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10.9.10
Dated 20th December, 1990
ROYAL BANK OF SCOTLAND
(INDUSTRIAL LEASING) LIMITED
and
SIMON-HORIZON LIMITED
CHARTERPARTY BY WAY OF DEMISE
in respect of m.v. "SEAWAY LABRADOR"
and Equipment
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INDEX
Clause Heading Page
------ ------- ----
1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2 Representations and Warranties . . . . . . . . . . . . . . . . . . 9
3 Term of Charter . . . . . . . . . . . . . . . . . . . . . . . . . 11
4 Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . 13
5 Delivery and Acceptance . . . . . . . . . . . . . . . . . . . . . 14
6 Extent of Owner's Liability; Third Party Warranties . . . . . . . 16
7 Charterhire . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8 Payments, Interest and Calculations . . . . . . . . . . . . . . . 18
9 Costs and Indemnities . . . . . . . . . . . . . . . . . . . . . . 19
10 Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11 General Undertakings . . . . . . . . . . . . . . . . . . . . . . . 23
11.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(a) Notification of Relevant Event . . . . . . . . . 24
(b) Consents and Authorisations . . . . . . . . . . . 24
(c) Preparation of Accounts . . . . . . . . . . . . . 24
(d) Supply of Accounts . . . . . . . . . . . . . . . 24
(e) Information concerning the Charterer . . . . . . 24
(f) Information concerning the Ship . . . . . . . . . 24
(g) Observance of Covenants . . . . . . . . . . . . . 25
11.2 Protection of Owner's Rights . . . . . . . . . . . . . . . 25
(a) Disposal of the Ship . . . . . . . . . . . . . . 25
(b) Encumbrances . . . . . . . . . . . . . . . . . . 25
(c) Notification of Arrest . . . . . . . . . . . . . 25
(d) Prevention of and Release from Arrest . . . . . . 25
(e) No pledging of Owner's Credit . . . . . . . . . . 26
(f) Protection of Owner's Rights in the Ship . . . . 26
(g) Notice of Owner's Rights . . . . . . . . . . . . 26
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(h) Release from Arrest Owner's Vessels . . . . . . . 27
12 Sub Chartering . . . . . . . . . . . . . . . . . . . . . . . . . . 27
13 Use and Trade of the Ship . . . . . . . . . . . . . . . . . . . . 28
13.1 Permitted Use . . . . . . . . . . . . . . . . . . . . . . 28
13.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(a) Ship's Registration . . . . . . . . . . . . . . . 28
(b) Employment . . . . . . . . . . . . . . . . . . . 28
(c) Payment of Outgoings and Evidence of
Payments . . . . . . . . . . . . . . . . . . . . 29
(d) Operation in the U.S.A. or Canada . . . . . . . . 29
(e) Use for a Qualifying Purpose . . . . . . . . . . 29
(f) Bills of Lading . . . . . . . . . . . . . . . . . 30
14 Title, Registration, Name and House Flag . . . . . . . . . . . . . 30
14.1 Title . . . . . . . . . . . . . . . . . . . . . . . . . . 30
14.2 Initial Registration . . . . . . . . . . . . . . . . . . . 30
14.3 Transfer of Flag or Registry . . . . . . . . . . . . . . . 30
14.4 Name and House Flag . . . . . . . . . . . . . . . . . . . 31
15 Maintenance and Operation . . . . . . . . . . . . . . . . . . . . 31
15.1 Possession and Control of Ship by Charterer . . . . . . . 31
15.2 Undertakings concerning Maintenance and Operation . . . . 32
(a) Maintenance of Classification;
Compliance with Regulations . . . . . . . . . . . 32
(b) Supply and Crewing . . . . . . . . . . . . . . . 32
(c) Surveys . . . . . . . . . . . . . . . . . . . . . 32
(d) Repair . . . . . . . . . . . . . . . . . . . . . 32
(e) Drydocking . . . . . . . . . . . . . . . . . . . 33
(f) Inspection of the Ship . . . . . . . . . . . . . 33
(g) Manuals and Technical Records . . . . . . . . . . 33
(h) Modification; Removal of Parts;
Equipment owned by Third Parties . . . . . . . . 33
(i) Manager . . . . . . . . . . . . . . . . . . . . . 34
(j) Notification of certain Events . . . . . . . . . 34
(k) Repairers' Liens . . . . . . . . . . . . . . . . 35
(l) Health and Safety . . . . . . . . . . . . . . . . 35
(m) No Operational Interest . . . . . . . . . . . . . 35
(n) Safe Operation . . . . . . . . . . . . . . . . . 36
(o) Fitness to go to Sea . . . . . . . . . . . . . . 36
16 Insurance Undertakings; Wreck Removal and Insurance Assignment . . 36
16.1 Insurance Undertakings . . . . . . . . . . . . . . . . . . 36
(a) Insured Risks . . . . . . . . . . . . . . . . . . 36
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(b) Brokers and Insurers . . . . . . . . . . . . . . 37
(c) Fleet Cover . . . . . . . . . . . . . . . . . . . 37
(d) Payment of Premiums . . . . . . . . . . . . . . . 37
(e) Renewal . . . . . . . . . . . . . . . . . . . . . 37
(f) Guarantees . . . . . . . . . . . . . . . . . . . 38
(g) Custody of Policy Documents; Letters
of Undertaking; Loss Payable Clauses . . . . . . 38
(h) Club Letters of Undertaking; Certificates of
Entry . . . . . . . . . . . . . . . . . . . . . . 38
(i) Broker's Report . . . . . . . . . . . . . . . . . 38
(j) Collection . . . . . . . . . . . . . . . . . . . 39
(k) Compliance with Insurances . . . . . . . . . . . 39
(l) Application of Recoveries . . . . . . . . . . . . 39
(m) Other Insurances and Assureds . . . . . . . . . . 39
(n) Information concerning Insurances . . . . . . . . 40
16.2 Wreck Removal . . . . . . . . . . . . . . . . . . . . . . 40
16.3 Further Requirements . . . . . . . . . . . . . . . . . . . 40
16.4 Insurance Assignment . . . . . . . . . . . . . . . . . . . 40
17 Powers of Owner to Remedy Defaults . . . . . . . . . . . . . . . . 41
17.1 Failure to Perform Insurance Undertakings . . . . . . . . 41
17.2 Failure to Perform Maintenance Undertakings . . . . . . . 41
17.3 Failure to Prevent or Release from Arrest . . . . . . . . 41
17.4 Failure to comply with other Obligations . . . . . . . . . 41
17.5 Costs of Remedying Defaults . . . . . . . . . . . . . . . 42
17.6 Hire Still Payable . . . . . . . . . . . . . . . . . . . . 42
18 Redelivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
18.1 Redelivery Procedure and Condition . . . . . . . . . . . . 42
18.2 Redelivery Survey . . . . . . . . . . . . . . . . . . . . 42
19 Consumable Stores . . . . . . . . . . . . . . . . . . . . . . . . 43
19.1 Upon Delivery . . . . . . . . . . . . . . . . . . . . . . 43
19.2 Upon Redelivery . . . . . . . . . . . . . . . . . . . . . 43
20 Use of Equipment and Replacement . . . . . . . . . . . . . . . . . 43
20.1 Use of Equipment and Manuals and Technical Records . . . . 43
20.2 Renewal of Equipment . . . . . . . . . . . . . . . . . . . 43
20.3 Alteration of Equipment; Additional Equipment . . . . . . 44
21 Loss and Damage . . . . . . . . . . . . . . . . . . . . . . . . . 44
22 Salvage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
23 Requisition . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
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24 Termination Events . . . . . . . . . . . . . . . . . . . . . . . . 49
25 Owners Rights Following a Termination Event . . . . . . . . . . . 52
26 Increased Costs, Funding Problems and Illegality . . . . . . . . . 53
27 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
28 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
29 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . 56
30 Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
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SCHEDULE 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
List of Documents and Evidence . . . . . . . . . . . . . . . . . . 58
SCHEDULE 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Form of Delivery Notice . . . . . . . . . . . . . . . . . . . . . 60
SCHEDULE 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Charterhire . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SCHEDULE 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Temination Sum . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SCHEDULE 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Forms of Loss Payable Clauses . . . . . . . . . . . . . . . . . . 82
SCHEDULE 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
List of Excluded Equipment . . . . . . . . . . . . . . . . . . . . 83
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A CHARTERPARTY BY WAY OF DEMISE dated 20th December, 1990, and made BETWEEN:
(1) ROYAL BANK OF SCOTLAND (INDUSTRIAL LEASING) LIMITED whose registered
office is at ▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ (the
"Owner"); and
(2) SIMON-HORIZON LIMITED whose registered office is at ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇ (the "Charterer")
BY WHICH IT IS AGREED as follows:
1 DEFINITIONS
1.1 In this Charterparty, unless the context otherwise requires:
"Approved Brokers" means such firm of insurance brokers appointed by
the Charterer, as may from time to time be approved in writing by or
on behalf of the Owner for the purposes of this Charterparty;
"Banking Day" means a day (other than a Saturday) on which banks are
open for business in London and Edinburgh;
"BFE" means the equipment, machinery and parts to be supplied by the
Charterer to the Owner pursuant to the Conversion and Supply
Agreement;
"CAA" means the Capital ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇;
"Casualty Amount" means Two hundred and fifty thousand Pounds
(L.250,000) (or the equivalent in any other currency);
"Charterhire Payment Dates" means, subject to Clause 8.2, in relation
to the Primary Period, each of the dates referred to in paragraph 2.2
of Schedule 3 and, in relation to the Secondary Period, means each of
the dates referred to in paragraph 6.2 of Schedule 3;
"Charter Period" means the period during which the Charterer shall be
entitled to the possession and use of the Ship in accordance with this
Charterparty;
"Charterer" means Simon-Horizon limited of ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇ and includes its successors and permitted
assignees and transferees;
"Classification" means "DNV + Al (MV), EO, SF, Supply Vessel Helideck"
with the Classification Society or such other classification as the
Owner shall, at the request of
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the Charterer, have agreed in writing shall be treated as the
Classification for the purposes of this Charterparty;
"Classification Society" means Det Norske Veritas or such other
classification society which the Owner shall at the request of the
Charterer, have agreed in writing shall be treated as the
Classification Society for the purposes of this Charterparty;
"Compulsory Acquisition" means requisition of title or other
compulsory acquisition, requisition, appropriation expropriation,
deprivation or confiscation for any reason of the Ship by any
Government Entity or other competent authority, whether de jure or de
facto, but shall exclude requisition for use or hire not involving
requisition of title;
"Conversion and Supply Agreements" means an agreement of even date
herewith between the Owner and the Charterer with regard to the Ship
and relating to certain conversion works to be carried out to the Ship
and the purchase of certain equipment to be installed thereon;
"Conversion and Supply Price" means the aggregate amount in Pounds of
the payments made to the Charterer pursuant to certificates presented
under Clauses 2.5 and 3.4 of the Conversion and Supply Agreement;
"Corporation Tax" means corporation tax in the context of the scheme
of taxation contained in the United Kingdom Tax Acts (as defined in
section 831 ICTA) and any applicable Finance Act or any other tax on
companies imposed in the United Kingdom in substitution for
corporation tax;
"Delivery" means the time when the Owner shall accept, and obtain
title to, the Ship under the Purchase Agreement;
"Delivery Date" means the date on which Delivery shall occur;
"Encumbrance" means any mortgage, charge (whether fixed or floating),
pledge, lien, hypothecation, assignment, security interest, title
retention or other encumbrance of any kind securing, or any right
conferring a priority of payment in respect of, any obligation of any
person;
"Expected Delivery Date" means the date specified in the notice to be
given by the Charterer to the Owner pursuant to Clause 5.2 as being
the date upon which it is expected that the Charterer will deliver the
Ship to the Owner pursuant to the Purchase Agreement;
"Excluded Equipment" means the equipment, machinery and parts owned by
or leased to the Charterer listed in Schedule 6 which although
installed or to be installed on the
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Ship by the Start Date are not chartered by the Owner to the Charterer
pursuant to this Charterparty;
"Government Entity" means and includes (whether having a distinct
legal personality or not) any national or local government authority,
board, commission, department, division, organ, instrumentality, court
or agency and any association, organisation or institution of which
any of the foregoing is a member or to whose jurisdiction any of the
foregoing is subject or in whose activities any of the foregoing is a
participant;
"Guarantee" means the guarantee issued or, as the context may require,
to be issued by the Guarantor in favour of the Owner;
"Guarantor" means Simon Engineering plc whose registered office is at
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇;
"ICTA" means the Income and Corporation Taxes ▇▇▇ ▇▇▇▇;
"Indebtedness" means any obligation for the payment or repayment of
money, whether as principal or as surety, and whether present or
future, actual or contingent;
"Insurances" means all policies and contracts of insurance (which
expression includes all entries of the Ship in a protection and
indemnity or war risks association) which are from time to time during
the Charter Period in place or taken out or entered into by the
Charterer pursuant to Clause 16 for the benefit of itself and the
Owner in respect of the Ship or otherwise howsoever in connection with
the Ship and all benefits thereof (including claims of whatsoever
nature and return of premiums);
"Loss Payable Clauses" means the provisions regulating the manner of
payment of sums receivable under the Insurances which are to be
incorporated in the relevant insurance documents, such Loss Payable
Clauses to be in the forms set out in Schedule 5 or in such other
forms as may from time to time be agreed in writing by the Owner;
"Manager" means Ervik Marine Services A/S of ▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ or any other person appointed by the Charterer, with
the prior written consent of the Owner, as the manager of the Ship;
"Management Agreement" means the agreement approved by the Owner dated
19th December, 1990 and made between the Charterer and the Manager or
any other agreement, previously agreed in writing by the Owner,
between the Charterer and the Manager providing (inter alia) for the
Manager to manage the Ship;
"Manuals and Technical Records" means all such books, records, logs,
manuals, technical data, drawings and other materials and documents
(whether kept or to be kept
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in compliance with any applicable laws or the requirements of the
Classification Society or otherwise) relating to the Ship;
"Month" means a period beginning in one calendar month and ending in
the next calendar month on the day numerically corresponding to the
day of the calendar month on which it started, provided that (i) if
the period started on the last Banking Day in a calendar month or if
there is no such numerically corresponding day, it shall end on the
last Banking Day in such next calendar month and (ii) if such
numerically corresponding day is not a Banking Day, the period shall
end on the preceding Banking Day and "months" and "monthly" shall be
construed accordingly;
"MWB Conversion Contract" means the agreement dated 18th October, 1990
and made between the Charterer and the Yard relating to certain
conversion works to be carried out, and for the supply of certain
equipment, so the Ship;
"Net Sale Proceeds" means, in relation to a sale of the Ship, the
amount actually received by the Owner from a purchaser of the Ship
after deducting the Owners expenses in connection with such sale
including without limitation (where applicable) broker's commissions,
Owner's marketing expenses, legal costs, agency fees and port charges,
insurance premiums, stamp duties, registration fees and any expenses
relating to the overhaul or repair of the Ship (including putting the
Ship in class) incurred to restore the Ship to the condition required
by this Charterparty or pursuant to the provisions of any sale and
purchase agreement in respect of the sale of the Ship;
"Original Cost" means an amount equal to the aggregate of
(i) the Purchase Price; and
(ii) the Conversion and Supply Price;
"Owner" includes successors and assignees of the Owner;
"Permitted Encumbrance" means in respect of the Ship:
(a) any Encumbrance arising from the Owner's own acts or defaults;
(b) any Encumbrance for Taxes either not yet assessed or, if
assessed, not yet due and payable or being contested in good
faith by appropriate proceedings (and for the payment of which
adequate reserves have been provided) so long as any such
proceedings or the continued existence of such Encumbrance do
not involve any likelihood of the sale, forfeiture or loss of,
or of any interest in, the Ship;
(c) liens arising in the ordinary course of business by statute or
by operation of law in respect of obligations which are not
overdue or which are being contested in
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good faith by appropriate proceedings (and for the payment of
which adequate reserves have been provided) so long as any
such proceedings or the continued existence of such liens do
not involve any likelihood of the sale, forfeiture or loss of,
or of any interest in, the Ship;
(d) any lien for General Average or for Master's, officer's or
crew's wages outstanding in the ordinary course of trading,
any lien for salvage and any ship repairer's or outfitters'
possessory lien for a sum not exceeding the Casualty Amount;
and
(e) during the period of the conversion of the Ship pursuant to
the MWB Conversion Contract, any lien or right of the Yard to
retain the Ship to the extent that it arises as a result of,
or is provided for in, the MWB Conversion Contract and does
not become exercisable by reason of a default by the Charterer
in its performance of its obligations under the MWB Conversion
Contract;
"Pounds" and the sign "L." means pounds sterling of the United
Kingdom;
"Pre-Primary Period" means the period commencing on the Delivery Date
and terminating, subject to the terms and conditions of this
Charterparty, on the Start Date;
"Primary Period" means the period commencing on the Start Date and
terminating, subject to the terms and conditions of this Charterparty,
on 1st April, 2001;
"Purchase Agreement" means the Memorandum of Agreement dated December,
1990 and made between the Charterer and the Owner under which the
Charterer is to sell and the Owner is to purchase the Ship;
"Purchase Price" means the sum of Five million five hundred thousand
Pounds (L.5,500,000) payable by the Owner to the Charterer for the
Ship under the Purchase Contract;
"Relevant Documents" means this Charterparty, the Conversion and
Supply Agreement, the Guarantee and any other document or instrument
from time to time executed as a guarantee and/or security for the
obligations of the Charterer and/or any sums of money from time to
time owing, whether actually or contingently, under or pursuant to
this Charterparty and all notices, consents, certificates and other
documents and agreements issued or, as the case may be, to be issued
pursuant to any of the foregoing, and until expiry of the warranties
given to the Charterer pursuant to the MWB Conversion Contract,
includes the MWB Conversion Contract;
"Relevant Event" means any Termination Event or any event which with
the giving of notice or lapse of time or the satisfaction of any other
condition (or any combination thereof) would constitute a Termination
Event;
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"Relevant Party" means all or any one of the Charterer, the Guarantor
or any other party (other than the Owner) to any of the Relevant
Documents;
"Relevant Rate of Interest" means the rate of interest determined by
the Owner to be Two percent (2%) per annum above the base rate of The
Royal Bank of Scotland plc;
"Requisition Compensation" means all moneys or other compensation from
time to time payable in respect of the Compulsory Acquisition of the
Ship;
"Secondary Period" means the period for which the Charter Period is
extended or further extended in accordance with Clause 3.2;
"Ship" means the m.v. "Seaway Labrador" to be purchased by the Owner
pursuant to the Purchase Contract presently registered under the
Bahamian flag at the Port of Nassau with Official Number 715224 and
includes any share or interest therein and her engines, machinery,
boats, tackle, outfit, equipment, compressors, computers, seismic
survey equipment, spare gear, fuel consumables or other stores
belongings and appurtenances whether on board or ashore (but excluding
Excluded Equipment, consumable stores and provisions, bunkers,
domestic fuel lubricants, rented equipment, and charterer's additions
as contemplated in Clause 20.3) which become the property of the Owner
pursuant to the Purchase Contract and the Conversion and Supply
Agreement and belong to the Owner as at Delivery or installed on the
Ship thereafter or which, having been removed therefrom remain the
property of the Owner pursuant to this Charterparty together with any
and all substitutions therefor and replacements and renewals thereof
from time to time made in or to her in accordance with the provisions
of this Charterparty and, where the context permits, "Ship" shall
include the Manuals and Technical Records;
"Start Date" means 31st March, 1991;
"Subsidiary" of a person means any company or entity directly or
indirectly controlled by such person for which purpose "control" means
either ownership of more than 50 per cent of the voting share capital
(or equivalent right of ownership) of such company or entity, or power
to direct its policies and management whether by contract or
otherwise;
"Taxes" includes all present and future taxes, levies, imposts,
duties, fees or charges of whatever nature, including, without
limitation, corporation, capital gains, income, gross receipts
franchise, transfer, sales, use, business, occupation, transaction,
purchase, value added, excise, personal property, real property,
stamp, documentary, national insurance, or similar taxes at the rate
applicable for the time being, imposed by any national or local taxing
authority or any other agency or government, together with interest
thereon and penalties in respect thereof and "Taxation" shall be
construed accordingly;
"Termination Event" means any of the events or circumstances described
in Clause 24;
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"Termination Sum" means at any relevant time the amount calculated in
accordance with Schedule 4 as being applicable at such time;
"Total Loss" means any of the following events:
i) the actual or constructive total loss of the Ship (including
any damage to the Ship which results in an insurance
settlement on the basis of a total loss, or requisition for
use or hire of the Ship which results in an insurance
settlement on the basis of a total loss);
ii) the Compulsory Acquisition of the Ship; or
iii) the hijacking, theft, condemnation, confiscation, arrest,
capture, detention, seizure or requisition for use or hire of
the Ship (other than where the same amounts to Compulsory
Acquisition of the Ship) unless the Ship be released and
restored to the Charterer from such hijacking, theft,
condemnation, confiscation,, arrest, capture, detention,
seizure or requisition for use or hire within thirty (30) days
after the occurrence thereof,
"Total Loss Date" shall have the meaning ascribed thereto in Clause
21.2(b);
"Value Added Tax" or "VAT" means value added tax as provided for in
the Value Added Tax ▇▇▇ ▇▇▇▇ or any similar tax replacing or
introduced in addition to the same;
"Yard" means Motorenwerk Bremerhaven GmbH of Barkhausenstrasse, ▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of Germany.
