier by Charterers pursuant to this Clause and for the purpose of the EU Advance Cargo Declaration Regulations shall be without prejudice to the identity of carrier under any bill of lading, other contract, law or regulation.

 

115. Dry Docking Clause.

 

(a) No drydocking shall be undertaken by the Owners during the period of this Charter Party unless mutually agreed, unless the drydocking is necessary to maintain vessel’s seaworthiness, in which case the vessel shall be off-hire from the time vessel 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 and presented at the Charterers’ discharging and/or loading place.

 

In case of drydocking at a port other than where the vessel is to load, discharge or bunker under the Charterers’ orders the following time and bunkers shall be deducted from hire:

 

Total time and bunkers including repair, port call for the actual voyage from last port of call under the Charterers’ orders to the next port of call under the Charterers’ orders less theoretical voyage time and bunkers for the direct voyage from said first port of call to

 

 

said next port of call. Theoretical voyage will be calculated on the basis of the sea buoy distance at the warranted speed and consumption.

 

(b) In the event that gas freeing of certain tanks is required in connection with drydocking, the Charterers’ will reimburse Owners for a maximum of 48 hours towards the additional time of gas freeing to the standard required for entry into drydock for cleaning and painting the hull. Any time spent for such gas freeing in excess of 48 hours to be for Owners account. Such gas freeing time commences when the vessel is released to the Owners for the purposes mentioned in this clause and terminates when the tanks are gas-freed to the above required standard. For the avoidance of doubt, all fuel consumed and related gas-freeing expenses shall be for Owners account.

 

(c) Charterers and Owners to mutually cooperate for economic dry docking of the vessel. Owners to provide minimum 90 days advance notice of any drydocking while Charterers to make best endeavours to bring the vessel to a trading range where drydocking can be undertaken in a shipyard suitable for Owners’ requirements.

 

116. Insolvency of Owners.

 

In the event of the potential application of both, or a conflict between, admiralty and insolvency/ bankruptcy jurisdiction, the parties expressly agree that admiralty jurisdiction shall pre-empt insolvency/ bankruptcy jurisdiction with respect to the rights and obligations of the parties under this Charter, and with respect to enforcing maritime lien or attachment rights. In the event that Owners, its parent or affiliated companies file for insolvency / bankruptcy protection, the parties expressly agree that this Charter and any and all liens that Owners otherwise possess with respect to bunkers and cargo terminate, and ownership interest reverts to Charterers at 0001 hours on the date of such filing. In that event, Owners remain a bailee of the bunkers and cargo, and as such are obligated to safely discharge same into Charterers custody. Owners also stipulate that Charterers are entitled to recover possession of the bunkers and cargo for purposes of Admiralty Supplemental Rule D or other equivalent legislation or regulation in any other jurisdiction.

 

117.  Sanctions Clause.

 

Owners represent, warrant, guarantee and undertake that:

 

	
(a)
    	
Owners are not a   target of Sanction or a Sanctioned Entity;
    
	
(b)
    	
the vessel is not   a target of Sanction or a Sanctioned Entity; and
    
	
(c)
    	
to the best of   their knowledge, after having made due enquiries, none of the operational   manager, the technical manager nor any owners above the Owners in the   chartering chain of the vessel (if applicable), nor the registered owner nor   the ultimate beneficial owners of the vessel are Sanctioned Entities or a target   of Sanction.
    

 

For the purposes of this clause 117:

 

“Sanction” means any sanction, regulation, statute, official embargo measures or any ‘specially designated nationals’ or ‘blocked persons’ lists, or any equivalent lists maintained and imposed by the United Nations, the European Union, the United States Department of Treasury’s Office of Foreign Assets Control. the United States Department of State or any replacement or other regulatory body enforcing economic and trade sanctions legislation in such countries or by any supranational or international governmental organization; and

 

“Sanctioned Entity” means any entity, being an individual, corporation, company, vessel, association or government, who or which:

 

(x) is target of a Sanction; or

 

 

(y) is subject to a sanction or is directly or indirectly owned by any entity who is subject to a Sanction.

 

Notwithstanding anything to the contrary herein, nothing in this Charter is intended, and nothing herein should be interpreted or construed, to induce or require Charterers to act in any manner (including failing to take any actions in connection with a transaction) which is inconsistent with or prohibited under any Sanction.

 

In the event it is or becomes unlawful under the laws of any jurisdiction for Charterers in their respective judgment to perform any of their obligations under this Charter by reason of the provisions of this clause 117 or in the event that the Owners and/or the  vessel become the target of Sanction or become a Sanctioned Entity, Charterers may immediately terminate the Charter and redeliver the vessel forthwith, without incurring any liability.

