Atch_3_-_Charter_Terms_and_Conditions_(Final).pdf

Attachment 3 - Page 1 of 31 21 July 2015

CHARTER TERMS AND CONDITIONS

TABLE OF CONTENTS

Part

I. ACTIVATION

II. DRY CARGO TIME TERMS AND CONDITIONS

(a) Charter Hire

(b) Mission

(c) Reporting Requirements

(d) Crew

(e) MARAD Construction Differential Subsidy (CDS)

(f) Cargo Receipt

(g) Loading and Discharging

(h) Oil Pollution Spill

(i) Safety in Loading and Discharging Cargo

(j) Deck Cargo

(k) Cleaning

III. TIME CHARTER COMMON TERMS AND CONDITIONS

(a) General Definitions

(b) Delivery

(c) Redelivery

(d) Ports/Places

(e) Charter Period

(f) Drydock

(g) Insurance

(h) War

(i) Readiness

(j) Off-Hire

(k) Supercargo and Government Designated Representatives

(l) Time Lost

(m) Negligence of Pilots

(n) Port Charges and Expenses

(o) Owner’s Obligation

(p) Fuel

(q) Reduced Operational Status (Layup)

(r) Waiver of Claims

(s) Charter Not a Demise

(t) Salvage

(u) Limitations

(v) Alterations

(w) Reimbursable Supplies and Services (Charters)

(x) Standards of Appearance

(y) Savings

(z) Substitution

(aa) Shipboard Antiterrorism/Force Protection Measures

(ab) Payment

(ac) Special Requirements

(ad) Statutory Employee

(ae) In-Transit Visibility

(af) Security Threat

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(ag) Immunizations (U.S. -Flag Only)

(ah) Investigations

(ai) Military Extraterritorial Jurisdiction Act

IV. CHARTER ADDITIONAL CONTRACT REQUIREMENTS

(AS APPLICABLE)

Unless specifically referenced upon activation of the VISA Contingency Contract, the paragraphs that follow do not apply:

(a) Navigational Equipment

(b) Fuel Monitoring

(c) Time Charter War Risk Coverage

(d) Automated External Defibrillator (AED)

(e) Both to Blame

(f) Tugs and Barges

(g) Contractor Security (CS)

PART I. ACTIVATION

When the Vessel Activation Notice is issued, if the Vessel is at sea, Vessel shall proceed to its next scheduled port-of-call, unless otherwise ordered by the Government. Upon arrival at the next scheduled, or otherwise ordered, port-of-call, Vessel shall offload all commercial cargo onboard. If the Vessel Activation Notice is issued when the Vessel is in port, all commercial cargo onboard shall be offloaded, and the Vessel shall proceed as directed. To the extent that cargo is diverted from its intended transportation by activation of the Vessel, all reasonable costs and damages incurred by Owner as a result of such diversion shall be for the Government’s account.

PART II. DRY CARGO (TIME) TERMS AND CONDITIONS

(a) CHARTER HIRE

(1) Hire Rates. Charter hire for services under this Charter Party shall be payable at the applicable rates stipulated in theVISA Carrier Vessel Information Sheet, Boxes 40-42 and shall be earned at the expiration of each fifteen (15) days of the charter period. Except as otherwise provided herein, said hire rates shall be considered payment in full for all services of the Vessel and Associated Equipment under this Charter including all overtime (including but not limited to crew overtime/penalty time required for the opening and closing of hatches), penalty time, bonuses, payments, and emoluments payable to Master, Officers, and crew for services under this Charter, irrespective of the geographic scope of said service and including the carriage of ammunition and hazardous cargoes. Said hire rates are exclusive of the costs of fuel and port charges, which are addressed at Part III(p) (Fuel) and III(n) (Port Charges and Expenses) below, respectively, and other stevedoring costs such as loading, securing and discharging cargo, which are addressed in II (g) (Loading and Discharging) below.

(2) Loss of Vessel. Should the Vessel be either lost or missing and presumed lost, Charterer may, at its sole discretion, terminate this Charter, in which case hire shall cease to be payable at the time of the loss or, if said time is unknown, at the time of the Vessel’s last received communication. Similarly, should the Vessel become a constructive total loss, Charterer may, at its sole discretion, terminate this Charter, in which case hire shall cease to be payable at the time of the casualty resulting in the constructive loss. The Vessel shall be considered missing and presumed lost when, after a reasonable lapse of time, it fails to reach its next scheduled port and reasonable efforts to contact it fail.

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(b) MISSION

The Vessel may be employed in worldwide trade for the following: transportation and/or prepositioning of cargo (including but not limited to hazardous cargoes, explosives, ammunition, vehicular, containerized, and general cargoes) and military readiness, in accordance with the terms of this Charter.

(c) REPORTING REQUIREMENTS

Charterer’s Instructions. The Charterer shall furnish the Master with all requisite instructions and sailing directions in writing, including the COMSC “Standard Operating Manual” (SOM) COMSCINST 3121.9 Series.

The Master shall exercise due diligence to observe all such orders and instructions of the Charterer with respect to the Charterer's employment of the Vessel's services. Vessel must meet all USTRANSCOM requirements for reporting. Reports required of the Vessel include, without limitation, the following:

(i) Movement reports (see SOM, section 2-4-1);

(ii) Pre-arrival reports (see SOM, section 2-7-3);

(iii) Casualty reports (see SOM, section 4-3);

(iv) Dry-cargo reports (see SOM, section 3-7);

(v) Defense Readiness Reporting System-Navy (see SOM, Section 4-1); and

(vi) Position Reports. (see SOM, section 2-4-2). Vessel shall provide position/status reports in-port and at-sea every six (6) hours daily at 0000, 0600, 1200, and 1800 hours local Washington, DC time (GMT-5 EST/GMT-4 EDT). Position reports shall be issued by electronic mail to the addresses designated in the cargo orders as issued by the appropriate Program Office or Area Command.

