EXHIBIT 10.12
MEMORANDUM OF AGREEMENT
DECEMBER 1997
DSND Shipping AS, Xxxxxxxxxxx 00, 0000 Xxxx, Xxxxxx, hereinafter called the
Sellers, have agreed to sell, and Horizon Vessels, Inc., hereinafter called the
Buyers, have agreed to buy:
Name: DSV "DSND Stephaniturm"
Classification Society/Class: Lloyds
Built: 1978
By: Xxxxxxx, Lauenburg, Germany
Flag: Bahamian
Place of Registration: Nassau
Call Sign: C6MN9
Grt/Nrt: 1954/586
Register Number: 725330
hereinafter called the Vessel, on the following terms and conditions:
DEFINITIONS
"Banking days" are days on which banks are open both in the country of the
currency stipulated for the Purchase Price in Clause 1 and in the place of
closing stipulated in Clause 8.
"In writing" or 'written" means a letter handed over from the Sellers to
the Buyers or vice versa, a registered letter, telex, telefax or other modern
form of written communication.
"Classification Society" or "Class" means the Society referred to in
line 4.
1. PURCHASE PRICE
USD 17,500,000 (USDollar-seventeen millionfivehundredthousand)
2. (CLAUSE 2 INTENTIONALLY DELETED)
3. PAYMENT
The said Purchase Price shall be paid in full free of bank charges to Fokus
Bank ASA, Oslo, Norway, account no. ____________, on delivery of the Vessel, but
not later than 3 banking days after the Vessel is in every respect physically
ready for delivery in accordance with the terms and conditions of this Agreement
and Notice of Readiness has been given in accordance with Clause 5.
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4. INSPECTIONS
(a) The Buyers have inspected and accepted the Vessel's classification
records. The Buyers have also inspected the Vessel and have accepted the Vessel
and the sale is outright and definite, subject only to the terms and conditions
of this Agreement.
(b) Clause 4(b) intentionally deleted.
5. NOTICES, TIME AND PLACE OF DELIVERY
(a) The Sellers shall keep the Buyers well informed of the Vessel's
[SUBJECT TO THE IPO HAVING SUCCESSFULLY TAKEN PLACE, REFERENCE CLAUSE 17 AND
19]. When the Vessel is at the place of delivery and in every respect
physically ready for delivery in accordance with this Agreement, the Sellers
shall give the Buyers a written Notice of Readiness for delivery.
(b) The Vessel shall be delivered and taken over at sea, in the North Sea.
Expected time of delivery: REFERENCE CLAUSE 17 AND 19
Date of canceling (see Clauses 5c, 6b(iii) and 14); REFERENCE CLAUSE 17
AND 19
(c) Should the Vessel become an actual, constructive or compromised total
loss or otherwise sustain any damage not existing when the Vessel was inspected
by the Buyers, the Buyers shall, upon paying to the Sellers the Purchase Price
in full, see below, receive all insurance proceeds therefor and receive a credit
against the Purchase Price in the amount of any deductible or the amount of
damage not otherwise insured (in which case the Sellers shall deliver to the
Buyers any and all documents necessary to establish that payment of the
insurance proceeds for such damage to the Vessel will be made to the Buyers).
The Sellers shall insure the Vessel with such underwriters and in such forms of
insurance and with deductibles as are acceptable to the Buyers. The Sellers,
upon reasonable notice by the Buyers, shall provide the Buyers with original
cover notes evidencing such insurance, including evidence of hull and machinery
insurance for the full replacement value of the Vessel and protection and
indemnity insurance covering the Vessel.
6. CLAUSE 6 INTENTIONALLY DELETED.
7. SPARES/BUNKERS, ETC.
The Sellers shall deliver the Vessel to the Buyers with everything
belonging to her on board and on shore. All spare parts and spare equipment
including spare tall-end shaft(s) and/or spare propeller(s)/propeller blade(s),
if any, belonging to the Vessel at the time of inspection used or unused,
whether on board or not shall become the Buyers' property including spares on
order. Forwarding charges, if any, shall be for the Buyers' account. The
Sellers are required to replace spare parts including spare tail-end shaft(s)
and spare propeller(s)/propeller blade(s) which are taken out of spare and used
as replacement prior to delivery, but the replaced items shall be the property
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of the Buyers. The radio installation and navigational equipment shall be
included in the sale without extra payment if they are the property of the
Sellers. Unused stores and provisions shall be included in the sale and be
taken over by the Buyers without extra payment.
The Buyers shall take over the remaining bunkers and unused lubricating
oils in storage tanks and sealed drums and pay the current net market price
(excluding barging expenses) at the port and date of delivery of the Vessel.
Payment under this Clause shall be made at the same time and place and in
the same currency as the Purchase Price.