1.2 Insurance Definitions
In Clause 16:
(i) "excess risks" means the proportion (if any) of claims for
general average, salvage and salvage charges and under the
ordinary collision clause not recoverable in consequence of
the value at which a vessel is assessed for the purpose of
such claims exceeding her insured value;
(ii) "fire and usual marine risks" means hull and machinery
coverage in accordance with Institute Time Clauses Hulls
including Institute Additional Perils Clause or equivalent
thereof;
(iii) "protection and indemnity risks" means the usual risks covered
by an English protection and indemnity association including
the proportion (if any) not recoverable in case of collision
under the ordinary collision clause; and
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(iv) "war risks" includes the risk of mines and all risks excluded
from the standard form of English marine policy by the free of
capture and seizure clause.
1.3 Clause headings and the Index are inserted for convenience of
reference only and shall be ignored in the interpretation of this
Charterparty.
1.4 In this Charterparty, unless the contact otherwise requires:
(a) references to Clauses and Schedules are to be construed as
references to the clauses of, and schedules to, this
Charterparty and references to this Charterparty include its
Schedules;
(b) references to (or to any specified provision of) this
Charterparty or any other document shall be construed as
references to this Charterparty, that provision or that
document as in force for the time being and as amended in
accordance with the terms thereof, or as the case may be, with
the agreement of the relevant parties and (where such consent
is, by the terms of this Charterparty or the relevant document
required to be obtained as a condition to such amendment being
permitted) the prior written consent of the Owner;
(c) words importing the plural shall include the singular and vice
versa;
(d) references to a person shall be construed as including,
without limitation, references to an individual, firm,
company, corporation, unincorporated body of persons and any
Government Entity, and
(e) without prejudice to any provisions in this Charterparty
providing for payments to be made or for adjustments to be
made to amounts payable hereunder in the event of a change in
any statute or statutory provisions references to statutory
provisions shall be construed as references to those
provisions as respectively amended or re-enacted (whether
before or after the date hereof) from time to time and shall
include any provisions of which they are re-enactments
(whether with or without modification) and any subordinate
legislation made under such provisions so far as such
modification or re-enactment applies or is capable of applying
to any transactions entered into prior to the date hereof and
(so far as liability thereunder may exist or can arise) shall
include also any past statutory provisions or regulations (as
from time to time modified or re-enacted) which such
provisions or regulations have directly or indirectly
replaced.
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2 REPRESENTATIONS AND WARRANTIES
2.1 The Charterer represents and warrants to the Owner that:
(a) the Charterer is duly incorporated and validly existing under
the laws of England as a limited liability company and has
power to carry on its business as it is now being conducted
and to own its property and other assets;
(b) the Charterer has the power to execute, deliver and perform
its obligations under the Relevant Documents to which it is a
party and all necessary corporate, shareholder and other
action has been taken to authorise the execution, delivery and
performance of the same;
(c) the Relevant Documents to which the Charterer is a party,
constitute or will upon execution thereof, constitute valid
and legally binding obligations of the Charterer enforceable
in accordance with their respective terms;
(d) the execution and delivery of, the performance of its
obligations under, and compliance with the provisions of, the
Relevant Documents to which it is a party by the Charterer
will not (i) contravene any existing applicable law, statute,
rule or regulation, or any judgment, decree or permit to which
the Charterer is subject (ii) conflict with, or result in any
breach of any of the terms of, or constitute a default under,
any agreement or other instrument to which the Charterer is a
party or is subject or by which it or any of its property is
bound, (iii) contravene or conflict with any provision of the
Charterer's Memorandum and Articles of Association;
(e) no litigation, arbitration or administrative proceeding is
taking place, pending or, to the knowledge of the officers of
the Charterer, threatened against the Charterer which has not
been notified to the Owner in writing and which is neither
frivolous nor vexatious and could have a material adverse
effect on the business, assets or financial condition of the
Charterer or its ability to perform its obligations under the
Relevant Documents and such proceedings remain unstayed or
unresolved for a period exceeding thirty (30) days unless
contested by the Charterer in good faith;
(f) the audited financial statements of the Charterer in respect
of the financial year ended on 31st December, 1989 as
delivered to the Owner have been prepared in accordance with
generally accepted accounting principles and practices in the
United Kingdom which have been consistently applied and
present fairly and accurately the financial position of the
Charterer as at such date and the results of the operations of
the Charterer for the financial year ended on such date, and
as at such date the Charterer did not have any significant
liabilities (contingent or
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otherwise) which are not disclosed by, or reserved against in,
such financial statements and the Charterer did not have any
unrealised or anticipated losses.
2.2 The Charterer further represents and warrants to the Owner that:
(a) there has been no material adverse change in the financial
position of the Charterer from that set forth in the financial
statements referred to in Clause 2.1 (f);
(b) every consent, authorisation, license or approval of, or
registration with, or declaration to, governmental or public
bodies or authorities or courts required by the Charterer to
authorise, or required by the Charterer in connection with the
execution, delivery, validity, enforceability or admissibility
in evidence of the Relevant Documents, or the performance by
the Charterer of its obligations under the Relevant Documents
has been obtained or made and is in full force and effect, and
there has been no default in the observance of the conditions
or restrictions (if any) imposed in, or in connection with,
any of the same;
(c) the obligations of the Charterer under the Relevant Documents
are direct, general and unconditional obligations of the
Charterer and rank at least pari passu with all other present
and future unsecured and unsubordinated obligations (including
contingent obligations) of the Charterer with the exception of
such obligations as are mandatorily preferred by law and not
by contract;
(d) the Charterer is not (nor would with the giving of notice or
lapse of time or both be) in breach of or in default under any
agreement relating to Indebtedness to which it is a party or
by which it may be bound;
(e) the information, exhibits and reports furnished by the
Charterer to the Owner in connection herewith or with the
negotiation and preparation of this Charterparty are true and
accurate in all material respects and not misleading, do not
omit material facts and all reasonable enquiries have been
made to verify the facts and statements contained therein;
there are no other facts the omission of which would make any
fact or statement therein misleading,
(f) no Relevant Event has occurred and is continuing,
(g) the Ship is and will on Delivery be free from all Encumbrances
other than Permitted Encumbrances; and
(h) neither the Charterer's interest in the Insurances or any
Requisition Compensation nor any part thereof will on Delivery
be subject to any Encumbrances save for any Permitted
Encumbrance.
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2.3 The representations and warranties in Clause 2.1 (and so that the
representation and warranty in Clauses 2.1(f) shall for this purpose
refer to the then latest audited financial statements delivered to the
Owner under Clause 11.1(d)) shall be deemed to be repeated by the
Charterer on and as of each day from the date of this Charterparty
until the end of the Charter Period as if made with reference to the
facts and circumstances existing on each such date.
2.4 The rights and remedies of the Owner in relation to any
misrepresentation or breach of warranty on the part of the Charterer
shall not be prejudiced by any investigation by or on behalf of the
Owner into the affairs of any person (other than the Owner) being a
party to any of the Relevant Documents, by the performance of any of
the Relevant Documents or by any other act or thing which may be done
or omitted to be done by the Owner under any of the Relevant Documents
and which would or might, but for this Clause 2.4, prejudice such
rights and remedies.
3 TERM OF CHARTER
3.1 The Owner shall let and demise and the Charterer shall take on hire
the Ship, subject to the terms and conditions of this Charterparty,
for the Pre-Primary Period and the Primary Period.
3.2 The Charterer shall be entitled (subject as hereinafter provided) on
giving to the Owner notice (which notice, when given shall be
irrevocable) not less than one hundred and eighty (180) days prior to
the end of the Primary Period, to extend the Charter Period for a
period of ten (10) years from the last day of the Primary Period.
3.3 Subject to the Charterer indemnifying the Owner for all losses, costs
and expenses incurred by the Owner (including any losses, costs or
expenses incurred by the Royal Bank of Scotland plc or any other party
providing funds to the Owner in connection with the payments to be
made and received by the Owner under the Purchase Agreement and the
Relevant Documents) as a result of such termination, the Charterer
shall be entitled on giving to the Owner not less than one hundred and
twenty (120) days notice (which notice, when given, shall be
irrevocable) to terminate the Charter Period on any date falling on or
after the first anniversary of the Start Date. Upon such termination
the Charterer shall re-deliver the Ship to the, Owner in accordance
with Clause 18 and shall pay to the Owner an amount equal to the
Termination Sum on the date of such termination together with all
amounts of charterhire and other moneys then due and owing to the
Owner under this Charterparty or any of the other Relevant Documents.
3.4 If (a) the Charterer does not elect to extend the Charter Period
pursuant to Clause 3.2, or (b) the Charterer shall give notice to
terminate the Charter Period pursuant to Clause 3.3, then, provided
that the Ship shall have been returned to the Owner in accordance with
the subsequent provisions of this Clause 3.4 and in accordance with
Clause 18 and that the Owner shall not be prevented from so doing for
any reason whatsoever, the
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Owner shall endeavour to sell the Ship for delivery on, or as soon as
possible after, in the case of (a) above, the expiry of the Primary
Period or, in the case of (b) above, the date of the termination of
the Charter Period pursuant to Clause 3.3. Notwithstanding anything
to the contrary in this charterparty, where the Charter Period expires
by effluxion of time or if the Charterer gives notice to terminate the
Charter Period pursuant to Clause 33, the Charter Period shall
continue until and end on the date on which the Ship shall be
delivered to a purchaser thereof pursuant to a sale of the Ship as
contemplated by Cause 3.6, whenever such delivery shall take place; it
being agreed that if by reason of the foregoing the Charter Period
continues beyond 1st April 2001, the Secondary Period shall be deemed
to have commenced and charterhire shall be payable accordingly.
Immediately prior to such termination of the Charter Period the
Charterer shall re-deliver the Ship to the Owner in accordance with
Clause 18 and shall pay to the Owner an amount equal to the
Termination Sum on the date of such termination together with all
amounts of charterhire and other moneys then due and owing to the
Owner under this Charterparty and/or any of the other Relevant
Documents.
3.5 Upon the termination of the Charter Period and the sale of the Ship in
accordance with the foregoing provisions of this Clause 3, the Net
Sale Proceeds shall be applied by the Owner (subject to Clause 10.4)
as follows:
(a) Firstly in or towards settlement of any amounts due and owing
by the Charterer to the Owner under the Charterparty or any
other Relevant Documents (including any interest due in
respect thereof);
(b) Secondly if the Charterer shall on or before the date of
application of the Net Sale Proceeds by the Owner have paid
the Termination Sum, or a part thereof, in accordance with
Clauses 3.3 or 3.4, in or towards refunding by way of rebate
of charterhire to the Charterer the amount of the Termination
Sum or part thereof so paid by the Charterer; and
(c) Thirdly an amount equal to two per cent (2%) of the Net Sale
Proceeds shall be retained by the Owner and any balance
remaining shall be paid to the Charterer by way of rebate of
charterhire and/or payment of sales commission or otherwise as
appropriate.
3.6 In respect of any sale of the Ship on termination or expiry of the
Charter Period (other than pursuant to Clauses 21.3 or 25.1), the
Charterer shall act as the sole and exclusive agent of the Owner for
the purpose of negotiating the sale of the Ship on the following
terms:
(a) the Charterer will endeavor to arrange the sale of the Ship
for a cash consideration on the best terms (including price)
reasonably obtainable on the open market provided that the
Ship shall not be sold to
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(i) the Charterer or any person or persons connected with
the Charterer (as the term "connected persons" is
used in section 839 ICTA); or
(ii) any person acting in trust for, as nominee of, as
agent or otherwise as representative of or on behalf
of any of the persons referred to in (i) above;
and the Charterer will keep the Owner informed from time to
time of its progress;
(b) the Charterers authority will not extend to concluding a
contract for the sale of the Ship for which the Owner's
specific written authority will be required;
(c) the Ship shall be offered for sale and for delivery on, or as
soon as practicable after, such termination or expiry of the
Charter Period and any contract for its sale shall include
terms to the following effect:
(i) that all conditions, representations or warranties,
expressed or implied by statute or otherwise, whether
as to the state or quality of the Ship or as to
description, fitness for purpose, merchantable
quality or otherwise, are, so far as is permitted by
law, expressly excluded as between the Owner and the
buyer save in respect of the warranty that the Owner
shall be passing such title to the Ship as received
from the Charterer free from any Encumbrances created
by the Owner, and
(ii) that the sale is conditional upon the Owner first
recovering possession of the Ship;
Provided always that nothing in this Clause 3.6(c) shall
prevent the Charterer including any other representations and
warranties to be given directly by the Charterer to a buyer in
connection with such sale; and
(d) the Charterer's agency and authority pursuant to the foregoing
provisions shall terminate if a Relevant Event shall occur and
the Owner shall give notice to the Charterer terminating such
agency.
4 CONDITIONS PRECEDENT
4.1 The obligation of the Owner to charter the Ship to the Charterer under
this Charterparty is subject to the condition that, not less than
seven (7) Banking Days prior to the Expected Delivery Date (or by such
later time prior to Delivery as the Owner may agree) the Owner shall
have received the documents and evidence specified in Schedule 1 in
form and substance satisfactory to the Owner.
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4.2 The obligation of the Owner to charter the Ship to the Charterer under
this Charterparty is subject to the further conditions:
(a) that the representations and warranties set out in Clause 2.1
and 2.2 are true and correct as if each were made with respect
to the facts and circumstances existing immediately prior to
the time when Delivery is to take place;
(b) that no Relevant Event shall have occurred and be continuing
or would arise by reason of Delivery taking place;
(c) that Delivery shall have occurred.
4.3 The conditions specified in Clauses 4.1 and 4.2 are inserted for the
sole benefit of the Owner and may be waived in whole or in part and
with or without conditions by the Owner provided that if any of the
said conditions are outstanding after Delivery has taken place then,
unless the Owner shall have given a specific written waiver or
deferral in respect thereof, the Charterer shall ensure that such
outstanding conditions are fled within thirty (30) days of the
Delivery Date and the Owner shall be endued to treat the failure of
the Charterer to perform such outstanding conditions within such
period of thirty (30) days as a Termination Event.
5 DELIVERY AND ACCEPTANCE
5.1 The Owner appoints the Charterer and the Charterer accepts such
appointment as the Owner's agent:
(a) to perform all duties required of the Owner under the Purchase
Agreement other than the payment of the Purchase Price of the
Ship thereunder;
(b) to carry out or procure the carrying out of all inspections
necessary or desirable to supervise the works agreed to be
carried out pursuant to the Conversion and Supply Agreement
and to evaluate the condition, seaworthiness and performance
of the Ship when it is tendered for redelivery after such
conversion works and all relevant parts and equipment
installed thereon; and
(c) to accept delivery of the Ship on behalf of the Owner when it
is tendered for delivery in accordance with the Purchase
Agreement, and on redelivery from conversion, and to sign on
behalf of the Owner any necessary documents evidencing such
delivery and acceptance provided in both cases that the
Charterer is first satisfied that on Delivery the Owner will
obtain good title to the Ship free from Encumbrances other
than Encumbrances within paragraphs (a), (b), (c) and (d) of
the definition of Permitted Encumbrances, and that both on
Delivery and redelivery from conversion, the Charterer is
satisfied that the Ship is and remains free from Encumbrances
other than Encumbrances within paragraphs (a), (b), (c)
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and (d) of the definition of Permitted Encumbrances and is
seaworthy, and that the condition of the Ship is satisfactory
and accords on Delivery, with the Purchase Agreement, and on
redelivery from conversion, the specifications of the
Conversion and Supply Agreement.
5.2 The Charterer will give the Owner at least five (5) Banking Days prior
written notice, in the form contained in Schedule 2, of the date upon
which it is expected that the Charterer will deliver the Ship to the
Owner pursuant to the Purchase Agreement.
5.3 Subject to Clause 4, immediately following Delivery the Ship shall be
deemed delivered to the Charterer and shall become subject to and
governed by this Charterparty, the Charter Period shall commence and
the Charterer shall be deemed to have taken delivery of the Ship under
this Charterparty.
5.4 The Charterer acknowledges and confirms that immediately upon title
passing to the Owner in respect of the relevant conversion works to be
carried out to the Ship and the supply of certain equipment thereto
and BFE pursuant to the Conversion and Supply Agreement and/or the MWB
Conversion Contract, such conversion works, equipment and BFE shall be
part of the Ship and deemed delivered to the Charterer and shall
become subject to and governed by this Charterparty and the Charterer
shall be deemed to have taken delivery thereof under this
Charterparty.
5.5 The Charterer acknowledges that prior to Delivery the Ship was
chartered to the Charterer and owned by the Charterer, that the
condition of the Ship on delivery to the Charterer and its compliance
with the provisions and specifications of the Purchase Agreement shall
be the sole responsibility of the Charterer, and the Charterer shall
not be entitled for any reason whatsoever to refuse to accept delivery
of the Ship under this Charterparty once the same has been accepted by
it, on behalf of the Owner, under the Purchase Agreement and the Owner
shall not be liable for any loss or expense, or any loss of profit,
resulting directly or indirectly from any defect or alleged defect in
the Ship or failure or alleged failure of the Ship to comply with the
Purchase Agreement.
5.6 The conversion works, BFE and other equipment to be installed on the
Ship pursuant to the Conversion and Supply Agreement are carried out
at the sole risk of the Charterer. Accordingly the Charterer shall not
be entitled for any reason whatsoever to reject the Ship under this
Charterparty even if the Ship is unseaworthy or suffering from any
defect as a result of such conversion works or installation of parts
and equipment.
5.7 The Owner shall not be responsible for any loss or expense, or any
loss of profit, arising from any delay in the delivery of, or failure
to deliver, the Ship to the Charterer under this Charterparty.
5.8 If for any reason the Ship shall not have been delivered to and
accepted by the Charterer in accordance with Clause 5.3 by 31st
December, 1990 then the Owner shall have no
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further obligation under this Charterparty to charter the Ship to the
Charterer (unless the Owner and Charterer shall otherwise agree in
writing) and the Charterer shall (in addition to any other obligation
it may then have under Clause 9 to indemnify and hold harmless the
Owner as therein provided) reimburse to the Owner forthwith on demand
all amounts which the Owner shall have expended or shall thereafter be
required to expend under the Purchase Agreement or otherwise in
connection with the purchase of the Ship, together with interest on
each amount so demanded at the Relevant Rate of Interest from the date
of demand until the date of reimbursement (both before and after any
relevant judgment).
5.9 The Charterer shall indemnify the Owner in respect of any liabilities,
losses, costs or expenses incurred by the Owner as a consequence of
any delay in the delivery of or non-delivery of the Ship to the Owner
under the Purchase Agreement and/or to the Charterer under this
Charterparty.
6 EXTENT OF OWNER'S LIABILITY; THIRD PARTY WARRANTIES
6.1 The Owner warrants that, subject to Clause 21.1 and Clause 25, the
Owner shall not interfere during the Charter Period with the use,
possession and quiet enjoyment of the Ship by the Charterer on the
terms of this Charterparty.
6.2 The Charterer expressly agrees and acknowledges that, save only as
provided in Clauses 6.1 and 14.2, no condition, warranty or
representation of any kind is or has been given by or on behalf of the
Owner in respect of the Ship or any part thereof or any work during
conversion or any part or equipment then installed or any BFE, and
accordingly the Charterer confirms that it has not, in entering into
this Charterparty, relied on any condition, warranty or representation
by the Owner or any person on the Owner's behalf (whether authorised
or not), express or implied, whether arising by law or otherwise in
relation to the Ship or any part thereof or any work during conversion
or any part or equipment then installed or any BFE, including, without
limitation, warranties or representations as to the description,
seaworthiness, merchantability, fitness for any purpose, value,
condition, design or operation of any kind or nature of the Ship or
any part thereof or any work during conversion or any part or
equipment then installed or any BFE, and the benefit of any such
condition, warranty or representation by the Owner is hereby
irrevocably and unconditionally waived by the Charterer. The Charterer
further acknowledges and agrees that the Ship is to be designed,
manufactured, assembled and erected pursuant to the Conversion and
Supply Agreement without reference to or involvement of the Owner
other than payments of the Conversion and Supply Price. To the extent
permissible under applicable law, the Charterer hereby also waives any
rights which it may have in tort in respect of any of the matters
referred to above and irrevocably agrees that the Owner shall have no
greater liability in tort in respect of any such matter than it would
have in contract after taking account of all of the foregoing
exclusions. No third party making any representation or warranty
relating to the Ship or any part thereof or any work during conversion
or any part or equipment then installed
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or any BFE is the agent of the Owner nor has any such third party
authority to bind the Owner thereby.
6.3 During the Charter Period the Owner will use reasonable endeavors to
extend to the Charterer the benefit of all warranties and indemnities
given by any manufacturer or supplier of any part of the Ship or any
work during conversion or any part or equipment then installed or any
BFE. The Charterer shall be entitled during the Charter Period, with
the prior written approval of the Owner, to take such action upon any
such warranty or indemnity in the name of the Owner against any such
manufacturer or supplier as the Charterer shall see fit, but subject
to the Charterer first ensuring that the Owner is indemnified and
secured to its reasonable satisfaction against all costs and expenses
thereby incurred or to be incurred.
7 CHARTERHIRE
7.1 During the Primary Period the Charterer shall pay to the Owner on the
respective Charterhire Payment Dates installments of charterhire for
the Ship in arrears, each such instalment being of the amount
specified in paragraph 2 of Schedule 3 one such instalment being
payable on each Charterhire Payment Date falling during the Primary
Period.
7.2 During the Secondary Period the Charterer shall pay to the Owner on
the respective Charterhire Payment Dates installments of charterhire
for the Ship in advance, each such instalment being of the amount
specified in paragraph 6 of Schedule 3 one such installment being
payable on each Charterhire Payment Date falling during the Secondary
Period.
7.3 The installments of charterhire and all other sums payable by the
Charterer to the Owner under this Charterparty are exclusive of any
Value Added Tax or similar tax payable in respect thereof which shall
in each case be paid in addition thereto.