USTRANSCOM may require additions or deletions to the addressees on the Position Reports and may also require additional reporting requirements.

These reports must include the Vessel’s Speed of Advance and the ETA to the next port.

(d) CREW

(1) Conduct of Master, Officers, and Crew. The Master, Officers, and crew shall be appointed or hired by the Owner and shall be deemed to be the servants and agents of the Owner at all times except as otherwise specified in this Charter. The Master of the Vessel shall be under the Charterer’s direction with regard to the employment of the Vessel, but shall not be under the Charterer's orders with regard to the navigation, care, and custody of the Vessel. If the Charterer shall have reason to be dissatisfied with the conduct of the Master, Officers, or crew, the Owner shall, upon receiving the particulars of the complaint, investigate the matter and, if necessary, make a change in personnel.

(2) Qualifications. The Master, Officers, and crew shall be U.S. citizens to the extent required by U.S. law (if

Vessel is U.S.-flag), and shall be conversant with English, and in possession of valid and current certificates, licenses, and documents.

(3) Identification Cards. In the event Government identification cards are issued to Master, Officers and crew, the Contractor shall be responsible for tracking and, upon redelivery of the Vessel, returning all cards.

(4) OCONUS Contractor Conduct. Upon award of this Contract, the Contractor shall immediately notify all contractor personnel, who are or who will be employed by, or who are or who will be accompanying, United States Naval Forces outside the continental United States (OCONUS), and who are not a host country national ordinarily resident in the host country, that such personnel, and any dependents residing with such personnel, who engage in conduct OCONUS that would constitute an offense punishable by imprisonment for more than one year if the conduct had been engaged in within the special maritime and territorial jurisdiction of the United States, may potentially be subject to the criminal jurisdiction of the United States as required by the Military Extraterritorial Jurisdiction Act of 2000, Pub. L. 106-523, 114 Stat. 2488, codified at 18 U.S.C. 3261 – 3267, as implemented by DoD Instruction 5525.11, “Criminal Jurisdiction over Civilians Employed by or accompanying the Armed Forces outside the United States.”

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Reference is made to Secretary of Defense memo dated 10 March 2008; "UCMJ jurisdiction Over DoD Civilian Employees, DoD Contractor Personnel, and Other Persons Serving With or Accompanying the Armed Forces Overseas During Declared War and in Contingency Operations."

(e) MARAD CONSTRUCTION DIFFERENTIAL SUBSIDY (CDS) (JUN 1998)

The Contractor, if operating a Vessel or Vessels built with Construction Differential Subsidy (CDS) unequivocally agrees that there will be no increase in contract price due to any liability to repay CDS which such Contractor may incur.

(f) CARGO RECEIPT (AUG 2005)

(1) Manifest/Bill of Lading. The Charterer or consignor of the cargo shall prepare a manifest and/or bill of lading, which shall list the cargo loaded on the Vessel. The Master shall sign said cargo receipt(s) in acknowledgment of the receipt of cargo said to have been loaded by the Charterer or the consignor of the cargo, without responsibility as to quantities, mixture, mark, number of packages, weights, etc., or the apparent condition of the cargo, it being understood that it is the Charterer's or the consignor's responsibility to tally the cargo and to check the condition thereof upon loading and discharging. The Contractor shall provide a copy of the signed manifest(s) upon request by the Government.

(2) Charter Paramount. Any receipt signed by or on behalf of the Master or Agent shall be without prejudice to the terms, conditions, and exceptions of this Charter and subject to all of them. The terms of this Charter Party shall apply to any shipment made by the Government whether or not bills of lading are issued.

(g) LOADING AND DISCHARGING (AUG 2005)

(1) General. The whole reach and burthen of the Vessel shall be at the disposal of the Charterer, reserving only proper and sufficient space for Vessel's Master, Officers, and crew, tackle, apparel, furniture, provisions, stores, and fuel. The Charterer shall have the use of all cargo handling equipment onboard and the Owner shall provide sufficient power to operate all the Vessel's cargo handling equipment simultaneously. The Vessel shall work night and day, if required by the Charterer. The Charterer shall have the use of any special gear or fittings actually aboard the Vessel, although said gear or fittings are not required by this Charter. Any material required for securing cargo is to be furnished by the Charterer and for its account, but the Charterer may have the free use of any lashings aboard the Vessel. The Charterer will be responsible for the replacement of lashing gear damaged by the Charterer or its servants. Such replacement shall be as original or equivalent.

(2) Cargo Quantity Limitation. In no case shall the cargo exceed what the Vessel can reasonably stow and carry, in the judgment of the Master, over and above the space and burthen necessary for Vessel's Officers and crew, her cabin, tackle, apparel, furniture, provisions, fresh water, stores, necessary ballast and fuel.

The amount of the deck cargo shall be at the discretion of the Master and the loading, carriage and discharge thereof shall be at the risk of the Charterer.

(3) Detention or Standby. If by reason of the Owner's failure to use diligence to keep the Vessel in a thoroughly efficient state of hull, machinery, equipment, personnel, and other particulars relating to the seaworthiness of the Vessel, the Charterer incurs cost of stevedoring detention or standby time in connection with the loading or discharging of cargo, such costs shall be for the account of the Owner

(4) Lighterage. Lighterage, if any, will be at the risk and expense of the Charterer, except as otherwise provided herein.