8. DOCUMENTATION
The place of closing: Oslo/London
In exchange for payment of the Purchase Price the Sellers shall furnish the
Buyers with delivery documents, namely:
(a) Legal Xxxx of Sale in a form recordable in (THE
COUNTRY IN WHICH THE BUYERS ARE TO REGISTER THE VESSEL) warranting full title
and warranting that the Vessel is free from all encumbrances, mortgages and
maritime liens or any other debts or claims whatsoever, duly notarially attested
and legalized by the consul of such country or other competent authority.
(b) Current Certificate of Ownership Issued by the competent authorities of
the flag state of the Vessel.
(c) Confirmation of Class Issued within 72 hours prior to delivery.
(d) Current Certificate Issued by the competent authorities stating that
the Vessel is free from registered encumbrances.
(e) Certificate of Deletion of the Vessel from the Vessel's registry or
other official evidence of deletion appropriate to the Vessel's registry at the
time of delivery, or, in the event that the registry does not as a matter of
practice issue such documentation immediately, a written undertaking by the
Sellers to effect deletion to the Buyers promptly and latest within four weeks
after the Purchase Price has been paid and the Vessel has been delivered.
(f) Any such additional documents as may reasonably be required by the
competent authorities for the purpose of registering the Vessel, provided the
Buyers notify the Sellers of any such documents as soon as possible after the
date of this Agreement.
At the time of delivery the Buyers and Sellers shall sign and deliver to
each other a Protocol of Delivery and Acceptance confirming the date and time of
delivery of the Vessel from the Sellers to the Buyers.
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At the time of delivery the Sellers shall hand to the Buyers the
classification certificate(s) as well as all plans etc., which are on board the
Vessel. Other certificates which are on board the Vessel shall also be handed
over to the Buyers unless the Sellers are required to retain same, in which case
the Buyers to have the right to take copies. Other technical documentation
which may be in the Sellers' possession shall be promptly forwarded to the
Buyers at their expense, if they so request. The Sellers may keep the Vessel's
log books but the Buyers to have the right to take copies of same.
9. ENCUMBRANCES
The Sellers warrant that the Vessel, at the time of delivery, is free from
all charters, encumbrances, mortgages and maritime liens or any other debts
whatsoever. The Sellers hereby undertake to indemnify the Buyers for any claims
relating to title of the Vessel and against all consequences of liabilities or
claims arising against the Vessel which have been incurred prior to the time of
delivery, whether or not the claims have actually been made at or before the
delivery.
10. TAXES, ETC.
Any taxes, fees and expenses in connection with the purchase and
registration under the Buyers' flag shall be for the Buyers' account, whereas
similar charges in connection with the closing of the Sellers' register shall be
for the Sellers' account.
11. CONDITION ON DELIVERY
Subject to the Buyers rights under clause 5c, the Vessel with everything
belonging to her shall be at the Sellers' risk and expense until she is
delivered to the Buyers, but subject to the terms and conditions of this
Agreement she shall be delivered and taken over as she was at the time of
inspection, fair wear and tear excepted. However, the Vessel shall be delivered
with her class maintained without condition/recommendation*, free of average
damage affecting the Vessel's class, and with her classification certificates
and national certificates, as well as all other certificates the Vessel had at
the time of inspection, valid and unextended without condition/recommendation*
by Class or the relevant authorities at the time of delivery.
"Inspection" in this Clause 11, shall mean the Buyers' inspection according
to Clause 4(a) or 4(b), if applicable, or the Buyers' inspection prior to the
signing of this Agreement. If the Vessel is taken over without inspection, the
date of this Agreement shall be the relevant date.
* Notes, if any, in the surveyor's report which are accepted by the
Classification Society without condition/recommendation are not to be taken
into account.
12. NAME/MARKINGS
The Buyers undertake not to change the name of the Vessel or alter funnel
markings until the expiry of the charter agreement referred to in Clause 18.
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13. BUYERS' DEFAULT
Should the Purchase Price not be paid in accordance with Clause 3, the
Sellers have the right to cancel the Agreement. The Sellers shall be entitled
to claim compensation for their losses and for all expenses incurred together
with interest.
14. SELLERS' DEFAULT
Should the Sellers fail to give Notice of Readiness in accordance with
Clause 5(a) or fail to be ready to validly complete a legal transfer by the date
stipulated in line 61 the Buyers shall have the option of canceling this
Agreement provided always that the Sellers shall be granted a maximum of three
banking days after Notice of Readiness has been given to make arrangements for
the documentation set out in Clause 8. If after Notice of Readiness has been
given but before the Buyers have taken delivery, the Vessel ceases to be
physically ready for delivery and is not made physically ready again in every
respect by the date stipulated in line 61 and new Notice of Readiness given, the
Buyers shall retain their option to cancel.