7.4 The Charterer's obligation to pay charterhire and make other payments
in accordance with this Charterparty shall, subject to Clause 21.3, be
absolute and unconditional irrespective of any contingency whatsoever
including (but not limited to) (i) any right of set-off, counterclaim,
recoupment, defense or other right which either party hereto may have
against the other, (ii) any unavailability of the Ship for any reason,
including, but not limited to, any lack or invalidity of title or any
other defect in the title, seaworthiness, merchantability, fitness for
any purpose, condition, design, or operation of any kind or nature of
the Ship, or the ineligibility of the Ship for any particular use or
trade, or for registration or documentation under the laws of any
relevant jurisdiction, or any damage to the Ship, (iii) any failure or
delay on the part of either party hereto, whether with or without
fault on its part, in perforating or complying with any of the terms
or conditions of this Charterparty, (iv) any insolvency, bankruptcy,
administration, reorganisation, arrangement, readjustment of debt,
dissolution, liquidation or similar
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proceedings by or against the Owner or the Charterer, (v) any lack of
due authorisation of, or other defect in, this Charterparty.
7.5 The provisions of this Clause 7 with regard to the calculation and
payment of charterhire during the Pre-Primary Period and the Primary
Period are subject to adjustment in accordance with the charterhire
adjustment provisions contained in Schedule 3.
7.6 No charterhire paid in advance shall (except as expressly contemplated
by the provisions of this Charterparty be repayable by or recoverable
from the Owner.
8 PAYMENTS, INTEREST AND CALCULATIONS
8.1 All payments to be made by the Charterer under this Charterparty shall
be made (unless specifically otherwise provided in this Charterparty)
without prior demand in full, without any set-off or counterclaim
whatsoever and, subject as provided in Clause 10.3, free and clear of
any deductions or withholdings in Pounds (or, in the case of indemnity
payments, in the currency in which the cost or expense which is the
subject of the indemnity payment is incurred) for value on the day on
which payment is due to the account of the Owner with The Royal Bank
of Scotland PLC, ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
lPY (Sort Code: 16-16-13 and Account Number: ▇▇▇▇▇▇▇▇) or to such
other account as the Owner may from time to time notify the Charterer
in writing.
8.2 Other than any sum payable on demand, which shall be payable in
accordance with such demand, when any payment under any of the
Relevant Documents would otherwise be due on a day which is not a
Banking Day, the due date for payment shall be the preceding Banking
Day.
8.3 If the Charterer fails to pay any sum (including without limitation,
any sum payable pursuant to this Clause 8.3) on its due date for
payment under this Charterparty the Charterer shall pay to the Owner
on demand interest on such sum, compounded daily, from the due date up
to the date of actual payment (as well after as before any relevant
judgment) at the Relevant Rate of Interest.
8.4 All interest under this Charterparty shall accrue from day to day and
shall be calculated on the basis of the actual days elapsed and a 365
day year.
8.5 Any certificate or determination of the Owner as to any rate of
interest or any other amount payable under this Charterparty shall in
the absence of manifest error, be conclusive and binding on the
Charterer.
8.6 If any sum due from the Charterer under any of the Relevant Documents
or under any order or judgment given or made in relation thereto has
to be converted from the currency, ("the first currency") in which the
same is payable under any of the Relevant
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Documents or under such order or judgment into another currency ("the
second currency") for the purpose of (i) making or filing a claim or
proof against the Charterer, (ii) obtaining an order or judgment in
any court or other tribunal or (iii) enforcing any order or judgment
given or made in relation to such Relevant Document, the Charterer
shall indemnify and hold harmless the Owner from and against any loss
suffered as a result of any difference between (a) the rate of
exchange used for such purpose to convert the sum in question from the
first currency into the second currency and (b) the rate or rates of
exchange at which the Owner may in the ordinary course of business
purchase the first currency with the second currency upon receipt of a
sum paid to it in satisfaction, in whole or in part, of any such
order, judgment, claim or proof. Any amount due from the Charterer
under this Clause 8.6 shall be due as a separate debt and shall not be
affected by judgment being obtained for any other sums due under or in
respect of any of the Relevant Documents and the term "rate of
exchange" includes any premium and costs of exchange payable in
connection with the purchase of the first currency with the second
currency.
9 COSTS AND INDEMNITIES
9.1 The Charterer shall pay promptly all costs or expenses (other than
payment of the Purchase Price pursuant to the Purchase Agreement) of,
or arising from, the purchase, delivery, import, export, design,
registration, classification, ownership, possession, control, use,
management, ▇▇▇▇▇▇▇, victualling, the provision of bunkers and
lubricating oils, chartering, sub-chartering, insurance, maintenance,
conversion, repair, dry docking, survey, refurbishment, condition,
service, overhaul modification, change, alteration, loss, damage,
storage, laying up, removal, re-delivery, sale or disposal of, in or
to the Ship, and all costs or expenses otherwise arising in connection
with the Ship or the performance of the Charterer's obligations under
any of the Relevant Documents.
9.2 The Charterer shall pay all stamp, documentary, registration or other
like Taxes (including any such Taxes payable by the Owner) imposed on
or in connection with the Relevant Documents and shall indemnify the
Owner against any liability arising by any delay or omission of the
Charterer to pay such duties or Taxes.
9.3 Whether or not the Ship is delivered to the Charterer pursuant to this
Charterparty, the Charterer shall pay to the Owner on demand:
(a) all expenses (including legal advisory, printing, and
out-of-pocket expenses) incurred by the Owner in connection
with the negotiation, preparation, and execution of the
Relevant Documents, and of any amendment or extension of, or
the granting of any waiver or consent under, any of the
Relevant Documents, and
(b) all expenses (including legal, survey and other costs)
incurred by the Owner in contemplation of, or otherwise in
connection with, the enforcement of, or preservation of any
rights under, any of the Relevant Documents, or otherwise
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in respect of moneys owing under any of the Relevant
Documents, or in respect of breach of any representation,
warranty, covenant, agreement, condition or stipulation
therein contained or in respect of the repossession of the
Ship.
All expenses payable pursuant to this Clause 9.3 shall be paid
together with any irrecoverable Value Added Tax or similar tax
thereon, and in the currency in which the same are incurred by
the Owner.
9.4 The Charterer shall indemnify and hold harmless the Owner, without
prejudice to any of the Owner's other rights under any of the Relevant
Documents, from and against:
(a) any costs or expenses which the Charterer has agreed to pay
but which shall nevertheless be claimed from or assessed
against or paid by the Owner, and against any liability
incurred by the Owner by reason of any delay or failure of the
Charterer to pay any such costs or expenses;
(b) any Taxes which the Charterer has agreed to pay but which
shall nevertheless be claimed from or assessed against or paid
by the Owner, and against any liability incurred by the Owner
by reason of any delay or failure of the Charterer to pay any
such Taxes including without limitation, any delay or failure
of the Charterer to make any such deduction or withholding as
is referred to in Clause 10.3 or by reason of any increased
payment as is referred to in Clause 10.3 not being made on the
due date for such payment.
9.5 Without prejudice to the Charterer's obligations under Clauses 9.1 to
9.4 inclusive, the Charterer agrees at all times, whether before,
during or after the Charter Period, to indemnify and hold harmless the
Owner from and against all costs, expenses, payments (other than the
payment by the Owner to the Charterer of the Purchase Price pursuant
to the Purchase Agreement and the Conversion and Supply Price pursuant
to the Conversion and Supply Agreement), charges, losses, demands,
liabilities, claims, actions, proceedings (whether civil or criminal),
penalties, fines, damages, judgments, orders or other sanctions,
liens, salvage, General Average (in this Clause 9.5 together referred
to as "Losses") which may be incurred by, or made or asserted against
the Owner at any time:
(a) relating to, or arising directly or indirectly in any manner
or for any cause or reason whatsoever out of, the design,
nature, description, manufacture, testing, purchase, delivery,
import, export, registration, flag, classification,
certification, ownership, possession, control, use, operation,
▇▇▇▇▇▇▇, crewing, navigation, victualling, supply or servicing
(whether at sea or not), provision of bunkers and lubricating
oils, chartering, sub-chartering, insurance, maintenance,
conversion, repair, dry docking, surveys, refurbishment,
condition, service, overhaul, modification, change,
alteration, loss, damage, removal, laying up, storage,
re-delivery, sale or disposal of, in or to the Ship,
conversion works, parts and
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equipment installed and BFE or otherwise in connection with
the Ship, conversion works, parts, equipment and BFE, or
relating to loss or destruction of or damage to any property,
or death or injury of, or other loss of whatsoever nature
suffered by, any person caused by, relating to, or arising
from or out of (in each case whether directly or indirectly)
any of the foregoing matters;
(b) which may be made or brought on the ground that any design,
article or material in the Ship or in respect of the
conversion works, parts, equipment and BFE to be installed and
supplied to the Ship pursuant to the Conversion and Supply
Agreement or the operation or use thereof constitutes an
infringement of patent, intellectual property right or any
other right whatsoever;
(c) in preventing or attempting to prevent the arrest,
confiscation, seizure, taking in execution, impounding,
forfeiture or detention of the Ship, or in securing the
release of the Ship or any of the parts, equipment or BFE to
be installed on the Ship except to the extent any Losses are
incurred in this respect as a result of the Owner's breach of
Clause 6.1 due to any Encumbrance on the Ship directly created
by the Owner which adversely affects the operation of the
Ship;
(d) as a consequence of any default in payment by the Charterer of
any sum under any of the Relevant Documents when due or any
other default by the Charterer in the due and punctual
performance of its obligations under any of the Relevant
Documents.
9.6 Notwithstanding anything to the contrary contained in this
Charterparty, the indemnities by the Charterer in favour of the Owner
contained in this Charterparty shall continue in full force and effect
notwithstanding any breach by the Owner or the Charterer of the terms
of this Charterparty (including any fundamental breach) or any of the
other Relevant Documents, the termination of the chartering of the
Ship to the Charterer under this Charterparty, the repudiation by the
Owner or the Charterer of this Charterparty, or the expiration of the
Charter Period by effluxion of time or otherwise.
9.7 Moneys becoming due by the Charterer to the Owner under the
indemnities contained in this Clause 9 or elsewhere in the Relevant
Documents shall be paid on demand made by the Owner and shall be paid
together with interest thereon at the Relevant Rate of Interest from
the date of demand by the Owner to the date of reimbursement by the
Charterer to the Owner (after as well as before judgment).
10 TAXATION
10.1 The Charterer shall pay promptly all Taxes levied or assessed on or in
respect of the Ship, any payments made under any of the Relevant
Documents or any of the transactions contemplated by any of the
Relevant Documents but, subject to the remaining provisions of this
Clause 10, excluding any Taxes assessed against the Owner
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by reference to its overall profits, or by reference to its gains, if
any, realised in connection with the ultimate disposal of the Ship, or
arising out of a Total Loss.
10.2 (a) Sums payable to the Owner by the Charterer under any Relevant
Document by way of indemnity or reimbursement shad be
calculated on an after-tax basis. Accordingly, if and to the
extent that any such sum payable to the Owner is taxable in
the hands of the Owner as the auditors of the Owner (acting as
experts and not as arbitrators) shall certify from time to
time such sum shall be increased to an amount which (after
subtracting any Taxation suffered by the Owner on the
increased payment and after taking into account any deduction
for Taxation purposes available to the Owner in respect of the
discharge by the Owner of any corresponding liability to a
third party) shall equal the amount which the Owner would have
received had the sum payable by the Charterer not been taxable
in the hands of the Owner. If the sum payable by the Charterer
is initially paid on the basis that it is not taxable in the
hands of the Owner and it is subsequently determined to be
taxable or vice versa, such adjustment and payment shall be
made between the Owner and the Charterer as the auditors of
the Owner (acting as experts and not as arbitrators) shall
certify as appropriate to restore the after-tax position of
the Owner to that which it would have been had the adjustment
not been necessary.
(b) If and to the extent that any sum (the "indemnity sum")
constituting (directly or indirectly) an indemnity to the
Owner but paid by the Charterer to any person other than the
Owner, shall be treated as taxable in the hands of the Owner,
the Charterer shall pay to the Owner such sum (the
"compensating sum") as (after subtracting any Taxation
suffered by the Owner on the compensating sum and after taking
into account any deductions for the purposes of Taxation
available to the Owner in respect of any corresponding payment
treated as made by the Owner to such person) shall reimburse
the Owner for any Taxation suffered by it in respect of the
indemnity sum.
(c) For the purposes of this Clause 10.2 a sum shall be deemed to
be taxable in the hands of the Owner if it falls to be taken
into account in computing the profits or gains of the Owner
for the purposes of Taxation and if so the Owner shall be
deemed to have suffered Taxation thereon at the rate of
Taxation applicable to the Owner's profits or gains for the
period in which the payment falls to be taken into account for
the purposes of such Taxation.
10.3 If at any time any applicable law, regulation or regulatory
requirement, or any governmental authority, monetary agency or central
bank requires the Charterer to make any deduction or withholding in
respect of Taxes from any payment due under the Relevant Documents:
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(i) the sum due from the Charterer in respect of such
payment shall be increased to the extent necessary to
ensure that, after the making of such deduction or
withholding, the Owner receives on the due date for
such payment a net sum equal to the sum which it
would have received had no such deduction or
withholding been required to be made;
(ii) the Charterer shall pay to the relevant authority
within the period for payment permitted by applicable
law the full amount of the deduction or withholding
(including, but without prejudice to the generality
of the foregoing, the full amount of any deduction or
withholding from any increased amount paid pursuant
to this Clause 103); and
(iii) the Charterer shall furnish to the Owner within the
period for payment permitted by applicable law,
evidence of payment to the relevant authority of all
amounts deducted or withheld as aforesaid.
10.4 If the Owner is required to pay any sum to the Charterer or any other
party under any of the Relevant Documents and such sum is payable out
of or represents a reimbursement of an amount which is brought into
account in computing the profits or gains of the Owner for the
purposes of Taxation and such payment will not he allowed to the Owner
as a deductible trading expense or as a basis for, or otherwise as, a
deduction or off-set for Taxation purposes in the accounting period of
the Owner in which it is required to he paid as the auditors of the
Owner (acting as experts and not as arbitrators) shall certify from
time to time, the Charterer shall pay to the Owner such amount as
shall put the Owner in the same after-tax position as the Owner would
have been in had the payment been allowed as a deductible trading
expense or as a basis for, or otherwise as, a deduction or set-off as
aforesaid. If any such payment is initially made on the basis that it
is a deductible trading expense, or that it will be allowed as a basis
for, or otherwise as, a deduction or off-set of the Owner for tax
purposes in the accounting period of the Owner in which it is incurred
and it is subsequently determined that it is not, or vice versa, such
adjustment and payments, if any, shad be made between the Owner and
the Charterer as the Owner's auditors from time to time (acting as
experts and not as arbitrators) may certify as appropriate in order to
restore the after-tax position of the Owner (or any company within the
group of companies of which the Owner is a member to which relief from
corporation tax in respect of the payment was surrendered) to that
which it would have been had the adjustment not been necessary.
11 GENERAL UNDERTAKINGS
11.1. The Charterer undertakes with the Owner that it will:
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(a) Notification of Relevant Event
promptly inform the Owner of any Relevant Event forthwith upon
becoming aware thereof;
(b) Consents and Authorisations
without prejudice to Clauses 2.2 and 4, obtain or cause to be
obtained, maintain in full force and effect and comply in all
material respects with the conditions and restrictions (if
any) imposed in, or in connection with, every consent,
authorisation, licence or approval of governmental or public
bodies or authorities or courts and do, or cause to be done,
all other acts and things, which may from time to time be
necessary or desirable under applicable law for the continued
due performance of all its obligations under any of the
Relevant Documents;
(c) Preparation of Accounts
cause to be prepared in each financial year and cause to be
certified by its auditors consolidated financial statements
which are prepared in accordance with generally accepted
accounting principles and practices in England which have been
consistently applied and present fairly and accurately the
financial position of the Charterer as at the end of the
relevant financial year and the results of the operations of
the Charterer for the relevant financial year, which discloses
all significant liabilities (contingent or otherwise) of the
Charterer;
(d) Supply of Accounts
deliver to the Owner a copy of the financial statements
referred to in Clause 11.1 (c) as soon as practicable but not
later than two hundred and forty (240) days after the end of
the financial period to which they relate and a copy of every
report, notice or like document issued by it to its
shareholders or creditors generally (in each case at the time
of issue thereof);
(e) Information concerning the Charterer
promptly provide the Owner with such financial and other
information concerning the Charterer and its affairs as the
Owner may from time to time reasonably require;
(f) Information concerning the Ship
furnish the Owner promptly with all such information as it may
from time to time reasonably require regarding the Ship, her
insurance, condition, maintenance,
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employment, position and engagements, particulars of all
towages and salvages, and copies of all charters and other
contracts for her employment, or otherwise howsoever
concerning her; and
(g) Observance of Covenants
duly and punctually perform each of its obligations under this
Charterparty and the other Relevant Documents.
11.2 Protection of Owner's Rights
The Charterer hereby further undertakes with the Owner that throughout
the Charter Period it will:
(a) Disposal of the Ship
not attempt or hold itself out as having any power to sell,
agree to selL transfer or otherwise dispose of or (except to
avoid loss of life or personal injury or as otherwise agreed
pursuant to Clause 21) abandon the Ship, any share or interest
therein;
(b) Encumbrances
not create or agree or purport to create any Encumbrance over
the Ship, any share or interest therein or in the Insurances
or Requisition Compensation or any part thereof (other than
Permitted Encumbrances);
(c) Notification of Arrest
notify the Owner promptly by telex of any arrest or detention
of the Ship or any exercise or purported exercise of a lien or
other claim on the Ship or the Insurances or any part thereof;
(d) Prevention of and Release from Arrest
promptly pay and discharge all debts, damages, liabilities and
outgoings whatsoever which have given or may give rise to
maritime, statutory or possessory liens on, or claims
enforceable against, the Ship or the Insurances or any part
thereof and, in the event of a writ or libel being filed
against the Ship or the Insurances or any part thereof, or of
any of the same being arrested, attached or levied upon
pursuant to legal process or purported legal process or in the
event of detention of the Ship in exercise or purported
exercise of any such lien or claim as aforesaid, to procure
the release of the Ship and the Insurances from such arrest,
detention, attachment or levy or, as the case may be, the
discharge of the writ or libel forthwith upon receiving notice
thereof by providing
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bail or procuring the provision of security or otherwise as
the circumstances may require;
(e) No pledging of Owner's Credit
not pledge the credit of the Owner for any maintenance,
service, repairs, drydocking or modifications to, or changes
or alterations in, the Ship or for any other purpose
whatsoever,
(f) Protection of Owner's Rights in the Ship
not do or permit to be done any act or thing which might
jeopardise the title, rights and interest of the Owner in the
Ship and/or omit or permit to be omitted to be done any act
which might prevent that title and those rights and interest
from being jeopardized;
(g) Notice of Owner's Rights
generally on all occasions when the ownership of the Ship is
relevant make clear to third parties that the same is the
property of the Owner and the Charterer agrees to fasten to
the Ship in a conspicuous place and to keep so fastened during
the Charter Period a notice reading as follows:
"This Ship is the property of and is registered in
the name of ROYAL BANK OF SCOTLAND (INDUSTRIAL
LEASING) LIMITED. It is under demise charter to
SIMON-HORIZON LIMITED and, by the terms of the
Charterparty, neither the Charterer nor the Master
nor any servant or agent thereof nor any other person
has any right, power or authority whatsoever to
contract on behalf of the Owner or to pledge the
Owner's credit or to involve the Owner in any
liability whatsoever and neither has the Owner nor
the Charterer nor the Master nor any servant or agent
thereof nor any other person has any right, power or
authority whatsoever to create, incur, or permit to
be imposed on the Ship any lien whatsoever except for
General Average, crews' wages and salvage"
or in such other form as the Owner may require from time to
time;
the Charterer shall not remove or cover up such notice, and
will not place or permit to be placed any other notice
(affecting the ownership of the Ship or otherwise relating to
the rights of the Owner and dealing with the rights of any
person other than the Owner in or on the Ship or any part
thereof) without prior written consent of the Owner such
consent not to be unreasonably withheld so long as the same is
not inconsistent with the rights of the Owner of the Ship;
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the Charterer agrees to give written instructions with regard
to the foregoing matters to the Master of the Ship, such
instructions to be in such terms as may from time to time be
required by the Owner; and
(h) Release from Arrest Owner's Vessels
if the Ship or any other vessel for the time being owned (in
whole or in part) by or chartered to the Owner shall at any
time have a writ or libel filed against it or be arrested,
attached or levied upon pursuant to any legal process or
purported legal process or be detained in exercise or
purported exercise of any, lien or claim of whatsoever nature,
whether arising out of the use or operation of the Ship or out
of the use or operation of any other vessel owned by or
chartered to the Charterer or other company (other than the
Owner) associated with, the Charterer or its subsidiaries or
associated companies or otherwise by reason of the act or
omission of any of the aforesaid persons, the Charterer shall
forthwith upon receiving notice thereof at its expense procure
the release of the Ship or such other vessel (as the case may
require) from such arrest, detention, attachment or levy or,
as the case may be, the discharge of the writ or libel by
providing bail or procuring the provision of security or
otherwise as the circumstances may require and the Charterer
shall be responsible for discharging each and every liability
in connection with any such process, claim, lien or other
action. Without prejudice to the generality of the other
indemnities contained in this Charterparty, should any other
vessel owned by the Owner and chartered by the Owner otherwise
than to the Charterer be arrested, detained, attached or
levied upon or be the subject of a writ or libel in such
circumstances, the Charterer shall indemnify the Owner against
all claims made on the Owner by the charterers of such other
vessel in connection with such arrest, detention, attachment,
levy, writ or libel.