(5) Stevedore Damage. The Charterer is to be responsible for any physical damage done to the Vessel by Government stevedores on loading and/or discharging only if such damage is occasioned by negligence, breach of warranty or breach of contract and the Master advises the Charterer, or the Charterer's representatives, in writing, within twenty-four hours after occurrence of the specific damage and the Master further notifies the parties who have caused this damage, in writing, and endeavors to obtain their

Attachment 3 - Page 5 of 31 admission of liability. As soon as practicable after such damage is sustained, the Owner is to have an independent survey made to define and estimate the damage; a written copy of the survey report is to be promptly forwarded to the Charterer. All claims are to be settled directly between the Owner and the stevedores, with the Charterer being ultimately responsible.

(6) Charterer's Responsibility. The Charterer shall load, stow, trim, secure, and discharge the cargo, all in compliance with applicable laws and regulations and the permit/waiver requirements there under;

notwithstanding, however, that the Master shall supervise and be responsible for such actions as they concern the seaworthiness and stability of the Vessel. Upon request of the Charterer, the Owner shall arrange for stevedoring services at ports visited under this Charter, with reimbursement for all necessary and reasonable agency fees, all reasonable costs of loading and/or discharging, and port charges in accordance with Part III(n) (Port Charges and Expenses) below, 52.212-4 (i)(Payment) above, and Part III

(y) (Reimbursable Supplies and Services below.

(7) Expenses. The Charterer shall pay all expenses directly connected with the loading and discharging of the cargo including stevedoring, wharfage, clerking and tallying, winchmen, heavy lifts, dumping, stowing, securing, lashing, sheathing, dunnaging, and trimming, and removal of strongbacks with shore equipment where the use of shore equipment is not necessitated by a structural or mechanical defect in the Vessel unless that defect is caused by the fault or negligence of the Charterer. Unless otherwise provided herein, the Charterer shall provide necessary dunnage and shifting boards, also any extra fittings or materials requisite for a special trade or unusual cargoes, but the Owner shall allow the Charterer the use of any dunnage, shifting boards and other fittings or materials already onboard the Vessel. The Charterer shall have the privilege of using shifting boards for dunnage, but if the Vessel's shifting boards are used as dunnage, the Charterer shall make good any damage to or shortage of such shifting boards on redelivery of the Vessel. If the Charterer elects or is required by the Owner to remove dunnage and fittings placed onboard by the Charterer, the cost of removal and discharge shall be borne by the Charterer. The Charterer shall have free use of any lashing gear, dunnaging, shifting boards, and fittings aboard the Vessel.

(h) OIL POLLUTION SPILL

(1) Pollution Damage. Where an escape or discharge of oil occurs from the Vessel and threatens to cause pollution damage to coastlines, Charterer may, at its option, and upon notice to Owner or Master, undertake such measures as are reasonably necessary to prevent or mitigate such damage, unless Owner promptly undertakes same. Charterer shall keep Owner advised of the nature of the measures intended to be taken.

Any of the aforementioned measures actually taken by Charterer shall be at Owner’s expense except to the extent that any such escape or discharge or threat was caused or contributed to by Charterer. If Owner considers such measures should be discontinued, Owner shall so notify the Charterer and thereafter neither the Charterer nor its nominee shall have any right to continue said measures under the provisions of this paragraph and all further liability to Charterer under this paragraph shall thereupon cease, except that Charterer may continue such measures at Owner’s expense if Owner does not undertake reasonable measures to prevent or mitigate damages.

(2) Reservation. The above provisions are not in derogation of such other rights as Charterer or Owner may have under the provisions of this Charter including but not limited to IV(g) (Insurance) hereof, or may otherwise have or acquire by law or any international convention.

(i) SAFETY IN LOADING AND DISCHARGING CARGO

Attention of the Owner is directed to the Occupational Safety and Health Act of 1970, 29 U.S.C. 651 et seq., as amended, and to the standards promulgated there under by the Secretary of Labor.

(j) DECK CARGO

Should deck cargo be carried, it shall be carried at the Charterer's risk, excepting cargo shipped in containers.

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(k) CLEANING

(1) Delivery. Upon delivery in accordance with Part III(b) (Delivery) below, all holds, containers, and spaces designated for cargo carriage shall be cleaned and ready to receive lawful cargo.

(2) Redelivery. Upon redelivery of the Vessel in accordance with Part III(c) (Redelivery) below, the holds and spaces of the Vessel (and those deep tanks the last use of which was made by the Charterer) shall be swept clean by the Charterer with refuse removed, unless during the period of this Charter the Vessel has carried in these spaces cargo with respect to which custom requires more complete cleaning, in which case the Charterer shall give such spaces the required cleaning.

PART III. TIME CHARTER COMMON TERMS AND CONDITIONS

(a) GENERAL DEFINITIONS

Alterations - Additions of equipment; changes to the configuration, location, type, or number of pieces of equipment or systems; changes in the arrangement and outfitting of Vessel’s structure

API - American Petroleum Institute

API Standard - The most recent edition of API, Manual of Petroleum Measurement Standards ch.17.1

AR - interchangeable with ATRS

Assisting - Movement of a tow, which is making use of, or which has available for use, her own propulsion

Associated Equipment - Construed to include all Contractor-owned and Contractor-furnished equipment, supplies, fixtures, and tackle necessary for performance under this Charter Party

ASTM - American Society for Testing and Materials

ATRS - American Tanker Rate Schedule (as revised and current as of the Charter Party Date, issued and copyright by the Association of Ship Brokers and Agents (USA), Inc.)