Should the Sellers fail to give Notice of Readiness by the date stipulated
in line 61 or fail to be ready to validly complete a legal transfer as aforesaid
they shall make due compensation to the Buyers for their loss and for all
expenses together with interest if their failure is due to proven negligence and
whether or not the Buyers cancel this Agreement.
15. (CLAUSE 15 INTENTIONALLY DELETED)
16. ARBITRATION
(a) and (b) intentionally deleted.
(c) Any dispute arising out of this Agreement shall be referred to
arbitration in Oslo, Norway, subject to the procedures applicable there. The
laws of the Kingdom of Norway shall govern this Agreement.
17. INITIAL PUBLIC OFFERING
This Agreement is subject to a successful Initial Public Offering (IPO) of
the common stock of Horizon Offshore, Inc. in the US. If the IPO does not occur
on or before December 31, 1998, this Agreement will be cancelled by the Sellers
and considered null and void.
18. CHARTER AGREEMENT
This Agreement is subject to the Sellers and the Buyers entering into a
charter agreement for the chartering by the Sellers of the Vessel on such terms
as follows from Annex A hereto, with effect as from the delivery of the Vessel
and valid for 240 days as from the 1st January 1998.
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19. PAYMENT AND DELIVERY
Subject to the closing of the IPO as described above, physical delivery of
the Vessel shall take place within one week after the proceeds of the IPO have
been received, and the Sellers shall give Buyers 5 days notice of estimated time
of delivery. The Buyers shall keep the Sellers informed on the progress of the
IPO.
Payment of the purchase price shall be made in full simultaneously with the
physical delivery of the vessel.
For accounting purposes, and irrespective of the date of physical delivery
of the Vessel, delivery shall be deemed to have taken place on 1st January 1998.
Oslo/Houston, December 1997
DSND SHIPPING AS
/s/ XXXX XXXXXX
-------------------
Xxxx Xxxxxx
HORIZON VESSELS, INC.
/s/ XXXX XXX
-------------------
Xxxx Xxx
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1. Shipbroker THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)
STANDARD BAREBOAT CHARTER
CODE NAME: "BARECON 89" PART I
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2. Place and date
December 1997
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3. Owners/Place of business 4. Bareboat charters (Charterers)/Place of business
Horizon Vessels, Inc. DSND Shipping AS
Xxxxxxxx. 00
0000 Xxxx
Xxxxxx
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5. Vessels' name. Call Sign and Flag (Cl. 9(c))
"DSND Stephaniturm"
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6. Type of Vessel 7. GRT/NRT
Diving Support Vessel 1954/586
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8. When/Where built 9. Total DWT (abt.) in metric tons on summer freeboard
1978 / Xxxxxxx, Lauenburg, Germany 1954
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10. Class (Cl. 9) Lloyds 100 Al 11. Date of last special survey by the Vessel's classificaton society
Diving Support Vessel DPAA LMG 22nd April 1997
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12. Further particulars of Vessel (also inidcate minimum number of months' validity of class certificates agreed acc. to Cl. 14)
6 months
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13. Port or Place of delivery (Cl. 2) 14. Time for Delivery (Cl. 3) 15. Cancelling Date (Cl. 4)
1st January 1998 or
North Sea Sector upon delivery of the N/A
Vessel to the Owners, if later
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16. Port or Place of redelivery (Cl. 14)
North Sea
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17. Running days' notice if other than stated in Cl. 3 18. Frequency of dry-docking if other than stated in Cl. 9(f)
18 / 30 months
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19. Trading Limits (Cl. 9)
N/A - world wide
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20. Charter period 21. Charter hire (Cl. 10)
240 days as from USD 12,500 per day and for
1st January 1998 240 days
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22. Rate of interest payable acc. to Cl. 10(f) and, if 23. Currency and method of payment (Cl. 10)
applicable, aop. to PART IV
2% p.a. above LIBOR USD
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"Barecon 89" Standard Bareboat Charter PART I
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24. Place of payment; also state 25. Bank guarantee/bond (sum and place)
beneficiary and bank account (Cl. 10) (Cl. 22) (optional)
N/A
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26. Mortgage(s), if any, (state whether Cl. 11(a) or 27. Insurance (marine and war risks) (state value acc. to Cl. 12(f)
(b) applies; if 11(b) applies state date of Deed(s) or, if applicable, acc. to Cl. 13(k))
of Covenant and same of Mortgagee(s)/Place of (also state if Cl. 13 applies)
business (Cl. 11)
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28. Additional insurance cover, if any, for Owners' 29. Additional insurance cover, if any, for Charters'
12(b)) or, account limited to (Cl. if applicable, (Cl. 13(g)) account limited to (Cl. 12(b)) or, if applicable, (Cl. 13(g))
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30. Latent defects (only to be filled in 31. War cancellation (indicate countries agreed ) (Cl. 24)
if period other than stated in Cl. 2)
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32. Brokerage commission and to whom payable (Cl. 25)
N/A