12 SUB CHARTERING
The Charterer will not at any time without the prior written consent
of the Owner (which the Owner shall have full liberty to withhold)
and, if such consent is given, only subject to such conditions as the
Owner may impose, part with the possession or operational control of
the Ship (except for the purpose of maintenance, service, repair or
overhaul work or any modifications, changes or alterations permitted
under this Charterparty and the Conversion and Supply Agreement) or
sub-charter the Ship:
(a) on demise charter for any period;
(b) by any time or consecutive voyage charter for a term which
exceeds or which by virtue of any optional extensions therein
contained may exceed thirteen months' duration;
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(c) on terms whereby more than two months' hire (or the
equivalent) is payable in advance;
(d) below the market rate prevailing at the time when the Ship is
fixed or on any other than arms' length terms;
(e) on any charter for a period extending or capable of extending
beyond the end of the Charter Period as extended pursuant to
Clause 3.2;
(f) on terms involving any transfer or purported transfer of title
or interest in the Ship or part thereof or which would
contravene the provisions of this Charterparty or any of the
other Relevant Documents (including, without limitation, the
provisions of Clause 13.2(d) relating to qualifying use during
the requisite period as therein referred to).
13 USE AND TRADE OF THE SHIP
13.1 Permitted Use
Subject to the other terms and conditions of this Charterparty and the
other Relevant Documents, the Charterer shall have the full and
exclusive use control and command of the Ship during the Charter
Period and may operate the Ship or employ her throughout the world in
any lawful trade for which she is suitable.
13.2 Undertakings concerning Use
The Charterer hereby undertakes with the Owner that throughout the
Charter Period it will:
(a) Ship's Registration
not do or suffer to be done anything whereby the documentation
of the Ship for the time being in accordance with the
provisions of Clause 14.2 may be forfeited or imperilled;
(b) Employment
not employ the Ship or permit her employment in any manner,
trade or business which is forbidden by International Law, or
which is unlawful or illicit under the law of any relevant
jurisdiction, or in carrying illicit or prohibited goods, or
in any manner whatsoever which may render her liable to
condemnation in a Prize Court, or to destruction, seizure,
confiscation, penalty or sanctions and, in the event of
hostilities in any part of the world (whether war be declared
or not), not
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employ the Ship or permit her employment in carrying any
contraband goods, or enter or trade to or continue to trade in
any zone which is declared a war zone by any government or by
the Ship's war risks insurers unless such special insurance
cover as the Owner may require shall have been effected by the
Charterer and at its expense;
(c) Payment of Outgoings and Evidence of Payments
pay all tolls, dues and other outgoings whatsoever in respect
of the Ship and the Insurances and keep proper books of
account in respect of the Ship and, as and when the Owner may
so require, make such books available for inspection on behalf
of the Owner and furnish satisfactory evidence that the wages
and allotments and the insurance and pension contributions of
the Master and crew are being prompter and regularly paid and
that all deductions from crew's wages in respect of United
Kingdom tax liability are being properly accounted for and
that the Master has no claim for disbursements other than
those incurred by him in the ordinary course of trading on the
voyage then in progress;
(d) Operation in the U.S.A. or Canada
give the Owner at least ten (10) Banking Days prior written
notice if the Ship is to be operated in or into or offshore
from the United States of America or Canada, and prior to the
commencement of such operation, to increase the amount of
protection and indemnity, pollution risk and other legal
liability insurance referred to in Clause 16.1 (a) to such
amount as the Owner may require;
(e) Use for a Qualifying Purpose
not to use the Ship or permit the Ship to be used and shall
procure that the Ship is not used other than for a qualifying
purpose during the requisite period (as each such term is
defined in section 40 CAA) so as to result in the application
of sections 42, 43, 44 and 46 CAA and shall immediately notify
the Owner if at any time within such requisite period the Ship
is used for leasing to a non-resident within the meaning of
section 50 CAA and also notify the Owner of any event or
matter which under section 48 CAA ought to be notified by the
Owner to the Board of the Inland Revenue or any Inspector of
Taxes in connection with the Ship or the chartering thereof
and shall promptly furnish when the Owner may require such
information as may properly be required to be so furnished by
the Owner to the Board of the Inland Revenue and Inspector of
Taxes regarding the chartering of the Ship or the use to which
it is being put or has been put, in order to enable the Owner
to comply with the provisions of section 48 CAA or to respond
to such a request; and
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(f) Bills of Lading
if applicable, procure that all Bills of Invading issued for
carriage of goods by the Ship shall contain a Paramount Clause
incorporating any legislation relating to carrier's liability
for cargo compulsorily acquired applicable in the trade or, if
no such legislation exists, Bills of Lading incorporating the
British Carriage of Goods by ▇▇▇ ▇▇▇ ▇▇▇▇ and that all such
Bills of Lading shall also contain the amended New ▇▇▇▇▇
Clause and the Both-Blame Collision Clause and, without
prejudice to provisions of Clause 30.4, provide that the
General Average, if any, shall be settled according to the
York-Antwerp Rules of 1974 in London.
14 TITLE, REGISTRATION, NAME AND HOUSE FLAG
14.1 Title
Title to the Ship shall remain vested in the Owner. The Charterer
shall have no right, title or interest in or to the Ship or any part
thereof except the right to use the same upon the terms and conditions
contained in this Charterparty. It is hereby expressly declared that
the Charterer shall not have any option or right to acquire title to
or any proprietary interest in the Ship or any part thereof. Subject
to Clause 6.1, nothing in this Clause 14.1 shah be construed as
imposing any liability on the Owner to the Charterer in respect of or
arising out of the acts or omissions of any third party (including any
charterer or lessee of any other vessel or assets of the Owner)
affecting the Charterer or the Ship or otherwise.
14.2 Initial Registration
The Owner shall take all necessary steps to register itself as the
registered owner of the Ship upon Delivery under the laws of the
Commonwealth of the Bahamas at the Port of Nassau in the name of the
Owner and thereafter subject to Clause 14.3 shall during the Charter
Period do all that may be necessary on its part to maintain such
registration in force.
14.3 Transfer of Flag or Registry
The Charterer may at any time and from time to time during the Charter
Period, request the Owner to transfer the register of the Ship to any
port and/or to re-document the Ship under laws of any jurisdiction
other than the port and/or jurisdiction at which the Ship is for the
time being registered and/or under whose laws the Ship is for the time
being documented. If the Owner approves of such transfer of register
(such approval not to be unreasonably withheld) and/or
re-documentation of the Ship, the Owner shall at the request of the
Charterer, co- operate with and permit the Charterer to take all
necessary steps to comply with such request and thereafter shall
during the Charter Period co-operate with the Charterer to take such
actions as the Charterer may reasonably
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require to maintain the documentation of the Ship at the port to which
the register of the Ship is so transferred and/or under the laws of
the jurisdiction under whose laws the Ship is so re-documented. For
the purposes of this Clause 14.3, the Owner shall be deemed to approve
the transfer of the register of the Ship to any port of registry in
the United Kingdom or in any relevant overseas territory (as that
expression is defined in section 57(1) of the Merchant Shipping Act
1988).
If, in the reasonable opinion of the Owner it shall become impossible,
unlawful, impracticable or undesirable for the Owner to maintain the
documentation of the Ship under the laws of any jurisdiction (other
than the United Kingdom or any other such relevant overseas territory)
under whose laws the Ship is for the time being documented, the Owner
shall give notice thereof to the Charterer and the Owner and the
Charterer shall forthwith enter into negotiations in good faith with a
view to agreeing upon an alternative jurisdiction for the
documentation of the Ship as a British ship, but if no such agreement
shall be reached within thirty (30) days after the Owner shall have
given such notice to the Charterer, the Owner shall be at liberty to
take and/or require the Charterer to take such action to re-document
the Ship as a British ship at a port of registry in the United Kingdom
or in any other relevant overseas territory and/or to transfer the
registry of the Ship to a port of registry in the United Kingdom or in
any other such relevant overseas territory and in either case the
Charterer shall do all that may be necessary on each part to give
effect to such re-documentation and/or transfer of register.
Without prejudice to the generality of the provisions of Clause 9, the
Charterer shall indemnify and hold harmless the Owner against all
losses, costs, expenses and liabilities of whatsoever nature
(including penalties, claims, demands, orders or judgments) which the
Owner may suffer or incur and which arise directly or indirectly out
of the documentation of the Ship under the laws of any jurisdiction at
the request of the Charterer as aforesaid.
14.4 Name and House Flag
The name of the Ship shall as from the Delivery Date remain unchanged
or shall be such other name as the Charterer shall select and the Ship
shall be painted in such colours, display such funnel insignia and fly
such house flag as the Charterer may require. The Charterer shall
notify the Owner of any intended change in the name of the Ship.
15 MAINTENANCE AND OPERATION
15.1 Possession and Control of Ship by Charterer
During the Charter Period the Ship shall, subject to the terms and
conditions of this Charterparty, be in the full and exclusive
possession and at the absolute disposal of the Charterer for all
purposes and under its complete control in every respect.
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Notwithstanding any other provision of this Charterparty, without
prejudice to any of the obligations of the Charterer under this
Charterparty or any of the other Relevant Documents imposing any
higher standard of performance upon the Charterer, the Charterer shall
make or procure to be made, and shall have sole responsibility for
making or procuring to be made, all such arrangements as may be
necessary to ensure that the Ship is fit to go to sea without serious
danger to human life.
15.2 Undertakings concerning Maintenance and Operation
The Charterer further undertakes with the Owner that throughout the
Charter Period it will:
(a) Maintenance of Classification; Compliance with Regulations
maintain the Classification as the present class of the Ship
with the Classification Society and with such other
certificates required by statute and the Ship's insurers in
force at all times and so as to comply with the provisions of
all other regulations and requirements (statutory or
otherwise) from time to time applicable to vessels registered
at the Ship's port of registry or otherwise applicable to the
Ship, her Master, officers and crew wherever the Ship may
proceed or trade and (without prejudice to the generality of
the foregoing) at its own expense maintain in force for the
Ship all safety, radio, loadline and other certificates
whatsoever and all licenses and permits which may from time to
time be prescribed by any legislation in force in the United
Kingdom or other applicable jurisdiction;
(b) Supply and Crewing
ensure that at all times during the Charter Period the Ship is
properly manned, victualled, navigated, operated, supplied,
fuelled and repaired;
(c) Surveys
submit the Ship to continuous surveys and such periodical or
other surveys as may be required for classification purposes,
comply with all recommendations and requirements of the
Classification Society in accordance with their terms and,
upon the Owner's request, supply to the Owner copies of all
survey reports issued in respect thereof;
(d) Repair
keep the Ship and every part of her in a good and efficient
state of repair, in efficient operating condition, seaworthy
in all respects and in accordance with good maintenance
practice (fair wear and tear excepted and having regard to the
type and age of the Ship) and procure that all repairs to, or
replacement of, any
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damaged, worn or lost parts or equipment are effected in such
manner (both as regards workmanship and quality of materials)
as not to diminish the value of the Ship;
(e) Drydocking
drydock the Ship and clean and paint her underwater parts in
accordance with good commercial practice for vessels of the
type and age of the Ship;
(f) Inspection of the Ship
permit the Owner by surveyors or other persons appointed by it
for such purpose to board the Ship at all reasonable times for
the purpose of inspecting her and to afford all proper
facilities for such inspections and for this purpose to give
the Owner on request reasonable advance notice of any intended
drydocking of the Ship (whether for the purpose of
classification, survey or otherwise). The cost of any such
inspection and survey shall be paid by the Charterer. All time
taken in respect of such inspection or survey shall form part
of the Charter Period. Inspection or survey of the Ship in
drydock shall be made only when the Ship shall be in drydock
for the purpose of the surveys referred to in Clause 15.1(e);
(g) Manuals and Technical Records
maintain all such other records, logs, manuals, technical data
and other materials and documents which are required to be
maintained in respect of the Ship to comply with any
applicable laws or the requirements of the Classification
Society and, keep accurate, complete and up to date logs and
records of all voyages made by the Ship and of all
maintenance, repairs, alterations, modifications and additions
to the Ship and, on reasonable advance notice from the Owner
permit the Owner or its representatives at any time to examine
and take copies of such logs and records and other records;
(h) Modification; Removal of Parts;
Equipment owned by Third Parties
not without the prior written consent of the Owner (and then
only on and subject to such terms as the Owner may agree):
(i) make any modification to the Ship in consequence of
which her structure, type or performance
characteristics could or might be materially altered
or her value materially reduced; or
(ii) remove any material part of the Ship or any equipment
the value of which is such that its removal from the
Ship would materially reduce the value
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of the Ship without replacing the same with
equivalent parts or equipment which are owned by the
Owner free from Encumbrances (other than Permitted
Encumbrances); or
(iii) install on the Ship any equipment owned by a third
party which cannot be removed without causing damage
to the structure or fabric of the Ship;
(i) Manager
not without the previous consent in writing of the Owner
(which shall not be unreasonably withheld) and subject to such
terms as the Owner may require (including approval of the new
manager and the terms of any Management Agreement), appoint
any manager of the Ship other than the Manager or to terminate
or amend the terms of the Management Agreement (and for the
purposes of this Charterparty "Manager" shall include any ship
manager or other person providing to the Charterer analogous
specialised services in respect of the Ship);
(j) Notification of certain Events
notify the Owner forthwith by telex of
(i) any damage to the Ship requiring repairs the cost of
which Drill or might exceed the Casualty Amount and
furnish the Owner with full information regarding any
single casualty or other accident or damage to the
Ship which may involve repairs costing more than the
Casualty Amount;
(ii) any occurrence in consequence of which the Ship has
or may become a Total Loss;
(iii) any requisition of the Ship for hire;
(iv) any requirement or recommendation made by any insurer
or the Classification Society or by any competent
authority which is not complied with in accordance
with its terms;
(v) any serious injury to a third party caused by, or in
connection with, the Ship;
(vi) any substantial damage to property caused by, or in
connection with the Ship;
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(vii) any assistance which has been given to the Ship which
has resulted or may result in a lien for salvage
being acquired over the Ship; and
(viii) any other event which occurs in connection with the
Ship which affects or might affect the rights of the
Owner or involves any material loss or liability;
(k) Repairers' Liens
other than pursuant to the Conversion and Supply Agreement,
not without the previous consent in writing of the Owner
(which shall not be unreasonably withheld but which may be
given only on and subject to such terms as the Owner may
agree) put the Ship into the possession of any person for the
purpose of work being done upon her in an amount exceeding or
likely to exceed the Casualty Amount unless such person shall
first have given to the Owner and in terms satisfactory to it,
a written undertaking not to exercise any lien on the Ship for
the cost of such work or otherwise;
(l) Health and Safety
take such steps as are reasonably practicable to ensure that
the Ship and all constituent parts thereof will be safe and
without risk to health when properly used and specifically
(without prejudice to the generality of the foregoing) that it
will:
(i) take such steps as are reasonably practicable to
ensure that any defects in the Ship and all
constituent parts thereof which could be or cause a
danger to safety and a risk to health shall be made
good;
(ii) for such purpose, have a detailed inspection of the
Ship carried out from time to time including all
electrical, fluid, oil and gas connections (being
either supplies to or discharges from the Ship) and
all constituent parts thereof as well as all life
saving and other safety equipment;
(iii) take such action as is reasonably practicable to see
that appropriate safety measures are adopted; and
(iv) not use or permit the Ship or any constituent parts
thereof to be used beyond their limits and
capacities;
(m) No Operational Interest
procure that the Owner is not at any time represented as
carrying goods or passengers or providing any other service on
or from the Ship, or as being in any
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way connected or associated with any operation of carriage or
other service which may be undertaken by the Charterer, or as
having any operational interest in, or responsibility for, the
Ship;
(n) Safe Operation
take all reasonable steps to secure that the Ship is navigated
and operated in a proper, safe and ▇▇▇▇▇▇-like manner; and
(o) Fitness to go to Sea
shall procure that the Ship shall at all times be fit to go to
sea without serious danger to life (by reason of the
condition, or the unsuitability for its purpose, of either the
Ship or its machinery or equipment or any part of the Ship or
its machinery or equipment or undermining or overloading or
unsafe or improper loading or any other matter relevant to the
safety of the Ship) unless arrangements have been made which
are appropriate to ensure that before the Ship goes to sea it
is made fit to do so without serious danger to human life by
reason of any such matters or it is reasonable for such
arrangements not to be made at such time.
16 INSURANCE UNDERTAKINGS; WRECK REMOVAL AND INSURANCE ASSIGNMENT
16.1 Insurance Undertakings
The Charterer hereby covenants with the Owner and undertakes that
throughout the Charta Period and thereafter until sale of Ship
pursuant to any provision of this Charterparty it will:
(a) Insured Risks
insure and keep the Ship insured free of cost and expense to
the Owner and in the joint names of the Charterer and the
Owner (but without liability on the part of the Owner for
premiums or calls) and, at the request of the Charterer, the
Manager or other third party providing specialist services to
the Charterer in connection with the operation of the Ship
(each as their interests may appear):
(i) against fire and usual marine risks (including excess
risks) and war risks, on an agreed value basis, in
such amounts (but not in any event less than
whichever shall be the greater of the market value of
the Ship for the time being and One hundred and ten
per cent (110%) of the maximum Termination Sum
applicable during the period of the policy) and upon
such terms as shall from time to time be approved in
writing by the Owner;
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(ii) against protection and indemnity risks (including
pollution risks) for the full value and tonnage of
the Ship in a protection and indemnity association
(as approved in writing by the Owner) for a full and
unlimited entry (other than for oil pollution risks
which shall be for a minimum sum of U.S.$500,000,000
or equivalent thereof) and upon such terms as shall
from time to time be approved in writing by the
Owner; and
(iii) in respect of such other matters of whatsoever nature
and howsoever arising in respect of which insurance
would be maintained by a prudent owner of the Ship
having regard to the financial resources and
liabilities of the Charterer and to the situation and
method of operation of the Ship;
(b) Brokers and Insurers
effect the insurances aforesaid in Pounds or such other
currency as the Owner may approve and through the Approved
Brokers and with such insurance companies and/or underwriters
as shall from time to time be approved in writing by the Owner
provided however that the insurances against war rusks and
protection and indemnity risks may be effected by the entry of
the Ship with such war risks and protection and indemnity
associations as shall from time to time be approved in writing
by the Owner;
(c) Fleet Cover
if any of the insurances referred to in Clause 16.1 (a) form
part of a fleet cover, procure that the Approved Brokers
and/or insurers and protection and indemnity or war risks
associations (as appropriate) shall undertake to the Owner
that they shall neither set off against any claims in respect
of the Ship any premiums due in respect of other vessels under
such fleet cover or any premiums due for other insurances, nor
cancel the insurance for reason of non-payment of premiums
other vessels under such fleet cover or of premiums for such
other insurances, and shall undertake to issue a separate
policy in respect of the Ship if and when so requested by the
Owner;
(d) Payment of Premiums
punctually pay all premiums, calls, contributions or other
sums payable in respect of all such insurances and to produce
all relevant receipts or other evidence of payment when so
required by the Owner;
(e) Renewal
at least 14 days before the relevant policies, contracts or
entries expire, notify the Owner of the names of the brokers
and/or the war risks and protection and
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indemnity risks associations proposed to be employed by the
Charterer for the purposes of the renewal of such insurances
and of the amounts in which such insurances are proposed to be
renewed and the risks to be covered and, subject to compliance
with any requirements of the Owner pursuant to this Clause
16.1 procure that appropriate instructions for the renewal of
such insurances on the terms so specified are given to the
Approved Brokers and/or to the approved war risks and
protection and indemnity risks associations at least ten (10)
days before the relevant policies, contracts or entries
expire, and that the Approved Brokers and/or the approved war
risks and protection and indemnity risks associations will at
least seven (7) days before such expiry (or within such
shorter period as the Owner may from time to time agree)
confirm in writing to the Owner as and when such renewals have
been effected in accordance with the instructions so given;
(f) Guarantees
arrange for the execution and delivery of such guarantees or
indemnities as may from time to time be required by any
protection and indemnity or war risks association;
(g) Custody of Policy Documents; Letters of Undertaking; Loss
Payable Clauses
deposit with the Approved Brokers (or procure the deposit of
all slips, cover notes, policies, certificates of entry or
other instruments of insurance from time to time issued in
connection with such of the insurances referred to in Cause
16.1(a) as are effected through the Approved Brokers and
procure that the interest of the Owner shall be endorsed
thereon by incorporation of the relevant Loss Payable Clause
and that the Owner shall be furnished with pro forma copies
thereof and a letter or letters of undertaking from the
Approved Brokers in such form as shall from time to time be
required by the Owner;
(h) Club Letters of Undertaking; Certificates of Entry
procure that any protection and indemnity and/or war risks
associations in which the Ship is for the time being entered
shall endorse the relevant Loss Payable Clause on the relevant
certificate of entry or policy and shall furnish the Owner
with a copy of such certificate of entry or policy and a
letter or letters of undertaking in such form as shall from
time to time be required by the Owner;
(i) Broker's Report
if so requested by the Owner but at the cost of the Charterer
(except where the insurances maintained on the Ship have not
been changed since the time of the last such report), furnish
the Owner from tune to time with a detailed report
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signed by an independent firm of marine insurance brokers
appointed by the Owner dealing with the insurances maintained
on the Ship and stating the opinion of such firm as to the
adequacy thereof,
(j) Collection
do all things necessary and provide all documents, evidence
and information to enable the Owner to collect or recover any
moneys which shall at any time become due in respect of the
Insurances;
(k) Compliance with Insurances
comply with the terms and conditions of the Insurances, not
do, consent to or permit any act or omission which might
invalidate or render unenforceable the whole or any part of
the Insurances and not (without first obtaining the consent of
the insurers to such employment and complying with such
requirements as to extra premium or otherwise as the insurers
may prescribe) employ the Ship or suffer the Ship to be
employed otherwise than in conformity with the terms of the
Insurances (including any warranties express or implied
therein);
(l) Application of Recoveries
apply all sums receivable under the Insurances which are paid
to the Charterer in accordance with the Loss Payable Clauses
and Clause 21 in repairing all damage and/or in discharging
the liability in respect of which such sums shall have been
received;
(m) Other Insurances and Assureds
not, without the prior written consent of the Owner, take out
additional insurances for the Charterer's sole benefit, or
permit the Charterer or the Owner or any other person to be
named insured in insurances with respect to the Ship, other
than as required under this Charterparty or the Conversion and
Supply Agreement where such additional insurances will or may
prejudice the Insurances or recovery thereunder or will exceed
the amount permitted by the warranties or other conditions of
the Insurances (unless the insurers under the Insurances have
consented thereto) and will, upon the Owner's request,
immediately furnish the Owner with particulars of any such
additional insurances (including copies of any cover notes or
policies) and of the written consent of the insurers under the
Insurances in any case where such consent is necessary;
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(n) Information concerning Insurances
supply to the Owner all necessary information, documentation
and assistance which may be required by the Owner in
connection with making any claim under the Insurances.