 

118. Ebola Clause.

 

(a) If the Vessel proceeds to or through any port, place, area or zone, or any waterway or canal (hereinafter called an “Area”) exposed to the risk of Ebola the Owners shall have the liberty, but not the obligation:

 

(i) to take reasonable preventative measures to protect the Vessel, her crew and cargo including but not limited to furnishing the crew with necessary personal protective gear at charterers time and cost, (PPG) as follows:

 

1.             Sufficient disposable Tyvek coveralls

2.             Antibacterial face masks

3.             Disposable shoe covers

4.             Nitrile or latex gloves

5.             Antibacterial wash

6.             Remote-sensing infrared thermometer

7.             Disposable dining utensils

8.             Additional food for stevedores

 

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

 

(iii) to comply with all orders, directions, recommendations or advice (including all updates to such orders, directions, recommendations or advice) given by the Government of the Nation under whose flag the Vessel sails, or other Government to whose laws the Owners are subject, or any other Government, body or group, including military and/or health authorities, whatsoever acting with the power to compel compliance with their orders or directions. Where such orders, directions, and recommendations vary, Owners shall, if they chose to comply with them, be at liberty, acting reasonably, to decide which orders, directions, and recommendations, if any, they comply with; and

 

(iv) to comply with the terms of any recommendation of the World Health Organization and/or the United States National Institute of Health Center for Disease Control, the effective orders of any other Supranational body which has the right to issue and give the same, and with national laws aimed at enforcing the same to which the Owners are subject, and to obey the recommendations, orders or directions of those who are charged with their enforcement. Where such orders, directions, and recommendations vary, Owners shall, if they chose to comply with them, be at liberty, acting reasonably, to decide which orders, directions, and recommendations, if any, they comply with.

 

(b) Costs and hire

 

 

(i) If the Vessel proceeds to or through an Area where, due to risk of Ebola, additional costs will be incurred including but not limited to preventative measures to avoid Ebola, such directly related, documented and reasonable costs which are approved in advance by the Charterers shall be for the Charterers’ account. Any time and expenses incurred waiting for quarantine or at the load/discharge port(s) and or used in taking measures to minimise risk in both cases up to 21 days after the vessel’s arrival, shall be for the Charterers’ account;

 

(ii) If the Owners become liable under the terms of employment to pay to the crew any bonus or additional wages in respect of sailing into an area which is dangerous in the manner defined by the said terms, then any bonus or additional wages paid in accordance with the International Transport Workers’ Federation and the International  Bargaining Forum framework agreement shall be reimbursed to the Owners by the Charterers;

 

(iii) If the underwriters of the Owners’ insurances require additional premiums, or additional insurance cover is necessary, because the Vessel proceeds to or through an Area exposed to risk of Ebola, then such additional insurance costs shall be reimbursed by the Charterers to the Owners;

 

(iv) Owners must submit all reimbursement and expense claims together with all required supporting documents under this clause to Charterers within one (1) month after the completion of final discharge of the relevant voyage otherwise Owners’ claim shall be time-barred under this clause. All payments arising under sub-clause (b) shall be settled within fifteen (15) days of receipt of Owners’ supported invoices.

 

(c) Notwithstanding the terms of clause 21, hire shall be paid for time lost from Ebola including any time lost owing to loss of or sickness to the Master, Officers, crew or passengers from Ebola PROVIDED that no hire shall be payable in respect of any time lost due to the action of the Crew in refusing to proceed to a place where there has been any actual, threatened or reported cases of Ebola. Such delay shall be limited to seven (7) running days for Charterer’s account. If any crew is found to have contracted Ebola any and all expenses, including death benefits due under the collective bargaining agreement (CBA) shall be for the account of the Charterers.

 

(d) If the Vessel is affected or detained by reason of suspected or actual Ebola in the load/discharge port Owners shall keep the Charterers closely informed of the efforts made to have the Vessel released.

 

	
 
    	
 
    	
 
    
	
GMR ATLAS LLC
    	
 
    	
VL8 POOL INC
    

 

END OF CHARTER PARTY TERMS AND CONDITIONS

 

 

APPENDIX 3.2

 

TIME CHARTER PARTY

 

[NOT APPLICABLE]

 

THE FOLLOWING FIXTURE CONCLUDED AS PER DETAILS BELOW:

 

	
CHARTER PARTY DATE:
    	
[      ]
    
	
 
    	
 
    
	
DISPONENT OWNER:
    	
[    ]
    
	
 
    	
 
    
	
CHARTERERS:
    	
VL8 POOL INC.
    
	
 
    	
 
    
	
VESSEL:
    	
[    ]
    
	
 
    	
 
    
	
HIRE RATE:
    	
Zero Hire but without prejudice to V8 Pool Inc’s obligation to pay   distributions to the Disponent Owner in accordance with clause 8 of the Pool   Agreement for the Vessel.
    