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33. Law and arbitration (state 25.1, 26.2, or 34. Number of additional clauses covering special provisions,
26.3 of Cl. 26 as agreed; if 26.3 agreed, also if agreed
state place of arbitration) (Cl. 26)
26.3 - arbitration in Oslo,
Norwegian law
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35. Newbuilding Vessel (indicate with 36. Name and place of Builders (only to be filled in if
"yes" or "no" whether Part II applies) (optional) Part III applies)
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37. Vessel's Yard Building No. (only to 38. Date of Building Contract (only to be filled in if
be filled in if Part III applies) Part III applies)
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39. Hire/Purchse agreement (indicate with 40. Bareboat Charter Registry (indicate with "yes" or "no" whether
"yes" or "no" whether Part IV applies) Part V applies) (optional)
(optional)
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41. Flag and Country of Bareboat Charter Registry 42. Country of Underlying Registry (only to be filled in if
(only to be filled in if Part V applies) Part V applies)
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PREAMBLE - It is mutually agreed that this Contract shall be performed subject to the conditions contained in this Charter which
shall include PART I and PART II, in the event of a conflict of conditions, the provisions of PART I shall prevail over those of
PART II to the extent of such conflict but no further. It is further mutually agreed that PART III and/or PART IV and/or PART V
shall only apply and shall only form part of this Charter if expressly agreed and stated in the Forms 36, 38 and 40. If PART III
and/or PART IV and/or PART V apply, it is further mutually agreed that in the event of a conflict of conditions, the provisions of
PART I and PART II shall prevail over those of PART III and/or PART IV and/or PART V to the extent of such conflict but no further.
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Signature (Owners) Signature (Charterers)
Horizon Vessels, Inc. DSND Shipping AS
/s/ XXXX XXX /s/ XXXX XXXXXX
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Xxxx Xxx Xxxx Xxxxxx
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Part II
"Barecon 89" Standard Bareboat
1. Definitions
In this Charter, the following terms shall have the meanings hereby
assigned to them:
"The Owners" shall mean the person or company registered as Owners of the
Vessel.
"The Charterers" shall mean the Bareboat charterers and shall not be
construed to mean a time charterer or a voyage charterer.
2. Delivery (not applicable to newbuilding vessels)
The Vessel shall be delivered and taken over by the Charterers at the port
or place indicated in Box 13. in such ready berth as the Charterers may direct.
The Owners shall before and at the time of delivery exercise due diligence to
make the Vessel seaworthy and in every respect ready in hull, machinery and
equipment for service under the Charter. The Vessel shall be properly documented
at time of delivery.
The delivery to the Charterers of the Vessel and the taking over of the
Vessel by the Charterers shall constitute a full performance by the Owners of
all the Owners' obligations under Clause 2. and thereafter the Charterers shall
not be entitled to make or assert any claim against the Owners on account of any
conditions, representations or warranties expressed or implied with respect to
the Vessel including latent defects.
3. Time for Delivery (not applicable to newbuilding vessels)
The Vessel to be delivered not before the date indicated in Box 14 unless
with the Charterers' consent.
Unless otherwise agreed in Box 17, the Owners to give the Charterers not
less than 30 running days' preliminary and not less than 14 days' definite
notice of the date on which the Vessel is expected to be ready for delivery.
The Owners to keep the Charterers closely advised of possible changes in
the Vessel's position.
4. Cancelling (not applicable to newbuilding vessels)
Should the Vessel not be delivered latest by the cancelling date indicated
in Box 15, the Charterers to have the option of cancelling this Charter without
prejudice to any claim the Charterers may otherwise have on the Owners under the
Charter.
If it appears that the Vessel will be delayed beyond the cancelling date,
the Owners shall, as soon as they are in a position to state with reasonable
certainty the day on which the Vessel should be ready, give notice thereof to
the Charterers asking whether they will exercise their option of cancelling, and
the option must then be declared within one hundred and sixty-eight (168) hours
of the receipt by the Charterers of such notice. If the Charterers do not then
exercise their option of cancelling, the seventh day after the readiness date
stated in the Owners' notice shall be regarded as a new cancelling date for the
purpose of the Clause.
5. Trading Limits
The Vessel shall be employed in lawful trades for the carriage of suitable
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lawful merchandise within the trading limits indicated in Xxx 00.
The Charterers undertake not to employ the Vessel or suffer the Vessel to
be employed otherwise than in conformity with the terms of the Instruments of
Insurance (including any warranties expressed or implied therein) without first
obtaining the consent to such employment of the Insurers and complying with such
requirements as to extra premium or otherwise as the Insurers may prescribe. If
required, the Charterers shall keep the Owners and the Mortgagees advised of the
Intended employment of the Vessel.