Bbl - Barrel (42 U.S. gallons volume measure)

CAGE - Commercial and Governmental Entity Code (reference DFARS 252.204-7001)

CEC – Contractor Establishment Code

CFE - Contractor-furnished equipment

CFR - Code of Federal Regulations

Charter - Interchangeable with “Charter Party” and "Contract"

Charterer - The United States of America

Charter Party - This document when executed; interchangeable with “Contract” and “Charter”

Charter Party Date - Identified in Block 31c of SF 1449

CHOP - Charterer’s option

CLC - Convention on Civil Liability for Oil Pollution Damage, 1969

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CLIN – Contract Line Item Number

Clean - Petroleum or its products not darker than 3.5 NPA color

COA - Contract of Affreightment; interchangeable with "Contract" and "Charter Party" and "master solicitation” as defined at FAR 15.205(b)

COGSA - Carriage of Goods by Sea Act. 46a U.S.C. Chapter 28

COMSC - U.S. Department of the Navy, Commander, Military Sealift Command

COMSCINST - COMSC Instruction

Contract – Interchangeable with "Charter Party"

Contracting Officer - Identified in Blocks 31a and 31b of SF 1449

Contractor - Interchangeable with “Owner”

CONUS – Continental United States. Consists of 48 contiguous states and Alaska.

COR - Contracting Officer's Representative - (DFARS 202.101) - means an individual designated (in accordance with subsection 201.602-2 of the DFARS) and authorized in writing by the contracting officer to perform specific technical or administrative functions.

If the Contracting Officer designates a COR, the Contractor will receive a copy of the written designation.

It will specify the extent of the COR’s authority to act on behalf of the Contracting Officer. The COR is not authorized to make any commitments or changes that will affect price, quality, quantity, delivery, or any other term or condition of contract.

COW - Crude oil wash

CPP - Clean petroleum products, not darker than 3.5 NPA color

Crew - Of the Vessel identified in the VISA Carrier Vessel Information Sheet

CS – Contractor Security

Cu ft - cubic foot [1 cubic foot equals 0.028317 cubic meter]

DD 250-1 - Tanker/Barge Material Inspection and Receiving Report

DFARS - Department of Defense Federal Acquisition Regulation Supplement (issued by the Department of Defense)

DoD – U.S. Department of Defense

DPP - Dirty petroleum products, darker than 3.5 NPA color

DWT – Deadweight tonnage (Owner’s account for any and all costs to meet port restrictions)

ETA - Estimated time of arrival

FAR - Federal Acquisition Regulation (issued by the Department of Defense, General Services Administration, and National Aeronautics and Space Administration)

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FCC - Federal Communications Commission

FEU - Forty-foot equivalent unit (container volume measure)

FHEX - Fridays, U.S. Government holidays, and holidays observed at the port (whether national or local) to be excluded from the time computation.

FHINC - Fridays, U.S. Government holidays, and holidays observed at the port (whether national or local) to be included in the time computation.

F.i.o. - Free in and out

F.i.o. ex s.s. - Free in and out except for stowage and securing

F.i.o.s.s. - Free in and out stowed and secured

FLO/FLO - Float-on, float-off loading/discharging process

FPCON – Force Protection Condition

Ft - Foot/feet [1 foot equals 0.3048 meter]

Full Cargo - That quantity not exceeding what the Vessel can reasonably stow and carry , Charterer's obligation to furnish and Owner's obligation to load a Full Cargo as above, which may be further subject to stipulated minimum and maximum values or an optional margin, in which latter case, Charterer's and Owner's obligation is set at a Full Cargo or the stated minimum, whichever is the lesser.

Full Operational Status (FOS) - Vessel manned and provisioned, all Associated Equipment operational, and Vessel prepared in all respects to perform her mission in accordance with this Charter, whether or not so ordered

FY – Fiscal Year. 1 October to 30 September.

GFP - Government-furnished property (see FAR 52.245-1 in VIII(b)(3) below)

Government - The United States of America; interchangeable with “Charterer”

Government Designated Representative - Including, but not limited to, force protection personnel, military, government employees, and government contractors

GSV - Gross Standard Volume as defined by API Standard, that is, the total volume of all petroleum liquids and sediment and water (excluding free water), as corrected by various factors hp – horsepower [1 hp equals 0.745799 kW]

IGS - Inert gas system

IMDG – International Maritime Dangerous Goods Code

IMO - International Maritime Organization

In. - Inch(es) [1 inch equals 25.4 mm/2.54 cm]

In-transit loss - The difference in the TCV at 60 degrees Fahrenheit, as measured aboard the Vessel after loading at the load port or place and before unloading at the first discharge port or place

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ITOPF – International Tanker Owners Pollution Federation Limited kg - kilogram [1 kg equals 2.20 pounds] km – kilometers kPa - kilo Pascal [1 kPa equals 20.886 psf] kW - kilowatts [1 kW equals 1.34 horsepower (hp)]

LASH - Lighter-aboard-ship Vessel type

Laydays - The span of Commencing and Cancelling dates identified in Box 5

Laytime - The period of time agreed upon state in the contract upon VISA activation during which the Owner will make and keep the Vessel available for loading and discharging the cargo and for all other Charterer's purposes without payment additional to the freight

Lb - Pound [1 pound equals 0.453592 kg]