	
 
    	
 
    
	
LAYCAN:
    	
[    ]
    

 

All other terms and conditions as per head tcp dated [              ] between [    ]and [              ] (as attached) with logical amendments.

 

	
 
    	
 
    	
 
    
	
Disponent owner
    	
 
    	
Charterers
    

 

 

Schedule of Substantially Identical Issuer Contracts Omitted

 

Pool Participation Agreement, dated as of June 11, 2015, by and between VL8 Pool Inc. and Gener8 Tankers 1 Inc. with respect to Hull No. S768

 

Pool Participation Agreement, dated as of June 11, 2015, by and between VL8 Pool Inc. and Gener8 Tankers 2 Inc. with respect to Hull No. S769

 

Pool Participation Agreement, dated as of June 11, 2015, by and between VL8 Pool Inc. and Gener8 Tankers 3 Inc. with respect to Hull No. S770

 

Pool Participation Agreement, dated as of June 11, 2015, by and between VL8 Pool Inc. and Gener8 Tankers 4 Inc. with respect to Hull No. S771

 

Pool Participation Agreement, dated as of June 11, 2015, by and between VL8 Pool Inc. and Gener8 Tankers 5 Inc. with respect to Hull No. 2794

 

Pool Participation Agreement, dated as of June 11, 2015, by and between VL8 Pool Inc. and Gener8 Tankers 6 Inc. with respect to Hull No. 2796

 

Pool Participation Agreement, dated as of June 11, 2015, by and between VL8 Pool Inc. and Gener8 Tankers 7 Inc. with respect to Hull No. H0137

 

Pool Participation Agreement, dated as of June 11, 2015, by and between VL8 Pool Inc. and Gener8 Tankers 8 Inc. with respect to Hull No. H0138

 

Pool Participation Agreement, dated as of June 11, 2015, by and between VL8 Pool Inc. and Gener8 Andriotis Inc. with respect to Hull No. H1356

 

Pool Participation Agreement, dated as of June 11, 2015, by and between VL8 Pool Inc. and STI Perth Shipping Company Ltd. with respect to Hull No. 5406

 

Pool Participation Agreement, dated as of June 11, 2015, by and between VL8 Pool Inc. and STI Dundee Shipping Company Ltd. with respect to Hull No. 5407

 

Pool Participation Agreement, dated as of June 11, 2015, by and between VL8 Pool Inc. and STI Edinburgh Shipping Company Ltd. with respect to Hull No. 5405

 

Pool Participation Agreement, dated as of June 11, 2015, by and between VL8 Pool Inc. and Gener8 Chiotis Inc. with respect to Hull No. H1357

 

Pool Participation Agreement, dated as of June 11, 2015, by and between VL8 Pool Inc. and STI Cavaliere Shipping Company Ltd. with respect to Hull No. S777

 

 

Pool Participation Agreement, dated as of June 11, 2015, by and between VL8 Pool Inc. and STI Newcastle Shipping Company Ltd. with respect to Hull No. 5408

 

Pool Participation Agreement, dated as of June 11, 2015, by and between VL8 Pool Inc. and GMR Hercules LLC with respect to Genmar Hercules (to be renamed “Gener8 Hercules”)

 

Pool Participation Agreement, dated as of June 11, 2015, by and between VL8 Pool Inc. and Gener8 Miltiades Inc. with respect to Hull No. H1358

 

Pool Participation Agreement, dated as of June 11, 2015, by and between VL8 Pool Inc. and STI Glasgow Shipping Company Ltd. with respect to Hull No. 5404

 

Pool Participation Agreement, dated as of June 11, 2015, by and between VL8 Pool Inc. and STI Esles Shipping Company Ltd. with respect to Hull No. S778

 

Pool Participation Agreement, dated as of June 11, 2015, by and between VL8 Pool Inc. and GMR Poseidon LLC with respect to Genmar Poseidon (to be renamed “Gener8 Poseidon”)

 

Pool Participation Agreement, dated as of June 11, 2015, by and between VL8 Pool Inc. and Gener8 Strength Inc. with respect to Hull No. H1384

 

Pool Participation Agreement, dated as of June 11, 2015, by and between VL8 Pool Inc. and Gener8 Success Inc. with respect to Hull No. H1355

 

Pool Participation Agreement, dated as of June 11, 2015, by and between VL8 Pool Inc. and Gener8 Supreme Inc. with respect to Hull No. H1385

 

Pool Participation Agreement, dated as of June 11, 2015, by and between VL8 Pool Inc. and GMR Ulysses LLC with respect to Genmar Ulysses (to be renamed “Gener8 Ulysses”)

 

Pool Participation Agreement, dated as of June 11, 2015, by and between VL8 Pool Inc. and GMR Zeus LLC with respect to Genmar Zeus (to be renamed “Gener8 Zeus”)

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