Provided however that if, in the event of requisition of the Ship for
hire, it is proved to the satisfaction of the Owner that such
requisition is upon terms whereby the requisitioning authority has
assumed the responsibility of the Charterer to the Owner to indemnify
or recompense it in respect of or otherwise to make good all losses
which would ordinarily be covered by the insurances required to be
effected by the Charterer under this Charterparty, the Charterer shall
be relieved from its insurance obligations under this Charterparty in
respect of such period of requisition or in the event that the
requisitioning authority shall have assumed only a partial
responsibility as aforesaid the insurance obligations of the Charterer
under this Charterparty shall be modified in such manner and to such
extent as the Owner may approve.
16.2 Wreck Removal
In the event of the Ship becoming a wreck or obstruction to navigation
the Charterer shall (in addition to any other obligation it may have
under Clause 9 to indemnify and hold harmless the Owner as therein
provided) indemnify and hold harmless the Owner against all costs,
expenses, payments, charges, losses, demands, any liabilities, claims,
actions, proceedings (whether civil or criminal), penalties, fines,
damages, judgments, orders or other sanctions which may be incurred,
by, or made or asserted against the Owner by reason that the Ship
shall have become a wreck or obstruction to navigation (including,
without limitation) in respect of the removal or destruction of the
wreck or obstruction under statutory powers but only to the extent
that such has not been recovered from the Ship's insurers.
16.3 Further Requirements
Notwithstanding the other provisions of this Clause 16, the Charterer
shall comply with such further reasonable requirements relative to
insurance (and if applicable any requirements relative to reinsurance)
as the Owner may from time to time request.
16.4 Insurance Assignment
As continuing security for the payment of all sums due and payable to
the Owner by the Charterer under or pursuant to this Charterparty and
the other Relevant Documents, the Charterer as beneficial owner
assigns and agrees to assign to the Owner all its right, title and
interest in and to the Insurances and any Requisition Compensation and
agrees and undertakes to do all that may be necessary (by ▇▇▇▇▇ of
giving notice, lending its name to any action or otherwise howsoever)
to enable the Owner to perfect and/or enjoy the
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full benefits of such assignment. The Owner shall re-assign to the
Charterer the property so assigned upon receipt by the Owner of all
such sums and provided the Charter Period shall have ended.
17 POWERS OF OWNER TO REMEDY DEFAULTS
17.1 Failure to Perform Insurance Undertakings
If the Charterer fails to comply with any of the provisions of Clause
16.1, the Owner may, without being in any way obliged so to do, or
responsible for so doing, and without prejudice to the ability of the
Owner to treat that non-compliance as a Termination Even, to effect
and thereafter to maintain all such insurances upon the Ship as in its
discretion it may think fit in order to procure the compliance with
such provisions or alternatively, to require the Ship (at the
Charterer's risk) to remain in, or to proceed to and remain in a port
designated by the Owner until such provisions are fully complied with.
17.2 Failure to Perform Maintenance Undertakings
If the Charterer fails to comply with any of the provisions of Clauses
15.2(a), (c), (d) or (e), the Owner may, without being in any way
obliged so to do, or responsible for so doing, and without prejudice
to the ability of the Owner to treat that non-compliance as a
Termination Event, to arrange for the carrying out of such repairs,
changes or surveys as it may deem expedient or necessary in order to
procure the compliance with such provisions.
17.3 Failure to Prevent or Release from Arrest
If the Charterer fails to comply with any of the provisions of Clause
11.2(d) the Owner may, without being in any way obliged so to do, or
responsible for so doing, and without prejudice to the ability of the
Owner to treat that non-compliance as a Termination Event, pay and
discharge all such debts, damages, liabilities and outgoings as are
therein mentioned and/or take any such measures as it may deem
expedient or necessary for the purpose of securing the release of the
Ship in order to procure the compliance with such provisions.
17.4 Failure to comply with other Obligations
If the Charterer fails to comply with any of its other obligations
under this Charterparty or any of the other Relevant Documents, the
Owner may, without being in any way obliged to do so or responsible
for so doing, and without prejudice to the ability of the Owner to
treat that non-compliance as a Termination Event, take such action as
it may deem expedient or necessary in order to procure the compliance
with such provisions.
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17.5 Costs of Remedying Defaults
Without prejudice to Clause 25.1, all losses, liabilities, costs,
charges, expenses, damages and outgoings of whatsoever nature
(including, without limitation, Taxes, repair costs, registration fees
and insurance premiums) suffered, incurred or paid by the Owner in
connection with the exercise by the Owner of any of its powers under
Clauses 17.1, 17.2, 17.3 and 17.4 and interest on all such losses,
liabilities, costs, charges, expenses, damages and outgoings from the
date on which the same were suffered, incurred or paid by the Owner
until the date of receipt or recovery thereof (both before and after
any relevant judgement) at the Relevant Rate of Interest shall be
repayable by the Charterer to the Owner on demand.
17.6 Hire Still Payable
Notwithstanding any exercise by the Owner of any of the powers
contained in this Clause 17, charterhire shall continue to accrue
during such time.
18 REDELIVERY
18.1 Redelivery Procedure and Condition
Except in the event of a Total Loss of the Ship and subject to the
provisions of Clause 23.5, the Charterer shall at the end of the
Charter Period redeliver the Ship to the Owner free of all
Encumbrances (other than Permitted Encumbrances), and the Owner shall
accept such redelivery, at a safe port to be mutually agreed between
the parties or, in the absence of such agreement, at such nearby safe
port in the United Kingdom as the Owner may require. Subject to the
provisions of Clause 23.5, the Charterer shall at its expense before
such redelivery make all such repairs and do all such work as may be
necessary so that the Ship at the date of redelivery shall have
installed the machinery and other equipment installed on the Ship at
Delivery or, after redelivery from the Yard pursuant to the MWB
Conversion Contract, as on redelivery from the Yard or replacements
for the same made in accordance with the provisions of this
Charterparty, shall maintain the Classification unexpired and shall be
in as good structure, state and condition as at Delivery or, after
redelivery from the Yard pursuant to the MWB Conversion Contract, as
on redelivery from the Yard, fair wear and tear and changes and
alterations properly made by the Charterer as permitted under this
Charterparty excepted.
18.2 Redelivery Survey
At or about the time of redelivery a survey shall, if the Owner so
requires, be made to determine the state and condition of Me Ship, her
machinery and equipment. In that event, the Charterer and the Owner
shall each appoint surveyors to be present at such survey and the
surveyors present shall determine the condition of the Ship, her
machinery and equipment and shall state the repairs or work necessary
to place the Ship at the date
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of redelivery in the structure state, condition and classification
referred to in Clause 18.1. If the said surveyors disagree they shall
refer the matter to a senior surveyor of the Classification Society
whose decision shall be final and binding on the parties hereto. All
reasonable costs occasioned by any such survey including the costs of
the said surveyors appointed by the Charterer and the Owner and, if
appointed, the costs of the senior surveyor of the Classification
Society shall be payable by the Charterer but if the Ship is found to
be in the condition provided for Clause 18.1 fair wear and tear and
changes and alterations properly made by the Charterer as permitted
under this Charterparty excepted, such cost shall be payable by the
Owner.
19 CONSUMABLE STORES
19.1 Upon Delivery
It is acknowledged and agreed that all consumable stores, unused
diesel and lubricating oils and bunkers on board the Ship at Delivery
belong to the Charterer.
19.2 Upon Redelivery
All consumable stores, unused diesel and lubricating oils and bunkers
on board the Ship at the time of re-delivery shall be purchased by the
Owner from the Charterer and sold by the Owner to the purchaser of the
Ship. The price payable by the Owner to the Charterer shall be the
same as that received from the said purchaser of the Ship.
20 USE OF EQUIPMENT AND REPLACEMENT
20.1 Use of Equipment and Manuals and Technical Records
The Charterer shall have the use of all outfit, equipment (including
cabin, crew and galley equipment), furnishings, furniture and
fittings, spare and replacement parts which are the property of the
Owner on board the Ship at the time of Delivery or installed on the
Ship pursuant to the Conversion and Supply Agreement and as
redelivered by the Yard pursuant to the MWB Conversion Contract and
the Manuals and Technical Records and the same or their substantial
equivalent shall be returned to the Owner on redelivery in good order
and condition fair wear and tear alone and changes and alterations
properly made by the Charterer as permitted under this Charterparty
excepted.
20.2 Renewal of Equipment
The Charterer shall at its own expense from time to time during the
Charter Period replace, renew or obtain substitutes for such items of
equipment as shall be so damaged or worn as to be unfit for use
provided always that in any such case title to any part replaced,
renewed or substituted shall remain with the Owner until the part
which replaced it or the new or substituted part becomes the property
of the Owner or is
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replaced, renewed or substituted by a part which thereupon becomes the
property of the Owner and the Charterer agrees that if any replaced,
renewed or substituted part is not the property of the Owner it will
as soon as practicable replace the same with a part which thereupon
becomes the properly of the Owner.
20.3 Alteration of Equipment; Additional Equipment
The Charterer may at any time alter or remove all or any items of
equipment or may fit any additional equipment required to render the
Ship available for any purpose for which the Charterer may require to
use her under the provisions of Clause 13 provided that the Charterer
shall first have obtained the prior written consent of the Owner
thereto if and to the extent such consent may be required pursuant to
Clause 15.2(h). Any additional equipment so fitted by the Charterer
shall be considered the property of the Charterer who may remove such
additional equipment and/or any Excluded Equipment at any time before
the expiration of the Charter Period. The cost of fitting or removing
any equipment together with the cost of making good any damage caused
by such fitting or removal shall be payable in full by the Charterer
who shall redeliver the Ship's equipment to the Owner in accordance
with the provisions of Clause 20.1 unless it is agreed between the
Owner and the Charterer that any extra fittings or equipment which
have been supplied by the Charterer during the Charter Period shall
remain on the Ship after redelivery in which event such fittings or
equipment shall as from redelivery become the property of the Owners.
21 LOSS AND DAMAGE
21.1 Notwithstanding Clause 6.1, the Ship shall throughout the Charter
Period be in every respect at the risk of the Charterer who shall bear
all risks howsoever arising whether of navigation, operation and
maintenance of the Ship or otherwise and of any other occurrence of
whatever kind which shall deprive the Charterer of the use, possession
or enjoyment thereof provided however that nothing in this Clause 21.1
shall restrict any claim by the Charterer against the Owner for any
default of the Owner in respect of its obligations under Clause 6.1.
21.2 (a) If the Ship shall become a Total Loss during the Charter
Period, the Charterer shall pay, or procure that the insurers
pay, to the Owner within one hundred and twenty (120) days (or
such longer period as may be agreed) of the Total Loss Date,
the Termination Sum as at the Total Loss Date together with
interest thereon calculated at the Relevant Rate of Interest
from the Total Loss Date to the date of payment and together
with all amounts of charterhire and any other amounts then due
and payable under this Charterparty and the other Relevant
Documents.
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(b) For the purposes of this Charterparty a Total Loss shall be
deemed to have occurred on the following date ("Total Loss
Date"):
(i) in the case of an actual total loss, at noon (London
time) on the actual date the Ship was lost, or if
such date is not known, noon (London time) on the day
on which the Ship was last reported;
(ii) in the case of a constructive total loss of the Ship,
upon the date and at the time notice of abandonment
of the Ship is given to the insurers of the Ship for
the time being (provided a claim for such
constructive total loss is admitted by the insurers)
or, if the insurers do not admit such a claim at the
date and time at which a constructive total loss is
subsequently adjudged by a competent court of law to
have occurred;
(iii) in the case of a compromised or arranged total loss,
at the date upon which a binding agreement as to such
compromised or arranged total loss has been entered
into by the insurers of the Ship;
(iv) in the case of Compulsory Acquisition, upon the date
upon which the relevant compulsory acquisition,
requisition, appropriation, expropriation,
deprivation or confiscation occurs; and
(v) in the case of any of the events described in sum
paragraph (c) of the definition of Total Loss, upon
the expiry of the period of thirty (30) days referred
to in such sub-paragraph (c) after the date upon
which the relevant hijacking, theft, condemnation,
confiscation, capture, detention, seizure or
requisition for use or hire occurred.
21.3 The Charter Period shall terminate on the Total Loss Date and, subject
to the payment by the Charterer to the Owner of all amounts of
charterhire then due and payable under this Charterparty, the
Charterer shall cease to be under any liability to pay charterhire
(but not any other amounts) thereafter becoming due and payable under
this Charterparty or any of the other Relevant Documents.
21.4 In the event of the Compulsory Acquisition of the Ship after Delivery,
all Requisition Compensation received by the Owner shall be applied by
the Owner (or, if receded by the Charterer, shall be held in trust by
the Charterer for application) in accordance with Clause 21.5.
21.5 All moneys received by the Owner as loss payee under the Insurances
from insurers or others in respect of a Total Loss shall be applied by
the Owner subject to Clause 10.4 as follows:
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(a) Firstly, in or towards settlement of any amounts due and owing
by the Charterer to the Owner under this Charterparty or any
of the other Relevant Documents;
(b) Secondly, if the Charterer shall on or before the date of
application of such moneys have paid the Termination Sum, or a
part thereof, in accordance with Clause 21.2 (a) in or towards
refunding by way of rebate of hire or otherwise as appropriate
to the Charterer the amount of the Termination Sum or part
thereof so paid by the Charterer, and
(c) Thirdly, an amount equal to two per cent. (2%) of such moneys
received by the Owner as loss payee under the Insurances shall
be retained by the Owner, and the balance shall be paid to the
Charterer or to its order by way of rebate of charterhire or
otherwise as appropriate.
21.6 In the event of repairable damage to the Ship, the Owner as loss payee
under the Insurances shall pay any insurance moneys received by it to
the Charterer upon the Charterer furnishing evidence to the Owner that
such damage has been made good or repaired or put in hand for repair
Provided always that if a Relevant Event has occurred and is
continuing, the Owner shall be entitled to require that such insurance
moneys be applied in or towards settlement of any amounts owing by the
Charterer to the Owner under this Charterparty or any of the Relevant
Documents.
21.7 Any insurance moneys paid under the insurance taken out or entries
made referred to in Clause 16.1 (a) (ii) shall be paid to the person
to whom the liability (or alleged liability) covered by such
insurances or entry was incurred or if the liability (or alleged
liability) to such person has previously been discharged by the
Chatterer, such moneys shall be paid to the Charterer in reimbursement
of the moneys so expended by it in satisfaction of such liability or
alleged liability and, in such case, the Owner shall pay any insurance
moneys received by it in respect of such liability or alleged
liability to the Charterer upon the Charterer furnishing evidence to
the Owner that such liability or alleged liability has previously been
discharged provided always that if a Relevant Event has occurred and
is continuing, the Owner shall be entitled to apply such insurance
moneys in or towards settlement of any amounts due and owing by the
Charterer to the Owner under this Charterparty or any of the other
Relevant Documents.
21.8 In the event of repairable damage to the Ship or a liability or
alleged liability covered by the insurances taken out or entries made
referred to in Clause 16.1 (a) being incurred or alleged, and if the
insurance moneys paid in respect thereof are insufficient to pay the
cost or estimated cost of making good or repairing such damage or
discharging the liability or alleged liability, the Charterer will pay
the deficiency.
21.9 (a) The Charterer shall have the sole right to determine whether
or not a case has arisen for the giving of notice of
abandonment to abandon the Ship to the insurers
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and/or claim a constructive total loss and the Charterer is
hereby irrevocably authorised by the Owner to give the same if
it so determines.
(b) The Owner shall upon the request of the Charterer promptly
execute such documents as may be required to enable the
Charterer to abandon the Ship to the insurers and/or claim a
constructive total loss and the Owner shall give the Charterer
all possible assistance in pursuing the said claim.
21.10 Any moneys payable under the Insurances shall be payable in accordance
with the terms of the relevant Loss Payable Clause and, unless and
until a Relevant Event shall occur (whereupon all insurance recoveries
shall be receivable by the Owner and applied in accordance with the
foregoing provisions of this Clause 21), the Owner shall not give any
notice or direction to the contrary to the insurers as contemplated by
the Loss Payable Clauses.
21.11 If the insurers of the Ship have satisfied or admitted in full their
obligations under the Insurances and have expressly waived any rights
they may have, or would or might acquire, in the Ship, the Owner shall
as soon as practicable after the date of Total Loss of the Ship
endeavour to sell the Ship, to the extent that the Owner retains title
therein. Any such sale shall comply with Clauses 3.5 and 3.6.
22 SALVAGE
22.1 All salvage and towage and all proceeds from derelicts shall, subject
to the Owner's prior right to retain thereout any sums which may be
due from the Charterer to the Owner under this Charterparty or any of
the other Relevant Documents, be for the Charterer's benefit and the
cost of repairing damage occasioned thereby shall be borne by the
Charterer.
23 REQUISITION
23.1 If the Ship is requisitioned for hire by any Government Entity or
other competent authority during the Charter Period then, unless and
until the Ship becomes a Total Loss following such requisition and the
Charterer shall have made payment of all sums due pursuant to Clause
21.2 (a), the charter of the Ship to the Charterer under this
Charterparty shall continue in full force and effect (subject always
to the provisions of Clause 25) for the remainder of the Charter
Period and the Charterer shall remain fully responsible for the due
compliance with all its obligations under this Charterparty other than
such obligations which the Charterer is unable to comply with solely
by virtue of such requisition.
23.2 If the Charterer shall duly comply with all its obligations under this
Charterparty, save as mentioned in Clause 23.1, the Charterer shall
during the Charter Period, be entitled
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to all requisition hire paid to the Owner or to the Charterer on
account of such requisition.
23.3 The Charterer shall as soon as practicable after the end of any
requisition for hire, cause the Ship to be put into the condition
required by this Charterparty, and where that requisition shall end
after the expiry or termination of the Charter Period, the Charterer
shall, as soon as practicable, cause the Ship to be put into the
redelivery condition required by Clause 18, allowance being made for
fair wear and tear in respect of the period from the expiry or
termination of the Charter Period.
23.4 The Owner shall be entitled to all compensation payable in respect of
any change in the structure, state or condition of the Ship arising
during the period of requisition for hire. The Owner shall apply such
compensation in reimbursing the Charterer for the cost of complying
with its obligations under Clause 23.3, provided always that if a
Relevant Event has occurred and is continuing, the Owner shall be
entitled to apply such compensation in or towards settlement of any
amounts owing by the Charterer under this Charterparty and any of the
other Relevant Documents.
23.5 Should the Ship be under requisition for hire at the end of the
Charter Period:
(a) the charter of the Ship under this Charterparty shall (unless
otherwise agreed between the parties hereto) nevertheless be
terminated at such end but without prejudice to the accrued
rights of the parties, including, without prejudice to the
generality of the foregoing, the obligations of the Charterer
contained in Clause 23.3, and the Owner shall be entitled to
receive and retain any requisition hire payable in respect of
the period from the expiry or termination of the Charter
Period;
(b) the Charterer shall if it is prevented by reason of the
requisition for hire from redelivering the Ship under Clause
18, be relieved from its obligations so to do, but shall
consult with the Owner as to the most convenient method of
enabling the Owner to obtain redelivery of the Ship when the
Ship is released from such requisition; and
(c) after such release the Charterer shall be given a reasonable
opportunity of removing the Excluded Equipment and any
additional equipment as is referred to in Clause 20.3 on the
terms therein referred.
23.6 If the Ship shall be requisitioned for hire upon terms whereby the
Charterer is not relieved from its insurance obligations pursuant to
the proviso to Clause 16.1, insurance recoveries in respect of all
claims whatsoever (otherwise than in respect of a Total Loss) arising
during the period or requisition shall (to the extent to which such
recoveries have not been expended by the Charterer in repairs to the
Ship) at the end of the Charter Period be paid to the Owner and in
respect of any amount so paid the Charterer shall to
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that extent be relieved from its obligations under the last sentence
of Clause 18.1 and under Clause 20.3.
24 TERMINATION EVENTS
24.1 If the Charterer commits a repudiatory breach of any Relevant Document
or the Guarantor commits a repudiatory breach of the Guarantee the
Owner may accept such breach as repudiation of this Charterparty.