The Charterers also undertake not to employ the Vessel or suffer her
employment in any trade or business which is forbidden by the law of any country
to which the Vessel may sail or is otherwise illicit or in carrying illicit or
prohibited goods or in any manner whatsoever which may render her liable to
condemnation, destruction, seizure or confiscation.
Notwithstanding any other provisions contained in this charter it is agreed
that nuclear fuels or radioactive products or waste are specifically excluded
from the cargo permitted to be loaded or carried under this Charter. This
exclusion does not apply to radio-isotopes used or intended to be used for any
industrial commercial, agricultural, medical or scientific purposes provided the
Owners' prior approval has been obtained to loading thereof.
6. Survey on Delivery and Re-Delivery
The Owners and Charterers shall agree in writing at the time of delivery
and redelivery hereunder on the quantity of bunkers and unused lubrication oils
and sealed drums, and any difference shall be compensated by the respective
party, ref. line 371-373.
7. Inspection
Inspection. -- The Owners shall have the right at any time to inspect or
survey the Vessel or Instruct a duly authorized surveyor to carry out such
survey on their behalf to ascertain the condition of the Vessel and satisfy
themselves that the Vessel is being properly repaired and maintained.
Inspection or survey in dry-dock shall be made only when the Vessel shall be in
dry-dock for the Charterers' purpose. However, the Owners shall have the right
to require the Vessel to be dry-docked for inspection if the Charterers are not
docking her at normal classification intervals. The fees for such inspection or
survey shall in the event of the Vessel being found to be in the condition
provided in Clause 9 of this Charter be payable by the Owners and shall be paid
by the Charterers only in the event of the Vessel being found to require repairs
or maintenance in order to achieve the condition so provided. All time taken in
respect of inspection, survey or repairs shall count as time on hire and shall
form part of the Charter period.
The Charterers shall also permit the Owners to inspect the Vessel's log
books whenever requested and shall whenever required by the Owners furnish them
with full information regarding any casualties or other accidents or damage to
the Vessel. For the purpose of this Clause, the Charterers shall keep the Owners
advised of the intended employment of the Vessel.
9. Maintenance and Operation
(a) The Vessel shall during the Charter period be in the full possession
and at the absolute disposal for all purposes of the Charterers and under their
complete control in every respect. The Charterers shall maintain the Vessel, her
machinery, boilers, appurtenances and spare parts in a good state
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of repair, in efficient operating condition and in accordance with good
commercial maintenance practice and, except as provided for in Clause 13(f),
they shall keep the Vessel with unexpired classification of the class indicated
in Box 10 and with other required certificates in force at all times.
The Charterers to take immediate shape to have the necessary repairs done
within a reasonable time failing which the Owners shall have the right of
withdrawing the Vessel from the service of the Charterers without noting any
protest and without prejudice to any claim the Owners may otherwise have against
the Charterers under the Charter.
Unless otherwise agreed, in the event of any improvement, structural
changes or expensive new equipment becoming necessary for the continued
operation of the Vessel by reason of new class requirements or by compulsory
legislation costing more than 5 per cent of the Vessel's marine insurance value
as stated in Box 27, then the extent, if any, to which the rate of hire shall be
varied and the ratio in which the cost of compliance shall be shared between the
parties concerned in order to achieve a reasonable distribution thereof as
between the Owners and the Charterers having regard, inter alia, to the length
of the period remaining under the Charter, shall in the absence of agreement, be
referred to arbitration, according to Clause 26.
The Charterers are required to establish and maintain financial security or
responsibility in respect of all or other pollution damages as required by any
government, including federal, state or municipal or other division of authority
thereof, to enable the Vessel, without penalty or charge, lawfully to enter,
remain at, or leave any port, place, territorial or contiguous waters of any
country, state or municipality in performance of the Charter without any delay.
This obligation shall apply whether or not such requirements have been lawfully
imposed by such government or division of authority thereof. The Charterers
shall make and maintain all arrangements by bond or otherwise as may be
necessary to satisfy such requirements at the Charterers' sole expense and the
Charterers shall indemnify the Owners against all consequences whatsoever
(including loss of time) for any failure or inability to do so.
(b) The Charterers shall at their own expense and by their own procurement
man, victual, navigate, operate, supply, fuel, and repair the Vessel whenever
required during the Charter period and they shall pay all charges and expenses
of every kind and nature whatsoever incidental to their use and operation of the
Vessel under this Charter, including any foreign general municipality and/or
state taxes. The Master, officers and crew of the Vessel shall be the servants
of the Charterers for all purposes whatsoever, even if for any reason appointed
by the Owners.