LO/LO - Lift-on, lift-off loading/discharging process

LT - Long ton, of 2,240 pounds weight [1 long ton equals 1.016047 metric tons] m – meter [1 meter equals 3.28 feet] m2 – square meter [1 square meter equals 10.764 square feet] m3 - cubic meter [1 cubic meter equals 0.883 measurement tons/35.314 cubic feet]

MarAd – U.S. Department of Transportation, Maritime Administration

Master - Of the Vessel identified in the VISA Carrier Vessel Information Sheet

Maximum Cargo - Unless otherwise noted, the greater tonnage identified in the task order; should a margin (plus or minus) be identified with the cargo tonnage, Maximum Cargo shall be considered to be the greatest quantity of cargo calculable from such margin

Minimum Cargo - Unless otherwise noted, the lesser tonnage identified in the task order; should a margin (plus or minus) be identified with the cargo tonnage, Minimum Cargo shall be considered to be the least quantity of cargo calculable from such margin mm - millimeter [1 millimeter equals 0.039 inch]

Moderate Weather - Conditions up to sustained winds of Beaufort Force 5 and sea state 4(any day during which sustained winds of Beaufort Force 5 or above are encountered for more than six hours shall not be considered a “moderate-weather” day for purposes of fuel or speed warranties made under this Charter)

MOL - More or less

MOLCHOP - More or less at Charterer's option

MOLOO - More or less at Owner's option

MSC -U.S. Department of the Navy, Military Sealift Command

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MT - Measurement Ton (40 cubic feet volume)

NM- Nautical Miles

NMCARS - Navy Marine Corps Acquisition Regulation Supplement

NOR - Notice of readiness

Notice Time - Free time allowed prior to the commencement or resumption of laytime or, if the Vessel is on demurrage, prior to the resumption of demurrage

OBQ - Onboard quantity of material as defined by API Standard, that is, the water, oil, slops, oil residue, oil/water emulsions, sludge, and sediment remaining in Vessel tanks, void spaces, and/or pipelines prior to loading

OCIMF - Oil Companies International Marine Forum

OCONUS – Outside Continental United States

Office hours - from 0800 hours until 1700 hours local time on a Working Day

OO - Owner's option

Owner - That entity or entities exercising commercial control of the Vessel identified in Box 7; interchangeable with “Contractor” and “Offeror” and to include the disponent owners and all the shipowner’s and the disponent owner’s agents, employees, independent contractors, Master, Officers, and crew

P&I - Marine protection and indemnity insurance

Part Cargo - Charterer's obligation to furnish and Owner's obligation to load a specified quantity of cargo, which may be further subject to stipulated minimum and maximum values or an optional margin

Paying Office - Identified in Block 18a of SF 1449

Place - Any berth, dock, anchorage, submarine line, alongside any vessel or lighter or any other place whatsoever to which the Charterer is entitled to direct the Vessel hereunder

Psf - Pounds per square foot load measure [1 psf equals 0.0478803 kPa]

QAR - Quality Assurance Representative; interchangeable with “Charterer’s inspector” and “Charterer’s representative”

RFP - Request for Proposals; interchangeable with "solicitation"

R.O.B. - Material remaining onboard as defined by API Standard, that is, the water, oil, slops, oil residue, oil/water emulsions, sludge, and sediment in Vessel tanks, void spaces, and/or pipelines after discharge

RO/RO - Roll-on/Roll-off loading/discharging process

SDWT - Deadweight capacity, to assigned summer mean draft

SHEX - Sundays, U.S. Government holidays, and holidays observed at the port (whether national or local) to be excluded from the time computation with the following time so excluded:

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(a) from 1700 hours local time on Saturday until 0800 hours local time on the following Monday, except in countries where Friday is the recognized weekly day of rest (where time from 1200 hours local time on Thursday until 0800 hours local time on the following Saturday will be excluded);

(b) from 1700 hours local time on the day proceeding a holiday until 0800 hours local time on the following working day.

SSHEX - Saturdays, Sundays, U.S. Government holidays, and holidays observed at the port (whether national or local) to be excluded from the time computation, with the following time so excluded:

(a) from 1700 hours local time on Friday until 0800 hours local time on the following Monday, except in countries where Friday is the recognized weekly day of rest (where time from 1200 hours local time on Thursday until 0800 hours local time on the following Saturday will be excluded);

(b) from 1700 hours local time on the day proceeding a holiday until 0800 hours local time on the following

SHINC - Sundays, U.S. holidays and holidays observed at the port (whether national or local) to be included in the time computation. See SSHINC.

SSHINC - Saturdays, Sundays, U.S. Government holidays, and holidays observed at the port (whether national or local) to be included in the time computation, with time counting:

(a) from 1700 hours local time on Friday until 0800 hours local time on the following Monday, except in countries where Friday is the recognized weekly day of rest (where time from 1200 hours local time on Thursday until 0800 hours local time on the following Saturday will count);

(b) from 1700 hours local time on the day proceeding a holiday until 0800 hours local time on the following

SOLAS – Safety of Life at Sea

Speed - Derived by dividing the total hours at sea on any given sea passage (as shown in the Vessel’s log)--after excluding any hours of non-moderate weather and any sea passage covered by an off-hire calculation--into the total miles at sea on the given sea passage

SWL - Safe Working Load t - Metric Ton (1 metric ton equals 0.9842064 long ton)

Tanker Loading Reports - Charterer-issued cargo manifests, to include DD Form 250-1

TCV - Total Calculated Volume as defined by API Standard, that is, GSV plus free water

TEU - Twenty-foot equivalent unit (container volume measure)

TIN - Taxpayer Identification Number

USCG - United States Coast Guard

USD - U.S. dollars

VEF - Vessel Experience Factor as defined by API

VISA – Voluntary Intermodal Sealift Agreement

WOG - Without guaranty

Worldscale - interchangeable with “WS”

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WS - New Worldwide Tanker Nominal Freight Scale, code name New Worldscale, (as revised and current as of the Charter Party Date, jointly sponsored and issued by the Worldscale Association (London), Ltd. and Worldscale Association (NYC), Inc.