24.2 Without prejudice to the generality of Clause 24.1 the Owner and the
Charterer agree that it is a fundamental term and condition of this
Charterparty that none of the following events shall occur during the
Charter Period and that the occurrence of any of the following events
shall constitute a repudiatory breach of this Charterparty
(a) any Relevant Party fails to pay any sum payable by it under
any of the Relevant Documents when due or on demand within
five (5) Banking Days of such due date or date of demand (as
the case may be); or
(b) the Charterer fails to obtain and/or maintain the Insurances
or if any insurer in respect of any part of the Insurances
cancels any part of the Insurances or disclaims or repudiates
liability by reason, in either case, of any mis-statement in
any proposal for the Insurances or for any other failure or
default on the part of the Charterer, or
(c) any Relevant Party commits any breach of or omits to observe
any of the obligations or undertakings expressed to be assumed
by it under any of the Relevant Documents (other than those
referred to in sub-clauses (a) and (b) above) and in respect
of any such breach or omission which in the opinion of the
Owner is capable of remedy, such action as the Owner may
require shall not have been taken within fourteen (14) days of
the Owner notifying any Relevant Party of such default and of
such required action;
(d) any representation or warranty made or deemed to be made or
repeated by any Relevant Party in or pursuant to any of the
Relevant Documents or any document, certificate or statement
referred to in or delivered under any of the Relevant
Documents is or proves to have been incorrect in arty material
respect when made or deemed repeated; or
(e) any Indebtedness of any Relevant Party becomes due or capable
of being declared due prior to the date when it would
otherwise have become due whether or not such breach or
default shall be waived by the person to whom the same is
payable or is not paid on the due date and in the opinion of
the Owner the ability of any Relevant Party to perform all or
any of its obligations under, or otherwise to
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comply with the terms of any Relevant Documents shall or may
reasonably be expected to be materially adversely prejudiced
as a consequence thereof; or
(f) any consent, authorisation, licence or approval of or
registration with or declaration to governmental or public
bodies or authorities or courts required by any Relevant Party
to authorise, or required by any Relevant Party in connection
with, the execution, delivery, validity, enforceability or
admissibility in evidence of any of the Relevant Documents or
the performance by any Relevant Party of its obligations under
any of the Relevant Documents is modified in a manner
unacceptable to the Owner or is not granted or is revoked or
terminated or expires and is not renewed or otherwise ceases
to be in full force and effect; or
(g) a creditor attaches or takes possession of, or a distress,
execution, sequestration or other process is levied or
enforced upon or sued out against any of the undertakings,
assets, rights or revenues of any Relevant Party and is not
discharged within seven days; or
(h) any Relevant Party suspends payment of its debts or becomes or
is deemed to be insolvent or unable to pay its debts within
the meaning of Section 123 of the Insolvency ▇▇▇ ▇▇▇▇ as they
fall due or commences negotiations with one or more of its
creditors with a view to the general re-adjustment or
re-scheduling of all or part of its Indebtedness or proposes
or enters into any composition or other arrangement for the
benefit of its creditors generally or any class of creditors
or proceedings are commenced in relation to any Relevant Party
under any law, regulation or procedure relating to
reconstruction or readjustment of debts; or
(i) any Relevant Party takes any action or any legal proceedings
are started or other steps taken for (or for the consideration
of) (i) any Relevant Party to be adjudicated or found bankrupt
or insolvent, (ii) the winding-up or dissolution of any
Relevant Party or (iii) the appointment of a liquidator,
trustee, receiver, administrator or similar officer of any
Relevant Party of the whole or any part of their respective
undertakings, assets, rights or revenues; or
(j) any event occurs or proceeding is taken with respect to any
Relevant Party in any jurisdiction to which it is subject
which has an effect equivalent or similar to any of the events
mentioned in Clauses 24.2 (g), (h) or (i); or
(k) any Relevant Party suspends or ceases or threatens to suspend
or cease to carry on its business; or
(l) all or a material part of the undertakings, assets, rights or
revenues of or shares or other ownership interests in, any
Relevant Party are seized, nationalised, expropriated or
compulsorily acquired by or under the authority of any
government; or
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(m) any Relevant Party disposes or threatens to dispose of all or
a material part of its assets, whether by one or a series of
transactions, related or not, other than for the purpose of a
reconstruction or amalgamation the terms of which have
received the previous consent in writing of the Owner;
(n) there occurs, in the reasonable opinion of the Owner, a
material adverse change in the financial condition of the
Charterer or the Guarantor by reference to the financial
statements referred to in Clause 2.1(f) of this Charterparty
and Clause 5.1(i) of the Guarantee respectively; or
(o) any of the Relevant Documents at any time and for any reason
is or becomes invalid or unenforceable or otherwise ceases to
remain in full force and effect, or the validity or
enforceability of any of the Relevant Documents at any time
and for any reason is contested by any party thereto (other
than the Owner), or any such party denies that it has any, or
any further, liability thereunder or it becomes impossible or
unlawful for the Charterer or any other Relevant Party to
fulfil any of its covenants and obligations contained in any
of the Relevant Documents; or
(p) any Relevant Party repudiates any of its obligations under the
Relevant Documents or does or causes or permits to be done any
act or thing evidencing an intention to repudiate any of its
obligations under the Relevant Documents; or
(q) the Ship is arrested, confiscated, seized, taken in execution,
impounded, forfeited, detained in exercise or purported
exercise of any possessory lien or other claim, or otherwise
taken from the possession of any Relevant Party or any
operator thereof other than pursuant to a breach of Clause 6.1
by the Owner, as a result of any Encumbrance directly created
by the Owner which adversely affects the operation of the Ship
and any Relevant Party shall fail to procure the release of
the Ship at the earliest possible time and in any event within
a period of fourteen (14) days or if the Ship is not
redelivered under the MWB Conversion Contract with the works
provided for under that contract completed to the satisfaction
of the Owner on or before 1st May 1991 or such later date as
the Owner may agree in writing; or
(r) the registration of the Ship is cancelled or terminated
(otherwise than upon the Ship being redocumented or its
registration transferred as contemplated by Clause 14.3)
except by reason of the Owner's default in its obligations
under Clause 14.2; or
(s) any other event (other than a Total Loss) occurs or state of
affairs exists which has or may reasonably be expected to have
a prejudicial effect on the Owner's title to the Ship (other
than pursuant to a breach of Clause 6.1 by the Owner as a
result of any Encumbrance directly created by the Owner which
adversely affects the operation of the Ship) or a prejudicial
effect on its rights under any of
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the Relevant Documents, or an adverse effect on the ability of
any Relevant Party to perform all or any of its obligations
under, or otherwise to comply with the terms of, any of the
Relevant Documents; or
(t) in the "requisite period", the Ship shall be used for any
purpose other than a "qualifying purpose" as those expressions
are described in Clause 13.2(e); or
(u) there shall occur a material adverse change, from the position
applicable immediately following Delivery, in the business,
affairs or condition (financial or otherwise) of any Relevant
Party the effect of which is (in the reasonable opinion of the
Owner) materially to imperil, delay or prevent the due
fulfillment by any Relevant Party of any of their obligations
and undertakings contained in any of the Relevant Documents;
or
(v) except with the prior written consent of the Owner the whole
of the legal and beneficial ownership of the whole of the
issued share capital of the Charterer ceases to be owned
directly or indirectly by the Guarantor.
25 OWNERS RIGHTS FOLLOWING A TERMINATION EVENT
25.1 At any time after any repudiation of this Charterparty by the
Charterer, including the occurrence of any Termination Event (and
provided that the same is continuing) the Owner may, by notice to the
Charterer, accept such repudiation and immediately terminate the
Charter Period (whereupon, as the Charterer hereby agrees and
acknowledges, the Charterer's right, title and interest in and to the
Ship and to possess and operate the Ship, shall terminate) and retake
possession of the Ship, (the Owner agreeing, in such circumstances,
that provided that the seaworthiness of the Ship is not thereby
diminished nor the value of the Ship thereby materially altered the
Charterer may first remove or that the Owner will at the Charterer's
cost and expense remove and deliver to the Charterer, or to whomever
else may be entitled thereto, any equipment belonging to the Charterer
installed in or on the Ship, and the Charterer agrees that the Owner
may for this purpose enter upon any premises belonging to or in the
occupation or under the control of the Charterer where the Ship or any
part thereof may be located, and the Charterer shall pay to the Owner
forthwith upon such termination such sum as shall equal the aggregate
of:
(a) all amounts due under the Charterparty or any of the other
Relevant Documents as shall be payable and remain outstanding;
(b) all losses incurred by the Owner in connection with such
termination including, without prejudice to the generality of
the foregoing, all costs and expenses so incurred in
recovering possession of the Ship, and in carrying out any
works or modifications required to bring the Ship up to the
condition specified in Clause 18.1;
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and the Charterer shall also pay to the Owner forthwith upon such
termination by way of agreed compensation and not as a penalty, the
amount of the Termination Sum at the date of termination.
25.2 Without prejudice to the obligation of the Charterer to make the
payments referred to in Clause 25.1 upon any such termination as is
referred to in Clause 25.1 and provided that the Owner shall not be
prevented from so doing for any reason whatsoever, the Owner shall
endeavour to sell the Ship as soon as practicable. The Net Sale
Proceeds shall be applied by the Owner subject to Clause 10.4 as
follows:
(a) Firstly in or towards settlement of any amounts due and owing
by the Charterer to the Owner under this Charterparty or any
of the other Relevant Documents (including any interest due in
respect thereof);
(b) Secondly if the Charterer shall on or before the date of
application of the Net Sale Proceeds by the Owner have paid
the Termination Sum, or a part thereof, in accordance with
Clause 25.1, in or towards refunding by way of rebate of
charterhire or otherwise as appropriate to the Charterer the
amount of the Termination Sum or part thereof so paid by the
Charterer; and
(c) Thirdly an amount equal to two per cent (2%) of the Net Sale
Proceeds shall be retained by the Owner and any balance shall
be paid to any Relevant Party by way of rebate of charterhire
or otherwise as appropriate.
25.3 If the Charterer fails to comply with any of its obligations under
this Charterparty or any of the other Relevant Documents the Owner
may, without being in any way obliged so to do, or responsible for so
doing, and without prejudice to the ability of the Owner to treat that
non-compliance as a Termination Event, effect compliance on the
Charterer's behalf, and if the Owner incurs any expenditure in
effecting such compliance the Owner shall be entitled (without
prejudice to Clause 25.1) to recover such expenditure from the
Charterer together with interest thereon at the Relevant Rate of
Interest from the date on which such expenditure is incurred by the
Owner until the date of reimbursement thereof by the Charterer (both
before and after any relevant judgment).
25.4 The rights and remedies of the Owner provided in this Charterparty are
cumulative and are not exclusive of any rights and remedies provided
by law.
26 INCREASED COSTS, FUNDING PROBLEMS AND ILLEGALITY
26.1 If the Owner notifies the Charterer that adequate and fair means do
not exist for calculating the variable portion of the charterhire then
the Owner shall give notice thereof to the Charterer and the Owner and
the Charterer shall meet together to discuss the matter in good faith
and, unless within thirty (30) days of the giving of such notice the
Owner and the Charterer arrive, by negotiation in good faith, at an
alternative basis
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acceptable to the Owner and the Charterer for continuing the Owner's
funding of its purchase of the Ship and/or continuing the chartering
of the Ship hereunder and calculating the variable portion of
charterhire (and any alternative basis agreed in writing shall be
retroactive to and effective from the commencement of the relevant
period and shall continue until the Owner determines that
circumstances are such that such alternative basis may cease to be
effective) the Charterer shall indemnify the Owner from and against
any liability, loss or expense suffered or incurred by the Owner
during the relevant period provided that the Owner shall take all
reasonable steps as may be open to it to mitigate the effect of this
Clause.
26.2 If any law, regulation or regulatory requirement or any judgment,
order or direction of any court, tribunal or authority binding upon
the Owner in the jurisdiction in which it is formed or in which any
action is required to be performed by it for the purposes of any of
the Relevant Documents (whether or not in force before the date of
this Charterparty) renders it unlawful for the Owner to continue to
charter the Ship to the Charterer under this Charterparty the Owner
shall promptly inform the Charterer and the Owner and the Charterer
shall both be entitled by written notice to the other to terminate the
Charter Period. Such termination shall be deemed to be a voluntary
termination of the Charter Period in accordance with Clause 3.3
(notwithstanding that such termination shall not have occurred on a
date falling on or after the first (1st) anniversary of the Delivery
Date or that the Owner shall not have received one hundred and eighty
(180) days' notice thereof) and the provisions of Clauses 33 to 35
shall apply thereto.
27 NOTICES
27.1 Every notice, request, demand or other communication under this
Charterparty shall:
(a) be in writing delivered personally or by prepaid first class
letter, telex or facsimile transmission (confirmed in the case
of a telex or fax transmission, by prepaid first class letter
sent within 24 hours of despatch but so that the non-receipt
of such confirmation shall not affect in any way the validity
of the telex or facsimile transmission in question);
(b) be deemed to have been received, subject as otherwise provided
in this Charterparty, in the case of a telex, at the time of
despatch with confirmed answerback of the addressee appearing
at the beginning and end of the communication, in the case of
a facsimile transmission, at the time of despatch with
confirmation that the communication was well received
(provided that, in the case of a telex or facsimile
transmission, if the date of despatch is not a business day in
the country of the addressee it shall be deemed to have been
received at the opening of business on the next such business
day), and in the case of a letter, when delivered personally
or five (5) days after being put in the post;
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(c) be sent:
(1) to the Owner to:
Royal Bank of Scotland (Industrial Leasing) Limited
▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Telex : 43466 SMTCHT
Fax: ▇▇▇▇-▇▇▇▇▇▇
(Attention: Managing Director)
(2) to the Charterer:
Simon-Horizon Limited
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇
Telex 896050 EXPLOR G
Fax: ▇▇▇▇ ▇▇▇▇▇▇
(Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇)
or to such other address, telex number or facsimile number as
is notified by one party to the other under this Charterparty.
28 ASSIGNMENT
28.1 Save as hereinafter provided, neither the Owner nor the Charterer may
assign or otherwise transfer any of its rights or obligations under
this Charterparty without the prior written consent of the other party
hereto PROVIDED ALWAYS that the Owner may assign or otherwise transfer
any or all of its rights under, and the benefit of, this Charterparty
without the consent of the Charterer to any Subsidiary for the time
being of The Royal Bank of Scotland Group plc. In the event of any
such assignment or transfer by the Owner to any Subsidiary of The
Royal Bank of Scotland Group plc, such assignment or transfer shall
not impose any greater liabilities on the Charterer towards the Owner
then those liabilities which the Charterer would have had to the Owner
had no such assignment or transfer taken place.
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29 MISCELLANEOUS
29.1 This Charterparty contains the entire agreement between the Owner and
the Charterer relating to the chartering of the Ship, and the terms
and conditions of this Charterparty shall not be varied otherwise than
by an instrument in writing of even date herewith or subsequent hereto
executed by or on behalf of the Owner and the Charterer.
29.2 No failure or delay on the part of the Owner in exercising any right,
power or remedy under this Charterparty shall operate as a waiver
thereof nor shall any single or partial exercise by the Owner of any
such right, power or remedy preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The
remedies provided in this Charterparty are cumulative and are not
exclusive of any remedies provided by law.
29.3 Subject to the periods of grace referred to in Clause 24, time shall
be of the essence as regards the performance by the Charterer of its
obligations under this Charterparty.
29.4 All rights and liabilities in respect of the Ship by way of General
Average shall be for the account of the Charterer.
29.5 If any term or provision of this Charterparty or any of the other
Relevant Documents or the application thereof to any person or
circumstances shall to any extent be invalid or unenforceable, the
remainder of this Charterparty and the other Relevant Documents or
application of such term or provision to persons or circumstances
(other than those as to which it is already invalid or unenforceable)
shall not be affected thereby and each term and provision of this
Charterparty and the other Relevant Documents shall be valid and be
enforceable to the fullest extent permitted by law.
29.6 The Charterer authorises the Owner without prejudice to any of the
Owner's rights of set-off at law, in equity or otherwise, at any time
and with notice to the Charterer to set off or withhold from any sum
or sums expressed in this Charterparty or one of the other Relevant
Documents to be payable to the Charterer by the Owner any amount due
and payable to the Owner from the Charterer under this Charterparty or
any of the other Relevant Documents. For any such purpose the Owner is
authorised to purchase with the sums which would but for this Clause
29.6 be so payable to the Charterer, such other currencies as may be
necessary to effect such set off or withholding. The Owner shall not
be obliged to exercise any right given to it by this Clause 29.6. The
Owner shall notify the Charterer forthwith upon the exercise or
purported exercise of any right of set-off or withholding full details
in relation thereto.
29.7 The Charterer undertakes that it will at its expense execute, sign,
perfect and do any and every such further assurance, document, act or
thing as in the reasonable opinion of the Owner may be necessary or
desirable to carry out the purpose of this Charterparty or any
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of the other Relevant Documents or protect or enforce any right of the
Owner hereunder or thereunder or the title of the Owner in the Ship.
29.8 In the event of any conflict between this Charterparty and any of the
other Relevant Documents, the provisions of this Charterparty shall
prevail.
30 LAW
30.1 This Charterparty is governed by and shall be construed in accordance
with English law.
IN WITNESS whereof the parties hereto have entered into this Charterparty the
day and year first above written.
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SCHEDULE 1
List of Documents and Evidence
1 A copy certified by a Director or the Secretary of the relevant person
to be a true, complete and up-to-date copy, of the Certificate of
Incorporation and Memorandum and Articles of Association of each of
the Charterer and the Guarantor.
2 A copy, certified by a Director or the Secretary (or similar officer)
of the relevant person to be a true copy, and as being in full force
and effect and not amended or rescinded, of resolutions of the board
of directors of each of the Charterer and the other Relevant Parties:
(i) approving the transactions contemplated by such of the
Relevant Documents to which the relevant person is a party;
(ii) authorising a person or persons to sign and deliver on behalf
of the relevant person or, as the case may be, authorising the
sealing by the relevant person of the Relevant Documents to
which it is a party and any notices or other documents to be
given pursuant thereto;
3 A copy certified by a Director or the Secretary (or similar officer)
of the relevant person to be a true copy, and as being in full force
and effect and not revoked or withdrawn, of any power of attorney
issued by the relevant person pursuant to the said resolutions.
4 A list, certified as true, complete and up to date by a Director or
the Secretary (or similar officer) of each of the Relevant Parties of
its directors and officers.
5 Evidence that all governmental and other licenses, approvals,
consents, registrations and filings necessary for any matter or thing
contemplated by the Relevant Documents and for the legality, validity,
enforceability, admissibility in evidence and effectiveness thereof
have been obtained or effected on an unconditional basis and remain in
full force and effect (or, in the case of effecting of any
registrations and filings, that arrangements satisfactory to the Owner
have been made for the effecting of the same within any applicable
time limit).
6 Certified true copies of the Memorandum of Agreement relative to the
Ship between the Charterer and K/S Safir A/S and the ▇▇▇▇ of Sale in
respect thereof.
7 An independent valuation by valuers acceptable to the Owner of the
current value of the Ship immediately prior to Delivery satisfactory
to the Owner in all respects.
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8. An independent valuation of the current value of the Ship after the
conversion works have been carried out and equipment installed in
accordance with the Conversion and Supply Agreement or otherwise as
proposed by the Charterer and confirming that the anticipated
life-span of the Ship is not less than the Primary Period satisfactory
to the Owner by valuers acceptable to the Owner.
9 An auditor's certificate in form and content satisfactory to the Owner
confirming that the costs incurred by the Charterer in connection with
the Ship (other than the Purchase Price) as at Delivery exceed One
million two hundred thousand Pounds (L.1,200,000).
10 Evidence that, on Delivery, the Ship:
(a) will be registered forthwith in the name of the Owner as a
Bahamian ship at the Port of Nassau and that the Ship, the
Insurances and any Requisition Compensation are free of
Encumbrances other than Permitted Encumbrances;
(b) is safely afloat undamaged and maintains the Classification
with the Classification Society; and
(c) is insured in accordance with the provisions of this
Charterparty and all requirements of this Charterparty in
respect of such insurance have been complied with.
11 The Purchase Agreement duly executed by the Charterer.
12 The legal ▇▇▇▇ of Sale referred to in the Purchase Agreement duly
executed by the Charterer in favour of the Owner in such form as the
Owner may have approved for the purposes of the Purchase Agreement
together with all other documents to be delivered by the Charterer to
the Owner pursuant to the Purchase Agreement.
13 The Guarantee duly executed by the Guarantor.
14 The Conversion and Supply Agreement duly executed by the Charterer.
15 A certified true copy of the MWB Conversion Contract.
16 Original invoices issued by the Yard prior to Delivery and in respect
of which a reimbursement is claimed by the Charterer or made by the
Owner to the Charterer pursuant to Clauses 3.3 or 3.4 of the
Conversion and Supply Agreement.
17 The legal opinion of ▇▇. ▇▇▇▇▇▇▇▇ & Partner, special German legal
advisers to the Owner, in form and content satisfactory to the Owner.
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SCHEDULE 2
Form of Delivery Notice
To: Royal Bank of Scotland (Industrial Leasing) Limited
[Address]
(dated)
Charterparty by way of Demise
dated December, 1990
in respect of m.v. "Seaway Labrador"
We refer to the above Charterparty and hereby give you notice that the
Expected Delivery Date is December, 1990.
We confirm that the representations and warranties contained in
Clauses 2.1 and 2.2 of the Charterparty are true and correct at the date hereof
as if made with respect to the facts and circumstances existing at such date.
Words and expressions defined in the Charterparty shall have the same
meanings when used herein.
For and on behalf of
SIMON-HORIZON LIMITED
.......................