Charterers shall comply with the regulation regarding officers and crew in
force in the country of the Vessel's flag or any other applicable law.
(c) During the currency of this Charter, the Vessel shall retain her
present name as indicated in Box 5 and shall remain under and fly the flag as
indicated in Box 5. Provided, however, that the Charterers shall have the
liberty to paint the Vessel in their own colours, install and display their
funnel insignia and fly their own house flag. Painting and re-painting,
installment and re-installment to be for the Charterers' account and time used
thereby to count as time on hire.
(d) The Charterers shall make no structural changes in the Vessel or
changes in the machinery, boilers, appurtenances or spare
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parts thereof without in each instance first securing the Owners' approval
thereof. If the Owners so agree, the Charterers shall, if the Owners so require,
restore the Vessel to its former condition before the termination of the
Charter.
(e) The Charterers shall have the use of all outfit, equipment, and
appliances on board the Vessel at the time of delivery, provided the name of
their substantial equivalent shall be returned to the Owners on redelivery in
the same good order and condition as when received, ordinary wear and tear
excepted. The Charters shall from time to time during the Charter period replace
such items of equipment as shall be so damaged or worn as to be unfit for use.
The Charterers are to procure that all repairs to or replacement of any damaged,
worn or lost parts or equipment be effected in such manner (both as regards
workmanship and quality of material) as not to diminish the value of the Vessel.
The Charterers have the right to fit additional equipment at their expense and
risk but the Charterers shall remove such equipment at the end of the period of
requested by the Owners.
Any equipment including radio equipment ono hire on the Vessel at time of
delivery shall be kept and maintained by the Charterers and the Charterers shall
assume the obligations and liabilities of the Owners under any issued contracts
in connection therewith and shall reimburse the Owners for all expenses incurred
in connection therewith, also for any new equipment required in order to comply
with radio requirements.
(f) The Charterers shall dry-dock the Vessel and clean and paint her
underwater parts whenever the same may be necessary, but not less than once in
every eighteen calendar months after delivery unless otherwise agreed in Box 18.
10. Hire
(a) The Charterers shall pay to the Owners for the hire of the Vessel at
the lump sum per calendar month as indicated in Box 21 commencing on and from
the date and hour of that delivery to the Charterers and at and after the agreed
lump sum for any part of a month. Hire to continue until the date and hour when
the Vessel is redelivered by the Charterers to her Owners.
(b) Payment of Hire, except for the first and last month's Hire, if sub-
clause (c) of this Clause is applicable, shall be made in cash without discount
every month in advance on the first day of each month in the currency and in the
manner indicated in Box 23 and at the place mentioned in Box 24.
(c) Payment of Hire for the first and last month's Hire if less than a full
month shall be calculated proportionally according to the number of days in the
particular calendar month and advance payment to be effected accordingly.
(d) Should the Vessel be lost or missing, Hire to cease from the date and
time when she was lost or last heard of. Any Hire paid in advance to be
adjusted accordingly.
(e) Time shall be of the essence in relation to payment of Hire hereunder,
in default of payment beyond a period of seven running days, then Owners shall
have the right to withdraw the Vessel from the services of the Charterers
without noting any protest and without interferences by any court or any other
formality whatsoever, and shall, without prejudice to any other claim the Owners
may otherwise have against the Charterers under the Charter, be entitled to
damages in respect of all costs and losses incurred as a result of the
Charterers' default and the ensuing withdrawal of the Vessel.
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(f) Any delay in payment of Hire shall entitle the Owners to an interest at
the rate per annum as agreed in Box 22. If Box 22 has not been filled in the
current market rate in the country where the Owners have their Principal Place
of Business shall apply.
11. Mortgage
(a) Owners warrant that they may mortgage the Vessel.
(b) The Vessel chartered under this Charter is financed by a mortgage
according to the Deed(s) of Covenant annexed to this Charter and as stated in
Box 26. By their counter-signature on the Deed(s) of Covenant, the Charterers
undertake to have acquainted themselves with all terms, conditions and
provisions of the said Deed(s) of Covenant. The Charterers undertake that they
will comply with all such instructions or directions in regard to the employment
insurances, repairs and maintenances of the Vessel, etc., as laid down on the
Deed(s) of Covenant or as may be directed from time to time during the currency
of the Charter by the Mortgagee(s) in conformity with the Deed(s) of Covenant.
(c) The Owners warrant that they have not effected any mortgage(s) other
than stated in Box 26 and that they will not effect any other mortgage(s)
without the prior consent of the Charterers.
(-Optional- Clauses 11(a) and (b) are alternatives: Indicate alternative
agreed in Box 26).