(b) DELIVERY (AUG 2005)

(1) Inspection (Time). The Vessel and Associated Equipment shall be subject to the Government's inspection as to suitability for the required service prior to delivery and subject to subsequent inspections at any time during the currency of this Charter to determine continuing suitability for the required service as well as to determine whether the material condition of the Vessel and Associated Equipment will prevent effective operation during the Charter period. Such inspections shall include but not be limited to:

(A) Condition and operability of all cargo handling gear including standing and running rigging, cranes, booms, gantries, and status of regulatory body inspections of same;

(B) Condition and operability of navigation, communication, and environmental-protection equipment and existence of appropriate technical manuals and onboard spares;

(C) Condition (tightness and preservation) of hull, deck plating, superstructure, divisional bulkheads and the operability of ground tackle;

(D) General material condition and maintenance of the Vessel;

(E) Condition, operability, and certification of required safety and firefighting equipment;

(F) Operability and safety of engineering spaces and equipment;

(G) Bunker survey;

(H) Condition of all equipment required under this Charter;

(I) Condition (tightness and preservation) of cargo access equipment including hatch covers, between-deck covers, doors, ramps, ports, and elevators;

(J) Condition of holds.

(ii) The Government further reserves the right to have the Vessel surveyed at any time by an independent surveyor at Charterer’s time and expense.

(iii)If in the opinion of the Government Inspector the vessel is deficient in the specifications herein, a notice of correction shall be issued. In the event that the stated deficiencies are not corrected in a reasonable period of time and in the opinion of the contracting officer (based upon the recommendation of the government inspector and/or independent surveyor) the vessel is not in accordance with the specifications herein or unable to operate for a period of 30 days or more, the government reserves the right to cancel this charter at no cost to the government at any time during its term or to take any other action available under this charter party or authorized by law.

(iv)The Vessel horsepower identified in Boxes 40-41 shall, if required by the Contracting Officer, be verified by an independent surveyor approved by the Government.

(2) Predelivery Inspection. A predelivery inspection of the Vessel may be held at Charterer's option upon the request of the Owner; such inspection shall be of an advisory nature only. At any such inspection, any representation of a Government representative present, or lack thereof, shall not be binding on the Charterer. This inspection shall be conducted, if possible, in a shipyard and on a date mutually agreeable to the Owner and the Government. The Owner will be advised of the condition of the Vessel and Associated Equipment as found by the Inspector. This predelivery procedure is to enable the Owner to correct any deficiencies discovered before the delivery inspection. The results of any predelivery inspection under this

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Article shall further be without prejudice to any later determinations that the Vessel or its Associated Equipment are unsuitable under this Charter Party, whether made at the delivery inspection or at any time during the currency of the Charter period including options if exercised.

(3) Laydays. The Vessel and all Associated Equipment shall be delivered to the Charterer at a port or place in accordance with the task order instructions upon activation, the Owner giving written notice of readiness during office hours to the appropriate Government representative at the port or place of delivery on a working day (Saturdays, Sundays, or other recognized weekly days of rest, U.S. Government holidays, and holidays observed at the delivery port, whether national or local, shall not be considered working days).

Government inspection of the Vessel shall be completed within a reasonable amount of time thereafter, not exceeding twenty-four (24) hours after proper tender of the notice of readiness, (Saturdays, Sundays, or other recognized weekly days of rest, U.S. Government holidays, and holidays observed at the delivery port, whether national or local, excepted in the computation of said twenty-four hour period). Hire shall commence upon acceptance of the Vessel by the Charterer but not before the commencing date stated in the task order upon activation, unless approved in writing in advance by the Contracting Officer. The Charterer shall have the liberty to cancel this Charter at no cost to the Government should the Vessel or Associated Equipment not be ready in accordance with the provisions hereof by the canceling date stated in the task order upon activation, said cancellation to be declared not later than twenty-four (24) hours after 1600 hours local time at place of delivery on the canceling date stated in the task order upon activation, should the Vessel not be ready by that time. This paragraph shall not limit any right of the Government under this Charter Party or any right to take any other action authorized by law.

(4) Condition. The Vessel and all Associated Equipment shall be, insofar as due diligence can make them so, seaworthy, properly and efficiently manned and trained, equipped, supplied, and in every way suitable and adequately fitted for and in all respects ready for the service contemplated under this Charter Party. Any Associated Equipment shall upon delivery be as described in this Charter Party and all cargo-handling equipment shall be rigged, secured, and operable. The Owner shall exercise due diligence to maintain the Vessel and Associated Equipment in such state during the period of this Charter Party.

(c) REDELIVERY

Unless lost, the Vessel shall be redelivered at a port or place in accordance with the awarded task order.