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SCHEDULE 3
Charterhire
1 Definitions
In addition to the definitions comprised in Clause 1 and Schedule 4 of
this Charterparty the following expressions shall have the following
meanings:
"Accounting Period" means an accounting period for the
purposes of section 12 ICTA;
"Applicable Rate" means in relation to any Interest
Reference Period where the
Applicable Rate is being applied to
a negative balance of Notional
Capital Outstanding, the greater of
(i) LIBOR for that period and (ii) 7
per cent per annum, in either case,
plus the Reserve Asset Rate for that
period;
"Assumption" means the assumptions set out in
paragraph 3 of this Schedule 3;
"Corporation Tax means in relation to any Accounting
Applicable Rate" Period of the Owner,
the effective rate of Corporation
Tax which is or would be applicable
to companies generally in respect of
taxable profits (if there were such
profits and ignoring for this
purpose the special rate applicable
to small companies) of such
Accounting Period, such rate to be a
weighted average calculated on a
time apportionment basis where
different rates apply for more than
one Financial Year within which such
Accounting Period falls. Without
prejudice to the foregoing, if, at
any date on which a calculation is
to be made hereunder, the
Corporation Tax rates are fixed
retrospectively or for some other
reason the relevant rate is not
known at the time, such calculation
shall (without prejudice to any
provision of this Schedule providing
for such calculation to be adjusted
once the rate of Corporation Tax is
fixed by law) be made on the basis
that the rate of Corporation Tax
last fixed will not change;
"Final Date" means the date falling nine months
and one day after the last day of
the Accounting Period of the Owner
in which:
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(i) the last Primary Period
Charterhire (or any
adjustment thereto) falls due
to be paid; or
(ii) any Termination Sum (or any
adjustment thereto) falls due
to be paid;
whichever is later;
"Financial Year" has the meaning given to that
expression in Schedule 1 of the
Interpretation ▇▇▇ ▇▇▇▇;
"Interest Payment means, for any Interest Reference
Date" Period, the date specified
in respect thereof in Column 2 of
the table annexed to this Schedule
3, or if any such date is not a
Banking Day, the immediately
preceding Banking Day,
"Interest Reference means each of the following
Period" successive periods:
(i) the period commencing on 1st
April, 1991 and ending on
30th June, 1991, and
thereafter each successive
period of three (3) months
commencing on the date
specified in Column 1 of the
table annexed to this
Schedule 3 and ending on the
day immediately preceding the
first day of the next
Interest Reference Period;
and
(ii) the period from the expiry of
the last three (3) month
period referred to in (i)
above to the Final Date;
"LIBOR" means in relation to any Interest Reference
Period, the annual percentage rate of
interest (as certified by The Royal Bank of
Scotland plc whose certificate shall in the
absence of manifest error be conclusive and
binding) at which deposits in Pounds for the
period in question in amounts comparable with
the sum in respect of which such interest
rate falls to be determined were offered by
The Royal Bank of Scotland plc to prime banks
in the London Interbank Market at or about
11.00 a.m. on the first day of such period
or, if such day is not a Banking Day then on
the immediately preceding day which is a
Banking Day;
"Notional Capital means the amount of the Owner's investment in
the Outstanding Charterparty from time to time;
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"Owner's Group" means all those companies which at any
particular time constitute a group of
companies for the purposes of the provisions
relating to group relief contained in Chapter
IV Part X ICTA and of which the Owner is a
member;
"Owner's Return" means the Owner's after-tax profit take out
rate of return;
"Pre-Primary means in relation to any Pre-Primary Interest
Applicable Rate" Reference Period where the PrePrimary
Applicable Rate is being applied to a
negative balance of Notional Capital
Outstanding, the greater of (i) Pre-Primary
LIBOR for that period and (ii) 7 per cent per
annum, in either case, plus the Reserve Asset
Rate for that period;
"Pre-Primary Interest means each of 31st December 1990 and 31st
Payment Date: March 1991;
"Pre-Primary Interest means each of the following successive
Reference Period" periods:
(i) the period commencing on the
Delivery Date and ending on 31st
December 1990;
(ii) the period commencing on the expiry
of the period referred to in (i)
above and ending on the date three
(3) months thereafter;
"Pre-Primary means, in relation to any Pre-Primary
LIBOR" Interest Reference Period, the annual
percentage rate of interest (as certified by
The Royal Bank of Scotland plc whose
certificate shall in the absence of manifest
error be conclusive and binding) at which
deposits in Pounds for a period of one month
in amounts comparable with the sum in respect
of which such interest rate falls to be
determined were offered by The Royal Bank of
Scotland plc to prime banks n the London
Interbank Market at or about 11:00 am on
the first day of such period or, if such day
is not a Banking Day then on the immediately
preceding day which is a Banking Day;
"Pre-Primary means the period commencing on the Delivery
Period" Date and ending on the last day of the last
Pre-Primary Interest Reference Period;
"Primary Period means the charterhire calculated and payable
in accordance
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Charterhire" with paragraph 2 of this Schedule 3 and,
where applicable, as adjusted in accordance
with paragraph 4 of this Schedule 3;
"Reference Rate" means thirteen per cent (13%) per annum;
"Reserve Asset means for any period the annual percentage
Rate" rate of interest derived from the following
formula:
CL+D(L-X)+(M-D)(L-T)+S(L-Z)% per annum
100-(C+S+M)
Where
C = The amount required to be held on
non-operational non-interest bearing
deposit account with the Bank of
England pursuant to the Cash Ratio
deposit requirement of the Bank of
England, expressed as a percentage
of The Royal Bank of Scotland plc's
Eligible Liabilities ("The Cash
Ratio Deposit")
L = LIBOR
D = The amount required to be held on
secured Loans to members of the
London Discount Market Association
and/or on secured call Loans with
those money brokers and gilt-edged
primary market makers recognised for
this purpose by the Bank of England,
expressed as the normal average
percentage of The Royal Bank of
Scotland plc's Eligible Liabilities
to be so maintained ("Discount House
Deposits")
X = The rate of interest per annum at
which Sterling deposits can be
placed on secured Loans with a
member of the London Discount Market
Association at or about 11.00 on the
relevant day for a period comparable
to the relevant Interest Reference
Period or for three months,
whichever is the shorter. ("Discount
House Deposit Rate")
M = The amount required by the Bank of
England to be maintained in specific
liquid assets, expressed as the
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normal average percentage of line
Royal Bank of Scotland plc's
Eligible Liabilities to be so
maintained ("Mandatory Liquid
Assets")
T = The yield on Treasury Bills having a
period remaining to maturity
comparable to the relevant Interest
Reference Period, or for 91 days,
whichever is shorter. If for 91 days
the yield shall be calculated by
reference to the average discount
rate for Treasury Bills at the
tender as published by the Bank of
England weekly, usually on Friday;
if for any lesser period the yield
shall be calculated by reference to
the discount rate quoted for the
sale of Treasury Bills having that
period remaining to maturity by a
member of the London Discount Market
Association at or about 11.00 am. on
the relevant day ("Treasury ▇▇▇▇
Yield")
S = The amount required to be placed as
Special Deposits with the Bank of
England, expressed as a percentage
of The Royal Bank of Scotland plc's
Eligible Liabilities ("Special
Deposits")
Z = The rate of interest, per annum,
allowed by the Bank of England, from
time to time, on Special Deposits
("Interest on Special Deposits")
In making any calculation under this formula:
any negative factor shall be given the value
zero; and
each calculation shall be rounded up to the
next one-sixteenth per cent.
Provided that if such formula ceases in the
reasonable option of The Royal Bank of
Scotland plc to be a realistic and accurate
basis for calculating the cost of The Royal
Bank of Scotland plc complying with any
reserve assets, interest free, special
deposit or other requirements of a similar
nature imposed on it by any competent
authority (including, without limitation, the
Bank of England) with similar intent (whether
or not such requirements have the force of
law) or if such a cost is imposed directly on
the Owner then the Owner shall be entitled to
modify, expand
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or replace such formula to the extent that
the Owner in its discretion and acting in
good faith considers necessary to make it a
realistic basis for recovery of any reserve
asset costs arising in connection with the
funding of the transactions contemplated by
this Charterparty provided that any
modification, expansion or replacement shall
be of similar effect to other formulae having
a like purpose being or to be applied by
clearing banks or (where such cost is imposed
directly on the Owner) of undertakings
comparable to the Owner in the United
Kingdom;
"Secondary Period means the Charterhire calculated and payable
Charterhire" in accordance with paragraph 6 of this
Schedule 3;
"Variable means each of the Assumptions set out in
Assumption" paragraphs 3 (i) - (xx) (inclusive) of this
Schedule 3;
2 Primary Period Charterhire
2.1 During the Primary Period the Charterhire payable on each Charterhire
Payment Date shall be L.14.82 per L.1000 of Original Cost.
2.2 Charterhire in respect of the Primary Period shall be payable in
monthly installments in arrears. The first such instalment shall be
payable on 1st May 1991 and a further instalment of Charterhire shall
be payable on the first day of each month following after 1st May 1991
up to (and including) 1st April 2001.
2.3 Each Primary Period Charterhire shall be subject to adjustment in the
manner specified in paragraph 4 of this Schedule 3.
3 Assumptions in relation to Primary Period
The Primary Period Charterhire has been calculated on the following
Assumptions:
(i) that the Original Cost will be incurred in seven installments
in the following amounts on the following dates:
Date Amount per L.1,000
of Original Cost
15.11.90 571.20
15.12.90 12.50
10. 1.91 87.50
31. 1.91 41.50
28. 2.91 33.30
10. 3.91 62.50
31. 3.91 191.50
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and;
(ii) that the Primary Period will commence on 31st March 1991; and
(iii) that in accordance with the provisions of Chapter I Part II
CAA writing down allowances of 25 per cent per annum on a
reducing balance basis in respect of Original Cost will be
available to the Owner such writing down allowances to
commence in respect of all installments of Original Cost in
the Accounting Period of the Owner ending 31st March 1991 and
to continue in each subsequent Accounting Period of the Owner
until the Accounting Period of the Owner in which the Primary
Period expires by effluxion of time, that the writing down
allowances so available will not be withdrawn, either wholly
or in part, and that there will be no delay in the agreement
of the Owner's claim for such allowances; and
(iv) that the Ship will be sold in the Accounting Period of the
Owner in which the Primly Period expires by effluxion of time
and that the amount which the Owner is required to bring into
account as disposal value on such sale in accordance with
section 24 (6) CAA will be the balance of the Original Cost on
which writing down allowances are assumed to be available for
that Accounting Period by paragraph 3(iii) above; and
(v) that any interest paid or assumed to be paid in respect of
funds borrowed or assumed to be borrowed by the Owner for the
purpose of this transaction is or would had it actually been
paid have been allowed as a trading expense or as a charge on
income in the Accounting Period of the Owner to which such
interest relates or is paid (or assumed to be paid); and
(vi) that in the "requisite period", (as that expression is defined
in section 40 CAA) the Ship will not be used for a purpose
which results in section 42 CAA applying; and
(vii) that, in relation to Original Cost, no charge will arise under
section 46 CAA in respect of any excess relief (as therein
defined) or under section 42 CAA as the same may be amended,
extended, substituted or replaced from time to time; and
(viii) that any losses for taxation purposes arising to the Owner in
connection with the transactions contemplated by this
Charterparty (including losses arising as a result of the
availability of the said allowances) will be available for
offset against other profits of the Owner pursuant to section
393(2) ICTA or for surrender by way of
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group relief in accordance with the provisions of sections 402
to 413 ICTA (as amended, and in force, as at the date hereof)
and that there will be no change in the law or practice in
relation to group relief which would affect or in any way
restrict the Owner's ability to surrender such losses to any
company in the Owner's Group or the ability of any company in
the Owner's Group to whom such losses are surrendered to claim
or enjoy the benefit of such surrender, and
(ix) that the Corporation Tax Applicable Rate applicable to
Accounting Periods of the Owner commencing on or after 1st
April 1990 and ending with the Accounting Period of the Owner
in which the Final Date falls will be 35 per cent; and
(x) that the Owner will not be required to bring into account as
disposal value (within the meaning of and in accordance with
the provisions of section 24 CAA) in respect of the Original
Cost an amount greater than the Net Sale Proceeds and/or
insurance proceeds in respect of the Ship actually received by
the Owner, and
(xi) that no change occurs in the nature, method or application of
any relevant United Kingdom taxation by reason of any
enactment, provision, practice or ruling of or by any
authority, whether legislative, judicial, administrative or
revenue, after the date of this Charterparty, and
(xii) that the provisions of section 10 ICTA will not be amended
after the date hereof so as to result in the Owner first
becoming liable to pay any Corporation Tax on profits for any
Accounting Period on a date other than the date which is nine
months and one day after the end of that Accounting Period;
and
(xiii) that the Owner will not be required by law or accounting
practice to draw up its accounts for any period other than 12
months and/or as at any date other than 31st March in any
year; and
(xiv) that the only amounts which the Owner will be required to
bring into account as income in calculating its profits by
reference to the chartering of the Ship will be the
charterhire in Pounds payable pursuant to paragraph 2 of this
Charterparty, and
(xv) that all installments of charterhire to be received by the
Owner under this Charterparty will be fully taxable on their
full amount in the Accounting Period of the Owner in which
they fall due to be paid; and
(xvi) that the Pre-Primary Applicable Rate will be equal to the
Reference Rate; and
(xvii) that the Owner will incur professional fees and disbursements
of L.2 per L.1000 of Original Cost (exclusive of Value Added
Tax) in respect of the transactions contemplated by this
Charterparty excluding the funding arrangements; and
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(xviii) that the fees incurred by the Owner referred to in paragraph
(xvii) above will be deductible as a trading expense in the
Accounting Period of the Owner in which such fees are payable;
and
(xix) that the interest assumed to be received and paid in
Assumptions 3 (xxi) and (xxiii) will be treated as accruing on
a daily basis for the purpose of Corporation Tax and will be
accrued on positive or negative balances of Notional Capital
Outstanding (as the case may be) until the Final Date; and
(xx) (1) that all losses arising in an Accounting Period of
the Owner as referred to in paragraph 3 (viii) will
be surrendered to members of the Owner's Group;
(2) that the Owner will receive payments for group relief
on the date assumed to be the date for payment of
Corporation Tax by the Owner in paragraph 3 (xii),
that no refund of such payments shall be made by the
Owner and that, in accordance with section 402(6)
ICTA, such payments will not be taken into account
(either as a receipt or a deduction) for Corporation
Tax purposes; and
(xxi) that on the Interest Payment Date in respect of each Interest
Reference Period during which the Notional Capital Outstanding
is
(i) a negative figure the Owner will pay interest
calculated on a daily basis using a 365 day
year on the daily balances of Notional
Capital Outstanding during such Interest
Reference Period at the Reference Rate; or
(ii) a positive figure the Owner will receive
interest calculated on a daily basis using a
365 day year on the daily balances of
Notional Capital Outstanding during such
Interest Reference Period at a rate of 7 per
cent per annum; and
(xxii) the acquisition of the Ship by the Owner, its conversion
pursuant to the Conversion and Supply Agreement, the
chartering of the Ship under this Charterparty, the sale of
the Ship by the Owner under this Charterparty and the funding
of the transactions in relation thereto are the only
transactions carried out by the Owner and the Owner shall be
regarded as having no assets in respect of which capital
allowances are available other than the Ship provided that
nothing in this paragraph shall deem a balancing allowance to
be received by the Owner at any time; and
(xiii) that on each Pre-Primary Interest Payment Date in respect of
each Pre-Primary Interest Reference Period during which
Notional Capital Outstanding is a negative
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figure, the Owner will pay interest at the Pre-Primary
Applicable Rate calculated on a daily basis using a 365 day
year on the daily balances of Notional Capital Outstanding
during each Pre-Primary Interest Reference Period and that
such interest is compounded on 31st December 1990 and 31st
March 1991; and
(xiv) that no fees will be payable to London Financial Group
limited; and
(xv) that the interest referred to in paragraphs 3(xxi) and (xxiii)
will be payable to a person carrying on a bona fide banking
business in the UK.
4 Adjustments to Primary Period Charterhire
4.1 Change in Assumptions
On or as soon as reasonably practicable after any date on which the
Owner becomes aware or is notified by the Charterer that there has
been a change In any of the Variable Assumptions on the basis of which
the Primary Period Charterhire has been calculated and the effect of
such change would require the Primary Period Charterhire to be
adjusted if the Owner's Return is neither to be increased or
decreased, the Owner shall notify the Charterer of the amount by which
the Primary Period Charterhire is required to be adjusted upwards or
downwards. Any such adjustment shall:
(a) subject to sub-paragraphs (b) and (c) below, be calculated on
the same basis as the Primly Period Charterhire was calculated
and by reference to the Assumptions in order to ensure that
the Owner's Return is neither increased nor decreased; and
(b) take into account any changes in any of the Variable
Assumptions which have occurred (and are known to the Owner)
between the date of this Charterparty and the date of
notification of such adjustment; and
(c) be such as to ensure that, subject to the payment by the
Charterer of the adjusted Primary Period Charterhire on each
subsequent Charterhire Payment Date and on the basis that each
instalment of the adjusted Charterhire shall bear to each
other such instalment the same ratio as each instalment of the
Primary Period Charterhire bears to each other Primary Period
Charterhire instalment, the Notional Capital Outstanding on
the Final Date will be zero or as near thereto as may be.
4.2 Adjusted Primary Period Charterhire
As from the date any notification of adjusted Primly Period
Charterhire is to take effect in accordance with this Charterparty the
amount of charterhire to be paid on each Charterhire Payment Date
during the Primary Period shall be the adjusted Primary Period
Charterhire so notified.
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4.3 Change in Assumptions after the Primary Period
If the Owner shall become aware or is notified by the Charterer that
there has been a change in any of the Variable Assumptions on the
basis of which any Primary Period Charterhire has been calculated at a
time when no Primary Period Charterhire remains to be paid the Owner
shall as soon as reasonably practicable determine a single amount
calculated on the basis of the Assumptions but taking into account any
changes in any of the Variable Assumptions which have occurred and are
known to the Owner between the date of this Charterparty and the date
of such calculation which shall be either payable by the Charterer to
the Owner by way of additional charterhire or by the Owner to the
Charterer by way of rebate of charterhire and which amount shall be
calculated so that the Owners Return is neither increased nor
decreased. No account shall be taken of a change in a Variable
Assumption occurring more than six years after the last day of the
Accounting Period in which the final instalment of Primary Period
Charterhire falls to be paid.
4.4 Correcting adjustments
Of a Variable Assumption which has been regarded as incorrect
subsequently proves to have been correct or to be incorrect in a
different manner or with a different effect from that which such
Assumption was originally regarded as incorrect, then, such further
adjustments shall be made under paragraph 4 as may be required to
ensure that the Owners Return is the same as it would have been had
the relevant Assumption (and all such other Assumptions) proved to be
correct at all times (but fully taking into account the amount of any
previous adjustments).
4.5 Exclusion of Adjustments
No adjustment of charterhire shall be made under Paragraph 4 if and to
the extent that any of the Variable Assumptions shall prove to be
incorrect solely as a result of:
(i) otherwise than as a result of Assumption (xi) proving to be
incorrect, the Owner not being or ceasing to be resident in
the UK for the purpose of Corporation Tax or not being or
ceasing to be within the charge to Corporation Tax in respect
of the Ship;
(ii) otherwise than as a result of Assumption (xi) proving to be
incorrect or a default by the Charterer, the Owner (or any
member of the Owner's Group to which it might surrender or
purport or wish to surrender group relief) not having a
sufficiency of profits, or gains or income, in any Accounting
Period or part thereof;
(iii) otherwise than as a result of Assumption (xi) proving to be
incorrect, the Owner (or member of the Owner's Group as
aforesaid) voluntarily causing any or
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permitting any of its Accounting Periods to be other than
twelve months ending on a date other than on 31st March in
each year,
(iv) the Owner failing duly to claim in the appropriate amount and
in the correct manner or disclaiming any capital allowance to
which it is properly entitled (or to which but for any of the
facts or circumstances referred to in this paragraph 4.5 it
would be properly entitled) in respect of the Ship;
(v) the Owner disposing of the Ship (or any interest therein)
otherwise than in accordance with or as contemplated by this
Charterparty;
(vi) the Owner materially failing to meet its obligations under
clause 2.5 and/or clause 3.4 of the Conversion and Supply
Agreement.
4.6 Notification and Disputes
(a) The Owner shall certify in writing the amount of any
calculation or adjustment under this Schedule 3 or Schedule 4
or the determination of any rate of interest or other amount
payable under this Agreement together with reasonably
sufficient detail to substantiate such calculation, adjustment
or determination and in the event of there being a dispute as
to the amount of such calculation, adjustment or
determination, then without prejudice to the obligation of the
Charterer to pay amounts as certified pending resolution of
such dispute, the same shall immediately be referred to the
auditors for the time being of the Owner ("the Accountants")
(acting as experts and not as arbitrators) whose decision
shall in the absence of manifest error, be final and binding
on the parties.
(b) The Owner shall supply to the Accountants a copy of the
example cash flow on which the Owner has based the calculation
of Primly Period Charterhire and the Owner shall provide the
Accountants with any revised cash flow on the basis of which
the Owner calculates an adjustment to the charterhire payable
hereunder.
(c) Where the decision of the Accountants results in an adjustment
to any calculation certified as aforesaid by the Owner, such
payment shall be made between the parties as the Accountants
(acting as experts and not as arbitrators) shall certify as
appropriate to give effect to such adjustment (after taking
into account any financial or cash flow advantage or
disadvantage to either of the parties resulting from the
making of such adjustments and payments). The costs of and in
connection with such reference to the Accounts shall unless
otherwise agreed, be payable by the Charterer unless the
Accountants' decision shall reveal that the Owner's
calculation of such adjustment or determination was
significantly inaccurate, having regard to the size of the
transaction of which this Charterparty forms part and the
result thereof would have been adverse to the Charterer.