12. Insurance and Repairs
(a) During the Charter period the Vessel shall be kept insured by
Charterers at their expense against marine, war and Protection and Indemnity
risks in such form as the Owners shall in writing approve, which approval shall
not be unreasonably withheld. Such marine, war and P. and I. Insurance shall be
arranged by the Charterers to protect the interests of both the Owners and the
Charterers and mortgagees (if any), and the Charterers shall be at liberty to
protect under such insurances the interests of any managers they may appoint.
All insurance policies shall be in the joint names of the Owners and the
Charterers as their interests may appear.
If the Charterers fail to arrange and keep any of the insurances provided for
under the provisions of sub-clause (a) above in the manner described therein,
the Owners shall notify the Charterers whereupon the Charterers shall rectify
the position within seven running days, telling which Owners shall have the
right to withdraw the Vessel from the service of the Charterers without
prejudice to any claim the Owners may otherwise have against the Charterers.
The Charterers shall, subject to the approval of the Owners and the
Underwriters, effect all insured repairs and shall undertake settlement of all
costs in connection with such repairs as well as insured charges, expenses and
liabilities (reimbursement to be secured by the Charterers from the
Underwriters) to the extent of coverage under the insurance herein provided for.
The Charterers also to remain responsible for and to effect repairs and
settlement of costs and expenses incurred thereby in respect of all other
repairs not covered by the insurance and/or not exceeding any possible
franchise(s) deductibles provided for in the insurances.
All time used for repairs under the provisions of sub-clause (a) of this Clause
and for repairs of latent defects according to Clause 2 above including any
deviation shall count as time on hire and shall form part of the Charter period.
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(b) If the conditions of the above insurance permit additional insurances
to be placed by the parties, such cover shall be limited to the amount for each
party set out in Xxx 00 xxx Xxx 00, respectively. The Owners or the Charterers
as the case may be shall immediately furnish the other party with particulars of
any additional insurance effected, including copies of any cover notes or
policies and the written consent of the insurers of any such required insurance
in any case where the consent of such insurers is necessary.
(c) Should the Vessel become an actual, constructive, compromised or agreed
total loss under the insurance required under sub-clause(s) of Clause 12, all
insurance payments for such loss shall be paid to the Mortgagee, if any. In the
manner described in the Deed(s) of Covenant, who shall distribute the moneys
between themselves, the Owners and the Charterers according to their respective
interests. The Charterers undertake to notify the Owners and the Mortgagees, if
any, of any occurrences in consequence of which the Vessel is likely to become a
Total Loss as defined in this Clause.
(d) If the Vessel becomes an actual, constructive, compromised or agreed
total loss under the insurances arranged by the Charterers in accordance with
sub-clause (a) of this Clause, this Charter shall terminate as of the date of
such loss.
(e) The Owners shall upon the request of the Charterers, promptly execute
such documents as may be required to enable the Charterers to abandon the Vessel
to insurers and claim a constructive total loss.
(f) For the purposes of insurance coverage against marine and war risks
under the provisions of sub-clause (a) of this Clause, the value of the Vessel
is the sum indicated in Box 27.
13. Clause 13 Intentionally Deleted
14. Redelivery
The Charterers shall at the expiration of the Charter period redeliver the
Vessel at a safe and ice-free port or place as indicated in Box 16. The
Charterers shall give the Owners not less than 30 running days' preliminary and
not less than 14 days' definite notice of expected data, range of ports of
redelivery or port or places of redelivery. Any changes thereafter in Vessel's
position shall be notified immediately to the Owners.
Should the Vessel be ordered on a voyage by which the Charter period may be
exceeded the Charterers to have the use of the Vessel to enable them to complete
the voyage, provided it could be reasonably circulated that the voyage would
allow redelivery about the time fixed for the termination of the Charter.
The Vessel shall be redelivered to the Owners in the same or as good structure,
state, condition and class as that in which she was delivered, fair wear and
tear not affecting class excepted.
The Vessel upon redelivery shall have her survey cycles up to date and class
certificates valid for at least the number of months agreed in Box 12.
15. Non-Lien and Indemnity
The Charterers will not suffer, nor permit to be continued, any lien or
encumbrance incurred by them or their agents, which might have priority over the
title and interest of the Owners in the Vessel.
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The Charterers further agree to fasten to the Vessel in a conspicuous place and
to keep so fastened during the Charter period a notice reading as follows:
"This Vessel is the property of (name of Owners). It is under charter to (name
of Charterers) and by the terms of the Charter Party neither the Charterers nor
the Master have any right, power or authority to create, incur or permit to be
imposed on the Vessel any lien whatsoever."
The Charterers shall indemnify and hold the Owners harmless against any lien of
whatsoever nature arising upon the Vessel during the Charter period while she is
under the control of the Charterers, and against any claims against the Owners
arising out of or in relation to the operation of the Vessel by the Charterers.