(d) PORTS/PLACES (AUG 2005)

(1) Safety. The Charterer shall exercise due diligence to order the Vessel to safe berths or places (or alongside vessels or lighters reachable on her arrival and designated/procured by the Charterer) that the Vessel can approach, lie at, and depart from always accessible, always afloat. The Charterer shall not, however, be deemed to warrant the safety of any berth or place and shall not be liable or accountable for any loss, damage, injury, or delay resulting from any unsafe condition at any berth or place unless caused by the Charterer's failure to exercise due diligence as aforesaid. Any lightering will be at the expense of the Charterer; however, in the event the Charterer directs the Owner to arrange for lighterage services, the Owner shall make all necessary arrangements therefore.

(2) Ice. The Vessel shall not be ordered or bound to enter any port or place inaccessible due to ice or at which lights, lightships, markers, or buoys on Vessel's arrival are (or are likely to be) withdrawn by reason of ice.

The Vessel shall not be obliged to force ice. If a port or place to which the Vessel is ordered is inaccessible due to ice, the Master shall immediately notify the Charterer requesting revised orders and shall remain outside the ice-bound area. If there is danger of the Vessel being frozen in at any port or place, the Vessel shall, at Master's discretion, proceed to the nearest safe and ice-free position, at the same time requesting the Charterer's revised orders. Any delay or detention resulting from ice to be for the Charterer's account.

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(e) CHARTER PERIOD

The Charter period, which shall be no less than six months in duration or as otherwise mutually agreed, shall commence upon the Vessel’s discharge of commercial cargo, if the Vessel is not diverted. If the Vessel is diverted prior to entry into the next scheduled port-of-call, the Charter period shall commence upon diversion and the Government’s liability for charter hire herein shall be reduced by the cost savings, if any, realized by Owner in not completing its scheduled voyage. The Charter period shall continue until terminated in accordance with the provisions herein, but in no event shall it exceed five years. In the event that the Charter period exceeds the period of this contract, the period of this contract shall be extended until the date of redelivery of the Vessel. Any option periods shall be in direct continuation; shall be without guaranty at the Charterer's sole option; and shall be declared as specified in FAR 52.217-8. Optional periods may be declared at any time prior to redelivery of the Vessel.

(f) DRY DOCK

(1) General. The Owner, at its expense, shall dry dock, clean and maintain the Vessel's bottom and propeller, and make all overhaul and other necessary repairs properly to maintain the Vessel in class, maintain the Vessel in compliance with FAR 52.212-4(O) (Warranty), and otherwise to keep the Vessel tight, staunch, and strong, and in thoroughly efficient order and condition. For such purpose of dry dock, the Charterer shall allow Vessel to proceed to an appropriate port upon sixty days prior notice to the Contracting Officer.

All towage, pilotage, fuel, gas-freeing if required, water, and other expenses incurred while proceeding to and from dry dock shall also be for the Owner's account.

(2) Suspension of Hire. In case of dry docking at a port where Vessel is to load, discharge, or bunker under the

Charterer's orders, hire shall be suspended from the time the Vessel receives free pratique on arrival, if in ballast, or upon completion of discharge of cargo, if loaded, until Vessel is again ready for service. In case of dry docking at a port other than where Vessel loads, discharges or bunkers, payment of hire shall cease from the time of deviation until the Vessel is again ready and in a position not less favorable to the Charterer than that at which such deviation occurred.

(g) INSURANCE

(1) Requirement. During the period commencing with the first loading and terminating with the final discharge of the Vessel, the Owner shall have in place marine insurance coverage on the Vessel including Hull and Machinery, Protection and Indemnity (P&I), War Risk Hull and Machinery including P&I and, if U.S.-flagged, Second Seamen's War Risk Policy. Owner shall, when requested, furnish a Certificate of Insurance evidencing required coverage. Except as otherwise provided in this Charter Party, the Owner shall be responsible for the cost of such insurance, including deductibles, premia, additional premia, calls, commissions, advancements, assessments, and overspill claims where applicable

(2) Trading Limits. Trading limits of the vessel shall be worldwide. If Vessel is sent beyond the limits of

American Institute Trade Warranties or Institute Warranties (as applicable to Owner's coverage) under this Charter Party, Charterer agrees to reimburse Owner for the actual extra cost of additional premia and/or increased deductible levels, to the extent incurred, properly assessed by the Vessel's marine insurance underwriters and payable by the Owner, which extra cost is occasioned by the Vessel's trading beyond such limits.

(3) Limitation of Charterer's Liability. Except as otherwise specifically provided herein, the Charterer shall not be liable for any loss, damage, expense, cost, or liability whatsoever and howsoever incurred by the Owner or Vessel or which are imposed upon Owner by operation of law. Any amount due Owner under III(g) shall be subject to setoff by Charterer to the extent of any recovery under any insurance carried by the Owner.

(4) Notification to Charterer. Owner shall, to the maximum extent practicable, keep the Charterer, through the

Contracting Officer, currently informed in writing as to the potential vitiation, suspension, lapse, or termination of any of Vessel's insurance policies as a consequence of this Charter Party.

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(5) Charterer Named Assured. The United States of America shall be named as an additional assured with waiver of subrogation on all applicable insurance policies. All cost of such insurance, including but not limited to deductibles, premia, additional premia, calls, commissions, advancements, assessments, and overspill claims where applicable, shall be for Owner’s account. Owner agrees to make claims against insurers for losses or damages covered by insurance regardless of Charterer fault, action or omission, and Owner will pay all costs and deductibles associated with such claims.