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(d) The Owner agrees to notify the Charterer of any communication
("Claim") it receives from the Inland Revenue indicating that
any matter relating to or affecting the correctness of any of
the Variable Assumptions and/or Variable Termination
Assumptions is being disputed by the Inland Revenue and as a
result there is or it appears that there is likely to be an
upward adjustment of charterhire under this Agreement or
upward adjustment in the Termination Sum.
(e) Following such notification and provided that the Owner
continues to receive from the Charterer all amounts of
charterhire and all other sums payable under this Agreement
the Owner agrees to discuss the Claim with the Charterer and
upon request to provide to the Charterer relevant extracts of
the correspondence with the Inland Revenue concerning such
Claim save that the Owner shall not be required to provide any
information or correspondence which is in the opinion of the
Owner confidential or of a sensitive nature having regard to
the business of the Owner or of the Owner's Group. Such
discussions shall take place with a view to agreeing the form
and content of the Owner's response to such claim.
(f) If the subject matter of the Claim is not resolved by
negotiation with the Inland Revenue the Charterer may require
the Owner to obtain (at the Charterer's expense) the opinion
of leading tax counsel ("Counsel") concerning the merits of
the subject matter of the claim. The Owner and Charterer will
instruct such Counsel as they may mutually agree provided that
if the parties shall not reach such agreement the Owner shall
instruct the Counsel of its choice. The Owner's legal advisers
will prepare Instructions to Counsel. The Charterer may make
representations as to the contents of such Instructions but
the Owner shall not be obliged to reflect those
representations in the Instructions submitted to Counsel. The
Charterer and its professional advisers may attend any
conference with Counsel save that the Charterer and its
professional advisers shall withdraw from such conference at
the request of the Owner when in the of opinion of the Owner
matters which in the Owner's opinion are confidential or of a
sensitive nature having regard to the business of the Owner or
the Owners Group may be discussed during such conference.
(g) The Owner shall have the sole right to decide whether to
pursue any appeal to the Special or General Commissioners (as
the case may be) or beyond. The Owner and the Charterer agree
to consult in such circumstances with a view to agreeing
whether or not any application for postponement of payment of
tax should be made.
(h) The Charterer hereby agrees to keep the Owner indemnified
against any costs, expenses or charges (including, without
limitation, interest or penalties in respect of Taxes) arising
to or incurred by the Owner in respect of any action taken by
the Owner under the provisions of sub-paragraph 4.6(d) to (g)
(inclusive) and it shall be a condition precedent to the
Owner's obligations under those
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sub-paragraphs that the Charterer shall provide or procure
security to the reasonable satisfaction of the Owner in
respect of its obligations under this paragraph 4.6 (h).
4.7 Limitation
In the event of any assignment or transfer of this Charterparty by the
Owner pursuant to Clause 28 other than to a member of the Owner's
Group the Charterer shall have or incur (at that or at any subsequent
time) no greater liability to pay any charterhire, additional
charterhire, Termination Sum or other moneys under this Charterparty
or have or enjoy (at that or any subsequent time) any lesser
entitlement to a reduction, refund, repayment or rebate of any
charterhire, additional charterhire, Termination Sum or any other
moneys than it would have had if no such sale or disposal had been
made and had Royal Bank of Scotland (Industrial Leasing ) Limited
continued to be the Owner at all material times.
5 Adjustment to Charterhire for changes in Interest Rates
5.1 The Primary Period Charterhire has been calculated on the assumption
that the Applicable Rate for each Interest Reference Period will be 13
per cent per annum. Where for any Interest Reference Period the
Applicable Rate shall be more or less than 13 per cent per annum then
on the relevant Interest Payment Date the Charterer shall pay to the
Owner by way of additional charterhire or the Owner shall pay to the
Charterer by way of rebate of charterhire the amount calculated by
multiplying for each 1 per cent increase or it decrease in the
Applicable Rate above or below 13 per cent (with adjustments for
variation other than an integral multiple of 1 per cent being made pro
rata to two decimal places) the Original Cost by the amount listed
opposite the relevant Interest Reference Period in Column 3 of the
Table annexed to this Schedule 3 and dividing the result by 1,000.
5.2 The amounts specified in Column 3 of the Table annexed to this
Schedule 3 are calculated on the basis of the Assumptions. In the
event that any of the Variable Assumptions proves to be incorrect then
the Owner will provide the Charterer with a revised Table prepared on
the same basis as the Table annexed to this Schedule 3 except in so
far as is necessary to reflect the change in any Variable Assumptions
which have proved to be incorrect. Thereupon this paragraph shall
continue to apply in respect of such revised Table mutatis mutandis
and so on.
5.3 The Primary Period Charterhire payable under paragraph 2 of this
Schedule 3 (including any adjustments thereto which may be required
pursuant to the terms of this Schedule) may be replaced by agreement
between the Owner and the Charterer by Primary Period Charterhire
calculated on the same basis but adjusted to reflect the availability
of fixed-rate funding to be obtained by the Owner in place of variable
rate funding obtained or assumed to be obtained by the Owner for the
purposes of the transactions
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contemplated by this Charterparty. In such event the Owner and the
Charterer shall enter into a memorandum specifying the terms on which
the Primary Period Charterhire shall be adjusted and the Table annexed
to this Schedule 3 (or replacement Table) shall be revised accordingly
to take account of such fixed rate funding on the basis that the
Owner's Return shall be neither increased nor decreased. The Charterer
will bear any commitment commission or other fee (including legal
fees) incurred by the Owner in obtaining that fixed rate funding and
in connection with the memorandum provided that such commission or
other fee (other than legal fees) shall be notified in advance to the
Charterer (or the basis for calculating the same) and specifically
referred to in the memorandum.
5.4 The Charterer undertakes and agrees to indemnify the Owner on demand
against any loss, cost, expense or detriment (as certified to the
Charterer by the Owner) sustained or incurred by the Owner (including
without limitation any damages, penalties or premiums incurred by the
Owner) as a result of the Owner repaying prior to its specified
maturity any funding obtained by the Owner or re-employing or
liquidating any funds received from third parties acquired in relation
to the transactions contemplated by this Charterparty, the Purchase
Contract and the Conversion and Supply Agreement in consequence of the
service or deemed service by the Charterer of a notice pursuant to
Clause 3.3 or Clause 3.4 of this Charterparty, a Total Loss or the
occurrence of a Termination Event in the event the same is actually
accepted by the Owner as a repudiation of this Charterparty.
6 Secondary Period Charterhire
6.1 The Secondary Period Charterhire shall be payable annually in advance
and each installment of Secondary Period Charterhire shall be L.2 for
every L.1000 of Original Cost.
6.2 An installment of Secondary Period Charterhire shall be due on 2nd
April 2001 and on each anniversary thereof during the Secondary
Period.
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Annexure to Schedule 3
Simon-Horizon Limited Royal Bank of Scotland (Industrial Leasing) Limited.
--------------------- ----------------------------------------------------
Rental Variation Factor
-----------------------
1% Interest 1% Interest
Fixing Settlement Variation Fixing Settlement Variation
Date Date Factor Date Date Factor
---- ---- ------ ---- ---- ------
1.04.91 1.07.91 L.2.59 1.07.96 1.10.96 L.1.17
1.07.91 1.10.91 L.2.59 1.10.96 1.01.97 L.1.10
1.10.91 1.01.92 L.2.58 1.01.97 1.04.97 L.1.04
1.01.92 1.04.92 L.2.27 1.04.97 1.07.97 L.0.98
1.04.92 1.07.92 L.2.23 1.07.97 1.10.97 L.0.92
1.07.92 1.01.93 L.2.22 1.10.97 1.01.98 L.0.84
1.10.92 1.01.93 L.2.19 1.01.98 1.04.98 L.0.80
1.01.93 1.04.93 L.1.97 1.04.98 1.07.98 L.0.73
1.04.93 1.07.93 L.1.95 1.07.98 1.10.98 L.0.65
1.07.93 1.10.93 L.1.93 1.10.98 1.01.99 L.0.56
1.10.93 1.01.94 L.1.89 1.01.99 1.04.99 L.0.54
1.01.94 1.04.94 L.1.74 1.04.99 1.07.99 L.0.45
1.04.94 1.07.94 L.1.71 1.07.99 1.10.99 L.0.36
1.07.94 1.10.94 L.1.67 1.10.99 1.01.00 L.0.26
1.10.94 1.01.95 L.1.62 1.01.00 1.04.00 L.0.26
1.01.95 1.04.95 L.1.51 1.04.00 1.07.00 L.0.16
1.04.95 1.07.95 L.1.47 1.10.00 1.10.00 L.0.16
1.07.95 1.10.95 L.1.42 1.10.00 and Nil
thereafter
1.01.96 1.04.96 L.1.29
1.04.96 1.07.96 L.1.23
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SCHEDULE 4
Temination Sum
1 In addition to the definitions comprised in Clause 1 and paragraph 1
of Schedule 3 to this Charterparty the following expressions shall
have the following meanings:
"Table" means the table annexed to this Schedule 4;
"Revised Table" means any revised Table produced pursuant to
paragraph 3 of this Schedule 4;
"Settlement Date" means each of the dates set out in Column 1
of the Table or any Revised Table;
"Variable Termination means the assumptions set out in paragraph
Assumptions" 3.2 of this Schedule 4.
2 The Termination Sum on any relevant date shall be the sum calculated
according to the following formula:
A X B
1000
where:
(i) A = Original Cost of the Ship; and
(ii) B = the amount listed in Column 2 of the Table or any
Revised Table opposite, where the relevant date is
not a Settlement Date, the next following Settlement
Date or where the relevant date is a Settlement Date,
that Settlement Date.
3.1 The amounts specified in Column 2 of the Table arc calculated on the
basis of the Assumptions and the Variable Termination Assumptions.
3.2 The Variable Termination Assumptions are:
(a) that for the purposes of section 24 CAL the amount of the Net
Sale Proceeds (in the case of a sale of the Ship) and/or any
moneys actually received by the Owner in respect of a Total
Loss will be equal to the equaling expenditure in respect of
the Original Cost at the commencement of the Accounting Period
of the Owner in which the Termination Sum is payable;
(b) that for the purposes of section 24 CAA the Ship will be sold
or a Total Loss will occur and Net Sales Proceeds or, as the
case may be, insurance proceeds will be received by
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the Owner in the same Accounting Period as that in which the
Termination Sum is payable;
(c) that the refund of charterhire or payment of sales agency
commission in respect of Net Proceeds of Sale and/or moneys
received by the Owner in respect of a Total Loss due in
accordance with Clauses 3.5, 21.5 and 25.2 of the
Charterparty:
(i) will occur in the Accounting Period of the Owner in
which the Termination Sum is payable;
(ii) that any refund of charterhire will be wholly
deductible for Corporation Tax purposes as a trading
expense in the Accounting Period of the Owner in
which the Termination Sum is payable;
(iii) that any payment of sales agency commission
(excluding recoverable Value Added Tax) will be
deductible from and in computing the amount to be
brought into account as disposal value under section
24 CAA in the Accounting Period of the Owner in which
such disposal value falls to be brought into account;
(iv) that the Owner will be able effectively to deduct the
trading expense referred to in paragraph 3.2(c)(ii)
above in computing its Corporation tax liability in
respect of the Net Proceeds of Sale and/or any moneys
received by the Owner in respect of a Total Loss; and
(d) that all and no more or no less of the Net Proceeds of Sale
(less any sales agency commission) and/or any moneys received
by the Owner in respect of Total Loss in excess of Original
Cost shall be treated as a chargeable gain for United Kingdom
Corporation Tax purposes in the Accounting Period of the Owner
in which the Termination Sum falls due and that the rate of
Corporation Tax in respect of chargeable gains is the same as
the rate assumed in paragraph 3.1(ix) of Schedule 3;
3.3 On or as soon as reasonably practicable after any date on which the
Owner becomes aware that any of the Variable Assumptions or any of the
Variable Termination Assumptions has become or will become incorrect
(which shall be referred to in this Schedule 4 as a change in a
Variable Assumption or Variable Termination Assumption) then the Owner
will provide the Charterer with a Revised Table (but only if such
Revised Table would differ from the existing Table) prepared on the
same basis as the Table except that the preparation of such Revised
Table shall take account of the change in say Variable Assumption or
Variable Termination Assumption and except that such Revised Table
shall take account of the Termination Sum due and payable on the
Termination Date where the Revised Table is produced after such date
and which Revised Table shall be calculated so that the Owner's Return
shall be neither increased nor decreased. Insofar as a change in
Variable Termination Assumption 3.2 (d) is concerned no account shall
be taken in preparing any Revised Table of (a) any rollover or
holdover of gains to another asset or (b) of any allowable losses
arising to the Owner from the disposal of assets other than the Ship
or (c) of relief for any losses for the purpose of capital gains tax
or Corporation Tax on chargeable gains arising from the disposal of
the Ship. Any Revised Table shall be deemed to
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85
take effect from the date when the change in any such Variable
Assumption or Variable Termination Assumption occurs.
3.4 Following production by the Owner to the Charterer of a Revised Table
pursuant to paragraph 3.3 of this Schedule 4 at a time after the
Termination Sum has been paid or the obligation to pay the Termination
Sum has been discharged the Owner shall recalculate the amount of the
Termination Sum using such Revised Table with effect from the date on
which the Termination Sum was first calculated and shall notify the
Charterer of the amount thereof and of the amount of difference
between the Termination Sum as so calculated and as immediately
previously calculated. Within 30 days of such notification the
Charterer shall pay to the Owner by way of additional charterhire the
amount of the difference so notified where that amount is a positive
figure or the Owner shall pay to the Charterer by way of rebate of
charterhire the amount of the difference so notified where the amount
is a negative figure.
3.5 As from the date any Revised Table is to take effect in accordance
with this Charterparty the same shall be deemed to be incorporated
herein in substitution for the Table or any previous Revised Table and
payments to be made hereunder shall be determined by reference
thereto.
3.6 No Revised Table may be produced pursuant to paragraph 3.3 above if
the date on which the Owner became aware that there has been any
change in a Variable Assumption or Variable Termination Assumption
falls seven years after the date which is nine months and one day
after the last day of the Accounting Period of the Owner in which the
Termination Sum initially fell due to be paid.
4. Paragraphs 4.4 to 4.7 of Schedule 3 to this Charterparty shall apply
with all necessary and/or appropriate adaptations to this Schedule in
relation to Variable Termination Assumptions, revisions to the Table
and adjustments to or repayments of Termination Sums (and other
matters contemplated hereby) as it applies to that Schedule in
relation to Variable Assumptions or adjustments of charterhire (and
other matters contemplated thereby).
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Table to Schedule 4
SIMON-HORIZON LIMITED
Termination Termination Termination Termination
----------- ----------- ----------- -----------
Date Amount Date Amount
---- ------ ---- ------
1 May 1991 1059.87 1 January 1995 837.65
1 June 1991 1057.69 1 February 1995 831.56
1 July 1991 1055.06 1 March 1995 824.56
1 August 1991 1052.76 1 April 1995 805.09
1 September 1991 1050.50 1 May 1995 798.39
1 October 1991 1047.80 1 June 1995 791.87
1 November 1991 1045.43 1 July 1995 785.00
1 December 1991 1042.69 1 August 1995 778.30
1 January 1992 1040.31 1 September 1995 771.51
1 February 1992 1037.26 1 October 1995 764.38
1 March 1992 1033.41 1 November 1995 757.41
1 April 1992 1019.75 1 December 1995 750.10
1 May 1992 1016.11 1 January 1996 742.95
1 June 1992 1012.79 1 February 1996 735.73
1 July 1992 1009.06 1 March 1996 727.93
1 August 1992 1005.66 1 April 1996 708.20
1 September 1992 1002.20 1 May 1996 700.37
1 October 1992 998.34 1 June 1996 692.67
1 November 1992 994.79 1 July 1996 684.65
1 December 1992 990.83 1 August 1996 676.74
1 January 1993 987.18 1 September 1996 668.74
1 February 1993 983.15 1 October 1996 660.42
1 March 1993 978.03 1 November 1996 652.20
1 April 1993 961.40 1 December 1996 643.67
1 May 1993 956.76 1 January 1991 635.24
1 June 1993 952.39 1 February 1997 626.79
1 July 1993 947.64 1 March 1997 617.64
1 August 1993 943.15 1 April 1997 598.16
1 September 1993 938.60 1 May 1997 589.11
1 October 1993 933.67 1 June 1997 580.14
1 November 1993 928.99 1 July 1997 570.88
1 December 1993 923.93 1 August 1997 561.67
1 January 1994 919.13 1 September 1997 552.35
1 February 1994 914.10 1 October 1997 542.74
1 March 1994 908.06 1 November 1997 533.18
1 April 1994 889.61 1 December 1997 523.33
1 May 1994 883.96 1 January 1998 513.52
1 June 1994 878.55 1 February 1998 503.74
1 July 1994 872.76 1 March 1998 493.37
1 August 1994 867.19 1 April 1998 474.60
1 September 1994 861.56 1 May 1998 464.24
1 October 1994 855.55 1 June 1998 453.89
1 November 1994 849.75 1 July 1998 443.27
1 December 1994 843.60 1 August 1998 432.66
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Termination Termination Termination Termination
----------- ----------- ----------- -----------
Date Amount Date Amount
---- ------ ---- ------
1 September 1998 421.91 1 January 2000 225.63
1 October 1998 410.91 1 February 2000 212.80
1 November 1998 399.88 1 March 2000 199.64
1 December 1998 388.61 1 April 2000 183.47
1 January 1999 377.31 1 May 2000 170.09
1 February 1999 366.07 1 June 2000 156.60
1 March 1999 354.37 1 July 2000 142.90
1 April 1999 336.72 1 August 2000 129.07
1 May 1999 324.92 1 September 2000 115.07
1 June 1999 313.07 1 October 2000 100.87
1 July 1999 300.98 1 November 2000 86.56
1 August 1999 288.83 1 December 2000 72.15
1 September 1999 276.53 1 January 2001 57.68
1 October 1999 264.00 1 February 2001 43.11
1 November 1999 251.39 1 March 2001 23.44
1 December 1999 238.55 1 April 2001 14.83
Where a Termination Sum falls due on a rental payment date the rental payable
on such a date is included in the Termination Sum quoted.
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SCHEDULE 5
Forms of Loss Payable Clauses
(A) Hull and Machinery (Marine and War Risks)
By a Charterparty by way of Demise made the ___ day of December, 1990,
Royal Bank of Scotland (Industrial Leasing) Limited (the "Owner") has
demise chartered m.v. "Seaway Labrador" (the "Ship") to Simon-Horizon
Limited (the "Charterer") and the Charterer has pursuant to a first
priority assignment contained in such Charterparty assigned to the
Owner all of the right, title and interest of the Charterer in any and
all policies and contracts of insurance from time to time taken out or
entered into by or for the benefit of the Charterer and the Owner in
respect of the Ship.
All recoveries under this policy shall be applied as follows:
(a) all claims hereunder in respect of an actual or constructive
or compromised or arranged total loss, and all claims in
respect of a major casualty (that is to say any casualty the
claim in respect of which exceeds L.250,000 (or the
equivalent) inclusive of any deductible) shall be paid in full
to the Owner or to its order; and
(b) all other claims hereunder shall be paid in full to the
Charterer or to its order, unless and until the Owner shall
have notified insurers hereunder to the contrary, whereupon
all such claims shall be paid to the Owner or to its order.
(B) Protection and Indemnity Risks
Payment of any recovery which Royal Bank of Scotland (Industrial
Leasing) Limited of ▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (the
"Owner") or Simon-Horizon Limited of ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇ (the "Charterer") is entitled to make out of the
funds of the Association in respect of any liability, costs or
expenses incurred by the Owner or the Charterer, shall be paid to the
person to whom the liability (or alleged liability) covered by the
entry was incurred or if the liability (or alleged liability) to such
person has previously been discharged by the Owner or the Charterer,
such moneys shall be paid to the Owner or its order or, as the case
may be, the Charterer or its order in reimbursement of the moneys so
expended by it in satisfaction of such liability or alleged liability,
unless and until the Association receives notice to the contrary from
the Owner; provided that no liability whatsoever shall attach to the
Association, its Managers or their agents for failure to comply with
the later obligation until the expiry of two clear business days from
the receipt of such notice.
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SCHEDULE 6
List of Excluded Equipment
1 HERRINGBONE SYSTEM
64 T.I. SLEEVE GUNS
2 UMBILICAL WINCHES, MPD
2 UMBILICAL WINCHES, LOW PULL, MPD
4 SLIPRING UNITS PLUS ASSY
4 STOWING WINCHES
1 AIR CONDITIONING UNIT, INST ROOM
1 STREAMER REEL, MPD
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Z6010390/6010430
1 LEAD IN Z6010392
1 STREAMER CONNECTOR SET 10-303132
1 SYNTRAK DIGITISING MODULE 10-305002
1 SYNTRAK REPEATER ▇▇▇▇ ▇▇-▇▇▇▇▇▇
▇ ▇▇▇▇▇▇▇ ▇▇ SYSTEM 10-308301
1 UNINTERRUPTIBLE POWER SUPPLY UNIT 1040S/25
1 UNINTERRUPTIBLE POWER SUPPLY UNIT AST 3350/380/60
UMBILICAL REEL ACCESSORIES, STRIVERS
4 HAMWORTHY COMPRESSORS 4TH565W100
1 MAGNAVOX INTEGRATED NAVIGATION SYSTEM
1 HYDROLINK SYSTEM
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SIGNED by )
for and on behalf of )
ROYAL BANK OF SCOTLAND ) /s/ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ (INDUSTRIAL LEASING) LIMITED )
in the presence of: )
[illegible name]
Royscot House
Cheltsham
SIGNED by )
for and on behalf of )
SIMON-HORIZON LIMITED ) /s/ B.E. Timmins in
the presence of: )
▇▇▇▇▇▇ Kelbilt
Berwin Height
Soliciters
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇
84