Should the Vessel be arrested by reason of crimes or liens arising out of her
operation hereunder by the Charterers, the Charterers shall at their own expense
take all reasonable steps to secure that within a reasonable time the Vessel is
released and at their own expense put up bail to secure release of the Vessel.
16. Lien
The Owners to have a lien upon all cargoes and sub-freights belonging to
the Charterers and any Xxxx of Lading freight for all claims under the Charter,
and the Charterers to have a lien on the Vessel for all moneys paid in advance
and not earned.
17. Salvage
All salvage and towage performed by the Vessel shall be for the Charterers'
benefit and the cost of repairing damage occasioned thereby shall be borne by
the Charterers.
18. Wreck Removal
In the event of the Vessel becoming a wreck or obstruction to navigation
the Charterers shall indemnify the Owners against any sums whatsoever which the
Owners shall become liable to pay and shall pay in consequence of the Vessel
becoming a wreck or obstruction to navigation.
19. General Average
General Average, if any, shall be adjusted according to the York-Antwerp
Rules 1974 or any subsequent modification thereof current at the time of the
casualty.
The Charter Hire not to contribute to General Average.
20. Assignment and Sub-Demise
The Charterers shall not assign this Charter nor sub-demise the Vessel
except with the prior consent in writing of the Owners which shall not be
unreasonably withheld and subject to such terms and conditions as the Owners
shall approve.
21. Bills of Lading
The Charterers are to procure that all Bills of Lading issued for carriage
of goods under this Charter shall contain a Paramount Clause incorporating any
legislation relating to Carrier's liability for cargo compulsorily applicable in
the trade; if no such legislation exists, the Bills of Lading shall incorporate
this British Carriage of Goods by Sea Act. The Bills of Lading shall also
contain the amended New Xxxxx Clause and the Both-to-Blame Collision Clause.
The Charterers agree to indemnify the Owners against all consequences or
liabilities arising from the Master, officers or agents signing Bills of Lading
or other documents.
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22. Bank Guarantee
The Charterers undertake to furnish, before delivery of the Vessel, a first
class bank guarantee or bond in the sum and at the place as indicated in Box 25
as guarantee for full performance of their obligations under this Charter.
Optional, only to apply if Box 25 filled in.
23. Requisition/Acquisition
(a) In the event of the Requisition for Hire of the Vessel by any
governmental or other competent authority (hereinafter referred to as
"Requisition for Hire"). Irrespective of the date during the Charter period when
"Requisition for Hire may occur and Irrespective of the length thereof and
whether or not it be for an indefinite or a limited ________________________.
24. War
(a) The Vessel unless the consent of the Owners be first obtained not to be
ordered nor continue to any piece or on any voyage nor be used on any service
which will bring her within a zone which is dangerous as the result of any
actual or threatened act of war, war, hostilities, operations, acts of piracy or
of hostility or malicious damage against this or any other vessel or its cargo
by any person, body or State whatsoever, revolution, civil war, civil commotion
or the operation of international law, nor be exposed in any way to Sanctions,
nor carry any goods that may in any way expose her to any risks of seizure,
capture, penalties or any other interference of any kind whatsoever by the
belligerent or fighting powers or parties or by any Government or Ruler.
(b) The Vessel to have liberty to comply with any orders or directions as
to departure, arrival, routes, ports of call, stoppages, destination, delivery
or in any other wise whatsoever given by the Government of the nation under
whose flag the Vessel sails or any other Government or any person (or body)
acting or purporting to act with the authority of such Government or by any
committee or person having under the terms of the war risks insurance on the
Vessel the right to give any such orders or directions.
(c) In the event of outbreak of war (whether there be a declaration of war
or not) between any two or more of the countries as stated in Box 31, both the
Owners and the Charterers shall have the right to cancel this Charter, whereupon
the Charterers shall redeliver the Vessel to the Owners in accordance with
Clause 14, if she has cargo on board after discharge thereof at destination, or
if debarred under this Clause from reaching or entering it at a near open and
safe port as directed by the Owners, or if she has no cargo on board, at the
port at which she then is or if at sea at a near open and safe port as directed
by the Owners. In all cases hire shall continue to be paid in accordance with
Clause 10 and except as aforesaid all other provisions of this Charter shall
apply until redelivery.
25. Commission
The Owners to pay a commission at the rate indicated in Box 32 to the
Brokers named in Box 32 on any Hire paid under the Charter but in no case less
than is necessary to cover the actual expenses of the Brokers and a reasonable
fee for their work. If the full Hire is not paid owing to breach of Charter by
either of the parties the party liable therefor to indemnify the Brokers against
heir loss of commission.
Should the parties agree to cancel the Charter, the Owners to indemnify the
Broker against any loss of commission but in such case the commission not to
exceed the brokerage on one year's Hire.
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