(h) WAR (AUG 2005)

(1) Requirement. If Vessel is ordered under this Charter Party to any port, place, zone, or route involved in a state of war, warlike operations or hostilities, civil strife or piracy (whether there be a declaration of war or not) where it might reasonably be expected to be subject to capture, seizure, arrest, or hostile act by a belligerent power (whether de facto or de jure), it shall be unreasonable for the Owner not to prosecute said voyage instructions if insurance against said risks is then available commercially or under a Government program, or if the Government offers the Owner an indemnity under Public Law 85-804 against losses that would be covered by such insurance. In the event of the existence of said risks, the Charterer shall, to the extent provided in this paragraph (h), assume provable additional costs of wages (including all additional bonuses and payments required) and insurance and all taxes associated therewith properly incurred by the Owner as a consequence of service under this Charter Party. No other additional costs shall be reimbursable except as is expressly provided for in this Charter.

(2) Additional Wage Costs. Charterer shall reimburse Owner for provable additional costs (including taxes associated therewith) incurred pursuant to this Charter Party as a consequence of the risks identified in subparagraph (1) above for (i) wages of Master, Officers, or crew and (ii) required payments or bonuses to Master, Officers, or crew. However, any of said wages or payments shall not exceed in amount that which would be payable, under applicable laws and regulations, to U.S. Civil Service mariners in the employ of MSC in the same port, place, zone, or route.

(3) Additional Insurance Costs. Charterer shall reimburse Owner for provable additional costs of premia and taxes associated therewith (over and above such costs in effect on the Charter Party Date) reasonably incurred pursuant to this Charter Party as a consequence of the risks identified in subparagraph (1) above in the Vessel's War Risk Hull & Machinery policy, in the Vessel's War Risk Protection & Indemnity policy, and in any war risk policy on the lives of or for injuries to Officers and crew to the extent provided in section (h)(5). Provided, however, that no proportion of additional premia allocable to insuring an amount in excess of the coverage in place as of the Charter Party date shall be reimbursable by Charterer in respect of any of the foregoing war risk policies. Provided further that Owner shall apply for and remit to Charterer as savings any rebates by reason of reductions in or rebates of premiums charged for entry into War, Piracy, Terrorism and Related Perils Listed Areas. Provided further that the United States of America shall be named as an additional assured with waiver of subrogation noted under all of the foregoing war risk policies. Alternatively, with respect to any area(s) excluded by war risk trading warranties under Owner’s commercial war risk insurance coverage, in Charterer's sole option and at no cost to the Government, Charterer may delete this subparagraph (h)(3) with twenty-four hours notice in which case (i) IV(c) (Time Charter War Risk Coverage) shall automatically be effective in such area; or (ii) the Government shall offer an indemnity under Public Law 85-804.

(4) Insurance Nonavailability. If no commercial or Governmental insurance is available for service under this

Charter Party covering the risks identified in subparagraph (1) above, Vessel shall not be required to enter or remain at any port, place, zone, or route subject to said risks; Charterer in such case shall have the right to order the Vessel to other port(s) or areas consistent with the task order upon activation.

(5) Owner must immediately notify Charterer of any changes in the Vessel’s commercial war risk insurance, including but not limited to, changes to war, piracy, terrorism and related perils listed areas and/or increases in commercial war risk insurance premia. After giving notice, Owners must secure Charterer’s permission prior to entry into any commercial war risk Listed Areas before incurring liability for additional premia.

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Prior notice to Charterer and Charterer’s permission are conditions precedent to reimbursement of additional premium costs and associated taxes.

(i) READINESS (JUN 1998)

Readiness is a required service of the Vessel. Readiness shall be defined as the ability of a Vessel and Associated Equipment to perform the function for which designed, built, or chartered, including the ability to deploy without delays, whether or not so ordered to perform. If there is a degradation of this readiness, such that actual performance or condition of the Vessel or Associated Equipment shows any failure to satisfy one or more of the Owner's warranties or renders the Vessel in less than a fully efficient state, the hire will be proportionately decreased so as to indemnify the Charterer to the extent of such failure, this Charter Party to remain otherwise unaffected. Failure of the parties to agree upon the extent of the proportional decrease in hire shall be a dispute under the clause entitled "Disputes" incorporated herein by reference in Part II(d) above.

Nothing in this clause shall limit the rights of the Charterer to place the Vessel off-hire pursuant to III(j) (Off- Hire) below.

(j) OFF-HIRE (AUG 2005)

(1) General. In the event of the loss of time resulting from deficiency and/or default of men including but not limited to misconduct, illness, injury, strikes, labor disruptions, lockouts, deficiency of stores; fire;

breakdown of or damages to hull, machinery, or equipment; collision; stranding; grounding; detention by authorities; average accidents to Vessel or cargo unless resulting from inherent vice, quality, or defect of the cargo; repairs; inspections; dry docking for the purpose of examination or painting bottom; or deviation for the purpose of landing any ill or injured person onboard other than any passenger, supercargo, or military personnel who may be carried at the Charterer's request; or by any other cause whatsoever preventing the full working of the Vessel; the payment of hire shall cease for all time lost until the Vessel is again ready and in a fully efficient state to resume her service from a position not less favorable to the Charterer than that at which such loss of time commenced. Should the Vessel deviate or put back during a voyage contrary to the orders or directions of the Charterer for any reason, the hire is to be suspended from the time of her deviating or putting back until she is again ready and in a fully efficient state to resume her service from a position not less favorable to the Charterer than that at which such loss of time commenced.

When the period of time lost to the Charterer on any one occasion is less than four (4) consecutive hours (or twelve (12) consecutive hours while in prepositioning service), the hire shall not be reduced for such period.

(2) Costs for Owner. The cost of fuel…